Delhi District Court
L.G. Polymers Pvt. Ltd. vs . M/S Luxmi Thermo Forming Pvt. Ltd. on 12 January, 2012
1
CC No. 970/10
IN THE COURT OF MS. GURMOHINA KAUR :
METROPOLITAN MAGISTRATE:SPECIAL COURT13,
DWARKA COURTS : NEW DELHI.
C.C NO.970/10
L.G. Polymers Pvt. Ltd. Vs. M/s Luxmi Thermo Forming Pvt. Ltd.
1. Complaint Case No. : 970/10
2. Name of the complainant : L.G. Polymers Pvt. Ltd.,
1001, Vikram Tower, 16,
Rajendra Place, New Delhi
3. Name of the accused and his : 1. M/s Luxmi Thermo
parentage and residence Forming Pvt. Ltd., Through
Mr. Sunil Jain, Director, Plot
No. 3, Industrial Area,
Baddi, District Solan,
Himachal Pradesh.
2. Sh. Sunil Jain,
Director, M/s Luxmi Thermo
Forming Pvt. Ltd., R/O 991,
Sector 9, Ist Floor,
Panchkula, Haryana.
4. Offence complained of or proved: U/s 138 of the
Negotiable Instrument Act,
1881
5. Plea of the accused : Pleaded not guilty
6. Final Order : Both the Accused are
Convicted
7. Date of Order : 12.01.2012
2
CC No. 970/10
BRIEF FACTS OF THE CASE
1. The brief facts of the case are that the Complainant company is duly registered under the Companies Act, 1956, and having its office at Delhi. Mr. V. Mohandasan, Senior Sales Officer is the Authorized Representative of the Complainant company who has been duly authorized to file the present complaint and further to sign/verify all the documents and pleadings vide authority letter of the complainant company dated 02.09.2007 and the same are Ex.C1 (Colly).
2. It is stated in the complaint that the accused no. 1, M/s Luxmi Thermo forming Pvt. Ltd. is a private limited company duly registered under the Companies Act and having its registered office at Himachal Pradesh and the accused no. 2 - Mr. Sunil Jain is the Director of the accused company and has been looking after the date to day affairs of the accused company and having business dealings with the complainant. It is also stated in the complaint that the complainant has been supplying the accused persons polystyrene - plastic raw material, through their Consignment Stockists. It is further stated in the complaint that during the period March, 2006 to June 2006, various orders were placed by the accused persons on the complainant for supply of the aforesaid Polystyrene - plastic raw material and thereafter, the complainant company delivered the said material to the accused and number of Invoices was raised by the complainant through their consignment Stockists, M/s Deep Polymers amounting to Rs.8,55,760/ and in consideration to absolve the liability arising out of the aforesaid debt, the accused no. 2 for self and on behalf of the accused company issued one cheque bearing no. 344887 dated 3 CC No. 970/10 12.07.2007 for an amount of Rs.39,000/ and drawn on HDFC Bank Ltd. SCO43, Sector7, Panchkula134109 Haryana i.e. Ex.C3 and when the said cheque was presented for encashment was returned back with remark 'insufficient funds' vide cheque return memo dated 13.07.2007 i.e. Ex.C4. Copy of intimation of the complainant's Banker is Ex.C5. A legal demand notice which is Ex. C6 dated 23.07.2007 was sent by the complainant bank through its lawyer which was duly served on the accused vide registered AD post and duly signed Registered AD Card which is Ex.C7 and that the accused failed to make the payment within the statutory period of 15 days and hence this criminal complaint was filed by the complainant.
3. Upon service of summons, the accused no. 2 put his appearance firstly before the court on 23.04.2008. Notice was framed against the accused no. 2 on 01.08.2008 to which he pleaded not guilty and claimed trial.
EVIDENCE
4. To support its case, the complainant company examined CW1 Mr. V. Mohan Dasan, Asstt. Manager, AR of the Complainant company on 20.04.2011.
