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Delhi District Court

Mukesh Kumar Mehto vs Rajiv And Anr on 31 January, 2025

          IN THE COURT OF SHRI KUMAR RAJAT,
      ADDL. SESSIONS JUDGE-07, SHAHDARA DISTRICT,
             KARKARDOOMA COURTS, DELHI.

CA No. 132/2022
CNR No. DLSH01-006383-2022

MUKESH KUMAR MEHTO,
S/o Late Sh. Laxman Prasad Mehto,
R/o A-127, 3rd Floor, Gali No. 8,
Madhu Vihar, Delhi-92.                                                    ...Appellant

Vs.

1. RAJIV,
S/o Sh. Ved Prakash,
R/o A-26, Madhu Vihar,
Delhi-92.

2. STATE,
(Govt. of NCT of Delhi)
                                                                       ...Respondents

Present:-          Sh. A K Choudhary, Ld. counsel for appellant along
                   with appellant.
                   Sh. Vivek Kumar, Ld. Counsel for R1 appeared
                   through VC.
                   R1 Rajiv in person.
                   Sh. Ghanshyam, Ld. Substitute Addl. PP for the
                   State/R2.

                                  JUDGMENT

1. It is submitted by Ld. Counsel for the appellant that the present appeal has been filed against the impugned judgment dated 30.07.2022 and order on sentence dated 01.09.2022 passed by Ld. MM-02, Shahdara Karkardooma Courts, Delhi vide which appellant was convicted and sentenced to undergo SI for 6 months and directed to pay the fine of Rs. 1,75,000/- as CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 1 of 27 Digitally signed KUMAR by KUMAR RAJAT RAJAT 14:32:51 Date: 2025.01.31 +0530 compensation within 30 days and in default, shall undergo SI for 1 month.

2. It is submitted by Ld. Counsel for the appellant that appellant has two minor children and he has worked in Insurance Sector as Sales Officer with different companies from 2006 to 2020 and since then he is doing business of consultancy in sectors like Insurance, Finance, Loans etc., and he was residing at Vaishali, Ghaziabad upto February, 2013 and then shifted to Mandawali, Delhi and stayed as tenant till January, 2015 and then shifted to IP Extension, Delhi and resided there as tenant till January, 2016 and then, they returned to his parental house at Madhu Vihar, IP Extension, Delhi-92 and he never received any legal notice dated 14.12.2013 and he came to know about the present case through his brother when the police reached his parental house for execution of warrants.

3. It is also submitted that on 25.01.2014, complainant Rajiv filed the complaint case u/s 138 NI Act against the appellant for the cheque of Rs. 1,00,000/- dated 14.11.2013. On 15.11.2014, the said complaint case was directed to be returned to him due to jurisdictional issue in the light of judgment of Dashrath Roop Singh Rathore. On 06.01.2015, complainant Rajiv again filed the same criminal complaint case. On 16.01.2015, complainant examined himself as CW1 in pre- summoning evidence and he was the only witness examined. The notice u/s 251 Cr.P.C./274 BNSS was framed on 07.04.2018. On 09.12.2019 opportunity was given to appellant to cross- examine the complainant subject to cost as he had sought adjournments on previous dates and not paid the previous costs CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 2 of 27 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:

2025.01.31 14:32:58 +0530 and when cross-examination was not done, the CE was closed on that date as no other witness was to be examined. Ld. Counsel for appellant was present to examine the complainant, but he was not allowed by Ld. MM on the ground that he had not paid the cost.

4. It is also submitted that on 13.01.2020, SA of the appellant was recorded and on 24.11.2021 and 05.04.2022, appellant examined three defence witnesses i.e. DW1 Mukesh Kumar Mehto himself, DW2 Ganeshi Devi, mother and DW3 Sharma Mehto, brother. On 29.07.2022, appellant filed an application for re-calling witnesses, but it was dismissed vide order dated 30.07.2022 and impugned judgment was pronounced on same day and appellant was held guilty and vide order dated 01.09.2022, appellant was sentenced to SI for 6 months and to pay the fine of Rs. 1,75,000/- as compensation to the complainant and in default, SI for 1 month.

5. It is further submitted that the impugned judgment dated 30.07.2022 and order on sentence dated 01.09.2022 of Ld. MM are against the law and based on assumption or presumption and deserves to be set aside as Ld. MM ignored the material facts, circumstances and law. The present case is full of doubts, contradictions and provisions of law, but Ld. MM has not appreciated the relevant materials available on record as well as the evidence so recorded during the course of trial and required ingredients of Section 138 NI Act are not fulfilled, therefore, the conviction of appellant is wrong, incorrect and illegal in the eyes of law and he deserves to be acquitted.

