Delhi District Court
:: vs :: on 18 February, 2022
IN THE COURT OF MR. SAHIL KHURMI,
METROPOLITAN MAGISTRATE (N.I. ACT)- 02,
PATIALA HOUSE COURTS: NEW DELHI
DLND020158812015
Case No: 41257/2016
M/s. Movers International Pvt. Ltd.
44, L.G.F, World Trade Centre,
Babar Lane, Connaught Place, New Delhi
Through Shri Sachin Rai, Its Manager
...... Complainant
::Versus::
Rajiv Malhotra, Proprietor-Darshan Impex
H 6 & 6A, Parwana Road, Jagat Puri
Delhi-110051
Also at following two addresses
a) B-17, Gali No. 19, 1st Floor, Titar Nagar,
Parwana Road, Jagat Puri, Delhi-110051
b) C/o Shalini Collection
B-26, Titar Nagar,
Jagat Puri, Delhi-110051 .......Accused
CC No: 41257/2016 Page 1 of 10
Offence Complained of: 138 NI Act
Plea of the Accused: Not Guilty
Date of Institution: 22.04.2013
Arguments Heard On: 16.02.2022
Date of Judgment: 18.02.2022
Decision: Acquittal
JUDGMENT
1. Vide this judgment, I shall decide the present matter, CC No. 41257/2016, filed by complainant M/s. Movers International against the dishonor of cheque bearing no. 102765 dated 15.02.2013 for a sum of Rs. 80,000/-, cheque bearing no. 102766 dated 30.12.2013 for a sum of Rs. 76,000/- both drawn on HDFC Bank Laxmi Nagar, Vikas Marg New Delhi (henceforth, the cheques in question).
2. Shorn to unnecessary details, the brief facts of the case put forth by the complainant are that the complainant company is engaged in the business of acting as clearing forwarding agents, both by Sea and Air, on commission basis.
3. The complainant further stated that the accused is proprietor of M/s. Darshan Impex and has been dealing with the complainant on day-to-day basis. It is further stated by the complainant that the complainant rendered services to the accused and against the said services in part discharge of their liability, accused issued the cheques in question which was dishonored with the reason "insufficient funds."
4. Legal demand notice dated 20.03.2013 was sent to the accused. The accused failed to repay the amount within 15 CC No: 41257/2016 Page 2 of 10 days. Hence the present complaint.
5. The complainant examined himself as CW-1 in pre-
summoning evidence, and relied upon his evidence by way of affidavit along with the following documents: -
S.No. Documents relied upon Exhibited as:
1. Evidence by way of affidavit Ex. CW-1/A
2. Certificate of Incorporation along Ex. CW-1/1 with memorandum of articles of (Colly) association
3. Board Resolution dated 02.09.2011 Ex. CW-1/2
4. Cheque bearing no. 102765 and Ex. CW-1/3 cheque bearing no. 102766 and Ex. CW-1/4
5. Original Cheque Return memo Ex. CW-1/5 dated 12.03.2013
6. Legal demand notice dated Ex. CW-1/6 20.03.2013
7. Registered AD receipt Ex.\CW-1/7 (Colly)
8. Present Complaint u/s 138 NI Act Ex. CW-1/8
9. Board Resolution dated 30.09.2013 Ex. CW-1/9
6. The present matter was transferred from Karkardooma Courts to Patiala House Courts vide order dated 28.10.2015.
7. On appearance of accused, notice of accusation u/s 251 Cr.PC was served upon the accused on 29.11.2016, to which the accused pleaded not guilty and claimed trial. He stated that the cheque in question was issued in advance to complainant for clearance of goods. The complainant did not clear the goods and CC No: 41257/2016 Page 3 of 10 neither did he return the cheques. He further stated that he had not received the legal demand notice.
8. Application u/s 145 (2) NI Act was moved on behalf of the accused, which was allowed on 30.03.2017. Thereafter, the complainant was examined and duly cross-examined on 04.04.2018. Thereafter, CE stood closed vide separate statement of AR recorded on 13.12.2019.
