Delhi District Court
Ms Abs Mercantiles P.Ltd vs Ms Leela Ventures ( India ) P.Ltd on 28 April, 2025
IN THE COURT OF
Judicial Magistrate First Class (NI ACT)-05, RACC
At New Delhi, NEW DELHI
(Presided Over by Ms. Nishi Jindal, DJS)
C.C. No. 40737/2016
PS : Parliament Street
CNR No.DLND020058482016
M/s ABS Mercantiles Pvt. Ltd.,
Through its AR/Director,
Having its registered office at
89-A, Ground Floor, Zamrudpur,
G.K.-1, New Delhi- 110048
..........Complainant
Versus
M/s. Leela Ventures (India) Pvt. Ltd & Others
Through its Director,
Leela House 41-A, Ambazari Road,
Nagpur- 440033
Mr. Y.V.S.S. Raju,
Director, M/s Leela Ventures (India) Pvt. Ltd & Others
Leela House 41-A, Ambazari Road,
Nagpur- 440033 .......... Accused
Date of Institution 18.02.2016
Offence complained of 138 NI Act
Date of decision 28.04.2025
C.C. No. 40737/2016
M/s ABS Mercantiles Pvt. Ltd., vs. M/s. Leela Ventures (India) Pvt. Ltd & Others
Page No. 1/17
NISHI Digitally signed
by NISHI JINDAL
JINDAL Date: 2025.04.28
14:59:00 +0530
Plea of guilt Not guilty
Decision Conviction
JUDGMENT
Vide this judgment, this Court shall dispose of the present complaint case instituted by the Complainant invoking the provisions of Section 138 of the Negotiable Instruments Act, 1881(as in after referred to as 'NI Act').
2. The accused hereinabove mentioned has been summoned to face trial under Section 138 NI Act on the complaint filed by M/s ABS Mercantiles Pvt. Ltd (hereinafter referred as 'complainant'). It is alleged in the complaint that accused M/s. Leela Ventures (India) Pvt. Ltd & Others, though its Director, Mr. Y.V.S.S. Raju (hereinafter referred as 'accused') approached the complainant for manufacture of "Paracetamol" API. It was mutually decided that the raw material required for the manufacture of Paracetamol API would be imported by complainant company and sold to accused company by raising invoice, detailing the quality and quantity of raw material. Further, it was proposed by accused that the amount raised in the invoice would be settled by them either by supplying the finished product or by payment of the invoice amount to the complainant. In pursuance of the same, the complaint company imported the raw material from China and deliver two consignments to the accused company however, the accused did not supply the finished products to them and it was agreed that the accused would in return, remit the invoice amount to them. Consequently, to discharge its liability, the accused issued three cheques bearing no. 802257 dated 30.05.2013 drawn on Union Bank of India amounting to Rs. 1,00,00,000/-, bearing no. 802258 dated 28.06.2013 drawn on Union Bank of India amounting to Rs. 1,00,00,000/-and bearing no. 727996 dated 25.07.2013 drawn on Union Bank of C.C. No. 40737/2016 M/s ABS Mercantiles Pvt. Ltd., vs. M/s. Leela Ventures (India) Pvt. Ltd & Others Page No. 2/17 NISHI Digitally signed by NISHI JINDAL JINDAL Date: 2025.04.28 14:59:10 +0530 India amounting to Rs. 85,00,000/-. Complainant presented the aforesaid cheques for collection, to its banker but the same was returned unpaid by the banker of the accused with the remarks "Exceeds Arrangement". Thereafter, complainant got issued legal notices dated 08.08.2013 and 30.07.2013 which was duly sent however, accused has not made any payment of the amount within stipulated period. Thereafter, the present complaint has been filed.
Pre Trial Procedure:-
3. The AR of the complainant tendered his evidence by way of affidavit which is Ex. CW-1/B and relied upon following evidences: -
a) Copy of Board Resolution is Ex. CW1/1
b) Excise Invoice along with other documents are Ex. CW1/3
c) Impugned Cheques and Return memos dated 16.07.2013 and 26.07.2013 are Ex. CW1/4 (Colly)
d) Legal demand notices dated 08.08.2013 and 30.07.2013 are Ex.CW1/5 (Colly)
e) Reply to legal notice by accused dated 21.08.2013 is Ex. CW1/6
4. Upon appreciation of pre-summoning evidence, accused was summoned for an offence punishable under Section 138 of NI Act and notice under Section 251 Code of Criminal Procedure, 1973 (hereinafter referred as 'Cr.P.C.') was served upon him on 08.03.2022 to which he pleaded not guilty and claimed trial.
