Delhi District Court
Rajinder Satija vs Sandeep Tandon on 15 January, 2025
IN THE COURT OF SH. ANKIT SOLANKI : JMFC NI
DIGITAL COURT NUMBER 01, WEST DISTRICT, TIS
HAZARI COURTS COMPLEX
RAJINDER SATIJA
Vs.
SANDEEP TANDON
CC NI ACT No. 1849/2021
U/S 138 Negotiable Instruments Act, 1881
1. CC NI Act number : 1849/2021
2. Name of the complainant : Rajinder Satija
3. Name of the accused : Sandeep Tandon
4. Offence complained of or proved : U/S 138 of Negotiable Instruments
Act, 1881
5. Plea of the accused : Pleaded not guilty and claimed trial
6. Final Judgment/order : Acquittal
7. Date of judgment/order : 15.01.2025
Date of Institution: 30.06.2021
Date of Reserving Judgment/Order: 04.01.2025
Date of Pronouncement of Judgment/Order : 15.01.2025
JUDGMENT
1. Vide this Judgment, this court shall dispose of the present complaint filed by Rajinder Satija (hereinafter referred to as 'the complainant') against Sandeep Tandon (hereinafter referred to as 'the accused') U/S 138 of Negotiable Instruments Act, 1881 Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 16:59:52 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 1 Out of 42 r/w Section 142 Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act').
Brief facts:
2. It is the case of the complainant, that the complainant is a sole Proprietor of firm M/s Swarn Plastic Industries and is engaged in trading and manufacturing of raw material(s) and various types of rubber and plastic components etc., at the address mentioned in his complaint. Due to his adherence to a high degree of prefessionalism and business ethics, the complainant is enjoying an impeccable trade reputation and unblemished business goodwill in the even trade and business. On the other hand, accused as a sole proprietor of firm M/s Tandon Electricals is carrying out trade and manufacturing of various types of electrical appliances and components at his above captioned address. Since the past financial years, the accused and his representatives approached the complainantt about named at his above mentioned address and upon thorough inspection of the goods, as per his/their requirements and technical specifications Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 16:59:56 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 2 Out of 42 and followed by price negotiations, ordered him for supply of various types of plastic Grannuals etc. for his business purposes.
While placing the aforenoted orders to complainant at his above mentioned address, accused as well as his representative(s) vehemently assured the former for making timely payment(s) against such purchase(s). Accordingly complainant pursuant to the aforesaid understanding supplied accused entire quantity(s) of materials as per his business requirements, instructions and in consonance with the orders placed by accused. All the said supplies were made to the accused against respective invoices and the same strictly as per his requirement and satisfaction with no complaints regarding quality or time schedule etc. Upon receipt of the aforesaid goods the same were duly appropriated by the accused. Complainant comprehensively incorporated all the above said transactions with the accused, including the part payments remitted, in running statements of account maintained in the normal course of his business. Off late, it was noted by complainant that as per his running statement of accounts Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:00:00 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon
3 Out of 42 maintained in the normal course of business with respect to the instant transaction(s) with the accused, a whopping amount of Rs.14,09,906/- was outstanding against the accused. Needless to mention, the aforesaid outstandings were staggering and were causing immense business hardships to the complainant, as such the complainant time and again approached and requested the accused to settle his aforesaid outstanding dues at the earliest.
However, no need heed was paid to above said requests of the complainant. Nevertheless, pursuant to the repeated requests and reminders of complainant, accused, in order to discharge his legally enforceable liability towards the former issued following cheques, duly signed by accused, respectively as lump-sum/on
-account/part payment, with the assurances that the said cheques would be duly encashed upon presentation. The details of the respective cheques so issued by the accused are hereunder:-
Cheque No. Dated Amount Drawn at
864640 15.02.2021 4,84,980/- Syndicate
Bank, West
Punjabi
Bagh, Central
Digitally
signed by
ANKIT
ANKIT SOLANKI
SOLANKI Date:
2025.01.15
17:00:05
+0530
CC NI ACT No. 1849/2021
Rajinder Satija Vs. Sandeep Tandon 4 Out of 42 Market, New Delhi-110026 727880 17.03.2021 4,83,860/- Syndicate Bank, Punjabi Bagh Branch, New Delhi-
110026.
863070 24.03.2021 6,00,000/- Syndicate Bank, West Punjabi Bagh, Central Market, New Delhi-110026
3. As per the assurance of the accused that the cheques in question will be encashed as and when presented, the complainant presented the cheques in question to his banker State Bank of India, Jawala Heri, New Delhi-110063 for encashment but the cheques were returned for giving the reason "Funds Insufficient" vide returning memos dated 07.04.2021, 02.04.2021 and 17.04.2021 respectively. Thereafter, complainant many times requested the accused to make the payment but the accused failed to make the payment on one pretext or the other.
The complainant after receipt of said dishonoured cheques, sent Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:00:09 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 5 Out of 42 a separate 'Legal Notices' dated 01.05.2021 to the accused through his counsel, but despite receiving of the notice the accused did not bother to pay back his outstanding dues to the complainant. The accused had failed to pay the cheque amount to the complainant within stipulated time of 15 days, hence this complaint U/S 138/142 NI Act.
