Delhi District Court
M/S Rashi Peripherals Pvt Ltd vs Sachin Narula on 6 February, 2024
IN THE COURT OF MS. NEHA GARG, METROPOLITAN
MAGISTRATE (N.I. ACT)- 02,
PATIALA HOUSE DISTRICT COURT: NEW DELHI
DLND020229362016
Case No: 49951/2016
M/s Rashi Peripherals Pvt. Ltd.
Having its registered office at
Aristo House 5th Floor,
Corner of Telli Gali,
Andheri (E) Mumbai - 400069
Having branch office at:
314, Mansarover Building,
90, Nehru Place,
New Delhi-110019.
......Complainant
::Versus::
Sh. Sachin Narula
(Prop.)
M/s USA Telcom,
C-10, Amar Colony Market,
Lajpat Nagar-IV,
New Delhi - 110024. .....Accused
Offence Complained of: 138 of the NI Act
Plea of the Accused: Not guilty
Date of Institution: 27.09.2014
Arguments Heard On: 08.01.2024
Date of Judgment: 06.02.2024
Decision: ACQUITTED Digitally
signed by
NEHA
NEHA GARG
CC No: 49951/2016
GARG Date:
2024.02.06
16:54:04
M/s Rashi Peripherals Pvt. Ltd. vs. Sachin Narula Page 1 of 27 +0530
JUDGMENT
1. Vide this judgment, I shall decide the present complaint filed u/s 138 of the Negotiable Instruments Act, 1881 (herein after referred to as 'the NI Act') bearing CC No.49951/2016, against the dishonor of cheque bearing No.123414 dated 31.07.2014 for a sum of Rs.4,51,655/- drawn on Allahabad Bank, Lajpat Nagar, New Delhi, (hereinafter referred to as 'the cheque in question').
BRIEF FACTS OF THE CASE:
2. Shorn to unnecessary details, the brief facts of the case put forth by the complainant are that the complainant company is engaged in the business of sales of computer peripherals and mobile etc. and accused in the capacity as a proprietor of M/s USA Telecom approached the complainant with an offer to purchase certain computer peripherals and mobile etc. from the complainant. It is further stated that complainant company delivered the said mobile etc. to the accused as and when ordered by the accused from time to time. It is further stated that accused never raised any complaint whatsoever regarding the said delivered goods and in discharge of his liability, accused had issued the cheque in question, which was dishonored with the remarks "exceeds arrangement" vide cheque returning memo which is on record. Legal demand notice dated 22.08.2014 was sent to the accused. However, no payment was made within 15 days and hence, the present complaint. Digitally signed by NEHA NEHA GARG GARG Date:
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3. The complainant examined himself as CW-1 in pre-
summoning evidence, and relied upon his evidence by way of affidavit along with the following documents: -
S. No. Documents relied upon Exhibited as:
1. Copy of certificate of Ex.CW1/1 incorporation.
2. Copy of authorization letter / Ex.CW1/2 resolution dated 23.08.2014.
3. Cheque in question. Ex.CW1/3
4. Cheque return memo. Ex.CW1/4
5. Ledger of the accused Ex.CW1/5 to maintained by complainant. Ex.CW1/11
6. Speed post report of legal notice. Ex.CW1/12
7. Copy of legal demand notice. Ex.CW-1/13
8. Original speed post. Ex.CW-1/14
9. Present complaint. Ex.CW1/15
10. Affidavit by way of evidence Ex. CW-1/16
4. On appearance of accused, notice of accusation u/s 251 of Cr.P.C. was served upon the accused on 22.03.2017, to which the accused pleaded not guilty and claimed trial. Accused admitted his signature on the cheque in question, however he denied filling the rest of the details on the cheque in question. He denied receiving of the legal demand notice from the complainant. He further stated that he had business transactions with the accused and his cheques used to be with the complainant. He also stated that he had not issued the cheque in question towards any legal liability to the complainant. He further stated that complainant had nothing due to him and complainant has misused the cheque.
Digitally signed by NEHA NEHA GARG Date:
GARG 2024.02.06
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M/s Rashi Peripherals Pvt. Ltd. vs. Sachin Narula Page 3 of 27
5. Thereafter, an application u/s 145(2) of the NI Act was moved which was allowed by the Court. CW1 was examined in chief, cross-examined and discharged. Thereafter CE was closed. Thereafter, all the incriminating evidence was put before the accused and the statement of accused u/s 313 of Cr.P.C. was recorded in which accused reiterated his defence and stated that the there was no intimation regarding the dishonour of the cheque in question. He further stated that complainant company called him asking if any payments were due on his behalf to which he had replied that no such payment was due. It is further stated by accused that in fact he had to collect payments from the complainant company.
