Delhi District Court
Dentsply India Pvt. Ltd vs Alpride Health Care Pvt. Ltd on 7 April, 2026
IN THE COURT OF MS SHRUTI CHAUDHARY,
SCJ-CUM-RC, NEW DELHI DISTRICT,
PATIALA HOUSE COURTS, NEW DELHI
DLND030047362017
CC No. 1676/2017
Dentsply India Private Limited
Through Authorized Representative
Sh. Ashish Awasthi
Regd. Office at :
Kh. No. 66/20, 66/11/2,
Gali No. 2, Main Rohtak Road,
Mundka Industrial Area,
Mundka, Delhi-110041. ............Complainant
Versus
1. Alpride Health Care Private Limited
Through its M.D/Authorized Signatory
New No. 21, West Cott Road,
Near Woodlands Theater, Royapettah,
Chennai, Tamilnadu-600014
2. Janardhanam Raghavendran
(Managing Director)
Alpride Health Care Private Limited
R/o 6, Pattabhiram, Iyer ST,
Sowcarpet, Chennai-600079
Also at Regd. Office :
Alpride Health Care Private Limited
New No. 21, West Cott Road,
Near Woodlands Theater, Royapettah,
Chennai, Tamilnadu-600014
3. Vupputur Prabhakar
(Director responsible for day to day work)
CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 1/25
R/o 21, Gilchrist Avenue,
Harrington Road, Chepet,
Chennai-600031
Also at :
Alpride Health Care Private Limited
New No. 21, West Cott Road,
Near Woodlands Theater, Royapettah,
Chennai, Tamilnadu-600014 .............Accused Persons
Date of institution of case : 27.11.2017
Offence complained of : 138 NI Act
Plea of accused : Not Guilty
Date of reserving judgment : 28.03.2026
Date of Judgment : 07.04.2026
Final Order : Accused no. 1- Acquittal
Accused no. 2- Acquittal
Accused no. 3- Acquittal
JUDGMENT
1. Vide this judgment, I shall dispose off the complaint filed by the complainant company under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'NI Act'). Brief facts, as per complaint, relevant for the decision of the case are as under:-
a) It is stated that the complainant company is duly incorporated under the Companies Act, 1956 having its registered office at Mundka, Delhi-41 and is carrying on its business of manufacturing, marketing and selling of various dental equipment and its parts. The present case has been filed by the AR of the complainant company duly authorized by a Board Resolution dt. 07.02.2018.
b) It is further stated that the Accused no. 2 and 3 have been dealing with the complainant company for various products, on CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 2/25 behalf of accused no. 1 and are responsible for day to day affairs/activities of the company. It is stated that during the course of dealings with accused company, complainant, inter alia, supplied various goods to the accused company from time to time as per requirements and requests by accused no. 2 and 3, which have been duly received by accused.
c) It is stated that in order to discharge its legally payable debt/liability towards the complainant company for the goods supplied by them from time to time to the accused, the accused no. 2 and 3 had instructed the complainant company to present the cheque bearing no. 206633 drawn on The Catholic Syrian Bank Ltd., already handed over to the complainant as security in order to discharge of its legally payable liability towards the complainant company. It is stated that thereafter, upon believing the words of accused nos. 2 and 3, the said cheque bearing no.
206633 dt. 19.09.2017 for a sum of Rs. 18,23,800/- drawn on The Catholic Syrian Bank Ltd. (i.e. cheque in question) was presented for encashment.
d) It is the case of complainant company that on presentation of the aforesaid cheque, the same was returned unpaid vide returning memo dated 20.09.2017 with remarks "Account Blocked" and accused no. 2 and 3 were duly informed about the same by the complainant, but did not take any positive steps.
e) It is stated that thereafter, a legal notice dated 12.10.2017 was sent through advocate to accused under section 138 NI Act, calling upon them to make the payment of the outstanding cheque amount and despite service of notice, accused have failed to make the payment of the cheque amount to the complainant. Hence, the present complaint.
CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 3/25
2. In his pre-summoning evidence, complainant examined the AR Sh Ashish Awasthi on affidavit. He reiterated the contents of complaint in his evidence affidavit and relied upon the following documents:-
i. Copy of Incorporation Certificate as Ex.CW1/1, ii. Board Resolution dt. 07.02.2018 as CW1/2, iii. Cheque bearing no. 206633 dated 19.09.2017 for a sum of Rs.18,23,800/- drawn on The Catholic Syrian Bank Ltd., Branch at 18, V.S.S.M Building, Royapettah Road, Chennai-600014 as Ex.CW1/3, iv. Cheque Returning Memo dated 20.09.2017 as Ex.CW-1/4, v. Legal Notice dated 12.10.2017 as Ex. CW-1/5, vi. Postal Receipt as Ex. CW-1/6, vii. Tracking report as Ex. CW-1/7. Thereafter, PSE stood closed.
3. The ingredients of s.138 NI Act are as follows:-
138. Dishonour of cheque for insufficiency, etc., of funds in the account. --Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount ar-
ranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless--
CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 4/25
(a) the 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;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writ- ing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank re- garding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the pay- ment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
4. Upon appreciation of pre-summoning evidence, it was observed that prima facie the conditions u/s 138 NI Act were fulfilled and accused was summoned for the offence punishable under Section 138 of the Act. Thereafter, upon appearance of accused persons, notice under Section 251 Cr.P.C. was framed upon accused persons on 02.02.2018. Accused no. 2 stated in his plea of defence, as under:-
Q. Why did you issue the cheque in favour of
the complainant?
Ans. It was given as a security cheque in the
year 2010.
Q. Do you want to say anything else in your
defence ?
Ans. We had made request to the complainant to
delivery stocks worth Rs. 5 lacs to us but they delivered us stock worth Rs. 25 lacs. We requested them to take back the stocks. They took some of it back and some of it is still lying with us which they have told us that it would be sold at a later date. Further in some cases, they have already sold off certain amount of stock and taken the money for it for their own purpose. The cheque in question was issued only as a security cheque by us in the year 2010 which was subsequently filled and misused against us.
Q. Do you want to lead defence evidence ?
Ans. Yes.
Q. Do you plead guilty or claim trial ?
Ans. I do not plead guilty and claim trial.
CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 5/25
Accused no. 3 stated in his plea of defence as under:-
Q. Why did you issue the cheque in favour of
the complainant?
Ans. It was given as a security cheque in the
year 2010.
Q. Do you want to say anything else in your
defence ?
Ans. We had made request to the complainant to
delivery stocks worth Rs. 5 lacs to us but they delivered us stock worth Rs. 25 lacs. We requested them to take back the stocks. They took some of it back and some of it is still lying with us which they have told us that it would be sold at a later date. Further in some cases, they have already sold off certain amount of stock and taken the money for it for their own purpose. The cheque in question was issued only as a security cheque by us in the year 2010 which was subsequently filled and misused against us.
Q. Do you want to lead defence evidence ?
Ans. Yes.
Q. Do you plead guilty or claim trial ?
Ans. I do not plead guilty and claim trial.
5. Thereafter, an application u/s 145(2) NI Act was filed by the accused persons, which was allowed vide order dt. 02.02.2018 and matter was listed for cross examination of CW1.
6. Before proceeding further, it is relevant to delineate the points for determination in the present case, which are:
(i) Whether the cheque in question was issued in discharge of legally enforceable debt?
(ii) Whether the presumption under section 118 NI Act and 139 NI Act applies?
(iii) Whether the accused has rebutted the presumption.?
