Delhi District Court
Pg. No. 1 Of 18 M/S Bimal Paper (P) Ltd. vs . Ramandeep Singh Cc No. 13948-2016 on 7 March, 2023
IN THE COURT OF METROPOLITAN MAGISTRATE (NI ACT),
NORTH-WEST, ROHINI, DELHI
Presided over by- Sh. Vikas Madaan, DJS
CNR No. DLNW020057102015
CC No. 13948-2016
M/s Bimal Papers (P) Ltd.
Through its Director Sh. Praveen Jain
Shop No. 220, 906-912, IInd Floor,
Maharaja Agarsen Market, Chawri Bazar,
Delhi-110006
............Complainant
Versus
Ramandeep Singh,
M/s M.G Print Services
B-64 Naraina Industrial Area,
Phase-II, New Delhi-110028
S/o Sh. Shailender Nath Som,
.............Accused
Pg. no. 1 of 18 M/s Bimal Paper (P) Ltd. vs. Ramandeep Singh CC No. 13948-2016
JUDGMENT
(1) Name of the complainant : M/s Bimal Papers
(2) Name of accused : Ramandeep Singh
(3) Offence complained of or
proved : 138 N.I. Act
(4) Plea of accused : Pleaded not guilty
(5) Date of institution of case : 03.07.2013
(6) Date of reserve of order : 24.02.2023
(7) Date of Final Order : 07.03.2023
(8) Final Order : Convicted
Argued By:
Sh. Mukul Kumar: For complainant
Sh. Anshul Gupta: For Accused
Pg. no. 2 of 18 M/s Bimal Paper (P) Ltd. vs. Ramandeep Singh CC No. 13948-2016
BRIEF FACTS RELEVANT FOR THE DECISION OF THE CASE A. FACTUAL MATRIX
1. Vide this judgment I shall dispose of the complaint filed by the complainant under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'Act ').
2. The substance of the allegations, as contained in the complaint, are as follows:
a. The complainant claims that accused was his customer and supplies were made at the firm of accused namely M/s M.G. Print Services, and against the supplies made, an amount of Rs. 13,35,298/- is shown as outstanding in the statement of account maintained by the complainant towards the accused.
b. In partial discharge of the aforesaid liability, accused issued a cheque bearing no. 826026 dated 28.04.2013 for an amount of Rs. 1,68,703/-, drawn upon Syndicate Bank, Delhi (hereinafter referred to as 'cheque in question', for brevity) with the assurance that the said cheque would be honored upon its presentment before the bank. However, when the cheque in question was presented, the same got Pg. no. 3 of 18 M/s Bimal Paper (P) Ltd. vs. Ramandeep Singh CC No. 13948-2016 dishonoured with the remarks "funds insufficient" vide return memo dated 30.04.2013.
c. Thereupon, a legal demand notice dated 16.05.2013 was sent to the accused through registered AD, which was delivered upon the accused and it is the case of the complainant that despite service of notice, accused persons have failed to pay the cheque amount within stipulated time.
B. PRE-SUMMOING EVIDENCE & NOTICE
3. Pre-summoning evidence was led by the complainant and upon appreciation of pre-summoning evidence, accused was summoned for an offence punishable under Section 138 of the Act and notice under Section 251 Cr.P.C. was framed upon accused on 04.11.2016 to which he pleaded not guilty and claimed trial. In his plea of defence, accused stated that "The cheque in question was given by me to the complainant as advance for supply of papers. The cheque in question bears my signature, however, the contents in the same were not filled by me. The papers supplied by the complainant to me was in damage condition and I returned the same to the complainant. I do not have any liability towards the complainant. Legal notice regarding the cheque in question was not received by me."
