Delhi District Court
Ms Narain Timber Products vs Ms Salach Enterprises on 11 March, 2025
IN THE COURT OF SH. RISHABH TANWAR,
JUDICIAL MAGISTRATE FIRST CLASS/NI ACT-01/WEST/TIS
HAZARI COURT/DELHI
CT Cases no. 13644/2016
CNR No. DLWT020043852016
M/s Narain Timbers,
Having its office at 1/4, Industrial Area,
Kirti Nagar, New Delhi-110015
Through its AR Sh. R. K. Dawar .........Complainant
Vs.
M/s Salach Enterprises
through its Proprietor of Sh. Sarabjeet Singh,
R/o B-64, WHS, Kirti Nagar, New Delhi ............Accused
::J U D G M E N T::
1. Date of institution of case : 10.06.2016
2. Date of reserving the judgment : 15.02.2025
3. Date of pronouncement of judgment : 11.03.2025
4. Offence complained or proved : 138 N.I. Act
5. Plea of Accused : "Not Guilty"
6. Final Order : CONVICTION Digitally
7. Date of Final Order : 11.03.2025 signed by RISHABH RISHABH TANWAR TANWAR Date:
2025.03.11 CC No. 13644/2016 M/s Narain Timbers vs. M/s Salach Enterprises pg. no. 1/20 15:05:49 +0530 BRIEF FACTS AND REASONS FOR DECISION
1. The present case arises from a complaint filed under section 138 read with section 142 of the Negotiable Instrument Act, 1881 (referred to as N.I. Act) by M/s Narain Timbers through its authorized representative Sh. R. K. Dawar (referred to as 'the Complainant') regarding the dishonor of cheque numbered 079901 dated 15.01.2016 respectively, for amount of Rs.1,83,819/-, drawn on ICICI Bank, Kirti Nagar branch (referred to as 'the cheque in question') issued by Sarabjeet Singh, the proprietor of M/s Salach Timbers (referred to as 'the accused') in favor of the complainant.
2. The complainant and the accused are engaged in the timber products business. It is alleged that the accused purchased products from the complainant against bills. The complainant asserts that a running account was maintained, recording all payments made by the accused during the business transactions. According to the ledger account of the accused, there was an outstanding liability of Rs. 41,60,154/- as of 10.08.2015. The accused issued cheque to discharge this liability, which were subsequently dishonored upon presentation, as indicated by the return memos dated 19.01.2016 from the complainant's bank, citing 'FUND INSUFFICIENT'.
The complainant issued a legal demand notice dated 18.02.2016 under section 138(b) of the NI Act. The complaint was filed when the accused RISHABH failed to pay the amount specified in the cheque despite receiving the legal TANWAR Digitally signed by demand notice. RISHABH TANWAR Date: 2025.03.11 15:06:07 +0530 CC No. 13644/2016 M/s Narain Timbers vs. M/s Salach Enterprises pg. no. 2/20
3. The complainant examined himself as CW-1 on 23.04.2016 and tendered his evidence on affidavit which was exhibited as Ex. CW-1/A. He also placed reliance on the following documents: -
(a) Ex. CW-1/1 is the ledger account statement of the accused for the period 01.04.2012-31.03.2017
(b) Ex. CW-1/2 is the cheque deposit slip dated 18.01.2016.
(c) Ex. CW1/3 is the cheque in question.
(d) Ex. CW-1/4 is the return memos dated 19.01.2016 respectively.
(e) Ex. CW-1/5 is the demand notice dated 18.02.2016.
(f) Ex. CW1/6 and Ex. CW1/7 are the postal receipt.
(g) Ex. CW-1/8 is the tracking report.
