Delhi District Court
"...15. In Suresh Chandra Goyal vs . Amit Singhal, Crl. on 22 April, 2023
CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 1
IN THE COURT OF Ms. AISHWARYA SHARMA,
METROPOLITAN MAGISTRATE (NI ACT) DIGITAL COURT02,
SOUTHEAST DISTRICT, SAKET COURT COMPLEX, NEW DELHI
Criminal Complaint No.: CC NI ACT/2592/2021
M/S PNEUMAX PNEUMATICS INDIA PVT.LTD ...Complainant
Versus
GAJENDER KAUSHIK ... Accused
1. Name & address of the complainant: M/S PNEUMAX PNEUMATICS
INDIA PVT.LTD.
Having registered office at D82,
Hosiery Complex, Phase II
Extension, NOIDA, U.P.201305
(Through it's AR Sh.Chander
Mohan Singh Rawat)
2. Name & address of the accused : Sh. GAJENDER KAUSHIK
Proprietor M/S Expert
Pneumatic, Registered office at
D11, Lakhani Chowk, Sanjay
Colony, Near Awadhesh Sarai,
Sector 23, Faridabad, Haryana
121005,
Also at DC1404 Dabua
Colony, NIT Faridabad,
Faridabad, Haryana121001
3. Offence complained of : U/S 138 of The Negotiable
Instruments Act,1881.
4. Plea of accused : Pleaded not guilty.
5. Final Arguments : 27.03.2023
Digitally signed
by AISHWARYA
SHARMA
AISHWARYA
Date:
SHARMA 2023.04.24
15:05:19
+0530
CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 2
6. Date of Institution of case : 03.03.2021
7. Date of decision of the case : 24.04.2023
JUDGEMENT
1. Vide this judgment, I shall dispose of the aforementioned complaint case filed by the complainant M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. (hereinafter referred to as the 'complainant') through it's AR Sh. C M Singh Rawat, against the accused Sh. Gajender Kaushik (hereinafter referred to as the 'accused').
2. Factual Matrix: The complainant's case is that the the complainant is a registered company dealing in the business of Pneumatic components and the accused being the proprietor of M/s Expert Pneumatic was handling it's day to day business affairs. It is stated that the accused had approached the complainant for purchase of various goods on credit and had also made some payments and thus, opened a mutual open current account and as per the statement of account maintained by the complainant an amount of Rs. 10,36,381/ was due upon the accused, towards the complainant for the goods supplied. It is further stated that in partial discharge of the said liability, the accused had issued the cheques bearing No. 913365 dated 23.11.2020 for a sum of Rs. 2,41,837/, cheque bearing No. 913366 dated 07.12.2020, for a sum of Rs. 2,33,128/, cheque bearing No. 913367 dated 14.12.2020, for a sum of Rs. 2,43,900/, cheque bearing No. 913369 dated 28.12.2020 for a sum of Rs. 2,17,516/ all drawn on United bank of India, Sector 55 Faridabad Branch (hereinafter referred to as the "cheques in question"). However, the said cheques upon presentation were dishonoured for the reason "Funds Insufficient" vide return memos dated 13.01.2021. Thereafter, the complainant sent a legal demand notice dated 21.01.2021 U/S 138 of the N.I. Act at the last known address of the accused asking him to make the payment of cheque amount, which was Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2023.04.24 15:05:27 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 3 duly served upon the accused on 27.01.2021, however, the accused failed to make the payment despite delivery of the legal demand notice. Hence, being aggrieved, the complainant has filed the present complaint under section 138 of The Negotiable Instruments Act, 1881 on 03.03.2021 and prayed that the accused be summoned and prosecuted and he be also directed to pay compensation to the complainant company.
3. Summoning of accused: Ld. Predecessor of this court summoned the accused after hearing the arguments at the stage of pre summoning vide order dated 28.09.2021 and the accused entered appearance in the present case on 12.04.2022 and he was granted bail on the same day.
4. Notice: The court has framed notice of accusation under Section 251 Cr.P.C. against the accused on 05.05.2022. The substance of accusation was read over and explained to the accused and after being satisfied that the accused comprehended the same, the court recorded his plea.
5. Plea of the accused: The accused pleaded not guilty and claimed trial. The accused admitted his signatures on the cheques in question, however, denied filling particulars of the same. He denied the receiving of legal demand notice however, stated that it was sent at his correct address. In his defence, he stated that he has given the cheques in question to the complainant four years back as security as he was the distributor of the complainant and the same have been misused by the complainant. He further stated that he has no liability towards the complainant. On the same day, the statement of accused regarding his admission and denial was recorded U/S 294 Cr.PC, wherein the accused admitted correctness of dishonour memo pursuant to which the bank witnesses mentioned at Sr. No.3 and 4 in the list of witnesses of the complainant were dropped. Thereafter, the accused has also preferred an application U/S 145(2) of NI Act, wherein he has admitted doing Digitally signed by AISHWARYA SHARMA AISHWARYA Date: SHARMA 2023.04.24 15:05:34 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 4 business with the complainant company, however, he has claimed that the complainant company has intentionally filed wrong and incomplete account statement for the period from 16.04.2020 to 16.10.2020. He further stated that the parties are doing business with each other much prior to this period and he disputed his liability by claiming that complainant company has not filed any proof of delivery of goods and invoices and further, the goods supplied by the complainant company during the year 2020 was sometimes defective and not as per description of the goods ordered by the accused, due to which he suffered financial losses and loss of his reputation in the market. The accused has further stated that he claimed for redressal of this issue by making communication with the complainant company on 17.11.2020 through email and the complainant company also filed reply to the same but instead of resolving the issue, the complainant company presented the cheques in question with malafide intention.
