Delhi District Court
Sushant Chanana vs Sunil Bhatia on 29 April, 2025
IN THE COURT OF SH. SNEHIL SHARMA, JUDICIAL MAGISTRATE
FIRST CLASS, NI ACT, SOUTH WEST, DWARKA DELHI
JUDGMENT
SUSHANT CHANANA VS SUNIL BHATIA
CC NO: 15677/2017 P. S. Vikaspuri
U/s 138 NI Act
a CNR No. of the case : DLSW02-021735-2017
b Date of institution of the case : 09.08.2017
c Cheque number and dated : 518296, 518298, 518299, 113320
dt. 03.07.2017
d Cheques amount : Rs. 5 lacs each
e Name of the complainant : Sushant Chanana
S/o Sh. Surender Kumar Chanana
R/o J-200, Vikaspuri, Delhi – 18.
f Name of the accused and his : Sunil Bhatia
s/o B.L. Bhatia,
parentage
H.No. 472, 1st floor, Vikaspuri,
Delhi – 18.
g Offence complained of : 138 NI Act h Plea of accused : Not guilty i Orders reserved on : 24.02.2025 j Final order : Accused Sunil Bhatia is Convicted for offences punishable under sections 138 NI Act. k Date of judgment : 29.04.2025
1. Vide this judgment the present complaint case for an offence
punishable U/S.138 of the Negotiable Instruments Act, 1881 (hereinafter
“the NI Act“) is being decided.
2. It is case of the complainant that the complainant wanted to purchase
some property. Some time in July 2011, he met the Accused who is a
builder by profession and requested him to assist in purchasing some
suitable property.
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signed by
SNEHIL
SNEHIL SHARMA
SHARMA Date:
2025.04.29
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3. That the Accused informed him that he had already on 13.12.2010
entered into a collaboration agreement with one Shri Man Singh Tyagi who
claimed to be owner of the double and a half storied built up property
No.C-131, Vikaspuri, New Delhi measuring of 160 sq. mtrs. for demolition
and redevelopment of the said property. The redeveloped property was to
comprise stilt for parking, upper floor, first floor, second floor and third
floor. It was a condition of the said collaboration agreement that after
redevelopment of the said property, the entire upper ground floor would
belong to the original owner Shri Man Singh Tyagi and the rest of the
building comprising first floor, second floor and third floor would be the
share of the Accused as the builder and developer of the said property.
4. The reconstruction of the said property was to be completed within
12 to 15 months from date of approval of building plan. It was also
stipulated that Shri Man Singh Tyagi, the original owner shall not create
any lien/charge or mortgage on the said property in any manner.
5. That on 05.07.2011 the Accused entered into an agreement to sell the
first floor of the said property after redevelopment to complainant’s father.
During construction of the said property, the Accused made demands from
time to time for payment of the consideration settled for the sale of the first
floor which his father complied with and by the time the construction was
completed towards the end of the year 2012, the Accused had received the
entire consideration from his father.
6. That having paid to the Accused the entire consideration for the
purchase of the first floor of the said property, his father asked the Accused
to execute a sale deed in his favour but accused put him off by one lame
excuse or the other. When his father insisted that he could no longer wait
for execution of sale deed in his favour, the Accused disclosed that he had
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SNEHIL SHARMA
SHARMA Date:
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raised money from a financier Shri Kulijit Singh Sethi and had mortgaged
the said property in favour of the said financier. When he met Shri Kuljit
Singh Sethi, he was told that the Accused had in fact sold the first floor of
the property to him and since he had not by then become owner of the first
floor he had prevailed upon the real owner of the property Shri Man Singh
Tyagi to execute a sale deed in favour of Shri Kuljit Singh Sethi.
7. From the papers made available to me by Shri Kuljit Singh Sethi
after execution of sale deed in his favour it was found that a sale deed dated
28.6.2011 had been executed by Shri Man Singh Tyagi in favour of Shri
Kuljit Singh Tyagi which was registered on 1.8.2011 in respect of the first
floor of the property while the accused had already executed an agreement
to sell in his father’s favour the first floor of the redeveloped property on
05.07.2011.
8. The Accused had thus played a fraud on complainant’s father as he
had executed an agreement to sell the first floor to him and had received the
entire settled consideration therefor. After knowing the facts when he met
the said Shri Sethí, he told me that he wanted to sort out the matter on his
own terms. He made it clear to complainant that he was interested only in
getting back his money advanced to the Accused and further that he had no
objection in executing a sale deed in his father’s favour if the outstanding
amount, which according to him was then Rs. 30,00,000/- (Rs. thirty lacs)
was returned to him either by the accused or by complainant.
9. The Accused expressed his inability to arrange funds and since his
father had already invested a huge amount he had no option but to meet the
demand of Shri Sethi and get a sale deed in his father’s favour. It was
accordingly settled that complainant will pay an amount of Rs. 30,00,000/-
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SHARMA
SHARMA Date: 2025.04.29
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to accused and accused will pay amount to Sh. Sethi who will execute the
sale deed in favour of complainant’s father.
10. It was further agreed that the Accused would treat the amount of Rs.
30,00,000/- paid to Shri Sethi as loan from complainant which the accused
promised to repay in 11(eleven) months. Accordingly, complainant
deposited in the bank account of the accused the amount of Rs. 30,00,000/-
( partly through cash and rest by RTGS) which was eventually paid to Shri
Sethi and Shri Sethi executed two sale deeds on 13.8.2014; one jointly in
favour of complainant and his father and the other jointly in the names of
complainant and of complainant’s wife in respect of the first floor of the
said redeveloped property. On execution of sale deeds, the physical vacant
possession of the first floor of the property was handed over to them.
