Delhi District Court
25. In A.C. Narayanan vs State Of Maharashtra & Anr On 13 on 27 November, 2018
IN THE COURT OF MS.NUPUR GUPTA, CIVIL JUDGEI
METROPOLITAN MAGISTRATE, NEW DELHI
Judge Code No. DL0804
CC No.195/2016
Unique Case ID No.
Steel Authority of India Limited
(Salem Steel Plant) having its registered office at
Ispat Bhawan, Lodhi Road, New Delhi 110003
And also having one of its Regional Marketing Office at
10th Floor, Antriksh Bhawan, Kasturba Gandhi Marg,
New Delhi 110001
through Sh. Narendra Kumar, Regional Manager, Northern Region,
Salem Steel Plant (Marketing), 10th floor, Antriksh Bhawan,
Kasturba Gandhi Marg, New Delhi 110001 ... Complainant
Versus
1. Mr S.M. Lata, Director
M/s Lata Steel Agency (P) Ltd.
i) 1/6B, Asaf Ali Road, New Delhi 110002.
ii) C6/18, Rana Pratap Bagh, Delhi.
2. Mr. I.K. Lata, Additional Director
M/s Lata Steel Agency (P) Ltd.
i) 1/6B, Asaf Ali Road, New Delhi 110002.
ii) Sector 2, Block B, Plot No. 2/3, Rajinder Nagar, Ghaziabad (UP).
3. Mr. P.D. Lata, Additional Director
M/s Lata Steel Agency Pvt. Ltd.
i) 1/6B, Asaf Ali Road, New Delhi110002.
ii) No.3, Hunger Fort Street, Calcutta.
4. M/s Lata Steel Agency Pvt. Ltd.
CC No. 195/2016 1/24
1/6B, Asaf Ali Road, New Delhi 110002. ... Accused
COMPLAINT U/s 138 OF THE NEGOTIABLE INSTRUMENTS ACT
Offence complained of : U/s 138 N.I. Act
Date of commission of offence : 30.06.1996
Plea of Accused : Not guilty
Complaint filed on : 20.12.1996
Final Arguments heard & Concluded on : 22.10.2018
Date of decision of the case : 27.11.2018
Final order : Acquittal
JUDGMENT
1. Vide this judgment, I shall dispose off the present complaint under section 138 Negotiable Instruments Act, 1881 (hereinafter referred to as the 'N I Act') filed by the complainant against the accused persons.
2. The brief facts of the case as averred by the complainant in its complaint are that: The complainant is a Government of India Enterprises and a company registered under section 617 of the Companies Act, having its registered office as stated above and it is engaged in the manufacture of iron and steel materials through its various steel plants located in the State of Orissa, Bihar, Madhya Pradesh and West Bengal. It is stated that the present complaint case has been filed through Sh. Narendra Kumar, Regional Manager of the complainant, who is competent and authorized person on behalf of the complainant vide general power of attorney dated 13.12.1996 to institute suits or other legal proceedings by the company to act, file and plead on behalf of the complainant. It is alleged in the complaint that accused no.1 the CC No. 195/2016 2/24 director of accused no.4 M/s Lata Agency Pvt. Ltd. and accused no.2 and 3 are the additional Directors of the accused no.4. They are also the authorized representatives/ incharge/ responsible of the accused company in the daytoday functioning of the company in the matter of transaction of business of the company.
It is alleged in the complaint that the accused no.1 on behalf of the accused no.4 company had represented to the complainant that they required stainless steel and also, intend to pay advance unfilled and duly signed cheques issued by them. In this regard, the accused persons issued unfilled cheque bearing no. 790724 signed by the accused no.1 on behalf of the accused no.4 company with respect to the goods as per delivery order no. 171 dated 31.10.1995 for 16.532 M.T., which was later on supplied to the accused no.4 against invoices bearing no. 833, 839 and 841 dated 01.11.1995 ad 02.11.1995.