6. Thereafter, list of defence witness has been filed on behalf of the accused and examined DW1 Sh. Himendra Kumar, Senior Manager, HDFC Bank, DW2 Sh. Gopal Kapoor, Officer from Allahabad Bank and DW3 Sh. Kunj Bihari Meera as defence witnesses. No application u/s 315 of Cr.P.C. was moved on behalf of accused. Thereafter, DE was closed and the matter was fixed for final arguments.
7. Thereafter, final arguments were heard on behalf of both the parties.
LAW UNDER CONSIDERATION:
8. Before adverting to 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 the NI Act, the complainant must fulfill all the essential Digitally signed by NEHA NEHA GARG CC No: 49951/2016 GARG Date:
2024.02.06 16:54:32 M/s Rashi Peripherals Pvt. Ltd. vs. Sachin Narula Page 4 of 27 +0530 ingredients of the offence, as highlighted below:
1st Ingredient: The cheque was drawn by a person on an account maintained by him/her 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;
2nd Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability;
3rd 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;
4th 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;
5th Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice.
9. Ld. Counsel for the complainant has submitted that the accused should be convicted of offence u/s 138 of the NI Act because the complainant has proved the original cheque, which the accused has not disputed as being drawn on the account of the accused. He has further submitted that the cheque in question was returned unpaid vide cheque returning memo which is on record. The same is also not disputed by accused. He has further Digitally signed by NEHA NEHA GARG GARG Date:
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submitted that the legal demand notice was sent to accused on his address and the same was refused by the accused and the same is proved by the endorsement made by the postal authorities on the speed post envelope. Ld. Counsel for the complainant has argued that since refusal tantamount to valid service, the accused was duly served with the legal demand notice. He has further submitted that the fact that the payment was not made within 15 days of the receipt of the legal notice is also not disputed.
10. Per contra, Ld. Counsel for the accused has submitted that accused should be acquitted as firstly, the cheque in question was never dishonoured and accordingly, no offence under Section 138 of the NI Act is made out against the accused; secondly, this Court does not have the territorial jurisdiction to try the present compliant; thirdly, the accused has not received the legal demand notice; fourthly, the cheque in question is a stale cheque; fifthly, the cheque in question is a non-CTS cheque and hence is not a valid instrument; sixthly, the cheque in question was given as a security cheque to the complainant and the contents of the same were never filled by the accused and lastly, that there is no legally enforceable debt or liability of accused in favour of the complainant.
11. Having heard submissions made by both the Ld. Counsels and after considering the evidence led on record, I shall firstly proceed to decide the defence raised by the accused that no offence under Section 138 of the NI Act is made out against him as the complainant has failed to prove that basic ingredient of the Digitally offence that the cheque in question was dishonoured. NEHA signed by NEHA GARG GARG Date:
2024.02.06 16:54:51 +0530 CC No: 49951/2016 M/s Rashi Peripherals Pvt. Ltd. vs. Sachin Narula Page 6 of 27 DEFENCE THAT THE CHEQUE IN QUESTION WAS NEVER DISHONOURED:
12. It is submitted by Ld. Counsel for accused that the accused never received any intimation regarding the dishonour of the cheque in question and the cheque in question was never presented or dishonoured as the available credit in the account of the accused at the relevant time was 1.25 crore. Ld. Counsel for the accused has argued that statement of account Ex.DW3/1 would show that the cheque in question was never dishonored and since the cheque in question was never dishonoured, no offence under Section 138 of the NI Act is made out against the accused.
13. Per contra, Ld. Counsel for the complainant has argued that the statement of account Ex.DW3/1 is for the period 30.07.2014 to 08.08.2014 whereas the cheque in question has been dishonoured on 09.08.2014 and accordingly, document Ex.DW3/1 does not proof that the accused had sufficient balance as on 09.08.2014 in his account to honour the cheque in question. It has been submitted by Ld. Counsel for the complainant that the bank return memo Ex.CW1/4 is conclusive proof of the fact that the cheque in question was dishonoured on presentation.
14. In order to decide the aforesaid defence of the accused, it is pertinent to refer to Section 146 of the NI Act which provides that the Court shall presume the fact of dishonour of the cheque on the production of the bank's slip or memo having thereon the official mark denoting that the cheque has been dishonoured.
Digitally signed by NEHA NEHA GARG GARG Date:
2024.02.06 CC No: 49951/2016 16:54:58 +0530 M/s Rashi Peripherals Pvt. Ltd. vs. Sachin Narula Page 7 of 27 However, the aforesaid presumption is rebuttable if any evidence to the contrary is produced by the accused. In the instant case, the complainant has placed on record the bank return memo dated 09.08.2014 (Ex.CW1/4) to prove that the cheque in question was duly dishonoured on presentation. However, document Ex.CW1/4 does not bear any official mark of the banker which is necessary for raising the presumption u/s 146 of the NI Act. It is written in document Ex.CW1/4 that the said document is a computer-generated advice but the complainant has not placed on record the certificate under Section 65B of the Indian Evidence Act, 1872.
