Delhi District Court
Pg. No. 1 Of 18 M/S Hitech Polyplast And ... vs . Bhawna Madan & Anr Cc No. 15227-2016 on 28 February, 2023
IN THE COURT OF METROPOLITAN MAGISTRATE (NI ACT),
NORTH-WEST, ROHINI, DELHI
Presided over by- Sh. Vikas Madaan, DJS
CNR No. DLNW020006352016
CC No. 15227-2016
M/s Hitech Polyplast and Wires Pvt. Ltd.,
O/A E-681, Narela Industrial Park,
D.S.I.I.D.C, Delhi-110040
............Complainant
Versus
Bhuvan Dass Shanker Madan,
Auth. Rep. M/s Dass Industries,
Ploy No. 225, M Block, Sector-3,
Bawana Industrial Area, New Delhi
.............Accused
Pg. no. 1 of 18 M/s Hitech Polyplast and Wires Pvt. Ltd. vs. Bhawna Madan & Anr CC No. 15227-2016
JUDGMENT
(1) Name of the complainant :M/s Hitech Polyplast and . Wires Pvt. Ltd.
(2) Name of accused :Bhuvan Dass Shanker Madan
(3) Offence complained of or
proved : 138 N.I. Act
(4) Plea of accused : Pleaded not guilty
(5) Date of institution of case : 15.01.2016
(6) Date of reserve of order : 03.02.2023
(7) Date of Final Order : 28.02.2023
(8) Final Order : Convicted
Argued By:
Sh. Sanjay Garg: For complainant
Sh. B.P Singh: For Accused
Pg. no. 2 of 18 M/s Hitech Polyplast and Wires Pvt. Ltd. vs. Bhawna Madan & Anr CC No. 15227-2016 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 complainant is a company and is being represented by its director namely Sh. Tarun Garg. The present complaint was originally filed against two respondents namely Ms. Bhawna Madan and Sh. Bhuvan Dass Shanker Madan. However, the process was issued only against respondent no. 2 namely Sh. Bhuvan Dass Shanker Madan.
3. The substance of the allegations, as contained in the complaint, are as follows:
a. The complainant claims that respondent 1 and 2 had purchased goods from them and during the course of business and as per the books of account, accused has been liable to pay a sum of Rs.9,17,954/- along with an interest of Rs. 2,33,640/- to the complainant. In order to discharge the said liability, respondent no.1 had issued 10 postdated cheques totaling for an amount of Rs. 11,51,594/-. However, when the said cheques were presented for encashment, all those cheques were got dishonoured for the reason Pg. no. 3 of 18 M/s Hitech Polyplast and Wires Pvt. Ltd. vs. Bhawna Madan & Anr CC No. 15227-2016 "exceeds arrangement. Thereafter, respondent no.1 had requested the complainant to reconcile the accounts with her husband (respondent no. 2) and accordingly, on 27.07.2015, an amount of Rs. 9,17,954/- was reconciled between complainant and respondent no. 2 and the interest accrued upon the respondent no. 1 was also relaxed and settled for an amount of Rs. 1,65,231/- and accordingly, a total sum of Rs. 10,83,185/- was agreed between them to be payable to the complainant on behalf of respondent no. 1.
b. In discharge of the liability of respondent no. 1, accused no. 2 had issued twelve post-dated cheques, totaling to Rs. 10,83,185/- in favour of the complainant with the assurance that the said cheque would be honored upon its presentment. The details of the aforesaid cheques are as follows:
SI. No. Cheque No. Date Amount
1. 613823 27.07.2015 75,000/-
2. 613825 30.07.2015 25,000/-
3. 613836 10.08.2015 83,185/-
4. 613826 20.08.2015 1,00,000/-
5. 613827 30.08.2015 1,00,000/-
6. 613828 30.08.2015 1,00,000/-
7. 613829 10.09.2015 1,00,000/-
8. 613830 20.09.2015 1,00,000/-
9. 613831 30.09.2015 1,00,000/-
10. 613832 15.10.2015 1,00,000/-
11. 613833 30.10.2015 1,00,000/-
12. 613834 09.11.2015 1,00,000/-
Pg. no. 4 of 18 M/s Hitech Polyplast and Wires Pvt. Ltd. vs. Bhawna Madan & Anr CC No. 15227-2016
c. That, out of the aforementioned cheques, payment against the cheques mentioned at serial no. 1, 2 and 3 was received by the complainant.
