Ms. Bhumika Dubey vs M/S Multilux Hospital Technology Pvt. ... on 6 February, 2023

[Cites 30, Cited by 0]

Delhi District Court

Ms. Bhumika Dubey vs M/S Multilux Hospital Technology Pvt. ... on 6 February, 2023

    IN THE COURT OF MS. AAKANKSHA, METROPOLITAN
               MAGISTRATE, (NI ACT)07
   SOUTHWEST DISTRICT, DWARKA COURTS, NEW DELHI


Ct. Case No. 13801 of 2019
CNR No. DLSW020187482019



M/s Shiva Engineering Works

Through its proprietor Sh. Shiva Kant Dwivedi

                                                 .........Complainant

                                 Through: Mr. Kapil Yadav and

                                 Ms. Bhumika Dubey, Advocates



                           Versus

M/s Multilux Hospital Technology Pvt. Ltd.

Through its director Sh. P.C. Jain

                                                 ..........Accused

                                 Through: Mr. Vijay Wadhwa, Advocates




    (1)    Name of the complainant     Sh. Shiva Kant Dwivedi

                                       S/o Sh. Kali Charan Dwivedi,
                                       Proprietor of M/s Shiva
                                       Engineering Works

                                       A4, Gali No. 1, Yadav Enclave,
                                       Vikas Nagar, Near Hastsal
                                       Village, Delhi110059.

    (2)    Name of the accused         1. M/s Multilux Hospital
                                       Technology Pvt. Ltd.

                                       B104, Pal Mohan Plaza, 11/56,

 Ct. Case No. 13801/2019                                          Page 1 of 43
                                          Desh Bandhu Gupta Road, New
                                         Delhi110005.

                                         2. Padam Chand Jain

                                         S/o Late Sh. K.C. Jain, Director
                                         of M/s Multilux Hospital
                                         Technology Pvt. Ltd.

                                         B104, Pal Mohan Plaza, 11/56,
                                         Desh Bandhu Gupta Road, New
                                         Delhi110005.

     (3)   Offence complained of or      Section 138 Negotiable
           proved                        Instruments Act, 1881

     (4)   Plea of accused               Pleaded not guilty

     (5)   Date of institution of case   23.04.2019

     (6)   Date of conclusion of         30.01.2023
           arguments

     (7)   Date of Final Order           06.02.2023

     (8)   Final Order                   ACQUITTAL




                                 JUDGMENT

1. The complainant M/s Shiva Engineering Works through its proprietor Sh. Shiva Kant Dwivedi has instituted this complaint u/s 138 Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act') against accused M/s Multilux Hospital Technology Pvt. Ltd. through its director Mr. P.C. Jain on 17.01.2015.

2. The factual matrix as can be culled out from the complaint is that the accused approached the complainant and purchased sheet cutting machine with D.C. Motor and Control Panel with size gears by invoice no.

Ct. Case No. 13801/2019 Page 2 of 43

055 dated 16.11.2013 for Rs. 4,30,500/ and made part payment of Rs. 2,30,500/ with assurance to make the remaining payment of Rs. 2,00,000/ as soon as possible and kept on delaying the remaining part payment despite lot of request and persuasion by complainant, thereafter in discharge of its liability accused issued a cheque bearing no.779562 dated 23.11.2014 for a sum of Rs. 2,00,000/ drawn on State Bank of India, Karol Bagh in favour of the complainant assuring its encashment upon presentation. However, to the complainant's dismay the said cheque was returned unpaid, when it was presented for encashment through the banker at Vikaspuri, with remarks "Funds Insufficient" vide return memo dated 25.11.2014. The complainant issued a legal notice dated 04.12.2014 calling upon the accused to pay the cheque amount within 15 days from the receipt thereof, the same was duly served upon the accused. But the accused failed to pay the amount due thus constraining the complainant to file this complaint u/s 138 Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act') seeking redress against the dishonor of the cheque in question.

3. With a view to establish a prima facie case in order to enable the court to summon the accused, complainant led presummoning evidence by way of affidavit Ex.CW1/1. The complainant relied upon following documentary evidence:

(a) Copy of Form DVAT 06, which is Mark A. (However, the same is mentioned as Ex. CW1/A in the evidence but has actually been marked).

(b) Copy of tax invoice, which is Mark B. (However, the same is mentioned as Ex. CW1/B in the evidence but has actually been marked).

(c) Original cheque bearing no. 779562 dated 23.11.2014 for a sum of Rs.

2,00,000/ drawn on State Bank of India, which is Ex. CW1/C.

(d) Original cheque return memo dated 25.11.2014, which is Ex. CW1/D.

(e) Office copy of legal notice dated 04.12.2014, which is Ex. CW1/E. Ct. Case No. 13801/2019 Page 3 of 43

(f) Postal receipt, which is Ex. CW1/F.

(g) Tracking report, which is Ex. CW1/G. Complainant closed its presummoning evidence on 31.01.2015.

4. On the basis of above material and finding a prima facie case made out against the accused, the accused was summoned vide order dated 31.01.2015. Accused entered his first appearance on the date fixed i.e. 23.05.2015.

5. Notice u/s 251 Cr.P.C. was framed against accused on 23.05.2015 stating out to him the substance of accusation, to which he pleaded not guilty and claimed trial. His defence was recorded at the stage of framing of notice in compliance of directions passed by Hon'ble High Court of Delhi in Rajesh Aggarwal v. State 171 (2010) DLT 51. The accused took defence that the cheque in question was given to the complainant firm for purchase of paper sheet machine which bears his signature and is filled up by his accountant, that he has made the payment for the machine for a sum of Rs. 2,51,000/ before its delivery, the price of the machine was fixed at Rs. 2.25 lacs to Rs. 2.5 lacs but later complainant firm demanded Rs. 1 lac extra for slitting arrangement, the cheque in question was not returned despite his requests and therefore he sent a letter to his bank for stopping the payment with respect to the cheque in question.

6. The accused was granted right to crossexamine the complainant vide order dated 23.05.2015. In post summoning evidence, proprietor of the complainant firm examined himself as CW1 thereby adopting his presummoning evidence as postsummoning evidence and was Ct. Case No. 13801/2019 Page 4 of 43 crossexamined and discharged. Vide separate statement of proprietor of the complainant firm, complainant evidence was closed on 21.12.2019.

7. Statement of accused was recorded u/s 313 Cr.P.C. r/w section 281 Cr.P.C. on 15.02.2020 wherein all the incriminating evidence was put to the accused and he was granted an opportunity to explain the circumstances appearing against him at trial. While explaining the circumstances appearing in evidence against him, accused stated without oath that he purchased the said machine for a total sum of Rs. 2,25,000/ to Rs. 2,50,000/ which was estimated price given by complainant, he has already paid Rs. 2,51,000/ to the complainant as price of the machine with gear and accessories, the invoice Mark B was sent to him along with the machine and price of the machine mentioned therein is wrong, the cheque in question was given by him in advance and bears his signatures but the contents of the same were filled by his accountant, since the year was not correctly mentioned on the cheque, he transferred Rs. 1,00,000/ to the complainant through NEFT, the machine was not delivered within stipulated time which was to be delivered in August, 2013 but was delivered only in November, 2013, the machine delivered to him could cut the sheet vertically, when complainant could not deliver the machine in August, 2013, complainant agreed to provide the machine which has a facility of cutting the sheet horizontally and for the same complainant demanded further sum of Rs.1,00,000/ but did not deliver the machine with said facility, the reason for dishonor of the cheque in question is wrong since he issued stop payment instructions to his banker, he did not receive any legal notice, although it bears correct address of his company. Accused preferred to lead evidence in his defence.

8. At the stage of defence evidence, accused examined himself as DW1 and Mr. Utkarsh Chandra, Deputy Manager, SBI Bank as DW2 Ct. Case No. 13801/2019 Page 5 of 43 and they were duly crossexamined and discharged. The accused relied upon request letter sent to his bank, communication regarding clarification of stopping of cheque, letter refund of charge, bank statement showing stop payment of cheque and statement showing refund of amount as Ex. DW2/A. Vide separate statement of Ld. counsel for accused, defence evidence was closed on 17.12.2022.