7. In order to adjudicate the points for determination, the CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 6/25 evidence led by the parties must now be discussed herein. Following the substitution of AR of the complainant company, Sh. Rakesh Singh examined himself as CW1 in post-summoning evidence relying upon the documents relied upon by CW1 in pre- summoning evidence and additionally, the Board Resolution, Ex. CW1/2A. Ld. counsel for the accused persons cross examined CW1 at length, as under:-
"xxxx by Sh. Sashidhai Ld Counsel for accused I am a Chartered Accountant. I am Regional Finance Leader in complainant company. I am incharge for the whole of India. I am working with the complainant company since last seven years. The complainant company has three branches with a branch in Banglore as well. I do not recall the complete address of the Banglore branch office. I have not personally interacted or dealt with the accused. Vol. However, my colleagues have. I do not have personal knowledge about the transaction and my knowledge is based upon the books of accounts. I do not recall since when the complainant company is dealing with the accused. It is wrong to suggest that I have no knowledge pertaining to the facts of the case or the transaction in question. I cannot say and will have to check the books of account to state whether the accused was placing orders with the complainant on regular basis. The complainant and the accused entered into a distributor agreement. I cannot state whether the agreement is valid even as on date. I cannot say the approximate value of the orders placed by the accused with the complainant . I do not know whether the complainant company had attended a conference at Chennai called Expodent in the year 2016. I am not aware whether the complainant company had promised a stall to the accused company in the said conference . I do not known whether the complainant company had asked the accused to take stock worth Rs. 25 lacs and on refusal the stall was also cancelled. It is wrong to suggest that stock worth Rs. 25 lacs was dumped upon the accused company one month after the conference despite there being no order for the same. I cannot say whether the complainant company had assured that their employees Mr. T Suraj and Mr. Phillip Jacob would assist the accused in liquidating the said stock. It is wrong to suggest that certain non CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 7/25 moving stocks were deliberately dumped upon the accused with an intend to defraud the accused. It is wrong to suggest that the accused had time and again requested the complainant company to take back the non moving stocks. I am not aware whether despite receiving certain amount from the market on behalf of the accused Mr. T Suraj and Mr. Phillip Jacob in connivance with other employees of complainant neither appropriated the said amount to the accused or in the accounts maintained by the complainant or had siphoned off that amount. I am not aware whether the issue of siphoning off was taken up by the accused with several employees of complainant. I know Mr. Nagrajan. I am not aware whether Mr. Nagrajan had personally confirmed the siphoning off to accused. I cannot say whether the details of the post dated cheques given by Mr. Phillip Jacob in view of the some of the siphoned amount was communicated to the accused company as well. It is wrong to suggest that accused no. 2 and 3 have been deliberately impleaded in the present complaint only with a view to harass them. The complainant had sent a legal notice demanding the amount in question even prior to the presentation of the cheque in question. No reply to the said notice was received at that time. It is wrong to suggest that a reply to the said legal notice was sent by the accused to the complainant company. I do not recall when the cheque in question Ex. CW 1/3 was handed over by the accused to the complainant. I do not recall whether a blank cheque was handed over by the accused to the complainant. It is correct that the complainant might had requested the accused to issue security cheque vide letter dt. 14.12.2010 . I do not recall whether in reply to the said letter dt. 14.12.2010, a reply dt. 21.12.2010 was sent by the accused along with two blank cheques bearing no. 206633 and 206634 drawn on Catholic Syrian Bank Ltd. to the complainant. I do not recall whether at the time of handing over the said blank cheques accused had specifically directed the complainant not to present those cheques without prior intimation / permission of the accused. I do not recall whether the receipt of the said cheques was specifically acknowledged by the complainant vide letter dt. 28.12.2010 further assuring the accused that the said cheques would not be presented without permission / intimation to the accused. It is wrong to suggest that the complainant had not intimated the accused before presenting the said cheques for payment. I do CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 8/25 not know whether there is any document to prove that due intimation was sent to the accused has been placed on record. I am not aware whether accused had never given any permission to present the cheques in question. It is wrong to suggest that the contents of my affidavit are false and afterthought. On a regular basis payments were made by the accused by cheque to the complainant. I do not recall from which bank these cheques were issued for the last two years. I do not know whether reply to the notice Ex. CW 1/5 was given by the accused. It is wrong to suggest that the complainant has deliberately not placed the said reply on record. It is incorrect to suggest that the present proceedings have been initiated deliberately against the accused to extort money and to harass the accused. It is wrong to suggest that deliberately false averments have been made and material facts have been suppressed to implicate the accused. It is wrong to suggest that the complaint filed by me is contrary to law and is liable to be dismissed. It is wrong to suggest that I am deposing falsely.
Thereafter, CW1 was discharged on 07.05.2018 and vide separate statement of AR of complainant, CE stood closed.