6. Evidence on behalf of complainant: To prove it's case prima facie, the complainant has examined it's AR Sh. C M Singh Rawat as CW1, who has filed his evidence under Section 200 of the Cr.P.C. by way of an affidavit which is CW1/A bearing his signatures at point A & B, wherein he has reiterated the averments made in the complaint. The complainant has also relied upon EX. CW1/1 the copy of Board of Resolution dated 01.02.2021, EX. CW1/2 the copy of certificate of incorporation of the complainant company, EX. CW1/3 the account statement of complainant company along with EX. CW1/4 the certificate U/S 65 B of Indian Evidence Act, EX. CW1/5 to EX. CW1/8 the original cheques in question dated 23.11.2020, 07.12.2020, 14.12.2020 and 28.12.2020 respectively, EX. CW1/9 to EX. CW1/12 the original return memos dated 13.01.2021, EX.CW1/13 the legal demand notice dated 21.01.2021 along with it's postal receipts EX. CW1/14 and EX. CW1/15 Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.04.24 15:05:38 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 5 and tracking report EX. CW1/16 and EX.CW1/17. Thereafter, the complainant was subjected to crossexamination. However, despite being granted opportunity for crossexamination, the accused did not cross examine CW1 initially and thus, the CE was closed vide this court's order dated 20.07.2022, against which the accused preferred revision and the said revision petition was allowed vide order dated 12.10.2022 passed by Ld. ASJ05, South East District, Saket Court, New Delhi and thereafter, CW1 was crossexamined on 26.11.2022.
7. During his crossexamination, the complainant stated that apart from being the AR of the complainant company, he is also working with the company since the year 2017 in its Account branch. He stated that the accounts of the complainant company are being maintained electronically through computer system. He stated that he had prepared the statement of the account of the accused enclosed with the present complaint and he had made the relevant entries of the statement of the account of the accused filed with the present complaint. He stated that he does not remember since when the complainant is supplying materials to the accused. He stated that they have been supplying the same for last 34 years. He further stated that the outstanding amount of Rs.10,36,381/ as mentioned in para3 of their complaint was due from the accused as on December, 2020. He admitted that this amount is not reflected in the statement of account and further stated that the same has not been reflected as the statement of account has been filed only uptill 11.11.2020. He admitted that even after 11.11.2020, they had done transactions with the accused in November and December, 2020. He stated that he cannot specify any reason for not filing account statement uptill February, 2021 despite having transactions with the accused uptill February, 2021. He further stated that he can only confirm the receipt of payment of Rs.1,00,000/ from the accused on 26.11.2020, after examining the Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.04.24 15:05:42 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 6 complete account statement for the same. He admitted that they have sold the goods to the accused on 5th December, 10th December, 24th December 2020. He denied the suggestion that they have intentionally filed wrong/fabricated account statement and that is why they have not shown payment of Rs.1,00,000/ received from the accused on 26.11.2020. He also denied the suggestion that he has deliberately not mentioned the date on which the amount of Rs.10,36,381/ was due. He admitted that during the year 2020 for which he has submitted the statement of account, all the payments were made by the accused through banking transfers and no payment was made through cheque. He stated that he cannot say whether the accused made any other payment in the previous years through cheque which has been dishonored and for which if there is any complaint U/S 138 NI Act pending. He stated that he will have to verify this fact from books of the account of the complainant company. He admitted that the complainant company has not shown the receipt of the impugned cheques in the statement of account submitted with the present complaint. He denied the suggestion that they have deliberately not shown the receipt of the impugned cheques in their statement of account. He denied the suggestion that for this reason that they have filed the statement of account only uptill 11.11.2020. He further stated that he does not remember the exact date when the cheques were issued by the accused to the complainant company because they were received by him from the dispatch of the company and they were duly filled in. He stated that he cannot tell the exact date, month and the year when the impugned cheques were issued by the accused to the complainant company. He stated that he also cannot say when the impugned cheques were issued by the accused to the complainant company, whether they were duly complete in all respects or not. He stated that he can not say whether the impugned cheques were issued by the accused to the complainant company in the Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.04.24 15:05:47 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 7 year 2017 which were only signed by the accused and the name of the company filled in, but other particulars have been filled in by the complainant company on it's own. He stated that without checking their e mail, he cannot confirm the receipt of email communication Mark CW1/D1. He denied the suggestion that that the present complaint has been filed by misusing the blank singed cheques obtained in the year, 2017 only to put pressure upon the accused to make the payment for goods supplied which were of inferior quality. Thereafter, the CE was closed on 26.11.2022 vide separate statement of the CW1/AR for the complainant.
