Delhi District Court
M/S Sicpa India Ltd. vs Lalit Jain on 1 April, 2019
1
IN THE COURT OF MS. SNIGDHA SARVARIA : MM : NI ACT-03
(CENTRAL) : TIS HAZARI COURTS : DELHI.
CC No.530154/16
DATE OF INSTITUTION : 04.09.2008
DATE RESERVED FOR JUDGMENT: 12.03.2019
DATE OF JUDGMENT : 01.04.2019
IN THE MATTER OF:
M/S SICPA India Ltd., a company
incorporated under the Comapanies
Act, 1956 having its registered
office at 308312, Mercantile
House, 15, K.G Marg, New Delhi1.
Through its General Manager
Technical Mr. Akbal Bahadur Sachan. ..........Complainant
VERSUS
Mr. Lalit Jain, carrying on business
under the name and style of M/S
Bhagya Laxmi Enterprises, as sole
proprietor thereof
At EBlock, No.185, 2nd Floor,
New Rajendra Nagar Extension1,
Near Blind School, New Delhi110060.
And also at
Chandan Complex,
2nd Floor, 376, Mint Street, Sowcarpet, Chennai600 079.
And also at
Plot No.29, Gali No.1
New Sunder Nagar,
Ludhiana ..........Accused
CC No. 530154/2016
M/S Sicpa India Ltd. vs Lalit Jain
2
JUDGMENT :
a) Srl. No. of the case & Date of institution : 3396/08 & 04.09.2008
b) Date of commission of offence : after the 15th day of receiving of legal demand notice
c) Name of the complainant : M/S SICPA India Ltd.
d) Name of the accused : Sh. Lalit Jain, e) Nature of offence complained of : S. 138 NI Act f) Plea of the accused person : Accused pleaded not guilty h) Final Order : Acquittal i) Date of order : 01.04.2019 COMPLAINT UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881
BRIEF STATEMENT OF REASONS FOR DECISION OF THE CASE: 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 complainant is a public limited company incorported under the Companies Act, 1956 having its registered office at 308-312, Mercantile House, 15, K.G. Marg, New Delhi-1.
Mr. Akbal Bahadur Sachan, General Manager - Technical is duly authorized by a Resolution dated 20.08.08 passed by the Board of Director of the Complainant company and is competent to sign, verify, institute and conduct the present complaint case in all respects against the accused person and to adduce evidence. He is also fully conversant with the facts and circumstances of the CC No. 530154/2016 M/S Sicpa India Ltd. vs Lalit Jain 3 present case. The accused Lalit Jain is carrying on business under the name and style of M/S Bhagya Laxmi Enterprises as proprietor thereof at E-Block, No.185, 2 nd Floor, New Rajendra Nagar Extension-1, Near Blind School, New Delhi110 060 and is also having his office at No.376, Mint Street, 2 nd Floor, Sowcarpet, Chennai-600079 and at plot No.29, Gali No.1, New Sunder Nagar, 33 St. Road, Ludhiana-141010. The accused is carrying on business as trader in Duty Free Import Authorisation (DFIA) & DFRC licences issued by DGFT, Ministry of Commerce, Government of India against fulfilment of export obligations. Such DFIA Licences are used for importing the goods without payment of duty and/or in lieu of payment of duty, as per policy of Government of India. The complainant is an importer and it purchases such DFIA licenses for their imports. Being approached by the accused, the complainant agreed to buy DFIA licences from the accused person for import of printing inks and other materials and as such entered into an agreement dated 14.05.07 which expired on 31.03.08 and thereafter a subsequent agreement dated 11.04.08, validity period thereof is still 31.03.09. Both the Agreements dated 14.05.07 and 11.04.08 have been signed by the complainant through the said Mr. Akbal Bahadur Sachan, General Manaager- Technical and the Accused person Lalit Jain put his signatures as the proprietor for and on behalf of M/S Bhagya Laxmi Enterprises. Pursuant to the above two Agreements, the complainant had imported and had custom cleared printing ink (of High value) against the 1st Agreement in August year 2007 and against second Agreement three transactions took place in April and May 2008 and the complainant made payment in aggregate to the sum of Rs.1,83,97,972/- to the accused, the details whereof are as follows:-
CC No. 530154/2016M/S Sicpa India Ltd. vs Lalit Jain 4 S.No. Debit Note Amount Cheque No of Dated No/Date Corporation Bank, New Delhi
1. 001/2007-07 49,23,113 154626 25.08.2007 dated 17.08.2007
2. 001/2008-09 45,71,256 155642 23.04.2008 dated 21.04.2008
3. 002/2008-09 45,00,000 155737 16.05.2008 dated 13.05.2008
