Delhi District Court
Hari Om Sharma Vs. vs . M/S U.S.A Arts & Others on 11 February, 2020
1
IN THE COURT OF SH. GAURAV SHARMA : MM : NI ACT-03
(CENTRAL) : TIS HAZARI COURTS : DELHI.
CC No.534242/18
DATE OF INSTITUTION : 07.12.2015
DATE RESERVED FOR JUDGMENT : 23.12.2019
DATE OF JUDGMENT : 11.02.2020
IN THE MATTER OF:
Sh. Hari Om Sharma
Proprietor of M/S Hari m Sharma & Co.
F19/2 Subhah Vihar,
Delhi110053. ........Complainant
VERSUS
1. M/S U.S.A Arts,
D236, near Seed Farm Roa,
Nehru Enclave,
Alipur, Delhi.(through its partner)
2. Sh. Manoj Kumar
C/O Chowdhary Umed Singh,
Khasra No. 648, Gali no.1, Mahaveer Colony.
Opp. Bara Shiv Mandir Gate,
Alipur Delhi.
3. Shri Uma Shankar Aggarwal
R/O House no. 341, near Pakki Chopal.
Alipur, Delhi110036 ..........Accused
JUDGMENT :
a) Srl. No. of the case & Date of institution :180/08 & 08.07.2008
b) Date of commission of offence : after the 15th day of receiving of legal demand notice
c) Name of the complainant : Sh. Hari Om Sharma CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 2
d) Name of the accused persons : Sh. Manoj Kumar and Uma Shankar Aggarwal, partners M/s USA Arts
e) Nature of offence complained of : S. 138 NI Act
f) Plea of the accused person : Accused pleaded not guilty
h) Final Order : Convicted
i) Date of order : 11.02.2020 COMPLAINT UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881 JUDGMENT 11.02.2020
1. The accused M/s USA Arts & Ors, as well as its partners Manoj Kumar and Uma Shankar Aggarwal are hereby Convicted of the offence u/s 138 of the Negotiable Instruments Act, 1881.
2. Mere verbal denials and blank statements shorn of credible supporting evidence does not further the case of any defending litigant.
Brief facts
3. The brief facts of the present complaint filed U/s. 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "NI Act") are that Sh. Hari Om Sharma is the sole proprietor of M/S Hari Om Sharma & Co. (hereinafter referred to as the "complainant") and engaged in the business of manufacturing and sale of jute and H.D.P.E. bags. From 24.09.2007 onwards, M/s U.S. Arts, through its partners, Sh Manoj Kumar and Sh Uma Shankar Agarwal, (hereinafter referred to as the "accused") had been purchasing goods from the complainant on credit, and following purchase transactions had taken place :
CC No. 534242/2018Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 3 Bill No. Date Amount (Rs.) 233 24.09.07 015942 234 01.10.07 172966 235 03.10.07 11980 237 08.10.07 12032 238 11.10.07 72193 240 20.10.07 188322 243 20.10.07 4000 245 22.10.07 34370 247 03.11.07 141690 248 08.11.07 92177 250 08.11.07 7306 Total 752978 Against the above purchases the accused, inter alia, issued the cheques bearing no. 645402 dated 27.10.2007 for a sum of Rs.2,00,000/-, 645403 dated 01.11.2007 for a sum of Rs.2,00,000/-
and 65410 dated 24.04.2007 for a sum of Rs.6,25,000/-, all drawn on Syndicate Bank 64/60 Nehru Enclave, Alipur, Delhi which on presentation at the Tamilnad Mercantile Bank Ltd., Chandni Chowk Delhi, were dishonoured and were returned by the bank on 26.04.2008, with the remarks, "Funds insufficient". At the time of issuing the cheques the accused had assured the complainant that the cheques would be duly honoured on their presentation. The intimation regarding dishonouring of all the cheques was communicated to the complainant by his banker on 26.04.2008. When the complainant tried to contact the accused personally as well as on phone regarding such dishonour of the cheques, he avoided to meet on one pretext or the other. The complainant was thus constrained to issue legal notice dated 23.05.2008, through his counsel to the accused. The legal notice was dispatched through registered post. Registered notice sent to the firm M/s U.S. Arts was received unserved on 24.05.2008. Registered notice sent CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 4 to one of the partners, Shri Manoj Kumar was also returned unserved on 30.05.2008. However, registered notice sent to Shri Uma Shankar Aggarwal was duly served on 24.05.2008. All the accused preferred not to reply making it clear that they had issued the cheques without sufficient funds in their account, with the intention of deceiving the complainant. Hence, the present complaint under section 138 of NI Act Proceedings Before Court
4. In the present complaint, upon the accused persons entering an appearance, notice of accusation was framed against them u/s 251 CrPC on 29.02.2012 to which they pleaded not guilty and claimed trial. In the defence recorded on same date the accused Manoj Kumar stated that he issued the cheques to the complainant, however, as security and the same were blank signed cheques. Accused Uma Shankar stated that he did not issue these cheques to the complainant and the same were misused by his partner in collusion with the complainant. They both denied receiving legal demand notice.