15. Although the cheque in question (Ex.CW1/3) bears that stamp of the bank in which the cheque was deposited but the same only constitutes proof of deposit of cheque. This fact alone does not prove the case of the complainant any further because the stamp affixed on the cheque shows only name of the bank and the same does not prove dishonour of the cheque in question. Since, the memo purportedly issued by the bank for return of cheque does not bear official mark of the bank and therefore, it does not satisfy the requirement of Section 146 of the NI Act.
16. The Hon'ble Bombay High Court in Smt. Vandana vs. Smt. Abhilasha 2019 (2) Mh.L.J. 645 was dealing with a similar question as under consideration. In the said case, the complainant had relied in her evidence on the computer- generated copy of the memo issued by the bank and the same did not bear official mark or signature of the bank officer. In the background of the facts of the said case, the Hon'ble High Court Digitally signed by NEHA NEHA GARG Date:
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had held that since the appellant/complainant had failed to prove dishonour of cheque by any other mode than the one provided under Section 146 of the NI Act, the question of raising presumption against the respondent/accused does not arise. The Hon'ble Bombay High Court has observed to the following effect while upholding the acquittal of the respondent/accused:
"13. When the complainant (appellant in the present case) asserted that the cheque was returned or dishonoured, it was for her to prove this basic fact. Section 146 of the said Act provides that if the complainant places on record a slip or memo issued by the bank having official mark of the bank thereon, denoting that the cheque was dishonoured, it would be presumed that such cheque was dishonoured until such fact was disproved. Thus, if such a document was placed on record by the appellant in the present case, it would constitute prima facie evidence of dishonour of cheque and burden would have been entirely on the respondent to disprove such a fact. But, when the memo produced in the present case by the appellant did not bear official mark of the bank, there was no document as contemplated under Section 146 of the said Act to presume that the fact of dishonour of cheque had been proved by the appellant. The burden continued to lie on the appellant to prove the basic fact of dishonour of cheque, in the facts and circumstances of the present case.
14. In such a situation, mere statement made in the statutory notice and the complaint filed before the Court would not constitute proof of dishonour of cheque, unless further evidence to corroborate the same was placed on record on behalf of the appellant. The appellant is not justified in claiming that such statements would suffice as proof of Digitally signed by dishonour of cheque because the respondent NEHA NEHA GARG GARG Date:
2024.02.06 16:55:12 CC No: 49951/2016 +0530 M/s Rashi Peripherals Pvt. Ltd. vs. Sachin Narula Page 9 of 27 failed to enter the witness box in support of her defence. As the complainant, it was for the appellant to prove the fact of dishonour of cheque by cogent evidence. The appellant could have examined the bank official to prove that the cheque had been indeed dishonoured, but, she failed to do so.
15. The appellant could have placed on record a certificate contemplated under Section 65-B of the Indian Evidence Act, 1872, in respect of the memo of the Bank, which was allegedly a computer-generated electronic record. But, no such evidence was placed on record. The trial Court has also held that there was lack of evidence to show even deposit of the cheque because deposit slip was not placed on record by the appellant. But, a perusal of the cheque in question (Exhibit-21) does show that stamp of the bank in which the cheque was deposited is very much present on the cheque. To that extent, the trial Court was not right in holding that even the proof of deposit of cheque was not on record. Yet, this fact alone does not take the case of the appellant any further because the stamp affixed on the cheque shows only name of the bank and there is nothing to signify the date on which the cheque was deposited in the bank. Even as per the case of the appellant, the cheque in question was deposited twice and it is clear that there is no cogent evidence placed on record by the appellant to show dishonour of the said cheque."
17. In the instant case, once the accused has disputed the factum of dishonour of the cheque in question, it was for the complainant to adduce evidence to prove that the cheque in question was in fact dishonoured. Section 138 read with Section Digitally signed NEHA by NEHA GARG Date:
2024.02.06 CC No: 49951/2016 GARG 16:55:19 +0530 M/s Rashi Peripherals Pvt. Ltd. vs. Sachin Narula Page 10 of 27 142 of the NI Act requires that all the conditions specified under the said provisions are satisfied for cognizance of offence under Section 138 of the Act to be taken by the Court. The present case concerns criminal liability alleged against the accused and the burden of proof was entirely on the complainant to prove the basic fact of dishonour of cheque in order to claim that an offence under Section 138 of the NI Act had been committed by the accused. Reference is made to Sections 101 to 104 of the Indian Evidence Act, 1872, to emphasize that the burden of proof is absolutely on the complainant to prove the fact pertaining to dishonour of cheque.
