Delhi District Court
Cc No.8477/2021 Safe Towers Pvt.Ltd. vs . D N Bhagat Page No.1 on 24 January, 2023
CC No.8477/2021 Safe Towers Pvt.Ltd. vs. D N Bhagat Page No.1
IN THE COURT OF MS. AISHWARYA SHARMA,
METROPOLITAN MAGISTRATE (NI ACT) DIGITAL COURT02,
SOUTHEAST DISTRICT, SAKET COURT COMPLEX, NEW DELHI
Criminal Complaint No.: CC NI ACT/8477/2021
SAFE TOWERS PRIVATE LIMITED ... Complainant
Versus
DN BHAGAT ... Accused
1. Name & address of the complainant: Safe Towers Pvt. Ltd.
Having it's office at
Ground Floor, Plot No.65,
Pocket1, Jasola Vihar,
New Delhi25
Through it's Authorized
Representative Sh. Kamal
Sharma.
2. Name & address of the accused : D.N. Bhagat S/O Sh. Mohan
Bhagat
Sole Proprietor of M/S. A.B.
Engineering Works,
R/O 5A, DSIDC Complex Phase
II, Shani Bhazar Road, Sultan Puri,
Delhi 110086.
3. Offence complained of : U/S 138, The Negotiable
Instruments Act,1881.
4. Plea of accused : Pleaded not guilty.
5. Final Arguments : 05.01.2023
Digitally signed
by AISHWARYA
AISHWARYA SHARMA
SHARMA Date:
2023.01.24
16:15:58 +0530
CC No.8477/2021 Safe Towers Pvt.Ltd. vs. D N Bhagat Page No.2
6. Date of Institution of case : 09.11.2021
7. Date of decision of the case : 24.01.2023
JUDGMENT
1. Vide this judgment, I shall dispose of the aforementioned complaint case filed by the complainant, Safe Towers Pvt. Ltd. through it's AR Sh. Dharmendra Lingwal (hereinafter referred to as the 'complainant') against accused, D.N. Bhagat (hereinafter referred to as the 'accused').
2. Factual Matrix: The complainant's case is that the complainant is a company established under the provisions of Companies Act and it is engaged in the business of manufacturing and erection of Telecom Towers and providing Trunkey solutions in the telecom sector. The accused who is the proprietor of AB Engineering Works is engaged in the business of fabrication and pipe bending. In the months of March and April, 2021, the complainant supplied some coils (total weight of 42575 Kg) to the accused for pipe bending. However, the accused delivered pipe having weight of 35980 Kg only, leaving a balance 6595 Kg coils. Thereafter, the complainant requested to the accused many times for supply of remaining balance raw material or to pay the cost of raw material amounting to Rs.3,84,625.50 and GST applicable on the amount and also shared one debit note dated 13.08.2021 on 16.08.2021 for the said raw material and outstanding amount payable to the accused. It is stated that the accused was liable to pay Rs.4,53,858/ towards the cost of balance raw material including applicable GST as on 18.08.2021. In order to discharge his liability, the accused issued cheque bearing No.000930 dt. 19.08.2021 for a sum of Rs.4,53,858/ drawn on Bank of Baroda Branch, Sultanpur Majra, New Delhi (hereinafter referred to as the 'cheque in question') in favour of the Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.01.24 16:16:07 +0530 CC No.8477/2021 Safe Towers Pvt.Ltd. vs. D N Bhagat Page No.3 complainant with the assurance that the same will be encashed on it's presentation. However, when the complainant presented the cheque in question with it's bank HDFC Bank Branch, Sarita Vihar, New Delhi on 19.08.2021, the same was dishonored vide return memo dated 21.08.2021 with remarks "PAYMENT STOPPED BY DRAWER". The complainant thereafter, sent a legal demand notice dated 17.09.2021 to the accused calling upon him to repay the loan amount within fifteen days of the receipt thereof. The accused has sent reply dated 01.10.2021 to the legal demand notice. However, the accused did not repay his debt within the prescribed period of fifteen days. Hence, being aggrieved, the complainant filed the present complaint under section 138 of The Negotiable Instruments Act, 1881 on 26.02.2021 and prayed that the accused be summoned, tried and punished under section 138 of The Negotiable Instruments Act, 1881 and fine equivalent to double the cheque amount be imposed upon the accused.
