Delhi District Court
Complainant vs . on 20 April, 2023
IN THE COURT OF METROPOLITAN MAGISTRATE (NI05), WEST, TIS
HAZARI COURTS, NEW DELHI
Presided over by Sh. Karanbir Singh, DJS
Case No. Ct. Cases/8281/2016
Unique Case ID No. DLWT020053082017
In the matter of :
BRIJ NANDAN GUPTA
... Complainant
VS.
VIPUL VIKRAM SINGH
... Accused
1. Name of Complainant : Sh. Brij Nandan Gupta
2. Name of Accused : Sh. Vipul Vikram Singh
3. Section 138, Negotiable Instruments
Offence complained of or proved :
Act, 1881.
4. Plea of Accused : Not Guilty
5. Date of Filing : 04.07.2013
6. Date of Reserving Order : 13.03.23.
7. Date of Pronouncement 10.04.2023
8. Date of correction in terms of section
: 20.04.23.
362 Cr.P.C.
9. Final Order : Convicted.
CC No. 8281/2016 Brij Nandan Gupta Vs. Vipul Vikram Singh 1/11
Argued by: Sh. Vikram Gola, Learned counsel for the complainant.
Sh. Khushbir Singh, Learned counsel for the accused.
BRIEF STATEMENT OF REASONS FOR THE DECISION:
A. FACTUAL MATRIX
1. The present complaint has been filed under section 138 of the Negotiable Instruments
Act, 1881 (hereinafter "NI Act") by Sh. Brij Nandan Gupta (hereinafter "complainant")
against Sh. Vipul Vikram Singh (hereinafter "accused").
2. The substance of allegations, as contained in the complaint, are as follows:
A. That the complainant is dealing the quality products as well as other allied items
under the proprietor concern in the name of M/s Gaurav Kulfi.
B. That the accused placed the order to the complainant for catering Kulfi products as
well as other items in various parties organized by the accused. That the complainant
submitted a bill for an amount of rupees 10 lakhs the accused. That the accused in discharge
of his admitted liability, issued various cheques in favour of complainant with the assurance
that the said cheques would be honoured on the presentation and hence complainant accepted
the said cheques.
C. That out of the said cheques complainant presented the cheque bearing number
201129 dated 28 April 2013 and another cheque bearing number 201130 dated 5 th May 2013
for rupees 1,00,000 each drawn Oriental Bank of commerce Derawal Nagar Delhi to his
banker but the same was dishonoured with the remark 'dormant account' vide memo dated
10th May 2013.
D. The complainant sent a legal notice under section 138 of NI Act through his counsel
on 5 June 2013 through speed post and courier. That the legal notice was duly delivered and
th
the accused has failed to pay after delivery after 15 days of the serving of legal demand
notice and hence the present complaint was instituted.
B. PRESUMMONING EVIDENCE & NOTICE
3. Presummoning evidence was led by the complainant and on finding a prima facie case,
the accused was summoned to face trial vide order dated 07.10.2013. The accused appeared
on the very first day through his counsel and moved an exemption application. Thereafter, the
matter was referred to mediation. The accused also made some payment after settling the
present matter. Thereafter, the accused stopped making any payments and vide order dated
4th August 2016, Ld. predecessor of this court recorded that the matter shall now be preceded
on its merits as the accused has failed to abide by the terms of the mediation settlement and
the amount already paid by the accused to the complainant was forfeited in terms of clause
two of the mediation settlement. Notice against the accused was framed on 29.08.2016. He
took the following plea of defence at the stage of framing of notice:
CC No. 8281/2016 Brij Nandan Gupta Vs. Vipul Vikram Singh 2/11
The complainant was associated with me in business and I had handed over several blank
signed cheques to the complainant for the payment to the vendors time to time as per my
instructions and expenditure receipt of the vendors. Despite the payment in cash to the
complainant, vendors were calling me for the payment. The cheques in question have not
been issued by me in the name of the complainant. I have not filled the particulars of the
cheques in question except my signatures. I have not received any legal notice. I have no
legal liability towards the complainant under section 138 of Negotiable Instruments Act. He
admitted the signatures on the cheque in question.
