Delhi District Court
Hawa Singh vs Ms Magnum Logistic Project-1 on 20 November, 2023
IN THE COURT OF SH. TUSHAR GUPTA, MM - 04 :
NORTH DISTRICT
ROHINI COURTS : NEW DELHI
JUDGMENT
Complaint Case No. 8953/2016
Title Hawa Singh
Vs.
M/S Magnum Logistics
Project-1
Name of Complainant Sh. Hawa Singh Beniwal
Prop/o M/S Baniwal Builders,
Sector-16, PKT. H-3, Flat No.
172, Ground Floor, Rohini,
Delhi-85.
Name of Accused 1) M/S Magnum Logistics,
through its principal officers,
D-111, Okhla Indl. Area,
Phase-1, New Delhi.
2) Mr. Chandeep Singh
Kochar,
S/o SH. G.S. Kochar,
R/o G-Block, L-13, Kochar
Tower, Hari Nagar, New Delhi-
58.
And
3) Amarjeet Pal
R/o F-453, Sarita Vihar, Delhi
(not summoned).
Date of Institution of 27.11.2014
Complaint
Ct. Cases 8953/2016 Hawa Singh Vs. M/S Magnum Logistic Page 1/14
Date of Pronouncement 20.11.2023
Offence complained of Under Section 138 NI Act
Offence charged with Under Section 138 NI Act
Plea of accused Pleaded not guilty
Final Order Convicted for the offence U/s
138 N.I. Act.
In furtherance of the mandate of Sec. 355 of the Criminal Procedure Code, 1973. The judgment in the afore titled case is delivered below:-
1. Complainant's Case:
1.1 It is the case of the complainant that complainant sent building materials at different places on the assurances of the accused Nos.2 and 3. The complainant has been raising bills after supply of building materials on instructions of the accused Nos. 2 and 3 and they have been making payment in discharge of those bills being partners/principal officers/authorised signatory of accused No.1 M/S Magnum Logistic. As per the statement of accounts being maintained by the complainant in routine course of his business, a sum of Rs.2,53,043/- was liable to be paid by the accused persons to him as on 31.03.2011. Thereafter, in discharge of their liability, accused Nos. 2 and 3 issued Cheque bearing No. 000283 dt. 04.05.2011 for an amount of Rs.55,700/-
drawn on Bank of India CGO Complex, New Delhi Ex.CW1/1.
1.2 Upon the presentment of the said cheque, it was dishonored with the remarks "Funds Insufficient" vide memo dated 20.09.2011 Ex.CW1/2.
1.3 In light of the above, the complainant was constrained to issue legal notice dated 12.10.2011 Ex.CW1/3 (postal receipts Ct. Cases 8953/2016 Hawa Singh Vs. M/S Magnum Logistic Page 2/14 dated 12.10.2011 Ex. CW1/4), beseeching the accused to discharge his liability within 15 days. Failure of accused to repay the liability within 15 days, lead to the filing of the present complaint.
2. Accused's Defence :
2.1 The accused entered defence and was duly notified, (as per the mandate of S. 251 of the Criminal Procedure Code, 1973), of the offence alleged against him. Accused pleaded not guilty and claimed to be tried.
2.2 In his defence recorded in notice u/s 251 CrPC accused submits that the cheque in question was issued as a security cheque. The payment has already been made to the complainant in his other company i.e. Nirwal Builders etc. the cheque has been issued five years ago. The date in the cheque has not been filed by him. The legal notice has not been received by him.
In addition to this, vide statement u/s. 313 CrPC accused submits that he was the authorised signatory of accused No.1 firm and complainant used to supply building material. He had business relations with the complainant. The complainant was operating his five different firms and was supplying building material at various sites. At the inception of the business, the bill raised by the complainant was not having VAT number, however he had made the entire payment to the complainant as per the bill raised. In the year 2011, complainant had obtained a VAT number and in order to legitimate the transaction, he requested the accused to issue the cheques in and further promised that the amount mentioned on the cheques shall be paid to accused in cash. The firm for which the cheque in question and the VAT Ct. Cases 8953/2016 Hawa Singh Vs. M/S Magnum Logistic Page 3/14 number was obtained by the complainant was different from the earlier firms, which did not have the VAT number and through which the complainant used to transact. The said fact can be verified from the statement of account of the complainant. Further, it was promised that the cash would be paid prior to the presentment of the cheques in question. However, the complainant presented the cheques without the payment of the promised amount. The dates on the cheques in question were not filled by the accused and were presented without his knowledge.
2.3 The accused has denied the receiving of legal notice of demand in the defence taken in notice u/s 251 Cr.PC. He also denied the receipt of same in his statement u/s 313 CrPC.
