Delhi District Court
M/S Novista International vs Lata Ojha on 27 September, 2023
DLST020103902020
Registered on : 16.09.2020
Presented on : 17.09.2020
Decided on : 27.09.2023
Decision : Convicted
IN THE COURT OF
METROPOLITAN MAGISTRATE (NI ACT)
AT SOUTH, SAKET DISTRICT COURT
(PRESIDED OVER BY MR.KAWAL SINGH)
CT Cases/5308/2020
CNR NO.DLST020103902020
JUDGMENT
M/S NOVISTA INTERNATIONAL through its Proprietor Mr.Varun Aggarwal H19, UGF, Arjun Nagar, Safdarjung Enclave, New Delhi.
..............Complainant VERSUS Lata Ojha wife of Mr.Jagat Narayan Ojha, Proprietor of M/s Prashidh Enterprises, Kh. No.45/17/3, Ground Floor/First Floor, Digitally signed Near SBI Bank, Badli, Delhi. KAWAL by KAWAL SINGH SINGH Date:
2023.09.27 15:27:30 +0530 CT Cases 5308/2020 M/s Novista International v. Lata Ojha Page No.1 of 19 Also at 128, Kingsway Camp, Gali No.1, Village Dhaka, Delhi.
son of Mr.Vijay Singh r/o F4/1, 1B, First Floor, Malviya Nagar, New Delhi.
And C25, Hardev Nagar, Gali No.2, 3rd Floor, Buarai, Jharoda, New Delhi.
.............. Accused Offence punishable under section 138 of Negotiable Instruments Act, 1881 STATEMENT IN BRIEF OF THE DECISION WITH REASONS FACTUAL MATRIX
1. The instant proceedings have originated out of a complaint preferred by Mr.Varun Agarwal (proprietor of M/s Novista International) against Ms.Lata Ojha (accused/proprietor of M/s Prashidh Enterprises) for the offence under section 138, Negotiable Instruments Act, 1881 (hereinafter referred to as "NI Act").
2. A succinct account of the facts in the complaint is that, the accused is the proprietor of M/s Prashidh Enterprises manufacturing the socks and to look upon the day to day affairs of the firm. That the accused had a business dealing with the KAWAL Digitally signed by KAWAL SINGH SINGH Date: 2023.09.27 15:27:39 +0530 CT Cases 5308/2020 M/s Novista International v. Lata Ojha Page No.2 of 19 complainant and upon the request of accused, the complainant supplied goods to accused vide invoices dated 23.12.2019, 26.12.2019 & 16.01.2020 for total amount of Rs.1,15,123/.
That in view of the aforesaid liability, accused had issued cheques bearing number 607391 dated 21.12.2019 for sum of Rs.31,020/, 607404 dated 19.03.2020 for a sum of Rs.40,000/ & 607405 dated 28.03.2020 for a sum of Rs.44,103/ drawn on Yes Bank, Tagor Park, New Delhi (hereinafter referred to as the "cheques in question").
3. When the complainant presented the cheques in question for encashment, the same were returned unpaid upon presentation for the reason 'cheque is undated/post dated/out dated & bank/branch block' & 'funds insufficient' vide return memo dated 12.03.2020 and 12.06.2020 respectively. A legal demand notice dated 18.07.2020 was sent by the complainant to the accused in this regard, but to no avail as the accused failed to pay the cheques amount within the prescribed period. Hence, the present complaint under Section 138 of NI Act was filed.
APPEARANCE OF ACCUSED AND TRIAL
4. The accused entered appearance in response to summons on Digitally signed KAWAL by KAWAL SINGH SINGH 2023.09.27 Date:
15:27:49 +0530 CT Cases 5308/2020 M/s Novista International v. Lata Ojha Page No.3 of 19 18.05.2022. Notice of accusation under Section 251, Code of Criminal Procedure, 1973 (hereinafter referred to as "Cr.P.C.") was served upon accused to which she pleaded not guilty and claimed trial. Thus, her plea of defence was recorded. The accused did not know whether the signatures on the cheques in question are of her or not. Accused further deposed that her husband used to look after the business of proprietorship firm, who had expired on 19.08.2022. Accused stated that she did not know how and when these cheques were issued to the complainant.
