Delhi District Court
M/S Paramount Surgimed Ltd vs . on 30 March, 2022
IN THE COURT OF MM/CIVIL JUDGE-01, SOUTH EAST DISTRICT,
SAKET COURTS COMPLEX, SAKET, NEW DELHI
Presiding Officer: Ms. Aviral Shukla, DJS
CT CASES No. 44459/13
In the matter of:-
M/s Paramount Surgimed Ltd
Office at Plot No. 1, L.S.C.,
Okhla Industrial Area, Phase-II
New Delhi-110020
Through Its Authorized Representative
Sh. Rajesh Sabikhi ... Complainant
Vs.
Mr. B.K Saxena
The Proprietor of
M/s Shri Hari Om Enterprises,
46 B, Nai Basti, Babuganj,
Behind Ramadheen Market,
Lucknow (Uttar Pradesh) ....... Accused
Offence complained of : 138 of NI Act
Plea of accused : Not guilty
Final order : : Conviction
Date of Institution of case : 26.09.2011
Date of decision of the case : : 30.03.2022
JUDGMENT
1. Vide this judgement, the court shall dispose of the aforementioned complaint case filed by the complainant company against the accused, B.K Saxena.
2. The instant complaint has been filed by Sh. B.K Pradhan, Authorized Representative of the complainant company. The complainant company is running various businesses including the business of supply of surgical goods. The accused is running his business in the name and style of Sh. Hari Digitally signed AVIRAL by AVIRAL SHUKLA SHUKLA Date: 2022.03.30 17:54:44 +0530 CT CASES NO.44459/13 Paramount Surgimed Ltd Vs. B.K Saxena 1 / 14 Om Enterprises and dealing with the complainant company in purchase of goods and material.
3. Complainant's case 3.1. The accused had purchased the goods from the complainant company at New Delhi and goods were supplied to the accused against different invoices. It is stated that at the time of receiving of materials from the complainant company, the accused, in order to discharge his liability, issued a cheque bearing no. 659704 dated 28.07.2011 for an amount of Rs. 6,10,000/-, drawn on State Bank of India, Dali Ganj, Lucknow (hereinafter referred to as the 'impugned cheque') towards the part payment for supply of goods against the invoices raised. Upon presentation of the said cheque for encashment, the same was returned unpaid with the reason 'Insufficient Funds' vide cheque return memo dated 30.07.2011. The complainant informed the accused about the said dishonour and requested the accused to pay the amount, but the accused did not pay any heed to the request of the complainant. Thereafter, a legal notice dated 25.08.2011 was issued by the complainant to the accused under Section 138 NI Act calling upon the accused to pay the amount within 15 days of the receipt of legal notice. Despite service of legal notice, the accused neither replied to the legal notice nor made the payment. Hence, being aggrieved, the complainant filed the present complaint and prayed that the accused be summoned, tried and punished under Section 138 of The Negotiable Instruments Act, 1881.
4. Pre summoning evidence 4.1. To prove his case prima facie, the complainant led the pre-summoning evidence by way of an affidavit which is Ex. CW1/A on 03.02.2012, wherein the complainant reiterated the same facts as mentioned in the complaint and Digitally signed by AVIRAL AVIRAL SHUKLA SHUKLA Date: 2022.03.30 17:54:53 +0530 CT CASES NO.44459/13 Paramount Surgimed Ltd Vs. B.K Saxena 2 / 14 relied upon the following documents:-
(1) Board Resolution Ex.CW1/2 (2) Invoices Ex.CW1/3 (colly) (3) Statement of account Ex.CW1/4 (4) Cheque Ex.CW1/5 (5) Memo Ex.CW1/6 (6) Legal notice and postal Slip Ex.CW1/7
5. The Ld. Predecessor Court was pleased to summon the accused vide order dated 03.02.2012. The accused entered appearance and notice under Section 251 Cr.P.C. was framed against the accused by the Ld. Predecessor Court on 03.09.2019. The substance of accusation was read over and explained to the accused and after being satisfied that the accused comprehended the same, the court recorded his plea.
6. Plea of the accused 6.1. The accused pleaded not guilty and claimed trial. He stated in his defence that the material that was given to him was without any order being placed with the complainant company. He had returned the materials, however no credit note has been issued by the complainant. The said cheques were given as security cheques. He admitted his signature on the cheque, however he further stated that he has not filed the particulars therein.
7. Evidence of the complainant 7.1. To prove its case, the complainant adopted its pre -summoning evidence as its post summoning evidence and got examined its AR Sh. Rajesh Sabikhi as CW1.