5. CW1 tendered his evidence by way of affidavit and reiterated the contents of the complaint and relied upon the documents filed at the stage of presummoning evidence. During the crossexamination of CW1 by the Ld. Counsels for the accused, CW1 stated that he had been duly authorized by Mr. V. Sudhakar who was the DGM at the time of issuance of Power of Attorney in his favour to represent the complainant company in the present complaint and denied the 4 CC No. 970/10 suggestion that the Board Resolution, Minutes of Meeting and Memorandum have not been filed in this regard as he was never authorized by the complainant company. CW1 stated that the complainant company had business dealings with the accused no. 1 since 19991 and he was aware that the accused no. 1 manufactures the disposable containers. It is further stated that the invoices filed by the complainant are photocopies since he does not have the the original of the same. CW1 stated that the receipt of delivery has not been placed on record and denied the suggestion that the goods were never delivered the accused persons as there is no signatures on the invoices. CW1 also admitted that the order sheets have also not been placed on record but denied the fact that the same had not been placed on record as no order was ever placed by the accused company. CW1 denied the suggestion that no cheques were ever issued by the accused company and that the cheque in question has been misplaced and thereafter misused. CW1 also denied the suggestion that apart from the signatures of the accused the rest of the details on the cheuqe in question have been filled up by someone else and he also denied that the cheques were not issued by the accused in discharge of his debt/liability. CW1 also stated that he was not aware that as to when the legal demand notice was sent to the accused as the same was sent to the accused by his counsel. CW1 also admitted that the AD card placed on record does not bear the signatures of the accused no. 2. CW1 also denied the suggestion that the accused company did not have any business relation with M/s Deep Polymers or the complainant company. CW1 also stated that the cheques in question were given earlier as PDC.
5CC No. 970/10
6. Complainant Evidence was thereafter closed on 20.04.2011 and the matter was fixed for 27.05.2011 for recording of statement of the accused.
7. However, on 29.06.2011, an application U/s 311 Cr. P.C. was filed on behalf of the complainant for placing on record the board resolution passed by the complainant company on 10.05.2011 which was duly allowed by the court vide order dated 19.07.2011 and thereafter, the matter was fixed for crossexamination of the AR on the point of Board Resolution filed with application U/s 311 Cr. P.C. by the complainant.
8. On 23.08.2011, the CW1 was again crossexamined.
9. On 23.08.2011, the CW1 placed on record the copy of Board Resolution Ex.CW1/X and stated that the Board Resolution was passed on 10.05.2011 and that the Board Resolution has been passed earlier also and that it was passed at Visakapatnam where the complainant company have its registered office. C.E. was closed at the request of the complainant on the very same day.
10. The matter was thereafter, fixed for recording of statement of the accused.
11. The statement of the accused no. 2 under Section 313 of Cr.P.C. was thereafter recorded on 13.10.2011 wherein he stated he did not received any raw material from the complainant company and that the cheque in question was never issued by him to the complainant company as the same were misplaced from his factory. He stated that he had received the legal demand notice and only then it came to his knowledge that the aforesaid cheque which was misplaced had been presented for encashment.
12. Thereafter, the matter was fixed for D.E. on 08.11.2011. 6 CC No. 970/10
13. However, on 08.11.2011, an application U/s 315 Cr. P.C. was moved on behalf of the accused no. 2 to examine himself as a witness which was allowed.
14. On 28.11.2011, DW1 - Sunil Kumar Jain examined himself wherein it is stated by him that he was the director of the accused company but he did not have any business dealings with the complainant company. DW1 also stated that his factory has been closed down on account of default of loan availed by him from PNB. DW1 also stated that it was only after he received the summons in the present complaint that he came to know that the cheque in question has been presented for encahsment. DW1 also stated that the invoices raised by the complainant company are false since he did not receive any consignment of the goods on behalf of the complainant company.
15. Thereafter, the crossexamination of the DW1 was conducted on 29.11.2011 wherein he stated that he was in the said business for the last 10 years and that he did not know the complainant company personally and he had never dealt with it. He was however aware that the complainant company used to manufacture the plastic dana. DW1 stated that he did not know any company by the name of M/s Deep Polymers but admitted that Ex.C2 (Colly) are the invoices raised by M/s Deep Polymers in favour of the accused company. DW1 also denied the suggestion that the goods mentioned in the invoices had been received by the accused company. DW1 also stated that he does not know the serial number of the misplaced cheques nor any complaint had been filed in this regard either in the bank or before the concerned police station. It was also stated by the DW1 that the misplaced cheques were of the bank account of the accused company 7 CC No. 970/10 in PNB in Baddi, Himachal Pradesh. DW1 also stated that he used to issue the cheques on behalf of the accused company and that he used to fill the cheques along with the date and signatures. DW1 also stated that the address mentioned on the legal demand notice is also correct, however, he did not receive any legal demand notice from the complainant company. It is also stated that the stamp on the AD Card is in the name of the accused company but the same is not his nor can he identify the signatures on the AD Cards. D.E. was closed on the very same day i.e. 29.11.2011 and the matter was fixed for the purpose of final arguments.
