Interim Order 12

Order Details: COPY OF JUDGMENT
Pdf Text: IN THE COURT OF SH. HARJOT SINGH AUJLA
MM (NI ACT) DIGITAL COURT -01, PATIALA HOUSE COURT,
NEW DELHI.
J U D G M E N T
CC No.2936-2021
M/S Delhi Magazine Distributor Pvt. Ltd.
Through Shri Munish Rampal
110, Bangla Sahib Marg, New Delhi 110001 ................ Complainant
Versus
Sh. Rajeev Sharma
9/4A, Ramesh Nagar New Delhi ..................Accused
a) Unique/new case number : DLND02-008162-2021
b) Name of complainant : M/S Delhi Magazine Distributor Pvt.
Ltd.
c) Name of accused person(s) : Shri Rajeev Sharma
d) Offence complained of : Under Section 138 of NI Act,1881
e) Plea of accused person(s) : Pleaded not guilty
f) Final order : Acquitted
g) Date of such order : 26.03.2024
BRIEF STATEMENT OF THE REASONS FOR THE DECISION
(As mandated u/s 355(i) of the Code of Criminal Procedure, 1973.)
Case of the complainant
1. The present Judgment is a result of culmination of trial initiated on the
complaint filed by the complainant. It is stated that the complainant is engaged in the
business of dealing in books, periodicals and various magazines. It is stated that
accused has been regularly purchasing Indian Express Publications from complainant
from time to time on credit basis for which bills were being raised. It is stated that
accused has not been paying the amount regularly due against the bills raised by the
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complainant, however, he has been making part payments. It is further stated that in
discharge of his liability, accused issued six cheques bearing no. 603841, 603842,
603843, 603844, 603845 and 603846, all dated 07.04.2021, for an amount of Rs.
50,000/- each, drawn on State Bank of India, which are Ex. CW 1/3 to Ex. CW 1/8.
2. Complainant presented the cheques in question to its banker for encashment
but the same were returned unpaid with the endorsement “Funds Insufficient”.
Separate return memos dated 08.04.2021 are Ex. CW 1/9 to Ex. CW 1/14.
3. The complainant demanded the above said amount from the accused but he did
not make the payment. Thereafter, complainant sent a legal notice dated 30.04.2021
Ex. CW1/15 through speed post. Speed post receipt is Ex. CW 1/16 and tracking
report is Ex. CW 1/17. The accused failed to make the payment of the cheques
amount to the complainant within the stipulated period. Hence, the present complaint
case was filed.
4. On taking cognizance of the offence, proceedings were initiated against
accused Rajeev Sharma. On summoning, accused entered his appearance and it was
ensured that copy of complaint has been supplied. Thereafter notice under section
251 CrPC was put to the accused on 12.07.2023.
The Defence
5. Plea of defence was recorded on 12.07.2023. The accused took the defence that
“I do not owe the liability of the cheques amount towards the complainant company.
The cheques in question were given as blank security cheques in the year 2017.”
Thereafter, matter was fixed for complainant evidence and accused side was granted
opportunity to cross-examine the complainant’s evidence/witness.
COMPLAINANT’S EVIDENCE
6. During the trial, complainant has led the oral and documentary evidence
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against the accused to prove its case beyond reasonable doubt. The following
evidences are as under:
Oral Evidence
CW1 Sh. Munish Rampal, AR of complainant
Documentary Evidence
Mark A The certified copy of incorporation certificate is Mark A.
Ex. CW1/2 The resolution dated 05.06.2021
Ex. CW 1/3 Original cheque bearing no. 603841, dated 07.04.2021
Ex.CW 1/4 Original cheque bearing no. 603842, dated 07.04.2021
Ex. CW 1/5 Original cheque bearing no. 603843, dated 07.04.2021
Ex. CW 1/6 Original cheque bearing no. 603844, dated 07.04.2021
Ex. CW 1/7 Original cheque bearing no. 603845, dated 07.04.2021
Ex. CW 1/8 Original cheque bearing no. 603846, dated 07.04.2021
Ex. CW 1/9
to CW 1/14
Original return memos dated 08.04.2021
Ex. CW
1/15
Legal demand notice dated 30.04.2021
Ex. CW
1/16
Postal receipt.
Ex. CW
1/17
Tacking report.
Ex. CW
1/18
Ledger statement (running into 102 pages).
AR of Complainant stepped in witness box as CW1 and adopted his affidavit
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of pre-summoning as his evidence reiterating almost all facts of complaint, stating all
exhibits available on record.
7. Complainant evidence was closed vide order dated 18.09.2023 and thereafter,
matter was fixed for recording of statement of accused.
STATEMENT OF ACCUSED
8. The statement of accused was recorded under Section 313 of The Code of
Criminal Procedure, 1973 read with Section 281 of The Code of Criminal Procedure,
1973 on 21.12.2023. Incriminating evidence was put to him. Accused denied the
allegations. In recording of statement of accused, accused opted not to lead defence
evidence.
9. Final arguments were addressed by the complainant and accused. Case file
perused.
