Delhi District Court
Gulshan Thakur vs Manish Kumar on 15 January, 2025
IN THE COURT OF SHRI PRANJAL ANEJA,
SPECIAL JUDGE (NDPS)-02, CENTRAL DISTRICT,
TIS HAZARI COURTS, DELHI
Criminal Appeal No. 75/2023
CNR No. DLCT01-004450-2023
GULSHAN THAKUR
S/o Shri R.C. Thakur,
R/o Flat No. 35, Pocket-D,
Dilshand Garden, Delhi-110095.
....Appellant
Versus
MANISH THAKUR
S/o Late Shri Amar Singh,
R/o H. No. 207/2-R, Gali No. 10,
Than Singh Nagar, Anand Parbat,
Delhi-110005.
....Respondent
Preferred on : 28.03.2023
Reserved on : 04.10.2024
Pronounced on : 15.01.2025
JUDGMENT
1. The present appeal has been preferred by the appellant-
accused under section 374(3) of the Code of Criminal Procedure,
1973 (in short ‘Cr.P.C.’) against the impugned judgment dated
24.02.2023 and order on sentence dated 24.02.2023 (pronounced
on 25.02.2023), passed by the Court of Sh. Chandra Bose, Ld.
PO Special Courts (NI Act), Central District, Tis Hazari Courts,
Delhi, in Complaint Case No. 542483/16 titled as “Manish
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 1 of 29
Kumar Vs. Gulshan Thakur”. Vide judgment of conviction dated
24.02.2023, the appellant was convicted for the offence under
Section 138 of the Negotiable Instruments Act, 1881 (herein after
referred to in short ‘NI Act‘) and vide order on sentence dated
24.02.2023 (pronounced on 25.02.2023), he was punished with
one year rigorious imprisonment and fine of Rs. 6 Lacs to be paid
to the complainant and in default of payment of fine,
accused/convict was further awarded to undergo imprisonment of
four months.
Facts in brief :
2. The case of the complainant, in brief, is that the
appellant/accused is running a business of property dealing in the
name of M/s Gauri Property dealer at Dilshad Garden, Delhi.
That the accused called the complainant at his office and offered
to purchase a flat number B-71, DLF Colony, Ghaziabad, UP in
partnership, to which complainant agreed and upon asking of the
accused, he deposited a sum of Rs. 3 lacs in the ICICI bank a/c
no. 112701501507 of the accused towards the earnest money as
the share of the complainant i.e. 50% in two tranches i.e. Rs. 2
lacs on 04.07.2014 and Rs. 1 Lac on 07.07.2014. An agreement
was also executed between the parties in this regard on
04.07.2014. That later on, upon enquiry the complainant found
out that the aforesaid flat was mortgaged with the bank as the
owner of the said flat had taken loan from the bank. Thereafter,
the complainant told the accused about the loan and said to the
accused that the flat cannot be purchased untill the loan is not
clear, to which the accused promised the complainant to return
the amount of Rs. 3 Lacs to the complainant and the accused
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 2 of 29
issued a cheque bearing no. 971410 dated 21.09.2016 drawn on
SBI in favour of the complainant. The said cheque was given to
the complainant by the accused in his office at Dilshad Garden,
Delhi with assurance that it would be duly encashed on
presentation within time as per the date on that cheque. That
upon presentation with his banker PNB, Rohtak Road, New
Delhi a/c no. 0619000100229040, the said cheque returned
unpaid with remarks “Funds Insufficient” on return-memo dated
22.09.2016. That upon dishonour of the cheque, the complainant
personally met with the accused and told about the dishonour but
the accused flatly refused to pay the cheque amount. The
complainant sent a legal notice dt. 05.10.2016 to the accused by
Regd. AD but the same got returned with remarks ‘Incomplete
Address’. The complainant again sent the legal notice through
Regd. AD on 14.10.2016 but the same returned with remarks
‘Refused’. The accused thus deliberately did not receive the not
despite knowledge. That the accused wants to grab the said
amount of the complainant and is liable to be prosecuted for the
offence u/s 138 NI Act as the cheque was drawn by the accused
against the legally recoverable debt.