11. The settlement was reduced into loan agreement on 12.08.2014
Accused in order to discharge his liability accused gave complainant 6
signed but undated cheques, each for Rs. 5 lacs and promised that same
would be honoured on its presentation. The accused also executed
promissory note. It was orally agreed that accused will pay Rs.12% interest
per annum. The oral understanding about payment of interest was reduced
into writing on 03.03.2015.
12. That the complainant presented the four cheques bearing no.
518296, 518298, and 518299 of Rs. 5 lacs each were drawn on ICICI Bank,
New Delhi and another no. 113320 drawn on PNB Bank, Vikaspuri Branch
of Rs. 5 lac for encashment with his bank but the said cheque was
dishonoured and returned unpaid with remarks “Insufficient fund &
Account closed” vide return memo dated 04.07.2017.
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SNEHIL SHARMA
SHARMA Date:
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13. The complainant had sent a legal notice dated 14.07.2014 to the
accused through his counsel regarding the dishonour of the aforesaid
cheques through speed post but the accused has neither discharged his
liability nor make payment of the cheque amount and therefore, the present
complaint is filed by the complainant against the accused for the offence
under Section 138 of the NI Act.
14. On being satisfied of the prima facie ingredients of Section 138 of
the NI Act, cognizance was taken and summons were directed to be issued
against the accused vide order dated 14.09.2017.
15. Accordingly, on 10.05.2018 notice under Section 251 Cr.PC r/w
Section 263(g) Cr.P.C was framed and served upon the accused to which he
pleaded not guilty and claimed trial. While putting forth his plea of
defence, accused has admitted his signatures on the cheque in question,
however the remaining details in the cheque have not been filled by him.
He also denied having received the legal demand notice. He further states
he is a builder by profession. He had agreed to sell a floor C- 131, First
Floor. Vikaspuri, Delhi to father of the complainant for total consideration
amount of Rs. 1,86,00,000/-. After that father of complainant paid him Rs.
10000000/- (one crore) in lieu of the consideration. The registry of said
floor was in name of one K.L.Sethi and the same could not be got
transferred in the name of father of the complainant without payment of
consideration to K.L.Sethi. Therefore, father of the complainant transferred
Rs.29,00,000/- into his account and gave Rs. 1,00,000/- in cash to him for
the same. He gave six cheques including the four cheques in questions as
blank signed cheques for security purpose to father of the complainant. The
said blank cheques have been misused by the complainant.
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SNEHIL by SNEHIL
SHARMA
SHARMA Date: 2025.04.29
16:44:12 +0530
16. In Complainant’s evidence, the complainant (CW-1) tendered his
evidence affidavit in post summoning evidence and relied upon the
following documents:
i) Ex. CW1/A : Evidence of complainant by
way of affidavit.
ii) Mark CW1/1 : Copy of loan agreement
iii)Mark CW1/2 : Copy of promissory note
iv) Mark CW1/3 : Copy of acknowledgment
note
v) Ex. CW1/4 to CW1/7 : Cheque
vi)Ex. CW1/8 to CW1/11 : Returning memo
vii)Ex.CW1/12 : Legal notice
viii) Ex.CW1/13 : Postal receipts
ix) Ex.CW1/14 : AD Cards
x) Ex/CW1/15 : Courier receipts.
17. CW1 was cross examined on behalf of the accused. During cross
examination, CW1 has deposed that he is a graduate. He was working as
Assistant Manager in Spice Jet Airways since last 8 years. He know the
accused since 2011 when the present deal occurred. He met the accused
through one Mr. Sharma who was a commission agent. He does not know
the address of Mr. Sharma. The accused met me in July 2011 for sale of
the property. He does not remember the exact date of the same. CW1 has
voluntarily deposed that the property deal was between accused and his
father. He saw the collaboration agreemnent dated 13.12.2010 in 2011
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SHARMA Date: 2025.04.29
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itself. Same was shown to him by his father. He had not stated the same in
his complaint. He did not meet Man Singh to verify the collaboration
agreement.
18. CW1 has voluntarily deposed that his father must have done the
same. He does not remember when his father met Man Singh. He had copy
of the collaboration agreement. He can produce the same in Court. CW1
has voluntarily deposed that the present amount of Rs. 30 lakh was given a
loan to the accused to get the property released from the financier Kuljeet
Singh Sethi. Kuljeet Singh Sethi told them that he would release the
property only when Rs. 30 lakh is paid to him. Thus they had no choice but
to pay the amount. He was not witness to agreement to sell between his
father and accused. He does not remember seeing agreement to sale.
19. Other than payment of Rs. 30 Lakh made under the present
transaction, an amount of Rs. 1,86,00,000/- was paid towards the sale deeds
in favour of his father,himself and his wife. Some paymernt was made in
cash and some through cheque. He does not remember the proportion of
the same. He could produce bank statement of himself and his father
showing payment. The total consideration in the sale deeds is Rs. 57 lakh.
He had the sale deeds in his possession. He could produce the same in
Court. He cannot say as of now whether the present loan amount of Rs. 30
lakh was shown in his ITR. He had to check the same with his CA. He
could produce his ITR in which present loan amount is reflected.
20. He had brought the collaboration agreement, sale deed and ITR for
the relevant period. He had not brought his bank statement today despite of
order dated 07.02.2019 because he had already given loan agreement detail
in the Court. CW1 was aksed when first time his father had made payment
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SHARMA Date: 2025.04.29
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to Kuljeet Sethi and what was amount to which he answered that we have
not made any payment to Kuljeet Singh Sethi. CW1 has voluntarily
deposed that they had made payment to the Sunil Bhatia. On 12.08.2014,
they had paid Rs. 57 lacs to Kuljeet Sing Sethi. He had not filed any police
complaint against Sunil Bhatia. The stamp paper of loan agreement was
purchased by Sunil Bhatia.