5. The complainant was crossexamined after allowing the application under Section 145 (2) of NI Act. Further, statement of accused under Section 313 Cr.P.C. was recorded wherein the incriminating evidence were denied by her. The accused deposed that she did not know about the transaction as all the affairs of M/s Prashidh Enterprises were taking care of by her late husband and she was the proprietor of it on papers only.
EVIDENCE LED BY THE COMPLAINANT
6. To support his case, the complainant examined himself as complainant witness CW1 and tendered his evidence by way of affidavit. Digitally signed by KAWAL KAWAL SINGH SINGH Date:
2023.09.27 15:27:58 +0530 CT Cases 5308/2020 M/s Novista International v. Lata Ojha Page No.4 of 19
7. Documentary evidence led by the complainant:
Ex.CW1/A : Evidence by way of affidavit. Ex.CW1/1 : GST Invoice dated 23.12.2019 Ex.CW1/2 : GST Invoice dated 26.12.2019 Ex.CW1/3 : GST Invoice dated 16.01.2020 Ex.CW1/4 : Cheque in question dated 21.12.2019 Ex.CW1/5 : Cheque in question dated 19.03.2020 Ex.CW1/6 : Cheque in question dated 28.03.2020 Ex.CW1/7 : Return memo dated 12.03.2020 Ex.CW1/8 : Return memo dated 12.06.2020 Ex.CW1/9 : Return memo dated 12.06.2020 Ex.CW1/10 : Legal Notice dated 18.07.2020 Ex.CW1/11 : Postal Receipt Ex.CW1/12 : Annexure C12 Ex.CW1/13 : Annexure C13 Ex.CW1/14 : Certificate u/s 65B I E Act.
Ex.CW1/15 : Ledger Account
Ex.CW1/16 : Detailed Statement
EVIDENCE LED BY THE ACCUSED
8. On the other hand, the accused has examined herself as defence witness to support her case as DW1 and had tendered her Digitally signed KAWAL by KAWAL SINGH SINGH 15:28:08 Date: 2023.09.27 +0530 CT Cases 5308/2020 M/s Novista International v. Lata Ojha Page No.5 of 19 evidence. Accused relied upon the documents i.e. account statement Ex.DW1/1 (colly) & copy of ledger Mark DW1/2 during her examination. Past that, the matter was fixed for final arguments.
ARGUMENTS
9. Counsel for the complainant has argued that accused is the proprietor of M/s Novista International, which had a business with the complainant for which the complainant supplied various goods to the accused against which invoices were also generated. Counsel for the complainant had argued that in order to pay for the aforesaid goods supplied, the accused issued cheques in question Ex.CW1/4, Ex.CW1/5 and Ex.CW1/6 which were presented as requested by the accused. Counsel for the complainant submitted that the aforementioned cheques were dishonoured, as shown in the return memo Ex.Cw1/7, Ex.CW1/8 and Ex.CW1/9. Counsel for the complainant further argued that the accused had not disputed her signatures on the cheques in question, and the legal demand notice was also served upon her.
10. In view of above all the requirements of section 138 NI Act of being met with in the present case. Hence, the accused be KAWAL Digitally signed by KAWAL SINGH CT Cases 5308/2020 SINGH Date: 2023.09.27 15:28:19 +0530 M/s Novista International v. Lata Ojha Page No.6 of 19 convicted.
11. Counsel for the accused has, on the other side argued that the complainant has filed a false and fabricated case against the accused. Counsel for the accused has stated that the cheques in question were not issued to discharge any legal liability due upon the accused towards the complainant, as the husband of the accused was taking care of the business of the proprietorship had returned goods of value Rs.47,123/ and had already paid Rs.50,000/ to the complainant. Counsel for the accused contends that the accused has no knowledge of the purpose for which the cheques in question were given to the complainant but the same were not issued for payment of invoices as alleged by the complainant. Hence, the present case deserves to be dismissed.
POINTS OF DETERMINATION
12. The following points of determination arise in the present case.
1. Whether the complainant has been successful in raising the presumptions under Section 118 read with Section 139 of NI Act. Digitally signed KAWAL by KAWAL SINGH SINGH Date: 2023.09.27 15:28:29 +0530 CT Cases 5308/2020 M/s Novista International v. Lata Ojha Page No.7 of 19
2. If yes, whether the accused has been successful in raising a probable defence?
THE LAW APPLICABLE
13. On perusal of record, and after giving my thoughtful consideration to the final submission of the parties. This court would like to narrate the legal principles relevant for adjudication of complaint under section 138 of NI act briefly, before appreciating the evidence led on behalf of both the parties.