5. In support of his case the complainant examined herself as CW-1 and he proved his affidavit in evidence as Ex.CW1/A; Copies of bills Ex CW1/X (Colly); Cheques bearing no. 645402 dt. 27.10.07 for Rs.2,00,000/-, 645403 dated 01.112007 for Rs 2,00,000/- and 645410 dated 24.04.2008 for Rs 2,25,000/- all drawn on Syndicate Bank 64/60, Nehru Enclave, Alipur, Delhi as ExCW1/1(colly.); cheque return memo dated 26.04.2008 with remarks "funds insufficient" as Ex.CW1/2 (colly.); legal notice dated 23.05.2008 as Ex.CW1/3 & postal receipt as proof of sending legal demand notice as ExCW1/4 (colly). The said legal notice was duly served upon the accused vide AD card as Ex.CW1/5 and return envelopes as Ex.CW1/6 (colly.). The ledger statement as Ex.CW1/7 and Ex CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 5 CW1/D1 and the complaint as Ex.CW1/A. Initially, despite several opportunities being given, the accused persons did not avail their right to cross examine the complainant, which was closed, firstly on 17.10.2017 and subsequently on 11.12.2018, after accused no 2 had availed opportunity to cross examine the complainant pursuant to its application u/s 311 CrPC was allowed. The accused no 3 did not even pursue its application u/s 311 CrPC.
6. Statement of accused persons u/s 313 CrPC. was recorded on 11.12.2018 wherein both the accused stated that their company had already paid all their outstanding dues and that they had receipts signed by complainant for the same too. Moreover, it was stated that the cheques in question were given as security and were misused by the complainant.
7. Thereafter, accused Manoj Kumar examined himself as DW1 and was duly cross-examined. The other accused Uma Shankar Agarwal did not examine any witness in his defence. The defence evidence was thus closed on 01.07.2019. Final arguments were advanced from either side and the complainant also filed written submissions. On the other hand, the accused relied upon the judgments M/s Rajhans Cloth House v Annappa Fakira Manjalkar & Ors, Bombay HC (Cr Appeal No 976 of 2002) (on the point of legal demand notice not being proved to have been sent), Ramesh Chandra Baregama v Ramesh Chandra JoshI, Rajasthan HC at Jodhpur (Cr Appeal No 254/2008) (on the point of the unsigned legal demand notice) and M/s Khushal Chand Jagdish Rai v Hakam Singh, P&H HC (RSA 439 of 1986 (O&M)) (on the point of non-production of account statements/records)
8. I have heard counsel for the parties, perused the record and have gone through the relevant provisions of the law.
CC No. 534242/2018Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 6 Findings
9. The constituent elements for an offence u/s 138 NI Act are well laid out, in the section itself as well as through various pronouncements of the superior courts. The Hon'ble Apex Court summed them up in Himanshu v. B. Shivamurthy, (2019) 3 SCC 797 as below :
'The first condition is that the cheque ought to have 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. The second condition is that the payee or the holder in due course of the cheque, as the case may be, ought to make 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 cheque as unpaid. The third condition is that the drawer of such a cheque should have failed to make 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. It is only upon the satisfaction of all the three conditions mentioned above and enumerated under the proviso to Section 138 as clauses (a), (b) and (c) thereof that an offence under Section 138 can be said to have been committed by the person issuing the cheque.' (emphasis supplied) As can be seen, the law is fairly straightforward to comprehend with regards the ingredients of section 138 NI Act.
10. The defence raised by both the accused is that the cheques in question were issued as blank signed for security purposes and other details therein were not filled by them. At this juncture it would be worthwhile to discuss the provisions under S. 20 and S. 118 of the Negotiable Instruments Act, which provide as under:
20.Inchoate stamped instruments.-
Where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in [India], and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as then case may be, upon it a negotiable instrument, instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 7 which he signed the same, to any holder in due course for such amount, provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder.
118. Presumptions as to negotiable instruments of consideration 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;
(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 stamps-that 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. Having noted as aforesaid, in Mojj Engineering Systems Limited & Ors. Vs. A.B. Sugars Ltd.; 154 (2008) Delhi Law Times 579, the Hon'ble Delhi High Court had observed as under :-
"7. Even otherwise, prima facie, it was the petitioners who had handed over the undated cheque for a certain amount to the respondent in terms of a contract between the parties. Since an undated cheque cannot be encashed, it can only mean that the petitioners had authorized the complainant to enter an appropriate date on it. In Young Vs. Grote (1827) 4 Bing. 253 it was held that when a blank cheque is signed and handed over, it means the person signing it has given an implied authority to any subsequent holder to fill it up. Similarly, in Scholfield Vs. Lord Londesborough (1895-1899) All ER Rep 282 it was held that whoever signs a cheque or accepts a bill in blank, and then puts it into circulation, must necessarily intend that either the person to whom he gives it, or some future holder, shall fill up the blank which he has left. This common law doctrine was also affirmed by Justice Macnaghten in CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 8 Griffiths Vs. Dalton [1940] 2 KB 264 where it was held that the drawer of an undated cheque gives a prima facie authority to fill in the date. This aspect has also been incorporated in Section 20 of the Negotiable Instruments Act, which deals with Inchoate Stamped Instruments. The Supreme Court in T.Nagappa Vs. Y.R.Murlidhar, (2008) 5 SCC 633 while discussing the scope of Section 20 held that by reason of this provision, a right has been created in the holder of the cheque. Prima facie, the holder thereof is authorized to complete the incomplete negotiable instrument. In that view of the matter, all further issues that may be raised by the petitioners regarding the nature and scope of the authority of the respondent to put any particular date on the cheque in question, are all matters for trial.
