IN THE COURT OF MS [ENTITY] [CASE NUMBER] [ENTITY] Prop. of M/s. Bricks Ice Cream WZ-297-C, Madipur Village, New Delhi-63. Complainant Versus [ENTITY] Prop. of M/s. Nirmal Foods, R-8 & R-9, Krishna Market, U-Block Market, Opposite U-Block Pink Town House, DLF Phase-III, Gurgaon-122001. Accused Date of Institution : 08.12.2010 Offence complained of : U/[SECTION] [ACT]. Date on which the order was reserved : 08.01.2016 Date of Decision : 22.01.2016 Final Order : Convicted / Held guilty. [CASE NUMBER] [ENTITY] vs [ENTITY] 1/ 13 Judgment 1.
The complainant herein is aggrieved by the dishonor of cheque bearing no. 826131 dated 30.9.2010 in the sum of 3 lacs, drawn on ICICI Bank (hereinafter referred to as the cheque in question/impugned cheque) following which he took recourse to the filing of the present complaint under [SECTION] of the [ACT].
2. The admitted factual scenario is that the complainant and the accused entered into an agreement dated 7.3.2010 whereby the complainant was to supply ice cream to the accused. The complainant has placed photocopy of the said agreement on record as Ex. CW1/1. In pursuance of the said agreement, the complainant deposited a sum of 3 lacs with the accused. The complainant has alleged that this amount was to be refunded on 4.5.2010. Accordingly on 4.5.2010, the accused issued the cheque in question dated 30.9.2010 to the complainant. However upon presentation, the cheque in question was dishonored on account of insufficient funds. Consequently, the complainant took recourse to the procedure envisaged under [SECTION] of the [ACT] (hereinafter referred to as the [ACT]) and sent a legal notice to the accused dated 3.10.2006 on 4.10.2006 demanding payment of the cheque amount. However as the cheque amount was not paid by the accused within the prescribed period of 15 days, the present complaint was filed.
3. The complainant examined himself alone in support of his case by means of affidavit in evidence Ex.CW1 wherein he reiterated the averments of his complaint and relied upon the following documents [CASE NUMBER] [ENTITY] vs [ENTITY] 2/ 13 namely copy of agreement dated 7.3.2010 Ex. CW1/1, cheque in question and returning memo Ex. CW1/2 and Ex. CW1/3, demand notice and postal receipts and returned envelopes Ex. CW1/4 to 7.
4. Per contra, the accused has pleaded defence that while the cheque has been issued to the complainant, it had been issued as security for the repayment of the deposit of Rs.3 Lacs made by the complainant. However, the complainant never supplied any Ice-cream to the accused in pursuance of the agreement Ex.CW1/1 and hence the deposit of Rs.3 Lacs stood forfeited and consequently the accused did not owe any liability to the complainant towards the cheque in question.
5. 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.
6. In the present case, all the statutory time limits stand complied with. The accused has however denied that the cheque in question was issued for the discharge of any legally enforceable liability. The accused further denied the receipt of legal demand notice. In addition, during his statement under [SECTION] [ACT] and his examination in [CASE NUMBER] [ENTITY] vs [ENTITY] 3/ 13 chief, the accused also disputed the dishonor of the cheque in question.
7. I shall first deal with the issue of receipt of legal demand notice by the accused. While in his examination under [SECTION] [ACT], there is a simple denial by the accused, in his examination in chief, the accused has stated that the address mentioned on the [ACT] does not reflect the correct address and does not mention the block i.e. U-25.
8. The defence of non receipt of legal demand notice has been reduced to a vanishing point by a conspectus of judgments of the Delhi High Court as well as Supreme Court. 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 cannot be accomplished by a mere denial. For this proposition, among many others, reliance is placed upon the pronouncements of the 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.
9. The demand notice has been sent to the accused at R-8 R-9, Krishna Market, U block Market Opposite U block Pink Town House [CASE NUMBER] [ENTITY] vs [ENTITY] 4/ 13 DLF Phase III Gurgaon. Albeit the accused has stated in his chief examination, that the said address is incomplete, he has furnished the same address at the time of framing of notice as well as during his examination under [SECTION] [ACT]. Further Ex. CW1/7 reflects that the demand notice could not be served upon the accused as the accused had 'refused' service thereof as per the postal endorsement. Further, the same address has been furnished by the accused in his bail bonds. I am therefore unable to conclude that the address on which demand notice has been sent by the complainant is incorrect or incomplete. Having said that, the burden was heavily upon the accused to prove that he actually did not or could not have received the legal demand notice. The accused has not discharged the evidentiary burden by adducing anything to this effect. Therefore the denial of the accused with respect to the demand notice does not pass muster.
