Delhi District Court
Small Farmers Agri Business ... vs M/S Fouress Agro Exports And Anr on 30 March, 2026
COPY OF THE JUDGMENT OF (CONVICTION /DISMISSAL / REVERSAL
OF ACQUITTAL / DISMISSAL OF BAIL APPLICATION)
________________________________________________________________
COVERSHEET TO THE COPY OF JUDGMENT
The convict has been informed that the convict may avail free legal aid facilities
for pursuing higher remedies, for which they may contact for seeking appropriate
guidance:
Delhi Legal Services Authority (North West)
Address of the Authority: Room No.405, Fourth Floor, Rohini courts,
Delhi-110085.
Ph.: 011-27555536, Digitally
signed by
e-mail: [email protected] Jayanti
Jayanti chander
chander Date:
2026.03.30
16:33:29
+0530
(Jayanti Chander)
JMFC (NI ACT) Digital Court-03 (N/W),
Rohini Courts, Delhi, 30.03.2026
IN THE COURT OF MS. JAYANTI CHANDER,
JUDICIAL MAGISTRATE FIRST CLASS (NI ACT) - 07,
SOUTH DISTRICT, SAKET COURTS, NEW DELHI.
1 Complaint Case Number : CT Case No. 17979/2018
2 Name & Address of : Small Farmers Agri
Complainant Business Consortium
(SFAC)
Registered office at - NCUI
Auditorium Building, 5th
floor, 3 Siri Fort
Institutional Area, August
Kranti Marg, Hauz Khas,
New Delhi - 110016
3 Name & Address of : M/s Fouress Agro Exports
Accused through Shri Jitendra
Kumar S. Jain
Office at - Kalapurna
Chambers, 20,
Ekambareshwar Agraharan,
Chennai - 600003
4 Offence complained of : Section 138 r/w142,
Negotiable Instruments Act
1881
5 Plea of guilt : Pleaded not guilty
6 Date of institution : 22.12.2018
7 Date on which case was : 28.03.2026
reserved for judgment
8 Date of judgment : 30.03.2026
9. Decision : Conviction Jayanti
chander
Digitally signed
by Jayanti
chander
Date: 2026.03.30
CT Cases 17979-2018 16:33:36 +0530
Small Farmers Agri Business Consortium
(SFAC) Vs M/s Fouress Agro Exports and Ors. 1 of 16
JUDGMENT
1. Vide this judgment, this court shall dispose of the aforementioned complaint case filed by the complainant Small Farmers Agri Business Consortium (SFAC) against the accused, namely M/s Fouress Agro Exports through its proprietor Shri Jitendra Kumar S. Jain in respect of the dishonor of cheque bearing number 313423 dated 30.09.2018 for an amount of Rs. 15,96,000/- (Rupees fifteen lakhs ninty six thousand) drawn on Canara Bank, High Tech, AF Branch, Chennai- 600002 (here and after referred to as the "cheque in question").
BRIEF FACTS OF THE CASE
2. Succinctly, it is the case of the complainant, a registered society under Societies Registration Act 1860 established by Department of Agriculture and Cooperation, Ministry of Agriculture, that the SFAC is providing venture capital (interest free loan) as Central Sector Scheme to set up Agri-Business projects. The accused proprietorship was in need of venture capital assistance (for brevity "VCA" hereinafter) for cultivation and processing of gherkins. The proprietor Sh. Jitendra Kumar S Jain requested to the complainant for providing venture capital assistance which will be deemed to be a loan after recovery of term loan of lending bank i.e. Canara Bank, High Tech Agricultural Finance Branch, Spensor Towers II, 770 A, Anna Salai, Chennai- 600002. The VCA of Rs. 15,96,000/- was sanctioned vide sanction order dated 11.03.2011 by the complainant.
