Delhi District Court
M/S Khanna Traders And Engineers vs Sh Bhupinder Singh on 22 January, 2025
IN THE COURT OF Ms. Kavita Bist: JMFC : MAHILA
COURT-01 : PATIALA HOUSE COURTS : NEW DELHI.
M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh
Ct Cases No. 1522/2017
U/s 138 Negotiable Instruments Act, 1881
1. CIS number : 1522/2017
2. Name of the Complainant : M/S Khanna Traders &
Engineers through its Manager
Sh. Rohit Khanna
S/o Late D.P. Khanna
Office at: CB-105, Ring Road,
Naraina, New Delhi-110028.
3. Name of the accused, : Sh. Bhupinder Singh proprietor
parentage & residential address of M/s Yadvi Enterprises
S/o Sh. Rajbir Singh
Office at: Plot no. 108, Khasra
No. 23/2, First Floor, Gali no. 13,
Sushant Vihar, Ibrahimpur,
Delhi-110036
also at: G-1, DSIDC Industrial
shed, 72, Work Center, G-Block,
Near Marbal Market,
Mangolpuri, Delhi-110083
4. Offence complained of or : U/s 138 Negotiable Instruments
proved Act, 1881
5. Plea of the accused : Pleaded not guilty and claimed
trial.
6. Final Judgement / order : Convicted
7. Date of Judgement / order : 22.01.2025
Date of Institution : 02.01.2015
Date of Reserving Judgement / Order : 23.12.2024
Date of Pronouncement of Judgement / Order : 22.01.2025
Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 1/22
Digitally
signed by
KAVITA
KAVITA BIST
BIST Date:
2025.01.22
16:46:54
+0530
JUDGEMENT
1.) By way of the present Judgement, this court shall dispose off the present complaint filed by M/S Khanna Traders & Engineers through its Manager/AR Sh. Rohit Khanna (herein after referred to as 'Complainant') against Sh. Bhupinder Singh proprietor of M/s Yadvi Enterprises (herein after referred to as 'accused') u/s 138 Negotiable Instruments Act, 1881 r/w section 142 Negotiable Instruments Act, 1881 (herein after referred to as "N.I. Act" in short).
Factual Matrix
2.) The brief facts as alleged by the complainant in the complaint are that the complainant is a partnership firm and engaged in the business of manufacturing and selling of printing material and accused is the proprietor of M/S Yadvi Enteriprises and accused used to have business transactions with the complainant firm. The complainant firm had supplied printing material such as UV Screen Lacquer vide invoice no. 924 dated 03.03.2014 to the accused and as per the books of accounts maintained by the complainant against the accused in the due course of business an amount of Rs. 53,824/- is due upon the accused towards the complainant and in discharge of his legally enforceable liability towards the complainant firm, the accused had issued a cheque bearing no. 401783 (herein after referred to as 'cheque in question') dated 19.09.2014, amounting to Rs. 46,154/- drawn on IDBI Bank, Sector-3, Rohini Delhi in favour of the complainant.
When the Complainant presented the said cheque, (herein after referred to as 'cheque in question') through its banker Central Bank of India, Parliament Street, New Delhi branch, the same was returned unpaid Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 2/22 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.01.22 16:46:59 +0530 by the banker of the accused vide returning memo dated 03.11.2014 with the remarks "Payment Stopped by Drawer".
The complainant thereafter issued a legal demand notice on 08.11.2014 through Counsel calling upon the accused to pay the said cheque amount within a period of 15 days from receipt thereof. The said notice was duly served upon the accused and the accused failed to pay the aforesaid cheque amount within the statutory period.
Hence, the present complaint u/s 138 N.I.Act was filed on 02.01.2015 by the complainant, praying for the accused to be summoned, tried and punished for commission of the offence u/s 138 N.I.Act. The Complainant has averred that the present complaint is within the period of limitation and falls within the territorial limits of this Court's jurisdiction;
thus, being tenable at law.
Proceedings before the Court
3.) Pre-summoning evidence of the complainant: To prove prima-facie case, the complainant led pre-summoning evidence by way of affidavit, exhibit CW1/A.
