Delhi District Court
CT CASES/626386/2016 on 15 March, 2022
Anoop Kumar v. Mahesh Golani
CC No. 626386/2016
IN THE COURT OF MS. TWINKLE CHAWLA: MM, NI ACT-02, SOUTH-
EAST DISTRICT, SAKET COURTS COMPLEX: NEW DELHI
Anoop Kumar v. Mahesh Golani
CC No. 626386/2016
U/s 138 Negotiable Instruments Act, 1881
1. CIS number : DLSE020012602011
2. Name of the Complainant : Mr. Anoop Kumar, Proprietor of M/s
Modcare Enterprise,106, Red Rose
Building, 49-50, Nehru Place, New Delhi-
110019.
3. Name of the Accused, : Mr. Mahesh Golani,
parentage & residential Proprietor, M/s Emkay Peripherals R-5/6,
address Ansal Chamber-II, 6, Bhikaji Cama Place,
New Delhi-110066
Also at:
B-7, Somdutt Chamber-I, 5, Bhikaji Cama
Place, New Delhi- 110066
4. Offence complained of or : U/s 138 of Negotiable Instruments Act,
proved 1881
5. Plea of the Accused : Not guilty
6. Final Judgment/order : ACQUITTED
7. Date of judgment/order : 15.03.2022
JUDGMENT
1. Complainant has filed the present complaint under Section 138 /142 of Negotiable Instruments Act, 1881 ("NI Act") on the averments that, the Complainant had business transactions with the Accused, who had purchased Page 1 of 16 Anoop Kumar v. Mahesh Golani CC No. 626386/2016 various computer parts from the Complainant; and the Complainant had raised several invoices on the Accused.
2. As per the Complainant, the Accused in discharge of his liability issued:
(i) Cheque bearing No. 182873 dt. 12.05.2014 drawn on State Bank of India, Bhikaji Cama Place, New Delhi, for an amount of Rs. 58,103/- in favour of the Complainant ("cheque 1");
(ii) Cheque bearing No. 182897 dt. 17.05.2014 drawn on State Bank of India, Bhikaji Cama Place, New Delhi, for an amount of Rs. 2,01,911/-, in favour of the Complainant ("cheque 2");
(iii) Cheque bearing No. 877378 dt. 22.05.2014 drawn on State Bank of India, Bhikaji Cama Place, New Delhi, for an amount of Rs. 1,51,079/- in favour of the Complainant ("cheque 3");
(iv) Cheque bearing No. 877383 dt. 28.05.2014 drawn on State Bank of India, Bhikaji Cama Place, New Delhi, for an amount of Rs. 1,32,121/-, in favour of the Complainant ("cheque 4");
(v) Cheque bearing No. 877379 dt. 29.05.2014 drawn on State Bank of India, Bhikaji Cama Place, New Delhi, for an amount of Rs. 69,178/-, in favour of the Complainant ("cheque 5");
(vi) Cheque bearing No. 877384 dt. 29.05.2014 drawn on State Bank of India, Page 2 of 16 Anoop Kumar v. Mahesh Golani CC No. 626386/2016 Bhikaji Cama Place, New Delhi, for an amount of Rs. 1,37,913/- in favour of the Complainant ("cheque 6");
(hereinafter collectively referred as "cheques in question").
3. Upon presentation, the cheques in question were returned unpaid on grounds of "payment stopped by drawer" vide return memos dated 12.08.2014. The Complainant sent the legal demand notice dated 10.09.2014 through his counsel by speed post. The Accused even replied to the legal demand notice by way of reply dt. 26.09.2014. Hence, despite the service of the legal demand notice, the Accused failed to make the payment and hence the present complaint.
4. After taking pre-summoning evidence, Accused was ordered to be summoned in this case for commission of offence under Section 138 of Negotiable Instruments Act, 1881 ("NI Act"), vide order dated 08.12.2014.
5. Accused appeared and was released on bail on 04.09.2015. On finding a prima facie case, notice U/s 251 of the Criminal Procedure Code, 1973 ("CrPC") was served upon the Accused on 07.12.2015 to which he pleaded not guilty and opted to contest after disclosing the following defence:
"I do not plead guilty and claim trial. The impugned cheques bear my signatures and I admit issuance of the same to the complainant. However, the goods that were supplied by the complainant regarding which these payments were made were defective. I received complaints from the persons to whom the goods were supplied that the toner Page 3 of 16 Anoop Kumar v. Mahesh Golani CC No. 626386/2016 cartridges were showing lines/dots and some time the printout is completely black. I had received the legal notice Ex.CW1/21 and has also replied to the same."