It is further alleged in the complaint that thereafter, when the said unfilled cheque was to be presented by the complainant, the accused persons requested to the complainant for return of the said unfilled cheque and in lieu of returned cheque, the accused persons had issued another cheque bearnig no. 011131 dated 30.06.1996 for an amount of Rs. 21,88,290/ drawn on Jammu & Kashmir Bank Ltd. 1/90, Connaught Place, New Delhi, signed by the accused no.1 on behalf of the accused no.4 company in favour of the complainant for discharge of the liability of the accused no.4 towards price including interest of the materials sold to the accused no.4 and had misrepresented to the complainant that the said cheque would be cleared on presentation. However, on presentation of the said cheque by the complainant to its banker, the said cheque was returned by the banker of the complainant with remarks "payment stopped by the drawer" vide return memo dated 30.10.1996. Thereafter, the complainant had sent a legal notice dated 13.11.1996 to all CC No. 195/2016 3/24 the accused by way of registered post dated 13.11.1996 for payment of the above said amount, which was received by the accused no.1 to 4 on 14.11.1996. However, as per the complainant, despite service of the said legal notice of the demand, the accused failed to pay the aforesaid dishonoured cheque amount. Hence, the present complaint.
3. The cognizance of offence u/s 138 Negotiable Instrument Act was taken and accordingly, all accused were summoned. Thereafter, notice u/s 251 Cr.P.C. explaining accusations against accused persons, namely, S.M. Lata, I.K. Lata, P.D. Lata and M/s Lata Steel Agency Pvt. Ltd. u/s 138 NI Act was framed on 15.05.2006 to which they did not plead guilty and claim trial. During the course of trial, accused no.2 I.K. Lata was expired and proceedings against him were abated vide Order dated 10.02.2016.
4. The complainant examined Sh.Narender Kumar, Regional Manager of the complainant as CW1 who deposed vide his affidavit Ex.CW1/A. He had relied upon following documents in support of the case : S.No. Exhibit/Mark Nature of Document
1. Ex.PW1/1 Minutes of Meeting dated 17.04.1996.
2. Ex.PW1/2 General power of attorney in favour of Sh. M.P. Sinha dated 07.05.1996.
3. Ex.PW1/3 General power of attorney dated 13.12.1996.
4. Ex.PW1/4 Guarantees executed and signed by the accused no.1 to 4 to Ex.PW1/6 all dated 06.05.1996.
5. Ex.PW1/7 Delivery order no. 171 dated 31.10.1995 for 16.52 MTs.
6. Ex.PW1/8A, Invoices no. 833 dated 01.11.1995 & no. 839, 841 both dated Ex.PW1/8B, 02.11.1995 Ex.PW1/8C CC No. 195/2016 4/24
7. Ex.PW1/9 Certified copy of the cheque bearing no. 011131 dated 30.06.1996 in the sum of Rs. 21,88,290/ drawn on Jammu & Kashmir Bank Ltd., New Delhi.
8. Ex.PW1/10 Letter dated 08.06.1996.
9. Ex.PW1/11 Copy of cheque returning memo dated 30.10.1996.
10. Ex.PW1/12, Legal notice dated 13.11.1996 sent to the accused persons Ex.PW1/13A alongwith postal receipts.
to Ex.PW1/13D
11. Ex.PW1/14A Original courier receipts.
to Ex.PW1/14D
12. Ex.PW1/15 Complaint u/s 138 NI Act.
5. This witness was cross examined at length by counsel for the accused no.1 to 4. Thereafter, the complainant evidence was closed on 15.03.2013.
6. After that on 24.03.2017 the statement of accused S.M. Lata was recorded u/s 313 Cr.P.C in which all the incriminating evidence along with exhibited documents were put to the accused. In his statement, accused no.1 S.M. Lata stated that he has not received the legal notice from the complainant and a false case has been instituted against him. Accused stated that he wish to lead evidence in his defence.
7. On 18.4.2017, the statement u/s 313 Cr.PC of accused P.D. Lata was recorded. In his statement, accused no.3 P.D. Lata stated that a false case has been instituted against him and he was separated from his brother (accused persons) in the year 1997 prior to the formation of the accused no.4 company. Accused no.3 further stated that he is not aware of anything done in the company. Thereafter, accused no.3 stated that he does not wish to lead evidence in his defence.
8. DW1 Sh. S.K Jha, Sr. Judicial Assistant, Hon'ble High Court of Delhi CC No. 195/2016 5/24 has brought the summoned record of CS (OS) No. 1471/97. Same is Ex.DW1/1.
10. The witnesses was not cross examined by ld. Senior counsel for the complainant. Thereafter, the defence evidence was closed on 12.03.2018 and matter was fixed for final arguments.
