Delhi District Court
M/S Kasan Varnisha And Paint Industries vs Sujay Thapa on 11 January, 2023
IN THE COURT OF ADITIONAL SESSIONS JUDGE-05,
SOUTH DISTRICT, SAKET COURTS : DELHI
CRL. APPEAL No. 26 of 2022
CNR No. DLST01-000525-2022
M/S KASAN VARNISHA AND PAINT INDUSTRIES,
KASAN, ALMORA,
THROUGH ITS
PROP. JEEVAN KUMAR,
S/O SHRI GHUSHI RAM,
R/O : KASANABAND DHOULCHINA,
ALMORA, UTTARAKHAND-263601
.......APPELLANT
VERSUS
SUJAY THAPA
S/O LATE SH. BHUPINDER THAPA
R/O : F-22, JAWAHAR PARK,
DEVLI ROAD, KHANPUR, NEAR BRT CORRIDOR,
NEW DELHI-110062.
...... RESPONDENT
DATE OF INSTITUTION : 22.03.2022
JUDGMENT RESERVED ON : 04.01.2023
DATE OF JUDGMENT : 11.01.2023
JUDGMENT
1. One Sujay Thapa invested some money (20 Lakhs) in the firm of one Jeevan Kumar on the assurance of good returns and initially he received some profits in return but subsequently, the said Jeevan Kumar stopped returning any amount. After persistent efforts, the said Jeevan Kumar given 3 post dated cheques to the said Sujay Thapa who presented one of the cheques (of Rs. 3 lakhs) in the bank for encasement but the same was not hounoured by the bank and therefore, after completing the due formality of issuing legal demand notice, the said Sujay Thapa filed a case before the Ld. Magistrate U/s 138 NI Act. The CA No. 26/22 M/s Kasan Varnisha & Paint Industries vs. Sujay Thapa Page 1 of 14 case resulted in conviction against the said Jeevan Kumar wherein the Ld. Magistrate sentenced him to pay fine of Rs. 5,20,000/- to be payable as compensation to the said Sujay Thapa.
2. Against the judgment and order passed by the Ld. Magistrate, the said Jeevan Kumar filed an appeal U/s 374 Cr.P.C praying that the judgment/order be set aside and Sujay Thapa filed an appeal U/s 374 Cr.P.C (?) for enhancement of sentence. This is how two appeals were filed against the same judgment/order and upon transfer, came to this Court for disposal. By this common judgment, I shall decide both the appeals.
3. Both the sides have been heard. Record perused.
4. Before proceeding on merits of the case, it will be useful to note the procedural aspect of the case. When the summons was issued by the Trial Court in the case, the accused adopted dilatory tactics and the situation escalated to the issuance of process U/s 82 Cr.P.C. It is only thereafter, the accused appeared in the court with application for cancellation of the said process whereupon he was admitted on bail. The Trial Court framed notice U/s 251 Cr.P.C against the accused and given him time to move application U/s 145 (2) NI Act for cross-examination of the complainant.
4.1. However, the accused again tried to adopt dilatory tactics by not appearing on the adjourned date either in person or through properly authorized Counsel. He chosen to send a Proxy Counsel with exemption application instead of application U/s CA No. 26/22 M/s Kasan Varnisha & Paint Industries vs. Sujay Thapa Page 2 of 14 145 (2) NI Act. Though, the Ld. Trial Court allowed the exemption but it did not allow any further adjournment for the accused and closed the right to file application U/s 145 (2) NI Act. In this manner, the evidence of complainant remained as it is.
4.2. The NI Act provides for some exception in the procedural requirement of giving evidence in the court. For instance, the complainant has been allowed to file affidavit instead of orally deposing before the court. In terms of Section 145 (1) NI Act, such affidavit once filed can be read in evidence in any proceeding including the trial.
