Delhi District Court
Arun Kumar vs Sanjay Mittal on 27 May, 2025
GARIMA IN THE COURT OF MS. GARIMA JINDAL,
JUDICIAL MAGISTRATE FIRST CLASS-06, NORTH, ROHINI
COURTS, DELHI
Digitally CC.No. 5268/19
signed by CNR No. DLNT020114592019
GARIMA
Date:
2025.05.27 Arun Kumar
15:08:05 s/o Late Hari Shankar
+0530
R/o A-111, Indra Nagar,
Gali no. 9 Delhi-110033 ... Complainant
VS.
Sh. Sanjay Mittal
s/o Sh. Chander Bhan Mittal
R/o C-7/2, Model Town III
Delhi-110009 .... Accused
Date of Institution : 04.11.2019
Offence complained of : u/s 138 N.I. Act
Date of final arguments : 29.04.2025
Date of decision : 27.05.2025
Decision : Conviction
J U D G M E N T:
1. Vide this judgment, I shall dispose the present complaint filed under Section 138 N.I. Act against the accused. Before going further, it is necessary to dwell upon the brief facts of the case. Brief facts:
2. In brief, the case of the complainant is that complainant is in the business of transport import/ export under the name and style of M/s Chawla Transport Corporation and was well acquainted with complainant and hence, accused several times approached the complainant for monetary help and acceding to his requests, complainant had advanced a sum of Rs. 6 lakhs, in different installments, to the accused and in discharge of his liability the accused issued a cheque bearing no. 133695 dated 29.05.2019 amounting to Rs. 32,000/- drawn on Corporation Bank, Model Town, Ct.Case. 5268/2019 Arun Kumar Vs. Sanjay Mittal Page 1 of 8 GARIMA (hereinafter referred to as the cheque in question) towards part payment, however, when the complainant presented the cheque in question with his bank for its encashment, the same was returned unpaid with the remarks Digitally signed "Insufficient Funds". Thereafter, the complainant approached the accused by GARIMA assured the complainant that same shall be honored upon its representation Date:
2025.05.27 and accordingly, complainant re- presented the said cheque with its bank on 15:08:09 +0530 26.08.2019, however, again, the same was returned unpaid with the remarks "Incorrect account/ no such account". Thereafter, the complainant served a legal demand notice to the accused, which was duly served upon the accused but he failed to make the payment of the amount mentioned over the cheque in question within statutory period. Hence, the present complaint was filed before this court.
3. Cognizance in the present complaint was taken against the accused and after his appearance, notice u/s 251 Cr.P.C was framed against accused on 14.09.2023 wherein he denied the case of complainant and claimed trial. In his defence, the accused stated that complainant was in the business of transportation and he was doing the business of coal, complainant used to supply his coal to the customers and he (accused) used to make the payment to him for the same. He further stated that he has not borrowed any money from the complainant. He further stated that the cheque in question bears his signature however, other details were not filled by him. He further stated that the cheque in question was given by him to the complainant qua the transportation charges. He further stated that a fire was set out at his godown in the year 2019 and many of his cheques gone missing. He further stated that he has no liability towards the complainant and the cheque in question has been misused by the complainant. He further stated that he did receive the legal demand notice in the present case.
4. Thereafter, matter was listed for complainant's evidence and to establish his case, complainant / Arun Kumar has examined himself as CW-1 and relied upon documents Ex.CW1/1 to Ex.CW1/7. He was duly cross examined by the Ld. counsel for the accused. The material facts that emerged during his cross examination, shall be dealt hereinunder, at the Ct.Case. 5268/2019 Arun Kumar Vs. Sanjay Mittal Page 2 of 8 GARIMA appropriate stage. It is pertinent to mention here that during the course of trial, the accused has admitted some documents and thus, the relevant witnesses were dropped from the list of complainant's witnesses.
Digitally signed by GARIMADate: 5. Statement of accused under section 313 Cr.P.C was recorded 2025.05.27 on 25.11.2024 wherein accused denied the case of the complainant and 15:08:14 +0530 reiterated the stance taken by him at the stage of framing of notice u/s 251 of Cr.PC. However, at this stage, accused denied receipt of legal demand notice and admitted correctness of his address mentioned upon the same. He further chose to lead DE, however, later failed to produce any witness in his defence and hence DE was closed vide order dated 11.03.2025 and the matter was listed for final arguments.