C. COMPLAINANT'S EVIDENCE
4. During the trial, the complainant has led the following oral and documentary evidence
against the accused to prove its case beyond reasonable doubt:
Oral & Documentary Evidence
Ex.CW1/A & CW1/B The cheque in question
Ex. CW1/C & CW1/D Return memo dt. 10.05.2013
Ex.CW1/E Legal demand notice 05.06.2013
Ex.CW1/F,G,H Postal receipt and tracking report
Ex.CW1/I,J,K Courier receipts
Ex. CW1/L Tracking report
Ex. CW1/M (OSR) Copy of letter
Ex. CW1/N Mediation order
CW1 Testimony of complainant
CW2 Testimony of Bank witness
D. STATEMENT OF ACCUSED
6. Thereafter, before the start of defence evidence, in order to allow the accused to
personally explain the circumstances appearing in evidence against him, his statement under
Section 313 CrPC was recorded without oath. In reply, the accused denied all the allegations
against him. The accused submitted the following in his statement under section 313 CrPC:
The complainant has never supplied any material to me including Kulfi product. The
complainant used to work with me as a supervisor and I used to pay him daily wages
for the work done by him. The complainant has lied to the court that he used to
supply catering material to me.
He further stated that he has never placed any order with the complainant.
CC No. 8281/2016 Brij Nandan Gupta Vs. Vipul Vikram Singh 3/11
He further stated that he has never placed any order with the complainant. That the
cheque in question does not bear at his signatures and he has not filled any particular
in the said cheque in question.
He stated that he does not have any knowledge regarding the cheque return memo.
He stated that he does not know who received the legal notice. However, the same
was sent to the address and was received by somebody.
He stated that he has not given the cheque in question to the complainant. He is not
aware how he came into the possession of the same. He used to visit my house and I do not
know how the cheques came in his possession. He and his wife used to work and servant used
to be at home. I don't know if the complainant used to visit our house behind our back and
took the cheques in question without my authority.
7. The accused lead his DE and remained 2 witnesses. Thereafter, the matter was listed
for final arguments. After listening to final arguments from both sides, the matter was
reserved for pronouncement. I have heard the learned counsels on both the sides and have
given my thoughtful consideration to the material appearing on record.
E. INGREDIENTS OF OFFENCE UNDER SECTION 138 OF NI ACT
8. Before dwelling into the facts of the present case, it would be pertinent 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 essential ingredients of the offence,
as highlighted below:
• The cheque was drawn by a person on an account maintained by him/her 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;
• The cheque was drawn by the drawer for discharge of any legally enforceable debt or
other liability;
• 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;
• 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.
• The drawer fails to make payment of the said amount of money within fifteen days
from the date of receipt of notice.
9. In addition to the above, the conditions stipulated under Section 142 NI Act have to
be fulfilled.
10. ANALYSIS OF VARIOUS INGREDIENTS OF THE OFFENCE
CC No. 8281/2016 Brij Nandan Gupta Vs. Vipul Vikram Singh 4/11
• The complainant has proved the original cheques, Ex.CW1/E. The accused has
disputed the same and admitted his signatures on the cheques.
• The cheque in question was returned unpaid vide Ex. CW1/B. The same has also been
proved by the complainant. As per Section 146 of NI Act, Bank's slip is prima facie evidence
of proof of dishonor.
• The complainant has proved on record legal notice Ex. CW1/C. He has stated that the
legal notice has been received by somebody.
• The fact that the payment was not made within 15 days of the receipt of the legal
notice is also not disputed. As such, on the basis of the above, the first, fourth and fifth
ingredient of the offence under Section 138 NI Act stands proved against the accused.
11. The controversy in the present complaint case pertains to second ingredient.
PRESUMPTIONS UNDER NI ACT
12. As far as the proof of second ingredient is concerned, the complainant is required to
prove that the cheque in question was drawn by the drawer for discharging a legally
enforceable debt. As per the scheme of the NI Act, once the accused admits signature on the
cheque in question, certain presumptions are drawn, which result in shifting of onus on the
accused.
13. The combined effect of section 118(a) NI Act and section 139 of the NI Act is that a
presumption exists that the cheque was drawn for consideration and given by the accused for
the discharge of debt or other liability. In Hiten P. Dalal v. Bratindranath Banerjee (2001)
6 SCC 16), their Lordships of Hon'ble Supreme Court observed as follows:
Because both Sections 138 and 139 require that the Court "shall presume" the liability of the
drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of
Madras vs. A. Vaidyanatha Iyer AR 1958 SC 61, it is obligatory on the Court to raise this
presumption in every case where the factual basis for the raising of the presumption had
been established. "It introduces an exception to the general rule as to the burden of proof in
criminal cases and shifts the onus on to the accused" (ibid). Such a presumption is a
presumption of law, as distinguished from a presumption of fact which describes provisions
by which the court "may presume" a certain state of affairs. Presumptions are rules of
evidence and do not conflict with the presumption of innocence, because by the latter all that
is meant is that the prosecution is obliged to prove the case against the accused beyond
reasonable doubt.