Proceedings before the Court:
4. The complaint was received by assignment in this Court. After perusing the complaint and hearing the arguments of the complainant on the point of summoning of the accused, prima facie it appeared that the offence U/S 138 NI Act, has been committed. Hence, cognizance of the offence U/S 138 NI Act was taken against the accused on 26.11.2021 and summons were issued to the accused.
5. Notice U/S 251 Cr.P.C. was framed against the accused on 19.02.2022 to which the accused pleaded not guilty and claimed Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:00:14 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 6 Out of 42 trial. Thereafter, considering the defence stated at the time of framing of notice by the accused, this court decided to allow cross examination of the complainant as per 145(2) NI Act, and the case was tried as a summons case. During complainant evidence, complainant has examined himself as sole witness as CW-1. After due cross examination of CW-1 by the Ld. Counsel for the accused, CE was closed in the present case on 25.08.2022. Statement of the accused U/S 313 CrPC was recorded on 17.11.2022 wherein the accused has opted to lead defence evidence, as such, the case was fixed for defence evidence. In defence evidence, the accused examined himself as DW1 and thereafter, vide separate statement of accused dated 20.12.2022, DE stands closed and the case was listed for final arguments. On 21.02.2023, application u/s 311 Cr.P.C. was allowed and last and final opportunity was granted to the accused to cross-examine the complainant again. On 04.01.2025, final arguments were heard on behalf of the complainant and accused and the case was reserved for judgment.
Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:00:18 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 7 Out of 42 Evidence:
6. To prove his case, complainant had examined himself as CW1 and has led his evidence by way of evidence affidavit.
7. Complainant had not examined any other witness in this case.
8. The accused had examined himself as DW1 and vide separate statement of accused dated 20.12.2022 DE stood closed.
Arguments of both parties:
9. Ld. counsel for the complainant while reiterating the contents of the complaint has argued that all the requirements of Section 138, NI Act have been fulfilled by the complainant in the present case. He argued that the cheques in question were issued by the accused towards his legally enforceable liability.
He further argued that when the cheques were presented before the bank for encashment, the same were dishonored on presentation vide return memos dated 07.04.2021, 02.04.2021 Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:00:23 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 8 Out of 42 and 17.04.2021 for reasons 'Funds Insufficient'. Thereafter the legal notice dated 01.05.2021 was sent to the accused to make the payment within the 15 days stipulated period, but no payment was made by the accused. Thus, all the ingredients of section 138 NI Act, have been duly satisfied and thus presumption U/S 139 NI Act, has been validly raised against the accused. Ld. Counsel submits that the accused has failed to raise any probable defence to disprove the case of complainant and to rebut the presumption U/S 139 NI Act.
Appreciation of evidence:
10. I have heard counsels on behalf of both the sides, perused the record as well as relevant provisions of law.
11. Before appreciating the facts of the case in detail for the purpose of decision, let relevant position of law be discussed first. Section 138, NI provides as under:
"Section 138.- Dishonour of cheque for insufficiency, etc., of funds in the account.-
Digitally
signed by
ANKIT
ANKIT SOLANKI
SOLANKI Date:
2025.01.15
17:00:26
+0530
CC NI ACT No. 1849/2021
Rajinder Satija Vs. Sandeep Tandon 9 Out of 42 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 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 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 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 or other liability" means a legally enforceable debt or other liability.
Digitally
signed by
ANKIT
ANKIT SOLANKI
SOLANKI Date:
2025.01.15
17:00:30
+0530
CC NI ACT No. 1849/2021
Rajinder Satija Vs. Sandeep Tandon 10 Out of 42
12. It is well settled position of law that to constitute an offence under Section 138, NI Act, the following ingredients are required to be fulfilled:
I. drawing of the cheque by a person on an account maintained by him with a banker, II. The cheque was issued for payment to another person for discharge in whole/part any debt or liability;
III. 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. RBI in its notification DBOD.AML BC.No.47/14.01.001/2011-12 has reduced the aforesaid period from 6 months to 3 months.
IV. Returning of the cheque unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque;
V. Giving notice in writing to the drawer of the cheque within 30 days of the receipt of information by the payee from the bank regarding the return of the cheque as unpaid demanding payment of the cheque amount;
VI. Failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered by the cheque within 15 days of the receipt of the notice.
The offence under Section 138, NI Act is made out against the drawer of the cheque, only when all the aforementioned ingredients are fulfilled.
Digitally
signed by
ANKIT
ANKIT SOLANKI
SOLANKI Date:
2025.01.15
17:00:35
+0530
CC NI ACT No. 1849/2021
Rajinder Satija Vs. Sandeep Tandon 11 Out of 42
13. In the present case at hand, the complainant has filed on record the original cheques, i.e., bearing no.864640 dated 15.02.2021 drawn on Syndicate Bank, West Punjabi Bagh, Central Market, New Delhi-110026, 727880, dated 17.03.2021 drawn on Syndicate Bank, Punjabi Bagh Branch, New Delhi-
110026 and 863070 dated 24.03.2021 drawn on Syndicate Bank, West Punjabi Bagh, Central Market, New Delhi-110026. In notice under Section 251 CrPC, the accused has admitted to issuing the cheque in question to the complainant and admitted the signatures on the cheques. Therefore, ingredient number I stands fulfilled in the present case.
