Delhi District Court
M N Beig vs Shree Hari Clothing House on 12 September, 2025
IN THE COURT OF SH. LOVLEEN, ADDITIONAL SESSIONS
JUDGE-03, SAKET COURTS, NEW DELHI
DLSE010129252024
CRL. APPEAL No. 485/2024
M.N. BEIG
S/o Mirza Munner Beg
R/o House No. 544, Second floor,
Block-B, Gate No.4,
Greenfield Colony, Amarnagar,
Faridabad, Haryana -121003
....Appellant
VERSUS
M/S. SHREE HARI CLOTHING HOUSE
Through Ms. Anita Tiberwal,
LR of its proprietor Mr. Anil Kumar Tibrewal,
Office at 88, 1st Floor,
Hari Nagar, Ashram,
New Delhi-110014.
...Respondent
Date of institution : 10.12.2024
Date of Reserving judgment : 19.08.2025
LOVLEEN Date of Pronouncement : 12.09.2025
Decision : Dismissed.
Digitally signed
by LOVLEEN
Date: 2025.09.12
16:37:51 +0530
Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 1/31
JUDGMENT
1. This is an appeal under section 415(3) BNSS, 2023 preferred by the appellant against the impugned judgment dated 29.10.2024 and order on sentence dated 08.11.2024 passed by Court of Ld. Judicial Magistrate First Class (NI Act-02), South East District in CC No. 621299/2016 titled M/s. Shree Hari Clothing House Vs. M/s. M.N. Mode and Ors, whereby interalia the appellant/ convict M.N. Beg (being a partner in M/s M.N. Mode) was convicted of the offence punishable under Section 138 of Negotiable Instruments Act and was sentenced to undergo simple imprisonment for a period of 02 years (sentence is to run concurrently in all the 52 connected cases) and was further directed to pay a fine of Rs.7,00,000/- to the complainant as compensation within 30 days from the date of order on sentence. In default of payment of the above stated fine, convict is to undergo simple imprisonment for 06 months. For the sake of convenience, the appellant herein shall be referred to as 'accused No.3' (in line with the Trial Court judgment) and the respondent herein shall be referred to as 'complainant'.
BRIEF FACTS
2. The facts of the case put forth by the complainant against the accused No. 3 have been correctly noted by the Ld. Magistrate in her impugned judgment. The relevant paragraphs are reproduced hereinafter for ready reference:-
".............................................................................. ................................................................................
1.. Vide this judgment, I shall dispose of the present complaint Digitally signed by LOVLEEN LOVLEEN Date:
2025.09.12 Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 2/31 16:37:58 +0530 case filed by the complainant, M/s Shree Hari Clothing House through its proprietor Ms. Anita Tiberwal, LR of late Sh. Anil Kumar Tibrewal (hereinafter referred as the 'complainant) against the accused partnership firm M/s M.N. Mode (hereinafter, referred as the 'accused No.1') through its partners Sh. Ajay Kalra (hereinafter, referred as the 'accused No.2') and Sh. M.N. Beg (hereinafter referred as the 'accused No.3'), u/s 138 of the Negotiable Instruments Act, 1881 (in short "NI Act").
2. In a nutshell, the facts of the present case as per the complaint are that the Complainant is a whole sale Cloth Merchant/ Dealer and that the Accused No.2 and No.3 had represented to be the Partners of Accused No.1 firm to the complainant and they had purchased large quantities of clothing material on behalf of accused no.1. It is further averred that the accused persons had made the part payment of the aforesaid purchase/Clothing material through a Cheque bearing no. 329341 drawn on State Bank of Patiala, NFC, New Delhi- 110005 dated 18.02.2011 for a sum of Rs. 3,50,000/-(cheque in question) and when the cheque in question was presented to the complainant's bank the aforesaid cheque was dishonoured with the remarks "Exceeds Arrangement" vide return memo dated 19.02.2011.
3. That the Complainant informed the Accused persons that their Cheque has returned dishonored, and also asked them to Digitally signed by immediately make the payment of the Cheque Amount. Thereafter LOVLEEN LOVLEEN Date:
2025.09.12 the Complainant sent a Legal Notice dated-24.02.2011 to the 16:38:05 +0530 Accused persons vide Registered AD dated 28.02.2011, calling upon the Accused persons to make the payment of the Cheque Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 3/31 amount within 15 days, however the accused persons failed to make the payment thereof within the statutory period. Hence, on non-payment of the above said amount the present complaint was filed seeking prosecution of the accused persons for the offence punishable under Section 138/142 NI Act."..................................... ................................................................................ ..................................................................................."
TRIAL
3. Vide order dated 05.04.2011, the Ld. Metropolitan Magistrate summoned the accused No. 3 and some others (including the partnership firms M/s. M.N. Mode) to face trial u/s 138 NI Act. On 19.12.2018, a notice u/s 251 Cr.P.C. was framed upon the accused wherein he plead as under:-
"I do not plead guilty and claim trial. I am not the signatory of the impugned cheque. I do not remember as to during which period I was the partner of M/s. M.N. Mode. I do not know how the impugned cheque came in the possession of complainant. I also do not know for what purpose / transaction the impugned cheque was kept. I have never Digitally signed by LOVLEEN received legal notice of demand Ex.CW1/3 before LOVLEEN Date:
2025.09.12 16:38:09 +0530 institution of the present case. Hence, I am not liable to pay the cheque amount. I have to receive approximately Rs. 13- 14 crores from accused no. 2 Ajay Kalra."
3.1. However, he admitted that the cheque belongs to the partnership Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 4/31 firm M/s. M.N. Mode and that the return memo pertains to the cheque in question. He denied the receipt of legal notice.