Summoning & Trial
3. Complainant led pre-summoning evidence in which he
tendered his affidavit-in-evidence Ex. CW-1/A alongwith
documents viz. Ex. CW1/1 to Ex. CW1/10. The accused was
then summoned on 21.11.2016. Record shows that upon non-
appearance NBW was issued against the accused, however after
some evasion he appeared on 30.07.2018 before the Ld. Trial
Court which framed notice U/s 251 Cr. P.C., 1973 on the same
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 3 of 29
date. Accused pleaded not guilty and claimed trial. His plea of
defence was recorded as under :-
“I admit my signature on cheque in question. I
did not receive any legal notice. I do not have
to make any payment to the complainant
herein as I have already made the entire
payment after the period of six months as per
the agreement.”
4. Complainant then led his post-summoning evidence by
adopting the evidence led in his pre-summoning. Despite several
opportunities, complainant/CW-1 was not cross-examined by the
accused and therefore the opportunity was closed. Statement of
the accused was then recorded u/s 313 r/w Section 281 Cr.P.C. as
follows:
“I have sufficient knowledge of the accusation
against me that the Ex. CW-1/1 i.e. deposit
slip dated 04.07.2014 evidences the deposit of
Rs. 2,00,000/- into my own account. It has
been filled by me. The Ex. CW-1/2 i.e.
Agreement bears my signature at point ‘A’ and
I had entered into the said agreement with the
complainant. The Ex. CW-1/3 i.e. deposit slip
dated 07.07.2014 is also evidencing the
deposit of Rs. 1,00,000/- into my own account.
It has also been filled by me. The Ex. CW-1/4
i.e. Cheque in question is bearing my
signature. However, none of the other
particulars filled by me. The Ex. CW-1/5 i.e.
Cheque return memo pertains to the return of
my cheque and is a matter of record. The
Ex. CW-1/6 i.e. Legal Demand Notice bears
my office address. I further say that no legal
demand notice has been received by me. The
Postal receipt Ex. CW-1/7 and Ex. CW-1/8 are
matter of record. The returned envelope Ex.
CW-1/9 and Ex. CW-1/10 have never been
received by me. The address appearing on the
returned envelope is my correct address and
incomplete address. I cannot say as to why the
returned envelopes bear the report of ‘Refusal’
and ‘incomplete address’ respectively. I sayCA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 4 of 29
that the complainant is the owner of a shop in
D-71, DLF, Extn. II, Bhopra, Ghaziabad, UP.
The said shop of the complainant as well as
the flat behind the shop is mortgage in favour
of SBI. I had entered into talks with the
complainant for the purchasing the flat behind
the shop. The brother of the complainant Sh.
Sunder is friend of my younger brother. I had
entered into an agreement whereby I had
agreed with the complainant that both of us
shall respectively pay 50 % of the mortgage
amount to the Bank so that the flat may be
released. I and the complainant were inclined
to jointly purchase the settlement. However,
the talks with the bank could not materialized
as the Bank demanded approx. Rs. 9,00,000/-.
I had given the cheque in question as security
and to express my willingness to the
complainant to purchase the said flat jointly
with the complainant. The complainant had
filed false case against me. I had demanded the
cheque from the complainant. However, the
complainant refused to do so. The complainant
has misused the cheque.”
5. Accused opted to lead defence evidence but despite
opportunity he did not lead any evidence. The judgment rendered
by the Ld. Trial Court led to the conviction dated 24.02.2023 and
order on sentence dated 24.02.2023 (pronounced on 25.02.2023)
under Section 138 NI Act.
