INTHECOURTOF[ENTITY], METROPOLITANMAGISTRATE(NIACT)(EAST),KARKARDOOMA COURTS: SHAHDARA,DELHI. JUDGMENTU/S355Cr.PC a. SerialNo.ofthecase :53011/16 b. Dateofthecommissionoftheoffence:18.12.2016 c. Name of the Complainant : M/s Kapin Trading Co. Pvt. Ltd. d. NameofAccusedpersonandhisparentage:Sh.[ENTITY] andresidence ProprietorofM/sARNSalesAgencies(LG) e. Offencecomplainedof :Dishonouringofchequefor thereason"Fundsinsufficient". f. PleaoftheAccusedandhisexamination(ifany):Notguilty becauseall outstandingliabilities alreadyrepaid. g. FinalOrder :Heldguilty. Convicted. h. Orderreservedon :07.04.2018. i.Orderpronouncedon : 28.04.2018. Briefreasonsfordecision: 1. Thenecessaryfactsfordisposalofpresentcasearethataccused personhadpurchasedgoodsfromthecomplainantfirmoncreditandwithaview PageNo.1of11 M/sKapinTradingCo.vs.[ENTITY] toclearhisdues/credit,accusedissuedsixchequesinquestionEx.CW1/Bto Ex.CW1/FforRs.10,000/eachandotherchequeEx.CW1/GforRs.9,000/.Itis also case of complainant that said cheques in question were returned as dishonoured vide bank return memo Ex.CW1/H to Ex.CW1/M with remarks "Insufficientfunds".Complainantalsoclaimedthatithadsentalegaldemand noticeEx.CW1/Ndt.30.11.2006totheaccusedandhehasfailedtomakeany payment despite service of said notice. Aggrieved by the said conduct of accused,thecomplainanthasfiledthepresentwrittencomplaintcaseu/s138r/w 142oftheNegotiableInstrumentsAct,1881(inshortNIAct)on11.01.2007. 2. Noticeofaccusationu/[SECTION].PCwasservedupontheaccusedon 25.03.2014andpleaofdefenceofaccusedwasalsorecordedonthesameday. AuthorizedrepresentativeofcomplainantSubhashChandSharma,BankOfficial [ENTITY] and [ENTITY] have been examined as complainant's [ENTITY]/[SECTION] [ACT] Statementofaccusedwasalsorecordedu/[SECTION].P.Con05.12.2016 after completion of complainant's evidence. Thereafter, Ld. Counsel for complainant and Ld. Counsel for accused had made detailed final oral submissionsonbehalfofrespectiveparties. 3. Accusedadmittedthathehadsignedhisownchequesinquestion andhandedovertothecomplainant. However,accusedpleadedthathehad givenchequesinquestiontothecomplainantassecuritybecauseheusedto purchaseelectronicgoodsfromthecomplainant.Hefurtherpleadedthathehad alreadyrepaidentiredueamounttothecomplainantandhedidnotreceiveany legaldemandnoticeissuedbythecomplainant.Accusedalsostatedthathehad PageNo.2of11 M/sKapinTradingCo.vs.[ENTITY] businessdealingwiththecomplainanttill2009andhehadalreadypaidalldue amount to the complainant. (Referred to plea of defence of accused dt. 25.03.2014andstatementofaccusedu/[SECTION][ACT]). 4. [ENTITY] (CW1) during his cross examination admittedthathewasnotawareabouttheaddressoftheaccusedfirmandwho hadenteredintothetermsandconditionsofbusinesswithaccusedonbehalfof the complainant. CW1 could not tell the details of first and last transactions betweentheparties. However,CW1negatedthesuggestionofdefenceasto complainant companyhad taken all chequesinquestion assecurity from the accusedatthetimeofstartingofbusiness. Itwassuggestedbythedefence during cross examination of CW1 that Sh. [ENTITY] was not competent to appoint him as authorized representative for the complainant company in present case. CW1 also stated that he could not say whether documentEx.CW1/D1,Ex.CW1/D2,Ex.CW1/D3&Ex.CW1/D4wereissuedby thecomplainantcompanywithoutgoingthroughtherecordofthecomplainant company.CW1furtherstatedthathecannotsaywhethercomplainantcompany hadsuppliedgoodstotheaccusedfrom06.04.2008to25.10.2008through11 bills.ItwassuggestedbythedefenceduringcrossexaminationofCW1thatin year20092010,theaccusedhadclearedallduestowardscomplainantcompany asfullandfinal.Finally,Ld.DefencecounselalsosuggestedthatCW1hadnot witnessed any transaction between the parties nor had he any knowledge regardingtransactioninquestion. Sh.AshuKumar(CW2)testifiedthatthechequesbearingnumber 257759to257764hadbeendishonouredonaccountofinsufficiencyoffunds. Sh.KannavSharma(CW3)alsodeposedthesamethingregardingthereasonof PageNo.3of11 M/sKapinTradingCo.vs.[ENTITY] dishonouringofsaidcheques. 