6. It is further submitted that Ld. MM fell in a grave error while appreciating the facts and law particularly about the CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 3 of 27 Digitally signed KUMAR by KUMAR RAJAT RAJAT 2025.01.31 Date:

14:33:04 +0530 alleged claim of the complainant that he had given the alleged loan of Rs. 1 lakh to the accused/appellant, but the date and mode of payment of alleged loan are not mentioned and in order to discharge the liability, the accused/appellant has given the cheque bearing no. 062536 dated 14.11.2013 of Rs. 1,00,000/- to the complainant, which appeared to be very odd or unrealistic and on the other hand, the claim of the appellant/accused appeared to be genuine or plausible that said cheque in question were misused by the complainant.

7. It is further argued that complainant did not produce any books of accounts or any other proof to show that he got so much money from the bank and this fact is not mentioned in the complaint nor any written document is filed nor any witness to this effect has been examined. Apart from this, Ld. Trial Court failed to notice that ordinarily in terms of Section 269-SS of Income Tax Act, any advance taken by way of any loan of more than Rs. 20,000/ was to be made by way of an account payee cheque only, but this statutory provision was completely ignored by Ld. MM while passing the impugned judgment and it is punishable u/s 271-D IT Act. Thus, the complainant failed to prove his case from its inception as he has given the alleged loan in cash and Ld. MM failed to properly appreciate these facts and law.

8. Complainant claimed that cheque in question was returned by the banker vide returning memo dated 14.11.2013 and he sent a legal notice dated 13.12.2013 through speed post as well as courier, which were received back unserved on

17.12.2013 and said legal notice was duly served upon the CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 4 of 27 Digitally signed KUMAR by KUMAR RAJAT RAJAT Date: 2025.01.31 14:33:11 +0530 accused/appellant, but as per annexed copy of speed post envelop and the track of the courier, it is clearly reflected that the items booked through such postal department and courier was returned being unclaimed and the shop/premises found closed, but the complainant has not produced any document or examine any witness to that effect during trial that it was duly served upon the appellant and this fact was not appreciated by Ld. MM and he presumed that the alleged legal notice dated 13.12.2013 was duly served or received because it reached at the given address without going into the inquiry that same remained unserved. Hence, complainant has failed to prove his case from its inception on this aspect also, which is basic requirement of NI Act for proving the alleged claim of the complainant that alleged notice was served upon accused/appellant. The said legal notice was never served on the appellant and Ld. MM ignored that address of complainant and appellant were same and appellant has no knowledge about the pendency of present complaint as no such legal notice was received.

9. It is further argued that in the light of Dashrath Roop (Supra), the complaint case was filed beyond limitation and no condonation of delay application was filed and no opportunity to cross-examine the complainant was given to the appellant only for non payment of cost, which is against principles of natural justice and due to inadequate legal advice and financial weakness, the appellant could not engage a better defence lawyer. The complainant did not examine any other witness mentioned in the list of witnesses i.e. bank official, postal department official, courier provider etc., and in statement u/s 313 CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 5 of 27 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:

2025.01.31 14:33:16 +0530 Cr.P.C./351 BNSS material incriminating evidence was not put to the accused by the Ld. Trial Court.

10. It is also argued that the judgments cited by Ld. Counsel for appellant were ignored and the judgments cited in the judgment are of different facts and circumstances and Ld. MM did not appreciate that appellant belonged to poor family and has clean antecedents. The appellant has filed the written submissions and mentioned therein that after returning of complaint case, complainant had to file it within 30 days, but he re-file the case on 06.01.2015 after delay of 52 days and complaint case was time barred as per judgment of Dashrath (Supra) and even no application for condonation was filed or allowed. Complainant has not disclosed specific mode of giving said loan and that it was not a legally recoverable debt against the appellant and he has not disclosed his financial capacity and source for arranging the loan and he has not filed any ITRs for the relevant period of extending loan and legal notice dated 13.12.2013 is not valid as it was signed by some Ram Narayan Bajaj instead of complainant Rajiv and no corrigendum was sent and concerned advocate was not examined as witness and said legal notice was sent at wrong address, which was never served and fair and proper opportunity was not given to the appellant to cross-examine the complainant and no legal aid counsel was provided. Complainant had never given any loan and he misused the said cheque and appellant had given multiple blank signed security cheques including present one to Sh. Ram Narayan Bajaj as security at the time when appellant's deceased father had taken funds from Ram Narayan Bajaj, who is real brother-in-law of CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 6 of 27 Digitally signed by KUMAR KUMAR RAJAT Date:

RAJAT 2025.01.31 14:33:23 +0530 complainant Rajiv and DWs were examined by the appellant to prove his version.

