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Delhi District Court

) M/S Ilu Electronics Private Limited vs M/S Sharp Business Systems India ... on 16 February, 2021

  IN THE COURT OF SH.DINESH KUMAR SHARMA
     PRINCIPAL DISTRICT & SESSIONS JUDGE
                  NEW DELHI

Criminal Appeal No.220/19


1.) M/s ILU Electronics Private Limited
B/B­2, Nawalkha Apartments
Bharat Mata Path, J.L.Bajaj Marg
Near Civil Lines Crossing
C­Scheme, Jaipur.
Through its Managing Director
2.) S.K.Sharma, Managing Director
M/s ILU Electronics Private Limited
B/B­2, Nawalkha Apartments
Bharat Mata Path, J.L.Bajaj Marg
Near Civil Lines Crossing
C­Scheme, Jaipur.                   .....Appellants

Versus

M/s Sharp Business Systems India Limited
214, 221, Ansal Tower
38, Nehru Place, New Delhi­110019.
Through its Managing Director.     .....Respondent

                     Date of filing of appeal   : 30.09.2019
                     Date of arguments          : 03.02.2021
                     Date of judgment           : 16.02.2021


JUDGMENT

1. Vide this judgment, I shall dispose off the present appeal challenging the judgment dated 26.08.2019 whereby the appellants have been convicted for the offence Criminal Appeal No.220/19 Page No.1 of 12 u/S 138 of The Negotiable Instruments Act,1881 ("NI Act" in short) and order on sentence dated 11.09.2019 whereby appellant no.1 has been sentenced to pay fine of Rs.1,00,000/­ u/S 357(3) CrPC to the complainant within one month and appellant no.2 has been sentenced to one month simple imprisonment and also directed to pay the compensation of Rs.1,00,000/­ u/S 357(3) CrPC to the complainant within one month and in default of payment of the compensation, appellant no.2 shall further undergo six months simple imprisonment.

2. The appellants have challenged the impugned orders on the following grounds;

(i) The complainant failed to prove the statement of account as per rules of evidence and Section 34 of Indian Evidence Act.

(ii) The complainant placed on record no supporting documents in support of the entries made in the statement of account.

(iii) The certificate u/S 65B of Indian Evidence Act is not a proper/ valid certificate.

(iv) Ld. Trial Court did not take into account that CW1 admitted in his evidence that after filing of the complaint, the accused did not pay even a single penny. However, as per document Ex.CW1/DW1 dated 12.07.2016 there was an outstanding of Rs.60,266/­ only.

(v) The complainant also utterly failed to show any document to prove the alleged outstanding or any legally enforceable liability of Rs.1,36,816/­ on 31.10.2016 i.e. the date when the cheque in question was given.

(vi) The statement of account filed by the complainant is not a legally valid document as it is neither verified nor signed by Managing Director or by Authorised Representative at any point of time.

(vii) No tax invoice prior to date of cheque in question was produced by the complainant to prove the liability.

(viii) Ld. Trial Court has not followed the law laid down in Vipul Kumar Gupta Vs Vipin Gupta, (2014) ACD 383, Kumar Exports Vs Sharma Carpets, (2009) 2 SCC 513, Manager PCA & RD Bank Limited Vs Suresh Ganapathi Dass, 2018 ACD 607, John K. Abraham Vs Simon C. Abraham And Another, (2014) 2 SCC 236, Tristar Consultants Vs Vcustomer Services India Pvt., (2007) 139 DLT 688, Swastik Coaters Private Limited Vs Deepak Brothers & Anr., (1998) DCR 259, Balaji Agencies Private Limited Vs M/s Samudra Ropes Private Limited, (2011) AIR Bom 306, Rahul Builders Vs Arihant Fertilizers And Chemicals And Another, (2008) 2 SCC 321 and CBI Vs V. C. Shukla And Others, AIR, 1998 SC 1406.

3. Upon filing the appeal, notice was issued to the complainant/respondent and trial court record was called.

Perusal of the trial court record indicates that the Ld.Trial Court after recording the facts of the case, evidence adduced by the parties and submissions made by Ld. Counsels clearly identified the ingredients of offence u/S 138 NI Act which are as follows :

a) Existence of legally enforceable debt or liability and issuance of cheque in discharge of said debt or liability;

b) Dishonor of cheque in question which must have been drawn on an account maintained by the accused;

c) Service of demand notice seeking payment of cheque amount within fifteen days from the date of service;

d) Non­payment of cheque amount within fifteen days from the date of service of notice; and

e) Filing of complaint within one month from the date on which cause of action arises.