6. After conclusion of trial, final arguments were addressed by Ld. Counsel for the complainant, however, Ld. Counsel for accused failed to address final arguments and considering the past conduct of accused, the court deemed it appropriate to pronounce judgment on the basis of record.
7. Ld. Counsel for the complainant submitted that the signatures of the accused on the cheque in question being not denied and the accused had not led any probable defence in the present matter to rebut the presumption under Section 139 N.I. Act, and thus, he should be convicted for under Section 138 N.I. Act.
8. Contrary to this, accused has taken the defence that he had no legally enforceable liability towards the complainant, on the date of presentation of the cheque, to the extent of cheque amount and hence, he should be acquitted for offence under Section 138 of NI Act. The Law:
9. Before proceeding to the merits of the case, it is considered important to enumerate the basic provisions of law with respect to section 138 of the Act which are as follows: -
Ct.Case. 5268/2019 Arun Kumar Vs. Sanjay Mittal Page 3 of 8GARIMA 10. Section 138 of Negotiable Instruments Act, 1881 makes dis-
honour of cheques an offence. It provides that " where any cheque drawn by a person on an account maintained by him with a banker for payment of any Digitally signed amount of money to another person from out of that account for the dis- by GARIMA charge, in whole or in part, of any debt or other liability, is returned by the Date:
2025.05.27 bank unpaid, either because of the amount of money standing to the credit 15:08:19 of that account is insufficient to honour the cheque or that it exceeds the +0530 amount arranged 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--
(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 va- lidity, 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 giv-
ing a notice; in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment 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.
Explanation. -- For the purposes of this section, debt of other liability means a legally enforceable debt or other liability.
11. Careful reading of section 138 of the Act reflects that there are five key ingredients which need to exist for there to be an offence under section 138 Negotiable Instruments Act, 1881. The ingredients for require- ments of section 138 are as follows:
a) There is a legally enforceable debt;Ct.Case. 5268/2019 Arun Kumar Vs. Sanjay Mittal Page 4 of 8
GARIMA b) The drawer of the cheque issued the cheque to satisfy part or whole of the debt;
c) The cheque so issued has been returned due to insufficiency of funds/ exceeds insufficient;
Digitally signed
by GARIMA d) Legal demand notice was issued by the payee of the cheque within
Date: 30 days of dishonor of the cheque; and
2025.05.27
15:08:24 e) The drawee of the cheque has failed to make the payment of the
+0530 cheque amount within 15 days of the receipt of the legal demand no-
tice.
12. In the present case, the signatures on the cheque and the dis- honour thereof are not in question. Moreover, though the accused has not admitted the receipt of legal notice, in his statement u/s 313 Cr.P.C., the same cannot be taken as a defence at this stage. In this regard, reliance is warranted upon the judgment of Hon'ble Apex Court in CC Alavi Haji Vs. Palapetty Muhammed & Another (2007) 6SCC 555 wherein it was held that when the drawer of cheque raises an objection that he never received legal notice U/s 138 NI Act, he can, within 15 days from receipt of summon from the court, make payment of the cheque amount. In case he does not do so, he cannot complain that there was no proper service of legal notice. In view of the said judgment, it is sufficiently clear that the defence of inadequate service of legal notice cannot be taken at this stage. The court finds merit in the submission of Ld. counsel for complainant that presumption of valid ser- vice of legal demand notice arises against the accused, if not by legal notice sent through post, by service of summons issued by the court.
13. The only defence taken by the Accused is that the cheque in ques- tion was not issued by him in discharge of any legal liability and the same has been misused by the complainant. It is a well settled principle of crimi- nal jurisprudence that a criminal trial proceeds on the presumption of inno- cence of the accused i.e. an accused is presumed to be innocent unless proved guilty. Thus, normally the initial burden to prove is on the com- plainant/ prosecution to prove the guilt of the accused. Also, the standard of proof is beyond reasonable doubt. However, in offences under section 138 Ct.Case. 5268/2019 Arun Kumar Vs. Sanjay Mittal Page 5 of 8 of the Act, there is a reverse onus clause contained in sections 118 and 139 GARIMA of the Act.