4. 003/2008-09 44,03,603 155744 17.05.2008 dated 13.05.2008 Total: 1,83,97,972
2. On 11.01.08 the accused person handed over with the complainant a cheque No.000010 for an amount of Rs.4923113/- in favour of the complainant company in respect of DFIA Licence No.0510204965 dated 14.0-6.07 on the specific conditions that once it would be decided to make the duty payment for the consignment cleared against the said licence no.0510204965, the said cheque shall be presented in bank with intimation to M/S Bhagya Laxmi Enterprises. On 27.05.08 the DRI, Delhi Zonal Unit, CGO Complex, New Delhi visited complainant's office and caused inspection at the business place of the complainant. There were seizure of goods, lying in the complainant's stock as well as at air cargo which was yet to be custom cleared. DRI started proceeding in relation to the above imports and also prepared Panchnama and issued summons etc. Based on such proceedings of DRI, the complainant was compelled to deposit full Custom Duty for four transactions on 27th/28th May 2008. In this respect copies of the letters dated 27th/28th May 2008 are filed alongwith this complaint.
In view of deposit of Full Duty, the complainant became entitled to refund of the aforesaid entire amount paid to the accused person.
CC No. 530154/2016M/S Sicpa India Ltd. vs Lalit Jain 5 The complainant demanded the aforesaid sum of Rs.1,83,97,972/- from the accused but the accused failed and neglected to return the said money. However, the subject matter of the present complaint arise out of purchase of DFIA licence No.0510204965 dated 14.06.07 which was purchased by the complainant some times in the month of August 2007. Against this DFIA, the materials were cleared vide Bill of Entry No.734416 dated 22.08.07. The complainant issued a debit note no.001/2007-07 dated 17.08.07 for Rs.9846228/- On receipt of debit note, the complainant paid the accused a sum of Rs.4923113/- (50% of debit note as per agreement) vide complainant's cheque No. 154626 dated 25.08.07 of Corporation Bank, Industrial Finance Branch, Karol Bagh, New Delhi. In view of the specific arrangement between the parties as stated in para 7 above, that once the complainant decides to make payment for the consignment cleared against the said licence No. 0510204965 the complainant shall be entitled to present the said cheque No.000010 for Rs.4923113/- in the Bank with intimation to the accused person and because of the investigation by DRI, the complainant was bound to pay the duty and to make the payment of Rs.1,09,40,253/-, which the complainant paid vide their Pay Order no.062340 dated 28.05.08 and upon such payment by complainant, the complainant became entitled to present the said cheque No.000010 for Rs.4923113/- and to get the same encashed. Vide letter dated 4th August 2008 sent by Registered Post with A.D. the accused was called upon to reimburse the amount paid by the complainant including the sum of Rs.49,23,113/-. It was also informed to the accused that the cheque lying with the complainant was being deposited in the bank account on 8th August 2008. On 7th August 2008 the accused person wrongfully and illegally purported to stop the complainant from depositing the said cheque issued against discharge of its debt and liability. However, by a reply e-mail dated 07.08.08 written CC No. 530154/2016 M/S Sicpa India Ltd. vs Lalit Jain 6 on behalf of the complainant it was clarified to the accused that the said cheque should be encashed upon presentation. The said cheque No.000010 drawn on Kotak Mahindra Bank Ltd., was deposited in the Bank account of the petitioner i.e. Corporation Bank, Industrial Finance Branch, Karol Bagh, New Delhi on 8 th August 2008 as intimated when upon presentation, the said cheque returned unpaid on the ground of 'payment stopped by drawer'. The intimation of dishonour of cheque was received by the petitioner on 09.08.08 from its Banker. Vide letter No. SIL/ABS/2008/32/965 dated 09.08.08 the complainant by giving notice in writing to the accused person U/s 138 of Negotiable Instruments Act, 1881 as amended by Negotiable Instruments (Amendment) Act, 2002 demanded for the payment of the money within 15 days of the receipt of the said notice. The said letter was dispatched by Regd. Post