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Delhi District Court

Arguments Of Advocates vs Reena 172 (2010) Dlt 56 on 24 February, 2014

      IN THE  COURT  OF SH. APOORV SARVARIA, CIVIL JUDGE­I, NEW 
                     DELHI  DISTRICT,  NEW DELHI

C.C. No:  921/11
Unique Case ID No.02403R0098782011
J.D. Solitaire
Through: Sanjay Kalsi,
Sole Proprietor
I­48B, First Floor,
Lajpat Nagar­II,
Central Market, New Delhi­110024.

                                                                                        .....Complainant

                                                    Versus
      1. Jewel International
         Through: Proprietor
         Sh. Sandeep Chaudhary
         B­2/3, Model Town­II, Delhi.
      2. Sandeep Chaudhary
         Proprietor of M/s. Jewel International
         B­2/3, Model Town­II, Delhi.


                                                                                            .....Accused

                                   COMPLAINT UNDER SECTION 138 OF THE 
                                    NEGOTIABLE INSTRUMENTS ACT, 1881 

                                                                   Date of Institution: 15.11.2007
                                                             Date of Reserving Order: 21.12.2013
                                                                   Date of Judgment: 24.02.2014

                                                  JUDGMENT

Brief facts

1. The brief facts of the present complaint filed U/s. 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "NI Act") are that the CC No. 921/11 M/s. J D Solitaire v. M/s. Jewel International Page 1 of 8 complainant Sh. Sanjay Kalsi, proprietor of M/s. J D Solitaire is a dealer of diamond jewellery and other jewellery articles and is operating at Lajpat Nagar­II, Central Market, New Delhi.

2. The accused Sh. Sandeep Chaudhary is the proprietor of M/s. Jewel International and is involved in the business of sale and purchase of jewellery. It is stated that the accused visited the complainant's shop at Lajpat Nagar­II and purchased diamond bangles worth Rs. 1,51,500/­ and made the payment vide cheque no. 864839 dated 14.09.2007 drawn on Karnataka Bank, Lajpat Nagar, New Delhi. The accused also purchased multi­coloured stone diamond bangles worth Rs. 30,300/­ and for that purchase the accused issued cheque no. 864838 dated 08.09.2007 and the same was cleared by the accused's banker. Thereafter, the complainant presented the cheque no. 864839 dated 14.09.2007 in his bank but the same was returned unpaid with remarks "funds insufficient"

as per the return memo dated 15.09.2007. The accused asked the complainant to again deposit the cheque after three days with assurance that the same will be realised and the complainant again presented the cheque no. 864839 on 18.09.2007 but the same was again returned unpaid with the same remarks. Thereafter, the complainant issued legal notice dated 27.09.2007 through registered AD. It is stated that despite service of the legal notice accused did not make the payment of the cheque amount within the prescribed period. Therefore, it is stated that the accused is liable for the commission of the offence U/s. 138 of the NI Act.

Proceedings Before Court

3. The present complaint was received by way of assignment on 16.11.2007.

Summons were issued against the accused. The accused entered appearance and took bail and notice of accusation was framed against the accused on CC No. 921/11 M/s. J D Solitaire v. M/s. Jewel International Page 2 of 8 22.05.2010 to which accused pleaded not guilty and claimed trial.

4. In support of his case, the complainant produced himself as CW1 and tendered his evidence by way of affidavit Ex.CW1/A and relied upon documents Ex.CW1/1 to Ex. CW1/7. Thereafter, CW1 Sh. Sanjay Kalsi was cross­ examined. The complainant also produced CW2 Sh. Ashwani Kumar from Punjab and Sind Bank who produced the documents Ex.PW2/1 and Ex.PW2/2. Thereafter, CW2 was cross examined and re examined after which the complainant closed his evidence.

5. During examination conducted U/s. 313 Cr.P.C, the accused stated that in September 2007, he had placed the order for a diamond studded gold bangle of Rs. 1,82,000/­ and he had paid Rs. 30,300/­ in advance for gold portion but the complainant did not deliver the bangle. He further stated that after certain discussion, he had paid Rs. 25,000/­ more by demand draft. He also stated that the cheque was issued in advance in first week of September 2007 and the cheque had to be encashed after delivery of bangle. He stated that he did not receive legal notice.

