Delhi District Court
Cc No. 15765/2019 Mukut Singh Sharma vs Sandeep Arora 1 Of 28 on 21 July, 2022
IN THE COURT OF SH HARSHAL NEGI,
MM(NIAct)-05/South-West District, Dwarka, Delhi
Complaint Case no. 15765 of 2019
CNR no. DLSW02-022410-2019
In the matter of :
SH. MUKAT SINGH SHARMA
S/O SH. BANSIDHAR SHARMA,
R/O A-184, NAND RAM PARK,
NEW DELHI. .......Complainant
VERSUS
SANDEEP ARORA
S/O LATE SH. S. D. PRAKASH
R/O FLAT NO.254, KAUTILYA APARTMENT,
POCKET-B, SECTOR-14, DWARKA,
NEW DELHI .........Accused
Offence complained of : U/s 138 of NI Act.
Date on which the complaint was instituted : 02.02.2015
Plea of the Accused : Not Guilty
Date on which judgment was reserved : 01.07.2022
Date of Pronouncement of judgment : 21.07.2022
CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 1 of 28
JUDGMENT
1. The case of the complainant is that he is a manufacturer of scientific tools etc and is operating under the name and style of M/s Sharma Scientific Works. It is his case that the accused is maintaining a running, current and mutual account in its books of accounts and as per the statement of accounts a sum of Rs 2, 22,981/- was due and outstanding against the accused as on 15.09.2014. It is further his case that in discharge of his part debts and payment of supplied materials, the accused issued a cheque bearing no 342493 dated 17.09.2014, drawn on Punjab National Bank, Vikaspuri Branch, New Delhi 110018 for Rs 72,281/- in favor of the complainant. That he deposited the said cheque for encashment with his bankers i.e. Canara Bank, Uttam Nagar, New Delhi and the same was received back dishonoured vide return memo dated 14.11.2014 with remarks "payment stopped by drawer". Thereafter, complainant served a legal notice dated 12.12.2014 upon the accused through his counsel demanding the said amount. Despite service of aforesaid notice, neither any reply was sent CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 2 of 28 nor was the money repaid by the accused. Thereafter, complainant has filed the present complaint case.
2. The accused entered appearance on 12.01.2016. Notice under Section 251 CRPC was accordingly framed to which the accused pleaded not guilty and claimed trial. In his notice under Section 251 CRPC the accused stated that the complainant was to provide instruments being compression testing machine, flow table, vibrating machine head, pressure gauge with cut out vavle all totaling for sum of Rs 72,281/- for which a bill was raised and the payment was subject to the delivery of the aforementioned goods. He further stated that it was specifically written in the bill that the cheque shall be enchased only after the goods are delivered. That the complainant failed to deliver the goods within the specified time period, therefore, the banker was directed to stop the payment towards the said cheque and the complainant was also intimated vide a letter dated 03.11.2014 that the goods have not been delivered and therefore the banker was directed to stop the payment. That the complainant was aware about the letter and non-delivery of the goods and thereafter has filed the present case. That there is no liability towards the complainant. He admitted the signatures on the cheque and also admitted that particulars on the cheque were filled by him. He further CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 3 of 28 admitted the receipt of legal notice and also stated that he have given the reply to the legal notice.
3. The complainant has placed reliance on the following documents:
a. Certified statement of Accounts Ex CW 1/1;
b. Carbon Copy of the Invoice No 900 Ex CW ½;
c. Original Cheque in question Ex CW 1/3;
d. Original returning memo Ex CW 1/4;
e. Copy of Legal Notice Ex CW 1/5;
f. Original reply to the legal notice Ex CW 1/9.
