IN THE COURT OF MS. AKRITI MAHENDRU, MM04 (NI ACT) CENTRAL DISTRICT, TIS HAZARI COURTS, DELHI CC No. : 530495/16 U/s [SECTION] [ACT] JUDGMENT
a The Sl. No. of the case : 530495/16 b The date of Institution of the case : 20.10.2014 c The name of complainant : [ENTITY] S/o. Late Sh. [ENTITY], Prop. Of M/s. Bajaj Industries, 3344, Peepal Mahadev, Hauz Quazi, Delhi. d The name of accused : [ENTITY] Prop. Of Seven Wonders International, 246, Lane 04, Opp. Shiv Mandir, Haiderpur Road, Shalimar Bagh,Delhi. e The offence complained of [SECTION] [ACT] f The plea of accused : Pleaded not guilty g The final order : Convicted h The date of judgment : 28.09.2019 JUDGMENT
1. Vide this judgment and final order, this Court shall dispose of the present complaint case instituted by the Complainant invoking the provisions of [SECTION] of the [ACT] (as amended todate).
2. Succinctly speaking, the facts giving rise to the instant complaint case may be enumerated as hereafter: the Complainant, being the proprietor of M/s. Bajaj Industries, is engaged in the trading business of all kinds of pipes, pipe fitting, tools, GI Sheets and hardware etc. Whereas, the Accused, on the other hand, had allegedly purchased goods worth Rs. 85,67,421/ (rupees eighty five lakhs, sixty seven thousand, four hundred and twenty one only) from the Complainant from time to time and purportedly issued impugned cheques bearing Nos. 857066 and 857067; drawn on Oriental Bank of Commerce, Pitam Pura Branch, Delhi in the tune of Rs.10,00,000/ (rupees ten lakhs only) each dated 10.01.2013 and 10.02.2013, respectively. It is germane to note that impugned cheques bearing nos. 857066 and 857067 were drawn by the Accused on an account maintained in the name of M/s. Seven Wonders International qua its proprietor. Reportedly, upon presentation, the impugned cheques bearing nos. 857066 and 857067 were returned dishonored owing to the reason "funds insufficient" vide bank return memos dated 11.02.2013. Thereafter, and since the statutory legal demand notice dated 06.03.2013 was returned undelivered, not to mention that the payment entailed in the impugned cheque was not forthcoming, the Complainant was constrained to institute the present complaint case.
3. The Complainant tendered his pre summoning evidence by way of affidavit (Ex.CW1); and relied upon documents, to wit - Retail Invoices [Mark CW1/1 (Colly)], Ledger Account (Mark CW1/2 Colly), Cheques (Ex.CW1/3 & CW1/4), Bank Returning Memos (Ex.CW1/5 and CW1/6), Legal Demand Notice (Ex.CW1/7), Postal/Delivery Receipt (Ex.CW1/8 & 9). Thereupon, the Accused was summoned vide order dated 20.10.2014.
4. Upon appearance, notice under [SECTION] of the [ACT] was framed against the Accused during the course of proceeding dated 30.06.2017 to which, the Accused, inter alia, pleaded not guilty and claimed that he had handed over the impugned cheques to one M/s. Misbah International, a proprietorship concern in accordance with trade and usage as security for completion of iron work at events organized by the aforesaid proprietorship concern. The Accused alleged misuse of the impugned cheques inasmuch as denied privity of contract with the Complainant, or his firm, and also contended that in spite of making entire payment against material as well as labour to M/s. Misbah International, the latter firm, has failed to return the impugned cheques which had now been misused by the Complainant, or its firm. In the same breath, Accused expressed his willingness to lead DE.
5. Thereafter, upon grant of the application under [SECTION] of the [ACT] (as amended to date) vide order dated 12.04.2019, the Accused was granted the opportunity to cross examine the Complainant as well as his witnesses, if any.