9. Statement of accused u/s 313 Cr.PC was recorded on 04.03.2020. Thereafter, matter was fixed for DE.
10. An application u/s 315 Cr.P.C was moved by the accused to examine himself as defence witness which was allowed vide order dated 12.11.2021.
11. DW-1 accused Rajiv Malhotra was examined and cross examined and discharged on 29.11.2021. DE stood closed. Thereafter, the matter was fixed for final arguments.
12. Final arguments were heard on 16.02.2022.
13. I have heard the counsels for both parties at length, considered the evidence led by them carefully and have perused the court records thoroughly.
14. Therefore, in the present matter, the onus of proof is now upon the accused to raise a probable defence and to rebut the presumption of the existence of a legally recoverable debt arisen in favour of the complainant company. Now let us examine the defenses raised by the accused and evaluate the same.
15. The accused has primarily taken three defenses before this court. Firstly, that he did not receive the legal demand notice and secondly, that AR of complainant has no knowledge of present transaction and thirdly, there is no legally enforceable liability of the accused as no service was rendered by complainant to clear CC No: 41257/2016 Page 4 of 10 the goods of accused abroad.
Now, I shall be discussing all the defences of accused one by one. DEFENCE OF NON-RECEIPT OF LEGAL DEMAND NOTICE
16. The accused denied receiving the legal demand notice regarding the cheque in question in notice framed u/s 251 CrPC and statement recorded u/s 313 CrPC. It is observed that the accused has filled the same address as his residential address in the bail-bonds furnished by him during the course of trial. Therefore, it emerges that the legal demand notice being properly addressed and posted by the complainant, as proved by the postal receipts, the same is presumed to have been delivered under section 114 of the Indian Evidence Act, 1872 and the accused has failed to rebut the said presumption.
17. Moreover, it was held by the Hon'ble Supreme Court in the decision cited as C.C. Alavi Haji vs Palapetty Muhammed & Anr. (2007) 6 SCC 555 that a person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the General Clauses Act and Section 114 of the Evidence Act. Thus, the plea of the accused that the legal demand notice was never received will not help the accused in light of law laid down in C.C. Alavi Haji (Supra). DEFENCE THAT AR OF COMPLAINANT HAS NO KNOWLEDGE OF PRESENT TRANSACTION
18. It is submitted by counsel for accused that the AR of complainant has no personal knowledge of present transaction CC No: 41257/2016 Page 5 of 10 and the same is duly admitted by him in his cross examination, thus he was not competent witness to depose. The argument that the new AR Sachin Rai doesn't have personal knowledge of the instant case is not tenable. It is not inconceivable that during the long drawn pendency of the proceedings, the AR through whom the complaint was originally filed could have left the complainant company. What is required in such a case is not personal knowledge of the transaction, but due knowledge of the transaction, which could be based on documents/records. The requirement of due knowledge of the Authorised representative is also in consonance with the decision of Hon'ble Supreme Court in A C Narayanan and Ors. Vs State of Maharashtra AIR 2014 SC 630. This court is of the opinion that the AR, having joined the organization even after the issuance of impugned cheque, fulfills the criterion of due knowledge and merely on this ground, the testimony of new AR, examined as CW-1, can't be rejected.
DEFENCE OF NO LEGALLY ENFORCEABLE DEBT
19. It is the consistent defence of the accused during the whole trial that complainant approached him for clearing and forwarding his goods which were to be sent to Africa and the complainant asked for two advance cheques which are the cheques in question. However, later on, neither the complainant cleared his goods nor he returned his cheques.
20. It is submitted by the Ld. Counsel for accused that the complainant has admitted in his cross examination that no document in form of purchase order, bill, invoice, builty etc has been placed on record by complainant and therefore, the case of CC No: 41257/2016 Page 6 of 10 complainant doesn't stand on its own leg as the complainant has not been able to show the existence of legally enforceable liability of the accused.
