IN THE COURT OF SH. PRANJAL ANEJA METROPOLITAN MAGISTRATE-01, SHAHDRA DISTRICT, KARKARDOOMA COURTS, DELHI CC No. 549/MV/17 Comp. ID No. 884/16 IN THE MATTER OF: - M/s [ENTITY] Through its Attorney [ENTITY], 1/9937, Gali no. 3, West Gorakh Park, Shahdara, Delhi. Complainant VS. M/s [ENTITY] Through its Proprietor [ENTITY], Plot no. 9, Main Bazar, Adarsh Mohalla, Patparganj, Mayur Vihar, Delhi. Accused Date of institution : 21.10.2013 Date on which order reserved : 19.07.2018 Date of final order : 30.11.2018 Final Order : Convicted [CASE NUMBER] Pageno.1of17 CCno.549/MrV/17 03.12.2018 COMPLAINT UNDER [SECTION] OF [ACT]:
1. This is a complaint U/[SECTION] of [ACT], filed by the complainant M/s [ENTITY] against the accused [ENTITY] proprietor of M/s SMC World Office in respect of alleged dishonour of cheque bearing no. 001316 dt. 20.08.2013 of Rs. 3,10,000/- drawn on Bank of India, Mayur Vihar Branch, Delhi which was allegedly issued by accused to complainant towards discharge of legal liability.
2. It is the case of complainant that complainant is running a business of plastic, crockery wares in the name and style of M/s National Crockery House and authorized Sh. [ENTITY] vide special attorney executed on 14.10.2013 to file the present complainant and to act in respect of present complaint on behalf of complainant. It is stated that accused has placed four purchase order for purchasing various goods on the office of complainant at Shahdara on 08.08.2013, 16.08.2013, 17.08.2013 and 18.08.2013 and accordingly complainant sent the goods on 19.08.2013 for sum of Rs. 4,59,732/- to the accused and accused to discharge his part liability issued a cheque bearing no. 0091316 for a sum of Rs. 3,10,000/- drawn at Bank of India, 13/14 Shree Balaji Shopping Center, Mayur Vihar Delhi-91 dated 20.08.2013 with assurance that said cheque is good for payment and would be honoured on [CASE NUMBER] Pageno.2of17 CCno.549/MrV/17 03.12.2018 representation and also assured the complainant that remaining outstanding of Rs. 1,49,732/- would paid within one month. Thereafter, complainant had presented the above said cheque with its banker for encashment but same was returned unpaid vide return memo dt. 17.09.2013 with remarks "Funds Insufficient". Thereafter complainant approached the accused but he did not give satisfactory reply to complainant no his paid the outstanding amount of Rs. 1,49,732/- after passing of one month which shows the malafide intention of accused. Thereafter, complainant had sent a legal notice of demand dt. 28.09.2013 by registered A.D and speed post which was duly served upon the accused but despite that accused has not discharged his liability against the cheque in question. Thereafter present complaint has been filed.
3. After recording the pre-summoning evidence of complainant, cognizance of offence was taken against accused in respect of offence U/[SECTION] of [ACT] and summons were issued against the accused for offence U/[SECTION] of [ACT].
4. After supply of complaint along with documents to the accused, notice of accusation U/[SECTION] [ACT] was framed against the accused vide order dt. 21.02.2014 to which the accused pleaded not guilty and claimed trial.
5. Thereafter matter proceeded to the stage of [CASE NUMBER] 03.12.2018 complainant's evidence. Complainant has got examined himself as CW-1 and filed his examination-in-chief by way of affidavit Ex. CW1/1 and relied upon documents i.e. SPA as Ex. CW1/A, Cheque bearing no. 0091316 dt. 20.08.2013 as Ex. CW1/B, copy of returning memo as Ex CW1/C, legal notice as Ex. CW1/D, copy of registry slip as Ex. CW1/E, Track report as Ex. CW1/F, bills as Ex. CW1/G to CW1/I, returning memo as Ex. CW1/C-A, documents issued by bank regarding proprietorship of the complainant firm as Ex. CW1/J, letter from Sales tax authority dt. 17.05.2006 as Ex. CW1/K, letter from Punjab & Sind Bank dt. 23.07.2014 as Ex. CW1/L. Complainant has also examined officer of Bank of India Mr. [ENTITY] as CW-2, who brought the statement of account in the name of M/s SMC World from 01.07.2013 to 01.10.2013 as Ex. CW2/1(colly.) and marked relevant entry regarding dishonour of cheque at point 'A'. CW-1 & CW-2 were also cross-examined by the ld. Defence Counsel. Thereafter, vide order dt. 05.02.2015, CE was closed. Statement of accused U/[SECTION] [ACT] was recorded. In his statement U/[SECTION] [ACT], accused set up defence that he had ordered for the above said purchase but complainant had not supplied the goods i.e. thermoware goods and he issued the cheque in question to the complainant in advance as security and complainant has filed the present complaint unnecessarily to harass him. Accused opted to lead DE and thereafter, without leading evidence vide his statement dated 21.03.2017, DE was closed by accused.