11. Ld. Counsel for the R1 has filed the written submissions and argued that R1/complainant and appellant are permanent resident of Madhu Vihar, Delhi since childhood, hence very well known to each other and for the last so many years, respondent helped the appellant due to friendly relations and appellant always returned the amount as per his assurances, but in the first week of July, 2013, he did not return the amount and handed over cheque bearing no. 062536 of Rs. 1 lakh drawn at Axis Bank Ltd. dated 14.11.2013 to discharge the liability, but the same was returned dishonoured with returning memo dated

14.11.2013 and thereafter when no positive response was given by the appellant to return the amount, the legal notice dated 13.12.2013 was got issued by the respondent through his counsel through speed post and courier, but the notice sent through speed post returned unserved as unclaimed by the accused and the notice sent by courier did not return to the counsel for respondent and service was deemed fit and complaint was filed, but as per directions of Hon'ble Supreme Court file was returned due to jurisdiction issue and it was re-filed.

12. It is further argued that the conduct of appellant is also very much clear as he did not receive the notice issued by the Court and started to appear when NBWs were issued against him and several adjournments were sought by the appellant for cross examination of respondent and several times costs were imposed for non-examination of the witness, but the same are still unpaid.

KUMAR RAJAT Date:

RAJAT 2025.01.31 14:33:28 +0530

13. It is further submitted that the defence taken by the appellant was that "the cheque involved in the present case was handed over to Ram Narayan Bajaj, who had filed another case against the appellant and the series of cheque are different and under that circumstances it can not be presumed that the cheque involved in the present case was misused by the respondent in another case namely Ram Narayan Bajaj and the witnesses produced by the appellant also did not support his version. The said defence of appellant was not supported by any satisfactory documentary evidences and the issuance of cheque as well as the signatures are admitted by the accused. The appellant also did not place on record any mortgaged deed as stated by him during his examination in chief and under that circumstances when the transaction between the appellant and Ram Narayan was different, the said transaction had no concerned with this case.

14. The conduct of the appellant is very much clear that he accepted the cases filed against him by Ram Narayan Bajaj and Rajiv Kumar and one another case filed by one Sh. Amar Singh, to whom he also issued the cheque for a sum of Rs. 75,000/-, but as per the details available with the respondent some other cases are also pending or filed against the appellant in different courts.

15. It is further submitted that the above said circumstances are sufficient to show the conduct and nature of the accused, who is habitual of issuance of cheques to several persons including the respondent and the cases u/s 138 NI Act are still pending for and few are settled. In the present matter by going through with the facts and circumstances of the case the CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 8 of 27 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:

2025.01.31 14:33:34 +0530 judgment was passed by the Ld. Trial Court and appellant was held guilty. It is further submitted that the appeal of impugned order is based on false, frivolous and bogus grounds only with the motive to harass the respondent appeal be dismissed.

16. I have heard the rival contentions and perused the record.

17. The present complaint was filed by complainant Rajiv u/s 138 NI Act against appellant Mukesh Kumar Mehto, wherein it was alleged that accused was having good relations with complainant and since accused/appellant was in need of money, he requested complainant to extend financial help in first week of July, 2013 and complainant agreed to the same and accused took a friendly loan of Rs. 1,00,000/- from complainant on 14.07.2013. In discharge of his legal liability towards the said payment, the accused had issued a cheque bearing no. 062536 dated 14.11.2013 for a sum of Rs. 1 lakh drawn on Axis Bank, Yamuna Vihar, Delhi to the complainant, Ex.CW1/A with assurance of encashment on presentation.

18. On his assurance, the said cheque was deposited in said bank of complainant, but same was returned unpaid on presentation for the reason "Funds Insufficient" vide return memo dated 14.11.2023, Ex.CW1/B, which was returned to the complainant on 15.11.2013. The complainant contacted accused, but he refused to make payment as he became dishonest.

19. It is also mentioned in the complaint that the complainant sent legal notice dated 13.12.2023, Ex.CW1/C through speed post and courier dated 14.12.2023 on the correct address mentioned in the complaint, but notice sent through CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 9 of 27 Digitally signed by KUMAR KUMAR RAJAT Date:

RAJAT 2025.01.31 14:33:40 +0530 Speed Post returned back with remarks dated 17.12.2013 as unclaimed, while notice through courier did not return and deemed to be served, but no reply or payment was made by the appellant intentionally with ulterior and malafide reasons.

20. Then, on failure to pay the cheque amount within statutory period, the complaint u/s 138 NI Act was filed. The cheque was presented within the period of 3 months and legal notice was issued within 30 days of receipt of return memo dated 17.12.2013 and after the service of the legal notice on the appellant, the complaint was filed after the expiry of 15 days from the date of receipt of the said notice.