4.) Documentary Evidence of the complainant: To prove his prima-facie case, the complainant has relied upon the following documents:
a.) Letter of Authorization of complainant firm in favour of Sh. Rohit Khanna exhibited as Ex. CW1/1.
b.) Copy of partnership deed of M/S Khanna Traders and Engineers exhibited as Ex. CW1/2.Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 3/22
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2025.01.22 16:47:04 +0530 c.) Copy of ledger account maintained by the complainant against the accused from 01.04.2013-05.11.2014 exhibited as Ex. CW1/3.
d.) Copy of invoice no. 924 dated 03.03.2014 exhibited as Ex. CW1/4.
e.) Original cheque bearing no. 401783 dated 19.09.2014 exhibited as Ex. CW1/5.
f.) Original returning memo dated 03.11.2014 exhibited as Ex. CW1/6.
g.) Legal demand notice dated 08.11.2014 exhibited as Ex. CW1/7.
h.) Speed postal and courier receipts exhibited as Ex. CW1/8, Ex. CW1/9, Ex. CW1/10 and Ex. CW1/11.
i.) Returned envelopes of legal demand notice exhibited as Ex. CW1/12 and Ex. CW1/13.
j.) Tracking reports for the legal demand notice exhibited as Ex. CW1/14 to Ex. CW1/17.
5.) After perusing the complaint and hearing the argument of the complainant on the point of summoning of the accused, prima-facie it appeared that the offence u/s 138 N.I.Act has been committed. Hence, cognizance of the offence u/s 138 N.I.Act was taken on 02.01.2015.
6.) Framing of notice and plea of defence: Notice u/s 251 Cr.P.C was framed against the accused on 01.09.2022 to which he pleaded not guilty and claimed trial.
7.) Evidence of the complainant: After the framing of notice, AR of the complainant was cross-examined as CW-1 and discharged. No other witnesses were examined by the complainant. Thereafter, complainant Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 4/22 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.01.22 16:47:10 +0530 evidence was closed, and the matter was put up for statement of accused u/s 313 r/w Section 281 Cr.P.C.
8.)Statement of the accused: Statement of the accused was recorded u/s 313 r/w Sections 281 Cr.P.C on 04.04.2024, wherein all the incriminating circumstances appearing in evidence against the accused were put to him to which, he admitted his signature on the cheque in question and stated that he had not received any legal demand notice. He further stated that the cheque in question was given as a security cheque to the complainant and the payment of the cheque in question was stopped by him as the material sent by the complainant was defective and further stated that despite several requests, the complainant did not pay any heed to his grievances as to the defective material. The accused has also stated that he wants to lead defence evidence and the present case is a false and fabricated case.
9.) Defence evidence: The accused entered the witness box as DW1. Thereafter, a separate statement of the accused closing defence evidence was recorded and defence evidence was closed and then the matter was fixed for final arguments.
10.) Final Arguments: Final arguments were advanced by both sides. I have heard the submission of Ld. Counsel for the complainant as well as the accused. I have also perused the record.
11.) Before deciding the present complaint case u/s 138 of N.I. Act, 1881, the following legal requirements must be satisfied from the averments in the complaint as well as the evidence of complainant.
a.) That a person has drawn a cheque, on an account maintained by him with the banker for payment of any amount of money in other person from Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 5/22 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.01.22 16:47:15 +0530 out of that account for the discharge, in whole or in part, of any legally enforceable debt or other liability;
b.) That the cheque has been presented to the bank with in a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier;
c.) That the cheque has been returned by the drawee bank unpaid, for the reason that the amount of money standing to be credit of that account is insufficient to honor the cheque or that it exceeds the amount arranged to be paid from that account by agreement made with that bank;
d.) That the payee or holder in due course has made a demand for payment of the said amount of money by giving the notice in writing to the drawer of the cheque within 30 days of receipt of information from the bank regarding the return of the cheque as unpaid;
e.) That the drawer of the cheque fails to make the payment of the said amount of money to the payee or holder in due course within 15 days of the receipt of the said notice;
The aforesaid legal requirements are cumulative in nature, i.e only when all of the aforementioned ingredients are duly proved is the drawer of the cheque deemed to have committed an offence u/s 138 of N.I Act.