4. The accused was summoned on 23.04.2016 and made his first appearance on 08.09.2016. On 25.04.2017, the defense under section 251 Criminal Procedure Code, 1973 (hereinafter referred to as "Cr.P.C." for the sake of brevity) was recorded. The accused pleaded not guilty and claimed the cheque was given as security, not for purchasing goods. He said he regularly borrowed money from the complainant and provided security cheque, which he alleges have been misused. He confirmed his signatures on the cheque but denied receiving legal notice, despite acknowledging the address was correct.
5. This court had allowed the accused to cross-examine the complainant based on his defense raised under section 251 Cr.P.C. The complainant's evidence on affidavit (Ex. CW-1/A) was read as his examination in chief Digitally signed by RISHABH RISHABH TANWAR under section 145(1) NI Act. CW-1 was cross-examined by Ld. Counsel for TANWAR Date:
2025.03.11 15:05:59 +0530 CC No. 13644/2016 M/s Narain Timbers vs. M/s Salach Enterprises pg. no. 3/20 the accused, wherein he was confronted with handwritten receipts (Ex. CW-1/D-1, Ex. CW-1/D-2, Mark CW-1/DA, Mark CW-1/DB and Mark CW-1/DC) and witness denied that these document were prepared either by his staff or by him while giving loan to the accused wherein the interest charged was also mentioned. CW-1 admitted that he had appended any bills/vouchers showing the sale of goods to the accused along with his complaint.
6. The Statement of accused u/s. 313 Cr.P.C. was recorded on 20.12.2019 wherein the accused denied issuing the cheque to the complainant and denied receiving the legal notice. He further stated that he had never purchased any material from the complainant and had given the cheque in question as security to the complainant against the payments received.
7. The accused examined himself as a witness under section 315 Cr.P.C. wherein he had reiterated his defence taken under section 251 Cr.P.C. The accused brought his bank account statement from 04.06.2014 to 08.08.2014, his income tax returns for the assessment year 2014-15 with balance sheets (Ex. DW2) and Value Added Tax (V.A.T.) receipts Ex. DW3. The accused again filed an application under section 311 Cr.P.C. to bring on record the details of payment made to the complainant though his bank account statement Ex. DW-1/A alongwith with certificate under section 65B I.E.A. He was duly cross-examined by the Ld. Counsel for the complainant.
Digitally signed by RISHABH RISHABH TANWAR
8. The accused examined one Sh. Gopi Prashad as his witness (DW-2) TANWAR Date:
2025.03.11 15:06:21 +0530 CC No. 13644/2016 M/s Narain Timbers vs. M/s Salach Enterprises pg. no. 4/20 who was working with the accused has a labourer/' munshi' for last 32 years who deposed that the accused had never purchased any material from the complainant, however he denied knowing whether M/s Narain Timbers used to lend money on interest. He was duly cross-examined by the Ld. Counsel for the complainant.
9. The accused examined one Sh. Sukhdev Madnani as his witness (DW-3) who was a chartered account. In his cross-examination he stated that Ex. CW-1/C-2 were prepared based on books of accounts provided by M/s Salach enterprises and audited by him.
10. The accused examined one Sh. Jagjit Singh as his witness (DW-4) who was a running a shop opposite the accused. He deposed that he used to take money from interest from the complainant at 3% interest rate. He further stated that the complainant used to take cheque from him and raised invoices for material which have never been purchased by him. He further stated that he had introduced the accused to the complainant and the accused also used to take money from the complainant. He was duly cross-examined by the Ld. Counsel for the complainant. Subsequently, the case was put up for final arguments.
THE APPLICABLE LAW
11. Before appreciating the facts of the case in detail for the purpose of RISHABH decision, let relevant position of law be discussed first. It is well settled TANWAR Digitally signed by RISHABH TANWAR Date: 2025.03.11 15:06:28 +0530 CC No. 13644/2016 M/s Narain Timbers vs. M/s Salach Enterprises pg. no. 5/20 position of law that to constitute an offence under S.138 N.I. Act, the following ingredients are required to be fulfilled:
(1) That the cheque in question has been drawn by a person on an account maintained by him with a banker, for payment to another person from out of that account for discharge in whole/part any debt or liability.
