Delhi District Court
Malhotra Brothers Exhibitors Pvt. Ltd vs Avtar Singh on 6 May, 2025
CC NI Act. 6089/2021 Malhotra Brothers Exhibitors Pvt. Ltd. Vs. Avtar Singh Page No. 1
IN THE COURT OF SH. PRITHVI JOSHI,
JUDICIAL MAGISTRATE FIRST CLASS (NI ACT) DIGITAL COURT-03,
SOUTH-EAST DISTRICT, SAKET COURT COMPLEX, NEW DELHI
Criminal Complaint No.: CC NI ACT/6089/2021
CNR No. DLSE02-015329-2021
Malhotra Brothers (Exhibitors) Pvt. Ltd. ... Complainant
Versus
Avtar Singh ... Accused
1. Name & address of the complainant: Malhotra Brothers (Exhibitors) Pvt.
Ltd., Having its registered Office
at: 1, Paras Cinema Building,
Nehru Place, Delhi-110019,
Through its Authorized
Representative Sh. Onkar Chand
Mobile No. 9818003646
Email ID : [email protected]
2. Name & address of the accused : Avtar Singh, Proprietor
Karnail Singh & Bros Electric
Works, 8/129, Pocket-A, Kalkaji
Extension, Delhi - 110019
Mobile - 9811911811
Email ID : [email protected].
3. Offence complained of : U/S 138, The Negotiable
Instruments Act,1881.
4. Date of Institution of Complaint : 30.07.2021
5. Date of Final Arguments : 22.04.2025
6. Date reserved for judgment : 06.05.2025
Digitally signed
by PRITHVI
PRITHVI JOSHI
Date:
JOSHI 2025.05.06
18:13:49
+0530
CC NI Act. 6089/2021 Malhotra Brothers Exhibitors Pvt. Ltd. Vs. Avtar Singh Page No. 2
7. Date of Pronouncement of : 06.05.2025
8. Final Order : Acquittal
JUDGMENT
1. The complainant's case is that he had invited bids in the month of January 2019 for a work contract tender and the accused had also submitted his bid as contractor which was duly accepted and a work agreement was duly exe- cuted between the complainant and the accused on 1 April 2019.
2. As per the work agreement, the complainant was required to give 10% of the agreed "contract sum" as mobilisation advance which is duly mentioned in the appendix to the work agreement. This mobilisation advance was duly given to the accused via cheque amounting to Rs.16,83,000. A TDS of Rs.17,000 was deducted.
3. Soon after that, the complainant approached the accused for starting the work which had not started even in 2021. Consequently, the complainant ex- pressed his displeasure over the same, and finally the accused agreed to re- turn the mobilisation advance for which the impugned cheque was issued. Upon presentation of the same, it got dishonoured. Despite service of legal notice, no payment was made within the requisite period of 15 days. Hence, the present complaint was filed.
4. The complainant gave his evidence by way of affidavit (Ex.CW1/A) and re-
lied on the following documents- Ex. CW1/1- Board Resolution, Ex. CW1/2- Work agreement, Ex.CW1/3- Cheque bearing no.000499 dated 22.03.2021, Ex.CW1/4-Return memo, Ex.CW1/5- Legal notice, Ex.CW1/6- Postal receipt, Ex.CW1/7- delivery proof, Mark A- Account Statement.
5. Upon finding that a prima facie case existed, summons were issued on the basis of the pre-summoning evidence presented by the complainant. On the Digitally signed by PRITHVI PRITHVI JOSHI Date: JOSHI 2025.05.06 18:13:53 +0530 CC NI Act. 6089/2021 Malhotra Brothers Exhibitors Pvt. Ltd. Vs. Avtar Singh Page No. 3 appearance of the accused, notice under section 251 CrPC was framed to which the accused pleaded not guilty and claimed trial. He stated in his de- fence that the impugned cheque was given as a security cheque. Further, he had raised running bills amounting to approximately Rs. 15 lakhs. More- over, the complainant did not take decision as regards the electric work to be done by him, and therefore the work could not be done. Despite his multiple requests, information as regards the work was not given to him. Lastly, he stated that he did not owe the cheque amount to the complainant, and that the impugned cheque had been refused.
6. Since the trial involved complex facts and it was undesirable to try the case summarily, the trial was converted to a summons triable case. Further, the accused was given a right to cross examine the complainant under section 145(2) NI Act.