3. Summoning of accused: The learned predecessor court summoned the accused after hearing the arguments at the stage of presummoning vide order dated 22.03.2022 and the accused entered appearance in the present case on 02.06.2022 and he was admitted to bail vide same order.
4. Notice: The court has framed notice of accusation under Section 251 Cr.P.C. against the accused pursuant to arguments being advanced on the point of consideration thereof on 11.07.2022. The substance of accusation was read over and explained to the accused and after being satisfied that the accused comprehended the same, the court recorded his plea.
5. Plea of the accused: The accused pleaded not guilty and claimed trial.
He admitted his signature on the cheque in question, however, denied filling it's particulars. He admitted that the legal demand notice was sent at his correct address and he has received the same. In his defence, he stated that the complainant has Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.01.24 16:16:16 +0530 CC No.8477/2021 Safe Towers Pvt.Ltd. vs. D N Bhagat Page No.4 defrauded him and has caused him huge losses.
6. Evidence on behalf of complainant: To prove his case prima facie, the AR of the complainant has examined himself as CW1 and has filed his evidence under Section 200 of the Cr.P.C. by way of an affidavit which is EX. CW1/1 wherein the AR of the complainant averred the same facts as are averred in the complaint. He has also filed EX.CW1/A, which is the Board Resolution dt. 16.11.2020 authorizing him to prosecute this complaint.
7. Documentary evidence: To prove the above claims, the AR of the complainant has also filed EX.CW 1/B copy of Debit Note dated 13.08.2021, EX.CW1/C the original cheque in question dated 19.08.2021, EX.CW1/D the return memo dt. 21.08.2021 in respect of the cheque in question, EX. CW1/E the legal demand notice dated 17.09.2021 sent to the accused by the complainant after dishonor of cheque, EX CW1/F postal receipts along tracking report and EX.CW1/G reply to the legal demand notice sent by the accused. Thereafter, this witness was cross examined.
8. During his crossexamination, this witness stated that he has been working in the complainant company since last ten years. He deposed that there are two directors in the complainant company. He admitted that he has not placed on record any document which is signed by both the directors authorizing hims to pursue the present complaint and stated that the board of resolution authorizing him has been signed by the main director namely Sh. Satendra Kumar Sharma. He denied the suggestion that he is not authorized to pursue this complaint. He stated that he does not remember the date when the cheque in question was handed over to the account department of the company and stated that it was handed over to one Mr. Pradeep Kumar Bajaj who is working as account head in the account department in the complainant company. He stated that the complainant company provide raw Digitally signed by AISHWARYA SHARMA AISHWARYA Date: SHARMA 2023.01.24 16:16:24 +0530 CC No.8477/2021 Safe Towers Pvt.Ltd. vs. D N Bhagat Page No.5 material sheets/plates for making pipes and same has been given to the accused also and generally there is 5 % wastage in one Sheet while making pipes. He stated that the complainant company demanded return of unused material from the accused several times through e mail and he can file record of the same which is Ex. CW1/H (Colly). He stated that he had informed about the outstanding amount to the accused through this e mail communication and had also sent debit note to the accused through e mail. He admitted that the accused did not make any communication regarding admission of outstanding amount. He deposed that there is no fixed price of the wastage material and it varies from Rs. 25/ to Rs. 40/and depends upon the rate of material in the market. He stated that he cannot tell as to who had filled the particulars in the cheque. He admitted that the cheque in question was given as security by the accused to the complainant company. He denied the suggestion that they have misused the cheque in question. He stated that the complainant company has filed the GST amount of the debit note voucher in their IT Return. He denied the suggestion that the GST amount has been wrongly reflected in Debit Note Voucher Ex. CW1/B as no GST is charged on the wastage. He further deposed that the complainant company had sent an e mail to the accused before generating the Debit Note. He admitted that they did not make any communication with the accused mentioning any time and venue about discussion before making the debit note and stated that they had sent communication through e mail, if the accused would have any objection, he could approach them. He admitted that the debit note was generated unilaterally in their office in the absence of the accused. He admitted that the accused had handed over blank cheque to them. He denied the suggestion that the accused has no outstanding liability for the cheque amount towards the complainant company. He further denied the suggestion that the complainant company is not inclined to take back the wastage, though the accused intends to Digitally signed by AISHWARYA SHARMA AISHWARYA Date: SHARMA 2023.01.24 16:16:38 +0530 CC No.8477/2021 Safe Towers Pvt.Ltd. vs. D N Bhagat Page No.6 return the same and stated that they had given the MS Plates to the accused and there is no wastage of the same as these plates are available in particular size. He denied the suggestion that there is around 1015 % wastage while making the pipes.
