Delhi District Court
Case No. : 2966/12 Vandana Carpets vs . Anuj Chandra Page No. 1/14 on 27 September, 2014
IN THE COURT OF SHRI RAVINDER SINGHII
METROPOLITAN MAGISTRATE
DWARKA COURTS, NEW DELHI
Case No. : 2966/12
Unique Case ID No. : 02405R00067412011
M/s Vandana Carpets
Through its Proprietor Sh. Shukal Gupta.
1724, Ranaji Enclave, PartII
Near Sanatam Dharm Mandir
Uttam Nagar, Najafgarh Road
New Delhi110043 .......................................Complainant
Versus
1) Anuj Chandra
2) Neelu Chandra
Both R/o 3/15, Shanti, Niketan,
New Delhi110021
Also at:
J705, Som Vihar Apartments
Opposite Sangam Cinema
R.K Puram
New Delhi .......................................Accused
Date of Institution: 01.02.2011
Plea of the accused: Pleaded Not Guilty
Date of Reserving Judgment: 12/09/2014
Sentence or final Order: Acquitted
Date of Judgment: 27/09/2014
JUDGMENT
BRIEF FACTS AND REASONS FOR DECISION OF THE CASE
1. By way of the present judgment, I shall decide the complaint case U/s 138 of the Negotiable Instrument Act 1881 (hereinafter said as NI Case No. : 2966/12 Vandana Carpets Vs. Anuj Chandra Page No. 1/14 Act) filed by the complainant M/s Vandana Carpets through its proprietor Shukal Gupta against the accused persons Anuj Chandra & Neelu Chandra.
2. The factual matrix necessary for disposal of the present case as per the allegations in the complaint are that, the complainant is proprietor of M/s Vandana Carpets and the said firm is engaged in business of manufacturing of carpets. It is further submitted that the accused persons Anuj Chandra and Neelu Chandra approached the complainant and ordered for 2000 sq. feet of carpet. It is further alleged that both the accused persons assured the complainant that the payment of the same would be made within three days of delivery. It is further alleged that acting upon the assurance of the accused persons the complainant supplied the desired carpets on 16.10.2010 and also raised invoice no. 5/244 dated 16.10.2010 for a sum of Rs. 2.20 lacs. It is further alleged that the accused no. 1 Anuj Chandra in discharge of the liability issued a cheque bearing no. 775655 dated 18.10.2010 amounting to Rs. 2,20,000/ drawn on Indian Bank, Shanti Niketan branch in favour of the complainant and advised the complainant to present the same after 15.11.2010 as the accused persons expressed financial constraints. It is further alleged that due to financial constraints the accused no. 1 Anuj Chandra issued and signed the said cheque though it was insisted by the complainant that the cheque be signed by both the accused persons as the carpet was supplied by the complainant on their joint order. It is further alleged that as the carpet was already delivered the complainant had no option but to agree to the request of the accused persons. It is further alleged that both the accused persons assured that the cheque would be honoured on it presentation. It is further alleged that the complainant presented the cheque in question for encashment with its banker i.e. Oriental Bank of Commerce, Dwarka Branch as per the instruction of the accused persons. It is further alleged that the cheque in question was dishonoured vide cheque returning memo dated 22.11.2010 with remarks "Payment stopped by drawer". Thereafter it is alleged that the complainant contacted the accused persons but the accused persons started avoiding him on one pretext or other. It is further alleged that the Case No. : 2966/12 Vandana Carpets Vs. Anuj Chandra Page No. 2/14 complainant thereafter visited the residence of the accused persons at Shanti Niketan, New Delhi. It is further alleged that on visit to the residence of the accused persons the complainant came to know that the accused persons have shifted their residence to Som Vihar Apartments. It is further alleged that the conduct of the accused persons was evident that both of them were having malafide intentions of not making payment to the complainant. It is further alleged that the after getting no response from the accused persons regarding the payment towards the dishonoured cheque a legal notice of demand dated 15.12.2010 was sent to the accused persons through registered post and U. P. C. on 21.12.2010. It is further alleged that the accused persons received the said legal demand notice and despite receipt of the same have failed to pay any sum in response to the legal notice of demand and instead of making the payment sent a false and frivolous reply dated 19.01.2011 as a result of which the complainant has filed the present complaint for prosecution of the accused persons U/s 138 of the NI Act.
