Delhi District Court
Cc No. 526853/2016 Deepak Distributing ... vs . Mahender Rawat 1/20 on 13 February, 2023
IN THE COURT OF MS. SAKSHI JAISWAL, MM05
(NI ACT)/ CENTRAL/THC/DELHI
In case of:
M/s Deepak Distributing Co.
Through one of its partners
Sh. Deepak Aggarwal
At 1640, Sohan Ganj, Krishna Gali,
Subzi Mandi, Ghanta Ghar, Delhi07
..............
Complainant
VERSUS
Sh. Mahender Rawat
Prop. Of Yash Enterprises
At D1, 206, Street No. 6, Sonya Vihar
Delhi94
.............. Accused
JUDGMENT
a) CNR No. : DLCT020056462014
CC No. 526853/2016 Deepak Distributing Co. Vs. Mahender Rawat 1/20
b) Sl. No. of the cases : 526853/2016
c) Date of institution of the cases : 26.08.2014
d) Offence complained of : 138 NI Act
e) Plea of the accused : Pleaded not guilty
f) Arguments heard on : 12.12.2022
g) Final order : Acquittal
h) Date of Judgment : 13.02.2023
JUDGMENT
BRIEF STATEMENT OF REASONS FOR DECISION OF THE CASE: FACTUAL MATRIX
1. This is a complaint case filed under Section 138 of Negotiable Instrument Act, 1881 (hereinafter referred to as "NI Act") by M/s Deepak Distributing Company through its partner Sh. Deepak Aggarwal (complainant) against Sh. Mahender Rawat (accused) in respect of three cheques bearing no. 311926 dated 05.04.2014 for Rs. 50,000/, no. 311927 dated 06.04.2014 for Rs. 50,000/ and no. 311928 dated 27.04.2014 for Rs. 60,000/, all drawn on United Bank of India, Timarpur Branch (cheques in question). The facts of the case, as alleged by the complainant, are as follows: CC No. 526853/2016 Deepak Distributing Co. Vs. Mahender Rawat 2/20 a. That the complainant firm is engaged in the business of printing and packaging and that the accused had approached the complainant and availed the services of the complainant of printing and packing.
b. That the complainant supplied the material as per the specifications of the accused and a bill of Rs. 1,72,123/ was raised against the accused vide separate invoices of different dates.
c. That in part discharge of his liability, the accused issued the cheques in question but on presentation, all the three cheques got dishonored for the reason "funds insufficient" vide return memos dated 01.07.2014 and 07.07.2014.
d. That thereafter, legal demand notice dated 22.07.2014 was got send by the complainant to the accused through registered post and speed post and despite due service of the notice, the accused failed to make the payment. Hence, the present complaint.
PROCEEDINGS BEFORE THE COURT
2. On a prima facie case being made out against the accused, the cognizance was taken and the accused was summoned. Accused entered appearance and notice of accusation under Section 251 CrPC was framed against accused on 09.01.2015 to which the accused pleaded not guilty and claimed trial. In his defence recorded on the CC No. 526853/2016 Deepak Distributing Co. Vs. Mahender Rawat 3/20 same day, accused stated that he had given the cheques in question along with another cheque bearing no. 311929 to the complainant for the delivery of agreed printed material which was not supplied by the complainant and that the complainant misused the cheques. He further stated that he had only filled the date and the amount in figures on the cheques in question. He also denied receiving the legal notice but admitted the correctness of the address appearing on the legal notice.
