Delhi District Court
Ruchi Strips And Alloys Ltd vs . on 28 March, 2013
IN THE COURT OF SHRI ARUL VARMA : MM (NI ACT- 1) : PATIALA HOUSE COURTS : NEW DELHI. Case Number. : 1461/1 Date of Commencement of Offence. : 02.01.2000 Date of Institution of Present Case. : 18.01.2000 1.
Ruchi Strips and Alloys Ltd.
43, Daryaganj, Delhi
2. Pankaj Khandelwal S/o R.K. Khandelwal Senior Marketing Executive, Ruchi Strips and Alloys Ltd.
43 Daryaganj, Delhi ... Complainant.
Vs. B.P. Khandelwal Sole Proprietor of M/s A.K. Associate, Kothi No. 1314, Sector 17C Case No. 1461/1 Page No. 1 of 17 Gurgaon (Haryana) - 122001 Also At:
Kailash Market, Near Anaj Mandi, Gurgaon (Haryana) - 122001 ... Accused.
Offence Complained Of. : U/s 138 NI Act.
Plea of the Accused. : Not Guilty.
Arguments Heard On. : 20.03.2013
Final Order. : Conviction
Date of Judgment. : 28.03.2013
:: JUDGMENT ::
1. Vide this judgment, I shall dispose off the present complaint filed by the complainant u/s 138 Negotiable Instrument Act, 1881 (hereinafter referred to as the "NI Act").
2. Brief facts as averred in the present complaint are that the complainant is a company duly incorporated under Case No. 1461/1 Page No. 2 of 17 the Companies Act, 1956 and that the accused purchased from the complainant certain consignments of CRCA sheets from 10.01.1999 to 24.07.1999. It has further been averred that in respect of purchase of these CRCA sheets, the accused had issued 3 cheques bearing nos. 001851 dated 09.08.1999 for a sum of Rs.
2,57,212/, 001880 dated 25.9.1999 for a sum of Rs. 1,15,584/, 001864 dated 27.09.1999 for a sum of Rs. 2,06,488/ all drawn on Central Bank of India, Mulla Hera, Haryana in favour of the complainant which, on presentation, got dishonoured due to the reason "Insufficient Funds / Payment Stopped by Drawer".
3. The complainant thereafter issued a legal demand notice dated 16.12.1999 which was replied to by the accused. However, the accused did not pay the amount of cheques in question. Hence, the complainant has filed the present complaint to prosecute the accused u/s 138 NI Act.
4. The complaint was filed within limitation on 18.01.2000 pursuant to which summons were issued Case No. 1461/1 Page No. 3 of 17 against the accused, consequent thereupon the accused entered appearance and was admitted to bail. Notice was framed against the accused to which the accused pleaded not guilty and claimed trial. Thereafter, the matter was listed for evidence.
5. The complainant led its evidence by examining CW1 Sh. Pamkaj Khandelwal (authorized representative of the complainant) and has relied upon the following exhibited documents namely: Affidavit Ex. CW 1/A, Cheque no.001851 dated 09.08.1999 for Rs.2,57,212/ as Ex CW1/1, cheque no. 001880 dated 25.09.1999 for Rs.1,15,584/ as Ex CW1/2, cheque no.001864 dated 27.09.1999 for Rs.2,06,488/ as Ex. CW1/3, cheque return memos dated 16.12.99 as Ex CW1/4 and Ex. CW 1/5, legal notice dated 16.12.1999 as Ex CW1/6, registered AD receipts as Ex. CW1/7 and Ex. CW 1/8, UPC as Ex. CW1/9, Courier receipts as Ex. CW1/10 and Ex. CW1/11, receipt / acknowledgment of UPC and Regd. AD as Ex. CW 1/12.
6. Complainant also examined CW 2 Shri Gyanendra Case No. 1461/1 Page No. 4 of 17 Singh and CW 3 Shri Pankaj Khandelwal. CW1, CW 2 and CW 3 were cross examined by the counsel for accused.
7. In his statement u/s 313 CrPC, accused stated that he is innocent and has been falsely implicated.
8. Accused led his evidence in defence and relied upon the following exhibited documents namely: DD bearing no. 0006 28 dated 24.06.1999 drawn on Central Bank of India, Gurgaon, for Rs. 1 lac given to the complainant Ex. DW 1/A, reply to the legal notice dated 14.01.2000 Ex. DW 1/B.
9. Other documents were also relied upon by the parties namely:
(a) Ex. DW1/C1 mark A letter dated 24.06.99 addressed to the complainant from the accused.
(b) Ex. DW1/C2 letter dated 21.07.99 addressed to the complainant from the accused.
(c) Mark X (colly) G.R's containing acknowledgment of goods received.Case No. 1461/1 Page No. 5 of 17
(d) Ex. CW2/1 Letter dated 24.11.98 to the complainant by the accused.
(e) Ex. CW2/2 Quotation dated 17.12.98 from the complainant to the accused.
(f) Ex. CW2/3 Offer letter dated 23.12.98 from the accused to the complainant.
(g) Ex. CW2/4 Invoice cum excise gate pass No. 0000 084.
