Delhi District Court
13. In Rangappa vs Sri Mohan (2010)11 Scc 441, It Was ... on 12 May, 2022
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IN THE COURT OF SH. VIKAS MADAAN,
METROPOLITAN MAGISTRATE (NI ACT), NORTH-WEST,
ROHINI, DELHI
CNR No. DLNW020086282015
CC No. 16144-2016
Atul Bhatia s/o Sh. Satpal Bhatia
R/o 86, Dipni Apartment, Road No. 44,
Pitampura, Delhi-110034
............Complainant
Versus
M/s HariOm Electronics
F-18/1, Sector 15, Rohini
Delhi-110089
............. Accused no. 1
Sunil Chaudhary
Prop. Of M/s HariOm Electronics
C-9/35, 3rd Floor, Sector-15,
Rohini, Delhi-110089
............Accused no. 2
JUDGMENT
(1) Name of the complainant, : Atul Bhatia s/o Sh. Satpal Bhatia Digitally signed CC No. 16144/2016 by VIKAS 1 of 15 VIKAS MADAAN MADAAN Date:
2022.05.12 16:06:25 +0530 2 parentage and address : R/o 86, Dipni Apartment, Road No. 44, Pitampura, Delhi-110034 (2) Name of accused : 1.M/s HariOm Electronics
2. Sunil Chaudhary (3) Offence complained of or proved : 138 N.I. Act (4) Plea of accused : Pleaded not guilty (5) Date of institution of case : 07.03.2015 (6) Date of reserve of order : 04.04.2022 (7) Date of Final Order : 12.05.2022 (8) Final Order : Acquittal
1. Vide this judgment I shall dispose of the complaint filed by the complainant under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'Act').
2. Brief facts relevant for the decision of the case are as under: -
The present complaint has been filed by the complainant, Atul Bhatia against the accused, M/s Hariom Electronics and Sunil Chaudhary under section 138 of the Act. The substance of allegations and assertions of the complainant is that complainant was working in accused's firm from 10.02.2014 to 15.09.2014 on a salary and commission basis. That his salary was Rs. 20,000/- per month excluding the conveyance and other miscellaneous expenses.
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That accused further provide commission to the complainant on the tender/work which was obtained by him. That the services of the complainant were terminated by the accused and Rs. 1,00,000/- were paid by the accused to the complainant through cheque. That towards further/balance payment accused issued a cheque bearing no. 291831 dated 20.12.2014 for an amount of Rs. 1,30,000/- drawn on Punjab National Bank, Sector-15, Rohini, Delhi-110085 (hereinafter referred to as the "cheque in question") with the assurance that the same be dishonoured upon presentment. Upon presentment, cheque in question got dishonoured with remark "Funds Insufficient" on dated 13.01.2015 and thereupon, a legal demand notice dated 24.01.2015 was sent to the accused through courier which was duly served upon the accused. It is the case of the complainant that despite service/receipt of the notice, accused failed to make the payment to the complainant within stipulated period and hence, the present complaint.
3. On finding a prima facie case against the accused, he was summoned to face trial. The accused entered appearance, copy of complaint as well as of documents were supplied to the accused. Subsequent to that, notice u/s. 251 Code of Criminal Procedure (hereinafter referred to as 'Cr.P.C') for offence u/s. 138 of the Act was served and the accused pleaded not guilty and claimed trial. In his plea of defence, accused Sunil Chaudhary (also on behalf of accused no. 1) admitted his signatures on cheque in question. He further stated that the contents of the cheque in question were also filled by him. He further stated that the cheque in question was Digitally signed by VIKAS VIKAS MADAAN CC No. 16144/2016 MADAAN Date: 3 of 15 2022.05.12 16:06:49 +0530 4 given by him to the complainant as advanced commission for supply of work to him but complainant failed to provide him any work and thus, no legal liability existed towards the cheque in question. He further admitted receiving of legal demand notice.
Evidence of the complainant
4. Complainant examined only himself as CW1. He reiterated the facts of his complaint in his evidence by way of affidavit which is EX. CW- 1/A. He relied upon documents Ex.CW1/1 to Ex. CW1/7 to prove his case against the accused beyond reasonable doubt.
Ex. CW1/1: Original Cheque dated 20.12.2014;
Ex. CW1/2: Pay in slip;
Ex. CW1/3: Cheque Returning memo dated 13.01.2015;
Ex.CW1/4: Legal Notice dated 24.01.2015;
Ex. CW1/5: Original Courier receipt;
Ex. CW1/6: Courier receipt;
Ex. CW1/7: Reply to legal notice.
