Delhi District Court
By This Order I Shall Pronounce The Final ... vs M/S. Medchl Chemicals & Pharma (P) on 25 August, 2010
IN THE COURT OF SH. PRASHANT KUMAR CCJ/ARC ROHINI COURTS
DELHI
C. Case No. 892/08
M/s. Gangesh Pharma Pvt. Ltd.
Through its AR Mr. S.K.Guta
(COMPLAINANT)
Versus
Mrs. Madhu Dhings
W/o Sh. Kulbhushan Dhingra
C/o M/s. M.M.Agency
(ACCUSED)
Date of filing of the case : 01.09.2008
Date of reserving for order : 25.08.2010
Date of pronouncement of orders : 25.08.2010
JUDGMENT
1. By this order I shall pronounce the final judgement.
Facts of the case narrated by the plaintiff in brief are as under
that:-
Complainant is a business firm and accused approached the complainant for purchasing medicines and accordingly the complainant had supplied medicines to the accused for Rs. 50,364/- vide bill No. 04150 dated 30.11.07 and vide bill no. 04278 dated 12.12.2007. The complainant also issued one CR loan price itself vide PO NO. SC0052 and SC0103 for Rs. 936/- after deducting this amount. The net amount comes to 49,428/- and accused issued a cheque bearing no. 920571/-CC No. 892/08 1
dated 20.02.2008 for Rs. 49,428 drawn on OBC Bank, Fateh Puri, Chandani Chowk, Delhi. This cheque, however, was dishonoured upon presentation vide memo dated 08.04.2008 with a remark "Insufficient Funds". A legal notice dated 17.07.2008 was given to the accused, however no payment was made , hence this case filed u/sec. 138 N.I.Act.
2. After filing of the complaint the accused was summoned and appeared and after completing the initial requirements notice u/sec. 251 Cr.P.C. was framed on 25.10.2008 in which accused Madhu Dhingra pleaded not guilty and claimed trial.
3. In order to prove his case the complainant has examined only one witness Sh. S.K.Gupta and accused in her defence has not examined any witness. Thus, the liability of the parties has to be seen from the record and the evidence of the complainant's witness itself.
4. CW 1 S.K.Gupta has stated that accused have purchasing the medicines and complainant had supplied the medicines to the accused for Rs. 50,364/- vide two bills which are Ex. CW 1/1 & Ex. CW 1/2. The accused issued a cheque for a sum of Rs. 49,428/- which is Ex. CW 1/3. This cheque was transferred upon presentation vide bank return memo dated 08.07.2008 with remarks "Insufficient Funds". A legal notice sent to the accused dated 17.07.2008 is Ex. CW 1/5. It is further stated by the complainant's witness that accused has not make any payment till date.
5. In his cross-examination Sh. S.K.Gupta has stated that he is working as a Manager Marketing in the complainant's company for the last one and half years. Sh. S.K.Gupta further stated that accused has approached complainant through a telephonic call. Sh. S.K.Gupta further stated that he did not know exact date or month or year , however he definitely came before 30.11.07.
CC No. 892/08 2Sh. S.K.Gupta further stated that when the bills dated 30.11.07 and 12.12.07 was issued he was not working with the complainant. CW 1 further stated that the cheque in question was handed over to him by his office. CW Sh. S.K.Gupta also expressed his ignorance and has stated that he was not aware as to who had filled up the body of the cheque in question. S.K.Gupta further stated that he was not aware as to when accused had met with the officials of the complainant's company, however , he was having business relations with the complainant for the last more than 4 years i.e. prior to December 2007. S.K.Gupta further stated that medical goods required by the accused were supplied and post dated cheques were taken from the accused against the supplying of the goods. S.K.Gupta also expressed his ignorance regarding the details of the goods supplied to the accused and the mode of conveyance .