8. It is not as if the cheque came to be issued without any consideration whatsoever in the first place or that there was such a glaring defect in the complaint that the decision of the Trial Court to issue summons has ex facie resulted in miscarriage of justice or an abuse of the process of Court, and therefore interference under Section 482 Cr.P.C. to quash the proceedings is warranted in the interest of justice. The question whether the consideration for which the cheque was issued was ultimately satisfied or whether the cheque was wrongly sought to be encashed, are all issues that must also be decided at the trial. The Supreme Court in the case of M.M.T.C. Ltd. and Another Vs. MEDCHL Chemicals and Pharma (P) Ltd. and Another, (2002) 1 SCC 234 held as follows:
"13.....the well-settled law that the power of quashing criminal proceedings should be exercised very stringently and with circumspection. It is settled law that at this stage the Court is not justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the complaint. The inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice. At this stage the Court could not have gone into merits and/or come to a conclusion that there was no existing debt or liability."
The Court further held that:
"17. There is therefore no requirement that the complainant must specifically allege in the complaint that there was a subsisting liability. The burden of proving that there was no existing debt or liability was on the respondents. This they have to discharge in the trial. At this stage, merely on the basis of averments in the petitions filed by them the High Court could not have concluded that there was no existing debt or liability."
(emphasis supplied)
12. From the aforesaid discussion, it is manifest that by reason of the provision under S. 20 NI Act, a right has been created in the holder of the cheque who is prima facie authorized to complete the CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 9 incomplete negotiable instrument. Mere averment to the effect that the accused/drawer of the cheque did not fill in the details on the cheque except for signing on the cheque is not sufficient. Thus, merely the allegation of issuance of incomplete negotiable instrument does not create absolute defence in favour of the accused unless corroborative evidence exists to show that by threat or fraud, a cheque was taken. There is no law that a person drawing the cheque has to necessarily fill it up in his own handwriting. Accused persons have not denied their signatures on the cheques. Once signatures on the cheques are admitted, the accused persons cannot escape their liability on the ground that the same were not been filled in by them. 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. Thus, this defence is of no assistance to the accused in the present case also (Reference in this regard may also be made to Jaspal Singh vs State decided on 16.11.2016 by Hon'ble High Court of Delhi in Crl. Rev P. 160/2016; Lillykutty vs Lawrence - 2003 (2) DCR 610 (Ker) (DB) & Ravi Chopra vs State and Anr. - 2008n (2) JCC (NI) 169).
13. The accused persons also denied receiving of legal demand notice. The complainant has however proved legal notice dated 23.05.2008 as Ex.CW1/3 & postal receipt as proof of sending legal demand notice as ExCW1/4 (colly), proof of service vide AD card as Ex.CW1/5 and return envelopes as Ex.CW1/6 (colly.). All of these have remained insufficiently challenged by the accused persons. Also, barring accused Manoj Kumar, the addresses mentioned by the other accused Uma Shankar Agarwal and the CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 10 accused no 1 firm in their bail bonds and statements recorded u/s 313 CrPC are the same on which the legal demand notice was indeed sent. In such a scenario, there is no cogent evidence on record which may prove the non-service of the said legal notice on the accused no1 firm and at least on one of the accused Sh Uma Shankar Aggarwal. If the firm has been proved to be served, its partners can also be similarly said to have had sufficient notice of the same and hence, the service of the legal notice stands confirmed.
14. In addition to the above, the defence of the accused that legal demand notice was not received is devoid of merit also in view of the decision of the Hon'ble Apex Court in C.C. Alavi Haji v Palapetty Muhammad & Anr. (2007) 6 SCC 555, which states that in case, drawer of the cheque raises an objection that he never received Legal Notice U/s 138 of N.I. Act, he can within 15 days of the receipt of summons make payment of the cheque amount and in case, he does not do so, he cannot complain that there was no proper service of Legal Notice U/s 138 of N.I. Act. Hence, in view of the Judgment in C.C. Alavi Haji (supra) also, the presumption of service of valid Legal Demand Notice arises against the accused persons, if not of the legal notice sent vide registered post, then through issuance of summons by the court.
15. Having noted as above therefore, since it is admitted that the cheques in question bear the signatures of both the accused persons, presumption shall be raised under section 139 read with sections 118/20 of the NI Act, that cheques in question were issued in discharge of valid debt or liability. Analysing all the concerned provisions of law and various pronouncements in this regard, the Hon'ble Apex Court in Basalingappa v. Mudibasappa, (2019) 5 SCC 418 : 2019 SCC OnLine SC 491 at page 432 noted at para CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 11 25 as follows :
'25. We having noticed the ratio laid down by this Court in the above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner :
25.1. 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. 25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
25.3. 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 25.4. 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.
