Delhi District Court
Ms Sunrise Sports (I) P Ltd vs Manish Chadha on 22 March, 2025
CC NO: 37082/2016 M/S. SUNRISE SPORTS (I) PVT. LTD. VS. MANISH CHADHA
THE COURT OF MS. NEHA SHARMA,
JUDICIAL MAGISTRATE FIRST CLASS (NI ACT) -04,
NEW DELHI DISTRICT, PATIALA HOUSE COURTS, NEW DELHI
CRIMINAL COMPLAINT NO: 37082/2016
M/S. SUNRISE SPORTS (I) PVT. LTD. ............COMPLAINANT
VERSUS
MANISH CHADHA ............ACCUSED
1. CIS number : DLND020124712015
2. Name of the complainant : M/s. Sunrise Sports India Pvt. Ltd.
62, Upper Ground Floor,
World Trade Centre,
Babar Road,
New Delhi-110001
3. Name of the accused, : Manish Chadha
parentage & Proprietor of M/s. Sai Sports
residential address Shop no. A-4C/200-A.
Near B.S Mota Singh School,
Delhi-110058
4. Offence complained of or : U/s 138 of Negotiable Instruments Act, 1881
proved
Digitally
signed by
NEHA
NEHA SHARMA
SHARMA Date:
2025.03.22
16:50:01
+0530
Page no. 1 of 16 (Neha Sharma)
JMFC NI Act-04/NDD/PHC/ND
CC NO: 37082/2016 M/S. SUNRISE SPORTS (I) PVT. LTD. VS. MANISH CHADHA
5. Plea of the accused : Pleaded not guilty and claimed trial.
6. Date of Institution : 17.11.2015
7. Date of judgment/order : 22.03.2025
8. Final Judgment/order : ACQUITTAL
JUDGMENT
1. By way of the present Judgment, this court shall dispose of the present complaint case filed by the complainant M/s. Sunrise Sports India Pvt. Ltd. (hereinafter referred to as 'complainant') against Manish Chadha (hereinafter referred as the 'accused' u/s 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act'). CASE OF THE COMPLAINANT
2. Succinctly, the brief facts of the complaint is that the complainant is the sole distributor and representative of the world renowned Yonex Co. Ltd. and has been engaged inter alia in the business of trading and sale of various sports goods and other sports accessories under the brand name Yonex. It is submitted that the accused approached the complainant sometime in 2011 for the dealership of Yonex Products. After the dealership was granted to the accused, he started placing orders on the complainant for the supply of articles like badminton and tennis racquets etc. Since 2011, the accused has been placing purchase orders with the complainant telephonically. The complainant company has accordingly been supplying goods and sale invoices were accordingly raised on the accused.
3. It is stated that as per the Statement of Account, after adjusting the amount received from accused, a sum of Rs. 24,94,474/- is still due and payable by the accused Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2025.03.22 16:50:05 +0530 Page no. 2 of 16 (Neha Sharma) JMFC NI Act-04/NDD/PHC/ND CC NO: 37082/2016 M/S. SUNRISE SPORTS (I) PVT. LTD. VS. MANISH CHADHA for the goods supplied by the complainant to the accused. In discharge of his liability, accused issued 10 cheques for the total amount Rs. 24,80,920/- drawn on Indian Bank, SFS Branch, A-3. Block Local Shopping Centre, Janakpuri, New Delhi 110058 in favour of the Complainant (hereinafter referred to as the 'cheques in question'). The details of the cheques in question and the amount are as follows:
1) Cheque No. 732772 Dated 12.02.2015 Amount of the cheque INR3,00,000/-,
2) Cheque No. 732773 Dated 12.02.2015 Amount of the cheque INR3,00,000/-,
3) Cheque No. 732774 Dated 12.02.2015 Amount of the cheque INR3,00,000/-,
4) Cheque No. 732775 Dated 12.02.2015 Amount of the cheque INR4.28.250/-,
5) Cheque No. 732791 Dated 26.02.2015 Amount of the cheque INR 2,00,000/-,
6) Cheque No. 732792 Dated 28.02.2015 Amount of the cheque INR 2,17,375/-,
7) Cheque No. 732793 Dated 24.02.2015 Amount of the cheque INR 45,225/-,
8) Cheque No. 732798 Dated 09.03.2015 Amount of the cheque INR 1,33,675/-,
9) Cheque No. 732799 Dated 11.03.2015 Amount of the cheque INR 1,39,020/-,
10) Cheque No. 732810 Dated 20.03.2015 Amount of the cheque INR 4,17,375/-.
