Delhi District Court
Sumit Garg vs . Vimal Ghai on 17 July, 2023
IN THE COURT OF MS. ANAM RAIS KHAN,
METROPOLITAN MAGISTRATE -01 (NI ACT),
NEW DELHI DISTRICT, RACC, NEW DELHI
1. Complaint Case : 7754/2020
number DLND020126672020
2. Name & address of the : Sumit Garg
complainant S/o Ashok Kumar Garg
R/o H.No. 63, Kanjimal
Dasna Gate, Ghaziabad, UP-
201001.
3. Name and address : Vimal Ghai
of the accused S/o Sri Ram Ghai
R/o H.No. S-213, 1st Floor,
Greater Kailash-I, GK South,
Delhi-110048.
4. Offence complained : Section 138, Negotiable
Instruments Act, 1881.
5. Plea of the guilt : Pleaded not guilty
6. Final Order : Acquitted
7. Date of institution : 16.09.2020
8. Date on which : 10.07.2023
reserved for judgment
9. Date of judgment : 17.07.2023
CC No. 7754/2020 Page 1 of 18
Sumit Garg Vs. Vimal Ghai
BRIEF STATEMENT OF FACTS AND REASONS FOR
THE DECISION
1. Vide this judgement, this court shall dispose of the
aforementioned complaint case filed by the complainant
namely, Sumit Garg against the accused, namely Vimal
Ghai in respect of the dishonour of one cheque bearing no.
136853 dated 22.07.2020 for an amount of Rs.10,00,000/-
(Rs. Ten Lakhs only) drawn on Vijaya Bank, Delhi-Karol
Bagh Branch, New Delhi-110005 (hereinafter referred to
as the "Impugned Cheque").
2. Shorn of unnecessary details, it is the case of the
complainant that the accused misguided him and took a
friendly loan of Rs.10,00,000/- in cash on the pretext to
return the same within one month alongwith interest. It is
further the case of the complainant that the accused issued
the impugned cheque in his favour in discharge of his
aforesaid legally enforceable debt or liability, which upon
presentation was returned dishonoured for the reason
"funds insufficient" vide bank return memo dated
24.07.2020. Thereafter the complainant sent a legal
demand notice dated 18.08.2020 which was duly served
upon him. Since the accused failed to pay the amount of
the impugned cheque within the statutory period of 15
days from the receipt of legal demand notice, hence, the
complainant has moved this court with the present
complaint under Section 138 of the Negotiable Instruments
Act, 1881 (hereinafter referred to as the "NI Act").
3. In the pre-summoning evidence, the complainant namely
Sh. Sumit Garg examined himself on affidavit being Ex.
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Sumit Garg Vs. Vimal Ghai
CW1/A and placed on record certain documents i.e. the
impugned cheque being Ex. CW1/1, bank return memo
dated 24.07.2020 being Ex. CW1/2, copy of legal demand
notice dated 18.08.2020 being Ex. CW1/3 & Ex. CW1/4,
original speed post receipt being Ex. CW1/5, tracking
reports thereof being Ex. CW1/6 to Ex. CW1/8, Copy of
reply dated 31.08.2020 being Ex. CW1/9 & Ex. CW1/10.
4. Upon prima facie consideration of the pre-summoning
evidence, the accused was summoned vide order dated
19.12.2020.
5. Upon appearance of the accused, notice under Section 251,
Cr.P.C. was served upon him on 31.03.2021, to which he
pleaded not guilty and claimed trial. At this stage, the
accused admitted being the drawer of the impugned
cheque and also admitted his signatures therein. He further
stated that the amount in figures and words has been filled
in by him but he did not write the date or the name of the
payee. He admitted the receipt of legal demand notice and
stated to have replied to the same. He further stated that he
had given the impugned cheque for security purpose and
the complainant was his lease holder.
6. After an application under Section 145(2) NI Act moved
on behalf of the accused was allowed, the complainant was
re-called for his examination. He relied upon his affidavit
filed at the stage of pre-summoning evidence at the post
summoning stage as well and deposed as CW-1. CW-1 was
cross-examined at length by Ld. Counsel for the accused.
