Delhi District Court
Divya Unnati Cooperative Urban T And C ... vs Mahesh Kumar on 28 May, 2025
IN THE COURT OF JUDICIAL MAGISTRATE FIRST CLASS, (NI
ACT), DIGITAL COURT-01, EAST, KKD
NEW DELHI
Presided over by- Sh. Shiva Parashar, DJS
In the matter of :-
Divya Unnati Cooperative Urban DLET020005342022
Thrift & Credit Society Ltd.
Through its AR Sh. Angad Kumar Singh,
Office at: 13/425, Kalyanpuri
Delhi-110091
.... Complainant
VS.
Mahesh Kumar
S/o Sh. Budhram
R/o 17/483, Trilokpuri,
Delhi- 110091
.... Accused
Divya Unnati Cooperative Urban
1. Name of Complainant :
Thrift & Credit Society Ltd.
2. Name of Accused : Mahesh Kumar
Offence complained of or Section 138, Negotiable
3. :
proved Instruments Act, 1881
4. Plea of Accused : Not Guilty
5. Date of Filing : 22.01.2022
6. Date of Reserving Order : 23.05.2025
7. Date of Pronouncement : 28.05.2025
8. Final Order : Acquittal
Argued by :- Sh. Satwant Singh, Ld. counsel for the complainant.
Sh. Nitin Kumar Jain, Ld. counsel for the accused.
CC NI ACT 308/2022 Divya Unnati vs. Mahesh Kumar 1
Digitally signed
by SHIVA
SHIVA PARASHAR
PARASHAR Date:
2025.05.28
15:31:24 +0530
BRIEF STATEMENT OF REASONS FOR THE DECISION:-
FACTUAL MATRIX
1. The present complaint is filed against the accused Mahesh Kumar s/o
Sh. Budhram under Section 138 of the Negotiable Instruments Act, 1881
(hereinafter referred to as "NI Act"). The substance of allegations and assertions of
the complainant, Divya Unnati Cooperative Urban Thrift & Credit Society Ltd., is
that the accused approached it for a loan of Rs. 50,000/- and accordingly, a loan of
Rs. 50,000/- (Rs. Fifty Thousand) was granted to the accused with the condition to
pay EMIs as per the payment schedule. However, accused failed to make the
payments as per the loan agreement. Ultimately, accused issued a cheque bearing
no. 684146 dated 29.11.2021 for an amount of Rs. 66,000/-, drawn on Corporation
Bank, Shalimar Bagh, Delhi (hereinafter referred to as "cheque in question"). The
said cheque, when presented, was retuned unpaid vide return memo dated
01.12.2021 by the bank with remarks, "Bank CD Excl Wef". Thereafter, the
complainant informed the accused about the dishonour of the cheque in question,
however, accused failed to pay any heed to the requests of the complainant. The
complainant then issued demand notice dated 13.12.2021, through its counsel upon
the accused. Even after the receipt of the demand notice, accused failed to pay the
cheque amount within the stipulated period and hence, the present complaint.
2. On finding a prima facie case against the accused, he was summoned
to face trial vide order dated 25.05.2022 and after his appearance, notice of
accusation under Section 251, Code of Criminal Procedure, 1973 (hereinafter
referred to as "CrPC") was served on him on 11.08.2023. In reply to the notice of
accusation, the accused pleaded not guilty and claimed trial. He stated that he is
signatory to the cheque but disputed the liability on account of repayment.