11. I have heard the submissions of counsel for the accused persons and the counsel for the complainant. I have also gone through the entire case record meticulously with the kind assistance of both the counsels of the parties. After weighing the rival contentions and after appreciating the evidence adduced, my findings are as below.
12. Before proceeding further let us go through the relevant provisions of law. The main ingredient of Section 138 of the Negotiable Instruments Act are as follows: The accused issued a cheque on an account maintained by him with a bank.
The said cheque has been issued in discharge of any legal debt or other liability.
The cheque has been presented to the bank within the period of six months from the date of the cheque or within the period of its validity. When the aforesaid cheque was presented for encashment, the same was returned unpaid/ dishonoured.
The Payee of the cheque issued a legal notice of demand within 30 days from the receipt of information by him from the Bank regarding the return of the cheque.
The Drawer of the cheque failed to make the payment within 15 days of the receipt of the aforesaid legal notice of demand.
CC No. 195/2016 6/2413. If the aforesaid ingredients are satisfied then the drawer of the cheque shall be deemed to have committed an offence punishable u/s 138 Negotiable Instruments Act.
14. Now let us deal with the each ingredient of the section 138 of Negotiable Instruments Act to see whether the case against the accused has been proved or not.
15. At this stage, let us go through the relevant provisions of law. There is a presumption in favour of the complainant u/s 118 (a) Negotiable Instruments Act that until the contrary is proved, it will be presumed that every negotiable instrument was drawn for consideration and every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration.
16. Further Section 139 of the Negotiable Instruments Act, 1881 provides that it shall be presumed until the contrary is proved that the holder of the cheque received the cheque of the nature referred in the Section 138 for the discharge in whole or in part of his debt or liability.
17. Now it will have to be examined whether the accused has rebutted the presumption as contemplated by Section 118 (b) and Section 139 of Negotiable Instruments Act.
18. It has been observed by the Hon'ble High Court of Delhi in V.S. Yadav Vs. Reena 172(2010) DLT 561 that the offence u/s 138 NI Act is a technical offence and the complainant is only supposed to prove that the cheques issued by the respondent were dishonored, his statement that cheques were issued against liability or debt is sufficient proof of the debt or liability and the onus shifts to the respondent / CC No. 195/2016 7/24 accused to show the circumstances under which the cheques came to be issued and this could be proved by the respondent only by way of evidence and not by leading no evidence.
19. Therefore, after the establishment of the fact that the cheque was issued by the accused and specific statement of the complainant as stated above regarding liability of the accused the burden to rebut the presumption shifted to the accused. It is established principle of law that presumption of law as raised Under sections 138 & 118 of the N.I. Act can be rebutted only by cogent evidence. In Kumar Exports V. Sharma Carpets (2009) 2 SCC 513 it was held by Hon'ble Supreme Court that:
To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the nonexistence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated.
20. Therefore, I now turn to the facts of the present case to examine as to whether, or not, the accused persons have been able to raise a probable defence to CC No. 195/2016 8/24 cast a doubt on the claim made by the complainant with regard to the existence of debt or other liability in relation to the transactions in respect whereof the cheque in question had been issued.
21. The accused may discharge his burden either by punching holes in the case of the complainant during cross examination of complainant and his witnesses, if any, by showing suppression of facts by complainant, noncompliance of any statutory requirement, or nonexistence of liability etc; or by leading cogent evidence in support of his defence raised.
22. In the case at hand, the accused has resorted to both the available possibilities. He has crossexamined the complainant and has also lead evidence in his defence.
23. In the present case, at the outset accused persons have challenged the authority of Sh. Narender Kumar who has deposed on behalf of the complainant as CW1. It is contended by the accused persons that no authority letter has been filed by CW1 on behalf of the complainant to depose in the present case and therefore, his testimony cannot be read in evidence. Per contra, it is argued by complainant that CW1 has tendered his evidence as Ex.CW1/1 and has duly proved his authority by exhibiting documents Ex.PW1/1 to Ex.PW1/3.
24. Therefore, it is relevant to examine these documents at this stage to determine the authority of Sh. Narender Kumar to depose on behalf of the complainant. It is important to mention that Ex.PW1/1 to Ex.PW1/3 are all photocopies and their originals were never produced before the Court in post summoning evidence. Thus, these documents cannot be read in evidence unless proved otherwise. Complainant has placed on record general power of attorney of Sh.