8. Statements of accused no. 2 & 3 u/s 313 CPC was recorded on 06.07.2018, wherein they chose to lead DE. Thereafter, matter was listed for DE. The accused no. 2 examined himself as DW1 and stated in his examination-in-chief as follows:-
"I am the Chariman and Managing Director of the accused company ie Alpride Health Care (P) Ltd. We have been dealing with the complainant company since the year 2002 onwards. We are the distributors of complainant company for clinical as well as lab products. On behalf of the complainant company we take part with the authorization of the company in supplying to govt. institutions, medical colleges and various other institutions which are authorized by the complainant company. In the year 2010, we have received an intimation letter from the complainant company requesting us to submit security collateral cheque. On the basis of the request and CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 9/25 letter of complainant company, we have issued two blank cheques without filling up the amount as collateral and security cheque with a covering letter dt. 21.12.2010 to the Regional Sales Manager stating that this cheque should be used only for collateral and security purpose only. For which we have also received an acknowledgment from the Regional Sales Manager on 28.12.2010. Then, in the year 2012 during the course of renewal of agreement between the complainant company and us, complainant company asked for dealers signatures should be attested by the bank or the notary public. They also asked for self attested copy evidencing the place of business of the dealer and self attested copy of the ID proof of the witness. Accordingly, we got endorsement from the bank stating that we are operating our account in the Standard Chartered Bank, Chennai for which a duly attested copy from the bank was also sent to the complaint company in the year 2012. The chqeue which has been issued by us as a collateral/security cheques are of a bank account which is lying dormant since the year 2014. We informed the complainant that the said account is dormant in the year 2012 itself. In March 2015, we have placed an order to the complainant to the tune of Rs. 5,00,000/- in order to participation in Dental Exhibition called Expodent 2015. We were denied to take part in the Exhibition by the complainant. At the fag end of the Exhibition we were forced to take up the stocks amounting to Rs. 25 lacs with the assurance that the same will be liquidated at the earliest. However, the said stock is still lying with us. The sales employees namely T Suraj and Phillip Jacob from the complainant company have given the product to various distributors but have not paid us the requisite amount for the same. The stock worth Rs. 25 lacs was given to the complainant company by us as a promotional stock. The complainant company had participated in Expodent 2015. we made a complaint to the complainant company regarding the siphoning of money which is due to us by its employees. We had replied to the legal notice received from the complainant company. I rely upon the following documents:
i) Letter dt. 14.12.2010 from the complainant company is Mark A.
ii) Letter dt. 21.12.2010 is Ex. DW 1/A. CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 10/25
iii) Letter dt. 28.12.2015 is Ex. DW 1/B.
iv) Certificate dt. 17.02.2012 is Ex. DW 1/C.
v) Emails sent by accused to complainant alongwith the certificate under section 65 (B) of Indian Evidence Act are Ex. DW 1/D (colly.).
vi) Reply to the legal notice dt. 28.10.2017 is Ex.
DW 1/E (colly).
9. Hence, he was duly cross examined by Ld. counsel for the complainant on 26.05.2022, 06.02.2023 & 27.01.2024 respectively. Thereafter, DE stood closed and matter was fixed for final arguments.
10. Final arguments have been heard at length on behalf of both the parties and court record has been perused thoroughly. Written arguments on behalf of both the parties are on record.
11. Before delving into the brief reasons for the decision in the present case, it would be expedient to take a glance at the relevant provisions of law, which are as under: -
118. Presumptions as to negotiable instruments. --Until the contrary is proved, the following presumptions shall be made:--
(a) of consideration --that every negotiable instru-
ment was made or drawn for consideration, and that every such instrument, when it has been accepted, in- dorsed, negotiated or transferred, was accepted, in- dorsed, negotiated or transferred for consideration;
(b) as to date --that every negotiable instrument bear- ing a date was made or drawn on such date;
(c) as to time of acceptance --that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;
(d) as to time of transfer --that every transfer of a ne- gotiable instrument was made before its maturity;
(e) as to order of indorsements --that the indorse- ments appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stamps --that a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course --that the CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 11/25 holder of a negotiable instrument is a holder in due course:
Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful cus- tody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful considera- tion, the burden of proving that the holder is a holder in due course lies upon him.
