Delhi District Court
Of Madras In The Case Titled As Mohammad ... vs . Velukannan, Crl. A. on 29 July, 2022
IN THE COURT OF SH. KAPIL GUPTA,
METROPOLITAN MAGISTRATE, (NI ACT)-07
SOUTH-WEST DISTRICT, DWARKA COURTS, NEW DELHI
Ct. Case No. 29298 of 2018
CNR No. DLSW02-033329-2018
Yogender Singh ............Complainant
Versus
M/s M.K. Fancy Light Works
through prop. Manoj Kumar & Anr. .............Accused
JUDGEMENT
(1) Name of the complainant Sh. Yogender Singh
(2) Name of the accused 1. M/s M.K. Fancy Light
and address Works through prop. Manoj
Kumar
2. Sh. Manoj Kumar,
proprietor of M.K Fancy Light
Works
(3) Offence complained of or U/s 138 NI Act
proved
(4) Plea of accused Pleaded not guilty
Ct. Case No.29298 of 2018 Page 1 of 26
(5) Date of institution of case 04.09.2018
(6) Date of conclusion of 25.07.2022
arguments
(7) Date of Final Order 29.07.2022
(8) Final Order Accused no. 2 is convicted
1. The complainant, Sh. Yogender Singh, stated to be proprietor of Ramender Oil Carrier had filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'Act') against the accused no. 1 M/s M.K. Fancy Light Works through prop. Sh. Manoj Kumar and accused no. 2 Sh. Manoj Kumar, proprietor of M.K Fancy Light Works.
2. As per complainant, upon request of the accused, a friendly loan of Rs. 7,50,000/- was given by him to the accused by way of cheque dated 17.07.2017 for an amount of Rs. 2,00,000/- and by way of RTGS on 17.07.2017 for an amount of Rs. 5,50,000/- for a period of 11 months and an agreement was executed for the same and in discharge of liability, accused issued cheque bearing no. 193141 and cheque bearing no. 193142 both dated 25.06.2018 for total amount of Rs. 7,50,000/- drawn on Punjab National Bank, Najafgarh, New Delhi in favor of the complainant. It is alleged that the cheques upon presentment were returned dishonored with remarks "Funds Insufficient" and the complainant thereby sent a legal notice dated 21.07.2018 to the accused, despite which the accused failed to repay the amount and thereafter the present complaint was filed.
3. In his pre-summoning evidence, the complainant stated that he maintains his bank account in Corporation Bank, Najafgarh Branch, New Ct. Case No.29298 of 2018 Page 2 of 26 Delhi and examined himself as CW1 vide his affidavit Ex.CW1/A. He reiterated the contents of the complaint and placed on record, cheque bearing no. 193141 dated 25.06.2018 for an amount of Rs. 2,00,000/- drawn on Punjab National Bank, Najafgarh Village, New Delhi as Ex. CW1/1, cheque bearing no. 193142 dated 25.06.2018 for an amount of Rs. 5,50,000/- drawn on Punjab National Bank, Najafgarh Village, New Delhi as Ex. CW1/2, bank returning memo dated 27.06.2018 for cheque bearing no. 193141 as Ex.CW1/3 (colly), bank returning memo dated 27.06.2018 for cheque bearing no. 193142 as Ex.CW1/4, legal demand notice dated 21.07.2018 as Ex.CW1/5 and postal receipts as Ex.CW1/6 (colly).
4. The accused was summoned and notice under Section 251 of Code of Criminal Procedure, 1973 (hereinafter referred to as 'CrPC') was served upon him on 21.09.2019, to which he pleaded not guilty and claimed trial. He stated that he had given the cheques in issue to the complainant in a blank signed manner as security. He further stated that he and the complainant were working jointly and had invested money, suffered losses and had to close the business. He admitted having liability of Rs. 7,50,000/- towards the complainant. He stated that he did not receive the legal notice, however stated that it bears his correct address.
5. As per order of the court dated 09.10.2019, application u/s 145 (2) NI Act moved on behalf of the accused to cross examine the complainant and witnesses was withdrawn by Ld counsel for the accused and the complainant's evidence was closed.