CC No. 195/2016 9/24M.P. Sinha who is authorized by the complainant to institute the present complaint which is Ex.PW1/1. Thereafter, another general power of attorney has been placed on record vide which Sh. M.P. Sinha has further authorized Sh. Narender Kumar to depose in the present case. However, neither the original power of attorney has been placed on record nor complainant has ever made any efforts to examine Sh. M.P. Sinha in order to prove general power of attorney executed by him in favour of Sh. Narender Kumar.
25. In A.C. Narayanan vs State Of Maharashtra & Anr on 13 September, 2013, Honble Supreme Court of India while clarifying the aspect of deposition of power of attorney holder held as follows: "...26) While holding that there is no serious conflict between the decisions in MMTC (supra) and Janki Vashdeo Bhojwani (supra), we clarify the position and answer the questions in the following manner:
(i) Filing of complaint petition under Section 138 of N.I Act through power of attorney is perfectly legal and competent.
(ii) The Power of Attorney holder can depose and verify on oath before the Court in order to prove the contents of the complaint.
However, the power of attorney holder must have witnessed the transaction as an agent of the payee/holder in due course or possess due knowledge regarding the said transactions.
(iii) It is required by the complainant to make specific assertion as CC No. 195/2016 10/24 to the knowledge of the power of attorney holder in the said transaction explicitly in the complaint and the power of attorney holder who has no knowledge regarding the transactions cannot be examined as a witness in the case.
(iv) In the light of section 145 of N.I Act, it is open to the Magistrate to rely upon the verification in the form of affidavit filed by the complainant in support of the complaint under Section 138 of the N.I Act and the Magistrate is neither mandatorily obliged to call upon the complainant to remain present before the Court, nor to examine the complainant of his witness upon oath for taking the decision whether or not to issue process on the complaint under Section 138 of the N.I. Act.
(v) The functions under the general power of attorney cannot be delegated to another person without specific clause permitting the same in the power of attorney. Nevertheless, the general power of attorney itself can be cancelled and be given to another person."
26. In these circumstances, there is no authority letter of Narender Kumar on record in the eyes of law. Therefore, documents placed on record by the complainant cannot be read in evidence. Ld.counsel for the complainant has relied upon judgment titled as Janki Vashdeo Bhojwani & Anr. Vs. Indusind Bank Ltd. & Ors. [(2005) 2 SCC 217] as per which any person can depose on behalf of a party even without any authority letter. However, it is relevant to quote para 17 of the said judgment which reads as follows : CC No. 195/2016 11/24
17. On the question of power of attorney, the High Courts have divergent views. In the case of Shambhu Dutt Shastri Vs. State of Rajasthan, 1986 2WLL 713 it was held that a general power of attorney holder can appear, plead and act on behalf of the party but he cannot become a witness on behalf of the party. He can only appear in his own capacity. No one can delegate the power to appear in witness box on behalf of himself. To appear in a witness box is altogether a different act. A general power of attorney holder cannot be allowed to appear as a witness on behalf of the plaintiff in the capacity of the plaintiff.
27. In view of the judgment relied upon by the complainant itself, it is clear that general power of attorney holder can appear and act on behalf of a party but he cannot become a witness on behalf of a party. It is also clear that to appear as a witness, a witness must have a personal knowledge of the facts of the case. Therefore, this judgment is not of any help to the complainant.
28. It is the case of the complainant that accused persons approached the complainant for supply of stainless steel and in lieu of the same, cheques were issued by the accused persons and they have also issued their personal guarantees. It is also stated by the complainant that unfilled cheques were handed over by the accused persons qua invoice bearing no. 171 dated 31.10.1995. Then, on expiry of validity period of the said cheques, accused persons by way of a letter requested the complainant not to present the said cheques and rather issued fresh cheque in lieu of the earlier cheques.
CC No. 195/2016 12/2429. Firstly, it is important to note here that neither any offer letter nor any acceptance letter of the goods allegedly supplied by the complainant has been placed on record. In crossexamination, CW1 has stated that offer letter was issued in writing to the accused persons, however, the same has not been placed on record at any point of time during the trial. Though, complainant has placed on record delivery order, however, it is also a photocopy and neither the original of the same was ever produced nor it was proved by any other competent witness who had executed it. Further, it is also a matter of record that even the invoice against which the cheque in question has allegedly been issued was never proved in accordance with provisions of Indian Evidence Act. Moreover, even the letter as alleged by complainant written to it by the accused persons to not to present the cheques was never placed on record. Therefore, averments of complainant are not substantiated by any evidence.
