Delhi District Court
Pernod Ricard India Pvt Ltd vs Shiva Wines Ors on 13 August, 2025
IN THE COURT OF MS. VANSHIKA MEHTA
JMFC (NI ACT)- 04/ PHC/ NEW DELHI
CC No. 18148/2016
Unique Case ID No. DLND02-002298-2016
In the matter of: -
M/s. Pernod Ricard India Pvt. Ltd.,
through its
Sales Manager/ Authorised Signatory
Mr. Sunil Lakhotia,
Office at:-
104/105, Ashoka Estate,
Barakhamba Road, New Delhi-110001
...........Complainant
Versus
1) M/s. Shiva Wine,
Through Sh. Sanjeev Kumar @ Sanjeev Gupta,
At Govind Palace, Bhagat Mandi Chowk,
Gau Shala Road, Karnal.
2) Mr. Vijay Gupta,
S/o Lt. Sh. Raj Kumar,
R/o 1357, Sector 7,
Karnal-132001.
3) Mr. Parbash Gupta,
S/o Lt. Sh. Ved Prakash Gupta,
R/o 83-B, Wazir Chand Colony,
Karnal-132001.
4) Mr. Ankush Gupta,
S/o Sh. Parbash Gupta,
R/o 83-B, Wazir Chand Colony,
Karnal-132001
5) Mr. Sanjeev Kumar @ Sanjeev Gupta (Expired)
S/o Sh. Ishwar Dayal,
R/o H.No. 145, Sector-14,
Urban Estate, Karnal-132001.
6) Mr. Nitesh Gupta,
S/o Sh. Surinder Gupta,
R/o H.No. 145, Sector-14,
Urban Estate, Karnal-132001.
............ Accused Persons Digitally
signed by
VANSHIKA
VANSHIKA MEHTA
MEHTA Date:
2025.08.13
16:41:08
+0530
CC No. 18148/2016 Pernod Ricard India Pvt. Ltd. Vs. Shiva Wines Ors. page no. 1 of 20
Date of Institution : 02.04.2016
Offence Punishable Under Section : U/s 138 Negotiable Instrument Act, 1881
Plea of Accused : Not guilty
Date of presentation : 31-03-2016
Date of decision : 13.08.2025
Final Order: : Conviction
Argued by: : Ms. Shipra Chaudhary, Ld. Counsel for complainant.
: Mr. Daljeet Singh, Ld. Counsel for accused.
JUDGMENT
“If we do not maintain justice, justice will not maintain us.” – Francis Bacon
INTRODUCTION AND FACTUAL MATRIX
1. Accused persons are produced before the court to stand trial for the offence punishable u/s 138 of
the Negotiable Instruments Act, 1881 (“Act” or “NI Act“). They were summoned by this court to face the
trial vide order dated 08.03.2017.
2. Tersely put, it is the case of the complainant that the complainant company is engaged in the
business of manufacturing, distribution, and sale of alcoholic beverages and has instituted the present
complaint through its duly authorized representative, Mr. Sunil Lakhotia, under a valid Special Power of
Attorney backed by a Board Resolution dated 23.04.2014. The accused No.1 is a partnership firm, M/s
Shiva Wine, and accused Nos.2 to 6 are its partners, jointly and severally responsible for the firm’s
business and liabilities. The accused entered into commercial transactions with the complainant by
executing a Customer Selection Form and submitting a partnership deed, pursuant to which they placed
orders for supply of goods from time to time. The complainant supplied the goods against confirmed
orders, issued invoices accordingly, and maintained a running account showing an outstanding liability of
Rs. 63,30,628.31/- against the accused. Towards part payment of this liability, the accused issued Cheque
No. 005382 dated 16.11.2015 for Rs.63,10,000/-, drawn on The Karnal Central Cooperative Bank. On
presentation through the complainant’s banker, HSBC, the cheque was dishonoured on 11.01.2016 for
the reason “Funds Insufficient.” Despite service of a statutory legal demand notice dated 10.02.2016, the
accused failed to make payment and instead sent a vague reply denying liability.
Digitally
signed by
VANSHIKA
VANSHIKA MEHTA
MEHTA Date:
2025.08.13
16:41:12
+0530
CC No. 18148/2016 Pernod Ricard India Pvt. Ltd. Vs. Shiva Wines Ors. page no. 2 of 20
2.1. In reply to the legal notice dated 10.02.2016, the accused persons categorically denied all
allegations and assertions contained therein. They stated that the demand raised was erroneous, baseless,
and contrary to the actual state of affairs. Their firm was not liable to pay any amount to the complainant,
much less the alleged sum of Rs.63,30,628.31/-. The cheque bearing No. 005382 dated 16.11.2015 was
never issued by them in discharge of any liability; rather, it appeared to have been fabricated and misused
by the complainant, who had earlier procured signatures and blank cheques from the partners of the
accused firm at the inception of business dealings in April 2014 under the pretext of completing
formalities. As per their records, the cheques in the relevant series (Nos. 005375 to 005387) had already
been used and cleared between April 2014 and July 2014, with cheque No. 005383 cleared on
06.05.2014, leaving no occasion to issue cheque No. 005382 in November 2015. The accused persons
emphatically denied the allegation that they had promised encashment of the cheque or intended to evade
payment. They further stated that the accounts relied upon by the complainant were incorrect,
manipulated, and inconsistent with the actual business transactions. They asserted that the threatening
language of the notice was intended only to harass, humiliate, and blackmail them.
3. The accused persons were summoned vide order dated 08.03.2017, and on 10.11.2022, notice was
framed against all the accused persons under Section 251 Cr.P.C. for the offence punishable under
Section 138 of the Negotiable Instruments Act.