During the course of his cross examination, CW-1 was
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Sumit Garg Vs. Vimal Ghai
confronted with plaint and pleadings of CS No. 869/20
titled as Sumit Garg Vs. Vimal Ghai being Ex.CW1/R1
and Ex.CW1/D1 (Colly) which were admitted by him.
Since no other witnesses were sought to be examined by
the complainant, complainant evidence was closed vide
order of this court and separate statement of the
complainant dated 20.01.2023.
7. Statement of accused under Section 313 read with Section
281 Cr.P.C was recorded on 15.02.2023 whereby the entire
incriminating evidence was put to him. At this stage, the
accused admitted being the drawer of the impugned
cheque and also admitted his signatures therein. He further
stated that the impugned cheque was issued as a security
cheque to the complainant against the advance rent of
Rs.10 lacs paid by the complainant against the lease deed
executed between them and the agreed rent was
Rs.2,10,000/ per month. He further stated that it was
further agreed that the monthly rent shall be adjusted in
advance paid by him every month and after the payment of
rent to the tune of Rs.10 lacs, it was also agreed that the
impugned cheque shall be returned back to him. He further
stated that even after exhausting the amount of advance
rent of Rs. 10 lacs, the complainant continued in the
possession of the tenanted premises till about 1415
months and hence the complainant was in arrears of rent
for a duration of around 10 months. He further stated that
against the amount of arrears of rent which was payable to
him by the complainant, the complainant issued a cheque
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Sumit Garg Vs. Vimal Ghai
for an amount of Rs. 5 lacs which was honoured upon
presentation. He further stated that he does not owe any
liability towards the complainant and four days prior to the
expiry of the lease deed, the complainant presented the
impugned cheque malafidely and it is a false case against
him. He admitted the receipt of the legal demand notice
and stated to have replied to it.
8. Since the accused chose to lead defence evidence, the
matter was adjourned for filing of application under
Section 315 Cr.P.C and list of defence witnesses, if any.
9. After the application under Section 315 Cr.P.C. moved on
behalf of the accused to examine himself as the only
witness in the present case was allowed vide order dated
23.03.2023, he deposed as DW-1.
10.DW-1 was duly cross examined and discharged. During
the course of his cross-examination, DW-1 was confronted
with copy of legal notice dated 28.10.2020 being Mark
DW1/C1 which the witness denied. Since no other
witnesses were sought to be examined by the accused, DE
was closed vide his separate statement and order of this
court dated 24.05.2023. Thereafter, the matter was
adjourned for advancement of final arguments.
11.Final arguments were advanced on behalf of both the
parties on 08.06.2023. Written submissions were also filed.
12.Rival submissions have been considered and record of the
case has been carefully perused.
13.The sole defence of the accused as revealed at different
stages of the trial is that there is no legally enforceable
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Sumit Garg Vs. Vimal Ghai
debt or liability to the tune of the amount of the impugned
cheque in favour of the complainant and against the
accused as on the date of its drawl or presentation.
14.Before delving into the facts of the present case, it is
relevant to discuss the law applicable to the present
proceedings. To bring home a liability under Section 138
of the NI Act, following elements must spring out from the
averments in the complaint and the evidence adduced by
the complainant, which are:
"(a) The accused issued a cheque on an account
maintained by him with a bank.
(b) The said cheque has been issued in
discharge, in whole or in part, of any legal debt
or other liability, which is legally enforceable.
(c) The said cheque has been presented to the
bank within a period of three months from the
date of cheque or within the period of its
validity.
(d) The aforesaid cheque, when presented for
encashment, was returned unpaid/dishonoured.
(e) The payee of the cheque issued a legal
notice of demand to the drawer within 30 days
from the receipt of information by him from the
bank regarding the return of the cheque.
(f) The drawer of the cheque failed to make the
payment within 15 days of the receipt of
aforesaid legal notice of demand."