(2) That the said cheque has been presented to the bank within a period of six months (now three months) from the date on which it is drawn or within the period of its validity whichever is earlier. (3) That the cheque was returned dishonoured by the drawee bank for want of sufficient funds or the same exceeded any arrangement with the banker to pay the sum covered by the cheque. (4) That the complainant gave a notice in writing to the drawer of the cheque within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid demanding payment of the cheque amount.
(5) Lastly that the accused failed to make payment to the payee (the complainant), or the holder in due course, the cheque amount within 15 days of the receipt of the notice.
12. It is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the N I Act. The Act also raises two presumptions in favour of the holder of the cheque namely first, in Section RISHABH 118(a) which says that every negotiable instrument was made or drawn for TANWAR consideration, and, second, a presumption under Section 139, that the holder Digitally signed by RISHABH TANWAR Date: 2025.03.11 15:06:34 +0530 CC No. 13644/2016 M/s Narain Timbers vs. M/s Salach Enterprises pg. no. 6/20 of cheque receiving the same of the nature referred to in Section 138 for discharge, in whole or in part, of any debt or other liability. Analysing all the concerned provisions of law and various pronouncements in this regard, the Hon'ble Apex Court in 'Basalingappa v. Mudibasappa, AIR 2019 SC 1983', noted at para 23 Bharat Barrel and Drum Manufacturing Company v. Amin Chand Pyarelal, (1999) 3 SCC 35; M.S. Narayana Menon alias Mani v. State of Kerala and another, (2006) 6 SCC 39; Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54; Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513; Rangappa v. Sri Mohan, (2010) 11 SCC 441]:
(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.
(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 RISHABH in support of his defence, Section 139 imposes an evidentiary TANWAR burden and not a persuasive burden. Digitally signed by RISHABH TANWAR Date: 2025.03.11 CC No. 13644/2016 M/s Narain Timbers vs. M/s Salach Enterprises pg. no. 7/20 15:06:40 +0530
(v) It is not necessary for the accused to come in the witness box to support his defence.
ARGUMENTS ADVANCED ON BEHALF OF THE PARTIES
13. Sh. Pranav Kishore Jha, Ld. counsel for the complainant has argued that the complainant has been able to prove all the pre-requisites of Section 138 NI Act against the accused and the accused has failed to rebut the presumption u/s. 138 NI Act. Ld. counsel has prayed that the accused be convicted of the offence u/s. 138 NI Act.
14. Per contra, Sh. Sanjeev Kohli, Ld. Counsel for the accused had argued that the accused had never bought any goods from the complainant. It was further argued that the complainant used to give loans on interest under the guise of goods transactions and he had given a loan to the accused against security cheque. It was further argued that the complainant has misused those security cheque to file the present complaint. Ld. Counsel for the accused has further prayed that the accused be acquitted of the offence alleged against him.
POINTS OF DETERMINATION
15. The following points of determination arise in the present case:
RISHABH A. Whether the complainant has successfully proven the facts which TANWAR would raise the presumption u/s. 118 r/w Section 139 of NI Act by Digitally signed by RISHABH TANWAR Date: 2025.03.11 CC No. 13644/2016 M/s Narain Timbers vs. M/s Salach Enterprises pg. no. 8/20 15:06:45 +0530 proving that the cheque in question bears the signature of the accused?
B. If yes, whether the accused has been successful in raising a probable defence to rebut the presumption under section 139 NI Act?
C. If yes, whether the complainant has proved its case, beyond the shadow of reasonable doubt, without taking the aid of presumption under section 139 NI Act?
FINDINGS OF THE COURT Points of determination number (A):
16. Whether the complainant has successfully proven the facts which would raise the presumption u/s. 118 r/w Section 139 of NI Act by proving that the cheque in question bears the signature of the accused?