The accused took the defence that the impugned cheques were issued as blank signed cheques to the complainant during business transactions. He denied having any legal liability towards the complainant for the amount C.C. No. 40737/2016 M/s ABS Mercantiles Pvt. Ltd., vs. M/s. Leela Ventures (India) Pvt. Ltd & Others Page No. 3/17 NISHI Digitally signed by NISHI JINDAL JINDAL Date: 2025.04.28 14:59:19 +0530 mentioned in the cheque in question. He admitted that the cheques bear his signatures however, he denied filling the particulars upon the same. He denied having received the legal demand notice from the complainant, however, admitted that the address on the legal notice was correct. He further stated that there was a dispute between the parties related to difference of amount converted from Dollar to Rupees.
5. Thereafter, an oral application of the accused under Section 145 (2) of NI Act was allowed vide order dated 17.05.2022 and the accused was granted the opportunity to cross examine the AR of the complainant as well as its witnesses, if any.
6. The AR of the complainant was examined as CW-1. In the post- summoning evidence, the AR of the complainant (CW1) adopted his pre- summoning evidence. The AR of the complainant was cross examined at length by the Ld. Counsel for accused. Thereafter, evidence was closed by the AR of the complainant on 14.07.2022.
Statement of accused :-
7. Accused was, thereafter, examined U/s 281 r/w Sec 313 Cr.P.C. on 21.12.2022, wherein entire incriminating evidence was put to him.
The accused took the defence that he issued blank cheques for security to the complainant however, he did not fill the amount and date upon it. He admitted to have received the legal demand notice from the complainant. He stated that the complainant has mis used the impugned cheques by filling wrong amount upon them. He further stated that he had supplied final products to the C.C. No. 40737/2016 M/s ABS Mercantiles Pvt. Ltd., vs. M/s. Leela Ventures (India) Pvt. Ltd & Others Page No. 4/17 Digitally signed NISHI by NISHI JINDAL JINDAL Date: 2025.04.28 14:59:28 +0530 complainant. It was the complainant who used to supply raw materials and he used to supply finished products to them. The blank signed cheques were given as a matter of business practice to the complainant who used to return the same after finished products were supplied to them.
Defence Evidence:-
8. The accused chose to lead Defence Evidence. Accordingly, the accused was examined as DW-1 and his evidence was closed vide order dated 30.01.2025. The matter was, thereafter, fixed for final arguments.
9. I have heard counsel for the parties and have ruminated over the case file thoroughly.
10. The following points required determination in the present case.
(i) Whether the offence punishable under Section 138 of the Negotiable Instrument Act is made out against the accused.
(ii) Whether the complainant proved the guilt of the accused beyond shadow of reasonable doubt.
11. In order to bring home the guilt of the accused, the complainant is duty bound to prove the following ingredients of Section 138 of the Negotiable Instrument Act as held by the Hon'ble Apex Court in case titled as Aparna A. Shah v M/s Sheth Developers P. Ltd &Anr. (2013)8 SCC 7.
"9. It is manifest that to constitute an offence under Section 138 of the Act, the following ingredients are required to be fulfilled:
a) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;
b) the cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;C.C. No. 40737/2016
M/s ABS Mercantiles Pvt. Ltd., vs. M/s. Leela Ventures (India) Pvt. Ltd & Others Page No. 5/17 Digitally signed NISHI by NISHI JINDAL JINDAL Date:
2025.04.28 14:59:40 +0530
c) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;
d) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;
e) the payee or the holder in due course of the cheque 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 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
f) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice"
12. The Act also raises certain presumptions i.e. one contained in Section 118
(a) of the Act and other in Section 139 thereof. Section 118 (a) raises presumption as to Negotiable Instrument, until the contrary is proved the following presumption shall be made: -
Section 118 of the N.I Act provides:
"Presumptions as to negotiable instruments: Until the contrary is proved, the following presumptions shall be made:
of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred was accepted, indorsed, negotiated or transferred for consideration;"
Section 139 of the N.I Act further provides as follows:
"Presumption in favour of holder - it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability".