In this regard, the Hon'ble Apex Court, having analysed all the concerned provisions in
Basalingappa Vs. Mudibasappa, (2019) 5 SCC 418 : 2019 SCC OnLine SC 491 at page
432, came down to the following conclusion:
CC No. 8281/2016 Brij Nandan Gupta Vs. Vipul Vikram Singh 5/11
"25. We having noticed the ratio laid down by this Court in the above cases on Section
118(a) and 139, we now summarise the principles enumerated by this Court in the following
manner:
25.1. Once the execution of cheque is admitted Section 139 of theAct mandates a
presumption that the cheque was for the discharge of any debt or other liability.
25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the
accused to raise probable defence. The standard of proof for rebutting the presumption is
that of preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or
the accused can also rely on the materials submitted by the complainant in order to raise a
probable defence. Inference of preponderance of probabilities can be drawn not only from
the materials brought on record by the parties but also by reference to the circumstances
upon which they rely.
25.4. That it is not necessary for the accused to come in the witness box in support of his
defence. Section 139 imposed an evidentiary burden and not a persuasive burden.
25.5. It is not necessary for the accused to come in the witness box to support his defence."
Further, it has been held by the Hon'ble Apex Court in Rangappa v. Sri
Mohan, (2010) 11 SCC 441 that the presumption contemplated under Section 139 of NI Act
includes the presumption of existence of a legally enforceable debt.
14. In order to discharge the aforesaid burden, it has been contended by learned counsel
for the accused that there are inherent inconsistencies in the version of the complainant, as
listed below, which lead to a probable defence in favour of the accused:
1. That the complaint as well as legal notice has been filed on behalf of the proprietorship
firm and not in the individual capacity
15. Counsel for accused argued that the complaint as well as the legal demand notice has
been sent on behalf of the proprietorship firm whereas the cheques in question are in the
name of complainant. It was further argued that the complainant has not furnished any
document to prove that he is the proprietor of M/s Gaurav Kulfi. It was further argued that the
evidence by way of affidavit has been filed on behalf of the firm, the same does not bear any
seal or stamp of the firm and therefore it has been filed without any authorization.
16. Counsel for complainant on the other hand argued that the proprietorship firm and
proprietor are these one and the same entity and therefore any such document is not
necessary.
17. Perusal of the record reveals that the cause title of complaint is Brij Nandan Gupta,
proprietor of M/s Gaurav Kulfi versus Mr. Vipul Vikram Singh. In fact the legal demand
notice is also sent on behalf of Brij Nandan Gupta, proprietor of M/s Gaurav Kulfi. 18. The
CC No. 8281/2016 Brij Nandan Gupta Vs. Vipul Vikram Singh 6/11
evidence by way of affidavit is also titled as Brij Nandan Gupta proprietor of M/s Gaurav
Kulfi.
The complainant was duly cross examined on these aspects by the learned counsel for
accused as follows:
The complainant was cross examined on the proprietorship firm. He stated that it is correct
that he has not filed any document showing the identity of the firm. That he has the same
document with him. He further stated that it is correct that the evidence by way of affidavit of
it is in the name of the firm. He voluntarily deposed that his name is also written in the
affidavit. He stated that it is correct that it is not written his father's name in the affidavit it
and in the complaint.
19. Before proceeding further, It is pertinent to note here that the complaint has neither been
filed on behalf of the firm nor has been filed by the firm through its proprietor. Therefore, the
argument advanced by the counsel for accused is rejected. It is also pertinent to note here that
the accused never disputed the identity of the complainant. Therefore, the said argument has
no merit and is liable to be rejected. Had the complainant been filed in the name and style of
M/s Gaurav Kulfi then the argument would have been tenable but nonmentioning of father's
name is not fatal to his case.
