Delhi District Court
Rajesh Ghai vs M/S Sharma Electricals on 1 May, 2023
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IN THE COURT OF DR. SATINDER KUMAR GAUTAM
PRESIDING OFFICER SPECIAL COURT(NI ACT) SOUT WEST,
DWARKA
CC NO. 2141/2018
DLSW02-029701/2018
Rajesh Ghai VS M/S SHARMA ELECTRICALS
P.S Vikas Puri
1. Name and address of the complainant : Rajesh Ghai
Sole proprietor ofM/S Shree
Sai Enterprises Plot No. 10-
12, Nilothi Extension ,
Chander Vihar, New Delhi
-110041
2. Name and address of accused 1. M/S Sharma Electricals
Through its Sole proprietor
Sh. Lalit Kumar Sharma
H No.225-A,Opp.Metro
Pillar No.528, Mundka, New
Delhi -110041
2. Sh. Lalit Kumar Sharma
H No.225-A,Opp.Metro
Pillar No.528, Mundka, New
Delhi -110041
Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 1 /39
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3. Offence complained of : U/S 138 read wth 142 of
Negotiable Instrument
Act,1881
4. Plea of accused : Pleaded not guilty
5. Date of institution : 16.01.2018
6. Final Order : convicted
7. Date of such order : 01.05.2023
JUDGMENT
BRIEF FACTS OF THE CASE
1. Brief facts as averred in the complaint of the complainant are that the complainant is a sole proprietor of M/S shree Sai Enterprises. Accused no. 1 is also a sole proprietorship firm and accused no.2 is sole proprietor. The complainant's firm is carrying on business of trading of LED bulbs and electronic items ( herein after referred to as 'goods') and complainant at the request of accused, started supplying goods from 11.1.2017 onwards to the accused as per order placed to the statisfaction of the accused on the agreed terms and condition inter-alia that the goods would be supplied on 30 days credit basis. As such, the complainant supplied goods to the accused through various invoices from 11.1.2017 till 2.09.2017. The complainant that last purchase was made by accussed on 2.9.2017 and last part payment towards the outstanding dues was made by accused to the complainant on 01.09.2017 and thereafter, purchase Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 2 /39 3 and supply of goods between complainant and accused discontinued as a sum of Rs.3,78,591.74/- was left unpaid by the accused and when the accused firm was informed for the dues, accused agreed and promised to clear the dues by the end of December, 2017.
2. It is further alleged by the complainant that after sending many reminders, accused in discharge the outstanding liabilities towards the complainant, issued four cheques bearing no. 795697 dated 16.9.2017 of Rs.50,000/-, cheque bearing no. 795698 dated 15.10.2017 of Rs.34,960/-, cheque bearing no. 795652 dated 15.11.2017 of Rs. 1,00,000/- and cheque bearing no. 795651 dated 15.12.2017 of Rs.90,000/- all drawn Vijya Bank Mundka Branch in favour of complainant. Out of the said cheques the complainant presented cheques bearing no. 795697 dated 16.9.2017, cheque bearing no.795698 dated 15.10.2017 and cheque bearing no. 795652 dated 15.11.2017 on 14.12.2017, however the said cheques returned as dishonoured vide cheques returning memos dated 15.12.2017 with remarks " Payment Stopped by Drawer" where as cheque no. 795698 returned dishonoured by the complainant's bank with remarks " funds insufficient" vide cheque returning memo dated 15.12.2017.
3. Thereafter, the complainant sent a legal demand notice dated 22.12.2017. Despite service of the legal notice, the accused failed to Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 3 /39 4 make payment of the cheque in question within 15 days. Hence, the present case.
SUMMONING AND FRAMING OF NOTICE.
4. Vide order dated 16.01.2018, accused was summoned and on 02.06.2018 notice u/s 251 cr.p.c was framed to which he pleaded not guilty and claimed trial and replied to the question as under:
Q. Were goods regularly supplied by complainant firm to your firm i.e accused no.1?
Ans. Yes, Goods were regularly supplied to accused no.1 firm by the complainant firm.
Q Do you admit your signature on cheque bearing no. 795697 dated 16.9.2017 amounting to Rs.50,000/-, 795698 dated 15.10.2017 amounting to Rs.34,960/-, 795652 dated 15.11.2017 amounting to Rs.1,00,000/- and 795651 dated 15.12.2017 amounting to Rs.90,000/- all drawn onVijaya Bank, Mundka Branch, New Delhi ? Ans. The cheques are signed by me. However, the remaining details in the cheques have not been filled by me except on cheque no. 795698 which was fully filled by me.
Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 4 /39
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Q Do you admit the receipt of legal demand notice ?
Ans No.
Q What do you have to say in your defence?
Ans. The complainant firm supplied us LED bulbs and panels on regular basis . The cheques in question were given as security cheques to the compainant in advance. The goods supplied by the complainant turned out to be defective and despite request for replacement, the same was not provided on time by the complainant firm. I returned the goods of complainant to them. However, the accounts were not reconciled by the complainant firm. The said security cheques have been misused by the complainant.
5. Thereafter, matter was listed for Complainant evidence considering application u/s 145 (2) NI Act moved by the accused.
On 25.10. 2018 complainant Sh. Rajesh Ghai step into witness box and adopted his pre summoning evidence in his examination in chief.