4. During trial, the complainant examined witnesses in support of its / his allegations against the accused No. 3 and others. Statement of accused No.3 was recorded u/s 313 Cr.P.C wherein he claimed that he never purchased any material from the complainant and the cheque in question was never handed over to the complainant. He further claimed that the cheque in question was a part of a cheque book which was misplaced in the year 2011. In defence evidence, co-accused Ajay Kalra examined himself as DW-1. Accused No. 3 also examined SI Mahinder Singh, PS Tilak Marg as DW-2 and Sh. Avinash Verma, SBI as DW-3. Upon conclusion of trial, accused No. 3 was convicted of the offence punishable u/s 138 NI Act vide the impugned judgment dated 29.10.2024.
GROUNDS OF APPEAL
5. The grounds cited by the accused No. 3 against the impugned judgement are as under :
A. Because the impugned order passed by the Ld. Magistrate has been passed per-incuriam and without appreciation of facts.
B. Because the Ld. Magistrate failed to appreciate that the respondent has not been able to prove that any liability of the petitioner, but has only relied upon the presumption and Digitally signed by moreover the Complainant witness did not had personal knowledge of the transaction.
LOVLEEN LOVLEEN Date:
2025.09.12 16:38:14 +0530 C. That the cross-examination has not been done, is an erroneous approach, under such circumstances, when proper Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 5/31 procedure and proper application of mind has not been made in the course of trial of conducting the case by the learned Magistrate, the conviction order passed by the Ld. Magistrate suffers from proper finding with respect to the offence alleged against the accused.
D. That AR of the Respondent CW2 also had no any personal knowledge about the transaction, thereby incompetent to give evidence by way of affidavit as observed by Supreme Court in case of A. C. Narayanan v. State of Maharashtra & Anr. (Criminal Appeal No. 73 of 2007).
E. Because, Ld. Magistrate failed to follow procedure prescribed under Section 220 of CrPC, and erroneously proceeded in separate trial.
F. Because, the Ld. Magistrate failed to consider that the delivery of goods was not proved by the Complainant, and even no such endorsement has been tendered by the Appellant in the delivery receipt.
G. Because, Ld Magistrate failed to consider that the receipt which has been placed on record are hand written receipt and neither the same has any VAT registration number nor the same bears any endorsement by the accused.
H. Because, the onus was on the Complainant to prove existence of legally enforceable debt and as such no any evidence has been placed on record to prove delivery of the Digitally goods and material.
signed by LOVLEEN LOVLEEN Date:
2025.09.12 I. Because Ld. Magistrate failed to appreciate that the 16:38:19 +0530 'Affidavit-cum-Undertaking' relied upon by the respondent to prove the existence of a debt on part of the petitioner nowhere Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 6/31 establishes that goods and clothing material were supplied to the Applicant/accused. Without verifying the signature upon the invoice it can not be concluded that goods and clothing material were supplied.
J. Because Ld. Magistrate failed to appreciate that it has nowhere been mentioned as to how the goods and clothing material were delivered to the petitioner and this clearly shows that the petitioner never received the consignment of goods and clothing material and thereby no liability arises to pay and the complainant herein Respondent misused the security cheque.
K. Because Ld. Magistrate failed to appreciate that CW2 did not had personal knowledge of the transaction and she failed to prove existence of legally enforceable debt. L. Because, Ld Magistrate failed to consider that the Complainant failed to prove that the cheques were given qua which invoices. Further, the complainant has also not produced its audited accounts or ITRs. The ledger produced by the complainant is also incomplete.
M. Because, the sentence award by the Ld Magistrate is disproportionate. Ld. Magistrate has imposed disproportionate and unreasonable fine and default stipulation in payment of fine is also disproportionate. The Appellant has been sentence to undergo 6 month of simple imprisonment in default to pay the fine. It is stated that in altogether 52 cases punishment of 6 month of simple imprisonment has been imposed. Ld Trial Court failed to consider that general rule is that the sentence shall run concurrently, but no such direction has been passed in Digitally signed by sentence order qua default of payment of fine. LOVLEEN LOVLEEN Date:
2025.09.12 N. It would be pertinent to mention here that cross- 16:38:24 +0530 Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 7/31 examination is crucible in which the reliability of the complainant evidence is to be tested. It is also taken care of in the criminal justice system. Hon'ble Punjab-Haryana High Court in case of Sanjiv Nagpal vs Atul Sharma Crl. Misc. No. M-3011 of 2013 observed that piecemeal evidence of complainant's witnesses is not generally allowed. Material witnesses are allowed to be examined on one date. The cross- examination is the only method by which the accused may directly challenge the veracity of the complainant witnesses and it is one of the fundamental and important rights of the accused. It is stated that in the present matter no effective evidence has been led on behalf of the Appellant and the counsel for the appellant merely adopted the cross examination conducted by the accused 2.
6. It is prayed that the impugned judgment dated 29.10.2024 and the order on sentence dated 08.11.2024 may be set aside.
SUBMISSIONS OF COMPLAINANT
7. On the other hand, Ld. Counsel for the complainant has argued that the accused No. 3 has been correctly convicted by the Ld. Magistrate. He prays for dismissal of the appeal filed by the accused No. 3.
DISCUSSION
8. This Court has considered the oral submissions as well as the records.
9. Recently, the Hon'ble Supreme Court was pleased to define the contours of the law relating to the provision u/s 138 of Negotiable Instruments Act in Rajesh Jain Vs. Ajay Singh 2023 INSC 888. The relevant extracts of the observations are reproduced below for ready LOVLEEN Digitally signed by LOVLEEN Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 8/31 Date: 2025.09.12 16:38:30 +0530 reference:-
Section 138 of the NI Act - Necessary Ingredients
25. Essentially, in all trials concerning dishonour of cheque, the courts are called upon to consider is whether the ingredients of the offence enumerated in Section 138 of the Act have been met and if so, whether the accused was able to rebut the statutory presumption contemplated by Section 139 of the Act.