2. That the return memo does not bear seal of the bank.
20. 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 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
CC No. 8281/2016 Brij Nandan Gupta Vs. Vipul Vikram Singh 7/11
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 discussion, the argument advanced by Ld. Counsel for the
accused stands rejected.
3. That no invoice has been filed along with the complaint
21. Counsel for accused argued that the complainant has not filed any invoice along with the
complaint. Counsel for complainant on the other hand argued that both the parties went into
mediation to settle the present matter and it was in the mediation centre that the complainant
handed over the original bills to the accused as the same was demanded by the accused in
order to arrive at the settlement. Therefore, the said bills were never returned by the accused.
The complainant was also cross examined on this aspect.
22. He stated that it is correct that he has not filed the invoices raised for the liability against
the accused. He voluntarily submitted that the matter was finalized in the mediation where I
showed the bills to the accused and accused admitted it and I handed over the bills to the
accused.
23. It is pertinent to note here that the accused at the stage of framing of notice in his defence
stated that the complainant was associated with him in business and he had handed over
several blank signed cheques to the complainant for the payment to the vendors time to time
as per his instructions and expenditure receipt of the vendors. Thus, the business dealing has
been clearly admitted by the accused in his defence. Therefore, the non exhibiting of plea of
invoices is not fatal to the case of the complainant. While the accused at the stage of framing
of notice admitted the business dealings and the business relations between the parties, he
changed his version at the stage of framing of statement of accused under section 313 Cr.P.C.
and in his examination in chief. The story at the stage of defence evidence appears to be that
the complainant used to work for the accused as a labourer. Both the versions put forth by the
complainant at different stages of trial are contradictory and hence not reliable. In fact in his
cross examination the accused admitted that complainant and accused have business dealings
since 2008 and still are continued. In fact he also admitted that he does not know about the
complainant in Gaurav Kulfi are different but he only knows Mr Brij Nandan Gupta. He
further deposes that sometimes order placed by us with respect to catering as well as Kulfi
product were duly fulfilled and sometimes they were not fulfilled. He further stated that he
has received payment received from vendors and sometimes he has not. The above
admissions in the cross examination clearly point out that both the parties had business
relations between them and therefore the non filing of invoices is not fatal to the case of the
complainant.
It is also pertinent to note here that in the complaint case under section 138 of NI Act, the
onus is on the accused to rebut the presumption. In the present case as well it was for the
accused to submit a list of vendors who did not receive the payments due to which the dispute
arose between the parties which he has failed to do so. Therefore, he has failed to discharge
CC No. 8281/2016 Brij Nandan Gupta Vs. Vipul Vikram Singh 8/11
his burden. Not only he took different defences at different stages of trial, his versions are
contradictory and he has not lead any proof or submitted any list of vendors who did not
receive payment. DW1 is an interested witness and his testimony cannot be regarded as
truthful. While in his cross examination he has clearly stated that sometimes vendors receive
the payment and sometimes they did not receive the payment he never filed any documents
regarding the name of the vendors. Therefore, this argument is also liable to be rejected. It is
further pertinent to note here that the accused issued a letter Ex. CW1/M (OSR) to the
complainant. At the stage of statement of accused u/s 313 Cr.P.C., he denied that the said
letter bears his signatures whereas in his cross examination dt. 19.10.22, he admitted that the
signatures at point A on the said letter belong to him. It is trite law that facts admitted need
not be proved. Since the accused has already admitted his signatures on Ex. CW1/M, the
liability becomes crystal clear. Moreover, the liability is further fortified by the fact that the
cheque nos. in Ex. CW1/M and the cheques exhibited in all the three connected matters bear
the same no. Therefore, non filing of invoices is not fatal to the complainant since the liability
has been clearly admitted by the accused.
24. Similarly, the argument advanced by the counsel of for accused that complainant has not
filed ITR along with the complaint also stands rejected for the simple reason that accused has
duly admitted the business transactions between the parties at this stage of framing of notice
as well as in his cross examination. Had accused not admitted the relation between the parties
and disputed the identity of the complainant, the above arguments would have been relevant.
But in the present matter these arguments are not relevant as the accused has duly admitted
the business relations and business transactions between the parties. Therefore, the said
argument is also rejected.
25. The Honourable Supreme Court has in various judgments has held that once the
presumption is raised, questions such as when the loan was given whether or not any
document was executed or other such questions do not bode well with the presumption.
