Delhi District Court
Lic Housing Finance Ltd vs Shabana Khan on 6 March, 2025
CC NI ACT 12607/2018 LIC HOUSING FINANCE. LTD. VS. SHABANA KHAN
IN THE COURT OF MS. NEHA SHARMA,
JUDICIAL MAGISTRATE FIRST CLASS (NI ACT) -04,
NEW DELHI DISTRICT, PATIALA HOUSE COURTS, NEW DELHI
CRIMINAL COMPLAINT NO: 12607/2018
LIC HOUSING FINANCE LTD. ............COMPLAINANT
VERSUS
SHABANA KHAN ............ACCUSED
U/s 138 Negotiable Instruments Act, 1881
1. CIS number : DLND020116292018
2. Name of the complainant : Lic Housing Finance Ltd.
Area office at;
at D-3, Shop no. 217-220,
Harsha Mall, 2nd Floor, Sector ALPHA-1,
Commercial Belt,
Greater Noida, UP-201308
(through its Authorized Signatory)
Mr. Vibhav Srivastava)
3. Name of the accused, : Smt. Shabana Khan,
parentage & W/o Sh. Waseem Ahmed Khan,
residential address Flat No. 107-B, 2nd Floor,
DDA Flats, Sun Light Colony, Ashram,
Delhi-110044
Digitally signed
by NEHA
SHARMA
NEHA Date:
SHARMA 2025.03.06
16:57:22
+0530
Page no. 1 of 16 (Neha Sharma)
JMFC NI Act-04/NDD/PHC/ND
CC NI ACT 12607/2018 LIC HOUSING FINANCE. LTD. VS. SHABANA KHAN
4. Offence complained of or : U/s 138 of Negotiable Instruments Act, 1881
proved
5. Plea of the accused : Pleaded not guilty and claimed trial.
6. Date of Institution : 02-08-2018
7. Date of judgment/order : 06.03.2025
8. Final Judgment/order : CONVICTED
JUDGMENT
1. By way of the present Judgment, this court shall dispose of the present
complaint case filed by the complainant LIC Housing Pvt Ltd. through its authorized
signatory Mr. Vaibhav Srivasatava (hereinafter referred to as ‘complainant’) against
Shabana Khan (hereinafter referred as the ‘accused’) u/s 138 of Negotiable Instruments
Act, 1881 (hereinafter referred to as ‘NI Act‘).
CASE OF THE COMPLAINANT
2. Succinctly, the case of the complainant is that the complainant was
approached by accused Shabana Khan in the beginning of the year 2014 for the purpose of
obtaining a housing loan with respect to property bearing Flat no. 2107, 20th Floor, Tower-
H, R.G. Luxury Homes (hereinafter referred to as “property in question”). The accused
also offered to mortgage the said property in question by way of deposit of title deeds with
the complainant company as security in respect to the said loan in case of grant/sanction.
The complainant submits that consequently, considering the request of the accused, a loan
for a sum of Rs. 35,00,000/- was sanctioned to the accused on 30.01.2014 out of which a
sum of Rs. 28,60,162/- has been disbursed. The said amount was repayable in 240 equal
monthly installments of Rs. 28,499/- each.
3. It is submitted that initially the accused paid her EMIs from time to time but
later, the accused started committing default(s) in the repayment of said EMIs and
Digitally
signed by
NEHA
NEHA SHARMA
SHARMA Date:
2025.03.06
16:57:26
+0530
Page no. 2 of 16 (Neha Sharma)
JMFC NI Act-04/NDD/PHC/ND
CC NI ACT 12607/2018 LIC HOUSING FINANCE. LTD. VS. SHABANA KHANdefaulted in her financial commitments and breached the contractual obligations of
availing the financial credit facilities from the complainant. Thereafter, the accused issued
a cheque bearing No. 031314 dated 31.05.2018 for a sum of Rs. 29,95,678/- drawn at
ICICI Bank, DLF City, Ph-II, Gurgaon (hereinafter referred to as the ‘cheque in question’)
to the complainant in discharge of aforesaid liability regarding outstanding amount.
However, upon presentation the said cheque with HDFC Bank, Kailash Building, K. G.
Marg, New Delhi, the cheque was returned dishonored on 07.06.2018 with the
endorsement “Funds Insufficient”.
