Delhi District Court
Salora International Ltd vs Shree Krishna Enterprises on 21 August, 2024
THE COURT OF SH. ABHINAV SINGH, JMFC-04(N.I. ACT),
NEW DELHI DISTRICT, PATIALA HOUSE COURTS, NEW
DELHI
CC No. 44391-2016
M/s Salora International Ltd. vs. M/s Shree Krishna
Enterprises & Anr.
U/s 138 Negotiable Instruments Act, 1881
1. CIS number : DLND020116782016
2. Name of the complainant : M/s Salora International Ltd.,
D-13/4, Okhla Industrial Area,
Phase-II, New Delhi-110020
Through:- Mr. T.D. Joshi, Attorney
3. Name of the accused, : 1. M/s. Shree Krishna
parentage & residential Enterprises, Through its
address proprietor/ AR, 12, Arjun Nagar,
Safdarjug Enclave, New Delhi-
110029
2. Mr. Abhishek Mehra,
Proprietor / Authorized
Signatory, M/s. Shree Krishna
Enterprises, 12, Arjun Nagar,
Safdarjug Enclave, New Delhi-
110029
4. Offence complained of or : U/s 138 of Negotiable
proved Instruments Act, 1881
5. Plea of the accused : Pleaded not guilty and claimed trial.
6. Final Judgment/order : Convicted
7. Date of judgment/order : 21.08.2024
Date of Institution: 05.07.2016
Date of Reserving Judgment/Order: 22.05.2024
Date of Pronouncement of Judgment/Order: 21.08.2024 Digitally
signed by
ABHINAV
ABHINAV SINGH
SINGH Date:
CC No. 44391-2016 Page No. 1 of 13 2024.08.21
17:51:58
+0530
JUDGMENT
1. By way of the present Judgment, this court shall dispose of the present complaint filed by the complainant M/s Salora International Ltd. Through its AR (hereinafter referred to as 'complainant') against Mr. Abhishek Mehra, proprietor of M/s. Shree Krishna (hereinafter referred as the 'accused' u/s 138 of Negotiable Instruments Act, 1881 of Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act' in short).
Brief facts:
2. The complainant's story in nutshell is that the complainant is engaged in the business of manufacturing and marketing of color television LED Ultra Slim TV and its components. It is averred that the accused no.2, being the proprietor of accused no.1 company, had been purchasing LED TV from the complainant on credit and the payment was being made from time to time. It is submitted that the accused bought goods from complainant vide invoices no. TAA1315T0009 dated 31.12.2015.
3. It is further submitted that in discharge of its liabilities towards the complainant company, the accused issued cheque bearing no. 800936 dated 07.05.2016 for a sum of Rs. 17,83,607/- drawn upon Axis Bank Ltd., Khan Market, New Delhi-11003. However, the same was returned unpaid due to the reasons "Funds Insufficient"
vide cheque return memo dated 10.05.2016.
Digitally signed by ABHINAV ABHINAV SINGH SINGH Date:
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4. Thereafter, as accused failed to pay the cheque amount, complainant sent a legal demand notice dated 16.05.2016 to the accused. It is alleged that despite service of legal demand notice, accused did not make payment to discharge his liability.
5. Consequently, upon failure of the accused to make payment of the cheque in question within the stipulated time of 15 days, the complainant has filed the present complaint u/s 138 of the Act.
Proceedings before the Court:
6. On the basis of complaint and pre-summoning evidence filed by the complainant, and on the basis of documents annexed with the complaint, cognizance of the offence U/s 138 NI Act was taken by Ld. Predecessor of this Court and process was issued against the accused on 05.07.2016.
7. The notice of substance of accusation u/s 251 of the Code of Criminal Procedure, 1973 (hereinafter "CrPC") was given to the accused on 29.08.2018 to which accused pleaded not guilty and claimed trial. Application moved on behalf of accused u/s 145(2) NI Act was allowed by the Ld. Predecessor of this court vide order dt. 08.01.2019. At the time of framing of notice, the accused denied his signatures on the cheque in question and also denied the receipt of the legal demand notice. The accused however admitted his address on the legal demand notice. Thereafter, the matter was listed for CE Digitally signed by ABHINAV ABHINAV SINGH CC No. 44391-2016 Page No. 3 of 13 SINGH Date:
2024.08.21 17:52:11 +0530 and CE was conducted in the matter. CE stood closed vide statement of the AR of the complainant on 15.12.2022.