The provision of section 138 N.I. Act is buttressed by section 139 and section 118(a) of the N.I. Act. Section 139 of the Act provides that the court shall presume, that the holder of a cheque received the cheque for the discharge, wholly or in part of any debt or other liability. Section 118(a) of the Act provides interalia that the court shall presume, until the contrary is proved, that every Negotiable Instrument was made or drawn for Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 6/22 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.01.22 16:47:20 +0530 consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration.
12.) It is a well settled principle of criminal jurisprudence that a criminal trial proceeds on the presumption of innocence of the accused i.e an accused is presumed to be innocence unless proved guilty. Thus, normally the initial burden to prove is on the complainant/prosecution to prove the guilt of the accused. Also, the standard of prove is beyond reasonable doubt. However, in offences u/s 138 of the N.I Act, there is a reverse onus clause contained in section 118(a) and section 139 of the N.I Act. The presumption u/s 139 and section 118(a) of the N.I Act mandate the court to draw them, when a given set of facts are shown to exist. The same is evident by the peremptory language "Shall presume" used. However, the said presumptions are rebuttable in nature, i.e it is open for the defence to disprove the same by establishing facts to the contrary.
In the case of Hiten P. Dayal Vs. Bratindranath Bannerjee (2001) 6 SCC 16, the Hon'ble Supreme Court had occasion to examine the confines of the presumptions u/s 139 of the Act wherein, it held as follows:
"because both section 138 and 139 require that the court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras Vs. A. Vaidyanatha Iyer AIR 1958 SC 61, it is obligatory on the court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. It introduces an Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 7/22 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.01.22 16:47:24 +0530 exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused. The obligation on the prosecution may be discharged with the help of presumptions of law or facts unless the accused adduces the evidence showing the reasonable possibility of the non existence of the presumed fact. Therefore, the rebuttal does not have to be conclusive establish but such evidence must be adduced before the court in support of the defence that court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of 'prudent man'"
13.) It is a settled proposition of law that the standard of proof which is required from the accused to rebut the statutory presumption u/s 118(a) r/w section 139 of the N.I Act is preponderance of probabilities. The accused is not required to prove his case beyond reasonable doubt. This onus on the accused can be discharged from the materials available on record and from the circumstantial evidences. At this point, the Hon'ble Supreme Court in M.S Narayan Menon Vs. State of Kerala (2006) 6 SCC 39 has interalia held the following:
"The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from materials on record but also by reference to the circumstances upon which he relies."
14.) It is not always mandatory for the accused to examine its own witness in order to rebut the said statutory presumption. At this point, reliance may Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 8/22 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.01.22 16:47:28 +0530 be placed on the decision of the Hon'ble Supreme Court in the case of Krishna Janardhan Bhat Vs. Dattatraya G. Hegde AIR 2008 SC 1325, wherein the Hon'ble Court has categorically held the following:
"Accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. As accused has a constitutional right to remain silent. Standard of proof on the part of an accused and that of the prosecution in a criminal case is different."
15.) With regard to the factors taken into account for rebutting the presumption u/s 139 r/w Section 118(a) of the Act, the Judgment of Hon'ble Delhi High Court in V.S Yadav Vs. Reena, 172 (2010) DLT 561, assumes importance, wherein, it was held that:
"Mere pleading not guilty and stating that the cheques were issued as security, would not amount to rebutting the presumption raised u/s 139 of N.I Act. The accused, by cogent evidence, has to prove the circumstance under which cheques were issued."
16.) Now, I shall proceed with the legal ingredients one by one and give my finding on whether the evidence on record satisfies the legal ingredients in question or not:-
a.) "That a person has drawn a cheque, on an account maintained by him with the banker for payment of any amount of money in other person from out of that account for the discharge, in whole or in part, of any legally enforceable debt or other liability."Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 9/22
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2025.01.22 16:47:33 +0530 16.1) This condition pertains to the issuance of the cheque itself. It is pertinent to note that the accused in his statement recorded u/s 313 r/w Section 281 of Cr.P.C has admitted his signature on the cheque in question.
Further, the cheque has been drawn on the account of accused's firm. This leads to drawing of an inference u/s 139 r/w section 118 of the Act, that the cheque was issued in discharge of a legally recoverable debt or other liability.