14. Section 118(a) of the Act provides that until the contrary is Digitally proved, it shall be presumed that "that every negotiable instrument was signed by made or drawn for consideration, and that every such instrument, when it GARIMA has been accepted, indorsed, negotiated or transferred, was accepted, in- Date:
2025.05.27 dorsed, negotiated or transferred for consideration." 15:08:29 +0530
15. Further, Section 139 of the Act lays down that "it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability."
16. Thus, section 139 of the Act puts the burden on the accused to prove his defence. However, the accused has to prove his defence on the balance of probabilities and not beyond reasonable doubt. Once the pre- sumption is displaced, the accused is liable to be acquitted. The guiding principles have been laid down by the hon'ble Apex Court in the case of Basalingappa vs Mudibasappa 2019 (5) SCC 418 in this regard which are as follows:
Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.Ct.Case. 5268/2019 Arun Kumar Vs. Sanjay Mittal Page 6 of 8
GARIMA That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.
Digitally signed It is not necessary for the accused to come in the witness box to by GARIMA support his defence.
Date:
2025.05.27 15:08:33 +0530 17. In the present case, the accused has admitted his signatures on the cheque in question. Thus, in view of the above-mentioned principles, the only question which remains to be determined by the court is whether the cheque was issued by the accused qua any legally enforceable liability or not, i.e., whether the accused has been able to rebut the presumption u/s 118 r/w Section 139 of NI Act.
18. In the present case, the case of the complainant is that cheques in question have been issued by the Accused for repayment of part of the loan amount taken by him from the former. The accused has denied having any liability towards the complainant and has claimed that he has no liability towards the complainant. Regarding issuance of the cheque, he submitted that many of his cheques went missing during a fire in his godown. The signatures on the cheque have been admitted by the Accused at every stage of proceedings. No defence evidence has been led by the accused to prove his defence. The only material relied upon, potentially, by accused is the cross-examination of complainant dated 13.08.2024.
Questions were put to the complainant regarding his capacity to advance the loan which were satisfactorily answered. Though he admitted that the loan amount was not advanced in front of any witness and there was no documentation, since the accused persons (the present accused Sanjay Mittal and his wife Rekha Mittal in connected case bearing Ct. No. 5267/19) have admitted their acquaintance with the complainant, the said omission is not of much significance. Similarly, regarding the non-filing of ITR by the complainant, it has been categorically held by superior courts that even if a transaction amounts to offence under IT Act, it shall not affect the commission of an offence under Section 138 of NI Act by the accused. Remaining questions were satisfactorily answered by the complainant and Ct.Case. 5268/2019 Arun Kumar Vs. Sanjay Mittal Page 7 of 8 nothing contradictory to the case of complainant could be brought on record by way of cross-examination.
19. It is pertinent to mention here that during the cross- examination, suggestion was given to the complainant that cheques in question were issued for expanding the business of complainant. In these circumstances, the denial of issuance of the cheques by the accused renders the whole defence taken by the accused unworthy of credit. Moreover, here is another significant contradiction in the case of accused in as much as during the framing of notice, he admitted the receipt of legal demand notice, whereas during his statement u/s 313 r/w 281 Cr.P.C., he denied the same. In view of the above inconsistencies, the defence taken by the accused does not inspire confidence of the court.
20. Furthermore, no action has been taken by the accused or his wife regarding the misuse of the cheques in question by the complainant. In these circumstances, the defence taken by the accused loses any credibility it might have had, had there been sound documentary evidence or consistent oral evidence in its support. The case of complainant, on the other hand, is based on sound oral and documentary evidence which finds support in the presumptions under NI Act.
21. In these circumstances, in view of the facts and circumstances of the present case, the discrepancies in the stance of the accused throughout the trial, as discussed hereinabove, coupled with the fact that accused has failed to raise any doubt in the case of the complainant, accused Sanjay Mittal is convicted for the offence under Section 138 N.I. Act in the present case. Digitally signed by GARIMA GARIMA Date:
ANNOUNCED IN THE OPEN 2025.05.27
COURT ON 27th May, 2025 15:08:38
+0530
(Garima Jindal)
Judicial Magistrate First Class-06
North District
Rohini Courts,Delhi/
27.05.2025
Ct.Case. 5268/2019
Arun Kumar Vs. Sanjay Mittal Page 8 of 8