SUMETI VIJ VS M/S PARAMOUNT TECH FAB INDUSTRIES

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CITATION	2021 SCC OnLine SC 201
DATE OF JUDGMENT	9^th March 2021
COURT	Supreme Court of India
APPELLANT	Sumeti Vij
RESPONDENT	M/S Paramount tech Fab Industries
BENCH	Ajay Rastogi, Indu Malhotra, JJ.

INTRODUCTION

The case revolves around Section 138 of the Negotiable Instruments Act which lays down provisions related to dishonor of cheque due to various reasons. In this case, the appellant purchased non woven fabric for the payment of which she issued cheque in name of the complainant. However, the cheque was returned on presentation due to insufficient funds in the account of the appellant. Notices were served to her by the respondent but there was no response from her side. So, a case was filed by the respondent- seller for the payment of non woven fabric.

The case moved all the way up from the trial court to the high court and then to the Supreme Court. The trial court found that the appellant was not guilty on the basis that the complainant failed to establish that the material/goods were delivered to the appellant. An appeal was filed in the High Court which reversed the ruling of trial court and held that appellant was guilty of committing an offence under Section 138 of the Negotiable Instrument Act. Again, an appeal was filed before the Supreme Court which finally gave the ruling that appellant is guilty and dismissed all other appeals on the ground of being substance less.

FACTS OF THE CASE

The appellant-accussed approached the seller- complainant at his factory at Moginand to purchase non woven fabric. The purchase amounted to Rs.5,07,062/ and Rs.5,10,000/- for which a cheque was issued by the purchaser in the name of the seller.
On getting the cheque presented in the bank, it got dishonoured due to insufficient amount of funds in the accussed’s account. Two legal notices were sent to the appellant but they chose not to respond to any of the notice and hence, did not make any payment to the seller.
Two complaints were filed under Section 138 of the Negotiable Instrument Act against the purchaser which were heard by the learned trial court judge. She pleaded not guilty and claimed trial for the same. The complainant provided documentary evidence and three witnesses, whereas the statement of the accused were recorded under Section 313 of Code of Criminal Procedure.
The trial court ruled that the complainant failed to establish the fact that the material was delivered to the appellant for which the cheque was issued. This led to the appellant being proven not guilty by the judge of trial court. The matter was then transferred to the High Court of Himachal Pradesh.
After taking into account the evidence produced, the High Court declared that the primary burden was discharged by the complainant. It reversed and set aside the judgement of the trial court and pronounced the appellant as guilty and awarded appropriate punishment.
The appeal was then transferred to the Supreme Court. It dismissed the appeals on the basis that the judgement given by High Court needed no interference as it had committed no error in finding the accused as guilty. The appellant was given the option to either serve a sentence or pay the fine.

ISSUES OF THE CASE

Whether the cheques were issued in lieu of the delivery of the material?
Were the cheques issued for any consideration or without any consideration?

CONTENTIONS OF THE APPELLANT

The appellant urged before the court that the complainant was not able to put forth any evidence regarding the fact that the cheque was issued in furtherance of receiving the delivery of the non woven fabric.
They also contented that mere issuance of a cheque doesnt signify that cheques were written in discharge of any debt or liability. They relied on the judgment of K. Prakashan vs. P.K. Surenderan1 and Indus Airways Private Limited and Others Vs. Magnum Aviation Private Limited and Another.
The counsel for the appellant submitted before the court that they were successful in creating a doubt before the trial court with regard to non existence of any debt. They also said that it was wrong and unjustified to deem the judgement of high court more plausible and thus overturn the judgement of Trial Court.
The counsel put in the light the fact that the findings of High Court are inadmissible since they have been recorded in contrary to the settled principles of law as considered by this
Court in appreciating the mandate of Sections 118(a), 138 and 139 of the Act.