4. Upon presentation, the cheque in question bearing no. 732772 dated 12.02.2015, 732773 dated 12.02.2015, 732774 dated 12.02.2015, 732775 dated 12.02.2015, 732791 dated 26.02.2015, 732792 dated 28.02.2015, 732793 dated 24.02.2015, 732798 dated 09.03.2015, 732799 dated 11.03.2015, 732810 dated 20.03.2015 were returned as dishonored vide cheque returning memo dated 11.04.2015 with the remarks 'Funds Insufficient, return memo dated 18.03.2015 with the remarks 'Alteration require drawers authentication', return memo dated 19.03.2015 with the remarks 'Funds Insufficient', return memo dated 11.04.2015 with the remarks 'Funds Insufficient', return memo dated 20.03.2015 with the remarks 'Funds Insufficient', return memo dated 11.04.2015 with the remarks 'Funds Insufficient', return memo dated Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2025.03.22 16:50:09 +0530 Page no. 3 of 16 (Neha Sharma) JMFC NI Act-04/NDD/PHC/ND CC NO: 37082/2016 M/S. SUNRISE SPORTS (I) PVT. LTD. VS. MANISH CHADHA 11.04.2015 with the remarks 'Funds Insufficient', return memo dated 26.03.2015 with the remarks 'Funds Insufficient', return memo dated 26.03.2015 with the remarks 'Funds Insufficient' and return memo dated 11.04.2015 with the remarks 'Funds Insufficient' respectively.
5. Thereafter, the complainant sent a legal demand notice dated 17.04.2015 to the accused demanding the payment of the cheque amount. It is alleged that despite the service of legal demand notice, accused did not make any payment to discharge the liability. Hence, being aggrieved, the complainant has filed the present complaint and prayed that the accused be summoned, tried and punished under Section 138 of the NI Act.
SUMMONING OF ACCUSED
6. On the basis of complaint and pre-summoning evidence filed by the complainant, and on the basis of documents annexed with the complaint, cognizance of the offence U/s 138 NI Act was taken by Ld. Predecessor of this Court and process was issued against the accused on 02.07.2015. The accused entered appearance in the present case on 01.05.2017 and on the same day, he was admitted to bail. NOTICE
7. The court framed notice of accusation under Section 251 of the Criminal Procedure Code, 1973 (hereinafter referred to as 'Cr.P.C.') against the accused on 06.12.2018. The substance of accusation was read over and explained to the accused and after being satisfied that the accused comprehended the same, the court recorded his plea.
The accused pleaded not guilty and claimed trial. The plea of defence taken by the accused is that the payment against the impugned cheques has already been made.