7.2. CW1 was duly cross examined on behalf of Ld counsel for accused.
7.3. To reinforce its case the complainant company called for a summoned witness from the Indian Overseas Bank, Defence Colony Branch, New AVIRAL Digitally signed by AVIRAL SHUKLA SHUKLA 17:55:00 +0530 Date: 2022.03.30 CT CASES NO.44459/13 Paramount Surgimed Ltd Vs. B.K Saxena 3 / 14 Delhi. Sh. Rahul Sehgal, Manager was examined as CW2 wherein he brought the summoned record i.e., record pertaining to lodging of the cheque on 29.07.2011, same is Ex.CW2/A, bank return memo dated 30.07.2011 and normal inward return report dated 29.07.2011, which is already marked as Ex.CW1/6 (running into 2 pages), account ledger of the account no.011502000005168 for the period of 25.07.2011 till 31.08.2011. The same were exhibited as Ex.CW2/B (colly).
8. Examination of the accused under section 313 Cr.P.C. 8.1. Statement of the accused was recorded under Section 313 Cr.PC and all the incriminating circumstances were put to him to enable him to offer an explanation. The accused inter alia stated that he had issued the cheque in favour of the complainant as a security cheque. It has been stated that the cheque contains only his signature and the amount is not filled by him. He further stated that he has not received any legal demand notice. He also stated that the security cheque was taken by the complainant prior to supplying of goods. The complainant had issued forced invoices against him by supplying more goods than ordered. There were other goods also supplied to him apart from what was ordered by him. He stated that he also has proof that he had ordered some other goods and the same were sent by the complainant. It has been stated that the complainant did not ask the amount after dishonour of the cheque. It is alleged that the complainant has misused the blank cheque issued by him.
8.2. The accused further stated that he did not owe any liability towards the complainant. The goods worth Rs.13,98,000/- were returned to the complainant for which he also had the receiving. It has been stated that the complainant had issued credit note for an amount of Rs. 3,30,000/-. It has AVIRAL Digitally signed by AVIRAL SHUKLA SHUKLA 17:55:08 +0530 Date: 2022.03.30 CT CASES NO.44459/13 Paramount Surgimed Ltd Vs. B.K Saxena 4 / 14 been claimed that the accused also has the letter of the complainant wherein it is stated that they had issued forced invoices. He further stated that he closed his business in the year 2011, thereafter no business transactions with the complainant were undertaken. It has been lastly stated that the complainant had given him letter in the year 2014-2015 that only an amount of Rs.3,93,000/- is remaining.
9. Defence Evidence 9.1. The accused got himself examined as a witness under section 315 Cr.P.C wherein he inter-alia stated that he had worked with the complainant company from the year 2009-2011. It is stated that the complainant company used to take blank cheques against the supply of goods. He returned the goods worth Rs. 13,95,869/-. It is stated that the complainant company had acknowledged the return of the said goods vide their letter dated 03.02.2011 Ex.CW1/DX2. He further stated that he had intimated the return to his letter dated 26.02.2011 Mark DW1/B and 12.03.2011 Mark DW1/C. He further stated that the complainant company had only given a credit note of worth Rs. 30,760/- Mark DW1/A. He further stated that he had requested the complainant company to give him the proper accounting of transactions made between the parties, however the complainant failed to supply the proper statement. The complainant company had taken a blank cheque from him on 27.01.2011 and the same was presented by the complainant company on 27.07.2011. The said cheque number was having last two digit of 04 as leaf let number, however the cheque bearing leaf let 05 was presented before the cheque leaf let number 04. The complainant company had never intimated about the presentation of the cheque in question i.e 659704. Thereafter, complainant company had issued a letter to him Ex.CW1/DX3 wherein the outstanding amount was shown as Rs. 3,93,294.75/-. It is stated that the last transaction between the complainant and him was done on AVIRAL Digitally signed by AVIRAL SHUKLA SHUKLA Date: 2022.03.30 17:55:14 +0530 CT CASES NO.44459/13 Paramount Surgimed Ltd Vs. B.K Saxena 5 / 14 30.04.2011 and thereafter no transaction was done between the parties. It is alleged that the complainant company presented the cheque of Rs. 6,10,000/- in the month of July 2011 for which he had no liability. It has been stated that he does not have to make any payment to the complainant company, however as per his account, he has to take an amount of Rs. 98,570/-. The account details of transaction between the parties which is maintained by him is Ex.DW1/B (colly). It is averred that the complainant has filed a false case against him by fabricating the cheque in question and he has no liability towards the complainant company.
