Delhi District Court
Smt. Shail Maheshwari vs M/S K.B.G. Exports Pvt. Ltd on 31 January, 2015
IN THE COURT OF METROPsOLITAN MAGISTRATE- 02,
SHAHDARA, KARKARDOOMA COURTS, DELHI
Presided by : Sh.Achal Tyagi
Unique Identification No. 02402R0008552006
Smt. Shail Maheshwari
W/o Sh. Vimal Maheshwari
Prop : M/s J.M.D. Industries,
Khasra No.543, Village Mandoli,
Shahdara, Delhi-110093 .......Complainant
Versus
1. M/s K.B.G. Exports Pvt. Ltd.
Through its Director/Authorised person,
98-Udyog Kendra, Greater Noida,
Gautam Budha Nagar, U.P.
2. Sh. Kulbhushan Goyal,
Chairman/M.D. Of M/s KBG Exports Pvt.Ltd.
98-Udyog Kendra, Greater Noida,
Gautam Budha Nagar, U.P. (Since deceased)
3. Sh. Ravi Goyal,
Director : M/S KBG Exports Pvt. Ltd.
98-Udyog Kendra, Greater Noida,
Gautam Budha Nagar, U.P. .........Accused
Date of Institution : 13.01.2006
Plea of Accused : Pleaded not guilty
Date on which judgment was reserved : 30.01.2015
Final order : Convicted
Date of decision : 31.01.2015
JUDGMENT:
1. Brief facts of the case shorn of unnecessary details are as follows. The allegations of the complainant are that accused No.1 company through accused no. 2 and 3 who are its directors had purchased the goods from the shop of the complainant and in lieu of their liability for the aforesaid goods, the accused had issued two cheques bearing Nos.208668 dt. 31.05.05 for Rs.20,000/- and another cheque bearing No.208669 dt. 02.06.05 for Rs.30,000/- as part payment against the purchase of the goods. That the said cheques were drawn on O.B.C. CC No.53MS/12 Smt. Shail Maheshwari v. M/s K.B.G. Exports Pvt. Ltd. Page no.1 of 11 Ghaziabad, (U.P.). That the said cheques on being presented for encashment were dishonored due to insufficient funds vide return memo dated 12.11.05. It has been stated that the accused No.1 is Private Ltd. Company and accused No.2 is Chairman and M.D of the company who is fully responsible for all the activities of the company. That accused No.3 Sh. Ravi Goyal is the Director of accused No.1 and incharge of the affairs of the company. It is stated that complainant sent legal demand notice dated 26.11.05 to the accused persons through registered courier DTDC however the accused persons despite service of legal demand notice did not make payment within the stipulated period. Hence, the present case has been filed by the complainant.
2. The complainant led pre-summoning evidence by way of affidavit and summons were issued to the accused vide order dated 28.05.07 for the offence under Section 138 Negotiable Instrument Act, 1881 (hereinafter called as the Act). On appearance of the accused, notice u/s. 251 Cr.P.C. dt. 02.06.11 was served upon the accused No.1 and 3 for committing offence u/s 138 of the Act to which they pleaded not guilty and claimed trial. It is important to mention that accused No.2 expired during the pendency of the case and proceedings against him were abated vide order of this court dt. 02.06.11. Thereafter application U/s 145(2) N.I. Act was filed by the accused persons which was allowed vide order dt. 07.09.11 and the complainant was cross examined by the counsel for accused persons.
3. All the incriminating evidence was put to the accused persons and statement of accused under section 313 Cr.PC. r/w 281 Cr.P.C was recorded. In reply to the said incriminating evidence, accused denied the allegations against him and averred that he had given 10 blank signed cheques to the complainant and that the present cheques are among the said blank signed cheques. Accused also stated that he has already made the payment against the cheques in question and that the CC No.53MS/12 Smt. Shail Maheshwari v. M/s K.B.G. Exports Pvt. Ltd. Page no.2 of 11 receipt in this regard was issued by the complainant in November, 2005 and June 2006. Accused also stated that one Sanjeev Jindal production incharge of accused no.1 had made payment against the cheques in question in cash. It was also stated that the complainant had told the accused persons that the cheques in question had been destroyed and therefore receipts Ex.CW1/D1 and Ex.CW1/D2 were issued by the complainant. Accused also denied receiving any legal notice from the complainant. Accused also stated that the complainant continued his business with the accused even after the dishonour of the cheque for the reason that the payment against the cheques in question had been made by the accused. The accused admitted that the blank signed cheques were issued by him to the complainant as the accused had business agreement with the complainant for purchase of packing box.