Digitally signed by Jayanti Jayanti chander chander Date:
2026.03.30 16:33:40 CT Cases 17979-2018 +0530 Small Farmers Agri Business Consortium (SFAC) Vs M/s Fouress Agro Exports and Ors. 2 of 16
3. Subsequently, the accused executed an agreement with the complainant on 31.03.2011 confirming that the venture capital amount will be deemed to be a loan after ending the term loan of Canara bank as aforesaid. The lending bank i.e. Canara Bank confirmed the last installment of the sanctioned loan as per the original schedule as 30.09.2018 vide letter no. CHAF/FOURESSS/2011/RB dated 30.03.2011. The agreement dated 31.03.2011 also provides an undertaking of the accused that sufficient amount would be kept in account to debit the account with the entire refundable amount of VCA and authorized to hold securities with lending bank towards term loan after re-payment of term loan on the due date or earlier until the re-payment of VCA.
4. It is averred in the complaint that in the event of the venture capital amount not being refunded on the same day as the repayment of the term loan of the bank, the rate of interest of the term loan shall accrue.
5. The amount of Rs. 15,96,000/- was dispersed by the complainant to the accused as a VCA and payable on 30.09.2018. In discharge of the legal liability the accused gave a post-dated cheque in question to the complainant. The complainant advised the accused to maintains sufficient balance in his bank account.
6. On presentment upon the instructions of the accused, the cheque in question was returned with remarks "funds insufficient" vide returning memo dated 03.10.2018 Digitally signed by Jayanti Jayanti chander exhibited as Ex. CW1/9. Thereafter, complainant sent a notice of chander Date:
2026.03.30 16:33:44 +0530 CT Cases 17979-2018 Small Farmers Agri Business Consortium (SFAC) Vs M/s Fouress Agro Exports and Ors. 3 of 16 demand Ex. CW1/10 calling upon the accused to pay the cheque amount within 15 days. The postal receipt and tracking report are exhibited as Ex. CW1/11 (colly) respectively. The tracking report confirmed delivery on the alleged address of accused on 27.11.2018. It is further stated that despite service of legal notice, the accused failed to make the payment, hence, the complainant moved to the court with the present complaint under section 138 of the Negotiable Instruments Act, 1881, (here in after referred to as the "NI Act").
7. The Complainant has placed on record original cheque in question Ex CW1/8 and certificate of registration of complainant under the Societies Registration Act marked as Mark - CW1/1. The authorization letter of the Managing Director of SFAC authorizing Sh. Sushil Kumar to file case on behalf of the complainant is exhibited as Ex. CW1/2. The agreement between M/s Fouress Agro Export (the accused) and the complainant is exhibited as Ex. CW1/3, Sanction order marked as Mark-A, release order marked as Mark-B and letter to the complainant by the Canara Bank exhibited as Ex. CW1/6 (OSR). The letter of the accused for submission of crossed account payee cheque in question to the complainant exhibited as Ex. CW1/7 (OSR).
8. Upon prima facie consideration of the per-
summoning evidence, the accused was summoned vide order Jayanti dated 11.01.2019 and directed to furnish bail bond and surety chander Digitally signed by bond. Jayanti chander Date: 2026.03.30 16:33:49 +0530 CT Cases 17979-2018
Small Farmers Agri Business Consortium (SFAC) Vs M/s Fouress Agro Exports and Ors. 4 of 16
9. Upon the appearance of the accused, notice under section 251, Code of Criminal Procedure 1973 (hereinafter referred to as "CrPC") was framed on 18.03.2021 to which the accused pleaded not guilty. The accused admitted that a loan was borrowed from complainant company. The accused stated that there was a condition that after expiry of the term loan taken by the Canara Bank the same is to be repaid to the complainant company. The accused stated that the term loan from Canara bank has still not expired and the cheque in question was presented by the complainant without any intimation.