9.2. Accused was duly cross examined on behalf of counsel for complainant.
10. Final Arguments 10.1. Final arguments were heard on behalf of the complainant and accused. Ld counsel for complainant relied upon the various documents exhibited during CE and submitted that all the ingredients of Section 138 NI Act have been satisfied. It has been argued that the case has been proved beyond reasonable doubt. On the contrary, Ld counsel for accused has argued that the complainant has failed to prove their case. It has been argued that the ledger account cannot be relied upon as the amount mentioned at the base of the account is not the same as that mentioned in the cheque. It has been argued that AR of the complainant company has accepted during cross examination that the 'outstanding' amount mentioned in the ledger account is wrong. Ld counsel has relied upon the case of 'M.S Narayana Menon @ Mani Vs. State of Kerala & Anr ' 2006 JCC (NI) 198 to argue on the aspect that discrepancy in the books of account shall vitiate the case of the complainant.
10.2. In his rebuttals, Ld counsel for complainant has distinguished the facts of the aforesaid cited judgement from the facts of the present case. It has been AVIRAL Digitally signed by AVIRAL SHUKLA SHUKLA 17:55:22 +0530 Date: 2022.03.30 CT CASES NO.44459/13 Paramount Surgimed Ltd Vs. B.K Saxena 6 / 14 vehemently argued that there was no reconciliation in the accounts of the complainant and there is no infirmity in the ledger account itself. It has been finally submitted that the aforesaid cited case is not applicable in the present matter. Ld counsel for accused has conceded at the conclusion of final arguments that facts of the cited case law are different from the present facts before this court.
10.3. Arguments advanced by respective counsels have been heard. This court has carefully perused the evidence on record and considered the oral as well as documentary evidence led by the parties.
11. Appreciation of Evidence and Findings.
11.1. At the outset, it is essential to lay down the ingredients of an offence under Section 138 of NI Act. For constituting an offence under the aforesaid provision, following conditions must be met:-
(1) a person must have drawn a cheque on an account mentioned by him in a bank;
(2) the cheque must be drawn for payment of certain amount of money in favour of another person to discharge in whole or in part, any legally enforceable debt or other liability;
(3) the cheque has been presented to the bank and is returned unpaid by the bank either due to insufficiency of funds or because it exceeds the amount arranged to be paid from the account by virtue of an agreement made with that bank;
(4) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing to the drawer of cheque within the stipulated period; and (5) the drawer fails to make payment within the stipulated time after the receipt of the notice. (reference may be made to the judgment AVIRAL Digitally signed by AVIRAL SHUKLA SHUKLA Date: 2022.03.30 17:55:29 +0530 CT CASES NO.44459/13 Paramount Surgimed Ltd Vs. B.K Saxena 7 / 14 in 'Kusum Ingots And Alloys Ltd & Ors Vs. K.Pennar Peterson Securities Ltd & Ors, (2000) 2 SCC 745.) 11.2. It is further pertinent to take note of the presumptions provided under the NI Act. Section 118 (a) of NI Act and Section 139 of NI Act are provided hereunder for easy reference:-
"Section 118- Presumptions as to negotiable instruments.- Until the contrary is proved, the following presumptions shall be made:-
(a) of consideration--that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;
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."
Upon a conjoint reading of the aforesaid provisions, a presumption is raised in favour of the holder of the cheque that he has received the same for discharge of any debt or liability in whole or in part.
11.3. The complainant has exhibited several documents in support of its case. The cheque bearing no. 659704 dated 28.07.2011 has been exhibited as Ex. CW1/5. The cheque has been issued for an amount of Rs. 6,10,000/- and bears the signature of the accused. The complainant has further relied upon the cheque return memo dated 30.07.2011 (Ex.CW1/ 6) wherein the reasons for return of the cheque has been stated to be 'insufficient funds'. The complainant has also placed on record a total of 55 copies of invoices that are attested true copies and belong to the period of 2010-11. It is noted that AVIRAL Digitally signed by AVIRAL SHUKLA SHUKLA Date: 2022.03.30 17:55:37 +0530 CT CASES NO.44459/13 Paramount Surgimed Ltd Vs. B.K Saxena 8 / 14 various surgical items were being supplied by the complainant to 'Hari Om Enterprises'. The aforesaid invoices are accompanied by the ledger account that was maintained by the complainant company for transactions undertaken with Hari Om Enterprises [Ex.CW1/4 (colly)]. The cheque in question i.e. Ex.CW1/5 finds mentioned in the ledger account. The amount due against the accused, as per the ledger has been shown to be Rs. 6,55,389.75/-. The complainant has also relied upon copy of the legal notice Ex.CW1/7 (colly). The same is accompanied with an original postal receipt [Ex.CW1/7 (colly)]. The complainant has lastly relied upon the account statement brought by the summoned witness CW2 that has been exhibited as CW2/B (colly). The said account statement reiterates the return of the cheque in question on 30.07.2011.