6. During cross examined, admitted that he has not placed any documents with regard to his company to show that he is proprietor of Shree Sai Enterprises and document Ex. CW1/A also does not bear stamp of the company or signature of any authority. Further, he stated that same is VAT reports derive from the internet. CW1 further Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 5 /39 6 stated that he do not remember when the cheques in question came in his possession but it must be around the year 2017. Further he stated that the cheques in question were given by accused no.2 Sh. Lalit Kumar proprietor of accused no1 and he received first order in first quarter of the year 2017 vide invoice dated 11.1.2017, Ex. CW1/B (colly). CW1 denied that Ex. CW1/B is tax invoice not order invoice. He further stated that "There were no written terms and conditions for placing the orders by accused and supply of goods to accused and the books of account of accused were maintained by himslf proprietorship firm , the original ledger accoount Ex.CW1/C being computer generated print out." CW1 denied that the said ledger account is forged and fabricated. CW1 complainant further stated that " the same is the ledger account from 1.4.2017 to 12.12.2017. The ledger account for January 2017 to March, 2017 is separate which has not been placed on record but he can produce the same. CW1 further testified that the amount on invoices at running page no. 44 dated 17.2.2017 and running page no. 53 dated 19.5.2017 of Ex.CW1/B does not contain any adjustment of amount for replaced goods mentioned as handwwritten in said invoices. Further he stated that the goods were replaced against old goods and there was no amount to be adjusted."
Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 6 /39 7
7. During further cross examiantion on 27.4.2019, complainant stated that he is a Super distributor for supply of LED bulbs and lights after obtaining the same from the company,, there was no requirement of ISI certificate for the goods. He do not know whether the goods supplied to accused were of ISI certifiation or not. If defective goods supplied to the accused or any other person, they would give replacement of the same, if there is manufacturing defect and not otherwise. The replacement was done by the manufacturing company itself after they supplied the defective goods to them. He has replaced defective goods of the accused entity on occasion and the entry regarding replaced goods has been made in Ex. CW1/B on the invoices dated 17.2.2017 at point A to A-1 and invoice dated 19.5.2017 at point B to B-1. No separate invoice was prepared for the replaced goods.
8. Further, CW1 stating that it is correct that he is a stockist of Karuna Green Tech. Pvt. Ltd. For LED bulbs and brand name of the said company is Nordusk and his staff namely Vinod and Raju were engaged for delivery of goods to their customers but he do not know any Sh. Vinay Shukla, Sales executive in Karuna Green Tech Ltd. who used to do work of marketing of LED bulbs of Karuna Green Tech for the Sai company as well as for him. CW1 denied document i.e inventory of goods EX CW1/D-1 and Ex. CW1/D-2 for replacement of defective goods stating that no such goods were sent Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 7 /39 8 or returned to him. On seeing inventory of goods Ex. CW1/D-3, CW1 stated " it is correct that I have issued the said inventory of goods to Sharma Electricals. The said inventory reflects the substituted goods which were provided to accused after replacement. "Further he stated that when the goods were replaced, sometimes separate inventory such as Ex. CW1/D-3 was prepared and sometimes the endorsement was made on the previous inventory itself. Further, CW1 stated that he is not aware of sending e-mail by accused to company staff of Karuna Green Tech stating that they are not taking back the defective goods. CW1 further stated " that I do not remember as of now whether ledger account of Sharma Electricals after 28.3.2017 was sent to them and receiving taken thereupon. The cheques in question were given by hand from the accused entity. Some cheques were given in his office and some were given to his staff. Further, testified by complainant that "I do not remember as to which cheques were given in office and which cheques were given to staff. CW1 denied the case of accused that the cheques in questions were given by accused in Karuna Green Tech company as securtiy from where, CW1 procured the same and misused the cheques for filing the present case. CW1 further stated that " I did not sent any written demand letter to accused persons demanding the amount of dues as mentioned in Ex CW1/C". Thereafter Complainnat evidence was closed and matter was listed for statement of accused.
Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 8 /39 9 STATEMENT OF ACCUSED AND DEFENCE EVIDENCE.
9. On 31.5.2019 statement of accused u/s 313 cr.p.c was recorded wherein accused admitted all the incriminating evidence put to him. He admitted as correct invoices from 11.1.2017 till 2.9.2017. Accused admitted that the goods were supplied on credit basis. However period of credit used to vary and was sometime 90 days to 120 days. They had a running account however, complainant failed to provide the account statement pertaining to period after 31.3.2017. He started business with the complainant in January 2017 and the accounts were tallied as on 31.3.2017 and after that, the complainant did not provide them with any account statement nor tallied mutually between them. Accused denied correctness of ledger account statement prepared on the basis of invoices from 11.1.2017 to 2.9.2017 as it does not show the adjustment towards the goods returned by him to the complainant. Accused denied that he had issued the cheques in question though, the same bears his signature but he did not fill the other particulars on the cheques except cheque bearing no. 795698 of Rs. 34,960/- which was duly filled as the same was given as post dated cheque on the assurance of complainant that he would take back the faulty goods and give the replacement of the same to him. Accused denied having received Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 9 /39 10 any legal notice. Further, following questions were put to accused and replied as under:
10. Q It is in evidence against you that despite service of aforesaid notice you have failed to make the payment of the cheques amount to the complainant.what do you have to say?
Ans. It is incorrect.
Q Any thing else do you want to say?
