Delhi District Court
The State vs Bratindra Nath Banerjee Air 2001 Sc on 3 June, 2010
IN THE COURT OF SH. J. R. ARYAN,
ADDITIONAL SESSIONS JUDGE; NEW DELHI
Date of Institution : 24.09.2009
Date of judgment reserved on : 28.04.2010
Date of decision : 03.06.2010
Criminal Appeal No. 45/2009
IN THE MATTER OF :
Harish Malhotra @ Love Malhotra
S/o Late Sh. S. P. Malhotra
F-7, Lajpat Nagar-III,
New Delhi-110 024. ... Applleant
Versus
1. The STATE
2. Vijay Gera
S/o Sh. Sunder Dass
Shop No. 5,
Amrit Kaur Market,
Paharganj, New Delhi. ..... Respondents
JUDGMENT:
Appellant - accused Harish Singh @ Love Kumar Malhotra has been convicted u/s. 138 of the N.I. Act in a complaint case no. CC 266/2009 which had been instituted on 8.1.1998 and conviction judgment has been passed on 28.8.2009. Accused has been imposed a sentence of one year imprisonment RI and has been directed to pay Rs. 22,57,000/- as a compensation to t he complainant. Conviction is in respect of cheque dt. 1.8.1997 issued by accused for Rs. 13,12,200/- in favour of complainant Shri Vijay Ghera - respondent in the present appeal.
The point raised and consequently arising for determination in the present appeal is whether ' the cheque was drawn towards discharge of a legally recoverable debt or liability'. The case of the complainant as set out in the complaint filed before Ld. MM is as under : -
That complainant Shri Vijay Ghera is a export promotion agent. He received an order for supply of 62500 metric tones of non basmati rice for shipment to Masco from M/s. Premier Vinal Firm Ltd., New Delhi and this order dt. 2.5.1996 is Ex. CW-1/A was proved before the court. Complainant found it difficult to execute this order from his own resources and came in contact of accused who offered to get the supplier for that quantity of rice. An agreement dt. 25.9.96 was executed between the complainant and accused Harish Singh whereby it was stipulated that accused Harish Singh will execute the letter of intend / order and will arrange supply of rice to Masco through M/s. Asian Capital Services and will pay 1/3 of the total commission to Vijay Ghera out of commission which Harish Singh will receive from the buyer as well as seller and the balance 2/3 of the commission shall be retain by accused.
It is averred in complaint that accused made arrangement of supply of rice through M/s. Asian Capital Services and the first consignment of the order i.e., 12,500 metric tone was sent & total commission of Rs. 39,36,600/- was worked out. Though the shipment was completed in the month of August 1996, accused failed to pay share of complainant'scommission, which commission had been received by accused from M/s. Asian Capital Services (P) Ltd., New Delhi.
Accused kept avoiding complainant but then finally with intervention of friends , the matter was settled and on 1.8.1997 accused issued a cheque in question drawn on Punjab & Sind Bank, Janpath, New Delhi and executed an undertaking assuring the honour of the cheque.Cheque was present by complainant for collection on 15.11.1997 but it was returned unpaid with remarks " funds insufficient". A demand notice in terms of section 138(b) of the Act was issued, sent through regd. post as well through UPC and it was duly served. Accused did not pay amount of the bounced cheque and accordingly committed offence and was punishable.
Trial commenced with notice of offence u/s. 251 CrPC given to accused. Accused claimed trial by pleading not guilty. Complainant Vijay Ghera examined himself by filing his affidavit. He was cross examined. Defence pleaded in cross examination of complainant was that since accused had not been able to receive commission from M/s. Asian Capital Services (P) Ltd., New Delhi, he could not have paid any amount to the complainant and no liability could be said to have arisen and accrued against accused in the given situation.A bank official and executive officer from Bank of Punjab Ltd., Gurdwara Road, Karol Bagh, New Delhi was examined on behalf of complainant to prove the fact that cheque for Rs. 13,12,200/- had been returned dishonoured due to "insufficient fund".
