A Delhi court in, M/s Dhanraj Shree Kishan Das v. Royal Varsha Industries Pvt. Ltd. & Ashutosh Vijay made its reliance on Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Limited which said that, “If on the date of the cheque, liability or debt exists or the amount has become legally recoverable, then Section 138 is attracted and not otherwise.”
Facts
Complainant is a partnership firm with Sh. Vipul Goel is one of the partners and deals with the business of fruits, spices etc. The accused is of a similar field, and he placed an order for the supply of various spices. The complainant delivered the same and raised a bill of Rs.1,97,400 (1,88,000+9400 VAT) on 6/9/2016. Before delivery, the officials of the accused visited the complainant for inspection and issued a cheque of Rs. 1,88,000 in favor of complainant firm on 30/8/2016 and rest money was assured to be given after receipt.
When the complainant first presented the cheque on 14/10/2016, it was returned with remarks "Payment stopped by drawer” and again on 24/10/2016 it was returned due to insufficient funds. Legal demand notice was issued to pay the sum within 15 days, upon failure of which the complainant approached the court u/s 138 of Negotiable Instruments Act.
Accused’s plea of defence
Accused claimed that the cheque was given as a security i.e in case of failure of payment in cash the cheque was supposed to be withdrawn. Accused claimed that goods were of poor packages and loss occurred due to this and the same was communicated to the complainant through message. The cheque was misused. The tax invoice was also asked for by the accused but they did not reply. They still paid Rs. 70,000 to the complainant and when they claimed it the matter was filed.
Essentials of Offence u/s 138 of NI Act
The court firstly ruled out the essentials for offence u/s 138 of NI Act:-
- The drawer should’ve issued the cheque for discharge
- The cheque is returned by bank unpaid due to insufficient funds or exceeds the amount arranged to be paid from that account by an agreement made with that bank
- The drawer of such cheque fails to make the payment of the said amount of money within fifteen days of the receipt of the notice from the payee or the holder in due course demanding the payment of the said amount of money.
Essential 1
With respect to the first condition, the complainant relied on K.N. Beena Vs. Muniyappan and Section 139 of NI Act that says “it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability”. Thus the burden of proof lied on the accused to rebut the statutory presumption.
The accused rebutted the contentions and said that cheque was given as security and hence there was no liability. The accused further claimed, “On the day when the cheque was issued to the complainant and on the day of its presentation in the bank, the accused did not owe the amount as mentioned on the cheque in question since an amount of Rs 70,000/- had already been paid to the complainant towards the transaction in issue.” The accused also relied on various other facts to rebut the contentions.
Court’s View
The court rejected both the arguments and said, “the date when the cheque in question was presented in the bank, the accused did not owe the amount as stated on the cheque in question, since he had already paid the part amount of the liability. Thus, on the date when the cheque in question was presented in the bank, there was no legal liability of the amount of the cheque in the question of the accused towards the complainant”. The court further said that the legal demand notice did not bear any mention of Rs 70,000/- which was received as advance payment, thus the first ingredient is not made out. It thus discredits the credibility of the complainant.
Regarding the issue of maintainability, the court said that bar to section 69(2) of the Indian Partnership Act does not apply to the proceedings under section 138 NI Act.
With regard to the question of cheque as a security, the court relied on Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Limited and said that no offence under section 138 NI Act is attracted since on the date of the cheque, liability of the amount of the cheque was not actually due to the complainant. The court thus discharged the accused.
Case Details
Complainants- M/s Dhanraj Shree Kishan Das Through its partner Vipul Goel
Accused- Royal Varsha Industries Pvt. Ltd. & Ashutosh Vijay
IN THE COURT OF MS. TISTA SHAH METROPOLITAN MAGISTRATE(CENTRAL)
Read Judgment @Latestlaws.com
