Delhi District Court
Vide This Judgment vs Manohar K. Deshmukh & Anr. 2007 Stpl(Dc) ... on 14 July, 2022
IN THE COURT OF MS. AISHWARYA SHARMA,
METROPOLITAN MAGISTRATE (NI ACT) DIGITAL COURT02,
SOUTHEAST DISTRICT, SAKET COURT COMPLEX, NEW DELHI
Criminal Complaint No: CC NI ACT/4616/2021
RASHI PERIPHERAL ...Complainant
Versus
M/S GENERATION NXT COMPMART PVT. LTD. ... Accused
1. Name & address of the complainant: Rashi Peripherals Pvt. Ltd.
Having its registered office at
Aristo House, 5th Floor, Corner of
Telli Galli, Andheri East Mumbai
400069
And having its branch office at B
22/1, Ground Floor, Okhla
Industrial Area, Phase II, New
Delhi110020
2. Name & address of the accused : 1) M/s Generation Nxt. Compmart
Pvt. Ltd. Having its registered
office at A2/4, 2nd floor,
Safdarjung, New Delhi110029
and also at - B1A Bhagwati
Tower 39, Comm. Complex,
Wazirpur, New Delhi110052
2) Mr. Manas Kumar Singh
Director of M/s Generation Next
Compmart Pvt. Ltd. Having its
registered office at A2/4, 2nd floor,
Safdarjung, New Delhi110029.
And also at R/o H4/3, 1st Floor,
Sector 16, Rohini, New Delhi
110085
Digitally signed by
AISHWARYA
AISHWARYA SHARMA
SHARMA Date: 2022.07.14
15:13:11 +0530
3. Offence complained of :
U/S 138 The Negotiable
Instruments Act,1881.
4. Plea of accused : Pleaded not guilty.
5. Final Arguments : 09.06.2022
6. Date of Institution of case : 20.04.2021
7. Date of decision of the case : 14.07.2022
JUDGEMENT
1. Vide this judgment, I shall dispose of the aforementioned complaint case filed by the complainant, Rashi Peripheral (hereinafter referred to as the 'complainant') against accused company M/S Generation Nxt Compmart Pvt. Ltd., through it's Director Sh. Manash Kumar Singh, (hereinafter referred to as the 'accused persons').
2. Factual Matrix: The complainant's case is that the complainant is a registered company engaged in the business of sale of mobile, computer and it's peripheral in India and Mr. Ramesh Rawat who is working as Account Manager with the complainant company, is aware of the facts of the case and is authorized to pursue this case. The case of the complainant is that the accused No.2, who is the director of Accused No.1 company and is in charge of day to day business affairs of the accused company, approached the complainant company for purchase of computer components and its peripherals, with the assurance to make the payment promptly of the invoices for goods purchased as per credit terms of complainant company. It is stated that as per various purchase orders of accused company, goods were delivered to accused company through various invoices and against the said invoices, the accused No.2 issued cheque bearing No. 014381 dated 01.03.2021 for a sum of Rs.2,27,23,336/ drawn on HDFC Bank, Plot No1, Sector 4, R K Puram, New Delhi (hereinafter referred as the 'cheque in question') in favour of the complainant company towards discharge of his liability. When the complainant presented the Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.07.14 15:13:17 +0530 same, it got dishonoured vide return memo dated 03.03.2021 with remarks "Exceeds Arrangement". After dishonour of the cheques in question, the complainant company issued legal demand notice dated 18.03.2021 to the accused through Speed Post and courier which was duly served upon the accused on 20.03.2021. However, the accused did not come forward to repay his debt within the prescribed period of fifteen days. Hence, being aggrieved, the complainant filed the present complaint under section 138 of The Negotiable Instruments Act, 1881 on 20.04.2021 and prayed that the accused be summoned, prosecuted and punished under section 138 of The Negotiable Instruments Act, 1881 and the complainant be granted compensation U/S 357 Cr. P.C.
3. Summoning of accused: The court summoned the accused after hearing the arguments at the stage of presummoning vide order dated 24.08.2021 and the accused entered appearance in the present case on 11.10.2021 and accused was admitted to bail vide same order.
4. Notice: The court has framed notice of accusation under Section 251 Cr.P.C. against the accused on 27.01.2022. The substance of accusation was read over and explained to the accused and after being satisfied that the accused comprehended the same, the court recorded his plea.