5. Accused[ENTITY](DW1)statedthathehadhandedoverchequesin questiontoNiranjan,theownerofcomplainantcompanyassecuritychequesfor starting business with the complainant company. DW1 admitted that he had received electronic goods from the complainant company several times for severalyearsandheusedtopaytothecomplainantcompanyagainstthesupply of electronic goods as per current account. DW1 further stated that the complainant company had given final account statement Ex. CW1/D1 & Ex. CW1/D2andhehadpaidentireremainingoutstandingamountofRs.37,500/to the complainant against written acknowledgment Ex. CW1/D3. During cross examination DW1 stated that some time he used to pay to the complainant companyasperbillandsometimeasperhisconvenienceandhenevermade any advance payment towards supply of goods to the complainant company. DW1 tried to improve subsequently by stating that he had issued cheque or makecashpaymentevenbeforesupplyofgoodsaftermakingorder. Itwas suggestedbycounselforthecomplainantduringcrossexaminationofDW1that hehadnevermadeanyadvancepaymenttothecomplainantbeforesupplyof goods.DW1failedtogivedetailsofthechequeorcashamountallegedlygiven tothecomplainantasadvancepayment.DW1couldnottellthedateandmonth ofissuanceofchequesinquestionforthecomplainant. DW1firstlyadmitted fillingofamountinsomechequesinquestionandagaindeniedfillingofamount in any cheques in question during his cross examination. However, DW1 admittedthathehadfilledthenameofpayeeonsomechequesinquestion. DW1admittedthathehadpurchasedthegoodsfromthecomplainantagainst billsevenafterfilingthepresentcaseashewasnotawareoffilingofpresent PageNo.4of11 M/sKapinTradingCo.vs.[ENTITY] caseagainsthimandreceiptEx.CW1/D1wasregardingpaymentmadebyhim tothecomplainantafterfilingofpresentcomplaintcase. DW1admittedthatin saidreceiptsEx.CW1/D1itisnotmentionedthatpaymentisalsomadeagainst the cheques in question of present case. It was suggested during cross examinationofDW1bythecomplainantthatthesaidreceiptEx.CW1/D1ofRs. 11,000/ pertains to the goods purchased by him from the complainant after 15.01.2007.DW1couldnottellhowmuchamountwastobepaidbyhimtothe complainanton15.01.2007. DW1alsodeposedthathehadpurchasedgoods from the complainant against 12 to 13 bills after 15.01.2007 and minimum amountofasaidbillmustbethatofRs.6,000/orRs.7,000/andthemaximum amountmustbeofRs.32,000/.However,DW1admittedthathehadnotfiled any document with respect to any payment made by him to the complainant regardingsaid12to13bills.DW1admittedthatasperdocumentEx.CW1/D1 as on 28.03.2009, an amount of Rs. 37,000/ was due on him towards the complainant. DW1 also admitted that said documents Ex. CW1/D1 to Ex. CW1/D4donotbearseal/stampofcomplainantcompany.DW1alsoadmitted thathehadnotwrittenanylettertothecomplainantcompanyforreturninghis chequesinquestionevenaftercomingtoknowregardingdishonouringofthe sameandhedidnotfeelanyneedtogothroughthebankaccountstatementof hisaccount.DW1furtheradmittedthattheaddressappearingondocumentEx. CW1/N ishisaddress. It wassuggestedbythe counsel forthe complainant duringcrossexaminationofDW1thathereceivedlegaldemandnotice.During cross examination of DW1 complainant also suggested that he had given chequesinquestiontothecomplainantcompanyafterreceivinggoodsfromthe complainantcompanyformakingpayment. PageNo.5of11 M/sKapinTradingCo.vs.[ENTITY] 6. Ld. Defence counsel contended that no cause of action arose in presentcasebecausesendingofmandatorylegaldemandnoticeandserviceof the same upon the accused have not been proved by the complainant vide judgmentofDelhiHighCourtpassedinHDFCBankLtd.vs.