IN THE COURT OF SH. APOORV SARVARIA, CIVIL JUDGEI, NEW DELHI DISTRICT, NEW DELHI C.C. No: 559/11 Unique Case ID No. 02403R0100932011 [ENTITY]. Through its Corporate Manager Col. [ENTITY], Sena Medal Complainant Versus NLP Organics Pvt. Ltd. Works A590 (B) Bhiwadi Industrial Area, Bhiwadi301019 (Rajasthan) Through its Managing Director Sh. Anil Bahl, S414, Greater KailashI, New Delhi Accused COMPLAINT UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881 Date of Institution: 09.01.2001 Date of Reserving Judgment: 10.05.2014 Date of Judgment: 22.05.2014 JUDGMENT
Brief facts
1. The brief facts of the present complaint filed U/[SECTION] of the [ACT] (hereinafter referred to as "[ACT]") are that the complainant company is engaged in businsss of export of human health care products and entered into an agreement dated 14.10.1997 with NLP Organics Pvt. Ltd. for compensation against business of [ENTITY] and M/s Tra Vinh Paharimexco Ho Chi Minh City, Vietnam for the [ENTITY] injections supply. It is stated that the accused company had agreed to compensate the complainant with claimed amount of Rs.6,12,000/ for the business as the goods supplied by the accused were rejected by the companies on quality grounds. The accused had agreed to return the amount of Rs.6,12,000/. It is further stated that the accused had made payment of Rs.1,44,000/ and for paying the balance amount of Rs.4,68,000/, the accused company had issued 12 post dated cheques of Rs.39,000/ each including cheque no. 301547 dated 01.04.2000 for Rs.39000/ drawn on Indian Bank,South Extn., New Delhi.
2. The complainant presented the said cheque but the same was returned unpaid with remarks "suit filed account" as per the return memo dated 04.04.2000. Thereafter, the complainant issued legal notice dated 17.04.2000 through registered AD and UPC. It is stated that despite service of the legal notice accused did not make the payment of the cheque amount within the prescribed period. Therefore, it is stated that the accused is liable for the commission of the offence U/[SECTION] /141 of the [ACT].
Proceedings Before Court
3. The present complaint was received by way of assignment. Summons were issued against the accused. Notice of accusation was framed against the accused to which accused pleaded not guilty and claimed trial.
4. In support of its case, the complainant produced CW1 Sh. [ENTITY], who tendered his evidence by way of affidavit Ex.CW1/F and relied on documents Ex.CW1/A to Ex.CW1/E. Thereafter, CW1 was crossexamined after which the complainant closed its evidence.
5. During examination conducted U/[SECTION] [ACT], the Managing Director of the accused comany stated that the LC was issued in favour of the complainant and it was transferred in favour of the accused compnay for the export of [ENTITY] to Vietnam. He stated that the goods were received by the clients but no payment was made and the accused company did not receive any intimation of rejection of goods from the LC opening bank. He further stated that goods were supposed to be returned by 15.11.1997 as per the agreement dated 14.10.1997 Ex.CW1/A. He stated that the date was extended till 30.11.1997 but the shipment of goods out of Vietnam was made in March, 1998 and the complainant did not fulfill its obligation in terms of the agreement. He further stated that he paid Rs.6.7 lacs to the shipping line for demurrage and personally visited Vietnam to get the goods returned back to India. He stated that in fact complainant is libale to pay Rs.1.5 lacs which were taken as advance for shipment of goods out of Vietnam.
6. On 22.2.2014, it was submitted that the accused does not wish to lead defence evidence and defence evidence was closed.
Arguments of Advocates
7. Sh. [ENTITY], Ld. Advocate for complainant submitted that presumption U/[SECTION] of [ACT] is running against the accused and the accused has not rebutted the said presumption. He further relied on the decision in [PRECEDENT], [PRECEDENT], [CASE NUMBER], decision dated 25.3.2009, Kerala High Court, [PRECEDENT] in support of his submissions. On the other hand, Sh. [ENTITY], Ld. Advocate for accused stated that accused has rebutted the presumption. He further submitted that the complaint was not filed by a propertly authorized person and the complainant also failed to meet its obligation as per the agreement dated 14.10.1997. In support of his submission, he relied upon [PRECEDENT], [PRECEDENT], [PRECEDENT] [CASE NUMBER] decision dated 22.2.2011, SC.