9. At the stage of final arguments, Ld. counsel for complainant submitted that it is not disputed that complainant is a proprietorship firm and DVAT form has been placed on record, it is also not disputed that there was commercial transaction between both the parties and that accused purchased a sheet cutting machine from complainant, the bill is also not disputed by accused during crossexamination of CW1 though initially it was disputed, it is mentioned in the invoice Mark B that interest would be charged @18%, that postdated cheque was issued by accused towards full and final payment of Rs. 2,00,000/ which was returned back unpaid on 25.11.2014 and was delivered to complainant on 05.12.2014, the defence taken by accused has been that the cheque was misused by complainant and that the machine costed Rs. 2,25,000/ to Rs. 2,50,000/ and that the date was wrongly mentioned on the cheque. However, DW1 has admitted during his examination that the cheque was filled by his accountant and he signed on the cheque i.e. the cheque was filled under knowledge and presence of accused, DW1 also stated that the complainant informed him about the wrong year mentioned on the cheque when it was presented, however, the cheque was presented only once, his further evidence would show that he admitted that the bill was filed by accused in his returns, there is no document to support the contentions that the installation was done by some Vishwakarma, accused has not placed on record any statement of account to show the debit note/credit note. He further submitted that accused deposed that the relations between the parties were cordial but on the other hand accused contends that complainant failed to install the machine and he Ct. Case No. 13801/2019 Page 6 of 43 called Vishwakarma to install the machine and yet did not file any complaint against the complainant and therefore the relations could not be called as cordial, there is no document on record that the complainant assured him to return his cheque, it was duty of the accused to inform the complainant that he has given stop payment instructions to his bank, the machine was delivered on 16.11.2013 and not on 27.11.2013, there is no document/ledger of patty cash, if the accused actually spent Rs. 5,000/ for installation of the machine he never asked the complainant to reimburse the said amount, Ex. DW1/C1 is the same invoice that the accused has claimed from VAT, there is no letter issued to complainant that there is any mismatch, the complainant has already filed a civil suit against accused which is pending adjudication and prays to convict the accused on the ground that he has been unable to raise a probable defence. Ld. counsel for complainant relied upon the case of Kusum Ingots & Alloys Ltd. v. Pennar Peterson Securities Ltd. (2000) 2 SCC 745 and Guneet Bhasin v. State of NCT of Delhi Crl. M.C. 4100/2022 Per contra, Ld. counsel for accused submitted that in June, 2013 it was the complainant who approached the accused and assured the quality of the machine and after negotiations the price of the machine was fixed between Rs. 2,20,000/ to Rs. 2,50,000/, token money of Rs. 51,000/ was paid to the complainant in June, 2013 and the complainant assured to deliver the machine within 02 months i.e. by August, 2013, however in July, 2013 complainant again asked for some part payment and the accused paid Rs. 1,00,000/ to the complainant on 25.07.2013, but the complainant did not deliver the machine by August 2013, in August 2013 complainant came up with an offer that if the accused purchases extra attachment of Rs. 1,00,000/ to cut the paper, the total cost of the machine with attachment would be at max Rs. 3,51,000/, the accused agreed to it, but the complainant did not deliver the machine by November, 2013 and asked accused to make the payment prior to delivery, it was therefore that the accused issued the cheque in question believing that the complainant would deliver the machine along with the attachment but when the machine was Ct. Case No. 13801/2019 Page 7 of 43 delivered, the complainant asked accused to make the payment, the accused found that the machine did not have the said attachment and therefore the complainant only delivered the machine but failed to install the same, the accused asked the complainant to deduct Rs. 1,00,000/ from the total amount of machine as the machine had no attachment i.e. to pay Rs. 2,51,000/, accused immediately transferred Rs. 1,00,000/ through NEFT and asked the complainant to return the cheque and revise the bill, the complainant failed to revise the bill and after one year he presented the cheque, the accused had issued stop payment instructions although the return memo bears the reason for return as 'Funds Insufficient', that the accused also examined the bank witness who admitted that stop payment instructions were given qua the cheque in question. He further submitted that although presumption u/s 139 NI Act is in favour of complainant but the same is rebuttable, the complaint has been filed by a proprietorship concern which is not a legal entity, the DVAT document does not bear the name of complainant as proprietor and is a photocopy document, according to complainant the price of the machine was Rs. 4,30,500/ and in para no. 3 of the complaint the complainant admitted that accused has already paid Rs. 2,30,500/, but no statement of account and no document has been filed by complainant to prove the same deliberately as the payment of Rs. 2,51,000/ was made by the accused through bank, further no ledger account has been placed on record although the complainant claims to be maintaining accounts in due course, which means that the cheque amount is more than the liability of the accused which is admitted by CW1 during his cross examination. He further submitted that even the original invoice has not been produced by complainant because they may have corrected the same and taken benefit from VAT, that the return memo is also a photocopy document which does not bear the seal or signature of the bank, the complainant did not bother to summon the banker to prove the return memo, as per Section 146 NI Act bankers slip is prima facie document only if it has official mark on the same, CW1 was even put a suggestion to the said effect during his crossexamination and still the banker was not summoned and Ct. Case No. 13801/2019 Page 8 of 43 therefore the return memo is not proved. He further submitted that although the accused admitted issuance of cheque and his signatures thereupon but it has to be seen under what circumstances the cheque was issued, the complainant has also filed a recovery suit on the basis of the same document and the accused has been granted leave to defend by civil court, the said leave to defend has been granted unconditionally and Ld. Civil Court has also passed certain observations regarding liability of accused, the said order has been placed on record. He further submitted that during cross examination CW1 admitted the liability of accused to be Rs. 1,79,500/ but the cheque has been presented for an amount of Rs. 2,00,000/, the said discrepancy has been tried to be covered by the complainant by stating that interest is also payable by the accused, however, the word 'interest' has never came up in the legal notice or the complaint or presummoning evidence or postsummoning examinationinchief of complainant, that when accused filed a document before Civil Court about the payment already made by him, it was then that the complainant stated that it was a typographical error, during evidence CW1 stated that he can produce the copy of invoice but it has not been filed even then, CW1 has admitted receiving of Rs. 2,51,000/ from accused and stated that Rs. 2,30,500/ is a typographical error and he came to know about that error on 22.09.2017, however, his examinationinchief was conducted on 23.01.2018 but he failed to file fresh postsummoning evidence by way of affidavit correcting the said error, that the above statement of complainant is also wrong as in 2016 when the accused filed his application seeking leave to defend in the corresponding civil case the complainant came to know of the above fact. He further submitted that during crossexamination dated 30.10.2019 CW1 admitted the fact that he purchased the machine from Vishwakarma Engineering but he did not produce the bill, and now during arguments Ld. counsel for complainant argued as to who is Vishwakarma, complainant also admitted that on 27.11.2013 accused made payment of Rs. 1,00,000/ and told the complainant that the date on the cheque is 23.11.2014, that when the above statement has been admitted by CW1 in his cross Ct. Case No. 13801/2019 Page 9 of 43 examination how can complainant allege during final argument that the accused did not tell the complainant. He further relied upon Ex. CW1/DX i.e. reply filed by complainant to the application seeking leave to defend in the corresponding civil case and stated that in the said application the complainant has admitted that the price of machine was fixed at Rs. 2,51,000/ and that he had informed accused that the cheque could not be presented on 23.11.2013 as the date has been incorrectly mentioned as 23.11.2014, then how at the stage of final arguments complainant can take a plea that he was not informed, also in the said reply complainant has admitted the fact that the accused requested him that he would issue fresh cheque or would make him payment in cash and to return the cheque in question, then how can complainant take plea during final arguments that why accused did not take any action against complainant for nonreturn of cheque, that the said reply mentions the next date of hearing as 01.08.2015 which means that the said reply was filed by complainant prior to 01.08.2015 and in para no. 6 of the said reply complainant took plea that the earlier submissions of Rs. 2,30,500/ as paid by accused is typographical error, then how can the complainant in this case claim Rs. 2,00,000/ stating that the interest was also due, even if the interest is calculated @ 18 % it does not come out to be Rs. 19,500/. Ld. counsel for accused concluded his arguments by taking the defence i.e. the cheque issued was not in discharge of legal enforceable debt as Rs. 2,00,000/ was not the outstanding amount against accused and no statement of account has been filed by complainant; that before presenting the cheque complainant was bound to endorse the same incorporating the actual liability of accused as per Section 56 NI Act which has not been done; that Section 56 and Section 58 NI Act bars this complaint as the cheque has been obtained through unlawful means and the complainant has admitted in Ex. CW1/DX that he would return to cheque but failed to return the same; that the cheque returning memo has not been proved and therefore Section 138 NI Act is not attracted; that the original bill has not been produced by the complainant and prayed to acquit the accused. Ld. counsel for accused relied upon RBI Notification dated Ct. Case No. 13801/2019 Page 10 of 43 25.07.2011 and the cases of Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel (2023) 1 SCC 578, Rajendra Kumar @ Rajesh Kumar Bal Kishan Agrawal v. State of Gurjarat 2011 SCC OnLine Guj 480 and Vandana v. Abhilasha 2019 (2) Mh.L.J. 645.