Digitally signed
CC NI ACT 308/2022 Divya Unnati vs. Mahesh Kumar by SHIVA
PARASHAR
2
SHIVA
PARASHAR Date:
2025.05.28
15:31:28
+0530
3. During the trial, the complainant has led the following oral and
documentary evidence against the accused to prove his case beyond reasonable
doubt:-
ORAL EVIDENCE
CW 1 : Angad Kumar Singh (AR of Complainant)
CW 2 : Shikha Kajla (Bank Witness)
DOCUMENTARY EVIDENCE
Ex.CW1/1 : Original Cheque bearing no. 684146
Ex.CW1/2 : Return Memo dated 01.12.2021
Ex.CW1/3 : Legal Notice dated 13.12.2021
Ex.CW1/4 : Original Postal Receipt
Ex. CW1/5 : Tracking Report
Ex. CW1/6
: Letter of Authorisation
(OSR)
Ex. CW1/7
: Loan Application Form
(OSR)
Mark-A : Circular
Ex. CW1/A : Evidence by way of affidavit of CW1
4. Thereafter, before the start of defence evidence, in order to allow the
accused to personally explain the incriminating circumstances appearing in
evidence against him, the statement of the accused was recorded without oath
under Section 313 Cr.P.C. In reply, accused accepted the dishonour of cheque in
question; however, he denied his liability on account of repayment. Accused
further submitted that he does not wish to lead defence evidence in the matter.
ARGUMENTS-
5. The final arguments were heard in the matter. I have heard the ld.
counsels appearing for the parties and have given my thoughtful consideration to
the material appearing on record.
Digitally signed
CC NI ACT 308/2022 Divya Unnati vs. Mahesh Kumar by SHIVA 3
PARASHAR
SHIVA
Date:
PARASHAR 2025.05.28
15:31:33
+0530
6. It has been argued by the ld. counsel for the complainant that all the
ingredients of the offence are fulfilled in the present case. He has argued that it is
proved from the material on record that the accused borrowed Rs. 50,000/- from
the complainant and issued the cheque drawn on his personal account towards the
payment of loan. Even further, the lending of loan is proved from the agreement
Ex. CW1/7. The accused has failed to prove his defence and in addition, the
accused has raised disparate defences in his Notice under Section 251 Cr.P.C. and
in his statement recorded under Section 313 Cr.P.C. Further, the defence of cheque
being invalid on account of merger of banks will not affect its dishonour and
accrual of cause of action in favour of the complainant. Ld. Counsel for
complainant has relied upon Premanand Prusty vs. Sita Devi, Crl.M.C. 1566/2023
and B. Venugopal vs. S. Narayanan, Crl. O.P. 21832/2022 . As such, it is prayed
that the accused be punished for the said offence.
7. Per contra, ld. counsel for the accused has argued that the complainant
has failed to establish his case beyond reasonable doubt. He submits that no case is
made out in favour of the complainant since the cheque in question is invalid and
void on account of merger between the banks. Further, the cheque in question was
a security cheque which has been in possession of the complainant even prior to
the loan agreement. Ld. Counsel for accused has relied upon Archana Singh
Gautam vs. State of U.P., 2024(4) Criminal Court Cases 757 (All.) . As such, it is
prayed that the accused be acquitted.
INGREDIENTS OF OFFENCE AND DISCUSSION
8. Before dwelling into the facts of the present case, it would be apposite
to discuss the legal standards required to be met by both sides. In order to establish
the offence under Section 138 of NI Act, the prosecution must fulfil all the
CC NI ACT 308/2022 Divya Unnati vs. Mahesh Kumar 4
Digitally signed
by SHIVA
PARASHAR
SHIVA
Date:
PARASHAR 2025.05.28
15:31:39
+0530
essential ingredients of the offence. Perusal of the bare provision reveals the
following necessary ingredients of the offence:-
First Ingredient: The cheque was drawn by a person on an account maintained
by him for payment of money and the same is presented for payment within a
period of 3 months from the date on which it is drawn or within the period of its
validity;
Second Ingredient: The cheque was drawn by the drawer for discharge of any
legally enforceable debt or other liability;
Third Ingredient: The cheque was returned unpaid by the bank due to either
insufficiency of funds in the account to honour the cheque or that it exceeds the
amount arranged to be paid from that account on an agreement made with that
bank;
Fourth Ingredient: A demand of the said amount has been made by the payee or
holder in due course of the cheque by a notice in writing given to the drawer
within thirty days of the receipt of information of the dishonour of cheque from
the bank;
Fifth Ingredient: The drawer fails to make payment of the said amount of
money within fifteen days from the date of receipt of notice.