Section 146 of NI Act provides that:
C.C. No. 40737/2016M/s ABS Mercantiles Pvt. Ltd., vs. M/s. Leela Ventures (India) Pvt. Ltd & Others Page No. 6/17 NISHI Digitally signed by NISHI JINDAL JINDAL Date: 2025.04.28 14:59:49 +0530 "Bank's slip prima facie evidence of certain facts. -- The Court shall, in respect of every proceeding under this Chapter, on production of bank's slip or memo having thereon the official mark denoting that the cheque has been dishonoured, presume the fact of dishonour of such cheque, unless and until such fact is disproved."
13. However, in N.S. Narayana Menon Vs. State of Kerala 2006 (6) SCC 39, while dealing with the aspect of presumption in a case under Section 138 of the NI Act, 1881, Hon'ble Supreme Court has held that the presumption under Section 118 (a) and 139 of the Act are rebuttable and the standard of proof required for such rebuttal is preponderance of probabilities and not proof beyond reasonable doubt. It was further observed that in terms of Section 4 of the Indian Evidence Act that, whenever it is provided by the Act that the court shall presume a fact, it shall regard the said fact as proved unless and until it is disproved.
Applying the said definition of proved and disproved to the principle behind Section 118(a) of the Act, the court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers non- existence of the consideration so probable that a prudent man ought, under the circumstance of the particular case, to act upon supposition that the consideration does not exist. For rebutting such presumption what is needed is to raise a probable defence.
The standard of proof evidently is preponderance of probability. Inference of preponderance of probabilities can be drawn not only from the material on record but also by reference to the circumstances upon which he relies.
Therefore, rebuttal does not have to be conclusively established but such evidence must be adduced before Court in support of defence, the court must C.C. No. 40737/2016 M/s ABS Mercantiles Pvt. Ltd., vs. M/s. Leela Ventures (India) Pvt. Ltd & Others Page No. 7/17 Digitally signed NISHI by NISHI JINDAL JINDAL Date: 2025.04.28 15:00:01 +0530 either believe the defence to exist or consider its existence to be reasonably probable. The standard of reasonableness being that of the "Prudent Man".
14. In this way from the combined reading of both these sections, two kinds of presumptions are raised i.e. one regarding the fact that the cheque was drawn for some consideration and that the same was held by the holder in whole or in part of any debt or any other liability. It is a mandatory presumption, though the accused is entitled to rebut the said presumption.
15. During the course of final arguments, Ld. Counsel for complainant argued that there exists a legally enforceable liability on behalf of the accused towards the complainant. He further argued that the impugned cheques Ex. CW1/4 (Colly) were issued to the complainant in discharge of the liability. He further argued that upon presentation the cheques were dishonoured and the same have been proved by the cheque return memos Ex. CW1/4 (Colly). Further, Ld. Counsel for complainant argued that legal demand notices Ex. CW1/5 (Colly) were sent to the accused and the same were duly served upon the accused. Ld. Counsel for complainant submitted that all the ingredients of Section 138 NI Act are fulfilled and accordingly, the accused should be convicted.
16. Per contra, Ld. Counsel for accused argued that he had issued the cheques as blank signed security cheques. The particulars upon the same have not been filled by him and hence, he has no legal liability towards the complainant. He further argued that the essential ingredients of Section 138 NI Act have not been satisfied in the present complaint in order to constitute a valid complaint. He prayed that the accused be acquitted of the offence.
C.C. No. 40737/2016M/s ABS Mercantiles Pvt. Ltd., vs. M/s. Leela Ventures (India) Pvt. Ltd & Others Page No. 8/17 Digitally signed NISHI by NISHI JINDAL JINDAL 15:00:10 Date: 2025.04.28 +0530 FINDINGS-
17. Insofar as the facts of the present case are concerned, it is an undisputed fact that the cheques in question bears the signatures of the accused and the same have been drawn on an account maintained by him. Hence, a mandatory presumption is raised against the accused in this case that the cheques in question were issued in discharge of a legally recoverable debt and drawn for good consideration by virtue of Section 118(a) r/w Section 139 of NI Act. The onus to rebut this presumption lies upon the accused. The same has been held by the Hon'ble Apex Court in the case titled as Kumar Exports vs. Sharma Carpets, (2009) 2 SCC 513 that: -
"The accused under Section 138 NI Act has two options. He can either show that the consideration and debt did not exit or that under the particular circumstances of the case, the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumption, an accused is not expected to prove his defence beyond reasonable doubt as it is expected of the complainant in a criminal trial. 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 debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which his probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, 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 there non-existence was so probably that a prudent man 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, C.C. No. 40737/2016 M/s ABS Mercantiles Pvt. Ltd., vs. M/s. Leela Ventures (India) Pvt. Ltd & Others Page No. 9/17 NISHI Digitally signed by NISHI JINDAL JINDAL Date: 2025.04.28 15:00:21 +0530 was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon the circumstantial evidence and if the circumstances so relied upon are so compelling, the burden may likewise shift again on the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arises under Section 118 and 139 of NI Act".