CONTENTION OF THE RESPONDENT

The counsel for the respondent supported the findings of High Court and mentioned that there were enough evidences given to prove that the cheques were issued in furtherance of the invoices.
They mentioned that all the documentary evidence, three witnesses were presented before the court in favour of the complainant which were able to establish and discharge the burden of proof.
They urged before the court that no error has been committed by the High Court in its judgement and it needs no interference and that the appellant has been rightly convicted
for the offence punishable under Section 138 of the Act.
The counsel also contented that according to Section 138 of the Negotiable Instruments Act, the onus to prove that the cheque was not received for any discharge of liability shifts to the accused.
The counsel emphasizes that the appellant failed to record evidence to disprove or rebut the presumption. She just simply recorded statements under Section 313 of the Code which just acts as an opportunity to the accused to explain themselves. Therefore, there is no rebut to the presumption that the cheque was issued for consideration.

JUDGEMENT OF THE CASE

This case travels all the way from the district court of Himachal pradhesh to the High Court of Himachal Pradesh and then finally to the Supreme Court which passed the judgement in support of the one given by the High Court, declaring the accused as guilty and awarding her punishment.

The learned trial court judge had given acquittal to the appellant-accused after taking into account all the documentary evidence and three witnesses established by the complainant-respondent. The accused was first summoned for commiting an offence under Section 138 of the act, to which she pleaded non guilty and claimed a trial. The learned trial court judge placed his judgement on the fact that the complainant failed to establish that the cheque was issued in lieu of any liability or delivery of the material, due to which the burden was not discharged by the complainant and hence the onus to disprove or rebut the presumption could not be shifted to the appellant as referred under Section 139 of the Act. All of this led to the accused being given an acquittal by the trial court judge which was then referred to the High court.

The High Court set aside the judgement given by the trial court judge and noted that primary burden was discharged by the complainant and they were successful in proving that the cheques were issued in lieu of the delivery of the products and the appellant had not done anything to disprove or rebut the presumption in defence and has just recorded a statement under Section 313 of the Code. Thus, the appellant was held guilty of commiting an offence under Section 138 of the act and was awarded punishment of fine or sentence.

At last the appeal went to the Supreme court which mentioned that the High Court had done no fault in recording the appellant as guilty and awarding her with punishment. The appeals were said to be dismissed since they were without any substance and the guilty was asked by an order dated 30 april 2019 to either pay the fine or serve the sentence. All the bail bonds also stood cancelled.

ANALYSIS

This case sheds a good light on how the system and hierarchy of judiciary works in India. This particular matter traversed all the bodies of Indian judiciary and finally reached a decision which was given by the highest judiciary body in India, the Supreme Court. The case was initially filed in the Trial court but the complainant- respondent remained unhappy with it so he filed an appeal in the High Court. The judgement of High Court was also supported by the Supreme Court. This shows that all the bodies of judiciary are independent of each other and don’t have any obligation to bind with the decision of the other court.

This case has paved way for a lot of matters that would be filed within Section 138 of the Negotiable Instruments Act and would be argued on rebuting or disproving the presumption of the defence. Provisions such as Section 138 of the Act and Section 319 of the Code were also inferred in different ways by different courts but at last the decision of Supreme Court prevailed. In this matter it was observed that Section 313 of the Code of Criminal Procedure just acts as an opportunity before the accused to record his statements and not any substantive evidence. Section 138 of the Negotiable Instruments Act also just enhances the acceptability of cheques for settlement of any liabilities. It is the drawer of the cheque who will be held liable on dishonoring of the cheque due to insufficiency of funds or any other reason.

CONCLUSION

This case throws light on the importance of interpreting the statues and provisions in the most right way possible. The reliance placed by the appellant on cases that happened before on the same lines was invalidated by the court and said that those judgement would not be of any help to the case. So, this case also shows how important it is to interpret the statutes and not just place reliance on previous judgements as the situation may differ and even minute differences can turn the whole case upside down.

Law itself comes with a lot of developments wither through new laws being passed in the parliament or judicial developments so it can turn out pretty harmful and biased towards the society if the laws are not interpreted or contemplated upon. In the case at hand, many provisions were interpreted and understood in different ways than in which they had been done before. Therefore, it becomes an indispensable part of the justice delivery mechanism to interpret the law and apply it differently on each case.

REFERENCES

This Article is written by Anshika Agarwal student of Vivekananda Institute of Professional Studies, Delhi, Intern at Legal Vidhiya.

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