3.1. The accused No. 2 (Mr. Vijay Gupta, representing Accused no. 1 as well) pleaded not guilty and
claimed trial. He admitted having signed the cheque in question, however, denied that the handwriting of
the particulars on the cheque was his. He stated that the other signature on the cheque belonged to Mr.
Sanjeev Kumar, who has since expired. He further asserted that the particulars on the cheque in question
were not filled in by him.
He admitted having received the legal notice and stated that the same was duly replied to.
According to him, the cheque in question was given to the complainant at the inception of business
merely for the purpose of matching signatures. He claimed that all the business dealings of the firm were
handled exclusively by Late Sh. Sanjeev Kumar, who used to keep signed cheques in his possession. He
therefore denied having any liability towards the complainant and submitted that he had already disclosed
his defence in the application under Section 145(2) of the NI Act.
Digitally
signed by
VANSHIKA
VANSHIKA MEHTA
MEHTA Date:
2025.08.13
16:41:15
+0530
CC No. 18148/2016 Pernod Ricard India Pvt. Ltd. Vs. Shiva Wines Ors. page no. 3 of 20
3.2. The accused No. 3 (Mr. Parbash Gupta) pleaded not guilty and claimed trial. He denied having
signed the cheque in question and further denied that the handwriting of the particulars on the cheque was
his. He stated that the cheque belonged the firm and asserted that the particulars on the cheque in question
were not filled in by him.
He admitted having received the legal notice and stated that the same was duly replied to. He
further asserted that he has no knowledge of the transaction with the complainant and that he has no
liability towards the complainant. He also stated that he has disclosed his defence in the application under
Section 145(2) of the NI Act.
3.3. The accused No. 4 (Mr. Ankush Gupta) pleaded not guilty and claimed trial. He denied having
signed the cheque in question and further denied that the handwriting of the particulars on the cheque was
his. He stated that the cheque belonged the firm and asserted that the particulars on the cheque in question
were not filled in by him.
He admitted having received the legal notice and stated that the same was duly replied to. He
further asserted that he has no knowledge of the transaction with the complainant and that he has no
liability towards the complainant. He also stated that he has disclosed his defence in the application under
Section 145(2) of the NI Act. He further pleaded that he was only a sleeping partner and that all dealings
were handled by Late Mr. Sanjeev Kumar.
3.4. The accused No. 5 (Mr. Sanjeev Gupta) has expired.
3.5. The accused No. 6 (Mr. Nitesh Gupta) pleaded not guilty and claimed trial. He denied having
signed the cheque in question and further denied that the handwriting of the particulars on the cheque was
his. He stated that the cheque belonged the firm and asserted that the particulars on the cheque in question
were not filled in by him.
He admitted having received the legal notice and stated that the same was duly replied to. He
further asserted that he has no knowledge of the transaction with the complainant and that he has no
liability towards the complainant. He also stated that he has disclosed his defence in the application under
Section 145(2) of the NI Act. He further pleaded that he was only a sleeping partner and that all dealings
Digitally
were handled by Late Mr. Sanjeev Kumar and Mr. Vijay Gupta. signed by
VANSHIKA
VANSHIKA MEHTA
MEHTA Date:
2025.08.13
16:41:18
+0530
CC No. 18148/2016 Pernod Ricard India Pvt. Ltd. Vs. Shiva Wines Ors. page no. 4 of 20
EVIDENCE LED BY THE COMPLAINANT
4. The complainant in order to prove its case, examined its AR as CW-1 in its evidence and led CE
before the court on 20.05.2023. CW-1 tendered in evidence by way of affidavit Ex. CW-1/A and relied
upon the following documents:-
(a) Ex. CWI/L (OSR)- Power of Attorney (objected to as to not authorized to give any evidence and also
mode of proof):
(b) Ex. CW1/2 (OSR)- Board resolution (Objection as to mode of proof):
(c) Ex. CW1/3 (colly)- Invoices(Objection as to mode of proof);
(d) Ex. CW1/4- Ledger of accused no.1 maintained by complainant(Objection as to mode of proof);
(c) Ex. CW1/5- Cheque bearing no. 005382 dt. 16.11.2015(Objection as to mode of proof);
(1) Ex. CW1/6 (colly)- Returning memos dt. 11.01.2016 and 15.01.2016 (Objection as to mode of proof);
(g) Ex. CW1/7 (colly)- Legal demand notice along with postal receipts dt. 10.02.2016(Objection as to
mode of proof);
(h) Ex. CW1/8- Reply to the legal demand notice dt. 25.02.2016;
(i) Ex. CW1/9- Present complaint u/s 138 NI Act (Objection as to mode of proof).
4.1. The accused persons moved an application under Section 145 (2) of NI Act and submitted that no
legal debt or liability existed against them, as the cheque in question had never been issued in discharge of
any lawful liability. On the contrary, the cheque had been misused by the complainant company. It was
submitted that the complainant had fraudulently obtained a cheque bearing No. 005383 dated 06.05.2014,
along with other cheques, at the inception of business dealings in April 2014.
4.2. It was further submitted that the accused firm was not liable to pay any amount to the
complainant, much less the alleged sum of Rs.63,30,628.31/-, which appeared to be an inflated and
concocted figure deliberately introduced only to harass, humiliate, and blackmail the accused firm and its
partners. As per the books of account maintained by the accused firm, no such liability existed against
them and the figures mentioned in the complaint were manipulated and false. It was further submitted that
Digitally signed
by VANSHIKA
VANSHIKA MEHTA
MEHTA Date:
2025.08.13
16:41:22 +0530
CC No. 18148/2016 Pernod Ricard India Pvt. Ltd. Vs. Shiva Wines Ors. page no. 5 of 20
at the time when the excise license had been granted to the accused firm by the State of Haryana, the
complainant had approached the accused firm for supply of liquor and, under the guise of completing
certain formalities, had fraudulently obtained the signatures of the partners of the accused firm on blank
papers and also procured cheques. The complainant had thereafter fabricated the cheque in questionIt was
also submitted that only accused No.2, Shri Vijay Gupta, and accused No.5, Late Shri Sanjeev Kumar,
had been authorized to operate the bank account jointly, and no other partners had such authority. The
complainant, however, had falsely implicated all the accused persons in the case.