Accused after his examination u/s. 313 CrPC examined some defence witnesses as well examined himself as DW-4. Accused in his defence evidence states on oath that M/s. Asian Capital Services (P) Ltd., New Delhi, through its MD, S. K. Dixit issued two cheques, one bearing no. 409066 dt. 20.5.1996 for Rs. 21,25,000/- and drawn in favour of Malhotra Associates and another cheque no. 409067 dt. 20.5.96 for Rs. 17,00,000/- drawn in favour of Harish Singh, both cheques towards commission for export of rice deal of the present case were returned unpaid. A criminal case u/s. 420 and 406 IPC was got registered by accused against Sh. S. K. Dixit and others. Accused in his deposition placed on record photocopy of those cheques along with bank return memos and finally he deposed that amount of those cheques did not come to the accused from Sh. S. K. Dixit. Accused in his evidence further stated on oath that the cheque in question had been obtained by the complainant by way of coersion and force when accused was taken to the shop of the complainant where shutter of the shop was rolled down. He further stated on oath that a police complaint of that incident of complainant having obtained cheques from accused by force and threat was lodged on 2.7.1997. He further deposed that in the criminal case filed against accused S. K. Dixit, court had already summoned accused S. K. Dixit. Accused was then cross examined by counsel for the complainant.
After examining and analyzing the evidence from both sides and after appreciating both sides arguments and contention, Ld. MM held and found in para 19 of the conviction judgment that accused failed to prove that cheque was not issued in discharge of a legally and enforceable liability. Presumption u/s. 118 and 139 of the N. I. Act had not been rebutted by accused. In light of evidence of complainant supported by other material it stood proved that cheque Ex. PW-1/B had been issued in discharge of a liability in favour of the complainant and since it bounced and money had not been paid despite demand notice served upon the accused, accused was found to have committed the offence. As regards plea of accused before Ld. MM that he had not been able to receive any money from S. K. Dixit in the transaction and thereby no occasion arose to pay part of the commission to the complainant, Ld. MM held that no material was placed to suggest that payment of commission by accused to the complainant was contingent on the encashment of cheque received from S. K. Dixit in favour of complainant. Relying upon the agreement between the complainant and accused as Ex. CW-1/B it was held and found that the right of the complainant to receive 1/3 commission was absolute and the agreement did not incorporate that commission to the complainant was payable only when accused received the commission in this appeal.
The above findings recorded by Ld. MM has been challenged in this appeal. Ld. Counsel Sh. Nitender Sharma argued that payment of the share of the commission to the complainant by accused was dependent on accused receiving the commission in the deal. There was enough material to suggest that proposition and since accused had not been able to receive any money from M/s. Asian Capital Services (P) Ltd., New Delhi, liability to pay as share to the complainant did not arise. The cheque in question was obtained by force and that was now supported by the material that accused in the present case filed a criminal case against complainant of this case concerning the cheque in question and complainant Vijay Ghera and others had already been summoned for criminal offence which was pending inquiry / trial before Ld. MM at Tis Hazari Courts. Counsel further argued that two cheques issued by M/s. Asian Capital Services (P) Ltd., New Delhi, towards commission in this deal in favour of accused Harish Singh and Malhotra Associates, both the cheques bounced and a criminal case u/s. 420/406 IPC had been registered by the police as a F.I.R. against Asian Capital Service Ltd., & S. K. Dixit & Ors. When accused had not been able to receive any money out of the deal wherein complainant was to share commission, prosecution for the offence of bouncing of the cheque was uncalled for as there was no exiting debt or liability and conviction was illegal.
On the other hand counsel Sh. H. O. Bhaskar for the respondent - complainant argued that cheque was issued towards discharge of a liability of the payment of the commission in favour of complainant and there was a presumption u/s. 139 of the N. I. Act to presume that cheque had been drawn in discharge of a debt or a liability, the presumption could not be said to have been rebutted in the absence of evidence to substantiate the defence . Ld. MM rightly held and arrived on a conclusion that there was no evidence to substantiate the plea of accused that cheque was obtained from him by force. Once the cheque was drawn by accused in favour of complainant and simultaneously accused executed an undertaking that cheque was being issued acknowledging a liability and assuring complainant that it would be honoured then the bouncing of the cheque and the non payment of the money of the cheque despite demand notice constitute offence and accused was rightly convicted and the appeal deserves to be dismissed.