Grounds of Appeal :
6. Against the judgment of conviction and order on sentence,
the appellant/accused has filed the present appeal raising the
following grounds of appeal, broadly :
(i). It has been averred that the trial being “Summary” in
nature, the impugned judgment and order on sentence are illegal
and wrong as the statement of the accused was recorded in theCA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 5 of 29
presence of the counsel for the accused. The present order is a
gross violation of the judgment passed by the Hon’ble Supreme
Court of India titled as ‘Nitinbhai Sevantilal Shah & anr.Vs.
Manubhai Manjibhai Panchal & Anr., AIR 2011 SC (Criminal)
2472.
(ii) Ld Trial Court failed to appreciate the fact that the
appellant was neither given the opportunity to cross-examine the
complainant nor provided with him to produce DE in order to put
his case before the Court which is the gross violation of the
natural justice.
(iii) It is averred that the document Ex. CW1/2 is a forged
document filed by the complainant as the complainant has
manipulated the said document by deleting the receipt of Rs. 2
Lacs on the front page of the said document.
(iv) It is further averred that the cheque in question was a
security cheque and the date on teh cheque was filled up by the
appellant himself. It is submitted that the date on the cheque in
question was filled up without the consent and knowledge of the
appellant only in order to get it dishonoured.
(v) It is further averred that the deposit slips dated 04.07.2014
Ex. CW1/1 and dated 07.07.2024 Ex. CW1/3 have been falsely
used against the appellant.
(vi) Ld Trial Court failed to appreciate the fact that it was the
complainant himself who approached the appellant and got him
ready to purchase the flat behind his shop which was already
mortgaged in favour of State Bank of India.
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 6 of 29
(vii) Ld Trial Court did not grant opportunity to the appellant to
produce his argument oral or written and hurriedly and
mechanically passed the impugned judgment and order on
sentence.
(viii) Ld Trial Court has passed the impugned judgment and
order on sentence in rash manner and hence same are
contradictory to each other.
(ix) Ld Trial Court failed to appreciate that neither the accused/
appellant has received any intimation of legal notice nor it is
served upon him.
(x) It is averred that the appellant has no liability towards the
complainant.
(xi) It is prayed that the impugned judgment and order on
sentence may be set aside and may acquit the appellant.
Submissions of the parties:
7. Ld. Counsel for the appellant/accused argued that
the case of the complainant is false and there is no liability of the
appellant/accused. Ld. Counsel argued that the complainant filed
the complaint by forging the agreement Ex. CW-1/2 in the
manner that he obliterated the name of attesting witnesses to this
document at Page 2 and by obliterating the endorsement of
payment of Rs. 2 lacs at the first page of this agreement. In
support of this contention, Ld. Counsel stated that he filed filed
along with appeal a photocopy of this agreement where
endorement of Rs. 2 lacs is seen which is regarding the
repayment. Ld. Counsel thus argued that now only Rs. 1 lac
remains to be paid as the complainant repaid Rs. 2 lacs out of the
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 7 of 29
amount taken of Rs. 3 lacs. Therefore, the ingredient of Section
138 NI Act is not fulfilled. For this reason, Ld. Counsel stated
that the judgment of conviction has been wrongly passed. Ld.
Counsel also argued that the complainant could not be cross-
examined during the trial and the accused could not also present
any defence evidence and for this reason alone, the accused
should not be held guilty. Ld. Counsel relied upon Ayaaubkhan
Noorkhan Pathan Vs. State of Maharashtra & Ors. Civil Appeal
No. 7728 of 2012 decided on 08.11.2012 and P. Sanjeeva Rao
Vs. State of A.P Crl. Appeal Nos. 874-875 of 2012 decided on
02.07.2012 by Hon’ble Supreme Court of India.