6. During cross-examination one question was asked by the counsel for accused that whether cheque in question was presented twice for which CW Sh. S.K.Gupta answered in affirmative and he further admitted that the fact of dishonoring of cheque at the time of first presentation was appropriately informed to the accused and complainant's company had demanded the payment at the time from the accused when the cheque in question was dishonored for the first time.
7. It is further stated by CW S.K.Gupta that the cheque in question was presented at the specific instructions given by the accused. CW S.K.Gupta further stated that after the cheque in question was dishonored second time , a legal notice was sent again.
8. During cross-examination counsel for accused raised a question alleging that when the CW S.K.Gupta was not working with complainant company and the alleged presentation was took place then how signatures of accused were identified by him with regard to which he stated that CC No. 892/08 3 "we are having distributor profiled firm which is bearing the signatures of accused which I can produced , if required, in the Court on this information from the record I had identified the signatures."
9. Final arguments heard at length. Record perused thoroughly. It is stated on behalf of the complainant that relations in between the parties are admitted. It is further stated by the counsel for complainant that accused has issued a cheque against two invoices and that cheuqe in question has been dishonored twice and legal notice has been given to the accused which is duly received by her. It is stated by the counsel for complainant on behalf of the complainant that complaint filed is well within time. Accused has admitted her signatures upon the cheque. It is stated lastly on behalf of the complainant that the chqeue so issued by the accused is not given for security purpose.
10. The counsel for accused on the other hand has stated during final arguments that the complaint has not been filed by a duly authorised person. In this regard one judgment is cite before me which is as under:-
M.M.T.C. Ltd. Vs. M/s. Medchl Chemicals & Pharma (P) Ltd. 2020(1) RCR (Criminal) , (Supreme Court of India) In this case it has been held by Hon'ble Supreme Court of India that anyone can set the criminal law in motion by filing a complaint of facts constitution an offence before a Magistrate entitled to take cognizance . No Court can decline to take cognizance on the sole ground that the complainant was not competent to file the complaint. If any special statute prescribed offences and makes any special provision for taking cognizance of such offence under the statute, then the complainant requesting the Magistrate to take cognizance of the offence must satisfy the eligibility CC No. 892/08 4 criterion prescribed by the statute.
11. It was further observed in the M.M.T.C. Ltd. Vs. M/s. Medchl Chemicals & Pharma (P) Ltd. case by referring another judgment i.e. Vishwa Mitter v. O.P.Poddar, 1984(1) RCR(Crl.) 196 : 1983(4) SCC 701, held that it is clear that anyone can set the criminal law in motion by filing a complaint of facts constitution an offence before a Magistrate entitled to take cognizance. It has been held that no court can decline to take cognizance on the sole ground that the complainant was not competent to file the complaint. It has been held that if any special statute prescribes offences and make any special provision for taking cognizance of such offence under the statute, then the complainant requesting the Magistrate to take cognizance of the offence must satisfy the eligibility crieterion prescribed by the statue. In the present case, the only eligibility crieteria prescribed by Section 142 is that the complaint must be by the payee or the holder in due course. This criteria is satisfied as the complaint is in the name and on behalf of the appellant company.
12. Perusal of the record reflects that this complaint case has been filed through its AR Sh. S.K.Gupta. The Extracts of Minutes of Board of Directors for the Meeting which is Ex. CW 1/D-1 has been filed. The counsel for accused has stated that only the Extracts of Minutes the results is not filed nor the relevant register is shown. Perusal of the record further reflects that another document i.e. Special Power of Attorney has been filed on record in favour of Sh. S.K.Gupta which is executed by Naresh Goel, Director of complainant. Considering these documents I am of the opinion that the complaint has been filed by a duly authorised person and after relying upon the reasons so given in "MMTC's case" by Hon'ble Supreme Court of India. Therefore, in these circumstances, I am of the opinion that the complaint case has been filed on behalf of any authorised person or on behalf of the Attorney or any concerned person, CC No. 892/08 5 thus it is considered that the complaint has been filed by a duly authorised person.