6. Vide order dated 27.05.2016, opportunity was granted to the Accused to cross examine the Complainant. The Complainant/CW1 adopted his pre summoning evidence affidavit Ex. CW1/A and also proved following documents:
Ex. CW1/1: Invoice no. CNR410 dt. 11.04.2014
Ex. CW1/2: Invoice no. CNR581 dt. 16.04.2014
Ex. CW1/3: Invoice no. CNR865 dt. 23.04.2014
Ex. CW1/4: Invoice no. CNR1028 dt. 28.04.2014
Ex. CW1/5: Invoice no. CNR1030 dt. 28.04.2014
Ex. CW1/6: Invoice no. CNR1029 dt. 28.04.2014
Ex. CW1/7: Invoice no. CNR1086 dt. 29.04.2014
Ex. CW1/8: Invoice no. CNR1224 dt. 02.05.2014
Ex. CW1/9: Cheque bearing no. 182873 dated
12.05.2014 of Rs. 58,103/-
Ex CW1/10: Cheque bearing no. 182897 dated
17.05.2014 of Rs. 2,01,911/-
Ex. CW1/11: Cheque bearing no. 877378 dated
22.05.2014 of Rs. 1,51,079/-
Ex. CW1/12: Cheque bearing no. 877383 dated
28.05.2014 of Rs.1,32,121/-
Ex. CW1/13: Cheque bearing no. 877379 dated
29.05.2014 of Rs. 69,178/-
Ex. CW1/14: Cheque bearing no. 877384 dated
29.05.2014 of Rs. 1,37,913/-
Ex. CW1/15: Return memo issued by bank dt.
12.08.2014.
Ex. CW1/16: Return memo issued by bank dt.
12.08.2014.
Ex. CW1/17: Return memo issued by bank dt.
12.08.2014.
Ex. CW1/18: Return memo issued by bank dt.
12.08.2014.
Ex. CW1/19: Return memo issued by bank dt.
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Anoop Kumar v. Mahesh Golani
CC No. 626386/2016
12.08.2014.
Ex. CW1/20: Return memo issued by bank dt.
12.08.2014.
Ex. CW1/21: Legal Demand notice dt.10.09.2014
Ex. CW1/22 & Postal receipt dt. 11.09.2014 in respect Ex. CW1/23: of legal demand notice.
Ex. CW1/24: Reply of the Accused to the legal demand notice dt. 26.09.2014.
Complainant Evidence was closed vide separate statement on 03.07.2019.
7. Thereafter, Accused was examined under Section 313 of CrPC for explaining the circumstances appearing against him in the Complainant's evidence. He denied the Complainant's case and pleaded false implication in the present case and opted to lead evidence in his defence.
8. However, the Accused despite opportunity did not lead any DE; and defence evidence was closed vide separate statement of the Accused on 10.12.2019.
9. I have heard Ld. Counsel for the parties and have perused the case file along with the written submissions filed by the parties carefully and meticulously. Submissions of the Complainant and Accused
10.The Ld. Counsel for the Complainant has submitted that all ingredients of Section 138 NI Act are fulfilled in the present case and hence, the presumption under Section 139 NI Act arises in the favour of the Complainant, which has not been successfully rebutted by the Accused. He has submitted that the Accused has even admitted part liability in his reply to the legal demand notice. Page 5 of 16
Anoop Kumar v. Mahesh Golani CC No. 626386/2016
11.Per contra, Ld. Counsel for the Accused has submitted that the Accused deserves to be acquitted as the legal demand notice was defective and, in any way, liability is not made out as the goods supplied by the Complainant were of poor quality. Hence, the presumption under Section 139 NI Act stood rebutted. Legal Framework Ingredients of Section 138 NI Act:
12.The Hon'ble Supreme Court of India in Kusum Ingots & Alloys Ltd and Ors v.
K Pennar Peterson Securities Ltd and Ors., (2000) 2 SCC 745 ("Kusum Ingots Case"), has clearly stipulated that "the ingredients which are to be satisfied for making out a case under the provision are:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability;
(ii) that cheque has been presented to the bank within a period of six months1 from the date on which it is drawn or within the period of its validity whichever is earlier;
(iii) that cheque is returned by the bank unpaid, either because of the 1 Reduced to three months vide RBI circular dated 4.11.2011. Page 6 of 16
Anoop Kumar v. Mahesh Golani CC No. 626386/2016 amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(iv) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 152 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(v) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice;
If the aforementioned ingredients are satisfied then the person who has drawn the cheque shall be deemed to have committed an offence."
13.Therefore, if the aforesaid ingredients are made out, the Accused is deemed to have committed an offence under Section 138 NI Act.