16.2) The presumption, having been raised against the accused, it falls upon him to rebut it. The accused has taken a defence that he had given the cheque in question as a security cheque to the complainant and the payment of the cheque in question was stopped by him as the material sent by the complainant was defective and further stated that despite several requests, the complainant did not pay any heed to his grievances as to the defective material and as such denies the liability towards the cheque in question. He further stated that he did not receive any legal demand notice issued by the complainant. The accused has cross examined CW1 and has examined himself before the court as DW-1 in his defence.
16.3) The standard of proof for rebuttal is on preponderance of probabilities. As held by the Hon'ble Supreme Court in decision as K.N Beena Vs. Muniyappan and Anr. (2001) 8 SCC 458, in order to rebut the presumption, mere denial by the accused will not suffice. The accused must prove by leading cogent evidence that there was no debt or liability.
16.4) Major defence led by the Ld. Counsel for accused is that the accused had given the cheque in question as a security cheque to the complainant and the payment of the cheque in question was stopped by the accused as Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 10/22 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.01.22 16:47:38 +0530 the material sent by the complainant was defective and further stated that despite several requests of accused, the complainant did not pay any heed to grievances of accused as to the defective material and as such denies the liability towards the cheque in question. He further stated that the accused did not receive any legal demand notice issued by the complainant. In the present case, the onus to prove that accused has not issued the cheque in question for any legal liability in favour of the complainant primarily lied on the accused. Section 103 of Indian Evidence Act, 1872, enunciates that the person who asserts a fact must prove the same unless the law otherwise provides.
Now, I shall deal with all the defences separately.
The cheque in question issued as security.
A contention advanced by the defence which deserves scrutiny of this court is that the cheque in question was given as security cheque to the complainant. Even if it is assumed that the cheque in question was issued as security to the complainant, by this fact alone, the presumption u/s 139 N.I Act can not be disloged. The law is settled on the point of security or advance cheque. The Hon'ble High Court of Delhi in the case of Suresh Chandra Goel Vs. Amit Singhal (2015) SCC Online DEL 6459 has observed that:
"Section 138 of N.I Act does not distinguished between a cheque issued by the debtor in discharge of his existing debt or other liability, or a cheque issued as a security cheque on the premise that on the due future date the debt which shall have crystallized by then, shall be paid. So long as there is a Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 11/22 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.01.22 16:47:43 +0530 debt existing, in respect whereof the cheque in question is issued, in my view, the same would attract section 138 of N.I Act in case of its dishonor."
The Hon'ble Supreme court of India in Sripati Singh (D) Vs. State of Jharkhand 28.10.2021 held that:
"A cheque issued as a security pursuant to a financial transaction can not be considered as a worthless piece of paper under every circumstance. Security in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledge to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advance and borrower agrees to repay the amount in a specified time frame and issued a cheque as security to secure such repayment; if the loan amount is not repay in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplate u/s 138 and the other provisions of N.I Act would flow."
Hence, mere averment that the cheque in question was given as security cheque in the absence of any cogent evidence is not sufficient to Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 12/22 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.01.22 16:47:49 +0530 rebut the statutory presumption raised against the accused. Therefore, in view of the above judgments, the defence taken by the accused that the cheque in question was given as a security has no force.
Invoice & ledgers not duly proved One of the defence taken by the accused which requires the attention of this court is that the ledger and invoice filed by the complainant in the present matter are not duly proved, as such, the complainant has failed to establish its claim.
In this regard, firstly it is important to draw attention on the complaint and evidence affidavit of the complainant wherein, the complainant has stated that the accused used to have business transactions with the complainant establishment and the complainant has supplied the printing material vide invoice number 924 dated 03.03.2014 Ex. CW1/4 to the accused and as per the books of account of the complainant establishment Ex. CW1/3 maintained in its regular course of business an amount of Rs. 53,824/- is due upon the accused towards the complainant.
