Delhi District Court
M/S Akzonobel India Limited vs M/S Shanti Motors on 4 November, 2023
IN THE COURT OF MS. PADMA LANDOL,
METROPOLITAN MAGISTRATE, NI ACT DIGITAL COURT- 03, NEW
DELHI DISTRICT, PATIALA HOUSE COURT, NEW DELHI
M/S AKZONOBEL INDIA LIMITED Vs M/S SHANTI MOTORS
1. Complaint Case no. : 3892/2021
2. Date of Institution of case : 11.08.2021 (As per Layers
Software)
3. Name of the complainant : M/S Akzonobel India Limited,
Through Sh. Bharat Lal Juyal
(Authorized Representative)
9th & 10th Floor, Magnum
Towers, Golf Course Ex Road,
Sec-58, Gurugram Haryana-122011
4. Name and address of Accused : Mr. Indrajit Kumar Roy,
Proprietor of M/s Shanti Motors
342/611, Sudarshanpur, NH-34,
Raiganj, Siliguri More, Uttar Dinajpur,
West Bengal- 733134
5. Offence complained of : Section 138 NI Act
6. Plea of accused : Pleaded not guilty
7. Final Order : Acquitted
8. Date of judgment : 04.11.2023
-:JUDGMENT :-
1. This judgment shall decide and dispose off Criminal Complaint Case No.
2408/2021; titled as M/s Akzonobel India Limited Vs M/s Shanti Motors; instituted
under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter NI Act) for
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Digitally signed
by PADMA
PADMA LANDOL
Date:
LANDOL 2023.11.04
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the dishonour of one cheque bearing no. 710502 for a sum of Rs.1,73,295/-(Rupees
One Lakh Seventy Three Thousand Two Hundred Ninety Five Only).
2. It is the case of the complainant that it is a company engaged in manufacture
and distribution of paints and related products. The accused who runs his business in
the name of M/s. Shanti Motors (proprietorship firm) had regular dealings with the
complainant, purchasing paints and allied products. That the goods were supplied by
the complainant to the entire satisfaction of the accused. In partial discharge of his
liabilities, the accused issued a cheque bearing No. 710502 dated 22.02.2021 for
Rs.1,73,295/-(Rupees One Lakh Seventy Three Thousand Two Hundred Ninety Five
Only) drawn at Punjab National Bank, Raiganj, West Bengal to the complainant.
Upon presentation, it got dishonoured due to "Account Blocked (Situation covered in
21-25)" vide return memo dated 25.02.2021.Eventually complainant company got
issued a legal notice dated 23.03.2021 to the accused as per the provisions of section
138 N.I. Act within the stipulated period. Despite the service of legal notice, the
accused failed to make the payment. Hence, the present complaint has been filed
against the accused.
3. The complainant was directed to submit the original case documents
(complaint, affidavit of pre-summoning evidence, cheque and annexed documents)
with the Court, a condition precedent to the taking of cognizance of the complaint, as
per SOP/Guidelines issued by the SCMSC Hon'ble High Court of Delhi for
functioning of Digital Courts. Pursuant to the said compliance, vide order dated
25.10.2021, after being satisfied that prima facie ingredients of Section 138 NI Act
are made out cognizance was taken and summons were directed to be issued against
the accused. Accused entered into appearance on 30.11.2022 and was admitted to bail
on the same date. Upon seeing a possibility of settlement, matter was referred to
mediation, however, mediation was not successful, hence, notice under Section 251
Cr.PC was framed and served upon the accused to which he pleaded not guilty and
claimed trial.
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Digitally signed
by PADMA
PADMA LANDOL
Date:
LANDOL 2023.11.04
16:35:09
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4. The accused then expressed his willingness to move an application under Sec.