9. Examination of the accused under section 313 Cr.P.C.: The accused was examined under section 313 Cr.P.C. on 17.10.2022, wherein he admitted that the complainant company is a company established under the provisions of Companies Act and it is engaged in the business of manufacturing and erection of Telecom Towers and providing Trunkey solutions in the telecom sector and it has authorized Mr. Kamal Sharma vide it's board of resolution dated 21.10.2021 EX. CW1/A to pursue this complaint and he is the proprietor of AB Engineering Works, which is engaged in the business of fabrication and pipe bending. However, he stated that he does not know Mr. Kamal Sharma and he used to talk to Mr. Satender Sharma, who is Director of the complainant company. He denied that in March and April, 2021, the complainant supplied him with some coils of total weight 42575 Kg for pipe bending and against the same, he delivered the pipes having weight 35980 kg only, leaving a balance 6595 Kg coils and he failed to supply pipes/ remaining raw material despite repeated request made by the complainant and further stated that he had contacted Director of the complainant namely Mr. Satender Sharma and told him to get the remaining material collected and he told him that he will send his vehicle for collecting of the same but he never sent any vehicle. He further denied that complainant requested him many times to either supply the remaining raw material or to pay the cost of the same i.e. Rs. 384625.50 and GST applicable on the said amount and on 16.08.2021 the complainant also shared a Debit Note dated 13.08.2021 for the said raw material and outstanding amount payable by him. He also denied that on 18.08.2021, his liability was Rs. 4,53,858/ towards the cost of balance raw material including applicable GST and against discharge of the same Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2023.01.24 16:16:42 +0530 CC No.8477/2021 Safe Towers Pvt.Ltd. vs. D N Bhagat Page No.7 liability, he issued the cheque in question and he stated that he gave the cheque in question to Mr. Satender Sharma as security on 04.03.2021 and he also has receiving regarding the same. He also admitted that the cheque in question upon presentation got dishonored with remarks "payment stopped by drawer" vide return memo dated 21.08.2021. He denied having received legal demand notice dated 21.01.2021. He admitted his signature on the cheque in question. However, he denied filling up the particulars in the same and stated that same were filled by Mr. Satender Kumar in his presence on 04.03.2021. He further stated that the waste material of the complainant is still lying with him and he is still willing to return the same. He also stated that he knows the complainant and he was in business with the complainant company for 7 months and during that period, he had visited the office of the complainant company 34 times and he has met with Mr. Satender Kumar. He finally stated that the complainant company has caused him losses of Rs. 1012 lakhs and has committed fraud with him and he has even filed police complaint against the complainant company. He stated that he intends to lead defence evidence.