5. Complainant was subjected to cross-examination by the Ld. Counsel for the accused. Thereafter complainant's evidence was closed vide order dated 02.07.2016 at the request of the complainant.
6. In order to personally explain the incriminating circumstances appearing in evidence against it, the statement of the accused no. 2 (also on behalf of accused no. 1) namely Sunil Chaudhary under section 281 r/w section 313 Cr.P.C was recorded without oath on 29.08.2016 wherein he denied all the incriminating evidences appearing against him. In reply, the accused stated that the complainant was not working with him on salary rather he was working only as a commission agent.
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He further stated that complainant had asked him to pay some amount as advance for doing some work and in this regard, he had given two cheques of Rs. 1,00,000/- and Rs. 1,30,000/-. Cheque for amount Rs. 1,00,000/- was honored but he asked the complainant to return the second cheque as complainant failed to provide him requisite work. He further stated that cheque in question bore his signature and its contents were also filed by him. He further stated that he had received the legal demand notice and he also gave reply to same. He denied having any liability towards the complainant. He further wished to lead defence evidence.
Evidence of the Accused
7. In his defense evidence, accused examined himself DW-1. He further examined Sh. Rajkumar as DW-2. DW-2 further brough documentary evidence vide Ex. DW-2/1(OSR) and Mark DW/A(colly). Further, Sh. Sanjay Kumar was also examined as DW-3. DW-3 further brought on record documentary evidence vide Ex. DW-3/1(OSR). All the witnesses were further subjected to cross-examination by the Ld. counsel for the complainant.
8. Thereafter, final arguments were addressed by both the counsel. I have heard the contention of both the Ld. Counsel appearing on behalf of complaint and accused and have given my thoughtful consideration to the material appearing on record.
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INGRIEDIENTS OF OFFENCE AND DISCUSSION-
9. Before dwelling into the facts of the present case, it would be apposite to discuss the legal standards required to be met by both sides. In order to establish the offence under Section 138 of NI Act, the prosecution must fulfil all the essential ingredients of the offence. Perusal of the bare provision reveals the following necessary ingredients of the offence: -
First Ingredient: The cheque was drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;
Second Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability;
Third Ingredient: The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;
Fourth Ingredient: A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in writing given to the drawer within thirty days of the receipt of information of the dishonour of cheque from the bank;
Fifth Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice.
10. The accused can only be held guilty of the offence under Section 138 NI Act if the above-mentioned ingredients are proved by the complainant co-extensively.
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11. On analysis of the facts and legal position stated above, the Court finds the parties to be at variance on one of the primary issues i.e., whether the cheque in question was issued by the accused in favour of the complainant in order to discharge her legal liability.
A. EXISTENCE OF LEGALLY ENFORCEABLE DEBT OR LIABILITY
12. It has been admitted by the accused that the cheque in question bore his signature. Once these foundational facts are admitted and a factual base is established, presumption of cheque having been issued in discharge of legally recoverable debt and drawn for lawful consideration arises by virtue of Section 118 (a) and Section 139 of N. I. Act. It is a mandatory presumption though the accused is entitled to rebut the said presumption. In a catena of judgements, it has been laid down by the Hon'ble Supreme Court that such presumption in favour of the complainant cannot be rebutted by a mere plausible explanation but more than a plausible explanation is required.
13. In Rangappa Vs Sri Mohan (2010)11 SCC 441, it was observed that Section 139 of N.I. Act is stated to be an example of a reverse onus clause which is in tune with the legislator intend of improving the credibility of negotiable instruments. Section 138 of N. I. Act provides for speedy remedy in a criminal forum, in relation to dishonour of cheque.
14. In case of Kumar Exports vs. Sharma Carpets, (2009) 2 SCC 513, the Hon'ble Supreme Court had held:
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'The accused under Section 138 NI Act has two options. He can either show that the consideration and debt did not exit or that under the particular circumstances of the case, the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumption, an accused is not expected to prove his defence beyond reasonable doubt as it is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which his probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or there non-existence was so probably that a prudent man under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question, was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon the circumstantial evidence and if the circumstances so relied upon are so compelling, the burden may likewise shift again on the complainant. The accused may CC No. 16144/2016 Digitally signed 8 of 15 by VIKAS MADAAN VIKAS Date:
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also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arises under Section 118 and 139 of NI Act''.
