Delhi District Court
Shriram Finance Ltd vs Inderjeet Singh on 1 April, 2025
Narender Kumar Gupta Vs. Gian Prakash Arora
IN THE COURT OF MS. SHIVANGI MANGLA,
JUDICIAL MAGISTRATE-FIRST CLASS (NI ACT)-05,
DWARKA COURTS, NEW DELHI
CNR NO.DLSW02-024793-2019
Ct. Cases No.17581/2019
Narender Kumar Gupta Vs. Gian Prakash Arora
01.04.2025
1. Name of the complainant : Narender Kumar Gupta
Proprietor of NBS Enterprises
WZ-K173C, Nangal Raya,
New Delhi.
2. Name and address of the : Gian Prakash Arora
accused S/o Sh. D. C Arora
R/o C2C-12/177, Janakpuri,
New Delhi-110058.
3. Offence complained of or : Under Section 138 of the
proved Negotiable Instruments Act,
1881.
4. Plea of the accused : Pleaded not guilty and
claimed trial.
5. Final Order : Convicted
6. Date of Institution : 06.09.2014
7. Date of pronouncement of : 01.04.2025
judgment
Ct. Case No. 17581/2019 Page No. 1 of 18
Narender Kumar Gupta Vs. Gian Prakash Arora
JUDGMENT
1. Vide this judgment, I shall decide the present matter, Ct. Cases No.17581/2019 filed by complainant against the dishonour of two cheques bearing no. 000064 dt. 05.05.2014 of Rs.5,00,000/- and cheque bearing no. 000065 dt. 07.05.2014 of Rs. 5,00,000/-, both drawn on HDFC Bank, JanakPuri, New Delhi 110058, (henceforth, the cheques in question).
2. Briefly stated, the facts that the complainant is the proprietor of M/s N.B.S. Enterprises and the wholesale dealer of grocery items like oil, sugar, rice etc. It is the case of the complainant that accused purchased articles from the complainant against bill no. 241 on 01.05.2014 for Rs.5,01,250/- and subsequently purchased articles worth Rs.5,01,250/- on 02.05.2014 against the bill no. 252 on credit. In discharge of the legal debt/liability towards the complainant, accused issued the cheques in question. On presentation, the cheques in question were returned unpaid with the remarks "Funds insufficient" vide returning memos dated 05.08.2014.
3. Thereafter, complainant sent separate legal notices both dated 09.08.2014 to the accused through registered post calling upon him to pay the outstanding amount. It is the case of the complainant that despite service/receipt of the notice, the accused failed to repay the amount within 15 days. Hence, the present complaint.
Ct. Case No. 17581/2019 Page No. 2 of 18Narender Kumar Gupta Vs. Gian Prakash Arora
4. The present complaint was filed within the limitation period.
5. Pre summoning evidence of complainant was recorded and the cognizance was taken u/s 138 NI Act on 30.09.2014 and summons were issued to accused thereupon.
6. Notice was framed against the accused on 05.10.2018 to which he pleaded not guilty and claimed trial. Application u/s 145(2) NI Act was filed and considering objections, the same was allowed.
7. CW1/complainant examined himself and filed his evidence by way of affidavit as Ex.CW1/1. He has relied upon the documents: -
1. Ex.CW1/A & Original bills Ex.CW1/B Ex.CW1/C&
2. Original cheques in question Ex.CW1/D Ex.CW1/E &
3. Bank slips Ex.CW1/F Ex.CW1/G &
4. Legal demand notices Ex.CW1/H Ct. Case No. 17581/2019 Page No. 3 of 18 Narender Kumar Gupta Vs. Gian Prakash Arora Ex.CW1/I &
5. Postal receipts Ex.CW1/J Legal demand notice regarding
6. Ex.CW1/K bill no. 241 dt. 01.05.2014.
7. Ex.CW1/L Postal receipt.
8. Ex.CW1/M ITR Returns & Ledger account statement
9. Ex.CW1/N Bank account statement Ledger account, sales register, 10 Mark A (colly.) purchase register and stock register
8. CW1/complainant was examined in chief, cross examined in part on 11.11.2021, 11.10.2022, 19.12.2022 and discharged on 14.03.2023. Closing CE, the matter was listed for SA.
9. The accused was examined and his statement was recorded under section 313, Cr.P.C. on 25.04.2023, after all the incriminating evidence and the documents on record were put to him. Accused had chosen to lead evidence in his defence. Accordingly, the matter was fixed for DE.