7. In his cross examination, the complainant admitted that the cheque bearing number 000499 was received by him as blank signed for the purpose of secu- rity from the accused. Further, as per the complainant, the accused was in- formed multiple times through phone calls about non starting of the work. Moreover, the mode of communication with the accused was through What- sApp group chat. Further, it was never mentioned in the WhatsApp group that the accused was not completing the work or that he was required to re- pay the advance given. Thereafter the the complainant was shown What- sApp chats which are exhibited as Ex.DW-1/A along with certificate under section 65B Indian Evidence Act. The complainant was shown chats dated 28.10.2020 as regards completion of the lift work. To this, the complainant agreed and stated that the said chats were as regards the completion of the work of the lift. However, even upon calling the accused multiple times he Digitally signed PRITHVI by PRITHVI JOSHI JOSHI Date: 2025.05.06 18:13:56 +0530 CC NI Act. 6089/2021 Malhotra Brothers Exhibitors Pvt. Ltd. Vs. Avtar Singh Page No. 4 did not come and Schindler (incorrectly mentioned in the cross examination as Schneider) put the MCB to make it operational. He further admitted that the accused was allotted the work after 28.10.2020 as regards staircase how- ever he did not turn up. Thereafter, complainant was shown chats dated 7.12.2020 and 8.12.2020, as per which the accused is asking which MCB and ELCB rating is to be put in the escalator. To this, the complainant sub- mitted that the accused never supplied the MCB and ELCB rating to the complainant. Lastly, the complainant submitted that he had filled the cheque but the amount was already filled and the signature was already done on the cheque.
8. In his statement under section 313 CrPC, the accused in his defence stated that he had started the work but he did not remember the year. Further, the complainant had not made the payment to the accused after getting the work done from him. They had also stopped him from completing the work and misused the cheque.
9. In his defence evidence, the accused examined himself and stated that the complainant had paid an amount of Rs. 17 lakhs to him as an advance. Fur- ther, he had started the work at the site and had done work of all the common areas at the site. The actual reason for delay in the work was that the com- plainant had stopped giving any instructions as regards for their work. More- over, the complainant had also stopped him from procuring a transformer and other major items such as electric panels till further instructions were re- ceived. Lastly, the complainant had not paid for the work, which was already done by him, and that he had done total work amounting to Rs.15,00,000.
10. In this cross examination, the accused admitted that the contract also in-
cluded the cost of electrical goods which were to be installed at the site. It Digitally signed by PRITHVI PRITHVI JOSHI Date: JOSHI 2025.05.06 18:14:00 +0530 CC NI Act. 6089/2021 Malhotra Brothers Exhibitors Pvt. Ltd. Vs. Avtar Singh Page No. 5 was further admitted that running bills were to be issued to the complainant for claiming the amount from him. Further, the accused denied that he had not raised any running bills. Moreover, he admitted that the advance amount which was paid by the complainant was refundable in case no work was done by him. The accused also stated that a WhatsApp group was created where work related exercises were discussed and he used to post about the work done by him on the said group and the same was acknowledged by the Manager of the complainant company. Lastly, he stated that reminders for the payment to be made by the complainant were done through verbal mode and not through WhatsApp groups.
11. In his defence evidence, DW-2 Hardeep Singh stated that he had been an em-
ployee of the accused since 2005. He had worked at the site of Paras Cinema on behalf of the accused after the Covid period. More specifically, he had done the work of Car Lift, washrooms, normal lift, staircase, basement earth- ing, and office.
12. In his cross examination, he stated that he did not have any knowledge about the billings of the work done by the accused. He also stated that he had com- pleted the work which was assigned to him by the accused. Lastly, he stated that he had no proof of the work done by him at the site. However, he stated that there must be an entry register at the site.
13. In his defence evidence, DW3 Vishal Kumar Rana stated that he had been an employee of the accused since 2017, and that he had worked at the Paras cin- ema site on behalf of the accused before and after the Covid period. More specifically, he had done the work of lift, earthing, putting two DVR boxes of the lift and of the bathrooms. He also did the work of staircase.
Digitally
signed by
PRITHVI
PRITHVI JOSHI
JOSHI Date:
2025.05.06
18:14:04
+0530
CC NI Act. 6089/2021 Malhotra Brothers Exhibitors Pvt. Ltd. Vs. Avtar Singh Page No. 6
14. In his cross examination, he stated that he did not have any knowledge about the billings of the work done by the accused. Lastly, he stated that he had no proof of the work done by him at the site.
15. In his defence evidence, DW4 Ram Lakhan stated that he had been an em-
ployee of the accused for the past 30-35 years. He had worked at the Paras cinema site on behalf of the accused. More specifically, he had done the work of Car Lift, bathrooms, earthing in the basement. Further, he had also installed cables of two lifts and he had also done the work of staircase. Lastly, he had also installed a board at the first floor.
16. In his cross examination, he stated that he did not have any knowledge about the billings of the work done by the accused. Lastly, he stated that he had no proof of the work done by him at the site. However, as per him, the same would have been recorded in the CCTV camera installed at the site.
