Delhi District Court
Hpm Chemicals & Fertilizers Ltd vs Hira Lal on 26 November, 2018
IN THE COURT OF MS. PRIYANKA RAJPOOT, METROPOLITAN MAGISTRATE,
NORTH-WEST, ROHINI, DELHI
CC No. 16721/2016
HPM Chemicals & Fertilizers Ltd.
(Formerly known as HIM Pulverising Mills Ltd.)
Sole Proprietor of
Hindustan Pulverising Mills
Having its registered office at
209-210, Anupam Bhawan,
Commercial Complex, Azadpur,
Delhi-110033 ............Complainant
Versus
Hira Lal, Proprietor
M/s. Haryana Beej Bhandar
New Grain Market,
Hisar Road, Bhattu,
Distt. Fathehabad (Haryana) .............Accused
JUDGMENT
(1) Name of the complainant, : HPM Chemicals & Fertilizers Ltd.
parentage and address (Formerly known as HIM
Pulverising Mills Ltd.)
Sole Proprietor of
Hindustan Pulverising Mills
Having its registered office at
209-210, Anupam Bhawan,
Commercial Complex, Azadpur,
Delhi-110033
(2) Name of accused, : Hira Lal
parentage and address M/s. Haryana Beej Bhandar
New Grain Market,
Hisar Road, Bhattu,
Distt. Fathehabad (Haryana)
(3) Offence complained of or
proved : 138 N.I. Act
(4) Plea of accused : Pleaded not guilty
HPM Chemicals & Fertilizers Ltd. v. Hira Lal CC No. 16721/2016 Page no. 1
(5) Date of institution of case : 03.06.2003
(6) Date of reserve of orders : 22.10.2018
(7) Date of Final Order : 26.11.2018
(8) Final Order : Convicted
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:-
That the complainant is a limited company duly incorporated and registered under Indian Companies Act and is the sole proprietor of M/s. Hindustan Pulverising Mills. The accused is the proprietor of M/s. Haryana Beej Bhandar and he is responsible for the day to day affairs of the proprietorship concern. The complainant had supplied goods to the accused on credit as per his demand/orders. A running account was being maintained by the complainant and on 10.03.2003, there was an outstanding balance of Rs.3,19,024.12/- against the accused. In discharge of liability, the accused issued a cheque bearing no. 898754 dated 28.03.2003 for a sum of Rs.3,19,024.12/- drawn on Punjab National Bank. On 24.03.2003, the accused had made a payment of Rs.5,000/- in cash to the complainant without assigning any reason and the complainant got the same entered in the books of accounts separately. On presentation, the cheque in question was returned unpaid for the reason "insufficient funds" vide returning memo dated 10.04.2003. The complainant sent a legal notice dated 25.04.2003 through an advocate calling upon the accused to pay Rs.3,14,024.12/- (i.e. cheque amount Rs.3,19,024-12/- less Rs.5,000/-). The notice was duly served upon the accused, however, neither any payment was made nor any reply was sent. Thereafter, complainant has filed the present complaint case with the submission that accused be summoned, tried and punished according to law.
3. In pre-summoning evidence, Sh. Pawan Gupta, AR of the complainant company placed on record his affidavit and documents viz. two certificates of incorporation as Ex. CW-1/A & Ex. CW-1/B, copy of minutes book as Ex. CW-1/C, copy of GPA as Ex. CW-1/D, copy of extracts of meeting as Ex. CW-1/E, statement of account for the period 01.04.2002 to 31.03.2003 as Ex.
HPM Chemicals & Fertilizers Ltd. v. Hira Lal CC No. 16721/2016 Page no. 2 CW-1/F, cheque bearing no. 898754 dated 28.03.2003 for a sum of Rs.3,19,024.12/- drawn on Punjab National Bank as Ex. CW1/G, cheque returning memos as Ex. CW-1/H & Ex. CW-1/I, legal notice dated 25.04.2003 as Ex. CW-1/J, postal receipts as Ex. CW-1/K & Ex. CW-1/L and A.D. Card as Ex. CW-1/M.
4. Upon appreciation of pre-summoning evidence, accused was summoned for an offence punishable under Section 138 of the Act and notice under Section 251 Cr.P.C. for this offence was framed upon accused on 03.06.2013 to which he pleaded not guilty and claimed trial. The accused took the defence that he issued the cheque in question to one Sh. Sanjeev Sharma as a guarantor for purchase of pesticides. He further alleged that all the payment for the pesticides purchased by him had already been paid and therefore, no liability remains with respect to the goods purchased. He admitted that he was the proprietor of M/s. Haryana Beej Bhandar. He admitted his signatures on the cheque in question, however, he denied having filled in contents therein. He denied receiving of legal notice but admitted the address appearing on the notice and postal receipts as correct. He admitted his signatures on A.D. Card Ex. CW-1/M.