25.5. It is not necessary for the accused to come in the witness box to support his defence.' (emphasis supplied)
16. To put it succinctly therefore, that presumption u/s.139 read with Section 118 of the NI Act are raised against the accused persons on account of their admission of the issuance of the cheques in question. It is thereafter upon them, to rebut such presumptions by adducing evidence. If upon preponderance of probabilities, the accused is able to do the same, onus once again shifts back on the complainant to prove its case beyond reasonable doubt. If the accused is unable to make out a probable defence, the complainant is entitled for a decision in his favour.
17. However, mere denial regarding existence of a valid debt shall not serve any purpose as far as the accused is concerned, as has CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 12 been held in Kishan Rao v. Shankargouda, (2018) 8 SCC 165,. Quoting Sharma Carpets case [Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513, the Hon'ble Apex Court had held at para 20 therein :
'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 is 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 probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist.' (emphasis supplied) 1.
18. In Hiten P. Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16 :
2001 SCC (Cri) 960 also, the Hon'ble Apex Court has stated in clear terms as to what kind of rebuttal evidence is required for the accused to negate the presumptions raised against him under the NI Act. It was opined that mere reasonable and probable explanation will not suffice. The same must be supported by proof. Relevant portion from para 24 of the said judgment may be reproduced herein :
' ........ In the case of a discretionary presumption the presumption if drawn may be rebutted by an explanation which "might reasonably be true and which is consistent with the innocence" of the accused. On the other hand in the case of a mandatory presumption the burden resting on the accused person in such a case would not be as light as it is where a presumption is raised under Section 114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation offered by the accused is reasonable and probable. It must further be shown that the explanation is a true one. The words 'unless the CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 13 contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof' and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before it the court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted (AIR p. 580, para 12)' (emphasis supplied)
19. Considering the above, when the contentions raised by the accused persons as against those raised by the complainant are weighed under the facts and circumstances of the present case, they don't appear to favour the accused. Agreed, that the accused persons can rebut the presumptions raised against them by showing gaps in the complainant's version, but nevertheless, credible defence must be raised that can cast a doubt on the narrative of the complainant. Such opportunity arose on four occasions when the accused persons put forth their case, one, during the time of recording of the plea of defence of the accused when notice of accusation u/s 251 CrPC was framed, two, when the accused cross examined the complainant pursuant to the application made u/s 145(2) of the NI Act, three, when the statement of the accused was recorded u/s 313 CrPC and four, when defence witness was examined. Let us take them one by one to see if any probable defence was made out in favour of the accused on the touchstone of the ratio laid down in Kishan Rao (supra) and Hiten P. Dalal (supra) as noted above.
20. In the notice of accusation framed against the accused persons on 29.02.2012, the accused no 2 admitted to the issuance of the cheques in question as security to the complainant. However, throughout the trail the accused was unable to establish the said averment of his as to when and under what circumstances such security cheques were issued, if at all. As has been mentioned CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 14 above already, bare denial and mere averments are not sufficient for the accused to rebut the presumptions raised against him under the NI Act. As far as the accused no 3 was concerned, he denied issuance of the cheques in question and also stated that the same had been misused by his partner in collusion with the complainant. Even this remains unsubstantiated throughout the trail. Had the accused wanted, it could have cross examined the complainant on this vital aspect. But instead, accused no 3 did not cross examine the complainant altogether. Initially, due to continuous non- presence the right of the accused to cross-examine the complainant was closed. But even after he had filed an application u/s 311 CrPC, he did not pursue the same because of which it was dismissed. The accused no 3 did not also examine himself as a witness and subject himself to cross examination. In such a scenario, the contention of the accused no 3 also remains a bald statement that he had not even issued the cheques in question. Importantly, he has at no place tried to prove that the signatures on the cheques in question are not his by any sort of other alternative evidence also.
21. Both the accused also denied having received the legal demand notice. However, it has been noted above already that such a plain denial with not proving anything to the contrary does not take the case of the accused persons one inch further. Moreover, once the accused persons entered an appearance in court, their defence of non-receipt of legal demand notice also stands diluted in view of the judgment in C.C. Alavi Haji (supra) already cited above. In view of the same therefore, the defence put forth by the accused persons during framing of notice u/s 251 CrPC does not help them espouse any valiant defence in their favour.
22. The two-page cross examination of the complainant conducted on CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 15 behalf of accused no 2 only, also does not add any value to the defence of the accused. The complainant withstood his version during the same and there were no material contradictions brought to the fore by the accused. The complainant was questioned on the aspect of the turnover of his firm to which he answered in approximate terms. The said line of questioning was not germane to the accused trying to rebut the presumptions raised against him since up until the time when the accused is able to rebut such presumptions, it is not open to him to challenge the sources of funds of the complainant or to make roving inquiries about the same. It has been so laid down by the Hon'ble Apex Court in Rohitbhai Jivanlal Patel vs State of Gujarat & Anr 2019 SCC OnLine SC 389 and therefore, questioning on that aspect does not add to the defence of the accused.
23. There was some issue raised by the accused qua the pre summoning documents not being on record or otherwise. The complainant filed the same afresh on record as per the orders of the court and the suggestion of that being manipulated was denied as well. The accused did not pursue that point further and nothing was shown to the court, which could have gone on to suggest that there was something amiss or added/subtracted from the original pre summoning affidavit filed. Considering the same, this point raised by the accused also goes neither here nor there qua his defence.