26. In Gimpex Private Limited vs. Manoj Goel (2022) 11 SCC 705 , this Court has unpacked the ingredients forming the basis of the offence under Section 138 of the NI Act in the following structure:
(1) The drawing of a cheque by person on do account maintained by him with the banker for the payment of any amount of money to another from that account;
(i) The cheque being drawn for the discharge in whole or in part of any debt or other liability;
(iii) Presentation of the cheque to the bank arranged to be paid from that account,
(iv) The return of the cheque by the drawee bank Digitally as unpaid either because the amount of money signed by LOVLEEN LOVLEEN Date:
standing to the credit of that account is insufficient 2025.09.12 16:38:35 to honour the cheque or that it exceeds the amount +0530
(v) A notice by the payee or the holder in due course making a demand for the payment of the amount to the drawer of the cheque within 30 days Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 9/31 of the receipt of information from the bank in regard to the return of the cheque; and
(vi) The drawer of the cheque failing to make payment of the amount of money to the payee or the holder in due course within 15 days of the receipt of the notice.
27. In K. Bhaskaran v. Sankaran Vaidhyan Balan (1999) 7 SCC 510 this Court had summarised the constituent elements of the offence in fairly similar terms by holding:
"14. The offence Under Section 138 of the Act can be completed only with the concatenation of a number of acts.The following are the acts which are components of the said offence: (1) drawing of the cheque, (2) presentation of the cheque to the bank, (3) returning the cheque unpaid by the drawee bank, (4) giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, (3) failure of the drawer to make payment within 15 days of the receipt of the notice."
28. The five (5) acts as set out in K Bhaskaran's case (supra) are, generally speaking, matters of record and would be available in the form of documentary evidence as early as, at the stage of filing the complaint and initiating prosecution. Apart from the above acts, it is also to be proved that cheque was issued in discharge of a debt or Digitally signed by liability (Ingredient no. (ii) in Gimpex's case). The burden LOVLEEN LOVLEEN Date:
2025.09.12 of proving this fact, like the other facts, would have 16:38:40 +0530 ordinarily fallen upon the complainant. However, through the introduction of a presumptive device in Section 139 of Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 10/31 the NI Act, the Parliament has sought to overcome the general norm as stated in Section 102 of the Evidence Act and has, thereby fixed the onus of proving the same on the accused. Section 139, in that sense, is an example of a reverse onus clause and requires the accused to prove the non-existence of the presumed fact, i.e., that cheque was not issued in discharge of a debt/liability. Burden of Proof and Presumptions: Conceptual Underpinnings
29. There are two senses in which the phrase 'burden of proof' is used in the Indian Evidence Act, 1872 (Evidence Act, hereinafter). One is the burden of proof arising as a matter of pleading and the other is the one which deals with the question as to who has first to prove a particular fact. The former is called the 'legal burden' and it never shifts, the latter is called the 'evidential burden' and it shifts from one side to the other. [See Kundanlal v. Custodian Evacuee Property (AIR 1961 SC 1316)]
30. The legal burden is the burden of proof which remains constant throughout a trial. It is the burden of establishing the facts and contentions which will support a party's case. If, at the conclusion of the trial a party has failed to establish these to the appropriate standards, he would lose to stand. The incidence of the burden is usually Digitally signed by clear from the pleadings and usually, it is incumbent on the LOVLEEN LOVLEEN Date: plaintiff or complainant to prove what he pleaded or 2025.09.12 16:38:44 +0530 contends. On the other hand, the evidential burden may shift Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 11/31 from one party to another as the trial progresses according to the balance of evidence given at any particular stage; the burden rests upon the party who would fail if no evidence at all, or no further evidence, as the case may be is adduced by either side (See Halsbury's Laws of England, 4th Edition para 13). While the former, the legal burden arising on the pleadings is mentioned in Section 101 of the Evidence Act, the latter, the evidential burden, is referred to in Section 102 thereof. [G.Vasu V. Syed Yaseen (AIR 1987 AP139) affirmed in Bharat Barrel Vs. Amin Chand [(1999) 3 SCC 35] ]
31. Presumption, on the other hand, literally means "taking as true without examination or proof". In Kumar Exports v. Sharma Exports (2009) 2 SCC 513, this Court referred to presumption as "devices by use of which courts are enabled and entitled to pronounce on an issue notwithstanding that there is no evidence or insufficient evidence."
32. Broadly speaking, presumptions are of two kinds, presumptions of fact and of law. Presumptions of fact are inferences logically drawn from one fact as to the existence of other facts. Presumptions of fact are rebuttable by evidence to the contrary. Presumptions of law may be either irrebuttable (conclusive presumptions), so that no evidence Digitally to the contrary may be given or rebuttable. A rebuttable signed by LOVLEEN LOVLEEN Date:
2025.09.12 presumption of law is a legal rule to be applied by the Court 16:38:50 +0530 in the absence of conflicting evidence (Halsbury, 4th Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 12/31 Edition paras 111, 112]. Among the class of rebuttable presumptions, a further distinction can be made between discretionary presumptions ('may presume') and compulsive or compulsory presumptions ('shall presume'). [G. Vasu V. Syed Yaseen (Supra)]
33. The Evidence Act provides for presumptions, which fit within one of three forms: 'may presume' (rebuttable presumptions of fact), 'shall presume' (rebuttable presumption of law) and conclusive presumptions (irrebuttable presumption of law). The distinction between 'may presume' and 'shall presume' clauses is that, as regards the former, the Court has an option to raise the presumption or not, but in the latter case, the Court must necessarily raise the presumption. If in a case the Court has an option to raise the presumption and raises the presumption, the distinction between the two categories of presumptions ceases and the fact is presumed, unless and until it is disproved, [G.Vasu V. Syed Yaseen (Supra)] Section 139 NI Act-Effect of Presumption and Shifting of Onus of Proof
34. The NI Act provides for two presumptions: Section 118 and Section 139. Section 118 of the Act inter alia directs that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or Digitally signed by LOVLEEN drawn for consideration. Section 139 of the Act stipulates LOVLEEN Date:
2025.09.12 16:38:55 that 'unless the contrary is proved, it shall be presumed, that +0530 the holder of the cheque received the cheque, for the Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 13/31 discharge of, whole or part of any debt or liability'. It will be seen that the 'presumed fact' directly relates to one of the crucial ingredients necessary to sustain a conviction under Section 138.