5. In the meantime, name of the complainant company changed to M/s. HPM Chemicals & Fertilizers Ltd. On 29.04.2014, applications for change of name of complainant company and for substitution of AR were moved by the complainant's counsel and the said applications were allowed vide order dated 11.07.2014.
6. Thereafter, the complainant company again changed its AR and appointed Sh. K. Muttuswami. An application was moved for substitution of AR alongwith Board of Resolution in favour of Sh. K. Muttuswami which was allowed by the court vide order dated 07.04.2016.
7. On 18.08.2017, Sh. K. Muttuswami led post summoning evidence by way of affidavit Ex. CW-1/1. He relied on documents viz. Certificate of Incorporation Mark A, General Power of Attorney as Ex. CW-1/B(OSR), Board of Resolution dated 31.12.2015 in favour of Sh. K. Muttuswami as Ex. CW-1/C, copy of statement of account for the year 2002-03 as Ex. CW-1/D, copy of statement of account for the year 2000-01 as Ex. CW-1/E, copy of statement of account for the year 2001-02 as Ex. CW-1/F, cheque bearing no. 898754 dated 28.03.2003 for a sum of Rs.3,19,024.12/- drawn on Punjab National Bank as Ex. CW1/G, cheque returning memos as Ex. CW-1/H & Ex. CW-1/I, legal notice dated 25.04.2003 as Ex. CW-1/J, postal receipts as Ex.
HPM Chemicals & Fertilizers Ltd. v. Hira Lal CC No. 16721/2016 Page no. 3 CW-1/K & Ex. CW-1/L and A.D. Card as Ex. CW-1/M. During cross-examination, he stated that he does not remember at which place and to whom the cheque in question was given. He also stated that the cheque in question was issued in favour of M/s. Hindustan Pulverising Mills. He also stated that he has been authorised by M/s. Hindustan Pulverising Mills to file this case. He also stated that he has filed an authority letter Ex. CW-1/C issued by M/s. HPM Chemicals & Fertilizers Ltd. He also stated that the name of complainant company was changed from M/s. HIM Pulverising Mills Ltd. to M/s. HPM Chemicals & Fertilizers Ltd. He also stated that the branch office of M/s. Hindustan Pulverising Mills situated at Hissar, Haryana was dealing with the accused and the payment were also received at the branch office. He also stated that he has no personal knowledge regarding the payments made by the accused. He admitted that the representative of M/s. Hindustan Pulverising Mills used to visit shop of the accused to receive payment. He admitted that as on 28.03.2003, the outstanding balance reflected in statement of account is 3,14,024.12/- whereas the amount filled in cheque is Rs.3,19,024.12-/-. He denied the suggestion that the cheque in question was given in a blank signed manner as security at the time of commencement of business transaction and later on it was misused by M/s. Hindustan Pulverising Mills. He admitted that representative of M/s. Hindustan Pulverising Mills used to visit shop of the accused and received payment after 31.03.2003. He denied the suggestion that the accused was making the payments regularly and the cheque in question was never issued towards outstanding amount. He denied the suggestion that he was not aware of transaction between M/s. Hindustan Pulverising Mills and the accused.
8. Sh. Satish Mittal, Deputy General Manager(Accounts) of complainant company, as CW-2 led his evidence by way of affidavit Ex. CW-2/1 where in it is stated that as per the records available with the complainant company, the accused had been purchasing agro chemicals from the complainant company on credit basis and the accused had since then been maintaining running account with the complainant company. During cross-examination, he stated that he has been working in the complainant company since the year 2008. He also stated that all the transactions with the accused were upto March 2003 as per the account statement. He denied the suggestion that all the payments made by the accused to the complainant company were in cash and not through cheques.
9. On 30.05.2018, statement of accused under Section 281 Cr.P.C. read with Section 313 HPM Chemicals & Fertilizers Ltd. v. Hira Lal CC No. 16721/2016 Page no. 4 Cr.P.C. was recorded in which all the incriminating evidence were put to him to which accused took the same defence as it was taken by him at the time of framing of notice under Section 251 Cr.P.C. The accused has not led any defence evidence and the matter was listed for final arguments.