30. Complainant has relied upon judgments (i) Goaplast (P) Ltd. Vs. Chico Ursula D'Souza & Anr. (2003) 3 SCC 232; (ii) Mallavarapu Kasivisweswar Rao Vs. Thadikonda Ramulu Firm & Ors. (2008) 7 SCC 655;(iii) Rangappa Vs. Sri Mohan (2010) 11 SCC 441; (iv) Krishna Janardhan Bhat Vs. Dattatraya G. Hegde (2008) 4 SCC 54; (v) Hiten P. Dalal Vs. Bratindranath Banerjee (2001) 6 SCC 16; and (vi) T.P. Murguan (Dead) through LRs Vs Bojan and Posa Nandhi represented through Power of Attorney, T.P. Murugan Vs. Bojan (2018) 8 SCC 469 stating that under section 138 there is a presumption in favour of the complainant and accused is liable to rebut the same in order to succeed in a case u/s 138 NI Act. However, it is relevant to quote paras 27 and 28 of the judgment relied upon by the complainant itself titled as Rangappa Vs. Sri Mohan (Supra) which reads as follows : CC No. 195/2016 13/24
27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof.
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 has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence 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 CC No. 195/2016 14/24 rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.
31. The abovementioned judgment is a landmark judgment in the cases of 138 NI Act, which clarifies the burden of proof on the parties in the like cases. It is well settled law that though section 138 NI Act encompasses reserved burden of proof, however, initial onus always lies upon the complainant to satisfy the basic ingredients of section 1389 NI Act. It is also not disputed that accused can discharge his burden of proof by cross examining the complainant or by leading defence evidence. The basic ingredient which complainant was required to satisfy for making a valid complaint us/ 138 NI Act are as follows :
(i) Issuance of cheque by the accused;
(ii) Dishonour of said cheque on its presentation within the validity period;
(iii) Service of legal notice upon the accused within 30 days from the date of returning memo;
(iv) Filing of complaint within 15 days of service of legal notice.
32. It can be observed that basic ingredients of section 138 NI Act is presenting the cheque and its dishonour vide returning memo issued by the bank. Thus, returning memo assumes great importance in commission of offence u/s 138 NI Act. In the present case, perusal of the returning memo placed on record shows that it is a photocopy and original returning memo was never brought on record nor any bank official was ever called for proving the same. Secondly, and most importantly the returning memo Ex.PW1/11 does not bear any cheque number qua CC No. 195/2016 15/24 which the said returning memo has been issued. Thus, it is not even clear as to whether the said returning memo has been issued for the cheque in question or not.
33. The other important ingredient of section 138 NI Act is service of legal notice. Accused persons have categorically denied the service of receipt of legal notice in their statements u/s 313 Cr.PC. Complainant has placed on record the postal receipts and courier receipts which are Ex.PW1/13A to Ex.PW1/13D and Ex.PW1/14A to Ex.PW1/14D, however, even these documents are photocopies and originals were never produced before the Court. Moreover, no witness from postal department was ever summoned for proving these receipts. It is correct that there is a presumption in favour of complainant that legal notice has been served upon the accused if it is correctly addressed. According to Section 114 of the Act, read with Illustration (f) thereunder, when it appears to the Court that the common course of business renders it probable that a thing would happen, the Court may draw presumption that the thing would have happened, unless there are circumstances in a particular case to show that the common course of business was not followed. Thus, Section 114 enables the Court to presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business in their relation to the facts of the particular case.
34. Consequently, the court can presume that the common course of business has been followed in particular cases. When applied to communications sent by post, Section 114 enables the Court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee. But the presumption that is raised under Section 27 of the G.C. Act is a far stronger presumption. Further, while Section 114 of Evidence Act refers to a CC No. 195/2016 16/24 general presumption, Section 27 refers to a specific presumption. For the sake of ready reference, Section 27 of G.C. Act is extracted below:
"27. Meaning of service by post. Where any Central Act or regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression 'serve' or either of the expressions 'give' or 'send' or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, prepaying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post".
35. Section 27 gives rise to a presumption that service of notice has been affected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business.