21. Counsel for accused has placed reliance on Indus Airways Pvt. Ltd. and Ors. Vs. Magnum Aviation Pvt. Ltd. and Ors Criminal Appeal no. 830 of 2014 decided on 07.04.2014 in which it was held that:
The explanation appended to Section 138 explains the meaning of the expression 'debt or other liability' for the purpose of Section 138. This expression means a legally enforceable debt or other liability. Section 138 treats dishonoured cheque as an offence, if the cheque has been issued in discharge of any debt or other liability. The explanation leaves no manner of doubt that to attract an offence under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque. In other words, drawal of the cheque in discharge of existing or past adjudicated liability is sine qua non for bringing an offence under Section 138. If a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise, and material or goods for which purchase order was placed is not supplied, in our considered view, the cheque cannot be held to have been drawn for an existing debt or liability. The CC No: 41257/2016 Page 7 of 10 payment by cheque in the nature of advance payment indicates that at the time of drawal of cheque, there was no existing liability.
22. The relevant extract of cross-examination of complainant is reproduced here for ready reference:
I have not placed any documents (purchase order, bill, invoice, builty) pertaining to clearing/forwarding the goods of the accused by the complainant company........I cannot tell about the transaction/dealing of the accused with the complainant company.
23. Thus, perusal of cross examination of complainant shows that it is uncontroverted fact that no document has been placed on record by the complainant in support of his case in form of purchase order, bill, invoice, builty etc to prove that goods of accused were actually cleared and forwarded abroad. Therefore, the complainant has failed to show any business transaction between the complainant and accused. It is mentioned in the complaint that the complainant, acting as clearing and forwarding agents, rendered service the accused. Interestingly, nothing is mentioned as to what services were provided, what type of goods of accused were sent and to which country the goods were cleared. No document in the form of purchase order, bill, invoice, builty etc has been placed on record by complainant. Thus, the complainant has failed to prove the existence of legally enforceable liability of accused.
24. Thus, the accused has been successful in bringing a probable defence on the basis of preponderance of probabilities that the cheque in question was not issued to the Complainant in CC No: 41257/2016 Page 8 of 10 discharge of legally enforceable liability existing as on the date of the presentation of the said cheques.
25. At this stage, it should be noted that when the accused successfully creates doubt in the complainant's case by drawing inferences from the materials on record and also from circumstances, statutory presumptions under section 118(a) r/w 139 of the Act stand rebutted and burden to proof is then shifted to the complainant to prove the guilt of accused beyond reasonable doubt.
26. Reference can be taken from the decision of the Hon'ble Supreme Court from the case of Bharat Barrel & Drum Manufacturing Company vs. Amin Chand Pyarelal 1999 (3) SCC 35, wherein it has held the following:
"Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non- existence of the consideration can be either direct or by bringing on record preponderance of probabilities by reference to the CC No: 41257/2016 Page 9 of 10 circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the non- existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading evidence as the existence of negative evidence is neither possible not contemplated and even if led, it is to be seen with a doubt..." (Emphasis supplied)
27. Hence, the onus shifted back to the Complainant to prove the existence of the legally enforceable debt. In light of the aforesaid discussion, the Complainant has failed to discharge this burden. In light of these observations, it appears that the Accused has successfully rebutted the presumption under 139 NI Act by the standard of preponderance of probabilities and the Complainant has been unable to prove the existence of legal debt/liability.
28. Accordingly, the ingredients of Section 138 of Negotiable Instruments Act, 1881 are not proved. Therefore, Accused Rajiv Malhotra is acquitted of the offence punishable under Section 138 of the Negotiable Instrument Act, 1881.
Announced in open court on 18.02.2022.
(Sahil Khurmi) Metropolitan Magistrate (NI Act)-02 PHC/ND/18.02.2022 CC No: 41257/2016 Page 10 of 10