10. Thereafter, final arguments were addressed on behalf of both the parties.
11. An application under Section 311 Cr.P.C. was moved by Ld. Counsel for the complainant for re-examining the complainant and for exhibiting minutes book to show that the complainant company is the sole proprietor of M/s. Hindustan Pulverising Mills. Minutes Book was already on record, however, the new authorised representative namely Sh. K. Muttuswami did not rely upon the same at the stage of post summoning evidence. The said application was allowed by the court vide order dated 27.09.2018. Sh. K. Muttuswami was re-examined. He had brought original minutes book of the complainant company dated 06.07.1987 and copy of the same was exhibited as Ex. CW-1/N(OSR). He deposed that there was a common seal of the complainant company by its previous name i.e. M/s. Him Pulverising Mills Pvt. Ltd. on each and every page of minutes book but the same was not visible in the copy as it was not an ink impression. He was duly cross-examined by Ld. Counsel for the accused.
12. I have considered the rival submissions of the parties and perused the entire evidence led by the complainant as well as by the accused.
13. Before appreciating the facts of the case in detail for the purpose of decision, let relevant position of law be discussed first:-
For the offence under Section 138 of the Act to be made out against the accused, the complainant must prove the following points, that:-
1. the accused issued a cheque on account maintained by him with a bank.
2. the said cheque has been issued in discharge, in whole or in part, of any legal debt or other liability.
3. the said cheque has been presented to the bank within a period of three months from the date of cheque or within the period of its validity.
4. the aforesaid cheque, when presented for encashment, was returned unpaid/dishonoured.
HPM Chemicals & Fertilizers Ltd. v. Hira Lal CC No. 16721/2016 Page no. 5
5. the payee of the cheque issued a legal notice of demand to the drawer within 30 days from the receipt of information by him from the bank regarding the return of the cheque.
6. the drawer of the cheque failed to make the payment within 15 days of the receipt of aforesaid legal notice of demand.
14. The Act raises two presumptions in favour of the holder of the cheque i.e. complainant in the present case; firstly, in regard to the passing of consideration as contained in Section 118
(a) and secondly, a presumption that the holder of cheque receiving the same of the nature referred to in Section 139 discharged in whole or in part any debt or other liability.
Section 118 of the N.I Act provides : "Presumptions as to negotiable instruments: Until the contrary is proved, the following presumptions shall be made: (a) of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred was accepted, indorsed, negotiated or transferred for consideration;"
Section 139 of the N.I Act further provides as follows: "Presumption in favour of holder - it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability".
15. For the offence under Section 138 of the Act, the presumptions under Sections 118(a) and 139 have to be compulsory raised as soon as execution of cheque by accused is admitted or proved by the complainant and thereafter burden is shifted to accused to prove otherwise. These presumptions shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability etc. A presumption is not in itself evidence but only makes a prima facie case for a party for whose benefit it exists. Presumptions both under Sections 118 and 139 are rebuttable in nature. Same was held by the Hon'ble Supreme Court of India in Hiten P. Dalal v. Bratindranath Banerjee [(2001) 6 SCC 16].
16. It has been held in M/s. Kumar Exports v. M/s. Sharma Carpets, [2009 A.I.R. (SC) 1518] that the accused may rebut these presumptions by leading direct evidence and in some and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant HPM Chemicals & Fertilizers Ltd. v. Hira Lal CC No. 16721/2016 Page no. 6 during the trial. Further, the burden may be discharged by the accused by showing preponderance of probabilities and the onus on the accused is not as heavy as it is on the complainant to prove his case.
17. From the aforesaid discussion, it becomes amply clear that the presumption of law, though rebuttable, works in favour of the complainant. However, the presumption gets rebutted if the defence raises a reasonable suspicion in the prosecution story by raising a probable defence.
18. In the present case, the accused has admitted that the cheque in question bears his signatures. Reference can be made to Judgment of Apex Court in Rangappa v. Mohan, AIR 2010 SC 1898,that, "Once the cheque relates to the account of the accused and he accepts and admits the signatures on the said cheque, then initial presumption as contemplated under Section 139 of the Negotiable Instruments Act has to be raised by the Court in favour of the complainant."
19. It means that in the present case the onus is upon the accused to rebut the presumption raised under Sections 118(a) and 139 of the said Act and merely saying that the cheque in question was given as security and not in discharge of any liability is not sufficient to rebut the presumption of law.