4. The complainant was cross examined on 01.04.2016, 07.11.2016 and 30.11.2018.
5. In his cross examination dated 01.04.2016 the complainant stated that the documents Ex CW 1/10 is the complaint filed. He affirmed that he have not filed proof of service of legal notice i.e. the postal receipts and courier receipts which have been mentioned in his affidavit as Ex CW1/6 and Ex CW1/7. He further affirmed that Ex CW1/6 and Ex CW 1/7 do not form part of the record. He stated that he have not brought the original ledger which he has maintained for running, current and mutual account. He also stated that CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 4 of 28 the statement of accounts that have been filed as Ex CW1/1 was made from the account maintained and the documents Ex CW 1/1 is a typed detail of ledger book and is true ledger book as per the ledger. He denied the suggestion that the statement of accounts Ex CW 1/1 is wrong and does not show the correct running accounts. He stated that he can bring the original ledger if ask for. He stated that he is the sole proprietor of M/s Sharma Scientific Works. He further stated that he used to raise invoice in respect of material supplied to the accused. That he have entire duplicate bills of the material supplied. He stated that the accused used to come and inspect the statement of accounts at his firms at regular intervals. He stated that he have shown Ex CW1/1 to the accused. He stated that he do not remember whether he mailed, posted or couriered copy of Ex CW1/1 to the accused. That his firm is assessed for sales tax. He stated that he do not remember whether the transaction in question is reflected in return of sale tax. He stated that he can bring the sale tax return in respect of bill in question. He stated that he deal in manufacture of scientific instruments and the said instruments were manufactured only on demand of customers. He stated that he do not maintain any stock register of goods which are manufactured by his firm. He stated that first he received order from the customer and on the basis of order CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 5 of 28 his firm manufactures the instruments. That when the customer takes the instruments his firm raise invoice and receive cheque in consideration. He stated that in some cases he also delivered goods through a rented goods carrier. He stated that the invoices in such cases are sent through the driver of the carrier. He stated that there is no process of taking acknowledgement of receipts of goods from the customers. He stated that he take receipts of goods only for certain customers who insists. He stated that he have never taken any acknowledgment from the accused. He denied the suggestion that he never supplied the goods which are mentioned in the invoice Ex CW1/2. He stated that he will bring the original ledger, invoices raised against the accused and relevant sale tax returns.
6. The complainant was then cross examined on 07.11.2016. In his cross examination dated 07.11.2016 he stated that he have already filed the true copy of the ledger account which is Ex CW1/1 and the same is prepared manually. He stated that he do not have a personal email id but his brother has. He stated that the firm has an email id though voluntarily stated that at the time of filing of this case the firm did not have an email id. He stated that he do not know the address of email id created for the firm. He stated that he do not know the email id maintained by his brother. He stated that he have CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 6 of 28 never emailed the accused showing the account of his transactions. He stated that he do not know whether he emailed the ledger shown as ledger as subject from the email id [email protected] of the email id of the accused Sandeep Arora i.e. [email protected] in which he had attached a typed PDF document of ledger.
7. During the cross examination the accused put Ex CW1/D1 (Colly) and Ex CW1/D2 (Colly) to the complainant. The complainant stated that he have not received any email reply from the accused wherein the accused has sent the mail to [email protected] and [email protected] and had attached a letter dated 03.11.2014 as scanned document. He denied the suggestion that he have received the letter and the email from the accused wherein the accused had specifically referred to bill no 900 and said that the material has not been received and therefore, payment has been stopped. He stated that he do not know whether he have filed any affidavit u/s 65B with Ex CW 1/1. He stated that he have shown the transactions in his sales tax return filed by him. He voluntarily stated that whatever documents with respect to sales tax return he have brought with me are maintained by his brother Rambir Sharma. He stated that he cannot show from the documents brought whether the same contains the sale tax CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 7 of 28 returns filed with respect to bill no 900. He stated that the bills of his firm M/s Sharma Scientific Works are prepared by his brother Rambir Sharma and Amit Sharma, Sumit Sharma his nephew and his son Manjit Sharma. He stated that they all work together in the management of the firm. He denied the suggestion that he is not showing his sale tax return with respect to the bill in question because he never showed the same in his returns. He stated that he have not filed on record anything to show the hire charges of the transportation of the materials. He voluntarily stated that the hire charges were always paid by the accused. He denied the suggestion that accused was never liable to pay the transportation charges as the same was always paid by him. He stated that the bill Ex CW 1/D3 is raised at his hand but the writing in Hindi was not made by him. He also stated that the sign at point A belongs to Rambir Sharma. He again stated that he cannot identify the sign.