35. Section 139 of the NI Act, which takes the form of a 'shall presume' clause is illustrative of a presumption of law. Because Section 139 requires that the Court 'shall presume' the fact stated therein, 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. But this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary as is clear from the use of the phrase 'unless the contrary is proved'.
36. The Court will necessarily presume that the cheque had been issued towards discharge of a legally enforceable debt/liability in two circumstances. Firstly, when the drawer of the cheque admits issuance/execution of the cheque and secondly, in the event where the complainant proves that cheque was issued/executed in his favour by the drawer.
The circumstances set out above form the fact(s) which bring about the activation of the presumptive clause. [Bharat Barrel Vs. Amin Chand] [(1999) 3 SCC 35] Digitally
37. Recently, this Court has gone to the extent of holding signed by LOVLEEN that presumption takes effect even in a situation where the LOVLEEN Date:
2025.09.12 accused contends that 'a blank cheque leaf was voluntarily 16:39:01 +0530 signed and handed over by him to the complainant. [Bir Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 14/31 Singh v. Mukesh Kumar (2019) 4 SCC 197]. Therefore, mere admission of the drawer's signature, without admitting the execution of the entire contents in the cheque, is now sufficient to trigger the presumption.
38. As soon as the complainant discharges the burden to prove that the instrument, say a cheque, was issued by the accused for discharge of debt, the presumptive device under Section 139 of the Act helps shifting the burden on the accused. The effect of the presumption, in that sense, is to transfer the evidential burden on the accused of proving that the cheque was not received by the Bank towards the discharge of any liability. Until this evidential burden is discharged by the accused, the presumed fact will have to be taken to be true, without expecting the complainant to do anything further.
39. John Henry Wigmore12 on Evidence states as follows:
"The peculiar effect of the presumption of law is merely to invoke a rule of law compelling the Jury to reach the conclusion in the absence of evidence to the contrary from the opponent but if the opponent does offer evidence to the contrary (sufficient to satisfy the Judge's requirement of some evidence), the presumption 'disappears as a rule of law and the case is in the Jury's hands free from any rule."
40. The standard of proof to discharge this evidential burden is not as heavy as that usually seen in situations where the prosecution is required to prove the guilt of an Digitally signed by accused. The accused is not expected to prove the non- LOVLEEN LOVLEEN Date:
2025.09.12 existence of the presumed fact beyond reasonable doubt. 16:39:06 +0530 Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 15/31 The accused must meet the standard of 'preponderance of probabilities', similar to a defendant in a civil proceeding. [Rangappa vs. Mohan (AIR 2010 SC 1898)]
41. In order to rebut the presumption and prove to the contrary, it is open to the accused to raise a probable defence wherein the existence of a legally enforceable debt or liability can be contested. The words 'until the contrary is proved' occurring in Section 139 do not mean that accused must necessarily prove the negative that the instrument is not issued in discharge of any debt/liability but the accused has the option to ask the Court to consider the non-existence of debt/liability so probable that a prudent man ought, under the circumstances of the case, to act upon the supposition that debt/liability did not exist. [Basalingappa Vs. Mudibasappa (AIR 2019 SC 1983) See also Kumar Exports Vs. Sharma Carpets (2009) 2 SCC 513]25
42. In other words, the accused is left with two options. The first option-of proving that the debt/liability does not exist-is to lead defence evidence and conclusively establish with certainty that the cheque was not issued in discharge of a debt/liability. The second option is to prove the non- existence of debt/liability by a preponderance of probabilities by referring to the particular circumstances of the case. The preponderance of probability in favour of the Digitally signed by LOVLEEN accused's case may be even fifty one to forty nine and LOVLEEN Date:
2025.09.12 arising out of the entire circumstances of the case, which 16:39:13 +0530 includes: the complainant's version in the original Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 16/31 complaint, the case in the legal/demand notice, complainant's case at the trial, as also the plea of the accused in the reply notice, his 313 statement or at the trial as to the circumstances under which the promissory note/cheque was executed. All of them can raise a preponderance of probabilities justifying a finding that there was 'no debt/liability'. [Kumar Exports and Sharma Carpets, (2009) 2 SCC 513]
43. The nature of evidence required to shift the evidential burden need not necessarily be direct evidence i.e., oral or documentary evidence or admissions made by the opposite party; it may comprise circumstantial evidence or presumption of law or fact.
44. The accused may adduce direct evidence to prove that the instrument was not issued in discharge of a debt/liability and, if he adduces acceptable evidence, the burden again shifts to the complainant. At the same time, the accused may also rely upon circumstantial evidence and, if the circumstances so relied upon are compelling the burden may likewise shift to the complainant. It is open for him to also rely upon presumptions of fact, for instance those mentioned in Section 114 and other sections of the Evidence Act. The burden of proof may shift by Digitally presumptions of law or fact. In Kundanlal's case- (supra) signed by LOVLEEN when the creditor had failed to produce his account books, LOVLEEN Date:
2025.09.12 16:39:18 this Court raised a presumption of fact under Section 114, +0530 that the evidence, if produced would have shown the non-
Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 17/31 existence of consideration. Though, in that case, this Court was dealing with the presumptive clause in Section 118 NI Act, since the nature of the presumptive clauses in Section 118 and 139 is the same, the analogy can be extended and applied in the context of Section 139 as well.