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6. I have heard the final arguments on behalf of the parties and perused the record.
7. Culpability for the offence of dishonor of cheque under [SECTION] of the [ACT] requires that the accused should have drawn the cheque on a bank account maintained by him and issued the same to the complainant in discharge of a debt or other legal liability. It further enjoins the payee to send a notice to the drawer demanding payment of the cheque amount within 30 days of the dishonor of the cheque. It is only upon non payment of the cheque amount within 15 days of the receipt of demand notice that the complainant is at liberty to file a criminal complaint against the drawer for dishonor of the cheque.
8. In the present case, all the statutory time limits stand complied with. As the accused has denied the receipt of legal demand notice, I shall deal with that aspect first.
9. The successive interpretation of [SECTION] of [ACT] read with [SECTION] of the [ACT] has obviated the need of the complainant to adduce positive evidence regarding receipt of demand notice by the accused. It is now settled law that if the demand notice is properly and correctly addressed, there is presumption of service thereof. It is then for the accused to prove that he did not receive the demand notice and this [CASE NUMBER] Pageno.5of17 CCno.549/MrV/17 03.12.2018 cannot be accomplished by a mere denial. For this proposition, reliance is placed upon the pronouncements of the Hon'ble Supreme Court in [PRECEDENT] reiterated in [PRECEDENT]. The reason for casting this evidentiary burden upon the complainant is to ensure that unscrupulous drawers are not given a wide berth to escape the rigor of law merely by manipulating the postal report at their end.
10. Accused has denied the service of legal demand notice U/[SECTION] [ACT] upon him in his statement recorded U/[SECTION] [ACT]
11. It is observed that the legal demand notice Ex. CW1/D has been sent to the accused at address i.e. M/s SMC World, Plot no. 9, Main Bazar, Adarsh Mohalla, Patparganj, Mayur Vihar, Delhi Through Its proprietor Sh. [ENTITY]. The complainant has adduced the said legal notice as Ex CW1/D, its registry receipt as Ex. CW1/E & track report as Ex. CW1/F. Nowhere in the cross- examination of complainant/CW-1, it is suggested that the address mentioned on these documents is incorrect or does not belong to the accused. Rather, no suggestion or question as to the legal notice has been put/asked to the complainant/CW-1 in cross-examination. Further, it is noted that on the bail bond furnished by the accused during the trial of the case before the court, he mentioned his [CASE NUMBER] 03.12.2018 address as Plot no. 9, Main Bazar, Adarsh Mohalla, Patparganj, Mayur Vihar, Delhi. [SECTION] of [ACT], emphasizes the requirement that notice must be "properly" addressed. The word "properly" obviously envisages notice being sent to correct present address of noticee. The address over the legal notice and postal receipts have not been challenged and therefore the same can well be said to be properly addressed. It is therefore evident that the demand notice has been sent by the complainant to the accused at correct address and in view of the legal position as stated above, the burden was heavily upon the accused to prove that he actually did not receive the legal demand notice. But accused did not discharge this burden. It is thus established that legal demand notice Ex. CW1/D was duly served upon the accused.
12. Having therefore established that the technical parameters of the offence constituted by [SECTION] of the [ACT] are met by the present complaint, it is opportune to now proceed to the decisive issue i.e. whether the cheque in question was issued by the accused to the complainant in discharge of any legal liability owed to him.
13. Before proceeding further, it would be germane to refer to the well settled propositions of law and jurisprudence on issue of dishonour of cheques. The [ACT] raises two rebuttable presumptions which are as follows:
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1. Presumption U/[SECTION] According to [SECTION] of [ACT], it shall be presumed that every negotiable instrument was made or drawn for consideration. By virtue of this clause, the Court is obliged to presume that the instrument was made for valid consideration, until the contrary is proved.
2. Presumption U/[SECTION] : According to [SECTION] of [ACT], it shall be presumed, unless the contrary is proved that the holder of a cheque received the cheque for discharge in whole or in part, of any debt or other liability. Under [SECTION] [ACT] there is a legal presumption that the cheque was issued for discharging an antecedent liability and that presumption can be rebutted only by the drawer of the cheque and once complainant has discharged this initial burden only then onus shifts to accused to discharge the burden U/[SECTION] and [SECTION] of [ACT] by [CASE NUMBER] Pageno.8of17 CCno.549/MrV/17 03.12.2018 standard of proof of "preponderance of probability".