21. No other documents were executed between him and Sunil Bhatia on
12.08.2014. It is correctly admitted that on 12.08.2014, he had also signed
GPA, Agreement to sell and purchase, affidavit, receipt of Rs. 30 lacs,
Possession slip and Undertaking but the same documents were not
notarized and it was made by Sunil Bhatia only. It is correcttly admitted
that the said documents are exhibit CWI/DI (colly). CW1 has voluntarily
deposed that it was decided that the said documents will be destroyed as the
same could not be complied with. CW1 was asked that how much payment
was made to Sunil Bhatia when you come to know about the remaning
payment towards Sunil Bhata and to Kuljeet Singh Sethi to which he
answered that Rs. 1,35,00,000/- was made to Sunil Bhatia before the sale
deed to be executed. He does not remember the date, month and amount.
22. CW1 does not remember the exact date when accused has informed
that he was unable to pay Rs. 30 lacs to Sh. Kaljeet Sethi. They had paid to
Sunil Bhatia, out of Rs. 1,35,00,000/-. CW1 has voluntarily deposed that
the accused was not informed him about Rs. 30 1acs. It was informed by
Kuljeet Singh Sethi before excluding the sale deed. He was infomed almost
2 months before. The repayment of loan of Rs 30 lacs to be started from
12.08.2014. He had done RTGS of Rs. 29 lacs in the account of Sunil
Bhatia and One lac was paid in cash. He does not remeber the date when
the accused gave him permission to fill the particulars in the cheque. He
does not remember the name of the witnesses on the promissory note
already marked as CW1/2. All the six cheques were handed over by Sunil
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SNEHIL by SNEHIL
SHARMA
SHARMA Date: 2025.04.29
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Bhatia on the same day. CW1 was asked that how much interest and how
many installments were given by Sunil Bhatia to which he answered that he
thought it was given only for one month. He does not remember. He
thought he has given one month interest but he have to check.
23. He had not taken any possession of shop of Sunil Bhatia as
documents were not relevant and notorized. The documents were made by
Sunil Bhatia only. CW1 was asked whether he had issued any notice to
Sunil Bhatia for not payment of interest to which he answered that they
have issued one notice to Sunil Bhatia regarding the payment of whole
amount to repay in the the loan amount in the time period. However, he
does not remermber the month and year of the notice.
24. He does not remember the date of issuance of demand notice which
was sent by his lawyer. He had not issued any notice to the accused except
the notice U/s 138 NI Act. It was only when he presented thc cheque that
got to know that the bank account of the accused was closed. It is correcttly
admitted that he had sent a notice Ex.CW1/D2 to the accused Sunil Bhatia.
He does not remember whether he had filed any declaration given by Sunil
Bhatia in the present case or not. He does not remember the date on which
firstly he appeared before this Court. He does not remember when he had
filed his evidence by affidavit in the present case.
25. The Ex.CW1/3 was written by Sunil Bhatia. He does not remember
the place where it was prepared. CW1 has voluntarily deposed that there
documents were never in his possession and were never notrized. He does
not remember the exact date when for the first time the accused asked to
him to not present the cheque as he did not had funds. He does not
remember the exact date when he contacted accused after receiving the
cheque return nemo in the year 2016. The cheques for the remaining anount
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SHARMA
SHARMA Date: 2025.04.29
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of Rs. 10 lac has been filed in a different court. No receipt was ever given
of payment of Rs. 30 lacs by the accused. He does not know that the legal
notice was received or not by Suni Bhati because he has changed the
address. CW1 had denied all the suggestions put to him during cross
examination. Thereafter, CE was closed.
26. The accused was then examined under Section 313 Cr.P.C., 1973 all
the incriminating circumstances appearing in evidence against accused
along with documents including 1. Mark CW 1/1 to mark CW 1/3, 2. EX.
CWN 1/4 to EX CW 1/14, 3. Mark CW 1/15 and mark P,Q, R, 4. EX. CW
1/D2, EX. CW 1/D3, EX. CW 1/D4, EX. CW 1/D5 were put to the accused
and he deposed that with respect to mark CW1/1 he say that the signatures
on the same are his. However, it is incomplete set. With respect to mark
CW 1/2 he deposed that signatures are on his. With respect to mark CW1/3
he said that he denied the said document and say that the signatures and the
writing is not his. With respect to cheques in question Ex. CW 1/4 to EX
CW 1/7 he said that signatures are his however he had given these cheques
in blank to father and father in law of the complainant. There was a
property deal between him and father and father in law of the complainant
regarding which there was some dispute.
27. Accused further stated that to see the deal to the end he had given
these blank cheques along with possession and property documents of his
shop. Certain other documents were also the dispute was resolved and
complainant was liable to retun the blank signed cheques to executed at
that time. However he did not do so and misused the same. With respect to
Ex. CW 1/ 8 -11 he said that his account was closed. With respect to EX,
CW 1/12 that is legal notice he said that he was not residing at the address
mentioned on the notice at the time,it was sent and hence he never
received. With respect to Ex. CVW 1/ 13 to Ex. CW 1/14 and mark CW
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SNEHIL by SNEHIL
SHARMA
SHARMA Date: 2025.04.29
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1/15 he said that he had no information. With respect to mark P, he said
that he admit the same. With respect to mark Q. He said that he admit the
same. With respect to EX CW 1/D2, he said that he had never received it
and he does not remember whether he was residing at the said address at
the relevant time With respect to EX CW 1/D3 he said that he admitted the
same. With respect to EX CW 1/D4, he admit the same. With respect to EX
CW 1/D5 he said that he admitted the same. With respect to Mark R, he
said that he had no information. This is entirely false case against him.
Accused has opted to lead DE.