4. Thereafter, the complainant sent a Legal Demand notice U/S. 138 of the NI
Act dated 26.06.2018 to the accused, however, despite the service of legal demand notice,
accused did not make any payment to discharge the liability. Hence, being aggrieved, the
complainant has filed the present complaint and prayed that the accused be summoned,
tried and punished under Section 138 of the NI Act.
SUMMONING OF ACCUSED
5. On the basis of complaint and evidence filed by the complainant, and on the
basis of documents annexed with the complaint, cognizance of the offence U/s 138 NI Act
was taken by Ld. Predecessor of this Court and process was issued against the accused on
02.08.2018. The accused entered appearance in the present case on 19.09.2019 and on
25.09.2021, she was admitted to bail.
NOTICE
6. The court framed notice of accusation under Section 251 of the Criminal
Procedure Code, 1973 (hereinafter referred to as ‘Cr.P.C.’) against the accused on
04.12.2021. The substance of accusation was read over and explained to the accused and
after being satisfied that the accused comprehended the same, the court recorded her plea.
The accused pleaded not guilty and claimed trial. The accused admitted her signatures on
the cheque in question but denied filling any particulars on the cheque in question. Upon
Digitally
signed by
NEHA
NEHA SHARMA
SHARMA Date:
2025.03.06
16:57:29
+0530Page no. 3 of 16 (Neha Sharma)
JMFC NI Act-04/NDD/PHC/ND
CC NI ACT 12607/2018 LIC HOUSING FINANCE. LTD. VS. SHABANA KHANbeing questioned regarding her defence, the accused stated that the cheque in question was
issued to the complainant as a security cheque. The accused stated that she has already
repaid the EMIs to the complainant. The accused denied having any liability towards the
complainant. The matter was, thereafter, listed for the evidence of the complainant.
EVIDENCE OF THE COMPLAINANT
7. To prove its case prima facie, the complainant has filed affidavit of evidence
of the AR under Section 200 of the Cr.P.C. by way of an affidavit i.e. Ex. CW-1/B wherein
he has reiterated the averments made in the complaint. He placed reliance upon the
following documents:
EX. CW1/1A i.e. the authority letter dt. 30.06.222;
EX. CW1/2 i.e. the original cheque;
EX. CW1/3 i.e. the original return memo;
Ex. CW1/4 i.e. the legal demand notice dated 26.06.2018;
Ex. CW1/5 i.e. the postal receipt;
Ex. CW1/6 i.e. email print out dt. 29.06.2018;
EX. CW1/7 i.e. Bank statement account dt. 24.07.2018 from the month of July, 2009 to the
month of July, 2018.
8. CW-1 was cross examined by Ld. counsel for accused. Thereafter, CE was
closed on 27.09.2023.
EXAMINATION OF THE ACCUSED UNDER SECTION 313 CR.P.C.
9. The statement of accused U/S 313 Cr.P.C. was recorded on 15.01.2024. In
her statement under Section 313 Cr.P.C., the accused admitted availing the loan of Rs.
35,00,000/- from the complainant. She further admitted that the said loan was sanctioned
by the complainant in her favour. She stated that the cheque in question was given as a
blank security cheque to the complainant on assurance that the said cheque will not be
presented without intimation. She further stated that the complainant never provided her
Digitally
signed by
NEHA
NEHA SHARMA
SHARMA Date:
2025.03.06
16:57:32
+0530
Page no. 4 of 16 (Neha Sharma)
JMFC NI Act-04/NDD/PHC/ND
CC NI ACT 12607/2018 LIC HOUSING FINANCE. LTD. VS. SHABANA KHANwith any account statement. She denied receiving any legal demand notice. She stated that
the loan was disbursed to the builder without any basis and she has been cheated by the
builder as well as the complainant. She denied having any liability in respect of the cheque
in question. She denied filling any particulars on the cheque except for the signature.
Thereafter, since the accused expressed her willingness to lead DE, the matter was listed
for defence evidence.
DEFENCE EVIDENCE
10. Pursuant thereto, the accused did not lead DE. Vide statement of the accused
dated 04.03.2024, DE was closed. Thereafter, the matter was listed for final arguments.
FINAL ARGUMENTS
11. Both parties addressed their final arguments. Ld. counsel for the complainant,
argued that the accused has admitted availing loan from the complainant but no evidence
has been led as to payment of any installment. He further argued that the accused has
admitted her signatures on the cheque but failed to rebut the presumption U/S 139 NI Act.