8. Examination of the accused under section 313 Cr.P.C: The accused was examined under section 313 Cr.P.C. on 22.08.2022 and 25.01.2023, wherein the accused amitted that complainant is a registered company dealing in the business of Pneumatic components. He also admitted that he being the proprietor M/S Expert Pneumatic was handling it's day to day business affairs. He also admitted that he had approached the complainant for purchase of various goods on credit and had also made some payment against the same. However, he denied that he had outstanding liability of Rs. 10,36,381/ towards the complainant for goods supplied as reflected in the statement of account EX. CW1/3 filed along with certificate U/S 65 B of Indian Evidence Act EX. CW1/4 and he stated that his outstanding liability was approximately Rs. 8 Lakhs towards the complainant. He denied that in partial discharge of his liability, he had issued the cheques in question bearing No. 913365 dated 23.11.2020 for a sum of Rs. 2,41,837/, cheque bearing No. 913366 dated 07.12.2020, for a sum of Rs. 2,33,128/, cheque bearing No. 913367 dated 14.12.2020, for a sum of Rs. 2,43,900/, cheque bearing No. 913369 dated 28.12.2020 for a sum of Rs. 2,17,516/ all drawn on United bank of India, Sector 55 Faridabad Branch, i.e. EX. CW1/5 to EX. CW1/8. He stated that he had given these Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.04.24 15:05:51 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 8 blank cheques in question as security being authorized distributor of complainant company in Faridabad. He stated that he had not given these cheques towards discharge of any liability. He stated that the complainant company has misused his security cheques after filling particulars of the same without any intimation to him. He admitted the correctness of dishonour memo EX. CW1/9 to EX. CW1/12 dated 13.01.2021. He denied receiving of the legal demand notice dated 21.01.2021 U/S 138 of the N.I. Act i.e. EX.CW1/13 through speed post, corresponding postal receipt of which is EX. CW1/14 and EX.CW1/15 and it's tracking report is EX.CW1/16 & EX. CW1/17 and he stated that he received the legal demand notice through email.
He admitted his signatures on the cheques in question. He denied filling particulars in the cheques in question. He stated that he had outstanding liability of approximately Rs.8 Lakhs towards the complainant and he had received some defective goods from the complainant so he told the complainant to take back the defective goods and receive the payment after settling the account. He further stated that he had also communicated this fact to the MD of the complainant company through e mail and stated that they did not respond to his email and presented his cheques. He admitted knowing the complainant and stated that he had business dealing with the complainant company. He stated that he is willing to make the payment of outstanding after the complainant company receive it's defective goods and adjust the statement of account accordingly. In his statement U/S 313 Cr.P.C recorded on 25.01.2023, the accused further stated that he had had given total 67 cheques to the complainant including the cheques in question in the year, 2017 and there was defect in the material supplied by the complainant regarding which he had also sent email to the complainant but the complainant did not give any response to his email and also pressurized him to make the payment first and thereafter, to Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.04.24 15:05:56 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 9 resolve the issue. He stated that the complainant did not resolve the issue and presented the cheques in question without any intimation to him. He stated that he was not using this bank account at the relevant point of time and that he had only given the cheques in question as security from this account. He stated that the complainant never even shared the complete ledger with him. He also stated that he intends to lead defence evidence.
9. Evidence on behalf of Accused: In his defence, the Accused has examined himself as DW1 on 25.02.2023 whereby he adopted his statement recorded U/S 313 Cr. P.C as his examinationinchief and he further stated that he is doing business with the complainant company since the year 2017 and he used to make advance payment for his purchases from the complainant company. He stated that in the year 2017, the complainant company agreed to supply him the goods on credit basis subject to giving of 6 Blank Signed Security cheques which were accordingly issued by him to the complainant company in the month of October, 2017. He stated that copy of his counterfoils of the cheque book showing the issuance of 6 security cheques in favour of the complainant company is EX. DW1/1 (OSR) (Colly consisting of 12 pages) showing the relevant entry at Page No. 9. He further stated that thereafter, their dealing continued during the year 20192020 and 20202021. He stated that he paid most of the payment towards purchases from the complainant company through NEFT and that no payment was made by cheque. He filed copy of his statement of account for the period from 01.04.2020 till 24.12.2020 Ex. DW1/2 (Colly consisting of 3 pages) to show that he made payments to the complainant company through NEFT. He stated that during the year 2020, the complainant company supplied him material of inferior quality, thus, he sent one mail to the complainant company for arranging a meeting to settle the matter which Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.04.24 15:06:00 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 10 was duly replied by the complainant company whereby the complainant company told him to make payment first and then only told him that they will settle the matter and the copy of said email conversation is EX. DW1/3 along with the certificate U/S 65 B of Indian Evidence Act is EX. DW1/4. He stated that instead of setteling the matter, the complainant company has filed present complaint against him misusing his 4 blank signed security cheques out of total 6 blank signed security cheques obtained by the complainant company in October, 2017. He stated that the cheques in question were never issued towards any due payment to the complainant company. Thereafter, this witness was subjected to crossexamination.