Ld. Counsel submitted that court has to consider Supreme Court judgment in Hiten P. Dalal vs. Bratindra Nath Banerjee AIR 2001 SC 3897 case where elaborate discussion on the provision of section 139 of the N. I. Act has been made. Similarly in K. Bhaskaran case AIR 1999 SC 3762 , it has been held that where signature on the cheque were admitted by the drawee of the cheque, a presumption could be inferred that the cheque was drawn for consideration on the date which the cheque bears and court has to presume that the holder of the cheque received it for discharge of debt or liability. Burden would be on accused to rebut the said presumption. Relying upon another judgment referring to Dhanwanti Rai Balwant Rai Desai Vs. State of Maharasthra AIR 1964 SC 575, counsel argued that presumption was to be rebutted by proof and not by a bare explanation which was merely plausible.
Counsel argued that various complaints lodged by accused concerning the transaction of this case were only filed at a very late stage only to cover up a false plea of non existence of liability and no reliance can be placed on such pleas.
Finally counsel submitted that conviction judgment was liable to be sustained and up-held.
Having gone through the trial court record file and having heard contention from both sides, complaint in the present case appears to have been prosecute predominently on a legally available presumption u/s. 139 of the N. I. Act. The law is settled as regards presumption under this provision. In Hiten P. Dalal Vs. Bratindra Nath Banerjee , 2001 ,6,(SCC) 16, it has been held that 'the presumption under section section 139 of the Negotiable Instruments Act is a presumption of law and a presumption of law has to be distinguished from presumption of fact under section 114 of the Evidence Act. Such presumption of law is to be drawn and the Court has no option, but to draw the same in every case where the factual basis for raising the presumption is established. Once that presumption is drawn, the period of life of this presumption of law is also specified in section 139 of th e Negotiable Instruments Act. The presumption will live, exist and survive thereafter and sh all vanish only when ( the contrary is proved) by the accused. The contrary has to be proved. This obligation to prove the contrary is not the obligation to disprove the prosecution case in its entirely. The presumption is only on the question whether the cheque is issued for the discharge in whole or in part of any debt or liability. Until the contrary is proved, this presumption will continue to remain'.
Accordingly the presumption is rebutable. Obligation to prove the contrary is not a obligation to disprove the prosecution case. To rebut does not mean to conclusively establish but such evidence must be adduced before the court in support of defence that the court must either believe the defence to exist or consider its existence was reasonably probably, the standard of reasonability being that of the prudent man.
Coming to fact of the present case, it is necessary to refer to documents to reach certain conclusion as about the existence of liability.
The first document is Ex. CW-1/A dt. 2.5.1996 and this is a offer from Premier Vinal Flouring Ltd., addressed to complainant of this case Sh. Vijay Ghera. The offer is that Premier Vinal Flouring Ltd. had received letter of intend for supply of 62500 metric ton of non basmati rice to Masco , to be completed in six months and consignment was to be sent in 5 installments. Premier Vinal Floring Ltd., called upon complainant if interested in the deal to contact Premier Vinal Floring Ltd. within a week. Complainant Vijay Ghera then happened to contact accused of this case and a deal was struck between them now issued Ex. CW-1/B and is dt. 29.5.1996. It is relevant to re-produce this agreement :-
'Sh. Vijay Gera S/o Sunder Dass Gera of Shop No. 5, Amrit Kaur Market, Paharganj, New Delhi who is working as a export promotion Agent has got a LOI of supply of rice to Moscow for 62500 mt. tons from M/s. Premier Vynyl Flooring Ltd. SDA, New Delhi and as h e is unable to perform the agreement on his own and has been approached by Harish Singh alias Love Malhotra through friends, to perform the said agreement, it has been mutually agreed that Harish Singh will execute the LOI/ order and will arrange for supply of the rice to Moscow through M/s. Asian Capital Services and will pay one third of the total commission to Sh. Vijay Gera which he will receive from the buyer as well as seller. Balance 2/3rd commission will be retained by him. ' This agreement bear signature of complainant Vijay Gera as well accused Harish Singh. It is specifically stipulated that Harish Singh will execute the letter of intend by arranging supply of rice through M/s. Asian Capital Services P. Ltd. and Will pay 1/3 of the total commission to Vijay Gera which he will receive from the buyer as well as seller.