with A.D. on 09.08.2008 which was served upon the Accused on 12.08.2008. The postal acknowledgement card showing the receipt of the notice by the accused is filed alongwith this complaint. Inspite of receipt of the said notice, the accused dishonestly and negligently failed to make the payment of the said money to the complainant within 15 days from the date of receipt of the said notice. Vide letter purportedly dated 12th August 2008 the accused raised various false and flimsy allegations but did not pay the cheque amount. The false allegations made in the letter dated 12.08.08 were dealt with and replied by the complainant vide letter dated 01.09.2008. In the aforesaid manner, the accused have failed and neglected to honour the cheque issued by him and inspite of receipt of notice failed to pay the cheque amount to the complainant and therefore have rendered himself liable for criminal action under sections, 138 read with Section 142 of Negotiable Instruments Act. The said cheque was signed by the accused person himself. He is the proprietor and the person in charge of and responsible to the CC No. 530154/2016 M/S Sicpa India Ltd. vs Lalit Jain 7 conduct of business of M/S Bhagya Laxmi Enterprises and he is guilty of the offence. The present complaint is being filed within the stipulated period of limitation and no part of the complainant's case is barred by limitation. That in the above said manner the accused has committed an offence punishable under section 138/142 Negotiable Instruments Act (as amended up to date) and is liable to be prosecuted and punished accordingly.
Proceedings Before Court
3. In the present complaint summons were issued against the accused. The accused entered appearance and Notice of accusation was framed against the accused on 24.10.2008 to which accused pleaded not guilty and claimed trial.
4. In support of his case the complainant examined Mr. Akbal Bahadur Sachan as CW-1 and he proved his affidavit in evidence, A copy of the extracts of the Minutes of the Meeting of the Board of Directors of the complainant company held on 20.08.08 to prove authorisation in favour of CW1 by complainant company as Ex.CW-1/1; Two agreements dated 14.05.07 and 11.04.08 as Ex.CW-1/2 and CW-1/3; Copy of letter dated 11.01.2008 by complainant to accused as Ex.CW-1/4; Copies of the letters dated 27th/28th May 2008 by SICPA to DRI as Ex.CW-1/5 and Ex.CW-1/6; Copy of letter dated 04.08.08 by complainant to the accused as Ex.CW-1/7; Copy of the letter/e-mail mesage dated 07.08.08 by complainant to accused as Ex.CW-1/8; Copy of reply e-mail dated 07.08.08 by accused to SICPA as Ex.CW-1/9; cheque bearing no. 000010 dated 8.8.2008 of Rs. 49,23,113/- drawn on Kotak Mahindra Bank, Chennai as Ex CW1/10; returning memo dated 08.08.2008 and forwarding letter dated 09.08.08 with return memo as Ex.CW-1/11 and Ex.CW-1/12; legal demand notice dated 09.08.08 from complainant to the accused as Ex.CW-1/13; the CC No. 530154/2016 M/S Sicpa India Ltd. vs Lalit Jain 8 original two postal receipts and the original A/D card as Ex.CW- 1/14 & Ex.CW-1/15 andEx.CW1/16; reply in original dated 12.08.08 by accused to the complainant as Ex.CW-1/17; reply letter dated 01.09.08 by complainant to accused as Ex.CW-1/18; postal receipts as Ex.CW-1/19. On 28.05.08 Director of Revenue Intelligence RI seized 150 Kgs of Inksat the company's Godown situated at G4 Cash Services, Okhla, New Delhi vide their seizure memo no.DRI.F.NO.23/41/2008-DZU/2679 dated 28.05.08. A copy of the seizure memo no. DRI.F.NO.23/41/2008-DZU/2679 dated 28.05.2008 as Ex.CW-1/20. DRI seized 300 Kgs of Inks at Cargo Shed, IGI Airport, New Delhi vide their seizure memo no.DRI.F.No.23/41/2008-DZU/2680 dated 28.05.2008. A copy of the said seizure memo as Ex.CW-1/21. Copy of the letter No.SIL/MD/DRI/2008/27 dated 27.05.08 written by complainant to DRI as Ex.CW-1/22(colly.); copy of letter dated 28.05.08 written by the complainant to DRI as Ex.CW-1/23(colly.); two letters dated 28.05.2008 as Ex.CW-1/24 and Ex.CW-1/25; copy of letter dated 29.05.08 as Ex.CW-1/26(colly.); copy of leter dated 29.05.08 as Ex.CW-1/27(colly.); statement of account as Ex.CW-1/28 and appeal and stay applications as Ex.CW-1/29(colly.). CW1 was also cross-examined. The complainant closed his complainant evidence on 17.01.2011.
