Delhi District Court
M/S A.G. Interior vs . M/S Balaji Trading And Ors. on 1 May, 2023
DLST020570782019
IN THE COURT OF MS. AAYUSHI SAXENA
METROPOLITAN MAGISTRATE (SOUTH) 01,
N.I. ACT, SAKET COURTS : NEW DELHI
CC NO.41664/2019
M/s A.G. Interior Vs. M/s Balaji Trading and Ors.
1. Complaint Case number : CC No. 41664/2019
2 Name of the complainant : M/s A.G. Interior,
Through it proprietor Sh.
Abdul Gaffar.
At: Basemen, D485, Gali
No.16, Khasra No.116-125,
Chattarpur Pahari, New Delhi-
110074.
3. Name and address of the : 1. M/s Balaji Trading,
accused
2. Sh. Kundan Sharma,
Manager/Partner,
S/o Sh. Shyam Karam
Sharma,
R/o House No. 54, S.K.
Nagar, Rishra Hoogli, West
Bengal.
Also at:
Ground Floor, Silver Oak
Farm No.49, Plot No.C,
Khasra No.489, Road No.2,
Ghitorni, New Delhi-110030.
4. Offence complained of or : Under Section 138 read with
proved Section 142 of the Negotiable
Instruments Act, 1881.
CC No.41664/2019
M/s A.G. Interior Vs. M/s Balaji Trading and Ors. Page No. 1 of 20
5. Plea of the accused : Pleaded not guilty and
claimed trial.
6. Final Order : Acquittal
7. Date of Institution : 04.12.2019
8. Date of Reserving the : 24.04.2023
Judgment
9. Date of pronouncement : 01.05.2023
of judgment
JUDGMENT
1. The instant complaint is in respect of an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter "the NI Act").
2. The instant complaint has been instituted through Sh. Abdul Gaffar, who is the proprietor of the complainant proprietorship firm.
3. The brief facts necessary to appreciate the controversy in the present case, as elucidated in the instant complaint, are as follows:
3.1 The accused no1, a partnership firm, through accused no 2, approached the complainant to do job works and to supply of Interiors and Decorators of Steel/Copper/Aluminum material and Wooden furniture of plywood, timber, laminates etc. After CC No.41664/2019 M/s A.G. Interior Vs. M/s Balaji Trading and Ors. Page No. 2 of 20 finalizing the rate of job works, on 13.04.2019, the accused ordered the complainant to do job works and supply the goods worth Rs. 2,97,000/-, which was later increased to Rs. 3,00,000/- on account of cartage of Rs.3,000/- as work required by the accused persons. The accused made advance payment of Rs.1,00,000/- through cheque and the accused no. 2 issued in his writing an order in favour of the complainant. On instructions of the accused, the job works and goods of Rs.2,97,000/-
were delivered at the office of the accused, and the accused confirmed the receipt of the goods. 3.2 Further, the accused also placed order for supply of goods worth Rs. 1,36,000/-, inclusive of VAT/GST, Job works of Rs. 14,000/- and cartage of Rs. 5,000/-. The accused persons made part payment of Rs. 1,00,000/- against the said work, the goods were delivered at the office of the accused and the receipt of the same was confirmed by the accused persons. The complainant issued/raised a bill for supply of the said goods vide invoice no. 008 dated 08.06.2019 of Rs. 1,36,000/- upon accused no.1 but the accused persons requested the complainant not to issue/raise any invoice for the goods worth Rs. 1,36,000/-, so the complainant was forced to cancel the invoice on account of non-payment of GST. 3.3 For the remaining payment of Rs. 2,55,000/-, the accused issued Cheque bearing number 136365 for an amount of Rs. 1,50,000/- dated 15.06.2019 CC No.41664/2019 M/s A.G. Interior Vs. M/s Balaji Trading and Ors. Page No. 3 of 20 and Cheque bearing number 136491 for an amount of Rs. 1,00,000/- dated 18.07.2019, both drawn on Axis Bank Ltd., West Bengal. The said cheques, were returned unpaid, for the reason "Payment Stopped by Drawer" vide returning memos dated 19.06.2019 and 19.07.2019, respectively. On assurance of the accused, the complainant again presented the cheques in question, which were again returned unpaid, for the reason "Payment Stopped by Drawer" vide returning memos dated 27.08.2019. Thereafter, the complainant again presented Cheque bearing number 136491 for an amount of Rs. 1,00,000/- dated 18.07.2019, which was again returned unpaid, for the reason "Payment Stopped by Drawer" vide returning memo dated 17.10.2019. 3.4 Thereafter, the complainant got issued legal demand notice dated 11.11.2019, for cheque bearing number 136491 dated 18.07.2019 for an amount of Rs. 1,00,000/-, which was duly served upon the accused but despite receiving intimation of above- said notice, the accused failed and refused to pay the cheque amount to the complainant within the prescribed period of 15 days. Hence, the present complaint has been filed by the complainant against the accused.