139. Presumption in favour of holder. --It shall be pre-
sumed, 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.
12. Before examining the merits of the case, it is crucial to ascertain whether the essential ingredients of Section 138 of the NI Act are fulfilled, as the complainant's case must independently establish its basis before invoking the statutory presumption under Section 139 and u/s 118 of NI Act. In order to establish the liability of accused company u/s 138 NI Act, the complainant is required to prove that the cheque in question was drawn on an account maintained by the accused no. 1 company towards the discharge of a legally enforceable debt or liability and that the same was dishonoured upon presentment and a valid statutory notice was served upon the accused persons and that despite service of such notice, payment was not made within the prescribed period. Upon proof of these foundational facts, the statutory presumption u/s 139 NI Act operates in favour of the complainant, unless rebutted by the accused on a preponderance of probabilities.
13. In this regard, the complainant company has relied upon the evidence by way of affidavit where the complainant company CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 12/25 has alleged that the cheque in question was signed by the accused persons and was duly issued to the complainant company in discharge of legal liability. Accused no. 2 has admitted his signature on the cheque in question in his plea of defence to the notice u/s 251 Cr.P.C. Therefore, the presumption u/s 139 NI Act has arisen in favour of the complainant company in light of clear admission of signature on the cheque in question by accused no.
2. Reliance is placed upon Rangappa vs Sri Mohan 2010 (11) SCC 441. This is a rebuttable presumption and the accused is burdened with the onus of displacing the same on the test of proportionality. The accused is not expected to discharge an unduly high standard of proof but must prove his defence on the standard of preponderance of probabilities.
14. It is well settled law that in a case u/s 138 NI Act the initial presumption u/s 139 NI Act must be displaced by the accused by way of bringing such facts to the fore which would show this court that the defence taken by the accused is not a mere excuse but is credible. In Bir Singh v. Mukesh Kumar (2019) 4 SCC 197, Hon'ble Supreme Court of India held that presumption under Section 139 of the Act is a presumption of law. The Court held as under:-
"20. Section 139 introduces an exception to the general rule as to the burden of proof and shifts the onus on the accused. The presumption under Section 139 of the Negotiable Instruments Act is a presumption of law, as distinguished from presumption of facts. Presumptions are rules of evidence and do not conflict with the presumption of innocence, which requires the prosecution to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law and presumptions of fact CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 13/25 unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact as held in Hiten P. Dalal v.
Bratindranath Banerjee, (2001) 6 SCC 16 : 2001 SCC (Cri) 960]."
15. It has been clarified that the above presumptions do not conflict with the presumption of innocence of the accused as the same is a rebuttable presumption and does not amount to a "presumption of guilt". The burden on the accused is to prove his case on the scale of "preponderance of probabilities" and not on the scale of "beyond reasonable doubt". Reliance is placed upon the cases of Harbhajan Singh vs. State of Punjab AIR 1996 SC 97 and VD Jhingam vs. State of UP AIR 1996 SC 1762. It is now the initial burden upon the accused to probablize his defence, by way of which the onus would then shift back upon the complainant to prove her case before this Court beyond reasonable doubt. In the case of Lekh Raj Sharma vs Yashpal Gupta (2015) 3 DLT (Cri) 521 by Hon'ble High Court of Delhi, which is as follows: -
"The accused is obliged to set up a probable de- fence. The defence cannot be only a "possible"
defence. It cannot be premised on the mere ipse dixit of the accused. There should be some cred- ible material or circumstance available on record which should lead the Court to conclude that the defence/explanation for issuance of the dishon- oured cheque is a probable one."
16. Therefore, the rebuttal brought forward by the accused does not have to be conclusively established but such evidence must be adduced before the court in support of the defence of the accused that the court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 14/25 reasonability being that of the "prudent man". Reliance is placed on K.N. Beena v. Muniyappan and Another (2001) 8 SCC 458. It is a settled law that accused need not even step into the witness box in order to raise a probable defence but can simply rely upon the documents brought on record by the complainant to showcase his probable defence. Reliance is being placed on the case of Krishna Janardhan Bhat v. Dattatraya G. Hegde (2008) 4 SCC
54.