4. Thereafter, the matter was fixed for complainant's evidence.
Pg. no. 4 of 18 M/s Bimal Paper (P) Ltd. vs. Ramandeep Singh CC No. 13948-2016 C. COMPLAINANT'S EVIDENCE
5. In evidence, complainant examined it's AR namely Sh. Parveen Jain as CW-1 and he relied upon his pre-summoning evidence towards post summoning evidence which is Ex. CW-1/A. CW-1 relied upon the following documentary evidence to prove his case against the accused beyond any reasonable doubt: -
Ex.CW1/B Account Ledger
Ex. CW1/C Cheque in question bearing no. 826026
Ex. CW1/D Cheque returning memo
Ex. CW1/E Legal Demand notice
Ex. CW1/F Postal receipt
Mark A Confirmation of account
6. CW1 was further subjected to cross-examination by the Ld. counsel for the accused. Thereafter, the complainant's evidence was closed vide order dated 21.08.2018 at the request of the complainant.
D. STATEMENT OF ACCUSED
7. Statement of the accused was recorded under section 313 Cr.P.C on 05.10.2018 wherein all the incriminating evidences were put up before the accused. In reply, accused denied all the incriminating evidences appeared against him. He further wished to lead defence evidence.
Pg. no. 5 of 18 M/s Bimal Paper (P) Ltd. vs. Ramandeep Singh CC No. 13948-2016 E. STATEMENT OF ACCUSED
8. In his defence evidence accused examined himself as DW-1 and he relied upon the following documents:
Ex. DW1/A Copy of certificate issued by the bank Ex. DW1/B Copy of Debit Note Ex. DW1/C Copy of ledger from 01.04.2012 to 31.03.2014 Ex. CW1/D Statement of account from the bank
9. Thereafter final arguments were advanced by Ld. counsel of the accused. Written arguments filed on behalf of the complainant. I have heard the rival contentions of both the Ld. counsel and given my thoughtful consideration to the material appearing on record.
F. INGREDIENTS OF OFFENCE AND DISCUSSION
10. Before dwelling into the facts of the present case, it would be apposite to discuss the legal standards required to be met by both sides. In order to establish the offence under Section 138 of NI Act, the prosecution must fulfil all the essential ingredients of the offence. Perusal of the bare provision reveals the following necessary ingredients of the offence: -
Pg. no. 6 of 18 M/s Bimal Paper (P) Ltd. vs. Ramandeep Singh CC No. 13948-2016 First Ingredient: The cheque was drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;
Second Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability;
Third Ingredient: The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;
Fourth Ingredient: A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in writing given to the drawer within thirty days of the receipt of information of the dishonor of cheque from the bank;
Fifth Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice.
11. The accused can only be held guilty of the offence under Section 138 NI Act if the above-mentioned ingredients are proved by the complainant co-extensively. In addition to the above, the condition stipulated under section 142 NI Act have to be fulfilled.
Pg. no. 7 of 18 M/s Bimal Paper (P) Ltd. vs. Ramandeep Singh CC No. 13948-2016
12. Notably, there is no dispute at bar about the proof of first, third, fourth and fifth ingredients. The complainant has proved the cheque vide Ex. CW1/C. The cheque in question was dishonoured is proved vide Ex. CW-1/D. The complainant has proved on record the legal notice vide Ex. CW1/E and the notice was duly sent vide Ex. CW1/F was proved by the fact that accused has never challenged his address on the legal demand notice. As such, based on above, the first, third, fourth and fifth ingredient of the offence under section 138 NI Act stands proved against the accused.
13. The controversy in the present complaint pertains to second ingredient.
I. CONTENTIONS IN RELATION TO NON-FULFILMENT OF SECOND INGREDIENT
14. As far as the proof of second ingredient is concerned, the complainant has to prove that the cheque in question was drawn by the drawer for discharging a legally enforceable debt. In the present case, the accused has admitted his signature upon the cheque in question. As per the scheme of the NI Act, once the accused admits signature on the cheque in question, certain presumptions are drawn, which result in shifting of onus. Section 118(a) of the NI Act lays down the presumption that every negotiable instrument was made or drawn for consideration. Another presumption is enumerated in Section 139 of NI Act. The provision lays down the presumption that the holder of the cheque Pg. no. 8 of 18 M/s Bimal Paper (P) Ltd. vs. Ramandeep Singh CC No. 13948-2016 received it for the discharge, in whole or part, of any debt or other liability.
