Delhi District Court
M/S General Radio Stores vs M/S Metro Tyres Limited on 16 November, 2022
IN THE COURT OF SH. SANJAY GARG - I
PRINCIPAL DISTRICT & SESSIONS JUDGE
SOUTH EAST: SAKET COURTS, NEW DELHI.
Criminal Appeal No.204272/2016
1. M/s General Radio Stores
Kanthadhar, Ichapur,
Dist. North 24 Parganas
West Bengal 743144
Mrs. Sunita Pal (Ex-Proprietor)
2. Sumita Pal W/o Mr. Sabhyasachi Pal
Raja Apartment
2nd Floor, Baishali, Ghoshpara Road,
Post Office-Ichapur, District (North)
24 Parganas, West Bengal-743144
... Appellants/Accused
Versus
M/s Metro Tyres Limited
Corporate Office at 134/4 and 5
Kailash Colony, Delhi-110048
...Respondent
Date of Filing : 07.09.2015
Arguments Heard : 10.11.2022
Date of Decision : 16.11.2022
JUDGMENT
1) The order impugned vide this appeal is dated 31.10.2014 vide which appellant no. 2 being sole proprietor of appellant no. 1 was convicted for offence under Section 138 NI Act and order dated 13.02.2015 vide which appellant no. 2 was directed to pay compensation of Rs.6,62,139/-, in default CA No.204272/2016 Page 1 of 9 M/s General Radio Stores & Anr. Vs. M/s Metro Tyres Ltd.
simple imprisonment for three months and further directed to undergo simple imprisonment for a period of three months.
2) The case of the respondent / complainant is that he is manufacturer and supplier of cycle, rickshaw tyres and tubes and auto tyres and tubes. He is also engaged in the business of trading of different variety of electric fans and other home appliances. Appellant no. 2 had business relations with the complainant as he is the sole proprietor of appellant no. 1. He was sole in charge and was responsible for the affairs of the said firm. Appellant no. 2 purchased the goods from respondent and was indebted for an amount of Rs.5,62,139/-. This amount still continue to exist in his account books. In pursuance of the aforementioned transaction and in view of these admitted liabilities, the appellant no. 2 issued a cheque in name of M/s Metro Tyres Limited drawn on UTI Bank, Kolkata dated 09.04.2009 for a sum of Rs.5,62,139/-. On presentation with the bank for encashment, the cheque was returned unpaid with the return memo dated 17.04.2009 with the remark of "payment stopped by the drawer". Same was intimated to respondent by State Bank of India vide return memo dated 25.04.2009 which is its bank. The respondent sent a legal notice dated 14.05.2009 to appellant no. 2 through registered post questioning him about his obligation to pay the amount. However, no payment was made by appellant no. 2. The aforesaid cheque was issued by appellant no. 2 with mala fide intention to cheat the respondent as the accused had no intention to pay back the debt amount to respondent. The dishonour of the cheque read with CA No.204272/2016 Page 2 of 9 M/s General Radio Stores & Anr. Vs. M/s Metro Tyres Ltd.
subsequent inaction on the part of the appellant no. 2 to make payment clearly show offcence under Section 138 read with Section 142 NI Act. After receiving the legal notice, accused / appellant no. 2 has deliberately and wilfully had not cleared the cheque amount. In the background of these facts, respondent / complainant had filed this complaint under Section 138 NI Act.
3) On 01.06.2011, the respondent / complainant led the pre-
summoning evidence. On the basis of that court took cognizance of the offence and appellants were summoned. Appellant no. 2 being accused filed appearance. On 02.06.2014, notice under Section 251 Cr.P.C. was given to the appellant no. 2 to which he pleaded not guilty. As no application under Section 145(2) NI Act was moved by the appellants, the case was directly put for defence evidence. Appellants even did not lead any evidence. Accordingly, the learned Trial Court passed the impugned order.
4) Heard arguments of Shri Yadunandan Bansal, learned counsel for appellants and Shri Piyush Singhal, learned counsel for respondent.
5) In support of his submissions, learned counsel for appellants has relied upon following judgments :
i) Cisco Systems Capital (India) Pvt. Ltd. Vs. New Delhi Tele Tech Pvt. Ltd. & Ors., 2016 (1) DCR 493; and
ii) Dashrath Rupsingh Rathod Vs. State of Maharashtra & Anr., 2014 Legal Eagle (SC) 558.