5. Statement of accused u/s 313 Cr.P.C. was recorded on 10.02.2011 wherein he has stated that the cheque in question was issued but for the first transaction. At the second transaction, when Deputy Commission Custom has raised a query that the importing ink will not be eligible for DFIA, at the same time at the office of the complainant company with Mr Sachan and Mr. Vig, Managing Director of the Complainant the accused and they had decided that they will go to Commission Appeal and if the case is won then the cheque will be handed back to the accused and if the case is lost CC No. 530154/2016 M/S Sicpa India Ltd. vs Lalit Jain 9 then they shall not go for the appeal and will deposit the same and that is why the blank dated cheque was given to settle the issue. It was totally out of the agreement. In the para 9 of the Agreement dated 14.05.2007 Ex CW1/2 it was just given to not loose the credibility of Bhagya Laxmi Enterprises and his efforts towards the appeal. He stated that as per the letter given to the complainant company alongwith the cheque it was very clear that once the decision being between them then only complainant will present the cheque. Since appeal was already filed and case was won from the commission of appeal, it was very clear and decided that they will not use this cheque but seems they were got letters from the complainant company and accused asked his banker to stop payment of the said cheque. He admitted receiving of legal demand notice and stated that he even replied to the legal demand notice. He denied his liability to make payment to the complainant qua the cheque in question. He stated that as per complainant's letter there are five bill of entry and there may be more which he is not aware of. The payment of the same such as balance 50% of the invoice of Bhagya Laxmi Enterprises or bill of entry which got assessed by customs under DFIA licence supplied by/transferred by M/s. Bhagyalaxmi Enterprises is also pending with the complainant company as a security till the agreement is valid. M/s. Bhagya Laxmi Enterprises will not be liable for any payment if the Commissioner Appeal is being rejected and any penalty or interest is imposed not on Customs duty.
6. The accused examined himself as DW-1 and he was also cross- examined and the accused closed defence evidence on 22.01.2019.
7. Vide admission and denial of documents conducted on 23.02.2019 order dated 23.10.2017 of hon'ble High Court of Delhi in CC No. 530154/2016 M/S Sicpa India Ltd. vs Lalit Jain 10 CUS.A.C.5/2012 as Ex Z1; copy of order dated 19.11.2018 of Hon'ble Supreme Court of India in Civil Appeal Diary no. 29250/2018 as Ex Z2; as order no. 124/2018 dated November 2018 bearing no. VIII (1) 20/refund/ACE/108/2018 as Ex Z3.
8. I have heard counsel for the parties, perused the record and have gone through the relevant provisions of the law.
Findings
9. The following are the components of the offence punishable under Section 138 of Negotiable Instrument Act:-
(1) drawing of the cheque by a person on an account maintained by him with a banker, for payment to another person from out of that account for discharge in whole/part any debt or liability, (2) presentation of the cheque by the payee or the holder in due course to the bank, (3) returning the cheque unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque, (4) giving notice in writing to the drawer of the cheque within 15 days of the receipt of information by the payee from the bank regarding the return of the cheque as unpaid demanding payment of the cheque amount, (5) failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered by the cheque within 15 days of the receipt of the notice.