FIRST DEFENCE: - NON-RECEIPT OF LEGAL NOTICE
18. It has contended by the accused that he did not receive the legal notices which is a necessary requirement under section 138 of NI Act. As per law, Section 114 of Evidence Act, 1872 is applicable to communications sent by post and it 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. Section 27 of the General Clauses Act envisages that when a registered notice is posted, it is presumed to have been served unless rebuttal is given. In the present case, no evidence in rebuttal has been led by the accused.
19. In CC Alavi Haji Vs. Palapetty Muhammed & Anr. (2007) 6 SCC 555, the Hon'ble Apex Court has 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 u/s. 138 of the Act, make payment of the cheque amount and submit to the court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the court along-with the copy of the complaint u/s. 138 of the Act, cannot obviously contend that there was no proper service of notice as required u/s. 138, by ignoring statutory presumption to the contrary u/s. 27 of the General Clauses Act and Section 114 of the Evidence Act".C.C. No. 40737/2016
M/s ABS Mercantiles Pvt. Ltd., vs. M/s. Leela Ventures (India) Pvt. Ltd & Others Page No. 10/17 NISHI Digitally signed by NISHI JINDAL JINDAL Date: 2025.04.28 15:00:30 +0530 Further, in the present case, the accused has himself admitted in his notice framed under section 251 Cr.P.C that the address mentioned on the legal notices is correct. Though the accused has denied the receipt of legal notices in his notice of accusation, taking a complete contradictory stand, he has admitted to have received the same in his statement recorded under section 313 Cr.P.C. Moreover, the accused has not placed on record any evidence to the contrary to prove the non-receipt of the legal notices. Infact, his reply to the legal notice dated 21.08.2013 Ex. CW1/6 is on record wherein he has specifically mentioned that he has duly received the legal demand notices from the complainant. Furthermore, the accused has stated the same address as is mentioned in the legal notice in his personal bonds furnished on 07.03.2020.
Thus, in view of the above-mentioned dictum of the Hon'ble Apex Court and discussion, this court holds that the legal notices Ex. CW1/5 (Colly) dated 08.08.2013 and 30.07.2013 were served upon the accused.
SECOND DEFENCE: - NO LEGALLY RECOVERABLE DEBT/ LIABILITY OF THE ACCUSED TO PAY
20. Another defence of the accused is that there is no legally recoverable debt or liability in favour of the complainant as the cheques in question were issued as a security cheques. Moreover, he has further contended that he has already paid Rs. 45,00,000/- as tax in Central Excise on the goods supplied to the complainant company. To support the same, he has placed on record tax invoice along with transport receipts which are Ex. DW1/1 (OSR), despatch C.C. No. 40737/2016 M/s ABS Mercantiles Pvt. Ltd., vs. M/s. Leela Ventures (India) Pvt. Ltd & Others Page No. 11/17 Digitally signed by NISHI NISHI JINDAL JINDAL Date:
2025.04.28 15:00:39 +0530 instructions and emails dated 18.05.2013, 09.05.2013 and 02.05.2013 which are Ex. DW1/2, authority letter and email dated 31.01.2013 which are Ex. DW1/3.
21. Perusal of transport receipts Ex. DW1/1(OSR) as well as despatch instructions Ex. DW1/2 reveal that the same does not bear any kind of acknowledgment or stamp or seal of the complainant company to verify whether the finished products were ever actually received by them. Furthermore, the relevant documents have not even been confronted to CW-1 to prove their veracity and authenticity. In light of the above discrepancies, a question on the genuineness of the said documents is raised.