9. The accused can only be held guilty of the offence under Section 138
NI Act if the above-mentioned ingredients are proved by the complainant co-
extensively. Additionally, the conditions stipulated under Section 142 NI Act have
to be fulfilled.
10. With regard to the fourth and fifth ingredient, the complainant has
proved on record legal notice Ex. CW1/3 and original postal receipt Ex. CW1/4
and tracking report Ex.CW1/5. The legal notice was addressed to the accused and
sent by the counsel for the complainant is dated 13.12.2021 and the delivery is
confirmed as per the tracking report. The receipt of legal demand notice is denied
by the accused in his plea of defence recorded u/s 251 Cr.P.C., as well as in his
statement recorded u/s 313 Cr.P.C. No dispute is raised in regards the address
mentioned in the demand notice. Further, proviso (f) of Section 114 of the Indian
Evidence Act, 1872 entails a presumption in regard the common course of
business. In C.C. Alavi Haji vs. Palapetty Muhammed and Ors., 2007(3)A C
CC NI ACT 308/2022 Divya Unnati vs. Mahesh Kumar Digitally 5
signed by
SHIVA
SHIVA PARASHAR
PARASHAR Date:
2025.05.28
15:31:44
+0530
R2738(SC), it was observed:
"12. According to Section 114 of the Act, read with illustration (f) thereunder,
when it appears to the Court that the common course of business renders it
probable that a thing would happen, the Court may draw presumption that the
thing would have happened, unless there are circumstances in a particular case to
show that the common course of business was not followed. Thus, Section 114
enables the Court to presume the existence of any fact which it thinks likely to
have happened, regard being had to the common course of natural events, human
conduct and public and private business in their relation to the facts of the
particular case. Consequently, the court can presume that the common course of
business has been followed in particular cases. When applied to communications
sent by post, Section 114 enables the Court to presume that in the common course
of natural events, the communication would have been delivered at the address of
the addressee. But the presumption that is raised under Section 27 of the G.C. Act
is a far stronger presumption. Further, while Section 114 of Evidence Act refers to
a general presumption, Section 27 refers to a specific presumption."
Thus, when the tracking report shows the post as delivered, it may be safely
presumed that the same was delivered to the addressee mentioned therein.
Additionally, the accused has failed to bring any evidence to prove the contrary as
well. Therefore, it is proved that the legal notice was delivered to the accused on
the date mentioned in the Tracking Report Ex.CW1/5 i.e., 15.12.2021. No dispute
was raised on this issue by the counsel for the accused during arguments. The fact
that the payment was not made within 15 days of the receipt of the legal notice is
also not disputed. Therefore, the fourth and the fifth ingredient of the offence
stands proved.
11. Now it remains to be ascertained if the first, second and third
ingredient are proved or not. First and foremost, the cheque which is presented for
encashment should be a valid negotiable instrument as per law. A cheque, as per
Section 6 of the NI Act is "a bill of exchange drawn on a specified banker and not
expressed to be payable otherwise than on demand." The name of specified banker
is mentioned on the cheque itself. In the present case, the cheque in question
bearing no. 684146, drawn on Corporation Bank is dated 29.11.2021. In order to
CC NI ACT 308/2022 Divya Unnati vs. Mahesh Kumar 6
Digitally signed
by SHIVA
PARASHAR
SHIVA
Date:
PARASHAR 2025.05.28
15:31:50
+0530
clarify the reason for dishonour of cheque in question, complainant has brought a
bank witness, Ms. Shikha Kajla, Branch Manager from Union Bank of India as
CW-2 who has stated that the Corporation Bank had merged into Union Bank of
India and the old cheques of the Corporation Bank were accordingly discontinued
from 01.10.2021. She has also relied upon one Circular of the bank Mark-A which
states that the old IFSC/MICR Codes of erstwhile Corporation Bank stood
discontinued with effect from 01.10.2021 and, as such, the old cheques were to be
returned by the bank with the remarks "Bnk cd excl wef 01102021." CW-2 further
stated that the cheque in question was not a valid instrument since the same was an
old cheque and it was drawn on 29.11.2021 which is beyond the due date of
validity.