COMPLAINANT EVIDENCE
10. The AR of Complainant, Sh. Sushil Kumar, was cross-examined as CW1. CW-1 stepped in witness box and adopted his affidavit of per-summoning Ex CW1/A as his evidence reiterating almost all facts of complaint, stating all exhibits. Thereafter, CW-1 was cross-examined by the counsel for the accused. In his cross-examination, CW-1 deposed that he is working as field officer in the complainant company since last 3-4 years. CW-1 deposed that the cheque in question was issued at the time of execution of agreement between the complainant and the accused, from which the liability in the present case accrues. CW-1 further stated that default would take place on failure by a party to refund the amount of venture capital on a due date. CW-1 further stated that the accused firm did not opt for clause - 7 of the agreement to the extent of payment of the accrued amount by the borrower in four quarterly installment Jayanti chander within a year at prevalent rate of interest in case of default. Digitally signed by Jayanti chander Date: 2026.03.30 16:33:53 +0530 CT Cases 17979-2018 Small Farmers Agri Business Consortium (SFAC) Vs M/s Fouress Agro Exports and Ors. 5 of 16
11. Complainant closed his evidence vide his separate statement dated 28.05.2024 and thereafter, matter was fixed for recording of statement of accused.
STATEMENT UNDER SECTION 313 CRPC
12. On 02.09.2024 the statement of the accused under section 313, CrPC, read with section 281 Cr.PC was recorded wherein the entire incriminating evidence was put to him. In response, the accused reiterated the defence taken in the notice framed under section 251, Cr.PC. Additionally, the accused stated that the term loan has not ended and therefore the Venture Capital Assistance could not have been converted into a loan. The accused further stated that the date in the cheque in question was not mentioned by him and it was given as security.
DEFENCE EVIDENCE
13. The accused opted to lead evidence in defence and the application u/s 315 Cr.PC was allowed on 30.01.2026. DW-1 Sh. Jitendra (accused no. 2), deposed that the cheque in question was presented when the term loan was ongoing and without any intimation. DW-1 deposed that he does not remember whether the cheque in question was given along with the letter Ex. CW1/7. DW-1 deposed that the term loan expired one or two years after the presentation of the cheque in question, however, he does not remember the exact date. DW-1 stated that the complainant got the letter Ex. CW1/7 signed by him in 2011 itself. DW-1 further deposed that he did not request the complainant to repay the loan in four quarterly installment with interest. DW-1 admitted that he received intimation from bank Jayanti chander CT Cases 17979-2018 Small Farmers Agri Business Consortium Digitally signed (SFAC) Vs M/s Fouress Agro Exports and Ors. 6 of 16 by Jayanti chander Date: 2026.03.30 16:33:57 +0530 regarding dishonor of cheque in question. DW-1 admitted the address mentioned in the legal notice to be his correct address. DW-1 also admitted that no intimation was sent to the complainant for any change in the terms of the VC. DW-1 also stated that he is not aware about any changes in the original term loan. Thereafter, defence evidence was closed vide statement dated 03.05.2025.
FINAL ARGUMENTS
14. Final arguments were heard on 11.03.2026 on behalf of both the parties and written arguments were submitted. Learned counsel for the complainant submitted that the accused has admitted his signatures on the cheque in question and the ingredients of the offence are made out the accused is liable under section 138, NI Act. Learned counsel for the complainant further emphasized that the accused did not confront the complainant on the aspect of date of return and date of issuance of legal notice and has made a fresh argument at the stage of final arguments. Learned counsel for the complainant submitted that no opportunity was given to the complainant to prove the date of receipt of intimation of dishonor of cheque in question by the complainant as the bank witness was dropped because the compliance of abovesaid statutory period was never disputed by ld. Counsel for accused.
15. Per contra, Ld. counsel for the accused submitted Digitally signed by that the date of dishonor as mentioned in the return is 03.10.2018 Jayanti Jayanti chander chander Date:
2026.03.30 and the legal notice is dated 13.11.2018. The legal notice was 16:34:01 +0530 sent beyond the mandatory statutory period of 30 days and hence CT Cases 17979-2018 Small Farmers Agri Business Consortium (SFAC) Vs M/s Fouress Agro Exports and Ors. 7 of 16 a vital ingredient of offence u/s 138 NI act is not made out.