17. It is settled law that once the signature upon the cheque in question has been admitted by the accused, certain presumptions are drawn, which result in shifting of onus. Section 118(a) of the NI Act lays down the presumption that every negotiable instrument was made or drawn for consideration. Another presumption is enumerated in Section 139 of NI Act. The provision lays down the presumption that the holder of the cheque received it for the discharge, in whole or part, of any debt or other liability. RISHABH TANWAR Digitally signed by RISHABH TANWAR Date: 2025.03.11 15:07:00 +0530 CC No. 13644/2016 M/s Narain Timbers vs. M/s Salach Enterprises pg. no. 9/20
18. The combined effect of these two provisions is a presumption that the cheque was drawn for consideration and given by the accused for the discharge of debt or other liability. Both the sections use the expression "shall", which makes it imperative for the court to raise the presumptions, once the foundational facts required for the same are proved. Reliance is placed upon the judgment of the Hon'ble Supreme Court in 'Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16'.
19. The Hon'ble Supreme Court in 'Kumar Exports vs. Sharma Carpets (2009) 2 SCC 513', while elaborating upon the interplay of section 118(a) r/w 139 of the N I Act, has held that:
"14. Section 139 of the Act provides that 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.
15. Applying the definition of the word "proved" in section 3 of the Evidence Act to the provisions of sections 118 and 139 of the Act, it becomes evident that in a trial under section 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under section 118 RISHABH TANWAR and 139 of the Act help him shift the burden on the accused. The Digitally signed by RISHABH TANWAR CC No. 13644/2016 M/s Narain Timbers vs. M/s Salach Enterprises pg. no. 10/20 Date: 2025.03.11 15:07:07 +0530 presumption will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence but only makes a prima facie case for a party for whose benefit it exists."
20. In the present case, the accused at the time of framing of notice u/s 251 and statement recorded u/s 313 Cr.P.C has admitted his signatures on the cheque in question. Once signatures are admitted, the presumption under section 118(a) r/w 139 NI Act becomes operative in favour of the complainant in the present case.
21. Accordingly, the point of determination number A is decided in the affirmative.
Points of determination number (B):
22. Whether the accused has been successful in raising a probable defence or in another words, whether he had been able to prove that the cheque were not issued towards any legally recoverable debt or any other liability?
23. Let us discuss the factual matrix of the present case. The accused has argued that he never purchased any goods from the complainant. He claims that he had been borrowing money from the complainant periodically and RISHABH repaid the loans in cash. However, the accused did not provide any details TANWAR under section 251 Cr.P.C. regarding the loan amounts borrowed, nor did he Digitally signed by RISHABH TANWAR Date: 2025.03.11 CC No. 13644/2016 M/s Narain Timbers vs. M/s Salach Enterprises pg. no. 11/20 15:07:12 +0530 submit any proof of payments made. The accused presented his bank account statement (Ex. DW-1/1A) to demonstrate that certain withdrawals were made to repay the loan to the complainant. It seems illogical that an individual would withdraw funds to make a repayment in cash rather than using a banking transfer. It would have been more straightforward for the accused to prove the repayment if it had been conducted through the banking system. Simply showing cash withdrawal entries does not suffice as evidence that the withdrawn amount was given to the complainant. In the absence of surrounding circumstances or eyewitness' testimony, it cannot be concluded that the cash withdrawal documented in Ex. DW-1/1A was given to the complainant by the accused.
24. Under his examination as a witness under section 315 of the Cr.P.C., the accused testified that the complainant issued timber invoices to him in lieu of interest payment. Even accepting the accused's argument, he cannot now claim that his cheque were misused. The accused knowingly accepted the invoices despite not allegedly purchasing any timber from the complainant; therefore, he cannot now assert that no timber was purchased. He should have insisted on executing a loan agreement or acknowledgment. By accepting the invoices, the accused is bound by all resulting consequences. Furthermore, the accused has failed to present any alleged bills if they were indeed issued to him. Therefore, this defence of the accused appears to be an eyewash and is liable to be rejected.