10. During his crossexamination, he stated that when he started the business with the complainant firm, he used to give PDC for the material supplied to him. He stated that thereafter, the complainant firm started giving the material on credit basis. He stated that he is maintaining the ledger account from the end of year 2019 till date and he stated that prior to that, his accountant Amar Kaushik who is also his brother used to maintain the ledger account on behalf of his firm. He stated that he has studied upto 12th standard and that he had not done any course with respect to accountancy, however, he has the knowledge of accounts. He stated that he has filed the ledger account for the period 01.04.2020 to 24.12.2020 and that as per the ledger account maintained by him till 24.12.2020, he owes an amount of Rs.9,39,884.78/. He stated that he has not made any entry in the said ledger account for an interest. He stated that he has not made any email stating as to against which bill, the inferior quality material has been supplied to him. He stated that he used to email the complainant company. He could not identify the signatures on the the statement of accounts filed by the complainant and when the same was shown to him, he stated that he cannot tell as to whose signatures are these. He admitted that the Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.04.24 15:06:05 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 11 stamp on the statement of account filed by the complainant, is of his firm. He stated that he has received the legal demand notice with respect to dishonor of cheque through email and stated that he has not filed any reply to the legal demand notice on court record. He stated that the record EX.DW1/1 (colly) is maintained by him only and any other person do not have any access to the said document. He stated that he always make entries of the cheque when he issue them. He stated that he does not maintain the dates of drawl on counter foil of the cheque book. He admitted that the document EX.DW1/1 (colly) is not maintained as per the dates of issue. He stated that he has not taken any receiving at the time the alleged impugned cheques were handed over to the complainant company as security. He stated that he does not have any demand letter from the side of complainant company regarding demand of security cheques from him. He admitted that whenever the cheque is dishonoured, he used to receive the message from the bank. He stated that he has not given any letter for not presenting the impugned cheques in his account at any point of time. He admitted that he has not written any letter to the complainant company asking them to return the security cheques. He denied the suggestion that he has made the payment towards the goods supplied to him through impugned cheques, as he owes the liability against the complainant company. He denied the suggestion that he has also confirmed the statement of account submitted by the complainant company. He further denied the suggestion that he has not issued any security cheque to the complainant company. He also denied the suggestion that the document EX.DW1/1 (colly) is prepared by him afterwards in order to show that the cheques were given in 2017. He denied the suggestion that the said document is false and fabricated. He admitted that he has not given any legal notice to the complainant company that the goods supplied to him are of inferior quality. He stated that he has sent the email only Digitally signed by AISHWARYA SHARMA AISHWARYA Date: SHARMA 2023.04.24 15:06:40 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 12 on 17.11.2020 which is EX.DW1/3. He also admitted that he has received the goods after the said email which is also reflected in his statement of account. He admitted that he has not made any payment as per the ledger account filed by him. He stated that on 26.11.2020, he has made payment of Rs.1 Lac through NEFT. He stated that he has not made any email except the emails filed by him. He admitted that he has also sent the emails for confirming the statement of account, however, he cannot tell on which date the said emails were sent. He stated that he does not remember, whether email Mark DW1/A was sent to the complainant company or not. He denied the suggestion that the complainant company has never supplied any inferior quality products to him and that is why, he has not sent any legal notice in this regard till date. He denied the suggestion that he has created a false defence of supplying products of inferior quality. He admitted that he has not filed any quality check report with respect to the products received by him. Thereafter the DE was closed vide separate statement of accused and the matter was listed for final arguments.
11. Final arguments: Learned counsel for the complainant with the help of Section 118 (a) and Section 139 of the Act argued that complainant has successfully proved guilt of the accused for the commission of offence punishable under Section 138 of the Act beyond all reasonable doubt by way of ocular as well as documentary evidence on record. On the other hand, Learned counsel for the accused argued that the complaint is not maintainable as the AR has not been properly authorized. He further argued that the complainant has failed to establish the guilt of the accused as it has failed to prove the service of legal demand notice upon the accused and also that the complainant has failed to establish that particulars in the cheques in question have been filled by the accused. He further argued that the complainant company has failed to establish existence of legally enforceable debt as Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.04.24 15:06:44 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 13 the material supplied by the complainant company was defective and they have filed incomplete account statement which do not reflect the liability of the accused for outstanding amount as shown in the cheques in question. He also argued that the complainant company has misused the security cheques of the accused which is clear from the fact that the accused used to make payment to the complainant company only by way of NEFT and RTGS and not through cheques. Lastly, Ld. Counsel for accused argued that the cheques in question could not have been presented for the amount mentioned therein as the liability of the accused was for lesser amount. With these submissions, Ld. Counsel for accused argued that since the basic ingredients of Section 138 of NI Act have not been established by the complainant company, the accused must be acquitted. After hearing final arguments on behalf of both the parties, the matter was reserved for judgment.
12. 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. For securing conviction under section 138 of NI Act following points are required to be proved:
a) The cheque was issued by the drawer in discharge of any debt or other liability.
b) It must be legally enforceable debt or liability.
c) The cheque must be presented by payee within period of 3 months or it's
validity whichever is earlier.
d) The cheque is dishonoured because of insufficient funds or it exceeds the
arrangement.
e) A legal notice in writing demanding the payment of cheque is issued
Digitally signed
by AISHWARYA
AISHWARYA SHARMA
SHARMA Date:
2023.04.24
15:06:48 +0530
CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 14
within 30 days of the receipt of information from the bank.
f) There is default by the drawer to make the payment within 15 days from the date of the receipt of notice.
g) The complaint is filed within 30 days from the date of cause of action.