8. On the other hand, Learned Counsel for
complainant/respondent submitted that there are different
versions of the accused in his plea of defence recorded upon
framing of notice U/s 251 Cr.P.C and in his statement recorded
U/s 313 read with Section 281 Cr.P.C. Ld. Counsel argued that
the accused has admitted his liability in his plea of defence
recorded during the framing of notice U/s 251 Cr.P.C. as he has
admitted his signature on the cheque and also stated that he has
already made the entire payment after the period of six months as
per the agreement. Learned Counsel further argued that despite
opportunities, the accused neither cross-examined complainant/
CW-1 nor led any defence evidence. Learned Counsel argued
that the appellant/ accused has failed to discharge his onus of
rebutting the presumptions U/s 118 (a) and Section 139 NI Act
and the case of the complainant duly stands proved warranting
conviction of the accused.
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 8 of 29
Law governing the culpability of Section 138 Negotiable
Instruments Act, 1881
Legislative provisions
9. Section 138 of the NI 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:
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.
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 9 of 29
Explanation:- For the purposes of this section,
“debt or other liability” means a legally
enforceable debt or other liability.”
10. A bare perusal of Section 138 of the NI Act would
show that there are three fundamental requirements for
applicability of this provision which are : (1) that there should be
legally recoverable enforceable debt and (2) that the drawer
issued cheque to discharge part or whole of the debt and (3) that
the cheque issued had been returned due to insufficiency of funds
in the account of drawer.
10.1 Alongside, it would also be expedient to refer to the
legal presumptions which go hand-in-hand with Section 138 that
are laid down under Section 118 (a) and Section 139 of the NI
Act reproduced as under:-
Section 118 (a) NI Act reads as under :
Presumptions as to Negotiable Instruments –
Until the contrary is proved, the following
presumption shall be made; –
(a) of consideration – that every negotiable
instrument was made or drawn for
consideration, and that every such instrument,
when it has been accepted, endorsed,
negotiated or transferred, was accepted,
endorsed, negotiated or transferred for
consideration;
:::: :::: ::::
Section 139 NI Act reads as under :
Presumption in favour of holder
It shall be presumed, unless contrary is proved,
that the holder of a cheque received the cheque
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 10 of 29
of the nature referred in section 138 for the
discharge, in whole or in part, of any debt or
other liability.
Relevant Judicial pronouncements
11. It has been held by the Hon’ble Supreme Court in
Rangappa vs. Sri Mohan, (2010) 11 SCC 441 that :
“…. the presumption mandated by Section 139
of the Act does indeed include the existence of
a legally enforceable debt or liability.”
12. In Rajesh Jain vs. Ajay Singh, SLP (Crl.) No.
12802 of 2022 decided on 09.10.2023, the Hon’ble Apex Court
has observed as under:-
34. The NI Act provides for two presumptions:
Section 118 and Section 139. Section 118 of
the Act inter alia directs that it shall be
presumed, until the contrary is proved, that
every negotiable instrument was made or
drawn for consideration. Section 139 of the
Act stipulates that ‘unless the contrary is
proved, it shall be presumed, that the holder of
the cheque received the cheque, for the
discharge of, whole or part of any debt or
liability.’ It will be seen that the ‘presumed
fact’ directly relates to one of the crucial
ingredients necessary to sustain a conviction
under Section 138.”
35. Section 139 of the NI Act, which takes the
form of a ‘shall presume’ clause is illustrative
of a presumption of law. Because Section 139
requires that the Court ‘shall presume’ the fact
stated therein, it is obligatory on the Court to
raise this presumption in every case where the
factual basis for the raising of the presumption
had been established. But this does not
preclude the person against whom the
presumption is drawn from rebutting it and
proving the contrary as is clear from the use of
the phrase ‘unless the contrary is proved.’CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 11 of 29
36. The Court will necessarily presume that
the cheque had been issued towards discharge
of a legally enforceable debt/liability in two
circumstances. Firstly, when the drawer of the
cheque admits issuance/execution of the
cheque and secondly, in the event where the
complainant proves that cheque was
issued/executed in his favour by the drawer.
The circumstances set out above form the
fact(s) which bring about the activation of the
presumptive clause. [Bharat Barrel vs. Amin
Chand] [(1999) 3 SCC 35].