5. Plea of the accused: The accused pleaded not guilty and claimed trial. He admitted his signatures on the cheque in question, however, denied filling the amount and date in the cheque in question and stated that he had only filled the name of the payee. He has admitted having received the legal demand notice. In his defence, he stated that he used to purchase the hardware from the complainant company and the complainant company was increasing their credit limit and for the same, he issued the cheque in question as security in year 2019 and after 2019, the accused company purchased hardware and made payment to the complainant company several times, however, later on due to some financial problem in the Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.07.14 15:13:22 +0530 accused company, the complainant company misused the security cheque given by the accused. On the same day, statement of accused for admission and denial U/S 294 of Cr.P.C was recorded wherein he admitted the correctness of dishonour memo and postal receipt pursuant to which witness at Sr.No. 2 Manager/officer of Standard Chartered Bank was dropped on 27.01.2022.
6. Evidence on behalf of complainant: To prove his case, the AR of the complainant company has examined himself as CW1 and has filed his evidence under Section 200 of the Cr.P.C. by way of an affidavit which is EX. CW1/A wherein he has reiterated the averments made in the complaint. To support his case, the complainant has also placed on record Ex. CW1/1 which is the copy of incorporation certificate of complainant company, EX. CW1/2 which is the Authority letter dated 06.04.2021 in favour of CW1 authorizing him to pursue proceedings on behalf of complainant company, EX. CW1/3 which is the original cheque in question dated 01.03.2021, EX. CW1/4 which is the original return memo dated 03.03.2021, Mark CW1/5/ EX. CW1/15 which is the copy of request sent to the accused on 19.03.2021 for balance confirmation of the account by complainant company, EX. CW1/6 which is the copy of ledger account along with certificate U/S 65 B of Indian Evidence Act, EX. CW1/7 (Colly) which is the copy of the legal demand notice dated 18.03.2021, EX. CW1/8 to EX.CW1/11 are the postal receipt and Mark A to D are tracking report qua the postal receipt of legal demand notice. Thereafter, the complainant was subjected to cross examination and statement of accused U/S 313 CrPC was recorded. After recording statement of accused U/S 313 Cr. P.C, an application was preferred on behalf of complainant for reexamination of CW1 and the same was allowed, pursuant to which, CW1 has filed additional affidavit EX. CW1/A1 bearing his signatures at point A & B. Along with this affidavit, CW1 has filed copy of various email communications between the parties EX. CW1/13 to EX. CW1/15, & EX. CW1/17, along with copy of legal demand Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.07.14 15:13:34 +0530 notice dated 23.12.2019 EX. CW1/18, sent by the complainant company to the accused informing him about his outstanding liability of Rs.36,91,992/.
7. During his cross examination, CW1 stated that he is working as manager with the complainant company since 20122013. He stated that R P Tech is the brand name of Rashi Peripheral Pvt. Ltd. and Rashi peripheral is the legal name and both are same entities which is also established from their GST registration certificate. He stated that the accused company is doing business with the complainant company since 20052006. He denied the suggestion that the blank undated cheque in question was given by the accused company to the complainant company, in January 2019 when talks were going on to increase the credit limit of accused company and stated that the complainant company do not obtain such cheques. He admitted that cheques No. 014833, 014834, 014839, 014840 and 014616 were also issued by the accused company in favour of complainant company in the month of April, 2019 and the same were honoured. He stated that vide e mail dated 16.01.2020, the complainant company informed the accused company about the pending due amount to the tune of Rs. 36,91,992.52/. He admitted that the complainant company raise invoices along with supply of stock. This witness was specifically asked to explain entry of debit amount of Rs. 1,97,70,159/ on 16.03.2020 in their statement of account i.e. EX. CW1/6 (colly) and in explanation to the same, the witness stated that on 28.09.2019, complainant company raised invoices on Generation Next which were financed from Hero Finance, and against this invoice Hero Finance had transferred amount of Rs. 1,97,70,159/ to the complainant company. Thereafter, on 22.10.2019, goods supplied to accused company were returned to the complainant company. Then Hero Finance demanded return of amount of Rs. 1,97,70,159/ along with interest from the accused company, but the accused company refused to return that amount and then Hero Finance approached the complainant company for demanding amount of Rs. 1,97,70,159/ along with the Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.07.14 15:13:39 +0530 interest which was given by complainant company to Hero Finance on behalf of accused