8. The complainant was then further cross examined on 30.11.2018. In his cross examination he stated that he have not brought the original ledger as he have not been able to trace out the same. He voluntarily stated that there was a partition between him and his brothers. He denied the suggestion that he never prepared the ledger book with respect to his business. He stated that he has not been able to trace the ledger book from the time he and his brothers CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 8 of 28 started their separate business. He stated that he and his brothers separated in 2009-10. He stated that he can identify the signature at point A of Ex CW 1/D3. He stated that he have bills of the raw materials he purchased for production of science instruments. He stated that from 2009-10 to 2015 he had only one ledger. He stated that he have only a receipt showing a consolidated payment of sale tax and stated that he have not brought the returns that he have filed with the sale tax department. He affirmed that Ex CW1/2 does not bear any receiving of the product supplied by him. He stated his signatures are at Point B and signatures of his brother Rambir is at Point C at Ex CW1/2.
9. He further stated that sale tax return are prepared by his brother and his lawyer. He stated that he have not brought the sale tax returns. He denied the suggestion that he did not supply the materials to the accused. He denied the suggestion that there was no liability towards the bills raised by him as the products were not supplied by him. He denied the suggestion that he was informed by the accused that the products have not reached him by telephone and email. He denied the suggestion that despite being informed of the non-supply of material he did not supply the material. CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 9 of 28
10. The statement of the accused under Section 313 CrPC was then recorded on 15.02.2021 and all the incriminating material was put to the accused. The accused stated that there is no such amount due/outstanding against him and he have not issued any cheque in furtherance of the outstanding amount. He stated that the cheque was issued in furtherance of bill no 900 which he requested the complainant to cancel. He stated that since he was not in receipt of the goods against the bill no 900 he issued directions to bank to stop the payment.
11. The accused thereafter opted to lead his defence evidence in which he examined himself as DW 1.
12. In his examination dated 04.12.2021 as DW 1, the accused stated that he approached the complainant on September 2014 for inspection of the machine and the complainant raised the bill in his name. He stated that when he checked the machine the same was faulty and the complainant assured him that he will rectify the fault and will send the machine by evening. That the complainant called him in the evening and told him that he is dispatching the machine through a tempo and told him that the cheque in question should be issued in his i.e. complainant's favor before the delivery of the CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 10 of 28 machine. He stated that the complainant approached at 4.30 pm and requested that the cheque may be given. That at that time the complainant noted in the bill that is Ex CW1/D3 in which the complainant endorsed the cheque in question will not be encashed before the delivery of the machine and on this assurance he handed over the cheque to the complainant. He further stated that on the next day when he approached the complainant with respect to the delivery of the machine and inquired that the same has not been delivered, the complainant again assured him that he will rectify the defect and deliver the same to him. He further stated that thereafter he went to the bank and informed the bank for stop payment of the cheque in question as no delivery was given. He stated that in November 2014 the complainant had sent him a statement of account from his ledger through an email claiming that certain outstanding is against him and he had replied to the email on the next day to the effect that the bill which was earlier generated be cancelled and also requested the complainant to meet so that the statement can be verified. The emails are already Ex CW 1/D1 and Ex CW 1/D2. He also stated that the complainant after issuing the legal notice to which he has replied has filed a false case.