10. Allowing the application u/s 315 Cr.P.C, the accused examined himself as DW1. The witness was cross examined on Ct. Case No. 17581/2019 Page No. 4 of 18 Narender Kumar Gupta Vs. Gian Prakash Arora 01.08.2023 and discharged after completion of examination on 13.09.2023. The Ld. counsel for complainant brought on record following documents during the cross examination of DW1 as under:-
1. Ex. DW1/C1 (OSR) is the compromise deed between complainant and accused.
2. Mark DW1/C1 (colly) is the Letter of resignation from Directorship, consent letter alongwith list of shareholders.
DW2/Pawan Tiwari, official from M/s Ruchi Soya Industries was examined, cross examined and discharged on 22.10.2024. The witness brought on record the certified copy of ledger account maintained by M/s Ruchi Soya Ex.DW2/A. The another defence witness was dropped considering the absence of the witness and the non willingness for deposition. Subsequently an application u/s 311 Cr.P.C was filed for recalling of the witness so dropped, however, citing a detailed order the application was dismissed and the matter was proceeded ahead from stage of final arguments.
11. Both the counsels led their oral submissions in length. Rebuttal submissions also taken from both the counsels. The submissions made on behalf of both the parties and the judgments relied on by the parties have been considered.
Ct. Case No. 17581/2019 Page No. 5 of 18Narender Kumar Gupta Vs. Gian Prakash Arora POINTS FOR DETERMINATION, APPRECIATION OF EVIDENCE AND CONSEQUENT FINDINGS:
12. To establish the offence under Section 138 of the NI Act against the accused, the complainant must prove the following: -
i. the accused issued a cheque on 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.
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 aforesaid cheque, when presented for encashment, was returned unpaid/dishonored.
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.
13. The accused admitted his signatures on the cheques in question at every stage; from notice under section 251 Cr.P.C. to his statement under section 313 Cr.P.C. Thus, presumption under section 118(a) and under section 139 of NI Act arises against the accused. Unless the contrary is proved, it shall be presumed that the cheques in question were drawn for a consideration and that Ct. Case No. 17581/2019 Page No. 6 of 18 Narender Kumar Gupta Vs. Gian Prakash Arora the complainant received the cheques in question in discharge of a debt/ liability from the accused. In order to rebut the presumptions, the burden of proof shifts to the accused to prove on a preponderance of probabilities that there was no liability for the amount of cheque in question.
(Reliance placed on Triyambak S. Hegde vs Sripad decided by 3 judge bench of Hon'ble SC on 23.09.2021 and Basalingappa vs Mudibasappa (2019) 5 SCC 418; Bir Singh Vs. Mukesh Kumar (2019) 4SCC; K Bhaskaran Vs. Sankaran Vaidhyan Balan (1999) 7 SCC510; Hiten P. Dalal Vs. Bratindranath Banerjee (2001) 6 SCC16; 8 Kalamani Tex and Ors Vs. B Balasubramanian (2021) SCC online SC 75; J. Vasantha Kumar Vs. Vipyakuman Kumar AIR 2015 SC 2240.)
14. Therefore, in the present matter, the onus of proof is now upon the accused to raise a probable defence and to rebut the presumption of the existence of a legally recoverable debt arisen in favour of the complainant (reliance placed on Rangappa Vs. Sri Mohan (2010) 11 SCC441). It is now to be examined as to whether the accused has brought any material on record dislodging the presumption which meets the standard of preponderance of probabilities.
15. It is the defence of the accused that the cheques in question were issued not to the complainant but to the brother of the Ct. Case No. 17581/2019 Page No. 7 of 18 Narender Kumar Gupta Vs. Gian Prakash Arora complainant namely Rajendra Kumar. It is his further defence that the cheques in question were issued for the security purpose in lieu of the property transaction with the brother of the complainant and that the cheques in question have been misused by the complainant in connivance with his brother against him. The accused has abruptly denied the receipt of any goods from the complainant. Not only this he has also denied the entire transaction of purchase of any material from the complainant. The accused has bluntly denied his liability qua the cheques in question.
16. To establish the offence under section 138 NIA, as discussed above, all the ingredients shall be met.
17. The accused admitted the signatures on the cheques in question to be belonging to him. He also admitted the issuance of the cheques. The only fact disputed is with respect to the person to whom the cheques were issued (viz. the brother of the complainant as per the accused). In as such, it can be made out that the cheques in question have been drawn from the account maintained by the accused. Accordingly, the first ingredient stand established.