37. Recently, this Court has gone to the extent
of holding that presumption takes effect even
in a situation where the accused contends that
‘a blank cheque leaf was voluntarily signed
and handed over by him to the complainant.
[Bir Singh v. Mukesh Kumar (2019) 4 SCC
197]. Therefore, mere admission of the
drawer’s signature, without admitting the
execution of the entire contents in the cheque,
is now sufficient to trigger the presumption.
38. As soon as the complainant discharges the
burden to prove that the instrument, say a
cheque, was issued by the accused for
discharge of debt, the presumptive device
under Section 139 of the Act helps shifting the
burden on the accused. The effect of the
presumption, in that sense, is to transfer the
evidential burden on the accused of proving
that the cheque was not received by the Bank
towards the discharge of any liability. Until
this evidential burden is discharged by the
accused, the presumed fact will have to be
taken to be true, without expecting the
complainant to do anything further.
39. John Henry Wigmore on Evidence states
as follows:
“The peculiar effect of the presumption of law
is merely to invoke a rule of law compelling
the Jury to reach the conclusion in the absence
of evidence to the contrary from the opponent
but if the opponent does offer evidence to the
contrary (sufficient to satisfy the Judge’s
requirement of some evidence), the
presumption ‘disappears as a rule of law and
the case is in the Jury’s hands free from any
rule.”
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 12 of 29
40. The standard of proof to discharge this
evidential burden is not as heavy as that
usually seen in situations where the
prosecution is required to prove the guilt of an
accused. The accused is not expected to prove
the non-existence of the presumed fact beyond
reasonable doubt. The accused must meet the
standard of ‘preponderance of probabilities’,
similar to a defendant in a civil proceeding.
[Rangappa vs. Mohan (AIR 2010 SC 1898)].
41. In order to rebut the presumption and
prove to the contrary, it is open to the accused
to raise a probable defence wherein the
existence of a legally enforceable debt or
liability can be contested. The words ‘until the
contrary is proved’ occurring in Section 139
do not mean that accused must necessarily
prove the negative that the instrument is not
issued in discharge of any debt/liability but the
accused has the option to ask the Court to
consider the non-existence of debt/liability so
probable that a prudent man ought, under the
circumstances of the case, to act upon the
supposition that debt/liability did not exist.
[Basalingappa Vs. Mudibasappa (AIR 2019
SC 1983) See also Kumar Exports Vs. Sharma
Carpets (2009) 2 SCC 513].
42. In other words, the accused is left with two
options. The first option-of proving that the
debt/liability does not exist-is to lead defence
evidence and conclusively establish with
certainty that the cheque was not issued in
discharge of a debt/liability. The second option
is to prove the non-existence of debt/liability
by a preponderance of probabilities by
referring to the particular circumstances of the
case. The preponderance of probability in
favour of the accused’s case may be even fifty
one to forty nine and arising out of the entire
circumstances of the case, which includes: the
complainant’s version in the original
complaint, the case in the legal/demand notice,
complainant’s case at the trial, as also the plea
of the accused in the reply notice, his 313
statement or at the trial as to the circumstances
under which the promissory note/cheque was
executed. All of them can raise a
preponderance of probabilities justifying a
finding that there was ‘no debt/liability’.
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 13 of 29
[Kumar Exports and Sharma Carpets, (2009) 2
SCC 513.
43. The nature of evidence required to shift the
evidential burden need not necessarily be
direct evidence i.e., oral or documentary
evidence or admissions made by the opposite
party; it may comprise circumstantial evidence
or presumption of law or fact.
44. The accused may adduce direct evidence
to prove that the instrument was not issued in
discharge of a debt/liability and, if he adduces
acceptable evidence, the burden again shifts to
the complainant. At the same time, the accused
may also rely upon circumstantial evidence
and, if the circumstances so relied upon are
compelling the burden may likewise shift to
the complainant. It is open for him to also rely
upon presumptions of fact, for instance those
mentioned in Section 114 and other sections of
the Evidence Act. The burden of proof may
shift by presumptions of law or fact. In
Kundanlal’s case- (supra) when the creditor
had failed to produce his account books, this
Court raised a presumption of fact under
Section 114, that the evidence, if produced
would have shown the non-existence of
consideration. Though, in that case, this Court
was dealing with the presumptive clause in
Section 118 NI Act, since the nature of the
presumptive clauses in Section 118 and 139 is
the same, the analogy can be extended and
applied in the context of Section 139 as well.