6. In support of his defence, the accused produced DW1 Sh. Prem Raj Singh from the Department of Post, NS Mandi, Azadpur, DW2 Sh. Surender Kumar from the Trade and Taxes Department who produced the list of sundry debtors and creditors of the complainant Ex.DW2/A after which the witness was cross examined in which he produced the record of deposit of Vat for the period July to September 2007 Ex.DW2/B. The accused produced DW3 Sh. Chander Bhushan Bhardwaj from the Income Tax Department, who produced the IT Returns of the complainant from 2006­07 to 2011­12 after which the witness was cross­examined. DW4 Sh. Sanjay Sharma, Accountant of the complainant was also examined. DW5 Sh. Anil Chawla from Punjab and Sind Bank was also examined after which the defence evidence was closed.

Arguments of Advocates

7. Sh. Faisal Zafar, Ld. Advocate for complainant submitted that presumption U/s.

139 of NI Act is running against the accused and the accused has failed to rebut the same. He also relied upon decisions in V S Yadav v. Reena 172 (2010) DLT 561, Santosh Aggarwal v. Aushim Kapoor, Crl. LP 45/2013 decision dated 02.02.2010, Delhi High Court, CC Alavi Haji v. Palapetty Muhammed (2007) 6 SCC 555, Prakash Jewellers v. A K Jewellers 99 (2002) DLT 244 (DB), ICICI Bank v. Prafull Chandra 139 (2007) DLT 538 and Ancon Engineering Co. v. Amitava Goswami 1994 Cri LJ 351 (Cal).

8. On the other hand, Sh. Ruchir Batra submitted that the bills Ex.CW1/A and Ex.CW1/C filed by complainant are forged and there has been concealment of documents by the bank witness CW2. He also submitted that the legal notice was never received and no offence is made out.

9. This court has heard Sh. Faisal Zafar, Ld. Advocate for the complainant as well as Sh. Ruchir Batra, Ld. Advocate for the accused and perused the record.

Findings

10.The signatures on the cheque and issuance of the cheque bearing no. 864839 dated 14.09.2007 drawn on Karnataka Bank, Lajpat Nagar, New Delhi Ex.CW1/2 is admitted and, therefore, the execution of the cheque is not disputed. Hence, presumption U/s.139 of the NI Act is raised.

11. In Rangappa v. Sri Mohan AIR 2010 SC 1898 it was observed by the Hon'ble Supreme Court as under :

"14. In light of these extracts, we are in agreement with the respondent­claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the CC No. 921/11 M/s. J D Solitaire v. M/s. Jewel International Page 4 of 8 impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own. " (emphasis added)

12.In view of the decision in Rangappa laid down by the Supreme Court, the presumption raised under Section 139 of the NI Act is of legally enforceable CC No. 921/11 M/s. J D Solitaire v. M/s. Jewel International Page 5 of 8 debt or liability and it is for the accused to raise a probable defence to rebut the presumption.

13.The defence raised by the accused is that he placed an order of diamond studded gold bangle of Rs. 1,82,000/­ and made partial payment of Rs. 30,300/­ in advance. He stated that the cheque Ex.CW1/2 was given in advance to be realised after delivery of the bangle which was never delivered. To prove these facts, the accused has not produced any person in the witness box. Only the witnesses from Government Departments have been produced which of course cannot depose on the facts on which the above defence has been raised. Therefore, in the absence of any evidence being lead by the accused to prove the above facts, the aforesaid defence has not been proved by the accused.

14. In V.S. Yadav Vs. Reena 172 (2010) DLT 561, the High Court of Delhi has held that there is no presumption of law that the explanation given by the accused was truthful. It was further held therein that mere suggestion to the witness that cheques were issued as securities or mere explanation given in the statement of accused U/s 281 Cr. P.C. that the cheques were issued as security, does not amount to proof. Moreover, the offence U/s 138 of the N.I. Act is a technical offence and the Complainant is only supposed to prove that the cheques issued by the accused were dishonoured, his statement that cheques were issued against the liability or debt is sufficient proof of debt or liability and the onus shifts to accused to show the circumstances against which cheques came to be issued and this can be proved by the accused only by way of evidence and not by leading no evidence. (See para 5, DLT @ p.563).