6. Statement of the accused under Section 281 CrPC read with Section 313 CrPC was recorded on 06.03.2021, wherein all the incriminating evidence was put to him and he stated that the complainant had given him Ct. Case No.29298 of 2018 Page 3 of 26 Rs.5,50,000/- by way of RTGS and Rs.2,00,000/- by way of cheque, even though he had not asked for the same, to invest this sum in property on behalf of the complainant. He stated that he had given the cheques in issue to the complainant and had signed on the cheques and had filled amount in figure in both the cheques, however, had not filled any other detail in the cheques. He denied receiving the legal notice. He further stated that the amount of Rs.7,50,000/- was given to him by the complainant for investing in the property, however, they incurred losses and that he had given the cheques in issue as security. He also stated that the complainant pressurized him to return the money whereafter he told the complainant that he does not have money to repay and will return the money as and when he gets enough money. He stated that the complainant deposited the cheques after pressurizing him. He preferred to lead defence evidence.
7. The accused in his defence evidence examined himself as DW1 wherein he deposed that money in question amounting to Rs. 7,50,000/- was given by Mr. Ramender for business purpose. He further deposed that three people including him were involved in a deal and they suffered losses of about Rs. 20,00,000/- to Rs. 25,00,000/- which were mutually settled. He also deposed that the cheques in issue were given as security in the month of July, 2017, however, the said cheques have been misused by the complainant and he had never made any business proposal to the complainant.
8. The accused/DW1 was cross examined on behalf of the complainant wherein he admitted not filing any document regarding the settlement as alleged and stated that such settlement was verbal. He stated that the amount of Rs. 7,50,000/- was deposited in his account as per agreement.
Ct. Case No.29298 of 2018 Page 4 of 269. Sh. Vinod Kumar was examined as DW2 and he deposed that an amount of Rs. 20,00,000/- to Rs. 25,00,000/- was involved in the transactions qua the property business between him, the accused and the complainant and thereafter, losses were suffered due to down fall in the property business which were adjusted between the three of them. He further deposed that in lieu of the balance amount, property was given to Ravinder in Baghpat through one person namely Mr. Arjun Pradhan and the deal between him, accused and complainant was done in the year 2017- 2018.
10. In his cross-examination, DW2 stated that there was no written document qua the settlement stated by him in his examination in chief and voluntarily stated that the settlement was verbal. He admitted that the accused had to give payment to the complainant.
11. Sh. Arjun Singh was examined as DW3 and he deposed that the accused, complainant and few more people were involved in property business and a piece of land measuring 2.5 bighas was given to the daughter in law of complainant on request of complainant and the cost of land was around Rs. 46,00,000/- or 47,00,000/- at that time. He further deposed that an amount of Rs. 28,00,000/- was adjusted with the complainant in the name of accused, however, the details of the said adjustments is with the accused. He also deposed that the accused asked the complainant to return the cheques, however, same were not handed over on pretext that complainant has forgotten to bring the cheques from Delhi and he will return the same to the accused later. He was cross-examined on behalf of the complainant.
Ct. Case No.29298 of 2018 Page 5 of 2612. I have heard the final arguments as advanced by Ld counsel for the parties at length and have given my thoughtful consideration to rival submissions made by them. I have also gone through the material placed on record.
13. During the course of final arguments, Ld. counsel for the complainant submitted that the accused has admitted his signature on the cheques in issue. It was argued that all ingredients under Section 138 NI Act have been proved by the complainant and hence the accused must be convicted.