11.4. In the testimony led by CW1 in Ex.CW1/A1, the case of the complainant has been corroborated. It is further noted that the accused has admitted his signatures on the cheque Ex.CW1/5 in the answers given in response to the questions put to him during notice under Section 251 Cr.PC and also in the statement made under Section 313 Cr.PC. It has further been admitted by the accused in his cross examination that he is the proprietor of Hari Om Enterprises and the proprietorship had business transactions with the complainant company till 30.04.2011. It has been admitted that payments to the complainant company were being made by way of bank transactions as well as through security cheques. It has also been admitted that 'ad-hoc' payments were being made from time to time. Hence, based on the testimonies led and documents relied upon by the complainant, the presumption under Section 118 (a) and 139, NI Act are drawn in favour of the complainant. Digitally signed AVIRAL by AVIRAL SHUKLA SHUKLA Date: 2022.03.30 17:55:44 +0530 CT CASES NO.44459/13 Paramount Surgimed Ltd Vs. B.K Saxena 9 / 14 11.5. At this stage, it is upon the accused to rebut the presumption under Section 139 NI Act by raising a probable defence in his favour. Such a defence must be assessed on a scale of preponderance of probabilities. For this purpose, it is open for the accused to rely on evidence led by him or evidence adduced on behalf of the complainant and the materials submitted by the complainant to raise a probable defence in the matter. (Reference may be made to Rohit Bhai Jivanlal Patel Vs. State of Gujarat & Ors, AIR 2019 SC 1876').
11.6. The primary defence raised by the accused is that the cheque in question was given as a 'security cheque' to the complainant in the course of the transactions between the parties. The accused refused to plead guilty when notice under Section 251 Cr.PC was read over to him and claimed the aforesaid defence. However, in his own cross examination, the accused has admitted that payments for the invoices that were issued were made through the security cheques. The accused has however claimed that only the signature on the cheque pertains to him and the amount on the cheque has not been filled by him. Reliance must be placed on the decision of Hon'ble Supreme Court of India in the case of 'Bir Bikram Singh Vs. Mukesh Kumar (2019) 4SCC 197' for this purpose. Paragraphs 37 and 38 of the aforesaid judgement are reproduced hereunder for throwing light upon the settled legal position:-
"37. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Section 20, 87, and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section AVIRAL Digitally signed by AVIRAL SHUKLA SHUKLA Date: 2022.03.30 17:55:51 +0530 CT CASES NO.44459/13 Paramount Surgimed Ltd Vs. B.K Saxena 10 / 14 138 would be attracted.
38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence."
11.7. Reference must also be made to the decision of Hon'ble High Court of Delhi in 'The Jammu & Kashmir Bank Vs. Abhishek Mittal, (Cr. A. No. 294/2001), wherein the following has been held:-
"There is no law that a person drawing the cheque has to necessarily fill it up in his own handwriting. Respondent has not denied his signatures on the cheques. Once he has admitted his signatures on the cheques he cannot escape his liability on the ground that the same has not been filled in by him. When a blank cheque is signed and handed over, it means that the person signing it has given implied authority to the holder of the cheque, to fill up the blank which he has left. A person issuing a blank cheque is supposed to understand the consequences of doing so. He cannot escape his liability only on the ground that blank cheque had been issued by him"
11.8. In light of the aforementioned decisions of Ld. Appellate Courts, it becomes clear that a duly signed security cheque is not invalid in the eyes of law. Moreover, the invoices [Ex.CW1/3 (colly)] and the ledger account [Ex.CW1/4 (colly)] corroborate the existing legal liability of the accused towards the complainant. The accused has, during his cross examination, stated that payments qua the invoices that were being raised were being made either by way of security cheques or by way of advance payments. Therefore the use of security cheques, which includes the cheque in question, was within the knowledge and cognizance of the accused. Hence, the defence that the complainant company was 'misusing' the same is not Digitally signed tenable. AVIRAL by AVIRAL SHUKLA SHUKLA Date: 2022.03.30 17:55:59 +0530 CT CASES NO.44459/13 Paramount Surgimed Ltd Vs. B.K Saxena 11 / 14 11.9. Another defence that has been taken by the accused in his statement under Section 313 Cr.PC is that he did not receive any legal demand notice from the complainant. However, this plea of the accused is not tenable by virtue of the judgment of Hon'ble Supreme Court of India in 'CC Alavi Hazi Vs. Palapetty Muhammed & Anr, Cr. Appeal No. 767 of 2007, in which the following was held:-
"Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. 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 G.C. Act and Section 114 the Evidence Act."