145(2) NI Act. Upon the submission of the Ld. Counsel for complainant that he has
no objection to the said application and also considering the facts of the case and
defence taken by accused, the oral application stood allowed. The matter was then
listed for recording of evidence through video conference through Cisco Webex Meet
in compliance of the Project Implementation Guidelines 2020 laid down by Hon'ble
High Court of Delhi and Video Conferencing Rules 2021 issued by Hon'ble High
Court of Delhi dated 26.10.2021. AR for Complainant was examined and cross-
examined as CW-1. He tendered his affidavit in post summoning evidence and relied
upon following documents:
1. Authority letter dated 29.03.2023: Ex. CW-1/A(OSR).
2. Statement of account: Ex. CW-1/B.
3. Original cheque dated 22.02.2021: Ex. CW-1/C.
4. Bank Return memo dated 25.02.2021: Ex. CW-1/D.
5. Legal Demand Notice dated 23.03.2021: Ex. CW-1/E.
6. Postal receipts dated 24.03.2021: Ex. CW-1/F.
7 Internet generated tracking report: Mark A.
5. Thereafter, CE was closed. After the conclusion of complainant evidence,
accused was examined under Section 313 Cr.PC r/w Section 281 Cr.PC wherein all
the incriminating evidence were put to him. Then, oral application u/s. 315 CrPC of
accused stood allowed. Thereafter, accused was examined and cross-examined as
DW-1. He has relied on the following documents:
1. Copy of photocopied courier bill dated 03.04.2022: Mark X.
2. Compact disk containing 4 audio recordings between accused and Mr.
Arshad Alam along with copy of transcript and certificate u/s 65-B
Indian Evidence Act: Ex. DW1/1(colly).
Accused then closed his defence evidence.
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signed by
PADMA
PADMA LANDOL
LANDOL Date:
2023.11.04
16:35:14
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6. Final arguments have been heard at length. Complete record has been perused
carefully.
7. The Court shall now deal with the defence taken by the accused and
contentions of both the parties.
DEFENCE OF ACCUSED:
8. While framing notice u/s. 251 Cr.PC, 1973 accused has taken a defence that he
had given the cheque in dispute by way of security. That he had received paints from
the complainant, however they failed to supply machines in absence of which the
paints were useless. That he had asked them to supply the machines also, however to
no avail. That he has returned the paints to the complainant and whatever is the due
amount after the adjustment of the returned goods, he is liable to pay. Accused further
states that cheque in dispute bears his signature however other particulars are not in
his handwriting and further stated that he does not remember if he had received the
legal demand notice. In his statement u/s. 313 Cr.PC, accused has reiterated his
defence. Additionally, he has stated that he started doing business with the
complainant since the year 2015-2016. He has further admitted receiving the legal
demand notice and thereafter, he contacted Mr. Arshad Alam, an official of
complainant company working in his area to collect the goods, however, to no avail.
9. In the final arguments, complainant has asserted its case for conviction against
the accused essentially on the ground of having proved the cause of action against
him, beyond all reasonable doubt. This is premised on the substantive proof of
presentation of the cheque in dispute admittedly issued by the accused with his
signature, its return as dishonoured from the payee's bank upon presentation for
encashment and non-payment by the accused of the legally enforceable debts within
the statutorily prescribed period, despite service of legal demand notice. It is
submitted by the Ld. Counsel for the complainant:
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PADMA LANDOL
Date:
LANDOL 2023.11.04
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i) That the accused has accepted the delivery of materials with full satisfaction and he
never sent any written intimation about the return of materials, even to Arshad Alam.
ii) That the accused has failed to prove his defence and the presumptions u/s. 118 and
139 NI Act.
10. Per contra, Ld. Counsel for the accused has prayed for dismissal of the
complaint and acquittal of the accused on several counts:
i) That the dispute herein is only qua the existence of a legally enforceable liability.
He admits that the accused contacted Mr. Arshad Alam only after receiving of
summons from this court, however, the fault on the part of the complainant goes back
to the day of supply of incomplete materials.
ii) The entire conversation between the accused and Mr. Arshad Alam as per audio
conversations on record reveals that Mr. Arshad Alam never raised any objection to
the return of materials. If there was no fault of complainant, they should not have
accepted the returned materials.
iii) That the paints were useless in the absence of paint mixing machines and the AR
for complainant never denied this fact at any point of time.
iv) That the accused delayed in returning the goods because he was waiting for the
complainant to supply the paint mixing machines and also there was no clarity as to
who was going to borne the transportation charges. Entire conversation on record
reveals the same.
v) That accused has taken consistent stand throughout and onus shifts back to the
complainant to prove his case beyond reasonable doubt, however, complainant has
miserably failed to prove his case.