21. Upon service of summons, accused entered appearance and notice u/s 251 Cr.P.C./274 BNSS was framed on 07.04.2018 against him and accused was allowed to cross- examine the complainant u/s 145 (2) of NI Act. The accused at that time had taken a plea that he had not received any legal notice and cheque in question was given by him to Ram Narayan as security and he did not know complainant and he had no transaction with him and had no liability towards the cheque in question, but he admitted his signature on the said cheque.

22. The complainant examined himself as CW1 and led evidence by way of affidavit, Ex.CW1/1 reiterating the facts of complaint and proved the following documents/exhibits:

Documentary Evidence Ex.CW1/A Cheque no. 062536 dated 14.11.2013 of Rs.1,00,000/- of Axis Bank, Yamuna Vihar New Delhi-53.

Ex.CW1/B Returning Memo dated 14.11.2013 CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 10 of 27 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:

2025.01.31 14:33:47 +0530 Ex.CW1/C Legal Demand Notice dated 13.12.2013 Ex.CW1/D Postal Receipt Ex.CW1/E Slip of DTDC Courier Ex.CW1/F Envelop of Speed Post CW1 tendered his evidence by way of affidavit, Ex.CW1/1 and relied upon the above documents, Ex.CW1/A to Ex.CW1/F and reiterated the facts of the complaint.

23. The main contentions of the appellant in the present appeal are that:

(i) That the cheque amount was not given by complainant to the appellant and he had not taken any loan.

(ii) The complainant could not prove that he had capacity and means to pay the cash amount of Rs. 1,00,000/- to the accused and has not revealed the source of the same.

(iii) That no legal notice was served on the appellant and he has not shown the transaction in his ITRs and he could not have paid that much amount in cash, which is barred under IT Act.

24. Section 138 NI Act: Dishonour of cheque for insufficiency, etc. of funds in the accounts Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds 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 provisions of this Act, be punished CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 11 of 27 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:

2025.01.31 14:33:53 +0530 with imprisonment for [a term with may be extended to two years] 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 months from the date on which it is drawn or within the period of its validity, whichever is earlier,

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said amount of money 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.

25. The accused/appellant was allowed to cross- examine the CW1/complainant, but despite various opportunities he could not cross-examine the complainant as he did not pay the previous costs imposed on him on various dates from 07.10.2017 to lastly on 16.07.2019 for a total sum of Rs. 15,000/- and on several dates either counsel or complainant was not available and appellant was given opportunity to cross-examine the CW1/complainant on 07.04.2018, but on the next several dates neither he paid the cost nor cross-examined CW1/complainant and CE was closed on 09.12.2019 and accused had not challenged the said order dated 09.12.2019, rather he led DE and examined 3 witnesses including himself. Thus, the testimony of CW1 by way of affidavit, Ex.CW1/1 is unrebutted as he was not cross-examined.

KUMAR RAJAT RAJAT Date:

2025.01.31 14:33:58 +0530

26. In his SA recorded u/s 281/313 Cr.P.C. (316/351 BNSS) appellant submitted that he had not filled the particulars of cheque in question and did not receive legal demand notice and said cheque was given to Ram Narayan and not to the complainant and he did not know complainant nor he took any loan from him and cheque was given as security.

27. Appellant examined himself as DW1 and deposed that he was LIC Freelancer Commissioner Agent and did not know complainant Rajiv and his father had taken loan of Rs. 4 lakh from Ram Narayan and his shop at A-127, Ground Floor, Gali No.8, Madhu Vihar, Delhi-92 was mortgaged to Ram Narayan and issued blank cheque as security to him and Ram Narayan sold the said shop.

28. In his cross-examination, DW1 stated that he saw complainant Rajiv as he was residing in the same colony, but he was not having any relationship with him. DW2, who is mother of appellant deposed that she did not know Rajiv, but father of appellant had taken loan from Rajiv for sum of Rs. 1 lakh, which is contrary to the stand of DW1 that his father had taken loan of Rs. 4 lakh from Ram Narayan and that DW1 has not deposed, if his father has taken any loan from Rajiv. DW3 is the brother of appellant, who has deposed that he knew Rajiv, who was the complainant in the present case and in his cross, he stated that he knew Rajiv for last 4-5 years being friends and house of Rajiv was 200-300 m. from his house at A-227, Madhu Vihar, Delhi and DW3 also stated that he met Rajiv 5-6 years after completion of his education in 1996. Testimony of DW2 and DW3 shows that they knew complainant Rajiv and thus, it cannot be said that CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 13 of 27 Digitally signed by KUMAR KUMAR RAJAT Date:

RAJAT 2025.01.31 14:34:03 +0530 appellant was not known to the complainant.

CW1 was not cross-examined and his plea that accused had taken the friendly loan of Rs. 1 lakh remain unrebutted and there is no evidence about his incapacity or that complainant had not tendered any friendly loan to appellant.

