Delhi District Court
Ct. Case No.1564/2018 M/S Krishi ... vs . Gurvinder Beej Bhandar Page No.1 Of14 on 27 April, 2023
IN THE COURT OF Ms. ADITI RAO
METROPOLITAN MAGISTRATE (NI ACT)-03
SOUTH EAST, SAKET: NEW DELHI
DLSE020045852018
1.Complainant case number 1564/2018
2. Name of the complainant M/s Krishi Rasayan Exports Pvt.
Ltd.
Having its office at:
1115, Hemkunt Tower, 98, Nehru Place, New Delhi-110019.
3. Name and address of the 1. Gurvinder Beej Bhandar accused Having Office at Near Hero Honda Agency Road Lambi Th. Malout, Distt. Muktsar, Punjab-152113
2. Gurvinder Singh S/o Sh. Randhir Singh Prop of Gurvinder Beej Bhandar R/o H. No.149, Firni Th. Malout Distt. Muktsar, Punjab-152113
4. Offence complained of Section 138 of the Negotiable Instruments Act, 1881
5. Plea of the accused Pleaded not guilty and claimed trial
6. Final order Acquittal
7. Date of institution 17.12.2018
8. Date of reserving the 10.04.2023 judgment
9. Date of pronouncement 27.04.2023
-:JUDGEMENT:-
1. The present complaint under section 138 Negotiable Instruments Act, 1881 (herein referred to as NI Act) has been filed by M/s Krishi Rasayan Exports Pvt. Ltd. (herein referred to as the 'complainant') against Gurvinder Beej Bhandar (herein referred to as the 'accused').
Ct. Case No.1564/2018 M/s Krishi Rasayan Exports Pvt. Ltd. Vs. Gurvinder Beej Bhandar Page No.1 of14
2. Briefly stated, the case of the complainant is that the complainant is a reputed firm engaged in the business of manufacturing, selling and marketing of fertilizers alongwith insecticides. The accused no.2 is a proprietor of the firm who is looking after and managing all the business of the day to day affairs of accused no.l. The accused no.2 approached the complainant and intended to purchase some goods from the complainant. Believing on the assurances of the accused no.2, the complainant supplied goods to the accused against a cheque bearing no.429753 dated 13.12.2017 for a sum of Rs.3,52,973/-
(Rupees Three Lakh Fifty Two Thousand Nine Hundred Seventy Three only) drawn on Punjab National Bank Muktsar Branch. The said cheque was handed over by the accused as payment/part payment against outstanding dues, arising out of the said transaction.
3. Upon presentation of the said cheque, it got dishonoured with the remarks 'Funds Insufficient' vide return memo dated 14.12.2017. The legal demand notice dated 10.01.2018 was duly sent by the complainant to the accused by post on 11.01.2018. The accused failed to pay the cheque amount within the statutory period. Hence, the present complaint under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act') was filed.
4. On issuance of summons, the accused entered appearance in the present matter for the first time on 04.02.2019 through his counsel. The accused was admitted to bail on 01.04.2019. Notice u/s 251 Cr.P.C was served upon the accused on 13.05.2019, to which he pleaded not guilty and claimed trial. His plea of Ct. Case No.1564/2018 M/s Krishi Rasayan Exports Pvt. Ltd. Vs. Gurvinder Beej Bhandar Page No.2 of14 defence was also recorded. Thereafter, the accused was allowed to cross examine the complainant u/s 145(2) NI Act. After examining the complainant as CW-1, the complainant evidence was closed vide order dated 05.08.2019 and thereafter, statement of the accused u/s 313 Cr.P.C was recorded on 13.05.2022. Further, in his defence, the accused examined himself as DW-1 on 06.08.2022. Thereafter, DE was closed vide order dated 06.08.2022 and the matter was fixed for final arguments.