24. The complainant was then asked about the handwritten ledger account Ex CW1/7 placed on record and why not proper computerised ledger statement was filed. The complainant explained that though such ledger accounts are maintained electronically only but if anyone asks for it, the same is provided as a handwritten copy. Moreover, on demand the complainant agreed CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 16 to produce the relevant extract of the computerised ledger which is Ex CW1/D1. Both of these, Ex CW1/7 and Ex CW1/D1 have remained insufficiently challenged by the accused and there is nothing on record which goes on to prove that the said statement of accounts is false or fabricated. Instead, the said statements are relevant as per section 34 of the Indian Evidence Act, 1872 ('IEA') Of course, these cannot be used in a solitary manner to convict the accused, but they can nevertheless be used as an aid to the overall case of the complainant. With regards Ex CW1/D1, subsequently produced by the complainant, questions and suggestions were put to him that entire records have not been produced and since he was maintaining dual ledger, he had not produced the entire original record of year 2007-08. Obviously, these were denied by the complainant. Other than these, there was nothing brought to the notice of the court which could have led it to believe that the said documents are untrustworthy. On the other hand, whilst advancing final arguments, the counsel for the accused stated that the said document EX CW1/D1 could not be looked into altogether since the same was not supported by a certificate u/s 65B of IEA. This contention is also not wholly sustainable. First of all, when the said document was being exhibited, the accused did not take any objection and instead chose to put a few questions and suggestions to the complainant qua the same. Therefore, at the belated stage of final arguments, such objection was out of place. It has been so held lucidly by the Hon'ble Apex Court in R.V.E. Venkatachala Gounder Vs. Arulmigu Viswesaraswami & V.P. Temple and Another, (2003) 8 SCC 752. as well that if a document, otherwise admissible, is agitated against on the basis of its mode of proof, then an objection to the same must be taken at the first instance when the said document is being tendered in evidence. If not so, the said right to CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 17 object would be considered waived and the opposing party shall not be allowed to raise such an objection as to mode of proof at any later stage. Observations of the Hon'ble Court in this regard can be gainfully reproduced as herein below :
"20. The learned counsel for the defendant- respondent has relied on Roman Catholic Mission v. State of Madras [AIR 1966 SC 1457] in support of his submission that a document not admissible in evidence, though brought on record, has to be excluded from consideration. We do not have any dispute with the proposition of law so laid down in the abovesaid case. However, the present one is a case which calls for the correct position of law being made precise. Ordinarily, an objection to the admissibility of evidence should be taken when it is tendered and not subsequently. The objections as to admissibility of documents in evidence may be classified into two classes: (i) an objection that the document which is sought to be proved is itself inadmissible in evidence; and (ii) where the objection does not dispute the admissibility of the document in evidence but is directed towards the mode of proof alleging the same to be irregular or insufficient. In the first case, merely because a document has been marked as "an exhibit", an objection as to its admissibility is not excluded and is available to be raised even at a later stage or even in appeal or revision. In the latter case, the objection should be taken when the evidence is tendered and once the document has been admitted in evidence and marked as an exhibit, the objection that it should not have been admitted in evidence or that the mode adopted for proving the document is irregular cannot be allowed to be raised at any stage subsequent to the marking of the document as an exhibit. The latter proposition is a rule of fair play. The crucial test is whether an objection, if taken at the appropriate point of time, would have enabled the party tendering the evidence to cure the defect and resort to such mode of proof as would be regular. The omission to object becomes fatal because by his failure the party entitled to object allows the party tendering the evidence to act on an assumption that the opposite party is not serious about the mode of proof. On the other hand, a prompt objection does not prejudice the party tendering the evidence, for two reasons: firstly, it enables the court to apply its mind and pronounce its decision on the question of admissibility then and there; and secondly, in the event of finding of the court on the mode of proof sought to be adopted going against the party tendering the evidence, the opportunity of seeking indulgence of the court for permitting a regular mode or method of proof and thereby removing the objection raised by the opposite party, is available to the party leading the evidence. Such practice and procedure is fair to both CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 18 the parties. Out of the two types of objections, referred to hereinabove, in the latter case, failure to raise a prompt and timely objection amounts to waiver of the necessity for insisting on formal proof of a document, the document itself which is sought to be proved being admissible in evidence. In the first case, acquiescence would be no bar to raising the objection in a superior court."
(emphasis supplied)
25. Having noted as above therefore, the statements of account produced by the complainant were not objected to by the accused at the first instance and only when final arguments were being advanced were the same objected to. The said course of action was not available to the accused at that later stage.