13. Another objection taken by the counsel for accused , there is no admission of payment by the complainant and presumption u/sec. 139 N.I.Act which is rebuttable, , hence it cannot be considered in this case. Section 139 N.I. Act reads as under :-
Section 139 N.I.Act further reads as under :
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.
14. It is important to mention here that such an presumption given u/sec. 139 N.I.Act is rebutable. Following judgments are mentioned here for reference i.e. In another case, "Krishna Janardhan Bhat V/s. Dattatraya G. Hegde, AIR 2008 Supreme Court 1325", it has been held by the Court that presumption under section 139 Negotiable Instrument Act, merely raised presumption in favour of holder of cheque that same has been issued for discharged of any debt or other liability is the existence of legally recoverable debt is not a matter of presumption under section 139 Negotiable Instrument Act.
15. In order to prove his defence, the accused is not required to step into witness box. He may discharge his burden on basis of materials already brought on record. Question whether statutory presumption rebutted or not, must be deter in view of other evidences on record and accused has a constitutional right to maintain silence. Standard of proof on the part of an accused and that of the prosecution in a criminal case is different. Whereas prosecution must prove the guilt CC No. 892/08 6 of an accused is of reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is "preponderance of probabilities". Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by the reference to the circumstances upon which he realize. Statutory presumption has an evidentiary value. The question as to whether the presumption stood rebutted or not must, therefore, be determined keeping in view the other evidence on record.
16. In the case "John K. John V/s. Tom Varhese, AIR 2008 Supreme Court 278", it has been observed by the Hon'ble Supreme Court of India, the Court can take notice of conduct of parties. The Hon'ble High Court upon analyzing the materials brought on records by the parties arrived at a finding of fact that in view of the conduct of the parties it would not be prudent to hold that the respondent borrowed a huge sum despite the fact that the suits had already been filed against him by the appellant. Presumption raised in terms of Section 139 of the Act is rebuttable.
17. Thus, it is clear from the above mentioned law laid down by Hon'ble Supreme Court of India on the said presumption given u/sec. 139 N.I. Act is rebuttable. The observations on this presumption shall be given in the specific paras.
18. Another objection taken by the counsel for accused that suit has not been filed within the period of limitation given u/sec. 138 N.I.Act . The counsel for accused has stated that during cross-examination complainant's witness Sh. S.K.Gupta had admitted that the cheque in question had been presented twice and upon the first presentation and dishonor of the cheque in question the complainant had demanded the money from the accused. Thus, requirement u/sec. 138 N.I. Act were complied with on behalf of the complainant by demanding the payment at the time of first dishonor of the cheque in question. Therefore, the CC No. 892/08 7 limitation period starts from the first admission itself and in subsequent presentation of the cheque on behalf of the complainant, the limitation period cannot be said to have been stopped and starts afresh as per the law. It is further alleged on behalf of the accused that complainant has not shown any document though when such document was made on behalf of the complainant though it has been admitted by the complainant's witness Sh. S.K.Gupta categorically during his cross-examination, that at the time of first presentation of the cheque and it is dishonored, however admission of the payment was made by the complainant.
20. This Section 138 N.I. Act lays down that whenever any cheque so issued by the accused is return by the bank as unpaid and admission for the payment of the said amount is made by the complainant by giving notice in writing during 30 days from the date of dishonor and no payment is made within 15 days thereafter after receiving the notice then an offence u/sec. 138 N.I. Act is made out. Thus, essential requirement of the law laid down u/sec. 138 N.I.Act that whenever any cheque has been dishonored and any requirement of the payment is made by way of notice in writing from the accused within 30 days from the date of dishonoring of cheque and no payment is made during 15 days from the date of receipt of such notice, then offence u/sec. 138 N.I. Act is made out. It is well established principal of law that once an admission of payment by way of legal notice is made then the limitation period starts thereafter and it cannot stopped by any subsequent event.