17. From the aforesaid discussion, it becomes amply clear that the presumption of law, though rebuttable, works in favour of the complainant. However, the presumption gets rebutted if the defence raises a reasonable suspicion in the story of the prosecution by raising a probable defence. Now, it remains to be seen whether the defences raised by the accused persons are probable in nature.
18. I have perused the entire record and have given due considerations to the submissions made by the respective counsels of the parties. The findings of this court are as follows:-
(i) Presentment and dishonour of cheque in question:- It is unchalleged that the cheque in question was presented within the prescribed time according to the date of the instrument and was dishonoured qua bank return memo dt. 20.09.2017 for the reason "Account Blocked".
(ii) Statutory notice and payment within 15 days:- It is the case of the complainant that statutory legal demand notice dt.
12.10.2017 Ex. CW1/5 was issued to the accused no. 1 company CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 15/25 through registered post vide receipt Ex. CW1/6 and was duly delivered to the accused company on 14.10.2017 as per tracking report Ex. CW1/7. DW1 has stated in his examination-in-chief itself that the accused company had replied to the legal notice sent by the complainant company. Therefore, it stands proved that statutory legal notice was received by the accused company and consequently, no payment was made within 15 days of receipt of the said notice in terms of the present complaint.
(iii) Drawing of cheque by the accused no. 1 company on an account maintained by the accused no. 1 company:- One of the defences taken by the accused persons is that the accused no. 1 company had changed its bank in which its current account was maintained and intimation in this regard was already given to the complainant company. In order to show this, the accused persons have relied upon the letter dt. 17.02.2012 Ex. DW1/C, which clearly states that the accused no. 1 company is maintaining a current account with Standard Chartered Bank, Mount Road, Chennai. This document has not been disputed by the complainant during the cross examination of DW1. No suggestion has been put by the complainant that the contents of said letter were not in the knowledge of the complainant. Therefore, the accused persons have proved that intimation with respect to change of bank of the accused no. 1 company was duly given to the complainant company in 2012 itself. In the present case, the cheque in question, which is drawn upon The Catholic Syrian Bank Ltd., was presented for encashment in the year 2017 whereas it has been duly proved that it was in the knowledge of the complainant company in year 2012 itself that the accused no.
CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 16/25 1 company had changed its bank to Standard Chartered Bank. It is admitted by complainant in its complaint itself that the cheque in question was issued as a security cheque but accused no. 2 & accused no. 3 had instructed them to deposit the same in 2017. No explanation has come on record as to why the complainant company accepted a cheque drawn on a bank in which the accused company did not maintain its account anymore when the fact was squarely within the knowledge of the complainant company. This raises doubt on the genuineness of the case of complainant. Therefore, it stands proved that the cheque in question was not drawn by the accused no. 1 company on an account maintained by them at the alleged time of issuance of cheque.
(iv) The defence of security cheque:-
(a) Before delving into the facts, it is relevant to discuss that the defence of a security cheque does not, in and of itself, discharge the burden cast upon the accused persons to establish a probable defence. A "security cheque" issued by an accused also falls under the ambit of section 138 NI Act. Reliance is placed upon the case of Credential Leasing & Credits Ltd. vs. Shruti Investments & Anr. (2015) 3 BC 691, 2015 (4) JCC 252. However, burden is on the accused to show how the said security cheque was never given for the purpose of discharge of liability towards a legally recoverable debt. Coming to the facts of the present case, it is the contention of the accused persons that the cheque in question was given as a security cheque for the purpose of entering into distributorship agreement CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 17/25 in the year 2010, in pursuance of the letter of complainant company, Mark A, and was not issued in the year 2017.
This letter has not been disputed by the complainant during the cross-examination of DW1 as the entire cross- examination of DW1 revolved around the opening balance in the ledger account statement and return of the stock of Rs. 25 lakhs.