45. Therefore, in fine, it can be said that once the accused adduces evidence to the satisfaction of the Court that on a preponderance of probabilities there exists no debt/liability in the manner pleaded in the complaint or the demand notice or the affidavit-evidence, the burden shifts to the complainant and the presumption 'disappears' and does not haunt the accused any longer. The onus having now shifted to the complainant, he will be obliged to prove the existence of a debt/liability as a matter of fact and his failure to prove would result in dismissal of his complaint case. Thereafter, the presumption under Section 139 does not again come to the complainant's rescue. Once both parties have adduced evidence, the Court has to consider the same and the burden of proof loses all its importance. [Basalingappa vs. Mudibasappa, AIR 2019 SC 1983; See also, Rangappa vs. Digitally signed by Sri Mohan (2010) 11 SCC 441].
LOVLEEN LOVLEEN Date:
2025.09.12 16:39:24 +0530 EXISTENCE OF STATUTORY PRESUMPTIONS
10. As per complainant, partnership firm namely M/s. M.N. Mode purchased a large quantity of 'cloth' from time to time and in partial discharge of its liability to pay for the said 'cloth', said firm issued the Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 18/31 cheque in question in its favour. Accused No.3 and one Ajay Kalra are the partners in the said partnership firm. Complainant examined CW-1 Anil Kumar Tibrewal and CW-2 Mrs. Anita Tibrewal in support of its above assertions.
11. On the other hand, the accused No. 3 denies any such liability and claims as under, in response to notice framed upon him u/s 251 Cr.P.C:-
"I do not plead guilty and claim trial. I am not the signatory of the impugned cheque. I do not remember as to during which period I was the partner of M/s. M.N. Mode. I do not know how the impugned cheque came in the possession of complainant. I also do not know for what purpose / transaction the impugned cheque was kept. I have never received legal notice of demand Ex.CW1/3 before institution of the present case. Hence, I am not liable to pay the cheque amount. I have to receive approximately Rs. 13- 14 crores from accused no. 2 Ajay Kalra."
12. However, at that juncture, accused no. 3 admitted that the cheque belongs to said partnership firm M/s. M.N. Mode. Here, this Court must observe that at the stage of recording of statement of accused No. 3 u/s 313 Cr.P.C., accused no. 3 has admitted that the cheque in question bears his signatures. At that very stage, accused No.3 claimed that the cheque in question was a part of a cheque book which was misplaced in the year 2011. Essentially, accused No.3 is disputing the claim of the complainant LOVLEEN that the cheque in question was handed over to the complainant. Accused Digitally signed by LOVLEEN no. 3 did not examine himself as a witness during trial. However, in Date: 2025.09.12 16:39:30 +0530 Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 19/31 defence, co-accused Ajay Kalra was examined as DW-1, SI Mahender Singh was examined as DW-2 and Sh. Avinash Verma was examined as DW-3.
13. In view of the contradictory claims made by the parties with respect to the handing over the cheque in question, this court is required to look into the evidence available on record in order to assess whether or not the cheque in question was handed over to the complainant by accused no. 3 or the said partnership firm M/s. M.N. Mode.
14. Before proceeding to deal with the evidence based on record by the complainant, this Court must note the existence of a few peculiar circumstances of this case, which are extremely relevant to the final outcome of this appeal. As per TCR (of the main file CC No. 616211/2016), the above said complaint was initially filed by the proprietor (namely Mr. Anil Kumar Tibrewal) of M/s. Shree Hari Clothing House (complainant). Ld. Magistrate ordered the summoning of partnership firm M/s. M.N. Mode and its partners, including accused No.3 and one Ajay Kalra, to face the allegations punishable u/s 138 Negotiable Instruments Act. Said Ajay Kalra put in appearance before the Ld. Magistrate in adherence to the summons issued by the Ld. Magistrate. However, accused No. 3 evaded the process / summons issued qua him from time to time. Said TCR reflects that process / summons sent by speed post to accused No. 3 at D-14, DDA Flats, Kalkaji, New Delhi, which were returnable on 12.09.2013 and on 02.01.2014, were received back with the report 'left'. NBWs issued against accused No. 3 at the same address were also received Digitally signed by back unexecuted. Finally, Ld. Magistrate ordered issuance of process u/s 82 LOVLEEN LOVLEEN Date:
2025.09.12 16:39:36 Cr.P.C. against accused No. 3 at the same address. On 10.11.2015, accused +0530 No. 3 was declared an 'absconder'. Accused No. 3 joined the proceedings Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 20/31 pending before Ld. Magistrate only after his arrest in the last quarter of year 2018 and during trial, he furnished his residential address as D-14, DDA Flats, Kalkaji, New Delhi. In the meantime, Ld. Magistrate had proceeded further in the complaint by framing a notice u/s 251 Cr.P.C. upon co-accused Ajay Kalra. Said Shri Anil Kumar Tibrewal (CW-1), proprietor of Shree Hari Clothing House, was also cross-examined on two different occasions by co-accused Ajay Kalra. In fact, complainant evidence was closed by CW-1 Anil Kumar Tibrewal on 01.03.2018. After the arrest of accused No. 3, notice u/s 251 Cr.P.C. was framed upon him on 19.12.2018 and the complaint was then listed for cross-examination of CW-1 Anil Kumar Tibrewal (by accused No.3). However, CW-1 Anil Kumar Tibrewal expired before he could be cross-examined by accused No. 3. Thereafter, Mrs. Anita Tibrewal, widow of CW-1 Anil Kumar Tibrewal was substituted as a complainant. Said Mrs. Anita Tibrewal filed a fresh evidence affidavit and she was examined as CW-2. She was subjected to a lengthy cross- examination on behalf of accused no.3.