3. After the complaint was filed, the complainant Shukal Gupta, Proprietor of M/s Vandana Carpets led his presummoning evidence by way of an affidavit and after hearing the counsel for the complainant and considering the entire material and documents on record, summons were issued against the accused No. 1 Anuj Chandra only by the court vide order dated 27.05.2011 for the offence U/s 138 of NI Act. Hence the complaint of the complainant remained restricted to accused No. 1 Anuj Chandra. On appearance of the accused No. 1 Anuj Chandra a separate notice U/s 251 of the Criminal Procedure Code, 1973 (hereinafter said as the Code) dated 25.03.2013 was given to the accused No. 1 to which he pleaded not guilty and claimed trial. Thereafter, the matter was listed for complainant's evidence.
4. The complainant Shukal Gupta, proprietor of M/s Vandana Carpets got himself examined as CW1 and adopted his pre summoning evidence affidavit Ex. CW1/1 and he also relied on documents Ex. CW1/A to Ex. CW1/L. Ex. CW1/A is the invoice no. 5/244 dated 16.10.2010 amounting Case No. : 2966/12 Vandana Carpets Vs. Anuj Chandra Page No. 3/14 to Rs. 2.20 lacs, Ex. CW1/B is the transporter's bill, Ex. CW1/C is the original cheque in question, Ex. CW1/D is the cheque returning memo, Ex. CW1/E is the legal demand notice dated 15.12.2010, Ex. CW1/F (Colly.) are the postal receipts, Ex. CW1/G and Ex.CW1/G1 are the UPC receipts. Ex. CW1/H to Ex. CW1/K are the returned AD cards. Ex.CW1/L is the reply of the accused dated 19.01.2011. CW1 was duly cross examined by the Ld. Counsel for the accused and thereafter, the complainant's evidence was closed at request.
STATEMENT OF THE ACCUSED U/S 313 OF THE CODE
5. Thereafter, the statement of accused No. 1 Anuj Chandra was recorded U/s 313 of the Code in which all the incriminating evidence along with exhibited documents were put to the accused in which he stated that he has not approached the complainant for purchase of carpets. It is further submitted by the accused that no transaction was ever carried out between him and the complainant regarding the purchase of the carpet. It is further submitted by the accused that no verbal or written instructions was given by him to the complainant for purchase of the carpets. It is further submitted by the accused that the complainant has instituted a false case against him. The accused further stated that he has not received any carpets/goods from the complainant and bills and delivery challan raised against him is false and fabricated. The accused further stated that he owes no liability towards complainant. The accused also stated that he has not delivered the cheque in question to the complainant in order to discharge his liability towards the purchase of the carpet. The accused further stated that the complainant has approached him for grant of loan two times along with a person named Ashu Garg. It is further submitted by the accused that a condition for furnishing collateral security was imposed by him before granting of the loan to the complainant but the complainant failed to give collateral security for the first time and the loan cheque which he had earlier given to the complainant was returned back to him. It is further submitted by the accused that the complainant again approached him for grant of the loan for second time and he handed over the cheque in question to the complainant for granting the Case No. : 2966/12 Vandana Carpets Vs. Anuj Chandra Page No. 4/14 said loan. It is further submitted by the accused that the complainant again failed to furnish collateral security and accordingly he issued stopped payment instructions to his bank even prior to the presentation of the cheque in question. The accused further admitted that the cheque in question bears his signatures and also admitted that all the particulars in cheque in question has been filled by him. The accused further stated that the cheque in question was presented by the complainant with his banker without intimation to him. The accused further stated that the complainant has misused his cheque. The accused further admitted the receipt of the legal demand notice and also stated that he has even replied the same. The accused further stated that the complaint case is falsely instituted against him and complainant has also deposed against him falsely. The accused further stated that he has been falsely implicated in the present complaint case and he has no liability towards the complainant.