11. It is now pertinent to examine the factual matrix of the case in the light of the
ingredients of the provision as produced herein:
138. Dishonour of cheque for insufficiency, etc., of funds in the account.--
Where any cheque drawn by a person on an account maintained by him
with a banker for payment of any amount of money to another person
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PADMA LANDOL
Date:
LANDOL 2023.11.04
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from out of that account for the discharge, in whole or in part, of any
debt or other liability, is returned by the bank unpaid, either because of
the amount of money standing to the credit of that 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 that
bank, such person shall be deemed to have committed an offence and
shall, without prejudice to any other provision of this Act, be punished
with imprisonment for a term which may be extended to two years, or
with fine which may extend to twice the amount of the cheque, or with
both: 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. Explanation.--For the purposes of this section, "debt of other liability" means a legally enforceable debt or other liability.
12. The essential ingredients in order to attract Sec. 138 of NI Act, 1881 are:
i) Existence of legally enforceable debt or liability and issuance of cheque in discharge of said debt or liability;CC No.3892//2021 M/S AKZONOBEL INDIA LIMITED Vs M/S SHANTI MOTORS Page 6 of 12 Digitally signed by PADMA
PADMA LANDOL Date:
LANDOL 2023.11.04 16:35:37 +0530
(ii) Dishonor of cheque in dispute which must have been drawn on an account maintained by the accused;
(iii) Service of legal demand notice seeking payment of cheque amount within 30 days from the date of receipt of return memo;
(iv) Non-payment of cheque amount within fifteen days from the date of service of notice; and
(v) Filing of complaint within one month from the date on which cause of action arises.
13. Now, coming to the facts of the case in hand in the light of above mentioned legal principles. In the instant case, the issuance of the cheque in dispute [Ex. CW- 1/C] by the accused, its presentation in the bank for encashment and subsequent dishonour due to the reason "account blocked", is not disputed and is a matter of record, as proved by the return memo [Ex. CW-1/D]. It is also established that the cheque in dispute belongs to the accused and even the signature on the same is admittedly of the accused. Once these facts are established, a presumption of the cheque having been issued in discharge of a legally existing liability and drawn for good consideration arises by virtue of Section 118 (a) of the Negotiable Instruments Act. Once Section 139 of the NI Act comes into picture, the Court presumes that the cheque was issued in discharge, in whole or in part, of any debt or liability. At this stage, with the help of presumption under Section 139 of the Negotiable Instruments Act, the case of the complainant stands proved.
14. Since the presumption under Section 139 read with Section 118(a) of the NI Act is in favour of the complainant, it is now for the accused to rebut the same either by discrediting the veracity of material relied upon by the complainant or by leading positive evidence to probabilise his defence on the touchstone of preponderance of probabilities as provided by the three Judge bench of the Hon'ble Supreme Court in Rangappa Vs Sri Mohan (2010) 11 SCC 441 and also in Rohitbhai Jivanlal Patel v. State of Gujarat & Anr. (2019) 18 SCC 106.
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PADMA
PADMA LANDOL
LANDOL Date:
2023.11.04
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15. It is trite law that for rebuttal of the said presumption under Section 139 read with Section 118(a) of NI Act, accused need not even step into the witness box as he can rebut the same by placing reliance on the material brought on record by the complainant or even by raising presumptions of fact and law on the basis of material available on record. The accused has to make out a fairly plausible defence which is acceptable to the Court. Therefore, the standard of proof required from the accused to prove his defence is "preponderance of probabilities" and not beyond reasonable doubts. However, at the same time, it is also to be remembered that bare denial of the existence of legally enforceable debt or other liability cannot be said to be sufficient to rebut the presumption and something which is probable has to be brought on record to shift the burden back to the complainant. The statutory presumption u/s. 118(a) NI Act reads as under:
118 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 The statutory presumption u/s. 139 NI Act reads as under:
39. 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.