In rebuttal, Ld. counsel for complainant submitted that reply to leave to defend in the corresponding civil case was drafted by a new counsel and the admission in the said reply is typographical error and that accused has deliberately not filed his application for leave to defend and that actually the counsel for the complainant did not specifically deny the contentions of the accused in the said reply and the application of the accused was copied by counsel in the reply by only changing the words plaintiff and defendant. To this, Ld. counsel for accused objected that when the reply of leave to defend has been produced in evidence, why did not the complainant crossexamine the accused on the said part.

10. After hearing the arguments advanced on behalf of both the parties and perusing the record carefully, the appreciation of evidence and findings of the court are as below.

11. It would be apposite to first consider the legal position serving as base to the offence underlying Section 138 NI Act. The following legal requirements need to be satisfied in order to constitute an offence u/s 138 NI Act, as held by Hon'ble Supreme Court in the case titled as Kusum Ingots & Alloys Ltd. v. M/s Pennar Peterson Securities Ltd.: (2000) 2 SCC 745:

(i) that a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to Ct. Case No. 13801/2019 Page 11 of 43 another person from out of that account for the discharge of any debt or other liability;

(ii) that the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;

(iii) that the cheque is returned by the bank unpaid either because of the amount of money standing to the credit of the account is insuffi cient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;

(iv) that the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;

(v) that the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice;

The above legal requirements are cumulative, meaning thereby that only if all the aforementioned ingredients are satisfied can the person who had drawn the cheque be held liable for offence u/s 138 NI Act.

12. Burden of proof: The claim based under the provisions of Negotiable Instruments Act is an exception to the general rule of law that burden of proof lies on the prosecution. The two specific provisions viz. Section 118 (a) and 139 of NI Act contemplates that a presumption is attached in regard to each and every negotiable instrument that the same was drawn and issued against due discharge of the liability and thus, whenever any claim is made on the basis of a negotiable instrument, the presumption Ct. Case No. 13801/2019 Page 12 of 43 has to be drawn in favour of the holder of the cheque (drawee) and the law has put the burden to rebut the presumption on the accused that the cheque was not issued by him against discharge of a debt or a liability. In case, the accused is not able to rebut the presumption and fails to prove his defence, the presumption becomes absolute and it has to be assumed that the cheque was issued by the accused in discharge of debt or liability and consequently, accused is assumed guilty of the offence. It was held by Hon'ble Supreme Court in the case of Rangappa v. Mohan: 2010 (11) SCC 441 that presumption of Section 139 of N.I. Act also includes the existence of legally enforceable debt:

14. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Sec tion 139 of the Act does indeed include the existence of a legally enforceable debt or liability.

Hon'ble Supreme Court, in the case of Hiten P. Dalal v.

Bratindranath Banerjee: 2001 (6) SCC 16 held that the presumption mentioned in the section 139 NI Act is a presumption of law and not a presumption of fact and thus, this presumption has to be drawn in favour of the drawee and the burden to rebut the presumption with the probable defence is on the accused.

This is indeed an instance of the rule of 'reverse onus', where it is in cumbent on the accused to lead what can be called 'negative evidence' i.e. to lead evidence to show nonexistence of liability. Keeping in view that this is a departure from the cardinal rule of 'presumption of innocence' in favour of the accused and that negative evidence is not easy to be led by its very na ture, it is now settled that the accused can displace this presumption on a scale of preponderance of probabilities and the lack of consideration or a legally enforceable debt need not be proved to the hilt or beyond all reason able doubts. The accused can either prove that the liability did not exist or make the nonexistence of liability so probable that a reasonable person, Ct. Case No. 13801/2019 Page 13 of 43 ought under the circumstances of the case, act on the supposition that it does not exist. He can do so either by leading own evidence in his defence or even by punching holes in the case of the complainant in the testing ordeal of crossexamination. This can be deciphered from relevant para no.21 of Hiten P. Dalal (supra):

21. In other words, provided the facts required to form the basis of a presumption of law exist, no discretion is left with the Court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and prov ing the contrary. A fact is said to be proved when, "after considering the matters before it, the Court either believes it to exist, or consid ers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists". Therefore, the rebuttal does not have to be conclu sively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the 'prudent man'.

Further, in Bharat Barrel v. Drum Manufacturing: AIR 1999 SC 1008 Hon'ble Supreme Court held that the accused has to rebut the presumption and mere denial of passing of consideration is no defence.

It is, thus, clear that in cases of Section 138 NI Act, upon proof of foundational facts, law presumes in favour of drawee that the cheque was is sued by the accused in discharge, wholly or in part, of legally enforceable debt or liability and the burden to rebut the same is upon the accused. The burden does not have to be conclusively established but the accused has to prove his defence on preponderance of probability.

13. Now applying the above law to the facts of the present case, Ct. Case No. 13801/2019 Page 14 of 43 it has to be adjudged whether the legal requirements laid down hereinabove have been fulfilled in the instant case.

13.1. The first legal requirement is:

"A person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability."

At the outset, it has to be proved that the accused had issued the cheque in question on his account maintained with a bank for discharge of any debt or other liability. In the instant case, accused has admitted his signatures on the cheque in question in his statement recorded u/s 313 Cr.P.C. and in notice framed u/s 251 Cr.P.C. The cheque in question has also been drawn on the account maintained by him with State Bank of India. The said fact has not been denied by accused at any stage of proceeding.

It was held in the case of Kalamani Tex & anr. v. P. Balasubramanian: 2021 SCC Online SC 75 Hon'ble Supreme Court held that:

"14. Adverting to the case in hand, we find on a plain reading of its judgment that the trial court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NI Act. The statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these 'reverse onus' clauses become operative. In such a situation, the Ct. Case No. 13801/2019 Page 15 of 43 obligation shifts upon the accused to discharge the presumption imposed upon him."

The above said principle has also been crystallized by Hon'ble Supreme Court in the case of Basalingappa v. Mudibasappa: (2019) 5 SCC 418, by observing that:

"25. We having noticed the ratio laid down by this Court in above cases on Sections 118(a) and 139, we now summarize the principles enumerated by this Court in following manner:

(i) Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.

(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.

(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.

(iv) That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.

(v) It is not necessary for the accused to come in the witness box to support his defence."

Ct. Case No. 13801/2019 Page 16 of 43

13.2. In the instant case, the accused having admitted his signatures on the cheque in question and the said cheque being drawn on his bank account, a mandatory presumption automatically arises in favour of complainant by virtue of Section 118(a) r/w 139 NI Act that the cheque in question was issued by accused no.2 on behalf of accused no.1 in discharge of, whole or part of, legally enforceable debt or liability of accused no.1 proprietorship firm.

13.3. Now the burden shifts upon accused to rebut the above presumption by raising a probable defence, by leading evidence or bringing such facts on record in the crossexamination of the complainant that could make the latter's case improbable. If, in such a case, the accused is proved to have discharged the initial onus of proof placed on him by showing that the existence of consideration was improbable or doubtful or illegal, then the onus will again shift back to the complainant who will then be under an obligation to prove it as a matter of fact and failure to do so will disentitle him to any relief on the basis of the negotiable instrument (as held in Satish Sharma v. State NCT of Delhi & anr.: (2013) 204 DLT 289).