DEFENCE EVIDENCE
6. Thereafter the case was fixed for defence evidence. The accused Anuj Chandra filed an application U/s 315 of the Code for producing himself as a defence witness. The said application was allowed and the accused deposed as DW1. The accused also examined one Ashu Garg as DW2. DW1 (accused) and DW2 Ashu Garg were duly cross examined by Ld. Counsel for the complainant. Thereafter defence evidence was closed at request of the accused and the case was listed for final arguments.
FINAL ARGUMENTS
7. Final arguments were addressed on behalf of both the parties. I have heard the arguments of Ld. Counsels for both the parties and have also given my anxious and thoughtful consideration to the same and further I have also perused the entire record of the case file. Before proceeding further it is imperative for me to go through the relevant provisions of law.
Case No. : 2966/12 Vandana Carpets Vs. Anuj Chandra Page No. 5/14Section 138 of the Negotiable Instruments Act reads as:
"Dishonour of cheque for insufficiency, etc, of funds in the account:Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in while or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that 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 that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless
(a) 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;
(b) the payee or the holder in due course of the cheque, as the case may be, 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;
and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation:For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.
APPRECIATION OF EVIDENCE IN THE LIGHT OF THE INGREDIENTS OF SECTION 138 OF THE NI ACT & THE DEFENCE RAISED BY THE ACCUSED.
8. In the instant case, it is not disputed by the accused that the cheque in Question Ex. CW1/C is drawn on the account maintained by him. Further the signature on the cheque in question Ex. CW1/C and filling of the particulars therein has also been admitted by the accused. The presentation, dishonour of the cheque in question and the cheque returning memo has also not been disputed by the accused. Therefore, in view of the evidence on record it stands proved that the cheque in question Ex CW1/C is drawn on the account maintained by the accused and the same bears the signature of Case No. : 2966/12 Vandana Carpets Vs. Anuj Chandra Page No. 6/14 the accused and all the particulars therein has also been filled by the accused. Further it also stands proved that the cheque in question Ex. CW1/C was presented within the period of its validity and the same was dishonoured vide cheque returning Memo Ex. CW1/D with the remarks "Payment Stopped by the Drawer". Further throughout the trial, the receipt of the legal demand notice Ex. CW1/E has also been admitted by the accused. The accused has also stated that he has even replied the legal demand notice given by the complainant. The reply of the accused is also placed on record by the complainant as Ex. CW1/L. Therefore, it stands proved that the legal demand notice Ex. CW1/E was duly served upon the accused and the same has also been replied by the accused vide reply Ex. CW1/L.
9. Perusal of the entire evidence reveals that the only defence which has been taken by the accused in the present complaint case is that he has never purchased any carpet from the accused and he has never issued the cheque in question Ex. CW1/C dated 18.10.2010 in discharge of his liability towards the purchase of the carpet as alleged by the complainant.
10. It is trite to say that the crux of penal liability under Section 138 of the NI Act is that the cheque in question must be issued for the discharge of any legal debt or liability. Existing of legal debt or liability is sine qua non for constituting the offence under section 138 of the NI Act. Before proceeding further it is imperative for me to take notice of the provisions of Sections 118(a) and 139 of the NI Act which read as under:
"118. Presumptions as to negotiable instruments.-- Until the contrary is proved, the following presumptions shall be made
(a) of consideration.--that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;"
"139. Presumption in favour of holder.--It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to Case No. : 2966/12 Vandana Carpets Vs. Anuj Chandra Page No. 7/14 in Section 138 for the discharge, in whole or in part, of any debt or other liability.
11. The Division bench of Hon'ble Supreme Court in Krishna Janardhan Bhat Vs. Dattatraya G. Hegde, (2008) 4 SCC 54, has held that the accused can discharge the burden of presumption U/s 118 and U/s 139 of the NI Act by raising a probable defence on the strength of 'preponderance of probabilities'.