15.Once the other ingredients mentioned in the foregoing
paragraph are established by the complainant, then as soon
as the execution of impugned cheque is admitted by the
accused, a factual base is established to invoke the
presumption of cheque having been issued in discharge, in
whole or in part, of any debt or other liability by virtue of
Section 118(a) read with Section 139 of NI Act. This is a
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Sumit Garg Vs. Vimal Ghai
reverse onus clause, which means that unless the contrary
is proved, it shall be presumed that the impugned cheque
was drawn by the accused for a consideration and that the
complainant had received it in discharge of a debt/ liability
from the accused. In the case titled Bir Singh Vs. Mukesh
Kumar, (2019) 4 SCC 197, it was held by Hon'ble
Supreme Court of India that once the accused has admitted
the signatures on the cheque in question, then the court is
bound to raise presumption under Section 139 NI Act.
16. In the present case, in order to discharge his initial burden
to prove the above mentioned ingredients, complainant
relied upon the complaint, his own evidence affidavit and
placed on record several documents being Ex. CW1/1 to
Ex.CW1/10. Ld. Counsel for the complainant submitted
that the accused has already admitted his signatures on the
impugned cheque and hence presumption of the impugned
cheque having been issued in discharge of debt or other
liability arises in favour of the complainant in terms of
Section 118(a) read with Section 139 of NI Act. He further
argued that the accused has also admitted the genuineness
and correctness of the impugned cheque being Ex.CW1/1,
bank return memo being Ex.CW1/2 and legal demand
notice being Ex.CW1/3. He argued that the fact that the
complainant received no payment within 15 days of the
service of the legal demand notice coupled with the
admission of the accused, duly proves all the ingredients of
the offence under Section 138 NI Act. He thus submitted
that since all the ingredients laid down under Section 138
NI Act are fulfilled, the accused should be convicted.
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Sumit Garg Vs. Vimal Ghai
17.In the case at hand, since the complainant who deposed as
CW-1 has discharged his initial burden on the basis of the
documents mentioned hereinbefore and the admission of
the accused, all the other ingredients of the offence under
Section 138 of the NI Act stand successfully established.
Further, since the accused has admitted his signatures on
the impugned cheque and the fact of issuance of the same
from his account, thus, the presumptions under Sections
118(a) and 139 of the NI Act arise against the accused with
respect to the existence of legally enforceable debt/liability
in favour of the complainant. The onus is now upon the
accused to rebut the mandatory presumptions under the NI
Act by raising a probable defence to show that the
impugned cheque was not issued in discharge of a debt/
liability.
18. In order to rebut the mandatory presumptions, the accused
has raised a sole defence that there is no legally
enforceable debt or liability to the tune of the amount
mentioned on the impugned cheque against the accused
and in favour of the complainant as on the date of its
issuance or presentation primarily broadly on three
grounds. Firstly; that there are inherent contradictions as
well as dearth of material details in the case set up by the
complainant. Secondly; that the impugned cheque was
issued as a security cheque by the accused in favour of the
complainant in an altogether different transaction
pertaining to license agreement between the parties.
Thirdly; that the complainant does not have the financial
capacity to advance the loan in question.
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Sumit Garg Vs. Vimal Ghai
19.At the outset, Ld. Counsel for the accused argued that the
complaint suffers from heavy concealment as the
complainant has deliberately concealed material facts
relating to the legal relationship of licensee-licensor
between the parties, their previous transactions as well as
the fact that the same amount of Rs. 10 Lacs has been
sought by him before various courts under distinct causes
of action. He argued that the date and time of advancement
of loan also finds no mention in the complaint. He further
argued that admittedly the complainant does not have the
financial capacity to advance the loan in question
amounting to Rs.10 Lacs at the relevant point of time and
neither did his father as no statement or document has been
filed to show his financial capacity or that of his father to
pay the said amount.
20.Ld. counsel for the accused further argued that the
complainant has alleged that the loan in question was
advanced in June 2020, however as per para 15 of Ex.
CW1/D1 (Colly), which is admittedly a plaint filed by the
Complainant himself before the Civil Court, he says that
there was a fight between the parties in June 2020 and
further goes on to plead that the accused herein was
threatening him during that period and had illegally
dispossessed him from the shop. Hence, he submitted that
it is highly improbable that a person who has been
"dispossessed" from his shop shall advance a loan of Rs.