Accordingly, Ld. counsel prayed that the accused be convicted for the offence under
Section 138 NI Act. Reliance is placed on judgments in Mahender Yadav vs Subhiksha
Trading Services Ltd. CS (OS) No. 2003/2009 and Sripati Singh v. State of Jharkhand and
Anr. 2021 SCC OnLine SC 1002.
12. Per contra, Ld. counsel for the accused, argued that the accused owes no legal
liability for payment of cheque amount to the complainant as cheque given as a blank
security cheque has been misused by the complainant without any prior intimation. He
further argued that there is no liability of the accused for the amount of cheque in question
as the loan was disbursed to the builder contrary to the payment schedule and the accused
has rebutted the presumption raised U/S 139 NI Act but complainant failed to prove the
guilt of the accused beyond reasonable doubt, hence, accused is entitled to be acquitted.
Digitally
signed by
NEHA
NEHA SHARMA
SHARMA Date:
2025.03.06
16:57:37
+0530Page no. 5 of 16 (Neha Sharma)
JMFC NI Act-04/NDD/PHC/ND
CC NI ACT 12607/2018 LIC HOUSING FINANCE. LTD. VS. SHABANA KHAN
13. The file has been carefully and minutely perused and my issue-wise findings
with reasons thereof are as under: –
FINDINGS
14. Before appreciating the facts of the case and evidences led by the both the
sides for the purpose of decision, let us first discuss the relevant position of law which is
embodied in section 138 of NI Act. In the case of Kusum Ingots and Alloys Ltd. vs.
Pennar Peterson Securities Ltd. (2000) 2 SCC 745, the apex court has expounded the
ingredients which are required to be fulfilled in order to constitute an offence
under Section 138 of the NI Act. The relevant portion of the said judgment laying down
the ingredients to be satisfied for making out a case under Section 138 of the NI Act is
reproduced as under:
a) A person must have drawn a cheque on an account maintained
by him in a bank for payment of a certain sum of money to
another person from out of that account for the discharge of any
legally enforceable debt or liability;
b) cheque has been presented to the bank within a period of three
months from the date on which it is drawn or within the period of
its validity whichever is earlier;
c) That cheque has been returned by the bank unpaid, either
because of the amount of money standing to the credit of the
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 the bank;
d) The payee or the holder in due course of the cheque has made
a demand for the payment of the said amount of money by giving
a notice in writing, to the drawer of the cheque, within 30 days of
the receipt of information by him from the bank regarding the
return of the cheque as unpaid; and
e) The drawer of such cheque fails to make payment of the said
amount of money to the payee or the holder in due course of the
cheque within 15 days of the receipt of the said notice.
Digitally
signed by
NEHA
NEHA SHARMA
SHARMA Date:
2025.03.06
16:57:40
+0530Page no. 6 of 16 (Neha Sharma)
JMFC NI Act-04/NDD/PHC/ND
CC NI ACT 12607/2018 LIC HOUSING FINANCE. LTD. VS. SHABANA KHAN
15. Being cumulative, it goes without saying that it is only when all the
aforementioned ingredients are satisfied that the person who had drawn the cheque can be
deemed to have committed an offence under Section 138 of the Act. Having said that, it
becomes imperative to mention section 139 of NI Act which carves out a presumption in
favour of the drawee that the cheque was issued to him in discharge of a debt or other
liability of a legally enforceable nature. Also, the said provision must be read along with
the section 118 of the same enactment which spells out another presumption in favour of
the drawee that every negotiable instrument was drawn for consideration, and that every
such instrument, when it has been accepted, endorsed, negotiated or transferred, was
accepted, endorsed, negotiated or transferred for consideration.
16. Having said that, what follows from the above is that the journey of evidence
in a trial under section 138 NI Act, begins not from the home of the prosecution story but
from the point of the defence. As rebuttal evidence, the accused merely has to prove that
the cheque was not given for any consideration or that there was no legal liability in
existence against him for which the negotiable instrument was given. In the backdrop of
the factual narrative of the case, following points of determination arise in the present
case:
A. Whether the complainant has been successful in raising the presumption un-
der section 118 read with section 139 of the N.I Act, 1881?
B. If yes, whether the accused has been successful in raising a probable defence
to rebut the presumptions?