22. It was also the case of the accused that he was maintaining a running account for the transactions with the complainant company, however, despite sufficient opportunities given, he could not place the same on record to substantiate his claims. It is further an undisputed fact that the accused was directed to supply the finished products worth 1,00,000 kgs to the complainant company. Significantly, as per his own admission in Ex. DW1/3, the accused only supplied 16.00 ton of finished products to them. Furthermore, as per Ex. DW1/3, M/s Aquatic Remedies P. Ltd was authorized to release the payment to the complainant company for supply of finished product of 16 ton, however, no authorized person on their behalf has stepped into the witness box to bestow credence to the claims of the accused of supplying the finished products to them. The accused further deposed that finished products were dispatched to the complainant after 08.08.2013, however, no document advocating the same has been placed on record. Relevant portion of cross examination of DW-1 dated 30.08.2024 is reproduced hereunder:-
C.C. No. 40737/2016M/s ABS Mercantiles Pvt. Ltd., vs. M/s. Leela Ventures (India) Pvt. Ltd & Others Page No. 12/17 Digitally signed NISHI by NISHI JINDAL JINDAL Date:
2025.04.28 15:00:49 +0530 "It is incorrect to suggest that the finished products were dispatched to complainant subsequent to notice dt. 08.08.2013. I have not filed any document to show that finished products were dispatched to the complainant subsequent to notice dt. 08.08.2013 but prior to my reply to the notice dt. 21.08.0213."
Noteworthy, the accused has admitted during his cross examination that the raw materials as depicted by the invoice Ex. C3(Colly) have been duly supplied to him. Relevant portion of cross examination of DW-1 dated 30.08.2024 is reproduced hereunder:-
"At this stage witness is shown the excise invoice no. 595 dt. 24.11.2012 Ex. C3(Colly) whereby raw materials to the tune of 1,32,000.00 Kg having assessable value of Rs. 2,24,67,969/- were supplied to the accused which is admitted by the accused."
23. Pertinently, the accused had denied receipt of the legal notice Ex. CW1/5 (Colly) yet his reply to the same dated 21.08.2013 Ex. CW1/6 is on record wherein he has expressly admitted that he could not honour the impugned cheques and sought time to clear the balance payment to the complainant company. The same has been duly signed by the accused and admitted by him in his cross examination. It is worthy of mention that no other defence or plea was raised by the accused in his reply regarding the supply of finished products and owing no outstanding liability to the complainant.
24. Thus, keeping in mind the above discussion of law, discrepancies and shortcomings of the accused, the court is of the considered opinion that the accused has failed to discharge the onus placed upon him to rebut the mandatory presumptions which are in favour of the complainant and thus, is C.C. No. 40737/2016 M/s ABS Mercantiles Pvt. Ltd., vs. M/s. Leela Ventures (India) Pvt. Ltd & Others Page No. 13/17 NISHI Digitally signed by NISHI JINDAL JINDAL Date: 2025.04.28 15:00:59 +0530 unable to prove that no legally enforceable debt existed at the relevant time between the parties.
THIRD DEFENCE: - ISSUANCE OF "BLANK" SIGNED "SECURITY" CHEQUE BY THE ACCUSED TO THE COMPLAINANT
25. Another defence raised on behalf of the accused is that the complainant had taken security cheques including the impugned cheques from him. They were blank signed security cheques and the particulars have been arbitrarily filled by the complainant and the same are not in his handwriting. Since, the cheques were filled up by the complainant and not the accused, the complaint is liable to be dismissed.
It is pertinent to mention here that even if a blank signed cheque is given by the accused to the complainant and he fails to rebut the presumption against him, he would be liable under the ambit of the NI Act.
26. In Suresh Chandra Goyal v. Amit Singhal [Crl.L.P. No. 607.2014, Delhi High Court], the Hon'ble High Court has observed that-
"Para 61 Thus, in my view, it makes no difference whether, or not, there is an express understanding between the parties that the security may be enforced in the event of failure of the debtor to pay the debt or discharge other liability on the due date. Even if there is no such express agreement, the mere fact that the debtor has given a security in the form of a post-dated cheque or a current cheque with the agreement that it is a security for fulfillment of an obligation to be discharged on a future date itself, is sufficient to read into the arrangement, an agreement that in case of failure of the debtor to make payment on the due date, the security cheque may be presented for payment, i.e. for recovery of the due debt. A security cheque is issued by the debtor so that same may be presented for payment. Otherwise, it would not be a security cheque".C.C. No. 40737/2016
M/s ABS Mercantiles Pvt. Ltd., vs. M/s. Leela Ventures (India) Pvt. Ltd & Others Page No. 14/17 Digitally signed by NISHI NISHI JINDAL JINDAL Date:
2025.04.28 15:01:09 +0530 Therefore, a cheque which has allegedly been issued by the accused as a security would not per se be out of the ambit of section 138 of the NI Act. The important consideration is the fact as to whether the said cheque has been issued in discharge of a debt or other liability or not or whether any legally enforceable debt existed on the date when the cheque was issued. If yes, then section 138 of the Act would be attracted as the purpose for which the cheque was issued by the accused would be irrelevant if the said cheque was dishonoured by the bank and there existed a legally enforceable debt on the date when the said cheque was issued.