3. Applicable Legal Provisions :
3.1 The ingredients which need to be satisfied for establishing culpability under s. 138 of Negotiable Instrument Act has been expounded by the Hon'ble Apex court in the case of Kusum Ingots & Alloys Ltd. vs. Pennar Peterson Securities Ltd. And Others (2000) 2 SCC 745; the same is reproduced below:
" (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 months from the date on which it is drawn of within the period of its validity whichever is earlier;
(iii) 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 cheque or that it exceeds the amount Ct. Cases 8953/2016 Hawa Singh Vs. M/S Magnum Logistic Page 4/14 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 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(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;"
3.2 It is only upon the concatenation of the aforementioned ingredients that the culpability under s. 138 of Negotiable Instrument Act can be secured. The legal position being thus, let us examine the factual matrix on this legal touchstone.
4. Appreciation of evidence and marshalling of the facts :
4.1 Issuance of Cheque: The complaint beholds the onus of proving the issuance of cheque in his favour and the said issuance has to be done on an account maintained by the accused.
In this regard, complainant as CW-1 has disposed through his affidavit (CW-1/1) that accused in order to discharge his liability has issued cheque bearing no. 000283 dated 04.05.2011 for Rs.55,700/- drawn on Bank of India, CGO Complex, New Delhi, in favour of the complainant. Accused has accepted the signatures on the cheque, in his defense taken upon the notice served u/s. 251 CrPC and in his statement u/s. 313 CrPC. The gravamen of accused's defense is that the cheque in question was not filled by the accused.
Ct. Cases 8953/2016 Hawa Singh Vs. M/S Magnum Logistic Page 5/144.2 Presentment and dishonor of cheque: It must be satisfied that the cheque in question was presented within the statutorily prescribed time limit and further that upon presentment for encashment the same was returned unpaid by the bank. To this effect, Complainant as CW-1 through his affidavit has deposed that cheque in dispute was presented for encashment but the same was dishonored due to "Funds Insufficient" in the account of the accused. To evince the veracity of his deposition, CW-1 has brought on record original cheque (Ex. CW-1/1) and return memo showing the dishonor of cheque due to "funds insufficient" (Ex. CW-1/2). The accused has neither disputed nor disproved to the factum of presentment and dishonor of cheque. Thus, the presentment and the subsequent dishonor of cheque stands established. Further, the cheque has been drawn and has been presented well within the statutorily prescribed period.
4.3 Legal demand Notice: It is the onus on the complainant to manifest that he made a demand for the payment of the cheque amount 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. In this regard, CW-1 deposing through his affidavit has brought on record the demand notice dated 12/10/2011 (Ex. CW-1/3) and postal receipt dated 12/10/2011 (Ex. CW-1/4). The accused has denied the receipt of legal notice in his statement u/s. 251 and s. 313 CrPC. However, apart from this denial simplicitor, the accused has not brought any evidence or cross-examined the complainant on this aspect.
It would not be out of place to cite the relevant legal Ct. Cases 8953/2016 Hawa Singh Vs. M/S Magnum Logistic Page 6/14 position on the service of notice, which has been interpreted liberally inconsonance with the object of s. 138 of the NI Act. The accused cannot hide behind the veil of procedural technicalities to escape justice.
Hon'ble Supreme Court in the case of C.C. Alavi Haji v. Palapetty Muhammed and Another (2007) 6 SCC 555 held that a person failing to pay within the 15 days of the service of summon cannot hide behind the defense of non-receipt of legal notice. The relevant extract has been reproduced below:
"17. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation."
It is an undisputed factum that the accused had not made any payment within 15 days from the date of the receipt of summons. Further, as observed above the accused has also failed to rebut the presumption of the service of notice. Thus, the defense of non-service of legal notice is specious and is hereby rejected.
4.4 Rebuttal of Presumption by Accused:
4.4(a) The above discussion manifests that the foundational ingredients of the s. 138 of the NI Act are established. This would give rise to the presumption of the cheque having been issued in discharge of a legally sustainable liability and drawn for good Ct. Cases 8953/2016 Hawa Singh Vs. M/S Magnum Logistic Page 7/14 consideration, by virtue of conjoint reading of s. 118 (a) and 139 of the NI Act.
S.139 of the NI Act stands as an exception to the general rule as to the burden of proof and shifts the onus on the accused. The expression "unless the contrary is proved" endows the accused with the opportunity to rebut the presumption. It encapsulates the principle of "reverse onus" and thus the determination of successful rebuttal would be on the touchstone of proportionality. The same has been settled in the authoritative pronouncement by a three judge bench of the Hon'ble Supreme Court in the case of Rangappa Vs. S.Mohan (2010) 11 SCC 441. The relevant extract is reproduced:
"28...In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused must rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities. Therefore, if the accused can raise a probable defense which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant to raise such a defense and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own... "
4.4(b) Thus, in accordance with the above authoritative mandate, the accused must either show that consideration and debt did not exist or that under the circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. The accused can do so by either bringing positive evidence on record or by using the existing material on record.