17. Since criminal liability can be attached by proving each element of the section
under which liability is sought to be enforced, I shall now go on to appreciate the evidence-
documentary and oral, in light of how compellingly it satisfies each of such ingredient, if
at all. The first condition pertains to the issuance of the cheque in question to make the
payment from an account maintained by the drawer of the cheque towards a legally en-
Digitally
signed by
NEHA
NEHA SHARMA
SHARMA Date:
2025.03.06
16:58:12
+0530Page no. 7 of 16 (Neha Sharma)
JMFC NI Act-04/NDD/PHC/ND
CC NI ACT 12607/2018 LIC HOUSING FINANCE. LTD. VS. SHABANA KHANforceable debt or other liability. The complainant has proved the original cheque and origi-
nal return memo i.e. Ex. CW1/2 and Ex. CW1/3 respectively which the accused has not
disputed as being drawn on the account of the accused.
18. In the present case, the accused has admitted her signatures on the cheque in
question at the time of framing of Notice U/S 251 Cr.P.C. and recording of her statement u/s
313 Cr.P.C. As per the scheme of the NI Act, once the accused admits signature on the
cheque in question, certain presumptions are drawn, which result in shifting of onus. The
combined effect of Section 118(a) and Section 139 of NI Act is a presumption that the
cheque was drawn for consideration and given by the accused for the discharge of debt or
other liability. It has been held by Hon’ble Supreme Court in Hiten P. Dalal vs. Bratin-
dranath Banerjee (2001) 6 SCC 16 and Rangappa vs. Sri Mohan (2010) 11 SCC 441 that
the presumption contemplated under Section 139 of NI Act includes the presumption of
existence of a legally enforceable debt. Once the presumption is raised, it is for the accused
to rebut the same by establishing a probable defence.
19. The principles pertaining to the presumptions and the onus of proof were
summarized by the Hon’ble Apex Court in Basalingappa vs. Mudibasappa (2019) 5 SCC
418 wherein it was held;
“25. We having noticed the ratio laid down by this Court in
the above cases on Section 118(a) and 139, we now
summarise the principles enumerated by this Court in the
following manner:
25.1. 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.
25.2. The presumption under Section 139 is a rebuttable
presumption and the onus is on the accused to raise probable
defence. The standard of proof for rebutting the presumption
is that of preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused to
rely on evidence led by him or the accused can also rely on
Digitally
signed by
NEHA
NEHA SHARMA
SHARMA Date:
2025.03.06
16:58:15
+0530
Page no. 8 of 16 (Neha Sharma)
JMFC NI Act-04/NDD/PHC/ND
CC NI ACT 12607/2018 LIC HOUSING FINANCE. LTD. VS. SHABANA KHANthe 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.
25.4. 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.
25.5. It is not necessary for the accused to come in the
witness box to support his defence.”
20. In the instant case, the sanction of loan of Rs. 35,00,000/- in favour of the
accused is not denied. Ld. Counsel for accused has argued that the complainant disbursed
the loan contrary to the payment schedule in Annexure III to the Tripartite Agreement. In
the cross examination, CW-1 admitted the execution of Tripartite Agreement and he
stated that payment was made to the builder as per the terms of the builder buyer
agreement. CW-1 denied the suggestion that since there was no construction carried out
by the builder, the complainant company should not have released any amount of loan to
the builder. He further denied the suggestion that there was connivance between the
complainant and the builder whereby the complainant company released the entire
sanctioned amount even though the construction was not being carried out in terms of the
builder buyer agreement and the tripartite agreement.
21. The Annexure III which is a part of the Apartment Buyer’s Agreement
dated 06.02.2014, provides for the payment plan, however, the complainant company is
not a part to the said agreement. As per the Tripartite Agreement dated 30.01.2014, the
complainant company has the right to recall the entire loan from the borrower on any
default and the borrower shall have to repay the entire amount, failing which the
complainant company also has the power to ask the builder to cancel the Buyer’s
Agreement. Thus, the argument of Ld. Counsel for accused that the complainantDigitally
signed by
NEHA
NEHA SHARMA
SHARMA Date:
2025.03.06
16:58:20
+0530Page no. 9 of 16 (Neha Sharma)
JMFC NI Act-04/NDD/PHC/ND
CC NI ACT 12607/2018 LIC HOUSING FINANCE. LTD. VS. SHABANA KHANdisbursed the loan amount contrary to the payment schedule in Annexure III is not tenable
and same stands rejected.