4.3. Upon his cross-examination, complainant CW-1, inter alia, stated that he had been working with
the complainant company since February 2023. He admitted that the transaction in question had not taken
place in his presence. He stated that at the commencement of business with a wholesale license holder, the
company used to take KYC forms and documents. He deposed that he had no personal knowledge of Ex.
CW1/4 but volunteered that the transactions were recorded as and when they took place. He admitted that
there was no document to show that any benefit regarding promotional schemes or rebates was to be
given to the accused and that such benefits were verbally communicated. He volunteered that all such
benefits were shown in the ledger statement.
4.4. At that stage, the witness was shown a copy of an email, which was marked as Mark 01 (2
pages). CW-1 stated that he had no knowledge of the said email dated 25.02.2016 or its annexures.
Thereafter, he was shown a copy of the Customer Selection Form supplied by the complainant’s counsel
to the accused’s counsel, which was marked as Mark CW1/D2 (10 pages). He admitted that the said form
had not been filled in his presence and that he was not aware of which documents had been collected at the
time of receiving the said form. He stated that he could not say whether a blank security cheque had been
taken along with the KYC form or the above said form. He denied the suggestion that the complainant had
misused any blank security cheque. At that stage, the witness was shown a copy of the ledger account
maintained by the accused firm, which was marked as Mark CW1/D3 (07 pages). When confronted with
the suggestion that as per the said ledger account, no dues were pending against the accused towards the
complainant and that in fact a sum of Rs.7,513/- was payable by the complainant company to the accused,
CW-1 denied the same and stated that it was incorrect.
4.5. He admitted that the complainant company had also dealt with the firm Shiva Wines prior to
dealing with the present firm, Shiva Wines through Sanjeev Kumar. He further admitted that Sanjeev
Digitally signed
by VANSHIKA
VANSHIKA MEHTA
MEHTA Date: 2025.08.13
16:41:28 +0530
CC No. 18148/2016 Pernod Ricard India Pvt. Ltd. Vs. Shiva Wines Ors. page no. 6 of 20
Kumar had been a partner in both the said firms and that the firm Shiva Wines had since been dissolved.
He stated that he could not say whether the share of Rs.15,00,000/- (profit/promotional benefits) of the
firm Shiva Wines was to be adjusted in the new firm Shiva Wines through Sanjeev Kumar. At that stage,
the partnership deed was shown to the witness and exhibited as Ex. CW1/D4. CW-1 deposed that he was
aware that Ex. CW1/D4 was given at the time of filing of the KYC form. He also denied the suggestion
that the said cheque had been given only as a KYC document along with Mark CW1/D2. He further
denied the suggestion that after receipt of the email, the accused firm had contacted the concerned person,
apprised him of the correct ledger account maintained by the accused company, and that the concerned
person had been satisfied with Ex. CW1/D3. He denied all suggestions that he was deposing falsely.
STATEMENT OF THE ACCUSED PERSONS
5. Thereafter, on 09.12.2024, the statement of the accused persons under Section 313 Cr.P.C., read
with Section 281 Cr.P.C., was recorded.
5.1. The accused No. 2 (Mr. Vijay Gupta, representing Accused no. 1 as well) submitted that it was
correct that they had approached the complainant for selling the complainant’s products, but they had no
liability towards the complainant. They denied that the cheque in question was issued in discharge of any
liability and stated that the said cheque had only been given as a blank security cheque at the time of KYC
at the beginning of the business relationship. He further submitted that they had no knowledge about the
presentation of the cheque and came to know about it only after receiving the notice. The accused stated
that he did not remember whether he had received the legal demand notice dated 10.02.2016 or whether
any reply had been issued thereto, though the address mentioned on the notice was their correct address.
He admitted his signatures on the cheque but clarified that no particulars were filled by him except the
signatures, as the cheque had been issued only as a blank security cheque. The accused further contended
that he could not say why the complainant had deposed against them or filed the present case, as they were
merely sleeping partners and all business dealings of the firm were handled by Late Sh. Sanjeev Gupta.
He admitted that the accused firm had business dealings with the complainant but reiterated that they
personally had no liability towards the complainant.
5.2. The accused No. 3 (Mr. Parbash Gupta) submitted that he did not know if accused no.1 firm had
business dealings with the complainant as he had only been a sleeping partner in accused no.1 firm and
had no liability towards the complainant since he did not even know the complainant personally. He
VANSHIKA
CC No. 18148/2016 Pernod Ricard India Pvt. Ltd. Vs. Shiva Wines Ors. page no. 7 of 20 MEHTA
Digitally signed
by VANSHIKA
MEHTA
Date:
2025.08.13
16:41:35 +0530
further stated that he could not say whether the cheque in question belonged to accused no.1 firm,
reiterating that he was only a sleeping partner with no role in the firm’s business and had no liability
towards the complainant. He added that he could not say whether the cheque in question had been
dishonoured earlier and came to know about it only after receiving the notice. He admitted that he had
received the legal demand notice dated 10.02.2016 at his correct address and came to know about the
proceedings in the present case only upon receipt of the said notice. He denied having signed the cheque
in question and also denied filling in any of its particulars, including the date and the name of the payee.
The accused further submitted that he could not say why the complainant had deposed against him,
reiterating that he had merely been a sleeping partner in accused no.1 firm and that he had no liability
towards the complainant. He further stated that he did not know the complainant personally and had
nothing else to add.