26. Despite having noted as aforesaid, even if it is argued that whatever it may have been, Ex CW1/D1, being an electronic record and a secondary evidence, should have been accompanied with a certificate u/s 65B IEA in terms of the judgment of the Hon'ble Apex Court in Anvar P.V. v. P.K. Basheer and Others, (2014) 10 SCC 473, and in the case of it not having such certification, though the document may be considered inadmissible, but it shall otherwise remain relevant within the meaning of section 34 IEA already discussed in the preceding paras. And when looked at together with the other facts of the case and evidence on record, especially the handwritten statement of account Ex CW1/7, the case of the accused does not get strengthened even on this count as he has been unable to rebut the presumptions raised against him sans this document also. In the worst case scenario also, even if Ex CW1/D1 is discarded from consideration, Ex CW1/7, the handwritten ledger still remains and that also has remained inadequately challenged by the accused. In any case, this court has not solely relied on Ex CW1/D1 or Ex CW1/7 to infer the guilt of the accused. There are other presumptions against the accused that he has been unable CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 19 to rebut for probabalising a defence in his favour, and this statement of account is but one cog in the wheel of such circumstances against the accused. For the rest also, the accused has been not been able to plug the apparent gaps in his story and on that yardstick also, his defence has remained insufficient.
27. Other than the above, the cross examination of the accused did not raise any sort of a question mark on the narrative of the complainant. In fact, the complainant further explained that though he did not remember exactly the dates when the cheques in question were handed over to it, but he submitted that they were handed over some 3-4 days before the date of presentation marked therein. Further, he also stated that the accused no 3 filled the cheques in question in the presence of the accused no 2. He denied having received the balance amount due and also informed that in the one-year period, over which he had transacted with the accused persons, he used to receive all payments by cheque only. In this manner therefore, the complainant was able to hold its stand during the entire cross examination and the accused was unable to bring out any circumstances showing gap in the complainant's version to its own advantage. The presumptions raised against the accused were hence, not rebutted and the case of the accused stood one strand weaker.
28. The statements of both the accused and the firm were thereafter recorded u/s 313 CrPC wherein which the defence of the accused outlined thus far was essentially reiterated and both the accused stated that they have already paid the balance amounts outstanding to the complainant and that the cheques in question, which were given as security, were misused by the complainant. All of this has however remained as mere counter allegations without any cogent proof. In fact, the accused no 3, in his statement, as CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 20 opposed to his defence taken in the notice of accusation framed u/s 251 CrPC, did not say anything about any sort of collusion between accused no 2 and the complainant. The said inconsistency on such a vital aspect which may have been crucial to his case, was not reiterated by the accused no 3, which raises more questions about his previous statement itself, than answers it provides.
29. Thereafter, accused no 2 Manoj Kumar examined himself as a witness. The fulcrum of his evidence was based upon a document Ex DW1/A, which the accused claimed showed the amounts already paid to the complainant and counter signed by the complainant also. The accused had also alluded to it in his statement u/s 313 CrPC that he had receiving with him of the amounts paid to the complainant. However, upon cross examination by the complainant vis-à-vis this document Ex DW1/A, clouds of suspicion got raised over its authenticity itself which the accused wasn't able to clear or repel. First of all, the accused himself submitted in his cross examination that he used to maintain proper accounts of his business which started in 2007 till about 2011. In effect, if the accused had wanted, he could have produced such accounts for the business with the complainant also. This could have been useful in two ways. One, it could have given legitimacy to Ex DW1/A, a handwritten schedule of payments/receipts showing transactions with the complainant cushioning his argument that he had made all the payments to the complainant. And two, such an account statement, if produced, could have been used as against Ex CW1/7/Ex CW1/D1, the ledger statement filed by the complainant. However, the accused chose not to. But withholding of best evidence available with the accused raises an adverse inference against his own defence. More so, when the burden of proof to prove their defence was on CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 21 the accused persons themselves, they failed to discharge the same. As per section 103 of IEA, burden of proof means that a party has to prove an allegation before he is entitled to a judgment in his favour and that burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence, unless it is provided by any special law that the proof of that fact shall lie on any particular person. The provision of section 103 of IEA amplifies the general rule of section101 of IEA that the burden of proof lies on the person who asserts the affirmative of the facts in issue. Clearly, the accused persons have failed to come clean on this consideration also.
30. Coupled with the above, more damning was the admission of the accused himself that it was correct that he had not filed any record of sale and purchase transactions qua the complainant that the accused firm used to maintain for all the parties. In such a case, the claim of the accused that Ex DW1/A showed the payments made to the complainant does not get sufficient backing to become a trustworthy document in light of the fact that the complainant also has outrightly rejected it being a document pertaining to its transactions with the accused.
31. Further, the complainant sought to impeach the veracity of Ex DW1/A on the ground that it contained two phone numbers right at its bottom right corner with a signature in between. When the same were put to the accused, he seemed to be oblivious as to whom those numbers belonged to or who's those signatures were. The complainant used these replies by the accused to suggest that the accused had got hold of this document Ex DW1/A from some other third party with which the complainant had dealings and he was trying to purport that the said document pertains to the accused. The construction the complainant is trying to put forth that the CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 22 defence of the accused looks somewhat tardy since he himself is unaware regarding the phone numbers and the signatures on the Ex DW1/A is somewhat believable. If the accused claims that the said document is the one that shows that he had made payments to the complainant, surely it could not be kept so shabbily as to not even know its contents. The said phone numbers and the signatures are also quite prominently mentioned on Ex DW1/A so as not to escape anyone's sight. Therefore, for the accused not to know about it, when the document is being given in evidence by, he himself, indeed raises doubts as to the document itself. Moreover, the explanation offered by the complainant starts looking more plausible and does not help the accused to rebut the presumptions raised against him by using this seemingly dubious document Ex DW1/A.