22. The accused has taken another plea of defence that she has repaid the
EMIs till the date of the filing of the present complaint, however, no proof of payment has
been furnished. The onus is upon the accused to rebut the presumption but the accused
neither filed any proof of payment nor stepped into the witness box to prove any
document. Thus, there is nothing on record except the bald averments of the accused that
she has made the payment.
23. For the sake of argument, if one were to assume that the cheque in question
was in fact, given as a security cheque by the accused but the accused had repaid the
entire amount, then two pertinent questions may take birth out of reasonability- firstly,
why did the accused not send a written notice to the complainant to demand the cheque
back if there was no liability of the accused for the amount of the cheque in question in the
first place. Secondly, why did the accused not file any complaint either with her bank or
with the police immediately in order to ensure that the cheque was not misused. The
cheque in question was returned unpaid for reason “funds insufficient” and not payment
stopped by drawer.
24. If all EMIs are paid, a reasonable person would atleast file a complaint
with the bank or police to prevent misuse of cheque but the failure to lodge/file any
complaint, further causes dubiety to lurk around the story of the defence. An adverse
inference can safely be drawn against the accused who has otherwise failed to adduce any
evidence to show that he indeed did everything within her power and control, as a prudent
person would do, to ensure that the cheque tendered by her was not misused. Failure of
the accused to prevent such alleged misuse renders the defence evidence weak. Reliance
can be placed on the judgment pronounced by the Hon’ble Delhi High Court in V.S.
Yadav v. Reena, CRL. A. NO. 1136 Of 2010 wherein it was held that:
Digitally
signed by
NEHA
NEHA SHARMA
SHARMA Date:
2025.03.06
16:58:23
+0530Page no. 10 of 16 (Neha Sharma)
JMFC NI Act-04/NDD/PHC/ND
CC NI ACT 12607/2018 LIC HOUSING FINANCE. LTD. VS. SHABANA KHAN“Mere pleading not guilty and stating that the cheques were
issued as security, would not give amount to rebutting the
presumption raised under Section 139 of N.I. Act. If mere
statement under Section 313 Cr. P.C. or under Section 281
Cr. P.C. of accused of pleading not guilty was sufficient to
rebut the entire evidence produced by the complainant/
prosecution, then every accused has to be acquitted. But, it
is not the law. In order to rebut the presumption under
Section 139 of N.I. Act, the accused, by cogent evidence,
has to prove the circumstance under which cheques were
issued. It was for the accused to prove if no loan was taken
why he did not write a letter to the complainant for return of
the cheque. Unless the accused had proved that he acted like
a normal businessman/prudent person entering into a
contract he could not have rebutted the presumption u/s 139
N.I. Act. If no loan was given, but cheques were retained, he
immediately would have protested and asked the cheques to
be returned and if still cheques were not returned, he would
have served a notice as complainant. Nothing was proved in
this case.”
25. Further, for the sake of argument, even if the version of the accused that
cheque in question was issued as security cheque is taken to be true, the said fact cannot
extend any help to accused in the present case. The Hon’ble Supreme Court has held in
Sripati Singh v. State of Jharkhand and Anr. 2021 SCC OnLine SC 1002.
“16. 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 fulfilment 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
Digitally
signed by
NEHA
NEHA SHARMA
SHARMA Date:
2025.03.06
16:58:27Page no. 11 of 16 (Neha Sharma)
+0530JMFC NI Act-04/NDD/PHC/ND
CC NI ACT 12607/2018 LIC HOUSING FINANCE. LTD. VS. SHABANA KHANbetween 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.”
26. Thus, when the accused has admitted availing the loan from the complainant,
issuance of cheque in question, the factum of issuance of cheque as security would be of
no assistance to the accused as the cheque which was issued as security would mature for
presentation and the complainant was entitled to present the same. The accused has
claimed that the complainant had assured her that the cheque in question would not be
presented without prior intimation, however, no documentary or oral evidence in this
regard was led.
27. Ld. Counsel for accused has argued that the deposition of CW-1/AR of the
complainant is nothing but hearsay evidence which cannot be read as CW-1 has
categorically stated that he was not present during any transactions between the parties and
he did not witness signing or handing over of any document between the parties. This
argument is not tenable. The law regarding prosecuting the complaint under Section
138 NI Act through power of attorney or through AR is settled. The filing or prosecuting
the complaint under Section 138 NI Act through power of attorney is perfectly legal and
competent. The authority letter of CW-1 is Ex. CW1/1A. In the affidavit of CW-1, it is
specifically mentioned that the CW-1 is competent to depose and he is personally aware
with the facts and circumstances of the case.