45.Therefore, in fine, it can be said that 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 the
affidavit-evidence, the burden shifts to the
complainant and the presumption ‘disappears’
and does not haunt the accused any longer.
The onus having now shifted to the
complainant, he will be obliged to prove the
existence of a debt/liability as a matter of fact
and his failure to prove would result in
dismissal of his complaint case. Thereafter, the
presumption under Section 139 does not again
come to the complainant’s rescue. Once both
parties have adduced evidence, the Court has
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 14 of 29
to consider the same and the burden of proof
loses all its importance. [Basalingappa vs.
Mudibasappa, AIR 2019 SC 1983; See also,
Rangappa vs. Sri Mohan (2010) 11 SCC 441].
13. It has been held in Hiten P Dalal vs. Bratindranath
Banerjee, (2001) 6 SCC 16 that a mere plausible explanation given
by the accused is not enough to rebut the presumption and the
accused has to necessarily disprove the prosecution case by leading
cogent evidence that he had no debt or liability to issue the said
cheque.
14. In Rangappa vs. Sri Mohan (supra), the Hon’ble
Supreme Court has observed as under: –
Section 139 of the Act is an example of a
reverse onus clause that has been included in
furtherance of the legislative objective to
improve the credibility of negotiable
instruments. While Section 138 of the Act
specifies a strong criminal remedy in relation
to the cheques, the rebuttable presumption
under Section 139 is a device to prevent undue
delay in the course of litigation. However, it
must be remembered that the offence made
punishable by Section 138 can be better
described as a regulatory offence since the
bouncing of a cheque is largely in the nature of
a civil wrong whose impact is usually confined
to the private parties involved in commercial
transactions. In such a scenario, the test of
proportionality should guide the construction
and interpretation of reverse onus clauses and
the accused/defendant cannot be expected to
discharge an unduly high standard of proof. In
the absence of compelling justifications,
reverse onus clauses usually impose an
evidentiary burden and not a persuasive
burden. Keeping this in view, it is a settled
position that when an accused has to rebut the
presumption under Section 139, the standard
of proof for doing so is that of ‘preponderanceCA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 15 of 29
of probabilities’. Therefore, if the accused is
able to raise a probable defence which creates
doubts about the existence of a legally
enforceable debt or liability, the prosecution
can fail. As clarified in the citations, the
accused can rely on the materials submitted by
the complainant in order to raise such a
defence and it is conceivable that in some
cases the accused may not need to adduce
evidence of his/her own.
15. In view of the aforesaid proposition of law laid
down by the Hon’ble Apex Court, it has to be seen as to whether
the respondent/complainant has been able to prove that there was
legally enforceable debt or liability for which the cheques in
question were issued by the appellant/accused or that the
appellant/accused has been able to rebut the presumption and
prove that the cheques in question had not been issued in
discharge of legally enforceable debt or liability. The
complainant in a case of Section 138 NI Act, in order to succeed,
has to satisfy the legal ingredients of this provision viz. (1) that a
person has drawn a cheque, on his bank account for payment of
any amount to another person from that account for the
discharge, in whole or in part, of any legally enforceable debt or
other liability (2) presentment of that cheque to the bank within
time (3) cheque returned by drawee bank unpaid due to
insufficient balance or exceeding arrangement (4) payee makes a
demand notice in writing to the drawer within 30 days of receipt
of information from the bank as to dishonour of the cheque (5)
drawer fails to make said payment to payee within 15 days of
receipt of that legal notice.