14. As per the RBI guidelines, it is essential for the cheque in question be to presented within a period of three months from the date on which they are drawn and the same be returned as unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque. In the case at hand, the cheques in question were returned vide return memo dated 07.04.2021, Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:00:39 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 12 Out of 42 02.04.2021 and 17.04.2021 due to the reason "Funds Insufficient." By implication thereof, the cheques were presented within three months and the same were returned for Drawer Signature Differ. Therefore, Ingredient number III & IV stand fulfilled in the present case.
15. The legal notice was sent within 30 days of return of the bank memo indicating cheque in question being unpaid. The fact that the legal demand notice has made a clear and unambiguous demand for payment of the cheque in question is not disputed.
The accused has admitted to the receipt of legal demand notice in notice u/s 251 CrPC, the ingredient number V stands discharged by virtue of giving of legal demand notice within 30 days from the bank return memo.
16. Moving on, it is not disputed that the accused has not made the payment of the cheque amount within 15 days of the receipt of legal demand notice. Therefore, ingredient number VI also stands fulfilled in the present case.
Digitally
signed by
ANKIT
ANKIT SOLANKI
SOLANKI Date:
2025.01.15
17:00:43
+0530
CC NI ACT No. 1849/2021
Rajinder Satija Vs. Sandeep Tandon 13 Out of 42
17. Let us now move on to ingredient number II, 17.1. The NI Act raises two presumptions in favour of the holder of the cheque, i.e., complainant; firstly, with regard to the issuance of cheque for consideration, as contained in Section 118(a) and secondly, with regard to the fact that the holder of cheque received the same for discharge, in whole or in part, of any debt or other liability, as contained in Section 139 of the Act.
17.2. Analysing all the concerned provisions of law and various pronouncements in this regard, the Hon'ble Apex Court in the case of Basalingappa v. Mudibasappa [AIR 2019 SC 1983] held that:
I. Once the execution of cheque is admitted, Section 139 of the Act mandates that a presumption be drawn that the cheque in question was for the discharge of any debt or other liability.
II. 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.
III. 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 reference to the circumstances upon which they rely.
IV. That it is not necessary for the accused to come in the witness box in support of his defence. Section 139 imposes an evidentiary burden and not a persuasive burden.
It is therefore implied that the law regarding the presumption for the offence under Section 138, NI Act, the presumptions under Section 118(a) and Section 139 have to be compulsorily raised as soon as the execution of cheque by the accused is admitted or Digitally signed by ANKIT SOLANKI ANKIT Date:
SOLANKI 2025.01.15 17:00:47 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 14 Out of 42 proved by the complainant and thereafter the burden is shifted upon the accused to prove otherwise.
17.3. These presumptions shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability etc. The Hon'ble Apex Court in Kumar Exports v. Sharma Carpets [(2009) 2 SCC 513], has laid down the benchmark for the burden of proof that the accused has to raise a doubt as to the presumption under Section 139, NI Act.
"The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions, an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non- existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:00:51 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 15 Out of 42 that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act. The accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue."
17.4. To put in a nutshell, the intent behind the NI Act is to prevent financial frauds and affect the socio-economic well- being of the country. If the burden is placed on the complainant to prove the existence of liability against the accused, that would be too harsh as most of these transactions are in the nature of "friendly loan" and the accused would, in a normal circumstance, always deny the liability. Therefore, the legislation is drafted in a way so as to discharge the complainant from proving the liability and a presumption is raised by virtue of Section 139 read with Section 118(a) of the Act that the cheque if issued by the accused, then the same is deemed to be in discharge of some legally enforceable debt in favour of the complainant. The presumption is rebuttable and the accused "may" either prove that no legally enforceable debt existed or punch holes in the story of the complainant and give rise to a Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:00:55 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 16 Out of 42 probable defence to rebut the presumption. As per the law discussed above, the burden of proof on the accused to raise a probable defence is that of "preponderance of probabilities", and not "beyond reasonable doubt." Once a probable defence is raised, then the onus is shifted to the complainant to establish that a legally enforceable liability existed in his favour and the burden of proof on complainant in this case is that of "beyond reasonable doubt."
17.5. The accused can rebut the presumption as raised under the NI Act by (a) putting forth his defence at the time of framing of notice u/s 251 CrPC; (b) cross-examining the complainant; (c) when statement of accused is recorded u/s 313 CrPC; (d) or by leading defence evidence, thereby demolishi15 ptng the case of the complainant. It is amply clear that the accused does not need to discharge his or her liability beyond the shadow of reasonable doubt. He just needs to create holes in the case set out by the Complainant.
18. In light of the above discussions since the accused has admitted to issuance of cheque, admitted the signature on the cheque and the legal demand notice what is left to be seen is whether the accused has been able to rebut the presumption against himself and that whether he has been able to raise a probable defence in his favor or not.
19. It is correct that there is a presumption under Section 139 of Negotiable Instruments Act, 1881 that "it shall be presumed, Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:01:00 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 17 Out of 42 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".
20. There is a statutory presumption under section 139 of the act which arises in the favour of the complainant. This presumption is rebuttable and the accused is required to raise a probable defence. Burden of proof is hence upon the accused in such cases. Reliance can be placed on the decision of the Hon'ble Supreme Court in the case of In M.S Narayana Menon Vs. State of Kerala, (2006) 6 SCC 39, the Apex Court dealing with the statutory presumption under Sections 118(a) and 139 of the N. I. Act inter alia held as under:
"29. In terms of Section 4 of the Evidence Act whenever it is provided by the Act that the Court shall presume a fact, it shall regard such fact as proved unless and until it is disproved. The words "proved" and "dis-proved" have been defined in Section 3 of the Evidence Act (the interpretation clause)......