8. Thereafter, statement of the accused u/s 313 CrPC was recorded on 15.12.2022 wherein the accused admitted his business dealings with the complainant. The accused also admitted invoice Ex.
CW1/C but stated that the complainant never supplied the material with respect to the invoice. The accused also admitted cheque in question Ex. CW1/D to be of his firm however denied having signed the same. The accused further admitted that the cheque in question was given to the complainant as blank unsigned cheque for the purpose of opening the account with complainant. The accused also admitted issuing several other cheques in favour of the complainant. The accused was asked whether he wished to enter DE to which he replied in affirmative. Later, the accused did not lead any DE and the matter was posted for final arguments. However, an application u/s 311 CrPC was filed by the accused for examination of handwriting expert, and which application was allowed by this court vide order dt. 11.07.2023. Thereafter, the matter was listed for final arguments.
Evidence led in the matter.
9. In the present case, The A R o f c o m p l a i n a n t M r. T. D . J o s h i w a s examined as C W- 1 reiterating the statements made in the complaint. He also relied upon the documents Ex. CW1/A to CW1/J and Ex. CW1/K i.e., Certificate u/s 65B of Evidence Act.
Digitally signed by ABHINAV ABHINAV SINGH CC No. 44391-2016 Page No. 4 of 13 SINGH Date:
2024.08.21 17:52:17 +0530 a. Copy of Incorporation and Board Resolution as Ex.CW1/A and Ex. CW1/B;
b. Copy of invoice no. TAA1315T0009 dated 31.12.2015 as Ex. CW1/C;
c. Original cheque as Ex. CW1/D; d. Copy of Bank returning memo as Ex.CW1/E; e. Office copy of notice dated 16.05.2016 as Ex. CW1/F; f. Copy of speed post receipts dated 18.05.2016 as Ex.CW1/G- 1 and Ex. CW1/G-2; g. Internet generated delivery report as Ex.CW1/H-1 and Ex. CW1/H-2; h. The complaint filed within limitation as Ex. CW1/I; i. Affidavit as Ex. CW1/J; j. Certificate u/s 65 of Evidence Act as Ex.CW1/K. k. Annexure 2B for the period 01.07.2015 to 30.09.2015 and
01.10.2015 to 31.12.2015 which contains the summary of sale/outward branch transfer which is also supported by Certificate u/s 65B of I.E. Act, 1872 as Ex. CW1/L (Colly).
Thereafter, the AR of the complainant was duly cross examined by the Ld. Counsel of the accused. No other witness was examined by complainant. CE was closed on 15.12.2022.
9.1. Thereafter, the accused examined Handwriting Expert Sh. Syed Faisal Huda as DW1. DW1 and was duly cross examined on behalf of the complainant.
9.2. Thereafter, final arguments were heard on behalf of the parties in the matter. Digitally signed by ABHINAV ABHINAV SINGH SINGH Date:
CC No. 44391-2016 Page No. 5 of 13 2024.08.21 17:52:23 +0530 Reasons for Decision:
10. For deciding the present case, it is essential to lay down the ingredients of the offence under Section 138 NI Act which are as follows:
(a) A person must have drawn a cheque on an account maintained by him in a bank.
(b) The cheque must be drawn for payment of certain amount of money to another person to discharge in whole or in part, any legally enforceable debt or other liability.
(c) The cheque has been presented to the bank and is returned unpaid by the bank either due to insufficiency of funds or it exceeds the amount arranged to be paid from that account by an agreement made with that bank.
(d) The payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing to the drawer of cheque within stipulated period.
(e) The drawer fails to make payment within stipulated time after the receipt of the said notice. [Reference: Kusum Inglots & Alloys Ltd & Ors v. K Pennar Peterson Securities Ltd and Ors (2000) 2 SCC 745].