d. That upon presentment, the cheques in questions first dishonored with the following remarks:
SI. No. Cheque No. Date of Reason for
Dishonour Dishonour
1. 613826 18.11.2015 Funds
Insufficient
2. 613827 01.12.2015 Instrument
outdated/Cheque
stale
3. 613828 01.12.2015 Instrument
outdated/Cheque
stale
4. 613829 01.12.2015 Funds
Insufficient
5. 613830 01.12.2015 Funds
Insufficient
6. 613831 01.12.2015 Funds
Insufficient
7. 613832 01.12.2015 Funds
Insufficient
Pg. no. 5 of 18 M/s Hitech Polyplast and Wires Pvt. Ltd. vs. Bhawna Madan & Anr CC No. 15227-2016
8. 613833 01.12.2015 Funds
Insufficient
9. 613834 01.12.2015 Funds
Insufficient
e. Thereupon, a legal demand notice dated 10.12.2015 was sent to the accused persons through speed post and Regd. cover, which was delivered upon the accused persons 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
4. Pre-summoning evidence was led by the complainant and upon appreciation of pre-summoning evidence, accused no. 2 Sh. Bhuvan Dass Shanker Madan was summoned for an offence punishable under Section 138 of the Act for cheques bearing no. 613826, 613829, 613830, 613831, 613832, 613833 and 613835 and notice under Section 251 Cr.P.C. for this offence was framed upon accused no. 2 on 29.08.2016 to which he pleaded not guilty and claimed trial. In his plea of defence, accused stated that "The cheques in question were given by me to the complainant in lieu of liability of my wife namely Ms. Bhawna. The cheques in question bear my signature and the contents in the same were also filled by me. I have already made most of the payment to the complainant on behalf of my wife. Now I have liability of Rs. 33,713/- towards the complainant. Legal notice regarding the Pg. no. 6 of 18 M/s Hitech Polyplast and Wires Pvt. Ltd. vs. Bhawna Madan & Anr CC No. 15227-2016 cheques in question was received by me and I also gave reply to the same."
5. Thereafter, the matter was fixed for complainant's evidence.
C. COMPLAINANT'S EVIDENCE
6. In evidence, complainant's AR namely Sh. Tarun Garg was examined 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 vide Ex. CW1/1 to Ex. CW1/20, Mark CW1/21 to Mark CW1/30, Ex. CW1/31 to Ex. CW1/36, Ex. CW1/39 to Ex. CW1/44, Ex. CW1/47 to Ex. CW1/52, Ex. CW1/54 to Ex. CW1/56 and Mark CW1/53(colly).
7. CW1 was further subjected to cross-examination by the Ld. counsel for the accused. Thereafter, the complainant's evidence was closed vide order dated 28.01.2020 at the request of the complainant.
D. STATEMENT OF ACCUSED
8. Statement of the accused was recorded under section 313 Cr.P.C on 09.03.2022 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. 7 of 18 M/s Hitech Polyplast and Wires Pvt. Ltd. vs. Bhawna Madan & Anr CC No. 15227-2016
9. However, vide order dated 19.07.2022, the defence evidence was closed upon the statement of the accused.
10. Thereafter final arguments were advanced by both the Ld. counsel. I have heard the rival contentions of both the Ld. counsel and given my thoughtful consideration to the material appearing on record.
E. INGREDIENTS OF OFFENCE AND DISCUSSION
11. 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: -
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 Pg. no. 8 of 18 M/s Hitech Polyplast and Wires Pvt. Ltd. vs. Bhawna Madan & Anr CC No. 15227-2016 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.
12. 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.
13. Notably, there is no dispute at bar about the proof of first, third, fourth and fifth ingredients. The complainant has proved the cheques vide Ex. CW1/35, Ex. CW1/39, Ex. CW1/40, Ex. CW1/41, Ex. CW1/42, Ex. CW1/43 and CW1/44. The cheques in question were dishonoured is proved vide Ex. CW-1/36, CW1/47, CW1/48, CW1/49, CW1/50, CW1/51 and CW1/52. The complainant has proved on record the legal notice vide Ex. CW1/54(colly) and the notice was duly sent was proved by the fact that accused has himself admitted the receiving of legal demand notice vide Ex. CW1/56(colly). 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.
Pg. no. 9 of 18 M/s Hitech Polyplast and Wires Pvt. Ltd. vs. Bhawna Madan & Anr CC No. 15227-2016
14. The controversy in the present complaint pertains to second ingredient.
I. CONTENTIONS IN RELATION TO NON-FULFILMENT OF SECOND INGREDIENT
15. 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 cheques 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 received it for the discharge, in whole or part, of any debt or other liability.
16. 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.