14. It was observed by Hon'ble Supreme Court of India in case of [PRECEDENT], that essential ingredients of [SECTION] of [ACT] are:-
1. that there is a legally enforceable debt;
2. that cheque was drawn from account of bank for discharge in whole or in part of any debt or other liability which pre-supposes a legally enforceable debt and;
3. that the cheque so issued had been returned due to insufficiency of funds.
15. It has been clearly held by Hon'ble Supreme Court of India in [PRECEDENT] that presumption of [SECTION] of [ACT] includes presumption regarding existence of legally enforceable debt or liability and presumption contemplated U/[SECTION] of [ACT] is rebuttable presumption and it is enough for the accused to rebut the presumption by preponderance of probabilities.
16. Having dwelt upon the law, I shall now deal with the merits of the present case as regards the issue that whether the [CASE NUMBER] Pageno.9of17 CCno.549/MrV/17 03.12.2018 cheques in question was issued by the accused to the complainant in discharge of any legal liability owed to him.
17. In order to analyze the testimony of the parties and the witnesses, it would be pertinent to summarize the defence taken by the accused. The accused in his statement u/[SECTION] [ACT] has taken a defence that he had ordered for the above said purchase but complainant had not supplied the goods i.e. thermoware goods and he issued the cheque in question to the complainant in advance as security and complainant has filed the present complaint unnecessarily to harass him.
18. On the other hand, the complainant's case is that accused had placed four purchase orders for purchasing various goods total amounting to Rs. 4,59,732/- and in discharge of part liability of Rs. 3,10,000/- he had issued the cheque in question in favour of complainant.
19. Ld. Counsel for complainant has relied upon the authorities [PRECEDENT] decided by Hon'ble Supreme Court on 02.07.2018) which discussed about the presumption of [SECTION] of [ACT], [PRECEDENT]. [PRECEDENT] decided by Hon'ble Supreme Court on 12.08.2002 discussing about the offence U/[SECTION] of [ACT], [CASE NUMBER] Pageno.10of17 CCno.549/MrV/17 03.12.2018 [PRECEDENT] Indian Renewable Energy Development Agency Ltd. [PRECEDENT] decided by Hon'ble Supreme Court on 19.09.2016 discussing the dishonour of a posted dated cheque given for the payment of loan installment and also described as security in the loan agreement.
20. In background of aforesaid legal propositions and the factual matrix of the case, the contentions and the challenge of the accused have to be examined as to whether accused has placed enough and cogent material before this Court to rebut said statutory presumption which arose in favour of complainant. It is settled law that in trial U/[SECTION] of [ACT], accused can either show that consideration and debt did not exist or consideration and debt is so probable that prudent man ought to suppose that no consideration or debt existed.
21. The accused has firstly challenged the authority of the attorney to file and prosecute the present case apart from the challenge on merits.
22. In such challenge the attorney, appearing as CW-1, has been suggested that no document has been filed to show that he is employee with the complainant and he has been authorized only to pursue the present complaint. In answer to such suggestion and question the attorney/CW-1 deposed that his brother is the sole [CASE NUMBER] Pageno.11of17 CCno.549/MrV/17 03.12.2018 proprietor of the complainant i.e. National Crockery House. CW-1 also deposed that he has not signed the present complaint in his personal capacity. CW-1 further deposed that he personally received the purchase order from the accused who verbally placed the same upon which the goods were supplied to the accused on 19.08.2013 and delivered at 09.30 p.m. by a four wheeler tempo make TATA 407. Regarding transportation, CW-1 deposed that no receiving/acknowledgement of the transporter/driver was taken on the bills Ex. CW1/G, CW1/H and CW1/I, however the vehicle was arranged by the accused for taking delivery of the goods and that he himself had gone to the accused on next day and had taken from him the cheque in question alongwith yellow copies of the bills. There were questions/suggestions as to the above facts repeatedly put to the witness CW-1 in cross-examination but he maintained his stand in his answers. CW-1 also filed and relied upon the Special Power of Attorney Ex. CW1/A as per which the proprietor appointed the attorney to file and prosecute the present case and do all necessary acts consistent thereto. This document also states that attorney is aware of the entire facts of the case. Thus it has been shown that this document clearly gives the authority to the attorney to file and prosecute the present case and to do all other incidental acts since he is stated to be aware of the entire facts. The reading of the testimony corroborates this fact as CW-1 maintained his version that he only verbally received the purchase order from the accused and send the goods to him via a vehicle make TATA 407. Though there is [CASE NUMBER] Pageno.12of17 CCno.549/MrV/17 03.12.2018 no receiving of the transporter/driver on the bills yet merely this fact in itself does not discredits the testimony of attorney CW-1 that he is personally aware of the transaction in question which has been carried out by him only. CW-1 is the person who received the order, sent the goods, collected the cheque in question and the bills. The attorney CW-1, in order to show his authority, filed on record letter Ex. CW1/K from Sales Tax Department VAT Office depicting CW-1 as the authorized signatory of M/s National Crockery House. CW-1 also filed another document Ex. CW1/L from the Punjab & Sind bank certifiying that he is the authorized signatory in the bank account of M/s National Crockery House. CW-1 has been consistent in his deposition during his entire cross-examination.
