Delhi District Court
M/S Nathu Mal Ahuja & Sons vs . on 12 August, 2012
IN THE COURT OF SHRI ARUL VARMA : MM
(N.I.ACT - 1) : PATIALA HOUSE COURTS : NEW DELHI
Case Number. : 2295/1
Date of Commencement of Offence. : 30.09.2004
Date of Institution of Present Case. : 16.10.2004
M/s Nathu Mal Ahuja & Sons
11/3, Badarpur, Mathura Road
New Delhi
Through: Shri Ashish Ahuja Partner ... Complainant
Vs.
Shri Sanjeev Gupta
Proprietor
M/s Laxmi Petrolium
A41, Old Double Story
Amar Colony, Lajpat NagarIV
New Delhi
Also at:
C66, Dayanand Colony
Lajpat NagarIV
New Delhi ... Accused
Case No. 2295/1 Page No. 1 of 17
Offence Complained Of. : U/s 138 NI Act
Plea of the Accused. : Not Guilty
Arguments Heard On. : 26.07.2013
Final Order. : Acquittal
Date of Judgment. : 12.08.2013
- :: JUDGMENT ::
1.Vide this judgment, I shall dispose off the present complaint filed by the complainant u/s 138 Negotiable Instrument Act, 1881 (hereinafter referred to as the "NI Act").
2. Brief facts as averred in the present complaint are that the complaint is filed through Shri Ashish Ahuja, Partner of M/s Nathumal Ahuja & Sons and in the ordinary course of business, the accused had purchased diesel from the complainant firm against the following bills:
Case No. 2295/1 Page No. 2 of 17Sl. No. Bill No. Date Amount in Rs. 01. 2236 and 2237 15.06.04 7,18,463.52 02. 2351 30.06.04 52,420.24 03. 2196 31.05.04 6,41,764.80 04. 2172 & 2173 31.05.04 26,000 + 12,160
That the aforesaid purchases were made on the specific assurance that the payment will be made through cheques on believing the said representation, the goods were supplied to the accused persons, and in order to discharge the debt and liability the accused issued the following cheques drawn on Syndicate Bank, DTC, Okhla DepotI, Srinivaspuri Depot, New Delhi with the assurance that the same would be encashed on its presentation.
Sl. No. Cheque No. Date Amount in Rs. 01. 894605 12.06.04 38,262/ 02. 894610 13.06.04 38,262/
3. That the said cheques on presentation, got dishonoured due to the reason "funds insufficient". The complainant thereafter issued a legal demand notice dated 15.09.2004 but despite service of the same, no payment Case No. 2295/1 Page No. 3 of 17 has been made against the said cheques to the complainant. Hence, the complainant has filed the present complaint to prosecute the accused u/s 138 NI Act.
4. The complaint was filed within limitation on 14.10.2004 pursuant to which summons were issued against the accused, consequent thereupon the accused entered appearance and was admitted to bail on 14.10.2005. Thereafter, for a period of around 2 years the matter did not proceed ahead on account of assurance given by the accused to settle the matter. Finally on 20.08.07, notice was framed against the accused to which the accused pleaded not guilty and claimed trial. Thereafter, the matter was listed for evidence.
5. The complainant led its evidence by examining CW1 Sh. Ashish Ahuja, partner of M/s Nathumal Ahuja & Sons and has relied upon the following exhibited documents namely: authority letter in his favour Ex. CW 1/A, copies of bills Ex. CW 1/B (colly), copies of cheques Ex. CW 1/C (colly), cheques return memos as Case No. 2295/1 Page No. 4 of 17 Ex CW1/D (colly), legal notice Ex. CW 1/E, relevant postal receipt and AD card Ex. CW 1/F (colly) and copy of complaint Ex. CW 1/G. In his evidence by way of affidavit Ex CW1/X, complainant has reiterated the facts as mentioned in the complaint. Thereafter, on 08.12.09 matter was again compromised between the parties for a sum of Rs. 8,85,700/ to be paid in installments of Rs.50,000/ each. But the accused did not adhere to his commitment. Thereafter, the complainant witness was crossexamined by the Counsel of the accused. The complainant's evidence was closed & statement of the accused u/s 313 CrPC was recorded. The accused did not lead any evidence in his defence.
6. Coming to the point regarding issuance of cheques for discharge of legal debt or liability, it was asserted by Ld. Counsel for the complainant that the cheques in question were given against the bills Ex. CW 1/B, for diesel supplied to the accused. Ld. Counsel contended that vide undertaking dated 08.12.2009, the accused had admitted his liability, and therefore he should be convicted.
Case No. 2295/1 Page No. 5 of 177. There are two presumptions of law as mandated by the Negotiable Instruments Act. According to Section 118
(a) it shall be presumed that every negotiable instrument was made or drawn for consideration. By virtue of this clause, the Court is obliged to presume that the promissory note was made for consideration or until the contrary is proved.