18. In the considered opinion of this Court, the complainant in the present case ought to have placed on record evidence in the form of examination of the bank officer or any other such evidence to prove that the cheque in question was indeed dishonoured. Another point that warrants attention is that in the bank return memo placed on record by the complainant, there is no date to indicate as to when the cheque in question was deposited and therefore, there is no way in which it can be ascertained as to whether the statutory notice issued by the complainant was within the limitation provided under Section 138 of the NI Act. When the fundamental fact of dishonour of the cheque in question is not proved in the present case, no offence under Section 138 of the NI Act can be said to be made out against the accused and the same constitutes sufficient ground to acquit the accused. However, I shall succinctly discuss the other defences of the accused. Digitally signed by NEHA NEHA GARG GARG Date:
2024.02.06 16:55:25 +0530 CC No: 49951/2016 M/s Rashi Peripherals Pvt. Ltd. vs. Sachin Narula Page 11 of 27 DEFENCE THAT THIS COURT DOES NOT HAVE TERRITORIAL JURISDICTION:
19. Ld. Counsel for the accused has argued that the Extract of Minutes of Meeting of Board of Directors dated 20.04.2024 of the complainant company accompanying the account opening form (Ex.DW1/1) shows that the account was to be opened with HDFC Bank, Nehru Enclave, Kalkaji, New Delhi and in the account opening form also the address of Kalkaji, New Delhi is mentioned. Ld. Counsel for the accused has drawn the attention of the Court to the seal of the bank embossed at point 'A' of document Ex.DW1/1 which is of Mandivali, Maharashtra. Ld. Counsel for accused has submitted that the Extract of Minutes of Meeting dated 20.04.2024 would go on to show that the account was to be opened at Nehru Enclave, Kalkaji, New Delhi but the bank witness DW1 has deposed that the account was opened in KG Marg. Ld. Counsel for the accused has argued that in view of the aforesaid facts, it cannot be conclusively held at which branch the account was actually opened. Ld. Counsel for accused has also submitted that the document Ex.DW1/1 appears to be forged and fabricated as the same has different dates and same is not signed by any official from the bank.
20. Per contra, Ld. Counsel for the complainant has argued that the cheque in question was deposited in the account maintained by the complainant with HDFC Bank, KG Marg Branch, New Delhi and hence this Court has the territorial jurisdiction to try the present matter.
21. It is pertinent to mention here that Sub Section 2 has been Digitally signed by NEHA NEHA GARG CC No: 49951/2016 GARG Date:
2024.02.06 16:55:32 M/s Rashi Peripherals Pvt. Ltd. vs. Sachin Narula Page 12 of 27 +0530 inserted in Section 142 of the NI Act by the Negotiable Instruments (Amendment) Act, 2015. It is quite apparent from the Section 142(2)(a) of the NI Act that ordinarily, at two places jurisdiction would lie. Firstly, where the cheque is presented for collection through an account, the branch where the payee or holder in due course maintains the account, is situated and secondly, when the cheque is presented otherwise through an account, the branch of the bank where the drawer maintains the account.
22. In the present case, since the cheque in question has been presented for collection through an account, therefore, the complaint is to be filed before the Court where the branch of the bank is situated, where the complainant maintains its account.
Accused has summoned and examined the Senior Manager, HDFC Bank, KG Marg, New Delhi as DW-1 who has placed on record the account opening form (Ex.DW1/1) of the complainant company. DW-1 has deposed that the account in which the cheque was deposited for collection was opened in KG Marg, New Delhi by the complainant company. The aforesaid testimony of DW-1 clearly shows that the cheque has been presented for collection through an account opened and maintained by the complainant in the jurisdiction of this Court. Merely because the account opening form Ex.DW1/1 bears stamp of Mandivali due to some internal arrangement of the bank, is no ground to hold that this Court does not have the territorial jurisdiction to try the present case. Similarly, the Extracts of Meeting of the Board of Directors of the complainant company accompanying the account opening form (EX.DW1/1/) is not a conclusive proof that the Digitally signed by NEHA NEHA GARG CC No: 49951/2016 GARG Date:
2024.02.06 M/s Rashi Peripherals Pvt. Ltd. vs. Sachin Narula Page 13 of 27 16:55:38 +0530 account was in fact opened at Nehru Enclave, Kalkaji, New Delhi. The categorical testimony of DW1 that the account is opened and maintained by the complainant company at K.G. Marg, New Delhi is sufficient to arrive at a conclusion that this court has the territorial jurisdiction to try the present case. Accordingly, the defence of the accused that this Court does not have the territorial jurisdiction to try the present case, is rejected.