4.4(c) Onus of proof: At the outset it would be pertinent to record that considering the evidentiary rule enshrined under s. 106 Indian Evidence Act and the subsisting presumption under s. 118 (a) and 139 of the NI Act in favor of the complainant, the Ct. Cases 8953/2016 Hawa Singh Vs. M/S Magnum Logistic Page 8/14 onus to prove the plea of no subsisting liability towards the complainant is squarely upon the defense.
It would be pertinent to record that the accused has not led any defense evidence in its support, accordingly the relevant evidentiary consideration, as per the dictum of Hon'ble apex court in Rangappa (supra) is whether the accused has succeeded in punching holes in the version supplied by the complainant, by the means of cross-examination and has effectively rebutted the afore discussed presumption.
4.4(d) Evidence on record: In the present case the cheque in question belongs to the accused and bears his signature and was given to the complainant as the same is admitted by the accused in his notice of accusation u/s 251 CrPC. Accused has nowhere denied that the cheque in question does not belongs to him, nor bears his signature. Up to this extent facts are clear and undisputed. By admitting this fact, the presumption has been raised in the favor of the complainant and now burden of proof has been shifted upon the accused to create doubt over the story of the complainant. Let us examine whether the accused can relive the burden cast upon him.
Accused has taken two different defenses at two different stages. In his notice of accusation, the accused has raised the defense that the cheque in question was given by him to the complainant for the purpose of security, however in his statement u/ 313 Crpc, accused has raised the defense that the cheque was given to the complainant as the same was demanded by the complainant after obtaining the VAT number on pretext of legitimize the transaction between him and the complainant. Accused has made two contradictory statements at two different Ct. Cases 8953/2016 Hawa Singh Vs. M/S Magnum Logistic Page 9/14 stages regarding handing over of the cheques in question. The defense which the accused has taken in the present case is that he has already paid the due amount to the complainant and presently he does not have any liability towards the complainant. In the cross examination of the complainant lot of questions were asked to him pertains to the delivery of the material by him to the accused and lot of emphasis was given to supply of material, however, in the present case, it is not the dispute as to whether material was supplied by the complainant or not, as the accused in his notice of accusation, in his statement u/s 313 Crpc and in his examination in chief, has nowhere deposed that no material was supplied to him, rather he has taken the defense that he has already made the payment to the complainant against the supply of goods. In his statement u/s 313 and in examination in chief, it is deposed by the accused that he has made the entire payment to the complainant as per the bill raised by him. Therefore, whether the material was supplied or not is not disputed here. The dispute in the present case is whether the accused has made the entire payment to the complainant. Accused has examined himself as defense witness. Accused has not placed on record any oral or documentary evidence to show that he has made the entire payment to the complainant. Mere oral statements without any cogent evidence cannot be relied upon. It was the bounding duty of the accused to place on record any evidence to show that the payment has been made to the complainant or by creating any doubt over the story of the complainant. I have gone through the cross examination of the complainant; nothing has come in the cross examination of the complainant which would have raised any doubt over the story of the complainant. Further the accused has failed to explain whether the payment was made in cash or Ct. Cases 8953/2016 Hawa Singh Vs. M/S Magnum Logistic Page 10/14 by any other mode and the date month and year of the repayment. In his examination in chief the accused has deposed that the payment of the material supplied from 2009 to 2011 has already been made and the same can be check from the bank statement of the complainant. Here I am not able to understand as to who has stopped the accused from producing his bank accounts. Instead, it was the bounding duty of the accused himself to produces the documents to establish and support his contention. It was a very easy task for the accused to produce his bank statement which he has failed to produce. This warrants an adverse inference to be drawn under Section 114 (g) of the Evidence Act that the evidence if produced would have been unfavorable to the case of the accused and thus, the accused has failed to cast any doubt over the story of complainant.
It is argued by learned counsel for the accused that the legal notice sent to the accused is a vague legal notice and the complaint is liable to be dismissed on this technical ground. I have perused the legal notice sent by the accused to the complainant. I found no infirmity in the legal notice sent by the complainant as in the last para of the complainant the complainant has categorically mentioned the details of the cheque and the amount demanded from the accused. therefore, this argument has no legs to stand upon.
In considerate opinion of this court, the accused has miserably failed to probablise its defense for the reasons discussed henceforth.