27. It is for the accused to prove that no legally enforceable debt existed on the date on which the cheque was issued which is not the case in the present factual matrix. At the date of issuance of the cheques in question, there existed a legal liability to pay on part of accused as he has failed to rebut the same. Reference to Section 20 of NI Act in this regard becomes material which states that-
"20. Inchoate stamped instruments. - Where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in [India], and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount: provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder."
28. Further, no legal remedies have been sought by the accused against the complainant in order to recover his cheques including the impugned cheques that he alleges to have handed over to the complainant as security cheques.
C.C. No. 40737/2016M/s ABS Mercantiles Pvt. Ltd., vs. M/s. Leela Ventures (India) Pvt. Ltd & Others Page No. 15/17 Digitally signed by NISHI NISHI JINDAL JINDAL Date:
2025.04.28 15:01:17 +0530 Even in his reply to the legal notice which is dated 21.08.2013 Ex. CW1/6, there is not even a whisper of mention of return of his security cheques.
29. Thus, it is clear from the above proposition of law and bare reading of the provision that mere bald averment and allegations by the accused that he had issued security cheques in favour of the complainant is not sufficient rather he has to prove by way of cogent evidences in his favour to rebut the same by proving that all the outstanding dues were repaid by any other mode which has not been done in the present case.
On the other hand, the complainant has stood firm on its testimony throughout the trial on all aspects with respect to the outstanding dues payable. Thus, this court is of the view that there existed legal liability of the accused to pay the complainant company qua the amount mentioned in the cheques in question on the date of presentation of the impugned cheques and the accused has miserably failed to rebut the reverse onus that is cast upon him. Thus, the presumptions as laid down under the NI Act have remain unrebutted and uncontroverted in the present matter.
30. Consequently, the present complaint has disclosed the existence of a legally enforceable debt or liability. Moreover, the complainant has been successful in proving all the elements of Section 138 of NI Act. On the other hand, the accused has failed to rebut the presumption in favour of complainant either on the basis of the material available on record or by adducing any cogent or supporting evidence except bare assertions, which were not at all substantiated by any document on record.
C.C. No. 40737/2016M/s ABS Mercantiles Pvt. Ltd., vs. M/s. Leela Ventures (India) Pvt. Ltd & Others Page No. 16/17 Digitally signed by NISHI NISHI JINDAL JINDAL Date:
2025.04.28 15:01:25 +0530
31. Having regard to the allegations contained in the complaint and evidence on file, it is held that the impugned cheques Ex. CW1/4 (Colly) were issued by accused in favour of complainant for discharging his legally enforceable liability. Said cheques on presentation with bank were dishonoured, whereupon legal notice was issued to accused by complainant calling upon him to make payment, however, he did not make payment of amount of cheques and thus, committed offence under Section 138 of the Act.
32. In view of the above dicta and discussion, it is clear that accused has failed to raise a probable defence to rebut the presumption in favour of the holder in due course/complainant and in absence of probable defence, the accused namely M/s. Leela Ventures (India) Pvt. Ltd & Others, Through its Director, Mr. Y.V.S.S. Raju, is held guilty for punishable under section 138 NI Act and resultantly convicted under Section 138 NI Act in the present case.
Let the convict be heard on quantum of sentence.
Copy of this Judgment be given dasti to the convict free of cost as per rules. Digitally signed NISHI by NISHI JINDAL JINDAL Date:
2025.04.28 15:01:31 +0530 Pronounced in Open Court. (Nishi Jindal) Judicial Magistrate First Class- 05(NI Act), Dated: 28.04.2025 RACC, NDD Certified that this judgment contains 17 pages and each page bears my signature. NISHI Digitally signed by NISHI JINDAL (Nishi JINDALJindal) Date: 2025.04.28 15:01:36 +0530 Judicial Magistrate First Class-05 (NI Act), RACC, NDD C.C. No. 40737/2016 M/s ABS Mercantiles Pvt. Ltd., vs. M/s. Leela Ventures (India) Pvt. Ltd & Others Page No. 17/17