(h) Ex. CW2/5 Invoice cum excise gate pass No. 0008 25.
(i) Ex. CW2/6 Invoice cum excise gate pass No. 00114 40.
(j) Ex. CW2/7 Letter dated 15.04.99 to the complainant by the accused.
(k) Ex. CW2/8 Letter dated 17.06.99 to the complainant by the accused.
(l) Ex. CW2/9 Letter dated 21.07.99 to the complainant by the accused.
10. From the evidence led by the parties, and their arguments the following points arise for my determination: Case No. 1461/1 Page No. 6 of 17 S. DECISION POINTS FOR DETERMINATION NO. THEREON A Whether the cheques were drawn for discharge, in Affirmative.
whole or in part, of any legally enforceable debt or other liability?
B Whether statutory notice u/s 138 NI Act in Affirmative.
writing was given to the drawer of the cheques making a demand for the payment of amount mentioned in the cheques within 30 days of the receipt of information by payee/holder in due course from the bank regarding the return of the cheques as unpaid?
C Whether the drawer failed to make such payment Affirmative.
withing 15 days of the receipt of the aforesaid notice?
D What order? As per final
order.
STATEMENT OF REASONS FOR THE DECISION
11. Coming to the point regarding issuance of the cheques Case No. 1461/1 Page No. 7 of 17 for the discharge, in whole or in part, of legal debt or liability, it is averred by the complainant in the complaint that the accused purchased from the complainant certain consignments of CRCA sheets from 10.01.89 to 24.07.99. It is the contention of the complainant that the cheques in question were issued in respect of payment towards the purchase of these consignments.
12. At this juncture it would be also be apt to peruse the two presumptions laid down in the Negotiable Instruments Act namely presumptions u/s 118 (a) and Section 139. In Mallavarapu Kasivisweswara Rao Vs. Thadikonda Ramulu Firm and Others, AIR 2008 SC 2898 it was held as under: "12. Under Section 118 (a) of the Negotiable Instruments Act, the court is obliged to presume, until the contrary is proved, that the promissory note was made for consideration. It is also a settled position that the initial burden in the regard lies on the defendant to prove the nonexistence of consideration by bringing on record Case No. 1461/1 Page No. 8 of 17 such facts and circumstances which would lead the Court to believe the non existence of the consideration either by direct evidence or by preponderance of probabilities showing that the existence of consideration was improbable, doubtful or illegal."
13. According to Section 139 of NI Act "it shall be presumed, unless the contrary is proved that the holder of a cheque received the cheque for discharge in whole or in part, of any debt or other liability." Under Section 139 NI Act there is a legal presumption that the cheque was issued for discharging an antecedent liability and that presumption can be rebutted only by the person who drew the cheque. This presumption can be rebutted by the accused by adducing evidence. So the burden of proof is on the accused.
14. To rebut the mandatory presumption operating against him, Ld. Counsel for the accused placed reliance on Yashpal versus Vijay Kumar 2008 (3) JCC (NI) 321, RCR (Criminal) 504 and on Krishna Janardhan Bhat versus Dattaraya G. Hegde 2008 Case No. 1461/1 Page No. 9 of 17 (1) JCC (NI) 50 in order to contend that the presumption u/s 139 is only a rebuttable one and degree of proof for the rebuttal of such presumption is not comparable with that of the burden on the prosecution to prove the charge. It was also contended that as per the mandate of MS Narayana Menon (Supra) failure of the complainant to produce the books of accounts should result in acquittal of the accused.
15. Ld. Counsel for the accused raised the following contentions:
. None of the exhibits filed with the complaint have been duly attested by the Oath Commissioner as per Volume II Part B, Chapter 12, Part F, Rule 12 of the Delhi High Court rules as well as chapter 18 rule 9 of part B. . The witnesses led by the complainant are not credible witnesses as they were not aware of the dealings that took place between the complainant and the accused.
. No formal application was moved by the Case No. 1461/1 Page No. 10 of 17 complainant for leading secondary evidence. Most of the documents filed by the complainant are photocopies.
. Only the maker of a document can prove it.
. The complainant has failed to prove that the goods were supplied by the complainant to the accused.
16. In reply, Ld. Counsel for the complainant submitted that the failure to comply with the Delhi High Court Rules is a mere modality and non - adherence thereof cannot vitiate the trial. Ld. Counsel placed reliance on the following extract of 'Sangram Singh versus Election Tribunal, Kotah AIR 1955 SC 425':
"Now a code of procedure must be regarded as such. It is 'procedure' something designed to facilitate justice & further its ends: not a penal enactment for punishment and penalties, not a thing designed to trip people up....."Case No. 1461/1 Page No. 11 of 17
17. Further, it was contended that the originals were with the accused and therefore secondary evidence was led. Ld. Counsel for the complainant stated that since the photocopies have been admitted by the accused, they need not be proved as per section 58 of the Indian Evidence Act, 1872.
18. The contention of the Ld. Counsel for the accused that the documents Ex. CW 2/4 - Ex. CW 2/6 should not be read in evidence cannot be countenanced by this Court, for the reasons discussed hereinafter.