3. Thereafter, complainant lead its evidence. Partner of the complainant firm, Sh. Deepak Aggarwal, got examined himself as CW1 and tendered his affidavit in post summoning evidence as CW1/X. He relied upon the following documents: Ex. CW1/1: Copy of certificate of incorporation Ex.CW1/2: Copy of statement of account Ex.CW1/2A: Invoices dated 09.02.2014, 26.12.2013 & 24.12.2013 Ex. CW1/3 - Ex. CW1/5: Cheques in question Ex. CW1/6 - Ex. CW1/8: Return memos Ex. CW1/9: Copy of legal notice dated 22.07.2014 Ex. CW1/10: Postal Receipts Ex. CW1/11: Internet generated tracking report The CW1 in his affidavit reiterated the contents of the complaint. CW1 was crossexamined at length by the Ld. CC No. 526853/2016 Deepak Distributing Co. Vs. Mahender Rawat 4/20 Counsel for the accused. After his crossexamination, CW 1 was discharged and CE was closed on 23.07.2018
4. Thereafter, statement of accused was recorded under Section 313 CrPC on 10.08.2018 where all the incriminating evidences were put to the accused. In response, it was stated by the accused that cheques in question were given as security for payment of goods to be supplied as per his order of printing material for Bihar Lok Sabha Election but the complainant did not supply the material and misused the cheques in question without any liability.
5. Thereafter, accused lead evidence in which he got examined himself as DW1. He also got examined Sh. Jag Saran Shukla as DW2, Sh. Ramesh Kumar as DW3 and Sh. Pradeep Yadav as DW4. All the defence witnesses were crossexamined at length by Ld. Counsel for the complainant. Accused closed his DE on 01.04.2022.
6. Final arguments were advanced on behalf of both the parties. I have heard counsel for both the parties, perused the record and have gone through the relevant provisions of the law.
INGREDIENTS OF THE OFFENCE AND DISCUSSION
7. At this stage, it would be apposite to discuss the CC No. 526853/2016 Deepak Distributing Co. Vs. Mahender Rawat 5/20 relevant provisions of law in order to ascertain the legal standard required to be met by both the parties. In order to establish an offence under Section 138 of Negotiable Instrument Act, the complainant must prove the following ingredients: First Ingredient: The cheque was drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;
Second Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability;
Third Ingredient: The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;
Fourth Ingredient: A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in CC No. 526853/2016 Deepak Distributing Co. Vs. Mahender Rawat 6/20 writing given to the drawer within thirty days of the receipt of information of the dishonour of cheque from the bank;
Fifth Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice.
APPRECIATION OF EVIDENCE
8. The accused can only be held guilty of the offence under Section 138 NI Act if all of the abovementioned ingredients are proved by the complainant.
a. There is no dispute qua the fact that the cheques in question Ex. CW1/3 - Ex. CW1/5 were drawn by the accused on the account maintained by him and the same was presented for encashment within its validity period. Thus, first ingredient stands proved.
b. Dishonour of the cheques in question have also not been denied by the accused. Thus, third ingredient stands proved.
c. With respect to fourth ingredient, the accused has denied receiving the legal notice but admitted the correctness of the address. Once the correctness of CC No. 526853/2016 Deepak Distributing Co. Vs. Mahender Rawat 7/20 address on which a notice is sent by post is proved, presumption of deemed service of notice arises as per the provisions of Section 27 General Clauses Act. Unless the said presumption is rebutted, the court will presume the service of notice. In the present case also, the presumption of service of notice is raised as the accused has admitted the correctness of the address, and as it has not been rebutted, the fact of due service of notice stands proved. Thus, the fourth ingredient also stands proved.
d. There is no dispute either with respect to fifth ingredient.
Thus, the first, third, and fifth ingredients of the offence under section 138 NI Act stands proved against the accused.
9. As such, dispute exists with respect to second ingredient i.e., whether there is any enforceable legal liability of the accused towards the complainant
10. In the present case, the issuance of the cheques in question is not denied and the accused has admitted his signatures on the cheque. As per the scheme of the NI Act, once the accused admits signature on the cheque in question, certain presumptions are drawn in favour of the complainant, which result in shifting of onus. Section CC No. 526853/2016 Deepak Distributing Co. Vs. Mahender Rawat 8/20 118(a) of the NI Act lays down the presumption that every negotiable instrument was made or drawn for consideration. Another presumption is enumerated in Section 139 of NI Act. This provision lays down the presumption that the holder of the cheque received it for the discharge, in whole or part, of any debt or other liability.
11. The combined effect of these two provisions is a presumption that the cheque was drawn for consideration and given by the accused for the discharge of debt or other liability. Both the sections use the expression "shall", which makes it imperative for the court to raise the presumptions, once the foundational facts required for the same are proved. Reliance is placed upon the judgment of the Hon'ble Supreme Court, Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16.