Pg. no. 10 of 18 M/s Hitech Polyplast and Wires Pvt. Ltd. vs. Bhawna Madan & Anr CC No. 15227-2016
17. 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 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 Pg. no. 11 of 18 M/s Hitech Polyplast and Wires Pvt. Ltd. vs. Bhawna Madan & Anr CC No. 15227-2016 Section 114 of the Evidence Act to rebut the presumptions arises under Section 118 and 139 of NI Act''.
18. 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 defences raised by the accused to rebut the presumptions are discussed below:
Contention 1: Legal demand notice not issued to BNB Enterprises ARGUMENTS OF THE ACCUSED:
19. It is contended by the Ld. counsel for the accused that cheques in question were drawn on an account maintained by BNB Enterprises, but the complainant has failed to implead BNB Enterprises as an additional accused. It is further contended by the Ld. counsel that complainant has even failed to serve legal demand notice to M/s BNB Enterprises and therefore, present complaint is not maintainable and thus, liable to be dismissed.
Pg. no. 12 of 18 M/s Hitech Polyplast and Wires Pvt. Ltd. vs. Bhawna Madan & Anr CC No. 15227-2016 COURT'S OBSERVATION:
20. In the present case, the accused has never stepped into the witness box to support his defence on oath. Further, accused has never taken any defence by way of suggestion to the complainant that M/s BNB Enterprises was not a proprietorship firm of the accused. Since the beginning of the trial, accused has taken the plea that he had issued the cheques in question to the complainant for discharging the liability of his wife and he has already repaid the entire amount to him. It is a trite law that a proprietorship firm has no separate entity of its own other than its proprietor, who is solely responsible for the conduct of its proprietorship firm. The accused has never disputed about his status being proprietor of M/s BNB Enterprises and thus, it becomes an admitted fact that he is the sole proprietor of M/s BNB Enterprises and being a proprietor, he shall be responsible for the conduct of his firm. It is already proved that accused has received the legal demand notice and he also replied the same vide Ex. CW1/56(colly) and consequently, delivery of legal demand notice upon proprietor is a deemed delivery upon his firm as well. Thus, there is no requirement to send a separate legal demand notice upon M/s BNB Enterprises and to implead it as an additional accused. Thus, this contention of the accused is not tenable and liable to be rejected.
Contention 2: No liability towards the complainant.
ARGUMENTS OF THE ACCUSED:
21. It is argued by the Ld. counsel that accused has already repaid the entire amount due towards the complainant and no debt/liability exists Pg. no. 13 of 18 M/s Hitech Polyplast and Wires Pvt. Ltd. vs. Bhawna Madan & Anr CC No. 15227-2016 vis-à-vis cheques in question. It is further contended by the Ld. counsel that complainant has forged and filed incomplete ledger statement on account and the payment which was already paid to the complainant did not mention by them in their ledger statement. It is further argued by the Ld. counsel that complainant has further failed to prove the alleged invoices on record as the originals were never produced on record. It is further contended that vide Mark X and Ex. CW1/DW1 (colly), the accused has proved that payment has already made to the complainant. It is thus, prayed that present complaint shall liable to be dismissed.
ARGUMENTS OF THE COMPLAINANT:
22. Per contra, Ld. counsel for the complainant argued that the accused has failed to raise any probable defence in his favour as no cogent evidence has been brought by him on record to prove the rebut the existence of legal debt. It is further argued by the Ld. counsel that the cheques in questions were issued by the accused in discharge of liability of his wife and the liability of the accused has been confirmed vide Ex. CW1/31. It is further argued by the Ld. counsel that as the validity of bills and invoices were not a fact in issue, the contention of the Ld. counsel of the accused cannot be entertained being the liability was already admitted by the accused. It is further argued by the Ld. counsel that Ex. CW1/DW1 and Mark X are forged and fabricated documents and it is further contended by the Ld. counsel that signatures on the said documents were forged and this Court can, under its wisdom u/s 73 the Indian Evidence Act, 1872, can itself compare the admitted signatures Pg. no. 14 of 18 M/s Hitech Polyplast and Wires Pvt. Ltd. vs. Bhawna Madan & Anr CC No. 15227-2016 of the complainant to that appended upon Ex. CW1/DW1 and Mark X. COURT'S OBSERVATION:
23. At this stage, it would be prudent to refer to the judgment of Hon'ble Apex Court titled as ICDS Ltd. Vs Beena Shabeer and anr, (2002) 6 SCC 426, wherein it was observed that:
"The language, however, has been rather specific as regards the intent of the legislature. The commencement of the Section stands with the words "Where any cheque". The above noted three words are of extreme significance, in particular, by reason of the user of the word "any" the first three words suggest that in fact for whatever reason if a cheque is drawn on an account maintained by him with a banker in favour of another person for the discharge of any debt or other liability, the highlighted words if read with the first three words at the commencement of Section 138, leave no manner of doubt that for whatever reason it may be, the liability under this provision cannot be avoided in the event the same stands returned by the banker unpaid. The legislature has been careful enough to record not only discharge in whole or in part of any debt but the same includes other liability as well. This aspect of the matter has not been appreciated by the High Court, neither been dealt with or even referred to in the impugned judgment."