8. Vide order dated 21.12.2019, the application of the accused U/S 145(2) NI Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2025.03.22 16:50:12 +0530 Page no. 4 of 16 (Neha Sharma) JMFC NI Act-04/NDD/PHC/ND CC NO: 37082/2016 M/S. SUNRISE SPORTS (I) PVT. LTD. VS. MANISH CHADHA Act was allowed. The matter was, thereafter, listed for the evidence of the complainant. EVIDENCE OF THE COMPLAINANT
9. To prove its case prima facie, the complainant has filed the affidavit of evidence of its AR under Section 200 of the Cr.P.C. wherein he has reiterated the averments made in the complaint. He placed reliance upon the following documents:
a) Ex. CW1/1 (OSR) (Colly) i.e. Copy of resolution;
b) Ex. CW1/2 (Colly) i.e. Copies of Sale Invoices;
c) Ex. CW1/3 (Colly) i.e. Copy of customer ledger account of the accused;
d) Ex. CW1/4 i.e. Cheque no. 732772 dt. 13.02.2015 along with return memo dt. 11.04.2015;
e) Ex. CW1/5 i.e. Cheque no. 732773 dt. 12.02.2015 along with return memo dt. 18.03.2015;
f) Ex. CW1/6 i.e. Cheque no. 732774 dt. 12.02.2015 along with return memo dt. 19.03.2015;
g) Ex. CW1/7 i.e. Cheque no. 732775 dt. 12.02.2015 along with return memo dt. 11.04.2015;
h) Ex. CW1/8 i.e. Cheque no. 732791 dt. 26.02.2015 along with return memo dt. 20.03.2015;
i) Ex. CW1/9 i.e. Cheque no. 732792 dt. 28.02.2015 along with return memo dt. 11.04.2015;
j) Ex. CW1/10 i.e. Cheque no. 732793 dt. 24.02.2015 along with return memo dt.
11.04.2015;
Digitally signed by NEHA NEHA SHARMA SHARMA Date:
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k) Ex. CW1/11 i.e. Cheque no. 732798 dt. 09.03.2015 along with return memo dt. 26.03.2015;
l) Ex. CW1/12 i.e. Cheque no. 732799 dt. 11.03.2015 along with return memo dt. 26.03.2015;
m) Ex. CW1/13 i.e. Cheque no. 732810 dt. 20.03.2015 along with return memo dt. 11.04.2015;
n) Ex. CW1/14 i.e. the legal demand notice dated 17.04.2015 along with Registered A.D;
10. CW-1 was cross examined by Ld. counsel for accused. Thereafter, vide separate statement of AR recorded on 27.04.2024, CE was closed. EXAMINATION OF THE ACCUSED UNDER SECTION 313 CR.P.C.
11. In his statement recorded under Section 313 Cr.P.C., on 27.04.2024, the accused admitted entering into a Dealership Agreement with the complainant for selling the products of Yonex Company approximately in the year 2011 and the same continued approximately till the year 2015. He stated that the invoices were raised for goods supplied and the same are a matter of record but he does not have any liability towards the complainant and the amount of Rs. 24,94,474.19/- is a manipulated amount. He further stated that he has made the entire payment to the complainant against goods supplied by way of online transactions but the complainant is still in possession of some of his cheques which have not been returned.
12. He further stated that the cheques i.e. Ex. CW1/4 to Ex. CW1/13 had been issued as security cheques whereas payment against the same has been made. He admitted the signatures on the cheques in question but denied receiving the legal notice, however, he admitted the address mentioned in the legal notice to be the correct address of his shop and he stated that the shop is still situated at the same address. The accused stated that the Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2025.03.22 16:50:20 +0530 Page no. 6 of 16 (Neha Sharma) JMFC NI Act-04/NDD/PHC/ND CC NO: 37082/2016 M/S. SUNRISE SPORTS (I) PVT. LTD. VS. MANISH CHADHA complainant was supposed to pay certain amount under the marketing schemes of complainant, however, the same has not been paid and even goods had been taken away after the complainant filed a case of Trademark against the accused. Thereafter, since the accused expressed his willingness to lead DE, the matter was listed for defence evidence. DEFENCE EVIDENCE
13. Pursuant thereto, the accused examined himself as DW-1. The witness was cross examined by Ld. Counsel for complainant. Thereafter, the matter was listed for final arguments.
FINAL ARGUMENTS
14. Both parties addressed their final arguments. Ld. counsel for the complainant, argued that the accused has admitted dealership agreement with the complainant. He further argued that the accused has claimed to have made payments against the cheques in question but no evidence was led in this regard. The accused admitted his signatures on the cheques but failed to rebut the presumption U/S 139 NI Act. Accordingly, Ld. counsel prayed that the accused be convicted for the offence under section 138 NI Act. Reliance is placed on judgment in Kalamani Tex and Anr. vs P. Balasubramanian 2021 5 SCC 283.