16. Both the parties lead their final arguments on 16.12.2011 ARGUMENTS
17. During final arguments, Ld. Counsel for Complainant company submitted that the complainant company used to supply the plastic dana to the accused company through their stockist M/s Deep Polymer for which invoices were raised and copy of the same are placed on record. It was also argued that the accused issued various cheques regarding his liability and the same were dishonoured and hence, the present complaint was filed. It was also argued that the accused has in crossexamination on 29.11.2011 stated that he never dealt with the complainant company nor does he know M/s Deep Polymer. It is however, argued that the aforesaid submission made by the accused is not correct since the invoices have been raised specifically by M/s Deep Polymers in favour of the accused company. It is also argued that the ground taken by the accused that the cheque in question has been misplaced is false since the accused never complaint about the 8 CC No. 970/10 same either in the bank and before the concerned police station and also argued that the accused has stated in his crossexamination that the cheques misplaced were of Punjab National Bank, Baddi, Himachal Pradesh whereas the cheque in question is of HDFC Bank. It is also argued that the accused company duly received the legal demand notice as AD Card placed on record contains the stamp of the accused company.
18. On the other hand Ld. Counsel for the accused argued that the complainant company could not prove that the AR was duly authorized since no memorandum or Board Resolution have been place on record and neither any authority letter has been placed on record. It was further argued that the complainant has not placed before the court any proof with respect to its business dealings with the accused company. Also, no receipt of delivery of goods to the accused company as well as no copy of the orders placed by the accused company have been placed on record. It is also stated that the cheque in question had been misplaced from the factory of the accused no. 2 and that the accused does not know how to write in English except his signatures. It is argued that the AD card placed on record has not been signed by the accused himself and that he did not receive any legal demand notice. It is also argued that the accused only came to know about the present case only when he received summons with respect to the same.
SECTION 138 NEGOTIABLE INSTRUMENTS ACT
19. This court has heard the arguments on both the sides and have carefully gone through the record. On the basis of the facts and arguments placed before the court, Three main issues are to be decided as hereunder: 9 CC No. 970/10 i. Whether the legal demand notice was served to the accused persons?
ii. Whether there was legally enforceable liability outstanding against the accused persons as on the date of presentation of the cheque in question?
20. It is now pertinent to go through Section 138 of Negotiable Instruments Act.
138. Dishonour of cheque for insufficiency, etc., of funds in the accounts 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 extend to two year", 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 from the date on which it is drawn or within the period of its validity, whichever is earlier.
(b) The payee or the holder induce 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 cheques 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.10 CC No. 970/10
Explanation: For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability.
21. It is pertinent to mention section 139 and Section 118 of the Negotiable Instruments Act which are as follows:
"Section 139. Presumption in favour of holder 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."
"Section 118. Presumption of Negotiable Instruments of consideration Unless the contrary is proved, the following presumptions shall be made
(a) of considerationthat every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration;
(b) as to date that every negotiable instrument bearing a date was made or drawn on such date;
(c) as to time of acceptance that every accepted bill of exchange was accepted within a reasonable time after its date its date and before its maturity;
(d) as to time of transfer. that every transfer of a negotiable instrument was made before its maturity;
(e) as to order of endorsements that the endorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stampsthat a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course that the holder of a negotiable instrument is a holder in due course; provided that, where the instrument has been contained from its lawful owner, or form any person in lawful custody thereof, by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him."11 CC No. 970/10
22. Section 139 of the Negotiable Instruments Act lays down that it shall be presumed, unless contrary is proved that the holder of the cheque received the cheque of the nature stated in section 138 for the discharge of a debt or liability.
ISSUE NO. 1 : Whether the legal demand notice was served to the accused persons?
23. It is pertinent to mention Section 27 of the General Clauses Act wherein a presumption of service is drawn in, if a notice is sent at the correct address of the accused. Section 27 of the General Clauses Act, 1897 deals with the presumption of deemed service. The Section Reads as under: "Where any (Central Act) or Regulation made after the commencement of this Act authorizes of requires any document to be served by post, where the expression "serve" or either of the expressions "give" or "send" or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing prepaying and posting by registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post".
12CC No. 970/10
24. The legal demand notice dated 23.07.2007 was sent by the complainant company to both the accused company as well as accused no. 2 through Registered AD post dated 24.07.2007. The AD card received back has been placed on record and the same is Ex.C7. It is seen that Ex.C7 contains the stamp of the accused company and a signatures of a person by the name of Rakesh Kumar with the date as of 30.07.2007. The return AD Card with respect to the accused no. 2 is however, unsigned.
25. On a careful analysis of the judicial record, it is seen that legal demand notice were sent at the correct addresses of the accused persons within the stipulated time period.
26. With respect to the accused no. 1, being the accused company, legal demand notice was also deemed served by virtue of the AD Card placed on court record.