10. Defence Evidence: In his defence, the accused examined himself as DW1 and adopted his statement recorded U/S 313 Cr.P.C. as his examination in chief. Thereafter, the accused was cross examined. During his cross examination, the accused stated that he is into this business of fabrication since last 1520 years. He admitted that the complainant had supplied raw material weighing around 42575 KG to him. He stated that he does not remember the total weight of pipe supplied by him to the complainant. He admitted that [email protected] is his e mail ID and stated that he does not use it now. He stated that he cannot say that out of 42575 KG material received by him, he had prepared and sent material of 35980 KG only to the complainant and thus, remaining material of 6595 KG is lying with him. He admitted that he has stated that the cheque in question was given by him to Digitally signed by AISHWARYA SHARMA AISHWARYA Date: SHARMA 2023.01.24 16:16:46 +0530 CC No.8477/2021 Safe Towers Pvt.Ltd. vs. D N Bhagat Page No.8 the complainant as security and for explaining the meaning of word security, he stated that he was told by Manager/Director of the complainant namely Sh. Satender Kr. Sharma, to fix the set up and start the work and when he had completed the set up and before he could begin with work, he was asked by complainant to give one security cheque. He stated that he cannot say if he had received email communication dated 05.07.2021, 08.07.2021, 14.07.2021 i.e. EX. CW1/H (Colly). He stated that the complainant did not contact him rather he contacted the complainant and told him that he (accused) is paying rent of Rs. 50,000/ per month as his material is lying unused at his premise. He was shown one email communication dated 16.08.2021 i.e. Mark DW1/C1 and was asked if he has received one debit note from the complainant vide this email to which the accused stated that he cannot say anything about it. He stated that he did not reply and demanded factory rent from the complainant on 16.07.2021 vide email communication, made in response to the e mail of complainant dated 14.07.2021 whereby the complainant demanded his remaining raw material or in alternate told him that he will present his security cheque (which is part of EX. CW1/H (Colly)). He stated that regarding rent of factory, he had raised demand through telephone not through email. He denied the suggestion that he has replied vide email dated 17.08.2021 to the mail sent by the complainant dated 16.08.2021 i.e. Mark DW1/C1 wherein the complainant has shared Debit note. He admitted that that in answer to Question No. 8 during his statement U/S 313 Cr. P.C, he stated that the particulars in the cheque in question were filled by Mr. Satender Kumar on 04.03.2021. Then he stated that on 04.03.2021, the complainant did not fill the amount and date in the cheque in question, but he only wrote the name of payee as Safe Towers and told him that he will keep this cheque as security in his file. When this witness/accused was asked as to why his answer to question No. 8 in his statement U/S 313 Cr. P.C is Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.01.24 16:16:50 +0530 CC No.8477/2021 Safe Towers Pvt.Ltd. vs. D N Bhagat Page No.9 contrary to his own documents filed on record i.e. Mark DW1/A which is now EX. DW1/A as original has been filed on record wherein there is no date of drawal is mentioned, he stated that his answer recorded later is correct. He admitted that he received legal demand notice from the complainant and stated that he had also filed reply to the same. He stated that he does not remember the date, month and year when he had called the complainant and told him to collect his remaining material lying unused at his (accused)factory and stated that he had called him during lockdown. He denied the suggestion that despite receiving communications from the complainant several times asking for remaining raw material, he never gave response to the complainant or asked him to collect the same. He denied the suggestion that he had illegally demanded rent from the complainant vide e mail communication dated 17.08.2021 and due to this reason only he did not return his material. He denied the suggestion that the value of the remaining material lying with him is Rs.3,84,625.5 and stated that, that material is waste material. He denied the suggestion that after calculating 18 % GST i.e. Rs. 69,232/ on the remaining material, the total amount becomes Rs. 4,53,858/ i.e. the cheque amount. He also denied the suggestion that he has liability for payment of Rs. 4,53,858/ for the material lying with him and stated that he has no such liability and that he is still ready to return the remaining material.
11. Final arguments: Final arguments have been heard on behalf of the both the parties. The matter was then reserved for judgment. The submissions made on behalf of both the parties have been considered.
12. In order to ascertain whether the accused has committed the offence under Section 138 of the NI Act, it is deemed fit to examine separately as to whether all the indispensable ingredients constituting the offence have been proved by the complainant. The offence under Section 138 of the NI Act has the following Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.01.24 16:16:55 +0530 CC No.8477/2021 Safe Towers Pvt.Ltd. vs. D N Bhagat Page No.10 ingredients
a) Existence of legally enforceable debt or liability and issuance of cheque in discharge of said debt or liability;
b) Dishonor of cheque in question which must have been drawn on an account drawn on an account maintained by the accused;
c) Service of demand notice seeking payment of cheque amount within fifteen days from the date of service;
d) Nonpayment of cheque amount within fifteen days from the date of service of notice; and
e) Filing of complaint within one month from the date on which cause of action arises.