24. Further, the Hon'ble High Court of Madras, in one of its judgment titled as M. Jaishanker vs. M/s Sree Gokulam Chits and Finace Corporation Pvt. Ltd., Cr.O.P No. 2016 of 2016 and Crl. M.P No. 1007 of 2016, observed that:
Pg. no. 15 of 18 M/s Hitech Polyplast and Wires Pvt. Ltd. vs. Bhawna Madan & Anr CC No. 15227-2016 " 8. It is trite that if a cheque is issued by a person in discharge of the liability of another person and if the cheque is dishonoured, the person, who issued the cheque can be prosecuted under Section 138 of the NI Act. Just because Jaishankar (A1) was the beneficiary of the loan, he cannot be prosecuted under Section 138 of the NI Act for the dishonour of the cheque issued by his wife Nagalakshmi (A2)."
25. Perusal of the above discussed case-laws makes it clear that a cheque can also be issued to discharge the liability of another person. In the present case, since the inception of the trial, the accused has taken the plea that the cheques in question were issued by him for discharging the debt of his wife. It is further stated that all the debts against the complainant have already been paid by him. As rightly pointed out by the Ld. counsel for the complainant, as the delivery of goods was never a fact in issue, the same does not require consideration of this Court. Now, to prove that all the payments were made by the accused to the complainant, onus to prove the same lies upon the accused. The accused contented that the payments were made vide receipts Ex. CW1/DW1 and Mark X to the complainant. However, this Court fails to understand that when the alleged payments were received by Nitin, then why he did not put his signature on the alleged receipts. This raises a doubt over the claim of the accused. Further, the alleged payments vide Ex. CW1/DW1 was paid by one Mr. Rohan but the said person was never examined by the accused in his defence to prove that the alleged payments were made by him on behalf of the accused to the complainant. Non-examination of a material witness is fatal to the case of the accused. Further, this court has compared the alleged signatures of the complainant at point A on Ex. CW1/DW1 and Mark X with the Pg. no. 16 of 18 M/s Hitech Polyplast and Wires Pvt. Ltd. vs. Bhawna Madan & Anr CC No. 15227-2016 admitted signatures of the complainant appended by him on his complaint, evidence by way of affidavit and cross-examination and prima facie, what appears to this Court is that the admitted signatures of the complainant do not resemble with the alleged signatures on Ex. CW1/DW1 and Mark X. Even the accused has failed to prove the said documents as per the provisions of the Indian Evidence Act, 1872 and ergo, the said documents cannot be relied upon by this Court. Resultantly, keeping in view the aforesaid discussion, this Court is of the opinion that accused has failed to raise any probable defence in his favour to rebut the presumption, even on the basis of preponderance of probabilities, qua existence of debt vis-à-vis cheques in question.
F. CONCLUSION
26. 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 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. Moreover, the Hon'ble Supreme Court in the case of Laxmi Dyechem v. State of Gujarat (2012) 13 SCC 375, has held as under, ""Therefore, if the accused is able to establish a probable defence which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail. The Pg. no. 17 of 18 M/s Hitech Polyplast and Wires Pvt. Ltd. vs. Bhawna Madan & Anr CC No. 15227-2016 accused can rely on the materials submitted by the complainant in order to raise such a defence and it is inconceivable that in some cases the accused may not need to adduce the evidence of his/her own. If, however, the accused/drawer of a cheque in question neither raises a probable defence nor able to contest existence of a legally enforceable debt or liability, obviously statutory presumption under Section 139 of the NI Act regarding commission of the offence comes into play if the same is not rebutted with regard to the materials submitted by the complainant...."
27. 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 Bhuvan Dass Shanker Madan is held liable for committing the offence under section 138 of the Negotiable Instrument act, 1881 and hereby convicted.
28. Let the convict be separately heard for the quantum of sentence.
29. Let a copy of this judgment be given to the convict free of cost.
ORDER: - Convicted ANNOUNCED IN THE OPEN COURT TODAY 28.02.2023 (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 Hitech Polyplast and Wires Pvt. Ltd. vs. Bhawna Madan & Anr CC No. 15227-2016