As far as, the business relationship between the complainant and accused is concerned, it is important to draw attention on the examination of accused wherein, he has admitted that he was having business relation with the complainant establishment from 2013 till 2014, however, one of the ledger account (01.04.2013 till 31.03.2014) filed by the complainant in the present matter is a computer generated copy and the same is not supported with any certificate u/s 65B of IEA and also the other ledger account ( 01.04.2014 till 05.11.2014) as well as the invoice Ex. CW1/4 filed by the complainant in the present matter is a mere photocopy.Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 13/22
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2025.01.22 16:47:53 +0530 In this regard, it is also important to draw attention on the judgment of Hon'ble Supreme Court of India in D.K. Chandel Vs. M/s Wockhardt Ltd. and Anr, Criminal Appeal No. 132 of 2020, wherein the Hon'ble Court held that production of the account books, cash books may be relevant in the civil court; but may not be so in the criminal case filed u/s 138 of N.I. Act.
Although, the complainant has not filed the original invoice and certificate u/s 65B of IEA along with computer generated copy of ledger regarding the alleged liability of accused, however, considering the abovesaid judgment, the burden is still on the accused to rebut the presumption in favour of complainant, even in the absence of original invoice and certificate u/s 65B of IEA for the computer generated ledger account, as the present case pertains to dishonour of cheque and not recovery of money in a civil suit or claim for damages. Moreover, the accused has categorically admitted the business relationship with the complainant establishment from 2013 till 2014 which is in consonance with the ledger account filed by the complainant establishment in the present matter.
Considering the above-said judgment, and in view of the above-said findings and also considering the admission of business relation on the part of accused with the complainant, the court is considered view that the defence taken by the accused that the ledgers and invoice filed by the complainant in the present case are not duly proved and as such, complainant has failed to establish its claim, does not go into the root of the present matter.
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2025.01.22 16:47:58 +0530 Material supplied was of sub standard quality One of the defence taken by the accused which requires the close scrutiny of this court is that the material supplied by the complainant to him was of sub- standard quaility.
In this regard, it is important to draw attention on the testimony of DW-1 i.e accused in the present matter, wherein he has stated that he used to issue duly filled cheques to the complainant for the security of the purchases at the time of every purchase as the complainant establishment used to supply material to him on credit basis of 60 days, however, he has stated that the material supplied by the complainant to him in the month of June-July 2014 was of sub standard quality and he got to know about the same from his customers/users and after that he had contacted the complainant telephonically 3-4 times, however, the complainant does not pay any attention to his calls and as he had already given the cheque in question to the complainant for the said material that is why he had instructed his bank to stop the payment of the same.
As far as, the above-said defence of accused is concerned, he has stated during his cross-examination that his customers/users had never given any written complaint to him regarding the sub standard quality of the material and he has also stated that he had never made any written complaint to the complainant regarding the said issue. The accused has neither filed any documentary proof nor examined any witness before the court who can depose in his favour regarding the sub standard quality of material. The accused has also failed to examine any of his customer/user to substantiate his plea and he has never stated that he has returned the said material to the Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 15/22 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.01.22 16:48:04 +0530 complainant. As such, the plea taken by the accused that the material supplied by the complainant to him was of sub standard quality, is a mere bald averment, unsubstantiated by any cogent evidence.
The upshot of the above discussion is that the said ingredient remains fulfilled in favour of the complainant. Hence, considering the materials available on record, I am of the considered view that the accused has failed to rebut the presumption of legally enforceable debt or liability in favour of the complainant.
b.) "That the cheque has been presented to the bank with in a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier;"
16.5) This requirement is satisfied on a perusal of the cheque in question Ex. CW1/5 dated 19.09.2014 and returning memo Ex. CW1/6 which bears the date of 03.11.2014 respectively i.e within a period of three months from the date of issuance of cheque in question. The defence has led no evidence to controvert the same and hence, the ingredient stands fulfilled as against the accused person.
c.) "That the cheque has been returned by the drawee bank unpaid, for the reason that the amount of money standing to be credit of that account is insufficient to honor the cheque or that it exceeds the amount arranged to be paid from that account by agreement made with that bank."