Ans. " The complainant used to supply me LED bulbs and panels
with two years of warranty. I gave the cheuqes in question as blank signed security cheques to complainant in advance for purpose of business with him. I am distributor of said goods. However, the goods purchased from the complainant started developing various faults and I got numerous complaint from the market. The complainant used to periodically replace the faulty goods. When in June-July 2017, the goods started developing major fault, the complainant refused to replace the faulty goods. However, after that also, I was making payment to complainant from time to time. Even till today the faulty goods of complainant are being returned back by my customers. As per my account statement only an amount of Rs.2,20,000/- is due towards the complainant. However, the goods Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 10 /39 11 worth Rs.2,20,000/- suplied by complainant are also faulty and have already been received back as rejected from my customers. Complainant is not taking back the faulty goods. If he takes back his goods, I would have no liability towards him. The complainant had filed a false account statement wherein the faulty goods retrned to him have not been adjusted." The accused opted to lead defence evidence.
11. In order to prove his case accused examined as many as four DWs i.e himself as DW1. Accused reiterated his case / defence as given in reply to notice u/s 251 cr.p.c and statement u/s 313 cr.p.c as well as in his examination inchief by way of affidavit. Apart from the above, DW1 (accused) stated that complainant had further taken cheque of some amount for replacement of goods from accused when he went to the shop of complainant alongwith Naved and Vinay shukla and paid amount of Rs.34,960/- through cheque. Around Rs 1.5 lacs worth value of goods are lying with him in bad and defective stock which was sent by the complainant.
During cross examination, DW1 accused Lalit Kumar sharma stated that "all these invoices are signed by me except the invoices at running page no. 41, 42, 45, 47, 53, 54 but these invoices are also signed by person authorized by me to sign the same. It is correct that in the said invoices , there is no mentioned of Karuna green Tech Pvt Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 11 /39 12 Ltd. "Accused also admitted that there is no signature of complainant or stamp in the memos Ex. CW1/D-1 and Ex. CW1/D-2, however it bears signature of Sh. Vinay Shukla at point A who is the executi ve of Karuna Green Tech. And was accompanied by Satish Sharma manager of Karuna Green Tech company. DW1 further stated that Complainant also accompanied Vinay Shukla and signed Ex.CW1/D-1 and Ex. CW1 D-2 He did not obtain signature of complainant on the said memos as he was told by complainant that Vinay Shukla is present on behalf of Karuna Green Tech and he is giving the acknowledgement which is enough. Further, DW1 testified that he cannot produce any written contract which entitle his firm to adjust or set of or to stop payment to the complainant for the supply of goods by the complainant and if some of goods were returned by him or later on becomes defective. Even for the defected and new goods returned by him to the complainant, the complainant did not adjust the same into his account nor he settled the account. Thus, he feared that his cheques might be misused , then he issued the stop payment instructions. Further testified by accused as DW1 he sent reminder through mail, copy of which is mark A . However, accused admitted that the said mail is not made to complainant but it was sent to Karuna Green Tech. Further, stated that he might have taken goods after mail on 14 .9.2017 and accused admitted that " it is correct that I have shown the various invoices i.e Ex.CW1/B( colly) from the compainant or M/S Karun Green Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 12 /39 13 Tech Pvt. Ltd. in my purchase form 2 A. I have not shown the return of goods in the form 2A, as the replacement goods were to be received in lieu of the same, which were never received. I have mentioned about the replacement of the goods in the invoices at running page no 44 and 53 in Ex. CW1/B (colly) i.e invoice no. 199 and 318 dated 17.2.2017 and 19.5.2017 respectively. Vol . I also got the replacement in lieu of these invoices)
12. DW2 Sh. Chander Prakash Sharma, who is a electrician in the shop of accused as DW2 and witness of handing over cheques in question by accused as security to the complainant at the time of starting business. In his evidence by way of affidavit he specifically stated that "The cheques in question were given by the accused to the complainant in my presence for the security purpose at the time of starting work by the accused with the complainant. "......
"The complainant put a condition with the accused if he wants to start the work of receiving electrical goods from him, accused had to give 3-4 blank signed cheques for the security purpose."
... " The complainant has further taken the cheque of some amount for replacement from the accused when the complainant came alongwith Satish sharma, Naved and vinay Shukla to the shop of Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 13 /39 14 accused then accused paid some amount of Rs.34,960/- through cheque"
13. "Around Rs.1.5 lacs worth value of goods are lying with he accused in bad and defective stock which sent by the complainant"
DW2 was also cross examined at length by ld. Counsel for complainant. Whereas stated in cross examination that :-
"The cheques in question Ex. CW1/D ( colly) were given in his presence as security and they were given at shop of Sharma Electricals to Rajesh Ghai. No written agreement at the time of putting of condition of blank signed security cheque was executed. He did not himself told the complainant about defective goods. Same was told by the accused . DW2 further stated that the accused used to call the complainant in his presence and told about the defective goods.
Further he testified that none of the invoices in Ex. CW1/B( colly) were executed in his presence however, invoice at running page no. 44 was executed in his presence and replacement mentioned at point A to A-1 was also written in his presence but no replacement of goods was received by accused in his presence. DW2 further stated that he was not aware whether the accused had otherwise received the replacement of said goods or not.
Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 14 /39 15
14. DW3 Sh. Vinay Kumar shukla was an employee in Karuna Green Tech company since January 2017 and left the company in Oct. 2017 where he was working as sales Executive. He deposed that his duty was to take order from market and replacement of goods which were not in order. He further testified that Sharma Electricals was the disitrubutor of Karun Green Tech Pvt.Ltd. And they had Super Stockade named Sirsha Enterprises to whom they direct the distributors to take the delivery from the Superstockade to the distributor. He further stated that "whenever there was any replacement of the material, I used to collect the same and deliver to the super Stockade. The replaced material were collected by him and I used to sign the receipt of the same and fresh material were suplied in place of replaced material. The receipts which has been filed by the accused for the replaced material are signed by me on behalf of my company. In the year 2017, 3-4 security cheques were issued by the accused to the complainant for the replacement of the material supplied"
During cross examination, DW2 admitted that he has never been an employee of the complainant nor he has received salary from the complainant and that he cannot show any authorization letter from the complainant. On seeing document Ex. CW1/B ie invoices, stated that the invoices shown to him do not bear his signature. However, Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 15 /39 16 he admitted his signature on document Ex CW1/D1 and Ex. CW1/D2 ( acknowledgement of return of the goods from accused to complainant) and stated that he has not taken any receiving upon the documents Ex. CW1/D1 and EX. CW1/D-2. DW3 replied to a question meaning of term security cheque, he said "Security cheque as per him means that to take the cheque of he other party to secure the payment."
15. DW4 Sh. Satish Sharma who is also an employee since January 2016 of Karuna Green Tech. Pvt. Ltd. Company being Area Sales Manager and he left the job in November 2018 . He stated that when he was working in the said company M/S Sharma Electricals / accused company was his distributor and all the transaction used to happed through Sh. Sai Enterprises i.e complainant's company and accused issued 3-4 blank undated security cheques to his Junior Sh. Vinay Shukla ( DW3) which were delivered to Mr. Rajesh Ghai, complainant through them. The accused returned some goods to the complainant but complainant accepted the goods anddid dnot release any goods in favour of accused.
In cross examination, DW4 stated that neither he was employee of the complanant nor he is having any authority to receive defective goods, supply of goods, to take security cheques or make any kind of communication on behalf of complainant.
Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 16 /39 17 Thereafter, defence evidence was closed and matter was listed for final arguments. DW4 stated by the term " security cheque' menas to initiate the business and to secure the payment , security cheques are taken. Thereafter, defence evidence was concluded. Both parties filed written arguments in order to facilitate to the final verdict.
16. After considered the final written arguments and material on record and judgment cited. Findings are as discussed below.
CONTENTIONS OF COMPLAINANT
17. During arguments, ld. counsel for complainant contended that there are several admitted facts by the accused with regard to his signatures on the cheques in question, as mentioned in reply to notice u/s 251 cr.p.c as well as in statement u/s 313 cr.p.c., supply of goods by the complainant against invoices Ex CW1/B ( colly), as admitted in statement u/s 313cr.p.c that "invoices are correct". It is also admitted that the invoices Ex. CW1/B there is no mention name of Karuna Green Tech. P Ltd. It is also admitted that document Ex. CW1/D1 and Ex. CW1/D-2 do not contain any signature or stamp of the complainant acknowledging that the accused had returned the some of the goods. It is also admitted by DW3 Mr. Vinay Shukla and DW4 Mr. Satish Sharma that they have no written authorization Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 17 /39 18 on behalf of the complainant for supply of goods, receive the defective goods or to make any kind of communication or to take security cheque. Ld counsel for complainant further contended that cheques in question were given to secure the payments as corroboraed by DW3 and DW4 in their cross examination. It is also an admitted that there was no written contract which entitles the accused to adjust / set off or stop payment of the complainant for the goods supplied if some of the goods supplied by the complainant to the accused were returned or later on become defective. Which is clear from the deposition of DW1 who stated during his cross examination that " I cannot produce any written contract which entitle my firm to adjust or set of or to stop payment to the complainant for the goods supplied by the complainant to my firm"
18. It is further contended that complainant supplied the goods to the accused which can be corroborated with document form 2A which was submitted by accused to VAT/GST department and in the said form 2 A , the accused did not show anywhere the return of goods or intimated to VAT/GST depaprtment. It is further contended vide email dated 14.9.2017 mark A which was never sent to the complainant and this fact can also be testified from deposition of DW1 during cross examination where he stated that " It is correct that this ie-mail is sent to Karuna Group and not to Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 18 /39 19 complainant". As such reliance placed upon email by the accused is fallacious and unsustainable as the contents of e mail have not been proved as per law as the acusued did not file manadory certificate under Section 65-B of the Indian Evidence Act, 1872.
19. It is further contended that accused made contradictory statement on many points of worth of goods lying with him which is clear from perusal of application u/s 145 (2) NI Act and applicatioin u/s 315 crp.c wherein he stated that the goods of the value of Rs.1.5 lakhs are lying with the accused, on the other hand while giving reply to question no.13 of his statement u/s 313 cr.p.c, accused stated that the goods worth of Rs.2,20,000/- are lying with him and somewhere stated that the defective goods were directly sent to M/S Karuna green Tech. Pvt.Ltd.