EVIDENCE:-
5. In order to support its case, the AR for the complainant had stepped into the witness box as CW-1 and tendered his evidence by way of an affidavit which is Ex.CW1/A into evidence wherein averments made in the complaint were reiterated. He also relied upon various documents such as:
(a) Board of Resolution (Authority Letter) as Ex. CW1/1 (OSR);
(b) Account Statement as Ex.CW1/2;
(c) Cheque bearing no.429753 dated 13.12.2017 as
Ex.CW1/3;
(d) Cheque Return Memo dated 14.12.2017 as Ex.CW1/4;
(e) Legal Notice dated 10.01.2018 as Ex.CW1/5;
(f) Postal Receipts as Ex.CW1/6 and Ex.CW1/7;
(g) Tracking Reports as Ex.CW1/8 and Ex.CW1/9.
Thereafter, the accused had cross examined the
complainant as CW-1 on 05.08.2019.
Further, in his defence, the accused examined himself as DW-1 on 06.08.2022. After which, DE was closed vide order dated 06.08.2022. Then, the matter was fixed for final arguments.
6. Final arguments were heard at length on behalf of both the parties.
Ct. Case No.1564/2018 M/s Krishi Rasayan Exports Pvt. Ltd. Vs. Gurvinder Beej Bhandar Page No.3 of14 APPLICABLE LAW:-
7. Before appreciating the facts of the case in detail for the purpose of decision, let relevant position of law be discussed.
Now, Section 138 Negotiable Instrument Act provides as under:
Section 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 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 (reduced to three months vide notification no. RBI/201112/251, DBOD AMLBCNo. 47/19.01.0062011/12,dated 04.11.2011) 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. It is well settled position of law that to constitute an offence under S.138 N.I. Act, the following ingredients are required to be fulfilled: (1) drawing of the cheque by a person on an account maintained Ct. Case No.1564/2018 M/s Krishi Rasayan Exports Pvt. Ltd. Vs. Gurvinder Beej Bhandar Page No.4 of14 by him with a banker, for payment to another person from out of that account for discharge in whole/part any debt or liability; (2) cheque has been presented to the bank within a period of six months (now three months) from the date on which it is drawn or within the period of its validity whichever is earlier; (3) returning the cheque unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque, (4) giving notice in writing to the drawer of the cheque within 30 days of the receipt of information by the payee from the bank regarding the return of the cheque as unpaid demanding payment of the cheque amount, (5) failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered by the cheque within 15 days of the receipt of the notice.
Being cumulative, it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the N I Act.
The Act raises two presumptions in favour of the holder of the cheque i.e. Complainant in the present case; firstly, in regard to the passing of consideration as contained in Section 118 (a) therein and, secondly, a presumption under Section 139, that the holder of cheque receiving the same of the nature referred to in Section 138 for discharge, in whole or in part, of any debt or other liability. Analysing all the concerned provisions of law and various pronouncements in this regard, the Hon'ble Apex Court in Basalingappa v. Mudibasappa, AIR 2019 SC 1983, noted at para 23 as follows [Bharat Barrel and Drum Manufacturing Company v. Amin Chand Pyarelal, (1999) 3 SCC 35; M.S. Narayana Menon alias Mani v. State of Kerala and another, (2006) 6 SCC 39; Krishna Janardhan Bhat v.
Dattatraya G. Hegde, (2008) 4 SCC 54; Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513; Rangappa v. Sri Mohan, (2010) 11 SCC 441 referred]:
(i) Once the execution of cheque is admitted, Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the Ct. Case No.1564/2018 M/s Krishi Rasayan Exports Pvt. Ltd. Vs. Gurvinder Beej Bhandar Page No.5 of14 accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
(iv) That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposes an evidentiary burden and not a persuasive burden.
(v) It is not necessary for the accused to come in the witness box to support his defence.