15. According to the scheme of N. I. Act, on proof of foundational facts, a presumption arises as to the cheque having been issued in discharge of the legal liability and the burden is on the accused to rebut the said presumption. This clearly is an instance of the rule of "reverse onus" in action where it is incumbent on the accused to lead what can be called as "negative evidence". The evidence of a character, not to prove a fact affirmative, but to lead evidence to show non-existence of a liability. Keeping in view, this is a departure from the cardinal rule of "presumption of innocence" in favour of the accused, keeping in mind that the negative evidence is not easy to be led by its very nature. It is now clearly settled that the accused can reverse this presumption on a scale of preponderance of probabilities. Lack of legally enforceable debt in favour of the complainant need not be proved to the hilt beyond all reasonable doubts. Preponderance is superiority in weight. Preponderance of probabilities means more probable than not and superior in evidentiary weight than the opposite.
16. So far as the facts of liability is concerned, in view of mandatory presumption of law as discussed above, if any cheque has been produced by the complainant bearing the signatures of the accused, there cannot be any inherent lacuna in the existence of the liability. But then definitely, accused can point loop holes in the story of the complainant by impeaching the credit of the witness during his cross-
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examination. The accused can discharge his burden by demonstrating the preponderance of probabilities coming in its way.
17. In the present case, the complainant examined only himself as the sole complainant witness and to raise the presumption of cheque having been issued in discharge of legally recoverable debt and drawn for lawful consideration arising by virtue of Section 118 (a) and Section 139 of N. I. Act, the testimony of the complainant must be of such a character as to be believed as gospel truth. However, the presumptions raised under Section 118(b) and Section 139 NI Act are rebuttable presumptions. A reverse onus is cast on the accused, who has to establish a probable defence on the standard of preponderance of probabilities to prove that either there was no legally enforceable debt or other liability. In this case, the arguments raised by the Ld. counsel for the accused to rebut the presumption are discussed below:
a) Complainant was not the employee of the accused
18. Ld. Counsel for the accused argued that complainant was never an employee of the accused and he worked only as a commission agent and he used to procure work for the accused on commission basis. It is further stated that DW2 and DW3 categorically stated in their examination in chief that accused was only working as a commission agent with the accused. It is further stated that no document was produced by the complainant to prove that he was employed with the accused.
19. In the present case, perusal of testimony of DW2 and DW3 shows that accused was working as a commission agent for the accused. Here, it Digitally signed by VIKAS VIKAS MADAAN CC No. 16144/2016 MADAAN Date: 10 of 15 2022.05.12 16:09:24 +0530 11 would be prudent to refer to the judgment of Hon'ble Madras High Court titled as Focussed Corporate Services India Private Ltd., Vs Union of India 2011 LLR 989 wherein it was observed that "Merely because commission is paid to the employees, they do not cease to be employees and even commission agents can be said to be an employee in this connection. For this purpose, reference may be made to the judgment of the Supreme Court in Indian Banks Assn. v. Workmen of Syndicate Bank, reported in 2001 1 LLJ 1045 = (2001) 3 SCC 36. Further reference was also made to Canbank Financial Services Ltd v. RPFC reported in 1996 (3) LLJ (sppl) 1006. Ultimately, it is not the nomenclature which matters but the actual work done by the so-called Commission Agent alone matters." Similarly, section 182 of the Indian Contract Act, 1872(hereinafter referred to as 'Contract Act', for brevity) provides that an 'agent' is a person employed to do any act for another, or to represent another in dealings with third person. The person for whom such act is done, or who is so represented, is called the 'principal'. In the instant case, as it is not disputed that complainant used to procure the work for the accused, and thus it can be inferred that complainant was one of the employees of the accused. Thus, this contention of the accused that accused was not an employee of the accused is not tenable.
b) Cheque in question misused by the complainant
20. It is contended by the Ld. counsel that the cheque in question was given to the accused along with another cheque for an amount of Rs. 1,00,000/-. Both these cheques were given to the accused as a security for getting one new big project of NBCC with the stipulation that both Digitally signed VIKAS by VIKAS MADAAN CC No. 16144/2016 11 of 15 MADAAN Date: 2022.05.12 16:09:37 +0530 12 the cheques would be encashed only after getting written confirmation of assigning of project of NBCC. But the complainant had encashed one of the said cheques before getting confirmation of assigning of project of NBCC and the cheque in question was also presented without getting any confirmation of the project of NBCC. Thus, it is contended that the security cheque was misused by the complainant. It is contended by the Ld. counsel for the accused that no salary was ever paid to the accused as he was not his employee and it is further contended that in his complaint and affidavit by pre summoning evidence, complainant had stated that accounts were settled between him and accused for an amount of Rs. 2,30,000/- but in his cross- examination, complainant stated that the settled amount was Rs. 3,38,000/- thus, it is contended that there were material contradictions in the stand of the complainant. It is further argued that in his cross- examination dated 01.07.2016, the complainant stated that he settled his salary from May, 2014 to September, 2014 for Rs. 80,000/- whereas he again stated in his cross-examination dated 02.07.2016 that he received salary of the month Feb. 2014 of Rs. 10,000/-, in the month of March 2014 of Rs. 20,180/- and Rs. 7,500/- in the month of April 2014. Thus, contradictory stands were taken by the complainant.