INGREDIENTS OF OFFENCE AND DISCUSSION-
10. Before dwelling into the facts of the present case, it would be apposite to
discuss the legal standards required to be met by both sides. In order to establish the
offence under Section 138 of NI Act, the prosecution must fulfill all the essential
ingredients of the offence. Perusal of the bare provision reveals the following
necessary ingredients of the offence: -
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
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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 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-.
11. The accused can only be held guilty of the offence under Section 138 NI Act if
the above-mentioned ingredients are proved by the complainant co-extensively.
Additionally, the conditions stipulated under Section 142 NI Act have to be fulfilled.
Notably, there is no dispute qua the proof of first, third and fifth ingredient.
The complainant had proved the original cheques vide Ex. CW1/3 to Ex. CW 1/8
which the accused had not disputed as being drawn on the account of the accused and
are duly signed by the accused. It was not disputed that the cheques in question were
presented within the validity period. The cheques in question were returned unpaid
vide return memos dated 08.04.2021, Ex. CW1/9 to Ex. CW 1/14 with the remarks
“Funds Insufficient”. Fifth ingredient is also not disputed.
12. As far as the proof of fourth ingredient is concerned, the accused in his plea
of defense and statement recorded u/s 313 of Cr.P.C stated that he did not receive the
legal demand notice but the address on the legal notice dated 30.04.2021, Ex. CW
1/15 is his correct address. The original legal demand notice and postal receipt have
been placed on record by complainant. Accused has not disputed the genuineness of
postal receipt. At this juncture, reliance is placed upon the judgment passed by
Hon'ble Supreme Court in the case of C.C.Alavi Haji vs. Palapetty
Muhammed, 2007 (6) SCC 555 wherein it has been held:
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“It is also to be borne in mind that the requirement of giving of
notice is a clear departure from the rule of Criminal Law, where
there is no stipulation of giving of a notice before filing a
complaint. Any drawer who claims that he did not receive the notice
sent by post, can, within 15 days of receipt of summons from the
court in respect of the complaint under Section 138 of the Act, make
payment of the cheque amount and submit to the Court that he had
made payment within 15 days of receipt of summons (by receiving a
copy of complaint with the summons) and, therefore, the complaint is
liable to be rejected. A person who does not pay within 15 days of
receipt of the summons from the Court along with the copy of the
complaint under Section 138 of the Act, cannot obviously contend
that there was no proper service of notice as required under Section
138, by ignoring statutory presumption to the contrary under Section
27 of the G.C. Act and Section 114 of the Evidence Act. In our
view, any other interpretation of the proviso would defeat the very
object of the legislation. As observed in Bhaskarans case (supra), if
the giving of notice in the context of Clause (b) of the proviso was
the same as the receipt of notice, a trickster cheque drawer would
get the premium to avoid receiving the notice by adopting different
strategies and escape from legal consequences of Section 138 of the
Act.”
Therefore, in such circumstances, presumptions under section 114 Indian Evidence
Act and section 27 of General Clauses Act can be raised to the effect that notice was
duly served upon the accused. The presumptions have not been rebutted by the
accused. Therefore, it can be safely established that accused received the legal
demand notice.
13. As far as the proof of second ingredient is concerned, the complainant has to
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prove that the cheques in question were drawn by the drawer for discharging a legally
enforceable debt. In the present case, primarily the defence of the accused is that the
cheques in question were given as blank security cheques in the year 2017 and were
not given to discharge any liability. It is well settled law that mere denial by the
accused would not rebut the statutory presumptions u/s 139 and u/s 118 (a) of NI Act
which arises in favour of the complainant under NI act and presumptions will still
arise in favour of complainant.
14. As per the scheme of the NI Act, once the accused admits signature on the
cheque in question, certain presumptions are drawn, which result in shifting of onus.
Section 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. The 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.
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.
Further, it has been held by a three-judge 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
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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
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 summarize 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.
25.5. It is not necessary for the accused to come in the witness box to
support his defence.”
The presumptions raised under Section 118(a) and Section 139 NI Act are
rebuttable presumptions. A reverse onus is cast on the accused, who has to establish a
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probable defence on the standard of preponderance of probabilities to prove that
either there was no legally enforceable debt or other liability. In this case, the defence
raised by the accused to rebut the presumptions is discussed below:
Defence that the cheques in question were not issued for any legal debt or
liability
15. In a nutshell, the defence set up by the accused is that the cheques in question
were given as blank security cheques in the year 2017 and were not given to
discharge any liability for the amount allegedly claimed by the complainant company.
Further, the accused by way of his statement recorded u/s 313 r/w section 281 Cr.P.C
has stated that he is only liable to pay Rs.20,000/- approximately to the complainant
company and the same has been duly paid by him. It is further argued that the
liability claimed by the complainant company as per the ledger statement Ex. CW
1/18 is not maintainable as the bills / invoices on which the liability is based were not
intentionally produced by the complainant company during the course of trial. It is
further argued that the liability of the accused is not of the amount of the cheques and
the cheques cannot be said to represent any legally enforceable debt or other liability
as required u/s 138 r/w section 139 NI Act.