16. It is an admitted fact that in the year 2019 the transaction in dispute was the only business transaction between the parties herein. The receiving of materials by the accused and subsequently its return by the accused to the complainant are also not in dispute. Further, part payment of Rs. 32,267/- towards the said materials is also an CC No.3892//2021 M/S AKZONOBEL INDIA LIMITED Vs M/S SHANTI MOTORS Page 8 of 12 Digitally signed by PADMA PADMA LANDOL LANDOL Date:
2023.11.04 16:35:48 +0530 undisputed fact. The dispute is essentially whether the accused owed a legally enforceable liability at the time when cause of action arose and whether the cheque in dispute was issued against payment of a legally enforceable debt/liability.
17. It is now imperative to see if the accused has been able to establish a probable defence and/or if he has successfully picked and pointed holes in the case of the complainant so much so that it dislodges the presumption raised against him. Keeping these basic principles in mind, this Court shall now proceed to deal with the various defences taken by the accused and examine whether the accused has been able to rebut the presumption arising in favour of the complainant.
18. The first and foremost defence taken by the accused is that complainant did not supply the paint mixing machines with the paints and since the paints were completely useless without the mixing machines, the fault is on the part of the complainant. Hence, he owes no liability. In order to establish this defence, accused has cross-examined the AR for the complainant (CW-1) and examined himself as DW-1.
i) In the cross-examination, AR (CW-1) admitted that they did not supply the paint machines along with the goods to the accused. He has also deposed that paint machines were not supplied because the accused failed to pay the security amount and also did not make the complete payment of the paints. Further, he has denied having any knowledge if the paints were useless without the paint mixing machines. Thereafter, he has admitted receiving of 6 cartons of goods back from the accused. He, however, deposed that as per the regulations of the complainant company, return of goods is allowed within 7 days of its delivery but accused returned the 6 cartons of materials after 3 years that too without any information. He admitted that he did not file any such regulation on record. CW-1 further deposed that he could not recall if someone by the name of Mr. Alam works in their sales team.
CW-1 has failed to prove that the accused was under an obligation to pay the security amount before supply of paint mixing machines and since he failed to do so, CC No.3892//2021 M/S AKZONOBEL INDIA LIMITED Vs M/S SHANTI MOTORS Page 9 of 12 Digitally signed by PADMA PADMA LANDOL Date:
LANDOL 2023.11.04 16:35:53 +0530 such machines were not supplied to him, specially when it is an admitted fact that the complainant used to supply materials to the accused on credit basis. It is to be noted that at any point of time the complainant has never denied the fact that the paint mixing machines were necessary for the paints and the paints could not be applied on automobiles/sold individually. Further, a claim has been made by the AR that as per the regulations of complainant company, goods were to be returned within 7 days of its delivery, however, admittedly no such regulation has come on record. This is only a bald claim because complainant has duly accepted the returned materials from the accused without any demur. CW-1 has further never denied that Arshad Alam is working in their sales team. He has simply stated that he does not recall the name of any such person. It is to be noted that the statement of Accounts [Ex. CW-1/B] bears the name of Alam Md Arshad as Sales Representative. Further, the audio recordings on record [Ex. DW-1/1(colly)] which is not a disputed piece of evidence also bears voice of Mr. Arshad Alam who has introduced himself as Sales Person of complainant company to one SI Tulak Kumar. Hence, this leads to only one conclusion that Arshad Alam was a Sales Representative of the complainant company who was dealing with the accused on its behalf.