15. The combined effect of these two provisions is a presumption that the cheque was drawn for consideration and given by the accused for the discharge of debt or other liability. Both the sections use the expression "shall", which makes it imperative for the court to raise the presumptions, once the foundational facts required for the same are proved. Reliance is placed upon the judgment of the Hon'ble Supreme Court, Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16.
16. In case of Kumar Exports vs. Sharma Carpets, (2009) 2 SCC 513, the Hon'ble Supreme Court had held:
"The accused under Section 138 NI Act has two options. He can either show that the consideration and debt did not exit or that under the particular circumstances of the case, the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumption, an accused is not expected to prove his defence beyond reasonable doubt as it is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which his probable has to be Pg. no. 9 of 18 M/s Bimal Paper (P) Ltd. vs. Ramandeep Singh CC No. 13948-2016 brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probably that a prudent man under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question, was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon the circumstantial evidence and if the circumstances so relied upon are so compelling, the burden may likewise shift again on the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arises under Section 118 and 139 of NI Act''.
17. So far as the facts of liability is concerned, in view of mandatory presumption of law as discussed above, if any cheque has been produced by the complainant bearing the signatures of the accused, there cannot be any inherent lacuna in the existence of the liability. But then definitely, accused can point loop holes in the story of the complainant by impeaching the credit of the witness during his cross- examination. The accused can discharge his burden by demonstrating the preponderance of probabilities coming in its way. In the present case, the following contentions are raised by the accused to rebut the existence of legal debt/liability vis-à-vis cheque in question:
• Contention I: Firm of the accused was not impleaded as an accused:
Pg. no. 10 of 18 M/s Bimal Paper (P) Ltd. vs. Ramandeep Singh CC No. 13948-2016 Arguments of the accused
18. It is contended by the Ld. counsel for the accused the present complaint is not maintainable against the accused person as complainant has failed to comply the conditions of section 141 of the NI Act as the firm of the accused i.e M/s M.G Print Services was not impleaded as an accused and thus, prosecution solely against the accused is not permissible. It is further argued by the Ld. counsel that the drawer of the cheque in question is the firm of the accused and thus, without impleading the firm as an additional accused, the present complaint shall not be maintainable against the accused. To buttress his arguments, Ld. counsel has relied upon the following judgments:
➢ Tamil Nadu News Print & Papers Ltd. vs D Karunakar & anr, 2015 LawSuit (SC) 857 ➢ Ratishbhai D. Ramani vs. State of Gujarat & anr, 2015(2) NIJ 341 (Guj.) ➢ Ajit Balse vs. Capt. Ramga Karkere, 2015 (2) NIJ 25 (SC) COURT'S OBSERVATION:
19. The Hon'ble Supreme Court in the case of Raghu Lakshminarayanan vs M/S. Fine Tubes (2007) 5 SCC 103, has held that, "It is settled position in law that the concept of vicarious liability introduced in Negotiable Instruments Act is attracted only against the Directors, partners or other persons in charge and Pg. no. 11 of 18 M/s Bimal Paper (P) Ltd. vs. Ramandeep Singh CC No. 13948-2016 control of the business of the company, or otherwise responsible for its affairs. Section 141 of NI Act not covers within its ambit, the proprietary concern. The proprietary concern is not a juristic person so as to attract the concept of vicarious liability. The concept of vicarious liability is attracted only in the case of juristic person, such as the company registered under the provisions of the Companies Act, 1956 or the partnership firm registered under the provisions of Partnership Act, 1932 or association of persons which ordinarily would mean a body of persons which is not incorporated under any statute. The proprietary concern stands absolutely on different footing. A person may carry on a business in the name of the business concern being proprietor of such proprietary concern. In such case the proprietor of proprietary concern alone can be held responsible for the conduct of business carried in the name of such proprietary concern. Therefore, Section 141 of the Negotiable Instruments Act have no applicability in a case involving the offence committed by a proprietary concern."