DEFENCE THAT THE ACCUSED HAS NOT RECEIVED THE LEGAL DEMAND NOTICE:
23. It is the defense of the accused that he didn't receive the legal demand notice.
24. Ld. Counsel for complainant has argued that the legal demand notice is deemed to have been duly served on the accused as the accused has refused to take the legal notice as is evident from the endorsement made by the postal authorities on the speed post cover Ex.CW1/12.
25. It is pertinent to mention that accused has admitted the address mentioned on the legal demand notice in his notice framed u/s 251 of Cr.P.C. The deemed service of notice on the admitted address of accused is duly proved by complainant by postal receipt and the endorsement made by the postal authorities on envelope Ex.CW1/12.
26. Moreover, it was held by the Hon'ble Supreme Court in the decision cited as C.C. Alavi Haji vs Palapetty Muhammed & Anr. (2007) 6 SCC 555 that a person who does not pay within Digitally signed by NEHA NEHA GARG GARG Date:
2024.02.06 CC No: 49951/2016 16:55:46 +0530 M/s Rashi Peripherals Pvt. Ltd. vs. Sachin Narula Page 14 of 27 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the NI Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the General Clauses Act and Section 114 of the Evidence Act.
27. The Hon'ble Supreme Court of India has very well discussed this defence in K. Bhaskaran vs Sankaran Vaidhyan Balan and Anr. (1999) 7 SCC 510, where it was held that if a strict interpretation is given that the drawer should have actually received the notice for the period of 15 days to start running no matter that the payee sent the notice on the correct address, a trickster cheque drawer would get the premium to avoid receiving the notice by different strategies and he could escape from the legal consequences of Section 138 of the NI Act. Thus, for the detailed reasons aforementioned, the plea of the accused that the legal demand notice was never received is not tenable and accordingly, is rejected.
DEFENCE THAT THE CHEQUE IN QUESTION WAS A STALE CHEQUE AND A NON-CTS CHEQUE:
28. Ld. Counsel for the accused has argued that the cheque in question was quite old and a non-CTS cheque. Ld. Counsel for accused has submitted that the non-CTS cheques were stopped in 2008 by RBI and non-CTS cheques were not accepted during clearing in 2014. Digitally signed by NEHA NEHA GARG GARG Date:
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29. Firstly, I shall deal with the objection of the accused that the cheque in question is a stale cheque. As per proviso (a) to Section 138 of the NI Act, nothing containing in the said Section shall apply unless the cheque has been presented to the bank within a period of six months (this period has been reduced to 'three months' vide RBI notification No. RBI/2011-12/251, DBOD.AML BC NO.47/14.01.001/2011-12 dated 04.11.2011, w.e.f. 01.04.2012) from the date on which it is drawn or within the period of its validity, whichever is earlier.
30. As stated earlier, in the bank return memo placed on record by the complainant, there is no date to indicate as to when the cheque in question was deposited and therefore, there is no way in which it can be ascertained if the cheque in question was presented to the bank within a period of three months from the date on which it is drawn. Section 101 of the Indian Evidence Act, 1872 provides that the party asserting the existence of a fact, must prove the same. Since, it is the defence of the accused that the cheque in question is a stale cheque, it was for the accused to prove through evidence that the cheque in question is a stale cheque, however, the accused has not led any such evidence. In such a scenario, the accused has failed to prove his defence that the cheque in question is a stale cheque.
31. Now I shall deal with the defence of the accused that the cheque in question is a non-CTS cheque and hence is not a valid document. In order to decide the aforesaid defence, it is imperative to understand the legal position regarding the validity of non-CTS cheques. It is a factual and legal position that the Digitally signed by NEHA NEHA GARG Date:
CC No: 49951/2016 GARG 2024.02.06 16:56:00 +0530 M/s Rashi Peripherals Pvt. Ltd. vs. Sachin Narula Page 16 of 27 Reserve Bank of India started CTS (cheque truncation system) i.e. CTS-2010 Standard, directing all banks to issue only CTS- 2010 compliant cheques, and further to withdraw all non-CTS cheques in circulation before 31.12.2012 CC No. 19137/19 2/7 vide its notification dated 03.09.2012. The RBI extended the date up to 31.03.2013 for all banks to ensure withdrawal of non-CTS cheques and replace them with CTS-2010 Standard cheques. The RBI vide notification dated 18.03.2013 directed that all residual non-CTS cheques with customers would continue to be valid and accepted for another four months i.e. up to 31.07.2013. The RBI observed that despite the banks issuing cheques as per the CTS format, large number of non-CTS cheques were still in circulation and therefore vide notification dated 16.07.2013, it was decided to put in place a "Separate clearing session at 3 CTS centres i.e. Mumbai, New Delhi & Chennai for clearance of such nonCTS instruments with effect from January 1, 2014". It was decided that the said separate clearing session will initially operate thrice a week (Monday, Wednesday and Friday) up to 30.04.2014. Thereafter the frequency of such separate sessions would be reduced to twice a week (Monday & Friday) up to October 31, 2014 and further to once a week (Every Monday) from 01/11/2014 onwards. RBI vide its directive circular number DPSS (Che)/569/01/02.003/2017-18 dated 21.06.18, ordered as under:-
a. The frequency of the session for clearing of non-CTS cheques will be reduced to once a fortnight from 1st July 2018 (every alternate Wednesday beginning 4th July 2018). b. Thereafter to once a month from 1st September 2018 (second Wednesday of the month, beginning 12 September Digitally signed NEHA by NEHA GARG Date: CC No: 49951/2016 GARG 2024.02.06 16:56:06 +0530 M/s Rashi Peripherals Pvt. Ltd. vs. Sachin Narula Page 17 of 27 2018).
