Delhi District Court
Mukesh Kumar Mehto vs Ram Narayan Bajaj And Anr on 31 January, 2025
IN THE COURT OF SHRI KUMAR RAJAT,
ADDL. SESSIONS JUDGE-07, SHAHDARA DISTRICT,
KARKARDOOMA COURTS, DELHI.
CA No. 133/2022
CNR No. DLSH01-006382-2022
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. RAM NARAYAN BAJAJ,
S/o Sh. Bal Kishan Bajaj,
R/o A-127, 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 Ram Narayan Bajaj 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. 2,50,000/- as CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 1 of 28 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:
2025.01.31 14:35:37 +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 28.01.2014, complainant Ram Narayan Bajaj filed the complaint case u/s 138 NI Act against the appellant for two cheques of Rs. 75,000/- (each) both dated 11.11.2013 & 14.11.2013, 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 Ram Narayan Bajaj again filed the same criminal complaint case before the concerned court. 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 CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 2 of 28 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:
2025.01.31 14:35:44 +0530 previous dates and not paid the previous costs 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 costs.
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 witness, 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. 2,50,000/- 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.CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 3 of 28 Digitally signed by KUMAR
KUMAR RAJAT RAJAT Date:
2025.01.31 14:35:49 +0530
6. It is further submitted that Ld. MM fell in a grave error while appreciating the facts and law particularly about the alleged claim of the complainant that he had given the alleged loan of Rs. 1,50,000/- 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 tow cheques bearing no. 029362 & 029361 dated 11.11.2013 & 14.11.2013 respectively of Rs. 75,000/- each 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 cheques 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. Ld. MM did not appreciate that complainant falsely claimed that both the cheques in question were returned by the CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 4 of 28 Digitally signed by KUMAR KUMAR Date:
RAJAT RAJAT 2025.01.31 14:35:56 +0530 banker vide returning memos dated 19.11.2013 and he sent a legal notice dated 14.12.2013 through speed post as well as courier, which were received back unserved on 17.12.2013 and 21.12.2013 respectively and said legal notice was duly served upon the 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 were 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 14.12.2013 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 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 CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 5 of 28 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:
2025.01.31 14:36:01 +0530 list of witnesses i.e. bank official, postal department official, courier provider etc., and in statement u/s 313 Cr.P.C. 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 14.12.2013 is not valid as it was signed by some Rajiv instead of complainant Ram Narayan 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 Narain Bajaj CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 6 of 28 Digitally signed KUMAR by KUMAR RAJAT RAJAT 14:36:09 Date: 2025.01.31 +0530 as security at the time when appellant's deceased father had taken funds from Ram Narain Bajaj, who is real brother-in-law of Rajiv and DWs were examined by the appellant to prove his version.
11. Ld. Counsel for 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. Father of complainant used to run one Bajaj Dhaba at A-2, Gali No. 1, Madhu Vihar, Delhi and complainant helped him and both were earning handsomely 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 two cheques bearing no. 029361 and 029362 of Rs. 75,000/- each drawn at Axis Bank Ltd. Dated 14.11.2013 & 11.11.2013 to discharge the liability, but the same were 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 14.12.2013 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 CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 7 of 28 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:
2025.01.31 14:36:14 +0530 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.
13. It is further submitted that the defence taken by the appellant was that "his father took the loan from the respondent and at that time the security cheques were handed over by appellant to the complainant Ram Narain Bajaj and said cheques were misused against him without any liability, but this defence is not supported by any satisfactory documentary evidence and issuance of cheques as well as signatures were admitted by accused and appellant did not place on record any mortgaged deed as stated by him during his examination in chief, which was witnessed by his younger brother Prabhu Kumar and mother Ganeshi Devi. In his cross-examination, DW1 stated that said documents was executed at Amar Documents Centre and he did not put his signature at witness on the same and he was not aware of the dates of its execution. DW2 stated that loan was advanced by complainant in his office at Sai Chowk, while appellant stated the said place as Amar Documents Centre. DW2 did not put her thumb impression or signature and stated that she was not available in the office of Ram Narayan at the time of said transaction and she was not having any knowledge about advancing of loan or repayment or nature of document executed by her husband. DW3 admitted that loan was advanced by complainant to the father of the appellant in the office of advocate, but he did not reveal his name and he signed as witness CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 8 of 28 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:
2025.01.31 14:36:20 +0530 on the mortgaged deed, but it was never executed. There are several cases u/s 138 NI Act pending against the appellant and some have been settled by him and it shows the conduct of appellant, who has filed the present frivolous appeal, which deserves to be dismissed.