28. Accused has examined himself as DW1 and he stated that he does
not know the complainant neither did he had any dealings with him. His
dealing was only with his father Sh. Surender Chanana. He was dealing in
construction business in the year 2013-14. In the year 2013-14, he had
entered into a deal with father of the complainant for sale of First floor of
C-131 Vikas Puri, New Delhi-110018, which he was constructing. The deal
was finalised for Rs. 1,86,00,000/- (Rupees One Crore and Eighty Six
Lakhs). Payment was to be done partly in cash and cheque. It was agreed
that he would deliver the possession of the flat within 15 months from the
date of dealing.
29. Thereafter, father of the complainant kept making part payments
towards the deal. These are reflected on internal page 2 of Mark-
Q/Thereafter, due to some inadvertent delays, the construction got delayed
for about two, two and a half years. He had given previous property papers
to the father of the complainant showing who is the current owner of the
property and also showing that he was having the entire selling rights of the
subject property. When the construction of property reached completion,
the father of the complainant demanded that registry in his favour be done
first before he makes the remaining consideration payment which was
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SHARMA Date: 2025.04.29
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approximately Rs. 30,00,000/- at that time. On the other hand, property
owner Sh. Kulbeer Singh Sethi said that, first of all, entire remaining
consideration shall be paid and only thercafter will he get the registry of the
property done. He approached the father of complainant and asked him to
pay the remaining consideration amount. He said that he would consider
However, on the same evening, he along with 4 to 5 more people came to
his office and said that they do not believe either him or Sh Kulbeer Singh
Sethi.
30. Father of complainant insisted that registry shall be done first he
demanded that accused gave some security to assure that registry will be
done after payment of remaining consideration. As a security, he parted
with possession of JG3/4A Shop no. 1 and property papers pertaining to
this property in favour of the complainant. The property papers are already
on record as Ex. CW1/DI (colly). On the same day, an agreement dt.
12.08.2014 was also executed between accused and the complainant in
which it was written that accused had received a sum of Rs. 30,00,000/-
from the complainant. The same is now Ex. DW1/1 (colly) along with
receipt which is now Ex. DW1/2 as well as pronote which is already
exhibited as Ex. CW1/2. To corroborate the agreement Ex. DWI/1, the
father of complainant had called accused to Punjab National Bank, F-Block
Vikas Puri, in which father-in-law of the complainant used to work at some
post which he does not know. Rs. 29,00,000/- were transferred in his
account. He did not even have cheque book of this account of his in Punjab
National Bank.
31. However, the father-in-law of complainant got me issued 05
cheques at the same time and they asked him to affix his signatures on the
same. Thereafter the entire amount of Rs. 29,00,000/- was withdrawn in
cash from his PNB account by complainant and his accomplices.
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SNEHIL SHARMA
SHARMA Date:
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Thereafter, registry of the flat was done. The possession of his shop was
handed over to him by the father of complainant after the registry.
Thereafler, he asked father of complainant to return property papers to him,
he said that the same are in the possession of his son and he will hand it
over back to me in 4 to5 days. Thereafter, he received a notice from the
complainant which is already exhibited as Ex. CW1/D2 (colly). Thereafter,
he had gone to the residence of the complainant and confronted his father
with the notice his son had sent. He asked what is the reason for this, when
the entire deal has been completed successfully. He assured me that
property papers will be returned to him and he will counsel his son.
Thereafter, the complainant had again come to his shop in the evening and
had said in a very loud tone that because of him he has suffered loss of
about Rs. 50,00,000/-. Thereafter, despite regularly following up with the
father of the complainant, the issue could not be resolved and the
complainant misused four of the total six cheques given by him at the time
of executing agreement Ex. DW1/1 (colly).
32. DW1 was cross examined on behalf of accused to which he stated
that the subject property was in the name of Sh Kuljeet Sethi at the time he
had entered into an agreement with the father of the complainant for selling
it. It is correcttly admitted that before exccuting the agreement to sell dt.
05.07.2011, in respect of the property no. C-131 Vikas Puri Delhi, with the
father of the complainant, the said property being already sold in favour of
person namely Kuljeet Singh Sethi vide registered sale deed dt. 27.06.2011.
It is correctly admitted that there was a collaboration agreement executed
between him and the actual owner of the property Sh. Maan Singh Tyagi
vide collaboration agrcement dt. 13.12.2010. (At this stage, witness admits
Mark– P, Mark — Q and Ex. CWI/D3).
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SNEHIL by SNEHIL
SHARMA
SHARMA Date: 2025.04.29
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33. DW1 was asked that whether he had disclosed the property in
question was already sold to Sh K.L. Sethi at the time of entering into
agreement for sale Mark-Q with father of the complainant to which DW1
answered that he had said many times that he was having selling rights to
this property as he was the SPA holder and Kuljeet Singh Sethi himself had
executed it in his favour. He had duly informed to father of the complainant
and his original SPA was in the possession of father of complainant. It is
correcttly admitted that agreement to sell does not mention the said fact.
DW1 has voluntarily stated the said fact is mentioned in the SPA which was
in the possession of father of complainant.
34. He does not have the original SPA since it was provided to father of
complainant. He also does not have any photocopy of said document. It is
correcttly admitted that Ex. CWI/D3 does not mention that the property has
been mortgaged to Sh. Kuljeet Singh Sethi. DW1 has voluntarily stated it is
not required to be mentioned in this document. His property JG3/4A Shop
no. 1 was handed over to the father of complainant 5 to 7 days prior to
registry of subject property. EX. CW1/Dl was also exccuted on the same
day. This document was notarized at Janak Puri District Center by one Sh
Khatri.
35. At this stage, witness is confronted with Ex. CW1/D1 and shown that
there is no endorsement by any Notary on this document. He is asked to
explain the discrepancy in his statement. Witness states that he remember
that this document was notarized, may be the notarized copy is with the
complainant and he had the copy of this document prior to notarization. At
this stage, witness is confronted with loan agreement Ex. DW1/1 and asked
whether he executed it. Witness submits that his signatures were taken on
blank papers. He also points out that the cheque numbers mentioned on Ex.