30. Applying the said definitions of "proved" or "disproved" to the principle behind Section 118(a) of the Act, the Court shall presume a negotiable Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:01:04 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon
18 Out of 42 instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the nonexistence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon.
32. The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on record but also by reference to the circumstances upon which he relies. Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the s standard of reasonability being that of the 'prudent man'."
21. In the present case, at the stage of final arugments, Ld. Counsel for the complainant had contended that:
(i) It is an admitted fact that the accused had approached the complainant for supply of goods.
Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:01:09 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 19 Out of 42
(ii) The entries in the Ledger Accounts of the accused are wrong.
Closing balance of the complainant as on 31.03.2019 is 1752931 and opening balance as on 01.04.2019 is Rs.1,50,000/-. There is a difference of Rs.1602931/- and the accused has no explanation about the same.
(iii) The accused has nowhere stated in his reply that the goods delivered to him were defective.
(iv) The cheque in question was filled in presence of the accued, therefore, he was aware of his liability to pay.
(v) At the stage of notice framing, the accused had stated that he had given signed security cheques but the same has not been stated in his reply.
(vi) The accused has alleged that he has paid the complete amount to the complainant. But there is no proof of the same. There is no cash record. Also there is no entry of any payment in the ledger accounts also thereof.
(vii) The accused alleges that the cheques in question were given for security purpose, then why did he not inform the bank for not encashing the same and he also, never asked the complainant to return the cheques in question.
(viii) There are two different entities, one is Swarn Plastic and antoerh namely HUF Sh. Hardev. The accused used to deal with both as they belong to the complainant only. The accused had paid Rs.90,000/- to the HUF and not to the complainant. Therefore, there is no record of any repayment made to the present complainant.
(ix) The accused was well aware of the transactions taking place with the HUF, but he has denied the same at the stage of recording of SA. This goes to show that the accused is framing a story altogether. Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:01:13 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 20 Out of 42
(x) The accused has made some remarks on document marked on page no.7 and 9. It is not allowed as per law.
(xi) The accused was confronted with document exhibited as Ex.DW1/1 and asked who had put those remarks on it, to which he replied that he is not aware of it.
(xii) The WhatsApp chat exhibited as Ex.DW1/1 should be discarded as there are marks on the same.
(xiii) It is mentioned in WhatsApp chats that payment was made on 05.12.2020 whereas in the mark, it is made on 07.12.2020.
(xiv) The accused states that he had already paid the complete amount to the complainant, but why would he give signed cheques to the complainant if he had already made complete payment to the complainant?
(xv) All ingredients of Section 138 have been fulfilled. Therefore, the accused be convicted of the abovementioned offence.
22. In support of his contentions, Ld. Counsel for the complainant has relied upon the following judgments:
23. In case of Bir Singh vs. Mukesh Kumar (2019) 4 SCC 197, it has been held that:-
18. The Appellate Court affirmed the aforesaid factual findings. The Trial Court and the Appellate Court arrived at the specific concurrentfactual finding that the cheque had admittedly been signed by therespondent-accused.
Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:01:17 CC NI ACT No. 1849/2021 +0530 Rajinder Satija Vs. Sandeep Tandon 21 Out of 42 The Trial Court and the Appellate Court rejected the plea of the respondent-accused that the appellant-complainant had misused a blank signed cheque made over by the respondent-
accused to the appellant-complainant for deposit of Income Tax, in view of the admission of the respondent-accused that taxes were paid in cash for which the appellant-complainant used to take payment from the respondent in cash.
19. It is well settled that in exercise of revisional jurisdictionunder Section 482 of the Criminal Procedure Code, the High Court doesnot, in the absence of perversity, upset concurrent factual findings. It isnot for the Revisional Court to re- analyse and re-interpret the evidenceon record.
20. As held by this Court in Southern Sales and Services andOthers vs. Sauermilch Design and Handels GMBH2,it is a wellestablished principle of law that the Revisional Court will not interfereeven if a wrong order is passed by a court having jurisdiction, in the absence of a jurisdictional error. The answer to the first question istherefore, in the negative.
24. Presumption of innocence is undoubtedly a human right ascontended on behalf of the respondent-accused, relying on the judgments of this Court in Ranjitsing Brahmajeetsing Sharma vs. State ofMaharashtra and Anr5and Rajesh Ranjan Yada @ Pappu Yadavvs. CBI through its Director6. However the guilt may be established by recourse to presumptions in law and presumptions in facts, as observed above.
Digitally
signed by
ANKIT
ANKIT SOLANKI
SOLANKI Date:
2025.01.15
17:01:22
+0530
CC NI ACT No. 1849/2021
Rajinder Satija Vs. Sandeep Tandon 22 Out of 42
25. In Laxmi Dyechem vs. State of Gujarat & Ors.7,this Court reiterated that in view of Section 139, it has to be presumed that a cheque was issued in discharge of a debt or other liability but the presumption could be rebutted by adducing evidence. The burden of proof was however on the person who wanted to rebut the presumption. This Court held "however, this presumption coupled with the object of Chapter XVII of the Act leads to the conclusion that by countermanding payment of a post dated cheque, a party should not be allowed to get away from the penal provision of Section 138 of the Act".