10 Lacs to the person who dispossessed him.
21.Ld. counsel for the accused further argued that the
impugned cheque was a security cheque towards the
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Sumit Garg Vs. Vimal Ghai
advance rent payable and was to be returned when the
rental payments were set off by the Complainant. He
submitted that the disputes between the parties are still
pending and complainant is in arrears of license fees.
22.Ld. counsel for the accused lastly submitted that the stand
of the accused has been consistent and probable since the
first date and corroborated in his statements under Section
251 Cr.P.C and Section 313 Cr.P.C as well as his cross-
examination and hence, the accused has been able to bring
substantial material before this Court to rebut the
presumption under Section 139 NI Act and thus the benefit
of doubt must be extended to him.
23.Per contra, Ld. Counsel for the complainant argued that the
accused in his reply to the legal demand notice did not
raise any objection regarding the financial capacity of the
complainant. He argued that it is a settled position of law
that it is not for the complainant in a case under Section
138 NI Act to initially lead evidence to show that he had
the financial capacity unless the same is questioned by
accused. He relied upon the judgment of Hon'ble Supreme
Court of India in Criminal Appeal No. 362 of 2022
(Arising out of SLP (Crl.) No. 1963 of 2019) in a case
titled as Tedhi Singh Vs. Narayan Dass Mahant decided
on 07.03.2022.
24.Ld. Counsel for the complainant relied upon paragraph no.
3 at page number 20 in written statement filed by the
accused in CS No. 869/2020 i.e. Ex.CW1/D1 (Colly)
wherein accused stated that the complainant was inducted
as a Lessee by him vide Lease Deed dated 09.10.2019 for a
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Sumit Garg Vs. Vimal Ghai
monthly rent of Rs. 75,000/- but during his cross-
examination, he stated that the rent was Rs. 2,10,000/- per
month in order to mislead the Court. He further argued that
as per paragraph no. 7 at page number 25 of Ex.CW1/D1
(Colly) accused admitted that he received Rs. 4,00,000/-
from the complainant at the time of execution of rent
agreement in the month of October, 2019, but he denied
this payment during his cross-examination in this case.
Hence, he argued that these contradictions render his
testimony less worthy of credit.
25.He further argued that complainant had paid Rs.
10,00,000/- to the accused as a security (pagadi) in cash in
the month of January, 2017 on the pretext to adjust the
amount in rent in future but till date this amount was not
adjusted whereas the impugned cheque was given to the
complainant in the month of June 2020 after taking a
separate amount of Rs. 10 Lacs in cash. He argued that
both payments received by the accused are different i.e.
firstly, the amount of Rs. 10,00,000/- given by the
complainant to the accused at the time of taking the
possession of the tenanted premises in the month of
January, 2017 and secondly the amount Rs. 10,00,000/-
given by the complainant to the accused in the month of
June, 2020 and hence, the distinct causes of action.
26.He further argued that the accused admittedly received Rs.
10,00,000/- in the month of August, 2017 in cash as
advance rent and also Rs. 4,00,000/- in cash as an interest
free security deposit from the complainant but the same
was not mentioned in the agreement dated 09.10.2019.
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Sumit Garg Vs. Vimal Ghai
Moreover he argued that the accused did not produce the
rent agreement before this Court on the basis of which he
insisted that the agreed rent was Rs. 2,10,000/- per month.
He argued that hence the story of accused is rendered
false, frivolous and baseless.
27.Ld. Counsel for the complainant further submitted that the
accused admittedly did not lodge any complaint with the
police or any other authority/bank against the complainant
with respect to non-return of his security cheque which is
in question.
28.Ld. Counsel for the complainant lastly argued that the
dearth of date of advancement of loan is not fatal to the
case of the complainant and the accused should be
convicted as he has miserably failed to rebut the
mandatory presumptions resting in favour of the
complainant.
29.Upon a careful perusal of the record and judgments relied
upon by both the parties and on patiently hearing them at
length, apropos this defence of the accused, this court has
arrived at the following findings.
a) Absence of a documentary proof or witness: It is
astonishing to note that a loan transaction involving a huge
sum of Rs. 10 lacs has been allegedly advanced in cash
without execution of a formal document stipulating the
terms and conditions and in the absence of any witness.