21. During cross-examination the complainant's witness Sh. S.K.Gupta had admitted that at the time of first dishonor of cheque a demand for the payment was made to the accused. It is further alleged by the counsel for accused that such demand was made in writing therefore, requirement of Section 138 N.I. Act have been complied with at the time of first dishonor of cheque in question itself. The complainant has not explained anything in furtherance thereof though as the payment was not paid in respect to the notice in writing, thus, it is CC No. 892/08 8 considered that at the time of first dishonor of the cheuqe, admittedly, the demand of payment has been made by the complainant from the accused by way of notice.
It is further reflected from the record that no such an averment have been made in the complaint, therefore, it means that there is concealment of material of facts from the Court. Under these circumstances, the conduct of the complainant as a whole is under question as he has suppressed the material facts from the Court which goes to the root of the case as a whole. No explanation is furnished on behalf of the complainant in this regard during final arguments . Under these circumstances, therefore, it is considered that the cheque in question was admittedly presented twice and at the time of first presentation the complainant had made an admission from the accused as per Section 138 N.I.Act , therefore, I am of the opinion that limitation period starts from the first admission itself and not from the second legal notice so furnished on behalf of the accused . The complainant has not given an exact date and month as to when first admission was made on behalf of the complainant. Under these circumstances, I am of the opinion that the complainant himself has suppressed the certain material facts from the Court on the basis of which the liability of the accused is to be decided . Thus, the complainant himself is guilty of suppression of material facts .Thus, it is the complainant who has to answer and explain as to how such the documents have not been placed on record on behalf of the complainant. Under these circumstances, by any stretch of imagination it cannot be considered that the cause of action has been started from the date of giving the legal notice dated 17.07.2009. Under these circumstances, it is further reflected from the record that as the legal notice dated 17.07.2008 is not a relevant document in present circumstances which can not be considered while considering the liabilities of the accused u/sec. 138 N.I.Act and complainant has not placed the earlier demand notice given to the accused on judicial record. Therefore, under these circumstances, the liability of the accused is not established on behalf of the complainant beyond reasonable doubt as the essential ingredients of the Section 138 N.I.Act itself are not complied with by the complainant.
CC No. 892/08 922. Other important contradictions and discrepancies have been raised and pointed out by the counsel for accused alleging that the cheque in question so given as alleged by the accused was a posted dated cheque which has been admitted by the CW S.K.Gupta . The accused has admitted the signatures on cheque , however it is stated by the accused that it was given only for the purpose of security. Under these circumstances , statement of accused is recorded u/sec. 313 Cr.P.C. is also considered wherein accused has stated that no such legal notice dated 17.07.2008 has been received by her and the cheque in question was signed in blank alongwith three other cheques which were given by the accused to the complainant towards security for the goods supplied. It is further alleged by the accused during recording her statement u/sec. 313 Cr.P.C. that these cheques have been received by the complainant as she has not received any medicine as alleged by the complainant. Thus, they arise no liability to the complainant.
23. At this stage one judgment is relied upon for reference i.e. "M.S. Narayana Menon V/s. State of Kerala, AR 2006 Supreme Court 3366", it was observed by the Hon'ble Supreme Court that the books of accounts maintained by the respondent were found to be not reflecting the correct state of affairs. A discrepancy of more than Rs. 14,00,000/- was found. It was held that the evidences adduced by the parties before the trial Court lead to one conclusion that the appellant had been able to discharge his initial burden. The burden thereafter shifted to the second respondent to prove his case which he failed to do so. If the defence of appellant is acceptable as probable the cheque therefore cannot be held to have been issued in discharge of the debt as, for example, if a cheque issue for security or for any other purpose the same would not come within the purview of Section 138 of the Negotiable CC No. 892/08 10 Instrument Act.
Applying the said definitions of 'proved' or 'disproved' to principle behind Section 118(a) of the Act, the Court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the non-existence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon.