10. In so far as the factum of dishonor of the cheque in question is concerned, the complainant had got summoned official from the bank of the accused CW4 who placed on record Ex. CW4/A i.e. bank statement of the accused from January 2010 to December 2010 and stated that the cheque in question was unused i.e. had never been presented and dishonored. However thereafter the complainant had also examined official from his own bank branch CW5 who placed on record Ex. CW5/A and stated that the cheque in question had been dishonored for insufficiency of funds. The returning memo placed on record Ex. CW1/3 also reflects that the cheque in question has been dishonored for insufficiency of funds. In my opinion the documents produced by CW5 establish the dishonor of the cheque in question. In any event, the dishonor of the impugned cheque was not disputed [CASE NUMBER] [ENTITY] vs [ENTITY] 5/ 13 even by the accused during his examination under [SECTION] [ACT] and a plea to this effect was taken only during his examination under [SECTION] [ACT].
11. 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. The entrenched principle of criminal law requires the complainant to prove his case beyond reasonable doubt. However in so far as the burden of proof in regard to the existence of legal liability is concerned, there is a significant deviation as [SECTION] and [SECTION] of the [ACT] create a presumption in favour of the complainant. [SECTION] enjoins the court to draw a presumption that every negotiable instrument has been drawn for consideration while [SECTION] enjoins the court to presume that the holder of a cheque has received the same in discharge of liability. This burden can be however discharged by the accused by creating a reasonable doubt in the case of the complainant. Various judicial pronouncements on this aspect have thrown light on how the same can be accomplished by the accused. In one of the more recent judgements namely [PRECEDENT], dated 16 December, 2008], the court has articulated the position thus:
"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 [CASE NUMBER] [ENTITY] vs [ENTITY] 6/ 13 non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed 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. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant The accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial."
It was also held in this case that it is not necessary for the accused to step into the witness box in every case.
12. Having traversed briefly the rules pertaining to burden of proof in complaint cases under [SECTION] of the [ACT] and principles of appreciation of evidence which may be suitably employed, let us see if the defence of the accused appears probable in light of the evidence adduced.
13. First, let us examine certain contents of Ex. CW1/1 i.e. photocopy of the agreement executed between the parties for the supply of ice cream. Albeit Ex. CW1/1 is secondary evidence being a [CASE NUMBER] [ENTITY] vs [ENTITY] 7/ 13 photocopy, no challenge has been mounted by the complainant to its mode of proof. This agreement encapsulates the terms according to which the complainant was required to supply ice cream to the accused during the period 1.5.2010 to 31.3.2011. It stipulates the specifications and the rates in accordance with which the complainant is to supply ice cream to the accused. Certain terms of this agreement are material and require mention. Clause 2.3 states that quantity of the ice cream will be as per the requirement. As per clause 4.1, the accused was to raise bills which would be scrutinized and payment made on the fourth day. As per clause 6.1, the security deposit of 3 lacs made by the complainant with the accused would be refundable by 4.5.2010. As per clause 9, all notices, demands and other communications pursuant to the agreement are required to be in writing. As per clause 10.1, the agreement could be amended only in writing signed by the parties.
14. Let us now look at the defence of the accused. During his examination in chief, the accused stated that a cheque bearing no. 826109 dated 4.5.2010 (Mark A) was given to the complainant as security for the repayment of 3 lacs. The accused claims that there was a further condition that if no supply was made by the complainant, the amount of 3 lacs shall be forfeited. As the complainant did not supply any ice cream to the accused in pursuance of the agreement between the parties, the security deposit of 3 lacs stood forfeited and the accused was under no liability to pay the amount thereof. Thereafter the complainant again approached the accused and undertook to make the supply of ice cream. At that time, the accused issued the cheque in question dated 30.9.2010 as security to the complainant and document Mark B was also executed between the parties which records that if the [CASE NUMBER] [ENTITY] vs [ENTITY] 8/ 13 ice cream was not supplied by 28.9.2010, the amount of 3 lacs shall be forfeited. However, as the complainant again did not make the requisite supply to the accused, the amount of 3 lacs stood forfeited and the accused owed no liability to the complainant qua the cheque in question.
15. In my considered opinion, the defence taken by the accused does not appear plausible. The relationship between the parties is squarely governed by the terms set forth in the written agreement which is Ex. CW1/1. As per clause 6.1 of this agreement, the security deposit of 3 lacs was refundable by 4.5.2010. No condition has been appended to this clause which would make the repayment thereof conditional.