Appellant counsel was very emphatic in referring this stipulation that payment of 1/3 of the total commission to complainant was subject to accused receiving any such commission from the buyer and the seller.
An agreement was then executed between the Premier Vinal Flooring Ltd. And accused Harish Singh which has been proved by the complainant as Ex. CW-1/C. Premier Vinal Floring Ltd. acknowledged to Sh. Vijay Gera the fact of Sh. Harish Singh of Malhotra Associates introduced by Sh. Vijay Gera to Premier Vinal Floring Ltd. and complainant has proved this document as Ex. CW-1/1-2. In this document dt. 18.5.1996 Premier Vinay Flooring Ltd., has mentioned that in the midst of placing order on M/s. Asian Capital Services Ltd., they would like presence of Vijay Gera as well Harish Singh to settle the terms and conditions of the contract. Complaint is then silent as about finally a contract executed between Premier Vinay Flooring Ltd. And M/s. Asian Capital Services P. Ltd.
It is n ow clear from these documents that complainant Vijay Gera as an export promotion agent received an order from Premier Vinay Flooring Ltd. to arrange for supply of certain quantity of rice to be exported to Masco. Accused in this case agreed to arrange for that supply of rice from M/s. Asian Capital Services P. Ltd. and it was agreed between the Premier Vinay Flooring Ltd. and accused that out of the commission which accused was to receive in this deal, he was to pay 1/3 to the complainant. Meaning thereby a liability to pay 1/3 of the commission was dependent on the eventuality of accused receiving commission from the Asian Capital Services P. Ltd., and from the Premier Vinay Flooring Ltd. The defence plea of accused in this trial before Ld. MM was that he had not receive commission from M/s. Asian Capital Service P. Ltd. Two chques one for Rs. 21,25,000/- dt. 20.5.1996 drawn in favour of Malhotra Associates by M/s. Asian Capital Services P. Ltd., and another cheque for Rs. 1700000/- dt. 20.5.1996 drawn in the name of Harish Singh by M/s. Asian Capital Services Ltd., had been returned unpaid and rather though both these cheques were shown stamped by M/s. Asian Capital Services P. Ltd. and thereby represented to have been drawn on the account of Asian Capital Services Ltd., when return unpaid, the reason given by the drawee bank was that the cheques related to an account of "Sequences State P. Ltd." And singed by Sh. S. K. Dixit who was also authorized signatory for Sequences State P. Ltd. Cross examination of accused on this point is only to the fact that complaint lodged by accused against Asian Capital Services P. Ltd. , or Sh. S. K. Dixit were only subsequent to the filing of complaint in the present case.
Counsel Sh. H. O. Bhaskar for the complainant - respondent in this appeal submitted that it was a stage managed affair by the accused to represent that he had failed to receive the commission and it should not affect the right of the complainant and accused cannot be said to have rebutted the presumption merely by referring to those complaints. Once accused issued the cheque , it is to be presumed that it was drawn for discharge of legally and forceable liability.
I could not reconcile with the contention of Ld. Counsel Sh. H . O. Bhaskar. The point arises whether appellant - accused has been able to rebut the presumption which is available in favour of complainant u/s. 139 of the Act. It is a matter of fact that as regards the liability for the cheque amount, the only averment in para 4 & 5 of the complaint are :
"4. That accordingly the accused made an arrangement of supplying the rice through M/s. Asian Capital Services Ltd., Vasant Vihar, New Delhi for first consignment of 12,500.00 m. tons in which the total commission plus other charges were approximately Rs. 39,36,600.00
5. That though the shipment was completed in the month of August, 1996, the accused failed to pay the share of the commission to the accused which has been received by the accused from M/s. Asian Capital Services Ltd., New Delhi".