To put in nutshell, the law regarding the presumption for the offence under Section 138 N.I. Act,is that the presumptions under Sections 118(a) and 139 have to be compulsorily raised as soon as execution of cheque by the accused is admitted or proved by the complainant and thereafter burden is shifted upon the accused to prove otherwise. These presumptions shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability etc. The onus to prove the issuance of the cheque lies upon the complainant, and the same has to be proved beyond reasonable doubt, unless the accused admits the same. Once the issuance of cheque is established, either by admission or by positive evidence, the presumption under Section 139 of the Negotiable Instruments Act, 1881 arises. We can summarize the general principles in the following way:
Onus of proof: Section 139 of the Negotiable Instruments Act, 1881 states that it shall be presumed, unless the contrary is proved that the holder of a cheque received the cheque, of the nature referred to in Section 138, for the discharge, in whole or in part, of any debt or other liability. Therefore, here the onus shifts upon the accused to prove the nonexistence of debt or other liability. Section 139 of the N.I. Act uses the word "shall presume", which means that the presumption under Section 139 is rebuttable.
Standard of proof: The standard of proof required to rebut the presumption under Section 139 is that of "preponderance of probabilities". Therefore, if the Ct. Case No.1564/2018 M/s Krishi Rasayan Exports Pvt. Ltd. Vs. Gurvinder Beej Bhandar Page No.6 of14 accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or other liability, the onus shifts back to the complainant to prove by way of evidence, beyond reasonable doubt, that the cheque in question was issued by the accused in discharge, whole or in part, of any debt or other liability, and now the presumptions under Section 118 (a) and Section 139 will not come to the aid of the complainant.
Mode of Proof: The accused may adduce direct evidence to prove that the cheque 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 prove the nonexistence of the 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 a bare denial of passing of consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be 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 the consideration of which, the Court may either believe that the consideration and debt did not exist, or their nonexistence was so probable that a prudent man would, under circumstances of the case, act upon the plea that they did not exist.
As discussed above, from the legal provisions and the law laid down in various judgments, it can be safely gathered that it is for the accused to rebut the presumptions. He can do so by cross examining the complainant, leading defence evidence, thereby demolishing the case of the complainant. It is amply clear that the accused does not need to discharge his or her liability beyond the shadow of reasonable doubt. He just needs to create holes in the case set out by the complainant. Accused can say that the version brought forth by the complainant is inherently unbelievable and therefore the prosecution cannot stand. In this situation the accused has nothing to do except to point inherent inconsistency in the version of the complainant or the accused can give his version of the story and say that on the basis of his version the story of the complainant cannot be believed.
Ct. Case No.1564/2018 M/s Krishi Rasayan Exports Pvt. Ltd. Vs. Gurvinder Beej Bhandar Page No.7 of14 ARGUMENTS AND APPRECIATION OF EVIDENCE:-
8. Ld. Counsel for the complainant has argued that all the requirements of Section 138 NI Act have been met with in the present case and hence, the accused be convicted. I have heard the arguments and also gone through the record with due circumspection.
9. In the case at hand, Ld. Counsel for the complainant has submitted that the accused has not disputed the issuance of the cheque or the signatures on the cheque in the present case, thus, the presumptions u/s 118 (a) read with Section 139 of NI Act about the cheque in question having been issued for consideration and in discharge of legal liability should arise in favour of the complainant. On the contrary, Ld. Counsel for accused has submitted that the complainant has misued the cheque in question with malafide intention without sending any intimation before presenting the cheque. Therefore, presumption under S. 139 of NI Act, should not arise. The three-Judge Bench of hon'ble Supreme Court in Rangappa Vs. Sri Mohan, (2010) 11 SCC 441 has held that:
"where the fact of signature on the cheque is acknowledged, a presumption has to be raised that the cheque pertained to a legally enforceable debt or liability, however, this presumption is of a rebuttal nature and the onus is then on the accused to raise a probable defence."
10. In the present case, the accused has not denied his signatures on the cheque Ex.CW1/3. Thus, the factum of signature on the cheque is not disputed and has been acknowledged.
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11. It is pertinent to mention here that Sec. 139 only raises the presumption on fulfillment of its conditions that the cheque was issued for discharge of in whole or in part any debt or other liability but there is no presumption as to the existence of the debt or liabilty as such. In Rangappa (supra) it has been held that :
"Existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act. It merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability."
12. As regards the legal notice, the receipt of the same has not been denied by the accused. It is stated by the accused in notice u/s 251 Cr.PC dated 13.05.2019 that the accused had received the legal notice. Hence, the legal notice being undisputed was duly served upon the accused.