RISHABH TANWAR Digitally signed by RISHABH TANWAR Date: 2025.03.11 15:07:19 +0530 CC No. 13644/2016 M/s Narain Timbers vs. M/s Salach Enterprises pg. no. 12/20
25. The accused was confronted with the Value Added Tax (V.A.T.) Input for the goods purchased by him from the complainant (Ex. CW-1/C1) and he denied its authenticity. When it was pointed out that the TIN number on Ex. CW-1/C1 matched the document Ex. DW-3 - VAT Input document brought by the accused himself - he responded evasively and claimed he did not remember his TIN number. He acknowledged that the TIN number on both documents was identical and alleged misuse by the complainant. Typically, a vendor is expected to remember and identify their own TIN number since it is legally required on bills and frequently used in business. Given this situation, an adverse inference can be drawn regarding the accused's failure to recall his TIN number. The complainant demonstrated that he had taken the VAT input on the goods sold to the accused, as the TIN number on the VAT Input document Ex. CW-1/C1 and the document provided by the accused Ex. DW-3 were the same.
26. The defendant examined his employee (Munshi) as Defense Witness 2 (DW-2). DW-2 testified that he had been employed by M/s Salach Enterprises for the past 32 years and, to his knowledge, M/s Salach Enterprises had neither purchased any goods from the complainant nor received any goods from M/s Narain Timbers. During cross-examination, DW-2 admitted that the defendant had informed him of the facts prior to his testimony. Additionally, he acknowledged that he ceased working for M/s Salach Enterprises in 2016. It is apparent that DW-2 may have been influenced by the defendant before testifying. Notably, DW-2, as an employee of the accused, might naturally exhibit a bias in favor of his Digitally signed by RISHABH employer. The testimony provided by DW-2 is merely oral and lacks RISHABH TANWAR TANWAR Date:
2025.03.11 15:07:26 CC No. 13644/2016 M/s Narain Timbers vs. M/s Salach Enterprises pg. no. 13/20 +0530 corroborative evidence. Neither the defendant nor DW-2 submitted any accounts maintained by M/s Salach Enterprises reflecting business transactions with vendors during the relevant period, nor was any vendor list introduced as evidence. Consequently, DW-2's testimony has not substantiated the defendant's case.
27. The accused examined his Chartered Accountant, Mr. Sukhdev Madnani, as DW-3, who proved the books of account of the accused as Ex. DW-1/C-2. According to these records, the complainant's name appeared in the list of creditors under the name "M/s Narain Timbers" rather than his individual name. If the accused claimed he had never conducted business with the complainant but instead borrowed loans from him, it would be expected to see the complainant's personal name, not the proprietorship firm's name. Additionally, during cross-examination, the accused admitted that all his Income Tax Returns (I.T.R.) and balance sheets were prepared by Mr. Anil Verma based on information provided by the chartered accountant. He further stated that his accountant supplied information to Mr. Anil Verma. DW-4 acknowledged during cross-examination that the books of accounts were given to him by his client M/s Salach Enterprises through his advocate, Mr. Anil Verma. This indicates consistency in the testimonies of DW-1 and DW-4. It is important to highlight that the liability attributed to the complainant, listed as a sundry creditor in the balance sheet of the accused (Ex. DW-1/C-1) as of 31.03.2014, amounts to Rs. 39,76,332/-. This figure corresponds with the closing balance of the ledger account (Ex. CW-1/1) for March 2014, submitted by the complainant, thereby demonstrating RISHABH TANWAR Digitally signed by RISHABH TANWAR CC No. 13644/2016 M/s Narain Timbers vs. M/s Salach Enterprises pg. no. 14/20 Date: 2025.03.11 15:07:32 +0530 consistency in the complainant's case. Thus, DW-3, although a witness for the accused, contradicted the accused's claims.