15. Per contra, Ld. counsel for the accused, argued that the accused owes no legal liability for payment of cheque amount to the complainant as cheques have been misused by the complainant. He further argued that AR of the complainant who examined himself as CW-1 has no knowledge of the present case. The payments have been made to the complainant and the statement of account filed by the complainant is not accompanied with any certificate U/S 65B IEA. He further argued that the accused has rebutted the presumption raised U/S 139 NI Act but complainant failed to prove the guilt of the accused beyond reasonable doubt, hence, accused is entitled to be acquitted. He placed reliance Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2025.03.22 16:50:32 +0530 Page no. 7 of 16 (Neha Sharma) JMFC NI Act-04/NDD/PHC/ND CC NO: 37082/2016 M/S. SUNRISE SPORTS (I) PVT. LTD. VS. MANISH CHADHA upon judgments in AC Narayanan vs State of Maharashtra, (2014) 11 SCC 790, Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16.
16. The file has been carefully and minutely perused and my issue-wise findings with reasons thereof are as under: -
FINDINGS
17. Before appreciating the facts of the case and evidences led by the both the sides for the purpose of decision, let us first discuss the relevant position of law which is embodied in Section 138 of NI Act. In the case of Kusum Ingots and Alloys Ltd. vs. Pennar Peterson Securities Ltd. (2000) 2 SCC 745, the apex court has expounded the ingredients which are required to be fulfilled in order to constitute an offence under Section 138 of the NI Act. The relevant portion of the said judgment laying down the ingredients to be satisfied for making out a case under Section 138 of the NI Act is reproduced as under:
a) A person must have drawn a cheque on an account maintained by him in a bank for payment of a certain sum of money to another person from out of that account for the discharge of any legally enforceable debt or liability;
b) cheque has been presented to the bank within 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 cheque has been returned by the bank unpaid, either because of the amount of money standing to the credit of the 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 the bank;
d) The payee or the holder in due course of the cheque has made a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 Digitally days of signed by NEHA NEHA SHARMA SHARMA Date:
2025.03.22 16:50:36 +0530 Page no. 8 of 16 (Neha Sharma) JMFC NI Act-04/NDD/PHC/ND CC NO: 37082/2016 M/S. SUNRISE SPORTS (I) PVT. LTD. VS. MANISH CHADHA the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
e) The drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
18. Being cumulative, it goes without saying that it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act. Having said that, it becomes imperative to mention Section 139 of NI Act which carves out a presumption in favour of the drawee that the cheque was issued to him in discharge of a debt or other liability of a legally enforceable nature. Also, the said provision must be read along with the Section 118 of the same enactment which spells out another presumption in favour of the drawee that every negotiable instrument was drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration.
19. Having said that, what follows from the above is that the journey of evidence in a trial under section 138 NI Act, begins not from the home of the prosecution story but from the point of the defence. As rebuttal evidence, the accused merely has to prove that the cheque was not given for any consideration or that there was no legal liability in existence against him for which the negotiable instrument was given.
20. In the backdrop of the factual narrative of the case, following points of deter- mination arise in the present case:
A. Whether the complainant has been successful in raising the presumption un- der section 118 read with section 139 of the N.I Act, 1881?
Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2025.03.22 16:50:42 +0530 Page no. 9 of 16 (Neha Sharma) JMFC NI Act-04/NDD/PHC/ND CC NO: 37082/2016 M/S. SUNRISE SPORTS (I) PVT. LTD. VS. MANISH CHADHA B. If yes, whether the accused has been successful in raising a probable defence to rebut the presumptions?