15. Firstly, this Court shall deal with the oral testimony of CW-2 Mrs. Anita Tibrewal. Having gone through the evidence affidavit Ex.CW2/A tendered by CW-2 Mrs. Anita Tibrewal, this Court must observe that the same does not reflect any affirmation to the effect that she is aware of the business transactions which allegedly took place between her husband CW-1 Anil Kumar Tibrewal (since deceased) and the partnership firm M/s.
M.N. Mode or accused No. 3 at the relevant time. In fact, her cross- examination also reflects clear cut admissions to the effect that she was not involved in business transactions of Shree Hari Clothing House and rather LOVLEEN Digitally signed she was a housewife at the relevant time. In such facts and circumstances, by LOVLEEN Date: 2025.09.12 16:39:42 +0530 this Court is not inclined to act upon the oral testimony of CW-2 Mrs. Anita Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 21/31 Tibrewal in order to fasten any criminal liability upon accused No.3.
16. Be that as it may, it is a fact borne out of the discussion in the aforegoing paragraph No. 14 that accused No.3 deliberately avoided to join the trial till his arrest in the last quarter of year 2018. At the cost of repetition this Court must observe here that prior to the arrest of accused no. 3, Ld. Magistrate had already examined CW-1 Anil Kumar Tibrewal. In fact, CW-1 Anil Kumat Tibrewal had also been cross-examined by co- accused Ajay Kalra on two different occasions prior to the arrest of accused No. 3. Given the law laid down in Section 299 Cr.P.C., the evidence placed on record by CW-1 Anil Kumar Tibrewal is liable to be read against accused no.3. Accused No. 3 could not be permitted to escape the effect of the assertions made CW-1 Anil Kumar Tibrewal before the Ld. Magistrate merely because he (accused no.3) did not get an opportunity to cross- examine him (CW-1) at the relevant time. Reason being the fact that the said circumstances arose because of the conscious choice made by accused No. 3 to avoid the proceedings pending before the Ld. Magistrate. Reliance is placed upon the observations made by Hon'ble Supreme Court of India in the matter of Nirmal Singh Vs. State of Haryana 2000 Cri. L.J. 1803 and Sukhpal Singh Vs. NCT of Delhi 2024 INSC 385.
17. Accordingly, this court proceeds to consider the affidavit Ex.CW1/A furnished by CW1 Anil Kumar Tibrewal at the relevant time. As per said affidavit, the cheque in question was handed over to him towards part payment of the 'cloth' purchased by the partnership firm M/s M.N. Mode, of which accused No. 3 is a partner. Admittedly, the said assertions of CW1 Anil Kumar Tibrewal have gone unchallenged and unrebutted qua accused No.3. Even the cross-examination of CW-1 Anil Kumar Tibrewal, Digitally signed by LOVLEEN LOVLEEN Date: conducted on behalf of co-accused Ajay Kalra does not reflect any material 2025.09.12 16:39:47 +0530 Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 22/31 inconsistency or infirmity. CW-1 Anil Kumar Tibrewal has not betrayed any signs of falsity or untruth at that stage. Rather, the cross-examination reflects clear cut admissions regarding supply of 'cloth' to the partnership firm M/s. M.N. Mode on the basis of verbal orders received by CW-1 Anil Kumar Tibrewal. In fact, during his cross-examination, CW-1 Anil Kumar Tibrewal has clearly stated that the contents of the cheque in question were filled up by the accountant of partnership firm M/s. M.N. Mode. Admittedly, the said assertion of CW-1 Anil Kumar Tibrewal has gone unchallenged and unrebutted. Record further reflects that a query was put to CW-1 Anil Kumar Tibrewal during his cross-examination as to whether he is aware about the factum of loss of cheque in question, however, the said witness stated that he is not aware of any such fact. Admittedly, no direct suggestion was put to CW-1 Anil Kumar Tibrewal to the effect that the cheque in question was in fact lost by accused no.3 and then misused by him. In totality, CW-1 Anil Kumar Tibrewal seems to have withstood the test of cross-examination put forth by co-accused Ajay Kalra. That being so, there is no reason to disbelieve the oral testimony of CW-1 Anil Kumar Tibrewal. Here, this court must reiterate that at the time of framing of notice u/s 251 Cr.P.C., accused No. 3 has merely stated that he does not know as to how the cheque in question came into the possession of complainant, nor does he know as to for what purpose / transaction, the same was issued. However, at the stage of recording of statement u/s 313 Cr.P.C., accused no. 3 has stated that the cheque in question was a part of a cheque book which was misplaced in the year 2011. Apparently, accused No. 3 has not stated anything about the loss of his 'signed' cheque book bearing the cheque in question at the stage of framing of notice u/s 251 LOVLEEN Cr.P.C. No reason has been put forth by accused No. 3 to explain the said Digitally signed by LOVLEEN Date: 2025.09.12 Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 23/31 16:39:53 +0530 lapse. In fact, this Court must note here that accused no. 3 has not bothered to explain as to why he was carrying a 'signed' cheque book belonging to his partnership firm at the relevant time. The said act and conduct of accused No.3 is far from normal and creates a reasonable suspicion in the mind of this Court about the genuineness of the above claims made by accused No. 3. Given the consistent oral testimony of CW-1 Anil Kumar Tibrewal and the suspicious conduct of accused No. 3, this Court finds it appropriate to hold that the statutory presumptions operating against accused no. 3 stand unrebutted and intact despite the cross-examination of CW-1 Anil Kumar Tibrewal.