Ld. Trial Court after taking into account the running account between the parties Ex.CW1/3 inter­alia held that the complainant supplied products to the accused in the course of business transaction and a running account was maintained by the complainant in this regard. It was further held that a cheque dated 31.10.2010 Ex.CW1/4 in the sum of Rs. 1,36,816/­ was issued but upon presentation to the bank, it was dishonored vide return memo Ex.CW1/5. Dishonor of cheque is also reflected in the statement of account Ex.CW1/3. The cheque was found to be presented within the Criminal Appeal No.220/19 Page No.4 of 12 validity period. Appellant no.2 admitted his signature on the impugned cheque at the time of reply to the legal notice as well as at the time of framing of notice u/S 251 CrPC. The legal notice was also duly served upon the appellants and was also duly replied vide notice dated 06.06.2011. Thus, the Ld. Trial Court inter­alia held that the presentation of the cheque, its dishonorment and service of legal demand notice is not under question.

4. In regard to the plea taken by the appellants that the cheque was issued as a security, Ld. Trial Court relying upon Suresh Chandra Goyal Vs Amit Singhal,Crl.L.P. 706/2014 dated 14.05.2015 and Credential Leasing & Credits Ltd. Vs Shruti Investments, 223 (2015) DLT 343 inter­alia held that in the statement of account Ex.CW1/3 there was an outstanding of Rs.1,38,750/­ on the date of presentation of cheque i.e. 29.04.2011. In regard to the burden of proof to rebut the presumption, Ld. Trial Court relying upon the judgment of Hiten P. Dalal Vs. Bratindranath Banerjee, (2001) 6 SCC 16, Rangappa Vs Sri Mohan, (2010) 11 SCC 441 and Rohitbhai Jivanlal Patel Vs State of Gujart & Anr., Crl.Appeal No.508/19 dated 15.03.2019 inter­alia held that the accused is only required to raise a probable defense and he cannot be expected to discharge an unduly high standard of proof i.e. standard of proof for rebutting the presumption raised u/S 139 NI Act. Ld. Trial Court also held that accused Criminal Appeal No.220/19 Page No.5 of 12 failed to discharge the burden that there was no outstanding liability when the cheque was presented. Ld. Trial Court also dealt with all the contentions of the appellants which have been taken in the present appeal also i.e. that Authorized Representative of complainant was not duly authorized, the minutes were not produced, ILU Electronics and ILU EI­ Tronics are two different entities. Ld. Trial Court vide a detailed and reasoned judgment gave the categorical findings on each of the points. The objection taken by the appellants regarding the validity of certificate u/S 65B of Indian Evidence Act was also dealt with by the Ld. Trial Court and it was inter­alia held that the mentioning of date and place on the certificate so issued is desirable but absence of same does not render it invalid. It is also pertinent to mention here that the Ld. Trial Court acquitted accused no.3 Smt. Renu Sharma finding no evidence against her.

5. Ld. Counsel for appellants has submitted that the order of Ld. Trial Court suffers from serious infirmity as the complainant has miserably failed to prove any debt or liability against the accused. It has been submitted that the complainant did not place on record any invoice or challan so as to prove the debt against the appellants. The statement of account has also not been proved in accordance with law nor there is any evidence against the appellants. The attention was also drawn to the cross examination of the complainant Criminal Appeal No.220/19 Page No.6 of 12 recorded on 24.09.2014 wherein CW1 admitted that in Ex.CW1/3 statement of account the outstanding amount against the appellants were shown as Rs.100517/­ as on 31.10.2010. Ld. Counsel submitted that as there was an outstanding amount on the date of issuance of cheque was much lower than the amount for which the cheque was issued, this cannot be held to be a cheque issued against the discharge of debt or liability. Ld. Counsel also submitted that the judgment given by the Ld. Trial Court is contrary to the law laid down by Hon'ble Delhi High Court in Vipul Kumar Gupta's case (Supra) wherein it was inter­alia held that in a case u/S 138 NI Act, it must be proved beyond reasonable doubt that a cheque in question, which has been made as a basis for prosecuting the accused, must have been issued by him in the discharge of his liability or a legally recoverable debt. Ld. Counsel has also submitted that in Kumar Exports's case (Supra), the Apex Court has inter­alia held that accused in a case u/S 138 NI Act can either show that consideration & debt did not exist or that under particular circumstances of the case non existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt exist. Ld. Counsel submitted that in the present case also even from the statement of account, it has been proved that there was no debt against the appellants for which the cheque could have been issued and from the record, it can be made Criminal Appeal No.220/19 Page No.7 of 12 out that even a prudent man ought to suppose that no consideration or debt exist. It has been submitted that in this case, it was also categorically held by Apex Court that accused cannot be insisted to disprove the non­existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. Ld. Counsel has further submitted that the statement of account is not being signed by managing director or authorized representative and therefore, cannot be taken into consideration. Similarly, the certificate u/S 65B of Indian Evidence Act in absence of date or place is not a reliable piece of evidence.