20. The first defence taken by the accused is that the complainant company is not the owner/proprietor of the firm M/s. Hindustan Pulverising Mills thus it can not file the case under Section 138 of the Act. It was argued by Ld. Counsel for the accused that the cheque in question is in the name of M/s. Hindustan Pulverising Mills which is a proprietorship concern whereas the present complaint is filed by M/s. HPM Chemicals & Fertilizers(formerly known as HIM Pulverising Mills Ltd.). It was also argued that since the cheque in question is not in favour of the complainant company, therefore, the complaint by the company is not maintainable. It was also argued by Ld. Counsel for the accused that the complainant company has not led any documentary evidence to show that it is the proprietor of M/s. Hindustan Pulverising Mills. Further, it was admitted by AR of the complainant company in the cross-examination that he does not have any document to show that the complainant company is the proprietor of M/s. Hindustan Pulverising Mills. It was argued by Ld. Counsel for the accused that expressions HPM Chemicals & Fertilizers Ltd. v. Hira Lal CC No. 16721/2016 Page no. 7 used in the minutes book such as "it will take over running concern M/s. Hindustan Pulverising Mills" etc. refer to something in further and thus, there is no evidence on record to show that the complainant company has not taken over M/s. Hindustan Pulverising Mills. I do not find merits in the argument of Ld. Counsel for the accused. In the case of Eita India Ltd. v. National Capital Territory of Delhi [96 (2002) DLT 664], it was held that "7. In this case as noticed above the cheques in question were issued in the name of the sole proprietorship concern M/s. East India Transport Agency(EITA). The proprietorship concern could act only through its proprietor which happens to be the company. It is a de jure complainant; and it had to act through some human agency. Thus the complaint could be filed by any person connected with the company, may be its director or manager or any other person, so authorised by the company, who can represent the company in legal proceedings. Any other view would defeat the purpose and object of the Act. This view finds support from adecision of this court in Ram Richpal Gupta v. DCM Siri Ram Consolidated Ltd. [III CCR (1995) 841]. It is permissible for the courts to take into account the ostensible purpose or object and the real legislative intent. A bare mechanical interpretation of the words devoid of concept of purpose will render the legislative intent inane, as was held by the Apex Court in Directorate of Enforcement v. Deepak Mahajan". Thus, a private limited company can be a proprietor. In the present case, the complainant company has relied upon minutes book Ex. CW-1/N(OSR) to show that it is the proprietor of M/s. Hindustan Pulverising Mills. It is evident from Ex. CW-1/N(OSR) i.e. the minutes book that on 06.07.1987, a resolution was passed by the complainant company to take over M/s. Hindustan Pulverising Mills. On reading the minutes book Ex. CW-1/N in entirely, it is crystal clear that the complainant company is the sole proprietor of M/s. Hindustan Pulverising Mills. Moreover, section 16 of Indian Evidence Act states that when there is a question whether a particular act was done, the existence of any course of business, according to which it naturally would have been done, is a relevant fact. Section 114 of Indian Evidence Act states that the Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case. Thus, in view of the same, it is presumed that the decision taken at the time of passing of resolution are deemed to be complied with unless contrary is proved. Further, the documents on record viz. Board of Resolution Ex. CW- 1/C(OSR) and Ex. CW-1/E(resolution passed in favour of Sh. Pawan Gupta i.e. the previous authorised representative of complainant company) show that the complainant company is the proprietor of M/s. Hindustan Pulverising Mills.
HPM Chemicals & Fertilizers Ltd. v. Hira Lal CC No. 16721/2016 Page no. 8
21. It was also argued by Ld. Counsel for the accused that it the complainant's own case that the accused had made the payment of Rs.5,000/- but despite that the company has filed the case on the basis of cheque of Rs.3,19,024.12/-. It was also argued that as per the statement of account Ex. CW-1/F, the amount due on the date of presentation was only Rs.3,14,024.12/- and thus, no offence under Section 138 of the Act is made out against the accused as the cheque amount is more than the actual liability. There is no substance in the submission of Ld. Counsel for the accused. It is evident from the legal notice Ex. CW-1/J that the complainant called upon the accused to make the payment of Rs.3,14,024.12/-(after adjusting Rs.5000/- received from the accused on 24.03.2003) though the cheque Ex. CW-1/G is of Rs.3,19,024.12/-. The complainant has duly acknowledged the payment of Rs.5,000/- made by the accused in the complaint, affidavit Ex. CW-1/1 and statements of account Ex. CW-1/D and legal notice Ex. CW-1/J & it has claimed the amount actually due and not the cheque amount.
22. Another contention raised by the Ld. Counsel for the accused is that the complainant has not been able to prove the case beyond the reasonable doubt as the complaint is not supported with any document to show that goods were actually supplied by the complainant to the accused. It was also argued that the complainant has not placed on record the bills, delivery challans and ledger account to show that the balance of Rs.3,14,024.12/- is due against the accused.