CONTRADICTIONS
20. It is contended that accused stated during cross examination of complainant that the cheques in question were given as 'security' cheques to Karuna Green Tech. Pvt. Ltd where as, the accused mentioned in para no. 2 of application u/s 145 (2) NI Act as well as in application u/s 315 cr.p.c that the cheques in question given by the accused to the complainant for security purpose against the initial transaction of goods between complainant and accused. The Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 19 /39 20 accused in his statement u/s 313 Cr.p.c stated that " The goods supplied by the complainant turned out to the defective and despite request for replacement, the same was not provided on time by the complainant firm. I returned the goods of complainant to them." In application u/s 145 (2) NI Act, as well as in application u/s 315 cr. p.c accused stated in para no. 3 " that despite several request and reminder on the basis of mobile conversatiion, the complainant has not listened the accused and he has not taken back the defective goods supplied him from the accused... Around Rs.1.5 lacs worth value of goods are lying with the accused in bad and defective stock."
21. It is further contended by counsel of complainant that the accused could not prove his defence either on the point that he had given the cheques as security in advance towards liability nor the accused could prove that there was any written contract between them that the cheques could not be presented for payment or that the supply of goods were defective and intimation regarding the same was given by accused to complainant within reasonable time. However accused himself stated that he had sent email to Karuna Green Tech. Pvt. Ltd. with regard to defective goods. Accused also could not prove his defence that there was any agreement between the complainant and himself that accused had a legal right to adjust, set off or stop payment of the complainant for the supplied goods Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 20 /39 21 and if some of the goods supplied by the complainant to the accused were returned or later on become defective or that the accused has no liability towards the complainant. On the other hand, the complainant has proved that he had supplied the goods as admitted by the accused, accused issued the cheques towards liability & sending legal demand notice.
22. Ld. Counsel for complainant submitted that once accused admits the issuance of cheque and his signature on the cheques, there is a presumption u/s 139 and 118 of NI Act that cheque was made or drawn for consideration and that there exists a legally enforceable debt or liability and that it was executed for discharge of debt or liability. Onus to discharage the burden raised through presumption u/s 139 and 118 of NI Act is upon the accused. The complainant's. Counsel relied on Uttam Ram Vs. Devinder singh Hudan and anr (2019) 10 SCC 287.
23. It is prayed that accused may be convicted u/s 138 NI Act if the cheque was alleged to have been given as " security cheque" to secure the payment but the accused failed to clear the outstanding dues. Mere denial regarding existence of debt/ liability or the cheque was given as "security cheque" shall not serve any purpose without rebutting the same through cogent trustworthy reliable evidence and reliance on following judgements:
Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 21 /39 22
1. SriPati Singh Vs. The State of Jharkhand and Ors MANU SC
-1002 /2021,
2. M/S Anu Products Ltd. Vs. Raj Agro Tech & Ar 2015 Lawpack (Del) 57990 and APS Forex Services Pvt. Ltd. Vs. Shakti International Fashion Linkers and Ors 2020 Sec on line SC 193
24. It is argued by counsel for complainant that the onus was upon the accused to prove that there was no existing liability as the goods were defective and that the defective goods were returned to the complainant. Ld. Counsel also placed reliance on following judgments:
1. Indian Micro Electronics ( P) Ltd Vs. C Jamdra Industries and Ors 2015 Law Pack ( Del) 57790
2. M/s United Electronics and Anr. Vs M/S Compuage Infocom Ltd. And Anr. 2018 Lawpack (Del) 65205,
3. M/S AAR Ess and Co. And Anr. Vs M/s Rathi Udyog Ltd 2012 Lawpack (Del) 50518,
4. Satyapal Vs. Slick Auto Accessories Pvt. Ltd. And Ors. 2014 Law Pack (Del) 54413 and Narain Garh Suger Mills Ltd. Vs. Krishna Malhotra 190 (2012) DLT 253.
Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 22 /39 23
25. Per Contra, Ld.counsel for the accused has taken consistent plea that he had issued the cheque in question as security and he has no liability to pay that he has not received legal demand notice. The accused has to prove his defence by way of oral/ documentary evidence and cross examination of the complainant witnesses. The complainant made contradictory statment on the point of cheques came into his possession which are as follows:
As per statement of complainant as CW1 where he stated that " I do not remember when the cheques in question came into my possession" . Thereafter, he stated that "the cheques in question were given to him by the proprietor of M/S Sharma Electrical i.e Lalit Kumar sharma". Apart from this, CW1 Rajesh Ghai stated that " I was stockist/ distributors of LED Lights. I am super stockist of Karuna Green Tech. Pvt. Ltd. for LED bulbs. The brand name of LED bulbs of said company is Nordusk. Its staff engaged in deliviery of goods to their customers from January 2017 to September 2017 were names are Vinod and Raju. He do not know of any Mr. Vinay Shukla , Sales Executive in Karuna Green Tech Ltd. Who used to do work of marketing of LED bulbs of Karuna Green Tech for the said company as well as for him."
Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 23 /39 24
26. It is further contended by ld. Counsel for accused that the complainant statement itself is contradictory if he is a super stockist of M/S Karuna Green Tech. Pvt. Ltd. For LED bulbs and he stated that "he do not know any Sh. "Vinay Shukla, who as per his statement Vinay Shukla is a Sales Executive in Karuna Green Tech Ltd. who used to do work of marketing of LED bulbs of his company as well as for him." When Vinay Shukla works for him, his statement is not trustworthy that he do not know Vinay Shukla. Ex. CW1/D-1 and Ex. CW1/ D-2 with regard to inventory for replacement of goods whereby denied that no such goods were sent or returned to him. However, on seing inventory of goods Ex. CW1/D-3, CW1 stated "it is correct that I have issued the said inventory of goods to Sharma Electricals. The said inventory reflects the substituted goods which were provided to accused after replacement and further stated that when the goods were replaced, sometimes separate inventory vide Ex. CW1/D-3 was prepared and sometimes the endorsement was made on the previous inventory itself." It is further contended that complainant himself stated that ledger account of Sharma Electricals, after 28.3.2017, was prepared by him, however confirmaion of accused was never obtained on the same" This deposition of CW1 clearly shows that CW1/C is forged and fabricated document as complainant prepared of his own without confirming from accused whether it is authentic or not nor taken any signature thereon for making it Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 24 /39 25 authentic. It also clearly shows that the complainant malafidely did not take any confirmation on EX CW1/C as no due were pending and only to extort money, the complainant filed the present case falsely .