4.4(e) Non-existence of any legal liability towards the complainant: Accused has taken a wavering defense during the trial. It is the case of the defense there is no liability of the Ct. Cases 8953/2016 Hawa Singh Vs. M/S Magnum Logistic Page 11/14 accused towards the complainant. learned counsel for the accused has argued before this court that complainant has failed to bring on record any document to show the transaction. The said argument of the defense is contrary to the mandate of Rangappa(supra), as per which the onus was squarely upon the accused to call for such documents using the tools of cross- examination. The legal position regarding the onus on the accused has further been elaborately discussed in the case of Rohitbhai Jivanlal Patel v. State of Gujarat and Ors., AIR 2019 SC 1876, the relevant excerpt has been cited below:
"The observations of the Trial Court that there was no documentary evidence to show the source of funds with the Respondent to advance the loan, or that the Respondent did not record the transaction in the form of receipt of even kachcha notes, or that there were inconsistencies in the statement of the complainant and his witness, or that the witness of the complaint was more in know of facts etc. would have been relevant if the matter was to be examined with reference to the onus on the complaint to prove his case beyond reasonable doubt. These considerations and observations do not stand in conformity with the presumption existing in favor of the complainant by virtue of Sections 118 and 139 of the NI Act. Needless to reiterate that the result of such presumption is that existence of a legally enforceable debt is to be presumed in favor of the complainant. When such a presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the Accused has been able to rebut the presumption or not."
Thus, the contention of the defense that the complainant has failed to bring the relevant evidence for proving the transaction falls. Nevertheless, the complainant has placed on record the relevant documents to show the legal liability occurred against the accused.
It would be pertinent to discuss another paramount factor weighing against the accused. Once the accused has taken the defense that he has no transaction with the complainant, the onus was squarely upon the accused to show as to how the cheque in question came into the possession of the complainant. The same has nowhere been elaborated upon by the defense and Ct. Cases 8953/2016 Hawa Singh Vs. M/S Magnum Logistic Page 12/14 demonstrates the loophole in the version of the complainant.
The accused has further failed to manifest conduct of a prudent person, no reply was sent to the legal notice issued by the complainant.
4.4(f) This being the case, the factum of existing liability stands unrebutted. The accused having failed to either punch holes in the version supplied by the complainant or to produce any other evidence in that regard, has thus not discharged the presumption that the cheque was issued for discharge of a legally sustainable liability.
5. All in all, the collective import of the forgoing exposition lends an irresistible inference that the entire defence of the Accused is disingenuous and feigned, not to mention incredulous. Therefore, this Court has no hesitation in holding that the Accused has miserably failed to displace the statutory presumptions envisaged in the Negotiable Instruments Act, 1881 (as amended to date) leaning in favour of the Complainant in accordance with law, that is to say, on the touchstone of preponderance of probabilities, and therefore, the Complainant is entitled to derive the benefit of the same inasmuch has ¯proved his version in the light of the dicta rendered by the Hon'ble Supreme Court of India in the matter of 'Laxmi Dyechem v. State of Gujarat' reported as (2012) 13 SCC 375 wherein, it has been held as infra:
"... Therefore, if the accused is able to establish a probable defence which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is inconceivable that in some cases the accused may not need to adduce the evidence of his/her own. If however, the Ct. Cases 8953/2016 Hawa Singh Vs. M/S Magnum Logistic Page 13/14 accused/drawer of a cheque in question neither raises a probable defence nor able to contest existence of a legally enforceable debt or liability, obviously statutory presumption under Section 139 of the NI Act regarding commission of the offence comes into play if the same is not rebutted with regard to the materials submitted by the complainant...."
6. Conclusion:
Upon due circumspection of the totality of foregoing facts and circumstances, including but not limited to scrutiny of material available on record in the adumbral of the legal position governing the field, this Court is of the considered opinion that the accused has not been able to sufficiently rebut as much the statutory presumptions leaning against him as the version put forth by the Complainant vide his complaint. This Court hereby, convicts the accused Magnum Logistics and its partner Chandeep Singh Kochar for the commission of offence under Section 138 of the Negotiable Instruments Act, 1881 complained of by the Complainant in the instant CC.
Announced in open. Digitally signed
court on 20.11.2023. TUSHAR by TUSHAR
GUPTA
GUPTA Date: 2023.11.20
15:14:26 +0530
(TUSHAR GUPTA)
MM-04 (North) Rohini Courts
Delhi/20.11.2023
Certified that this judgment contains 14 pages, and Digitally signed each page bears my signature. TUSHAR by TUSHAR GUPTA GUPTA Date: 2023.11.20 15:14:20 +0530 (TUSHAR GUPTA) MM-04 (North) Rohini Courts Delhi/20.11.2023 Ct. Cases 8953/2016 Hawa Singh Vs. M/S Magnum Logistic Page 14/14