32. In the aforesaid case this Court affirmed an acquittal under Section 138 of the Negotiable Instrument Act, in the peculiar factsand circumstances of the case where several civil suits between the parties were pending".
33. In Krishna Janardhan Bhat vs. Dattatraya G. Hegde13,cited on behalf of the respondent- accused, this Court reaffirmed that Section 139 of the Act raises a presumption that a cheque duly drawnwas towards a debt or liability. However, keeping in view the peculiar facts and circumstances of the case, this Court was of the opinion that the courts below had approached the case from a wholly different angleby wrong application of legal principles.
34. It is well settled that a judgment is a precedent for the issue of law which is raised and decided. It is the ratio decidendi of the case which operates as a binding precedent. As observed by this Court in State of Punjab & Ors. vs. Surinder Kumar & Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:01:25 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 23 Out of 42 Ors.14, what is binding on all courts is what the Supreme Court says under Article 141 of the Constitution, which is declaration of the law and not what it does under Article 142 to do complete justice."
24. Ld. Counsel for the complainant has also relied upon the judgment of R Pramod Vs. Gangadhariah Criminal Appeal No.2000 of 2022 of Hon'ble High Court of Karnataka.
25. On the other hand, Ld. Counsel for the accused, at the stage of final arguments, argued that:
(i) There is no delivery note of the goods annexed with the complaint. Apart from that, the invoices have not been filed by the complainant along with the complaint in order to prove that goods were delivered to the accused.
(ii) As per page 175 that is Ledger Accounts of the complainant, there were four cheques submitted in his account for total of Rs.18.6 Lacs. However, in the complaint, the complaint has only mentioned 3 cheques.
(iii) In the legal demand notice, the complainant has stated that the total outstanding liabilities is of Rs. 1952931/-, whereas the cheques in question are of different amounts and therefore there is no clarity as to the total outstanding liability.
Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:01:30 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 24 Out of 42
(iv) There was a regular practice of giving security cheques to the complainant and the cheques in question have also been issued as a security.
(v) The cheques in question have not been filled by the accused.
(vi) The accused has already repaid the amount to the complaint in cash.
(vii) With respect to the aspect of marking remarks on exhibits, Ld. Counsel for the accused had submitted that those marks were for personal reference and it was a bonafide mistake, therefore, those chats should not be discarded.
(viii) Cconcept of HUF was introduced by the complaint in 2024. Prior to that there is no mentioning about either in the complaint or in the evidence affidavit.
(ix) Ingredients of Section 138 have not been made out. Therefore, the accused should be acquitted of all the charges.
26.Ld. Counsel for the accused has relied upon the judgment of Indus Airways Pvt. Ltd. & Ors. Vs. Magnum Aviation Pvt. Ltd.
& Ors. Cr. Appeal No.830 of 2014 decided by Hon'ble Supreme Court of India and Mahdoom Bawa Bahrudeen Noorul Vs. Kaveri Plastic CRL.MC 2164 of 2022 & CRL.MA 9155 of 2022 decided by Hon'ble High Court of Delhi.
27. After hearing both the parties at length, this court is of the considered opinion that from the cross-examination of CW1 on Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:01:34 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 25 Out of 42 06.04.2024, it is clear that there were two concerns with which accused used to deal namely Swarn Plastic and Sh. Hardev HUF.
In his cross-examination, the complainant had stated that the HUF and the other concern namely Swarn Plastic used to prepare same bills as the HUF did not have a separate GST number.
Therefore, it is clear that trading used to take place between the complainant and the accued by both the concerns and a single bill was prepared. Complainant had also stated that 'bills were generated only for Swarn Plastic Industry as it is registered and having its own GST number.' Therefore, it can be considered that the dealings used to take place in a combined form with both the concerns i.e. Swarn Plastic Industry and the HUF.
28. After that the complaint was confronted with WhatsApp chats and asked whether he is aware of the receipts of Rs.49,000/- twice from the accused or not; to which he replied that the payments made were with respect to the HUF. Therefore, the complainant had admitted that certain payments have been made by the accused to the complainant. It is also corroborated Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:01:38 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 26 Out of 42 from document exhibited as Ex.CW1/XB, where entry of receipt of Rs.49,000/- has been recorded by the complainant on 07.12.2020 and 15.12.2020. Therefore, it is clear that the complaint has received Rs.98,000/- from the accused and the remaining outstanding liability as reflected in Ex.CW1/XB is Rs.15,23,400/-. The complainant has alleged that it was received with respect to the goods supplied by the HUF. Now, the onus shifts from the accused to the complaint to prove that the payment was made for HUF and not for Swarn Plastic Industries.
29. The complainant has not placed on record any document to prove that the payment of Rs.98,000/- was for HUF. Also, it has already been discussed that there are no document on record to prove that a separate chain of transactions was going on with respect to the HUF and Swarn Plastic Industries. Apart from that a common bill for both the concerns was prepared. Therefore, in absence of any proof from the complainant that the payment of Rs.98,000/- received from the complainant was with respect to the HUF and not Swarn Plastic Industries, it may be presumed Digitally signed by ANKIT SOLANKI ANKIT Date:
SOLANKI 2025.01.15 17:01:43 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 27 Out of 42 that combined transactions used to take place between the accused and the two concerns of the complainant namely HUF Sh. Hardev and Swarn Plastic Industries. The complainant has not been able to prove that the payment of Rs.98,000/- was vis-a-
vis the HUF and not for Swarn Plastic Industry.