16. As such, once the issuance of the cheque is admitted
or proved, the court is duty bound to raise a presumption that the
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 16 of 29
dishonoured cheque placed before it was indeed issued in
discharge of a legally enforceable debt or liability of the amount
mentioned therein. Of course, the said presumption is rebuttable
one and it is for the accused to prove that the cheque in question
had not been issued in discharge of a legally enforceable debt or
liability.
Analysis and Conclusion
17. It is a cardinal principle of criminal jurisprudence
that it is the burden of the prosecution to prove the guilt of the
accused beyond reasonable doubt, however the statutory
presumptions wherever are available to the accused create an
exception to this cardinal principle by shifting the burden of
proof to the opposite party. Among the notable presumptions
available under the scheme of the NI Act, two are available under
Sections 118 (a) and 139 of the Act, the contours of which have
been cited and discussed in the above mentioned judicial
pronouncements.
18. In the instant case, as regards issuance of cheque in
question is concerned, the accused did not dispute his signature
on the cheque in question, however, he took the defence in his
statement u/s 313 Cr.P.C. that none of the other particulars in the
cheque is filled by him. The accused also took the defence that he
does not have to make any payment to the complainant as he has
already made the entire payment after six months as per the
agreement.
19. In Rajesh Jain vs. Ajay Singh, SLP (Crl.) No. 12802
of 2022, the Hon’ble Supreme Court held that mere admission of
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 17 of 29
the drawer’s signature, without admitting the execution of the
entire contents in the cheque, is now sufficient to trigger the
presumption. In the case of Satish Jayantilal Shah Vs. Pankaj
Mashruwala & Anr., 1996 Cri.L.J. 3099, it has been held that no
law provides that in case of any Negotiable Instruments, entire
body has to be written by maker or drawer only. In the present
case, the accused/appellant has admitted his signature on the
cheque in question and therefore in view of the abovenoted
authorities, the defence that none of the other particulars in the
cheque is filled by him does not hold any ground. This fact is
sufficient to raise the presumption against the appellant/accused
that the cheque was drawn in discharge of a legally enforceable
debt or other liability and the onus is upon him to rebut the same.
The defence taken by the accused that he does not have to make
any payment to the complainant as he has already made the entire
payment after six months as per the agreement has to be proved
by him in order to discharge the onus of rebutting the
presumptions standing against him. These shall be dealt
separately, however at this stage the ingredient remains satisfied
that the cheque in question was drawn by the appellant / accused
on his bank account.
20. Notably, the accused did not cross-examine the
complainant/CW-1 and neither led DE. The facts as to
presentment of the cheque within time and it getting dishonoured
due to “Insufficient Funds” as per the return memo are even
otherwise not in dispute. These ingredients therefore stand
satisfied.
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 18 of 29
21. The accused in his plea of defence, however,
disputes receiving legal notice. In his statement u/s 313 Cr.P.C.
the accused stated that the legal demand notice bears his office
address. The relevant portion of his statement u/s 313 Cr.P.C.
concerning legal demand notice is reproduced as under:
“……….. The Ex. CW-1/6 i.e. Legal Demand
Notice bears my office address. I further say
that no legal demand notice has been received
by me. The Postal receipt Ex. CW-1/7 and
Ex. CW-1/8 are matter of record. The returned
envelope Ex. CW-1/9 and Ex. CW-1/10 have
never been received by me. The address
appearing on the returned envelope is my
correct address and incomplete address. I
cannot say as to why the returned envelopes
bear the report of ‘Refusal’ and ‘incomplete
address’ respectively. I say that the
complainant is the owner of a shop in D-71,
DLF, Extn. II, Bhopra, Ghaziabad, UP. The
said shop of the complainant as well as the flat
behind the shop is mortgage in favour of SBI. I
had entered into talks with the complainant for
the purchasing the flat behind the shop. The
brother of the complainant Sh. Sunder is friend
of my younger brother. I had entered into an
agreement whereby I had agreed with the
complainant that both of us shall respectively
pay 50 % of the mortgage amount to the Bank
so that the flat may be released. I and the
complainant were inclined to jointly purchase
the settlement. However, the talks with the
bank could not materialized as the Bank
demanded approx. Rs. 9,00,000/-. I had given
the cheque in question as security and to
express my willingness to the complainant to
purchase the said flat jointly with the
complainant. The complainant had filed false
case against me. I had demanded the cheque
from the complainant. However, the
complainant refused to do so. The complainant
has misused the cheque.”
