Delhi District Court
In Rangappa vs . Sri Mohan Reported In (2010) 11 Scc 441 on 23 September, 2022
IN THE COURT OF SH. SAURABH GOYAL, METROPOLITAN
MAGISTRATE (SOUTH) NI ACT (DIGITAL-01), SAKET COURTS:
NEW DELHI
CT No. 1275/2021
ARVIND CHEMI SYNTHETICS V. NAVEEN KUMAR PROPRIETOR
1. Complaint Case No. : 1275/2021
2. Name and address of the
complainant : ARVIND CHEMI SYNTHETICS
PVT. LTD.
Through Its Authorized
Representative, B-7/7, Safdarjung
Enclave, ND- 110029.
3. Name and address of the
accused : NAVEEN KUMAR, PROPRIETOR
Jai Ambay Poly Packers,
Plot No. 12, Near Hassanpur Chowk,
Hodal, Palwal, Haryana.
4. Offence complained of : Under section 138 of the Negotiable
Instruments Act, 1881.
5. Plea of the accused : Pleaded not guilty.
6. Final order : CONVICTION
7. Date of institution : 02.03.2021
8. Date on which reserved
for judgment : 24.08.2022
9. Date of judgment : 23.09.2022
CT No. 1275/2021 Page No. 1 of 11
Digitally signed by
SAURABH SAURABH GOYAL
GOYAL Date: 2022.09.23
16:03:18 +0530
BRIEF STATEMENT OF FACTS
1. Briefly, the case of the complainant is that in the year 2018 the accused approached the complainant expressing its interest in purchasing Polypropylene (PP) and High Density Polythlene (HDPE) fabric and on satisfaction of the products provided by the complainant, the accused raised several purchase orders during the year 2019-20 and upon his request the complainant supplied Polypropylene (PP) and High Density Polythlene (HDPE) fabric to the accused. During the course of business, the complainant delivered goods to the accused and consequently raised invoices which contained terms that in case of failure to make payment, the accused would be liable to make payments along with interest @ 24% per annum as per clause 1 of the terms of and conditions. However, the accused failed to make complete payments of Rs. 2,71,902/- which was the invoiced amounts.
2. Thereafter despite repeated requests by the complainant, the accused failed to repay the aforementioned amount and in terms of invoice, accused is liable to make payments of Rs. 360,579/- along with interest as per the terms of the invoices. Subsequently, legal notice dt. 25.01.2021 for recovery of an amount of Rs. 360,579/- (including interest of Rs. 88,677/-) was also received by the accused thereupon accused had issued a cheque bearing no. 388882 dt. 30.01.2021 for an amount of Rs. 360,579/- drawn on Canara Bank, Hodal Branch, Haryana and upon presentation of the said cheque by the complainant at its banker i.e. HDFC Bank Ltd. Deer Park, CT No. 1275/2021 Page No. 2 of 11 Digitally signed by SAURABH SAURABH GOYAL GOYAL Date: 2022.09.23 16:03:23 +0530 Safdarjung Enclave, ND on 30.01.2021 for encashment, the same got returned unpaid due to remarks 'Funds Insufficient'. The complainant informed the accused about the same immediately through legal notices dt. 04.02.2021, 06.02.2021 and 09.02.2021 despite receiving of the which accused has failed to make the payment to the complainant hence, the present complaint u/s 138 NI Act.
3. In the pre-summoning evidence, Sh. Abhinay Mishra, Authorized Representative of the complainant examined himself as CW-1 by tendering affidavit Ex CW 1/A and placed on record documents which are Board Resolution dt. 22.05.2020 Ex CW 1/1, purchase orders Ex CW 1/2, delivery note Ex CW 1/3, legal notice dt. 25.01.2021, tracking reports and service by WhatsApp are Ex CW 1/4 to Ex CW 1/6, cheque bearing no. 388882 dt. 30.01.2021 Ex CW 1/7, return memo dt. 01.02.2021 Ex CW 1/8, legal notice dt. 06.02.2021, tracking reports and service through WhatsApp Ex CW 1/9 to Ex CW 1/11, legal notices dt. 04.02.2021 & 09.02.2021 Ex CW 1/12 & Ex CW 1/13 respectively.