20. The same view has been reiterated by the Hon'ble High Court of Delhi in the case of M. M. Lal v. State NCT of Delhi, 2012 (4) JCC 284 that, "It is well settled that a sole proprietorship firm has no separate legal identity and in fact is a business name of the sole proprietor. Thus, any reference to sole proprietorship firm means and includes sole proprietor thereof and vice versa. Sole proprietorship firm would not fall within the ambit and scope of Section 141 of the Act, which envisages that if the person committing an offence under Section 138 is a company, every person who, at the time of offence was committed, was in-charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded Pg. no. 12 of 18 M/s Bimal Paper (P) Ltd. vs. Ramandeep Singh CC No. 13948-2016 against and punished accordingly. Company includes a partnership firm and any other association of individuals. The sole proprietorship firm would not fall within the meaning of partnership firm or association of individual. Vicarious liability cannot be fastened on the employees of a sole partnership firm, by taking aid of Section 141 of the Act, inasmuch as, no evidence has been led to show that the business was run by the respondent no.2."
21. Thus, in the case of a proprietorship concern, only the proprietor can be held liable under Section 138 NI Act as the proprietorship concern and the proprietor are one and the same. In the case in hand, accused during his examination in chief has specifically deposed that M/s M.G Print Services was his proprietorship firm and he was its proprietor. Thus, this categorical admission of the accused left no iota of doubt that M/s M.G Print Service is a proprietorship concern and consequently, keeping in view the aforesaid position of law, this Court finds no merits in the contentions that firm shall be made as an additional accused.
• Contention II: Cheque in question given as a security Arguments of the accused
22. It is argued by the Ld. counsel that cheque in question was given only as a security to the complainant in the year 2012 and the same was given only as a blank signed instrument. It is further argued by the Ld. counsel that the cheque was given as an advance for procuring the goods but the goods were returned back to the complainant. It is further argued by the counsel that cheque in question was misused by the Pg. no. 13 of 18 M/s Bimal Paper (P) Ltd. vs. Ramandeep Singh CC No. 13948-2016 complainant as it was presented at a later stage by the complainant and the same can be seen by the fact that other cheques of the same series were already utilized by the accused before the presentation of the cheque in question. To prove the same, Ld. counsel has relied upon document vide Ex. DW1/D. COURT'S OBSERVATION:
23. In Bir Singh vs. Mukesh Kumar (2019) 4 SCC 197, the Hon'ble Apex Court observed that "Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under section 139 of the Negotiable Instrument Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt." In the present case, as the voluntary transfer of the cheque was admitted by the accused himself and thus, this contention does not hold water. So far as the existence of liability vis-à-vis cheque in question is concerned, it is a trite law that even if a cheque was issued as a security, so long as the debt is existing, the provision of section 138 of the NI Act would attract. Now, as to whether the legal debt existed or not at the time of presentation of the cheque in question, same will be discussed in the latter part of this judgment.
• Contention III: No liability of to pay any amount to the complainant Pg. no. 14 of 18 M/s Bimal Paper (P) Ltd. vs. Ramandeep Singh CC No. 13948-2016 Arguments of the accused
24. It is argued by the Ld. counsel that accused has no liability to the tune of Rs. 13,35,298/- towards the complainant as alleged. It is further contended by the Ld. counsel that Mark A and Ex. CW1/B are false, fabricated and forged documents and were prepared by the complainant just to extort money from the accused. It is further argued by the Ld. counsel that accused has already returned goods worth of Rs. 12,50,298.20 to the complainant and a debit note was issued by the complainant vide Ex. DW1/B and an amount of Rs. 85,000/- was already sent by the accused to the complainant through RTGs and the entry regarding the same is mentioned at page 24 of document vide Ex. DW1/D. Thus, it is argued by the Ld. counsel that accused has no liability towards the complainant and thus, as the cheque in question was presented in absentia of a legal debt, complaint shall liable to be dismissed.