Hence, the present complaint is liable to be dismissed. Ld. Counsel for accused further submitted that the term loan by Canara Bank did not expire on the date of presentation of the cheque and thus, the requirement for conversion of the VCA into the alleged loan is not fulfilled. Therefore, there was no outstanding legal liability on the date of presentation of the cheque in question.
16. Rival submissions have been considered and record of the case has been perused.
INGREDIENTS OF OFFENCE UNDER SECTION 138 NI ACT
17. Before delving into the factual matrix of the present case, it is significant to underpin the essential ingredients to be established in order to attract the liability under section 138, NI Act as follows:
(i) The accused issued a cheque on an account maintained by him with a bank.
(ii) The said cheque has been issued in discharge, in whole or in part, of any legal debt or other liability, which is legally enforceable.
(iii) 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.
(iv) The cheque in question, when presented for Jayanti encashment, was returned unpaid. chander Digitally signed by Jayanti chander CT Cases 17979-2018 Date: 2026.03.30 Small Farmers Agri Business Consortium 16:34:05 +0530 (SFAC) Vs M/s Fouress Agro Exports and Ors. 8 of 16
(v) 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.
(vi) The drawer of the cheque failed to make the payment within 15 days of the receipt of aforesaid legal notice of demand.
APPRECIATION OF EVIDENCE
18. The accused can be held guilty of the offence under Section 138 NI Act only if the above-mentioned ingredients are proved by the complainant co-extensively. Moreover, conditions stipulated under Section 142 NI Act have to be fulfilled in addition to above-mentioned ingredients.
WITH RESPECT TO FIRST, THIRD AND FOURTH INGREDIENT
19. The Complainant has adduced by way of documentary evidence the original cheque Ex. CW1/8 and the return memo Ex CW1/9 mentioning reason of dishonor as "funds insufficient". The accused has admitted his signatures on the cheque in question. The accused stated in his statement u/s 251 Cr.PC that the cheque in question was signed and issued as security to the complainant for VCA. The accused as DW-1 has deposed that he does not remember whether he filled the date on the cheque in question or not. DW-1 further deposed that he does not remember whether the cheque in question was given along Jayanti with the letter Ex. CW1/7. It can be inferred that the accused chander admitted that the aforesaid letter was written and given by the Digitally signed by Jayanti CT Cases 17979-2018 chander Small Farmers Agri Business Consortium Date: 2026.03.30 (SFAC) Vs M/s Fouress Agro Exports and Ors. 9 of 16 16:34:10 +0530 accused to the Complainant. The letter dated 31.03.2011 Ex CW1/7 (OSR) written by the accused to the Complainant states that the duly filled cheque in question amounting to Rs 15.96 lakhs is being issued towards the refund of venture capital amount and that adequate funds shall be kept in the account for the purpose. An admission of issuance of the letter is an implied admission of the contents of the same. It is evident in the contents of the aforesaid letter the post-dated cheque in question was issued by the accused to the Complainant. The deposition of the accused that he does not remember whether the cheque in question was issued along with the letter or not, is not sufficient to rebut the documentary proof of issuance of the cheque in question.
20. The admissions of accused and letter dated 31.03.2011 Ex. CW1/7(OSR) indicate that the cheque in question was duly issued by the accused to the complainant. The dishonor of cheque in question is a matter of record. Hence, first, third and fourth ingredients stands proved.
WITH RESPECT TO FIFTH AND SIXTH INGREDIENT
21. The perusal of postal receipts and tracking report exhibited as Ex. CW1/11 (colly) and the deposition of DW-1 (the accused) that the legal notice was sent on the correct ad- dress of the accused lead to an inference that the legal notice was duly sent to the accused. The tracking report also confirms Jayanti the delivery on the address of the proprietorship on 19.11.2018. chander However, the accused has denied receipt of legal notice. Digitally signed by Jayanti chander Date: 2026.03.30 16:34:13 +0530 CT Cases 17979-2018 Small Farmers Agri Business Consortium (SFAC) Vs M/s Fouress Agro Exports and Ors. 10 of 16
22. The Hon'ble Supreme Court in the case of C.C Alavi Haji vs. Palapetty Muhd. & Anr.1 held that 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 respect of the complaint under Section 138 of the Act, make payment of the cheque amount and who does not pay within 15 days of re- ceipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the General Clauses Act and Section 114 of the Evidence Act.