13.4. The accused has chosen to do that by crossexamining complainant and leading evidence in his defence. It is undisputed fact that accused purchased a paper cutting machine from complainant, he also issued cheque in question to complainant. The defence of accused has been that the cheque in question was given to the complainant firm for purchase of paper sheet machine but he has already made the payment for the machine for a sum of Rs. 1,51,000/ before its delivery as against the price of the machine which was fixed at Rs. 2.25 lacs to Rs. 2.5 lacs but later complainant firm demanded Rs. 1 lac extra for slitting attachment and he issued the present cheque for Rs. 2,00,000/ (including Rs. 1,00,000/ approx. as previous balance and Rs. 1,00,000/ towards slitting attachment), Ct. Case No. 13801/2019 Page 17 of 43 but the said attachment was also not provided to him, complainant told him that the cheque wrongly mentions date of 2014 instead of 2013 and therefore he issued stop payment instructions to his banker and transferred Rs. 1,00,000/ to complainant through NEFT (thus total payment was made for Rs. 2,51,000/) towards payment of balance amount but did not pay Rs. 1,00,000/ towards slitting attachment as the same was not supplied to him, and the cheque in question was not returned by complainant despite his requests who presented the said cheque after one year.

13.5. During crossexamination, CW1 deposed that document Mark A shows that he is proprietor of M/s Shiva Engineering but it does not bear his name as proprietor as at that time proprietor was never mentioned in DVAT forms, it was the first deal with the accused, he did not file any quotation sent to accused through email, he did not file statement of account of accused, he did not file balance sheet on record, the accused placed an oral purchase order in the year 2013, he filed VAT return of the said transaction but the same is not on record, that as per statement of account accused was under obligation to pay Rs. 1,79,500/ but it was due on 16.11.2013 and accused told him that accused did not have money and gave postdated cheque including interest which totaled to Rs. 2,00,000/ and some thousand rupees, he admitted not mentioning the same in his complaint or legal notice or affidavit, he admitted filing civil suit under Order 37 CPC, he admitted not filing any receipt to show money paid by accused towards part payment, he admitted receiving Rs. 2,51,000/ from accused and further stated that the fact of receiving Rs. 2,30,500/ written in his legal notice is a typographical error and he became aware of the said typographical error on 22.09.2017, he admitted filing of reply to application seeking leave to defend in corresponding civil case to be Ex. CW1/DX, he denied the suggestion that the machine supplied by him was not as per specification agreed, he admitted purchasing of cutting machine from Vishwakarma Engineering, the cheque was handed over to him in Ct. Case No. 13801/2019 Page 18 of 43 November 2013, the invoice was of Rs. 4,30,500/, he was unsure whether accused made payment after delivery of machine, he admitted receiving payment of Rs. 1,00,000/ on 27.11.2013 at the time when he told accused that the date on the cheque is 23.11.2014, he denied the suggestion that he quoted the price of machine as Rs. 2,25,000/ to Rs. 2,55,000/ including all accessories or that he assured and then could not deliver the machine in August 2013, he denied that he offered accused to get an additional slitting attachment in the machine for Rs. 1,00,000/, he also denied the suggestion that he asked accused to first make the payment and then the delivery would be affected, he admitted delivering the machine on 27.11.2013 but denied that the date on the bill was wrongly mentioned as 16.11.2013 or that he did not supply the slitting attachment or that he did not install the same or failed to rectify the bill and return the cheque.

13.6. Whereas, accused led defence evidence by examining himself as DW1 and deposed that in the year 2013 after coming to know about the requirement of paper cutting machine by accused no.1 company, Mr. Shiva Kant from complainant firm offered him to purchase the machine from complainant and there was a verbal discussion that complainant shall supply the machine for a sum of Rs. 2,25,000/ to Rs. 2,50,000/, he gave a cheque of Rs. 51,000/ as advance but complainant failed to supply the machine for 1 to 1.5 months and also demanded extra Rs. 1,00,000/ for making the machine in August/September 2013 which he gave, however the machine was still not supplied to him and in August/September 2013 complainant again demanded Rs. 1,00,000/ extra for an additional slitting arrangement which was accepted by him, then complainant demanded Rs. 2,00,000/ approx. as balance payment before delivery of machine and he issued the cheque in question to complainant but complainant informed him that the year on the same is mentioned incorrectly as 2014, therefore he issued stop payment instructions to his banker and transferred Rs. 1,00,000/ to complainant by NEFT, complainant told him that he would return the Ct. Case No. 13801/2019 Page 19 of 43 cheque, thereafter it was found that the machine did not have additional attachment, complainant did not come to install the machine and gave bill of date 16.11.2013/ 17.11.2013 whereas the machine was delivered after 27.11.2013, he requested complainant to install the machine, revise the bill and return the cheque in question but complainant did not respond for 23 months, he enquired about the original manufacturer Vishwakarma Engineering and they got it installed after paying installation charges, the complainant never revised the bill and did not return the cheque in issue, therefore he was constrained to mention erroneous bill in his sales tax/VAT return, he did not get VAT credit due to mismatch as he came to know that originally VAT was not paid by complainant, when he informed the complainant the complainant got the correction done with VAT department and it was resolved that the balance amount will be adjusted in the form of debit/credit note as the bill could not have been changed. During cross examination, DW1 admitted that he did not file any complaint or issue any notice to complainant for return of cheque or adjustment of payment, as the relation between him and complainant were cordial and complainant kept assuring him for adjustment of the excess amount as well as return of the cheque, he admitted the fact of filing of civil suit for recovery by complainant against him on the same subject matter, he instructed his banker for stop payment of cheque after 23 days from information received from complainant, he denied the suggestion that complainant never informed him about the wrong date on the cheque, he further denied giving of postdated cheque, he admitted not informing the complainant about stop payment instructions in writing but deposed that he verbally informed him, he admitted not filing any document to prove delivery of machine after 27.11.2013, he deposed that he paid less than Rs. 5,000/ in cash to Vishwakarma Engineering for the installation of machine, that he has not shown the said amount in books of account as it was Patty cash, he admitted not issuing demand notice to claim the installation charges, he admitted not having formal quotation in writing from complainant about the price of machine, he admitted filing VAT for Rs. 4,30,500/ but stated that he was Ct. Case No. 13801/2019 Page 20 of 43 constrained to file VAT return for Rs. 4,30,500/ as complainant assured him for adjustment of the amount and return of the cheque, he admitted the correctness of Ex. DW1/C1 but stated that the mismatch report sent by him is not annexed therewith, he denied the suggestion of issuance of cheque for the balance amount of Rs. 1,79,500/ alongwith interest.

13.7. Accused also examined Utkarsh Chandra, Deputy Manager, SBI Bank as DW2 who relied upon the application written by accused for stop payment of cheque in issue dated 28.11.2013, the letter of request by accused to his banker for refund of dishonor charges as deducted against dishonor of cheque in issue, clarification regarding stopping of cheque dated 09.03.2015 issued by his banker, statements showing stop payment of cheque and refund of amount to accused Ex. DW2/A (colly.). The witness was not crossexamined by complainant despite opportunity being granted.

13.8. Now let us try to examine the defence of accused one at a time.

13.8.1. Whether ingredients of Section 138 NI Act are not proved as the cheque returning memo remains unproved for want of official seal or stamp of the bank?

Ld. counsel for accused has contended that by virtue of Section 146 NI Act bankers slip is prima facie document only if it has official mark on the same, that the return memo filed by complainant is a photocopy document which does not bear the seal or signature of the bank, that he even put a suggestion to the said effect during crossexamination of complainant and still the complainant did not bother to summon the banker to prove the return memo and hence Section 138 NI Act is not attracted. During the course of final arguments, Ld. counsel for complainant relied upon the observation of Hon'ble High Court of Delhi in the case of Guneet Bhasin v. State of NCT Ct. Case No. 13801/2019 Page 21 of 43 of Delhi Crl. M.C. 4100/2022.