4. On finding a prima facie case on the basis of pre-summoning evidence, the accused was summoned. Upon his appearance, notice u/s 251 Cr.P.C. was served upon the accused to which he pleaded not guilty and claimed trial.
5. Accused took the defence that the cheque in question was issued to the complainant in a blank signed condition by way of security. He had taken material from the complainant on multiple occasions and CT No. 1275/2021 Page No. 3 of 11 Digitally signed by SAURABH SAURABH GOYAL GOYAL Date: 2022.09.23 16:03:28 +0530 according to him he owes only an amount of Rs. 2.3 lakhs to the complainant.
6. In order to prove his case, Sh. Keshan Kumar Sekhri, AR of the complainant got himself examined as CW-1 The complainant adopted his pre-summoning evidence as post-summoning evidence. The substitution of AR was allowed vide order dt. 15.02.2022. Thereafter, the application of accused under section 145(2) NI Act was allowed, the accused cross-examined the AR of the complainant. Thereafter CE was closed vide order dt. 25.03.2022.
7. Thereafter, statement of accused u/s 313 Cr.P.C. was recorded wherein the accused denied all the incriminating circumstances put to him. Upon being asked, accused wished to lead evidence in his defence. Thereupon, accused himself got examined as DW-1, cross- examined and discharged. Sh. Yudhister Kumar appeared as DW-2 who got examined however, Ld. Counsel for the complainant opted not to cross-examine him despite opportunity given. Thereafter, vide separate statement of Ld. counsel for the accused, DE was closed on 29.07.2022. Hence, the matter proceeded for final arguments.
8. Arguments were heard for both the parties and the record of the case has been perused.
9. It was argued on behalf of the complainant that the complainant has successfully raised a presumption under Section 139 NI Act read with Section 118 NI Act by proving all the prerequisites of section CT No. 1275/2021 Page No. 4 of 11 SAURABH Digitally signed by SAURABH GOYAL GOYAL Date: 2022.09.23 16:03:38 +0530 138 and that the accused has failed to rebut the said presumption.
10. The accused, on the other hand, has argued that he had taken material from the complainant on multiple occasions and was having business relations with the complainant for the past 7 to 8 year. However it was contended by the accused that he does not dispute the Ex CW 1/2 (colly) i.e. invoice raised by the complainant against the accused for an amount of Rs. 2,71,902/- but he has subsequently paid an amount of Rs 50,000/- to the employees of Complainant. Therefore, the liability of the accused is Rs 2,21,902/- only. In this regard, he placed on record Ex DW1/1 receipt showing depositing Rs 50,000/- to the complainant company and bearing signatures of one Ram Prasad Sharma, employee of the complainant. The accused has also examined Yudhister Kumar, ex- employee of the complainant who testified execution of Ex DW1/1 and the factum of receiving Rs 50,000/- from the accused. Thus, it has been argued on behalf of the accused that the liability of the accused is only of Rs 2,21,902/- and thus the legal notice served upon the accused is defective and thus no legally recoverable debt is due towards the accused and no presumption can be raised in favour of the complainant u/s 139 NI Act and even if it is raised, the accused has been able to rebut the same successfully.
11. In order to ascertain whether the accused has committed the offence under Section 138 of the NI Act, it is deemed fit to examine separately as to whether all the indispensable ingredients constituting the offence have been proved by the complainant. The offence under Section 138 of the NI Act has the CT No. 1275/2021 Page No. 5 of 11 SAURABH Digitally signed by SAURABH GOYAL GOYAL Date: 2022.09.23 16:03:46 +0530 following ingredients:
a) Existence of legally enforceable debt or liability and issuance of cheque in discharge of said debt or liability;
b) Dishonor of cheque in question which must have been drawn on an account maintained by the accused;
c) Service of demand notice seeking payment of cheque amount within fifteen days from the date of service;
d) Nonpayment of cheque amount within fifteen days from the date of service of notice; and
e) Filing of complaint within one month from the date on which cause of action arises.