Arguments of the complainant
25. Per contra, Ld. counsel for the complainant has submitted that as per ledger statement vide Ex. CW1/B, the complainant is liable to pay an amount of Rs. 13,35,298/- to the complainant and vide Mark A accused has himself admitted his liability towards the complainant. It is further submitted by the Ld. counsel that the cheque in question was issued in part discharge of the aforesaid liability. It is further submitted that accused has taken contradictory stands throughout the trial and he further forged and fabricated the debit note vide Ex. DW1/B as no such Pg. no. 15 of 18 M/s Bimal Paper (P) Ltd. vs. Ramandeep Singh CC No. 13948-2016 debit note was never issued by the accused to the complainant. Thus, it is contended that as no probable defence has been raised by the accused, he be punished as per law.
COURT'S OBSERVATION:
26. This court, after analysing this contention, is of the opinion that accused has failed to raise any probable defence to rebut the existence of legal debt vis-à-vis cheque in question. First of all, the delivery of goods to the accused by the accused is undisputed. Similarly, the payment of Rs. 85,000/- was also acknowledged as received by the complainant during the cross-examination of the accused. The only contention of the accused is that the goods were returned by him and a debit note vide Ex. DW1/B was issued by the complainant. Here it is pertinent to note that Ex. DW1/B was never put to the complainant during his cross-examination. Moreover, the signature at point A is also in dispute as accused himself has failed to prove that by whom it was signed and there is no stamp of the complainant firm. Further, perusal of Ex. DW1/B shows that it is a computer-generated document which is not accompanied by a mandatory certificate as per the provision of section 65B of the Indian Evidence Act, 1872. Even the same was generated on a letter head of M.G Print Services i.e., the firm of the accused. Resultantly, the same cannot be relied upon in evidence being filled without complying with the provisions of the Evidence Act, 1872 and further, as the accused himself has failed to identify the signatures upon the said instrument and therefore, the same cannot be used to prove that goods were returned back to the complainant. Moreover, accused has even failed to examine his messenger by whom he Pg. no. 16 of 18 M/s Bimal Paper (P) Ltd. vs. Ramandeep Singh CC No. 13948-2016 allegedly sends the document vide Ex. DW1/B to the complainant's office. Similarly, document vide Ex. DW1/C is also a self-serving document and it also does not bear any acknowledgment of the complainant. Accused has even failed to examine any independent witness to prove that the goods were returned by him to the complainant. It is a trite law that mere bald assertions without leading any cogent evidence does not aid the accused if no probable defence has been raised by him on touchstone of preponderance of probabilities.
27. Apart from the aforesaid contentions, no other contentions are advanced by the accused to raise a probable defence to rebut the presumption on preponderance of probabilities that the cheque in question was never issued for discharging the legal debt/liability towards complainant.
28. Therefore, as far as the second ingredient is concerned, the accused has failed to rebut the presumption, since he fails to raise any probable defence.
F. CONCLUSION
29. To recapitulate the above discussion, the complainant has been successful in establishing his case beyond reasonable doubt that the accused had issued the cheque in question in discharge of its legally enforceable liability. The presumptions under Section 118 and Section 139 of NI Act were drawn against the accused. The accused has Pg. no. 17 of 18 M/s Bimal Paper (P) Ltd. vs. Ramandeep Singh CC No. 13948-2016 miserably failed to rebut the said presumption by raising a probable defence. The defence of the accused that there was no legal liability is not proved, even on the standard of preponderance of probabilities.
30. In light of the aforementioned discussion, the complainant has successfully proved all the essential ingredients of section 138 of the NI act. Accordingly, the accused Ramandeep Singh is held liable for committing the offence under section 138 of the Negotiable Instrument act, 1881 and hereby convicted.
31. Let the convict be separately heard for the quantum of sentence.
32. Let a copy of this judgment be given to the convict free of cost.
ORDER: - Convicted ANNOUNCED IN THE OPEN COURT TODAY 07.03.2023 (VIKAS MADAAN) METROPOLITAN MAGISTRATE, NI ACT, Note: This judgment contains 18 pages and NORTH-WEST, ROHINI, DELHI each page is signed by the under signed.
Pg. no. 18 of 18 M/s Bimal Paper (P) Ltd. vs. Ramandeep Singh CC No. 13948-2016