13. In the present case, presentation of the impugned cheque for encashment is not in dispute. As per the return memo EX CW1/D dated 21.08.2021, the cheque in question was dishonoured with reason "payment stopped by drawer". The accused has not disputed this fact throughout the trial. Rather the accused has admitted the correctness of dishonour memo as per his statement recorded U/S 294 Cr. P.C. This fact is also not in dispute that the accused has affixed his signatures on the cheque in question and handed over the cheque to the Director of complainant company namely Sh. Satender Sharma. Accused has also admitted that the legal demand notice was sent at his correct address and he received the same. Service of legal demand notice is also established from the fact that the accused has filed reply dated 01.10.2021 to the legal demand notice of the complainant. However, the accused has disputed his liability by claiming that he did not issue the cheque in question for payment of Rs. 4,53,858/ towards the cost of balance raw material with GST, rather he has claimed that he has given the cheque in question as security to the director of complainant company namely Sh. Satender Kumar Sharma and he has misused the cheque in Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.01.24 16:16:59 +0530 CC No.8477/2021 Safe Towers Pvt.Ltd. vs. D N Bhagat Page No.11 question after filling it's particulars and the complainant company has never demanded the return of remaining raw material from him. Admittedly, due to this reason only, the accused has not made any payment to the complainant despite service of legal demand notice. Finally, the complaint has been filed within limitation period. Therefore, essential ingredients mentioned from b) to e) in the above paragraph have been duly satisfied.
14. Now the only question remaining for determination is whether a legally valid and enforceable debt existed qua the complainant and the cheque in question was issued in discharge of said liability / debt. It is pertinent to note that Section 139 of the NI Act provides a statutory presumption that the cheque was handed over in respect of a debt or other liability. Under Section 118 of the NI Act, every negotiable instrument is presumed to have been drawn and accepted for consideration. In the case of K. N. Beena v Muniyappan, AIR 2001 SC 2895, it was observed as follows:
"Thus in complaints under Section 138, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable. However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This Court in the case of Hiten P. Dalal v Bratindranath Banerjee has also taken an identical view."
15. The Hon'ble Supreme Court, in the case of Hiten P. Dalal v Bratindranath Banerjee (AIR 2001 SC 3897), observed as follows:
"Because both Sections 138 and 139 require that the Court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras v A. Vaidyanatha Iyer, (AIR 1958 SC
61), it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused (ibid)."
16. Also, in the case of K. Bhaskaran v Sankaran Vaidhyan Balan 1999 Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.01.24 16:17:04 +0530 CC No.8477/2021 Safe Towers Pvt.Ltd. vs. D N Bhagat Page No.12 (4) RCR (Criminal) 309, it has been held by the Hon'ble Supreme Court as under:
"As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability."
17. Further, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of "preponderance of probabilities". In Rangappa v Srimohan (2010) 11 SCC 441, the Hon'ble Supreme Court has observed:
"Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
18. Thus, as laid down in catena of decisions, it is an established law that onus lies upon the accused to rebut the presumption and to establish that the cheque in question was not given in respect of any debt or liability, with the standard of proof being preponderance of probabilities. Therefore, it becomes critical to examine whether the explanation of the accused coupled with the evidence on record is sufficient to dislodge the presumptions envisaged by Sections 118 and 139 of the NI Act.
19. In the present case, the accused has admitted being in business with the complainant and receiving supply of raw material weighing 42575 Kg and delivering product weighing 35980 kg as per his reply to the legal demand notice. Further, again Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.01.24 16:17:08 +0530 CC No.8477/2021 Safe Towers Pvt.Ltd. vs. D N Bhagat Page No.13 in his statement U/S 313 Cr. P.C as well as during his cross examination, accused did not deny the fact that against the coils / raw material weighing 42575 kgs, he has delivered the pipes having weight of 35980 Kg only and thus, the balance was of 6595 Kg. However, the accused has disputed his liability by claiming that the remaining material of 6595 Kg was waste material and the complainant did not demand the same from him. Rather, he approached the complainant for collection of his material but the complainant never got it collected. To controvert this defence of the accused, the complainant has placed on record several email communications exchanged between the parties from 05.07.2021 to 14.07.2021 i.e EX. CW1/H (Colly), vide which the complainant has demanded raw material or alternatively, it's cost from the accused. Though the accused stated during his cross examination that he cannot say if he has received these email communications from the complainant, however, the accused has admitted that [email protected] is his e mail ID and all the above mentioned email communication have been sent to this e mail ID, thus, the defence of the accused regarding non receiving of requests from the complainant side for return of remaining raw material is not tenable. Though the accused has stated that now he is not using this email id, however, from [email protected], one email has been sent to the Director of the complainant as well as the AR for the complainant requesting for factory rent of Rs.