6) Various grounds have been raised by appellant challenging the impugned judgment and conviction order. First and CA No.204272/2016 Page 3 of 9 M/s General Radio Stores & Anr. Vs. M/s Metro Tyres Ltd.
foremost contention raised on behalf of appellants is that the learned Trial Court has failed to consider law laid down by Hon'ble Supreme Court in Dashrath Rupsingh Rathod Vs. State of Maharashtra & Anr. (supra). It has been stated that learned Trial Court has failed to consider the various other judgments laying down law in such matters while pronouncing the impugned judgment. It has been further stated that Section 311 Cr.P.C. itself incorporates the rule of natural justice. The accused is presumed to be innocent until he is proved guilty. The right to adduce evidence in rebuttal is one of the inevitable steps in the defense of a case by the accused and a refusal of the same amounts to not only an infraction of the provisions of the Criminal Procedure Code but also of the principles of natural justice.
7) Perusal of the trial court record reveals that vide order dated 01.10.2012, an application moved by the appellant no. 2, her personal exemption was allowed and she was allowed to appear through counsel during trial. On 02.06.2014, notice of accusation under Section 251 Cr.P.C. was given to the appellant / accused to which she pleaded not guilty and claimed trial. Since no application as per settled procedure under Section 145(2) NI Act was moved by the appellants, the case was fixed for defence evidence. On 25.08.2014, one last opportunity was given to the appellants to lead defence evidence subject to cost of Rs.500/-. On the next date of hearing i.e. 03.09.2014, neither cost was paid nor any effort was made by the appellants to lead evidence, under these circumstances the right of the accused to lead defence CA No.204272/2016 Page 4 of 9 M/s General Radio Stores & Anr. Vs. M/s Metro Tyres Ltd.
evidence was forfeited and matter was fixed for arguments. Thereafter, after hearing arguments of both the parties, vide order dated 31.10.2014, appellant no. 2 was convicted for the offence under Section 138 NI Act.
8) The first and foremost contention raised on behalf of the learned counsel for appellants is that the Hon'ble Supreme Court in Dashrath Rupsingh Rathod Vs. State of Maharashtra & Anr. (supra) has observed that the prosecution in 138 matters is required to be launched against the drawer of the cheque only before the court within whose jurisdiction the dishonour takes place. He submits that the dishonouring of the cheque took place in Kolkata, hence as per the law laid down by the Apex Court, this complaint was required to be tried by the local court at Kolkata and this case should have been transferred to Kolkata but same was not done. It has been stated that hence the entire proceedings are vitiated due to lack of jurisdiction.
9) The learned Trial Court vide order dated 03.09.2014 has observed that in view of the decision of Hon'ble Supreme Court in case titled Dashrath Rupsingh Rathod Vs. State of Maharashtra & Anr. (supra), this court lacks territorial jurisdiction over the present matter as the drawee bank is located at Kolkata. The Court has further observed that since the present case has already reached the stage of defence evidence hence, the present case is deemed to be transferred to this court by above quoted order of the Hon'ble Supreme Court. Hence, the plea of the counsel for accused is not tenable.
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10) The Hon'ble Supreme Court in Dashrath Rupsingh Rathod Vs. State of Maharashtra & Anr. (supra) in para 31 (vii) has observed as under :
"(vii) The general rule stipulated under Section 177 of Cr.P.C applies to cases under Section 138 of the Negotiable Instruments Act. Prosecution in such cases can, therefore, be launched against the drawer of the cheque only before the Court within whose jurisdiction the dishonour takes place except in situations where the offence of dishonour of the cheque punishable under Section 138 is committed along with other offences in a single transaction within the meaning of Section 220(1) read with Section 184 of the Code of Criminal Procedure or is covered by the provisions of Section 182(1) read with Sections 184 and 220 thereof."