c. The separate clearing session will be discontinued from 31 December 2018. 7. It is a settled position that w.e.f 31.12.2018, a non-CTS cheque shall not be cleared upon presentation.
32. In the present case, the cheque in question is dated 31.07.2014. As discussed above, non-CTS cheque were stopped from clearance only w.e.f. 31.12.2018. The cheque in question (Ex.CW1/3) bears that stamp of HDFC Bank, Nehru Place Branch i.e., one of the 3 CTS centres. Since the cheque in question was presented prior to discontinuance of the clearing session for non-CTS cheque and the same also prima facie appears to have been presented in the proper zone, the defence of the accused that the cheque was a non-CTS cheque and hence not a valid instrument is untenable and is therefore rejected.
DEFENCE THAT THE CONTENTS OF THE CHEQUE IN QUESTION WERE NEVER FILLED BY THE ACCUSED.
33. It is defence of accused as stated in notice framed u/s 251 of Cr.P.C. and statement recorded u/s 313 of Cr.P.C. that the contents of cheque in question have not been filled by him. It is no longer res integra that details of cheque can be filled by any person than the accused. It is settled law that the fact that the details in the cheque have been filled up not by the drawer, but by some other person would be immaterial. Even if the details in the cheque have not been filled up by drawer but by another person, this is not relevant to the defense whether cheque was issued towards payment of a debt or in discharge of a liability. Digitally signed by NEHA NEHA GARG CC No: 49951/2016 GARG Date:
2024.02.06 16:56:15 M/s Rashi Peripherals Pvt. Ltd. vs. Sachin Narula Page 18 of 27 +0530 Reliance is placed upon Oriental Bank of Commerce vs Prabodh Kumar Tewar 2022 SCC OnLine SC 1089, Bir Singh vs Mukesh Kumar (2019) 4 SCC 197 and Ravi Chopra vs State & Anr. (2008) 102 DRJ 147.
34. Therefore, in consonance with the holding of the Hon'ble Supreme Court and High Court of Delhi, it is the considered opinion of this Court that merely because the other details of the cheque in question were not filled by the accused, he cannot take the defence that there was no liability that had accrued on part of the accused towards the complainant.
DEFENCE THAT THE CHEQUE IN QUESTION WAS GIVEN AS A SECURITY CHEQUE:
35. It is defence of accused as stated in notice framed u/s 251 of Cr.P.C. and statement recorded u/s 313 of Cr.P.C. that the cheque in question was given as a security cheque to the complainant and the same has been misused by the complainant.
36. Ld. Counsel for the complainant has argued that merely labeling the cheque in question as security cheque cannot absolve the accused from his liability under Section 138 of the NI Act.
37. It is pertinent to note here that merely stating that the cheque in question was given as a security cheque, does not rescue the accused. Reliance in this regard is placed by this court on the judgments of Hon'ble Supreme Court of India in Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd., (2016) 10 SCC 458, and Sunil Todi Digitally signed by NEHA NEHA GARG GARG Date:
2024.02.06 CC No: 49951/2016 16:56:21 +0530 M/s Rashi Peripherals Pvt. Ltd. vs. Sachin Narula Page 19 of 27 vs. State of Gujarat & Anr., 2021 SCC OnLine SC 1174 wherein the Hon'ble Apex Court has held that merely because a cheque has been given for security purposes does not mean that there is no legally enforceable debt or liability in favour of the complainant, however, it does mean that the court has to see whether there exists legally enforceable debt or liability as on the date mentioned on the cheque or whether a legally enforceable debt or liability has arisen at the time of presentation of the cheque.