12. At this stage, reference is made to the judgments cited by both the
counsels. Ld. Counsel for complainant has relied upon one judgment of Hon'ble
High Court of Delhi in Premanand Prusty vs. Sita Devi, Crl.M.C. 1566/2023. The
petitioner therein had approached the hon'ble court under Section 482 Cr.P.C., for
quashing the criminal proceedings and the setting aside of the summoning order
passed by the trial court upon a dishonour of cheque drawn on Syndicate Bank
which had been merged into Canara Bank. It was held:
"15. In this regard, this Court finds merit in the contention of the learned counsel
for the complainant that even if the cheque was not encashed and had returned
unpaid for the reasons that Bank was not accepting the MICR Code, the petitioner
after receipt of legal notice could have made the payment to the complainant or
could have issued a fresh cheque towards the discharge of his liability. The fact
remains that the cheque in question, which has been undisputedly signed by the
petitioner, was presented for encashment with the Bank by the complainant
towards discharge of debt, which the complainant claims is reflected from the
promissory notes and undertakings signed by the petitioner, and upon its
presentation, the cheque had been returned unpaid by the Bank to the
complainant. Thereafter, the petitioner had also failed to make payment of the
amount in question to the complainant after service of legal notice and therefore,
the present complaint was filed under Section 138 of NI Act.
CC NI ACT 308/2022 Divya Unnati vs. Mahesh Kumar Digitally 7
signed by
SHIVA
SHIVA PARASHAR
PARASHAR Date:
2025.05.28
15:31:55
+0530
16. In these circumstances, this Court finds no reason to quash the impugned
orders and the complaint case, pending before the learned Trial Court.
17. However, it is clarified that the petitioner shall be at liberty to raise all these
issues raised before the learned Trial Court at appropriate stage, and the learned
Trial Court shall decide the case pending before it on its own merits, and without
being influenced by any of the observations made hereinabove by this Court since
the same are only for the purpose of deciding the present petition."
As such, it is clear from the above extract that the Hon'ble Court did
not lay down a ratio decidendi and finally decide the lis between the parties. On the
contrary, a limited issue of quashing of criminal proceedings was before the
Hon'ble High Court and therefore it was noted that the opinion of the court was not
a comment on the merits of the case. Accordingly, this court is unable to place any
reliance upon the judgment of Hon'ble High Court of Delhi.
13. Ld. Counsel for complainant has also relied upon one judgment of
Hon'ble High Court of Madras in B. Venugopal vs. S. Narayanan, Crl. O.P.
21832/2022 wherein the cheque was dishonoured for the reason "Non CTS
cheque" and the accused had approached the court for quashing of criminal
proceedings. However, there as well, the Hon'ble High Court did not comment
upon the merits of the matter and remitted the same for trial. Thus, the reliance of
ld. Counsel for complainant upon the abovementioned judgments is misplaced
since both of them dealt with a limited issue and did not render any decision upon
the question of law.
14. Per contra, ld. Counsel for accused has relied upon the judgment of
Hon'ble Allahabad High Court in Archana Singh Gautam vs. State of U.P.,
2024(4) Criminal Court Cases 757 (All.) wherein the Hon'ble High Court came to
the conclusion that the old cheque of an erstwhile bank had become an invalid
instrument after its merger and accordingly, the same was not a valid cheque as per
the requirement of proviso (a) of Section 138 NI Act. Further, it was noted:
CC NI ACT 308/2022 Divya Unnati vs. Mahesh Kumar 8
Digitally signed
by SHIVA
SHIVA PARASHAR
PARASHAR Date:
2025.05.28
15:32:02 +0530
"7. From the perusal of Section 138 N.I. Act, it is clear that if any invalid cheque
is presented before the Bank and the same was dishonoured, then there is no
liability under Section 138 N.I. Act would be attracted, and the cheque of
Allahabad Bank is invalid after 30.09.2021 after merging the Allahabad Bank into
the Indian Bank on 01.04.2020. Therefore, dishonouring such cheques after
30.09.2021 will not attract liability u/s 138 N.I. Act.