29. The documents, Ex.CW1/A to Ex.CW1/F are proved as there is no question asked in the cross-examination of CW1 qua these documents as he was not cross-examined by appellant.

30. Accused at the time of his SA and notice u/s 251 Cr.P.C./274 BNSS has denied that he has received any legal notice, Ex.CW1/C dated 13.12.2013 sent through Speed Post and Courier vide receipts Ex.CW1/D & Ex. CW1/E respectively. Legal notice was sent to the correct address of accused i.e. A-127, Madhu Vihar, Delhi-92, but vide Speed Post the Envelop, Ex.CW1/F returned unclaimed, but the courier did not return and it was the last known address of the appellant and he has given the said address at the time of his examination as DW1 and same is also mentioned in the complaint filed before the concerned court and there is also one report of Process Server dated 03.05.2014, which is part of the record, as per which, he visited the said address of appellant and appellant had read the summons and copy of complaint, but he refused to receive and the person on the ground floor identified said person as appellant Mukesh Kumar Mehto, which shows that appellant had knowledge of the proceedings, but he deliberately refused to receive the summons and he was residing at the same address, on which notice was sent.

Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:

2025.01.31 14:34:11 +0530

31. Section 27 of The General Clauses Act, 1897.

27. Meaning of service by post Where any Central Act or Regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression serve or either of the expressions give or send or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.

In C Niranjan Yadav & D Ravi Kumar 2024 Livelaw (Kar) 313, Hon'ble Karnataka High Court held that notice u/s 138 NI Act is valid if sent to last known address of accused and onus is on the accused to say why he did not receive it and also held as follows:

29. Presumption under the General Clauses Act, 1897, would go to show that if a person has addressed a registered letter to the last known address that was known to a particular person, it is deemed to have been served.

30. Under such circumstances, admission, i.e. obtained in the cross-examination attributable to the complainant is not that significant enough to hold that the entire case of the complainant is to be discarded. As is referred to supra, since the purpose of issuing notice is to save the bonafide drawer of the cheque, nothing prevented the accused to pay the money after he appeared before the learned trial Magistrate or at least at the stage of the appeal, or at least before this Court.

31. Therefore, the arguments put forward on behalf of the petitioner that improper service of notice should result in dismissal of the complaint cannot be countenanced in law.

32. DW1/appellant in his cross-examination admitted that from the very beginning till he was examined on 24.11.2021, CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 15 of 27 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:

2025.01.31 14:34:18 +0530 he was residing at A-127, Madhu Vihar, Delhi i.e. the address on which legal notice was sent through different modes by the complainant. Thus, the complainant has proved that legal notice, Ex.CW1/C was served on the last known address of the appellant.

33. Ld. Trial Court rightly held that the defence of the accused that he did not receive legal demand notice without any merits as in decision in C.C. Alvi Haji V. Palpetty Muhammad & Anr. (2007) 6 SCC 555, which states that in case, drawer of cheque raises an objection that he never received legal notice, he/she can within 15 days of the receipt of the summons make payment of cheque amount and in case, he does not do so, he cannot complain that there was no proper service of legal notice u/s 138 NI Act.

34. Accused examined himself as DW1 and other two other DWs and he could have rebutted the presumptions by preponderance of probabilities and not by the defence beyond reasonable doubt, but he failed to do so. The accused examined himself as DW1, but he has not deposed in his examination in chief that he was not residing at A-127, GF, Madhu Vihar, Delhi at the time when legal notice was issued at the said address to him and even he has not deposed about the financial capacity of complainant.

35. The contention of the accused is that he had not received the legal notice, but no such question is asked in the cross-examination of CW1, who had sent the legal notice, Ex.CW1/C to the accused at his address i.e. A-127, GF, Madhu Vihar, Delhi and he has not proved that he was not residing at the CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 16 of 27 Digitally signed by KUMAR KUMAR Date:

RAJAT RAJAT 2025.01.31 14:34:23 +0530 said address nor he produced any evidence qua his residing at Ghaziabad and Mandawali, Delhi during the period claimed by him and the legal notice was signed by Ram Narayan, but the particulars of complainant Rajiv is mentioned and that it was sent on behalf of Rajiv by the counsel, who had signed the same and DW1 admitted in his cross that one case u/s 138 NI Act was filed against him by Ram Narayan. Inadvertently the legal notice in case titled Ram Narayan Vs. Mukesh Kumar Mehto was got signed by counsel from Rajiv and in case titled as Rajiv Vs. Mukesh Kumar Mehto, the legal notice was got signed by Ram Narayan. The purpose of sending notice is to make the party aware of his liability to repay the loan and particulars of Rajiv are mentioned in the same and thus, there is no defect in notice, which was deemed to be served on the appellant. The defence of accused was a sham one and cannot be relied upon.