38. The defence of security cheque has also been discussed by Hon'ble High Court of Delhi at length in the case of Credential Leasing & Credits Ltd. Vs. Shruti Investments & Anr. (2015) 3 BC 691 wherein Hon'ble High Court has relied upon Suresh Chandra Goyal v. Amit Singhal, Crl. Appeal Nos. 601/2015 decided on 14.05.2015, holding that:
"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 Digitally consideration on the due date, or on the NEHA signed by NEHA GARG Date:
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happening (or not happening) of a
contingency, the security may be enforced. While in some situations, the dishonor of such a cheque may attract the penal provisions contained in Section 138 of the Act, in others it may not."
39. At this juncture, it is imperative to discuss the judgment of Hon'ble Apex Court in Sripati Singh vs. State of Jharkhand & Anr., 2021 SCC OnLine SC 1002 wherein a similar defence of 'security cheque' given at the time of entering into a loan agreement was taken by the accused. It was clearly held by the Hon'ble Court that if a loan is advanced and the borrower agrees to repay the amount in a specified time frame and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of the NI Act would flow. Therefore, the defence of accused that cheque in question was security cheque is untenable.
DEFENCE OF NON-EXISTENCE OF A LEGALLY ENFORCEABLE DEBT/LIABILITY AGAINST ACCUSED
40. It is the defence of accused that there is no legally enforceable debt or liability in favour of the complainant and against the accused to the tune of the amount mentioned in the cheque in question either on the date of its drawl or its Digitally signed by NEHA NEHA GARG CC No: 49951/2016 GARG Date:
2024.02.06 16:56:35 M/s Rashi Peripherals Pvt. Ltd. vs. Sachin Narula Page 21 of 27 +0530 presentation. Ld. Counsel for the accused has argued that that in order to fasten the liability on the accused, the complainant had only produced a statement of account Ex.CW1/5 to Ex.CW1/11 which is a computer-generated document not accompanied by certificate u/s 65B of Indian Evidence Act. Ld. Counsel for accused has argued that since document Ex.CW1/5 to Ex.CW1/11 is secondary evidence, the same cannot be read for any purpose. Ld. Counsel for accused has further argued that no bills/voucher has placed on record by the complainant corresponding the entries made in the statement of account. Ld. Counsel for accused has further submitted that there are various cash entries in the statement of account which have not been duly accounted for by the complainant. Ld. Counsel for accused has submitted that the complainant has filled in the amount on the cheque in question on the basis of a forged and fabricated statement of account i.e., Ex. CW1/5 to Ex.CW1/11 which is not supported by any bills / voucher. He has argued that a simple statement of account is not sufficient to establish the liability of the accused in the absence of any purchase order, invoice, goods receipt, builty or delivery challan to show that the accused has ever placed the orders to purchase the said goods or that the goods were actually delivered corresponding to the order placed against proper invoices, if any, raised as reflected in statement of account Ex.CW1/5 to Ex.CW1/11.
41. During the course of final arguments, Ld. Counsel for the accused excerpted the following testimony of CW-1 i.e., the AR of the complainant in support of his submissions:
"a) What are the entries of debit and Digitally signed by NEHA NEHA Date:
GARG GARG 2024.02.06 CC No: 49951/2016 16:56:42 +0530 M/s Rashi Peripherals Pvt. Ltd. vs. Sachin Narula Page 22 of 27 credit of Rs.2 lakhs in the above-mentioned entries? (entries dated 07.08.2012 at page no.6 of Ex.CW1/10) Ans. The first two entries are contra entries document type CL passed by computer. The third entry with document type BR is the RTGS transfer by Mr. Sachin Narula company named USA Telecom. The fourth entry is cash payment of Rs.2 lakhs which was made by us to the accused."
"b) I have no knowledge as to whom the cash was given and I have got no receipt for the same but this entry is connection with RTGS dated 07.08.2012. It is wrong to suggest that Rs.2 lakhs were never given in cash to accused Sachin Narula on 07.08.2012. Another sum of Rs.1 lakh was given to accused on 08.08.2012 i.e. in connection with RTGS dated 08.08.2012 but I have no receipt of cash given to the accused nor do I remember to whom the cash was given. It is correct that in the amount due, I have added this Rs.3 lakhs."
"c) It is correct that on 11.07.2012 goods worth Rs.50,93,008/- were supplied to the accused.
Q. Is it correct that against the goods in the above-mentioned para a payment of Rs.49,19,992/- has been received by the complainant?
Ans. I cannot tell if the amount of Rs.49,19,992/- was received by the complainant against the above-mentioned goods supplied as I have no details.
However, I can state the same for sure if the statement of accused are shown to me."