4. Pursuant to filing of the said complaint, the proprietor of the complainant firm, filed his pre-
CC No.41664/2019M/s A.G. Interior Vs. M/s Balaji Trading and Ors. Page No. 4 of 20 summoning evidence by way Affidavit, Ex.CW-1/A and has relied upon documents mentioned below.
(i) Copy of Purchase Order dated 13.04.2019- Ex.CW1/1(OSR).
(ii) Copy of Invoice dated 08.06.2019- Ex.CW1/2 (OSR).
(iii) Cheque bearing number 136365- Ex.CW1/3.
(iv) Cheque bearing number 136491 dated 18.07.2019 for Rs. 1,00,000/- Ex.CW1/5 (cheque in question).
(v) Return memos Ex.CW1/5 to Ex. CW1/8.
(vi) Returning memo dated 16.10.2019 pertaining to cheque in question Ex.CW1/9.
(vii) Legal demand notice Ex.CW1/10.
(viii) Postal Receipts Ex.CW1/11 (colly).
(ix) Tracking Reports Ex. CW1/12 (colly).
(x) Reply dated 21.11.2019 to legal demand notice Ex.CW1/13.
5. Ld. Predecessor of this Court took cognizance of the offence under Section 138 NI Act vide order dated 06.12.2019 and ordered for issuance of summons for attendance of the accused
6. On 26.03.2021, accused no.2 Kundan Sharma entered appearance before this Court and he was admitted to bail. On that very date, notice under Section 251 Code of Criminal Procedure, 1973 (hereinafter referred to as 'Cr.P.C.') was given to accused no1. M/s CC No.41664/2019 M/s A.G. Interior Vs. M/s Balaji Trading and Ors. Page No. 5 of 20 Balaji Trading (through accused no. 2 Kundan Sharma) and accused no.2 Kundan Sharma and he was asked whether he pleaded guilty or claimed trial. In reply to this, he pleaded not guilty and claimed trial. In his defence, he inter-alia stated that accused no.1 had given order to the complainant for material made of stainless steel and they had also made the payment by way of PDCs to the complainant regarding the transaction of Rs.1,50,000/-. Further, he stated that as he was not satisfied with the work of the complainant, he issued stop payment instructions to its banker regarding cheque of Rs. 1,50,000/-. He also stated that, thereafter, the complainant agreed to do the work as desired by him within time of 2-3 days and for that the complainant demanded Rs. 1,00,000/- from him and for this purpose he again issued a PDC of Rs. 1,00,000/- in favour of the complainant. However, the complainant neither delivered the items nor answered his calls. So, he issued stop payment instructions to his banker regarding the abovementioned cheque of Rs. 1,00,000/-. He also admitted his signatures on the cheque in question.
6.1 Since the statement of defence of accused revealed a specific defence, hence, he was allowed to cross examine the complainant witness in accordance with Section 145 (2) of NI Act.
CC No.41664/2019M/s A.G. Interior Vs. M/s Balaji Trading and Ors. Page No. 6 of 20 6.2 Given the nature of the allegations, this Court had directed that the case shall be tried as a Summons case under Chapter XX of Cr.P.C. 6.3 Admission-denial of documents was conducted u/s 294 Cr.P.C. Witnesses mentioned at Serial No.2,3 and 4 of the list of witnesses filed by the complainant, were dropped.
7. The proprietor of the complainant firm Sh. Abdul Gaffar examined himself as CW1. He was cross examined and discharged on 05.12.2022 and on submissions of the complainant, CE stood closed.
8. Statement of accused under Section 313 Cr.P.C.
read with Section 281 Cr.P.C. was recorded on 19.12.2022 whereby circumstances appearing against him in evidence were put to him. While denying the incriminating evidence put to him, he reiterated his defence u/s 251 Cr. P.C
9. Pursuant thereto case was fixed for DE. Accused no.2 Sh. Kundan Sharma examined himself in his defence as DW1. He was cross examined and discharged on 24.01.2023. Accused examined another witness namely Sh. Kameshwar Sharma as DW2. He was examined in chief, cross examined and discharged on 06.03.2023. In view of submissions of Ld. Counsel for the accused, DE stood closed on 06.03.2023 and matter was fixed for final arguments.
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10. Final arguments were advanced on behalf of both the sides.