17. In his defence evidence, DW5 Dayal Topo stated that he had been an em-
ployee of the accused since 2000. He had worked at the Paras cinema site on behalf of the accused. More specifically, he had done the work of electrician at the site which included earthing of the lifts.
18. In his cross-examination, he stated that he did not have any knowledge about the billings of the work done by the accused. He also stated that he had com- pleted the work which was assigned to him by the accused. Lastly, he stated that he had no proof of the work done by him at the site.
19. At the stage of final arguments, Ld. Counsel for the complainant submitted that the agreement between the complainant and the accused was for electri- cal works and around Rs. 17 lakhs was paid to the accused as mobilisation amount. As part of the agreement, the accused had to perform his work, however, he failed to do so. The cheque which was issued by the accused got Digitally signed by PRITHVI PRITHVI JOSHI JOSHI Date:
2025.05.06 18:14:08 +0530 CC NI Act. 6089/2021 Malhotra Brothers Exhibitors Pvt. Ltd. Vs. Avtar Singh Page No. 7 dishonoured. Perusal of record would also show that the accused has admit- ted his signatures on the cheque and therefore presumption under section 139 NI act is validly raised. The only defence of the accused is that he has done work to the tune of Rs.15,00,000 and the mobilisation amount was given in that regard. However, no running bill has been issued by the ac-
cused, and in the absence of the bills, work done by the accused cannot be as- certained.
20. Per contra, Ld. Counsel for the accused submitted that in reality, he had done work of more than Rs.15,00,000. The WhatsApp chats which have been brought on record clearly show that regular communication with the accused is going on as regards the work. Further, it is quite plausible to assume that if the agreement between the complainant and the accused was not being fol- lowed, then it could have very well been cancelled, but nothing of this sort happened. Lastly, the WhatsApp chats clearly show that accused indeed worked and in view of that, he has been successful in rebutting the presump- tion under section 139 NI Act.
ANALYSIS AND FINDINGS
21. The fundamental requirements for commission of an offence under section 138 NI Act are as follows- 1. A cheque which was issued by the drawer on an account maintained by him and which was presented to a Bank before the expiration of three months or within the period of its validity. 2. The cheque was drawn by the drawer for the discharge of any legally enforceable debt or liability 3. The said cheque got dishonoured and a return memo was gener- ated stating that the amount was insufficient or that the payment exceeded the drawer's arrangement with the bank 4. Upon receipt of knowledge as re- gards dishonour, a legal demand notice to ask for the cheque amount is sent Digitally signed by PRITHVI PRITHVI JOSHI Date: JOSHI 2025.05.06 18:14:11 +0530 CC NI Act. 6089/2021 Malhotra Brothers Exhibitors Pvt. Ltd. Vs. Avtar Singh Page No. 8 in writing within 30 days. 5. The drawer fails to make the payment men- tioned in the legal notice within 15 days of receipt of the said notice.
22. As far as the first ingredient is concerned, it stands satisfied since the cheque was drawn on the bank account of the accused. It was dated 22 March 2021, and was presented within three months of the said date.
23. As far as the third ingredient is concerned, it is undisputed that the cheque got dishonoured and return memo with remarks 'funds insufficient' was generated.
24. As far as the fourth ingredient is concerned, the accused submitted that he did not receive the legal demand notice, however, in his notice under section 251 CRPC, he admitted that the notice was sent at the correct address. Even if the submissions of the accused were accepted, in view of CC Alavi Haji v Palapetty Muhammad & Anr, (2007) INSC 628, as soon as the legal demand notice has been sent on the correct address, presumption of service under section 27 General Clauses Act r/w section 114 Indian Evidence Act would kick in which has to be rebutted by the accused. No such rebuttal has been done. In view of the same, the legal demand notice would be deemed to be served. Hence, the fourth ingredient is also satisfied.
25. As far as the fifth ingredient is concerned, it is undisputed that no payment was made within the requisite period of 15 days after deemed service.
26. As far as the second ingredient is concerned, it is pertinent to note that the statute provides for a reverse onus clause wherein a presumption that the dis- honoured cheque was issued in discharge of a legally enforceable debt or lia- bility is raised under section 139 NI Act as soon as the factum of giving the cheque as well as signatures on the cheque are admitted by the accused, as per Bir Singh v Mukesh Kumar (2019) 4 SC 197. It needs to be noted that the Digitally signed by PRITHVI PRITHVI JOSHI JOSHI Date:
2025.05.06 18:14:15 +0530 CC NI Act. 6089/2021 Malhotra Brothers Exhibitors Pvt. Ltd. Vs. Avtar Singh Page No. 9 accused has admitted the cheque as well as his signatures on the cheque at the stage of framing of notice under section 251 CrPC. Consequently, a pre- sumption under section 139 NI Act is raised that the cheque was issued for a legally enforceable debt. The abovesaid presumption is a rebuttable pre- sumption which has to be rebutted on a standard of preponderance of proba- bilities by the accused. As per Basalingappa v Mudibasappa (2019) 5 SCC 418, it was held that it is not necessary that the accused has to bring addi- tional evidence on record to rebut such presumption. The accused can also rely on materials brought on record by the complainant and can also bring circumstances on record to show that the debt or liability did not exist.