Ld. counsel for the accused at the stage of the arguments raised the averment of the present complaint being time barred. He seeks reliance on the ledger account Ex. CW1/M, which shows that the cheques in questions were returned unpaid on 28.06.2014 and the said fact was within the knowledge of the Ct. Case No. 17581/2019 Page No. 8 of 18 Narender Kumar Gupta Vs. Gian Prakash Arora complainant. He acccordingly pleads that the legal notice so sent, was time barred, making the entire complaint not maintainable. He has further raised disputes with regard to the return memo filed in the present matter with respect to both the cheques in question.
With respect to the first averment, the complainant being in knowledge that the cheques were dishonored, does not bar the right of the party to present the cheque again and any number of times within the period of validity i.e. 03 months from the date of cheque. Further, no such contention was ever raised during the trial.
18. Now with respect to the third ingredient of section 138 NIA, the cheques in question have been returned with the remarks "fund insufficient". The reason for the return as per the return memo also falls straight within the purview of offence under section 138 NIA. Dispute has been raised with regard to the validity of return memos Ex. CW1/E and Ex. CW1/F. As per Section 146 of NI Act, Bank's slip is prima facie evidence of proof of dishonor. The Honourable Delhi High Court has recently held in Guneet Bhasin v State of NCT of Delhi, Neutral Citation Number: 2022/DHC/005048 that section 146 NI Act do not specify any particular mode of cheque return memo. The Honourable High Court further stated that any infirmity in the cheque return memo does not render the entire trial as void. Therefore, even though the cheque return mems are not stamped, the memos are valid. The Hon'ble High Court held Ct. Case No. 17581/2019 Page No. 9 of 18 Narender Kumar Gupta Vs. Gian Prakash Arora as follows; The cheque return memo is a memo informing the payee's banker and the payee about the dishonour of a cheque. When the cheque is dishonoured, the drawee bank immediately issues a cheque return memo to the payee's banker mentioning the reason for nonpayment. The purpose of the cheque return memo is to give the information of the holder of the cheque that his cheque on presentation could not be encashed due to the variety of reasons as mentioned in the cheque return memo. As per the section 146 of the NI act, the cheque return memo on presentation presumed the fact of dishonour of the cheque unless and until such fact is disapproved. Neither section 138 nor the section 146 of the NI act has prescribed any particular form of cheque return memo. The section 138 of the NI Act does not mandate any particular form of cheque return memo which is nothing but a mere information given by the Banker of the due holder of a cheque that the cheque has been returned as unpaid. If the cheque return memo is not bearing any official stamp of the bank, it does not render the cheque return memo as invalid or illegal. The cheque return memo is not a document which is not required to be covered under section 4 of the Bankers Book (Evidence) Act, 1891. If there is any infirmity in the cheque return memo, it does not render entire trial under section 138 of the NI Act as nullity.
In view of the above, it can be observed that there is no prescribed format for the issuance of return memo contemplated. On the glance of the return memo, the reason "IF" finds mentioned alongwith the cheque number, which made the Ct. Case No. 17581/2019 Page No. 10 of 18 Narender Kumar Gupta Vs. Gian Prakash Arora Court believe in the information to the fact that the cheques in question were returned unpaid, due to the said fact Court proceeded in taking the cognizance of the offence. Further, if any fact contrary is to be averred or relied, then the burdened to prove the same shall lie on the party so pleading, like in the present case it is accused. The mere fact that the return memo is not valid or does not mention the complete reason for return will not ipso facto be equivalent to proof. In the present case, however, apart from merely pleading Ex. CW1/E and Ex. CW1/F to be defective, no effort was ever made to call the bank witness to foreclose the real reason for the return. Accordingly, in view of the above, it can be observed that both the cheques in question were presented within the validity period. Hence, the third ingredient stands satisfied.
19. The fourth, fifth and sixth requirement of the section provides for issuance of the legal demand notice in writing to the drawer within 30 days of the receipt of the information from the bank regarding the dishonour of the cheques. And in case the drawer fails to pay the amount within 15 days from the date of receipt of the legal notice, then the cause of action arises in favor of the complainant for which the complaint shall be filed within period of one month thereof.