11. I have heard arguments on behalf of both the sides and have gone through the record carefully.
12. Before delving into the facts of the present case, it would be apposite to discuss the legal framework regarding the offence under Section 138 of NI Act. The ingredients which are to be satisfied for making out a case under Section 138 NI Act, are being reproduced hereunder:
First Ingredient: The cheque was drawn by a person on an account maintained by him/her 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 CC No.41664/2019 M/s A.G. Interior Vs. M/s Balaji Trading and Ors. Page No. 8 of 20 thirty days of the receipt of information of the dishonour 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.
13. Let us see whether the abovementioned ingredients have been duly proved by the complainant. 13.1 The complainant has proved the original cheque, Ex. CW1/4 which the accused has not disputed as the same has admittedly been drawn from account of accused no.1 It is not disputed that the cheque in question was presented within its validity period.
13.2 The cheque in question was returned unpaid vide return memo dated dated 17.10.2019 Ex. CW1/9 for the reason "Payment Stopped by Drawer".
13.3 The receipt of legal notice Ex. CW1/10 is also not disputed as the accused has admitted receiving the same and he also stated that he even replied to the same. The reply of legal demand notice is also on record, which is Ex.CW1/13.
13.4 The fact that the payment was not made within 15 days of the receipt of the legal notice is also not disputed.
14. As far as the proof of second ingredient is concerned, the complainant has to prove that the cheque CC No.41664/2019 M/s A.G. Interior Vs. M/s Balaji Trading and Ors. Page No. 9 of 20 in question was drawn by the drawer for discharging a legally enforceable debt. In the present case, the issuance of the cheque in question is not denied. 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. 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]. Further, it has been held by a three-judge bench of the Hon'ble Apex Court in the case of Rangappa vs. Sri Mohan [(2010) 11 SCC 441] that the presumption contemplated under Section 139 of NI Act includes the presumption of existence of a legally enforceable debt. Once the presumption is raised, it is for the accused to rebut the same by establishing a probable defence. The principles CC No.41664/2019 M/s A.G. Interior Vs. M/s Balaji Trading and Ors. Page No. 10 of 20 pertaining to the presumptions and the onus of proof were recently summarized by the Hon'ble Apex Court in Basalingappa vs. Mudibasappa [(2019) 5 SCC 418] as under:
"25. We having noticed the ratio laid down by this Court in the above cases on Section 118 (a) and 139, we now summarise the principles enumerated by this Court in the following manner:
1. 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.
2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the 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.
4. That it is not necessary for the accused to come in the witness box in support of his defence. Section 139 imposed an evidentiary burden and not a persuasive burden.
5. It is not necessary for the accused to come in the CC No.41664/2019 M/s A.G. Interior Vs. M/s Balaji Trading and Ors. Page No. 11 of 20 witness box to support his defence."
15. Let us now see whether accused no.1 and accused no.2 have been able to raise a probable defence in their favour and have been able to rebut the said presumption.
16. Admittedly, there was business transaction between the complainant proprietorship firm and accused no.1 and 2.
17. A reply to the legal demand notice was sent on behalf of accused no.1 and 2 qua the cheque in question, to the complainant.
17.1 In para 6 of the said reply, it has been stated on behalf of the accused that in the first week of April, 2019, the accused no. 1, the partnership firm, through accused no. 2, its partner, approached the complainant and gave order for steel frames along with drawing of furniture and the price for 23 steel items was settled at Rs. 3,50,000/-. The accused also paid Rs. 2,00,000/- in advance (vide 2 cheques of R. 50,000/- each and one cheque of Rs. 1,00,000/-, which were duly honored).
17.2 In Para 7, it has been stated that on 29.05.2019, the accused issued cheque bearing no. 136365, for Rs. 1,50,000/- and the complainant told the accused that they will supply all 23 steel items within a week, however the complainant failed to CC No.41664/2019 M/s A.G. Interior Vs. M/s Balaji Trading and Ors. Page No. 12 of 20 supply the same and the accused issued stop payment instructions to its banker.
17.3 In para 9, it has been mentioned that on assurance of the complainant, that the steel items would be supplied to the accused by the end of June 2019, the accused issued a postdated cheque bearing no. 136491 for Rs.1,00,000/-. The accused also told the complainant to destroy the cheque bearing no. 136365 for Rs.1,50,000/-. However, the complainant failed to supply requisite steel items, and the accused issued stop payment instructions to its banker.