after taking confirmation from the accused regarding the same. Thus, the outstanding liability of accused of Rs. 36,91,992.52/ increased to approximately Rs. 2,32,00,000/. He denied the suggestion that after return of goods, there was no liability of accused company for payment of Rs. 1,97,70,159/. He also denied the suggestion that the account statement EX.CW1/6 (Colly) is a fabricated and incorrect document. He also denied the suggestion that the accused has not affixed his signatures on request to balance confirmation EX. CW1/15 and he stated that signatures of accused are mentioned onEX.CW1/15 and further stated that the same can even be matched with his signatures on the cheque in question. He also denied the suggestion that copy of ledger EX.CW1/6 and the entries were never verified from the accused and stated that the same was being shared with the accused through e mail and verbally and he can produce such e mails. He admitted that when it was communicated in person, no receiving was taken. He denied the suggestion that the accused had only filled the name of the payee and has affixed signatures on the cheque in question and remaining particulars were filled by the complainant company and stated that the accused has handed over his duly filled cheque. He also denied the suggestion that the cheque in question was not handed over to the complainant company on 01.03.2021 but was handed over in January 2019. He denied the suggestion that the cheque in question has been altered and have been misused. He denied having any communication with the accused company to the effect that the complainant company was to give credit note of Rs. 52 Lakhs to the accused company. He admitted that in the e mail dated 08.02.2022, the accused has not admitted his liability for the alleged due amount, however, stated that the accused has given the payment schedule and denied the suggestion that the accused has not given the payment schedule against the alleged due amount. He also denied the suggestion that the accused has not given consent as mentioned in e mail dated 16.03.2020. He Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.07.14 15:13:44 +0530 further denied the suggestion that vide e mail dated 16.07.2020 and 04.09.2020, the accused has not admitted his liability. He denied the suggestion that the alleged liability vide legal notice dated 23.12.2019 was not admitted by the accused company. After examination of CW1, the CE was closed vide separate statement of AR on behalf of complainant.
8. Examination of the accused under section 313 Cr.P.C: The accused was examined under section 313 Cr.P.C. on 21.04.2022 and 04.06.2022, wherein he admitted that he approached the complainant company for purchase of computer components and it's peripherals with the representation to make the payment of invoices of goods purchased promptly as pre the credit terms of the complainant company. He denied that as per various purchase order placed by their company, the complainant company delivered the goods through various invoices but accused did not raise any complaint with respect to quality, quantity and time of delivery of the goods and stated that goods were delivered to accused company till JulyAugust 2019. Thereafter, goods were not delivered to the accused company, though one fake invoice was raised. He denied that against the invoices of the complainant company, he issued the cheque in question EX.CW1/3 dated 01.03.2021 in discharge of his liability towards the complainant company and stated that Complainant company asked the accused to give one security for increasing credit limit in January, 2019 and accused had given the cheque in question to the complainant company for increasing the credit limit and not towards discharge of any liability. He admitted that the cheque in question was dishonoured with remarks exceeds arrangement vide return memo EX. CW1/4 dated 03.03.2021. He denied that the complainant company has shared letter for balance confirmation EX.CW1/15 and their statement of account EX. CW1/6 and he affixed his signatures on the same and he stated that he has no knowledge about these documents as the complainant company has never taken any confirmation from him. He admitted having received the legal demand notice. He Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.07.14 15:13:50 +0530 admitted having filled the name of the payee in the cheque in question. He admitted being in business with the complainant company, however, claimed that the cheque in question which was given as security to increase the credit limit has been misused by the complainant company. With regard to email communication Ex. CW1/14, Ex. CW1/16 and Ex. CW1/17 stated that the payment schedule was not with regard to the alleged loan amount but it was for restarting the business pursuant to complainant's company undertaking to provide him with credit note of Rs. 52 Lakh and alleged due amount of Rs. 36 lakhs. He has admitted having received the legal notice dated 23.12.2019 Ex. CW1/18 from the complainant company. The accused refused to examine any witness in his defence, however, he has filed copies of his cheque book Ex. DW1/A (colly).