14. I have heard the rival contentions and perused the record.
15. The present complaint was filed by complainant Ram Narayan Bajaj 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. 1,50,000/- from complainant, which was received by him on 11.07.2013. In discharge of his legal liability towards the said payment, the accused had issued two cheques bearing no. 029362, Ex.CW1/A dated 11.11.2013 & 029361, Ex.CW1/B dated 14.11.2013 respectively of Rs. 75,000/- each drawn on Axis Bank, Yamuna Vihar, Delhi to the complainant with assurance of encashment on presentation.
16. 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 14.11.2013 and again presented the cheques, but again they returned without encashment vide return memo dated 19.11.2013, Ex.CW1/D for the same reason. The complainant contacted accused, but he refused to make payment as he became CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 9 of 28 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:
2025.01.31 14:36:25 dishonest.
17. It is also mentioned in the complaint that the complainant sent legal notice dated 14.12.2013, Ex.CW1/E through speed post and courier dated 14.12.2023 on the correct address mentioned in the complaint, Ex.CW1/F and Ex.CW1/G respectively, but notice sent through Speed Post returned back with remarks dated 17.12.2013 as unclaimed, Ex.CW1/H, 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.
18. 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 19.11.2013 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.
19. Upon service of summons, accused entered appearance and notice u/s 251 Cr.P.C. 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 cheques in question were given by him to complainant as security as his father had taken loan of Rs. 4 lakh from the complainant and he had not taken any loan from complainant and had no liability towards the cheques in question, but he admitted his signature on the said cheques.CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 10 of 28
Digitally signed by KUMAR KUMAR RAJAT Date:
RAJAT 2025.01.31
14:36:30
+0530
20. 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 & Ex.CW1/B Cheque no. 029361 dated 14.11.2013 of Rs.75,000/- and Cheque no. 029362 dated 11.11.2013 of Rs. 75,000/- both of Axis Bank, Yamuna Vihar New Delhi-53.
Ex.CW1/D Returning Memo dated 19.11.2013.
Ex.CW1/E Legal Demand Notice dated 14.12.2013.
Ex.CW1/F Postal Receipt. Ex.CW1/G Slip of DTDC Courier Ex.CW1/H Envelop of Speed Post
CW1 tendered his evidence by way of affidavit, Ex.CW1/1 and relied upon the above documents, Ex.CW1/A, Ex.CW1/B, Ex.CW1/D, Ex.CW1/E, Ex.CW1/F, Ex.CW1/G & Ex.CW1/H and reiterated the facts of the complaint.
21. 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 and the property/shop was mortgaged by his father, who had taken loan of Rs. 4 lakh and cheques were given as security by appellant.
(ii) The complainant could not prove that he had capacity and means to pay the amount of Rs. 1,50,000/- to the accused and has not revealed the source of the same.CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 11 of 28
Digitally signed by KUMAR KUMAR RAJAT Date:
RAJAT 2025.01.31 14:36:35 +0530
(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.
22. 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 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.
23. The accused/appellant was allowed to cross- examine the CW1/complainant, but despite various opportunities CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 12 of 28 Digitally signed by KUMAR KUMAR RAJAT Date:
RAJAT 2025.01.31 14:36:41 +0530 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 costs 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.
24. In his SA recorded u/s 281/313 Cr.P.C. appellant submitted that he had not filled the particulars of cheques in question and did not receive legal demand notice and he had not taken any loan from complainant, but his father had taken loan of Rs. 4-5 lakhs and he had given cheques in question as security for the loan taken by his father and he has no liability towards the complainant.
25. Appellant examined himself as DW1 and deposed that he was LIC Freelancer Commissioner Agent. Father of DW1 had taken loan of Rs. 4 lakh from father of complainant Ram Narayan and mortgaged his shop at A-127, Ground Floor, Gali No.8, Madhu Vihar, Delhi-92 and Ram Narayan issued blank cheques as security to him and Ram Narayan sold the said shop. The said transaction was witnessed by Prabhu Kumar, brother and Ganeshi Devi, mother.
CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 13 of 28 Digitally signed by KUMARKUMAR RAJAT Date: RAJAT 2025.01.31 14:36:47 +0530
26. DW1 has not deposed that he was not served with any notice nor he produced any document pertaining to the loan transaction nor took any objection that the complainant had not advanced any loan to him, rather he admitted that he had issued cheques to the complainant Ram Narayan. In his cross- examination, DW1 admitted his signatures on the said cheques and stated that he was present at Amar Documentation Centre when documents relating to mortgage were got prepared by his father, but admittedly he had not signed any document and in the absence of any such document, his testimony appears to be afterthought.
27. DW2, mother of appellant, deposed that complainant Ram Narayan Bajaj was known to her and cheque was not issued in her presence and her husband had taken loan from complainant Ram Narayan Bajaj of Rs. 4 lakh and shop was mortgaged in favour of complainant. DW2 is of no help to the accused, rather she has cemented the case of complainant as in her cross-examination, she admitted that accused was residing with her at Gali No. 8, Madhu Vihar, Delhi and she has not witnessed any such mortgage transaction. DW3, brother of appellant, deposed that he knew Ram Narayan Bajaj and reiterated about the loan of Rs. 4 lakh taken by his father from complainant by mortgaging shop, which was sold by complainant for non payment and his brother had given security cheques for the loan of his father. DW3 failed to produce any documents regarding loan taken by his father or execution of mortgage. DW3 admitted in his cross-examination that they had family visiting terms with complainant and stated that his brother i.e. CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 14 of 28 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:
2025.01.31 14:36:52 +0530 appellant resided separately from family at accommodation, 2-3 kms. from their house without any family problem. This version of DW3 creates doubt on the version of appellant that he had resided at Ghaziabad, UP and Mandawali, Delhi for a considerable and relevant period and that notice could not be served upon him. As per DW3, he was not having any dispute with family and if, any notice was sent through post/courier, the family members could have taken the same on his behalf, but it was the appellant, who refused the same. Testimony of DW1, DW2 and DW3 shows that they knew complainant Ram Narayan Bajaj.
28. CW1 was not cross-examined and his plea that accused had taken the friendly loan of Rs. 1.5 lakh and that appellant issued two cheques of Rs. 75,000/- each in discharge of his legal liability, which were dishonoured for the reasons "Funds Insufficient" and despite service of legal notice, the appellant failed to pay the same amount, 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, Ex.CW1/B, Ex.CW1/D, Ex.CW1/E, Ex.CW1/F, Ex.CW1/G and Ex.CW1/H 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 despite opportunities.
30. Accused at the time of his SA and notice u/s 251 Cr.P.C. has denied that he has received any legal notice, Ex.CW1/E dated 14.12.2013 sent through Speed Post and Courier vide receipts Ex.CW1/F & Ex. CW1/G respectively.
CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 15 of 28 Digitally signedKUMAR by KUMAR RAJAT RAJAT 14:36:58 Date: 2025.01.31 +0530 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/H 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 that summon was served on the appellant through his Bhabhi Prabha on 20.07.2015 for his appearance before Ld. MM on 25.08.2015 and since as per testimony of DW3 that appellant had no differences or disputes with the family and he was residing nearby and it shows that he was being told by his Bhabhi about the summons of court and thus, appellant had knowledge of the proceedings, but he deliberately did not appear in the Court and legal notice was sent on his last know address i.e. A-127, Madhu Vihar, Delhi.
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.
32. 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 CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 16 of 28 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:
2025.01.31 14:37:04 +0530 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.
33. DW1 admitted that he was residing at A-127, Madhu Vihar, Delhi and the same is correct address, which is mentioned in the legal notice as well as the complaint and he had given blank security cheques to complainant Ram Narayan at the time of mortgage of shop and his father and elder brother had not given any cheque. DW1 had not demanded said security cheques from Ram Narayan by giving any notice and he submitted that he demanded orally, which is an afterthought.
34. Ld. Trial Court rightly held that the defence of the accused that he did not receive legal demand notice is 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.CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 17 of 28 Digitally signed by KUMAR
KUMAR RAJAT RAJAT Date:
2025.01.31 14:37:10 +0530
35. 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.