There is no merit in the submission of the Ld. Counsel for the accused. Once the complainant files the complaint on the basis that he is holding the cheque as the holder in the due course which is admittedly given by the accused to the complainant and the said cheque got dishonoured and it is also established that the due notice of dishonour of the said cheque was given to the accused, there is a clear presumption in favour of the complainant that the amount is due under the said cheque. In the present case, the accused has not denied the issuance of cheque in favour of the M/s. Hindustan Pulverising Mills. He has also not denied his signature on the cheque in question. In the case of B.M. Basavaraj v. Srinivas S. Datta (IV(2016) SLT 155), Hon'ble Supreme Court of India has set aside the order of trial court and the Hon'ble High Court that had dismissed the complaint primarily on the ground that the complainant had not furnished any document to prove that it had actually supplied the material to the accused as per the agreement. It was held by Hon'ble Supreme Court of India that "it is not even necessary for the appellant/complainant to produce any document to the effect that it HPM Chemicals & Fertilizers Ltd. v. Hira Lal CC No. 16721/2016 Page no. 9 had fulfilled the obligation under the agreement which was entered into between the parties. The case was found on the dishonour of two cheques and not on the basis of the said agreement. Further, it was a civil suit which was filed on the basis of said agreement or any demand was raised for money on the ground that the agreement had been fulfilled. The case is that the payment was not released. In the legal notice, specific averment made by the appellant/complainant that appellant/complainant had discharged his obligation under the contract and only thereupon the cheque was issued and the respondent/accused had not even replied to the said notice".
In the instant case also, it is specifically averred in the complaint, affidavit Ex. CW-1/1 and legal notice Ex. CW-1/J that the complainant firm had supplied goods to the accused as per the order placed by him and a sum of Rs.3,14,024.12/- is due as per the statement of account. Thus, there is no requirement for the complainant to place on record bills, invoices, ledger account or delivery challans in support of his complaint. The claim of the complainant can not be discarded merely because bills, invoices, ledger account or delivery challans are not filed alongwith the complaint.
23. The accused has taken the defence that he has cleared all his dues and made the payment of goods purchased by him. However, no cogent evidence is led by the accused in this regard. The accused did not step into the witness box to stand by his defence. The defence taken by the accused at the time of framing of notice and while recording the statement of accused under Section 281 Cr.P.C. read with Section 313 Cr.P.C. can not be considered as evidence. For this, I rely upon the judgments of Hon'ble High Court of Delhi, V.S. Yadav v. Reena [172(2010)DLT 561] and Bansal Plywood v. State(NCT of Delhi) and Anr. (Criminal Appeal No. 17 of 2017) decided on 04.09.2017. It was held that "the defence taken by the respondent no. 3 at the time of framing of notice under Section 251 Cr.P.C. or the defence taken by her in her application under Section 145(2) NI Act or her explanation under Section 313 Cr.P.C. read with Section 281 of the Code recorded on 4.02.2015 is not "evidence" within the meaning of Section 3 of the Indian Evidence Act, 1872. When person appears in the court as a witness, he is required to state facts on oath under Section 4 of Oaths Act, 1969 and his examination in chief is tested on touchstone on cross-examination by other party. This is actually the evidence. Therefore, the plea taken in application under Section 145(2) NI Act or defence taken at the time of framing of notice under Section 251 of Code or the explanation under Section 313 read with Section 281 of the Code by any stretch and imagination can not be HPM Chemicals & Fertilizers Ltd. v. Hira Lal CC No. 16721/2016 Page no. 10 treated as "evidence". This is only a defence which should have been proved by cogent evidence to rebut the presumption under Section 139 and 118 of the Act".
Thus, the bald plea of the accused having not been substantiated by cogent evidence would not be sufficient to rebut the presumption of law against him.
24. Hence, in the light of above discussion it comes out that the complainant has successfully proved its case beyond all the reasonable doubts and accused has failed to rebut the presumption. Accordingly, accused is convicted for the offence under Section 138 of Negotiable Instruments Act.
25. As the complainant has proved its case beyond reasonable doubt, therefore, accused is being convicted for the offence under Section 138 of Negotiable Instruments Act.
26. Let the accused be heard on quantum of sentence.
27. Copy of Judgment be supplied to the convict free of cost.
ANNOUNCED IN THE OPEN COURT (PRIYANKA RAJPOOT)
TODAY i.e. 26th NOVEMBER 2018 METROPOLITAN MAGISTRATE
ROHINI DISTRICT COURTS/ DELHI
HPM Chemicals & Fertilizers Ltd. v. Hira Lal CC No. 16721/2016 Page no. 11