13. In the present case, presentation of the impugned cheques EX.CW1/5 to EX.CW1/8 for encashment is not in dispute. As per record, all these cheques in question were dishonoured with remarks "Funds Insufficient" vide return memos EX.CW1/9 to EX.CW1/12 dated 13.01.2021. This fact has been admitted by the accused in his statement of admission & denial recorded U/S 294 Cr. P.C. It is pertinent to point out that the accused has admitted his signatures on the cheques in question. The accsued has also admitted that the legal demand notice was sent at his correct address, however, the accused has tried to dispute his liability by claiming during notice put U/S 251 Cr.P.C. that the legal demand notice was not delivered upon him, but the accused in his statement U/S 313 Cr. P.C has admitted that the legal demand notice was received by him through email. Further, throughout the trial, the accused has not disputed the fact that the legal demand notice was sent at his correct address. In view of such admission of the accused, the service of the legal demand notice upon the accused is established, as the legal demand notice was sent to the accused through speed post at this correct address and as per the postal receipt and its tracking report EX.CW1/14 to EX.CW1/17 filed on record, the legal demand notice was served upon the accued through speed post at one of his address on 27.01.2021. Since, the legal demand notice was sent to the accused through speed post at his correct address and as per the tracking report filed on record, the same was duly served upon him and the accused has not lead any evidence to dispute the postal receipt or its tracking report, thus, the service of legal demand notice upon the Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2023.04.24 15:06:52 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 15 accused is to be presumed as per section 27 of the General Clauses Act. Further, the accused has also admitted that he had received the legal demand notice through e mail. Further during his crossexamination, the accused has even admitted that despite receiving the legal demand notice he did not file reply to the legal demand notice, thus, it is established that the complainant has sent the legal demand notice dated 21.01.2021 to the accused within limitation and the same was duly served upon the accused.
14. Accused has also tried to dispute his liability by claiming that the AR of the complainant company did not have authority to file this case as he is not aware of the facts of the case. In support of his submissions, Ld. Counsel for accused has relied upon judgment of Hon'ble Supreme Court in case titled as M/S TRL Krosaki Refractories Ltd. v M/S SMS Asia Pvt. Ltd. and Anr. (arising out of SLP (Crl.) No. 3113 of 2018 decided on 22.02.2022. In this judgment, it has been held by Hon'ble Apex Court that:
" ...17. In that view, the position that would emerge is that when a company is the payee of the cheque based on which a complaint is filed under Section 138 of N.I. Act, the complainant necessarily should be the Company which would be represented by an employee who is authorized. Primafacie, in such a situation the indication in the complaint and the sworn statement (either orally or by affidavit) to the effect that the complainant (Company) is represented by an authorized person who has knowledge, would be sufficient. The employment of the terms "specific assertion as to the knowledge of the power of attorney holder" and such assertion about knowledge should be "said explicitly" as stated in A.C. Narayanan (supra) cannot be understood to mean that the assertion should be in any particular manner, much less only in the manner understood by the accused in the case. All that is necessary Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.04.24 15:06:57 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 16 is to demonstrate before the learned Magistrate that the complaint filed is in the name of the "payee" and if the person who is prosecuting the complaint is different from the payee, the authorisation therefor and that the contents of the complaint are within his knowledge. When, the complainant/payee is a company, an authorized employee can represent the company. Such averment and prima facie material is sufficient for the learned Magistrate to take cognizance and issue process. If at all, there is any serious dispute with regard to the person prosecuting the complaint not being authorized or if it is to be demonstrated that the person who filed the complaint has no knowledge of the transaction and, as such that person could not have instituted and prosecuted the complaint, it would be open for the accused to dispute the position and establish the same during the course of the trial. As noted in Samrat Shipping Co. Pvt. Ltd. (supra), dismissal of a complaint at the threshold by the Magistrate on the question of authorisation, would not be justified. Similarly, we are of the view that in such circumstances entertaining a petition under Section 482 to quash the order taking cognizance by the Magistrate would be unjustified when the issue of proper authorisation and knowledge can only be an issue for trial....".
15. In view of the case law cited above, it becomes clear that the complaint on behalf of a company can be filed by it's duly authorized representative, who has knowledge about the facts of the case. In the present case, CW1 namely MR. C.M Singh Rawat has been authorized to file this complaint by Board or Resolution of the complainant company dated 01.02.2021 i.e. EX.CW1/1 and throughout the trial, the accused has not objected to the validity of board of resolution or the authority of CW 1, to file this complaint. For the first time during final arguments, accused has tried to challenge capacity of CW1 to file this complaint stating that CW1 is not aware about the fact of the case, however, I do not find any merits in this argument Digitally signed by AISHWARYA SHARMA AISHWARYA Date: SHARMA 2023.04.24 15:07:01 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 17 advanced on behalf of accused, as CW1 during his crossexamination has stated that he was working with the complainant company since the year 2017 in the accounts branch of the complainant company and he has even prepared the statement of account EX.CW1/3. CW1 has also confirmed that the goods were sold by the complainant company to accused even in December 2020, and he has even confirmed that the accused has made payment of Rs.1 Lac to the complainant company on 26.12.2020, which is not reflected in statement of account EX.CW1/3. All these facts clearly shows that CW1 had knowledge about the facts and transaction of the present complaint and he has been duly authorized by the complainant company to prosecute this complaint.