11.10.The other defence taken by the accused (in his examination under Section 315, Cr.PC) relates to the documents Ex.CW1/DX2 and Ex.CW1/DX3 that have been placed on record by the complainant. Vide Ex.CW1/DX2, the accused has sought to claim that the complainant company had acknowledged the return of the said goods. However, upon perusal of the letter, it is noted that the said exhibit rather proves delivery of goods to the accused. An option was given by the complainant to the accused to rebook the consignment back to the complainant. There is no acknowledgement of return of goods that has been proved vide the said exhibit. The accused has also relied upon Ex.CW1/DX3 to claim that the outstanding amount stated AVIRAL Digitally signed by AVIRAL SHUKLA SHUKLA Date: 2022.03.30 17:56:06 +0530 CT CASES NO.44459/13 Paramount Surgimed Ltd Vs. B.K Saxena 12 / 14 by the complainant has been Rs. 3,93,294.75/-. However, perusal of the exhibit reveals that the said outstanding liability has been stated only with respect to 4 invoices bearing no. T/588, T/589, T/590 and T/591 dated 31.01.2011 only. In the present case, the complainant has relied upon a total of 55 invoices for the period in question. Hence, it is concluded that no defence has been made out by virtue of the said exhibits.
11.11.Another defence taken by the accused is that the material was being supplied to him by the complainant company without any order being placed. It has been stated that goods were returned from time to time and intimations were sent to the complainant. Upon perusal of the intimation i.e. Mark DW1/B and DW1/C, it is noted that the same are mere photocopies of handwritten letters addressed to the CEO of the complainant. Mark DW1/A is a one time quantity verification of returned goods and the same is also a mere photocopy. The originals of the aforesaid documents have not been produced by the accused. Upon perusal of the cross examination of the accused, it is further noted that the accused has stated that the accounts between the parties were never reconciled. It is admitted that no recovery claims were filed by the accused against the complainant and some credit notes were issued by the complainant. The accused has thus been unable to adduce any evidence which may duly prove that the liability mentioned on the cheque was not due upon him.
11.12. The last defence on behalf of accused has been raised by Ld. Counsel for accused during final arguments. It has been argued that in the cross examination of CW1 (AR of complainant), the AR has accepted that amount stated as 'outstanding' in the ledger account is wrong. It has been argued that AR has accepted in the cross examination that amount that is outstanding Digitally signed by AVIRAL AVIRAL SHUKLA SHUKLA Date: 2022.03.30 17:56:13 +0530 CT CASES NO.44459/13 Paramount Surgimed Ltd Vs. B.K Saxena 13 / 14 should have been Rs. '6,05,389.75/-'. However, upon actual perusal of the ledger account [Ex.CW1/4 (colly)] for the period 01.04.2011 to 30.07.2011, it is revealed after due computation that an amount of Rs. 6,55,389.75 has been correctly and precisely mentioned therein. Hence, no discrepancy has been revealed in Ex.CW1/4 (colly) and amount outstanding upon the accused has been found to be Rs. 6,55,389.75/-. Hence, the defence taken by Ld counsel for accused is not tenable.
11.13.In light of the appreciation and analysis of the testimony and documentary evidence led by the accused, it has been found that no defence has been duly established by the accused even on the scale of balance of probabilities that may be termed as a "probable defence".
12. Conclusion 12.1. In light of the appreciation of oral testimonies and documentary evidence led by both the parties, the Court is of the considered view that the complainant has been able to establish the case beyond reasonable doubt and thus the presumption under Section 118 (a) and 139 NI Act has been raised in their favour. However, the accused has failed to raise a probable defence in his favour on the scale of balance of probabilities. Accordingly, the accused is hereby held guilty of the offence punishable under Section 138, NI Act and stands convicted.
Digitally signed Pronounced in the open Court & AVIRAL by AVIRAL
SHUKLA
via Cisco Webex Meeting App SHUKLA Date: 2022.03.30
17:56:20 +0530
on 30.03.2022 (Aviral Shukla)
MM/Civil Judge-01, South East,
Saket Court, New Delhi.
30.03.2022
CT CASES NO.44459/13 Paramount Surgimed Ltd Vs. B.K Saxena 14 / 14