14. Per contra, it was contended on behalf of the accused that the cheques in issue were merely given as security to the complainant and thus the accused does not have any liability towards the complainant. It was argued that the complainant has not elucidated the reason for granting loan to the accused and thus present complaint deserves to be dismissed. He stated that the cheques were issued in favour of Ramender Oil Carrier and not in favour of the complainant and hence the present complaint is not maintainable. It was argued that wrong cheque numbers have been written in the legal demand notice and even the name of the drawer of the cheques has been written wrongly in the legal demand notice and thus the present case is not maintainable. It was contended that the parties were involved in a property transaction wherein losses were suffered and the complainant was given a property in lieu of such losses and thus the cheques in issue have been misused. He relied upon judgement of the Hon'ble High Court of Madras in the case titled as Mohammad Irfan vs. Velukannan, Crl. A. No. 94 of 2014. It was prayed that the accused be acquitted of the offence punishable under Section 138 NI Act.
Ct. Case No.29298 of 2018 Page 6 of 2615. Before proceeding further, it would be appropriate to discuss, that as per Section 138 of the NI Act, following ingredients have to be proved by the complainant:
1. The accused issued a cheque on account maintained by him with a bank.
2. The said cheque has been issued in discharge, in whole or in part, of any legal debt or other liability.
3. The said cheque has been presented to the bank within a period of three months from the date of cheque or within the period of its validity.
4. The aforesaid cheque, when presented for encashment, was returned unpaid/dishonoured.
5. The payee of the cheque issued a legal notice of demand to the drawer within 30 days from the receipt of information by him from the bank regarding the return of the cheque.
6. The drawer of the cheque failed to make the payment within 15 days of the receipt of aforesaid legal notice of demand.
16. It is also apt to discuss that a negotiable instrument including a cheque carries following presumptions in terms of Section 118(a) and Section 139 of the NI Act:
(i) Section 118 of the NI Act provides: "Presumptions as to negotiable instruments: Until the contrary is proved, the following presumptions shall be made:
(a) of consideration that every negotiable instrument was made or drawn for consideration, and that every such instrument, when Ct. Case No.29298 of 2018 Page 7 of 26 it has been accepted, indorsed, negotiated or transferred was accepted, indorsed, negotiated or transferred for consideration;"
(ii) Section 139 of the N.I Act further provides as follows:
"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 debt or other liability".
Thus, the combined effect of Section 118 (a) and Section 139 of NI Act raises a presumption in favour of the holder of the cheque that he has received the same for discharge, in whole or in part of any debt or other liability.
17. For appreciating such legal position, reliance is placed on the judgement of the Hon'ble Supreme Court in the case of Hiten P. Dalal v. Bratindranath Banerjee (2001) 6 SCC 16 wherein it was held that:
"22. Because both Sections 138 and 139 require that the Court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras vs. A. Vaidyanatha Iyer AIR 1958 SC 61, it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been 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). 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 Ct. Case No.29298 of 2018 Page 8 of 26 with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the nonexistence of the presumed fact."
Similar view has been taken by the Hon'ble Supreme Court in the cases titled as K.N. Beena vs. Munyappan and Ors., AIR 2001 SC 289.
18. Further, recently the Hon'ble Supreme Court in the case titled as Kalamani Tex & Anr. v. P. Balasubramanian, 2021 SCC Online SC 75 held that:
"14. Adverting to the case in hand, we find on a plain reading of its judgment that the trial Court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NIA. The Statute mandates that once the signature(s) of an accused on the cheque/negotiableinstrument are established, then these 'reverse onus' clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him."
19. From the ratio decidendi laid down in the aforesaid judgements, it is clear that for the offence under Section 138 of the Act, the presumptions under Section 118 (a) and Section 139 of NI Act have to be compulsory raised as soon as execution of cheque by accused is admitted or proved by Ct. Case No.29298 of 2018 Page 9 of 26 the complainant and thereafter, burden is shifted upon the accused to prove otherwise.
A presumption is not in itself evidence but only makes a prima facie case for a party for whose benefit it exists. Presumptions, both under Sections 118 and 139 of NI Act are rebuttable in nature.
20. In the present case, the accused has admitted his signature on the cheques in issue.
21. It is pertinent to refer to the judgment of the Hon'ble Apex Court in the case of M/s Kumar Exports Vs. Sharma Carpets, (2009) 2 SCC 513 at this juncture, wherein it was held that:
"20. The accused in a trial under Section 138 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 non existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the Court need not insist in every case that the accused should disprove the nonexistence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, Ct. Case No.29298 of 2018 Page 10 of 26 apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the Court may either believe that the consideration and debt did not exist or their nonexistence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. 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 the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act."