12. After going through the evidence and circumstances of the case, it emerges that both the complainant and the accused were having business relations since the year 2018 and during the course of business the complainant delivered goods to the accused on multiple occasions and raised invoices. Ex CW1/2 was also one such invoice which was issued by the complainant with respect to goods supplied to the accused against receiving Ex CW1/3. The invoice was raised for an amount of Rs 2,71,902/- and as per the terms and conditions of the Purchase Order between the parties, interest @24% was charged on the invoiced amount for failure on part of the accused to make payment within 30 days of receipt of the goods. Therefore, the complainant issued notice dated 25.01.2021 for recovery of an amount of Rs 3,60,579/- comprising of Principle amount of Rs 2,71,902/- along with interest charged at 24% on the principle amount amounting to Rs 88,677/- .
CT No. 1275/2021 Page No. 6 of 11 Digitally signed by SAURABH SAURABH GOYAL
GOYAL Date: 2022.09.23
16:03:52 +0530
13. Subsequently, the accused issued the cheque in question Ex CW1/7 for an amount of Rs 3,60,579/-. However, the same got dishonoured due to insufficient funds vide return memo dt 01.02.2021 Ex CW 1/8. Thereafter, legal notice dated 06.02.2021 Ex CW 1/9 was served upon the accused via posts as well as through WhatsApp.
14. The postal tracking receipts have also been produced showing that said legal notice has been delivered on 12.02.2021. Moreover, the factum of receipt of legal notice has been admitted by the accused in his statement recorded u/s 313 Cr.PC. Therefore, the complainant has duly proved the serving upon the demand notice calling upon the accused to pay the cheque amount along with interest and cost of legal notice within 15 days after the receipt of legal notice.
15. However, the accused has failed to repay the amount as mentioned in the legal notice and thus present complaint has been filed by the complainant within the stipulated period on 02.03.2021 as per law.
16. Therefore the complainant has duly proved that the accused took material/ products from the complainant company against invoice Ex CW 1/2 for an amount Rs.2,71,902/- and in consideration thereof, the accused issued a cheque exhibited as Ex CW 1/7 with the assurance that the same shall be realized. But when the said cheque was presented/represented, the same was dishonoured with the remark "Fund Insufficient".
17. Thus, as discussed above, the presentation of cheque, its dishonorment and service of legal demand notice stands duly CT No. 1275/2021 Page No. 7 of 11 Digitally signed by SAURABH SAURABH GOYAL GOYAL Date: 2022.09.23 16:03:58 +0530 proved.
18. In view of above discussion, the complainant has successfully shown by enough evidence to raise presumption under Section 139 NI Act.
19. Now the moot question that remains to be determined is:
Whether the accused has successfully rebutted the presumption under Section 139 NI Act.
20. Section 139 NI Act read with Section 118, NI Act creates a rebuttable presumption in favour of the complainant. According to Section 118 NI Act, until the contrary is proved, it shall be presumed inter-alia that every negotiable instrument was made, drawn, accepted or endorsed for consideration. It is also presumed that, negotiable instrument was issued for a consideration until the contrary is proved.
21. There is no gainsaying that once the issuance of cheque is admitted by the accused/drawer, the presumption under Section 139 of the NI Act comes into play. As per the said Section 139 NI Act, it shall be presumed that the issuance of cheque was for the discharge, in whole or in part, of debt or other liability. The effect of the presumption has been explained in a catena of judgments, including the judgments of the Hon'ble Supreme Court passed in Rangappa vs. Sri Mohan reported in (2010) 11 SCC 441 and Bharat Barrel & Drum Mfg. Co. vs. Amin Chand SAURABH Digitally signed by SAURABH GOYAL GOYAL Date: 2022.09.23 16:04:06 +0530 Pyarelal reported in 1999 (3) SCC 35. It has been held time and CT No. 1275/2021 Page No. 8 of 11 again that the said presumption is a rebuttable and the onus shifts on the accused to rebut the same. It is also well settled that in order to rebut the presumption and shift back the burden of proof on the complainant, the accused is only required to raise a probable defence and he cannot be expected to discharge an unduly high standard of proof i.e. standard of proof for rebutting the presumption raised under Section 139 NI Act is "preponderance of probabilities". It is also well settled that the accused can rebut the said presumption either directly or by bringing on record preponderance of probabilities by reference to the circumstances upon which he relies. The accused, for this purpose, is also entitled under law to rely upon all the evidence led in the case including that of the complainant as well. It is also trite that Section 139 NI Act is an example of reverse onus clause and the accused cannot be expected to disprove the existence of legally recoverable debt or liability by direct evidence. Infact, it is also conceivable that in some cases, the accused may not need to adduce evidence of his/her own. However, at the same time it is also to be remembered that bare denial of the existence of legally enforceable debt or other liability cannot be said to be sufficient to rebut the presumption and something which is probable has to be brought on record to shift the onus back to the complainant.