16.6) Section 146 of N.I Act, 1881 provides that the court shall, on production of bank's slip or memo having therein the official mark denoting that the cheques have been dishonored, presumed the fact of dishonor of such cheques, unless and until such fact is disproved. The bank Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 16/22 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.01.22 16:48:10 +0530 returning memo Ex. CW1/6 is on record states that the cheque in question has been returned dishonored for the reason "Payment stopped by drawer." In MMTC Ltd. and Anr. Vs. MEDCHL Chemicals and Pharma (P) Ltd. and Anr. (2002) 1 SCC 234, the Hon'ble Supreme Court observed that even though the cheque is dishonored by the reason of "stop payment"
instructions an offence u/s 138 could still be made out. It is held that presumption u/s 139 is attracted in such a case also. The defence has led no evidence to controvert the same and hence, this ingredient is also fulfilled as against the accused.
d.) "That the payee or holder in due course has made a demand for payment of the said amount of money by giving the notice in writing to the drawer of the cheque within 30 days of receipt of information from the bank regarding the return of the cheque as unpaid"
16.7) As regard the service of legal demand notice Ex. CW1/7, the complainant has sent the same to the accused. The original postal receipts and courier receipts Ex. CW1/8, Ex. CW1/9, Ex. CW1/10 and Ex. CW1/11 in respect of the same are already on record along with returned envelopes Ex. CW1/12 and Ex. CW1/13 and tracking reports Ex. CW1/14, Ex. CW1/15, Ex. CW1/16 and Ex. CW1/17. However, at the time of recording statement u/s 313 Cr.P.C, the accused has stated that he has not received any legal demand notice regarding the cheque in question as the address mentioned in the legal demand notice was closed.
16.8) Before examining the issue in hand, it would be prudent to run through the legal position on the due service of notice sent by post. Presumption regarding successful delivery of documents sent by post can Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 17/22 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.01.22 16:48:17 +0530 be raised by the court as per provision enshrined in section 27 of Genral Clauses Act r/w Section 114 of Indian Evidence Act 1872. In terms of section 27 of General Clauses Act, notice must be deemed to have been served in the ordinary course subject to the fulfillment of the conditions laid down therein. Section 27 reads as under;
"Where any [Central Act] or Regulation made after the commencement of this Act authorises or required any document to be served by post, whether the expression "serve" or either of the expressions "give" or "sent" or any other expression is used, then, unless a different intention appears, the service shall be deemed to the effected by properly addressing, prepaying 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."
16.9) Reference can be taken from the decision of Hon'ble Supreme Court in the case of Subodh S. Salaskar Vs. Jay Prakash M. Shah and Anr. (2008) 13 SCC 689 wherein the Hon'ble Court has categorically held that service of notice which is sought to be effected by speed post/registered post shall be deemed to have been served in the ordinary course within few days. Such persumption of delivery of notice can also be raised u/s 144 of Evidence Act.
16.10) After examining the legal position with respect to the service of any notice by way of registered post, it would be prudent to examine the instant case in realm of the above discuss legal position. In the present case, as Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 18/22 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.01.22 16:48:26 +0530 discussed above the legal demand notice was sent on the address of the accused which got returned with postal remarks "Party refused to accept"
vide tracking report Ex. CW1/14 and returned envelope Ex. CW1/12. At this point, it is pertinent to note that the accused in his statement recorded u/s 313 Cr.P.C has not disputed the address on which the legal demand notice was sent. He simply took the plea that the said address was closed.
16.11) Moreover, the legal demand notice was returned with remarks "
Party refused to accept". It is a settled proposition of law that refusal of any post shall be considered as due service of notice and the date of refusal has to be taken as the commencing period for counting of 15 days for making the payment u/s 138 of the N.I. Act. Reference can be taken from the decision of the Hon'ble Supreme Court in the case of K.Bhaskaran. Vs. Sankaran Vidhyan Balan (1999) 7 SCC 510, wherein while discussing the effect of refusal of drawer in receiving the legal demand notice sent through post, the court has interalia held the follows:
"Thus, when a notice is return by the sender as unclaim such date would be the commencing date in reckoning the period of 15 days contemplated in clause (c) to the proviso of section 138 of the N.I. Act. Of course, such reckoning would be without prejudice to the right of the drawer of the cheque to show that he had no knowledge that the notice was brought to his address."