ii) In defence evidence, accused (DW-1) has reiterated his defence. He has further deposed that he has returned goods worth Rs. 1,62,000/- to the complainant. In this regard, he has filed a copy of courier bill dated 03.04.2022 at Mark X. The courier bill is only a photocopy and no reason is forthcoming for non-furnishing of the original. Hence, the photocopy at Mark X cannot be relied upon. However, as already noted the AR for the complainant has already admitted the receiving of returned materials, hence, non-furnishing of original courier bill shall not have any adverse bearing on the defence of the accused. In his cross-examination, accused has deposed that he had placed a common order for machine, thinner, hardener and paints and further, there was no written agreement with the complainant in this regard. Same is not objected to by the Ld. Counsel for complainant. No further question has been put to him on this aspect and also, no contrary suggestion has been given by the CC No.3892//2021 M/S AKZONOBEL INDIA LIMITED Vs M/S SHANTI MOTORS Page 10 of 12 Digitally signed by PADMA PADMA LANDOL Date:
LANDOL 2023.11.04 16:35:57 +0530 complainant side. Accused has further admitted that he had spoken to Arshad Alam about the return of goods only after receiving summons and warrants from this court. Complainant has neither put any question on the 4 audio recordings between accused and Arshad Alam [Ex. DW-1/1(colly)] nor any contrary suggestion has been given to that effect.
Perusal of examination of DW-1 reflects that the complainant has not denied the common order placed for machine, thinner, hardener and paints verbally. Further, the contents of the 4 audio recordings are also not disputed at any point of time. Perusal of the audio recordings reveal that the Sales Representative of the complainant company namely Arshad Alam has asked the accused to return the materials and he has also promised that once the goods are received back by the complainant, outstanding of the accused will become zero. The entire conversations reflects that the complainant through its Sales Representative has admitted the non- supply of paint machines because of which he has asked the accused to return the materials. Nothing in contrary has either been contended by the Ld. Counsel for complainant nor has come on record. Hence, as rightly contended by the Ld. Counsel for accused, the fault on the part of complainant for non-supply of paint machines goes back to the date of supply of incomplete materials. Even though the accused has returned the paints after the filing of the present case, however, the fault on the part of the complainant hits the root of the present case. Accused has successfully established that there was no liability to the extent of cheque amount in dispute either on the date of its dishonour or on the expiry of the statutory period after receiving the legal demand notice.
19. On the aspects of preponderance of probabilities, as already discussed above, the accused has to bring on record such facts and such circumstances which may lead the court to conclude either that the consideration did not exist or that its non- existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. In the case at hand, CC No.3892//2021 M/S AKZONOBEL INDIA LIMITED Vs M/S SHANTI MOTORS Page 11 of 12 Digitally signed by PADMA PADMA LANDOL Date:
LANDOL 2023.11.04 16:36:07 +0530 keeping all the aspects in view, the defence put forth by the accused and rebuttal of presumption raised against him is much more than a mere denial when tested on the touchstone of preponderance of probability. In fact, as already seen the non-supply of paint mixing machines and receiving of returned materials are duly admitted by the complainant. Furthermore, placing of common order for paint mixing machines and the paints are not disputed by complainant at any point of time. Also, nothing has come on record to show that separate invoices were generated for the paint mixing machines and the paints. In fact, complainant has claimed that the cheque in dispute was issued towards partial discharge of the outstanding liability and not against any specific invoice. Hence, accused has successfully raised a probable defence.
20. In any case, Negotiable Instruments Act envisages application of the penal provisions which need to be interpreted strictly, therefore even if two views are possible in a matter, the Court should lean in favour of the view which is beneficial to the accused and the same position has been upheld in a catena of judgments. Therefore, even on this ground, the benefit of doubt is to be granted to the accused.
21. In view of the above discussion, therefore the accused Mr. Indrajit Kumar Roy, Proprietor of M/s. Shanti Motors stands acquitted of the offence punishable under section 138 of Negotiable Instruments Act.
Announced in Open Court today on 04.11.2023. Digitally signed PADMA by PADMA LANDOL LANDOL 16:36:13 Date: 2023.11.04 +0530 (PADMA LANDOL) MM (NI Act) Digital Court-03 New Delhi, PHC/Delhi/ 04.11.2023 Certified that this judgment contains 12 pages and each page bears my signatures.
Digitally signedPADMA by PADMA LANDOL LANDOL Date: 2023.11.04 16:36:21 +0530 (PADMA LANDOL) MM (NI Act) Digital Court-03 New Delhi, PHC/Delhi/ 04.11.2023 CC No.3892//2021 M/S AKZONOBEL INDIA LIMITED Vs M/S SHANTI MOTORS Page 12 of 12