22. In the instant case, in order to rebut the presumptions, it is argued by the Ld. Counsel for the accused that the particulars on the cheque in question were not filled by him. However, it is settled law that filling of particulars of cheque by any person other than the drawer does not invalidate the cheque and shall still attract the presumption CT No. 1275/2021 Page No. 9 of 11 SAURABH Digitally signed by SAURABH GOYAL GOYAL Date: 2022.09.23 16:04:14 +0530 under Section 139 of the NI Act. The same was held by the Hon'ble Supreme Court of India in the decision cited as Bir Singh vs Mukesh Kumar; (2019) 4 SCC 197. Thus, the signatures of the accused on the cheques in question being admitted, the plea that the particulars of cheque were not filled by the accused is not sustainable in the eyes of law.
23. The accused in his statement u/s 313, Cr. P.C. has denied the outstanding liability of Rs 2,71,902/- along with interest @24% though admitting liabilities of Rs 2,21,902/- and that the said cheque was issued as a security for doing business with the complainant. It is further submitted that accused has made the payment of Rs 50,000/- towards invoice EX CW 1/2.
24. Thus, it stands proved that the cheque bearing no. 388882 dt.
30.01.2021 was issued by the accused in discharge of legally enforceable liability which includes principal amount of Rs. 2,71,902/- along with interest @ 24% per annum as per the terms and conditions mentioned in the invoice Ex CW 1/2. The arguments on behalf of the accused that the sum of Rs. 50,000/- has been paid vide Ex DW 1/1 dt. 28.8.2019 and that the liability of the accused is to the extent of Rs 2,21,902/- and not Rs. 2,71,902/- is not sustainable. From the circumstances of the case it emerges that the said sum of Rs. 50,000/- has been adjusted prior to the issuance of legal demand notice in the sum of Rs. 2,71,902 + interest in the sum of Rs. 88,677/- and the said fact of outstanding amount of Rs. 2,71,902/- has been admitted by the accused in his reply dt. 04.02.2021 to the legal notice dt. 25.01.2021 Ex CW 1/12 as well as CT No. 1275/2021 Page No. 10 of 11 Digitally signed by SAURABH SAURABH GOYAL GOYAL Date: 2022.09.23 16:04:20 +0530 in his reply dt. 09.02.2021 to the legal notice dt. 06.02.2021. Thus, it stands proved that the cheque in question was issued towards the legal liability of Rs. 3,60,579/-. The said cheque was dishonored for insufficiency of funds in his account as proved by the return memo. The service of legal demand notice also stands proved by way of postal receipt and admission by the accused. The fact that the accused did not pay the cheque amount within 15 days of service of notice and even after 15 days of service of summons also stands proved.
25. In view of the above observations, it has to be held that the complainant has duly proved his case under section 138 NI Act while the accused failed to rebut the mandatory presumption under section 118 (a) and under section 139 NI Act.
26. Accordingly, the accused NAVEEN KUMAR is held guilty and convicted for the commission of the offence punishable u/s 138 NI Act.
27. Copy of the judgment be given free of costs to the accused.
28. List for arguments on the point of quantum of sentence on 24.09.2022.
Digitally signed by Pronounced in the open court SAURABH SAURABH GOYAL on 23.09.2022 GOYAL Date: 2022.09.23 16:04:24 +0530 (SAURABH GOYAL) MM (NI Act) Digital Court-01 South, Saket Courts, New Delhi CT No. 1275/2021 Page No. 11 of 11