9. Final Arguments: Ld. Counsel for the complainant argued that the complainant has proved his case as it is proved that the accused used to take delivery of goods from the complainant company after placing purchase orders. Further, the accused has also admitted issuance of cheque in question in favour of complainant company and even filling the name of payee. It has also been proved that the cheque was dishonoured. Service of legal demand notice is also proved. The accused was liable to make the payment, however, he did not make the payment within stipulated time despite service of legal notice. It is also proved that all the steps were taken by the complainant within the time provided by the law. The accused has failed to rebut the presumption provided in the law. Hence, the accused may be convicted for the offence punishable under Section 138, NI Act. Per contra, Ld. counsel for the accused argued that the accused has no liability for payment of the cheque amount as the complainant has failed to establish the liability of the accused for the due amount. Even as per the version of the complainant admittedly the goods supplied for Rs. 1,97,70,159/ were already returned to the complainant somewhere in October,2019, thus, the accused company cannot be made liable for making payment of those goods Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.07.14 15:14:05 +0530 in March, 2021, specifically when even in their own communication dated 16.01.2020, made to the accused company, there is no mention for liability of this amount. Further, the complainant company has neither specified any period of delivery of goods nor they have filed invoices to support the fact that the accused company was liable for making payment of the alleged amount. He has further argued that admittedly cheques of subsequent series given by accused company in favour of complainant company have been honoured in April,2019 and this fact is also reflected in the copy of the cheque book of the accused that the blank cheque in question was given by the accused to the complainant company in January, 2019 which clearly suggests that the cheque in question has been misused by the complainant company. Hence, the accused cannot be convicted for the offence punishable under Section 138 N I Act. With these submissions, Ld. Counsel for accused has prayed that he may be acquitted.
10. I have heard the rival submissions of the Ld. Counsels of the parties and carefully perused the material available on record.
11. Appreciation of evidence and finding: Coming to the merits of the case, I first deem it pertinent to enunciate the law relating to dishonour of cheque.
12. To bring home the liability under section 138 of The Negotiable Instruments Act, 1881, following elements must spring out from the averments in the complaint and the evidence adduced by the complainant, viz,
a) A person must have drawn a cheque on an account maintained by him in a bank for payment of a certain sum of money to another person from out of that account for the discharge of any legally enforceable debt or liability;
b) cheque has been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity whichever is earlier;
c) That cheque has been returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.07.14 15:14:09 +0530 exceeds the amount arranged to be paid from that account by an agreement made with the bank;
d) The payee or the holder in due course of the cheque has made a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
e) The drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
Explanation: For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability.
13. Thus, for securing conviction under section 138 of NIA following points are required to be proved:
a) The cheque was issued by the drawer in discharge of any debt or other liability.
b) It must be legally enforceable debt or liability.
c) The cheque must be presented by payee within period of 3 months or
it's validity, whichever is earlier.
d) The cheque is dishonoured because of insufficient funds or it exceeds
the arrangement.
e) A legal notice in writing demanding the payment of cheque is issued
within 30 days of the receipt of information from the bank.
f) There is default by the drawer to make the payment within 15 days from the date of the receipt of notice.
g) The complaint is filed within 30 days from the date of cause of action.
Being cumulative, it goes without saying that it is only when all the Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.07.14 15:14:14 +0530 aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act.
14. The law as laid down in relation to the Negotiable Instruments Act is discussed in various judgments. It is settled position of law that there is a presumption in favour of the complainant and against the accused. However, the presumption is rebuttable. Hon'ble Supreme Court of India in Rangappa v. Sri Mohan (2010) 11 SCC 441 has discussed the law in detail. The Hon'ble Supreme Court has held as under:
"...15. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard of proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden.
Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.07.14 15:14:19 +0530 liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own..."
15. Thus, it is settled law that there is a presumption in favour of the complainant and against the accused, that the cheque was issued for consideration. However, the presumption is rebuttable. The accused can prove that the cheque was not issued for consideration or that the accused did not have any liability to pay the amount. It has also been held that the accused need not lead evidence in support of his defence. He can prove it on the balance of probabilities by showing the contradictions in the material produced by the complainant.
16. Since criminal liability can be attached by proving each element of the Section under which liability is sought to be enforced, I shall now go on to appreciate the evidence documentary and oral, in light of how compellingly it satisfies each of such ingredient, if at all. In the present case, the accused has admitted his signatures on the cheque. He has even admitted filling the name of payee in the cheque in question. It is also admitted that the cheque is drawn on the account of the complainant. It is also not in dispute that the cheque has been presented by payee within period of 3 months. Further, it is also an admitted fact that accused has not made payment of the cheque amount and this complaint is filed within limitation. It is also proved that the cheque was presented for encashment and that the same was dishonored with remarks "exceeds arrangements" as during his statement of admission and denial recorded U/S 294 CrPC, the accused has admitted the correctness of dishonor memo. Further, Section 146 of The Negotiable Instruments Act, 1881, in this regard also comes into play which raises a presumption that the court shall presume the fact of dishonour of the cheque in case the cheque is returned vide a return memo having thereon the official mark denoting that the cheque has Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.07.14 15:14:23 +0530 been dishonoured, such bank slip or memo is a prima facie proof of dishonor. The accused has also admitted having received the legal demand notice.