4.3. In the present case, the complainant had filed an affidavit during the pre-summoning evidence and therefore, the same could have been read in evidence even in the trial post framing of notice U/s 251 Cr.P.C. It is clear that evidence in the form of affidavit of complainant was available. Section 145 (2) NI Act is a further exception to the Cr.P.C which shows that on an application or suo moto, the complainant can be recalled for examination. In this case, the accused did not file any application despite availability of opportunity. A court can only grant opportunity and cannot compel him to take any steps which is even for his own benefit. In such circumstances, I do not find anything illegal or against the principle of natural justice if the Ld. Trial Court relied upon the affidavit of the complainant as evidence.
4.4. Subsequently, sufficient opportunity was granted to the accused to lead evidence in defence but he tried to protract the CA No. 26/22 M/s Kasan Varnisha & Paint Industries vs. Sujay Thapa Page 3 of 14 matter for one reason or the other and did not lead any evidence in defence for at least 14 dates of hearing spaning into almost two years. It seems that for some period, the case was within the jurisdiction of a court in other state and accused wanted to claim that all evidence were already recorded therein. However, despite opportunity being given, the accused failed to produced certified copies of such evidence. The Ld. Trial Court then closed the opportunity of leading defence evidence. Thereafter despite opportunity, the accused did not advance final arguments and Ld. Trial Court granted opportunity to him to file written arguments and reserved the matter for judgment. Instead of filing any written arguments, the accused came up with an application U/s 311 Cr.P.C which was ultimately dismissed. I do not find any illegality in the steps taken by the Ld. Trial Court. Sufficient opportunities were available with the accused at every stage to take appropriate steps to defend himself. Accused chosen not to avail the opportunities and therefore, he cannot claim that he was not duly represented or was not given opportunity to defend himself.
4.5. In the aforesaid manner, it appears that the affidavit of the complainant remained unrebutted and unimpeached due to non- cross-examination by the accused despite opportunity. There has not been any evidence on behalf of the accused in defence despite opportunity. As such, the only evidence in the case is the affidavit of complainant. This evidence was put to the accused during his examination U/s 313 Cr.P.C. Accused did not deny taking of money from the complainant but claimed that he had not given the cheque to the complainant as the cheque was CA No. 26/22 M/s Kasan Varnisha & Paint Industries vs. Sujay Thapa Page 4 of 14 misplaced from his office for which he had filed a police complaint and had also intimated his bank.
4.6. Till the aforesaid situation, I find that Ld. Trial Court acted in a correct manner. It, however, appears that Ld. MM exercised suo moto power U/s 311 Cr.P.C and summoned bank witnesses. The testimony of those witnesses were recorded as court witnesses but there was no opportunity granted to the accused to cross-examine those court witnesses. I am of the opinion that this was not the correct procedure. The accused should have been granted an opportunity to cross-examine those court witnesses. Further, neither the incriminating circumstances appearing from their tesimony nor the documentary evidence brought by them have been put to the accused by additionally examining him U/s 313 Cr.P.C. In such circumstances, I am not inclined to rely upon the testimony of court witnesses or any document brought by them.
4.7. The only evidence which shall be relied upon in this case is unrebutted and unimpeached affidavit of the complainant. We have, therefore, to see as to whether complainant has established his case or not on the basis of available material.
5. To sustain a case under Section 138 NI Act, issuance of cheque for legally recoverable debt, dishonour of cheque, issuance of legal demand notice and failure of drawer to pay the cheque amount are necessary ingredients which are required to be established.
6. There has not been any dispute that the cheque pertains to a Bank Account belonging to the accused (he is proprietor of the CA No. 26/22 M/s Kasan Varnisha & Paint Industries vs. Sujay Thapa Page 5 of 14 firm) and that the cheque was signed by him. Once this is so, the issue which will arise is that as to how his signed cheque went into the possession of the complainant. The complainant has produced the cheque before the Trial Court and has therefore, established the foundational facts that he was in the possession of the cheque. Now, it was for the accused to state as to how its cheque went into the possession of complainant. This can only be in his special knowledge and therefore, Section 106 Evidence Act will oblige him to establish the facts.