14. The Hon'ble Supreme Court of India in Basalingappa v.
Mudibasappa, 2020 SCC OnLine SC 491 at page 422 held as follows:
(i) 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.
(ii) 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.
(iii) To rebut the presumption, it is open for the accused to rely on evidence led by her or 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 KAWAL Digitally signed by KAWAL SINGH Date: 2023.09.27 CT Cases 5308/2020 SINGH 15:28:42 +0530 M/s Novista International v. Lata Ojha Page No.8 of 19 circumstances upon which they rely.
(iv) 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.
15. The threejudge bench of the Hon'ble Supreme Court in Rangappa v. S. Mohan, (2010) 11 SCC 441 has ruled that existence of liability itself is a presumption of law. It held as under:
"26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability."
16. The Hon'ble Supreme Court of India in C.C. Alavi Haji v.
Palapetty Muhammed, (2007) 3 SCC (Cri) 236 at page 565 held as follows:
"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 GC Act and Section 114 of the Evidence Act."
FINDINGS AND REASONING POINT OF DETERMINATION NO. 1:
17. It is not in dispute that the cheques in question were drawn on account maintained by the proprietorship of the accused. The KAWAL Digitally signed by KAWAL SINGH CT Cases 5308/2020 SINGH Date: 2023.09.27 15:28:51 +0530 M/s Novista International v. Lata Ojha Page No.9 of 19 signatures on the cheques in question are not disputed. The dishonourment of the cheque in question for the reason "Cheque outdated/post dated/ undated & Bank/Branch blocked"
and "Funds insufficient" can be seen from the return memo Ex.CW1/7, Ex.CW1/8 and Ex.CW1/9, which has not been disputed by the accused. The above mentioned return memo being signed and stamped by the concerned bank, the presumption of dishonour under Section 146, NI Act arises. The receipt of legal demand notice Ex.CW1/10 has not been admitted by the accused. It is pertinent to note that the second address mentioned on Ex.CW1/10 has been admitted by the accused as her old address while framing of notice under section251 Cr.PC. Legal demand notice being properly addressed and sent, gives way to the presumption under section 114 of Indian Evidence Act and section 27 of the General Clauses Act that the legal notice has been received by the accused in light of the pronouncement CC Alavi (supra). No evidence was led to rebut the aforesaid presumption on behalf of the accused save mere denial of the accused to prove her defence of not residing on the said address when the same was delivered. Also, it is nobody's case that the accused tendered the amount entailed in the cheque in question upon entering appearance before this court in response to the summons issued KAWAL Digitally signed by KAWAL SINGH Date: 2023.09.27 SINGH 15:29:01 +0530 CT Cases 5308/2020 M/s Novista International v. Lata Ojha Page No.10 of 19 in the instant case. The plea of the accused regarding non receipt of legal notice is accordingly rejected as being inconsequential.
18. The ingredients necessary for raising the statutory presumptions being fulfilled, the presumptions under sections 139 and 118, NI Act that the cheques in question were issued for a legally recoverable debt/liability stands activated.
19. Accordingly, the point of determination no.1 is decided in the affirmative.
POINT OF DETERMINATION NO. 2:
20. Now it is to be examined whether the accused has been able to rebut the statutory presumptions.
21. The case of the complainant is that the cheques in question were issued for making the payment of goods delivered by the complainant to the accused, as shown in the invoices for a sum of Rs.1,15,123/. The complainant has placed on record return memo of the dishonoured cheques Ex.CW1/7, Ex.CW1/8, Ex.CW1/9 and legal demand notice Ex.CW1/10 along with the tracking report of the same. The complainant has also relied Digitally signed KAWAL by KAWAL SINGH SINGH Date: 2023.09.27 15:29:10 +0530 CT Cases 5308/2020 M/s Novista International v. Lata Ojha Page No.11 of 19 upon invoices of the goods delivered Ex.CW1/1, Ex.CW1/2 and Ex.CW1/3 to support its case.