21. In the present case, there were some transactions between the complainant and accused which were admitted by both the parties. Qua the cheque in question, it is contended by the accused that it was given for procuring an assignment and complainant failed to procure any such assignment. Further, DW2 and DW3 deposed on the same lines that complainant had failed to procure the project from NBCC. However, no Digitally signed CC No. 16144/2016 VIKAS by VIKAS MADAAN 12 of 15 MADAAN Date: 2022.05.12 16:09:49 +0530 13 suggestion was put to any of the defence witness qua this fact. Similarly, no such suggestions were put to the accused during his cross- examination. Thus, this testimony of the accused as well of the defence witnesses regarding non procurement of project from NBCC gone unchallenged and as such, the same is required to be accepted as true. Further, with regard to the payment which complainant alleged that same was received as a salary vide Ex. CW-1/12(OSR), it is pertinent to mention here that no fixed amount was paid after regular intervals to the complainant and as such, this court is of the view that the payment made which is shown in Ex. CW-1/12(OSR) cannot be termed as salary. It is further pertinent to mention that accused has proved on record that he had issued salary receipts to its salaried employees vide Mark DW/A(colly) and the same shown that a fixed amount was paid by the accused to its employees in regular intervals. But no such receipts were produced by the complainant in his favour. Consequently, this court is of the view that accused has raised a probable defence and able to rebut the presumption raised against him on the touch stone of preponderance of probabilities by showing that no salary was ever paid to the complainant and that complainant has failed to procure assignment from NBCC.
22. Thus, in view of the totality of the circumstance and the settled legal positions as discussed above, the case attempted to be built by the complainant, appears to be suffering from fatal infirmities so much so, it goes directly to the root of the case and shakes the very edifice on which the case of the complainant rests. It is also relevant to mention here that it is of paramount importance to demand evidence of Digitally signed by CC No. 16144/2016 VIKAS VIKAS MADAAN 13 of 15 MADAAN Date: 2022.05.12 16:10:03 +0530 14 unambiguous, impeccable and of unimpeachable in nature so as to entail criminal conviction of the accused and which the complainant has failed to bring.
23. In the case of 'Kulvinder Singh vs Kafeel Ahmad'', Crl L. P. 478 of 2011, decided on 04.01.2013, Hon'ble Delhi High Court has held that the basic principle in criminal law is that the guilt of the accused / respondent, must be proved beyond reasonable doubts and if there is any slightest doubt about the commission of an offence, then the benefit has to accrue to him.
24. At the same time, it is important to underscore the established canon of criminal law that in order to pass a conviction in a criminal case, the accused ''must be'' guilty and not merely ''may be'' guilty. The mental distance between ''may be'' guilty to ''must be'' guilty is a long one and must be travel not on surmises and conjectures, but by cogent evidence. In this case, after the accused successfully rebutted the presumption of consideration by raising a doubt on the very factum of the loan. The accused has clearly presented a case which is superior in way. And as per the settled law, this is all that what is required, as preponderance of probabilities is not a rigorous standard of proof, but only so much evidence as makes the court lean in, in favour of one side and not the other. Consequently, the benefit of doubt must go to the accused. The material on record does not suggest that the accused ''must be'' guilty whichever way one looks at it.
25. In view of the above discussions, the present case appears to be a fit case where benefit of doubt can be extended to the accused. Accordingly, in view of the above discussions, this court hold that the Digitally signed by VIKAS CC No. 16144/2016 VIKAS MADAAN 14 of 15 MADAAN Date:
2022.05.12 16:10:13 +0530 15 complainant has failed to prove his case. The accused has been able to rebut presumption under Section 118 and 139 NI Act arising in favour of the complainant.
26. In light of foregoing reasons, it is clear that accused M/s Hari Om Electronics and Sunil Chaudhary has succeeded in rebutting the presumption of legal liability and the complainant has failed to prove the same affirmatively. As a result, accused M/s Hari Om Electronics and Sunil Chaudhary stands acquitted from the offence u/s 138 NI Digitally signed Act. by VIKAS VIKAS MADAAN MADAAN Date:
2022.05.12 16:10:25 +0530 ANNOUNCED IN THE OPEN COURT (VIKAS MADAAN) TODAY 12th of May, 2022 METROPOLITAN MAGISTRATE ROHINI DISTRICT COURTS DELHI CC No. 16144/2016 15 of 15