7. The claim in the present case is that the cheque was misplaced from the office of the accused and for this, he had lodged police complaint and given intimation to the bank. Now, this claim could only have been established by the accused as the complainant could not have been done anything in this regard. Unfortunately, the accused side has not led any evidence to establish this fact. In such circumstances, a bare claim cannot be accepted at all.
8. In such circumstances, once it is accepted that cheque bears the signature of the accused and has legally come to the possession of the complainant, mandatory presumption of law comes into play by virtue of Section 139 NI Act. This provision mandates that the Court shall presume that the cheques were issued in discharge of legally recoverable liability. Further, a three-Judge Bench of Hon'ble Supreme Court in "Rangappa vs Mohan (2010) 11 SCC 441" has held that the presumption U/s 139 NI Act also extends to the establishing of fact that there was an existing legal liability for the consideration mentioned in the cheques. Precisely, it observed "In light of these extracts, we are CA No. 26/22 M/s Kasan Varnisha & Paint Industries vs. Sujay Thapa Page 6 of 14 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". In such circumstances, it is clear that the question of liability can be established by the complainant by virtue of mandatory presumption of law available U/s 139 NI Act and the complainant is not required to produce any other evidence to prove her case.
9. A three Judges Bench of the Hon'ble Supreme Court in "Kalamani Tex and Another vs. P. Balasubramanian" (2021) 5 SCC 283 has observed in this regard "Once the 2nd appellant had admitted his signatures on the cheque and the deed, the trial Court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt. The trial Court fell in error when it called upon the respondent complainant to explain the circumstances under which the appellants were liable to pay. Such approach of the trial Court was directly in the teeth of the established legal position as discussed above, and amounts to a patent error of law".
10. Hon'ble Supreme Court in Bir Singh vs Mukesh Kumar (2019) 4 SCC 197 has dealt with the issue of blank signed cheque and has opined that the same also attracts the presumption under Section-139 NI Act. In such view of the matter, I do not find any necessity to deal with the judgment (of Hon'ble Kerala High Court) cited by the Ld. Counsel for appeallant saying that blank cheque is not a valid execution.
CA No. 26/22 M/s Kasan Varnisha & Paint Industries vs. Sujay Thapa Page 7 of 1411. In view of the above, it is clear that unless the accused rebuts this mandatory presumption, the complainant cannot be asked to produce any other evidence. In Dhanvantrai Balwantrai Desai vs State of Maharashtra AIR 1964 SC 575, a four-Judge Bench of Hon'ble Supreme Court was dealing with similar kind of mandatory presumption (in corruption law) and provided the manner of rebuttal. It observed "The words 'unless the contrary is proved' which occur in this provision 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 the provision cannot be said to be rebutted".
12. We have, therefore, to see if the accused have been able to rebut the presumption or not. Since the explanation provided by the accused that his cheque was misplaced is not acceptable, this Court is of the opinion that the accused has not been able to rebut the presumption. As the onus does not shift to the complainant in this case, there is hardly any necessity for the complainant to produce any other material to support the liability for the consideration mentioned in the cheque.
13. In view of the above discussion, it is held that the accused has not been able to rebut the mandatory presumption of law and CA No. 26/22 M/s Kasan Varnisha & Paint Industries vs. Sujay Thapa Page 8 of 14 the complainant has been able to prove that the accused had issued the cheque against legal liability.
14. In the absence of any rebuttal, the complainant is bound to succeed in his case simply through the presumption. In this case, the Ld. Counsel for the appellant, however, is primarily relying upon some technicalities for claiming benefit of acuittal. The same can be dealt with herein under:
14.1. Ld. Counsel argued that legal demand notice is defective.
The reason given by the Ld. Counsel is that in the Legal Demand Notice, the complainant has shown that the cheque was returned due to insufficieny of funds whereas in the complaint, he has indicated stoppage of payment. A judgment titled as Sanjay Garg vs Som Nath Singla 2002 (1) CCC 436 (P&H) has been cited on the point. I have gone through the judgment. It was decided on the law prevailing at that point of time. Primarily, the judgment assumed that "stop payment" situations do not create an offence and therefore, if there is contradictory stand in the legal demand notice & complaint, the notice should become defective. I am unable to follow the ratio. At present, a three-Judge Bench of Hon'ble Supreme Court in "Rangappa vs Mohan (2010) 11 SCC 441" has held that stop payment situations are also covered under Section-138 NI Act. As such, the basic premise of the judgment so cited is demolished. Further, Section-138 NI Act simply says that a demand of cheque amount shall be made in writing. It nowhere even requires that the complainant should mention the reason for dishonour of cheque. As such, the argument of Ld. Counsel does not help the accused.