Demand notice Ex. CW-1/F issued by complainant after the cheque was received back unpaid again on this point of the liability mentioned the following averment :
"That accordingly, you made arrangement of supplying the rice through M/s. Asian Capital Servides Ltd., Vasant Vihar, New Delhi for the first consignment of 12,500 mt. tons, in which the total commission plus other expenses were approximately Rs. 39,36,600/-.
That my client has been pressing for the payment of his share of commission from you, which you have been avoiding on the ground that you have not received the payment from the said M/s. Asian Capital Services Ltd.
That as my client could not wait more and was in need of money, on his request and with the interference of his friends, you agreed to pay the share of my client out of commission and accordingly, an agreement was executed on 1.8.1997. In pursuance of that agreement you issued a cheque of Rs. 13,12,200/-, bearing no. B 9898, drawn on Punjab & Sind bank, Janpath, New Delhi".
Demand notice is absolutely silent if this approximate commission amount Rs. 3936600/- had been received by the accused from M/s. Asian Capital Services Ltd. and rather it is alleged that liability was being avoided on the ground that accused had not received that commission amount from M/s.Asian Capital Services Ltd.. It is a fact that accused had sent a reply to this demand notice denying the liability under the cheque. All these facts and circumstances ought to have put complainant on a caution that some kind of evidence was brought before the court that in fact the alleged commission of Rs. 39,36,600/- had in fact been received by the accused from Asian Capital Services P. Ltd. In this deal of export of rice to Masco. Accused had filed documentary evidence that when he protested to M/s. Asian Capital Services P. Ltd., for withholding his commission amount, a reply was received that deal for supply and export of rice had not materalized and finalized with Premier Vinal Flooring Ltd. Complainant in such circumstances at least could have examined an official from Premier Vinal Flooring Ltd. that in fact the shipment of the first consignment of 12500 metric tons rice had taken place through an arrangement and supply made by M/s. Asian Capital Services. No such evidence was examined despite since the begin of the dispute between the parties and rather demand notice itself mentioning that accused was avoiding a liability on a wrong and false pretext of commission being not received from M/s. Asian Capital Services P. Ltd.
Counsel Sh. H. O. Bhaskar for respondent-complainant argued and submitted that besides issuing the cheque in question, accused had executed a writing in the form of an undertaking on 10 rupees non judicial stamp paper where it had been specifically mentioned by accused that he was issuing the cheque in question being the liability of the party to be honoured by him and accused will ensure that cheque is honoured whenever presented for collection. It is a matter of fact that when complainant produced his evidence in the form of his affidavit in this prosecution before Ld. MM there is no mention of this document at all in the affidavit. It is relevant to reproduced the contents of this affidavit :-
1. "That the respondent entered into an agreement for supply of 62500 metric tonnes of basmati rice for shipment to moscow from M/s. Premier Vineyal Flouring Ltd., New Delhi vide letter dt. 2.5.1996 copy of which is Ex. Cw-1/A and it was agreed between the complainant and the respondent, that complainant will get 1/3rd of the commission and agreement was re duced into writing copy of which is Ex. CW-1/B and consequently respondent made an agreement with M/s.
Premium Venyal Housing Ltd. which is Ex. Cw-1/C and accordingly the first consignment of 12500 metric tonnes of rice supplied through Asia Capital Services Ltd., Vasant Vihar, New Delhi and respondent received Rs. 39,36,600/- as commission in this month of August, 1996.
2. That the respondent for the discharge of his liability issued cheque no. 209898 dated 1.8.1997 for 13,12,200/- is Ex. Cw-
1/D in favour of the complainant drawn on Punjab Sind Bank, Janpath, Connaguth Place, New Delhi vide cheque returning memo dated 17.11.1997 Ex. CW-1/E, the above cheque was returned unpaid with the remarks 'Insufficient Funds'.The complainant was informed on 17.11.1997 by its bankers. A regd. Notice dated 26.11.1997 is Ex. Cw-1/F was sent to the respondent asking him to make the above said payment within 15 days from the date of receipt of the above notice, the notice was sent under postal receipt. The regd. AD cover acknowledgment Ex. Cw-1/G. Reply of notice from the respondent is Ex. Cw-1/H. The respondent also failed to make the payment hence this complaint is Ex. Cw-1/I. Respondent has sent several false complaints against me to different higher authorities of Delhi police and which were duly investigated by various different agencies of Delhi police and found fasle and frivolous complainants. The notices and complaints are annexed to this affidavit which is Ex. CW-1/J 1- to 34".
