Delhi District Court
M/S Lallubhai Amichand Limited vs . Sh. Shammi Sawhney on 29 August, 2014
M/s Lallubhai Amichand Limited Vs. Sh. Shammi Sawhney
IN THE COURT OF SH. SACHIN SANGWAN : METROPOLITAN
MAGISTRATE : TIS HAZARI COURTS : NEW DELHI.
CC No. 978/4/13
M/s Lallubhai Amichand Limited .......Complainant
Vs.
Sh. Shammi Sawhney ........ Accused
JUDGMENT
1. Name of the Complainant : M/s Lallubhai Amichand Limited & address 225/227-J, Dadajee Road, Tradeo, Bombay-400007, having their Regional/Branch Office at 23, West Patel Nagar, New Delhi.
Through Regional Manager (North) Sh. Sunil Maharjan.
New Delhi.
2. Name of accused : Sh. Shammi Sawhney & address Proprietor M/s Sawhney Distributors, 16, Navyug Market, Ghaziabad, U.P.
3. Offence complained of : Section 138 of Negotiable Instruments Act.
4. Plea of accused : Pleaded Not Guilty
5. Final Order : Acquitted Date of Institution : 25.02.1999 Date of matter reserved for judgment : 22.08.2014 Date of judgment : 29.08.2014 CC No. 978/4/13 Page No. 1 of 10 M/s Lallubhai Amichand Limited Vs. Sh. Shammi Sawhney BRIEF FACTS OF THE CASE:
The present complaint has been filed U/s 138 of Negotiable Instruments Act, 1881 (referred to hereinafter N. I. Act). As per the complaint the following facts have been averred by the complainant:-
1. That the complainant is Regional Manager (North) of M/s Lallubhai Amichand Limited and has been duly authorized and is competent to file, sign and prosecute the same on behalf of M/s Lallubhai Amichand Limited. The accused is a proprietorship concern and Sh. Shammi Sawhney is the person in charge and responsible for the conduct of business and management of M/s Sawhney Distributors, 16 Navyug Market Ghaziabad.
2. That the accused was appointed as consignee agent of complainant's firm for their product ELITE NONSTICK COOKWARES for Western UP Region on 01.04.1992 and his services were terminated by the complainant in the year 1996 on 20th September and on settlement of accounts a sum Rs. 1,96,885/- was found due to the accused which fact was communicated to the accused vide letter no.
MKTG/184/98-99 dated 15.04.1998 and in reply to the same the accused acknowledged and confirmed an outstanding amount of Rs. 1,75,442.50/- instead of Rs.1,96,885/- vide letter no. SD/01/29/98 dated 08.05.1998 wherein he further agreed to reconcile the difference on meeting. On accused's failure to make payment, another notice dt. 09.10.1998 was sent to accused by complainant demanding payment of dues and in his reply dt. 24.10.1998 accused asked for time on grounds of ill health etc. CC No. 978/4/13 Page No. 2 of 10 M/s Lallubhai Amichand Limited Vs. Sh. Shammi Sawhney
3. Thereafter, the accused issued a cheque bearing no. 205580 dated 25.01.1999 amounting to Rs. 1,75, 442.50/- drawn on Punjab & Sind Bank, Rajindra Place, New Delhi in favour of complainant towards the discharge of his liability/debts which accused had acknowledged in his letters.
4. That on the assurance by the accused, the complainant presented the said cheques in Union Bank of India, ,Patel Nagar, New Delhi. However, the said cheques were returned dishonored on 28.01.1999 along with returning memo with the remarks '' ACCOUNT CLOSED''.
5. As per complaint, the complainant sent a legal notice dated 30.01.1998 by way of Registered A.D. as well as UPC through his Counsel to the accused which was duly served upon the accused and a period of 15 days was granted to the accused for making payment of the said cheque to the complainant. However, despite legal notice being served upon the accused, he did not give any payment to the complainant. Accordingly, the present complaint was preferred by the complainant.