11) In Cisco Systems Capital (India) Pvt. Ltd. Vs. New Delhi Tele Tech Pvt. Ltd. & Ors. (supra), the Hon'ble Delhi High Court in para 20 has observed as under :
"20. The Apex Court in Dashrath Rupsingh Rathod's case (supra) observed in para 22 that the category of complaint cases where proceedings have gone to the stage of Section 145(2) of the Act or beyond shall be deemed to have been transferred from the Court ordinarily possessing territorial jurisdiction, as clarified therein, to the Court where it is presently pending. Thus, it is only when the stage of proceedings in cases filed under Section 138 of the Act has reached the stage of Section 145(2) of the Act or beyond thereof, such case shall continue to be dealt with by the Court where it is pending trial."
12) In view of the exception being carved out by the Hon'ble Supreme Court to the directions given in Dashrath Rupsingh Rathod Vs. State of Maharashtra & Anr. (supra), there is no fault in the order dated 03.09.2014 of the learned Trial Court vide which the learned Trial Court deemed the present case to be transferred to the same court. Thereby there is no CA No.204272/2016 Page 6 of 9 M/s General Radio Stores & Anr. Vs. M/s Metro Tyres Ltd.
substance in the plea raised by learned counsel for appellants that the proceedings get vitiated due to lack of jurisdiction and the matter should have been tried by the local court at Kolkata in compliance of the directions given by the Hon'ble Supreme Court in Dashrath Rupsingh Rathod Vs. State of Maharashtra & Anr. (supra).
13) It is relevant to mention here that the learned Trial Court after giving notice of accusation under Section 251 Cr.P.C. to the appellants had directly kept the matter for defence evidence without recording statement of the appellants under Section 281/313 Cr.P.C.
14) In Rajesh Agarwal Vs. State & Anr. 2010 SCC Online Del 2501, Hon'ble Delhi High Court in para 17 has laid down the summary procedure to be followed by the trial courts for the offence under Section 138 NI Act. The Step III provides that if there is an application u/s 145(2) of NI Act for recalling a witness of complainant, the court shall decide the same, otherwise, it shall proceed to take defence evidence on record and allow cross examination of defence witnesses by complainant.
15) As per the procedure laid down by the court, in view of the facts and circumstances of this case, the learned Trial court rightly not recorded statement under Section 281/313 Cr.P.C. of the appellants.
16) In the case of Rangappa Vs. Sri Mohan, (2010) 11 SCC 441, this Court had an occasion to consider the presumption of existence of a legally enforceable debt or liability under Section 139 of the N.I. Act. In the aforesaid decision, after CA No.204272/2016 Page 7 of 9 M/s General Radio Stores & Anr. Vs. M/s Metro Tyres Ltd.
considering other decisions of this Court on Section 118(a) and 139 of N.I. Act, it is observed and held that there exists a presumption which favours the complainant. It is further observed that the presumption under Section 139 of the N.I. Act is in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein there is existence of legally enforceable debt or liability can be contested. In Paragraph 27 this Court observed and has held as under:
"27. 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 defendant−accused cannot be expected to discharge an unduly high standard or proof."
17) In the case of Kishan Rao Vs. Shankargouda, (2018) 8 SCC 165 after considering the decision of this Court in the case of Kumar Exports vs. Sharma Carpets, (2009) 2 SCC 513, it is observed and held that the accused may adduce evidence to rebut the presumption, but mere denial regarding existence of debt shall not serve any purpose.
18) The presumption which has arisen in favour of the respondent / complainant could have been rebutted either by CA No.204272/2016 Page 8 of 9 M/s General Radio Stores & Anr. Vs. M/s Metro Tyres Ltd.
cross-examination of complainant or by adducing defence evidence but both these steps have not been taken by the appellants to the reasons best known to them. On the other hand, respondent had proved all the necessary ingredients of the offence under Section 138 NI Act. This court is left with no reason to interfere with the impugned judgment of the learned Trial Court vide which appellant no. 2 Sumita Pal, sole proprietor of appellant no. 1 is held guilty for the commission of offence under Section 138 NI Act. The various grounds of appeal raised by appellants are found to be untenable. The appeal is thereby dismissed.
19) Further, there is no reason to interfere in the order of quantum of sentence dated 13.02.2015.
20) A copy of this judgment along with Trial Court Record be sent back to the learned Trial Court.
21) Appeal file be consigned to Record Room.
Announced in the open court
today on 16.11.2022 (SANJAY GARG - I)
Principal District & Sessions Judge,
South East, Saket Courts
New Delhi
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M/s General Radio Stores & Anr. Vs. M/s Metro Tyres Ltd.