Appellant counsel pointed out as to how casual approach was adopted while swearing this affidavit and placing it on record as a evidence of the complainant that instead of complainant being described as deponent, the expression used in the first line of the 1st para as the respondent. Like wise where the affidavit concludes and has been signed by the complainant, the expression used is respondent instead of deponent. Counsel was justified in his argument that it could not be treated to be a valid evidence by way of affidavit. Without strictly going into the question of validity of this affidavit, when counsel Sh. H. O. Bhaskar submitted that it was only a typographical error which came on record as an inadvertence , still it may be noted that no details of receipt of Rs. 39,36,600/- alleged to have been received by accused from M/s. Asian Capital Services Ltd. were mentioned. This fact had even remained throughout the vague plea in the complaint or in other document. Rather complainant Vijay Gera when cross examined before Ld. MM deposed :- " I do not know whether accused had taken the commission from Mr. Dixit in connection with this rice deal. Vol. : Accused has received four cheques in this deal. Copies of the cheques is marked A1 to A4. The original of the cheques are with accused".
Accused when examined himself on oath in his defence before Ld. MM , had specifically stated on oath that two cheques, one for Rs. 21,25,000/- and second for Rs. 17,00,000/- received from Mr. Dixit, MD, M/s. Asian Capital Services (P) Ltd., , had bounced. Now if the complainant admits in cross that he was not aware whether commission had been received by the accused from Mr. Dixit or that original cheques were with accused , when this cross examination of complainant had been recorded on 16.03.2006 that certainly suggests a defence plea by accused that he had not been able to receive commission from M/s. Asian Capital Services P. Ltd.
Coming again to the contention that once the cheque was drawn by accused a presumption arose in complainant favour it was for discharge of a debt or a liability. Ld. Counsel has referred to an undertaking executed in writing by accused along with issue of the cheque. It is pertinent to note that expression used in this writing / undertaking is that cheque is being issued being liability of the party. This writing no where mentions as to what that liability was, was it towards the commission taken by accused in the rice deal or was it a liability anything other or else. Unless such writing or undertaking could be related to a liability alleged and pleaded in the complaint, a cheque issued in terms of this writing / undertaking could not be said to be a liability admitted for the matter which was subject matter of the complaint.
As seen above only averment by the complainant and then the only deposition in his affidavit evidence is that accused received Rs. 39,36,600/- as commission in the month of accused 1996. No details about this money as to how and in what mode it had been received, no evidence at all if the export of rice by way of first consignment of 12500 mt. Tones quantity had been executed. The appellant - accused since the very beginning was denying the liability, to my opinion and view has been able to rebut the presumption as regards existence of the liability towards discharge of which the cheque in question could be said to have been issued. Ld. MM to my considered view was un-justified in observing and holding that liability of accused to pay 1/3 of the commission in terms of an agreement Ex. CW-1/B executed with the complainant was an absolute one, irrespective of accused receiving in commission in the deal. The liability to pay 1/3rd commission to the complainant was to accrue and arise only after accused had received his share in the form of commission in the deal. There is no evidence at all except bare averment of the complainant that rice was exported & that in fact the deal materialized and commission was in fact received the accused. Accused has succeeded in rebutting the presumption from the above discussed evidence and material on file. Conviction judgment accordingly cannot be sustained. Appeal is accordingly allowed and the conviction judgment is set aside.
Appeal file be consigned to record room and trial court record along with copy of this order be sent to trial court .
Announced in the Open (J. R. ARYAN)
court on 03/06/2010 ADDITIONAL SESSIONS JUDGE
NEW DELHI.