42. Per contra, Ld. Counsel for the complainant argued that the liability of the accused as mentioned on the cheque in question is Digitally signed by NEHA NEHA GARG GARG Date:
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clearly established as per the ledger account i.e. Ex. CW1/5 to Ex.CW1/11, which in the light of the presumptions under Section 118(a) and 139 of the NI Act against the accused is sufficient to prove the ingredients of Section 138 of the NI Act, more so more so when the existence of a business relationship is an admitted position between the parties. Ld. Counsel for the accused has further argued that the presumption under Section 139 of the NI Act cannot be rebutted on a mere evasive denial but by leading cogent evidence which the accused failed to bring on record. Ld. Counsel for the complainant has submitted that the accused has clearly failed to rebut the mandatory presumptions that exist in favor of the complainant and hence he should be convicted.
43. At this stage it is pertinent to note here that in cases where the accused admits his signature on the impugned cheque, the Court raises presumption under Section 118(a) and 139 of the NI Act that the impugned cheque was issued by the accused to the complainant in discharge of legally enforceable debt or liability and in order to rebut the presumptions, the burden of proof shifts to the accused to prove on a preponderance of probabilities that there was no liability for the amount of impugned cheque. Thus, it is to be seen that once the accused admits his signatures on the impugned cheque, the onus of proof shifts upon the accused to raise a probable defence and to rebut the presumption of the existence of a legally recoverable debt arisen in favour of the complainant.
44. In the instant case, it is the case of the complainant that the cheque in question was issued against the goods supplied by him Digitally signed by NEHA NEHA Date:
GARG GARG 2024.02.06 CC No: 49951/2016 16:56:57 +0530 M/s Rashi Peripherals Pvt. Ltd. vs. Sachin Narula Page 24 of 27 to the accused and the only documentary proof brought on record to show this outstanding liability is the statement of account i.e., Ex. CW1/5 to Ex.CW1/11. It is a settled position of law that even if a statement of accounts contains correct and authentic entries, the same cannot, without independent evidence of their trustworthiness, fix a liability upon the accused. Reliance is placed upon the decision of Hon'ble Apex Court in CBI Vs. V C Shukla AIR 1998 SC 1406. Hence, in the considered opinion of this court, Ex.CW1/5 to Ex.CW1/11 by itself is not sufficient to establish the liability of the accused in terms of Section 34 of the Indian Evidence Act, 1872 as from the perusal of the Ex.CW1/5 to Ex.CW1/11 alone, it cannot be deduced as to how and in what manner or against which transactions/business dealings the said entries have been made.
45. Even till the fag end of the trial, no documentary proof regarding the proof of delivery of goods in the form of any delivery challan or invoices with due receipt was brought forth by the complainant to buttress its claim that the amount of the cheque in question was actually due from the accused as on the date of its drawl or presentation against the goods allegedly supplied to it on credit basis. Similarly, no receipt of the cash payments made to the accused on 07.08.2012 and 08.08.2012 have been placed on record by the accused. The said claim appears to be merely a bald assertion unsubstantiated by any cogent evidence and an adverse inference can safely be drawn against the complainant in terms of illustration (g) under Section 114 of the Indian Evidence Act, 1872 which enunciates the rule that the evidence which could be and is not produced would, if Digitally signed by NEHA NEHA Date:
GARG CC No: 49951/2016 GARG 2024.02.06 16:57:05 +0530 M/s Rashi Peripherals Pvt. Ltd. vs. Sachin Narula Page 25 of 27 produced, be unfavourable to the person who withholds it.
46. It is imperative to understand that in order to pronounce a conviction in a criminal case, the accused 'must be' guilty and not merely 'may be' guilty. For an accused to be guilty, guilt should not be based on mere surmises and conjectures but it should be based on cogent evidence. In the present case, the accused has clearly presented a defence that appears probable and as per the settled law, this is all that is required as preponderance of probabilities is not a rigorous standard of proof, but only so much evidence as makes the court lean in favour of one side and not the other. Consequently, the benefit of doubt must go to the accused.
47. In view of the aforesaid findings and analysis, this Court has arrived at the irresistible conclusion that the no offence under Section 138 of the NI Act is made out against the accused as the complainant has not only failed to prove the basic ingredient of dishonour of the cheque but the accused has been able to cast a shadow of reasonable doubt upon the case of the complainant by rebutting the mandatory presumption resting in favour of the complainant. Complainant has utterly failed to prove its case beyond reasonable doubt qua the existence of liability of the accused as on the date of the drawl or presentation of the impugned cheque. Since the basic ingredients which are pivotal to attract liability under Section 138 of the NI Act have not been proved by the complainant, accordingly no offence of dishonour of the cheque in question under the said Section is made out.
Digitally signed by NEHA NEHA GARG Date:
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FINAL ORDER:
48. In view of the aforesaid discussion, accused Sh. Sachin Narula proprietor of M/s USA Telcom is hereby acquitted of the offence under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881.
Announced in open Court Note: This judgment contains 27 pages and each page has been Digitally signed by me. NEHA signed by NEHA GARG Date:
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