Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Home Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles News Highlights
Extracts
Home List
← Previous Next →

Bansal Plywood Versus State (NCT of Delhi) And Ors.

2017 (9) TMI 287 - DELHI HIGH COURT

Dishonor of cheque - Acquittal for the offence punishable under section 138 of the Negotiable Instruments Act, 1881 - legally enforceable debt proof - Held that:- All burden of proving that a legally enforceable debt did not exist against the accused lies on the accused himself which has to be discharged by bringing on record some cogent evidence to make the Court believe that the existence of such liability was not probable. - The Trial Court has erred in not appreciating the provisions of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as erred in rejecting the complaint on the ground that no other invoice has been placed on record by the appellant to show that there had been dealing between the appellant and respondent no.3 upto December, 2010 and by dismissing the complaint on this score, the Trial Court has erred in putting the initial burden on the complainant/appellant without realising that initial burden was on the accused/respondents no.2 and 3. It was for the respondent no.3 to adduce cogent evidence and certainly not .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dated 31.12.2010 to the accused by registered AD & UPC dated 4.1.2011 which was duly served and despite service of notice the accused did not discharge the liability nor took any steps for repayment of the amount. The copy of the legal notice was exhibited as Ex.CW-1/C and postal receipts as Ex.CW-1/D (Colly.). In his cross-examination, the respondent/ accused had not disputed receipt of notice. She has failed to reply said notice which attracts the applicability of principles of Non-Traverse. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f the NI Act can easily get away from their legally enforceable liability by taking such sham and false defence. - This Court finds that the impugned judgment is erroneous and perverse and is not sustainable both on facts and in law. In the result, the criminal appeal is allowed and and the accused/respondent No.3 is convicted for the offence under section 138 of NI Act. - CRL.A. 17/2017 - Dated:- 4-9-2017 - MR. VINOD GOEL J. Petitioner Through: Mr. Surender Gupta, Adv. with appellant in per .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rough sole proprietor Pawan Bansal is engaged in the business of supplying timber and plywood. The respondent no.3 is the proprietor of respondent no.2 firm M/s Bosecage. Respondent no.1 through its proprietor used to purchase timber and plywood from the appellant. On 18.12.2010 the respondent no.2 & 3 had purchased goods worth ₹ 1,72,522/- from the appellant and a bill no.254 (tax invoice) was raised against this transaction. Respondent no.3 issued a cheque no.222181 dated 18.12.2010 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Despite the service of notice, the respondents no.2 & 3 failed to make the payment within the stipulated period of 15 days and hence the complaint. 3. The Trial Court acquitted respondents 2 & 3 on two grounds (i) the bill/invoice no. 254 dated 18.12.2010 had cutting/ interpolation on the date mentioned on it and (ii) no other invoice was placed on record to show that the appellant and respondents no.2 & 3 had dealings up to December 2010. 4. The learned counsel for the appellant co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the decision of the Hon ble Supreme Court in Rangappa v Sri Mohan (2010) 11 SCC 441 to further cement his arguments. 6. He further argued that the respondent admitted that a sum of ₹ 9200/- was due and payable to the appellant in the month of October/November 2010 but did not pay it to the appellant. He contended that the malafide on the respondent s part is evident from her conduct of having submitted a false application to stop payment to her banker in advance on 01.12.2010 and then issu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ious inconsistencies and contradictions in the statements of respondent no.3. The learned counsel of the appellant contended that respondent no.3 kept on changing her stand throughout before the filing of the complaint, after appearance before the learned MM and during the course of the trial. He argued that change of defence by itself makes the version of the respondent unreliable. 10. He contended that the legal notice dated 31.12.2010 issued to respondent no.2 & 3 was not replied to and a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eque no.222181 which is not explained by respondent no.3. 13. Per contra, learned counsel for the respondents No.2 and 3 had contended that the judgment of the Trial Court was based on correct appreciation of facts and law and therefore requires no interference. 14. He argued that respondent no.3 used to keep blank signed cheques with dates mentioned thereon at her residential office in order to make payment to various contractors and suppliers and cheque no.222181 was also kept at her office-cu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