4. In his defense accused examined one Sh. Sanjeev Kumar, Production Manager for the accused No.1 company as DW1. DW1 in his examination has stated that the cheques in question were issued to the complainant by the accused company which had got dishonoured. It is further stated that DW1 had given the amount of Rs.30,000/- in cash to the complainant on 26.11.05 and had also asked for return of the cheque from the complainant who did not return the cheque and rather issued a receipt of the same date. DW1 has further stated that he had given the amount of Rs.20,000/- in cash to the complainant on 15.05.06 and had also asked for return of the cheque from the complainant who did not return the cheque and rather issued a receipt of the same date. After cross examination, defence evidence was closed and matter was listed for final arguments.
5. I have heard Ld. Counsels for both the parties and perused the Court record. The complainant to prove his case against the accused under section 138 NI Act has to prove the following facts :
(i) That the accused issued the cheque in question.
CC No.53MS/12 Smt. Shail Maheshwari v. M/s K.B.G. Exports Pvt. Ltd. Page no.3 of 11
(ii) The cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
(iii) That cheque was presented to the bank within a period of three months for encashment;
(iv) That cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(v) The holder of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(vi) The drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
6. I shall now proceed to examine as to whether the said requirements have been satisfied by the complainant. Before coming to the evidence it would be appropriate to peruse the relevant provisions of NI Act relating to presumption in respect of negotiable instrument and the burden of proof.
Section 118 of the N.I Act provides :-
"Presumptions as to negotiable instruments: Until the contrary is proved, the following presumptions shall be made: (a) of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred was accepted, indorsed, negotiated or transferred for consideration;"
Section 139 of the N.I Act further provides as follows:
"Presumption in favour of holder - It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability"
CC No.53MS/12 Smt. Shail Maheshwari v. M/s K.B.G. Exports Pvt. Ltd. Page no.4 of 11 It is evident from the perusal of the above said provisions that once a cheque has been issued the presumption is that it has been issued in discharge of a legal liability, and the burden of proof lies upon the accused to rebut the said presumption.
7. I shall now come to the evidence led by the parties. It is important to note that the accused in the present case has not denied the fact that the cheques in question were issued to the complainant in lieu of legal liability. There is clear admission on behalf of accused persons in the statement U/s 313 Cr.P.C that the cheques in question had been issued for the purchase of packing box from the complainant. It is surprising that the accused No.3 in his statement has stated that he had given 10 blank signed cheques to the complainant for the purpose of business agreement. It is not expected from a businessman that he would give blank signed cheques to another party without having any liability in that regard. It is all the more surprising that the accused No.3 has further stated that he had made the payment against the cheques in question in cash . The said fact implies that the cheques in question were issued in respect of legal liability as then only the question of making payment in respect of the cheques in question can arise. In this regard testimony of defence witness DW1 is equally important as he has also stated that the cheques in question were issued to the complainant company by the accused company and the said cheques had bounced. DW1 has also stated that he had given the amount of Rs.30,000/- in cash to the complainant on 26.11.05 and had also asked for return of the cheque from the complainant who did not return the cheque and rather issued a receipt of the same date. DW1 has further stated that he had given the amount of Rs.20,000/- in cash to the complainant on 15.05.06 and had also asked for return of the cheque from the complainant who did not return the cheque and rather issued a receipt of the same date. These averments of the accused persons clearly show that the cheques that had been issued had CC No.53MS/12 Smt. Shail Maheshwari v. M/s K.B.G. Exports Pvt. Ltd. Page no.5 of 11 been issued in respect of the legal liability and the said liability was required to be discharged by the accused persons.