13. As regards to the fact of dishonour of the cheque in question, the original return memo Ex.CW1/4 filed by the complainant clearly show that the cheque in question Ex.CW1/3 was dishonoured for the reasons 'Funds Insufficient'. In the case at hand, neither any argument has been raised on behalf of the accused to dispute the dishonor of the cheque nor this fact has been denied at any stage of the matter. Thus, taking into account that dishonour of cheque is not disputed, this fact, also stands proved.
14. Thus, the presentation of the cheque in question, its dishonour and service of legal notice is not under question. Consequently, the complainant has successfully raised a presumption under Section 139 NI Act.
Ct. Case No.1564/2018 M/s Krishi Rasayan Exports Pvt. Ltd. Vs. Gurvinder Beej Bhandar Page No.9 of14 Accordingly, it is required to be presumed that the cheque in question was drawn for consideration and the holder of the cheque i.e., the complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the accused to establish a probable defence so as to rebut such a presumption.
In the segment on legal framework, set out above, the legal proposition with respect to the burden of proof upon the Accused has already been discussed. Hence, it is now to be examined as to whether the Accused brought any material on record or pointed out glaring discrepancies in the material produced by the Complainant for dislodging the presumption which meets the standard of preponderance of probabilities.
15. In the present matter, the first defence taken by the accused is that the accused had issued the cheque in question as a security cheque. In relation to this defence, it is important to note that the Hon'ble High Court of Delhi in Suresh Chandra Goyal v. Amit Singhal, Crl. L.P, 706/2014 has succinctly observed that:
"Section 138 of NI Act does not distinguish between a cheque issued by the debtor in discharge of an existing debt or other liability, or a cheque issued as a security cheque on the premise that on the due future date the debt which shall have crystallized by then, shall be paid. So long as there is a debt existing, in respect whereof the cheque in question is issued, in my view, the same would attract Section 138 of NI Act in case of its dishonour."
Therefore, the defence of the cheque being a security cheque does not by itself rebut the presumption. Here, it is noted that if the observations in Suresh Chandra Case (supra) are considered, it appears that if on the date of presentment of cheque, liability of the Accused existed towards the Complainant, Ct. Case No.1564/2018 M/s Krishi Rasayan Exports Pvt. Ltd. Vs. Gurvinder Beej Bhandar Page No.10 of14 the same would fall under Section 138 NI Act, even if the same was issued as a security cheque; and hence, it is not relevant if the cheque in question was issued with the intent of it being a security cheque. In fact, the Hon'ble Supreme Court in a recent judgment of the Sunil Todi Case (Supra), has held that the provisions of Section 138 NI Act apply to cheques issued on advance basis as well, if at the time of presentation of the same, liability exists. It was observed that:
"The object of the NI Act is to enhance the acceptability of cheques and inculcate faith in the efficiency of negotiable instruments for transaction of business. The purpose of the provision would become otiose if the provision is interpreted to exclude cases where debt is incurred after the drawing of the cheque but before its encashment. In Indus Airways, advance payments were made but since the purchase agreement was cancelled, there was no occasion of incurring any debt. The true purpose of Section 138 would not be fulfilled, if 'debt or other liability' is interpreted to include only a debt that exists as on the date of drawing of the cheque."
Hence, unless it is shown that no liability existed on the date of presentation, the provision of Section 138 NI Act would apply to cheques issued as a security cheque as well. Accordingly, this argument/defence of the Accused, by itself, does not rebut the presumption u/s 139 NI Act.
16. The second defence taken by the accused is that the accused had never received the goods from the complainant company in relation to the amount claimed in the present matter. It is the version of the accused that in relation to the transactions the accused has had with the complainant, an outstanding amount of only Rs.1,18,442/- remains to be paid on his behalf. According to the accused, the accused does not owe legal liability in favour Ct. Case No.1564/2018 M/s Krishi Rasayan Exports Pvt. Ltd. Vs. Gurvinder Beej Bhandar Page No.11 of14 of the complainant to the extent of amount mentioned on the cheque in question.