6. The pre-summoning evidence was led by the complainant and three witnesses were examined by the complainant.
A. Sh. Ravi Kr. Nayyar was examined as CW1. He was bank official from Union Bank of India and produced following documents:
1. Ex.CW1/A Statement of bank account of complainant
2. Ex.CW1/B copy of cheque return book CC No. 978/4/13 Page No. 3 of 10 M/s Lallubhai Amichand Limited Vs. Sh. Shammi Sawhney
3. Ex.CW1/C Cheque return memo B. Sh.J.S. Kawatra was examined as CW2. He was bank official from Punjab and Sind Bank. He produced the following documents:-
1. Ex.CW2/1 to Ex.CW2/3 Statement of account of M/s Sawhney Distributors
2. Ex.CW2/4 Copy of cheque bearing no. 205580 dated 25.01.1999 drawn on Punjab & Sind Bank
3. Ex.CW2/5 Copy of Cheque returning register C. Sh. Sunil Bhabota was examined as CW3. He was sales officer of the complainant. During his examination the following documents were referred to and relied upon by him:-
1. Ex.CW3/1 Copy of complaint
2. Ex.CW3/2 Copy of resolution dated 23.02.1999
3. Ex.CW3/3 Copy of resolution dated 09.08.1999
4. Ex.CW3/4 Copy of letter dated 24.10.1998
5. Ex.CW3/5 Copy of notice CC No. 978/4/13 Page No. 4 of 10 M/s Lallubhai Amichand Limited Vs. Sh. Shammi Sawhney
6. Ex.CW3/6 A.D. Card
7. Ex.CW3/7 Postal Receipt
8. Ex.CW3/8 Certificate of posting
7. From the documentary evidence filed by the complainant, a prima facie offence u/s 138 of N. I. Act was made out. Accordingly, the Court took cognizance of the offence and summoned the accused .
8. When the accused entered appearance, the particulars of the offence were explained to him. The accused did not plead guilty and claimed trial.
9. To prove its case, the complainant's sale officer Sunil Bhabota deposed as a witness and relied upon the pre summoning evidence. Besides the same he also filed the original cheque. He was duly cross examined by Counsel for accused.
10. Thereafter, complainant closed its evidence and the accused was examined U/s 313 Cr.P.C. wherein accused desired to lead defence evidence. In his defence evidence, accused examined two defence witness:
A. Sh. Shammi Sawhney i.e. accused himself was examined as DW1. He deposed that he was consigning agent for complainant. He dealt with complainant from 01.04.1992 to September 1996. During the said period he issued number of cheques to the complainant. He had issued ten cheques to the complainant for the purpose of security only in August 1993. He produced the original record slips contained in used cheque book regarding the entries (from 74 to 83) of aforesaid CC No. 978/4/13 Page No. 5 of 10 M/s Lallubhai Amichand Limited Vs. Sh. Shammi Sawhney cheques vide Ex.DW1/1. He deposed that the cheque in question is cheque no. 205580. He further deposed that the said cheques were signed by him and were filled only regarding the name of payee. The date, amount, were left blank in the said cheque. He deposed that he closed the account from which said cheques were issued in December 1997 and informed the complainant regarding the same on the same date. He deposed that he asked for the return of his cheques but he was given a response that what is the use of cheques when the account has been closed. He further deposed that he had closed the said account because the cheque bearing serial no. 205578 and 205579 were used by the complainant for amount of Rs. 1,00,000/- each but the cheques returned dishonored. He objected to the presentation of the cheques to the complainant because he had already paid amount towards the said two cheques. He had written letter to complainant in February 1997 that he had already paid the said amount through demand draft so why the cheques were presented. In the said letter he also demanded back his cheques and the complainant never replied the said letter Ex.DW1/2. He further deposed that he had no outstanding liability towards the complainant when he stopped dealing with the complainant. As per him he was not be liable to pay anything to the complainant because his job was only that of consignee agent and he only dispatched the goods against orders booked by complainant and collected the payment from the parties and send the same to complainant.
B. Sh. Charanjit Singh, officer of Punjab and Sind Bank was examined as DW2. He was summoned by accused to produce the statement of his bank account for the year 1993. However, DW2 deposed that the required record had been destroyed in the year 2008 being the old record.
Thereafter defence evidence was closed and arguments of both parties were heard.CC No. 978/4/13 Page No. 6 of 10
M/s Lallubhai Amichand Limited Vs. Sh. Shammi Sawhney DECISION OF THE CASE AND REASONS THEREOF
11. After considering the facts and circumstances of the case, the Court has come to the conclusion that complainant has failed to prove its case beyond reasonable doubts. The reasons for aforesaid conclusion are as follows:
A. The offence alleged against the accused is that of dishonor of cheque U/s 138 NI Act. The essential ingredients of the offence U/s 138 NI Act are :
(I) Issuance of cheque by the accused
(ii) Issuance of cheque towards any debt or liability
(iii) The presentation of the cheque within validity period
(iv) Dishonor of cheque due to insufficient funds/exceeds arrangement or
analogous reasons.
(v) Making demand of the payment by way of notice in writing, within
prescribed period
(vi) Failure of the accused to make the payment despite notice, within the
prescribed period.