6. In order to bring home the offence complained of against the Accused, the Complainant examined only one witness, namely himself qua CW1. The Complainant (CW1) adopted his presummoning evidence and was crossexamined at length by the Ld. Counsel for the accused. The sum and substance discernible from the testimony of CW1 may be delineated as hereafter: During the course of his crossexamination, CW1 categorically deposed that he received an inquiry from the Accused regarding sale & purchase of goods in June 2011 which was responded to over the email. Meeting in this regard are claimed to have been held between the parties sometimes in June/July 2011. Pertinently, on a specific query put to the witness by the Ld. Counsel for the Accused regarding knowledge about affairs of M/s. Misbah International, the witness has volunteered that the Accused had informed him that M/s. Misbah International was their sister concern and upon specific instructions issued by the Accused, the bills/invoices (Mark CW1/1) were raised in the name of M/s. Misbah International. The witness has also gone ahead to explain that since the Accused firm did not have the necessary permits in UP, the invoices were generated in the name of M/s. Misbah International, albeit, no written instructions were received to that effect, or have been placed on record. The Complainant, during his deposition, has unequivocally denied having received the impugned cheques from M/s. Misbah International, and therefore, has denied misuse thereof either by him or by his firm. The witness has relied upon the invoices [Mark CW1/1(colly)] as well as running account [Mark CW 1/2(colly)] to deny the suggestion that there was no privity of contract between Bajaj Industries, on the one hand and 'Seven Wonders International', on the other. All in all, CW1 stood the test of cross examination as much as was necessitated to corroborate the contents of the instant complaint case.
7. Thereafter, the Accused was examined in the exercise of power under [SECTION] of the [ACT] on 30.07.2019, wherein, he reiterated that he had handed over the impugned cheques bearing nos. 857064 and 857065 to M/s. Misbah International whose proprietor is one [ENTITY] qua security. He further stated that he has been falsely implicated in the present complaint case inasmuch as though the impugned cheques bear his signatures, however, the contents thereof, to wit name of the payee, amount in words and figures etc. have not been filled in his hand. It is also profitable to note that since M/s. Misbah International failed to restitute the impugned cheques purportedly received by way of security upon completion of work and despite payment made thereunder, the Accused had lodged a complaint with P.S. Sadar Bazar, Meerut; notwithstanding this, Accused expressed his aversion to lead defence evidence and the matter was posted for hearing of final arguments.
8. Final arguments were advanced with equal vehemence on behalf of either party hereto. While it was contended on behalf of the Complainant that the Accused has failed to displace the statutory presumptions envisaged under [SECTION] read with [SECTION] of the [ACT] (as amended todate) and therefore, liable to be convicted for the commission of offence under [SECTION] of the [ACT] (as amended todate); the Accused, per contra, argued that the foregoing statutory presumptions have been cogently rebutted inasmuch as the Complainant has himself failed to establish the existence of any legally enforceable debt thereby, failed to satisfy the most essential requirements to constitute commission of an offence under [SECTION] of the [ACT]
9. In the backdrop of the foregoing factual score, this Court shall now proceed to examine the position of law governing the facts peculiar to the instant CC.
10. Law is rather trite on the subject that following ingredients must be satisfied in order to bring home the guilt of a person accused for the commission of an offence punishable under [SECTION] of the [ACT]. This position of law has been observed by the Hon'ble Supreme Court of India in the matter of [PRECEDENT]:
"9. It is manifest that to constitute an offence under [SECTION] of the Act, the following ingredients are required to be fulfilled:
(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account
(ii) The cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;
(iii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
(iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
(v) 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 the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(vi) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice"
The abovementioned proposition of law was reiterated by the Hon'ble Supreme Court in the matter of Aparna A. Shah v M/s Sheth Developers P. Ltd & Anr. (2013)8 SCC 71
11. Admittedly, apart from disputing the liability visvis the transactions entailed, the Accused has objected to the very issuance of the impugned cheques in favor of the Complainant, no other ingredient enumerated hereto fore has been contested by the Accused during the course of the trial of the instant CC. Legally speaking, and taking into account the statutory presumptions leaning in favor of the Complainant and against the Accused, the onus is on the latter to rebut them, not to mention discharge the burden of proving that he is not indebted to the former in the tune of the amount entailed in the impugned cheques, or even that the impugned cheques weren't issued for the purpose alleged by the Complainant in his complaint.
12. At this stage, it is deemed germane to reproduce the statutory presumptions applicable to the facts entailed in the instant CC, namely those envisaged under [SECTION] & [SECTION] Inchoate stamped instruments: Where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in (India), and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount; provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder.
([SECTION]) Presumptions as to negotiable instruments: Until the contrary is provided, the following presumptions shall be made:
(a) of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration.