19. Ld. Counsel for the complainant had submitted that the cheque in question was not given for security purposes as is evident from the fact that the amounts mentioned in the invoice cum excise gate pass i.e. Ex. CW2/4, Ex. CW2/5 and Ex. CW2/6 tally with the amounts mentioned in the cheques in question. Further, a perusal of the correspondences between the complainant and the accused would make it pellucid that the cheques in question have been given in discharge of a legally enforceable liability. Ld. Counsel for the complainant pointed out that when a Case No. 1461/1 Page No. 12 of 17 cheque is filled with a particular amount which matches exactly with the amount of liability owed to another, it must be inferred that the cheque has been issued in discharge of legally enforceable debt or liability.
20. A perusal of Ex. CW 1/1 and Ex. CW1/3 reveals that the amounts mentioned therein tally exactly with the invoice cum excise gate pass i.e. Ex. CW 2/5 and Ex. CW 2/6 respectively. Further, the amount mentioned in cheque bearing no. 0018 80 i.e. Ex. CW 1/2 is Rs.1,00,000/ short of the amount of Rs.2,15,584/ mentioned on invoice cum excise gate pass Ex. CW2/4. During the course of arguments, Ld. Counsel for the complainant had explained this deficiency and had stated that the accused had given a DD of Rs. 1 lac i.e. Ex. DW 1/A in discharge of his liability arising out of invoice cum excise gate pass Ex. CW2/4.
21. It would also be pertinent to peruse the letters indicating correspondences which took place between the parties. A perusal of Ex. CW2/8 would make it Case No. 1461/1 Page No. 13 of 17 clear that the accused had issued Ex. CW 1/1 i.e. cheque no. 001851 for an amount of Rs.2,57,212/ against Ex. CW2/5 i.e. invoice number 000845.
22. A perusal of Ex. CW2/7 would make it clear that the accused had issued a cheque no. 00182 dated 31.05.2009 for an amount of Rs.2,15,584/ against Ex. CW2/4 invoice number 000084 dated 10.04.2009. It has been demonstrated by perusal of Ex. DW1/C2 that "a DD for Rs.1,00,000/ against invoice no. 84 dated 10/4/99 has been released to - day and balance payment 1,1584/ will be released after the receipt of 1 (truck) load of CRCA sheets".
23. Ld. Counsel for the accused had also contended that the goods were not supplied to the accused according to the quantity ordered by the accused. However, the following averments made by the accused in his cross
- examination belie the aforesaid contention "I had employees in the name of Case No. 1461/1 Page No. 14 of 17 Rohtash Yadav, Puran Singh & Accountant Sh. Kamal Uppal" and "I have seen Mark X (Colly) against No. 000594 and 8331, the back side of the GR has been shown to me at point A and B which I say is of Rohtash and at point C is of one Khandelwal."
The accused had further stated in his cross examination that:
"It is correct that I have not filed in Court any record maintained by me as per the requirement of Excise Authorities to show that the said goods were not received by me."
24. A perusal of G.R. No. 8331 dated 10.04.1999 reflects the mention of invoice no. 0084 i.e. Ex. CW 2/4 and it bears the signature of one 'Rohtash'. Similarly, in G.R. No. 8732 dated 06.06.2009, invoice no. 845 i.e. Ex. CW 2/5 has been mentioned and it bears the signature of one 'Khandelwal'. Further, G.R. No. 000594 reflects the mention of invoice no. 1440 i.e. Ex. CW 2/6 and it also bears the signature of one 'Rohtash'.
Case No. 1461/1 Page No. 15 of 1725. Thus, it is crystal clear that the goods had been received by the accused as is evident from a perusal of the back side of the G.R.s mark X (Colly) wherein the employee of the accused has endorsed their signatures.
26. The burden was on the accused to disprove the presumption u/s 139 NI Act, a burden which he failed to discharge at all. Thus, the complainant has proved that the cheques were issued for discharge of legal debt or other liability.
27. The next contention of the complainant is that in spite of giving of statutory notice u/s 138 NI Act, the accused failed to pay the amount of cheques in question. The accused replied to the legal notice as such it is deemed that the legal demand notice was duly served upon him.
28. It is evident that the drawer has failed to make the payment of the cheque amounts in question within 15 Case No. 1461/1 Page No. 16 of 17 days of the receipt of the aforesaid notice, thus, the present complaint u/s 138 NI Act was initiated against the accused.
FINAL ORDER:
29. In view of the above mentioned observations, all the ingredients of the offence u/s 138 NI Act are squarely made out in the present case. The complainant has successfully discharged its burden of proving its case whereas the accused has failed to rebut the presumption that the cheques in question were not issued towards a legally recoverable debt or liability. In view of the evidence led and arguments advanced by both the parties, the accused is hereby convicted u/s 138 NI Act.
Announced in the open Court on 28.03.2013 (ARUL VARMA) METROPOLITAN MAGISTRATE 01 PATIALA HOUSE COURTS, NEW DELHI Case No. 1461/1 Page No. 17 of 17