28. The Hon’ble Supreme Court in AC Narayanan vs. State of Maharashtra
(2015) 12 SCC 203, held that power of attorney holder must have either witnessed the
transaction as an agent of the payee / holder in due course or possess due knowledge
regarding the said transactions. Thus, the knowledge of CW-1 is based on the record of the
case even though documents were not signed or handed over in his presence which is valid
Digitally
signed by
NEHA
NEHA SHARMA
SHARMA Date:
2025.03.06
16:58:30
Page no. 12 of 16 (Neha Sharma)
+0530JMFC NI Act-04/NDD/PHC/ND
CC NI ACT 12607/2018 LIC HOUSING FINANCE. LTD. VS. SHABANA KHANin law. Accordingly, there is no substance in the argument of Ld. Counsel for accused and
same stands rejected. Accordingly, all the defences taken by the accused stand beseeched.
Now, considering the weight of the attending circumstances viz, the consistency in the
prosecution story, the compelling documentary evidence adduced by the complainant, the
first element of section 138 NI Act stands assembled.
29. As far as the second and third conditions are concerned, the same is satisfied
upon the perusal of the cheque in question and the return memo which show that the
cheque in question has been presented within prescribed period of limitation of three
months. The accused did not adduce any evidence whatsoever to contradict the same.
Thus, this element of Section 138 NI Act stands proved. The fact that the cheque was
dishonoured has not been disputed by the accused throughout the trial. Further, Section
146 of the NI Act, in this regard comes into play which raises a presumption that the court
shall presume the fact of dishonor of the cheque in case the cheque is returned vide a return
memo having thereon the official mark denoting that the cheque has been dishonoured.
Such bank slip or memo is a prima facie proof of dishonor and the defence has failed to
rebut the presumption U/S 146 of the NI Act.
30. Fourthly and lastly, it is required that the payee or the holder in due course of
the cheque has made a demand for the payment of the said amount of money by giving a
notice in writing, to the drawer of the cheque, within 30 days of the receipt of information
by him from the bank regarding the return of the cheque as unpaid and the drawer of such
cheque fails to make payment of the said amount of money to the payee or the holder in
due course of the cheque within 15 days of the receipt of the said notice. In the present
case, the accused has denied receiving the legal demand notice but admitted the email
address mentioned on the notice to be her correct address.
31. In C.C. Alavi Haji Appellant V. Palapetty Muhammed & Anr.
Respondents 2007 STPL(DC) 952 SC, it was observed that the service of notice is
Digitally
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NEHA
NEHA SHARMA
SHARMA Date:
2025.03.06
16:58:34
+0530Page no. 13 of 16 (Neha Sharma)
JMFC NI Act-04/NDD/PHC/ND
CC NI ACT 12607/2018 LIC HOUSING FINANCE. LTD. VS. SHABANA KHANpresumed until such presumption is rebutted by the addressee by proving to the contrary. It
was held:
“14. Section 27 gives rise to a presumption that service of
notice has been effected when it is sent to the correct address
by registered post. In view of the said presumption, when
stating that a notice has been sent by registered post to the
address of the drawer, it is unnecessary to further aver in the
complaint that in spite of the return of the notice unserved, it
is deemed to have been served or that the addressee is
deemed to have knowledge of the notice. Unless and until
the contrary is proved by the addressee, service of notice is
deemed to have been effected at the time at which the letter
would have been delivered in the ordinary course of
business. This Court has already held that when a notice is
sent by registered post and is returned with a postal
endorsement “refused” or “not available in the house” or
“house locked” or “shop closed” or “addressee not in
station”, due service has to be presumed. [Vide Jagdish
Singh Vs. Natthu Singh, AIR 1992 SC 1604, State of M.P.
Vs. Hiralal & Ors. (1996) 7 SCC 523 and V. Raja Kumari
Vs. P. Subbarama Naidu & Anr. (2004) 8 SCC 774]. It is,
therefore, manifest that in view of the presumption available
under Section 27 of the Act, it is not necessary to aver in the
complaint under Section 138 of the Act that service of
notice was evaded by the accused or that the accused had a
role to play, in the return of the notice unserved.”