5.3. The accused No. 4 (Mr. Ankush Gupta) submitted that he could not say whether accused no.1 firm
had any business dealings with the complainant company as he had no knowledge of the same and that he
had no liability towards the complainant since he did not even know the complainant company. He further
stated that he did not know whether the cheque in question belonged to accused no.1 firm and clarified
that he had not signed the said cheque. He also submitted that he did not know whether the cheque was
dishonoured and came to know about it only after he had received notice of the case. With regard to the
legal demand notice dated 10.02.2016, he stated that he did not remember whether he had received it,
although the address mentioned therein was his correct address. He categorically denied having signed
the cheque in question or having filled in any of its particulars, including the date or the name of the
payee. He further stated that he did not know why the complainant company had deposed against him,
asserting that he had been falsely implicated in the present case, as he did not know the complainant
company at all.
5.4. The accused No. 5 (Mr. Sanjeev Gupta) has expired.
5.5. The accused No. 6 (Mr. Nitesh Gupta) submitted that he had business dealings with the
complainant only to the extent that he had signed KYC documents at the inception of the business
transaction, but he maintained that he had no liability towards the complainant. He stated that he was
merely a sleeping partner in accused no.1 firm and, therefore, could not say whether the invoices or ledger
relied upon by the complainant were correct. He admitted that the cheque in question belonged to accused
VANSHIKA
MEHTA
CC No. 18148/2016 Pernod Ricard India Pvt. Ltd. Vs. Shiva Wines Ors. page no. 8 of 20
Digitally signed
by VANSHIKA
MEHTA
Date:
2025.08.13
16:41:39 +0530
no.1 firm but denied that the signatures on the same were his, and further stated that he could not say why
the cheque had been given to the complainant. He further submitted that he did not know whether the
cheque had been dishonoured and that he came to know of it only after receiving the legal demand notice
dated 10.02.2016. He admitted that the said notice was received by him at his correct address and that he
had also replied to it, but claimed that he came to know about the present proceedings only upon receipt of
the said notice. He categorically denied having signed the cheque in question or having filled in any of its
particulars, including the date or the name of the payee. He further submitted that he could not say why
the complainant had deposed against him, and that he did not personally know the complainant or
whether accused no.1 firm had any business dealings with him.
EVIDENCE LED BY THE DEFENCE
6. The DW-1 deposed that he used to look after the accounts of Shiva Wines belonging to Sh. Sanjeev
Kumar and was fully aware of the day-to-day affairs of the accused firm. He stated that the staff made the
entries under his supervision and, on the instructions of Sh. Sanjeev Kumar, he used to get the entries
recorded into the system. He further deposed that he had received an email from the representative of the
complainant company on 25.02.2016, in which the complainant company had shared its statement of
account for the year 2014-15 as an attachment. The said email was already marked as Mark CW1/D1 (two
pages). He further deposed that when Sh. Sanjeev Kumar enquired from him regarding the difference in
the statement of account filed by the complainant company and that of accused no.1 firm, he showed the
statement of account of the firm to the representative of the complainant company and explained its
details to him. According to him, the complainant’s representative agreed that the statement of account of
the firm was correct. He further deposed that he handed over a hard copy of the said statement of account
to the complainant’s representative, who assured him that he would revert; however, no reply was
received thereafter from the complainant company. He further deposed that, as per the statement of
account maintained by accused no.1 firm i.e., Mark CW1/D3, there was no liability of accused no.1 firm
except for an amount of Rs. 7,513/-, which was, in fact, recoverable from the complainant company. He
identified the statement of account of accused no.1 firm as Mark CW1/D3. The email dated 25.02.2016
was exhibited as Ex. CW1/D1, the statement of account was exhibited as Ex. CW1/D3, and the Certificate
under Section 65B of the Indian Evidence Act was exhibited as Ex. DW1/1.
Digitally
signed by
VANSHIKA
VANSHIKA MEHTA
MEHTA Date:
2025.08.13
16:41:42
+0530
CC No. 18148/2016 Pernod Ricard India Pvt. Ltd. Vs. Shiva Wines Ors. page no. 9 of 20
7. During the cross-examination of DW-1, admitted that he had been associated with Shiva Wines
through Sanjeev Kumar since 2014-15 and had also been associated with the earlier firm by the same
name. He stated that he was informed by Sanjeev Kumar about the transactions and accordingly used to
record them in the books of accounts, though he was personally not aware of the understanding between
Sanjeev Kumar and the complainant company. He admitted that he was orally informed about rebates by
Sanjeev Kumar and used to make entries in the books of accounts in the regular course of business as the
transactions happened and as informed to him.
7.1. At this stage, witness was shown Ex. CW1/D3. He stated that he did not recall when he had
prepared Ex. CW1/D3, but clarified that the statement was prepared in the regular course of business as
and when entries were informed to him by Sanjeev Kumar. He admitted that he was not in regular contact
with representatives of the complainant company, though he volunteered that he had received one email
dated 25.02.2016 from one Mr. Vinay Singh, possibly at the instructions of Sanjeev Kumar. He admitted
that no reply was sent by him to the said email. He further stated that somewhere towards the end of
February or in the first week of March 2016, he was called by Sanjeev Kumar and explained the statement
of account to a person whom Sanjeev Kumar introduced to him as a representative of the complainant
company. He also admitted that no receiving was taken by him after handing over the statement Ex.
CW1/D3 to that person.
7.2. He further stated that he did not check any understanding regarding rebates as captured in the
statement maintained by him, as everything was recorded as per the instructions of Sanjeev Kumar. He
admitted that he used to check the bank statement with the books of account for reconciliation and
confirmed that Ex. CW1/D3 was a reconciled statement with the bank statement of accused no.1 firm. He
denied the suggestion that Ex. CW1/D3 had been unilaterally prepared without any understanding with
the complainant.