21. Since criminal liability can be attached by proving each element of the section under which liability is sought to be enforced, I shall now go on to appreciate the evidence- documentary and oral, in light of how compellingly it satisfies each of such ingredient, if at all. The first condition pertains to the issuance of the cheque in question to make the payment from an account maintained by the drawer of the cheque towards a legally en- forceable debt or other liability. The complainant has proved the original cheques and orig- inal return memos i.e. Ex. CW1/4 to Ex. CW1/13 respectively which the accused has not disputed as being drawn on the account of the accused. At the time of framing of Notice U/S 251 Cr.P.C. and statement recorded U/S 313 Cr.P.C., the accused admitted his signa- tures on the cheques in question.
22. As per the scheme of the NI Act, once the accused admits signature on the cheques in question, certain presumptions are drawn, which result in shifting of onus. The combined effect of Section 118(a) and Section 139 of NI Act is a presumption that the cheque was drawn for consideration and given by the accused for the discharge of debt or other liability. It has been held by Hon'ble Supreme Court in Hiten P. Dalal vs. Bratin- dranath Banerjee (2001) 6 SCC 16 and Rangappa vs. Sri Mohan (2010) 11 SCC 441 that the presumption contemplated under Section 139 of NI Act includes the presumption of existence of a legally enforceable debt. Once the presumption is raised, it is for the accused to rebut the same by establishing a probable defence.
23. The principles pertaining to the presumptions and the onus of proof were summarized by the Hon'ble Apex Court in Basalingappa vs. Mudibasappa (2019) 5 SCC 418 wherein it was held;
NEHA
SHARMA
Digitally signed by
NEHA SHARMA
Date: 2025.03.22
16:50:45 +0530
Page no. 10 of 16 (Neha Sharma)
JMFC NI Act-04/NDD/PHC/ND
CC NO: 37082/2016 M/S. SUNRISE SPORTS (I) PVT. LTD. VS. MANISH CHADHA
"25. We having noticed the ratio laid down by this Court in the above cases on Section 118(a) and 139, we now summarise the principles enumerated by this Court in the following manner:
25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability. 25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. 25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. 25.4. That it is not necessary for the accused to come in the witness box in support of his defence. Section 139 imposed an evidentiary burden and not a persuasive burden. 25.5. It is not necessary for the accused to come in the witness box to support his defence."
24. In the case in hand, the complainant has placed reliance upon the invoices and statement of account i.e. Ex. CW1/2 and Ex. CW1/3. The primary contention of the Ld. Counsel for the accused is that the invoices and statement of account i.e. Ex. CW1/2 and Ex. CW1/3 cannot be read in evidence in the absence of a certificate of the appropriate authority under Section 65B of the Evidence Act. The law regarding the relevance of certificate under Section 65B of the Evidence Act is no more res integra. In the case of Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal reported in (2020) 7 SCC 1, a three Judge Bench of the Hon'ble Supreme Court held that the required certificate under Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2025.03.22 16:50:48 +0530 Page no. 11 of 16 (Neha Sharma) JMFC NI Act-04/NDD/PHC/ND CC NO: 37082/2016 M/S. SUNRISE SPORTS (I) PVT. LTD. VS. MANISH CHADHA Section 65-B(4) is unnecessary if the original document itself is produced. This can be done by the owner of a laptop computer, computer tablet or even a mobile phone, by stepping into the witness box and proving that the device concerned, on which the original information is first stored, is owned and/or operated by him. In cases where the "computer" happens to be a part of a "computer system" or "computer network" and it becomes impossible to physically bring such system or network to the court, then the only means of providing information contained in such electronic record can be in accordance with Section 65-B (1), together with the requisite certificate under Section 65-B (4).
25. During cross examination, the ledger account statement i.e. Ex. CW1/3 was put to the AR of the complainant who examined himself as CW-1. CW-1 stated that Ex.