Absence of any documentary proof and witness to the cash
transaction fortifies the defence version that the alleged
loan transaction did not take place between the parties.
b) Factum of advancement of loan not proved: The
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Sumit Garg Vs. Vimal Ghai
complaint is bereft of essential details such as the date,
time and place of advancement of the loan in question.
Since allegedly the loan had to be repaid within one
month, and the date of advancement of loan has not been
disclosed, it can not be ascertained whether the alleged
debt is time barred or not. Bare allegations regarding the
advancement of loan have been mentioned in very first
para of the complaint which is reproduced hereunder;
"That the accused misguided the complainant
and took Rs. 10,00,000/- (Rs.Ten Lakh only) in
cash from complainant as a friendly loan on the
pretext to return the money within one month
with interest and cheated complainant
intentionally and willfully."
c) Improbability of the case of the complainant:
Although the complaint does not disclose the date of
advancement of loan, however as per Ex. CW/D1 (Colly)
i.e. the pleadings filed by the parties in civil case pending
between them, and heavily relied upon in this case, the
loan in question was advanced in the month of June, 2020.
As per Para 15 of the plaint filed by the complainant, there
was a fight between the parties in June 2020 and the
accused was allegedly threatening him during that period
and had also allegedly dispossessed him from the shop. If
this set of allegations is taken to be true, then it is highly
improbable that a person who has been dispossessed from
a property shall advance a 'friendly' loan of Rs. 10 Lacs to
the person who dispossessed him. Moreover, such a
transaction if at all executed can not be termed 'friendly' as
admittedly parties were having strained relationship during
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Sumit Garg Vs. Vimal Ghai
the relevant period. In such circumstances the case of the
complainant appears to be improbable and gives strength
to the defence of the accused. Relevant extracts of Ex.
CW1/D1 (Colly) are reproduced hereunder:-
Para 15 of Plaint
"That the cause of action has arose in the month of
March, 2020 when the country is in the state of
national lockdown. That the cause of action has
arose in the month of June, 2020 when the
defendant and his associates threatened the the
plaintiff to vacate the suit property and tried to
dispossess the plaintiff from the suit property
forcefully and unlawfully."
***
Para 3 of Replication "Firstly, the amount Rs. 10,00,000/- (Rs. Ten Lakh only) given by plaintiff to defendant a the time of taking the possession of the suit premises in the month of January, 2017 and secondly the amount Rs. 10,00,000/- (Rs. Ten Lakh only) given by plaintiff to defendant in th month of June, 2020."
d) Probability of defence of the accused: The relationship of lessor/lessee or licensor/licensee was concealed by the complainant in the present complaint. As per his own version in the plaint filed in the civil suit (CS No. 869/20), complainant had paid Rs. 10 Lacs to the accused as security/pagdi to be adjusted in the monthly rent. Hence the version of the accused that he received the amount of Rs. 10 Lacs towards advance rent is proved. However, the bald assertion of the complainant that he had advanced Rs. 10 Lacs to the accused on two occasions for different purposes remains unsubstantiated by any cogent evidence. In the absence of any credible evidence to prove the cash transaction for a further amount of Rs. 10 lacs in CC No. 7754/2020 Page 14 of 18 Sumit Garg Vs. Vimal Ghai June 2020, only the amount of Rs. 10 lacs paid as advanced rent by the complainant is proved. In view of the foregoing facts and circumstances, possibility that Rs. 10 Lacs was only advanced on one occasion by the complainant to the accused can not be ruled out. Relevant extracts of Ex. CW1/D1 (Colly) are reproduced hereunder;
Paras 3 & 5 of Plaint "That the plaintiff gave Rs.10,00,000/- (Rs. Ten Lakh only) as a security (pagdi) in cash alongwith rent of Rs.20,000/- (Rs. Twenty Thousand only) per month as per oral agreement done between defendant and plaintiff w.e.f. January, 2017 but the defendant forcefully extort extra money from plaintiff.