CA No. 26/22 M/s Kasan Varnisha & Paint Industries vs. Sujay Thapa Page 9 of 1414.2. Main thrust of the Ld. Counsel for appeallant has been on the dishounr of cheque itself. It seems that before the Trial Court, the complainant produced the cheque and a deposit slip and submitted that the bank staff had orally intimated him about dishonour. Accused side has not disputed that the complaint had deposited the cheque in the bank. The only dispute raised is that there is no cheque return memo and therefore, dishonour of cheque is not proved. Two judgments have been cited namely, Immanuel vs Rajappan 2004 (1) CCC 0221 (Kerala DB) and John vs George Jacob 1999 (Suppl.) CCC 0319 (Kerala) to contend that oral intimation is not sufficient.
14.2.1. I have gone through both the cited judgments. It seems that the Immanueal case (supra) is a result of the reference in contradiction of the John case (supra). The division bench in Immanuel case accepted the ratio of John case. It will, therefore, be sufficient to note the Immanuel case. It seems that what weighed with the Hon'ble Judges in that case is the perception that a case under Section-138 NI Act can be made only if the dishonour of the cheque is for two reasons mentioned in the provision itself i.e. inufficiency of funds or amount exceeding the arrangement. This prompted the division bench to opine that unless the complainant knows the exact reason, he cannot issue the legal demand notice and such exact reason can only be available in the written document.
14.2.2. In my view, the law has changed. At present, if the cheque is dishonoured for any reason (even beyond the reasons mentioned in the provision), offence under Section-138 NI Act is deemed to have been committed (see M/S Laxmi Dyechem vs CA No. 26/22 M/s Kasan Varnisha & Paint Industries vs. Sujay Thapa Page 10 of 14 State of Gujarat (2012) 13 SCC 375). As such, the complainant is not required to note the exact reason for dishonour. It is sufficient if the cheque presented to the bank has not resulted into encashment of amount in the account of complainant.
14.2.3. Further, I do not find anything in Section-138 NI Act which says that written recipt of dishonour of cheque is mandatory. What is required is the fact that the cheque was presented to the bank and the bank returned it without paying the amount and informed the payee (normally a complainant of the case). Herein, there is not dispute that the cheque was presented to the bank. The complainant has produced the cheque in the court. Therefore, it can safely be said that the bank returned the cheque to the complainant. Since the returned cheque is in the hand of the complainant, it can be inferred that amount mentioned in the cheque was not credited to his bank account.
14.2.4. One thing may noted here. The law requires a person to establish the facts. It can be done by any means provided in the Evidence Act unless something contrary is given in other law. There is nothing in the NI Act which provides for any particular mode of proving a fact. Section-146 NI Act though say that if bank slip or memo is produced, the court shall presume the dishonour of cheque. However, it nowhere says that it is the only mode. It does not override the Evidence Act on this point. Therefore, even if any return memo is not produced by the complainant, the facts can be established through other means available in the Evidenc Act. The aforesaid facts, in this case, have been duly established on record through the cheque, deposit slip and unimpeached affidavit of the complainant.
CA No. 26/22 M/s Kasan Varnisha & Paint Industries vs. Sujay Thapa Page 11 of 1414.3. Next, Ld. Counsel for the appeallant argued that the examination of accused conducted on 23.08.2017 was vitiated as wrong question was put by the Ld. Trail Court and as such, the entire proceeding stood vitiated. He pointed out that there is no return memo but the Ld. Trial Court put a question indicating return memo dated 09.02.2013.