6. Ld. Counsel for respondent submitted that the Ld. Trial Court has passed a very detailed order based on the evidence on record and the appeal filed by the appellants is liable to be dismissed. It has been submitted that as per the statement of account, there was outstanding of Rs.100517/­ against the appellants and the cheque was issued as there was a running account between the parties. Attention has been drawn that even on 02.11.2010 there was an outstanding of around Rs.1,39,996/­. Ld. Counsel for respondent submitted that even at the stage of issuance of notice u/S 251 CrPC, the accused admitted that the cheque were signed and filled by him. Ld. Counsel for respondent submitted that the appellants neither filed any statement of account nor lead defence Criminal Appeal No.220/19 Page No.8 of 12 evidence to rebut the presumption in favour of the complainant. The attention was also invited to the reply sent by the appellants to the legal notice dated 20.05.2011. In the reply dated 06.06.2011, the appellants have taken a plea that the cheque was not filed up by them. It has been submitted that the appellants have taken a contradictory stand at every stage and therefore, is not reliable at all. Ld. Counsel has submitted that the statement of account Ex.CW1/3 would indicate that the appellants were duly given credit of interest. It has been submitted that the complainant have also duly proved invoice Ex.CW1/2 dated 24.11.2010.

7. I have heard the submissions and have perused the record.

8. The appellants have impugned the orders of Ld. Trial Court predominantly on the ground that the cheque in question was issued as security amount and was misused by the respondent. The other plea taken by Ld. Counsel for appellants are that the complaint was not filed by any Authorized Representative, the statement of account was not proved in accordance with law and certificate u/S 65 B of Indian Evidence Act is not valid. The appellants have also impugned the orders on the ground that the complainant failed to prove its complaint and the presumption raised in favour of the complainant is duly rebutted by the appellants. I consider that none of the pleas taken by the appellants hold any force.

Ld. Trial Court has passed a very detailed and reasoned order on the basis of material evidence on record. Ld. Trial Court has dealt with each and every contention raised by the Ld. Counsel for the accused on record. In the appeal, the Appellate Court cannot replace its opinion and the finding of the Ld. Trial Court can be set aside only if it is erroneous or contrary the record. I consider that the Ld. Trial Court has returned findings on the settled proposition of law and there is no reason to substitute the same.

9. In Sampelly Satyanarayana Rao Vs Indian Renewable Energy Development Agency Limited, (2016) 10 SCC 458, the Apex Court inter­alia held that whether a post­ dated cheque is for "discharge of debt or liability" depends on the nature of the transaction. It was inter­alia held that if on the date of the cheque liability or debt exists or the amount has become legally recoverable, the Section is attracted and not otherwise. In this case, it was inter­alia held that dishonour of cheque issued for discharge of later liability is clearly covered by the statute in question. In Rangappa Vs Sri Mohan, 2010 11 SCC 411, it was inter­alia held that once issuance of a cheque and signature thereon are admitted, presumption of a legally enforceable debt in favour of the holder of the cheque arises. It was for the accused to rebut the said presumption, though accused need not adduce his own evidence and can rely upon the material submitted by the Criminal Appeal No.220/19 Page No.10 of 12 complainant. However, mere statement of the accused may not be sufficient to rebut the said presumption. It was also held that a post dated cheque is a well recognized mode of payment. I have also considered the judgments cited by Ld. Counsel for the appellants. I consider that so far as the proposition of law is concerned that cannot be disputed. However, findings given in the above said judgments are peculiar to the facts and circumstances and therefore, respectfully distinguishable in the facts and circumstances of the case. I consider that in view of the discussion made, there is no substance in the appeal and same is dismissed accordingly.

10. In regard to the quantum of sentence, Ld. Counsel for the appellants has prayed for a lenient view. It has been submitted that the appellant no.2 is a middle aged person and his entire family is dependent upon him. It has been submitted that during the proceedings Rs.50,000/­ has already been paid to the complainant. In view of the above facts and circumstances, the sentence in respect of appellant no.1 is maintained Rs.1,00,000/­.However, the sentence of appellant no.2 is modified and enhanced to Rs.1,50,000/­ and in default of payment of same, appellant no.2 shall undergo two months simple imprisonment.

11. At this stage, the appellant no.2 undertakes to deposit the compensation amount till 22.02.2021 in the form Criminal Appeal No.220/19 Page No.11 of 12 of Demand Draft in favour of the complainant. In case, the appellant no.2 fails to make the payment, he shall surrender before the court for undergoing the sentence.

12. TCR be sent back alongwith copy of the judgment.

13. File be consigned to Record Room.

                                    DINESH     DINESH KUMAR
                                    KUMAR      SHARMA
                                               Date: 2021.02.16
                                    SHARMA     16:44:11 +0530


Announced in the                   (Dinesh Kumar Sharma)
open court on                 Principal District & Sessions Judge
16.02.2021.                               New Delhi.




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