DW1/1 are also mentioned in original agrccment to sell his property
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SHARMA Date: 2025.04.29
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JG3/4A Shop no. However, the same does not reflect on court record
because he only had a photocopy of the document prior to entering the
cheque details.
36. It is correcttly admitted that he never made a complaint in police or
otherwise that my signatures have been taken on blank papers. DW1 has
voluntarily stated he had informed this at every opportunity before the
court. DW1 was asked that the loan agreement was executed on 12.08.2017
and the registry was done on 13.08.2017 by Sh K. L. Sethi in favour of the
complainant to which he answered that yes. It was done because this was
the condition of father of complainant that he should execute loan
agreement i.e. Blank Papers and only then will he pay the remaining
consideration to Sh K. L. Sethi. It is correcttly admitted that he did not file
any complaint with any police etc. regarding withdrawal of Rs. 29,00,000/-
by complainant and his accomplice. It is correcttly admitted that he did not
file any complaint at any form that his cheques are being misused by the
complainant.
37. DW1 has voluntarily stated once court case was already filed there
was no need to explore any other remedy. It is correctly admitted that
cheques in question bear his signature. At this stage, witness is confronted
with a WS filed on his behalf in CS no.887/2017 which is DW1/CX1.
(colly) The witness admits that this is his evidence and bears his signatures
on point A and B. It is correcttly admitted that he did not file any reply of
Ex CW1/D2 dt. 14.10.2016. DW1 has voluntarily stated he had confronted
the father of complainant after receiving this notice. He did not receive
legal notice Ex.CW1/12 neither did he used to reside on the Vikas Puri
Address mentioned on the notice at the relevant time, however, the notice
correctly bears the address of his shop in Vikas Puri. He used to reside as a
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tenant on H-472, First Floor Vikas Puri in year 2015-16. DW1 has denied
all the suggestion put to him.
38. Accused examined Mrs. Vijay Rani as DW2 and she deposed that
she has been running a boutique at JG3-4A, Vikaspuri New Delhi – 110018
from 1992 to 2023. The afore-said shop was given to her for usage by her
brother Sunil Bhatia. The afore-said shop belongs to her brother Sunil
Bhatia. She handed over the possession of the afore-said boutique to her
brother in August, 2014 as her brother asked for the same, however, her
brother gave her the possession again within 8 days and she had been
running the aforesaid boutique till 2023.
39. DW2 was cross examined and she deposed that she had not brought
any document to show that she had in possession and have been running a
boutique at JG3-4A, however, she can bring the same. The boutique is in
the name of Reewaz boutique. The boutique has one small show-case, one
counter and two sewing machines. She handed over the possession of the
shop to the accused i.e. her brother Mr. Sunil Bhatia on 11.08.2014 and
shifted all the articles of the shop at her house on the Second floor of the
same building. She have no document or any other proof to show that she
handed over the possession of the boutique/shop at JG3-4A. She know that
the present matter pertains to some money transaction between her brother
and the complainant. She does not know whether any other civil or criminal
litigation is pending on his brother. It is correcttly admitted that his brother
is in the business of Constructing buildings. She had not aware as to how
many buildings her brother has constructed in Vikaspuri. DW2 has denied
all the suggestions put to her.
40. Accused examined Mrs. Julie Smith as DW3 and she deposed that
she is a social worker. About 10 years ago, the complainant Sushant
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Chanana came to our neighbourhood in the night and he was shouting and
abusing the accused Mr. Sunil Bhatia. When she intervened, the
complainant started abusing her in filthy language as well. Thereafter, she,
Sunil Bhatia, one nephew of Sunil Bhatia and one more person went to the
house of the complainant at (J) Block to complain about the incident. The
father of the complainant met them there and assured that the cheque as
well as other documents of the accused will be returned.
41. DW3 was cross examined and she deposed that she run an NGO in
the name of Human Help and Care charitable trust. The afore-said NGO
was registered atleast 20-22 years ago. She had filed various cases in
various courts in Delhi as a social worker. She was also witness in one or
two cases as a social worker. The present case relates to some money and
property (JG3, Vikaspuri) issues between the parties in the present case.
The issue between the parties is related to amount/money due. The money
was due upon the complainant to be paid to the accused. She was not
aware of the quantum of money due on the complainant. The above fact
was told to her by the father of the complainant when she visited their
house to complain about the abusive language which the complainant used
in her neighborhood.
42. The incident which she mentioned in her chief-examination must
have taken place at the end of the year 2014. She does not remember the
exact date. The complainant must have been around 27-28 years of age at
the time of the incident. She know the family of the accused for about last
30-32 years as they are her neighbors. She was not aware whether any other
litigation is pending against accused. She did not call the police on the
night of the incident as Mr. Sunil Bhatia suggested to first talk with the
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father of the complainant. She does not remember the exact address of the
complainant, however, the same was in J Block near Jhuggi.
43. The father of the complainant assured the return of the cheque which
was qua the payment due to Mr. Sunil Bhatia. She did not ask and the
father of the complainant did not tell her the amount of the cheque. She
had enquired from Mr. Bhatia as to whether he has received the cheque
from the complainant or not two three times. She does not remember the
date, month or year when he sought such inquiry. She had not filed any
written complaint for non-fulfillment of promise of the father of the
complainant. The documents which was assured by the father of the
complainant to be returned pertains to the property JG3, Vikaspuri. He had
not discussed the incident or the present matter or the dispute between the
parties with her neighbors. She know that the present case is pending
before the court for some time. She was not aware as to how many
litigations are pending between the parties. (mai ye baat jaanna nahi cahti).
She had not met the complainant or any of his family members since the
last time when she visited his house. CW3 has denied all the suggestions
put to her.