3,50,000/ otherwise, stating that he (accused) will be bound to sell the material in scrap to recover the rent on 17.08.2021, which establishes that the accused was using this email id at the relevant point of time. Thus, the accused has failed to establish that the complainant never demanded material from him and he was willing to return the same. Further, such email communication made by the accused also suggests that the material must have got good value, if from sale proceeds of the same, the accused could realize the amount of Rs. 3,50,000/. The accused has sent this email Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2023.01.24 16:17:12 +0530 CC No.8477/2021 Safe Towers Pvt.Ltd. vs. D N Bhagat Page No.14 communication on 17.08.2021, pursuant to email communication made by the complainant on 16.08.2021, sharing the debit note EX. CW1/B with the accused, thus, it is also established that the accused has received the debit note from the complainant otherwise the accused must have responded to the complainant stating that he has not received any such debit note. Thus, it is established that the complainant demanded return of his material several times and alternatively, it's cost from the accused and also shared debit note with him, however, the accused did not return the same.
20. The accused has also tried to dispute his liability by claiming that the material was waste material and did not have value of Rs. 4,53,358/. As per the debit note dated 13.08.2021 EX. CW1/B, filed by complainant the value of the material was Rs. 3,84,625.50 and it became Rs. 4,53,858/ after adding GST of Rs. 69,232.59/. To establish this defence of the accused, Ld. Counsel for accused has put question to CW1 during his cross examination about the price of wastage material and also question regarding the percentage of wastage material in making pipes and CW1 responded that there is generally 5% wastage in one sheet while making pipes and the price of waste material varies from Rs 25/ to Rs 40/ & it depends upon the rate of material in the market. However, he stated that regarding the transactions in question, they had given MS plates to the accused and there is no wastage in such plates as these plates are available in particular size. Thereafter, to dispute this fact Ld. Counsel for accused has not asked any further question to CW1. Further, except the bare averments of the accused, no other evidence has been lead by the accused to establish that the remaining material was waste material or there was any specific percentage of scrap / waste in making pipes from MS Plates, thus, the accused has failed to establish his defence that the value of the material was not equal to the amount of the cheque or that it was waste material. Had that been the case, the Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.01.24 16:17:16 +0530 CC No.8477/2021 Safe Towers Pvt.Ltd. vs. D N Bhagat Page No.15 accused would have at least given such response to the complainant through e mail as it is established that the parties were communicating with each other through emails and the accused himself stated that it will sell the material of the complainant on non payment of his factory rent of Rs. 3,50,000/ vide email communication dated 17.08.2021 which also suggests that the remaining material had good value. Further, in reply to his legal demand notice, the accused has not taken such defence, that the material was waste material and has no value rather he has come up with entirely different defence, that his factory's rent was not paid by the complainant as per the promise of his agent and the complainant also did not provide 100 tones of job work to the accused for next 6 months despite assurance of the complainant regarding the same, when the accused made big investments in the machines and further stated that he gave stop payment instructions to the bank authorities when the agent of the complainant used filthy words and threatened the accused to file false case against him. However, the accused has not stated these facts during trial. The accused has also stated in his statement U/S 313 CrPC that he has filed police complaint against the complainant company as it has committed fraud with him. However, no such complaint has been placed on record. In reply to the legal demand notice, the accused has time and again stated that he himself asked the complainant to collect his remaining material several times, but the complainant did not collect the same. It is pertinent to point out that similar deposition has also been made before this court by the accused, however, accused has failed to produce any communication made by him with the complainant in this regard, whereas the complainant has filed several communications showing that he demanded the remaining material from the accused time and again and the e mail sent by the accused to the complainant on 17.08.2021 shows that the accused did not agree to return the material, citing that the complainant is supposed to pay him factory rent of Rs. 3,50,000/ to him failing Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2023.01.24 16:17:21 +0530 CC No.8477/2021 Safe Towers Pvt.Ltd. vs. D N Bhagat Page No.16 which he will be bound to sell the material of the complainant in scrap. Thus, the accused has failed to prove that the material was waste material and did not have value of Rs. 4,53,358/.