8. I shall now come to the issue as to whether the accused persons have been able to prove that they had made payment in respect of the cheques in question to the complainant. The accused persons have consistently taken the plea that they had made the payment in respect of the cheques in question. In this regard accused no.3 in his statement under Section 313 Cr.PC and DW1 have stated that the payments were made in cash in respect of the cheques in question. The accused persons have also relied on Ex.CW1/D1 and Ex.CW1/D2 which were allegedly issued by the complainant to DW1 when payment was made by DW1. The question however remains as to whether the said receipts have been proved by the accused persons. DW1 in his cross examination has stated that he had made the cash payment to one Maheshwari at the ground floor of the factory at Shahdara. He has also stated that he doesnot remember the exact name of that person. He has also stated that he doesnot remember the premises number or the street number of the factory where payment was made by him. He has also stated that he had not met the said Maheshwari prior to the said payment. DW1 has also stated that he doesnot remember as to who had had signed the receipt which was given by Mr Maheshwari.
9. The testimony of DW1 is neither consistent nor inspires confidence. It is surprising that despite dealing with the complainant for a long time DW1 does not know the correct name of the person to whom the payment was made by him and neither does he know as to who had signed the receipt in question. DW1 is also not aware of the address of the factory where the payment was made by him. DW1 has also stated that no legal notice was given by the accused persons when the complainant told them that their cheques had been lost. It is surprising that accused persons never made an application to their Banker for CC No.53MS/12 Smt. Shail Maheshwari v. M/s K.B.G. Exports Pvt. Ltd. Page no.6 of 11 stopping the payment against the cheques in question when they came to know that the cheques had been lost. It is important to note that the accused no.1 is a company and it cannot be presumed that the accused persons were not aware of the uses to which a signed blank cheque could be put and the consequent liability. The accused also never sent any legal notice to the complainant for return of the cheques in question. It has been observed by the Hon'ble High Court of Delhi in V.S. Yadav v. Reena 172 (2010) DLT 561 that the offence u/s 138 of the Act is a technical offence and that in order to rebut the presumption u/s 139 of the Act, the accused, by cogent evidence, has to prove the circumstance under which the cheques were issued. It was for the accused to prove if payments were already made, why he did not write a letter to the complainant for return of the cheques. Unless the accused can prove that he acted like a normal businessman prudent person entering into a contract he could not have rebutted the presumption u/s 139 of the Act. If payments were already made, but cheques were retained he immediately should have protested and asked that the cheques be returned and if still cheques were not returned he could have served a notice on the complainant. The accused however has not done any such thing.
10. In the present case there is no cogent evidence that has been adduced by the accused to support his plea that the cheques in question were given to the complainant as security for the purchase of corrugated boxes and which were subsequently repaid. No stop memo was issued by the accused to his banker. He has not taken any other legal remedy against complainant. Thus the plea of the accused has not been substantiated by any cogent, convincing and clear evidence to rebut the presumption of law.
11. The accused in the present case has also taken the plea that he was not served with the legal notice. The accused has denied receiving the legal notice. The complainant on the other hand has stated that he had CC No.53MS/12 Smt. Shail Maheshwari v. M/s K.B.G. Exports Pvt. Ltd. Page no.7 of 11 sent the legal notice vide registered courier DTDC dated 26.11.05 and the courier receipt have been filed on record which are Ex CW1/7, Ex CW1/8 and Ex CW1/9. It is relevant to note that that the service of notice is not necessarily required to be through registered post and that the service can also be effected through registered courier. In this regard it is pertinent to note that the accused persons have nowhere stated that the address given on the legal notice is not their address. I may also mention that in the cross examination of the complainant the accused persons have given the suggestion to the complainant that all the transactions between the accused and the complainant took place at Greater Noida. The said averment of the accused persons goes to show that the accused persons were operating from Greater Noida and the legal notice has been sent to the said office by the complainant. In this regard it is also important to note that once legal notice is dispatched by Registered Post, a presumption of due service arises as per Section 27 of the General Clauses Act and Section 114 of the Indian Evidence Act. In such circumstances it is incumbent on the accused to lead evidence to prove that the notice was not served on him. Not even an iota of evidence has been brought on record by the accused to displace the presumption of due service. A mere denial that the legal notice has not been served, would not ipso facto rebut the presumption of due service. The accused ought to have rebutted the presumption by establishing that he was not residing at the said address at the given point of time or that the notice was not served on him for any other reason, by examining the postal authorities or any other mode. Therefore the defence of non receipt of legal notice does not inspire confidence. I may also place reliance on the Hon'ble Supreme Court in C.C. Alavi Haji v. Palapetty Muhammed and Another (2007) 6 SCC 555, wherein the court has held that the service of summons of the court is opportunity enough for the accused to pay the cheque amount and evade prosecution, any accused who fails to pay the CC No.53MS/12 Smt. Shail Maheshwari v. M/s K.B.G. Exports Pvt. Ltd. Page no.8 of 11 amount within 15 days of the service of summons, clearly cannot shield himself behind the technical defence of non service of legal notice. In the said authority it has been held that :
" It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation."