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13. The accused was cross examined on 04.12.2021. In his cross examination he stated that he was dealing with the complainant since 2009 and is not able to remember as to how much material he has taken from the complainant. He stated that many a times the cheques were given before the delivery and also many a times after the delivery. He stated that prior to the present matter there was no dispute as to the delivery between them. He denied to have issued any written communication with the complainant between 15.09.2014 and 03.11.2014 for non-delivery of goods or requesting non-presentation of cheque. He affirmed that the copy of the bill is which is given to the customers. He affirmed that the endorsement at Point A to A- is in his handwriting. He voluntarily stated that the whole bill is in his handwriting but the signature are of the complainant on the endorsement. He denied the suggestion that Ex CW1/2 is the carbon copy of the actual bill dated 15.09.2014. He voluntarily stated that at the time of filing of the bill the carbon was not attached and therefore on the second copy of the bill he himself entered the details.
14. He denied the suggestion that the endorsement in Ex CW1/D3 from A to A-
was filled by him after the bill was presented for encashment. He denied the suggestion that it is for the said reason that the endorsement is not present in CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 12 of 28 Ex CW1/2. He denied the suggestion that material in Ex CW1/D3 were delivered to him. He stated that he have not filed any complaint with respect to the misuse of the cheque in question in any authority. He denied the suggestion that he have not filed any complaint in any authority because the cheque in question was not misused by the complainant. He denied the suggestion that the cheque in question was given towards legally enforceable debt. He denied the suggestion that he have not sent any communication dated 03.11.2014 to the complainant. He voluntarily stated that he sent his son with the letter to the complainant, however, he refused to take the same on 03.11.2014 and that thereafter he sent an email on 09.11.2014. He denied the suggestion that he have never sent any written communication to the complainant through any mode. He denied the suggestion that Ex CW1/D1 and Ex CW1/D3 are false and fabricated. He denied the suggestion that complainant has never sent an email marked as Ex CW 1/D1 to him. He stated that he also maintain ledger receipt of goods and also maintain stock register of the material. He affirmed that he have not filed any ledger and stock register on record which can show that he maintain the material provided by the complainant. He denied the suggestion that an outstanding of Rs 2, 22,981/- is due on him as on 15.09.2014.
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15. Arguments adduced by Ld Counsels of both the parties have been heard.
Evidences and documents on record perused carefully.
Law Point
16. Before analyzing the material on record, it is imperative to set forth the legal benchmark which governs the adjudication of cases under Section 138 NI Act. A bare reading of Section 138 NI Act reveals that in addition to the cheque being issued for the discharge, in whole or in part, of any debt or other liability; following are the ingredients which constitute an offence:-
1. that a person drew a cheque on an account maintained by him with the banker;
2. that such a cheque when presented to the bank is returned by the bank unpaid;
3. that such a cheque was presented to the bank within a period of six months from the date it was drawn or within the period of its validity whichever is earlier;
4. that the payee demanded in writing from the drawer of the cheque the payment of the amount of money due under the cheque to payee; and CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 14 of 28
5. such a notice of payment is made within a period of 30 days from the date of the receipt of the information by the payee from the bank regarding the return of the cheque as unpaid.
(Para 26, N. Harihara Krishnan vs J. Thomas, (2018) 13 SCC 663, referred to in Himanshu vs B. Shivamurthy (2019) 3 SCC 797) Section 138 is to be read with the presumption, being a rebuttable presumption, as contained in Section 139. Section 139 provides that:
"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."
17. Thus, in cheque bouncing cases, the judicial scrutiny revolves around the satisfaction of ingredients enumerated under Section 138 NI Act and if so, whether the accused was able to rebut the statutory presumption contemplated by Section 139 NI Act. Section 139 is an example of reverse onus clause which usually imposes an evidentiary burden and not a persuasive burden. In other words, evidence of a character, not to prove a fact affirmatively, but to lead evidence to show non-existence of a liability. Further The law is well settled that when an accused has to rebut the CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 15 of 28 presumption under Section 139, the standard of proof of doing so is that of "preponderance of probability" (Rangappa vs Sri Mohan (2010) 11 SCC
441). Once execution of cheque is admitted, it is a legal presumption under Section 139 of Negotiable Instrument Act, the cheque was issued for discharging legally enforceable debt.