27. It is further argued that possession of cheques, the complainant has also made contradictory statement during his cross examination wherein he stated that some cheques were given in his office and some cheque were given to his staff.He did not disclose name of the staff anywhere nor produce any staff member to corroborate his version. Further CW1 also stated that he do not remember as to which cheques were given in the office and which cheques were given to staff. On the point of sending legal notice, complainant himself stated during his cross examination in last paragraph that "-- I did not sent any written demand letter to accused persons demanding the amount of dues as mentioned in Ex, CW1/C." Immediately, he denied suggestion that " It is wrong to suggest that I did not sent any such demand letter or confirmation of account statement as no such dues were pending." Both the statements creats a contradiction and benefit of same given to the accused. When statement of demand letter sent by complainant of due amount is shaky in nature then account statement dt. 28.3.2017 which was prepared by himself without taking confirmation from accused is not reliable. Even cheques in question came into Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 25 /39 26 possession of complainant is not sure then , it is established that the complainant used the cheques which were given as security and that is why complainant is giving statement shaky in nature where and to whom , the accused had given the cheques to the complainant .
28. It is also contended that accused examined DW 3 Sh. Vinay Kumar Shukla, employee of Karuna GreenTech Pvt, Ltd. which is admitted plea of both the parties. It is also admitted that as per his statement that accused company i.e sharma Electricals company was the distributor of Karuna Green Tech Pvt. Ltd., Complainant company i.e M/S Shree Sai Enterprises was super stockist of M/S Karuna Green Tech. Pvt. Ltd. which is also an admitted in statement of CW1. DW3 also proved that as he was working as sales executive for his company and for super stockist i.e for complainant company. DW3 stated that "Whenever there was any replacement of the material, I used to collect the same and deliver to the Super stockist. The replaced material were collected by me and I used to sign the receipt of the same and fresh material were supplied in place of replaced material" Meaning thereby receipt filed by accused having signature of DW3 corroborates the fact that he had collected the material of replacement and delivered to the Super stockist and on taking the replaced material, then he put his signature on the receipt. Further, it is contended that accused also examined DW4 Sh. Satish Sharma who was also an employee of M/S Karuna Green Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 26 /39 27 Tech. Pvt. Ltd. Being Area Sales Manager since January 2016 till November 2018 who proved that accused company was his distributor company and all the transactions were happened through Shree Sai Enterprises which is complainant company. It has also come on record in deposition of DW3 that M/S Sharma Electricals issued 3-4 blank undated security cheques to his junior Sh. Vinay Shukla which were delivered to the complainant through them. Thus, the accused has proved that the cheques were not handedover by the accused to the complainant towards any liability but the same were given as security. It has also come on record that complainant did not returned the goods towards replacement when DW3 stated that " the accused returned some goods to the complainant, but complainant accepted the goods did not release any goods in favour of accused." It is further contended that complainant did not cross examine DW3 and DW4 on the point of security cheques thus, the accused proved his case beyond all reasonable doubt that he had given security cheques and not towards any liability and no legal notice was received as such prayed that accused may be acquitted.
LEGAL DISCUSSION Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 27 /39 28
29. To bring home a liability under section 138 of NI Act, 1881 , essential ingredient of Section 138 of NI Act must be spring out from the averments of the material on record and evidence.
Essential elements of Section 138 of NI Act provided that nothing contained in this section shall apply unless -
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, 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 thirty days) of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque , within fifteen days of the receipt of the said notice.
Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 28 /39 29
31. The accused has categorically admitted in the notice of accusaion u/s 251 cr.p.c and statement u/s 313 Cr.P.C that goods were regularly supplied to his firm and the cheques in question were given as security to the complainant in advance. In reply to question no.4, the accused has himself stated that " it is correct the goods were supplied on credit basis." When the goods were supplied on credit basis, the cheques issued by the accused having his signature means that he had liability to pay the payment of the goods supplied to him. If accused not paid the amount against the delivery of goods, the complainant / holder of the cheques has every right to present the cheque in bank for encashment. The accused did not produce any documentary or oral evidence to show that he has paid all the payment against the delivery taken from the complainant and nothing was due during the period of presenting the cheques in question by the complainant in bank for encashment. The cheques in question bears his signature though, other particulars were not filled by him. The accused admitted that cheque bearing no. 795698 was fully filled by him. When he filled the other particulars in cheque no. 795698 there is every possibility that other cheques were also issued by him towards liability. The accused has taken a consistent plea that the goods supplied by the complainant turned out to be defective and despite request for replacement, the same was not provided on time by complainant firm and returned the goods of complainant to them and complainant misued the security cheques. As per deposition of accused that the replaced goods were not provided to him on time. It means the complainant had provided the replaced goods whether it was on Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 29 /39 30 time or thereafter. The accused also could not produce on record any cogent evidence on record to rebut the version that the complainant did not provided him replaced goods. Even other wise the invoices EXCW1/B ( colly) on which complainant relied upon, the accused himself admitted in answer to question no. 6 in his statement that "The invoices are correct"
If the invoices are correct, the accused has libaility to pay for it. Simply denial that he has no legal liability towards the complainant without leading any cogent evidence is baseless. . The accused in his notice, himself stated that goods were regularly supplied by the complainant, meaning thereby he had received the goods and then he issued the cheques in question against liability to pay the amount of supply received by him. The plea of accused that the complainant has misused the cheques in question which is a security cheque is an after thought and delibrately stop payment without assigning and communicating any reason. Accused himself filled up the complete detail in one of the cheque. The judgment cited by complainant to this effect give strength to the plea of complainant.