27. In the present case, the complainant has put forth an argument that the ac-
cused did not do any work at all till 2021 and no running bills were raised by the accused as regards completion of work. In the absence of such running bills, it could not be said that the accused had performed any work. How- ever, perusal of Ex.DW-1/A Whatsapp chats, which have not been opposed by the complainant as false and fabricated, bring to light certain circum- stances which need to be highlighted.
28. For instance, on 19/10/2020, a person named Sandeep who is admitted to be the consultant of the AR of the complainant, states that installation of the lift was complete and commissioning was awaited for want of earthing. To this, the accused replied that it was already connected long time back and that he will get it checked and do the needful. Thereafter, on 28/10/2020, there were congratulatory messages on the group whereby completion of the lift work was being celebrated. When complainant was asked as regards the same, he replied that the accused did not turn up and Schindler had to put the MCB to make the lift operational. However, the chats clearly denote that everything Digitally signed by PRITHVI PRITHVI JOSHI Date: JOSHI 2025.05.06 18:14:23 +0530 CC NI Act. 6089/2021 Malhotra Brothers Exhibitors Pvt. Ltd. Vs. Avtar Singh Page No. 10 was ready except for earthing which was also admittedly completed later. So, it would not be unreasonable to assume that the work of earthing, which was to be done by the accused was indeed completed successfully. This is further strengthened by the testimony of the defence witnesses DW-2, DW-3, DW-4, DW-5 who have stated that they indeed performed the earth- ing work and DW-5 even explicitly mentions that he worked on earthing of the lifts. The said assertion by the witnesses has not been rebutted by the complainant during cross examination. In fact, none of the assertions of DW-2, 3, 4 and 5 as regards the work done by them have been contradicted in their cross examination, except stating that there was no formal proof in the form of bills for the same.
29. Moreover, it is also reasonable to say that if the work were not being per-
formed at all by the accused, the same would have been pointed out on the Whatsapp group. In fact, on 22/12/2020, a person named Rohit Singh had pointed out that the earthing work of the escalator was not complete till that date. Thereafter, a person named Rajender Singh Bagley, who has been ad- mitted to be the Architect of the company, had requested for the earthing work to be finished to which the accused had thereafter replied with the rea- son for delay as the changing of a cable piece which would be delivered. Similarly, non completion of other work have also been pointed out on the group, be it as regards load pull out test on 10/08/2020, non completion of electrical work on the terrace level lift area on 29/08/2020 and non comple- tion of earthing work of the lift on 19/10/2020. Moreover, it is also safe to draw the conclusion that in the absence of any subsequent complaints as re- gards non completion of escalator work, the work of the escalator was in- deed complete in all respects.
Digitally signed by PRITHVIPRITHVI JOSHI Date: JOSHI 2025.05.06 18:14:27 +0530 CC NI Act. 6089/2021 Malhotra Brothers Exhibitors Pvt. Ltd. Vs. Avtar Singh Page No. 11
30. Lastly, a perusal of the complaint and the Whatsapp chats indeed raise ques-
tions that if the accused were not working properly or not completing his work on time, why was he kept on the group till March 2021? Why was he being given continuous work despite his alleged incompetence? Why was no action taken against him for breach of the work agreement?
31. In the view of this Court, even though not presenting any running bills as re-
gards the work done by the accused is a fact which goes against the accused, the above mentioned circumstances do create a reasonable doubt as regards the complainant's claim that no work at all was done by the accused and highlight the possibility that at least some work was completed.
32. In light of the aforesaid analysis, this Court finds that the accused has been successfully able to rebut the presumption against him on a standard of pre- ponderance of probabilities.
33. Consequently, accused Avtar Singh s/o Sh. Karnail Singh is acquitted of the offence under section 138 NI Act for dishonour of cheque amounting to Rs. 17,00,000.
This judgment contains 11 pages. This judgment has been pronounced by the undersigned in the open court and each page bears the signatures of the undersigned.
Let a copy of the judgment be uploaded on the official website of District Courts, South-East Digitally signed PRITHVI by PRITHVI Saket, forthwith. JOSHI JOSHI Date: 2025.05.06 18:14:31 +0530 Announced in the open court on (PRITHVI JOSHI) this day i.e. 06.05.2025 JMFC (N.I. ACT)Digital Court-03/SED, Saket Courts, New Delhi