Delhi District Court
Unknown vs Mehrotra Impex Pvt Ltd on 27 February, 2020
IN THE COURT OF SURESH KUMAR GUPTA
ADDITIONAL SESSIONS JUDGE04
& SPECIAL JUDGE (NDPS) SOUTH EAST: SAKET
COURTS: NEW DELHI
CA No. 335 of 2019 Digitally signed
by SURESH
SURESH KUMAR
GUPTA
Rajesh Kumar KUMAR Date:
Proprietor of Seema Creations GUPTA 2020.02.28
11:20:57
RZE, 251, Nihar Vihar, +0530
Nangloi, Delhi110041 ......Appellant
Vs.
Mehrotra Impex Pvt Ltd
Through its Director/Authorized Signatory
Mr. Shyamji Mehrotra
Having office at:
HR29E, 60 Feet Road, Pul Prahladpur,
New Delhi110044 ...... Respondent
Instituted on : 21.06.2019
Argued on : 03.02.2020
Decided on : 27.02.2020
JUDGMENT
1 The appellant has impugned the judgment dated 15.05.2019 passed by Ld. Trial Court vide which he has been Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 1 of 21 convicted u/s 138 of Negotiable Instruments Act (hereinafter referred to as Act) and order on sentence dated 25.05.2019 vide which he has been sentenced to undergo SI for three months with fine of Rs.22,00,000/ lakh and in default of the same he shall undergo SI for three months.
2 The appeal is filed on the grounds that respondent has never taken a plea about the receipt of Rs. 2 lakh from him. The respondent has accepted eight cheques against the total balance of seven invoices. The respondent has demanded a sum of Rs. 17,68,000/ in the legal notice against the seven invoices. He was not legally bound to honour alleged cheques as he has made a part payment on 23.07.2011. The presumption was rebutted that he was liable to pay a sum of Rs. 17,68,000/ as demanded by legal notice. No offence is made out once the amount due is less than the amount represented by the cheques. He cannot be convicted merely on the basis of a statement recorded u/s 313 Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 2 of 21 CrPC. The respondent has not led evidence that sum of Rs. 2 lakh was paid against cheque bearing No. 005604. The testimony of CW1 has not been properly appreciated. The undated cheques were given as security to the respondent but not against any liability. Hence, this appeal.
3 Notice of the appeal is given to the respondent. 4 The facts of the case are like this. The respondent has filed a complaint with the averment that Shyamji Mehrotra is the Director of respondent who has been authorized vide Board Resolution dated 10.08.2011 to represent the company. Shyamji Mehrotra is conversant with the facts and circumstances of the case. The appellant has approached the complainant for the supply of fabric. The business transactions started between them. The respondent has supplied fabrics to the appellant by different invoices in between 15.11.2010 to 29.12.2010. The appellant has received the fabric. The appellant has issued cheques bearing No. Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 3 of 21 005604 to 10 of Rs. 2 lakh each and cheque No. 005611 of Rs. 3,68,000/ lakh dated 01.08.2011 drawn on IDBI Bank, Paschim Vihar in favour of the respondent. The invoices are of Rs. 1774085/ but cheques of Rs. 1768000/ were issued as extra little payment was adjusted. The said cheques on presentation to bank were dishonoured with the remarks "insufficient funds" vide memo dated 08.08.2011. A legal notice dated 11.08.2011 was issued to the appellant by registered AD/courier to make the payment within 15 days from the date of receipt of notice. The appellant gave a reply dated 31.08.2011 wherein he has vaguely replied that payment was to be made in the installments of 23 years. The payment was not made in time. Hence, this complaint.
5 The appellant was summoned after recording pre summoning evidence. Notice of accusation u/s 251 Cr.PC for the offence u/s 138 of the Act was framed against the appellant Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 4 of 21 wherein he has taken the plea that it was mutually agreed that whenever he will receive payment from the importer the same will be paid to the respondent. The cheques were issued by way of security. The cheques were not issued against any liability. The respondent has assured that all the undated cheques will presented for realization after 89 months. CW1 Shyamji Mehrotra, is the Director and AR of the respondent. He was duly crossexamined. The evidence of the respondent was closed. The statement u/s 313 CrPC of the appellant was recorded wherein he has taken the plea that payment to the respondent for the fabric was to be made in installments for 23 years. He has suffered loss due to the bad quality of the fabric supplied by the respondent. He assured the respondent to make the payment till December, 2013 to which respondent has agreed. He has issued eight different undated cheques at the request of the respondent instead of a single cheque as a security against supply of fabric. Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 5 of 21 He has paid a sum of Rs. 2 lakh through pay order No. 000878 dated 22.07.2011 but respondent did not handover the cheque to him. His liability is of Rs. 15.68 lakh which was to be paid by December, 2013. He has examined two witnesses in defence evidence.