(b) as to date - that every negotiable instrument bearing a date was made or drawn on such date;
(c) as to time of acceptance that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;
(d) as to time of transfer - that every transfer of a negotiable instrument was made before its maturity.
(e) as to order of indorsements - that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stamps - that a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course - that the holder of a negotiable instrument is a holder in due course;
Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.
([SECTION] Presumption in favour of holder - 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] for the discharge, in whole or in part, of any debt or other liability.
13. Applying the foregoing legal exposition to the facts of the instant case, this Court shall now proceed to examine the competing pleas raised by the parties hereto.
14. The first and foremost plea raised by the Accused in his defense is that the impugned cheque stood invalidated and rendered unenforceable in law only by dint of the fact that the particulars thereof, such as the name of the payee, amount in words and figures, etc., have not been filled either by him or in his hand; and the fact that he doesn't dispute his signature thereon would not compensate for the aforesaid deficiencies amounting to misuse. This Court is, however, of the considered opinion that the plea of the Accused alleging misuse of the impugned cheque on the strength of the assertion that even the rest of its contents are not filled in by him, or in his hand, is of no consequence by virtue of [SECTION] of the [ACT], more so given the fact that the Accused has not disputed his signatures on the impugned cheques.
15. The second plea raised by the Accused is that the impugned cheques were not issued by the Accused in favor of the Complainant and the same were handed over by him to one M/s. Misbah International in accordance with custom and usage of the trade engaged in. Once it is established that the cheques were drawn on the account maintained by the Accused, either in his personal capacity or in the name of the firm, and they bear his signatures, the burden is on the Accused to explain how the impugned cheques came into the possession of the Complainant. It has been asserted by the Accused that he had given the cheques to the M/s. Misbah International and the same have been misused by the Complainant, however, no evidence has been adduced to corroborate the said fact, let alone the fact that the Accused took no steps whatsoever either to summon the person concerned from M/s. Misbah International or to controvert that said M/s. Misbah International is not a sister concern of the aforesaid 'Seven Wonders International' or that the Accused is not responsible for the management of day to day affairs of the forgoing two firms. In the absence of any independent evidence to the contrary, notwithstanding the plea raised by the Accused to the effect that he did not know the Complainant, or entered into any alleged business transaction with him, or claims to have never purchased the goods from the Complainant are all deemed concocted, imaginary, and tenuous in the eyes of law, more so considering that there is nothing on record to even remotely suggest that the Accused ever demanded the return of the unused cheques from the said M/s. Misbah International any time in the past. Moreover, considering that the Accused neither confronted nor filed any complaint against its proprietor, hitherto only reinforces that his defence is no more than a cock and bull story, since far from being credible, and therefore, fails to inspire the confidence of this court.
16. In this context, it is profitable to refer to the following reproduced excerpts extracted from in the judgment rendered by the Hon'ble Supreme Court of India in the matter of '[PRECEDENT], which expounds the position of law on the subject and reads as:
" The accused in a trial under [SECTION] of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the nonexistence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the nonexistence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that 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 proof shifted to the complainant. To disprove the presumptions, 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 nonexistence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. "
17. Whereas, the third plea raised by the Accused is that the Invoices (Mark CW1/1 (Colly. and the Ledger Account Statement (Mark CW 1/2 (Colly. , purportedly raised by the Complainant nowhere indicate that they have been generated in the name of the firm of the Accused, i.e. in the name of 'Seven Wonders International', but instead, have been raised in the name of aforesaid M/s. Misbah International. On the strength of the foregoing submission, the Ld. Counsel for the Accused argued that there is no privity of contract between the parties and therefore, the occasion to discharge the liability entailed in the impugned cheques does not even arise. This plea raised on behalf of the Accused, though seems attractive in the first blush, however, does not stand the test of closer scrutiny inasmuch as it is rather axiomatic from the crossexamination of CW1 itself that the Invoices (Mark CW1/1 (Colly. were raised upon the advice of the Accused since the latter had represented that his firm, i.e. 'Seven Wonders International', did not have the requisite trade license to operate in Uttar Pradesh (U.P.). The preceding testimony of CW1 also finds credence from the fact that the bare perusal of the Invoices (Mark CW1/1 (Colly. evinces that they have been raised either in the name of 'Seven Wonders International', or '7 Wonder International of Misbah International', or '7 Wonders International of Misbah International' and therefore, it no longer lies in the mouth of the Accused to gainsay the privity of contract, much less when no cogent evidence to the contrary has been adduced by him despite opportunity afforded to him during the course of the trial.