12. In Rangappa Vs Sri Mohan AIR 2010 SC 1898 the Hon'ble Supreme Court has held that it is a settled position that when an accused has to rebut the presumption under Section 139 of the NI Act, the standard of proof for doing so is that of 'preponderance of probabilities'. The accused can rely on the materials submitted by the complainant in order to raise such a defence.
13. From the reading of the above said provisions and the judgments the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) and Section 139 of the NI Act would arise in favour of the complainant that it is supported by a consideration. Such presumptions are rebuttable. The accused can prove the nonexistence of a consideration by raising a probable defence. If the accused discharges the initial onus of proof by showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the Complainant who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the accused of proving the nonexistence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he/she relies. In case, where the accused fails to discharge the initial onus of proof by showing the nonexistence of the consideration, the complainant would invariably be held entitled to the benefit of presumption arising under Section 118(a) and Section 139 of the NI Act in his favour.
Case No. : 2966/12 Vandana Carpets Vs. Anuj Chandra Page No. 8/1414. Now coming back to the present complaint case. In the instant case it is the case of the complainant CW1 that the accused Anuj Chandra along with Neelu Chandra has purchased 2000 sq ft. Carpet from him and against the same a bill/ invoice no. 5/244 dated 16.10.2010 for a sum of Rs. 2, 20,000/ Ex.CW1/A was generated and for the payment of the same the cheque in question Ex.CW1/C has been issued by the accused Anuj Chandra. Throughout the trial the accused Anuj Chandra has refuted the claim of the complainant and has examined himself in defence as DW1 and denied that he has purchased carpet from the complainant Shukul Gupta and stated that the complainant has approached him for grant of loan two times along with a person named Ashu Garg. DW1 also stated that the complainant Shukul Gupta firstly had approached him for the loan of Rs. 3 lakhs in the month of August 2010 along with Ashu Garg and he imposed two conditions upon the complainant firstly that a collateral security has to be provided for the grant of the loan and secondly that the complainant would pay interest @ 18% per annum which the complainant agreed and accordingly he gave a post dated cheque of Rs. 3,00,000/ to the complainant but the complainant did not provide any collateral security accordingly he issued stop payment instruction to his banker. DW1 further stated that again in the first week of October, 2010 the complainant Shukul Gupta approached him along with Ashu Garg and apologised for his previous conduct and again requested him for granting loan of Rs. 2.20 lakhs which he agreed imposing the same condition of collateral security and interest and accordingly he gave the post dated cheque in question Ex. CW1/C for a sum Rs. 2,20,000/ to the complainant. DW1 further stated that for the second time also the complainant Shukul Gupta failed to furnish collateral security and thereafter he again issued stop payment instruction to his banker. It is interesting to see that to corroborate his stand further the accused Anuj Chandra has also examined the said Ashu Garg as DW2. During cross examination of the accused Anuj Chandra as DW1 the accused has also stated that the witness Ashu Garg is his friend and he came in contact with Ashu Garg when he needed wrought iron and furniture. It is Case No. : 2966/12 Vandana Carpets Vs. Anuj Chandra Page No. 9/14 also interesting to see that the complainant in his cross examination as CW1 has admitted that he know Ashu Garg and he is also having business dealings with him. Therefore it is evidently clear that DW2 Ashu Garg is known to both the complainant Shukul Gupta and the accused Anuj Chandra.