21. Another defence taken by the accused that the cheque in question was given as security against the raw material supplied by the complainant and the same has been misused by the complainant by filling its particulars. CW1 during his cross examination has admitted that the accused has given his blank signed cheque in question as security to the complainant company, however, on this point it is relevant to refer to the judgment of the Hon'ble High Court of Delhi in case titled as Suresh Chandra Goyal v. Amit Singhal (CRL. L.P 706/2014) which stated as follows:
"...28. There is no magic in the word "security cheque", such that, the moment the accused claims that the dishonoured cheque (in respect whereof a complaint under section 138 of the Act is preferred) was given as a "security cheque", the Magistrate would acquit the accused. The expression "security cheque" is not a statutorily defined expression in the NI Act. The NI Act does not per se carve out an exception in respect of a 'security cheque' to say that a complaint in respect of such a cheque would not be maintainable. There can be mirade situations in which the cheque issued by the accused may be called as security cheque, or may have been issued by way of a security, i.e to provide an assurance or comfort to the drawee, that in case of failure of the primary consideration on the due date, or on the happening (or not happening) of a contingency, the security may be enforced. While in some situations, the dishonour of such a cheque may attract the penal provisions contain in section 138 of the Act, in others it may not..."
22. Thus, when the liability of the accused is established on record, the defence that the cheque in question has been given as security cannot come to the aid of the accused. The accused has also tried to dispute his liability by claiming that he did not fill the particulars in the cheques in question. It is not in dispute that the accused has signed the cheques in question and has given the cheque in question to Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2023.01.24 16:17:25 +0530 CC No.8477/2021 Safe Towers Pvt.Ltd. vs. D N Bhagat Page No.17 the director of the complainant company. As discussed above, the liability of the accused has been ascertained on record, thus, even if relying upon the version of the accused, it is believed that the contents of the cheque have been filled by the complainant, the said fact cannot extend any help to accused as the liability of accused has been assessed on the record. So, the complainant was having authority to fill and present said Cheque for encashment as, when any person issues duly signed blank Cheque to another person, there is implied consent on his behalf, whereby, he gives authority to payee/holder that he may complete Cheque in all respect and present same for payment, as per provisions of Section 20 of Act. Similar position has also been laid down in cases titled as General Auto Sales v Vijaylakshmi 2005(1) CCC 654 (Kerala), Purushottam v Manohar K. Deshmukh & Anr. 2007 STPL(DC) 988(BOM), Moideen v Johny 2006 STPL(DC) 700(KER), Prabhakar Xembhu v Surendra V. Pai and Another 2006 STPL(DC) 660 (BOM) and Sripati Singh v The State of Jharkhand & Anr in Criminal Appeal No. 12691270 of 2021 SLP (Criminal) No. 252253/2020.
23. In the present complaint, Ld. Counsel for accused has also objected to the maintainability of this complaint on the ground that the AR has no authority to file this complaint, however, I find no merits in this submission as the accused himself has admitted during his statement U/S 313 Cr. PC. that Mr. Kamal Sharma is Authorized representative of the complainant company vide it's board of resolution dated 21.10.2021 EX. CW1/A and he has also admitted that he handed over the cheque in question to the Mr. Satender Kumar who is director of complainant company and Mr. Satender Kumar is also signatory of this board of resolution EX.CW1/A dated 21.10.2021. To dispute his authority, Ld. Counsel for accused has given suggestion to CW1 during his cross examination that he has no authority to Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.01.24 16:17:29 +0530 CC No.8477/2021 Safe Towers Pvt.Ltd. vs. D N Bhagat Page No.18 pursue this complaint which has been denied by CW1. Though, CW1 admitted that he has not filed any document on record, which has been signed by both the directors of Complainant company, however, nonfiling of such document becomes irrelevant in view of the admission of the accused that he has done entire dealing and communication with one of the Director of complainant company namely Mr. Satender and he had given the cheque in question to the said Director. Thus, the AR for the complainant Mr. Kamal Sharma, has satisfied the criteria prescribed by Section 142 of NI Act to establish his authority for filing this complaint, as per which the complaint has to be made in writing by manager/authorized person on behalf of the payee / holder in due course i.e. Mr. Satender Kumar, who is one of the director of the complainant company. On this point reference can also be drawn from Eita India Pvt. Ltd. vs. NCT of Delhi (2003) 114 Comp Cas.32(Del.), wherein it was held that "... the conspectus of judicial opinion establishes a principle that complaint in respect of the offence punishable U/s 138 of the Act need not be personally filed by the payer or holder in due course. It can be filed by a natural person to act as defacto complainant..."