between respondent no.3 and Pawan Bansal. Learned counsel contended that the said cheque was stolen by Pawan Bansal, on one of such visits in December, 2010 to the house cum office of respondent no.3. He urged that Pawan Bansal forged the bill/invoice dated 18.12.2010 which is clear from the interpolation on the same in order to defraud respondents no. 2 & 3. 15. I have heard the learned counsel for the parties. 16. Before proceeding further I deem it appropriate to advert to Sections 138, 1 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice. to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless- (a) the cheque has been, presented to the bank within a period of six mon .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.-For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability. 139. 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 138 for the discharge, in whole or in part, of any d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

xmi Dyechem v. State of Gujarat, (2012) 13 SCC 375 held as under: 25. 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 q .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n Chand Payrelal, (1999) 3 SCC 35 held as under: - 12. Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the nonexistence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof sho .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leadi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

may either believe that the consideration did not exist or its nonexistence was so probable that a prudent man would, under the circumstances of the case, shall act.; upon the plea that it did not exist. (Emphasis supplied) 19. In Rangappa s case (supra), a three Judge Bench of the Hon ble Supreme Court observed that if the accused in a complaint under Section 138 of the NI Act admits his signatures on the cheque, presumption that the cheque pertains to a legally enforceable debt or liability ar .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of rebuttal of presumption under Section 139 of the NI Act as under: - 19. Just such a contention has been negatived by this Court in the case of Modi Cements Ltd. v. Kuchil Kumar Nandi [(1998) 3 SCC 249]. It has been held that even though the cheque is dishonoured by reason of stop-payment instruction an offence under Section 138 could still be made out. It is held that the presumption under Section 139 is attracted in such a case also. The authority shows that even when the cheque is dishonour .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f the cheque for encashment at the drawer bank and that the stop-payment notice had been issued because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encashment, then offence under Section 138 would not be made out. The important thing is that the burden of so proving would be on the accused. Thus a court cannot quash a complaint on this ground (emphasis supplied) 21. The Hon ble Supreme Court in Hiten P. Dalal v. Bratindra .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n established. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused. (Ibid. at p. 65, para 14.) Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court may presume a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter, all that is meant is that the prosecution .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

reme Court held as under: 17. Under Section 118(a) of the Negotiable Instruments Act, the court is obliged to presume, until the contrary is proved, that the promissory note was made for consideration. It is also a settled position that the initial burden in this regard lies on the defendant to prove the non-existence of consideration by bringing on record such facts and circumstances which would lead the court to believe the non-existence of the consideration either by direct evidence or by pre .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

itial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

above decision of this Court, it is pellucid that if the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who would be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. It is also discernible from the above decision that if the defendant fails .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, 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 in order to raise such a defence and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

it was a blank cheque but it was signed one. She requested to stop payment against cheque. 25. After a long gap of 22 days, on 23.12.2010 the respondent no.3 submitted an application to the Chowki Incharge, Police Station Govind Puri, to the effect that name of her company is BOSCAGE and is having current account with State Bank of India, Kalkaji, New Delhi. Her one cheque no.222181 dated 18.12.2010 bearing her signatures was lost and she wanted to inform so that no one could misuse it. She also .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ue has been misused by the complainant. 27. The respondent no.3 filed an application under section 145(2) of NI Act before the learned MM on 29.02.2012 wherein she pleaded that the complainant used to come to her office for business purposes and in December, 2010, in her absence the complainant came to her office and embezzled cheque no.222181 from there. She further mentioned that when she came back she was under the impression that the said cheque was misplaced somewhere in the market and imme .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er her stand taken in application to SBI for stop payment instructions and complaint dated 23.12.2010 given to Chowki Incharge PS Govind Puri. However, on 7.7.2014, the respondent no.3 again changed her stand and suggested in the further cross-examination of the appellant that the cheque in question was stolen by him from her residence-cum-office during his visit there. In her explanation under section 313 read with section 281 of the Code recorded on 4.2.2015 the respondent no.3 explained that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he meaning of section 3 of the Indian Evidence Act, 1872 which reads as under: 3. Interpretation clause. -In this Act the following words and expressions are used in the following senses, unless a contrary intention appears from the context:- …… ……… ……… …………… ………… …….. ………………. Evidence .- Evidence means and includes- (1) al .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ation by the other party. This is actually the evidence. Therefore the plea taken in application under Section 145(2) of NI Act or defence taken at the time of framing notice under Section 251 of Code or explanation under Section 313 read with Section 281 of the Code by any stretch of imagination cannot be treated as evidence . This is only a defence which should have been proved by her by cogent evidence to rebut the presumption under Section 139 and Section 118 of the NI Act. 31. The responden .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on 1.12.2010 when she went to Kotla Mubarakpur Market for purchasing some material for her firm, she noticed that the cheque in question bearing no.222181 was missing from her purse. 32. In her deposition as DW-3, the respondent no.3 had nowhere deposed that the cheque in question was stolen by complainant/appellant from her residential office as claimed by her at the time when she moved her application dated 29.02.2012 under section 145 (2) of NI Act or at the time of framing of the notice unde .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