12. Further, it has been held by a threejudge bench of the Hon'ble Apex Court in the case of Rangappa vs. Sri Mohan (2010) 11 SCC 441 that the presumption contemplated under Section 139 of NI Act includes the presumption of existence of a legally enforceable debt. Once the presumption is raised, it is for the accused to rebut the same by establishing a probable defence. The principles pertaining to the presumptions and the onus of proof were recently summarized by the Hon'ble Apex CC No. 526853/2016 Deepak Distributing Co. Vs. Mahender Rawat 9/20 Court in Basalingappa vs. Mudibasappa (2019) 5 SCC 418 as under:
"25. We having noticed the ratio laid down by this Court in the above cases on Section 118(a) and 139, we now summarise the principles enumerated by this Court in the following manner:
25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
25.4. That it is not necessary for the accused to come in the witness box in support of his defence. Section 139 imposed an evidentiary burden and not a persuasive burden.
CC No. 526853/2016 Deepak Distributing Co. Vs. Mahender Rawat 10/20 25.5. It is not necessary for the accused to come in the witness box to support his defence."
13. Section 139 NI 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 NI Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 NI Act 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 NI Act 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 of proof.
14. The 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 NI Act, 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 CC No. 526853/2016 Deepak Distributing Co. Vs. Mahender Rawat 11/20 of a legally enforceable debt or liability, the prosecution can fail. 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. In the present matter, the accused has raised the following two defences in order to rebut the presumptions raised against him.
i) The defence that the goods against the invoices were not received by the accused:
16. It has been argued by Ld. Counsel for the accused that the goods against the bills (Ex. CW1/2A) have not been supplied by the complainant and the said bills are forged and fabricated. It is further argued by him that the bills (Ex. CW1/2A) placed on record are carbon copies and not the original bills and as such, they cannot be relied upon. He further argued that the bills does not bear any receiving qua delivery of goods to the accused and the copy of these bills (Mark R1, R2 and R3), which were filed by the complainant at the time of filing of the present complaint, are different from the carbon copies (Ex. CW1/2A) of which Mark R1, R2 and R3 are said to be copies of.
CC No. 526853/2016 Deepak Distributing Co. Vs. Mahender Rawat 12/20
17. Per contra, Ld. Counsel for the complainant has argued that the accused has admitted to making of certain payments subsequent to the dates of the bills, as reflected in the ledger statement Ex. CW1/2, which shows that the accused had received the goods against the bills on record and had also made part payments.
18. Ex. CW1/2A consist of three invoices having serial no. 245 dated 09.02.2014 (corresponding copy is Mark R3), no. 241 dated 26.12.2013 (corresponding copy is Mark R1) and no. 240 dated 24.12.2013 (corresponding copy is Mark R2). As far as admissibility of Ex. CW1/2A in evidence is concerned, the court does not find merit in the arguments of Ld. Counsel for the accused that it is not admissible in evidence. Carbon copy is prepared in the same process as the original document, and thus, it would be a primary evidence within the meaning of Explanation 2 to Section 62 of the Indian Evidence Act 1872 (Reliance is placed upon the judgment of Hon'ble Supreme Court in Prithi Chand vs State of Himachal Pradesh 1989 AIR
702).