18. Now, this Court proceeds further to deal with the oral testimony of co-accused Ajay Kalra, who examined himself in defence as DW-1. His oral testimony is reproduced below for ready reference:-
"Me and my partner started transacting with the complainant in the year 2005 till November 2006. Out of the 52 cheques in question in all the connected matters, only 11 cheques were issued by us to the complainant and they were given as security cheques in the year 2005. We used pay the complainant in cash for all the transaction (i.e. fabric taken from the complainant) and the cheques in question were merely for security purpose. The signed cheque book of my partnership concern used to be with my partner Mr M. N. Beg i.e accused no. 3 as I used to Digitally signed by LOVLEEN travel and it was given to him for emergency purposes. LOVLEEN Date:
2025.09.12 16:39:58 One cheque was lost by my partner i.e accused no. 3 on +0530 17.01.2011 in Tilak Marg PS area and he lodge complaint regarding the same Tilak Marg PS. I am tendering the original Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 24/31 NCR as mark DW-1/1. On the same date, my partner went to the bank and gave stop payment instructions regarding the lost cheques along with copy of the NCR. The copy of intimation of lost cheque to the bank is Mark as Mark DW-1/2.
We consistently demanded our security cheques back from the complainant, however the complainant did not return them on one pretext or the other. Thereafter, the present case was filed against us and no legal notice was served to us. We have no liability towards the complainant."
19. Here, it would be appropriate to refer to the plea of defence made by co-accused Ajay Kalra at the time of framing of Notice u/s 251 Cr.P.C. The same is reproduced below for ready reference:-
"The particulars of the offence have been stated to the accused no. 2 Ajay Kalra, Partner M. N. Mode R/o 2J/96, NIT Faridabad, Haryana and he has been asked whether he pleads guilty or has any defence to make to which he has answered as follows:-
I do not plead guilty and claim trial. I am a post signatory of the impugned cheque. However, I had handed over the entire cheque book of which the present cheque was also a part to my Digitally signed by partner accused no.3 Mr. M. N. Beg for making payments in my LOVLEEN LOVLEEN Date:
2025.09.12 absence. The cheque book was lost by my partner Mr. M. N. 16:40:02 +0530 Beg and he had lodged a complaint to this effect in PS Tilak Marg. Further, our partnership has no liability to discharge against the impugned cheque. I have never received legal notice Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 25/31 of demand Ex. CW1/3 before institution of the present case. Hence, I am not liable to pay the cheque amount."
20. Apparently, there is a great deal of variation in the stance of co- accused Ajay Kalra at the stage of defence evidence and the stage of framing of notice. At the stage of framing of notice, there is complete denial of any liability with respect to the cheque in question. However, at the stage of defence evidence, it is asserted that some of the cheques (out of 52 'lost' cheques) were actually issued as 'security' in favour of the complainant. At the stage of framing of notice, it is asserted that the entire cheque book was handed over to accused No. 3 for making payments in the absence of co-accused Ajay Kalra. However at the stage of defence evidence, it is asserted that the cheque book was handed over to accused no. 3 for 'emergency purposes'. At the stage of framing of notice, there is no mention about the demand made by DW-1 Ajay Kalra regarding return of cheque in question from the complainant. However, at the stage of defence, it is so asserted. The above variations create a reasonable suspicion in the mind of this Court. Be that as it may, this Court proceeds to deal with the oral testimony of DW-1 Ajay Kalra in detail so as to put a closure to the entire matter.
21. DW-1 Ajay Kalra has inter alia deposed that on 17.01.2011, accused no. 3 lost his bag bearing certain documents and cheques no. 329334 to 329350, 307764, 65, 67, 70, 71, 73, 75, 76, 77, 78, 79, 82, 83, 84, 86 to 800 LOVLEEN at Patiala House Courts. He placed on record a copy of relevant NCR number 197/2011 dated 17.01.2011 recorded in this regard, which is Mark Digitally signed by LOVLEEN Date: DW1/1. At the very outset, this Court must observe that the said NCR 2025.09.12 16:40:07 +0530 Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 26/31 Mark DW1/1 was recorded by HC Roshan Lal, but for reasons best known to accused no.3, said HC Roshan Lal was never examined as a witness during the course of trial. As such, it could be safely held that the said NCR has not been proved in accordance with law. This Court further notes that neither the co-accused / DW-1 Ajay Kalra nor has accused no. 3 placed on record any written communication made in respect of loss of said cheques with the SHO concerned at that time, which lead to the recording of said NCR. No doubt, it was deposed by DW-2 SI Mahender Singh that daily diary register (Rojnamcha) pertaining to PS Tilak Marg upto the year 2012 stood destroyed vide order dated 04.04.2024 Mark DW2/1 issued by DCP New Delhi. However, the said order seems to be dealing with the weeding out of the physical records maintained in the PS. Nowhere does the said order state anything about 'deletion' of electronic records like the NCR Mark-DW1/1, which is heavily relied upon in defence by accused No. 3. As such, the oral testimony of DW-2 SI Mahender Singh does not seem sufficient to absolve the co-accused Ajay Kalra or accused No. 3 of their duty to prove the NCR Mark DW1/1 as per law. It seems that co-accused Ajay Kalra and accused no. 3 made half hearted efforts to prove the NCR Mark DW1/1, which demands an adverse view to be taken against them. No premium could be awarded to them for their lapses to prove the said NCR on record.