16. Further the basis on which the accused has claimed forfeiture of the security deposit is non supply of ice cream by the complainant. It is pertinent to note that the complainant admitted during his cross examination that no supply was in fact made as the accused never placed any orders. Once again, let us refer to the terms of the agreement. As per clause 4.1, the accused was to raise bills which would be scrutinized and thereafter payment made from the fourth day. Further as per clause 9, all notices, demands and other communications pursuant to the agreement are required to be in writing. While the accused has alleged that no supply of ice cream was made despite assurance by the complainant even the second time, he has not placed on record any purchase order issued to the complainant for supply of ice cream. The accused claims that no such bills were required to be raised as the supply was to commence automatically [CASE NUMBER] [ENTITY] vs [ENTITY] 9/ 13 from the 1.5.2010. I do not find any merit in this submission in view of the express terms of the contract which do not contemplate supply from the date abovementioned. This submission also does not appear plausible as the agreement Ex. CW1/1 only contains specifications of the ice cream to be supplied alongwith their rates and not any specific quantity or the dates of supply. In fact, the agreement specifically mentions that the quantity to be supplied would be as per requirement (clause 2.3).
17. I now turn to Mark B which was relied upon by the accused to support his claim that the amount of 3 lacs was to be forfeited. The accused has alleged that after the supplies of ice cream were not made as per the terms of the agreement, the complainant once again approached the accused and at that time this document was executed. On the other hand, it has been contended by the complainant that the words "deposited 3 lacs will be forfeited if supplies are not made by 28.9.2010" had been inserted in Mark B after the signatures of the complainant had been obtained on it. I find merit in the complainant's submission. It appears strange that a prudent businessman would agree to give a security cheque for the return of security amount deposited by the other party even though no supplies were made on that date. I also find support of the judgment of the Delhi High Court in the case titled as [PRECEDENT], [Decision dated 21.09.2010] in [CASE NUMBER] wherein the Delhi High Court is observed that the accused could not be said to have rebutted the presumption if his conduct was not that of a prudent businessman. The complainant also examined CW2 Sh. [ENTITY] in this [CASE NUMBER] [ENTITY] vs [ENTITY] 10/ 13 regard who has affirmed the submissions of the complainant and his testimony has remained unimpeached.
18. Further, as per the terms of Mark B itself, security deposit of 3 lacs would stand forfeited if no supplies were made by 28.9.2010. Notwithstanding the fact that the complainant had not actually supplied the goods even by 28.9.2010, no stop payment instructions have been issued by the accused qua the cheque in question nor has any notice been issued by the accused to the complainant. This also casts doubt upon the credibility of the defence taken by the accused.
Conclusion:
19. Therefore, upon due appreciation of the evidence on record, I find that the defence of the accused has remained unsubstantiated. The accused has been unable to raise a reasonable doubt in the case of the complainant. Accused is accordingly convicted for the commission of the offence under [SECTION] of the [ACT].
Announced today in the ([ENTITY]) open court on 22.01.2016 MM NI ACT (WEST)/DELHI/22.01.2016 [CASE NUMBER] [ENTITY] vs [ENTITY] 11/ 13 IN THE COURT OF MS [ENTITY] [ENTITY] Prop. of M/s. Bricks Ice Cream WZ-297-C, Madipur Village, New Delhi-63. Complainant Versus [ENTITY] Prop. of M/s. Nirmal Foods, R-8 & R-9, Krishna Market, U-Block Market, Opposite U-Block Pink Town House,
DLF Phase-III, Gurgaon-122001. Accused 30.01.2016 Order on Sentence:-
Ld. counsel for the accused has submitted that the accused in the present case is a senior citizen aged about 55 years and is the sole bread earner of the family. His family consists of only one son aged about 18 years who is still studying. He has further submitted that he works as a manager in a company and is able to earn only Rs.35,000/- per month. It is further [CASE NUMBER] [ENTITY] vs [ENTITY] 12/ 13 submitted that there is no other civil or criminal case pending against the accused except the civil suit filed by the complainant with respect to the cheque in question. Thus, the accused has prayed for a lenient view.
On the other hand ld. counsel for the complainant has argued that the present case has been pending in this court since the last six years and therefore the accused should be visited with maximum sentence and maximum compensation should be awarded to the complainant.
It is necessary to be mentioned here that the offences u/[SECTION] of [ACT] are on high rise and in order to keep the spirit of the legislation, the accused cannot be released on probation as these offences have massive effect on the economic condition of the persons.
I have heard the arguments led by both the counsels on behalf of the parties. It is not the case that he is a regular defaulter or has criminal antecedents. Keeping in view, the points put forth by both the parties and considering the submissions of the accused and sufferings of the complainant, I feel the ends of justice will meet if the accused is sentenced to undergo simple imprisonment of five months and is ordered to pay the compensation of Rs.4,80,000/- to the complainant and in case of failure to pay the amount, the accused shall undergo further simple imprisonment of two months. Accordingly, sentence stands passed.
[ENTITY] MM NI ACT (WEST),DELHI 30.01.2016 [CASE NUMBER] [ENTITY] vs [ENTITY] 13/ 13