24. The cross-examination of CW Sh. S.K.Gupta is perused again. From the perusal of the cross-examination of Sh. S.K.Gupta, he has admitted that the cheque so given by the accused was post dated cheque. The averment made in the complaint are now perused again. The complainant has not stated this fact in the complaint nor in the affidavit of Sh. S.K.Gupta. Thus, the complainant's witness himself has made certain contradictions in his examination which takes us towards the presumption in favour of the accused that the cheque in question was given towards security and takes away from the presumption that cheque in question was issued by the accused towards legal discharge from her liability.
25. Another discrepancy alleged by the accused is that legal notice has not been proved by the complainant. Perusal of the record reflects that from the above mentioned reasons the legal notice dated 17.07.2008 is not to be considered from the purpose of deciding the liability of the accused as complainant himself has made an admission at the time of first dishonor of the cheuqe in question . However, the complainant in order to establish his case against CC No. 892/08 11 the accused has not examined any witness from the Postal Department. The accused has stated in clear words that she has not been received any legal notice therefore, it was imparitive on the part of the complainant to prove as per the law that the legal notice is duly served upon the accused which has not been done by the complainant as per the law as he has not brought any witness from the Postal Department. The presence of any such witness from the postal department to prove the legal notice in question has not been explained by the complainant . In these circumstances, the presumption raised u/sec. 27 of General Clause Act cannot be considered in favour of the complainant. Section 27 of the General Clause Act reads as under :-
" Section 27 General Clauses Act lays down the presumption which is in favour of the complainant. This section lays down that the notice sent by registered post to correct address of accused, the same is deemed to have been served upon the endorsement of 27 of General Clauses Act. The presumption under this act cannot be rebutted either by way of mere suggestion or mere denial in statement under Section 313 Cr.P.C: It has to be rebutted specifically".
26. The counsel for accused has further stated that liability of the accused is also not proved by the complainant and accused has been able to rebut averments of the complainant . The cheuqe in question has been misused by the complainant. The impunged bill filed by the complainant on record are also not proved by him as the signatures on these bills are not that of the accused.
27. Section 138 N.I.Act lays down following principal of law of the accused . Thus Section 138 N.I. Act reads as under:-
CC No. 892/08 12Section 138 Negotiable Instrument Act lays down :
Provisions of the consequence of dishonour of the cheque and the limitation period prescribed for taking the steps accordingly "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 from out of that account for the discharge, in whole on 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 honor 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 offense and shall, without prejudice to any other provisions 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 CC No. 892/08 13 holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation - For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability."
28. Thus Section 138 read with section 139 Negotiable Instrument Act lays down the consequences of dishonour of cheque and further lays down certain principles on the basis of which the liability of the drawer are to be ascertained. These essential principles are:
1.) The cheque was issued by the drawer.
2.) The cheque was issued for a valid consideration.
3.) The cheque was presented and was dishonoured.
4.) Legal notice was sent within time period as prescribed.
5.) No payment was paid after receipt of the notice.
29. With regard to first point it is reflected from the record that it is not disputed that the cheque was issued by the accused. The clearance on the cheque in question are admitted. The objection is raised with regard to the second essential ingredient alleging that the cheque in question was not issued for valid consideration. It is stated by the accused that cheque in question given for security purpose. It has been partly admitted by the complainant that the cheque in question was posted dated cheque. It is further stated by the accused that the presumption given u/sec. 139 N.I.Act is rebuttable. Reliance can be made upon the judgement cited above by by Hon'ble Supreme Court of India in case In the case "John K. John V/s. Tom Varhese, AIR 2008 Supreme Court 278", it has been observed by the Hon'ble Supreme Court of India, the Court can take notice of conduct of parties. The Hon'ble High Court upon analyzing the materials brought on records by the parties arrived at a finding of fact that in view of the conduct of the parties it would not be prudent to hold that the respondent borrowed a huge sum despite the fact that the suits had already been filed against CC No. 892/08 14 him by the appellant. Presumption raised in terms of Section 139 of the Act is rebuttable.