16. Per contra, the case set up by the complainant is that the accused was regularly
purchasing Indian Express Publications from the complainant company on credit
basis for which bills were raised by the complainant company. It is stated that the
accused was not paying the amount regularly as against the bills raised and the
accused is liable to pay the amount of the cheques as per the liability based on ledger
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statement Ex. CW 1/18.
17. The case of the complainant is totally based on the fact that accused was
purchasing Indian Express Publications from the complainant for which complainant
used to raise bills against the accused. The bills were not produced on record by the
complainant at any stage of the trial. During the cross examination of AR of the
complainant company as CW-1, he stated that the bills raised against the accused are
not produced on record and further stated that the complainant company has the
possession of such bills. The bills raised against the accused are the primary and
direct evidence in the present case and it was the duty of the complainant to produce
the best evidence on record but despite having the possession of the bills, the
complainant has failed to produce the same on record.
18. Further, in order to fasten the liability of the accused, the complainant has
relied on the ledger statement Ex. CW 1/18. On perusal of the ledger statement Ex.
CW 1/18 it is seen that the ledger statement is a self made document of the
complainant company and is not counter-signed by the accused. Further, the ledger
statement is not admitted by the accused during the course of trial. Further, it contains
the details of the bills raised against the accused. The bills, if produced would have
corroborated the ledger statement and its genuineness and authenticity. But the bills
were not produced by the complainant company despite having the possession of the
same. In such an event, where the ledger statement is neither acknowledged by the
accused by way of any communication with the company nor counter-signed by him,
the ledger statement cannot be relied upon to establish the quantum of liability of
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accused.
19. Further, Ld. Counsel for accused had produced one document during the cross
examination of AR for complainant vide Ex. CW 1/D1. Ex. CW 1/D1 is the legal
demand notice dated 27.01.2021 sent by the counsel for complainant company to the
accused Rajeev Sharma on instructions from and on behalf of company M/s Delhi
Magazine Distributors Pvt. Ltd. The present notice is a notice sent in furtherance of
notice dated 11.12.2019 whereby the accused was called upon to pay Rs.24,002/-
alongwith 12% interest per annum as due and outstanding against the purchase of
Indian Express Group of Publications. Therefore, as on 27.01.2021, the accused was
liable to pay Rs.24,002/- alongwith interest to the complainant company as per notice
Ex. CW 1/D1.
20. The notice Ex. CW 1/D1 was not denied by the AR for the complainant in his
cross examination. The AR as CW1 in his cross examination has stated that the notice
was sent on behalf of complainant company and as per the notice, the legal liability
of the accused was Rs.24,002/- as on 27.01.2021. However, as per the ledger
statement Ex. CW 1/18 as on 28.12.2020, the liability of the accused was
Rs.3,85,027.25. Therefore, this again casts a doubt on the credibility and genuineness
of the ledger statement Ex. CW 1/18.
21. As per Ex. CW 1/D1 and the statement of the AR in his cross examination, the
liability of the accused as on 27.01.2021 was Rs.24,002/-. No justification or
explanation explaining the legal notice Ex. CW 1/D1 was given by the AR for
complainant in his cross examination. It is not the stand of the complainant that the
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notice Ex. CW 1/D1 was sent by mistake or was sent for some other transaction
concerning the accused. There is no transaction between the parties after 27.01.2021
and before dishonour of the impugned cheques i.e. before 08.04.2021 (date of return
memo) as per the ledger statement Ex. CW 1/18. Therefore, the complainant has
failed to explain that how the accused is liable to pay the amount of the cheques i.e.
Rs.3,00,000/- as on 08.04.2021 (date of return memo) when the liability of the
accused as on 27.01.2021 was of Rs.24,002/-. Therefore, it can be safely said that the
legal demand notice Ex. CW 1/15 sent after the dishonour of the impugned cheques is
an after-thought as no corroborative piece of evidence justifying the quantum of
liability of the accused as on date of presentation of cheques for encashment is
produced by the complainant. Therefore, it can be said that the accused has created a
reasonable doubt in the case set up by the complainant and thereby successfully
established that the cheques in question does not represent the legally enforceable
debt or other liability as required u/s 138 r/w section 139 NI Act. Therefore, second
ingredient to the offence u/s 138 NI Act stands not proved and the presumptions
raised against the accused under Section 118(a) and Section 139 NI Act stands
rebutted.
CONCLUSION/FINAL ORDER:
22. Thus, on account of above appreciation of facts, evidences and materials on
record, this court is of the considered opinion that the complainant has failed to prove
its case on the touchstone of “beyond reasonable doubt”. On the other hand, the
accused has succeeded in raising a plausible defence as per the yardstick of
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“preponderance of probabilities”. Consequently, the accused Rajeev Sharma is
acquitted from the accusation of committing the offence u/s 138 of NI Act.
23. This judgment contains 13 pages. This judgment has been signed and
pronounced by the undersigned in open court.
24. Let a copy of the judgment be uploaded on the official website of District
Courts, New Delhi forthwith.
Announced in the open Court (Harjot Singh Aujla)
On 26.03.2024 MM (NI Act),Digital Court-01
PHC/New Delhi-26.03.2024
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