24. As per Section 142 of the NI Act, a manager or any other person authorized by the complaint can represent it during the course of legal proceedings before the court and file a complaint. Reference drawn from Salar Solvent Extractions Ltd. v South India Viscos Ltd. (1994) 3 Crimes 295 (Madras). Since, in the present case the complaint has been filed by the employee of the complainant company who has been authorized by director of the complainant company namely Satender Kumar Sharma, to pursue it and the accused had done entire dealing/communication with the same director and even handed over the cheque in question to him, thus, it cannot be said that Mr. Kamal Dudani is not authorized to pursue this complaint on behalf of Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.01.24 16:17:35 +0530 CC No.8477/2021 Safe Towers Pvt.Ltd. vs. D N Bhagat Page No.19 complainant company.
25. In the present case, in view of the discussion made above, it becomes clear that the accused has failed to prove his defences. Further, had the version of the accused been true that he had no outstanding liability towards the complainant, then, he must have taken some action seeking return of his security cheque from the complainant. However, the accused has not taken any such action and he has not filed any complaint against the complainant to prevent misuse of his cheque. He has also not made any written communication with the complainant seeking return of his cheques. Since, the accused has not taken any action against the complainant for return of the cheque, this causes dubiety to lurk around the story of the defence and adverse inference can safely be drawn against the accused who has otherwise, failed to adduce any cogent evidence to prove his defence. Failure, of the accused to prevent such misuse, further renders the defence evidence weak.
26. The statement of CW1 Sh. Kamal Sharma, which is quite natural and seems to be trustworthy and corroborated by the documentary evidence lead by the complainant, shows that the cheque in question was given by accused to complainant in discharge of his liability for payment for the remaining material. Section 139 of The Negotiable Instruments Act, 1881 also carves out a presumption in favour of the drawee that the cheque was issued to him in discharge of a debt or other liability of a legally enforceable nature. Also, the said provision must be read along with the Section 118 of the same enactment which spells out another presumption in favour of the drawee that every negotiable instrument was drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration. In view of the testimony of complainant and presumption of law existing in favor of the Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2023.01.24 16:17:39 +0530 CC No.8477/2021 Safe Towers Pvt.Ltd. vs. D N Bhagat Page No.20 complainant, the onus to prove that the accused had no outstanding liability as alleged by the complainant rests on accused as per Section 103 of the Indian Evidence Act, 1872 which enunciates that the person who asserts a fact must prove the same unless the law otherwise provides. However, as discussed above, the accused has failed to discharge his burden as he has not lead any cogent evidence to support his defence.
27. In view of the discussion made above, since all the defences taken by the accused stand beseeched and the complainant's version stands established on the basis of documents produced, along with the statutory presumptions in the NI act under section 139, all the elements of Section 138 NI Act stands assembled.
28. Ratio: Since in the instant case, the accused has failed to lead any convincing evidence to aid him in discharge of his onus and the presumption of law operates in favour of existence of debt or liability, having considered the entire evidence, I am of the opinion that the complainant has successfully proved all the essential ingredients of Section 138 of the Act. Accordingly, accused D N Bhagat Sole Proprietor of M/S A.B. Engineering Works is found guilty of offence U/S 138 NI Act. Let he be heard on point of sentence on another date.
29. Let the copy of this judgment be given to the convict free of cost and the same be also uploaded on CIS and Layers forthwith.
Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2023.01.24 16:17:43 +0530 Announced in the open court on (Aishwarya Sharma) this day i.e.24.01.2023 MM (N.I. ACT)Digital Court02/SED, Saket Courts, New Delhi