(b) Perusal of record shows that the accused persons have proved vide documents, Mark A (a letter dt. 14.12.2010 sent by the complainant company to the accused company requesting to arrange two blank undated account payee cheques in favour of the complainant company), Ex. DW1/A (a letter dt. 21.12.2010 sent to the complainant company referring to two unfiled blank cheques bearing no. 206633 & 206634 being issued by the accused company to the complainant company) and Ex. DW1/B (a letter dt. 28.12.2010 sent to the accused company by the complainant company acknowledging the receipt of the two cheques bearing no. 206633 & 206634 given for security purpose by the accused company), that the cheque in question i.e. 206633 was issued by the accused company as a security cheque in the year 2010 itself. In fact, the complainant has clearly mentioned that the cheque in question was given as a security by the accused company earlier and was only presented upon the "instructions" of accused nos. 2 and 3. Further, by way of letter dt. 17.02.2012, Ex. DW1/C, the accused have also proved that the change of the bank in which the account of the accused CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 18/25 company is maintained, was duly intimated to the complainant company, as no controverting suggestions have been given by the complainant at the stage of cross- examination of DW1 and no separate evidence has been led by the complainant to show that contents of said letter Ex. DW1/C were not within the knowledge of the complainant company.
(c) Besides failing to disprove the above documents relied upon by the accused, not even a single suggestion controverting the above documents have been given by the Ld. counsel for complainant during the cross examination of DW1. It is settled law that accused need not disprove the case of the complainant by way of direct evidence to bring on record his probable defence, but the standard of proof is that of preponderance of probabilities. Therefore, the above discussed documents relied upon by the accused persons clearly establishes a probable defence on part of the accused persons that the cheque in question was nothing but a security instrument given as collateral or security for the purpose of distributorship agreement between the parties in the year 2010 and was not issued in the year 2017 towards any existing legally recoverable debt or liability in favour of the complainant company.
(v) Existence of legally enforceable debt or liability in favour of the complainant:-
(a)The accused persons have proved, as discussed above, that the cheque in question was handed over to the complainant CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 19/25 company for security purposes in the year 2010 with the rider that the same may not be used without their knowledge and consent. The accused persons have also proved that it was within the knowledge of the complainant that the cheque in question was given for security purpose and the complainant had assured the accused no. 1 company that the cheque in question would not be used without their knowledge and consent.
(b) It is the case of the complainant that the accused nos. 2 and 3 had "instructed" the complainant company to present the cheque in question, given as security, before the bank for encashment. No evidence, documentary or oral, has been led by the complainant in this regard. The complainant company has failed to prove the mode of communication by which the accused no. 2 and 3 had issued such instructions. CW1 has simply denied the suggestion put forth by Ld. Counsel for accused that no intimation regarding presentment of cheque in question was given by the complainant company to the accused company. On the other hand, the accused have successfully proved that the complainant company had assured them not to present the cheque in question without receiving the consent of the accused company and no such obtainment of consent has been shown by the complainant. In fact, CW1 has stated in his cross-examination that he did not recall whether no instructions were given by the accused persons for presentment of the cheque in question. This is in stark contradiction of the contents of the evidence affidavit of CW1 and has struck a fatal blow to the case of the CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 20/25 complainant company. Therefore, it stands to reason that the cheque in question was mala fidely presented by the complainant company, in contravention of their assurances to the accused company.
(c) It is the onus of the complainant to prove that there was a subsisting debt or liability on the date of presentation of the cheque in question. The cross examination of CW1 clearly shows that the witness was not aware of the facts of the case.