In the present case, the ingredients (I), (iii) to (vi) are not disputed and the core issue is whether the cheque was issued by the accused towards discharge of any liability. There are statutory presumptions in favour of the complainant regarding the same as per section 118 and 139 of NI Act. Accordingly, the burden is on the accused to rebut the same. The accused has claimed that he never issued cheque towards discharge of any liability and the same was issued as blank signed cheque with the name of payee only in the year 1993 for the purpose of security only and the same were misused by the complainant in the year 1999. As discussed in CC No. 978/4/13 Page No. 7 of 10 M/s Lallubhai Amichand Limited Vs. Sh. Shammi Sawhney succeeding paras, certain doubts have cropped up that suggest that defence of accused is a probable one.
B. The specific defence of the accused is that he had issued ten cheques to the complainant in august 1993 and all of the cheques were signed by him and the name of payee was written on the same but the date and the amount were left blank in the said cheque. In support of his defence the accused has examined himself as a witness and has filed record slips of cheque book of account no 785 of Punjab & Sind Bank from which cheques leaves no.205551 to 205600 were issued by him. The said cheque book contains record slips having handwritten entries regarding cheque no 205574 to 205583 (including cheque in question having serial no. 205580). All of said cheques have been shown to be issued to Lallubhai Amichand Ltd. All of them have been shown to be issued without any amount except 205575 and 205576. The first entry of said cheque leaves is that of 12.08.1993 and as per accused all cheques were given on the said date only. The last cheque leave of said cheque book was of serial no. 205600 and same has been stated to be issued on 09.12.1993. Thus as per said entries all cheque leaves had been issued by accused by end of year 1993. It is to be noted that nothing has come in the cross examination of the accused to show that the said entries of the used cheques have been manipulated or are wrong. The said record slip of cheque book shows the issuance date and the name of payee and the amount of the cheque regarding all cheque no's. The entries appear to have been made in ordinary course of business and do not appear to be prepared overnight. The entries have been made using different pens and two entries even mention about ''stop payment''. Most names of payees appear to be that of business concerns and not individuals thereby showing that account was being used for business purpose in ordinary course. Further, as discussed in succeeding para, claim of accused gets support from other evidence also.CC No. 978/4/13 Page No. 8 of 10
M/s Lallubhai Amichand Limited Vs. Sh. Shammi Sawhney C. Though cheque record slips are not conclusive proof of their entries as they are maintained by drawer himself, however, it is to be noted that the accused summoned bank officials for producing his bank account statement but the said official i.e. DW2 stated that the statement of the account of the said account no. have been destroyed being old record. Further, it is to be noted that accused also relied on letter Ex DW1/2 dated 24.02.1997 wherein he demanded two cheques from complainant stating that he had issued them on 12.08.1993. The said letter has not been disputed by the complainant during the cross examination of the accused. Thus, the defence of the accused gets corroborated by the contents of the said letter. Moreover, even the cheque in question is dishonored for reason ''account closed''. In addition to said factors, complainant witness during his cross examination has admitted that the date of cheque and amount mentioned in the cheque in figure and in words is not in the handwriting of Shammi Sawhney i.e accused. Here it is to be noted that as per the complaint the accused admitted his liability of amount of Rs 1,75,442.50/- whereas the complainant was demanding Rs 1,96,885/- and only thereafter the accused has issued the cheque in question for Rs 1,75,442.50/-. In such scenario it is highly improbable that the drawer shall issue the cheque to complainant without filling the amount himself as there were different claims regarding the actual amount due. Lastly, the statement of account filed by complainant shows entries (Ex.CW2/1- Ex.CW2/3) in bank account of accused from 24.05.1996 to 14.03.1998. All of the cheques entries regarding said period pertain to cheque series 1784**, 2182**, 3828** and not a single cheque has been transacted in the account from cheque series 2055**. This fact further corroborates the claim of the accused that all the cheques from the said cheque book were utilized way back in the year 1993.
CC No. 978/4/13 Page No. 9 of 10M/s Lallubhai Amichand Limited Vs. Sh. Shammi Sawhney Thus from aforesaid circumstances it appears very much possible that the cheque in question was issued by the accused as blank signed cheque with the name of complainant as payee way back in the year 1993 but the same was filled up and used by the complainant in the year 1999 to realize the dues pending from the accused. From the facts of the case it appears that the cheque was never issued for the settlement of the accused as alleged by the complainant. Accordingly giving benefit of the doubt to the accused Shammi Sawhney, he is acquitted from the charge U/s 138 N.I Act.
(Announced in the open Court (Sachin Sangwan)
on 29th August, 2014) Metropolitan Magistrate-05:
Central: Delhi.
Room No.354A.
CC No. 978/4/13 Page No. 10 of 10