ARGUMENTS ADVANCED BY THE PARTIES
8. Ld. Counsel for the complainant has argued that the cheques in question was issued by the accused
towards repayment of the loan obtained by him. She further argued that the accused has admitted his
signatures on the cheques in question. She also contended that the accused has not been able to rebut the
presumption of law in favour of the complainant and, accordingly, is liable to be convicted.
Digitally
signed by
VANSHIKA
VANSHIKA MEHTA
MEHTA Date:
2025.08.13
16:41:46
+0530
CC No. 18148/2016 Pernod Ricard India Pvt. Ltd. Vs. Shiva Wines Ors. page no. 10 of 20
9. Per contra, the Ld. Counsel for the accused contended that the complainant has failed to establish
the existence of any legally enforceable debt or liability, which is a sine qua non for sustaining conviction
under Section 138. The sole witness of the complainant, CW1, namely Mr. Apoorva Srivastava, candidly
admitted in his cross-examination that he joined the complainant company only in February 2023,
whereas the transactions in question pertain to an earlier period. He further admitted that he has no
personal knowledge of the ledger entries or transactions reflected in Ex. CW1/4.
10. Ld. Counsel for accused has further argued that the Statement of Account (Ex. CW1/4), heavily
relied upon by the complainant, has not been proved in accordance with law. The entries therein also
contradict the email dated 25.02.2016 (Ex. CW1/D1), which contained a different set of accounts shared
by the complainant itself. On the contrary, the ledger maintained by the accused (Ex. CW1/D3), duly
proved through DW1 along with Certificate under Section 65B of the Evidence Act, clearly shows that no
liability was outstanding and in fact, Rs. 7,513/- was recoverable from the complainant. This completely
demolishes the complainant’s case and fortifies the defence that the cheque in question was not issued
towards any liability but was a blank security instrument obtained in April 2014 at the time of furnishing
KYC documents, and later misused. The returning memos (Ex. CW1/5 and CW1/6) show dishonour of
the cheque on 23.11.2015, whereas the legal notice was admittedly issued only on 10.02.2016, well
beyond the statutory period. The subsequent memo dated 11.01.2016 could not condone such delay.
ANATOMY OF FACTS AND FINDINGS THEREON
LEGAL JURISPRUDENCE
11. So far so good. Having considered all the submissions, it is apposite to have a quick glance at
relevant position of law. Section 138 of the Act provides as under:
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 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:
VANSHIKA
CC No. 18148/2016 Pernod Ricard India Pvt. Ltd. Vs. Shiva Wines Ors. page no. 11 of 20 MEHTADigitally signed
by VANSHIKA
MEHTA
Date:
2025.08.13
16:41:50 +0530
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.]
12. It is a well-established principle of law that the Negotiable Instruments Act, 1881 (NI Act)
provides for two critical presumptions–one under Section 118 and the other under Section 139.
Section 118 of the Act provides that it shall be presumed, until proven otherwise, that every negotiable
instrument has been made or drawn for consideration. This presumption places the onus on the party
challenging the instrument to disprove this presumption of consideration.
Section 139 of the Act further provides that, unless proven otherwise, it shall be presumed that the holder
of the cheque received it for the discharge of, in whole or in part, any debt or liability. This creates a
strong legal presumption in favor of the complainant, especially in cases involving dishonored cheques.
APPLICATION OF LAW
13. Applying the aforesaid law at hand to the facts of the case, the accused during framing of notice u/s
251 Cr.P.C on 10.11.2022 admitted his signatures on the cheque in question, however, denied that the
handwriting of the particulars on the cheque was his. Thus, signature on the cheques is an admitted fact.
14. A careful examination of the Negotiable Instruments Act‘s provisions, particularly Sections 20,
87, and 139, makes it abundantly evident that whoever signs a cheque and gives it to the payee is still
accountable unless he provides proof to refute the assumption that the cheque was written to settle a debt
or release a liability. In the event that the drawer has properly signed the cheque, it makes no difference
who filled it out. The criminal provisions of Section 138 would apply if the cheque was otherwise
legitimate.1 Digitally
signed by
VANSHIKA
VANSHIKA MEHTA
MEHTA Date:
2025.08.13
16:41:53
1
Basalingappa v. Mudibasappa, AIR 2019 SC 1983. +0530CC No. 18148/2016 Pernod Ricard India Pvt. Ltd. Vs. Shiva Wines Ors. page no. 12 of 20
15. In view of the aforesaid, the presumption upon Section 139 of NI Act is liable to be attracted.
DISCUSSION OF EVIDENCE
Authorization of CW-1:
16. The Ld. Counsel for the accused has vehemently argued that the sole witness of the
complainant, CW1, namely Mr. Apoorva Srivastava, candidly admitted in his cross-examination that he
joined the complainant company only in February 2023, whereas the transactions in question pertain to an
earlier period. He further admitted that he has no personal knowledge of the ledger entries or transactions
reflected in Ex. CW1/4.
17. At this stage, it is pertinent to note that the Hon’ble Apex Court in A.C. Narayanan vs. State of
Maharashtra & Anr., (2014) 11 SCC 790 : 2013 AIR SCW 6807, held as under –
“When a company is the payee of the cheque based on which a complaint is filed under Section
138 of the N.I. Act, the complainant necessarily should be the company, which would be
represented by an employee who is duly authorized. Prima facie, in such a situation, the indication
in the complaint and the sworn statement (either orally or by affidavit) to the effect that the
complainant (Company) is represented by an authorized person who has knowledge, would be
sufficient. The expression ‘specific assertion as to the knowledge of the power of attorney holder’
and the requirement that such assertion about knowledge should be ‘explicitly made’ cannot be
understood to mean that the assertion must be made in any rigid manner, much less in the manner
understood by the accused. All that is necessary is to demonstrate before the learned Magistrate
that the complaint has been filed in the name of the payee, and if the person who is prosecuting the
complaint is different from the payee, the authorization therefore, and that the contents of the
complaint are within his knowledge. When the complainant/payee is a company, an authorized
employee can represent the company. Such averment and prima facie material are sufficient for
the learned Magistrate to take cognizance and issue process.”