17.4 In Para 2 and Para 4 of the para-wise reply, the accused has specifically denied that the accused had ordered to do job work and supply of goods of Rs.2,97,000/-, which later increased to Rs.3,00,000/- as well he also denied supply of goods worth Rs.1,36,000/- including VAT/GST, job works of Rs.14,000/- and local cartage of Rs.5,000/-. So, vide the reply to the legal demand notice, the accused has denied the liability as alleged by the complainant in the legal demand notice.
18. Now, when accused no. 2 came before the court for the first time, at the stage of framing of notice under Section 251 Cr.P.C, he stated that he had given an order for material of stainless steel and he had made payment by way of PDCs of Rs.1,50,000/- and Rs.1,00,000/- to the complainant but the complainant did not deliver any CC No.41664/2019 M/s A.G. Interior Vs. M/s Balaji Trading and Ors. Page No. 13 of 20 goods, so he issued stop payment instructions to its banker for the said cheques. This defense was reiterated by him at the stage of recording of his statement under Section 313 Cr.P.C as well as at the stage when he examined himself as DW1.
19. Now, when CW1 was cross-examined on 14.11.2022, he was asked a question by Ld. Counsel for the accused that:
"Question: Whether you have entered into writing terms and conditions in respect of the delivery and payment of goods?"
The witness answered that "Answer: Yes, it is on record which is Ex CW1/1(OSR)"
Further he also answered that "The said document was given to me by the accused and this document mentions all the details about the goods. The accused came to my office and wrote the goods in the said document and gave it to me and hence the said document is not on the office letter head pad. It is wrong to suggest that Ex. CW1/1(OSR) is only a piece of paper and not any bill/order. It is wrong to suggest that I have misled the court by filing the said document Ex. CW1/1(OSR) A and terming it as bill/order."
19.1 A perusal of Ex. CW1/1(OSR) shows that it is a handwritten document in which the total amount is shown as Rs. 2,97,000/- and there is a noting mentioned as 'External Rs.3,00,000/-'.
CC No.41664/2019M/s A.G. Interior Vs. M/s Balaji Trading and Ors. Page No. 14 of 20 19.2 Pertinently, the said document does not reflect how the amount increased from Rs.2,97,000/- to Rs.3,00,000/-. As per the complainant, if Rs.3,000/- were towards cartage charges, then the same should have also been mentioned in Ex.CW1/1 (OSR). However, the same does not find any mention in Ex.CW1/1 (OSR).
19.3 Now, during cross examination of CW1, he was asked a question by Ld. Counsel for the accused that:
"Question: In para 4 of evidence by way of affidavit, you have mentioned that goods worth Rs. 2,97,000/- were delivered at your office but in Para 3 of your legal demand notice, you have mentioned that goods worth Rs. 3,00,000/- were delivered at your office. Which of your versions is correct?"
To which the witness answered that:
"Answer: I had delivered goods worth Rs. 2,97,000/- to the accused."
So, if the complainant had supplied goods worth Rs. 2,97,000/- to the accused, then why did the complainant mention in the legal demand notice that goods worth Rs. 3,00,000/- were supplied to the accused? This makes the case of the complainant doubtful.
19.4 Now, on being asked by Ld. Counsel for the accused during cross-examination of CW1, he stated that "The accused had issued the cheque in question only after having received the goods. No separate CC No.41664/2019 M/s A.G. Interior Vs. M/s Balaji Trading and Ors. Page No. 15 of 20 receipt is there regarding supply of goods. The accused used to visit my workshop and used to take the goods and sometimes he used to send vehicle for collecting the goods."
So, as per this deposition, there is no separate receipt regarding supply of goods. Also, goods were supplied to the accused at the workshop of the complainant. However, in Para 3 and Para 4 of the complaint, it has been stated by the complainant that goods were delivered at the office of the accused. So, there is a contradiction in the complainant's version with regard to the place of supply of goods. 19.5 It has been stated by the complainant, in his complaint that he insisted to issue a bill for the said job work and supply of goods but the accused persons requested not to issue the same. Even if the accused persons told the complainant not to prepare any bill for delivery of the goods, then also, the complainant should have prepared it in order to keep a record of the transaction. If the case of the complainant is to be believed, that for the supply of goods the accused issued the cheque in question, then it was incumbent on the complainant to furnish receipt of the delivery of goods. In absence of any bill/receipt regarding delivery of goods, a doubt is raised on the case set up by the complainant. 19.6 It also noteworthy that regrading Ex.CW1/1 (OSR), CW1 stated that the accused came to his office and wrote the goods in the said document and CC No.41664/2019 M/s A.G. Interior Vs. M/s Balaji Trading and Ors. Page No. 16 of 20 gave it to him. Now during the cross examination of DW1 i.e. Kundan Sharma, no question was put to him by Ld. Counsel for the complainant regarding the fact that Ex. CW1/1(OSR) was given by him or was in his handwriting. DW1 was shown Ex. CW1/1(OSR) and he stated that "It is wrong to suggest that I have given the order of Rs. 3,00,000/-. The order was not of Rs. 3,00,000/- but was of Rs. 3,50,000/-."