22.The authorised representative (AR) of the complainant was cross examined by the counsel of the accused. Therein, it had emerged that the complainant was doing business with the proprietorship firm of the accused since 2019 and all the dealings were done with the husband of the accused. The AR of the complainant had filed the ledger account Ex.CW1/15 and bank account statement Ex.CW1/16. The AR of the complainant had stated that after issuance of the legal demand notice the accused had paid Rs.18,000/ and after taking into account this payment, only Rs.97,123/ is due upon the accused. The AR of the complainant had denied suggestion that the husband of the accused had returned goods of sum Rs.47,411.60/ and the same was received by his employee namely Mr. Khush aka Shiv.
23. To lead her evidence, the accused entered into the witness box and got herself examined. From her examination, it had emerged that the accused had no knowledge of the present transactions as her husband was handling the business of her proprietorship. The accused had relied upon her bank account Digitally signed KAWAL by KAWAL SINGH SINGH Date: 2023.09.27 15:29:20 +0530 CT Cases 5308/2020 M/s Novista International v. Lata Ojha Page No.12 of 19 statement Ex.DW1/1 (colly) and copy of ledger Mark DW1/2.
24. The primary defence of the accused is that she does not know the complainant and had not done any business related transactions with the complainant since it was her husband who was taking care of the entire business of the proprietorship.
25. It is a trite law that the liability of a proprietorship is the liability of the proprietor as they are the same entity. Hence, proprietor cannot evade the liability of its proprietorship by saying that the business of the proprietorship was not looked after by him/her but someone else on his/her behalf. Therefore, this defence of the accused is rejected in view of the abovementioned settled position of law.
26. Another defence taken by the accused is that she does not owe the amount of the cheques in question against the invoices filed by the complainant therefore, there is no legal debt or liability upon the accused towards the complainant. The counsel for the accused had argued that the husband of the accused had returned goods for a sum of Rs.47,173/ as shown in Mark A (colly) and paid Rs.50,000/ to the complainant. The counsel for the accused had further argued that the accused had already KAWAL Digitally signed by KAWAL SINGH SINGH Date: 2023.09.27 15:29:31 +0530 CT Cases 5308/2020 M/s Novista International v. Lata Ojha Page No.13 of 19 made the payment for cheque Ex.CW1/4 before filing of the present case and the same is also shown in Ex.DW1/1 (colly).
27.Perusal of Ex.DW1/1 (colly) clearly shows that payment of Rs.31,020/ was made to the payment and the same can be corroborated from the bank account Ex.CW1/16 of the complainant. The AR of the complainant had explained this payment made by accused towards the previous balance due upon the accused. It is pertinent to mention here that the AR of the complainant himself in his cross examination had admitted that the cheques in question were issued only for the payment of invoices Ex.CW1/1, Ex.CW1/2 and Ex.CW1/3 and that no other amount is due upon the accused. Further the complainant had not mentioned receiving any such amount either in his complaint or in any other documents. The cheque Ex.CW1/4 is dated 21.12.2020 and the payment of cheque amount is credited in the bank account of the complainant on 04.01.2020 which raises suspicion upon the case of the complainant qua the aforesaid cheque bearing number 607391 dated 12.12.2019.
28. And as far as the other two cheques are concerned, the accused had stated that her husband had returned the goods of Rs. 47,411.60 as shown in Mark A (colly) which was duly received Digitally signed KAWAL by KAWAL SINGH SINGH Date: 2023.09.27 15:29:41 +0530 CT Cases 5308/2020 M/s Novista International v. Lata Ojha Page No.14 of 19 by the employee of the complainant namely Mr. Shiv. The counsel for the accused also argued that the fact that aforementioned goods were returned to the complainant is also corroborated from the ledger Mark DW1/2 of the proprietorship of the accused.
29. Per contra, the AR of the complainant has denied the suggestion in his cross examination that the accused had returned the goods and the same were received by his employee Mr.Shiv. The counsel for the complainant also questioned the authenticity of Mark A (colly) and Mark DW1/2 as they are not in original and the same are fabricated documents, filed by the accused to support her false story.
30. It is a settled law that, in disputed written documents, it is necessary to prove the contents of the document through the evidence of persons or witnesses who have authored the documents or parties to it who are aware of the facts personally stated therein.