CW1 has stated in his cross-examination that his knowledge emanated from books of accounts, however, no such books of accounts has been produced or relied upon by the complainant company. The case put forward by the accused is that the complainant company wished to participate in the annual exhibition of dental equipments, namely Expodent 2016 and had offered a stall to the accused company at the said exhibition but the complainant company attempted to dump stock worth Rs. 25 lacs upon the accused company and when the latter refused to take the same, they were denied to take part in the said exhibition by the complainant. It is further the stance of accused that they were forced to take up stock amounting to Rs. 25 lakhs from the complainant company, without having placed any orders for the same with the assurance that the same would be liquidated at the earliest but the complainant stopped responding to their requests and only took some of the stocks back and rest of the stock was still lying with the accused company. CW1 has lucidly admitted in his cross-examination that he did not have personal knowledge of the transaction between the parties and had not CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 21/25 personally interacted or dealt with the accused. He was unable to state the value of the orders placed by the accused company with the complainant company and also did not know whether the complainant company had attended a conference at Chennai called "Expodent" in the year 2016 and whether the complainant company had promised a stall to the accused company in the said conference and whether the complainant company had asked the accused company to take stock worth Rs. 25 lacs, on the refusal of which, the stall of the accused company was also cancelled. The accused has proved the case set up by them with the help of series of emails Ex. DW1/D (Colly.), the genuineness or authorship of which has not been disputed by the complainant during cross examination of DW1. Ld. counsel for the complainant had argued during the course of final arguments that the accused has admitted that some stocks were lying with them and therefore, the complainant company needed to be compensated for the same. However, no such amount has been quantified by the complainant in the evidence led by them and therefore, this line of argument is not sustainable. Ld. counsel for the complainant had also apprised this court that a commercial suit in this respect was filed by the complainant herein, CS (comm) 285/2021 which has been dismissed by Ld. DJ (Commercial Court)-01, West, THC vide order dt. 21.01.2026. CW1 also failed to recall as to when the cheque in question, Ex. CW1/3, was handed over by the accused to the complainant company but has admitted that the complainant might have requested the accused to issue security cheques vide letter dated 14.12.2010. Perusal of the CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 22/25 cross examination of CW1 shows that the answers given by CW1 are evasive in nature, replete with contradictions and uncertainly. Hence, CW1 appears to be nothing short of a hearsay witness and his testimony does not lend any credence to the case of the complainant. It has become painfully clear, upon close perusal of the evidence led by the complainant, that no document has been relied upon by the complainant which could prove the existence of legally recoverable debt or liability. No statement of account or bills or invoices or any other document has been relied upon by the complainant and the absence of such supporting documents invites an adverse inference under Section 114(g) of the Indian Evidence Act.
(d) During the course of arguments, Ld. counsel for complainant company has argued vehemently that the ledger account produced by the accused Ex. DW1/X1 clearly shows that there were ongoing transactions between the parties and that the opening balance of the said account statement shows that there was existing liability of the accused no. 1 company towards the complainant company. However, the document Ex. DW1/X1 cannot come to the rescue of the complainant company as no crystallized debt or liability qua the cheque in question has been shown or pointed out in the said document. It is one of the core requirements for a complaint u/s 138 NI Act to prove that there was existence of a specific debt or liability on part of the accused at the time of presentation of cheque, which lies solely upon the complainant. This requirement has not been fulfilled by the complainant. In fact, the complainant has failed to challenge the documents CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 23/25 produced by the accused to show that the cheque in question was actually issued only as a security instrument and not for the purpose of discharge of any existing debt or liability. Therefore, the complainant has failed to prove that there was any legally enforceable debt or liability subsisting qua the accused persons at the time of presentation of cheque in question.
19. Therefore, in light of the above discussion, it is seen that the accused persons have successfully raised plausible defences and the presumption arising in favour of the complainant company stands rebutted by the accused persons. The burden now shifts back upon the complainant company to prove their case beyond reasonable doubt, which the complainant company has failed to discharge.
20. Accordingly, in light of above discussion, accused no. 1 company i.e. Alpride Healthcare Private Ltd. is acquitted of the offence u/s 138 NI Act. Now, the liability of the directors is derivative and it arises only if the company is shown to have committed the offence in the first place. Since the accused no. 1 company has been acquitted, no liability can be fasten upon the signatory of the cheque in question i.e. accused no. 2 Janardhanam Raghavendran, S/o Late Sh. R. Janardhanam, who also stands acquitted of the offence u/s 138 NI Act. Further, the accused no. 3 was not a signatory to the cheque in question and therefore accused no. 3 Vupputur Prabhakar S/o Sh. V. Anandkrishna Chetty also stands acquitted of the offence u/s 138 NI Act.
CC No. 1676/2017 Dentsply India Pvt. Ltd. vs. Alpride Health Care Pvt. Ltd. 24/25
21. Copy of judgment be provided to the accused persons free of cost.
(Announced in the open Court) (SHRUTI CHAUDHARY)
07th April, 2026 SCJ-cum-RC / PHC
NEW DELHI
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