13.8.1.1. In support of his contentions, Ld. counsel for accused relied upon notification RBI/201112/121 dated 25.07.2011 issued by Reserve Bank of India advising the banks to strictly adhere to the instructions of signing/initialing the cheque return memos as laid down in Rule 6 of Uniform Regulations and Rules for Bankers' Clearing Houses (URRBCH) issued under Payment and Settlement Systems Act 2007 read with Payment and Settlement Systems Regulations 2008. No doubt is casted on the said notification by Ld. counsel for complainant during the course of arguments. In support of his contentions, Ld. counsel for accused also relied upon the case of Rajendrakumar @ Rajeshkumar Balkishan Agrawal v. State of Gujarat 2011 SCC OnLine Guj 480 and Vandana v. Abhilasha 2019 (2) Mh.L.J. 645. In Rajendrakumar @ Rajeshkumar Balkishan Agrawal case (supra), the judgment of Trial Court acquitting the accused on the grounds of lacunae in oral and documentary evidence, including the fact that the cheque return memo produced on record does not bear the stamp of any bank and therefore cannot be considered in evidence u/s 146 NI Act, was upheld. However, the facts of the above case slightly differ from the case at hand in as much as the cheque return memo being not signed or stamp was not the sole reason for passing a judgment of acquittal in the above case. In Vandana v. Abhilasha case (supra), it was observed that Section 146 NI Act provides that if complainant places on record a slip or memo issued by the bank having official mark of the bank thereon, denoting that the cheque was dishonored, it would be presumed that such cheque was dishonored until such fact was disproved. But when the memo produced by complainant did not bear official mark of the bank, there was no document as contemplated u/s 146 NI Act to presume that the fact of dishonor has been proved and the burden continued to lie upon the complainant to prove the basic fact of dishonor of cheque. In such a situation, mere statement made in the statutory notice and the complaint filed before the court would not Ct. Case No. 13801/2019 Page 22 of 43 constitute proof of dishonor of cheque, unless further evidence to corroborate the same was placed on record. It was further observed that although the perusal of the cheque does show stamp of the bank in which the cheque was deposited but there is no cogent evidence placed on record by complainant to show dishonor of the said cheque. Thus, the order of acquittal was upheld.

13.8.1.2. However, in the case of Guneet Bhasin (supra) relied upon by complainant, by upholding the order of Ld. Trial Court taking cognizance of offence u/s 138 NI Act despite the fact that the cheque return memo did not bear the stamp or seal of the bank, Hon'ble High Court of Delhi observed that "If there is any infirmity in the cheque return memo, it does not render entire trial under section 138 of the NI Act as nullity".

13.8.1.3. What can be culled out from the above case laws is that the mere fact that the cheque return memo does not bear the official seal/stamp/signature of the bank would not in itself be a ground to throw out the case of prosecution and the only conclusion that could be drawn out of it would be that presumption u/s 146 NI Act would not arise. In fact, in such case the burden would continue to be upon the complainant to actually prove the fact of dishonor of cheque in order to attract conviction under Section 138 NI Act. In the present case, cheque return memo Ex. CW1/D is a mere photocopy document which does not bear any official seal or stamp of the bank. In such a case, the burden was upon complainant to prove the fact of dishonor of cheque as the presumption of Section 146 NI Act does not arise in absence of official seal of stamp of bank. CW1 was cross examined on behalf of accused to the said effect and CW1 denied the suggestion put by accused that the said return memo is a forged document. However, the accused has himself admitted the fact of dishonor of cheque in issue in his evidence by deposing and bringing on record material to prove Ct. Case No. 13801/2019 Page 23 of 43 that he had actually issued stop payment instructions to his banker. The communication of accused addressed to his banker for stop payment of cheque in issue is Ex. DW2/A (colly.). Thus, the accused has been unsuccessful in proving this defence that provision of Section 138 NI Act is not attracted in absence of official seal/stamp of bank on cheque return memo.

13.8.2. Whether the sale consideration of machine was not Rs. 4,30,500/ and whether the machine was not delivered according to its specification?

The accused has taken defence that he already paid Rs. 1,51,000/ out of total consideration of Rs. 2,25,000/ to Rs. 2,50,000/, thereafter complainant convinced him to pay additional Rs. 1,00,000/ for slitting attachment in the machine and that he issued the cheque in question for balance of around Rs. 2,00,000/ (including approx. Rs.1,00,000/ as previous balance and Rs. 1,00,000/ towards extra slitting attachment) but when complainant told him about the wrong date mentioned on cheque, he issued stop payment instructions and transferred Rs. 1,00,000/ through NEFT to complainant but did not pay remaining Rs. 1,00,000/ towards slitting attachment as no such attachment was supplied to him and complainant raised erroneous bill for Rs. 4,30,500/ and did not even pay VAT on the same. Whereas it is the case of complainant that the total sale consideration of the machine was Rs. 4,30,500/ and he received only Rs. 2,30,500/ which he later deposed to be only Rs. 2,51,000/ citing it as a typographical error, and further that the accused issued cheque for balance amount, which he later deposed to be towards principal sum of Rs. 1,79,500/ along with interest.

13.8.2.1. Complainant has placed on record copy of invoice Mark B which segregates the total consideration as Rs. 4,10,000/ towards purchase Ct. Case No. 13801/2019 Page 24 of 43 amount and Rs. 20,500/ towards VAT. Complainant has also placed on record notice of mismatch sent by accused to complainant Ex. DW1/C1, which has been admitted by accused. However, the accused has deposed that when the said invoice was delivered to him and he came to know about the wrong amount and date mentioned, he repeatedly contacted the complainant to revise the erroneous bill, to install the machine and to return his cheque but complainant did not respond to his calls for 23 months and he was constrained to get it installed by calling the original supplier Vishwakarma Engineering, and that he was compelled to file VAT return on the erroneous invoice when the complainant failed to answer his calls for 2 3 months but he did not get VAT credit as he was informed that complainant has not filed VAT on the said bill, he then informed the complainant about the same who got the correction done with VAT department and since no correction was done by complainant in the bill after filing VAT return, it was mutually decided that the balance amount would be adjusted through debit/credit note and that the said Ex. DW1/C1 does not contain the mismatch report. However, the complainant still failed to file original invoice. Ld. counsel for accused argued that it might be possible that complainant has already availed benefit of VAT after correcting it.

13.8.2.2. One cannot lose sight of fact that once legal presumption has arisen in favour of complainant, the burden is upon accused to prove his defence and not upon complainant to prove its case. Although the complainant has failed to file original invoice and has only filed a copy of the same on record. But the accused having shown the same allegedly erroneous bill in his own VAT return, points towards implied acceptance of bill by accused. If the defence of accused is to be believed that he was constrained to file VAT return for the allegedly errorneous bill as complainant failed to revise the bill or answer his calls for 23 months, the question is whether accused acted as prudent person? But accused failed to raise any written complaint or notice to complainant regarding the said Ct. Case No. 13801/2019 Page 25 of 43 allegedly erroneous bill. He also failed to raise any complaint and send any notice to complainant complaining about the deficient delivery of product. The invoice Mark B does not mention any additional slitting attachment. If the contention of accused is to be believed that the bill was erroneous, he ought to have acted like a prudent person and raise a complaint or send a notice to complainant regarding the said defect, but he failed to do so and no cogent explanation for not doing the same has come on record. Thus, the accused has failed to prove the defence that the sale consideration of the machine was not Rs. 4,30,500/ or that he received only part delivery.

13.8.3. Whether the cheque in question was not issued towards legally enforceable debt?

Ld. counsel for accused has contended that legally enforceable debt means the amount lying outstanding against the accused in the books of account of complainant, that the books of account have not been filed by complainant, that the complainant has admitted in his reply to application seeking leave to defend in corresponding civil suit the fact that accused has already paid Rs. 2,51,000/ towards part payment for the purchase of machine and even if the story of complainant is believed that the total consideration amount was fixed at Rs. 4,30,000/, then the accused already having paid Rs. 2,51,000/ was liable only to the extent of Rs. 1,79,500/ and thus the cheque in question being filled and presented for an amount of Rs. 2,00,000/ is more than the liability of accused and thus the complaint is not maintainable. On the other hand, Ld. counsel for complainant merely argued that the admission of complainant in the said reply to leave to defend is a typographical error on part of previous counsel for complainant as previous counsel failed to specifically deny the allegations of the accused and merely copied and pasted the entire paragraph in the said reply by only changing the words plaintiff and defendant. He further stated that this is the reason that accused failed to produce his application seeking leave to defend before this court.

Ct. Case No. 13801/2019 Page 26 of 43

13.8.3.1. It is admitted fact that the complainant herein has also filed a summary suit for recovery against the accused qua the same subject matter before Ld. Civil Court bearing Suit No. 8/2015. The said fact has never been denied by complainant during the proceedings and during the course of final arguments. The reply filed by complainant to the application of accused seeking leave to defend in the said summary suit is Ex. CW1/DX, which has been admitted by CW1 during his crossexamination but no objection was made by CW1 regarding its contents. It is only at the stage of final arguments that Ld. counsel for complainant raised objection on the contents of admitted document Ex. CW1/DX stating that it is all typographical error by previous counsel.