10. As regards the defence raised by the accused that he did not fill the details in the cheque himself and had handed over blank signed cheque to the complainant, at this juncture it would be worthwhile to discuss the provisions under S. 20 and S. 118 of the Negotiable Instruments Act, which is as under:
20.Inchoate stamped instruments. CC No. 530154/2016 M/S Sicpa India Ltd. vs Lalit Jain 11 Where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in [India], and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as then case may be, upon it a negotiable instrument, instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount, provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder.
118. Presumptions as to negotiable instruments of consideration Until the contrary is proved, the following presumptions shall be made:
(a) of considerationthat 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;
(b) as to date that every negotiable instrument bearing a date was made or drawn on such date;
(c) as to time of acceptance that every accepted bill of exchange was accepted within a reasonable time after its date its date and before its maturity;
(d) as to time of transfer. that every transfer of a negotiable instrument was made before its maturity;
(e) as to order of endorsements that the endorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stampsthat a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course that the holder of a negotiable instrument is a holder in due course; provided that, where the instrument has been contained from its lawful owner, or form any person in lawful custody thereof, by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.
11. Further, in Mojj Engineering Systems Limited & Ors. Vs. A.B. Sugars Ltd.; 154 (2008) Delhi Law Times 579, the Hon'ble Delhi High Court had observed as under :-
7. Even otherwise, prima facie, it was the petitioners who had handed over the undated cheque for a certain amount to the respondent in terms of a contract between the parties. Since an undated cheque cannot be encashed, it can only mean that the petitioners had authorized the complainant to enter an appropriate date on it. In Young Vs. Grote (1827) 4 Bing. 253 it was held CC No. 530154/2016 M/S Sicpa India Ltd. vs Lalit Jain 12 that when a blank cheque is signed and handed over, it means the person signing it has given an implied authority to any subsequent holder to fill it up. Similarly, in Scholfield Vs. Lord Londesborough (18951899) All ER Rep 282 it was held that whoever signs a cheque or accepts a bill in blank, and then puts it into circulation, must necessarily intend that either the person to whom he gives it, or some future holder, shall fill up the blank which he has left. This common law doctrine was also affirmed by Justice Macnaghten in Griffiths Vs. Dalton [1940] 2 KB 264 where it was held that the drawer of an undated cheque gives a prima facie authority to fill in the date. This aspect has also been incorporated in Section 20 of the Negotiable Instruments Act, which deals with Inchoate Stamped Instruments.
The Supreme Court in T.Nagappa Vs. Y.R.Murlidhar, (2008) 5 SCC 633 while discussing the scope of Section 20 held that by reason of this provision, a right has been created in the holder of the cheque. Prima facie, the holder thereof is authorized to complete the incomplete negotiable instrument. In that view of the matter, all further issues that may be raised by the petitioners regarding the nature and scope of the authority of the respondent to put any particular date on the cheque in question, are all matters for trial.
8. It is not as if the cheque came to be issued without any consideration whatsoever in the first place or that there was such a glaring defect in the complaint that the decision of the Trial Court to issue summons has ex facie resulted in miscarriage of justice or an abuse of the process of Court, and therefore interference under Section 482 Cr.P.C. to quash the proceedings is warranted in the interest of justice. The question whether the consideration for which the cheque was issued was ultimately satisfied or whether the cheque was wrongly sought to be encashed, are all issues that must also be decided at the trial. The Supreme Court in the case of M.M.T.C. Ltd. and Another Vs. MEDCHL Chemicals and Pharma (P) Ltd. and Another,(2002) 1 SCC 234 held as follows:
"13.....the wellsettled law that the power of quashing criminal proceedings should be exercised very stringently and with circumspection. It is settled law that at this stage the Court is not justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the complaint. The inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice. At this stage the Court could not have gone into merits and/or come to a conclusion that there was no existing debt or liability."
The Court further held that:
"17. There is therefore no requirement that the complainant must specifically allege in the complaint that there was a subsisting liability. The burden of proving that there was no existing debt or liability was on the respondents. This they have to discharge in the trial. At this stage, merely on the basis of averments in the petitions filed by them the High Court could not have CC No. 530154/2016 M/S Sicpa India Ltd. vs Lalit Jain 13 concluded that there was no existing debt or liability."