CW1/3 was prepared by the accountant of the complainant company. He admitted that Ex. CW1/3 bears no signatures or attestation and there is also alteration at point A on the last page of the ledger. Thereafter, objection was taken by Ld. Counsel for accused that Ex. CW1/3 is neither supported by certificate U/S 65B IEA nor authenticated by any official of complainant company. At that stage, CW-1 undertook to file certificate U/S 65B IEA on the NDOH. Thereafter, in cross examination conducted on 20.07.2013, CW-1 admitted that all invoices and statement of account i.e. Ex. CW1/2 and Ex. CW1/3 are computer generated but there is no certificate U/S 65B IEA. Thus, an objection in this regard was taken by the Ld. Counsel from accused in the cross examination of CW-1 multiple times, but in spite of the same, the complainant did not produce any such certification during the subsequent course of the proceedings before this court.
26. In a case titled as Samsung India Electronics Pvt. Ltd. vs MGR Enterprises AIRONLINE 2019 DEL 2559, the Hon'ble Delhi High Court held;
"17. Further, the petitioner company has placed on record Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2025.03.22 16:50:52 +0530 Page no. 12 of 16 (Neha Sharma) JMFC NI Act-04/NDD/PHC/ND CC NO: 37082/2016 M/S. SUNRISE SPORTS (I) PVT. LTD. VS. MANISH CHADHA the customer/ledger statement of account of the respondent firm maintained by them from 1st January 2011 to 30th November 2011 in order to show the liability. The same has been produced in the form of a computer printout which is a secondary evidence of the electronic record of data purportedly stored in the computer of the petitioner company. The petitioner company has not provided a certificate under Section 65B of the Evidence Act to prove the same and hence the ledger is inadmissible in evidence. Learned counsel for the petitioner contends that since no objection was raised qua the mode of proof at the time of exhibiting the copies of the ledger account and the same are duly exhibited, proved and admissible in evidence. This contention of learned counsel deserves to be rejected as in the absence of a certificate under Section 65B of the Evidence Act a computer generated document is inadmissible in evidence."
27. Thus, the original system in which accounts are maintained by the complainant were not produced before this court. The invoices and statement of account i.e. Ex. CW1/2 and Ex. CW1/3 originated from the computerized data management system of the complainant maintained in a computer system or computer network by the complainant. Thus, complainant would have to access the computer system or computer network of his company as the invoices and statement of account would be maintained and stored in the same. Thus, such a computer-generated document is inadmissible in evidence without a certificate under Section 65B of the Evidence Act.
28. Ld. Counsel for complainant relied on the case of Kalamani Tex & Ors. Vs. P. Balasubramanian (supra) in which the Hon'ble Supreme Court reiterated that unless the accused discharges the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2025.03.22 16:50:56 +0530 Page no. 13 of 16 (Neha Sharma) JMFC NI Act-04/NDD/PHC/ND CC NO: 37082/2016 M/S. SUNRISE SPORTS (I) PVT. LTD. VS. MANISH CHADHA case could not have been raised for want of evidence regarding the source of funds for advancing loan. However, this does not assist the complainant as in the present case, the invoices i.e. Ex. CW1/2 are for a total amount of Rs. 24,80,920.50/- and not of the amount of the cheque in question. In order to prove the liability of the accused to the tune of the amount of cheque in question, the complainant filed the statement of account i.e. Ex. CW1/3, however, Ex. CW1/2 and Ex. CW1/3 are nothing but "information contained in an electronic record which is printed on a paper, stored, recorded or copied in optical or magnetic media produced by a computer within the meaning of Section 65B (1) of the Evidence Act and in order that the same be admissible in evidence, they will require to be supported by a certificate of the appropriate authority under section 65B (4) of the said Act.
29. Despite the objection having been taken, the complainant did not produce any such certificate at any subsequent stage of the proceedings. There is no documentary proof except Ex. CW1/2 and Ex. CW1/3 to prove the liability of the accused, which cannot be looked into. Thus, in the absence of Ex. CW1/2 and Ex. CW1/3, the complainant has not been able to prove the liability of the accused. It is settled that the basic principle in criminal law is that the guilt of accused must be proved beyond reasonable doubt and if there is a slightest doubt about the commission of an offence then the benefit has to accrue to the accused. I am supported by judgment in Kulvinder Singh vs. Kafeel Ahmed MANU/DE/0786/2013.