22. Further, the above said principles have also been recently crystallized by Hon'ble Supreme Court in the case of Basalingappa vs Mudibasappa, (2019) 5 SCC 418, which is as follows:
"25. We having noticed the ratio laid down by this Court in above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:
(i) Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.Ct. Case No.29298 of 2018 Page 11 of 26
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
(iv) That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.
(v) It is not necessary for the accused to come in the witness box to support his defence."
23. As noted earlier, the accused has admitted his signature on the cheques in issue and hence, in the present case, a presumption under Section 139 NI Act has to be compulsorily raised in favour of the complainant. In view of the same, the burden of proof shifts upon the accused to rebut the presumption that such liability does not exist. The presumption raised under Section 139 of NI Act is that of legally enforceable debt or liability and it is for the accused to raise a probable defence to rebut the said presumption. Further, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. It has been held in the case titled K. Prakashan vs P. K. Surenderan, (2008) 1 Ct. Case No.29298 of 2018 Page 12 of 26 SCC 258, decided by the Hon'ble Supreme Court of India, that the accused has to discharge such burden by showing preponderance of probabilities.
24. The court has to now consider whether the accused has been successful in discharging the burden of proof. It was argued on behalf of the accused that that cheques in issue were given merely given as security to the complainant and thus, the accused does not have any liability towards the complainant.
25. The legal position qua security cheque is no more res integra. The Hon'ble High Court of Delhi in the case of Credential Leasing & Credits Ltd. vs. Shruti Investments & Anr. (2015) 223 DLT 343 after relying upon the case titled as Suresh Chandra Goyal v.Amit Singhal, (2015) 2 DLT (Cri) 803, decided by the Hon'ble High Court of Delhi has held as follows:
"15. In Suresh Chandra Goyal Vs. Amit Singhal, Crl. Appeal Nos.601/2015 decided on 14.05.2015, this Court had occasion to consider the defence of "security cheque". In that case the complainant invested monies, from time to time, in the business of the accused. A sum of Rs.3 Lakhs was outstanding after accounting for the monies returned by the accused. The accused entered into a MOU for repayment of the said outstanding amount in 6 monthly instalments of Rs.50,000/ each. The accused issued six security cheques of Rs.50,000/, which were to be returned upon payment of the corresponding instalment. While three instalments were admittedly received by the complainant, he claimed that the remaining three were not paid. The corresponding security cheques were banked; dishonoured Ct. Case No.29298 of 2018 Page 13 of 26 upon presentation, and; after issuance of statutory notice, the complaint under Section 138 NI Act filed due to non payment. This Court, inter alia, observed as follows: "28. There is no magic in the word "security cheque", such that, the moment the accused claims that the dishonoured cheque (in respect whereof a complaint under Section 138 of the Act is preferred) was given as a "security cheque", the Magistrate would acquit the accused. The expression "security cheque" is not a statutorily defined expression in the NI Act. The NI Act does not per se carve out an exception in respect of a "security cheque" to say that a complaint in respect of such a cheque would not be maintainable. There can be mirade situations in which the cheque issued by the accused may be called as security cheque, or may have been issued by way of a security, i.e. to provide an assurance or comfort to the drawee, that in case of failure of the primary consideration on the due date, or on the happening (or not happening) of a contingency, the security may be enforced. While in some situations, the dishonor of such a cheque may attract the penal provisions contained in Section 138 of the Act, in others it may not."