12. From the aforesaid discussion, it is manifest that by reason of the provision under S. 20 NI Act, a right has been created in the holder of the cheque. Prima facie, the holder thereof is authorized to complete the incomplete negotiable instrument. Mere averment to the effect that the accused/drawer of the cheque did not fill in the details on the cheque except for signing on the cheque is not sufficient. Thus, merely that allegation of issuance of incomplete negotiable instrument does not create absolute defence in favour of the accused unless corroborative evidence exists to show that by threat or fraud, a cheque was taken. There is no law that a person drawing the cheque has to necessarily fill it up in his own handwriting. Respondent has not denied his signatures on the cheques. Once he has admitted his signatures on the cheques he cannot escape his liability on the ground that the same has not been filled in by him. When a blank cheque is signed and handed over, it means that the person signing it has given implied authority to the holder of the cheque, to fill up the blank which he has left. A person issuing a blank cheque is supposed to understand the consequences of doing so. He cannot escape his liability only on the ground that blank cheque had been issued by him.Thus, this defence is of no assistance to the accused. (.(See also:Jaspal Singh vs State decided on 16.11.2016 by Hon'ble High Court of Delhi in Crl. Rev P. 160/2016; Lillykutty vs Lawrence - 2003 (2) DCR 610 (Ker) (DB) & Ravi Chopra vs State and Anr. - 2008n (2) JCC (NI) 169).
13. At the time of recording of statement under S. 313 CrPC the accused admitted the issuance of the cheque in question and receiving of legal demand notice. Since issuance of cheque in question by the accused is not disputed, hence, presumption CC No. 530154/2016 M/S Sicpa India Ltd. vs Lalit Jain 14 U/s.139 of the NI Act is raised.
14. 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 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)
15. 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 CC No. 530154/2016 M/S Sicpa India Ltd. vs Lalit Jain 15 legally enforceable debt or liability and it is for the accused persons to raise a probable defence to rebut the presumption.
16. Section 139 NI 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 NI Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 Act 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 Act can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong those 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 defendant accused cannot be expected to discharge an unduly high standard of proof.
17. The 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 NI Act, 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. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.
18. As discussed herein above, under S. 139 NI Act strong rebuttable CC No. 530154/2016 M/S Sicpa India Ltd. vs Lalit Jain 16 presumptions in favour of the complainant arise but same can be rebutted by the accused by way of credible defence.
19. The case of the complainant is that the cheque in question was issued towards DFIA licence no. 0510204965 dated 14.06.2007 and once the complainant decided to pay duty for the consignment clearance against the said licence then the cheque in question shall be presented for encashment under intimation to the accused. The complainant sent letters Ex CW1/4 and Ex CW1/7 to the accused in this regard and presented the cheque in question which was returned dishonoured due to stop payment instructions of the accused. During his cross-examination CW1 admitted that the DRI seized the goods at the godown and at the airport of the complainant which were under licence no. 051029624. He admitted that letter Ex CW1/5 sent to DRI and letter Ex CW1/25 sent by DRI was not qua licence no. 0510204965. The defence of the accused is that by virtue of agreement Ex CW1/2 and Ex CW1/3 (relevant clauses reproduced herein under) the cheque in question was not to be presented as the exigency for which the cheque in question was issued did not arise.
Para nos. 6 & 9 of agreement dated 14.05.2007 Ex CW1/2.
Security Payment Terms: That it is specifically agreed between FIRST PARTY and SECOND PARTY, that the security payment of Rupees 1 crore of the invoice value of FIRST PARTY will be released by SECOND PARTY to the FIRST PARTY on 31 st March 2009. The payment should be given fully to the FIRST PARTY unless and until any liability rises against the genuinity of the DFIA Licenses (provided by the FIRST PARTY) from customs or Government department for using the license to SECOND PARTY.
Indemnified Terms: The FIRST PARTY shall take full responibility to ensure that a valid DFIA License is sued for clearance and agree to (to keep indemnified SECOND PARTY) at all the times for any issues that are raised or may be raised in future by customs authority or any government in regards to usage of genuinity of the license) take full responsibility to present / resolve the issue that may be raised by the customs authorities at later dates and first party is liable for any kind of penalty.
CC No. 530154/2016M/S Sicpa India Ltd. vs Lalit Jain 17 Para no. 9 of agreement dated 11.04.2008 Ex CW1/3.