DISCUSSION ON LEGAL NOTICE
32. In judgment titled as C.C.Alavi Haji vs Palapetty Muhammad (2007) 6 SCC 555 it was held by the Hon'ble Supreme Court:
"17. 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 Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 30 /39 31 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."
Section 118 (a) of The Negotiable Instruments Act, 1881 provides as under:
"Section 118 Presumption as to negotiable instruments - Untill the contrary is proved , the following presumption 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, was indorsed, negotiated or transferred for consideration,...."
Section 139 of The Negotiable Instruments Act, 1881 provides as under:-
" Section 139 Presumption in favour of holder- It shall be presumed unless the contrary is proved, that the holder of a cheque Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 31 /39 32 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."
(ii) Security & Signed Cheque
33. Reliance can be placed on judgement pronounced in Bir Singh Vs Mukesh , (2019) 4 SCC 197 Section 20 NI Act 1981 says that :
" If a person gives a duly signed cheque which is either blank or partly filled then he is deemed to have given implied authority to the holder to fill up he particulars in it and complete the cheque, thus making the drawer liable for the payment mentioned in it. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted."
34. Reliance can also be placed on judgment pronounced in ICDS Vs Beena Shabir & Anr (2002) 6 SCC-426 where it was held that "Security cheques would also fall within the purview of the Section 138 NI Act and a person cannot escape his liability unless he proves that debt or liability for which cheuqe was issued as security is satisfied otherwise"
Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 32 /39 33
35. Reliance can also be placed on judgment recently pronounced by Supreme Court in case Sripati Singh Vs State of Jharkhand 2021 SCC online SC 1002 wherein it was held that " A cheque issued as security, pursuant to a financial transaction, cannot be considered as a worthles piece of paper. It is given to ensure the fulfilment of an obligation undertaken. The Court explained that if a cheque is issued to secure repayment of a loan advanced and if the loan is not repaid on or before the due date, the drawee would be entitled to present the cheque for payment, and if such a cheque is dishonoured , the consequences contemplated under Section 138 NI Act would follow"
36 Reliance can also be placed on judgment Sampelly Satyanaraya Rao Vs Indian Renewable Energy Development Agency Ltd, 2016 SCC on line SC 954 AIR 2016 SC 4363 : 2016 (9) SCAE 11: 2016 (10) SCC 458 wherein interpretting the word "security" it was observed that "The said expression refers to other cheques being towards repayment of installments. The repayment becomes due under the agreement, the moment the loan is advanced and the installment falls due. Once the loan was disbursed and installments have fallen due on the date of the cheque as per the agreement, dishonour of such cheques would fall under section 138 of the Act."
Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 33 /39 34
37. Further, not only the complainant but accused herein admitted that the complainant had sent supply of goods and also admitted the invoices on which the complainant relied on i.e Ex CW1/B (colly), the accused on failure of making payment against the cheques in question which were issued for the payable amount in favour of complainant company only on the ground that the supply was not in good condition , cannot be believed in absence of any supporting evidence in defence. The accused has not adopted any recourse for suitable action to the appropriate authority. The accused also seems to be making false deposition that he has not received any legal notice when he is not disputing anywhere that the address mentioned on the legal notice is incorrect when he is admitted other documents / invoices Ex. CW1/B where address is also same where he used to receive the goods and also received the summons. Thus, stand taken that he had not received the legal notice cannot be sustainable.
38. Even other wise, there are several contradition in the deposition of the accused. In application u/s 145(2) NI Act and u/s 315 cr.p.c , the accused stated that the cheques in questions were given by him to the complainant for security purpose against the initial transaction of goods between them. On the other side, he deposed that the cheques in question were given as security cheques to Karuna Green Tech. Pvt. Ltd. So, the complainant has fully rebutted this version by way of answer given during cross examination stating that " the cheques in question were given by hand from the accused entity. Some cheques were given in my office and some Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 34 /39 35 cheques were given to his staff." If the accused version is correct that he had given cheques in question to staff of Karuna Green as security, even then this fact is also corroborated by DW 2 Sh. Chander Prakash sharma who has stated that " Cheuqes were given as securtrity at shop of Sharma Electricials to Rajesh Ghai/ complainant. He further stated that no written agreement at the time of putting of condition of blank signed security cheque was executed.".