36. It is thus clear that Section 114 of the Evidence Act enables the Court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee. Section 27 of the GC Act gives CC No. 195/2016 17/24 rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. Though, it is not necessary to aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice, however, complainant is mandatorily required to prove that legal notice was actually sent to the accused.
37. Applying the above conclusions to the facts of this case, since complainant has failed to prove the postal receipts, copies of which are placed on record to prove that legal notice was sent to the accused persons, no presumption can be raised in favour of the complainant. Therefore in these circumstances, neither the cheque returning memo nor the service of legal notice is proved in the present case. Thus, it can be said that the ingredients of section 138 NI Act itself are not fulfilled in the case in hand.
38. It is also a matter of record that even the date of presenting the cheque has not been mentioned anywhere either in the complaint or in the evidence by way of affidavit filed by the complainant's witness. Further, it is admitted by CW1 at various places in his crossexamination that goods were supplied to the accused persons on credit period for 60 days and cheques are generally presented on the date of issuance or on the next day. However, in the present case, perusal of the cheque shows that it is dated 30.06.1996 and the returning memo is dated 30.10.1996, which shows that cheque was presented after about 4 months from the date of its issuance. It is totally contradictory to the statement made by CW1 that cheques are presented on the date of its issuance or on the next day. Further, it is categorically stated by CW1 that credit period is of 30 days (without interest) plus 30 days (with interest), that CC No. 195/2016 18/24 is, total 60 days, however, the cheque in question was presented after about 120 days.
39. It is also worth mentioning here that admittedly, amount stated in cheque in question includes both principal as well as interest portion. Relevant portion of crossexamination of CW1 is reproduced as below : It is correct that in cheque dated 30.06.1996, the interest from 31.10.95 to 30.06.96 at the rate of 20% p.a. was to be charged on the D.O. amount of Rs. 1,52,900/. The interest for about eight months comes around Rs. 2.87 lacs (approximately). It appears that the cheque Ex.PW1/9 does not include total interest upto 30.06.1996 and neither does not correspondence to the exact principal amount of D.O. or with total interest upto 30.06.1996. Vol. the cheque includes the D.O. amount plus some interest.
40. The above statement of CW1 creates doubt in the whole story of the complainant as it is also not clear as to whether the cheque in question was actually issued in discharge of crystallized liability, which is a necessary ingredient of section 138 NI Act.
41. In Credential Leasing & Credits Ltd. vs Shruti Investments & Anr. on 29 June, 2015, Hon'ble High court of Delhi has held as follows: In my view, therefore, the scope of Section 138 NI Act would cover cases where the ascertained and crystallised debt or other CC No. 195/2016 19/24 liability exists on the date that the cheque is presented, and not only to case where the debt or other liability exists on the date on which it was delivered to the seller as a postdated cheque, or as a current cheque with credit period. The liability, though, should be in relation to the transaction in respect whereof the cheque is given, and cannot relate to some other independent liability. If, on the date that the cheque is presented, the ascertained and crystallised debt or other liability relatable to the dishonoured cheque exists, the dishonor of the cheque would invite action under Section 138 NI Act. There could be situations where, for example, an issue may be raised with regard to the quality, quantity, deficiency, specifications, etc. of the goods/services supplied, or accounting. It would have to be examined on a case to case basis, whether an ascertained or crystallised debt or other liability exists, which could be enforced by resort to Section 138 NI Act, or not.
42. Applying the principles of abovementioned case to the facts of the present case, it is clear that since cheque was not presented for a crystallized liability as ascertained by the complainant, the provisions of Section 138 NI Act are not applicable. Also it is an admitted position in the present case that cheque in question was issued as blank. It is also admitted that cheque was supposed to be issued on instructions of the accused. However, when and how said instructions were obtained from the accused by the complainant is not mentioned anywhere in the complaint.
CC No. 195/2016 20/2443. It is also important to note that time and again CW1 has stated in his crossexamination that whenever any cheque was issued by any party for supply of goods, a money receipt is issued immediately. Relevant portion of crossexamination of CW1 is reproduced as below : Whenever the cheques were issued the money receipts were immediately issued. Ex.DW1/DB(Colly) are the copies of money receipt total 20 in number issued by complainant company to the accused for having receipt the payments / cheques in lieu of goods supplied to them (OSR). Object to by the Ld.counsel for the complainant.