30. In another case, "Krishna Janardhan Bhat V/s. Dattatraya G. Hegde, AIR 2008 Supreme Court 1325", it has been held by the Court that presumption under section 139 Negotiable Instrument Act, merely raised presumption in favour of holder of cheque that same has been issued for discharged of any debt or other liability is the existence of legally recoverable debt is not a matter of presumption under section 139 Negotiable Instrument Act.
31. It is therefore, important to mention here that the proving the liability of the accused is upon the complainant beyond reasonable doubt in order to establish its presumption u/sec. 139 N.I.Act . From the evidence so led by the complainant for proving his case is the sole witness Sh. S.K.Gupta . Therefore, I am of the opinion that complainant has not been able to establish the presumption given u/sec. 139 N.I.Act. The witness Sh. S.K.Gupta himself is not aware about each and every facts and circumstances which had taken place in between the accused and the complainant at the relevant time. The complainant's witness admittedly had joined after the entire proceedings had taken place. It is further reflected from the record that Sh. S.K.Gupta , is the Authroised Representative of the complainant, therefore, he has supposed to know each and every facts and circumstances of the case. However, being the AR of the complainant on behalf of the business firm he has supported to depose only on behalf of the information available on record. The complainant's witness S.K.Gupta has not answered various relevant questions raised by the counsel for accused. Therefore, I am of the opinion that presumption u/sec. 139 N.I.Act cannot be said to have been established in favour of the complainant.
32. Third essential requirement of dishonour of cheue is a matter of record.
CC No. 892/08 1533. With regard to the fourth essential requirement the legal notice given by the complainant to the accused dated 17.07.2009 is not considered as legal notice as per the law. The cheque in question allegedly has been presented twice and the legal notice dated 17.07.2009 was given after the second representation of the cheque in question. The complainant admittedly had demanded the payment from the accused after the first presentation, therefore, the requirement of Section 138 N.I. Act were completed at the time of first presentation itself and cannot said to have been extended after the second presentation of the cheque in question as per the law. Even otherwise the legal notice has not been proved by the complainant as per the law as no witness has been examined on behalf of the complainant from the postal department .
34. The fifth essential requirement as mentioned, therefore, need not be considered under these circumstances.
35. In the light of the above mentioned facts and circumstances of the case it is, therefore, reflected that various contradictions and discrepancies have merged from the cross-examination of the sole witness i.e. Sh. S.K.Gupta. Thus, he is not been able to establish the liability of the accused beyond reasonable doubt. It is further reflected from the above mentioned reasons and findings that the requirement made u/sec. 138 N.I.Act have not been complied with fully by the complainant and complainant himself is guilty of suppression of material facts i.e. not placing on record the relevant documents pertaining to the demand made by the complainant at the time of first dishonor of the cheque in question, therefore, the presumption cannot be said to be accrued. Under these circumstances, therefore, I am of the opinion that complainant have been misreably failed to prove the liability of the accused beyond reasonable doubt. Therefore, the complaint filed by the complainant is dismissed and accused Madhu Dhingra W/o Sh. Kulbhushan Dhingra is not liable Under Section 138 Negotiable Instrument Act and she is acquitted of the charge of Section 138 Negotiable Instrument Act. The surety for CC No. 892/08 16 accused stands discharged, documents, if any be returned and endorsement, if any, be cancelled.
Announced in Open Court (Prashant Kumar)
Dated 25.08.2010 CCJ/ARC/ROHINI/
Delhi
CC No. 892/08 17
C. CASE No. 892/08
25.08.2010 Present : Complainant alongwith counsel.
Accused alongwith counsel.
Final arguments have been heard. Final judgment is pronounced vide separate order sheet. Accused Madhu Dhingra W/o Kulbhushan Dhingra is not liable Under Section 138 Negotiable Instrument Act and she is acquitted of the charge of Section 138 Negotiable Instrument Act. The surety for accused stands discharged, documents, if any be returned and endorsement, if any, be cancelled.
File be consigned to record room.
(Prashant Kumar) CCJ/ARC/Delhi 25.08.2010 CC No. 892/08 18