32. Further, the complainant has also sought to belie the truthfulness of Ex DW1/A on one more count. He has submitted that as per him, the total outstanding amount to be paid by the complainant for the outstanding bills, mentioned in the complaint was Rs 7,52,979/-. Out of the said amount, the cheques in question pertained to Rs 6,25,000/-. However, if one were to add up the amounts mentioned in Ex DW1/A, the said figure comes to around Rs 9,96,000/-. Now there is no explanation offered by the accused as to the basis of this amount because neither the total amount, nor the amount represented by the cheques in question is equal to or about the same to the amount represented by Ex DW1/A. So how does this figure of Rs 9,96,000/- add up to the defence of the accused ? He has nowhere claimed this amount or stated that he owed this much to the complainant. He has neither agreed to the amount claimed by the complainant nor given any statement of account on his behalf also to say about the balance amount due against him. In such circumstances, the total amount as calculated from Ex DW1/A CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 23 looks to be fishy and reinforces the claim of the complainant that the said document has been procured by the accused from somewhere else and sought to be made use of in the present case. This court is in agreement with the complainant and holds that the document Ex DW1/A does not inspire confidence and has not been proved by the accused so as to accrue any sort of benefit in his favour.
33. Apart from the above, all suggestions put to the accused were denied and no cogent explanation, showing any sort of argument having conviction of evidence behind it was made by the accused which could have helped it to probabalise a defence in his favour. However, before concluding the discussion on the defence evidence led aspect, one argument of the accused deserves a mention, though only to be rejected. The accused has contended that in his cross examination, the complainant had asked it about two more cheques, one bearing no 645419 dated 07.12.2007 of Rs 70,000/- and the other bearing no 645422 dated 18.12.2007 for an amount of Rs 25,000/-, which were given to it by the accused and were duly encashed. The accused contends that the complainant did not disclose about these cheques in his complaint or evidence affidavit and hence, did not come to the court with clean hands or to put it differently, had things to hide. Admittedly, the complainant did not disclose about these two cheques earlier. But if there had been an intention to keep things under wrap, first of all, why would the complainant himself ask a question from the accused on these very two cheques? It could not be expected of a person trying something not to emerge, to put questions about the same. But the complainant did exactly so. By that logic, it cannot be said that the complainant meant to hide this transaction with respect to these two cheques encashed by it. The complainant in fact made a mention about these two cheques in his written submissions also CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 24 whilst advancing final arguments. Moreover, the case at hand pertains to the cheques that were dishonoured and all details with regards those have been given in all the documents filed by the complainant. Just the fact that he did not mention about some cheques which were encashed, does not in the opinion of the court go on to suggest that the complainant kept back material particulars of the case. There was no requirement in law to disclose about such cheques and they do not have any direct nexus with the case at hand about the dishonoured cheques. In such a case then, mentioning about such cheques for the first time in the cross examination of the accused and then in the written submissions does not in any which way colour the case of the complainant with any sort of doubt. Things remain the same.
34. In addition to the above, in a recent judgment of the Hon'ble Apex Court in Shree Daneshwari Traders v Sanjay Jain and Another 2019 SCC OnLine SC 1067, it was contended by the accused that since certain information regarding some facts of the case were not mentioned in the complaint and were explained only later in evidence by the complainant, the accused should be given the benefit of doubt. The trial court and the Hon'ble HC acquitted the accused. But the Hon'ble Apex Court reversed the acquittal and went on to convict the accused by noting as follows :
"19. In the present case, by examining himself as PW-1, the complainant has discharged the initial burden cast upon him that the cheques were issued for the rice bags purchased on credit. With the examination of PW-1, the statutory presumption under Section 139 of the Act arises that the cheques were issued by the respondent-accused for the discharge of any debt or other liability in whole or in part. The courts below disbelieved the evidence of the complainant on the ground that there are no averments in the complaint that the commodities were sold for cash and that the rice bags were sold on credit and the cheques were issued for the goods sold on credit. Though the complaint contains no specific averments that the cheques were issued for the purchase made on credit, in his evidence, PW-1 clearly stated that the CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 25 cheques were issued for the commodities purchased on credit. The courts below erred in brushing aside the evidence of PW-1 on the ground that there were no averments in the complaint as to the purchases made by cash and purchase. The courts below also erred in not raising the statutory presumption under Section 139 of the Act that the complainant received the cheques to discharge the debt or other liability in whole or in part."
(emphasis supplied)
35. In view of the above also, the contention of the accused that that the fact of encashment of the other two cheques was not mentioned in the complaint and was only later put to the accused, does not in any manner takeaway the merits of the case of the complainant. In this way, the accused was able to make out a credible defence in his favour during the evidence ;ed in his defence also.
36. Lastly, attention may be adverted to the three judgments the accused has placed reliance upon. The first one, M/s Rajhans Cloth House v Annappa Fakira Manjalkar & Ors, Bombay HC (Cr Appeal No 976 of 2002) does not make out a case in the accused's favour in view of C.C. Alavi Haji (supra) and the discussion already made in para no. 18 above. Moreover, the said case is also distinguishable on facts in as much as in the cited case, the original legal notice or the postal acknowledgment card were not produced before the court, as against the present case where they are filed on record being Ex CW1/5 and Ex CW1/6. Moreover, the addresses mentioned by the accused no 1 and accused no 3 in their statements u/s 313 CrPC and bail bonds were also the same at which the legal demand notice was sent. In view of this, the case being relied upon does not favour the accused.