16.12) Similar observation has been made by the Hon'ble Supreme Court in C.C Alava Haji Vs. Palapetty Muhd. and Anr. (2007) 6 SCC 555, wherein the Hon'ble Court has held that when a notice is sent by the registered post and is returned with a postal endorsement "Refused" or Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 19/22 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.01.22 16:48:32 +0530 "Not available in the house" or "House locked" etc. due service has to be presumed. Further, in case of Har Charan Singh Vs. Smt. Shivrani (1981) 2 SCC 535, the Hon'ble Supreme Court while discussing the effect of refusal vis a vis due service of post, has interalia the following:
"It is impossible to accept the contention that when factually there was a refusal to accept the notice on the part of the appellant he could not be visited with the knowledge of the contents of the registered notice because, in our view, the presumption raised u/s 27 of the General Clauses Act as well as section 114 of Indian Evidence Act is one of proper or effective service which must mean service of every thing that is contained in the notice. It would, therefore, be reasonable to hold that when service is effected by refusal of a postal communication the addressee must be imputed, with the knowledge of the contents thereof and in our view, this follows upon the presumptions that a raised u/s 27 of General Clauses Act and section 114 of the Indian Evidence Act."
16.13) Therefore, in light of the above mentioned judgments of the Hon'ble Supreme Court, I am of the considered view that a presumption regarding delivery of service of legal notice can be raised if the notice is sent through post on correct address of the accused and if it has been returned with remarks "refused" or "not available in house". Hence, in the present case, since, the address of the accused on which legal demand notice was sent, is not disputed at any stage of trail. Moreover, at the time, his cross- examination, the accused has stated that the address mentioned in the legal demand notice was duly reflecting at GST Portal of his business namely Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 20/22 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.01.22 16:48:37 +0530 Yadvi Enterprises till the year 2020. In view of the above-said findings, the said address seems to be correct. Legal demand notice in the present case was sent on the correct address of the accused through speed post, and, therefore, a presumption can be raised about its successful delivery and as accused has not lead any evidence regarding the non delivery of legal demand notice, hence, the accused has not been able to rebut the presumption of service of legal demand notice. Resultantly, the benefit of the presumption accrues in the favour of the complainant. A bare denial by the accused in his statement recorded u/s 313 r/w section 281 Cr.P.C would not assume the character of defence evidence. So this ingredients is fulfilled as against the accused.
e.) That the drawer of the cheque fails to make the payment of the said amount of money to the payee or holder in due course within 15 days of the receipt of the said notice;
16.14) In the instant case, the accused has denied receiving legal demand notice, in his statement recorded u/s 313 r/w section 281 Cr.P.C. However, the accused has failed to adduce any evidence in his favour to rebut the presumption of service.
16.15) In C.C Alava Haji (supra), it was held by the Hon'ble Supreme Court "any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in resepct of the complaint u/s 138 of the N.I. Act, make payment of the cheque amount and submit to the court that he had made payment within 15 days of receipt of summons and, therefore, Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 21/22 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.01.22 16:48:42 +0530 the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of summons from the court along with the copy of the complaint u/s 138 of the N.I.Act, can not obviously content that there was no proper service of notice as required u/s 138, by ignoring statutory presumption to the contrary u/s 27 of G.C Act and section 114 of the Evidence Act."
16.16) Hence, regardless of the said averments in respect of non receipt of legal notice, it was open to the accused to make the payment due under the cheque in question within 15 days of service of summons of the instant case. However, the accused has admittedly failed to do so, on the ground that he does not owe any liability towards the complainant. A defence which he has been able to prove at the trial. Hence, this ingredients stands fulfilled as against the accused.
17.) Decision:
As all the ingredients of the offences are cumulatively satisfied against the accused, the accused is hereby convicted of the offence u/s 138 of N.I. Act.
Copy of the judgment is handed over to the convict free of cost.
Digitally
signed by
KAVITA
KAVITA BIST
BIST Date:
Announced in open
2025.01.22
16:48:47
Court on 22.01.2025 (Kavita Bist)
+0530
JMFC: MAHILA COURT-01
PHC/ND/ 22.01.2025
Ct Cases No. 1522/2017 M/s Khanna Traders and Engineers Vs. Sh. Bhupinder Singh Page No. 22/22