36. 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/E 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 said address nor he produced any evidence qua his residing at Ghaziabad and Mandawali during the period claimed by him and the legal notice was signed by Rajiv, but the particulars of complainant Ram Narayan Bajaj is mentioned therein and that it was sent on behalf of complainant through 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 Amar Singh. 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 CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 18 of 28 Digitally signed by KUMAR KUMAR RAJAT Date:
RAJAT 2025.01.31 14:37:16 +0530 defence of accused was a sham one and cannot be relied upon.
37. 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 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.
38. The onus to prove whether the cheques in question were 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 cheques of Rs. 75,000/- each issued in the name of complainant, Ex. CW1/A & Ex. CW1/B, but he stated that he had CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 19 of 28 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:
2025.01.31 14:37:21 +0530 not filled the particulars therein.
39. 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.
Therefore the burden of proof is on B.
40. The accused has not disputed his signature on the cheques and thus, it shall be presumed that the holder of the cheques 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.
41. In case of 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, CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 20 of 28 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:
2025.01.31 14:37:26 +0530 "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 60 acres of agricultural land..."
42. 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.
43. 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 Ram Narayan to the police or other authority that he had misused the cheques or withheld the cheques 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 cheques nor he sent any legal notice to the complainant to return the said cheques by claiming that he had no legal liability towards the complainant.
CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 21 of 28 Digitally signed by KUMARKUMAR RAJAT RAJAT Date:
2025.01.31 14:37:30 +0530
44. 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 in other such cases.
45. 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 such instrument, in the capacity in which he signed the same, to any holder in due course for such amount.
46. 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 CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 22 of 28 Digitally signed by KUMAR KUMAR Date:
RAJAT RAJAT 14:37:40 2025.01.31 +0530 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 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;"
47. The accused had taken the plea that he had given the cheques as security to Ram Narayan. It is hard to believe as to why appellant(DW1) will give cheques 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. Ram Narayan was known to the family of appellant, which is evident from the testimony of DWs and no complaint was made against Ram Narayan for misuse of cheque.
48. In ICD Vs. Beena Shabir & Anr. 2002 (6) SCC 426 the Hon'ble Supreme Court held that the security cheques would also CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 23 of 28 Digitally signed by KUMAR KUMAR RAJAT RAJAT Date:
2025.01.31 14:37:45 +0530 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.
49. The complainant had paid a sum of Rs. 1,50,000/-, 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, 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.
50. 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".CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 24 of 28 Digitally signed by KUMAR
KUMAR RAJAT RAJAT Date:
2025.01.31 14:37:50 +0530
51. 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 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 CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 25 of 28 Digitally signed by KUMAR KUMAR Date:
RAJAT RAJAT 2025.01.31 14:38:01 +0530 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 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.
52. 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.
CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 26 of 28 Digitally signed by KUMARKUMAR RAJAT RAJAT Date:
2025.01.31 14:38:07 +0530
53. The complainant had proved that the said amount of Rs. 1,50,000/- 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.
54. The defence taken by the appellant before the Ld. Trial Court in his statement u/s 313 Cr.P.C. that the complainant has misused the cheques, which were 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.
CONCLUSION
55. 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 i.e. his sentence for a period of SI for 6 months compensation of Rs. 2,50,000/- to the complainant and in default sentence for 1 month SI for non payment of compensation, are upheld.
56. 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.
57. The appellant is directed to pay the further 9% interest on the cheque amount of Rs. 1,50,000/- from the date of Ld. Trial Court's order on sentence i.e. 01.09.2022 till the date of CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 27 of 28 Digitally signed by KUMAR KUMAR RAJAT Date:
RAJAT 2025.01.31 14:38:13 +0530 realization of the said amount apart from the said compensation of Rs. 2,50,000/- 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.
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.
58. 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 necessary compliance. KUMAR by KUMAR RAJAT RAJAT Date:
2025.01.31 14:38:20 +0530 (Kumar Rajat) ASJ-07/SHD/KKD Courts/Delhi 31.01.2025 CA. No. 133/2022 Mukesh Kumar Mehto Vs. Ram Narayan Bajaj & Anr. Page 28 of 28