6 Ld. Trial Court after hearing the Ld. Counsel for the parties and perusing the record has convicted and sentenced the appellant.
7 The respondent has examined Shyamji Mehrotra as CW1. He has filed his affidavit Ex. CW1/1 wherein he has corroborated the version of the complaint as set out in the beginning while briefing the facts. Ex. CW1/A is the copy of the Resolution passed by the Board of Directors of the respondent, Ex.CW1/B17 are the invoices, Ex. CW1/C17 are the challans received by the appellant, Ex. CW1/D1D8 are the cheques in question, Ex. CW1/E1E9 are the cheques returning memos, Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 6 of 21 Ex.CW1/F is legal notice, Ex. CW1/G and H are the postal receipts, Ex. CW1/I and J are the courier receipts, Ex. CW1/K is the acknowledgment card and Ex.CW1/F1 is the reply to the legal notice. During crossexamination the suggestion is denied that he has given the consent to the appellant to make the payment within a period of 23 years. He has not insisted to give eight undated cheques to settle the accounts of invoices in question. The cheques were given in July, 2011 in his office. He did not accept the proposal of the appellant referred in the reply because it was in violation of the terms of the payment to be made in 45 days. The invoice dated 29.12.2010 is not the last invoice raised by him as material was also supplied thereafter qua which payment was received. On 23.07.2011 he has received the payment of Rs. 2 lakh (voluntarily stated that it was against the running account) but this fact is not mentioned in the complaint. As per statement of account given to him by his clerk, the final Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 7 of 21 debit balance is Rs. 15,68,319/. The final account has no correlation with the invoices placed on record and the cheques given towards the invoices. The suggestion is denied that last transaction took place on 29.12.2010 or that payment of Rs. 2 lakh was towards seven invoices placed on record or that eight cheques were given as security and not against any legal liability or that a frivolous case is filed against the appellant. 8 DW1 Rajinder Kumar Nayak stated that he has been working as Production Manager with Seema Creations for the last 89 years. Mr. Mehrotra has supplied the fabric and it was agreed in his presence that payment will be made by December 2013. During the crossexamination he stated that the case is regarding the cheques issued by the appellant. The payment of cheques has not been made but voluntarily stated that part payment of Rs 2 lakh was made. The suggestion is denied that the sum of Rs. 2 lakh was not paid towards cheques in question. He admitted that Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 8 of 21 his firm is liable to pay cheque amount to the respondent. 9 DW2 Rajesh Kumar is the appellant. He stated that he is running the business in the name of Seema Creations. Mr. Mehrotra has agreed to supply the fabric and agreed to take the payment as and when same is received by him from the buyers. The respondent has supplied the fabric. Some fabric was not in accordance with the order placed. His buyer has issued a debit note of $ 1.2 lakh and this fact was narrated to the respondent who told him to issue security cheques upon which he has issued undated filled cheques. He told that payment will be arranged on receipt from the buyers. He has made a payment of Rs. 2 lakh against cheques in question to the respondent. Respondent has presented all the cheques despite the deadline of December, 2013 to make the payment. During crossexamination he admitted that he has issued the cheques in question against the material supplied by the respondent. There was oral understanding to Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 9 of 21 make the payment by December 2013. He is not liable to pay Rs. 17.68 lakh as he has only to pay a sum of Rs. 15.68 lakh. The suggestion is denied that he has made a payment of Rs. 2 lakh towards earlier transaction.
10 Ld. Counsel for the appellant submitted that there was an oral agreement to make the payment by December, 2013 and cheques in question were given at the insistence of the respondent as security for the payment of the material received from the respondent. He further submitted that undated cheques were given which were misused by the respondent. He further submitted that he has made a payment of Rs. 2 lakh even prior to the issuance of legal notice dated 11.08.2011 by the respondent but even then respondent has demanded the payment of all the cheques shown in the notice. He further submitted that demand raised by the respondent is more than the liability so the notice is defective and bad in the eyes of law.
Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 10 of 21 11 Ld. Counsel for the respondent submitted that there was no oral understanding that payment was to be made by December, 2013 rather the understanding was that payment was to be made within 45 days from the supply of the fabric. He further submitted that cheques in question were not issued as security by the appellant but it was against the legal liability. He further submitted that a sum of Rs. 2 lakh was given against the other transactions and has nothing to do with the invoices in question. He further submitted that there is no defect in the legal notice.
12 Heard and perused the record.
13 In order appreciate the submissions of the Ld. Counsel for the parties it is desirable to go through the relevant provisions.
118. Presumption 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, Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 11 of 21 and that every such instrument when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or tranferred for consideration;
138. 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 whole 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 provision of this Act, be punished with imprisonment for a term which may extend 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
i) 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.
ii) 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, Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 12 of 21 within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and iii), 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.
139. Presumption in favour of hold. It shall be presumed, unless the contrary is proved, that the holder of a cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt, or other liability.
13. Ordinary in cheque bouncing cases, what the courts have to consider is whether the ingredients of the offence enumerated in Section 138 of the Act have been met and if so, whether the accused was able to rebut the statutory presumption contemplated by Section 139 of the Act.
In K. N. Beena v. Muniyappan, 2001 (2) ALD (Crl.) 824 the Supreme Court observed that it would be erroneous approach in case the burden is cast on the prosecution/complainant to prove that the cheque was issued for a debt or liability. The Supreme Court further observed that the accused had to prove in the trial by leading cogent evidence that there was no debt or liability and that the accused not having lead any evidence could not be said to have Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 13 of 21 discharged the burden cast on him.
In Rangappa v. Mohan, AIR 2010 SC 1898 also the Supreme Court held that existence of legally recoverable debt or liability is a matter of presumption under Section 139 of the Act.
14 The perusal of the provisions of Section 138 of the Act indicates that a person who draws the cheque is responsible for making the payment of cheque amount within statutory period of 15 days, if the notice, as contemplated under this section is served upon him.
15 The appellant is supposed to disclose his defence at the time when notice of accusation is framed against him as observed in Rajesh Aggarwal v. Y K Goel, 2010 VII Delhi 57 because offence u/s 138 the Act is a document based offence.
16 The legal notice Ex.CW1/F was issued to the appellant which is duly received and replied by him. The reply is ExCW1/F1. 17 It is clear from the testimony of CW1 as well as DW2 that fabric was supplied by the respondent to the appellant. The Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 14 of 21 invoices Ex. CW1/B1B7 were issued. The invoices are nowhere disputed by the appellant. The challan receipts are Ex. CW1/C1 to 7. The appellant has not denied receipt of material. All these facts show that the receipt of fabric through invoices Ex.CW1/B17 is not in dispute.
18 The defence of the appellant is that payment was to be made by December, 2013 on receipt of same from the buyer of the fabric though respondent has disputed this fact. The appellant has examined DW1 to prove this fact. The defence to this effect does not inspire confidence. No question or suggestion is put to CW1 that terms were settled in the presence of DW1. Moreover, the appellant has taken the defence in his statement u/s 313 CrPC that he has made the payment of Rs. 14 lakh by July 2011. The appellant has failed to explain why a payment of Rs. 14 lakh was made by July 2011 in case the payment was to be made by December 2013 in installments. He has taken the plea in the statement u/s 313 CrPC that fabric in accordance with order was not supplied even then he agreed to make Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 15 of 21 the payment. No such question or suggestion is put to CW1 at the time of his crossexamination meaning thereby that this plea is without any merits and has nothing to do with the payment. There is nothing to further the defence that payment was to be made by December, 2013.