The Honble SC in Rohitbhai Jivanlal Patel v. State of Gujarat CRIMINAL
APPEAL NO. 508 OF 2019 held as follows:
19. Hereinabove, we have examined in detail the findings of the Trial Court and those of the
High Court and have no hesitation in concluding that the present one was clearly a case
where the decision of the Trial Court suffered from perversity and fundamental error of
approach; and the High Court was justified in reversing the judgment of the Trial Court. The
observations of the Trial Court that there was no documentary evidence to show the source
of funds with the respondent to advance the loan, or that the respondent did not record the
transaction in the form of receipt of even kachcha notes, or that there were inconsistencies in
the statement of the complainant and his witness, or that the witness of the complaint was
more in know of facts etc. Would have been relevant if the matter was to be examined with
reference to the onus on the complaint to prove his case beyond reasonable doubt. These
considerations and observations do not stand in conformity with the presumption existing in
favour of the complainant by virtue of Sections 118 and 139 of the NI Act. Needless to
CC No. 8281/2016 Brij Nandan Gupta Vs. Vipul Vikram Singh 9/11
reiterate that the result of such presumption is that existence of a legally enforceable debt is
to be presumed in favour of the complainant. When such a presumption is drawn, the factors
relating to the want of documentary evidence in the form of receipts or accounts or want of
evidence as regards source of funds were not of relevant consideration while examining if the
accused has been able to rebut the presumption or not. The other observations as regards
any variance in the statement of complainant and witness; or want of knowledge about dates
and other particulars of the cheques; or washing away of the earlier cheques in the rains
though the office of the complainant being on the 8 th floor had also been of irrelevant
factors for consideration of a probable defence of the appellant.
19. In Kumar Exports Vs. Sharma Carpets,(2009) 2 SCC 513], the Hon'ble Apex
Court had held as follows:
"The accused may adduce direct evidence to prove that the note in question was not
supported by consideration and that there was no debt or liability to be discharged by him.
However, the Court need not insist in every case that the accused should disprove the non
existence of consideration and that by leading direct evidence because the existence of
negative evidence is entirely possible nor contemplated. At the same time it is clear that bare
denial of the passing of the consideration and existence of that, apparently would not serve
the purpose of the accused. Something which is probable has to be brought on record for
getting the burden of proof shifted to the complainant. To disprove the presumption the
accused should bring on record such facts and circumstances, upon consideration of which
the Court may either believe that the consideration and debt did not exist or their non
existence was so probable that a prudent man would under the circumstances of the case, act
upon the plea that they did not exist. Apart from adducing direct evidence to prove that the
note in question was not supported by consideration or that he had not incurred any debt or
liability, the accused may also rely upon circumstantial evidence and if the circumstances so
relied upon are compelling, the burden may likewise shift again on the complainant."
CONCLUSION
26. In conclusion, I am of the view that accused has not been able to raise probable
defence in the present case.
27. Accordingly, in light of the scheme of the NI Act, a statutory presumption exists in favour
of the complainant. The statutory presumption cannot be rebutted in such a casual manner.
There must be something concrete on record to rebut the same.
2. Hence, in view of the discussion in the foregoing paragraphs, the inevitable
conclusion is that the accused has failed to rebut the onus put on him by virtue of the
presumptions enshrined in Section 118 and 139 of the NI Act. Therefore, the second
ingredient also stands proved against the accused.
29. To recapitulate the above discussion, the complainant has been successful in
establishing his case beyond reasonable doubt that the accused had issued the cheque in
question in discharge of his legally enforceable liability. The presumptions under Section 118
CC No. 8281/2016 Brij Nandan Gupta Vs. Vipul Vikram Singh 10/11
and Section 139 of NI Act were drawn against the accused. The accused has miserably failed
to rebut the said presumption by raising a probable defence.
30. Resultantly, the complaint of the complainant is allowed, and the accused, Sh.
VIPUL VIKRAM SINGH is hereby convicted of the offence under Section 138 of the
Negotiable Instruments Act, 1881. Let the convict be heard separately on quantum of
sentence.
31. A copy of this judgment be given free of cost to the convict.
Pronounced in open court.
ORDER : CONVICTED Date : 10.04.2023.
Para 30 of Judgment corrected on 20.04.23.
(SH. KARANBIR SINGH) Metropolitan Magistrate WEST DELHI CC No. 8281/2016 Brij Nandan Gupta Vs. Vipul Vikram Singh 11/11