18. Further, in Manisha Mahendra Gala & Ors. v. Shalini Bhagwan Avatramani & Ors. , 2024 INSC
293, the Hon’ble Supreme Court clarified:
“It is settled law that a Power of Attorney holder can only depose about the facts within his
personal knowledge and not about those facts which are not within his knowledge, or which fall
within the personal knowledge of the person he represents, or about events which transpired much
before he entered the scene.”
Digitally
signed by
VANSHIKA
VANSHIKA MEHTA
MEHTA Date:
2025.08.13
16:41:56
+0530CC No. 18148/2016 Pernod Ricard India Pvt. Ltd. Vs. Shiva Wines Ors. page no. 13 of 20
19. In the present case, the complainant has duly placed on record Ex. CW1/A i.e., the Board
Resolution, and Ex. CW1/1 i.e., the Power of Attorney, authorizing Mr. Apoorva Srivastava to act and
appear in any court on behalf of the company. It is well settled that while the Power of Attorney holder is
competent to represent the company, he can only depose with respect to the facts which are within his
personal knowledge.
20. Hence, in view of Ex. CW1/A and Ex. CW1/1, coupled with the aforesaid legal position, the
foundational competence of CW1 to represent and depose on behalf of the complainant company stands
proved. However, his evidentiary value is confined to matters within his personal knowledge, and he
cannot depose about transactions or events which occurred prior to his joining the company.
Defence taken by Accused no. 2:
At the stage of Section 251 CrPC:
21. The Accused No.2 (representing Accused no. 1 as well) stated that the cheque in question had
been handed over to the complainant merely at the inception of the business for the limited purpose of
matching signatures. He further claimed that all the business dealings of the firm were exclusively
handled by Late Sh. Sanjeev Kumar, who used to retain signed cheques in his possession. He therefore
denied having any liability towards the complainant.
At the stage of Section 145(2) NI Act:
22. The Accused No.2 (representing Accused no. 1 as well) contended that the cheque in question
had not been issued in discharge of any lawful liability but was misused by the complainant. It was
alleged that at the commencement of business dealings in April 2014, the complainant fraudulently
procured cheque no. 005383 dated 06.05.2014, along with other cheques, under the pretext of completing
formalities. It was further alleged that the complainant fabricated the impugned cheque. The accused
denied any outstanding liability towards the complainant, let alone the amount of Rs.63,30,628.31, which
he termed inflated, concocted, and introduced only to harass and blackmail the firm. As per the books of
account maintained by the accused firm, no such liability existed. It was further submitted that the
accused firm never signed any customer selection form, nor was any copy of such form ever supplied to
Digitally signed
them. VANSHIKA MEHTA
by VANSHIKA
MEHTA Date:
2025.08.13
16:42:01 +0530CC No. 18148/2016 Pernod Ricard India Pvt. Ltd. Vs. Shiva Wines Ors. page no. 14 of 20
At the stage of Section 313 CrPC:
23. The Accused No.2 (representing Accused no. 1 as well) reiterated that the cheque had been
given only as a blank security cheque at the time of KYC formalities at the inception of the business
relationship.
During Defence Evidence:
24. DW-1, a Chartered Accountant associated with the accused firm, deposed that as per the
statement of account maintained by accused no.1 firm (Mark CW1/D3), there was no liability of the firm
towards the complainant, except for Rs.7,513/-, which was in fact recoverable from the complainant. He
identified the said statement of account as Mark CW1/D3 and also relied on the email dated 25.02.2016
(Ex. CW1/D1), along with a certificate under Section 65B of the Indian Evidence Act (Ex. DW1/1).
25. It is pertinent to note that during final arguments, Ld. Counsel for the complainant candidly
admitted Ex. CW1/D1, i.e., the email sent by the complainant to the accused.
Oral Arguments of the Accused:
26. The accused argued that no liability to the tune mentioned in the impugned cheque existed as
the complainant had failed to extend the benefit of rebates/promotional schemes. Reliance was placed on
the cross-examination of CW-1, where he admitted that there was no written document showing grant of
rebates and that such benefits were only verbally communicated, though he volunteered that they were
reflected in the ledger. The accused emphasized that the complainant had not placed any documentary
proof of rebates. Reliance was also placed on Ex. CW1/D1 (the admitted email), which, as per the
accused, demonstrated discrepancies in the outstanding amount.
27. A perusal of Ex. CW1/D1 reveals a closing balance of Rs.63,37,191/-, whereas Ex. CW1/4
shows a closing balance of Rs.63,30,628.31 as on 31.03.2015. On the other hand, Ex. CW1/D3 shows a
closing liability of only Rs.7,513/- as on 31.03.2015. the accused has relied upon Ex. CW1/D1 to show
the discrepancy in the statement supplied by the complainant to the accused through email and Ex.
Digitally signed by VANSHIKA VANSHIKA MEHTA MEHTA Date: 2025.08.13 16:42:05 +0530 CC No. 18148/2016 Pernod Ricard India Pvt. Ltd. Vs. Shiva Wines Ors. page no. 15 of 20
CW1/4 i.e., the ledger account of the complainant. Even if the said argument is believed for the sake of it,
and there is any discrepancy as alleged, the very fact that the accused did not raise any such objection
contemporaneously either in reply to the legal notice dated 25.02.2016 or during the course of business
transactions significantly weakens the credibility of this defence, or even during the stage of Section 313
CrPC. It is further well settled that mere existence of variations in account statements, without any cogent
explanation supported by independent evidence, cannot by itself absolve the drawer of liability under
Section 138 of the NI Act.