19 The defence is that cheques in question Ex. CW1/D18 were issued as security. The defence does not inspire confidence. There is nothing on the record when these cheques as a security were issued to the respondent. The appellant has admitted that he has filled all the columns of the cheques except date. This fact itself shows that the cheques of particular amount were issued to the respondent. To my mind, the security cheques do not bear the amount in figures and words and cheques with all the particulars are issued when they are issued against liability. The argument does not hold water. 20 The legal notice Ex. CW1/F has been issued wherein particulars of all the cheques Ex. CW1/D18 have been reflected. The cheque amount, after adjustment of little extra amount, has been Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 16 of 21 demanded from the appellant. The statutory provision of Section 138 NI Act indicates what should be clearly indicated in the notice. The consolidated notice of eight cheques clearly shows that demand against the cheques is made from the appellant. The amount of cheques is claimed from the appellant and amount so claimed is not different from the amount of cheques. The notice in question is for the amount shown in the cheques so the notice cannot be said to be defective.
21 CW1 has admitted that on 23.07.2011 a sum of Rs. 2 lakh has been received from the appellant but it was against the running account. CW1 has failed to show that the said amount was adjusted against any particular entry of the running account. 22 CW1 has stated that a sum of Rs. 15,68,319/ was the final due amount. DW2 has admitted during the court question that he has issued eight cheques for payment of Rs. 1768000/ but a sum of Rs. 2 lakh was paid before the cheques were presented. DW2 has nowhere clarified that a sum of Rs. 2 lakh has been given by him Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 17 of 21 against any particular cheque or invoice.
23 A sum of Rs. 2 lakh has been received by the respondent. The appellant has not clarified that the said amount was paid against a particular cheque or invoice. The respondent has not adjusted the same against any of the invoices or cheques in question. The said amount can be adjusted against any of the cheques in question. Ld. Trial Court has rightly adjusted the said amount against cheque bearing No. 005604.
24 The legal notice Ex.CW1/F cannot be said to be defective in case a sum of Rs. 2 lakh as received by the respondent is not shown in the legal notice because he has demanded the amount from the appellant in terms of the cheques in question. 25 The appellant has admitted his liability to the tune of Rs. 17,68,000/ out of which he has paid a sum of Rs. 2 lakh. He has also admitted his liability to the tune of Rs. 15,68,000/ while appearing as DW2 as well as in his statement u/s 313 CrPC.
26 There is presumption in favour of the respondent by Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 18 of 21 virtue of section 118 and 139 of the Act.
27 The cheques in question relate to the account of the appellant. The respondent is a holder of cheques in question in due course. The initial presumption as contemplated u/s 139 of the Act has to be raised in favour of respondent. The appellant has to show the defence by preponderance of probability. The inference of preponderance of probability can be drawn not only from the material brought on record by the parties but also by reference to the circumstances upon which appellant has relied. 28 The appellant has failed to show even from the material on record that there was no existing liability to pay the amount of cheque in question to respondent. The appellant has failed to rebut the presumption u/s 139 of the Act even by preponderance of probability.
29 In view of all these facts, it can be said that cheque in question were issued in discharge of the legal liability by the Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 19 of 21 appellant to respondent.
30 Ld. Trial Court has considered all the facts, evidence and points raised by Ld. Counsel for the appellant. 31 I do not find any infirmity in the judgment dated 15.05.2019 passed by Ld. Trial Court and accordingly the same is upheld.
32 The appellant has not made the payment of the cheques in question to the respondent. He has not even shown his inclination to make the payment of the cheques in question to the respondent. The cheques are issued at will without bothering whether it will be encashed or not. The drawer of the cheque remains under the impression that he can get away by paying the fine in the Court. The drawer of the cheque must bear in mind that such kind of cases can result into conviction and imprisonment. There is nothing on record to take a lenient view in favour of the appellant. To my mind, nothing is brought on Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 20 of 21 record by the appellant to take a different view with respect to the sentence awarded by Ld. Trial Court. There is nothing on record to interfere with the order on sentence passed by Ld. Trial Court. Hence, order on sentence dated 25.05.2019 is also upheld. 33 The appeal is dismissed. The appellant is absent. Ld. Trial Court is directed to take the steps to secure the presence of the appellant in order to serve the sentence imposed upon him. 34 Attested copy of the judgment be supplied to the appellant or his counsel free of cost.
35 TCR alongwith copy of the judgment be sent to the Ld. Trial Court.
36 Appeal file be consigned to record room.
Ann;ounced in the
open court on
27th February, 2020 (SURESH KUMAR GUPTA)
Addl. Sessions Judge04 & Spl. Judge (NDPS)
South East, New Delhi
Rajesh Kumar vs. Mehrotra Impex Pvt Ltd - CA No. 335 of 2019 21 of 21