[ENTITY] 2010(1)DCR658.Ld.Defencecounselfurthercontendedthatnodocumentary evidencehasbeenfiledbythecomplainanttoshowthatInderChandSharma was a director and he has been authorized by the complainant company to appointanyGPAholderinpresentcaselikeCW1. Ld.Defencecounselalso contendedthatcomplainantfailedtoprovethattherewasexistingliabilityquathe dishonouredchequesinquestionandaccusedhassuccessfullyrebuttedlegal presumptionbyleadingreliabledefenceevidence. On other hand, Ld. Counsel for the complainant contended that accusedhasadmittedissuanceofchequesinquestiontothecomplainantand various business transactions & also no advance payment before supply of goods by the complainant. Accordingly, Ld. Counsel for the complainant submittedthatpresumptionofexistenceofconsiderationu/[SECTION] arise against the accused and accused has failed to prove that he had no outstanding liability towards the complainant at the time of presentation of cheques in question with the bank. Ld. Counsel for the complainant also submitted that complainant had sent legal demand notice Ex. CW1/N to the accusedathisadmittedlycorrectaddressthroughauthorizedcourierandUPC andforthatherelieduponthejudgmentofHon'bleSupremeCourtinthecaseof [PRECEDENT]. [PRECEDENT], theHon'bleApexCourtoftheland,whiledealingwithpresumptionsu/s139ofNI PageNo.6of11 M/sKapinTradingCo.vs.[ENTITY] Act,observedasunder: "Therehasbeensomecontroversybeforeuswithrespectto[SECTION]ofNegotiableInstrumentsActastowhethercomplainanthasto proveexistenceofalegallyenforceabledebtbeforethepresumption underSection139oftheNegotiableInstrumentsActstartsoperating andburdenshiftstotheaccused.Section139readsasfollows: "139.PresumptioninfavouroftheholderItshallbepresumed,unless thecontraryisproved,thattheholderofachequereceivedthecheque ofthenaturereferredtoinSection138forthedischarge,inwholeor inpart,ofanydebtorotherliability." 9.ThisCourthasheldinitsthreejudgebenchjudgmentinRangappa v.SriMohan(2010)11SCC441: "The presumption mandated by [SECTION] includes a presumption that thereexistsalegallyenforceabledebtorliability.Thisisofcourse inthe natureofarebuttablepresumptionanditisopentotheaccusedtoraisea defencewhereintheexistenceofalegallyenforceabledebtorliabilitycan be contested. However, there can be no doubt that there is an initial presumptionwhichfavourstherespondentcomplainant."
10.Therefore,in thepresent casesincethe cheque as well as the signature has been accepted by the accused respondent, the presumptionunderSection139wouldoperate.Thus,theburdenwas ontheaccusedtodisprovethechequeortheexistenceofanylegally recoverabledebtorliability.
8. Havingnoticedtherelevanttestimonyofallmaterialwitnessesand thematerialontherecordofthecaseandalsoconsideringtherivalsubmissions ofboththesides,thecourthastoevaluatethesameinproperprospective.Itis admittedfactthataccusedhadissuedhisownchequesinquestionandalsofill nameofpayeeonchequesEx.CW1/B,Ex.CW1/C,Ex.CW1/EandEx.CW1/G for supply of goods. It is also admitted fact that accused had purchased electronicgoodsfromthecomplainantcompanyseveraltimesforseveralyears.
PageNo.7of11 M/sKapinTradingCo.vs.[ENTITY] In these circumstances, presumption of legal enforceable debt / liability supportingdishonouredchequesinquestionwouldoperateagainsttheaccused [ENTITY].Now,itisuptoaccusedtorebutthesaidlegal presumptionbyleadingsufficientcogentevidenceorbyevenexposingmaterial contradictioninthecaseofthecomplainant.
9. Accused had filed balance confirmation receipt Ex. CW1/D1 dt. 01.04.2008,accountstatementEx.CW1/D2from01.04.2008to31.03.2009and cashreceiptEx.CW1/D3forvariousdatesofyear2009andalsoledgeraccount Ex.CW1/D4witheffectfrom01.04.2009to31.12.2009.However,theaforesaid defenceevidencesdonotreflectanythingabouttheoutstandingliabilityclaimed bythecomplainantagainstaccusedforduefortheyear2006asnodocumentof theaccusedshowsthattheclaimedliabilityofthecomplainantagainstaccused hadeitherbeenclearedoradjustedwithfuturetransactionorcarriedonfornext year. It is also an admitted fact on part of accused that accused had been dealing with complainant till 2009. Accused could not demonstrate that the subsequentpaymentafter15.11.07wasalsomadeagainsttheclaimedliabilityof thecomplainantinthiscase.Itisalsonoteworthythataccusedadmittedthathe hadpaidRs.37,500/asperreceiptEx.CW1/D3intheyear2009,although,he had purchased goods from the complainant against 1213 bills ranging from Rs.6,000/toRs.32,000/.ChequesinquestionhaddishonouredforInsufficiency of funds in the account of accused and accused had not written to the complainantcompanyforreturnofchequesorthebankforstoppingpayment.It isalsonoteworthythatevensecuritychequewouldbecomeenforceableafterthe duebecomepayableonpartofthedrawertothedrawee.