At this stage clarification is sought from the witness who submits that all the receipts produced does not belongs to the cheques in question.
44. It is admitted by CW1 that no such money receipt was ever issued to the accused persons for issuance of cheque allegedly for supply of goods. Complainant has also not placed on record any ledger accounts or any accounts statement in order to show the delivery of goods, its actual amount and the outstanding amount due from the accused.
45. Further, all the documents placed on record are photocopies and neither the originals of any of the documents nor any of the document is otherwise proved by any competent witness. Complainant has relied upon the judgment titled as Jai Prakash Aggaral vs State & Ors. 236 (2017) DLT 632 and Amarjit Singh & CC No. 195/2016 21/24 Anr. Vs Surinder Singh Arora & Ors. AIR 2017 Delhi 198. The facts of both these judgments are totally misconceived by the complainant and rather they are supporting the case of the accused persons. It was held in both these judgments that no written permission is required for proof of a document by secondary evidence. However, Court has to examine whether the situation mentioned in section 65 of Indian Evidence Act in which secondary evidence is permitted to be led are fulfilled or not. In the present case, complainant has failed to prove any of the circumstances mentioned in section 65 of Indian Evidence Act, which makes it entitled for leading secondary evidence. Though, it is correct that no specific application for seeking permission is necessary or required, however, in any event complainant has to satisfy the Court about the existence of the circumstances enumerated in section 65 of Indian Evidence Act, which is not proved in the present case. Accordingly, both these judgments are also not applicable to the facts of the present case.
46. It is no more Res Integra that in prosecutions under section 138 of the Act, despite statutory presumptions in favour of the complainant by virtue of section 118 & 139 of the Act, the complainant has to prove his case beyond all reasonable doubts. Per contra, the burden of the accused is only to show preponderance of probability in support of his defence. In the decision reported as 2006 (6) SCC 39 M.S. Narayana Menon @ Mani vs. State of Kerala & Anr., it was observed as under: "52. ................ If the defence is acceptable as probable the cheque therefore cannot be held to have been issued in discharge of the debt as, for example, if a cheque is issued for security or for any CC No. 195/2016 22/24 other purpose the same would not come within the purview of Section 138 of the Act.
47. From the above stated discussion, it is established that complainant fails to prove that the accused persons were liable to pay the cheque amount to him. Complainant has failed to prove any document whatsoever to show the liability of the accused persons, hence, the defence of the accused persons that the cheque in question was issued as security cheque and was not issued against any liability or debt appears to be probable. It is established principle of law that the accused has only to create a doubt in the version of the complainant, while the complainant has to prove the guilt of the accused persons beyond reasonable doubt. In the present matter Complainant has miserably failed to prove any document to show that there was a liability upon the accused persons. All these factors taken together proves that the defence of the accused persons is probable and is sufficient to rebut the presumption of law as arisen in favour of the complainant [Reliance placed on Vipul Kumar Gupta v. Vipin Gupta, 2012(4) JCC (NI) 248 (DEL) ]. After rebuttal of the presumption it was on the complainant to show by positive evidence that any such debt was in fact due upon the accused persons towards the complainant, in which the complainant has miserably failed.
48. Thus, from the above stated discussion, it can be held that the accused persons have proved a probable defence. They have rebutted the presumptions U/s 118 (b) and 139 of Negotiable Instruments Act and on the other hand, complainant has failed to prove liability of the accused persons positively. Considering the entire circumstances and evidence on record, it stands duly proved that the cheque in question was not issued and drawn in discharge of liability or a CC No. 195/2016 23/24 legally recoverable debt of the accused No.1 company towards complainant. Accordingly, all the accused persons, namely, accused no.1 S.M. Lata, accused no.3 P.D. Lata and accused no.4 M/s Lata Steel Agency Pvt. Ltd. stands acquitted of the offence U/s 138 Negotiable Instruments Act.
49. Accused no.1 S.M. Lata and accused no.3 P.D. Lata are directed to furnish fresh bail bonds and surety bonds in the sum of Rs. 50,000/ each as per Section 437A of Cr. PC.
Announced in the open Court (Nupur Gupta)
on 27.11.2018 Civil JudgeI/ Metropolitan Magistrate
New Delhi
The judgment contains pages 1 to 24
all checked and signed by me.
CC No. 195/2016 24/24