19. With regard to receipt/acknowledgement qua delivery of goods, it was deposed by CW1 in his cross examination dated 05.07.2017 that copy of bills Mark R1 and Mark R2 bears the receipt/acknowledgement at point A. However, perusal of corresponding bills no. 241 and 240 of Ex. CW1/2A shows no such CC No. 526853/2016 Deepak Distributing Co. Vs. Mahender Rawat 13/20 receipt/acknowledgement. Since, the original carbon copies of the bills no.241 and 240 are on record and the same does not bear any receipt/acknowledgement, it leads to the conclusion that there was, in fact, no signatures made by the accused or on his behalf for the receiving of the goods. The remaining invoice i.e., no. 245 also does not bear any receipt/acknowledgement qua delivery of goods, as admitted by CW1 in his crossexamination. It would be appropriate to mention here that initially in his crossexamination dated 05.07.2017, CW1 had deposed that in the usual course of business, a seller takes the signatures in original of the receipt of goods by the buyer, however, the same was not done by the complainant in respect of present transaction. Moreover, the testimony of CW1 that Mark R1 and R2 bears the receipt/acknowledgement of delivery of goods made to the accused, also stands contradicted by the absence of such receipt/acknowledgement on the original carbon copies. The aforesaid inconsistencies in the documents relied upon by the complainant as well as in his deposition, creates a suspicion as to the credibility of his testimony. Although the accused, in his crossexamination dated 29.09.2021, had admitted issuance of cheque no. 311126, 311141, 311143 and 311145 (as reflected in ledger statement CW1/2), he further deposed that the payments through the said cheques were made to the complainant against other transactions. The fact that there were other earlier transactions between the complainant and the accused, CC No. 526853/2016 Deepak Distributing Co. Vs. Mahender Rawat 14/20 apart from the transaction in question, has also been admitted by the complainant but the same is not reflected in the ledger statement CW1/2. Considering these facts, it cannot be concluded that the payments vide cheques no. 311126, 311141, 311143 and 311145 were made by the accused against the invoices on record.
20. It is a settled law that the accused does not have to prove his defence beyond reasonable doubt as is expected of a complainant in criminal trial. The law does not expect the accused to bring negative evidence in order to prove nonexistence of legal debt or liability, as the same is neither possible nor contemplated. The accused is required to create only a reasonable doubt as to the nonexistence of legal debt or liability. Considering the fact that there is no document or evidence to show delivery of goods, coupled with contradictory testimonies of the complainant, the accused has succeeded in creating a reasonable doubt as to the existence of a legally enforceable debt or liability qua the cheques in question.
ii) The defence that the cheques in question were given against a separate order wherein the complainant failed to supply the goods:
21. It was deposed by the accused in his examination in chief as DW1 that he used to do business of supply of CC No. 526853/2016 Deepak Distributing Co. Vs. Mahender Rawat 15/20 printed prachar prasaar material and the complainant used to supply him the items such as tool kits, tshirts, etc. He further deposed that in second week of February, 2014, he received bulk order of supply of printing material for Bihar elections, subsequent to which, the complainant agreed to supply printed pamphlets amounting to Rs. 4 lakhs @50 paisa per paper to the accused. He further deposed that the cheques in question were given as security and that the complainant presented the cheques for encashment without supplying any material. He further deposed that he has no liability towards the complainant and that the cheques in question have been misused by the complainant.
22. For the purpose of proving the fact that he had received bulk order for supply of printing material for Bihar Election, the accused got examined Sh. Pradeep Yadav as DW4 who deposed that he was member of Prachar Samiti, district Baksar unit of BSP in the year 2014 and that the bulk order to the accused was placed through him. He admitted his signatures on purchase order dated 10.02.2014 Ex. DW4/1 and also deposed in cross examination that out of all the goods which were to be supplied by the accused, the goods at serial no. 10, 11 and 12 relating to pamphlets of different specifications, were not supplied by the accused. His testimony could not be impeached and was further corroborated by the testimony of DW3 Sh. Ramesh Kumar, who was middleman between the accused and DW4. The accused had also examined Sh.
CC No. 526853/2016 Deepak Distributing Co. Vs. Mahender Rawat 16/20 Jag Saran Shukla as DW2 who had sent the election material vide his transport to Baxer Bihar at the instance of the accused. He relied upon carbon copy of the bilty Ex. DW2/1 vide which the goods were sent and he further deposed in his crossexamination that only 42 boxes were transported out of 200 boxes which was to be transported. Thus, the fact that the accused had received the bulk order as alleged by him, and that a part of the order relating to the pamphlet was not supplied by him stands proved by the testimony of DW4, DW2 and DW3.