44. Court witness/Mohit Dhawa, Manager PNB Bank, was also
examined and he stated that he had brought the summoned record i.e. the
statement of account bearing No. 4496000100052711 of Sunil Bhatia of
financial year 2014-2015 same is exhibited as Ex. COW1/1.
45. Court witness was cross examined on behalf of accused. He stated
that the amount of Rs. 29 lacs received in this account on 12.08.2014 was
transferred from the account of SK Chanan (Bank of India) bearing UTR
No. BKIDII14224469928. Whenever a cheque of an account which is
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closed is presented in the bank, the report on the return memo is “account
not present”. In such a case, the report “insufficient funds” is not given.
46. Court witness was cross examined on behalf of complainant and he
stated that it is correct that Rs. 29 lacs which was received in the aforesaid
account on 12.08.2014 was withdrawn on the same date. He could tell on
what date the aforesaid account was closed. In the present case, the report
on the return memo is “insuflicient funds” bccause there may not be
sufficient funds in the account of the drawer of the cheque. The account
holder can withdraw an amount of Rs. 29 lacs on the same date when it is
received. Thereafter, DE wa closed and final arguments were heard.
47. I have heard ld counsel for the complainant and Ld. Defence
counsel for accused & considered the respective arguments as well as gone
through case file very carefully.
48. The essential ingredients in order to attract Sec. 138 of NI Act, 1881
are as following:
i) The cheque for an amount is issued by the drawer to the
payee/complainant on a bank account being maintained by him.
ii) The said cheque is issued for the discharge, in whole or in
part of any debt or liability.
iii) The cheque is returned by the bank unpaid on account of
insufficient amount to honour the cheque or it exceeds the
amount arranged to be paid from that account by an
agreement made with the bank.
iv) The cheque is presented within 3 months from the date on
which it is drawn or within the period of its validity.
v) within 30 days a legal demand notice is issued by the payee
or the holder in due course to the drawer of the cheque on
receipt of information by him from the bank regarding the
dishonour of the cheque.
vi) The drawer of the said cheque fails to make payment of the
said amount of the money as demanded in the legal demand
notice to the payee or the holder in due course within 15
days of the reciept of said notice.
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vii) The debt or other liability against which the cheque was
issued is legally enforceable.
49. Now, coming to the facts of the present complaint case keeping in
view the essential ingredients of section 138 of NI Act. In this case, it is
not disputed and duly admitted by the accused that the cheque in question
bears his signatures, however he denies the other particulars fulfilled by
him but admits that the same was given to the complainant. Therefore, it
can be said that the cheque was drawn by him in favour of the complainant.
Therefore, the essential ingredient (i) as discussed in the preceding
paragraph stands fulfilled.
50. Accused has further admitted the fact of dishonour of the cheque in
question and no objection is taken, no bank witness is called to rebut the
returning memo, hence, another essential ingredients (iii) and (iv) also
stand proved by the complainant. Accused has denied the fact of receiving
the legal demand notice sent to him by complainant. As the accused has
appeared before the court and matter came in his knowledge and
documents were supplied to him after summoning, still accused chose not
to reply back the legal notice or to pay the due amount. The address stated
by accused during the various stages in the case also shows the same
address as is mentioned on legal notice. Moreover, the accused has not
challenged the postal receipts and has not called postal witnesses. So it can
be rightly said that he has received the legal notice. Hence, essential
ingredients (v) and (vi) also stand proved.
51. In the landmark decision of Hon’ble Supreme Court of India in
matter of “C. C. Alavi Haji Vs. Palapetty Mohd. & Anr.” reported in (2007)
6 Supreme Court Cases 555 held that as under:-
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“Any drawer who claims that he did not received the notice
sent by post, can, within 15 days of receipt of summons from
the court in respect of complaint Under Section 138 of the
Act, make the payment of the cheque amount and submit to
the court that he had made the payment within 15 days of the
receipt of summons (by receiving a copy of complaint with
the summons) and, therefore, the complainant is liable to be
rejected. A person who does not pay within 15 days of
receipt of summons from the court along-with the copy of
complaint Under Section 138 of the Act, can not 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 G. C. Act and 114 of the
Evidence Act.”
52. Now coming to the last and the remaining core ingredients (ii) and
(vii) of Section 138 of NI Act as discussed above and the real issue of
controversy herein i.e. whether the cheque in question was issued in
discharge of any debt or liability, whole or in part and whether the same is a
legally enforceable debt.
53. With respect to the point of blank cheque raised by the accused, it is
pertinent to mention that Section 20 of the NI Act talks about inchoate
instruments. As per this provision if a person gives a duly signed cheque
which is either blank or partly filled then he is deemed to have given
implied authority to the holder to fill up the particular in it and complete
the cheque, thus making the draw liable for the payment mentioned in it. It
is immaterial that the cheque may have been filled in by any person other
than the drawer, when the cheque is duly signed by the drawer. If the
cheque is otherwise valid, the penal provision of section 138 would be
attracted. At this stage, reference may be sought from the decision of
Hon’ble Supreme Court in the case of Bir Singh vs. Mukesh Kumar (2019)
4 SCC 197 wherein the Apex Court while upholding the validity of blank
signed cheque in a proceeding u/s 138 of the Act has interalia held the
following:
“If a signed blank cheque is voluntarily presented to a
payee,towards some payment, the payee may fill up the amount
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and other particulars. This in itself would not invalidate the
cheque. The onus would still be on the accused to prove that the
cheque was not in discharge of a debt or liability by adducing
evidence.”