37. Secondly, the accused has relied upon the judgment Ramesh Chandra Baregama v Ramesh Chandra JoshI, Rajasthan HC at CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 26 Jodhpur (Cr Appeal No 254/2008) to contend that since the legal demand notice was not signed, it amounted to an invalid legal demand notice and thus, cause of action did not arise in first place against the accused. This argument has also got to be rejected. First of all, in terms of the judgment of the Hon'ble Apex Court in C.C. Alavi Haji (supra), already noted above, there is presumption of service of a valid legal demand notice on the accused which may be rebutted. However, the same has not been so rebutted by the accused. In fact, the complainant has proved the same and that has already been noted in the foregoing discussion. Considering the same, the question of non-signing does not arise when the presumption of service of valid legal demand notice stands unrebutted. Secondly, nowhere has it been provided in the entire NI Act that the legal demand notice purported to be sent to the accused has also got to be signed. The intendment behind sending of such notice is only to inform the accused of the dishonour so that if he may so please, make payment within 15 days of its receipt. The condition of signing upon the said notice is neither explicitly stated nor implied. Section 94 of the NI Act may be noted in this regard :
"Section 94. Mode in which notice may be given.-- Notice of dishonour may be given to a duly authorized agent of the person to whom it is required to be given, or, where he has died, to his legal representative, or, where he has been declared an insolvent, to his assignee; may be oral or written; may, if written, be sent by post; and may be in any form; but it must inform the party to whom it is given, either in express terms or by reasonable intendment that the instrument has been dishonoured, and in what way, and that he will be held liable thereon; and it must be given within a reasonable time after dishonour, at the place of business or (in case such party has no place of business) at the residence of the party for whom it is intended. If the notice is duly directed and sent by post and miscarries, such miscarriage does not render the notice invalid".
As can be noted in the above provision, the emphasis is only on informing the party to whom the notice is sent about the fact of CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 27 dishonour. So much so, there is not even any specific form or manner provided that a legal demand notice must have. It is sufficient if it informs the recipient of the details of the cheque dishonour, and nothing more. In such a scenario, reading into the provision a requirement of signatures will be pettifogging to say the least and like legislating into the section something which is not there, and the same is completely beyond the domain of this court. Moreover, the Hon'ble Apex Court in Sill Import v. Exim Aides, reported in 1999 Cr. LI 2276: f1999(2) All India Criminal LR (S.C) 432 has gone on to the extent of holding that legal demand notice can also be sent via electronic modes. If that be the case, then obviously the requirement of signing the same cannot be considered mandatory. With these in mind, this court is not persuaded to agree with the judgment the accused has placed reliance upon. Instead, the judgments of P&H HC in Raj Kumar Batra vs Urmila Devi (CRM-A-629-MA-2014(O&M)) and that of Bombay HC in Vardhman Steel v Sai Engineering (Crl Appeal no 263 of 2019) (2019 NearLaw (BombayHC Aurangabad) Online 2221 lay down on the same lines as has been discussed above. In such a scenario again, the judgment relied upon by the accused does not further its case.
38. Finally, the accused has relied upon M/s Khushal Chand Jagdish Rai v Hakam Singh, P&H HC (RSA 439 of 1986 (O&M)) to submit that the account statements produced by the complainant Ex CW1/7/ Ex CW1/D1 can not be relied upon. The said issue has already been dealt with in para no. 21 above and this court has itself noted that account statements cannot form the sole basis of conviction of the accused but are nevertheless relevant and have to be read in the overall context of the facts and circumstances of the case. Moreover, the case cited was a recovery suit and is distinguishable on facts. Therefore, this judgment also does not CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others 28 help the accused.
39. As can be seen from the foregoing discussion, the accused persons have remained woefully short in rebutting the presumptions raised against them at any of the four stages of the case. There was nothing that came out in the cross examination of complainant or in the evidence of the accused himself which would probabalise the defence raised by them or falsify the case of the complainant.
40. In view of the aforesaid reasons, this court finds that the accused persons have not been able to prove any probable defence and have failed to rebut the presumptions raised u/s 118/139 of the NI Act.
41. The complainant has been able to prove that the cheques in question were issued in discharge of a valid legally recoverable liability owed to the complainant with the aid of presumptions of law raised in his favour.
42. The accused M/s USA Arts & Ors and its partners Manoj Kumar and Uma Shankar Aggarwal are hence Convicted for the offence punishable U/s. 138 of the Negotiable Instruments Act in respect of the cheques in question. Digitally signed GAURAV by GAURAV SHARMA (Announced in open SHARMA Date: 2020.02.12 10:58:36 +0530 Court on 11.02.2020 ) (Gaurav Sharma) MM/NI Act-03/Central.
11.02.2020 Judge Code: DL00855 CC No. 534242/2018 Hari Om Sharma Vs. Vs. M/S U.S.A Arts & Others