17. In support of the above contention, during the time of chief examination of the accused as DW-1 on 06.08.2022, the accused had placed on record an account ledger w.e.f. 01.04.2014 to 25.09.2019 Ex.DW1/A.
18. Perusal of the above mentioned document Ex.DW1/A reveals that on 25.09.2019, the balance which remains to be paid on behalf of the accused was Rs.1,18,442/-. The said document was never challenged by the complainant. During the time of cross examination of the accused as DW-1, not even one question was asked by Ld. Counsel for complainant with regard to the ledger account i.e. Ex.DW1/A. The said document remained undisputed through out the trial and hence, stood proved. In addition, the testimony of accused as DW-1 remained unrebutted as the accused did not shake from his stand at the time of his cross examination.
19. Ld. Counsel for the complainant, in relation to this contention has submitted before this court that the accused had always stated inconsistent defences through out the trial.
Perusal of the record reveals that in notice u/s 251 CrPC dated 13.05.2019, the accused has stated that he owes a liability of approximately Rs.1.5 Lacs in favour of the complainant. Further, in statement u/s 313 CrPC dated 13.05.2022, it was stated by the accused that he owes a payment only to the extent of approximately Rs.1.25 Lacs. Lastly, as DW-1, on 06.08.2022, the accused had stated that the outstanding amount is Rs.1,18,442/-.
Ct. Case No.1564/2018 M/s Krishi Rasayan Exports Pvt. Ltd. Vs. Gurvinder Beej Bhandar Page No.12 of14 It is important to note that the accused has remained consistent in stating his main defence in larger sense i.e. he does not owe legal liability to the extent of the amount mentioned on the cheque in question. The accused has always stated that he owes an amount which is less than the cheque amount in the present matter. It is only the amount which has differed in all the three statements, however, in first two statements i.e. in notice and in statement u/s 313 CrPC, the accused had used the word 'approximately'. It was only after perusal of the ledger, the accused had stated the exact outstanding amount which remained to be paid on his behalf. In view of the above, it cannot be concluded that the accused had stated inconsistent defences. Thus, the contention of the complainant stands dismissed.
20. In addition, the AR of the complainant who was cross examined on 05.08.2019 had clearly admitted that "It is correct that dealing between the complainant and the accused did not take place in front of me." It is further stated that "It is correct that the details of the goods sold by the complainant company to the accused is not there on record." The witness was also asked if any bills or receipts has been placed on record in the present matter in relation to the goods sold by the complainant to the accused to which the witness has replied in negative.
21. It is a settled position that the accused has to rebut the presumption raised under Section 139 and the standard of proof of which is 'preponderance of probabilities'. It is for the accused to raise a probable defence which creates a doubt on the version of the complainant. The accused, in the present matter has been successful in creating a doubt on the version of the complainant.
Ct. Case No.1564/2018 M/s Krishi Rasayan Exports Pvt. Ltd. Vs. Gurvinder Beej Bhandar Page No.13 of14 The accused has placed on record a documentary proof Ex.DW1/A showing his liability less than the cheque amount. The same remained undisputed and could not be disproved by the complainant.
The complainant, on the other hand has failed to prove its case beyond reasonable doubt. The complainant has neither placed on record any bills or receipts nor mentioned as to what were the goods that were allegedly supplied to the accused. The AR of the complainant when was examined by Ld. Counsel for the accused, was not able to give any clear description of the facts in relation to the transaction in question.
CONCLUSION:-
22. This court finds that cumulatively, the accused has been able to rebut the presumption raised against him under section 139 NI Act.
DECISION:-
23. Resultantly, the accused is acquitted of the alleged offence under section 138 of NI act.
Announced in the open court today on 27th April, 2023.
This judgment contains 14 pages all are signed by me. A copy of this judgment be placed on the official website of the District Court.
Digitally signed by ADITI RAO ADITI RAO Date: 2023.04.27 17:31:01
+0530
(ADITI RAO)
Metropolitan Magistrate-03 (NI Act)
South-East, Saket Courts, New Delhi.
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