16. As per section 142 of NI Act, a complaint U/S 138 NI Act on behalf of a company/payee or holder in due course, has to be made by its Manager/ Authorised person. In the present case, the complainant company has authorized CW1 Mr. C M Singh Rawat, to prosecute this complaint vide it's Board of Resolution EX. CW1/1. Further, in the present case admittedly the accused has received goods from the complainant company and even handed over the cheques in question to the complainant company, thus, it is established that the complainant company is the payee/holder in due course. Thus, it cannot be said that present complaint has not been filed by the complainant company by it's duly authorized representative. On this point, I draw reference from the judgment of Hon'ble Supreme court in Shankar Finance Investments v State of Andhrapradesh and Ors. (2008) 24 CLABL Supp 62 (SC), wherein the Hon'ble Supreme Court observed that:
"...the requirement of Section 142 of the NI Act are that the complaint should be in writing and the complainant should be made by the payee and holder in due course... once the Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.04.24 15:07:06 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 18 complaint is in the name of the payee and is in writing, the requirement of Section 142 are fulfilled..."
17. On this point, reference can also be drawn from Eita India Pvt. Ltd. v NCT of Delhi (2003) 114 Comp Cas.32(Del.) wherein it was held that "... the conspectus of judicial opinion establishes a principle that complaint in respect of the offence punishable U/S 138 of the Act need not be personally filed by the payer or holder in due course. It can be filed by a natural person to act as defacto complainant..."
18. Thus, as per Section 142 of the NI Act, a manager or any other person authorized by the complaint can represent it during the course of legal proceedings before the court and file a complaint. Since, in the present case the complaint has been filed by the Authorised Representative of the complainant company regarding the cheques in question which were issued for payment of material supplied by the complainant company to the accused, thus, it cannot be said that Mr. C.M. Singh Rawat is not authorized to pursue this complaint on behalf of complainant company.
19. In the present case, accused has also tried to dispute his liability by claiming that since the cheques in question were given to the complainant company as security and he has not filled the amount and date in the same, as such, he has no liability for making payment of the cheque amount to the complainant company. With respect to these facts, suggestions were given to the CW1 during his cross examination by accused, however, at one place, CW1 stated that he has received the cheques in question from dispatch department of the company and the same were duly filled in and later on, he stated that he cannot say, if apart from the name of the payee, other particulars in the cheques in question have been filled by complainant company on it's own or not. However, for the sake of arguments, even if it is Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.04.24 15:07:11 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 19 believed that the cheuqes in question were given as security and particulars of the same were filled by the complainant company, even the same will not absolve the accused from his liability, as, it is no more resintegra that the particulars of the cheques in question were not filled by accused persons is no defence in a trial U/S 138 of NI Act. The accused is liable for the offence under Section 138 NI Act, even if particulars of the cheque are not filled by the drawer of the cheque, if the liability of the drawer of the cheque / accused is proved as per law. Hon'ble High Court of Delhi in Ravi Chopra v State and Anr., 2008 SCC OnLine Del 351 has discussed in detail the issue related to the defence that there was no liability as cheque was given in blank. It has been held that " ...Even under the scheme of the NI Act it is possible for the drawer of a cheque to give a blank cheque signed by him to the payee and consent either implicitly or expressly to the said cheque being filled up at a subsequent point in time and presented for payment by the drawee. In the present case also, therefore, the defence taken by the accused persons that the cheques in question were blank, is no defence to avoid the liability as it has been established that the cheques in question were signed by the accused persons..."
20. The accused has also disputed his liability by claiming that since the cheques in question were given as security and not towards the payment of any outstanding liability, the accused cannot be held liable for dishonour of the same. To establish this fact that the cheques in question were given as security, the accused has stated that the cheques were given to the complainant in October 2017, when the complainant demanded the same as security for supplying the goods on credit to the accused firm and the said fact can also be established from the leaflets of the cheque book of the accused firm annexed as EX.CW1/1 (colly) consisting 12 pages. It is Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.04.24 15:07:15 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 20 pertinent to point that the entry regarding the cheques in question is mentioned at page no. 9 in this document. This document shows that against the cheques in question, no dates are mentioned and immediately above the same, there is entry of cheque bearing no. 363 and against the same, date of 05.01.2017 in mentioned and above that, date of 03.10.2017 is mentioned which do not support the claim of the accused that the cheques in question were given in October 2017. Further, even in previous page numbers, some cheques of prior series are shown to have been given in the year 2019, which also controverts the claim of the accused that the cheques in question were given as security by him to the complainant firm in October, 2017 and not in discharge of any outstanding liability for payment of goods. Further, even if the defence of the accused that the cheques in question were given as security, is accepted to be correct, the same will not help the accused in any manner as the legal position qua security cheque is no more res integra and it has been settled by Hon'ble High Court of Delhi in the case of Credential Leasing & Credits Ltd. v. Shruti Investments & Anr. (2015) 223 DLT 343, wherein after relying upon the case titled as Suresh Chandra Goyal v.Amit Singhal, (2015) 2 DLT (Cri) 803, decided by the Hon'ble High Court of Delhi, it was held that:
"...15. In Suresh Chandra Goyal Vs. Amit Singhal, Crl. Appeal Nos.601/2015 decided on 14.05.2015, this Court had occasion to consider the defence of "security cheque".