31. Here, the burden is upon the accused to prove her defence. No explanation has been given by the accused for not producing Mark A (colly) and Mark DW1/2 in original. The accused had KAWAL Digitally signed by KAWAL SINGH CT Cases 5308/2020 SINGH Date: 2023.09.27 15:29:51 +0530 M/s Novista International v. Lata Ojha Page No.15 of 19 also denied that in her testimony that she signed Mark A (colly) and had not identified the signatures upon it, done on behalf of the proprietorship of the accused. Further, the accused had also not examined the employee of the complainant namely Mr. Shiv to prove the document. A careful reading of Mark DW1/2 shows that few highlighted entries have been manipulated, which further weakens the authenticity of these documents relied upon by the accused. Neither the accused has shown in Ex. DW1/1 (colly) nor she had led any credible evidence to prove that payment of Rs 30,000/ through NEFT and Rs. 20,000/ through cheques were actually made to the complainant. Hence, the defence that she had returned goods and had made payment of Rs.50,000/ to the accused towards cheques Ex.CW1/5 as well as Ex.CW1/6 is rejected as the same stands not proved.
32. The last line of defence of the accused is that the complainant had misused the cheques in question as the same were not issued to discharge the liability as alleged by the complainant. The counsel for the accused had pointed out that the complainant in Ex.CW1/A had stated that the cheques in question were issued by the accused when the AR of the complainant visited the office of the accused, while in his cross Digitally signed KAWAL by KAWAL SINGH SINGH 15:30:00 +0530 Date: 2023.09.27 CT Cases 5308/2020 M/s Novista International v. Lata Ojha Page No.16 of 19 examination the AR of the complainant stated that the same were given for security purpose.
33. It has been held by Hon'ble Supreme court in the case of Rohitbhai J Patel v. The State of Gujarat, criminal appeal no. 508/19 that minor inconsistencies do not lead to the rebuttal of presumption raised under Section 118 (a) read with Section 139 of NI Act. Further, in the present case accused had neither disclosed the purpose or explained how the complainant got hold of the cheques in question. Even if for the sake for the arguments, it is believed that the cheques in were not issued for legal liability as alleged by the complainant then why did the accused not take any legal action for getting the cheques in question back, after having the knowledge of dishonourment of the cheques in question. Accused has not filed any complaint either with the police or with her bank to report the misuse of the cheques in question.
34. In view of above, the contention of the accused qua absence of any legal liability or misuse of the cheques in question, in absence of any legal action or communication seeking return of the cheques bearing number 607404 & 607405, the defence of the accused is only by way of mere/bare denial and does not Digitally signed KAWAL by KAWAL SINGH SINGH Date: 2023.09.27 15:30:10 +0530 CT Cases 5308/2020 M/s Novista International v. Lata Ojha Page No.17 of 19 inspire confidence from the stand point of a reasonable or prudent man.
35. On the other hand, this court finds that the complainant has proved his version by way of consistent and reliable oral testimony as well as documentary evidence qua the cheques Ex.CW1/5 and Ex.CW1/6 only.
36. Accordingly, in light of the aforesaid discussion, the point of determination no.2 is decided in the negative qua the cheques bearing number 607404 and 607405 and is decided in affirmative qua the cheque bearing number 607391.
VERDICT
37. In view of the foregoing discussion, this court holds that complainant has established his case beyond reasonable doubt by proving all the ingredients under Section 138 NI Act by leading cogent evidence and the accused has failed to raise a probable defence.
38. Accordingly, accused Lata Ojha is hereby convicted for offence punishable under Section 138 NI Act qua the Digitally signed by KAWAL KAWAL Date:
SINGH SINGH 15:30:21 2023.09.27 +0530 CT Cases 5308/2020 M/s Novista International v. Lata Ojha Page No.18 of 19 cheques bearing number 607404 and 607405 only and is acquitted qua cheque bearing number 607391 in the present case.
39. Let the convict be heard separately on quantum of sentence.
Copy of this judgment be given free of cost to the convict. Announced in the Open Court on this 27th September 2023. This Judgment consists of 19 signed pages.
Digitally signedKAWAL by KAWAL SINGH SINGH 2023.09.27 Date:
15:30:29 +0530 (KAWAL SINGH) Metropolitan Magistrate03 (South), NI Act Saket/New Delhi/27.09.2023 CT Cases 5308/2020 M/s Novista International v. Lata Ojha Page No.19 of 19