Deposition of DW-1:
28. In his examination-in-chief, DW-1 claimed that when a discrepancy was pointed out by Sanjeev
Kumar, he explained the statement of account (Mark CW1/D3) to a representative of the complainant
company, who allegedly agreed with its correctness. However, no documentary proof or correspondence
corroborating such discussion was produced. The alleged conversation thus remains a bald assertion.
29. His cross-examination revealed that:
“I was performing the advisory/ management roles for Shiva Wines through Sanjeev Kumar. I
was informed by Mr. Sanjeev Kumar about the transaction and accordingly, I used to record them
in the books of accounts. I was personally not aware about the understanding of Sh. Sanjeev
Kumar with the complainant company. I used to be informed by Mr. Sanjeev Kumar only. I was
informed orally about the rebates. I used to make entries in the books of accounts in the regular
course of business as the transaction used to happen and as informed to me by him. I used to
inform the accused firm as and when asked for it from me.
At this stage, witness is shown Ex. CW1/D3. I do not recall when I prepared Ex. CW1/D3. This
statement was prepared in the regular course of business as and when the entries were informed to
me by Sh. Sanjeev Kumar. I was not in regular contact with representatives of complainant
company. (Vol. I only received one email dt. 25.02.2016 from one Mr.
Vinay Singh, may be at the instructions of Mr. Sanjeev Kumar).”
30. From his testimony, it emerges that DW-1 had no personal knowledge of the transactions and
prepared Ex. CW1/D3 only on the instructions of Sanjeev Kumar. In view of the same, Ex. Ex. CW1/D3
cannot be relied upon.
31. The complainant has argued that Ex. CW1/D3 was prepared after receipt of the legal notice, as
it purports to show a balance as on 31.03.2015, whereas the reply to legal notice is dated 25.02.2016. This
court finds strength in the arguments of the complainant as despite the fact that reply to legal notice is
CC No. 18148/2016 Pernod Ricard India Pvt. Ltd. Vs. Shiva Wines Ors. page no. 16 of 20
Digitally signed
by VANSHIKA
VANSHIKA MEHTA
Date:
MEHTA 2025.08.13
16:42:12
+0530
dated 25.02.2016, yet, no mention of such statement was made in the reply, and it was introduced only
later during the defence evidence. The accused has not provided any sufficient justification as to why the
alleged discrepancy in the account was not pleaded in the reply to the legal notice dated 25.02.2016,
despite the fact that Ex. CW1/D3 had been prepared on 31.03.2015. It is further relevant that the accused
never raised the issue of rebate in their application under Section 145(2) NI Act, nor disputed the
complainant’s ledger during the course of business, or adduced any evidence to show that the said ledger
of complainant was disputed during the course of business transaction.
32. The accused has submitted that he does not owe any legally enforceable liability to the
complainant. Under Section 139 of the NI Act, however, there exists a statutory presumption in favour of
the holder of a cheque that it was issued for the discharge of a debt or other liability. Even if the defence of
the accused is accepted, namely, that the cheque in question had been handed over merely at the inception
of business for the purpose of matching signatures, the accused has failed to rebut the presumption that he
owed a legally enforceable liability to the complainant at the time of presentation of the cheque for
encashment.
33. It is a settled principle that criminal liability under Section 138 of NI Act arises only where a
legally enforceable debt or liability exists on the date of presentation of the cheque. While there may not
have been any subsisting liability on the exact date of issuance of the cheque, the offence under Section
138 NI Act is nonetheless made out if a legally enforceable debt or liability exists on the date of its
maturity or presentation.
34. In this context, the law recognizes that although a post-dated cheque may be drawn before a
debt actually becomes due, it operates to represent a legally enforceable liability as on the date of its
encashment. Thus, if no legally enforceable debt or liability exists at the time of presentation, no offence
under Section 138 of NI Act would be attracted. Conversely, if such liability exists at maturity, Section
138 of NI Act stands attracted regardless of whether it was present at the exact date of issuance.
35. Needless to say, the expression “debt” under Section 138 refers to an ascertained sum owed on
the date of issuance, whereas “other liability” is wider in scope and encompasses obligations crystallizing
by the date of maturity or presentation of the cheque. Consequently, accused no. 2 has failed to discharge
his burden of proving that no legally enforceable liability existed in favour of the complainant on the date
of presentation of the cheque.
CC No. 18148/2016 Pernod Ricard India Pvt. Ltd. Vs. Shiva Wines Ors. page no. 17 of 20
Digitally signed
by VANSHIKA
VANSHIKA MEHTA
MEHTA Date:
2025.08.13
16:42:16 +0530
36. In the present case, apart from relying upon Ex. CW1/D1, CW1/4, and CW1/D3 to point out
alleged discrepancies, the accused has not produced any independent or contemporaneous material to
show that no liability existed on the date of presentation of the cheque. This Court is well conscious of the
fact that the accused may rely upon the complainant’s case to discharge the burden under Section 139 of
the NI Act and is not mandatorily required to lead independent evidence. However, at the same time, it
must also be noted that the improvisation in the stand of the accused discounts the credibility of his
defence, and merely pointing out nominal discrepancies in the accounts does not per se exculpate the
accused from his liability
37. The accused has also failed to reconcile how such discrepancies negate the issuance of the
cheque itself or the presumption of liability arising therefrom. It is well settled that the presumption under
Section 139 NI Act is a presumption of law and not merely of fact, and the Court is duty bound to draw the
same once execution of the cheque is admitted.2
38. Therefore, even assuming that minor variations exist in the statements relied upon by both
parties, such variations do not, in themselves, discharge the statutory presumption in favour of the
complainant. The core fact remains that the cheque in question was drawn on the account of the accused,
was presented within the period of validity, and was dishonoured upon presentation for insufficiency of
funds. The accused has failed to rebut the presumption by raising a probable defence, and hence, the
liability stands established.