8. This court has heard Ld. Advocates for the complainant as well as accused and perused the record.
Findings
9. The signatures on the cheque and issuance of the cheque no. 301547 dated 01.04.2000 for Rs.39000/ drawn on Indian Bank,South Extn., New Delhi Ex.CW1/B are admitted and, therefore, the execution of the cheque is not disputed. Hence, presumption U/[SECTION] of the [ACT] is raised.
10.In [ENTITY] v. Sri Mohan AIR 2010 SC 1898 it was observed by the Hon'ble Supreme Court as under :
"14. In light of these extracts, we are in agreement with the respondentclaimant that the presumption mandated by [SECTION] of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in [PRECEDENT] (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. [SECTION] 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] of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under [SECTION] is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by [SECTION] 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 accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, 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], 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 of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own. " (emphasis added)
11. In view of the decision in [ENTITY] laid down by the Supreme Court, the presumption raised under [SECTION] of the [ACT] is of legally enforceable debt or liability and it is for the accused to raise a probable defence to rebut the presumption.
12.The defence of the accused is that the cheque Ex.CW1/B was issued subject to the condition that the complaiant would help the accused company in arranging shipment of goods out of Vietnam by 15.11.1997 but the complainant failed to do so. However, the accused has failed to lead any evidence to prove the above defence.
13.In [PRECEDENT], the High Court of Delhi has held that there is no presumption of law that the explanation given by the accused was truthful. It was further held therein that mere suggestion to the witness that cheques were issued as securities or mere explanation given in the statement of accused U/[SECTION] [ACT] that the cheques were issued as security, does not amount to proof. Moreover, the offence U/[SECTION] of the [ACT] is a technical offence and the Complainant is only supposed to prove that the cheques issued by the accused were dishonoured, his statement that cheques were issued against the liability or debt is sufficient proof of debt or liability and the onus shifts to accused to show the circumstances against which cheques came to be issued and this can be proved by the accused only by way of evidence and not by leading no evidence. (See para 5, DLT @ p.563).
14. Therefore, the accused has not been able to raise any probable defence in support of his case and has failed to rebut the presumption raised U/[SECTION] of the [ACT].
15.Since the accused has failed to rebut the presumption raised U/[SECTION] of the [ACT], there is no need to go into complainant's evidence for proving the complainant's case. Even otherwise, CW1 Sh. [ENTITY] has deposed the facts stated in the complaint. The agreement dated 14.10.1997 Ex.CW1/A which is admitted by both the parties states that accused company had to compensate the complainant because of the rejection of goods on quality ground. From the agreement itself, it can be easily inferred that complainant had to only arrange the no objection certificate from M/s [ENTITY]. However, complainant was not supposed to pay any shipping charges. The accused has failed to lead any evidence to show that no objection certificate was not arranged within time. Therefore, for the delay in shipment of the goods out of Vietnam, complainant cannot be blamed without any positive evidence. Even during his cross examination, CW1 was consistent with his stand. There is nothing coming out in the cross examination of CW1 Sh. [ENTITY] which would probablise the defence raised by the accused or falsify the case of the complainant.
16.The arguments raised on behalf of the accused that the complaint was not properly filed is misconceived. The authority letter dated 14.2.2003 has been filed authorizing Sh. [ENTITY] to pursue the present case on behalf of the complainant. Another authority letter has been shown on record which states that Col. [ENTITY] is authorized to pursue all legal case which the complainant company has filed or may file in a Court of law and it is signed by the Managing Director of the complainant company. A resolution dated 01.09.2001 is filed on record whereby Col. [ENTITY] was substituted and Sh. [ENTITY] was authorized to represent the complainant. Therefore, it cannot be said that the complaint was not filed by a properly authorized person. The case laws relied on behalf of the accused turn on their own material facts and are not applicable to the material facts of the present case.
17. Therefore, the complainant has been able to prove that the cheque in question i.e. Cheque no. 301547 dated 01.04.2000 for Rs.39000/ drawn on Indian Bank,South Extn., New Delhi Ex.CW1/B was issued in discharge of legally recoverable debt owed to the complainant. The accused company is convicted for the offence punishable U/[SECTION] /141 of the [ACT] in respect of cheque Ex.CW1/B. The accused company shall be heard on the point of sentence on 29.05.2014 at 2.00 pm. Announced in the Open Court ([ENTITY]) on 22nd May, 2014 Civil JudgeI/MM, New Delhi District New Delhi