26. Further, recently, the Hon'ble Supreme Court in the case titled as APS Forex Services Pvt Ltd v. Shakti International Fashion Linkers and Ors. AIR 2020 SC 945 has held that:
"9. Coming back to the facts in the present case and considering the fact that the accused has admitted the issuance of the cheques and his signature on the cheque and that the cheque in question was issued for the second time, after the earlier Ct. Case No.29298 of 2018 Page 14 of 26 cheques were dishonoured and that even according to the accused some amount was due and payable, there is a presumption under Section 139 of the N.I. Act that there exists a legally enforceable debt or liability. Of course such presumption is rebuttable in nature. However, to rebut the presumption the accused was required to lead the evidence that full amount due and payable to the complainant has been paid. In the present case, no such evidence has been led by the accused. The story put forward by the accused that the cheques were given by way of security is not believable in absence of further evidence to rebut the presumption and more particularly the cheque in question was issued for the second time, after the earlier cheques were dishonoured. Therefore, both the courts below have materially erred in not properly appreciating and considering the presumption in favour of the complainant that there exists legally enforceable debt or liability as per Section 139 of the N.I. Act. It appears that both, the Learned Trial Court as well as the High Court, have committed error in shifting the burden upon the complainant to prove the debt or liability, without appreciating the presumption under Section 139 of N.I. Act. As observed above, Section 139 of the Act is an example of reverse onus clause and therefore once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always a presumption in favour of the complainant that there exists legally enforceable debt or liability and thereafter it is for the accused to rebut such presumption by leading evidence."Ct. Case No.29298 of 2018 Page 15 of 26
27. Thus, the contention led on behalf of the accused that the cheques in issue were given as security cheques and thus the accused does not have any liability towards the complainant, finds no force in view of the aforementioned binding judgements of the Hon'ble Courts. Further as per the presumptions raised under the NI Act, the burden to raise a probable defence has not been discharged by the accused. Thus, the defence raised by the accused that the cheques in issue were issued as security and thus the accused does not have any liability towards the complainant, does not come to rescue.
28. It was argued that the complainant has not elucidated the reason for granting loan to the accused and thus present complaint deserves to be dismissed.
29. It has been stated in the complaint that the accused had approached the complainant seeking friendly loan for running his business and the said fact has also been stated in the evidence by way of affidavit Ex. CW1/A. Moreover, application under Section 145 (2) NI Act seeking to cross- examine the complainant moved on behalf of the accused was withdrawn as per order dated 09.10.2019 and thus, the complainant was never cross- examined. In view of no cross examination of the complainant by the accused, it can be said that the testimony of the complainant is undisputed and thus can be presumed to have been accepted by the accused. Therefore, the evidence of the complainant that the accused had approached the complainant seeking friendly loan for running his business remains undisputed and in view of the same it cannot be said that the complainant has not elucidated the reason for granting loan to the accused. In view of the discussion, the contention led on behalf of the accused that complainant Ct. Case No.29298 of 2018 Page 16 of 26 has not elucidated the reason for granting loan to the accused and thus present complaint deserves to be dismissed is rejected.
30. It was stated on behalf of the accused that the cheques were issued in favour of Ramender Oil Carrier and not in favour of the complainant and hence the present complaint is not maintainable.
31. As per record, the present case has been filed by Sh. Yogender Singh and the cheques in issue have been issued in favour of Ramender Oil Carrier. In the complaint it has been specifically stated that the complainant is the proprietor of Ramender Oil Carrier and the said fact has also been stated in the evidence by way of affidavit Ex. CW1/A. Furthermore, as discussed above, the complainant was never cross-examined by the accused and thus, the testimony of the complainant is undisputed.
32. Moreover, it is pertinent to discuss the law laid down in the case titled as M. M. Lal v. State NCT Of Delhi 2012 (4) JCC 284, decided by the Hon'ble High Court of Delhi which is as follows:
"5. It is well settled that a sole proprietorship firm has no separate legal identity and in fact is a business name of the sole proprietor. Thus any reference to sole proprietorship firm means and includes sole proprietor thereof and vice versa. Sole proprietorship firm would not fall within the ambit and scope of Section 141 of the Act, which envisages that if the person committing an offence under Section 138 is a company, every person who, at the time of offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be Ct. Case No.29298 of 2018 Page 17 of 26 deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. Company includes a partnership firm and any other association of individuals. The sole proprietorship firm would not fall within the meaning of partnership firm or association of individual. Vicarious liability cannot be fastened on the employees of a sole partnership firm, by taking aid of Section 141 of the Act."