So, from the above discussion, it is clear that the document Ex. CW1/1 (OSR) has not been proved by the complainant as the accused has neither admitted the issuance of the said receipt nor admitted his handwriting on the same.
20. It is also the case of the complainant that the accused placed orders for goods worth Rs.1,36,000/- inclusive of VAT/GST, Job works of Rs.14,000/- and local cartage of Rs.5,000/-. The accused made a part payment of Rs.1,00,000/- against the same and goods were duly delivered at the address of the accused. In this regard, the complainant has placed on record Ex. CW1/2(OSR). In para 6 of the complaint, it has been mentioned that as the accused persons refused to pay GST to the complainant, the complainant was forced to cancel the said invoice on account of non-payment of GST.
20.1 Let us turn our attention towards Ex.CW1/2 (OSR). Firstly, the said bill is of Rs. 1,36,000/- only.
CC No.41664/2019M/s A.G. Interior Vs. M/s Balaji Trading and Ors. Page No. 17 of 20 It does not mention any amount towards Job work and local cartage. During cross examination of CW1, he stated that "It is correct that Ex. CW1/2(OSR) does not mention Rs. 14,000/- job work and Rs. 5,000/- local cartage.
20.2 Also, the invoice Ex. CW1/2(OSR) is a cancelled Invoice.
20.3 As per the complainant, the accused refused to pay GST to the complainant and the complainant was forced to cancel the invoice. If the complainant had delivered the goods to the accused, then why did the complainant cancel the bill? The complainant could have taken relief in the appropriate forum against the refusal of the accused to pay GST. Cancellation of the invoice also implies that the transaction of Rs.1,36,000/-, as reflected in that invoice, also stood cancelled. In the eventuality that the invoice stood cancelled, how has the complainant alleged in the present complaint that the accused became liable to pay Rs. 1,36,000/- to the complainant? No explanation has come forth on behalf of the complainant regarding the same. Moreover, if goods worth Rs.1,36,000/- were delivered to the accused, then it was incumbent upon the complainant to furnish proof regarding supply of goods. In absence of any explanation by the complainant and in absence of any documentary evidence regarding supply of goods, the case set up by the complainant cannot be believed.
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21. Now, during cross examination of DW1, he stated that "it is wrong to suggest that I had given the order of Rs.4,55,000/- including cartage and other expenses to the complainant".
As per this suggestion, ld. Counsel for the complainant wanted to suggest to DW1 that the total order given by the accused to the complainant was for an amount of Rs.4,55,000/-, including cartage and other expenses. Pertinently, nowhere in the instant complaint, evidence by way of affidavit Ex. CW1/A, or legal demand notice Ex.CW1/10, there is any whisper regarding the abovementioned fact that accused had given an order of Rs.4,55,000/- to the complainant. So, this suggestion given to DW1, by Ld. Counsel for the complainant, is an afterthought, and must be rejected.
22. The case of the complainant is that the complainant supplied goods to the accused and for making payment for the said goods the accused issued the cheque in question to the complainant. Admittedly, the complainant has not placed on record any bills/invoices reflecting the factum of for delivery of goods to the accused. The handwritten bill Ex.CW1/1 (OSR) has not been proved by the complainant. As regards the other bill, Ex.CW1/2 (OSR), admittedly, the same is a cancelled bill/receipt.
CC No.41664/2019M/s A.G. Interior Vs. M/s Balaji Trading and Ors. Page No. 19 of 20 Conclusion
23. In view of the above discussions, I am of the considered opinion that the complainant has failed to prove that there was any legal debt or liability on the accused, for which the cheque in question was issued. Resultantly, the complainant has failed to prove its own case. Hence, Accused no.1 M/s Balaji Trading and accused no.2 Kundan Sharma are hereby acquitted for offence punishable under Section 138 NI Act. Copy of this judgment be given free of cost to both the sides. Announced in the open Court on 01.05.2023 Digitally signed by AAYUSHI AAYUSHI SAXENA SAXENA Date:
2023.05.01 15:32:28 +0530 (Aayushi Saxena) Metropolitan Magistrate-01 (South), NI Act/Saket/New Delhi/01.05.2023 CC No.41664/2019 M/s A.G. Interior Vs. M/s Balaji Trading and Ors. Page No. 20 of 20