54. It is a settled proposition of law that a cheque issued as security,
pursuit of financial transaction, cannot be considered as a worthless piece
of paper. It is given to ensure the fulfilment of an obligation undertaken. If
a cheque issued to secure repayment of a loan advanced and if the loan is
not repaid on or before the due date, the drawee would be entitled to get the
cheque for payment, and if such a cheque is disordered, the consequences
contemplated under section 138 NI act would follow. Reliance is placed
upon Sripati Singh v. State of Jharkhand,2021 SCCOnline1002. Further as
to the plea of cheque being a security cheque, it was held in ICDS v. Beena
Shabir & Anr. (2002)6 SCC 426, that security cheques would also fall
within the purview of section 138 NI Act and a person cannot escape is
liability unless he proves that the debt or liability for which cheque was
issued as security is satisfied otherwise.
55. In this case, the statutory presumptions under section 118(a) and 139
would be raised in favour of the complainant. Since, the accused has
admitted the execution of impugned cheques and signatures on cheque in
question, the aforementioned statutory presumptions would be raised in
favour of the complainant regarding the fact that the impugned cheques
have been drawn for consideration and issued by the accused in discharge
of legally enforceable debt.
56. It has been held by a three-judge bench of the Hon’ble Apex Court in
the case of 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
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a probable defence. The principles pertaining to the presumptions and the
onus of proof were recently summarized by the Hon’ble Apex Court in
Basalingappa vs. Mudibasappa (2019) 5 SCC 418 as under:
“25. We having noticed the ratio laid down by this Court in the above
cases on Section 118(a) and 139, we now summarize 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 the materials
submitted by the complainant in order to raise a probable defence.
Inference of preponderance of probabilities can be drawn not only
from the materials brought on record by the parties but also by
reference to the circumstances upon which they rely.
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.”
It is explicit in the NI Act that the said presumption shall remain
untill contrary is proved.
57. In the present case, perusal of the record shows that accused has not
rebutted the document Mark CW1/1 i.e copy of loan agreement, Mark
CW1/2 i.e promissory note, Mark CW1/3 i.e copy of acknowledgment. It is
found that there is no challenged to the loan amount of Rs 30 lacs
mentioned on these documents by the accused. It is also found that accused
has also not challanged the date of receiving of the loan amount. Here
though the accused admits the amount but denies it as loan amount and
despite opportunity accused has not brought relevant evidence to rebutt the
said document.
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58. It is also found that accused himself has agreed that he has never
filed any complaint against the complainant and accused’s witness also
stated that they had not filed complaint before police. No circumstances are
shown by the accused suggesting that why the complainant will misuse his
security cheques. Moreover the document where these cheques are
mentioned were shown as post dated cheque to be used to clear the liability.
Accused could not explain the reason for not clearing the liability or for
executing the document. Accused did not depose the compulsive
circumstances under which, he agreed to write it as loan of Rs 30 lac and
not consideration amount.
59. Further accused has not called K. S. Sethi in his support to prove that
there was no dispute between the accused and sethi. Here as Rs 30 lacs
amount is admitted by the accused during notice framing therefore account
statement not brought by the complainant does not have any negative
impact on the case. Even signatures on the loan agreement is admitted by
the accused in the form of suggestion by stating that it was a blank
document at the time of signing.
60. It is pertinent to mention here that the accused is a builder by
profession and is actively engaged in property dealings and financial
transactions. Being in such a profession, it is expected that he would be
fully aware of the standard practices of executing proper documentation
and the inherent risk of signing blank papers. Furthermore, given that he
was already delayed in delivering the property to complainant, it was even
more incumbent upon him to ensure proper documentation and to initiate
police complaints if any injustice was caused to him. Therefore, his
explanation that there was no need to explore any remedy or that he acted
negligently is not believable when tested on the touchstone of a prudent
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man standard. His conduct is not consistent with the behaviour expected
from a person of ordinary prudence engaged in similar business.
61. The defence taken by the accused, that he signed the loan agreement
solely because the complainant made it a condition precedent for further
remaining payment, does not appear convincing. Because the material on
record suggests that by the time of execution of the loan agreement, the
complainant had already disbursed a substantial portion of the agreed
amount and was yet to secure possession even after the delay of more than
2 years. In such circumstances, it was natural and reasonable that
complainant was in no position to put conditions for property. However it is
natural for complainant to stipulate the execution of a formal agreement to
safeguard his loan due to previous history of accused of not executing
property sale on time. Thus, the explanation offered by the accused lacks
credibility.
62. Also it is found that out of various agreements executed on stamp
paper on 12 August 2014, it was the agreement of loan which was executed
at last, suggesting the pendency of real issues between the parties . If it was
not the case then both the parties should mention on the document that it is
in continuation of previous agreements or it is agreements for safeguarding
in case of default of accused from previous agreements. No SPA in relation
to defence is shown by the accused. Also accused himself has stated during
DE that as a security he parted with the possession of the shop. Further in
DE, DW1 admits that these documents are not notarized. The fact accused
accepting all the demands of the complainant in order to satisfy and assure
him, indicates acknowledgment of fault and liability on his part.
63. In addition to the above, it is pertinent to note that the accused has
failed to examine any handwriting expert to rebut the testimony of the
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complainant regarding the authorship of document CW1/3, alleged to have
been written by the accused. This Court does not find merit in the
contention of the accused that the difference in the UTR number of the
RTGS transaction casts doubt upon the complainant’s case, particularly
when the receipt of the amount stands admitted by the accused.
64. Further, this Court does not concur with the argument advanced by
the accused that the complainant was inconsistent in describing the nature
of the loan — whether friendly, business, or interest-bearing — for the
reason that the primary transaction pertains to a loan of Rs. 30 lakhs, and
the dispute does not revolve around the interest component. Moreover, the
cheque amount is lesser than the liability asserted by the complainant,
thereby negating any substantial inconsistency.
65. This Court also finds no force in the submission of the accused that
the complainant, in collusion with the bank, procured a dishonour memo
citing ‘funds insufficient’, despite earlier cheques being dishonoured on the
ground of ‘account closed’. The bank is an independent and neutral entity,
and the accused has not led any evidence by summoning any bank official
to controvert the reason stated in the dishonour memo.