15. Now, looking at the testimony of DW2 Ashu Garg. DW2 Ashu Garg has supported the stand of the accused Anuj Chandra and stated that in the year 2010 he was in trade relation with the complainant Shukul Gupta and the complainant Shukul Gupta was in need of money and accordingly he introduced the complainant Shukul Gupta to the accused Anuj Chandra and believing his assurance the accused Anuj Chandra agreed to help the complainant and the accused Anuj Chandra imposed two conditions upon the complainant Shukul Gupta for granting the loan, firstly that a collateral security has to be provided for the grant of the loan and secondly that the complainant Shukul Gupta would pay interest @ 18% per annum to which the complainant agreed and accordingly the accused Anuj Chandra gave a post dated cheque of Rs. 3,00,000/ to the complainant Shukul Gupta for the month of September 2010 but the complainant did not provide any collateral security and accordingly the accused Anuj Chandra issued stop payment instruction to his banker. DW2 further stated that again the complainant Shukul Gupta approached him and stated that he should help him getting a loan of lesser amount from the accused Anuj Chandra. DW2 further stated that he along with the complainant Shukul Gupta again approached the accused Anuj Chandra and the complainant Shukul Gupta returned the cheque to the accused and the accused Anuj Chandra gave the post dated cheque in question Ex. CW1/C for a sum Rs. 2.20 lakhs to the complainant Shukul Gupta imposing the same condition of collateral security. DW2 further stated that for the second time also the complainant Shukul Gupta failed to furnish collateral security and thereafter the accused Anuj Chandra again issued stop payment instruction to his banker. DW2 also stated that the accused Anuj Chandra even asked him to get back his cheque from the complainant but the complainant avoided him on one Case No. : 2966/12 Vandana Carpets Vs. Anuj Chandra Page No. 10/14 pretext or other and thereafter he came to know about the institution of the legal proceedings between the complainant Shukul Gupta and the accused Anuj Chandra.
16. During course of arguments Ld. Counsel for the complainant argued that defence witness DW2 is deposing at the instance of the accused and he also owes amount to the complainant in respect of his dealings with the complainant Shukul Gupta and suggestions to this effect is also put the witness during his cross examination by the counsel for the complainant. The suggestions were denied by DW2. Interestingly DW2 was also confronted with emails Mark A and Mark B allegedly written by him to the complainant which shows amount due to be paid by him and one Mrs Chandra to the complainant which the witness has stated that they do not belongs to him. Surprisingly, no certificate to prove the genuineness of the said emails has been placed on record by the complainant. More so even if the witness owes any amount to the complainant that does not mean that he is deposing falsely at the behest of the accused Anuj Chandra. Further even believing that email Mark B is referring to outstanding liability of Neelu Chandra still it is surprising to see that the same is dated 13th of July 2010 whereas as per the own claim of the complainant the transaction of delivery of carpet involved in the present complainant case took place on 16.10.2010.
17. Now, even believing the stand of the complainant it is interesting to see that the complainant CW1 in his cross examination has stated that he has met the accused Anuj Chandra only two times firstly when the accused had handed over a cash of Rs. 3,00,000/ to him and has taken back his cheque which was given by the accused Anuj Chandra for the purchase of carpets and for the second time in respect of the transaction in question. Therefore from the own admission of the complainant CW1 two things are apparently clear firstly that he had dealt with the accused Anuj Chandra only two times and secondly prior to the transaction in question earlier also some transaction of Rs. 3,00,000/ had taken place between the complainant and the accused. It is also surprising to see further that as per the own version of Case No. : 2966/12 Vandana Carpets Vs. Anuj Chandra Page No. 11/14 the complainant in the complaint, the complainant has stated that the amount for the carpet was to be paid within 3 days however no probable explanation has been given by the complainant as to what made him accept the cheque in question Ex.CW1/C dated 18.10.2010 and further wait for a month's time for realising his payment as the cheque in question Ex.CW1/C dated 18.10.2010 is dishonoured vide returning memo dated 22.11.2010 as it is also admitted fact by the complainant CW1 in his cross examination that the accused Anuj Chandra is neither his friend nor his customer and as per the own version of the complainant the complainant has met the accused only two times, still the cheque as a mode of payment was accepted by the complainant and over and