23. Furthermore, DW3 had also deposed in his examination in chief that when he had gone to the office of the accused on 27th or 28th February 2014 , the partner of the complainant firm Sh. Deepak Aggarwal was present and the accused had handed over four cheques to Sh. Deepak Aggarwal "with the understanding that as the material would be supplied, the cheques were to be returned after payments of the material supplied". He further identified the three cheques in question to be three of the four cheques which were handed over in his presence. He further deposed that the accused had failed to supply the material due to which complete payment was not made to the accused. Nothing could be elicited from DW3 during his crossexamination which could shake his credit. It would also be important to mention here that during the entire crossexamination of the accused, no suggestion that accused had not placed any such order with CC No. 526853/2016 Deepak Distributing Co. Vs. Mahender Rawat 17/20 the complainant was put to the accused which leads to deem admission of the fact that the accused had placed an order of supply of pamphlets to the complainant.
24. From the aforesaid discussion, the following chain of circumstances is established that the accused had received a bulk order for supply of printing material for elections, that in respect of this order, the accused had placed an order of pamphlets with the complainant, that the cheques in question were handed over by the accused to the complainant as security for supply of pamphlets (as proved by testimony of DW3 ) and that the accused had failed to supply the part of his bulk order relating to the pamphlets. From these circumstances, it becomes probable that the complainant had failed to supply the goods ordered by the accused due to which the accused failed to supply it further, which leads to further probability that the liability against the cheques in question did not materialise. Moreover, the aforesaid facts also leads the court to believe that the cheques in question might not have been given in respect of the transaction as alleged by the complainant. This probability is further solidified from the fact that the complainant failed to answer as to when the accused had handed over the cheques in question to him. The accused has taken consistent stands since the beginning of the trial as opposed to complainant whose testimony is riddled with inconsistencies.
CC No. 526853/2016 Deepak Distributing Co. Vs. Mahender Rawat 18/20
25. Resultantly, the accused has raised a probable defence and successfully rebutted the presumption raised against him under section 118 read with section 139 NI Act. As such, the burden falls back on the complainant to prove his case beyond reasonable doubt. There is nothing coming out of complainant's evidence to convince the court of the existence of a legally enforceable debt or liability of the accused in favour of the complainant.
26. In the case of 'Kulvinder Singh vs Kafeel Ahmad'', Crl L. P. 478 of 2011, decided on 04.01.2013, Hon'ble Delhi High Court has held that the basic principle in criminal law is that the guilt of the accused / respondent, must be proved beyond reasonable doubts and if there is any slightest doubt about the commission of an offence, then the benefit has to accrue to him. At the same time, it is important to underscore the established canon of criminal law that in order to pass a conviction in a criminal case, the accused ''must be'' guilty and not merely ''may be'' guilty. The mental distance between ''may be'' guilty to ''must be'' guilty is a long one and must be travel not on surmises and conjectures, but by cogent evidence. In this case, the accused successfully rebutted the presumption of consideration and has clearly presented a case which is superior. And as per the settled law, this is all that what is required, as preponderance of probabilities is not a rigorous standard of proof, but only so much evidence as makes the court lean in, in favour of one side and not the CC No. 526853/2016 Deepak Distributing Co. Vs. Mahender Rawat 19/20 other. Consequently, the benefit of doubt must go to the accused.
27. Thus, the second ingredient of the offence i.e., whether the cheque was drawn by the accused for any legally enforceable debt or other liability is not proved.
CONCLUSION
28. Thus, in view of the totality of the circumstances and the settled legal positions as discussed above, the case attempted to be built by the complainant, appears to be suffering from fatal infirmities. The present case appears to be a fit case where benefit of doubt can be extended to the accused. The material on record does not suggest that the accused ''must be'' guilty whichever way one looks at it. Accordingly, in view of the above discussions, this court hold that the complainant has failed to prove his case.
29. As a result, Accused Sh. Mahender Rawat stands acquitted from the offence under Section 138 Negotiable Instruments Act, 1881.
Digitally signed by SAKSHI JAISWAL SAKSHI Announced in the Open Court JAISWAL Date: 2023.02.14 13:20:23 on 13.02.2023 +0530 (Sakshi Jaiswal) MM05(NI Act), (C)/THC/DELHI 13.02.2023 CC No. 526853/2016 Deepak Distributing Co. Vs. Mahender Rawat 20/20