Thus, it is settled law that a proprietorship does not have a separate legal entity. In view of the law laid by the Hon'ble High Court of Delhi in the above stated case and in view of the earlier discussion, the contention led on behalf of the accused that the cheques were issued in favour of Ramender Oil Carrier and not in favour of the complainant and hence the present complaint is not maintainable is liable to rejected.
33. At this juncture, it is also pertinent to discuss that the present case has been filed against accused M.K Fancy Light Works through proprietor Sh. Manoj Kumar who has been arrayed as accused no. 1 and also against Sh. Manoj Kumar, proprietor M.K Fancy Light Works who has been arrayed as accused no. 2. In light of the ratio decidendi in the case titled as M. M. Lal v. State NCT Of Delhi 2012 (4) JCC 284, decided by the Hon'ble High Court of Delhi discussed earlier, the present judgement shall deal with role of accused no. 2 only.
34. It was argued on behalf of the accused that wrong cheque numbers have been written in the legal demand notice and even the name of the drawer of the cheques has been written wrongly in the legal demand notice and thus the present case is not maintainable. It is not in dispute that the same have been written wrongly in the legal demand notice.
Ct. Case No.29298 of 2018 Page 18 of 2635. For appreciating the argument led on behalf of the accused, reliance is placed upon judgement of the Hon'ble High Court of Delhi in the case titled as Santosh Arora vs. Jai Narain Aggarwal & State (Govt. of NCT of Delhi), Crl. M.C. No. 2875/2009 wherein it has been held as follows:
"5. A perusal of the demand notice sent by the complainant/respondent no doubt does not give the complete particulars of the dishonoured cheques. However, in para 1 of the notice the complainant has pointed out that the petitioner had borrowed a loan from the complainant in the month of August i.e. for a sum of Rs.1,80,000/- on 1.8.2008 and Rs.2,00,000/- on 7.8.2008. The demand notice further states that the petitioner had issued two cheques for the payment of the said amount and the said cheques were drawn on Punjab National Bank, Sector-7, Rohini, Delhi-85. Para 4 of the demand notice further mentions the fact of the said cheques being dishonoured after presentation on 24.12.2008 with the remarks "Funds Insufficient". Although the demand notice should have been more specific to clearly disclose the exact particulars of the dishonoured cheques but yet in the absence of the same and also on account of the fact that the amount of the two cheques were clearly mentioned with the name of the bank. Therefore, it cannot be said that requirement as envisaged under the proviso of Section 138 N.I. Act is not met with 6 . Notice cannot be viewed in a hypertechnical manner. The purpose of giving notice is to bring it to the notice of the drawer of the cheque that the cheque issued by him has been dishonoured and also to put him on guard with regard to making Ct. Case No.29298 of 2018 Page 19 of 26 of payment covered by the cheque within the time prescribed so as to avoid prosecution. If all the necessary particulars, viz., date of issue of cheque, amount of cheque, name of the bank on which cheque is drawn etc. then mere non-mentioning of cheque number or giving incorrect cheque number would not be fatal. Depending upon the facts and circumstances of the case, if the details given by the complainant are sufficient enough to bring it to the notice of the drawer of cheque that the cheque issued by him is dishonoured then non-mentioning or wrong mentioning of cheque number would in itself be not fatal to the case of the complaint."