30. Now as per Ex.CW1/XB, taking into account the payment of Rs.98,000/- received by the complainant from the accused on two dates i.e. 07.12.2020 and 15.12.2020, the total outstanding liability of the accused was of Rs.15,23,400/-. It is clear that the payment of Rs.98,000/- was made by the accused to the complainant prior to issuance of the cheques in question.
31. The amount of outstanding liability as per Ex.CW1/B is Rs.15,23,400/- and the amount of the cheques in question is Rs.15,68,840/-. Therefore, the amount of the cheques is greater than the outstanding liability. The complainant has not been able to prove that he has a legally enforceable debt of Rs.15,68,840/-
i.e. the amount of the cheques in questions. Since part payment Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:01:48 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 28 Out of 42 of Rs.98,000/- has been paid by the accused, notice given by the complaint for an amount of Rs.15,68,840/- is not vailid.
32.In the case of Dashrathbhai Trikambhai Patel vs Hitesh Mahendrabhai Patel on 11 October, 2022, Hon'ble Supreme Court of India has dealt with a similar aspect. It is pertinent to discuss the judgment in detail.
33. Brief facts of the case are as under:
On 10 April 2014, the appellant issued a statutory notice under Section 138 of the Act to the first respondent-accused. It was alleged that the first respondent borrowed a sum of rupees twenty lakhs from the appellant on 16 January 2012 and to discharge the liability, issued a cheque dated 17 March 2014 bearing cheque No. 877828 for the said sum. It was further alleged that the cheque when presented on 2 April 2014 was dishonoured due to insufficient funds. The appellant issued the notice calling the first respondent to pay the legally enforceable debt of Rs. 20,00,000:
"Therefore, my client hereby calls upon you to make payment of Rs.20,00,000/- towards the legally enforceable debt due and payable by you within a Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:01:52 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 29 Out of 42 period of 15 days from the date of receipt of this particular notice, [...]"
On 25 April 2014, the first respondent addressed a response to the statutory notice where he alleged the following:
(i) The first respondent and the appellant are related to each other. The appellant's son married the first respondent's sister;
(ii) The appellant lent the first respondent a loan of rupees forty lakhs. There was an oral agreement between the parties that the first respondent would pay rupees one lakh every three months by cheque and rupees eighty thousand in cash to the appellant. Two cheques were given to the appellant for security. It was agreed that the appellant would return both the cheques when the sum lent was paid in full;
(iii) The appellant's son-initiated divorce proceedings against the respondent's sister. However, the dowry that was given at the time of marriage is still in the possession of the appellant; and
(iv) The cheques that were issued for security have been misused by the appellant.
4. On 12 May 2014, the appellant filed a criminal complaint against the first respondent for the offence under Section 138 of the Act. On 19 May 2014, the first respondent issued another reply to the legal notice. By the said reply, the earlier reply to the legal notice was sought to be amended by replacing the acknowledgment of having received a loan of rupees forty lakhs to rupees twenty lakhs.
Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:01:57 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 30 Out of 42
5. By a judgment dated 30 August 2016, the Trial Court acquitted the first respondent of the offence under Section 138 on the ground that the first respondent paid the appellant a sum of rupees 4,09,3015 between 8 April 2012 and 30 December 2013 partly discharging his liability in respect of the debt of rupees twenty lakhs. The split up of the payments is set out below:
Date Amount
18.04.2012 Rs. 49,315/-
05.10.2012 Rs. 1,20,000/-
15.01.2013 Rs. 60,000/-
10.07.2013 Rs. 1,20,000/-
30.12.2013 Rs. 60,000/-
Total Rs. 4,09,315/-
The Trial Court observed that the appellant has failed to prove that he was owed a legally enforceable debt of rupees twenty lakhs:
"Therefore, the plaintiff's complaint proved that the accused has paid Rs, 4,09,315 out of the amount due as per fact. So that on the day the plaintiff deposited in the bank to recover a legal amount of Rs, 20,00,000/- The court believes that the prosecution has failed to prove that fact."
Relevant paras of the judgment reads as:
Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:02:04 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 31 Out of 42 "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 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 provision of this Act, be punished with imprisonment for 8 [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 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 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 Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:02:08 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 32 Out of 42
(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. (emphasis supplied)
10. Section 138 of the Act provides that a drawer of a cheque is deemed to have committed the offence if the following ingredients are fulfilled:
(i) A cheque drawn for the payment of any amount of money to another person;
(ii) The cheque is drawn for the discharge of the 'whole or part' of any debt or other liability. 'Debt or other liability' means legally enforceable debt or other liability; and
(iii) The cheque is returned by the bank unpaid because of insufficient funds.
However, unless the stipulations in the proviso are fulfilled the offence is not deemed to be committed. The conditions in the proviso are as follows:
(i) The cheque must be presented in the bank within six months from the date on which it was drawn or within the period of its validity;
(ii) The holder of the cheque must make a demand for the payment of the 'said amount of money' by giving a Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:02:13 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 33 Out of 42 notice in writing to the drawer of the cheque within thirty days from the receipt of the notice from the bank that the cheque was returned dishonoured; and
(iii) The holder of the cheque fails to make the payment of the 'said amount of money' within fifteen days from the receipt of the notice.