[CASE NUMBER] M/sKapinTradingCo.vs.[ENTITY]
10. Intheinstantcase,Ld.DefenceCounselhasalsoraisedthedefence pleaastoInderChandSharma,allegeddirectorofcomplainantcompanywas notauthorizedtoappointanyGPAholder/AuthorizedRepresentativeinpresent case. However, complainant had filed extract of the board meetings of complainantcompanydt.05.10.2015andGeneralPowerofAttorneyEx.CW1/2, executedbySh.[ENTITY],Directorofcomplainantcompanyinfavourof [ENTITY] (CW1). It is also settled position of law that the complainantcompanymayrectifyanydefectinauthorizationofanypersonfor pursuinganycaseonitsbehalfatanystage,ifcomplaintisfiledbythepayeei.e. companyu/s142NIActvideM.M.T.CLtdvsM/sMedicalChemicals&Pharma (P)Ltd.&anr.AllMR(crl.)230(SC).
11. Sofarasseconddefenceplearegardingnonsending/nonservice oflegaldemandnoticeisconcerneditisnoticeablethatthecomplainanthadfiled legal demand notice Ex. CW1/N dt. 30.11.2016 being sent by Sh. [ENTITY].CW1/O andUPCEx.CW1/Qontherecordofthecase.Itisalsonoticeablethataccused himselfadmittedthattheaddressappearingonlegaldemandnoticeEx.CW1/N washiscorrectaddress.ReferencemaybemadetojudgmentofSupremeCourt of India made in [PRECEDENT] and relevantparaofthesameisreproducedasunder:
17."Itisalsotobeborneinmindthattherequirementof giving of notice is a clear departure from the rule of CriminalLaw,wherethereisnostipulationofgivingofa noticebeforefilingacomplaint.Anydrawerwhoclaims thathedidnotreceivethenoticesentbypost,can, PageNo.9of11 M/sKapinTradingCo.vs.[ENTITY] within15daysofreceiptofsummonsfromthecourt in respect of the complaint u/[SECTION] of [ACT], make payment of the cheque amount and submit to the court that he had made payment within 15 days of receiptofsummons,therefore,complaintisliableto berejected.Anypersonwhodoesnotpaywithin15days ofreceiptofthesummonsfromthecourtalongwiththe copyofthecomplaintunderSection138oftheAct,cannot obviously contend that there was no proper service of noticeasrequiredunderSection138,byignoringstatutory presumptiontothecontraryunderSection27oftheG.C. ActandSection114oftheEvidenceAct.Inourview,any other interpretationoftheprovisowoulddefeat thevery objectofthelegislation.AsobservedinBhaskaranscase (supra),ifthegivingofnoticeinthecontextofClause(b) of the proviso was the same as the receipt of notice a tricksterchequedrawerwouldgetthepremiumofavoid receiving the notice by adopting different strategies and escape from legal consequences of [SECTION] of the Act."
18. "Intheinstantcase,theavermentmadeinthe complaintinthisregardis:Thoughthecomplainantissued lawyers notice intimating the dishonour of cheque and demanded payment on 04.08.2001, the same was returnedon10.08.2001sayingthattheaccusedwasoutof station.True,therewasnoavermenttotheeffectthatthe noticewassentatthecorrectaddressofthedrawerofthe chequebyregisteredpostacknowledgementdue.Butthe PageNo.10of11 M/sKapinTradingCo.vs.[ENTITY] returned envelope was annexed to the complaint and it thus,formedapartofthecomplaintwhichshowedthatthe noticewassentbyregisteredpostacknowledgementdue to the correct address and was returned with an endorsementthattheaddresseewasabroad. Weareof theviewthatonfactsinhandtherequirementsof[SECTION]oftheActhadbeensufficientlycompliedwithandthe decisionoftheHighCourtdoesnotcallforinterference.".
InviewofaforesaidobservationofHon'bleSupremeCourtofIndia nonservice of legal demand notice is also of no great legal importance for accused.
12. Having gone through the testimony of witnesses and the material availableontherecordandalsoconsideringtherivalsubmissionsofbothside, this court is of considered view that accused has failed to rebut the legal presumptionoflegallyenforceabledebtorliabilityinfavourofholderofcheque i.e.complainantofthecaseu/s139ofNIAct.Accordingly,accusedisconvicted fortheoffenceu/s138oftheNIActinthepresentcomplaintcase.
[ENTITY] signed by [ENTITY] Location: Karkardooma Courts, East District, Delhi RAMPURI Date: 2018.04.28 16:47:44 +0530 Announcedintheopencourt ([ENTITY])
on28thDayofApril,2018. MM(NIAct)/East/KKD/Delhi Thisjudgmentcontains11signedpages.
PageNo.11of11 M/sKapinTradingCo.vs.[ENTITY]