36. There are presumptions under Negotiable Instruments Act and the relevant ones are as follows:

Section 118 NI Act: Presumption as to negotiable instruments Until the contrary is proved, the following presumption shall be made:-

(a) of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;

(b) as to date - that every negotiable instrument bearing a date was made or drawn on such date;

(g) that holder is a holder in due course - that the holder of a CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 17 of 27 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:

2025.01.31 14:34:28 negotiable instrument is a holder in due course;

Section 139 NI Act: 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 NI Act for the discharge, in whole or in part, of any debt or other liability.

37. The onus to prove whether the cheque in question was issued by the appellant in discharge of his liability in whole or in part lies on the complainant, but once the issuance of the cheque is established and the signatures on the cheque is admitted, then the presumption u/s 139 of NI Act is to be raised against the accused. The appellant has admitted his signatures on the said cheque of Rs. 1,00,000/- dated 14.11.2013 issued in the name of complainant, Ex. CW1/A, but he stated that he had not filled the particulars therein.

38. Section 4 of Indian Evidence Act:

"Shall presume": Whenever it is directed by this Act that the court shall presume a fact, it shall regard such fact as proved, unless and until it is disproved.

Section 102 Evidence Act: On whom burden of proof lies The burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side.

Illustration

(b) A sues B for money due on a bond.

The execution of the bond is admitted, but B says that it was obtained by fraud, which A denies.

In no evidence were given on either side, A would succeed, as the bond is not disputed and the fraud is not proved.

KUMAR by KUMAR RAJAT RAJAT 2025.01.31 Date:

14:34:33 +0530 Therefore the burden of proof is on B.

39. The accused has not disputed his signature on the cheque and thus, it shall be presumed that the holder of the cheque received the same for the discharge in whole or in part of any debt or other liability. The moment, the signature and issuance of cheque is admitted, the onus shifts on the appellant to disprove the allegations made against him by the complainant in the complaint. The usage of word 'shall' in Section 118 and 139 NI Act cast a duty on the Court to raise presumption particularly when the signature on cheque is admitted by the appellant.

40. In case Kashmir Singh v. Satnam Singh, (Punjab and Haryana) 2024 (1) R.C.R. (Criminal) 407, Hon'ble P & H High Court has upheld the conviction of the accused u/s 138 NI Act passed by Ld. Trial Court and held, "Para 14. That in the instant case, the petitioner has not denied his signature on the cheque. His contention is that the contents of the body of the cheque had been filled up and therefore, the cheque in question was a forged one. It may be relevant to mention here that once the signatures on the cheque are admitted, a rebuttable presumption arises that the said cheque has been issued in the discharge of a legally enforceable debt. The accused has led absolutely no evidence to rebut the said presumption either independently or by virtue of the cross examination of the complainant. In fact the petitioner has been unable to explain as to how the cheque has come into possession of the complainant and as to what was the enmity between the parties because of which he (petitioner) had been falsely implicated. It is also relevant to mention here that though the question of the financial capability of the complainant to pay the amount in question cannot be questioned once the issuance of cheque is established, however, in the instant case, the complainant has been able to establish his financial capacity by leading evidence to the effect that he was the owner of CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 19 of 27 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:

2025.01.31 14:34:38 +0530 60 acres of agricultural land..."

41. Hon'ble Supreme Court in Rangappa Vs. Sri Mohan reported as (2010) SCC 11 441 held that presumption u/s 139 of NI Act would also include within its ambit the presumption regarding existence of legally enforceable debt or liability.

42. The appellant could have rebutted the presumptions u/s 118 and 139 NI Act, but he failed to do so as he had not made any complaint against the complainant or Ram Narayan that they had misused the cheque to the police or other authority or withheld the cheque in question as security and even he did not make any representation to the concerned bank in this regard that complainant might misuse the said cheque nor he sent any legal notice to the complainant to return the said cheque by claiming that he had no legal liability towards the complainant.

43. The defence witnesses are of no help to the appellant as they failed to rebut any presumption, rather they have made the case of complainant more strong and admittedly the complainant was facing trial for 4-5 such cases.

44. Appellant claimed that he had only signed the cheque and not filled the particulars therein, which is not tenable.

Section 20 NI Act: Inchoate stamped instruments Where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in [India], and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 20 of 27 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:

2025.01.31 14:34:43 +0530 such instrument, in the capacity in which he signed the same, to any holder in due course for such amount.

45. It is pertinent to mention here that as per judgment in Bir Singh Vs. Mukesh Kumar (Crl. Appeal No.230-231 of 2019), Hon'ble Supreme Court has observed that:

"37. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted.

38. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence. In Ravi Chopra vs State & Anr Vs. Hon'ble High Court of Delhi held that Section 20 NI Act talks of inchoate stamped instruments; and states that if a person signs and delivers a paper stamped in accordance with the law and;either wholly blank or have written thereon an incomplete negotiable instrument, such person thereby gives prima facie authority to the holder thereof to make or complete as the case may be upon it, a negotiable instrument for any amount specified therein and not exceeding the amount covered by the stamp."

XXX XXX XXX "A collective reading of the above provisions shows that even under the scheme of the NI Act it is possible for the drawer of a cheque to give a blank cheque signed by him to the payee and consent either impliedly or expressly to the said cheque being filled up at a subsequent point in time and presented for payment by the drawee. There is no provision in the NI Act which either defines the difference in the CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 21 of 27 Digitally signed by KUMAR KUMAR Date:

RAJAT RAJAT 2025.01.31 14:34:48 +0530 handwriting or the ink pertaining to the material particulars filled up in comparison with the signature thereon as constituting a material alteration for the purposes of Section 87 NI Act. What however is essential is that the cheque must have been signed by the drawer;"

46. The accused had taken the plea that he had given the cheque as security to Ram Narayan. It is hard to believe as to why appellant(DW1) will give cheque as security to Ram Narayan for the loan secured by his father from him when the shop was mortgaged by his father, which was sold by Ram Narayan and DW1 failed to examine any witness in this regard nor he has filed any complaint against Ram Narayan that he had misused the cheque and gave it to Rajiv. Rajiv was known to his brother and mother and no complaint was made against Ram Narayan for misuse of cheque.

47. In ICD Vs. Beena Shabir & Anr. 2002 (6) SCC 426 the Hon'ble Supreme Court held that the security cheques would also fall within the purview of Section 138 NI Act and a person cannot escape his liability merely by stating that the cheque has been given as security. As such when there is existence of debt on the date of pretension of cheque and the security cheque issued is dishonoured, the accused would be liable u/s 138 NI Act. Similar view was taken by Hon'ble Delhi High Court in Wilson Mathew Vs. State of NCT of Delhi Crl. Rev. P. 188/2015 dated 15.09.2015.

48. The complainant had paid a sum of Rs. 1,00,000/-, which is not a huge amount to question his financial capacity particularly in the absence of his cross-examination and it is common between friends, family friends and relatives to make cash payments in the needy time and in this case, the accused required the money towards financial help and out of good faith, CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 22 of 27 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:

2025.01.31 14:34:55 +0530 the complainant had given the said amount as friendly loan.

In view of the above, it cannot be said that the complainant did not have capacity or means to pay the said amount and thus, this contention of the appellant is not tenable.

49. One more legal point required consideration was non mentioning of loan transaction in the Income Tax Return on payment of more than Rs. 20,000/- in cash by complainant. It is pertinent to mention here that The Hon'ble Supreme Court in the case of Krishna Janardhan Bhat Vs. Dattataraya G. Hegde reported as (2008) 4 SCC 54 has discussed section 269SS of ITA in the realm of section 138 of NI Act. Relevant extract of the Judgment reproduced below:

"19. The court's below failed to notice that ordinarily in terms of section 269SS of ITA, any advance taken by way of any loan of more than Rs 20,000/- was to be made by way of an account payee cheque only".

50. It should be noted that the Hon'ble Supreme Court in Rangappa Vs. Sri Mohan reported as (2010) SCC 11 441 has expressly overruled the observations in Krishna Janardhan Bhatt (Supra) to a limited extent that presumption u/s 139 of the Act would also include within its ambit the presumption regarding existence of legally enforceable debt. Although, the Apex Court did not specifically deal with the issue of advancing of loan amount of more than Rs. 20,000/- in cash, it nonetheless upheld the conviction of accused in the case which involved loan transaction of Rs. 45,000/- in cash. At this stage, it would be prudent to refer decision of Hon'ble Bombay High Court in case of Krishna P. Morajkar Vs. Joe Ferrato reported as 2013 SCC OnLine Bom 862, wherein it was held that Hon'ble Supreme CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 23 of 27 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:

2025.01.31 14:35:01 Court has impliedly overruled Krishna Janardhan Bhatt Case on the aspect that loan of more than Rs. 20,000/- could not be advanced in cash. Observations made by the Hon'ble Supreme Court in Krishna Janardhan Bhatt case regarding loan transaction of more than Rs 20,000/- in cash was made in peculiar facts and circumstances. The said observation cannot be considered as a blanket prohibition on loan transactions of more than Rs. 20,000/- in cash. A bare reading of the provision enshrined in section 269SS of the IT Act would suggest that there is a prohibition in accepting or taking loan by a data for an amount of more than Rs. 20,000/- in cash. It is more of a regulatory provision in nature which regulates the mode of accepting deposits or loans. It does not per se declare all transactions in cash above the threshold of Rs. 20,000/- illegal. No similar prohibition has been made regarding advancing of such loan by the lender or creditor. If the loan of more than Rs. 20,000/- in cash has been accepted by the debtor then he cannot seek protection u/s 269SS of the IT Act to argue that the said loan transaction is illegal and nothing could be recovered from him. At this stage, I also find support from Rangappa case and Krishna P. Morajkar case wherein transactions of more than Rs. 20,000/- in cash loan were upheld by the Hon'ble courts. Therefore, I am of the view that there is no blanket provision on advancing a loan of more than Rs. 20,000/- in cash. Courts cannot remain oblivious of the fact that loan transactions in cash specially between the family members and friends are very common. Rendering all such transactions illegal would frustrate the very basic purpose of section 138 NI Act and could prove to CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 24 of 27 Digitally signed by KUMAR KUMAR RAJAT Date:

RAJAT 2025.01.31 14:35:09 +0530 be heaven for unscrupulous debtors. Thus, it cannot be said that the whole transaction is vitiated, if done in cash for amount of more than Rs. 20,000/- and if it is so, then the family members/relatives/close friends may take advantage of the relations and escape from their legal liability towards the person, who had advanced the loan.

This plea as well as the plea of Limitation in re- filing was not taken before Ld. Trial Court nor challenged the same, thus taking such pleas in appeal will not help the appellant.

51. The judgment of Ld. Trial Court is well reasoned and supported by various judicial precedents on the issues raised by the accused before the Ld. Trial Court and as such the appellant is not entitled to any relief in the present appeal and accordingly, the judgment dated 30.07.2022 and order on sentence dated 01.09.2022 of the Trial Court are upheld.

52. The complainant had proved that the said amount of Rs. 1,00,000/- was the legally enforceable debt as explained in Section 138 of NI Act and also all the ingredients, the offence u/s 138 NI Act have been proved against the appellant before the Ld. Trial Court and the same do not require any interference from this Court.

53. The defence taken by the appellant before the Ld. Trial Court in his statement u/s 313 Cr.P.C./351 BNSS that the complainant has misused the cheque, which was given as a security to Ram Narayan, is not plausible as he could not rebut the presumptions or could bring on record any evidence to substantiate the said claim.

KUMAR by KUMAR RAJAT RAJAT 14:35:15 Date: 2025.01.31 +0530 CONCLUSION

54. In view of the discussion above, the appeal of the appellant Mukesh Kumar Mehto is dismissed and the judgment dated 30.07.2022 and order on sentence dated 01.09.2022 passed by Ld. MM, Shahdara Karkardooma Courts, Delhi are upheld i.e. his sentence for a period of SI for 6 months compensation of Rs. 1,75,000/- to the complainant and in default sentence for 1 month SI for non payment of compensation.

55. In R. Vijayan Vs. Baby (2012) 1 SCC 260, the Hon'ble Supreme Court held that in all cases where there is a conviction, there should be a consequential levy of fine of an amount sufficient to cover the cheque amount and interest thereon at a fix rate of 9% per annum interest.

56. The appellant is directed to pay the further 9% interest on the cheque amount of Rs. 1,00,000/- from the date of Ld. Trial Court's order on sentence i.e. 01.09.2022 till the date of realization of the said amount apart from the said compensation of Rs. 1,75,000/- as ordered by the Ld. Trial Court within 30 days and in default appellant has to undergo SI for 1 month. The appellant is also directed to pay the pending costs of Rs. 15,000/- imposed by Ld. Trial Court, if not paid till now.

Further, the default sentence against the compensation or fine cannot be a solution for the complainant and the accused may escape his financial liability by serving the default sentence. The solution lies u/s 421/431 Cr.P.C. (461/471 BNSS) under which the compensation/fine may be made recoverable and the law in this regard has been laid down in Kumaran Vs. State of Kerala 2017 (7) SCC 471.

KUMAR RAJAT Date: RAJAT 2025.01.31 14:35:21 +0530 The compensation amount as well as the interest accrued and the cost imposed shall be recoverable u/s 421/431 Cr.P.C. (461/471 BNSS), if not paid.

57. With these observations, the present appeal is dismissed and accordingly, disposed of.

Appellant/convict on bail is taken into custody. The surety/bail bonds cancelled. Surety discharged.

Copy of judgment be sent to Ld. Trial Court with TCR and be given to the convict/appellant free of cost.

The appeal file be consigned to Record Room after Digitally signed by KUMAR necessary compliance. KUMAR RAJAT Date: RAJAT 2025.01.31 14:35:27 +0530 (Kumar Rajat) ASJ-07/SHD/KKD Courts/Delhi 31.01.2025 CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 27 of 27