Presumption under Section 139 NI Act/Section 118 NI Act:
14.Section 139 NI Act states that:
"Presumption in favour of holder: It shall be presumed, unless the 2 The same is now enhanced to 30 days.Page 7 of 16
Anoop Kumar v. Mahesh Golani CC No. 626386/2016 contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability"
15.Section 139 NI Act is a type of reverse onus clause, which stipulates a presumption in the favour of the Complainant as to fact of a cheque being received in discharge of a legal debt or liability.
16.Further, Section 118(a) of the NI Act, states as follows:
"Presumptions as to negotiable instruments. -- Until the contrary is proved, the following presumptions shall be made:
a) of consideration --that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;"
17.The Hon'ble Supreme Court of India has in a number of judgments dealt with the combined effect of the presumptions raised under Section 139 and Section 118(a) NI Act.
18.The following proposition can be summarized on a perusal of the judgments of the Hon'ble Supreme Court of India in Sunil Todi & Ors v. State of Gujarat, LL 2021 SC 706, Kalamani Tex v. P. Balasubramanian, 2021 SCC OnLine SC 75; APS Forex Services Pvt. Ltd. v. Shakti International Fashion Linkers and Page 8 of 16 Anoop Kumar v. Mahesh Golani CC No. 626386/2016 Ors., AIR 2020 SC 945; Rohitbhai Jivanlal Patel v. State of Gujarat and Ors., AIR 2019 SC 1876 ("Rohitbhai Case"); Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 ("Kumar Exports Case"); K.N. Beena v. Muniyappan and Anr., (2001) 8 SCC 458; and Dhanvantrai Balwantrai Desai v. State of Maharashtra, 1964 Cri. LJ 437:
(i) Once the execution of cheque is admitted; Section 139 of the NI Act mandates a presumption that the cheque was for the discharge of legally enforceable debt or 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) Something which is probable has to be brought on record by the Accused 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;
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Anoop Kumar v. Mahesh Golani CC No. 626386/2016
(iv) The words "unless the contrary is proved" which occur in Section 139, 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 Section 139 NI Act cannot be said to be rebutted;
(v) To rebut the presumption, it is open for the Accused to rely on evidence led by him 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 circumstances upon which they rely;
(vi) 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.
Analysis
18.In the case at hand, it is not in dispute that the cheques in question were drawn by Page 10 of 16 Anoop Kumar v. Mahesh Golani CC No. 626386/2016 the Accused from the bank account of his proprietorship concern and that the Accused is the proprietor of the said firm. Further, it is also not in dispute that the Accused is the signatory of the cheques in question as in the defence disclosed by the Accused U/s 251 CrPC and Section 313 CrPC statement; he has duly admitted the same. Presentation of the cheques in question by the Complainant and their dishonour on grounds of payment stopped by drawer is also not in dispute.
19.The Complainant sent the legal demand notice, dated 11.09.2015 (Ex. CW1/21) by way of speed post (Ex. CW1/22 and Ex. CW1/23). The Accused replied to the same by way of Ex. CW1/24. Accordingly, the service of the legal demand notice is also undisputed.
20.Finally, the complaint has been filed within the limitation period. Therefore, essential ingredients (i) to (v) as stipulated by the Hon'ble SC in Kusum Ingots Case (supra), have been duly satisfied.
21. Further, as noted above, once the execution of the cheque by the Accused is proved/admitted, the presumption of the same being drawn for consideration stands attracted in terms of Section 139 NI Act. Now, in the case at hand, so far as the question of existence of basic ingredients for drawing of presumption U/s 118 (a) and 139 of the NI Act is concerned, from the aforesaid discussion, it is apparent that the Accused has not denied his signatures on the cheques in question that have been drawn in favour of the Complainant on a bank account maintained by the Accused; and hence the said presumption can be drawn.
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22.Accordingly, it is required to be presumed that the cheque in question was drawn for consideration and the holder of the cheque i.e., the Complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the Accused to establish a probable defence so as to rebut such a presumption.
23.In the segment on legal framework, set out above, the legal proposition with respect to the burden of proof upon the Accused has already been discussed. Hence, it is now to be examined as to whether the Accused brought any material on record or pointed out glaring discrepancies in the material produced by the Complainant for dislodging the presumption which meets the standard of preponderance of probabilities.