30. Thus, in the instant case also this doubt has been created by the accused through cross examination of CW-1 and by adducing evidence. Accordingly, the presumption stands rebutted. Once, the accused has rebutted the presumption U/S 139, it was imperative upon the complainant to prove its case beyond reasonable doubt but it Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2025.03.22 16:50:59 +0530 Page no. 14 of 16 (Neha Sharma) JMFC NI Act-04/NDD/PHC/ND CC NO: 37082/2016 M/S. SUNRISE SPORTS (I) PVT. LTD. VS. MANISH CHADHA failed to discharge its burden. At this stage, it is pertinent to refer to Section 43 of NI Act, which reads as-
"43. Negotiable instruments made, etc. without consideration: A negotiable instrument made, drawn accepted, endorsed, or transferred without consideration, or for a consideration which fails, creates no obligation of payment between the parties to the transaction".
31. From the bare reading of Section 43 of NI Act, it becomes clear that if a negotiable instrument is made or drawn without consideration, it creates no obligation of payment between the parties to the transaction. The facts and circumstances brought on record, rebuts the presumption raised in favour of the complainant that the cheque in question was issued by the accused in discharge of any existing liability but the complainant failed to prove its case beyond reasonable doubt.
32. Ld. Counsel for accused has argued that the AR of the complainant/CW-1 could not have been examined as he neither witnessed the transaction nor has any knowledge of the same. He has placed reliance upon judgment in AC Narayanan vs State of Maharashtra (supra). This argument is not tenable. The law regarding prosecuting the complaint under Section 138 NI Act through power of attorney or through AR is settled. The filing or prosecuting the complaint under Section 138 NI Act through power of attorney is perfectly legal and competent. The authority letter of CW-1 is Ex. CW1/1A. In the affidavit of CW-1, it is specifically mentioned that the CW-1 is competent to depose and he is conversant with the facts and circumstances of the case.
33. The Hon'ble Supreme Court in AC Narayanan vs. State of Maharashtra (supra), held that power of attorney holder must have either witnessed the transaction as an agent of the payee / holder in due course or possess due knowledge regarding the said Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2025.03.22 16:51:02 +0530 Page no. 15 of 16 (Neha Sharma) JMFC NI Act-04/NDD/PHC/ND CC NO: 37082/2016 M/S. SUNRISE SPORTS (I) PVT. LTD. VS. MANISH CHADHA transactions. Thus, the knowledge of CW-1 is based on the record of the case even though he was not a witness to the said transaction which is valid in law. Accordingly, there is no substance in the argument of Ld. Counsel for accused and same stands rejected.
34. Nevertheless, in view of the discussion made above and having considered the entire evidence, I have no hesitation to hold that in the present case, the complainant has failed to establish the very basic ingredient of offence under Section 138 of the Act i.e. issuance of the cheque in question in discharge of any existing legally enforceable debt or liability, thus, accused MANISH CHADHA is acquitted of offence U/S 138 NI Act. Let copy of this judgment be uploaded on CIS.
Digitally
Announced in the open court on signed by
NEHA
on this 22nd March, 2025 NEHA SHARMA
SHARMA Date:
2025.03.22
16:51:05
+0530
(NEHA SHARMA)
JUDICIAL MAGISTRATE FIRST CLASS
NI ACT-04/NDD/PHC/ND
Note :-This judgment contains sixteen pages and all the pages have been checked and signed by me. Digitally signed by NEHA NEHA SHARMA SHARMA Date:
2025.03.22 16:51:08 +0530 (NEHA SHARMA) JUDICIAL MAGISTRATE FIRST CLASS NI ACT-04/NDD/PHC/ND Page no. 16 of 16 (Neha Sharma) JMFC NI Act-04/NDD/PHC/ND