above it was presented for clearance allegedly at the instance of the accused after a month's time. It is highly inconceivable that if the bill was to be paid within three days the complainant after accepting the cheque would wait for a month's time for realising his payment only at the instance of the accused who admittedly is niether his friend nor a regular customer. Further, it is also surprising to see that no delivery challan for the goods delivered was prepared and neither any receiving was taken by the complainant for the carpet which was allegedly supplied by him to the accused Anuj Chandra and that too for a sum of Rs. 2,20,000/. Furthermore, the carriage bill/ transporters bill Ex.CW1/B placed on record by the complainant is generated on the own letter head of the complainant and it do not discloses as to what was delivered and to whom or whether any cheque in question Ex.CW1/C was given as payment against the delivery of the goods. Further, it is the own case of the complainant that the accused Anuj Chandra and Neelu Chandra has approached him for the purchase of the carpet, but interestingly, the Bill/ Invoice Ex.CW1/A is only in the name of accused Anuj Chandra which casts doubt about the bill/ invoice Ex.CW1/A as it appears that the complainant knew before hand that the amount would be paid by accused Anuj Chandra only. Further in the bill/invoice Ex.CW1/A in the column of delivery note, mode/term of payment, buyer's order number & date, dispatch document number & date, dispatch through and destination and in the terms of delivery there is complete blank. Furthermore the cheque in question Ex.CW1/C has been Case No. : 2966/12 Vandana Carpets Vs. Anuj Chandra Page No. 12/14 dishonoured on account of payment stopped by the drawer which also supports the case of the accused. Furthermore, consistent stand has been taken by the accused right from the threshold i.e. from his reply Ex. CW1/L given to the legal demand notice of the complainant till the conclusion of the trial. Also the testimony of DW1 and DW2 has gone unrebutted and there is no reason to disbelieve their testimony. All the aforesaid circumstances surround the claim of the complainant with clouds of suspicion and satisfy the test of rebuttal on the strength of 'preponderance of probabilities'.
18. In a case of this nature, where the chances of false implication cannot be ruled out, the background fact and the conduct of the parties together with their legal requirements are required to be taken into consideration. All the aforesaid circumstances/factors rebut the presumptions provided under Section 139 of the NI Act because they raise credible doubt over the veracity of the complainant's claims and satisfy the test of rebuttal on the strength of preponderance of probabilities thereby weakening the claim of the Complainant.
19. Therefore this court do not find any force in the arguments advanced by the learned counsel for the complainant that the accused has failed to rebut the presumption under Section 139 of the NI Act. Needless to say that presumptions are not in itself evidence but they only enables a party in whose favour they exists to show that he has a prima facie case. The question as to whether the presumptions stood rebutted or not must, is to be determined keeping in view the other evidences on record. In the case in hand the presumptions under Section 139 of the NI Act alone cannot be the sole basis to prove the case of the complainant as the materials and evidence available on the record do not bridge the gap. It is highly improbable that the accused Anuj Chandra has given the cheque in question Ex CW1/C in order to discharge his liability towards the purchase of carpet. Therefore, I hereby hold that the complainant has not been able to prove and substantiate all the allegations against the accused Anuj Chandra. Furthermore mere non Case No. : 2966/12 Vandana Carpets Vs. Anuj Chandra Page No. 13/14 payment of cheque amount within 15 days of receipt of legal demand notice is not sufficient to fasten any liability U/s 138 of the NI Act as it is established that the cheque in question Ex.CW1/C has not been issued by the accused Anuj Chandra in discharge of his liability towards the purchase of the carpet.
20. Accordingly, In view of the facts, evidence lead by both the parties coupled with my discussion above, I hereby hold that the complainant has not been able to prove and substantiate its allegation against the accused Anuj Chandra and all the ingredients for the offence under section 138 of the NI Act have not been proved against the accused Anuj Chandra. Accordingly, accused Anuj Chandra S/o Sh. Krishan Chandra is hereby acquitted for the offence u/s 138 of the NI Act.
File be consigned to record room after due compliance.
This Judgment contains 14 pages and every page of this judgment has been signed by me.
Announced in the open Court (RAVINDER SINGH -II
Dated 27.09.2014 MM (NI Act 07)
DWARKA/NEW DELHI.
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