Defence taken by Accused no. 3, 4, and 6:
39. Accused Nos. 3, 4 and 6 have taken a common defence that they did not sign the cheque in
question, nor are the particulars filled therein in their handwriting. They further contended that they were
only sleeping partners of the firm, while all business dealings were exclusively handled by Late Sh.
Sanjeev Kumar.
40. At this stage, it is pertinent to consider Ex. CW1/D4, i.e., the partnership deed brought on
record by the accused persons. The said document unequivocally records that the business of M/s Shiva
Wines through Sanjeev Kumar was commenced on 28.03.2014 by its partners, including the present
accused persons. The deed further provides that the bank account(s) of the firm were to be jointly
Digitally signed
by VANSHIKA
2 VANSHIKA MEHTA
Hiten P. Dalal v. Bratindranath Banerjee (2001) 6 SCC 16. MEHTA Date:
2025.08.13
16:42:20
+0530CC No. 18148/2016 Pernod Ricard India Pvt. Ltd. Vs. Shiva Wines Ors. page no. 18 of 20
operated only by two partners, namely, Sh. Vijay Gupta and Sh. Sanjeev Kumar. No other partner was
authorized to operate the bank account. The accused have thus sought to rely on this clause to argue that
they had no role in the issuance of the cheque in question.
41. The concept of a “sleeping partner” denotes a partner who remains in the background of the
business operations. Such a partner’s involvement is ordinarily limited to contributing capital and sharing
profits or losses as per the partnership deed. He does not participate in the day-to-day management, does
not represent the firm in external dealings, and generally maintains a passive role in business activities.
42. However, it is equally settled in law that, notwithstanding such passive participation, a sleeping
partner is nevertheless a full-fledged partner in the eyes of law unless specifically excluded by the
partnership deed or by registration. In an ordinary partnership firm, all partners — active or sleeping —
are subject to the principle of mutual agency and joint and several liability. This means that where the
partnership firm fails to discharge its financial obligations, the personal assets of every partner, including
a sleeping partner, may be used to satisfy the firm’s debts.
43. Accordingly, sleeping partners are liable towards third parties who transact with the firm,
particularly when their names are reflected in the partnership deed or in the official records of the firm. To
outsiders, the disclosure of a person as a partner creates a legitimate presumption of liability. The plea of
being a “sleeping partner” does not, by itself, absolve such partners from liability towards third parties
under the Negotiable Instruments Act. Ex. CW1/D4, i.e., the partnership deed brought on record by the
accused persons, clearly mentions the names of Accused Nos. 3, 4 and 6. Merely because the bank
account(s) of the firm were to be jointly operated only by two partners, namely, Sh. Vijay Gupta and Sh.
Sanjeev Kumar, and no other partner was authorized to operate the bank account, does not, by itself,
absolve Accused Nos. 3, 4 and 6 from liability for the acts of Accused No. 1, i.e., the partnership firm.
DECISION
44. It is axiomatic that the degree of proof expected from the accused is not as rigorous as that of the
complainant. He could discharge his onus by making dents in the case of the complainant. Therefore,
once the accused adduces evidence to the satisfaction of the Court that on a preponderance of
probabilities there exists no debt/ liability in the manner pleaded in the complaint or the demand notice or
Digitally
signed by
VANSHIKA
VANSHIKA MEHTA
MEHTA Date:
2025.08.13
16:42:24
+0530CC No. 18148/2016 Pernod Ricard India Pvt. Ltd. Vs. Shiva Wines Ors. page no. 19 of 20
the affidavit-evidence, the burden shifts to the complainant and the presumption ‘disappears’ and does not
haunt the accused any longer.3
45. In view of the foregoing discussion, this Court finds that the complainant has successfully
established all the ingredients of the offence under Section 138 of the Negotiable Instruments Act. The
issuance of the cheque in question by the accused is admitted. Its dishonour upon presentation is also
undisputed. The statutory presumptions under Sections 118(a) and 139 of the Act thus operate in favour
of the complainant. The accused persons have attempted to rebut the presumption by raising pleas of
discrepancies in the account statements, absence of liability, and misuse of a blank cheque. However,
such pleas remain unsubstantiated by credible or contemporaneous evidence. The discrepancies pointed
out are nominal in nature and, by themselves, do not displace the presumption of a legally enforceable
liability. The defence of issuance of the cheque merely for the purpose of matching signatures or for
completing formalities has not been proved. As regards the defence of the “sleeping partners,” it is well
settled that all partners of a firm are jointly and severally liable for the acts of the firm unless specifically
excluded. The partnership deed Ex. CW1/D4 clearly records the names of accused nos. 3, 4 and 6 as
partners of the firm. Their plea of being “sleeping partners” is of no avail against third parties transacting
with the firm.
46. Accordingly, this court hereby convicts the accused no. 1) M/s. Shiva Wine, 2) Mr. Vijay
Gupta, 3) Mr. Parbash Gupta,4) Mr. Ankush Gupta & 6) Mr. Nitesh Gupta for the offence punishable u/s
138 of the Negotiable Instruments Act, 1881 in respect of cheque in question.
PRONOUNCED IN OPEN COURT ON 13.08.2025.
Digitally
signed by
Present judgment consists of 20 pages and each page bears my initials. VANSHIKA
VANSHIKA MEHTA
MEHTA Date:
2025.08.13
16:42:28
+0530
(VANSHIKA MEHTA)
JMFC (NI ACT)-04/ PHC / New Delhi/13.08.2025
3
Basalingappa v. Mudibasappa, AIR 2019 SC 1983.
CC No. 18148/2016 Pernod Ricard India Pvt. Ltd. Vs. Shiva Wines Ors. page no. 20 of 20