28. The accused had examined one DW-4 to prove the fact that the complainant was working as a money lender. DW-4 stated that the complainant used to give him loans with an interest rate of 3% per month and he used to take cheque from him. He further stated that the complainant had raised invoices for materials against him for goods that were never delivered. Even if it is assumed that the complainant had given loans to DW-4, it does not prove that the complainant would have given loans to the accused as well. It may be possible that the complainant might have given a loan to DW-4, but this fact has no relevance to the present case since it is a completely different transaction. Furthermore, DW-4 stated that he had never purchased any timber from the complainant. When confronted with tax invoices [Ex. DW-4/CW-1/A (colly)], he admitted that the TIN number mentioned on them belonged to his business, which contradicts his statement that he had never conducted any business with the complainant. He also admitted that he had not shown any alleged loan taken from the complainant in his income tax returns or his books of account. During cross-examination, he admitted that he used to take advantage of input tax credit on purchases as per the invoice raised by the complainant. If DW-4 had not purchased any goods from the complainant, there would be no reason for him to claim the input tax credit on the invoices. Consequently, the testimony of DW-4 is considered unreliable. RISHABH TANWAR Digitally signed by RISHABH TANWAR Date: 2025.03.11 15:07:38 +0530 CC No. 13644/2016 M/s Narain Timbers vs. M/s Salach Enterprises pg. no. 15/20
29. Additionally, the accused has relied on certain handwritten documents (Mark CW-1/DA) spanning three pages, suggesting that these were written by the complainant's staff at his direction and provided to the accused. It is contended that this handwriting indicates the existence of a loan transaction between the parties. Notably, Mark CW-1/DA does not bear the complainant's signatures and was not authored by him. There are substantial doubts regarding the authenticity of these documents, including the identity of their creator, the ambiguous nature of the transactions mentioned therein, and their origin. The document Mark CW-1/DA cannot be considered reliable as it has not been substantiated. It would be feasible for any party to fabricate or produce such handwriting merely for confrontation with the witness. There is no evidence on record linking these documents to the complainant.
30. Now the moot question arises whether the accused has been able to prove that he had not issued the cheque in question for discharge of his legally recoverable liability. In short, why did the accused issue cheque to the complainant? The accused alleges that he had been taking loans from the complainant. He has not brought any iota of evidence to prove that either he had taken loans from the complainant or that he had paid interest to the complainant on any alleged loan. The details of cash payment shown in Ex. DW-1/1A only shows cash withdrawal entries and there is no proof that the cash withdrawn has been given to the complainant by the accused. There is no witness to prove these transactions. The accused's version, based on the oral testimonies of DW-2 and DW-4, has been deemed unreliable. Therefore, Digitally signed by it is concluded that the accused has failed to rebut the presumption under RISHABH RISHABH TANWAR TANWAR Date:
2025.03.11 15:07:50 CC No. 13644/2016 M/s Narain Timbers vs. M/s Salach Enterprises pg. no. 16/20 +0530 Section 139 NI Act, even on a balance of probabilities. Accordingly, the point of determination no. (ii) is decided in the negative.
31. Since the point of determination no. (ii) has been decided in the nega- tive, it would not be necessary to discuss the point of determination no. (iii).
32. On the other hand, the complainant has brought, not only his testimony but buttressed his case with ledger account statement of the accused (Ex. CW-1/1), books of accounting of the accused (Ex. DW-1/C-1). The presumption in his favour under section 139 NI Act have not rebutted. The complainant's case cannot be dismissed solely because he did not provide sale vouchers to the accused, as the accused has not countered the mentioned presumption. Therefore, the complainant has been able to prove that the accused had issued the cheque in question in discharge of his legally recoverable liability.