In that case the complainant invested monies, from time to time, in the business of the accused. A sum of Rs.3 Lakhs was outstanding after accounting for the monies returned by the accused. The accused entered into a MOU for repayment of the said outstanding amount in 6 monthly installments of Rs.50,000/ each. The accused issued six security cheques of Rs.50,000/, which were to be returned upon payment of the corresponding installment. While three installments were admittedly received by the complainant, Digitally signed by AISHWARYA SHARMA AISHWARYA Date: SHARMA 2023.04.24 15:07:21 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 21 he claimed that the remaining three were not paid. The corresponding security cheques were banked; dishonoured upon presentation, and; after issuance of statutory notice, the complaint under Section 138 NI Act filed due to non payment. This Court, inter alia, observed as follows:
28. There is no magic in the word "security cheque", such that, the moment the accused claims that the dishonoured cheque (in respect whereof a complaint under Section 138 of the Act is preferred) was given as a "security cheque", the Magistrate would acquit the accused. The expression "security cheque" is not a statutorily defined expression in the NI Act. The NI Act does not per se carve out an exception in respect of a "security cheque" to say that a complaint in respect of such a cheque would not be maintainable. There can be mirade situations in which the cheque issued by the accused may be called as security cheque, or may have been issued by way of a security, i.e. to provide an assurance or comfort to the drawee, that in case of failure of the primary consideration on the due date, or on the happening (or not happening) of a contingency, the security may be enforced. While in some situations, the dishonor of such a cheque may attract the penal provisions contained in Section 138 of the Act, in others it may not..."
21. Further, recently, the Hon'ble Supreme Court in the case titled as APS Forex Services Pvt Ltd v. Shakti International Fashion Linkers and Ors. AIR 2020 SC 945 has held that:
"...9. Coming back to the facts in the present case and considering the fact that the accused has admitted the issuance of the cheques and his signature on the cheque and that the cheque in question was issued for the second time, after the earlier cheques were dishonoured and that even according to the accused some amount was due and payable, there is a presumption under Section 139 of the N.I. Act that there exists a legally enforceable debt or liability. Of course, such presumption is rebuttable in nature. However, to rebut the presumption the accused was Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.04.24 15:07:26 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 22 required to lead the evidence that full amount due and payable to the complainant has been paid. In the present case, no such evidence has been led by the accused. The story put forward by the accused that the cheques were given by way of security is not believable in absence of further evidence to rebut the presumption and more particularly the cheque in question was issued for the second time, after the earlier cheques were dishonoured. Therefore, both the courts below have materially erred in not properly appreciating and considering the presumption in favour of the complainant that there exists legally enforceable debt or liability as per Section 139 of the N.I. Act. It appears that both, the Learned Trial Court as well as the High Court, have committed error in shifting the burden upon the complainant to prove the debt or liability, without appreciating the presumption under Section 139 of N.I. Act. As observed above, Section 139 of the Act is an example of reverse onus clause and therefore once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always a presumption in favour of the complainant that there exists legally enforceable debt or liability and thereafter it is for the accused to rebut such presumption by leading evidence."
22. Thus, the contention of the accused that the cheques in question were given as security cheque finds no force in view of the aforementioned binding judgments of the Hon'ble Courts. Further, as per the presumptions raised under the NI Act, the burden to raise a probable defence lies upon the accused and thus, the defence raised by the accused that the cheques in question were given as security, does not come to his rescue.
23. In the present case, the accused has primarily disputed his liability by claiming that the material supplied by the complainant was not of the good quality. It is pertinent to point out that suggestion regarding this fact was given to CW1 during his crossexamination, however, CW1 denied that the complainant company has Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.04.24 15:07:31 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 23 supplied goods of inferior quality to the accused. It is pertinent to point out that during notice put under Section 251 Cr.P.C, the accused has not stated anything about the quality of goods and he has only stated in his defence that he had given the cheques in question as security to the complainant and the same have been misused. For the first time, in his application under Section 145 (2) NI Act, the accused has stated that he was supplied with defective goods in the year 2020 and the goods supplied to him were not as per the description of goods ordered by him. During his statement under Section 313 Cr.P.C, the accused has stated that he has received defective goods from the complainant company and he has conveyed this fact to the complainant company through email EX.DW1/3, however, instead of setteling the issue, the complainant company presented his cheques in question. It is not in dispute that the accused has made one email communication to the complainant company on 17.11.2020 and the complainant company had also replied to the same, which is part of record as EX.DW1/3. It is pertinent to point out that in this email communication, the accused has only stated that he was not supplied with material in time and he was supplied with wrong material, which was not as per the order placed by him.