18. Likewise, raising objection regarding inadmissibility of the documents, namely Invoices (Mark CW1/1 (Colly. and Ledger Account Statement (Mark CW1/2 (Colly. on the ground that neither their originals have been produced on record by the Complainant nor are they accompanied by certificate under [SECTION] of the [ACT] does not in any manner redound to the benefit of the Accused, for this Court is of the considered opinion that insofar as the plea of admissibility is concerned, the fact that the Accused has given no suggestion whatsoever to CW1 during the course of his entire cross examination so as to dispute and/or cast a tincture of doubt with respect to the total liability ascertainable as much from the Invoices (Mark CW1/1 (Colly. as from the Ledger Account Statement (Mark CW1/2 (Colly. read in conjunction with the fact that the Accused has himself harped upon the aforesaid documents, namely Invoices and Ledger Account Statement (in the crossexamination of CW1) in order to disprove the existence of relationship between his firm, on the one hand, and that of the Complainant, i.e. 'Bajaj Industries', on the other, the plea regarding the admissibility of these documents is deemed as much superfluous as otiose for the disposal of the instant CC inasmuch as the Accused, by dint of his conduct, has rather forfeited his right to contest their admissibility. Moreover, unlike trial of civil cases, prosecution of offences under [SECTION] of the [ACT] is predicated on settled precepts, including but not limited to those envisaged under [SECTION] thereof read in the adumbral of the ratio of the celebrated judgment passed by the Hon'ble High Court of Delhi in the case titled as '[PRECEDENT] wherein it has been unequivocally held that the onus is on the Accused to prove his defence so as to displace the statutory presumptions leaning against him. Having said that, the plea regarding admissibility is thence reduced to a mere technicality not even borne in mind by this Court while returning the ensuing findings. The objection stands decided accordingly.
19. The fourth plea raised by the Accused is that the instant CC is liable to be dismissed since the Complainant has failed to establish that he is the proprietor of the payee named in the impugned cheques, i.e. 'Bajaj Industries', inasmuch as admitted in his cross examination that he has not filed any document to corroborate the same, not to mention that no evidence has been adduced to establish whether 'Bajaj Industries' is a proprietorship firm or a partnership firm. It is noteworthy that upon conclusion of final arguments, the Complainant filed an application under [SECTION] of the [ACT] inter alia to place on record additional documents, including GST Registration Certificate and Trade Identification Number (TIN) issued by the Sales Tax Department, seemingly in order to countervail the dismissal of the instant CC on the ground of a mere technicality as much as to bring home that he is the proprietor of the payee, i.e. 'Bajaj Industries'. Considering that the matter was at an advanced stage, this Court deems it rather inexpedient to issue notice of the foregoing application to the Accused since, at this belated stage, it would only relegate the matter to an inferior stage with the effect of reopening the trial of the instant CC; copy thereof was supplied to the Accused for his record, though. Nonetheless, even if this Court does not take cognizance of these additional documents, inter alia, pertaining to the government departments in spite of the fact that they carry the presumption of correctness much like the one stipulated qua Form 32 generated from the website of Ministry of Corporate Affairs (MCA), this Court is still not inclined to dismiss the instant CC and return a finding of acquittal in favour of the Accused on a mere plea of technicality which even otherwise failed to hold water during trial. Having said that, it is profitable to note that the tenor of suggestions put forth by Ld. Counsel for the Accused to CW1, on the contrary, reinforces that the Complainant has all along acted for and on behalf of 'Bajaj Industries' and therefore, has the requisite locus to institute the instant CC, for else there is no plausible explanation as to why would the Ld. Counsel for the Accused suggest (while crossexamining CW1) that he (i.e. CW1) has already received the entire payment against the Invoices (Mark CW1/1 (Colly. from 'M/s. Misbah International', or that the latter handed over the impugned cheques to the former against the transactions manifested vide Invoices (Mark CW1/1 (Colly. or that CW1 indulged in cash sales. Moreover, since no evidence, not even namesake, has been adduced to the contrary by the Accused that the Complainant is not authorised to pursue the instant CC on behalf of 'Bajaj Industries', this Court has no reservation in presuming that the Complainant is indeed the sole proprietor of 'Bajaj Industries' and therefore, the