18. Attention is also invited to Section 118(a) wherein a presumption of the cheque having been issued in discharge of a legally sustainable liability and drawn for good consideration, arises. 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;"
19. Hence, it can be seen that from its very inception a presumption that the cheque was issued in discharge of a debt or other liability subsists in favour of the Complainant and onus rests upon the accused to rebut the existing presumption on the touchstone of preponderance of probability. CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 16 of 28
20. Further, the accused in a trial under Section 138 has two options. Firstly, he can either show that consideration and debt did not exist or Secondly, that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed (Para 20, Kumar Exports vs Sharma Carpets (2009) 2 SCC 513 which was quoted with approval in Rohitbhai Jivanlal Patel v. State of Gujarat, (2019) 18 SCC 106, Rohitbhai Jivanlal Case, cited in Barun Kumar vs State NCT of Delhi, CRL.REV.P. 398/2018, Delhi High Court, judgment dated 25.06.2021). Another path, thirdly, which the accused can pursue is to show, either by creating a dent in the case of the complainant or through his own defence evidence, that he has already made good the payment of the loan or debt and nothing remains to be paid against the said loan or debt.
Analysis & Conclusion
21. Now, the law is also well settled 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 favor of the complainant." (Rangappa v. Mohan, AIR 2010 SC 1898). Reference can CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 17 of 28 also be made to K. Bhaskaran Vs. Sankaran Vaidhyan Balan 1999 (4) RCR (Criminal) 309, wherein it has been held by the Hon'ble Supreme Court as under:
"As the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability."
22. In this matter, the accused has admitted his signature. He has also admitted in Therefore the presumption under Section 139 NI Act does get raised in favor of the complainant and against the accused. Thus, the accused now has to rebut the presumption on the touchstone of preponderance of probabilities.
23. Before analyzing as to whether the accused has been able to rebut the presumption under Section 139 NI Act, it is imperative to set forth the indisputable facts which have come to light on the reading of the entire material on record and which are also admitted by both the parties. They are:
CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 18 of 28 There existed a business relationship between the accused and the complainant wherein the complainant used to provide scientific instruments to the accused. (Per Notice to accused under Section 251 CRPC, complaint, cross examination of the complainant and reply by the accused to the legal notice Ex CW1/9) The accused and the complainant entered into a transaction in furtherance of their business relation wherein Ex CW ½ i.e. Bill No 900 dated 15.09.2014 amounting to Rs 72,281 was generated. (Per complaint, Notice under Section 251 CRPC, Section 313 CRPC of the accused and reply of accused to the legal notice Ex CW1/9) That the cheque in question Ex CW 1/3 was issued by the accused in relation to the transaction pertaining to the bill no 900 dated 15.09.2014 and the same got dishonored vide return memo dated 14.11.2014 Ex CW ¼ with the remarks "payment stopped by drawer. (Notice under Section 251 CRPC and Section 313 CRPC) Section 138 (b) has also been duly complied by the complainant though the complainant has not filed any postal receipt or delivery report. (As per CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 19 of 28 admission of accused in Notice under Section 251 CRPC and reply dated 16.12.2016 Ex CW1/9 by the accused to the legal notice of the complainant)
24. Now, the case of the complainant is simple. He entered into a transaction with the accused, generated bill no 900 Ex CW ½ against the said transaction, supplied the goods as per the details of the bill and the accused as payment issued the cheque in question Ex CW 1/3 which got dishonored by return memo Ex CW1/4.