17. In the present case, the accused has primarily taken two defences, firstly that he cannot be made liable for payment of the cheque amount as he has not filled the particulars of the cheque except the name of the payee and secondly, that the cheque in question was not issued in discharge of any legally enforceable debt or liability in the year 2021 as claimed by the complainant but it was issued as security in favour of the complainant company to increase the credit limit in January, 2019 and he has also disputed receiving the supply of goods of Rs. 1,97,70,159/ from the accused company.
18. With respect to the first defence, the accused has tried to dispute his liability by claiming that he has not filled any particulars of the cheque in question and the complainant has misused his cheque after filling it's particulars. Though, CW1 has denied filling particulars in cheque in question, however, even if the version of the accused is taken to be true, the said fact cannot extend any help to accused in the present case. Once, the liability of accused is assessed on the record, the complainant gets authority to fill and present said Cheque for encashment, as per provisions of Section 20 of Act, as per which it is open to a person to sign and deliver blank and incomplete instrument and it is equally open for the holder to fill up blank and specify amount therein. Similar position has also been laid down in General Auto Sales v. Vijaylakshmi 2005(1) CCC 654(Kerala), Purushottam Versus Manohar K. Deshmukh & Anr. 2007 STPL(DC) 988(BOM), Moideen Versus Johny 2006 STPL(DC) 700(KER) and Prabhakar Xembhu Versus Surendra V. Pai And Another 2006 STPL(DC) 660 (BOM). Sripati Singh Vs. State of Jharkhand & Ors Appeal No. 12691270 of 2021. In view of discussion made above it becomes clear, once the complainant establishes the fact that the accused had Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.07.14 15:14:28 +0530 liability towards the complainant for the alleged amount, the complainant gets authority to fill the cheque amount and present the same. Thus, it becomes relevant to ascertain the amount for which the accused was liable towards the complainant.
19. As per the averments made in the complaint, the complainant was having a running account with the accused and supplied the goods as per various purchase order placed by accused company through various invoices and the accused has issued the cheque in question in discharge of his liability for outstanding amount of Rs. 2,27,23,336/ as the accused never raised any complaint with regard quality, quantity and time of delivery of goods. It is pertinent to mention here that the complainant has not specified any period of delivery of goods for payment of which the cheque in question was issued. The complainant has also not placed on record any invoices and has not even specified the relevant period during which the purchase orders were placed or invoices were raised, despite the fact that the accused has claimed during his statement U/S 313 Cr. P.C that the accused company has not received any goods from the complainant company after July, 2019 and that after this period, one fake invoice was raised by the complainant company, though the complainant had opportunity to lead such evidence as after recording statement of accused U/S 313 Cr.P.C CW1 was reexamined upon application of complainant preferred U/S 311 Cr.P.C.
20. To establish the liability of the accused for payment of the said amount, the complainant has relied upon various e mail communications Ex. CW1/13, Ex.CW1/14, Ex. CW1/16 & Ex. CW1/17, however, admittedly in any of these communications, the accused has not admitted his liability for the alleged amount and even in the payment schedule proposed vide e mail dated 08.02.2022, Ex. CW1/13, the accused has not admitted his liability for the amount in question. Further, it is pertinent to point out that CW1 during his cross examination has stated that goods of Rs. 1,97,70,159/ were delivered to the accused company on 28.09.2019 for which Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.07.14 15:14:32 +0530 the debit entry of the equivalent amount is reflected in the statement of account of complainant company EX.CW1/6 (Colly), however, even as per version of CW1, these goods were returned by the accused company to the complainant company on 22.10.2019. Thus, even going by the version of the complainant the accused company could not have been liable for making payment of these goods on the date mentioned in the cheque in question i.e. 01.03.2021. Even as per the e mail communication filed on record by CW1, upon return of goods, the accused could have been liable for making payment of interest accrued to Hero Fincorp but accused could not have been liable for making payment of entire amount to the complainant company. It is also pertinent to mention that though CW1 has denied the fact that the cheque in question was handed over to the complainant company in January, 2019 as claimed by the accused, however, the same finds strength from the admission of CW1 to the effect that the cheque of the subsequent series '0146' and '0148' given by the accused company in favour of complainant company in April 2019 have been honoured and further it is also supported from the copy of cheque book of the complainant Ex. DW1/A (Colly) wherein entry for the cheque in question is reflected as blank cheque given to complainant company between 11.01.2019 to 14.01.2019. Further, if the goods of alleged amount of Rs. 1,97,70,159/ were delivered to the accused company by the complainant company in September, 2019, then why this fact was not mentioned by the complainant company in their e mail sent to accused company on 16.01.2020, wherein they had claimed that the accused company had outstanding of Rs. 36,91,992.52/ towards the complainant company. There could have been only one justification to this, that is in the meantime this payment was received by the complainant company from Hero Fincorp and later on, they had to return this amount to Hero Fincorp. Even then, since the accused had already returned the goods to the complainant company on 22.10.2019 which were allegedly delivered on 28.09.2019 as per the testimony of CW1, the accused could not have Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.07.14 15:14:37 +0530 been liable for making payment of Rs. 1,97,70,159/. The cheque in question, even if taken to have been issued with respect to goods supplied, cannot be said to be issued for a legally enforceable subsisting liability as admittedly the goods were returned by the accused to the complainant company in October , 2019, much prior to presentation of the cheque. On this point, it is relevant to refer to the decision of the Hon'ble Supreme Court in M/S. Indus Airways Pvt. Ltd. & Ors. v M/S. Magnum Aviation Pvt. Ltd. & Anr., Criminal Appeal No. 830 of 2014, decided on 7th April, 2014, wherein the Court categorically held "13...The explanation appended to Section 138 explains the meaning of the expression 'debt or other liability' for the purpose of Section 138. This expression means a legally enforceable debt or other liability. Section 138 treats dishonoured cheque as an offence, if the cheque has been issued in discharge of any debt or other liability. The explanation leaves no manner of doubt that to attract an offence under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque. In other words, drawal of the cheque in discharge of existing or past adjudicated liability is sine qua non for bringing an offence under Section 138. If a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise, and material or goods for which purchase order was placed is not supplied, in our considered view, the cheque cannot be held to have been drawn for an existing debt or liability. "
21. On a reading of the aforesaid precedent, it can be said that accused did not have existing liability for amount of Rs. 1,97,70,159/ towards the complainant as the complainant has failed to prove the placing of purchase order and delivery of goods. Further, even going by the version of complainant, goods worth of Rs. 1,97,70, 159/ were returned by the accused to the complainant company in October, 2019 and complainant has nowhere stated that the accused was at fault in return of the goods, thus, it can not be said that the purchase order was carried out to it's logical conclusion. Thus, on the date of drawl of cheque i.e. 01.03.2021, the accused could not have been said to have liability for payment of the cheque amount i.e. Digitally signed by AISHWARYA AISHWARYA SHARMA SHARMA Date: 2022.07.14 15:14:42 +0530 2,27,23,336 which is inclusive of the abovementioned amount of Rs. 1,97,70, 159/. Apart from this disputed entry for Rs. 1,97,70, 159/ on 16.03.2020, in the statement of the account of the complainant company and all the communications made by the complainant company to the accused, the outstanding liability of the account was Rs. 36,91,992.52/ , thus, the accused could not have presented the cheque for amount of Rs.2,27,23,336/. Reference drawn from Alliance Infrastructure Project Private Ltd. V Vinay Mittal (Crl.MC No.2224/2009) , the Hon'ble High Court of Delhi has held that if the cheque is presented for an amount more than the amount actually payable to the payee, such a complaint could not be maintainable and the drawer of the cheque will not be guilty of offence U/S 138 of NI Act.
22. In light of the foregoing reasons, I have no hesitation to hold that the complainant has failed to establish the first ingredient of the offence U/S 138 NI Act i.e. the issuance of the cheque in question in discharge of any legally enforceable debt or any other liability. Upon consideration of facts of the case and discussion made above, it is clear that the complainant has failed to establish the guilt of the accused. Accordingly, the accused M/S GENERATION NXT COMPMART PVT. LTD. and its Director Mr. Manash Kumar Singh is hereby acquitted of offence U/S 138 of NI Act.
23. Let the copy of this judgment be uploaded on CIS and layers.Digitally signed by AISHWARYA
AISHWARYA SHARMA
SHARMA Date: 2022.07.14
15:14:47 +0530
Announced in the open court on (Aishwarya Sharma)
this day i.e .14.07.2022 MM (N.I. ACT)Digital Court02/SED,
Saket Courts, New Delhi