In light of the above stated authority and discussion I hold that the plea of non service of the notice by the accused is a bald plea only to escape the liability under the Act and is accordingly dismissed.
12. Keeping in view the discussion above made, the complainant in the present case has been able to prove the ingredients of section 138 of the Act against the accused beyond reasonable doubt. Accused persons have not been able to make out a probable defence in their favour. The accused persons accordingly stands convicted for offence under Section 138 of the Act. List for hearing the convict on the quantum of sentence on 06.02.2015.
Announced in the open Court Achal Tyagi
on this 31st day of January, 2015 Metropolitan Magistrate
Karkardooma Courts, Delhi
The judgment consist of 09 pages and all pages have been signed. Let the copy of the order be placed on the official website of District Court.
CC No.53MS/12 Smt. Shail Maheshwari v. M/s K.B.G. Exports Pvt. Ltd. Page no.9 of 11 IN THE COURT OF METROPsOLITAN MAGISTRATE- 02, SHAHDARA, KARKARDOOMA COURTS, DELHI Presided by : Sh.Achal Tyagi Unique Identification No. 02402R0008552006 Smt. Shail Maheshwari W/o Sh. Vimal Maheshwari Prop : M/s J.M.D. Industries, Khasra No.543, Village Mandoli, Shahdara, Delhi-110093 .......Complainant Versus
1. M/s K.B.G. Exports Pvt. Ltd.
Through its Director/Authorised person, 98-Udyog Kendra, Greater Noida, Gautam Budha Nagar, U.P.
2. Sh. Kulbhushan Goyal, Chairman/M.D. Of M/s KBG Exports Pvt.Ltd.
98-Udyog Kendra, Greater Noida, Gautam Budha Nagar, U.P.(Since deceased)
3. Sh. Ravi Goyal, Director : M/S KBG Exports Pvt. Ltd.
98-Udyog Kendra, Greater Noida,
Gautam Budha Nagar, U.P. .........Accused
ORDER ON SENTENCE
Present : None for complainant
Convict in person with Counsel Ms. Sandhya Gupta.
I have heard the convict as well as his counsel on the point of sentence. The convict is a middle aged man and has family to maintain. Convict submits that a lenient view may be taken against him as he is the sole bread earner of his family. Further, it is submitted on behalf of the convict that he is the first time offender and has clear antecedents.
Keeping in view the nature of the offence and the given facts CC No.53MS/12 Smt. Shail Maheshwari v. M/s K.B.G. Exports Pvt. Ltd. Page no.10 of 11 and circumstances of the present case and taking into consideration, economic, social and family background of the convict, I sentence the convict (accused no.3 Ravi Goyal) to simple imprisonment for the period of one year. The convicts (accused no.1 M/s K.B.G Exports and accused no.3) are also sentenced to pay compensation of Rs. 1,00,000/ to the complainant within one month from today failing which in default the convict shall undergo SI for a period of six months.
Copy of the order be given to the convict free of cost.
Announced in the open Court Achal Tyagi
on this 24 day of February, 2015 Metropolitan Magistrate
th
Karkardooma Courts,Delhi.
At this stage, an application u/s 389 Cr P.C for suspension of the sentence is moved by the convict through his counsel today in the Court. Heard. Allowed. Sentence of the convict is suspended till 24.03.15 to enable him to file an appeal or to serve the sentence. Convict is admitted to bail on his furnishing a personal bond and surety bond in the sum of Rs. 20,000/ Bail Bond furnished and accepted till 24.03.2015.
Announced in the open Court Achal Tyagi
on this 24th day of February, 2015 Metropolitan Magistrate
Karkardooma Courts,Delhi.
All pages signed
CC No.53MS/12 Smt. Shail Maheshwari v. M/s K.B.G. Exports Pvt. Ltd. Page no.11 of 11