8. It is also relevant to mention here that as per Section 118 (b) of N.I. Act a
cheque shall be deemed to be drawn on the date which is mentioned in the cheque
even if same may post dated.
9. In the present case, a cheque dated 02.06.2023 of erstwhile Allahabad Bank
was presented to the Indian Bank on 21.08.2023, and the same was returned on
25.08.2023 with the endorsement "wrongly delivered not drawn on us".
Therefore, the cheque in question was invalid on the date of presentation before
the Indian Bank."
Similarly, the Hon'ble High Court of Andhra Pradesh in Ganta
Kavitha Devi Vs. State of Andhra Pradesh , 2024 SCC OnLine AP 5115 has held
that an invalid cheque will not attract the liability u/s 138 NI Act. As per proviso
(a) of Section 138 NI Act, if the cheque itself is invalid, the bank is bound to
dishonour the same. The cheque in question is dated 29.11.2021, which is beyond
the date of validity of old cheques of Corporation Bank.
15. Further, the cheque in question is dishonoured with the remarks
"Bank CD Excl Wef" and as such, the same cannot be said to be covered
under Section 138 of NI Act as the said cheque was returned dishonoured not
because of the reasons specified in Section 138 of NI Act but for the reason which
was beyond the control of the drawer. Considering the above discussion, it is clear
that the cheque in question was dishonoured because of the merger of banks and
the same cannot be said to fall in one of the reasons to constitute offence
under Section 138 NI Act and thus, the third ingredient cannot be said to be
fulfilled qua the cheque in question.
16. Therefore, in view of the discussion in the foregoing paragraphs, the
CC NI ACT 308/2022 Divya Unnati vs. Mahesh Kumar 9
Digitally signed
by SHIVA
PARASHAR
SHIVA
Date:
PARASHAR 2025.05.28
15:32:08
+0530
inevitable conclusion is that when the cheque had become invalid by virtue of the
merger of banks, the essential ingredients of offence under Section 138 of NI Act
cannot be said to be proved. The accused has been successful in raising a defence
of invalidity of the cheque in question. As such, the statutory requirements of
Section 138 NI Act are not fulfilled in the present case.
CONCLUSION -
17. To recapitulate the above discussion, the accused has been successful
in establishing a probable defence on a standard of preponderance of probabilities
to rebut the presumption under Section 118 and Section 139 of NI Act by punching
holes in the case of the complainant and making the version of the complainant
doubtful. Cogent evidence is required to be proved beyond reasonable doubt to
secure conviction in a criminal trial. The accused has been successful in
establishing a probable defence from the evidence of the complainant that the
cheque in question had become invalid on the date of its presentation.
18. As such, the complainant has failed to prove the offence beyond
reasonable doubt and the accused has been able to raise a probable defence.
Resultantly, the complaint of the complainant is dismissed and the accused Mahesh
Kumar is hereby acquitted of the offence of Section 138 of the Negotiable
Instruments Act, 1881.
Digitally signed
ORDER:- ACQUITTED SHIVA
by SHIVA
PARASHAR
PARASHAR Date:
Pronounced in open court on 28.05.2025. 2025.05.28 15:32:15 +0530 (Shiva Parashar) JMFC (NI Act) Digital Court-01, East KKD, New Delhi Note: This judgment contains 10 pages and each page has been signed by me. CC NI ACT 308/2022 Divya Unnati vs. Mahesh Kumar 10