15.The other defence raised by the accused is that the bills ExCW1/1 and Ex.CW1/3 are forged as the copies of the bills produced by defence witness DW4 at page 11 and 12 of Ex.DW4/A do not match Ex.CW1/1 and Ex.CW1/3. The bill dated 01.09.2007 for Rs. 1,51,500/­ Ex.CW1/1 and bill dated CC No. 921/11 M/s. J D Solitaire v. M/s. Jewel International Page 6 of 8 01.09.2007 for Rs. 30,300/­ Ex.CW1/3 are perused by the court. The court finds no difference in the contents of these bills with the photocopies at page 11 and 12 of Ex.DW4/A. Therefore, no merit is found in this contention of the accused.

16. In view of the above reasons, the court finds that the accused has failed to rebut the presumption raised U/s. 139 of NI Act. The accused has failed to show why he had paid Rs. 25,000/­ by way of demand draft when he had already paid Rs. 30,300/­ as advance for the bangle. Further payment of Rs. 25,000/­ by demand draft and issuance of cheque Ex.CW1/2 go on to show that the jewellery was delivered to the accused and that is why further payment was made. Since the accused has failed to rebut the presumption raised U/s. 139 of the NI Act, there is no need to go into complainant's evidence for proving the complainant's case.

17. Even otherwise, CW1 Sh. Sanjay Kalsi has produced the invoices Ex.CW1/A of Rs. 1,51,500/­ dated 01.09.2007 raised againt Jewel International. Moreover, the defence witness DW2 Sh. Surender Kumar from Trade and Tax Department has produced list of sundry debtors of the complainant Ex.DW2/A (colly) as on 31.03.2008, 31.03.2009, 31.03.2010, 31.03.2011 and 31.03.2012. which shows M/s. Jewel International i.e. accused no.1 for the outstanding liability of Rs. 1,26,500/­. This is because demand draft of Rs. 25,000/­ was paid by accused after the legal notice was served. The amount of debt from sundry debtors has been shown by the complainant in the Income Tax Returns for the assessement year 2008­09 Ex.DW3/A as Rs. 1,26,500/­ which matches the entry shown for accused no.1. The defence witnessss DW2 and DW3 have proved the amount due by accused to complainant. Therefore, the complainant has been able to prove that cheque Ex. CW1/2 was issued in discharge of legally recoverable liability.

18. The demand draft of Rs. 25,000/­ was made on 28.09.2007 and it was presented by the complainant on 16.10.2007 and was realised by him as certified the letter dated 21.08.2013 Ex.DW5/A issued by the Manager of Punjab and Sind Bank. The legal notice dated 27.09.2007 Ex.CW1/F1 (dispatched on 28.09.2007) is valid as the partial payment of Rs. 25,000/­ was made only after the issuance of legal notice. Part payment made after issuance of legal notice does not escape the criminal liability U/s. 138 of NI Act. (See. Ancon Engineering Co. v. Amitava Goswami 1994 Cri LJ 351 (Cal)

19.There is nothing coming out in the cross­examination of complainant's witness which would probabilise the defence raised by the accused or falsify the case of the complainant. The complainant has been able to prove his case.

20.Therefore, the complainant has been able to prove that the cheque in question i.e. cheque bearing no. 864839 dated 14.09.2007 drawn on Karnataka Bank, Lajpat Nagar, New Delhi Ex.CW1/2 was issued in discharge of legally recoverable debt owed to the complainant. The accused is convicted for the offence punishable U/s. 138 of the NI Act in respect of cheque Ex.CW1/2. The accused shall be heard on the point of sentence on 03.03.2014 at 2.00 pm. Announced in the Open Court (Apoorv Sarvaria) on 24th February, 2014 Civil Judge­I/MM, New Delhi District New Delhi CC No. 921/11 M/s. J D Solitaire v. M/s. Jewel International Page 8 of 8