23. This court finds that the legal notice was sent on the address admitted by the accused to be the correct address and despite due service of the legal demand notice and summons in the present case, the accused has failed to repay the legal debt with 15 days of receipt of legal notice and subsequently, within 15 days of service of summons respectively. Hence, fifth and sixth ingredient also stand fulfilled.
WITH RESPECT TO SECOND INGREDIENT
24. As per the scheme of NI Act and recent precedents, once the accused admits signature on the cheque in question, presumption of law under section 139 of the Act shall be drawn. In the recent judgment, Kalamani Tex v. P. Balasubramaniyan,2 the larger bench of the Hon'ble Supreme Court, held that: Jayanti 1 chander C.C Alavi Haji vs. Palapetty Muhd. & Anr 2 Digitally signed by Kalamani Tex v. P. Balasubramaniyan Jayanti chander CT Cases 17979-2018 Date: 2026.03.30 Small Farmers Agri Business Consortium 16:34:17 +0530 (SFAC) Vs M/s Fouress Agro Exports and Ors. 11 of 16 "U/s 118 & 139, once issuance of cheque and signature admitted, it is required to presume that the cheque was issued as consideration for a legally enforceable debt."
The same was re-iterated in the case of Hiten P. Dalal vs. Bratindranath Banerjee.3
25. In the present case the accused has admitted his signatures on the cheque in question. Thus, the ingredients of offence u/s 138 NI Act are presumed u/s 139 NI Act. To discharge the evidentiary onus of proof under section 102, IEA, the accused may rely on the complainant evidence to rebut the existence of legally enforceable debt as was enunciated in the case of Rangappa Vs. Sri Mohan4. However, the evidence should create doubt to the standard of preponderance of probabilities.
26. Ld. Counsel for the complainant argued that the accused has admitted his signatures on the cheque in question and borrowing the loan from the Complainant. Learned Counsel for the accused submitted that the ingredients of the offence are not made out as the strict compliance of mandatory statutory time period of service of legal notice within 30 days from the date of receiving intimation of dishonor was not done by the complainant. Ld. counsel for the accused relied on the judgment in the case of Amit Kumar Mishra Vs. State (Goverment of NCT of Delhi) and Ors. 5 and Deepak Nagar Vs. State and Ors. 6.
3Jayanti Hiten P. Dalal vs. Bratindranath Banerjee 4 Rangappa Vs. Sri Mohan.
chander 5 2020 (2) RCR (Criminal) 451 decided on 30.01.2020. Digitally signed 6 by Jayanti 2024 DHC 2107 decided on 22.02.2024. chander CT Cases 17979-2018 Date: 2026.03.30 Small Farmers Agri Business Consortium 16:34:20 +0530 (SFAC) Vs M/s Fouress Agro Exports and Ors. 12 of 16
27. The crucial question is as to on which date the complainant received the information about the dishonour of the cheque. The court finds that the return memo bears stamp of the bank with the date of 22.10.2018, although the date of return is 03.10.2018. Also, it is averred by the Complainant in the Complaint that the information of dishonour of cheque was received on 22.10.2018. However, the accused has disputed the same at the stage of final arguments. It can be inferred that the return memo placed on record was stamped by the bank at the time of its issuance to the complainant on 22.10.2018. Therefore, the point of determination is whether the statutory period of 30 days given to the complainant begins from the 'date of return' or 'date of receiving of the intimation of dishonor of cheque' by the complainant.