13.8.3.2. A perusal of the said reply Ex. CW1/DX reveals that each paragraph contains specific denial of each allegation of accused in detail, being made on behalf of complainant. In paragraph 4 of Ex. CW1/DX the complainant herein has specifically denied each and every allegation of accused in detail, and also made few submissions. The said paragraph has been elongated to more than four pages and a perusal of the same does not even hint to the supposition that any typographical error has been made by Ld. counsel for complainant or that he has failed to specifically deny the allegations made by accused. In the said paragraph no. 4, complainant has denied the total consideration of machine to be Rs. 2,25,0002,55,000/ and submitted that the final amount as agreed between parties for the purchase was Rs. 4,30,500/, the complainant admitted the fact that accused has already paid Rs. 2,51,000/ stating that the amount of Rs. 2,30,500/ was a typographical error. When the complainant has himself pleaded to rectify the typographical error of Rs. 2,30,500/ to Rs. 2,51,000/ in his reply to application seeking leave to defend, it is hard to believe that the said fact was indeed in itself a typographical error by counsel. He also admitted the fact that he told accused about the wrong year mentioned on the cheque and that he would return the same to accused, however the said fact has been Ct. Case No. 13801/2019 Page 27 of 43 denied by CW1 in his crossexamination. Thus complainant has taken contradictory pleas in both the cases. It seems that the complainant has been trying to gain out of its own wrongs as complainant has not come to court with clean hands. The contention of Ld. counsel for complainant that accused deliberately did not file his own application seeking leave to defend is misplaced in law. When the said reply filed by complainant was led in evidence and CW1 was confronted with the said reply and he admitted filing the same, it was for the complainant to immediately point out any defect in the same, if any, or to produce the application for leave to defend to prove his allegation that the matter in the said reply was copied and pasted. Be that as it may, the said reply being a documentary evidence, oral pleading by Ld. counsel for complainant at the belated stage of final arguments disproving its contents is not admissible in law. The complainant also failed to bring on record any amendment to his reply filed by him before Ld. civil court to prove that the entire para no.4 of his reply was a typographical error and that he took appropriate action immediately before appropriate forum. But apart from levelling baseless allegations against his previous counsel, the complainant has not filed any proof of his allegations and has only tried to gain out of its own wrong by imputing allegations on his counsel. Such a practice is highly deprecated.

13.8.3.3. Also, if the said contention of complainant was true, it was for the complainant to prove his case beyond reasonable doubt after the accused has casted doubt on the prosecution story by showing admission of complainant of having received Rs. 2,51,000/ and the complainant could have produced his statement of account to disprove the fact that accused has paid Rs. 2,51,000/ and that he only paid Rs. 2,30,500/, especially in view of the fact that the payment was only made through bank account, cheque or NEFT and not in cash. But the complainant failed to bring the same on record despite assuring that he can bring the same, during his cross examination. To the contrary, CW1 has himself admitted during cross Ct. Case No. 13801/2019 Page 28 of 43 examination that accused has paid Rs. 2,51,000/ and that as per invoices accused is liable to pay a sum of Rs. 1,79,500/. It was then that the complainant for the first time alleged that the cheque of Rs. 2,00,000/ was handed over by accused towards payment of principal amount of Rs. 1,79,500/ alongwith interest which came out to be total Rs. 2,00,000/ and some thousand rupees which was rounded off to Rs. 2,00,000/ at request of accused.

13.8.3.4. Thus, Ld. counsel for accused has further taken defence that only in order to cover up the lacunae of presenting the cheque for more than the liability of accused, complainant has deposed that the interest was also to be levied on the principal sum.

Ld. counsel for accused contended that there was no agreement of levy of interest or even a pleading to the said effect by complainant in his complaint, legal notice, presummoning evidence or postsummoning examinationinchief and when in the corresponding civil suit accused raised his objection about Rs. 2,51,000/ already paid to complainant, complainant replied admitting that Rs. 2,30,500/ was typographical error and now only to cover his lie complainant came up with the story that the remaining amount was towards interest and that even if his story is taken to be true, the principal amount together with interest also does not come out to be Rs. 2,00,000/. On the other hand, Ld. counsel for complainant relied upon the invoice Mark B to contend that the said invoice mentions the levy of interest @ 18%.

13.8.3.5. If the pleadings of complainant are scrutinized in a chronological manner, this case has been filed by complainant on 17.01.2015 and reply to leave to defend Ex. CW1/DX was filed by complainant before Ld. civil court in a corresponding civil suit for recovery Ct. Case No. 13801/2019 Page 29 of 43 between the same parties prior to 01.08.2015, meaning thereby that reply to leave to defend was filed by complainant after filing of this case. In the present complaint, the complainant has alleged that he received Rs. 2,30,500/ from accused towards part payment and accused issued cheque for balance amount of Rs. 2,00,000/. There is no whisper of levy of interest in the present complaint. Thereafter, reply to leave to defend was filed by complainant before Ld. Civil Court pleading to rectify its typographical error and admitting receipt of Rs. 2,51,000/ from accused. However, no such plea of levy of interest was taken by complainant even in the said reply, despite complainant categorically admitting therein that accused had already paid Rs. 2,51,000/ out of total amount of Rs. 4,30,500/. Upon perusal of this complaint, reply of complainant Ex. CW1/DX and order dated 05.11.2016 passed by Ld. Civil Court, it transpires that till 05.11.2016, no plea of levy of interest on the principal sum was raised by complainant either before this court or before Ld. Civil Court.

13.8.3.6. It is also clear cut admitted position that complainant came to know about the alleged typographical error in the sum of amount received latest by the time accused filed his application of leave to defend i.e. prior to 01.08.2015. However, the complainant was examinedinchief before this court on 23.01.2018 and still complainant adopted his presummoning evidence concealing the fact in his examinationinchief that he actually received an amount of Rs. 2,51,000/ and not Rs. 2,30,500/ from accused. To further mislead the court, CW1 deposed that he came to know about the said typographical error only on 22.09.2017 and that prior to 22.09.2017 he was not aware about the said typographical error. This deposition of complainant goes contrary to his admission before Ld. Civil Court in his reply Ex. CW1/DX filed prior to 01.08.2015, thus raising a doubt on the veracity of the testimony of CW1.

Ct. Case No. 13801/2019 Page 30 of 43

13.8.3.7. Ld. counsel for accused has relied upon the order dated 05.11.2016 passed by Ld. Civil Court allowing the application of accused seeking leave to defend and stated that Ld. Civil Court has also observed that when complainant has admitted receiving of Rs. 2,51,000/ as against total consideration of Rs. 4,30,500/, it casts a doubt to the case of complainant that a sum of Rs. 2,00,000/ would be due against the accused and raises a doubt that cheque would be issued by accused in discharge of his liability. A certified copy of the said order dated 05.11.2016 is on record, which has not been disputed by complainant. Even the present complainant is silent on the issue of levy of interest. Interestingly, even the legal notice sent by complainant Ex. CW1/E does not demand any interest by accused. Presummoning evidence and examinationinchief of complainant in his postsummoning evidence is also silent upon the interest issue. It was only during crossexamination on 23.01.2018 that the complainant for the first time raised the issue that "the amount of Rs. 1,79,500/ was due as on 16.11.2013 however the accused said that he does not have the money and will give him a post dated cheque including interest and that alongwith the interest the amount was Rs. 2,00,000/ and some thousand rupees but accused insisted that it be converted to a round figure and thus handed over cheque for Rs. 2,00,000/". CW1 has also admitted that his complaint, legal notice or his evidence by way of affidavit does not mention the fact of payment of interest. Thus, it is only after passing of observation of Ld. Civil Court on 05.11.2016, that the point of levy of interest has been raised by complainant.