23. On the above challenged aspect of attorney, Ld. Counsel for complainant relied upon the authority of [PRECEDENT], in which Hon'ble Court discussed the authority of [PRECEDENT] to record that in cases of [SECTION] [ACT], a power of attorney holder of the complainant, who does not have personal knowledge, cannot be examined but where the attorney holder is incharge of business of complainant and attorney is alone personally aware of the transaction and the complaint is signed by attorney holder on behalf of the complainant payee, there is no reason why the attorney holder cannot be examined as the complainant.
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24. The above authority as applied to the facts of the present case makes the point clear that attorney CW-1 is authorized and a competent person to depose in the present case on behalf of the complainant and therefore the challenge of the accused on this point fails. The reliance of the accused upon the authority of [PRECEDENT] cannot therefore help him.
25. As regards the merits of the case, the ld. Counsel for the accused argued that the legal notice Ex. CW1/D does not pertain to the cheque in question as the cheque number is wrongly mentioned as "0091316" while the cheque in question Ex. CW1/B is numbered as "001316" and the complaint and affidavit in evidence also mentions the cheque number as "0091316". Upon this aspect ld. Counsel for complainant contended that the accused never mentioned the said aspect in his defence and no question has been put to the attorney CW-1 on this point. He further contended that the application of the accused filed U/[SECTION] [ACT] also does not challenge the said difference in the cheque number which goes to show that there is no confusion to the accused as regards the cheque number.
26. In view of the above position noted rival contentions, I have perused the record of the case which clearly supports the [CASE NUMBER] 03.12.2018 contention of the ld. Counsel for complainant and the mentioning of cheque no. "0091316" instead of "001316" merely appears to be a typographical error occurred inadvertently and the accused does not at all appears to have been misled. Complainant would not gain anything by wrongly mentioning the cheque number. Complainant's reliance upon the authority of [PRECEDENT] also supports his case. In this authority Hon'ble High Court of Delhi observed that mere non-mentioning of cheque number or giving incorrect cheque number would not be fatal if all other necessary particulars are correctly mentioned.
27. Going further towards the merits of the case, it is noted that in his defence taken at the time of framing the notice accused stated that he had given the cheque in question as advance payment to the complainant, however his contract was cancelled upon which he immediately apprised the complainant about the same that he would not require the goods, hence they did not supply the goods to him and despite that they misused his advanced security cheque. It is observed that in cross-examination questions and suggestions were put to CW-1 that goods were not supplied on time and therefore the cheque was got dishonoured. These questions/suggestions are not in consonance with the defence taken at the time of framing of notice U/[SECTION] [ACT] As per said defence contract for supplying goods was cancelled with the complainant and hence goods were [CASE NUMBER] Pageno.15of17 CCno.549/MrV/17 03.12.2018 not supplied but the defence put in cross-examination of CW-1 is that the goods were not supplied in time. No suggestion as to cancellation of contract has been put to CW-1. Those questions/suggestions put at the time of cross-examination reflects that there was delay on the part of complainant in supplying the goods while no such allegation is made in the defence taken at the time of framing notice U/[SECTION] [ACT]
28. Further observed that only a simple suggestion has been put to CW-1 that bills are forged and fabricated but the suggestion has been clearly denied. Bare perusal of the bills Ex. CW1/G, CW1/H and CW1/I reflects that the signature on them matches with the signature on the cheque in question. Accused has failed to offer any explanation how these bills bear his stamp. Accused alleges these bills to be forged and fabricated. It is noted that these bills bear his stamp. Ordinarily a prudent person in such circumstance should file a complaint to the police or in the court as to the misuse/forgery of his stamp and signature. But accused has not taken any legal recourse against such forgery/misuse.
29. In view of the aforesaid discussion, I am of the considered opinion that the accused has failed to establish his defence and to rebut the presumptions of [SECTION] & [SECTION] of [ACT]. All the ingredients of [SECTION] of [ACT] have been duly proved on record.
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Accordingly, accused [ENTITY] Proprietor of M/s SMC World stands convicted for the offence u/[SECTION] [ACT].
30. Convict be heard on point of sentence separately.
PRANJAL ANEJA Directly Dictated on the ANEJA Date: 2018.12.06 Computer System and 16:40:30 +0530 Announced in the open (PRANJAL ANEJA) Court on 03.12.2018 Metropolitan Magistrate-01 Shahdra District, Karkardooma Courts, Delhi. [CASE NUMBER] Pageno.17of17 CCno.549/MrV/17 03.12.2018