Indemnified Terms: The SECOND PARTY shall take full responsibility to ensure that a valid DFIA Licence is used for clearance and agree to (to keep indemnified FIRST PARTY at all the times (including after expiring of agreement) for any issues that are raised or may be raised in future by Customs Authority in regard to usage or genuinity of the license) take full responsibility to present / resolve the issue that may be raised by Customs Authorities at later dates and SECOND PARTY is liable for any interest and penalty that may be imposed by Custom or any other Department.
20. From the aforesaid clauses of agreements Ex CW1/2 and Ex CW1/3 it is apparent that the accused was to indemnify the complainant only if the DFIA licence was not found genuine by the concerned government department and pursuant thereto the complainant bears any financial burden. But as discussed herein above the DRI initiated proceedings against the complainant and the accused qua licence no. 051029624 and not qua licence no. 0510204965. As per own case of the complainant the cheque in question was issued to the complainant by the accused qua licence no. 0510204965. Also, as per deposition of DW1 the order of Deputy Commissioner of Customs, Group VII, Air cargo (Exports), New Delhi vide order dated VIII(12)ACU/Gr.VII/Shiv/SICPA/129/2007 dated 10.12.2007; Commissioner of Customs (Appeals), New Delhi vide order no. CC(A)/Cus/Exp/D-I/83/08 dated 21.02.2008 and Customs, Excise and Service Tax Appellate tribunal vide order no. C/420-427/11 dated 27.09.2011 has held that the Customs cannot challenge the validity of DFIA as licences were obtained legally and DFIA are not fake and thus, accused is not liable to pay the cheque amount to the complainant. This fact qua validity of DFIA is not questioned by the complainant in the cross-examination of DW1. The order of Deputy Commissioner of Customs, Group VII, Air cargo (Exports), New Delhi vide order dated CC No. 530154/2016 M/S Sicpa India Ltd. vs Lalit Jain 18 VIII(12)ACU/Gr.VII/Shiv/SICPA/129/2007 dated 10.12.2007; Commissioner of Customs (Appeals), New Delhi vide order no. CC(A)/Cus/Exp/D-I/83/08 dated 21.02.2008 and Customs, Excise and Service Tax Appellate tribunal vide order no. C/420-427/11 dated 27.09.2011 are already placed on record though not tendered in evidence but the court takes judicial notice of the said orders and hence the said orders are now Ex CZ (colly). Thus, from the aforesaid clearly the accused has proved his defence that there is no legally enforceable debt of liability towards which the cheque in question was issued by the accused to the complainant. Thus, the debt in question is not a legally recoverable debt or liability owed by the accused to the complainant. (See also: M/s. Collage Culture & Ors. Vs Apparel Export Promotion Council & Anr. - 2007 (4) JCC NI 388). Furthermore, vide Ex Z3 Asst Commissioner of Customs and Cargo Export Refund Section, New Delhi has admittedly has refunded Rs. 5,46,64,540/- to the complainant which the complainant had deposited for release of goods seized by DRI.
21. The decision in Bhaskaran Chandrasekharan vs V Radhakrishnan- 1998 (2) KLJ 86 and Sampelly Satyanarayana Rao vs. Indian Renewable Energy Development Agency Ltd. - AIR 2016SC4363 relied upon by the complainant are not applicable in the facts of the present case as are decided on different fact situation and cannot be applied like a Euclid's Theorem in the facts of the present case.
22. In view of the aforesaid reasons, the court finds that the accused has been able to prove probable defence and the complainant has failed to rebut the defence of the accused.
CC No. 530154/2016M/S Sicpa India Ltd. vs Lalit Jain 19
23. In view of the foregoing discussion, the accused Lalit Jain is acquitted of offences punishable under S. 138 NI Act.
Digitally signed by SNIGDHA SNIGDHA SARVARIA
(Announced in open
SARVARIA Date:
2019.04.01
Court on 01.04.2019) 16:44:12 +0530
(Snigdha Sarvaria)
MM/NI Act-03/Central.
01.04.2019
Judge Code: 0530
CC No. 530154/2016
M/S Sicpa India Ltd. vs Lalit Jain