13.8.3.8. It is an admitted fact and a matter of record that except for the copy of invoice Mark B on record, there is no other document or witness verifying the fact of levy of any interest albeit interest @ 18% on the principal sum and the same also does not find mention in the complaint or the legal notice or the examinationinchief of complainant. In the case of Suman Sethi v. Ajay K. Churiwala 2000(2) SCC 380, Hon'ble Supreme Ct. Case No. 13801/2019 Page 31 of 43 Court held that where the notice also contains a claim by way of cost, interest etc. and gives breakup of the claim of the cheque amount, interest, damages etc., which are separately specified, the claim for interest, cost, etc. would be superfluous and these additional claims being severable would not invalidate the notice. It was further held that if an ominous demand is made in a notice as to what was due against a dishonoured cheque, the notice might fail to meet the legal requirement and may be regarded as bad. Thus, what has been held is that a notice is not bad in law for separately specifying the interest etc. charged, however it might become bad in law for not raising specific demand. In the present case, the legal notice Ex.CW1/E was served upon accused raising ominous demand of the cheque amount without specifically demanding interest @ 18% on the principal amount and thus is bad in law, if the complainant now demands interest on Rs. 1,79,500/.

13.8.3.9. Even if complainant's case is believed that the interest was to be levied, the deposition of CW1 further casts a doubt on the veracity of the witness. CW1 has deposed during his crossexamination that amount of Rs. 1,79,500/ was due as on 16.11.2013 and postdated cheque for Rs. 2,00,000/ was handed over by accused towards principal amount of Rs. 1,79,500/ and interest which came out to be some thousand rupees above Rs. 2,00,000/ but the same was rounded off to Rs. 2,00,000/. However, right after that CW1 further admitted receiving of Rs. 1,00,000/ from accused on 27.11.2013. Thus, even if the plea of levy of interest is believed to be true, the fact that it is admitted by CW1 that Rs. 2,00,000/ was due as on 16.11.2013 but then he also received an amount of Rs. 1,00,000/, in such a case presenting the cheque for whole amount of Rs. 2,00,000/ is beyond the legal liability of accused.

13.8.3.10. In such circumstances, believing that the total sale consideration of the machine was Rs. 4,30,500/, in view of admission of Ct. Case No. 13801/2019 Page 32 of 43 CW1 that accused has already paid Rs. 2,51,000/, the liability of accused would have been only to the extent of Rs. 1,79,500/. However, admittedly the cheque in issue has been presented for payment of Rs. 2,00,000/ which is more than the liability of accused. The fact of remaining amount of Rs. 20,500/ being towards interest has not been proved as already observed hereinabove. Thus, it is a proven fact that the cheque in issue has been presented by complainant for an amount which was not due towards complainant on the date of its presentation.

13.8.3.11. Ld. counsel for accused has relied upon judgment in the case of Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel & anr. Criminal Appeal No. 1497 of 2022 dated 11.10.2022 to contend that since CW1 has admitted receipt of Rs. 2,51,000/, the presentation of cheque in question by complainant without endorsement as to part payment received in terms of Section 56 NI Act, cannot be said to be presented for discharge of legal debt or liability of the accused.

In M/s Alliance Infrastructure Project Pvt. Ltd. & Anr. case (supra) Hon'ble High Court of Delhi dealt with the issue of interpretation of expression 'amount of money' appearing in Section 138 NI Act in a case where the admitted liability of the drawer of the cheque gets reduced, on account of part payment made by him, after issuing but before presentation of cheque in question. The court was posed with the question whether the expression 'amount of money' would always mean the amount of cheque, even if the actual liability of the drawer of the cheque has got reduced on account of some payment made by him towards discharge of the debt or liability in consideration of which cheque in question was issued. Answering the said question in negative, it was held that:

"8. ...If it is held that the expression 'amount of money' would necessarily mean the amount of cheque in every case, the drawer of cheque would be required to make arrangement for more than the Ct. Case No. 13801/2019 Page 33 of 43 admitted amount payable by him to the payee of the cheque. In case he is not able to make arrangement for the whole amount of the cheque, he would be guilty of the offence punishable under section 138 of Negotiable Instruments Act. Obviously this could not have been the intention of the legislature to make a person liable to punishment even if he has made arrangements necessary for payment of the amount which is actually payable by him...

9. I am conscious of the implication that the drawer of a cheque may make payment of a part of the amount of the cheque only with a view to circumvent and get out of his liability under section 138 of Negotiable Instrument Act. But, this can easily be avoided, by payee of the cheque, either by taking the cheque of the reduced amount from the drawer or by making an endorsement on the cheque acknowledging the part payment received by him and then presenting the cheque for encashment of only the balance amount due and payable to him..."

To properly adjudicate the above issue, it would also be apposite to understand the law laid down by Hon'ble Supreme Court in Dashrathbhai Trikambhai Patel case (supra). It has been observed as follows:

"30. In view of the discussion above, we summarize our findings below:

For the commission of an offence under Section 138, the cheque that is dishonoured must represent a legally enforceable debt on the date of maturity or presentation;

If the drawer of the cheque pays a part or whole of the sum between the period when the cheque is drawn and when it is encashed upon maturity, then the legally enforeceable debt on the date of maturity would to be the sum represented on the cheque;

When a part or whole of the sum represented on the cheque is paid Ct. Case No. 13801/2019 Page 34 of 43 by the drawer of the cheque, it must be endorsed on the cheque as prescribed in Section 56 of the [NI] Act. The cheque endorsed with the payment made may be used to negotiate the balance, if any. If the cheque that is endorsed is dishonoured when it is sought to be encashed upon maturity, then the offence under section 138 will stand attracted..."

13.8.3.12. Thus, what has been laid down in the above precedent is that a cheque presented without endorsement of part payment made by drawer after issuance of the said cheque and before its maturity, cannot be considered to be cheque presented in discharge of legally enforceable debt. In the present case also, complainant has deposed that the outstanding liability of accused was only Rs. 1,79,500/ and has admitted receiving of Rs. 2,51,000/ prior to delivery but still presented the cheque for an amount of Rs. 2,00,000/ i.e. more than the liability of accused on the date of its presentation. Thus, the accused has been able to prove his defence that the cheque was presented for more than the liability of accused as on date of presentation.

13.8.4. Whether the complaint is liable to be dismissed for the cheque being presented by complainant for Rs. 2,00,000/ without making endorsement on the same u/s 56 and 58 NI Act acknowledging the part payment made by accused?

Section 56 NI Act enables the payee to make an endorsement on the negotiable instrument of any amount being partly paid and entitles the payee to negotiate such instrument for the balance sum due. Section 58 NI Act prohibits a person from receiving amount due on the negotiable instrument is the said negotiable instrument has been obtained by him by means of an offence or fraud, or for an unlawful consideration.

Ct. Case No. 13801/2019 Page 35 of 43

13.8.4.1. Ld. counsel for accused has contended that in the reply to the application seeking leave to defend in the corresponding civil suit, complainant has admitted the fact that accused requested complainant to return his cheque and promised to issue a fresh cheque incorporating the correct date or to make payment in cash, and yet the complainant did not return the said cheque being in unlawful possession of the cheque in question. However, Section 58 NI Act does not bar a complaint in case of unlawful retention of a negotiable instrument which was at first instance obtained by lawful means. In the present case, there is no dispute as to issuance of cheque in issue to the complainant. Thus, the first hand possession of cheque in issue with complainant cannot be said to be unlawful or obtained through an offence or fraud. What has been contended by accused is that once he found that the machine purchased did not have the extra attachment and the cheque handed over to the complainant could not be presented due to wrongly mentioned date on the same and complainant promising to return the cheque for exchange of another cheque or payment, the continued retention of the cheque in issue with complainant was unlawful. However, the same is no ground for dismissal of complaint u/s 58 NI Act.

13.8.4.2. Further, Ld. counsel for accused has contended that presenting the cheque for the whole amount without endorsement of the payment already received is in violation of Section 56 NI Act. It has been observed by Hon'ble High Court of Delhi in the case of Alliance Infrastructure Project Pvt. Ltd. v. Vinay Mittal 2010 SCC OnLine Del 182 as under:

"I am conscious of the implication that the drawer of a cheque may make payment of a part of the amount of the cheque only with a view to circumvent and get out of his liability under Section 138 of Negotiable Instruments Act. But, this can easily be avoided, by payee of the cheque, either by taking the cheque of the reduced Ct. Case No. 13801/2019 Page 36 of 43 amount from the drawer or by making an endorsement on the cheque acknowledging the part payment received by him and then presenting the cheque for encashment of only the balance amount due and payable to him. In fact, Section 56 of Negotiable Instrument Act specifically provides for an endorsement on a negotiable instrument, in case of part payment and the instrument can thereafter be negotiated for the balance amount."