However, in this entire communication it is nowhere mentioned that the goods supplied to the accused were defective. Throughout the trial, the accused has not even stated the date or month or the invoice number against which defective goods were supplied to him and the accused has not even mentioned the value of the defective goods supplied. Thus, on basis of this email only and oral testimony of accused, this fact cannot be relied upon that the goods supplied to the accused were defective, specifically when the complainant has not admitted this fact throughout the trial or even during the email conversation between the parties. Had the goods supplied to the accused prior to 17.11.2020 been defective, the accused would have made further Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.04.24 15:07:35 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 24 communication through email disputing his liability however, the accused has not done so and the accused on 30.11.2020 through email communication Mark DW1/A has confirmed having outstanding liability of Rs.10,52,736.01 towards the complainant company as per it's ledger, which further supports the case of the complainant that the accused has outstanding liability higher than the cheque amount towards the complainant company. Further, even the email communication relied upon by the accused EX.DW1/3 also suggests that accused was not making payment regularly to the complainant company. Further, if the goods supplied to the accused were defective, the accused would have sent some debit note regarding the same to the complaiannt company or he would not have done further business with the complainant company but admittedly the accused has done transactions with the complainant company uptill February 2021, which further refutes the defence of the accused. Further, if the cheques in question would have been given as security and not towards the payment of the goods supplied, the accused would have atleast made some written communication with the complainant company seeking return of his cheques or he would have at least given stop payment instructions against the cheque in question to his bank, however, the accused has not done so, which further falsify his defence that he did not have any outstanding liability or he had outstanding liability for lessor amount than the cheque amount, towards the complainant.
24. The accused has also tried to dispute his liability by claiming that he cannot be made liable for dishonour of the cheques in question as the complainant company has not reflected the payment of Rs.1 Lac made by him in it's favour on 26.11.2020 in it's statement of accout and thus, the accused has claimed that he has liability for reduced amount and the accused has further claimed that due to this reason only, the complainant company has filed incomplete account statement. It is Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date:
2023.04.24 15:07:40 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 25 pertinent to point out that this fact is undisputed that both the parties were maintaining current account with each other and payment made on 26.11.2020 by the accused in favour of complainant company has not been disputed by CW1 in his crossexamination. Further, though the accused in his defence stated that he had outstanding liability for approximately Rs. 8 Lacs towards the complainant company at the relevant point of time, however, during his crossexamination, the accused has admitted having outstanding liability of Rs.9,39,884.78/ as on 24.12.2020 towards the complainant company and he has nowhere stated that after 24.12.2020, he had made any payment in favour of the complainant company. Further, the accused has not even filed any statement of account to show that he had liability for an amount lesser that the cheque amount during the relevant period. The statement of amount filed by the accused uptill 24.12.2020 EX.DW1/2 (colly) is also showing that the accused had outstanding liability of Rs.9,39,884.78/ towards the complainant company. Ld. Counsel for accused has argued that the complainant has failed to establish that the outstanding liability of the accused was Rs.10,36,381/ towards the complainant company and thus, has claimed that in such a situation, it cannot be said the cheques in question have been issued by the accused in part discharge of liability for the outstanding amount towards the complainant company. In support of this submission, Ld. Counsel for accused has relied upon the Judgement of Hon'ble Apex Court in case titled as Dashrathbhai Trikambhai Patel v Hitesh Mahenderbhai Patel & Anr. CRL. Appeal No. 1497 of 2022 decided on 11.10.2022 and argued that since the cheques in question do not represent a legally enforceable debt on the date of their presentation, the accused cannot be held liable for dishonour of the same. However, I do not agree with this arguments of Ld. Counsel for accused. As even if, we ignore the account statement of the complainant company and only Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2023.04.24 15:07:44 +0530 CCNo. 2592/2021 M/S PNEUMAX PNEUMATICS INDIA PVT.LTD. V.GAJENDER KAUSHIK Page No. 26 consider the statement of account of the accused, even then the outstanding liability of the accused would atleast be Rs.9,39,884.78/ at the relevant point of time, if not higher than that. Since, the total amount of all the cheques in question is Rs.9,36,000/, thus, the amount mentioned in the cheques in question would still be the 'amount due'. Hence, it cannot be said that the cheques in question do not represent a legally enforceable debt on the date of maturity/presentation. Since, in the present case, as per statement of account filed by the accused himself, the liability of accused till December, 2020 was atleast Rs.9,39,884.78/, thus, the defence taken by the accused that the complainant company could not have presented the cheques for the total amount mentioned in the cheques i.e. Rs.9,36,000/ is not tenable. Thus, the dishonoured cheques in question in the present case represent a legally enforceable debt. Thus, as discussed above, the complainant company in the present case has established all the essential ingredients of offence U/S 138 of NI Act as mentioned in Paragraph No. 12 also stands established.
25. Ratio: Since in the instant case, the accused has failed to establish his defences and the complainant has proved all the essential ingredients of Section 138 of the Negotiable Instruments Act. Accordingly, accused namely Sh. Gajender Kaushik, is found guilty of offence U/S 138 NI Act. Let he be heard on point of sentence on another date.
26. Let the copy of this judgment be given to the convict free of cost and the same be also uploaded on CIS and Layers forthwith.Digitally signed by AISHWARYA
AISHWARYA SHARMA
SHARMA Date: 2023.04.24
15:07:49 +0530
Announced in the open court on (Aishwarya Sharma)
this day i.e. 24.04.2023 MM (N.I. ACT)Digital Court02/SED,
Saket Courts, New Delhi