11. Further, a negotiable instrument including a cheque carries presumption of consideration in terms of Section 118(a) and presumption of existence of liability under Section 139 of the Act.
Digitally signed by ABHINAV ABHINAV SINGH CC No. 44391-2016 Page No. 6 of 13 SINGH Date:
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12. Section 118 Clause (a) of Negotiable Instruments Act reads as under: -
"That every negotiable instrument was made or drawn for consideration and that every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration".
12.1. Section 139 of the Negotiable Instruments Act reads as under:
-
"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, or any debt or other liability."
13. The combined effect of Section 118(a) and Section 139 of NI Act is that it raises a presumption in favour of the holder of the cheque that he has received the same for discharge in whole or in part of any debt or other liability. In Rangappa V. Sri Mohan, (2010) 11 SCC 441, a three-judge bench observed that, Section 139 of the NI Act is stated to be an example of a reverse onus clause which is in tune with the legislative intent of improving the credibility of negotiable instruments. The Hon'ble Supreme Court observed that a reverse onus clause requires the accused to raise a probable defence or creating doubt about the existence of a legally enforceable debt or liability for thwarting the prosecution. The standard of proof for doing so would necessarily be based on "preponderance of probabilities" and not "beyond shadow of any doubt."
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14. In the present case, at the time of framing of notice u/s 251 CrPC, the accused stated that he did not issue the cheque in question to the complainant, however at the time of the statement of the accused u/s 313 CrPC, the accused stated that the cheque in question was given to the complainant as blank unsigned cheque for the purpose of opening account with the complainant. Further, the accused denied the receipt of legal demand notice at the time of framing of notice u/s 251 CrPC but admitted his address appearing on the legal demand notice. Thus, in view of the ratio in the matter of C.C Alavi Haji vs. Palapetty Muhd. & Anr 2007 6 SCC 555, t he service of the legal demand notice on the accused shall be deemed to be complete.
15. In view of aforesaid, the presumption under sections 118 and 139 of the NI Act would operate against the accused as has been held by the Hon'ble Supreme Court in the case of M/S Kalamani Tex vs P. Balasubramanian (2021) 5 SCC 283. The relevant portion is reproduced below: -
"The Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then the 'reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. Now it is upon the accused to rebut the presumption u/s 139 of NI Act by raising a probable defence in his favour on a scale of preponderance of probabilities."
Digitally signed by ABHINAV ABHINAV SINGH SINGH Date:
2024.08.21 17:52:41 CC No. 44391-2016 Page No. 8 of 13 +0530 15.1. Thus, in view of the above legal position, the burden was upon the accused to rebut the legal presumption that had been imposed upon him. In this regard, the Hon'ble Supreme Court in Kumar Exports v. Sharma Carpets (2009) 2 SCC 513 held: -
"Bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of presumptions shifted to the complainant. To disprove the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist."
16. Thus, it is well established that to rebut the presumption raised against the accused, it is not imperative for the accused to lead direct/definite evidence, even by relying on the facts and circumstances of the case as well as upon the flaws in evidence of the complainant, such presumption can be rebutted.
17. In the instant case, in order to rebut the presumption against accused, the accused has taken the substantial defence that the cheque in question has not been signed by him.