27. With respect to accused no. 2, it is seen that in view of provisions 138 N.I. Act and Section 27 General Clauses Act, prima facie, presumption of service is raised in favour of accused no. 2 and that it is the duty of the accused no. 2 to examine any postal witness or any other person in order to rebut the aforesaid presumption. However, no evidence was lead on behalf of the accused no. 2 in this respect and only some questions were put during the crossexamination of AR. DW1 in his crossexamination has stated that the alleged stamp of the accused company is false and that the AD card has not been signed by him personally. Mere allegations are not sufficient in criminal proceedings in order to rebut any ground taken by the 13 CC No. 970/10 opposite party. No stamp or seal of the accused company was placed on record by the defence to show that the alleged stamp is false and fabricated.
28. In this case the legal demand notice was sent through attorney of the complainant by way of registered AD and postal receipt of the same are placed on record. Also, the address mentioned of both the accused are correct and nothing has come on record to show that there has been a change in the addresses of the accused as stated in the legal demand notice as well as in the complaint. It is also seen that the bail bond filled in by the accused no. 2 bears the same address as that mentioned in the legal demand notice as well as complaint. The accused no. 2 has not examined any part or no document has been placed on record to show that the address mentioned in the complaint is wrong. Further, nothing has been placed on record by the accused no. 2 to rebut the presumption raised by virtue of Section 27 General Clauses Act. In order to rebut the aforesaid statement, no witness or document produced before the court by the accused no. 2. In view of the aforesaid facts, the issue is accordingly decided in favour of the complainant and presumption of valid service is made out against both the accused.
ISSUE NO. 2 : Whether there was legally enforceable liability outstanding against the accused persons as on the date of presentation of the cheque in question?
14CC No. 970/10
29. It is the case of the complainant that the accused company had been supplied the raw material by the complainant company through M/s Deep Polymers and thereafter, invoices were raised against the accused company for which the accused no. 2 issued cheque in question being Director of the accused company and the same got dishonoured. The photocopies of the invoices are placed on record. It is the matter of common practice that whenever any invoices are raised, the originals are supplied to the party from whom the payment is expected to be made and the party raising the invoices keeps a copy of the same. In the present matter, the defence has raised an objection that the complainant has only placed on record the photocopies of the invoices. Such objection raised by the defence is not tenable as on the perusal of the invoices, it is seen that they have been raised by the M/s Deep Polymers specifically in favour the accused company. Also, on going through the contents of the complaint it is seen that it has been mentioned categorically that M/s Deep Polymers was the consignment stockists for the complainant company. The invoices raised contains the invoice entry number, name and address of the buyer of the accused company, the description of goods, identification marks, the quantity, the rate prevalent along with the amount payable and other details and it also mentions the name of the supplier to be that of the complainant company. The invoices also contain a certificate at the bottom which reads as follows: 15 CC No. 970/10 "CERTIFICATE THAT THE GOODS COVERED UNDER THIS INVOICE WERE RECEIVED DIRECTLY FROM THE LG POLYMERS INDIA (P) LTD."
30. Hence, in view of the aforesaid, the ground taken by the accused that he had no business dealings with the complainant company does not hold good. The accused has only made allegation that he had no business dealings with the complainant company but has not placed any document or material or evidence on record to corroborate the same and to prove his defence. The accused no. 2 alleged that the cheque in question was misplaced from his factory and he came to know about the presentment of the said cheque only when he received summons with respect to the present complaint. The defence has also alleged that the cheque in question is false and fabricated as they had not been signed by the accused no. 2 himself and that the said cheque was misplaced from his factory and further stated that that the cheques misplaced were of PNB Bank of Baddi, Himachal Pradesh. But on the perusal of the judicial file, it is seen that the cheque in question is of HDFC Bank, Panchkula, Haryana. At the back of cheque in question, it is seen that the bank account number has been specifically mentioned. Therefore, the defence taken by the accused that the cheques were misplaced and thereafter, misused by the complainant company does not seem probable. On perusal of the complaint and document on record, it cannot be said that the same had been issued without consideration and without any liability. It is clear that the accused was liable to pay the various amounts against the invoices raised with respect to the 16 CC No. 970/10 goods supplied by the complainant company. It is therefore, clear that there was a valid legal liability outstanding against the accused company and in discharge of the same accused no. 2 issued the cheque in question. Accordingly, the issue no. 2 is decided in favour of the complainant and against the accused persons. FINAL ORDER
31. In view of the aforesaid facts and discussions, this court is of the opinion that the complainant has been able to prove its case and the accused have failed to rebut the presumption raised by virtue of Section 139/141 N.I. Act. Hence, the accused no. 1(Accused company), - L.G. Polymers Pvt. Ltd. and Accused No. 2 - Mr. Sunil Jain are hereby convicted for an offence U/s 138 N.I. Act.
32. Copy of the judgment be provided to the accused persons free of cost.
33. Now to come up for orders on quantum of sentence.
Announced in the Open Court
on 12th January, 2012 (GURMOHINA KAUR)
METROPOLITAN MAGISTRATE
DWARKA COURT:NEW DELHI