residential office. Further the respondent no. 3 had not proved her alleged visit to market by producing any Bill/invoice for purchase of material which she claimed to have purchased from Kotla Market on 01.12.2010 when she found cheque was missing from her purse. She had not explained as to why she kept that single cheque in question in her purse and why she had put a date as 18.12.2010 and signed it when it was blank. 33. Respondent no.3 in her testimony as DW-3 admitted that there was a runn .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

4. The respondent had taken contradictory and inconsistent plea in her deposition. On one hand respondent no.3 took the plea that there was a running account with the complainant and in the month of October/November 2010, there was outstanding balance amount of ₹ 9200/-. On the other hand, she pleaded that she closed her business with the complainant after end of 2009. 35. If she had no business terms with the appellant after 2009, she could have produced her books of accounts, bank statem .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e as she used to be in the field, shows that she might be having one or two employees with her. She had neither disclosed names of her employees nor examined any of them to prove that the said invoice was not bearing the signatures of any of her employees. 36. She had claimed that the invoice dated 18.12.2010 Ex.CW-1/E was forged. She took the plea that there was cutting on the date. Cutting of date does not make it to be forged when cutting of date was signed by the executant of invoice i.e. th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n under section 145(2) of NI Act that the complainant used to come at her office for business purposes and in December, 2010 he had visited the applicant s office. On one hand, she had taken the stand that she did not purchase any material after 2009 from the complainant but on the other hand, she had claimed that the complainant had visited her office as usual in December, 2010 for business purposes. This makes her defence completely false. If her deposition/evidence as DW-3 is ignored, and ins .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ctions to her banker on 01.12.2010. On one hand she took the stand that the cheque was misplaced in market on 01.12.2010 and on the other hand she took the defence that it was stolen by respondent in December, 2010. Therefore respondent No.3 has no leg to stand either way. The bare statement of the respondent is not at all sufficient to rebut the presumption under Section 139 and 118 of NI Act as held by Hon ble Supreme Court in Bharat Barrel s case (supra) and Mallavarapu Kasivisweswara Rao (su .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ges of the proceedings and as such her deposition as DW3 is not at all worth inspiring confidence. The respondent No.3 having adduced no other evidence is not able to rebut the presumption under Section 139 and Section 118 of the NI Act. She has not brought forward evidence which would have made a reasonable and prudent person believe that the explanation put forward by her was the most probable outcome. 40. It is clear as crystal from the ratio laid down in Bharat Barrel s case (supra) and Mall .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

bsessed with idea that initial burden is on the complainant instead of the accused. The complainant was only required to prove that the cheque issued by the respondent No.3 was dishonoured, and the statement of complainant that it was issued by respondent against her liability/debt is sufficient proof of debt or liability thus shifting the onus to the respondent to rebut by way of cogent evidence and not by bare statement. The learned Trial Court has erred in rejecting the complaint on the groun .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ings with the appellant after 2009 or that the goods in question were not purchased by her from the appellant. This is particularly so when respondent no. 3 admitted in her deposition that there was running account with the complainant and in the month of October/November, 2010, there was an outstanding balance of ₹ 9,200/-. 41. The complainant while appearing as CW-1 in his examination in chief testified that he got issued one legal notice dated 31.12.2010 to the accused by registered AD .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Forum
what is new what is new
  ↓     bird's eye view     ↓  


|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version