In the present matter, the cheques have been returned unpaid on 05.08.2014, whereafter the legal notice was issued to the accused with respect to both the cheques separately on the same date ie. 09.08.2014. In view of no defence in contrary to Ct. Case No. 17581/2019 Page No. 11 of 18 Narender Kumar Gupta Vs. Gian Prakash Arora disprove or challenge the validity of Ex. CW1/E and Ex. CW1/F, both the documents are deemed to be valid and hence the legal notices were issued within the limitation period.
The accused denied the receipt of the legal notice by him, and the address on the legal notice has also been denied to be belonging to him. However, it is pertinent to note that the summons issued to accused on the same address as mentioned on the legal notice were received back duly served as per the report received thereon by this court. The address in the compromise deed Ex. DW 1/C1 reflects the same address as mentioned on the legal notice. The execution of said compromise deed has been admitted by accused. He has further admitted to have signed Ex. DW1/C1 as second party. Further, no proof has been led by the accused to establish the fact that he was not present on the given address at the relevant time when the legal notice was sent, apart from his oral denial. Hence, by virtue of provisions of section 27 General Clauses Act and the guidelines laid down in the case C.C. Alavi Haji vs Palapetty Muhammed & Anr 2007 AIR SCW 3578, the presumption with regard to the receipt of the legal notice by the accused can be perfectly made. Considering the same, it can be further observed that no payment was made by the accused, despite being in receipt of the legal notice and that the present case has been validly filed before the court within its limitation period. Thereby, fourth, fifth and sixth ingredient of section 138 NIA also stands established.
Ct. Case No. 17581/2019 Page No. 12 of 18Narender Kumar Gupta Vs. Gian Prakash Arora
20. Moving ahead with respect to the discussion regarding the ingredient number two of s.138 NIA.
The accused has bluntly denied to have any existing legal debt or liability towards the complainant.
It is his case that he had property dealings with the brother of the complainant Rajendra Kumar and the cheques-in question were issued towards the aforesaid purpose. In pursuance of the same Mark DW1/C1(colly) was filed on record by the accused, however, the document failed to support the case of the accused, considering the admission on the part of the accused testifying- " It is correct that the documents Mark DW1/C1 is not reflecting that at somewhere and some point of time, the brother of the complainant was involved in property dealing."
The said document failed, not only to prove that the brother of the complainant was involved in property dealing, but also failed to corroborate the version of the accused that the property dealings were with the accused jointly.
No other proof, oral or documentary has been brought by the accused to establish his said defence that he was in regular property transaction with the brother of the complainant. No attempt was ever made to call the brother of the complainant, Rajendra Kumar before the court for deposition as witness in support of the case of the accused. Further, no disclosement has been done as to what was the actual property business for which the cheques in question were issued for and for security of which transaction.
Ct. Case No. 17581/2019 Page No. 13 of 18Narender Kumar Gupta Vs. Gian Prakash Arora Hence, it can be observed that the first contention of the defence as raised by the accused with respect to having transaction with the brother of the complainant only, has not been proved.
21. Accused vehemently denied to have taken any articles from the complainant and thus denied his liability towards the complainant. However, no direct evidence has ever been led by the accused in denial. An attempt was made to challenge the testimony of CW1 with respect to the non-placement of the signatures on original bills Ex. CW 1/A and Ex. CW1/B and with respect to the purchase by the complainant, which was further sold out to the accused. However, it can be validly observed that the case of the complainant is sufficiently supported with the documentary evidence while the case of the accused is merely made to be based on oral statements. The complainant has placed on record original bills Ex. CW1/A and Ex. CW1/B, his case is further corroborated with the ITR returns and account statement Ex. CW 1/M and Ex. CW1/N respectively. The said documents go on to establish that some articles were sold out by the complainant to the accused on the respective dates. It is a settled law that a written document cannot be countenanced by any oral evidence. Once terms of a contract between the parties are reduced into writing, Sections 91 and 92 of the Evidence Act come into play and any oral evidence to prove to the contrary cannot be accepted. It is a settled law that mere giving of suggestions does not amount to proof of that fact. As per Section Ct. Case No. 17581/2019 Page No. 14 of 18 Narender Kumar Gupta Vs. Gian Prakash Arora 103 of Evidence Act, the burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence. Thus, the burden lies on the accused specifically to prove that there was no transaction with respect to purchase of materials from the complainant. To prove the same accused brought on record, Ex. DW2/A the copy of the ledger account maintained by M/s Ruchi Soya, highlighting the good supplied to the complainant firm between 2011 to 2015. The said document successfully established the fact that the complainant used to regularly purchase the material(stock) from the said firm M/s Ruchi Soya industries. However, the same cannot be said to establish the fact that the accused had no transaction ever with the complainant. Or that no goods were supplied to the accused by the complainant (in view of Ex. CW1/A and Ex. CW 1/B). Further merely placement of the oral order by the accused as per the version of the complainant and not taking any written order does not provide for any benefit of doubt to the accused in presence of the original written bills Ex. CW 1/A and Ex. CW1/B. No cogent evidence has been brought by the accused to falsify the fact of being engaged in any transaction with the complainant.