And thus the court quashed the criminal complaint on the ground that the cheque was presented for whole of the amount although some payment as part payment was made by accused prior to presentment of the cheque.

13.8.4.3. In the present case, CW1 having admitted receipt of Rs. 2,51,000/ out of total sale consideration of Rs. 4,30,500/ presented the cheque for Rs. 2,00,000/ without making any endorsement on the same acknowledging such receipt of part payment, and thus presented the cheque for a greater amount than the liability of accused. Thus, accused has been able to prove this defence that the cheque in question suffers from infirmity in view of Section 56 NI Act.

13.8.5. Whether Mr. Shiva Kant Dwivedi is not the proprietor of M/s Shiva Engineering Works and therefore complaint is liable to be dismissed?

Ld. counsel for accused has contended that CW1 has failed to file any proof of him being proprietor of M/s Shiva Engineering. Whereas complainant has stated that he has filed DVAT form on record but at the relevant time name of proprietor was never mentioned on the DVAT form.

It is an admitted fact that accused purchased a paper cutting machine from M/s Shiva Engineering Works. The generation of copy of invoice Mark B has not been disputed by accused, although the accused has disputed the fact Ct. Case No. 13801/2019 Page 37 of 43 that this copy was generated earlier which was an erroneous bill and he had requested complainant to revise the bill but to no avail. Ld. counsel for accused has also contended that it might be possible that complainant may have revised the bill and obtained VAT rebate and therefore original bill has not been produced by complainant. Be that as it may, the generation of invoice Mark B is not disputed.

Further, if the signatures of authorized signatory on the bill is compared with the signature of CW1 in his evidence on record, by virtue of Section 73 Evidence Act 1872, they appear to be signed by the same person. CW1 has also deposed that his name as proprietor does not find mention in the DVAT form Mark A, as at that time name of proprietor was never mentioned on it. Moreover, notice of mismatch Ex. DW1/C1 has been admitted by accused to be correct. The said notice has been sent by accused to Shiva Engineering Works stating the name of contact person to be Mr. Shiva Kant. Thus, accused has himself admitted that Mr. Shiva Kant Dwivedi is the proprietor/authorized signatory of M/s Shiva Engineering Works. Accordingly, accused has failed to prove his defence that complaint has been filed by unauthorized person.

13.9. Thus, accused has been able to successfully rebut the presumption of law and discharge the burden of proof by raising a probable defence that the cheque in question was issued in excess of his liability.

The first legal requirement is, thus, proved in favour of accused and against the complainant.

14. The second legal requirement is:

Ct. Case No. 13801/2019 Page 38 of 43

"That cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier."

The cheque in question Ex. CW1/C is dated 23.11.2014. The cheque return memo Ex. CW1/D is dated 25.11.2014, which proves that the cheque in question was presented within the period of its validity. Further, defence has failed to controvert the said fact.

Thus, the second legal requirement is adjudicated in favour of complainant.

15. The third legal requirement is:

"That cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank."

Section 146 NI Act presumes the fact of dishonour of cheque upon produc tion of bank's slip or memo having the official mark denoting that the cheque in question has been dishonoured. This is also a rebuttable presump tion and the upon production of such bank memo, the burden shifts upon ac cused to disprove the same.

In the instant case, the presumption under Section 146 NI Act has not been raised for the reason that the return memo does not bear official seal or stamp of the bank. However, the fact of dishonor of cheque in issue is not disputed. The cheque in question was dishonoured for the reason stated therein viz. Funds Insufficient. However, the accused has examined Utkarsh Chandra, Deputy Manager, SBI Bank as DW2 to prove that he issued stop payment instructions to his banker qua the cheque in issue and the return memo filed by complainant is a forged document. The application written Ct. Case No. 13801/2019 Page 39 of 43 by accused for stop payment of cheque in issue dated 28.11.2013, the letter of request by accused to his banker for refund of dishonor charges as de ducted against dishonor of cheque in issue and clarification regarding stop ping of cheque dated 09.03.2015 issued by his banker are Ex. DW2/A (colly.). Thus, the accused has proved that the cheque was dishonored upon his instructions to his banker to stop its payment.

However, it was held in Laxmi Dyechem v. State of Gujarat: (2012) 13 SCC 375 that:

"15. ... We find ourselves in respectful agreement with the decision in NEPC Micon Ltd. (supra) that the expression "amount of money .......... is insufficient" appearing in Section 138 of the Act [NI ACT] is a genus and dishonour for reasons such "as account closed", "payment stopped", "referred to the drawer" are only species of that genus. Just as dishonour of a cheque on the ground that the account has been closed is a dishonour falling in the first contingency referred to in Section 138, so also dishonour on the ground that the "signatures do not match" or that the "image is not found", which too implies that the specimen signatures do not match the signatures on the cheque would constitute a dishonour within the meaning of Section 138 of the Act."

As held in Laxmi Dyechem (supra) dishonour of cheque with the remarks "payment stopped" also falls within the offence u/s 138 NI Act and there fore, the burden now shifts upon the accused to rebut this presumption by establishing some reasonable justification for the same.

Thus, the third legal requirement is adjudicated in favour of complainant since the fact of dishonor of cheque in issue remains undis puted.

Ct. Case No. 13801/2019 Page 40 of 43

16. The fourth legal requirement is:

"The payee or the holder in due course of the cheque makes a de mand for the payment of the said amount of money by giving a no tice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid."

The cheque was dishonoured vide return memo dated 25.11.2014 and the complainant sent a legal notice dated 04.12.2014 (Ex.CW1/E) addressed to the accused. Corresponding speed post receipt (Ex.CW1/F) is also on record. The tracking report Ex. CW1/G reflects delivery of the notice on 05.12.2014. Although the accused has denied receipt of legal demand no tice, he has admitted the fact that the same bears the correct address of his company, in his statement u/s 313 Cr.P.C. Thus, the legal notice has been properly addressed to the correct address of accused and by virtue of pre sumption u/s 27 General Clauses Act also accused is deemed to have re ceived the legal notice, if the notice has been sent to correct address by post.

16.1. Even otherwise, law expects a person pleading nonreceipt of any demand notice to prove his bona fide by making the payment of the cheque amount within 15 days of receiving court summons. This is crystallized by the verdict of Hon'ble Supreme Court in the case titled as C.C. Alavi Haji v. Palapetty Muhammed & anr.: (2007) 6 SCC 555:

"17. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of Ct. Case No. 13801/2019 Page 41 of 43 the complaint under section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and section 114 of the Evidence Act."

16.2. In the case at hand, despite issuance of summons and appearance of accused before the court, accused has failed to pay the cheque amount to the complainant and thus is precluded from raising the plea of nonservice of demand notice.

The fourth legal requirement is, thus, adjudicated in favour of complainant.

17. The fifth legal requirement is:

"The drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice."

It is an undisputed fact and also a matter of record that accused has failed to make the payment till date let alone making payment within 15 days of re ceipt of notice. The defence taken by accused for not making the payment Ct. Case No. 13801/2019 Page 42 of 43 within the statutory period of 15 days has been that he has no liability to the extent of the amount specified in the cheque.

Thus, the fifth legal requirement is adjudicated in favour of com plainant.

18. All the legal requirements constituting an offence u/s 138 NI Act being cumulative in nature, the fact that the first legal requirement has not been proved in favour of complainant, the ingredients necessary to bring home the guilt of accused remain incomplete. Accordingly, accused M/s Multilux Hospital Technology Pvt. Ltd. represented through its director P.C. Jain and authorized signatory P.C. Jain are acquitted for the alleged offence u/s 138 NI Act.

19. Bonds under Section 437A Cr.P.C. has been furnished on behalf of the accused after conclusion of final arguments are accepted for a period of six months from today. Original FDR taken on record.

Announced in the open court on 06.02.2023.

(Aakanksha) Metropolitan Magistrate(NI Act)07 South West District, Dwarka Courts, New Delhi Ct. Case No. 13801/2019 Page 43 of 43

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Ms. Bhumika Dubey vs M/S Multilux Hospital Technology Pvt. ... on 6 February, 2023