66. Furthermore, this Court does not agree with the contention of the
accused that the loan amount was not paid by the complainant but by his
father. The complainant (CW1), in his affidavit of evidence, has
specifically deposed that, “since the complainant’s father had already
invested a substantial sum, the complainant had no option but to meet the
accused’s demand….”. It is a settled proposition of law that consideration
may proceed from any person, including a stranger to the contract, at the
desire of the promiser. Hence, even if the complainant’s father was not a
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party to the instrument, he could validly furnish consideration; however, it
is only the parties to the contract who are entitled to enforce the same.
67. Further accused’s reliance on document Ex DW1/1 colly also
contradict accused’s plea that he has signed on blank papers. Also this court
does not agree with the contention of the accused that cheque is filled with
different inks as filling a cheque with different ink is not necessarily fatal
to a case. Mere use of different inks or handwriting in a cheque does not
automatically imply fraud, forgery, or fabrication, unless it is shown that
the cheque was materially altered without the consent of the drawer or was
otherwise fabricated.
68. Hon’ble High Court of Delhi in the judgment of Amit Jain vs Sanjeev
Kumar Singh & Anr. on 16 August, 2024 observerd that
“17. We often find that acquittals in Section 138 NI Act
proceedings place the burden of proving the existence of
the debt on the complainant, which is diametrically
opposite to the presumption placed on the accused under
Section 139 NI Act. The accused often gets away with an
acquittal, despite having tendered and even admitting to
the cheque, merely because the complainant is unable to
produce documents to support the existence of the debt
(usually in the form of a friendly loan provided in cash,
which does not have any document trail). It would be
unwise for the court to not acknowledge that friendly cash
loans are provided by parties, sometimes based on small
savings of the lender. In these circumstances rather than
focussing on the question as to why the accused gave the
cheque in the first place (which he or she admits), the
complainant is left unhinged for inability to provide any
documentation. Often when accused is asked by the court,
as to for what purpose they gave the cheque in the first
place, a cogent and rational answer is not forthcoming.
18. Presumption under Section 139 read with Section 118
of the NI Act is essentially based on pure common sense.
Instead of having the accused prove to the contrary, the
accused is acquitted, as in this case, without having led
any defence evidence and purely relying upon the
inconsistencies in the affirmative proof provided by the
complainant. The law and its application, is therefore
turned on its head. Conclusion”
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69. No doubt is raised upon the cheque liability shown by the
complainant. Accused had not shown how and when he has repaid the
entire amount. Mostly all the facts are admitted by the accused during the
notice, U/s. 294 Cr. P.C. and in his statement recorded U/s. 313 Cr.P.C. and
as defence witness. Once the cheque is drawn in favour of the complainant,
it was the duty of the accused to keep money in his bank account to
discharge his legal liability against the complainant or if he has already
paid the money he should ask the complainant in writing(documentary or
through whatsapp) to return the cheque. Mere verbal submission of the
accused is no evidence.
70. Also, accused had not shown any message or protest sent to the
complainant regarding the return of the cheque. No complaint to the police
or the complainant is made by the accused. Accused had not informed the
court regarding the date of visiting the complainant to demand back the
cheque. No chat, call recording or video recording etc. is produced by
accused in his support. There exists no circumstances to create any doubt or
confusion giving benefit of doubt to the accused. There are minor
contradictions in the evidence of the complainant but same are not fatal as
presumption is raised against the accused.
71. On the aspects of preponderance of probabilities, the accused has to
bring on record such facts and such circumstances which may lead the
court to conclude either that the consideration did not exist or that its non
existence was so probable that a prudent man would, under the
circumstances of the case, act upon the plea that the consideration did not
exist. As per the facts and circumstances of this case accused has not led
any cogent and believable evidence to support his defence and has failed to
rebut the presumptions.
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72. The Hon’ble Supreme Court in Rohitbhai Jivanlal Patel vs State of
Gujarat and Another 2019) 18 SCC 106 and in various other rulings have
time and again, emphasized that though there may not be sufficient
negative evidence which could be brought on record by the accused to
discharge his burden, yet mere denial would not fulfil the requirements of
rebuttal as envisaged under section 118 and 139 of the NI Act. Further, it
has been held in Rajesh Agarwal v. State, 2010 SCC online Del 2501 that:-
“9. …..There is no presumption that even if an accused fails to
bring out his defence, he is still to be considered innocent. If
an accused has a defence against dishonour of the cheque in
question, it is he alone who knows the defence and
responsibility of spelling out this defence to the court and
then proving this defences is on the accused…..”
73. Keeping in view the facts and circumstances of the present case and
the settled position of law in this regard, the presumption of law as per
section 118(a) and section 139 of NI Act clearly come in picture for the
favour of complainant and his burden of proving the fact of issuance of
cheque in question in discharge of legally enforceable debt stands
discharged and the accused has miserably failed to discharge his reverse
onus. Accordingly, the ingredients mentioned at (ii) & (vii) of Para No. 48
of this judgment are also fulfilled.
74. In my view, the complainant has proved that the accused had issued
the cheque in question in his favour for discharge of the legally enforceable
liability and has proved his case against the accused for the offence under
Sec. 138 Negotiable Instruments Act. Resultantly, accused Sunil Bhatia, is,
thus, held guilty and stands convicted for the said offence. SNEHIL Digitally signed by
SNEHIL SHARMA
SHARMA Date: 2025.04.29
16:46:41 +0530
Announced in Open Court (SNEHIL SHARMA)
today on 29.04.2025 JMFC(NI Act-08), SOUTH
WEST,DWARKACOURTS,DELHI
Copy of the judgment be given free of cost to convict.
CC NO.15677/2017 SUSHANT CHANANA VS SUNIL BHATIA Page 29 of 29
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