28. To determine the aforesaid issue, Proviso Clause (b) to Section 138 is reproduced as follows:
"Provided that nothing contained in this section shall apply unless--
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice; in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and"
29. The words of the proviso mentioned that the legal notice shall be given in writing "within 30 days of the receipt of Jayanti information from him from the bank regarding the return of the chander Digitally signed by CT Cases 17979-2018 Jayanti chander Small Farmers Agri Business Consortium Date: 2026.03.30 (SFAC) Vs M/s Fouress Agro Exports and Ors. 13 of 16 16:34:25 +0530 cheque as unpaid". It is pertinent to note that the stamp and date of the bank on the return memo Ex. CW1/9 mentions 22.10.2018 as the date of issuance of return memo. It can be inferred that the receipt of information from the bank regarding dishonor of the cheque in question by the complainant took place on 22.10.2018 and not on the date of dishonor mentioned in the return memo i.e. 03.10.2018. So, the statutory period of 30 days for issuance of the legal notice begins from 22.10.2018. The legal notice dated 13.11.2018 evidently appears to have been sent within the statutory period of 30 days as envisaged under section 138 Proviso (b) NI Act.
30. Furthermore, the contention raised by the accused was never highlighted during the cross-examination of the complainant. The Complainant did summon the bank witness to prove the same as the specific averments of the Complainant regarding receipt of information of return on 22.10.2018 was not disputed at the stage of cross examination. Also, the accused has not established that the intimation of dishonor of cheque was received by the complainant on the date of return i.e. 03.10.2018. The argument was only raised at the stage of final arguments by learned Counsel for accused and a fair opportunity was not given to the complainant to prove the fact by summoning the bank witness during the stage of trial.
31. Another contention raised by Learned Counsel for accused is that the term loan with Canara Bank did not expire on the date of presentation of the cheque. It may be noted that the Digitally signed by Jayanti letter Ex CW1/7 (OSR) specifically mentions the details of the Jayanti chander chander Date:
2026.03.30 CT Cases 17979-2018 16:34:30 Small Farmers Agri Business Consortium +0530 (SFAC) Vs M/s Fouress Agro Exports and Ors. 14 of 16 cheque in question including the date of cheque and assurance of the accused to keep sufficient funds in his bank account on the same date. It is indicated that the date of cheque was agreed between the accused and the Complainant keeping in mind the duration of the term loan. The VCA was agreed to accrue as a loan only on the expiry of the period of term loan. It is significant to note that the accused, in his cross examination as DW-1, deposed that he does not remember the date of expiry of term loan. Also, the accused has not adduced any cogent evidence to prove that the term loan had not expired. Thus, the contention of accused is not premised on any substantive piece of evidence.
32. The documentary evidence including the cheque in question, return memo, legal notice and postal receipts and the admission of accused of availing the loan fulfill the ingredients of offence u/s 138 NI Act. However, denials by the accused are not sufficient to raise a probable defence to rebut the presumption of commission of the offence.
33. Once the burden of proof has shifted on the accused and he has failed to rebut the case of the complainant by cogent evidence, the offence u/s 138 NI Act remains proved.
CONCLUSION
34. This court finds that the complainant has sufficiently discharged his initial burden of proving the essential ingredients of offence under Section 138 of NI Act as per law.
Jayanti
chander
CT Cases 17979-2018 Digitally signed
Small Farmers Agri Business Consortium by Jayanti
(SFAC) Vs M/s Fouress Agro Exports and Ors. 15 of 16 chander
Date: 2026.03.30
16:34:35 +0530
35. Accordingly, the proprietorship accused no. 1 M/s Fouress Agro Export through its proprietor Accused no. 2 Sh. Jitendra Kumar S. Jain is convicted of the offence under Section 138 of the Negotiable Instruments Act, 1881.
36. This judgment contains 16 pages and each page has been signed by the undersigned.
Digitally signed by th Announced in open Court on 30 March 2026 Jayanti Jayanti chander chander Date:
2026.03.30 16:34:41 +0530 Jayanti Chander JMFC (NI Act)-07/South District/Saket Courts/New Delhi 30.03.2026.
CT Cases 17979-2018 Small Farmers Agri Business Consortium (SFAC) Vs M/s Fouress Agro Exports and Ors. 16 of 16