24.The Accused in the present case, has taken the following line of defence with a view to rebut the presumption:
(a) Legal demand notice is defective:
25.In the present case, the Accused has submitted the legal demand notice is defective in as much as a demand of Rs. 7,50,305/- has been made from the Accused as on 10.09.2014, i.e., the date of the legal demand notice, whereas as on 09.09.2014 without conceding to liability; even as per the statement of account of the Complainant, only an amount of Rs. 6,80,463/- was due from the Accused as on the date of dispatch of legal demand notice. Ld. Counsel for the Accused has submitted that an amount of Rs. 25,000/- was paid to the Complainant on 09.09.2014 (a fact Page 12 of 16 Anoop Kumar v. Mahesh Golani CC No. 626386/2016 which has not been mentioned in the legal demand notice) and as per the statement of account sent by the Complainant to the Accused, the remaining balance prior to the payment of Rs. 25,000/- was Rs. 7,12,305/-. These facts have been mentioned by the Accused in his reply to the legal demand notice as well. Cross examination of the Complainant dt. 05.01.2018 shows that the Complainant has admitted that an amount of Rs. 25,000/- was paid to the Complainant by the Accused on 09.09.2014. Further, in cross examination of the Complainant dt. 25.08.2017, the Complainant has stated that he used to receive SMS regarding the payment received through NEFT; and in cross examination dt. 05.01.2018, the Complainant has stated that he was aware of the fact of remittance of Rs. 25,000/- at the time of PSE, however, the same was not disclosed in the PSE as well. In the light of the aforesaid discussion, it is clear that a payment of Rs. 25,000/- was made by the Accused on 09.09.2014, which was even reflected in the account statement of the Complainant. The legal demand notice in the present case is dated as of 10.09.2014 and has been sent on 11.09.2014. Admittedly, the amount of Rs. 25,000/- paid by the accused has not been adjusted in the legal demand notice despite knowledge and a demand of Rs. 7,50,305/- has been made from the accused. The Hon'ble High Court of Delhi in Alliance Infrastructure Projects Pvt. Ltd. v. Vinay Mittal, 2010 (1) JCC (NI) 98, has in a similar fact situation noted that "the expression amount of money used in section 138 (b) of Negotiable Instrument Act, to my mind, in a case of this nature would mean the amount actually payable by the drawer of the cheque to the payee of the cheque". Further, the Hon'ble High Court of Delhi has also noted that "in Page 13 of 16 Anoop Kumar v. Mahesh Golani CC No. 626386/2016 order to make the notice legal and valid, it must necessarily specify the principal amount payable to the payee of the cheque and the principal amount demanded from the drawer of the cheque should not be more than the actual amount payable by him." Accordingly, where the demand is made of an amount more than the amount due from the Accused, the same is not a valid notice and it would not fasten criminal liability on account of non-compliance of the legal demand notice.
26. The Hon'ble SC in Jagdish Sehgal v. Shamsher Singh Gogi (2009) 14 SCC 683, noted that:
"9. It is manifest that to constitute an offence under Section 138 of the Act, the following ingredients are required to be fulfilled:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;
(ii) The cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
(iii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
(iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the Page 14 of 16 Anoop Kumar v. Mahesh Golani CC No. 626386/2016 cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(v) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(vi) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice;
10. Being cumulative, it is only when all the afore-mentioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act."
27. In view of the aforesaid discussion, it is evident that a valid legal demand notice is an essential ingredient of the offence u/s 138 NI Act and that the offence u/s 138 NI Act is only made out when all the ingredients are fulfilled cumulatively.
28.Since the legal demand notice was defective, an essential requirement of Section 138 NI Act has not been fulfilled in the present case. The Ld. Counsel for the Accused has submitted that the Accused is accordingly absolved of the criminal liability under Section 138 NI Act. This Court is of the view that the contention of the Accused is in accordance with the settled principle of law set out in the aforesaid Page 15 of 16 Anoop Kumar v. Mahesh Golani CC No. 626386/2016 cases.
29.Further, since Section 138 NI Act is a technical offence, all ingredients mentioned in paragraph 26 above must be established for the accrual of cause of action in favour of the Complainant. In view of the above detailed discussion, the Complainant has failed to establish the essential ingredients of Section 138 of NI Act, hence no presumption under Section 139 is attracted in the present case. Since the Complainant has failed to discharge his initial burden under Section 138 NI Act, there is no requirement to delve into further evidence in the present case. Accordingly, the ingredients of Section 138 of NI Act, are not proved. Therefore, the Accused is held not guilty and is acquitted of the offence punishable under Section 138 of NI Act.
ORDER: ACQUITTED
Announced in Open Court (Twinkle Chawla)
15.03.2022 MM (NI-Act 02), South East
Saket Court, New Delhi
Note: This judgment contains 16 pages and each page has been signed by me.
(Twinkle Chawla) MM (NI-Act 02), South East Saket Court, New Delhi Page 16 of 16