36. Further, it has been recently held by the Hon'ble High Court of Delhi in the case titled as Naresh Chand Tyagi vs. Devender Kumar Tyagi, 2022 SCC OnLine Del 526 as follows:
"8. *** As far as the contention of the counsel for the petitioner is concerned that the cheque number has been wrongly mentioned is of no relevance and such ground cannot be the reason for quashing of the proceedings. Reliance can be placed on the judgment of Rajasthan High Court in Oswal Finlease Private Limited v. State of Rajasthan, 2014 SCC OnLine Raj 6663. Relevant para 6 & 7 are reproduced herein:
"6. Contention of the learned counsel for petitioner that mistake is bonafide seems to be true. Respondent has relied on 2012 (2) Cr. L. R. (Raj) 904, M.R. Choudhary v. State of Rajasthan where the complaint was filed about a particular Ct. Case No.29298 of 2018 Page 20 of 26 cheque whereas cheque submitted before the trial court was different. Hence the accused was acquitted but here in the present case, present petitioner wants to rectify his bonafide mistake. Further reliance has been placed on (2008) 13 SCC 689 : AIR 2008 SC 3086, Subodh S. Salaskar v. Jaiprakash M. Shah. where on the facts of the case, amendments on the complaint has been disallowed. But here in the present case, when complainant has been crossexamined, the mistake came to the notice of complainant and application for the rectification has been moved and no personcould be penalized for his bonafide mistake.
7. Hence, application is liable to be allowed and the present petitions is allowed and the order dated 26.9.2011 passed by Addl. Civil Judge (SD) cum Addl. Chief Judl. Magistrate, No. 10, Jaipur Metropolitan, Jaipur in Criminal complaint no. 869/2006 is set aside. Present petitioner is allowed to make necessary amendments in the complaint as about the details of bounced cheque and he is allowed to file a fresh affidavit in support of his complaint and the respondent is free to cross examine on the same."
9. Hence, the concerned trail court must look into this aspect and in my opinion the mentioning of wrong number of the cheque in the complaint would not make any difference as there are documents placed by respondent on record which gives the correct position and has to be taken as a typographical/inadvertent mistake."
Ct. Case No.29298 of 2018 Page 21 of 2637. In the present case, it has been specifically mentioned in the legal demand notice that complainant has granted friendly loan to the accused on 17.07.2017. It further states that the accused had issued two cheques in discharge of liability and said cheques were dishonoured after presentation on 27.06.2018 with the remarks "Funds Insufficient". Such averments have also been mentioned in the complaint and evidence affidavit Ex CW1/A. It is further not in dispute that the loan amount in respect of the transaction was duly mentioned in the legal demand notice and it was also stated that the cheques of the same amount were issued by the accused. In the present case, it is also not in dispute that the complainant has duly mentioned the correct details of the dishonoured cheques in the complaint and the evidence affidavit Ex. CW1/A and also filed the original dishonoured cheques on record.
38. Furthermore, in the notice served upon the accused under Section 251 CrPC, the accused has admitted giving cheques in issue to the complainant and has admitted having liability of Rs. 7,50,000/- towards the complainant. Moreover, in his statement under Section 281 CrPC read with Section 313 CrPC, the accused has admitted receiving Rs. 7,50,000/- from the complainant for investing in property and has stated that he will return the money as and when he gets enough money.
39. In view of the above discussion, it is held that vide the legal demand notice, attention of the accused was drawn to the fact that the cheques issued by him have been dishonoured and he was on guard with regard to making of payment covered by the cheques within the time prescribed so as to avoid prosecution and thus the argument led on behalf of the accused that wrong cheque numbers have been written in the legal demand notice and even the name of the drawer of the cheques has been written wrongly Ct. Case No.29298 of 2018 Page 22 of 26 in the legal demand notice and thus the present case is not maintainable is not tenable.
40. Further, judgement of the Hon'ble High Court of Madras in the case titled as Mohammad Irfan vs. Velukannan, Crl. A. No. 94 of 2014 relied upon on behalf of the accused is respectfully not applicable in facts and circumstances of the present case as the accused could not prove that the cheques in issue were issued as security despite wrong cheque numbers having been written in the legal demand notice.
41. It was contended that the parties were involved in a property transaction wherein losses were suffered and the complainant was given a property in lieu of such losses and thus the cheques in issue have been misused.