22. That apart, as observed earlier, accused no. 3 has not bothered to explain as to why he was carrying a 'signed' cheque book belonging to his partnership firm. DW-1 Ajay Kalra has merely deposed that the signed cheque book was in the custody of accused no. 3 for 'emergency purposes'. This Court fails to understand as to what and on how many occasions LOVLEEN 'emergency purposes' arose before the partnership firm M/s. M.N. Mode Digitally signed by LOVLEEN Date: 2025.09.12 Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 27/31 16:40:12 +0530 that required as many as 52 signed cheques to be retained by accused no. 3 in order to tide over the same. In the absence of any proof regarding the 'scale of business' being run by the partnership firm M/s. M.N. Mode, this Court could not uphold the bald oral assertion of DW-1 Ajay Kalra regarding the contingencies (emergency purposes) which could arise in their business. This Court notes that neither DW-1 Ajay Kalra nor has accused No. 3 bothered to explain the availability of accused no.3 in the area of Patiala House Courts on 17.01.2011. Moreover, neither DW-1 Ajay Kalra, nor accused No. 3 have explained during trial as to why they did not respond to the legal demand notice Ex.CW1/3 issued at the instance of M/s. Shree Hari Clothing House after the dishonour of cheque in question. Service of said legal notice has been assumed by this Court as the same was forwarded by registered post to the admitted addresses of both DW-1 Ajay Kalra and accused no.3.
23. DW-1 Ajay Kalra has orally asserted that he demanded the cheque in question back from the complainant but the complainant did not return the same to him. Admittedly, no written communication was sent by DW-1 Ajay Kalra or the accused no. 3 to the complainant demanding the cheque in question. This omission also demands an adverse view to be taken against DW-1 Ajay Kalra as well accused no. 3.
24. Most importantly, this Court finds it difficult to believe the theory of defence that the signed cheques of partnership firm M/s. M.N. Mode, which firm is admittedly having business transactions with M/s Shree Hari Clothing House (complainant), have somehow miraculously landed into the possession of M/s. Shree Hari Clothing House after its alleged loss on 17.01.2011 and which signed cheques were then used to launch the present LOVLEEN prosecution. It seems that DW-1 Ajay Kalra has made a self serving Digitally signed by LOVLEEN Date: 2025.09.12 Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 28/31 16:40:16 +0530 statement regarding loss of a cheque book by accused No. 3 just to create a false / sham defence. As such, the oral testimony of DW-1 Ajay Kalra is liable to be rejected in toto.
25. Given the fact that assertions of CW-1 Anil Kumar Tibrewal regarding handing over of cheque in question have practically gone unchallenged and unrebutted as also the inherent defects noted in the defence evidence, this Court finds it appropriate to reject the entire defence raised by the accused No. 3 challenging the handing over of the cheque in question to CW-1 Anil Kumar Tibrewal.
26. At the cost of repetition, it must be observed that the accused No.3 does not dispute that the cheque in question belongs to his partnership firm. Accused no.3 has admitted at the stage of recording of statement u/s 313 Cr.P.C. that the cheque in question bears his signatures. In the aforegoing paragraphs, this Court has rejected the theory put forth in defence regarding loss of cheque in question and rather concluded that the cheque in question was indeed handed over to the complainant. Admittedly, the cheque in question was dishonored upon being presented for encashment by the complainant. Service of the legal demand notice upon accused no. 3 is presumed as the said notice was forwarded by registered post at the admitted address (of accused no. 3). Admittedly, accused No.3 did not make any payment demanded vide the said legal notice within the period prescribed u/s 138 of NI Act. All the above facts are sufficient to invoke the presumptions available to the complainant u/s 118 NI Act and u/s 139 NI LOVLEEN Act. As such, the evidential burden stood transferred upon accused No.3 to Digitally signed prove that the cheque in question was not issued towards discharge of any by LOVLEEN Date: 2025.09.12 liability. Until the said evidential burden is discharged by accused No.3, the 16:40:20 +0530 presumptions available against accused No. 3 u/s 118 NI Act and u/s 139 NI Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 29/31 Act will have to be assumed to be true, without expecting the complainant to do anything further. The said burden could be discharged by accused No. 3 either by leading defence evidence to conclusively establish that the cheque was not issued in discharge of a debt / liability or by proving the non existence of debt / liability on preponderance of probabilities by referring to the particular circumstances of the case. The nature of evidence required to shift the evidential burden need not necessarily be direct evidence. Once accused No. 3 produces such evidence, the burden shifts back to the complainant and the above mentioned presumptions disappear.
REBUTTAL OF STATUTORY PRESUMPTIONS
27. As to the question whether the said presumptions have been successfully rebutted by the accused or not, it must be observed by this Court that the testimony of CW-1 Anil Kumar Tibrewal has gone unchallenged and unrebutted. (please refer to discussion made in the aforegoing paragraphs).
28. Admittedly, neither co-accused Ajay Kalra nor accused No. 3 have placed on record any receipt regarding the cash payments allegedly made to the complainant against the amount due under the cheque in question. This court has already dealt with and rejected the evidence led in defence by accused No. 3 through DW-1 Ajay Kalra and DW-2 SI Mahender Singh in the aforegoing paragraphs. DW-3 Avinash Verma, SBI has not deposed anything which could have any effect on the fate of this appeal. In the Digitally signed by LOVLEEN considered opinion of this Court, accused No. 3 has not been able to rebut LOVLEEN Date:
2025.09.12 16:40:27 the statutory presumptions through the evidence led in defence either. +0530
29. No other argument beyond the grounds taken in the present appeal Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 30/31 has been made before this Court.
DECISION
30. Apparently, all the statutory presumptions available to the complainant remain unrebutted and intact. All the ingredients of the offence punishable u/s 138 NI Act are available against accused No. 3. Consequently, it has to be held that accused No. 3 was correctly convicted u/s 138 NI Act by the Ld. Magistrate concerned. For the afore-going reasons, conviction of accused No. 3 vide the impugned judgment dated 29.10.2024 is hereby affirmed and upheld. Digitally signed by LOVLEEN LOVLEEN Date:
2025.09.12 Announced & Dictated in the 16:40:33 +0530 Open Court today i.e. 12.09.2025 (Lovleen) ASJ-03 (South East) Saket Courts, Delhi Crl. Appeal No: 485/2024 M.N. Beig vs M/s. Shree Hari Clothing House 31/31