14.3.1. I have considered the submission. It seems that on the back of the cheque, some writing is available showing the factum of no balance on certain dates (last of which is 09.02.2013). This apparently was treated as return memo by the Ld. Trial Court and was put to the accused. The accused accepted the same as correct.
14.3.2. I do not find any illegality in the aforesaid. Even otherwise, this cannot vitiate the entire trial. It is the claim of the accused himself that he had stopped the payment of the cheque. In such a scenario, the cheque could not have been cleared in any circumstance at all. It was for the accused to justify his action of stoppage of payment which he failed in this case. Now, he cannot claim any benefit on some marginally technical glitch.
14.4. Initially, the Ld. Counsel for appeallant tried to argue that the accused firm is a partnership firm and therefore, the complainant should not have made only the Jeevan Kumar as accused. However, during the course of arguments, he stated that the bank account still belogns to the propreitorship firm of which Jeevan Kumar is the properitor. Since, law on criminal side does not distinguish between a properitor or properitorship firm, I do CA No. 26/22 M/s Kasan Varnisha & Paint Industries vs. Sujay Thapa Page 12 of 14 not find any illegality in the fact that only Jeevan Kumar has been made liable.
15. In view of the above, it is clear that none of the technicalities pointed out by the Ld. Counsel for the accused/ appellant has any merit and therefore, it has to be accepted that complainant has succeeded.
16. So far as sentence is concerned, the Ld. Trial Court has shown leniency and has not awarded any imprisonment. It has simply imposed a fine of Rs.5,20,000/- to be payable as compensation.
17. Complainant has filed an appeal purportedly under Section-374 CrPC for enhancement of sentence. A bare perusal of the provision shows that the same is applicable to a convict and not a complainant. Be that as it may. During the course of arguments, the Ld. Counsel for the complainant submitted that his appeal may be treated under proviso to Section-372 CrPC. I, however, find that the said proviso empowers only a victim to file appeal that too in respect of acquittal, conviction for lesser sentence or inadequate compensation. The same nowhere provides for an appeal for enhancement of sentence. Section-377 CrPC is the provision under which enhancement of sentence can be prayed for. It, however, applies only to state government. Ld. Counsel then submitted that his appeal may be treated against inadquate compensation. I have considered this submission also. The cheque dated 30.01.2013 is of Rs. 3 lakhs. Almost 9 years have elapsed. Hon'ble Supreme Court in R. Vijayan vs Baby (2012) 1 SCC 260 has said that the compensation amount should CA No. 26/22 M/s Kasan Varnisha & Paint Industries vs. Sujay Thapa Page 13 of 14 such as may include cheque amount and 9% yearly interest. I am of the opinion that a compensation of Rs.5,20,000/- in respect of a cheque of Rs.3,00,000/- (pending for 9 years at the rate of 9%) is a sufficient and adequate compensation. I do not find any illegality in the sentence or any necessity for enhancing the compensation. The appeal filed by the complainant is liable to be dismissed.
18. In view of the discussion held herein above, judgment dated 17.11.2021 and order on sentence dated 23.12.2021 passed by the Ld. Trial Court are upheld. Both the appeals i.e. one filed by accused Jeevan Kumar and another filed by complainant Sujay Thapa are dismissed. One month time is allowed to the accused to pay the amount aforesaid to the complainant and file a compliance report before the Ld. Trial Court. Complainant shall be at liberty to receive any amount deposited with court in appropriate manner and subject to the fact that such amount shall be adjusted in the compensation amount.
20. Trial Court Record along with a copy of this Judgment be sent back.
21. The appeal file be consigned to the Record Room after due compliance.
ANNOUNCED IN THE OPEN COURT TODAY ON THIS 11th DAY OF JANUARY, 2023 (RAKESH KUMAR SINGH) ADDITIONAL SESSIONS JUDGE (SOUTH) SAKET COURTS : NEW DELHI CA No. 26/22 M/s Kasan Varnisha & Paint Industries vs. Sujay Thapa Page 14 of 14