25. The accused to rebut the presumption existing in favor of the complainant has lead his defence which can be summarized thus:
I. The cheque in question was indeed issued with respect to the Bill No 900 Ex CW1/2. (Per Notice under Section 251 CRPC, Reply to legal notice Ex CW1/9 and statement under Section 313 CRPC) II. That the payment was subject to the delivery of the goods as mentioned in the bill no 900 Ex CW ½ and he never supplied the goods. (Notice under Section 251 CRPC, testimony as DW 1 and reply to legal notice Ex CW1/9) CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 20 of 28 III. That the cheque was given on the assurance given by the complainant that he is dispatching the material and the complainant noted and endorsed in the bill Ex CW 1/D3 that the cheque in question will not be encashed before delivery of the materials. (Testimony as DW 1 and Ex CW1/D3) IV. That when the complainant did not delivered the materials, he i.e. accused issued stop payment instructions to his bank. (Testimony as DW 1, statement under Section 313 CRPC and reply to the legal notice Ex CW1/9) V. That he also intimated about the non-delivery and the issuance of stop payment instructions to his bank to the complainant vide letter dated 03.11.2014 which was forwarded to complainant through email. (Per testimony as DW 1, reply of accused to legal notice Ex CW1/9) Point No I is already an admitted position of both the parties.
On Point No II and III.
26. These two defences of the accused are taken together since they are inter connected and forms the core of the defence of the accused. The accused has CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 21 of 28 consistently stated that the payment was subject to delivery of goods and the complainant has never supplied the goods. Further he has stated that the complainant in Ex CW1/D3 i.e. the original bill, made an endorsement that the cheque in question will be presented for encashment only after delivery. Therefore, what needs to be first ascertained is that, firstly, whether the complainant made an endorsement in Ex CW1/D3 wherein it was agreed that the cheque in question would be presented only after delivery of the material, secondly, whether the complainant supplied/delivered the goods.
27. Coming to the firstly, the accused has been able to establish that it was agreed between the parties that the cheque in question will be presented for encashment only after delivery of the goods/materials as mentioned in Bill No 900. It has come in the cross examination of the complainant that the brother of the complainant namely Rambir Sharma was to manage the business of M/S Sharma Scientific Works and also used to prepare the bills on behalf of the firm. The following submissions of the complainant establishes this position:
"...the returns, accounts etc are maintained by my brother Sh. Rambir Sharma"
(Cross examination dated 07.11.2016) CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 22 of 28 "The bills of my firm M/S Sharma Scientific Works are prepared by my brother Rambir Sharma.....We all work together in the management of the firm". (Cross examination dated 07.11.2016) "....at point C at Ex CW1/2 it bears signature of my brother, Rambir Sharma. The bills and ledger were always prepared and signed by my brother Rambir Sharma". (Cross examination dated 30.11.2016) With respect to the signature on Ex CW1/D3 (Original Bill No 900), the c omplainant made the following submission in his cross examination:
"The sign at point A belongs to Rambir Sharma" (Cross examination dated 07.11.2016) "I can identify the signature at point A of Ex CW1/D3. Rambir Sharma is my younger brother" (Cross examination dated 30.11.2016)
28. A co-joint reading of the above said submissions clearly establishes the position that Ex CW1/2 (Carbon Copy of Bill No 900) and Ex CW 1/D3 (Original Bill No 900) was prepared by Rambir Sharma, brother of the complainant, who was at the given time carrying out business of M/S Sharma Scientific Works along with the complainant.
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29. It further stands established, on co-joint reading of the above said submissions, that the contents written in Hindi from Point A to A- in Ex CW1/D3 which states that the cheque in question was to be presented only after delivery of goods, was duly endorsed by Sh. Rambir Sharma on behalf of M/S Sharma Scientific Works.
30. Thus, from the above said material it stands established that there was an agreement between M/S Sharma Scientific Works (Firm of the complainant) and the accused that the cheque in question would be presented only after delivery of the material. In view of the above the position of the accused gains credence when he asserts, throughout his trial, that the payment was subject to delivery of the goods and that the cheque in question was to be deposited only after the delivery of goods.