It must be noted that when a part-payment is made after the issuance of a post-dated cheque, the legally enforceable debt at the time of encashment is less than the sum represented in the cheque. A part-payment or a full payment may have been made between the date when the debt has accrued to the date when the cheque is sought to be encashed. Thus, it is crucial that we refer to the law laid down by this Court on the issuance of post-dated cheques and cheques issued for the purpose of security. In Indus Airways Private Limited v. Magnum Aviation Private Limited, the issue before a two-Judge Bench of this Court was whether dishonour of post-dated cheques which were issued by the purchasers towards 'advance payment' would be covered by Section 138 of the Act if the purchase order was cancelled subsequently. It was held that Section 138 would only be applicable where there is a legally enforceable debt subsisting on the date when the cheque is drawn. In Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Limited, the respondent advanced a loan for setting up a power project and post-dated cheques were given for security. The two cheques were dishonoured and a complaint was instituted under Section
138. Distinguishing Indus Airways (supra), it was held that the test for the application of Section 138 is whether there was a legally enforceable debt on the date mentioned in the cheque. It was held that if the answer is in the affirmative, then the Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:02:18 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 34 Out of 42 provisions of Section 138 would be attracted. In Sripati Singh v.
State of Jharkand, this Court observed that if a cheque is issued as security and if the debt is not repaid in any other form before the due date or if there is no understanding or agreement between the parties to defer the repayment, the cheque would mature for presentation:
"17. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfillment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified time frame and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of N.I. Act would flow.
18. When a cheque is issued and is treated as 'security' towards repayment of an amount with a time period being stipulated for repayment, all that it ensures is that such cheque which is issued as 'security' cannot be presented prior to the loan or the instalment maturing for repayment towards which such cheque is Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:02:22 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 35 Out of 42 issued as security. Further, the borrower would have the option of repaying the loan amount or such financial liability in any other form and in that manner if the amount of loan due and payable has been discharged within the agreed period, the cheque issued as security cannot thereafter be presented. Therefore, the prior discharge of the loan or there being an altered situation due to which there would be understanding between the parties is a sine qua non to not present the cheque which was issued as security. These are only the defences that would be available to the drawer of the cheque in a proceedings initiated under Section 138 of the N.I. Act. Therefore, there cannot be a hard and fast rule that a cheque which is issued as security can never be presented by the drawee of the cheque. If such is the understanding a cheque would also be reduced to an 'on demand promissory note' and in all circumstances, it would only be a civil litigation to recover the amount, which is not the intention of the statute. When a cheque is issued even though as 'security' the consequence flowing therefrom is also known to the drawer of the cheque and in the circumstance stated above if the cheque is presented and dishonoured, the holder of the cheque/drawee would have the option of initiating the civil proceedings for recovery or the criminal proceedings for punishment in the fact situation, but in any event, it is not for the drawer of the cheque to dictate terms with regard to the nature of litigation." (emphasis supplied) Based on the above analysis of precedent, the following principles emerge:
(i) Where the borrower agrees to repay the loan within a specified timeline and issues a cheque for security Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:02:26 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 36 Out of 42 but defaults in repaying the loan within the timeline, the cheque matures for presentation. When the cheque is sought to be encashed by the debtor and is dishonoured, Section 138 of the Act will be attracted;
(ii) However, the cardinal rule when a cheque is issued for security is that between the date on which the cheque is drawn to the date on which the cheque matures, the loan could be repaid through any other mode. It is only where the loan is not repaid through any other mode within the due date that the cheque would mature for presentation; and
(iii) If the loan has been discharged before the due date or if there is an 'altered situation', then the cheque shall not be presented for encashment.
This Court in NEPC Micon Ltd. v. Magna Leasing Ltd. held that the Courts must interpret Section 138 with reference to the legislative intent to suppress the mischief and advance the remedy. The objective of the Act in general and Section 138 specifically is to enhance the acceptability of cheques and to inculcate faith in the efficacy of negotiable instruments for the transaction of business.7 Section 138 criminalises the dishonour of cheques. This is in addition to the civil remedy that is available. Through the criminalisation of the dishonour of cheques, the legislature intended to prevent dishonesty on the part of the drawer of a negotiable instrument.8 The interpretation of Section 138 must not permit dishonesty of the 6 AIR 1995 SC 1952 7 Sunil Sodhi v. State of Gujarat, Criminal Appeal No. 1446 of 2021 8 M/s Electronics Trade and Technology Development Corporation Ltd., 1996(3) Crimes 82 (SC) drawee of the cheque as well. A cheque is issued as security to provide the drawee of the cheque with a leverage of using the cheque in Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:02:30 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 37 Out of 42 case the drawer fails to pay the debt in the future. Therefore, cheques are issued and received as security with the contemplation that a part or the full sum that is addressed in the cheque may be paid before the cheque is encashed.
The High Court while dismissing the appeal against acquittal held that the notice issued by the appellant is an omnibus notice since it does not represent a legally enforceable debt. Relying on the judgment of this Court in Rahul Builders Vs. Arihant Fertilizers & Chemicals, it was held that the legal notice was not issued in accordance with proviso (b) to Section 138 since it did not represent the 'correct amount'. The appellant has contended that the requirement under Section 138 is to send a notice demanding the 'cheque amount'. It was contended that the offence under Section 138 was made out since the appellant in the statutory notice demanded the payment of rupees twenty lakhs which was the 'cheque amount'. Section 138 of the Act stipulates that if the cheque is returned unpaid by the bank for the lack of funds, then the drawee shall be deemed to have committed an offence under Section 138 of the Act. However, the offence under Section 138 of the Act is attracted only when the conditions in the provisos have been fulfilled. Proviso (b) to Section 138 states that a notice demanding the payment of the 'said amount of money' shall be made by the drawee of the cheque.