32. It was further observed that even if the accused claims that he did not receive
the legal demand notice, he may have paid the cheque amount within 15 days of receipt of
summons from the court but if he fails, he cannot contend that he has not received the legal
demand notice. The relevant extract is reproduced below:
“17. It is also to be borne in mind that the requirement of
giving of notice is a clear departure from the rule of
Criminal Law, where there is no stipulation of giving of a
notice before filing a complaint. Any drawer who claims
that he did not receive the notice sent by post, can, within 15
Digitally
signed by
NEHA
NEHA SHARMA
SHARMA Date:
2025.03.06
16:58:37
+0530Page no. 14 of 16 (Neha Sharma)
JMFC NI Act-04/NDD/PHC/ND
CC NI ACT 12607/2018 LIC HOUSING FINANCE. LTD. VS. SHABANA KHANdays of receipt of summons from the court in respect of the
complaint under Section 138 of the Act, make payment of
the cheque amount and submit to the Court that he had made
payment within 15 days of receipt of summons (by
receiving a copy of complaint with the summons) and,
therefore, the complaint is liable to be rejected. A person
who does not pay within 15 days of receipt of the summons
from the Court along with the copy of the complaint
under Section 138 of the Act, cannot obviously contend
that there was no proper service of notice as required
under Section 138, by ignoring statutory presumption to the
contrary under Section 27 of the G.C. Act and Section
114 of the Evidence Act. In our view, any other
interpretation of the proviso would defeat the very object of
the legislation. As observed in Bhaskaran’s case (supra), if
the “giving of notice” in the context of Clause (b) of the
proviso was the same as the “receipt of notice” a trickster
cheque drawer would get the premium to avoid receiving
the notice by adopting different strategies and escape from
legal consequences of Section 138 of the Act.”
33. Thus, from the above observations it is clear that when a registered letter is
sent to the correct address, it is deemed to be served upon the addressee in the ordinary
course. From perusal of Ex. CW1/4 i.e. legal demand notice alongwith Ex. CW1/5, Ex.
CW1/6 i.e. corresponding postal and email printout, it is evident that the legal demand
notice was delivered upon the accused. The burden was on the accused to rebut the said
presumption. The accused has only contended that she has not received the notice but not
led any evidence to prove the same. Thus, it can be safely concluded that the accused has
failed to rebut the aforesaid presumption. Therefore, this court holds that the accused was
served with the legal demand notice as envisaged by Section 138 NI Act but failed to make
the payment. Thus, the fourth and last limb of what will entail the liability against the
accused is also structured.
DECISION
34. Since in the instant case, the accused has failed to lead any convincing
Digitally
signed by
NEHA
NEHA SHARMA
SHARMA Date:
2025.03.06
16:58:41
Page no. 15 of 16 (Neha Sharma)
+0530JMFC NI Act-04/NDD/PHC/ND
CC NI ACT 12607/2018 LIC HOUSING FINANCE. LTD. VS. SHABANA KHANevidence to aid her in discharge of her onus and the presumption of law operates in favour
of existence of debt or liability. Thus, having considered the entire evidence, I am of the
opinion that the complainant has successfully proved all the essential ingredients of
Section 138 of the NI Act. Accordingly, this Court finds accused SHABANA KHAN
guilty and she is hereby convicted for the offence under Section 138 of the NI Act. Let the
accused be heard on the point of sentence separately.
35. Let the copy of this judgment be given to the convict free of cost and the same
be also uploaded on CIS and Layers forthwith.
Digitally
Announced in the open court on signed by
NEHA
NEHA
on this 06 th March, 2025
SHARMA
SHARMA Date:
2025.03.06
16:58:44
+0530
(NEHA SHARMA)
JUDICIAL MAGISTRATE FIRST CLASS
NI ACT-04/NDD/PHC/ND
Note :-This judgment contains sixteen pages and all the pages have been checked and
signed by me. Digitally signed
by NEHA
NEHA SHARMA
SHARMA Date:
2025.03.06
16:58:47 +0530
(NEHA SHARMA)
JUDICIAL MAGISTRATE FIRST CLASS
NI ACT-04/NDD/PHC/NDPage no. 16 of 16 (Neha Sharma)
JMFC NI Act-04/NDD/PHC/ND