42. In the present case, accused has admitted issuing the cheques in issue to the complainant and even admitted having liability of the cheque amount towards the complainant, however, claims that he and the complainant were involved in a property transaction wherein losses were suffered and the complainant was given a property in lieu of such losses and thus the cheques in issue have been misused. As discussed above, the burden to dislodge the presumptions under the NI Act has been shifted upon the accused in the present case as the accused had admitted giving the cheques in issue to the complainant in a signed manner. Upon perusal of the material available on record and arguments led on behalf of the parties, it can be observed that no evidence has been led on behalf of the accused to prove such contention as the accused could not bring any cogent evidence in support of his claim and has merely stated that the settlement between the parties was verbal, however, the accused could not confront the Ct. Case No.29298 of 2018 Page 23 of 26 complainant with such factum as the application under Section 145 (2) NI Act seeking to cross examine the complainant moved on behalf of the accused was withdrawn as per order dated 09.10.2019 and thus, the complainant was never cross-examined and in view of no cross examination of the complainant by the accused, the testimony of the complainant remained undisputed. Even otherwise, bare averments that a verbal settlement was arrived at, cannot amount to proof of the contention raised on behalf of the accused. The accused has been unable to take home his contention even by relying on the material available on record. Moreover, the accused has admitted signing the cheques in issue. It is unconscionable to believe that accused would admit having liability to the tune of the cheque amount yet contend that he and the complainant were involved in a property transaction wherein losses were suffered and the complainant was given a property in lieu of such losses and thus the cheques in issue have been misused. Thus, the contention raised on behalf of the accused is baseless and liable to be rejected and the burden to dislodge the presumptions under the NI Act has not been discharged by the accused in the present case. Further, testimony of DW 2 and DW 3 does not come to rescue of the complainant.
43. It is further noteworthy that the reason for dishonour of the cheques is "Funds Insufficient". Admittedly, the accused has not bothered to give instructions to his bank to stop payment qua the cheques in issue and no explanation has been given by him for the same, despite the alleged misuse of the cheques in issue. Any reasonable person would rush to give instructions of stop payment as soon as they discover that the cheques they have issued might be misused and not doing so raises a suspicion over the case of the accused. Moreover, no complaint was lodged by the accused against the complainant alleging misuse of the cheques in issue.
Ct. Case No.29298 of 2018 Page 24 of 2644. Further, it is also worthy to note that the accused never demanded in writing the cheques from the complainant after its alleged misuse. This again raises a suspicion over the claim of the accused that the cheques in issue were misused, as any prudent person would atleast immediately give a notice in writing to a person who has been allegedly withholding something as valuable as signed cheques. Moreover, it has been admitted by the accused that he knew the complainant from before filing of the present case. The presumption is fortified by the fact that the complainant had produced the cheques in issue from his possession. In the totality of facts and circumstances of the present case, non demand of the cheques and non- filing of a complaint regarding misuse of the cheques in issue, raises a serious doubt about the veracity of defence of misuse of the cheques taken by the accused and thus the contention raised on behalf of accused that cheques in issue were misused is rejected.
45. In considered opinion of the court, the present complaint has disclosed the existence of a legally enforceable debt or liability vide the cheques in issue, return memos and the legal notice brought on record. Moreover, the complainant has successfully proved all the necessary ingredients of Section 138 of NI Act. On the other hand, the accused has failed to rebut the presumption in favour of complainant either on the basis of the material available on record or by adducing any cogent evidence as except for bare averments, which were not at all substantiated by any material on record.
46. In view of the evidence adduced, documents put forth and arguments advanced by the parties and further in view of the above discussion, the court is of the considered opinion that the accused no. 2 Manoj Kumar, Ct. Case No.29298 of 2018 Page 25 of 26 proprietor M.K Fancy Light Works is guilty of offence under Section 138 of Negotiable Instruments Act, 1881 and accordingly, is hereby convicted under Section 138 of Negotiable Instruments Act, 1881.
Copy of this judgement be given Dasti to the convict free of cost as per rules.
Announced in the court on 29.07.2022.
(Kapil Gupta) Metropolitan Magistrate(NI Act)-07 South West District, Dwarka Courts, New Delhi Ct. Case No.29298 of 2018 Page 26 of 26