It was also observed that the question of whether the notice demanding an amount higher than the cheque amount is valid would depend on the language of the notice:
"8. It is a well-settled principle of law that the notice has to be read as a whole. In the notice, demand has to be made for the "said amount" i.e. the cheque amount.
Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:02:38 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 38 Out of 42 If no such demand is made the notice no doubt would fall short of its legal requirement. Where in addition to the "said amount" there is also a claim by way of interest, cost etc. whether the notice is bad would depend on the language of the notice. If in a notice while giving the break-up of the claim the cheque amount, interest, damages etc. are separately specified, other such claims for interest, cost etc. would be superfluous and these additional claims would be severable and will not invalidate the notice. If, however, in the notice an omnibus demand is made without specifying what was due under the dishonoured cheque, the notice might well fail to meet the legal requirement and may be regarded as bad."
Section 138 creates a deeming offence. The provisos prescribe stipulations to safeguard the drawer of the cheque by providing them the opportunity of responding to the notice and an opportunity to repay the cheque amount. The conditions stipulated in the provisos need to be fulfilled in addition to the ingredients in the main provision of Section 138. It has already been concluded above that the offence under Section 138 arises only when a cheque that represents a part or whole of the legally enforceable debt at the time of encashment is returned by the bank unpaid. Since the cheque did not represent the legally enforceable debt at the time of encashment, the offence under Section 138 is not made out.
In view of the discussion above, we summarise our findings below:
(i) For the commission of an offence under Section 138, the cheque that is dishonoured must represent a Digitally signed by ANKIT ANKIT SOLANKI SOLANKI Date:
2025.01.15 17:02:42 +0530 CC NI ACT No. 1849/2021 Rajinder Satija Vs. Sandeep Tandon 39 Out of 42 legally enforceable debt on the date of maturity or presentation;
(ii) If the drawer of the cheque pays a part or whole of the sum between the period when the cheque is drawn and when it is encashed upon maturity, then the legally enforceable debt on the date of maturity would not be the sum represented on the cheque;
(iii) When a part or whole of the sum represented on the cheque is paid by the drawer of the cheque, it must be endorsed on the cheque as prescribed in Section 56 of the Act. The cheque endorsed with the payment made may be used to negotiate the balance, if any. If the cheque that is endorsed is dishonoured when it is sought to be encashed upon maturity, then the offence under Section 138 will stand attracted;
(iv) The first respondent has made part-payments after the debt was incurred and before the cheque was encashed upon maturity. The sum of rupees twenty lakhs represented on the cheque was not the 'legally enforceable debt' on the date of maturity. Thus, the first respondent cannot be deemed to have committed an offence under Section 138 of the Act when the cheque was dishonoured for insufficient funds; and
(v) The notice demanding the payment of the 'said amount of money' has been interpreted by judgments of this Court to mean the cheque amount.
Digitally
signed by
ANKIT
ANKIT SOLANKI
SOLANKI Date:
2025.01.15
17:02:47
+0530
CC NI ACT No. 1849/2021
Rajinder Satija Vs. Sandeep Tandon 40 Out of 42
34. Having regard to the judgment, in the present matter also the accused had made payments of Rs.49,000/- twice to the complainant on 07.12.2020 and 15.12.2020 and the cheques in question were drawn on 15.02.2021, 17.03.2021 and 24.03.2021, i.e. after the payment of Rs.98,000/- to the complainant.
Therefore, the outstanding liability of the accused as on the date of issuance of the cheques in question as per Ex.CW1/XB, which is a complainant's document was Rs.15,23,400/-. However, the cumulative amount of the cheques in question is 15,68,840/-.
The amount in the cheques in question is greater than the outstanding liability of the accused. Part payment has been made by the accused to the complainant in discharge of his liability and the same has not been reflected in the complaint, therefore, ingredients of Section 138 NI Act are fulfilled.
35. On the basis of the discussion, this Court is of the opinion that the complainant has not been able to prove his case on the basis of preponderance of probabilities.
Digitally
signed by
ANKIT
ANKIT SOLANKI
SOLANKI Date:
2025.01.15
17:02:51
+0530
CC NI ACT No. 1849/2021
Rajinder Satija Vs. Sandeep Tandon 41 Out of 42
36. Ingredients of sec. 138 NI Act have not been fulfilled and accordingly I return the finding of the acquittal of the accused Sandeep Tandon in the present case.
37. Copy of the Judgment be supplied free of cost to both the parties.
File be consigned to Record Room, after due compliance of formalities.
Announced in open Court Digitally signed by ANKIT SOLANKI ANKIT Today on this 15.01.2025. Date:
SOLANKI 2025.01.15 17:02:56 +0530 (Ankit Solanki) Judicial Magistrate First Class (NI ACT) Digital Court No.1 Tis Hazar Courts, West, Delhi.CC NI ACT No. 1849/2021
Rajinder Satija Vs. Sandeep Tandon 42 Out of 42