22. Further, the complainant has brought on record the compromise deed Ex. DW1/C1(OSR) as executed between him and the accused on 29.09.2015 (ie. after filing of the present complaint) wherein the accused can be seen to be making settlement with the complainant to the tune of Rs.10 lakhs ( as is Ct. Case No. 17581/2019 Page No. 15 of 18 Narender Kumar Gupta Vs. Gian Prakash Arora also the total of both the cheques in question) and had issued further cheques qua the settlement. The execution of said document has been duly admitted by accused. Signatures on the document are duly admitted. Further, no denial with respect to the contents of Ex. DW1 /C1 has been made and merely the ignorance with respect to the contents have been shown by the accused. Further, the fact of being incompetent to remember the details in the cheques issued pursuant to execution of Ex. DW1/C1, in addition to the statement. -" I do not remember whether the cheques given at the time of execution of Ex. DW1/C1, were in my handwriting or not. Voluntarily, I do not know anything about the compromise deed".
The above statement, if read together with the other statement of DW1- " It is correct that signatures at point A of Ex. DW1/C1 are mine. It is correct that the cheques accompanied in Ex. DW1/C1 belongs to my account. I cannot remember whether I had signed the same. I also do not remember whether the cheques be my handwriting".
The said bunch of statements show the attempt of the accused to conceal certain facts of having entered into a settlement with the complainant after the institution of the present complaint. And attempt can be seen to have been made by the accused to falsify the statement given earlier. The further ignorance to provide the details by the accused cast shadows of doubt on his pleas of defence. The said circumstance is further accompanied with the attempt on the part of the accused to be not further questioned about the compromise deed after submitting to Ct. Case No. 17581/2019 Page No. 16 of 18 Narender Kumar Gupta Vs. Gian Prakash Arora be not knowing anything about the said compromise deed.
23. Admittedly, no complaint was filed by the accused against the complainant or his brother for the misuse of this cheques. And rather the admission of Ex. DW1/C1 (OSR) proves that the accused entered the settlement willingly out of his consent with the complainant, thereby defeating the defence of the accused in toto. The said conduct of the accused does not stand in line with the conduct of a prudent man who never had any transaction with a person and instead of initiating the legal recourse to prevent the misuse of his cheques rather entered into a further settlement and also issued additional cheques to the same person.
24. Having said so, it can be observed that the accused has not only failed to prove existence of transaction with the brother of the complainant but has also failed to prove to be not engaged in any transaction for purchase of material with the complainant. He has further failed to prove that no material was supplied to him ever qua the bills Ex. CW 1/A and Ex. CW 1/B and has further failed to challenge the said documents. Accordingly, he has further failed to prove the non-existence of the legal debt/liability in favor of complainant. While the case of the complainant as based on documentary evidences has been proved beyond reasonable doubt.
Accordingly, the ingredient number two stands satisfied and established.
Ct. Case No. 17581/2019 Page No. 17 of 18Narender Kumar Gupta Vs. Gian Prakash Arora Hence, the observation can be made with regard to the fact that accused has miserably failed to rebut the presumption that has arisen in favor of the complainant under section 118/139 NIA.
25. Accordingly in view of the above, it can be observed that all the ingredients of section 138 NIA stands duly proved. Hence, accused Gian Prakash Arora stands convicted for the offence under section 138 NIA.
26. Let the convict be heard on quantum of sentence.
27. Let the copy of the judgment be given to the convict free of cost.
Digitally signedAnnounced in the open Court on 01.04.2025. SHIVANGI by SHIVANGI MANGLA Date: MANGLA 2025.04.01 16:03:56 +0530 (Shivangi Mangla) (JMFC-05 (NI ACT) South West, Dwarka New Delhi/01.04.2025 Note : This judgment contains 18 pages and each page is signed by the undersigned.
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