8. According to Section 139 of NI Act "it shall be presumed, unless the contrary is proved that the holder of a cheque received the cheque for discharge in whole or in part, of any debt or other liability." Under Section 139 NI Act there is a legal presumption that the cheque was issued for discharging an antecedent liability and that presumption can be rebutted only by the person who draw the cheque. This presumption can be rebutted by the accused by adducing evidence. So the burden of proof is on the accused.
9. In Hiten P. Dalal Vs. Bratindranath Banerjee AIR 2010 SC 1898 it was held as under: Case No. 2295/1 Page No. 6 of 17 "The words 'unless the contrary is proved' which occur in this provision (Section 139) make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before it the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted......"
10. Ld. Counsel for the accused sought to refute the aforesaid mandatory presumptions operating against him by averring that the complainant Sh. Ashish Ahuja did not have the requisite authority to initiate proceedings and that no documents were filed on record which could prove the factum of supply of diesel to the accused.
Case No. 2295/1 Page No. 7 of 1711. To reinforce his first argument, Counsel for the accused submitted that a perusal of the evidence of the complainant would reveal that no document has been filed evincing the factum of partnership. There is no proof on record to show that the complainant Ashish Ahuja was a partner in M/s Nathumal and Sons, or that he was authorized to send a legal demand notice u/s 138 of the NI Act or to initiate proceedings thereunder. This, according to the Counsel, is explicit from the following statement made by the complainant in his cross examination on 15.12.2011: "It is correct to suggest that before 14.10.2004 I have no power of attorney in my favour to initiate or pursue the complaint against Sanjeev Gupta". Ld. Counsel for the accused submitted that Ex. CW 1/A viz. authority letter should have borne the signatures of Ashish Ahuja also. Ld. Counsel contended that the complainant did not have the personal knowledge of the transaction between the parties and as such, he could not be a witness. Reliance was placed on 'Janki Vashdeo Bhojwani and Anr. vs. Indusind Bank Ltd. and others 2005 (2) CCC 61 (HC)', Vilas Sawant vs Mayuri Shah 2011 (2). RCR (Criminal) and Mahendra Kumar vs Armstrong 2005 [2] JCC [NI] 173 Case No. 2295/1 Page No. 8 of 17
12. It was further contended by Ld. Counsel for the accused that no receipts evincing the factum of supply of diesel have been filed by the complainant despite the statement made by the complainant witness during his cross examination on 15.12.2011: "It is correct that in general business practice when we supply diesel to the customers we obtain receipts for the supply of the same. It is correct that on supply of diesel to Mr. Sanjeev Gupta, we did obtain receipts. I will have to check my records for the said receipts as the case is very old. However, if the same are available, I shall produce the same in Court". It was next contended that even a perusal of bills Ex. CW 1/B (colly) would reveal that they do not bear the signatures of the person who issued them or of the recipient. Thus, the authenticity of the bills is doubtful. Ld. Counsel for the accused stated that no ledger account was filed nor any other proof of supply of diesel to the accused. Reliance was placed on 'M.S. Narayana Menon vs. State of Kerala 2006 (3) RCR (Criminal)'.
13. During the course of arguments, it was also contended by Ld. Counsel for the accused that mere acknowledgment of a liability during the course of proceedings would not Case No. 2295/1 Page No. 9 of 17 tantamount to an admission of guilt on the part of the accused. Reliance was placed on 'Gajanan Narain Joshi vs. Haridas Bikulal Jobanputra 2011 (2) CCC 473 (Bombay)'. This Court concurs with this submission of Ld. Counsel for the accused. Reliance can be placed on the following extracts of the aforementioned judgment:
"18. Now after considering in proper perspective the matters stated in the pursis given by the petitioner and even after taking most charitable view of the same showing his admission / willingness to pay cheque amount in view of the settlement being arrived, still it is difficult to accept the submission of learned counsel of the same amounting to admission of guilt the petitioner / accused has no right to contest the said cases on merits after filing of such a pursis. The same is obvious as construing the same as an admission of guilt, the same should have disclosed a clear cut admission of commission of offence under Section 138 of the Negotiable Instruments Act or admission of all Case No. 2295/1 Page No. 10 of 17 the facts constituting commission of such offences on his part.
19.......... At the cost of repetition it is prompted to record that agreement to pay cheque amount would never be construed as an admission of guilt of commission of offence under Section 138 of the Negotiable Instruments Act."
14. Further, a perusal of the order sheet dated 29.01.07 would reveal that one Dharamraj Ahuja, partner of the complainant entered appearance. A perusal of Ex CW1/A would reveal that he is the father of SH Ashish Ahuja. Moreover, a perusal of Ex CW1/A would reveal that SH Ashish Ahuja was duly authorised by the complainant firm to prosecute the present complaint. There is no reason to disbelieve this authority in his favour. Reliance of the accused on Janki Vashdeo, Vilas Sawant and Mahendra Kumar (supra) is misplaced in as much as even if the cheque in question is drawn in the name of the partnership firm, any partner can file a complaint us/ 138 NI Act provided he has been duly authorized so. In the present Ex. CW 1/A is sufficient proof of such authorization.