39. Even there is no endorsement on the cheque in question as to be given as security cheque. so far as intimation given by accusued with regard to defective goods is concerned, DW2 stated " I did not myself tell the complainant about the defective goods.Same was told by the accussed". So the contention of accused that he had sent e-mail to Karuna Green Tech Pvt, Ltd, to intimate with regard to defective goods though the goods were supplied by the complainant, the intimation /e-mail should be sent to complainant and not to M/s Karun Green Tech.Pvt. Ltd. , as discussed above. On one side, the accused stated that he had sent back the defective goods to the complainant and the complainant did not returned/ replaced his goods to contradict it . Accused stated in his application u/s 145 cr.p.c, application u/s 315 cr.p. and in deposition of DW2 and DW3 that defected goods of around 1.5 lacs worth value are lying with accused. How DW2 and D3 could assured the quantity of goods lying with accused that of defective goods and not only this , they also know the worth value of the goods. Contradicting, DW3 stated that "the replaced material were Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 35 /39 36 collected by me and I used to sign the receipt of the same and fresh material were supplied in place of replaced material. The receipts which has been filed by the accused for replaced material are signed by me on behalf of my company ( Karuna Green Tech Pvt.Ltd.). He also deposd that he has not taken any receiving upon documents Ex, CW1/D1 and Ex. CW1/D2." Thus, the accused also failed to prove the said documents could have been corroborate his defence that he had sent any defective goods and the complainant did not replaced the same. DW1 and DW2 also stated that Security cheque as per them to be taken from the other party to secure the payment. Copy of E-mail Mark A dt. 14.9.2017 filed by the accused is a print out copy of the e-mail allegedly sent by the accused which is not prove in accordance with law even have contradict of own stand. Being an elctronic record which is printed out, it is required to have a certificate under Section 65 B of the Evidence Act. On the other hand, the complainant filed the document EX CW1/A supporting with certificate u/s 65 B of the Evidence Act. Accused not produce any witness who had complaint for the defective goods supplied nor produce any document to show that any customer of accused had infact returned the defective goods . In absence of such evidence, the stand of accused to stop payment issued on the ground that the material supplied were of inferior/ defective one is baseless. The plea taken by accused only at the time of giving reply to the notice u/s 251 cr.p.c after dishonour of the cheques. No documentary evidence placed on record by the accused in support of such plea. The claim made by the accused that it suffered losses due to the inferior Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 36 /39 37 quality of materials also found to be not supported by any trustworthy, reliable evidence. Accused also failed to established that the cheque in question was issued even prior to the delivery of the allegedly defective goods as a security. Even there is no prior transaction or practice in business to give a security cheque.
The judgement Indian Micro Electronics ( P) Ltd Vs. C Jamdra Industries and Ors 2015 Law Pack ( Del) 57790 where it is held that "It is settled law that the burden to rebut the presumption under Section 139 NI Act is on the accused. The defence of the accused, to rebut the presumption, has be tested on the touchstone of "preponderance of possibilities", whereas the complainant has to prove its case beyond reasonable doubt. It has also repeatedly been held that the accused can rely on the evidence brought on record by the complainant to rebut the presumption, and it is not always necessary that the accused has to lead its own evidence to substantiate its defence."
39 Invoice dated 17.2.2017 also shows the replaced goods with quantity." The said invoice is admitted by the accused. The compainant relied on ledger account Ex. CW1/C which pertains to the period of 1 st. April to 12 December. Whereas the accused relied on invoice dated 31.3.2017, it the complainant had not returned his defected goods as alleged by accused then, he continue having business transaction further Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 37 /39 38 period of 1.4.2017 till December 2017 so the alleged claim of the accusued that the complainant did not replaced his defective goods and therefore, he got stopped the payment of the cheques is not reliable and trustworhty.
It is implied that it is in lieu of liability upon the accused complainant relied upon judgment of Suresh Chand Goyal Vs. Amit Singhal( Supra) ( 2015) SCC 18 January 2020 which also give strength of its case.
40. The complainant proved in the form of evidence, documents exhibited in evidence, and notice u/s 251 cr.p.c and statement of accused recorded u/s 313 Cr.P.C that complainant admits supply goods to accused and the accused had received the same and had issued the cheque in question towards liability of payment of the goods purchased. The accused has not lead any cogent evidence to corrobotate his version that he has no liability to pay nor produce any documentary or oral evidence to show that supply of goods was of inferior / defective or that nothing is due towards the complainant. Thus, the defence taken by the accused through out is not supported with any occular, trustworhty evidence. On the contrary, the complainant has been able to prove its case that the cheque in question were issued by the accused for discharge of legally enforceable liability/debt hence, the foremost ingredients of offence punishable u/s 138 of NI Act has been proved beyound shadow of doubt.
Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 38 /39 39
41. In view of the aforementioned discussion and judgment relied upon for applying the test of the statutory provision of u/s 139 r/w 118 of NI Act and considering the judgement cited above in the present case, the court came to the definate conclusion that complainant has been able to prove its case u/s 138 of NI Act beyond all reasonable doubt. Accordingly, accused Lalit Kumar sharma s/o Sh. Purshotam Lal Sharma , sole proprietor of accused no.1 firm is hereby convicted for offence punishable u/s 138 NI Act.
42. This judgment contains 39 pages in number and every page of this judgment is signed by me with dated.
Announced in the open Court On 1st May, 2023.
( Dr. Satinder Kumar Gautam) PO Special Court (NI Act) S-W Dwarka 01.05 .2023 Rajesh Ghai Vs. MS sharma Electricals CC No. 141/18 39 /39