judgements relied upon by the Ld. Counsel for the Accused are rendered clearly distinguishable on facts, more so in the wake of absence of a singular suggestion/insinuation in the cross examination of CW1 that he is not authorised to act for and on behalf of the payee 'Bajaj Industries'. In the absence of the evidence to the contrary, the cumulative effect of the preceding exposition read in juxtaposition to the omission on behalf of the Accused to give any suggestion regarding payments received from 'Seven Wonders International' vide entries dated 24.08.2011, 01.10.2011, 24.10.2011, 25.10.2011, etc. in the running account (Mark CW1/2 (Colly. maintained by 'Bajaj International' vis avis 'Seven Wonders International' in the entire crossexamination of CW1 rather bespeaks as much of the existence of business relationship between the parties hereto as that the Complainant acted for and on behalf of 'Bajaj Industries', not to mention that 'M/s. Misbah International' and 'Seven Wonders International' had a relationship ostensibly intertwined by a common thread, namely the Accused. The application under [SECTION] of the [ACT] nevertheless, stands dismissed as being unduly belated.
20. The fifth and last plea raised by the Accused is regarding the non receipt of the legal demand notice on the strength of which the Ld. Counsel of the Accused has argued that the cause of action to institute the instant CC did not arise in favour of the Complainant. Perusal of the record reveals that the legal demand notice dated 28.10.2010 in the instant CC, though, received back with the endorsement "no such person", however, it is nobody's case that the Accused tendered the amounts entailed in the impugned cheques presently upon entering appearance before this Court in response to the summons issued in the instant CC. At this stage, the observations passed by the Hon'ble Supreme Court of India in the celebrated case titled as '[PRECEDENT] spring to mind which read as under:
"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] 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] of the Act, cannot obviously contend that there was no proper service of notice as required under [SECTION], by ignoring statutory presumption to the contrary under [SECTION] of the [ACT] and [SECTION] of the [ACT]. In our view, any other interpretation of the proviso would defeat the very object of the legislation."
21. In this backdrop, the plea with respect to the nonreceipt of the legal demand notice is also rejected as being frivolous and legally inconsequential.
22. All in all, the collective import of the forgoing exposition lends an irresistible inference that the entire defence of the Accused is disingenuous and feigned, not to mention incredulous, more so in the wake of the fact that the Accused neither himself stepped into the witness box nor adduced any cogent evidence to prove his defence despite opporutunity. Therefore, this Court has no hesitation in holding that the Accused has miserably failed to disprove the existence of business transactions with the Complainant qua proprietor of 'Bajaj International', let alone been able to manifest that the impuged cheques were not issued by him in favour of the Complainant, or that they have been misused by the Complainant in collusion with 'M/s. Misbah International' on the touchstone of preponderance of probabilities by virtue of which the Complainant is entitled to relief prayed by him in the instant CC inasmuch has proved his version in the light of the dicta rendered by the Hon'ble Supreme Court of India in the matter of '[PRECEDENT] wherein, it has been held as infra:
" Therefore, if the accused is able to establish a probable defence which creates doubt about the existence 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 inconceivable that in some cases the accused may not need to adduce the evidence of his/her own. If however, the accused/drawer of a cheque in question neither raises a probable defence nor able to contest existence of a legally enforceable debt or liability, obviously statutory presumption under [SECTION] of the [ACT] regarding commission of the offence comes into play if the same is not rebutted with regard to the materials submitted by the complainant "
23. Upon due circumspection of the totality of foregoing facts and circumstances, including but not limited to scrutiny of material available on record in the adumbral of the legal position governing the field, this Court is of the considered opinion that the Accused has not been able to rebut as much the statutory presumptions leaning against him as the version put forth by the Complainant vide his complaint. Having said that, this Court hereby, convicts the Accused for the commission of offence under [SECTION] of the [ACT] complained of against him by the Complainant in the instant CC.
[ENTITY] Date: 2019.09.30 16:19:43 +0530 Announced in the open (AKRITI MAHENDRU) Court on 28.09.2019 [ACT], Delhi.