That the abovesaid Rs.10,00,000/- (Rs. Ten Lakh only) given to defendant on the pretext to adjust the amount in rent in future but till today this amount was not adjusted in rent and after getting money the defendant again and again tortured, harassed and threatened the plaintiff to vacate the suit property."
*** Para 3 of Replication "Both payments received by defendant and both matters are different. That today on dated 07.09.2020, as per law provision, the plaintiff will file the case against defendant under S. 138 of the N.I. Act, 1881 to recover the amount. "Firstly, the amount Rs. 10,00,000/- (Rs. Ten Lakh only) given by plaintiff to defendant a the time of taking the possession of the suit premises in the month of January, 2017 and secondly the amount Rs. 10,00,000/- (Rs. Ten Lakh only) given by plaintiff to defendant in th month of June, 2020."
e) Financial Capacity of the complainant irrelevant:
Financial Capacity of the complainant can not be challenged by the accused when he himself has admitted to CC No. 7754/2020 Page 15 of 18 Sumit Garg Vs. Vimal Ghai have received an amount of Rs. 10 lacs from him in a different transaction as a security/pagadi to be adjusted in the monthly rent.
f) Non issuance of stop payment instructions to the bank/ complaint to any authority by the accused: The accused has not brought on record any cogent evidence in the form of any steps taken by him to get back the impugned cheque from the complainant, or any complaint made on his behalf to the bank or public authorities regarding the alleged misuse of her cheque. This raises some suspicion regarding the story of the accused as well as he failed to show that he indeed did everything within his power and control, as a reasonable and prudent person would, to ensure that the cheque tendered by him was not misused. Reliance in this regard is placed upon the judgment of Hon'ble High Court of Delhi in V.S. Yadav Vs. Reena, (2010) 172 DLT 561.
30.This is a classic case where the versions of both the parties may be probable and this court has to ascertain as to who has tilted the scales in his favour. It is a settled position of law that the accused can rebut the mandatory presumptions by leading defence evidence or by relying upon the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not even need to adduce evidence of his/her own. Hence the underlying principle remains that the case of the complainant has to stand on its own legs and if the accused through the material available on record, is able to show that converse is true, he can very well succeed in CC No. 7754/2020 Page 16 of 18 Sumit Garg Vs. Vimal Ghai rebutting the mandatory presumptions.
31.Even if the defence of the accused is kept aside, primarily it is the case of the complainant which should be convincing. In the case at hand, there are material lacunas and dearth of quintessential details in the case of the complainant as pointed out hereinbefore and his version does not inspire the confidence of the court. Hence, on the basis of preponderance of probabilities, the accused has created a doubt in the mind of the court regarding the case set up by the complainant.
32.This court has hence arrived at an irresistible conclusion the accused has been able to rebut the mandatory presumption resting against him. Complainant on the other hand has utterly failed to prove its case beyond reasonable doubt qua the existence of liability of the accused to the tune of amount of the impugned cheque as on the date of its drawl or presentation. Since this basic ingredient which is pivotal to attract liability under Section 138 NI Act has not been proved by the complainant, accordingly, no offence of dishonour of the impugned cheque under the said Section is made out.
33.It is imperative to understand that in order to pronounce a conviction in a criminal case, the accused 'must be' guilty and not merely 'may be' guilty. For an accused to be guilty, guilt should not be based on mere surmises and conjectures but it should be based on cogent evidence. In the present case, the accused has clearly presented a defence that is more probable than the complainant's story and consequently, the benefit of doubt must go to him.
CC No. 7754/2020 Page 17 of 18Sumit Garg Vs. Vimal Ghai FINAL ORDER
34.In view of the aforesaid discussion, this court finds the accused Vimal Ghai S/o Sri Ram Ghai not guilty of the offence under Section 138 Negotiable Instruments Act, 1881 and acquits him accordingly.
This judgment contains 18 pages and each page has been signed by the Presiding Officer.
Announced in open (Anam Rais Khan) Court on 17.07.2023 MM(NI Act)-01/RACC/ND CC No. 7754/2020 Page 18 of 18 Sumit Garg Vs. Vimal Ghai