31. Once the aforesaid is answered in affirmative what now needs to be ascertained is whether the complainant has delivered the goods. This becomes important as on failure to establish the delivery of the material, the entire case of the complainant would fall like a house of cards.
32. The complainant has not been able to bring on record any material to even remotely suggest that he has duly delivered the material. In view of the fact that it was agreed that the cheque in question was to be presented only after CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 24 of 28 the delivery of the material, it was incumbent on the complainant to show that he duly supplied/delivered the material. No document or witness was brought on record to establish the delivery of the material.
33. The reason of dishonor is "Payment stopped by drawer" and it is the case of the accused that he issued instructions to his bank for stopping the payment since no goods/material was ever delivered to him against the raised invoice. The Supreme Court in M/S M. M. T. C. Ltd. & Anr vs M/S Medchl Chemicals & Pharma (2002) 1 SCC 234 has observed thus:
"The accused can thus show that the "stop payment" instructions were not issued because of insufficiency or paucity of funds. If the accused shows that in his account there was sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer bank and that the stop payment notice had been issued because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encashment, then an offence under Section 138 would not be made out. The important thing is that the burden of so proving would be on the accused."
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34. Although the accused has not lead any evidence to establish that at the given time he was having sufficient balance in his account, the accused has been able to establish that the stop payment instructions were given because there was no existing debt or liability at the time of presentation of the cheque.
35. The presumption under Section 139 NI Act stands duly rebutted by the accused on his establishing that the cheque was to be presented only after delivery of the material. Raising of invoice simplicitr in absence of proof of delivery of the material, viewed in light of an agreement between the parties wherein the cheque was to be encashed only after delivery, does not tantamount to existence of a legally enforceable debt/existing debt or liability. The debt in the facts of the present case ought to arise only when the delivery has been effected by the complainant.
36. To arrive at the above said conclusion, I find strength in the judgment of the Supreme Court in Indus Airways Pvt. Ltd & Ors v. Magnum Aviation Pvt. Ltd & Anr 2014 (2) Crimes (SC) 105, wherein the Apex Court observed:
"The explanation appended to Section 138 explains the meaning of the expression 'debt or other liability' for the purpose of Section 138. This expression means a legally enforceable debt or other liability. Section 138 treats dishonoured cheque as an offence, if the CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 26 of 28 cheque has been issued in discharge of any debt or other liability. The explanation leaves no manner of doubt that to attract an offence under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque. In other words, drawal of the cheque in discharge of existing or past adjudicated liability is sine qua non for bringing an offence under Section 138. If a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise, and material or goods for which purchase order was placed is not supplied, in our considered view, the cheque cannot be held to have been drawn for an existing debt or liability. "
37. In the facts of the present case and the material which has come on record, the payment by cheque was in the nature of an advance payment and it indicates that at the time of drawal of cheque, there was no existing liability. Thus, the complainant has failed to establish one of the fundamental ingredients of Section 138 of the Act i.e. that the dishonoured cheques were issued in discharge of a legally recoverable debt or liability as at the time when the cheque in question was given to the complainant there was no CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 27 of 28 existence of legally enforceable debt as the material/goods were never supplied. Since the initial fundamental ingredient of Section 138 NI Act does not gets establish, the discussion on the other aspects of the offence under Section 138 NI Act becomes redundant.
38. Accordingly, the accused Sandeep Arora s/o Late Sh. S D Prakash is acquitted of the offence under section 138 of the Act.
This judgment contains 28 pages.
Every Page of this judgment has been signed by me.
Copy of this judgment be given to the accused free of cost.
Announced in the open court on Digitally signed
by HARSHAL
this day of 21st of July, 2022. HARSHAL NEGI
NEGI Date:
2022.07.22
11:10:06 +0530
(HARSHAL NEGI)
MM(NI Act)-05/South-West District
Dwarka Courts/New Delhi/21.07.2022
CC no. 15765/2019 Mukut Singh Sharma VS Sandeep Arora 28 of 28