18. To prove his defence, the accused examined handwriting expert Mr. Syed Faisal Huda as DW1. DW1 supported the version of the accused and stated in his report Ex. DW1/1 (Colly) that the cheque in Digitally signed by ABHINAV ABHINAV SINGH CC No. 44391-2016 Page No. 9 of 13 SINGH Date:
2024.08.21 17:52:47 +0530 question has not been signed by the accused. Having said the above, it is pertinent to observe here that in order to compare the signatures of the accused on the cheque in question, the documents such as Account Opening Form were summoned from the bank of the accused. The accused never raised any dispute upon the authenticity of the documents produced from the bank of the accused. A bare perusal of Account Opening Form would show that the signatures present on the cheque in question match with those of one Mr. Surender Pal who has been shown to be the authorized signatory of the firm of the accused in the Account Opening Form. This information was never brought on record by the accused himself and the accused simply stated that the signatures on the cheque in question did not belong to him. So much so, for the bonafide of the accused. Further, in improvement to what had been stated at the time of framing of notice u/s 251 CrPC, the accused stated in his statement u/s 313 CrPC that he had issued blank unsigned cheque to the complainant for the purpose of opening account with the complainant. What is important to note here is that the accused never alleged anywhere that the cheque in question had been signed by anyone on behalf of the complainant. The bank return memo Ex. CW1/E also mentions the reason for dishonor of the cheque in question Ex. CW1/D as "funds insufficient". The above circumstances further fortify the conclusion that the cheque in question had been issued on behalf of the firm of the accused by its authorized signatory Mr. Surender Pal. It is no longer Res-integra that even if a cheque has been signed by an authorized signatory on behalf of a proprietorship firm, the proprietor shall still be liable u/s Digitally signed by ABHINAV CC No. 44391-2016 Page No. 10 of 13 ABHINAV SINGH SINGH Date:
2024.08.21 17:52:53 +0530 138 NI Act. In this regard, the complainant has rightly relied upon the case of M/s. Shankar Finance & Investments vs. State of A.P. & Ors., AIR 2009 Supreme Court 422 and M.M. Lal vs. State of NCT of Delhi & Anr. In CRL.L.P. 290/2010 decided on 14.09.2012.
Thus, the defense taken by the accused that the cheque in question has not been signed by him holds no water.
19. Apart from the above, the accused has also raised certain other contentions. The accused stated at the time of arguments that the AR of the complainant has not been properly authorized by the complainant company and is therefore not competent to depose on behalf of the complainant. However, the accused failed to raise any serious dispute upon the authorization or the knowledge of the AR. The accused further raised contention regarding the actual liability of the accused towards the complainant and upon the statement of account Ex. CW1/K (Colly) however the accused failed to counter Ex. CW1/K (Colly) with any of his own documents. No specific question or suggestion regarding any particular entry in the statement of account has been put to CW1 in order to bring the own version of the accused on record. Mere putting a suggestion here or there shall not dispense with the requirement of a proper proof in order to rebut the presumption against the accused as has also been held by the Hon'ble Supreme Court in Rohitbhai Jivanlal Patel vs. State of Gujarat & Anr. in Criminal Appeal No. 508 of 2019 (arising out of SLP (Crl.) 1883 of 2018). Even otherwise, the position of the accused during the course of the trial has been ambivalent suffering from improvement, inconsistency and incoherence. In his statement Digitally signed by CC No. 44391-2016 Page No. 11 of 13 ABHINAV ABHINAV SINGH SINGH Date:
2024.08.21 17:52:59 +0530 u/s 313 CrPC, the accused stated that he never received material against invoice Ex. CW1/C but no question was put to CW1 regarding the same at the time of his cross examination. In the similar fashion, in his application u/s 145(2) NI Act, the accused introduced a completely new version by stating that the proprietorship firm of the accused was earlier a partnership firm and the cheque in question also belongs to the partnership firm however no evidence was led on behalf of the accused to this effect. Therefore, it can be concluded that the accused failed to erect any consistent defense in the matter. For the same reason, the citations relied upon by the accused are also of no aid to the accused.
Conclusion
20. It was incumbent upon the accused to rebut the presumption raised in favour of complainant either by leading direct evidence or by showing circumstances in the case of complainant which makes the story of complainant unbelievable for a reasonable man however the accused has miserably failed to set up any concrete defense in the matter.
Final Order
21. Accordingly, on the basis of the above held discussion, the accused Mr. Abhishek Mehra, S/o Sh. Surinder Pal Mehra, Proprietor / Authorized Signatory, M/s. Shree Krishna Enterprises stands convicted for offence under section 138 NI Act.
Digitally signed by ABHINAV ABHINAV SINGH SINGH Date:
2024.08.21 17:53:05 +0530 CC No. 44391-2016 Page No. 12 of 13 A copy of this judgment be uploaded on the official website of the District Court.
Announced in open court today i.e., 21.08.2024. (This judgment contains 13 pages. Each page has been signed by me).
(ABHINAV SINGH) JMFC-04 NI Act:PHC:ND DELHI Digitally signed by ABHINAV ABHINAV SINGH SINGH Date:
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