Case No. 2295/1 Page No. 11 of 1715. The next contention was with respect to non production of relevant books of accounts and other proof of supply of diesel to the accused. Reliance was placed on 'Ms. Narayanan Menon' (supra). In that case the complainant deliberately did not produce the books of accounts. Moreover, the complainant therein did not maintain the statutory book of accounts and other registers in terms of the bye laws of Cochin Stock Exchange. In the present case also the complainant did not produce the books of accounts despite being given sufficient opportunities. Neither did the complainant produce the receipts evincing the factum of supply of diesel to the accused. It would also be pertinent to peruse the following statements made by the complainant during his cross examination on 06.09.2012: 'My firm maintains books of accounts. It is correct that I have not filed the relevant ledger account, however, I can file it as and when directed. Whenever purchaser are made in the pump, receipts in respect thereof are duly prepared (Vol. Three copies are prepared). It is correct that I have not filed any proof of supplying diesel. (Vol. I will have to look for them).' Despite the above claims of the complainant, no books of Case No. 2295/1 Page No. 12 of 17 account, ledger or receipt was filed by the complainant.
16. Further, the bills Ex. CW 1/B (colly) purporting to be the proof of supply of diesel have not been prepared in the ordinary course of business as mandated by section 34 of the Indian Evidence Act, 1872. This fact has been admitted by the complainant during his cross examination on 06.09.2012 wherein he has averred: "it is correct that Ex. CW 1/B (colly) are unsigned. (Vol. However each of these bills contain the receipt nos. of the diesel supplied to the accused). It is correct that Ex. CW 1/B (colly) have not been signed by the accused also."
17. Further, a perusal of his statement would also reveal that the cheques in question were not filled in the presence of the complainant. Still further, there is no proof on record which would evince the factum of execution of any agreement between the complainant and the accused with respect to supply of diesel. This is evident from the following statement made by the complainant during his cross examination: "It is correct that no agreement was entered into between me and the accused for the supply of diesel"
and "the accused did not place any written order for the Case No. 2295/1 Page No. 13 of 17 supply of diesel". The complainant witness was not even aware of how his own affidavit came to be executed. This is apparent from the following statement made by him during his cross examination on 17.01.2012: "I do not remember if the Ex. CW 1/X was prepared in my presence or not as the same was prepared some time back. I do not remember where the affidavit was attested. I do not remember if I had signed in any register in any office of the oath commissioner". Thus, on several counts the accused has succeeded in rebutting the mandatory presumptions operating against him. Non production of books of accounts and receipts with respect to supply of diesel coupled with the fact that the evidence brought on record also lends credence to the assertion that the cheques in question were indeed issued for security purposes.
18. The burden was on the accused to disprove the presumptions operating against him under the NI Act, a burden which he has successfully discharged. Thus, the complainant has not been able to prove that the cheques were issued for discharge of legal debt or other liability.
Case No. 2295/1 Page No. 14 of 1719. The complainant further contended that in spite of giving of statutory notice u/s 138 NI Act, the accused failed to pay the amount of cheques in question. The accused, on the other hand, vehemently denied the receipt of any legal notice. In his statement u/s 313 CrPC he avowed that he never received the mandatory legal demand notice as stipulated by Section 138 NI Act.
20. The complainant placed reliance on legal notice dated 15.09.2004 alongwith postal receipt and AD card i.e. Ex. CW 1/F (colly) wherein the two addresses of the accused were given as: (i) A41, Old Double Storey, Amar Colony, Lajpat Nagar IV, New Delhi and (ii) C66, Dayanand Colony, Lajpat Nagar IV, New Delhi. A perusal of the notice framed against the accused on 20.08.2007 would reveal that the accused had spelt out the first address before the Court. A perusal of the vakalatnama of the Counsel of the accused and of the bail bond furnished by him reveals the second address of the accused.
21. At this juncture, it would be pertinent to refer to Section 27 of the General Clauses Act which is extracted as below: Case No. 2295/1 Page No. 15 of 17 "27. Meaning of service by post. Where any Central Act or Regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression serve or either of the expressions give or send or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre paying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post."
22. Thus, as there has been absolutely no rebuttal of this presumption by the accused, it is deemed that the legal demand notice was duly served upon him.
23. FINAL ORDER: In view of the foregoing observations and in view of the evidence, documents put forth and arguments of Case No. 2295/1 Page No. 16 of 17 both the parties, the accused is hereby acquitted for the offence punishable u/s 138 NI Act.
Announced in the open Court on 12.08.2013 (ARUL VARMA) MM (NI ACT1) PATIALA HOUSE COURTS NEW DELHI Case No. 2295/1 Page No. 17 of 17