33. The complainant has also proved issuance of legal notice under section 138(b) to the accused. The accused has argued that the legal notice was not served upon him, though he had admitted that the address mentioned on the demand notice was correct. In this regard, it would be relevant to discuss the judgement of the Hon'ble Supreme Court in "C.C. Alavi Haji vs Palapetty Muhammad & Anr AIR 2007 SC (SUPP) 1705" wherein it was held that: "17. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no RISHABH stipulation of giving of a notice before filing a complaint. Any drawer who TANWAR Digitally signed by RISHABH TANWAR CC No. 13644/2016 M/s Narain Timbers vs. M/s Salach Enterprises pg. no. 17/20 Date: 2025.03.11 15:07:56 +0530 claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act."
34. It is established that the accused has not paid the amount specified in the cheque within 15 days of appearing in this court. Consequently, based on the aforementioned case, the accused cannot claim that he did not receive the legal notice or that it was not properly served upon him.
35. The accused claims that the complainant misused his security cheque. However, he has not filed any complaint regarding this misuse. It is a settled law, a cheque issued as security in a financial transaction cannot be considered worthless; it ensures the fulfilment of an obligation. If a cheque secures repayment of a loan and the loan is not repaid by the due date, the drawee can use the cheque for payment. If the cheque bounces, consequences under section 138 of the NI Act will apply. Reliance is placed upon 'Sripati Singh v. State of Jharkhand,2021 SCCOnline1002'. Further as RISHABH TANWAR to the plea of cheque being a security cheque, it was held in 'ICDS v. Beena Digitally signed by RISHABH TANWAR CC No. 13644/2016 M/s Narain Timbers vs. M/s Salach Enterprises pg. no. 18/20 Date: 2025.03.11 15:08:10 +0530 Shabir & Anr. (2002) 6 SCC 426', that security cheque would also fall within the purview of section 138 NI Act and a person cannot escape is liability unless he proves that the debt or liability for which cheque was issued as security is satisfied otherwise.
36. It stands proved beyond all doubts that the complainant has been able to prove all the necessary ingredients of the offence under section 138 NI Act.
37. It is trite law that when the accused has failed to rebut the presump- tion under section 139 NI Act, the court can proceed to convict the accused. reliance is placed upon the judgment of Hon'ble Supreme Court in Supreme Court in 'Rajesh Jain v. Ajay Singh, (2023) 10 SCC 148', which discusses the correct approach in dealing with presumption under Section 139 ob- served as under; relevant extracts are reproduced hereunder:
"54. ...Once the presumption under Section 139 was given effect to, the courts ought to have proceeded on the premise that the cheque was, in- deed, issued in discharge of a debt/liability. The entire focus would then nec- essarily have to shift on the case set up by the accused, since the activation of the presumption has the effect of shifting the evidential burden on the ac- cused. The nature of inquiry would then be to see whether the accused has discharged his onus of rebutting the presumption. If he fails to do so, the court can straightaway proceed to convict him, subject to satisfaction of the other ingredients of Section 138...." RISHABH TANWAR Digitally signed by RISHABH TANWAR Date: 2025.03.11 CC No. 13644/2016 M/s Narain Timbers vs. M/s Salach Enterprises pg. no. 19/20 15:08:17 +0530 CONCLUSION
38. Accordingly, this Court finds the accused Sh. Sarabjeet Singh, proprietor of M/s Salach Enterprises, S/o Late Sh. Charan Singh 'guilty' of the offence under Section 138 NI Act and accordingly he is convicted of the said offence.
39. This judgment contains 20 pages, and each page has been signed by the undersigned as per rules. Let the copy of digitally signed judgment be uploaded on the website of Tis Hazari District Court as per rules.
Digitally signed
RISHABH by RISHABH
TANWAR
TANWAR Date: 2025.03.11
15:08:25 +0530
Announced in open Court (RISHABH TANWAR)
On 11th Day of March 2025 JMFC (NI ACT-01)/WEST/DELHI
CC No. 13644/2016 M/s Narain Timbers vs. M/s Salach Enterprises pg. no. 20/20