22. From the above, it is clear that the accused admits
that the legal demand notice bears his office address. It is noted
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 19 of 29
that the envelope Ex. CW1/10 bearing the correct address of the
accused has been returned back with report of refusal. Section 27
General Clauses Act and Section 114 of Indian Evidence Act gives a
combine effect that the legal demand notice sent through registered
post to the correct address is deemed served on that address in the due
course of time unless the contrary is proved. Section 27 General
Clauses Act reads:
“27. Meaning of service by post. Where any Central Act or
Regulation made after the commencement of this Act
authorizes or requires any document to be served by post,
whether the expression serve or either of the expressions give
or send or any other expression is used, then, unless a different
intention appears, the service shall be deemed to be effected
by properly addressing, prepaying and posting by registered
post, a letter containing the document, and, unless the contrary
is proved, to have been effected at the time at which the letter
would be dlivered in the ordinary course of post.”
23. In C.C. Alavi Haji Appellant v. Palapetty Muhammed & Anr.
Respondents 2007 STPL(DC) 952 SC, it was observed:
“14. Section 27 gives rise to a presumption that service of
notice has been effected when it is sent to the correct address
by registered post. In view of the said presumption, when
stating that a notice has been sent by registered post to the
address of the drawer, it is unnecessary to further aver in the
complaint that in spite of the return of the notice unserved, it
is deemed to have been served or that the addressee is
deemed to have knowledge of the notice. Unless and until the
contrary is proved by the addressee, service of notice is
deemed to have been effected at the time at which the letter
would have been delivered in the ordinary course of business.
This Court has already held that when a notice is sent by
registered post and is returned with a postal endorsement
“refused” or “not available in the house” or “house locked” or
“shop closed” or “addressee not in station”, due service has to
be presumed. [Vide Jagdish Singh Vs. Natthu Singh, AIR
1992 SC 1604, State of M.P. Vs. Hiralal & Ors. (1996) 7
SCC 523 and V. Raja Kumari Vs. P. Subbarama Naidu &
Anr. (2004) 8 SCC 774]. It is, therefore, manifest that in view
of the presumption available under Section 27 of the Act, it is
not necessary to aver in the complaint under Section 138 of
the Act that service of notice was evaded by the accused orCA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 20 of 29
that the accused had a role to play, in the return of the notice
unserved.”
It was further observed:
“17. It is also to be borne in mind that the requirement of
giving of notice is a clear departure from the rule of Criminal
Law, where there is no stipulation of giving of a notice before
filing a complaint. Any drawer who claims that he did not
receive the notice sent by post, can, within 15 days of receipt
of summons from the court in respect of the complaint under
Section 138 of the Act, make payment of the cheque amount
and submit to the Court that he had made payment within 15
days of receipt of summons (by receiving a copy of
complaint with the summons) and, therefore, the complaint is
liable to be rejected. A person who does not pay within 15
days of receipt of the summons from the Court along with the
copy of the complaint under Section 138 of the Act, cannot
obviously contend that there was no proper service of notice
as required under Section 138, by ignoring statutory
presumption to the contrary under Section 27 of the G.C. Act
and Section 114 of the Evidence Act. In our view, any other
interpretation of the proviso would defeat the very object of
the legislation. As observed in Bhaskaran’s case (supra), if
the “giving of notice” in the context of Clause (b) of the
proviso was the same as the “receipt of notice” a trickster
cheque drawer would get the premium to avoid receiving the
notice by adopting different strategies and escape from legal
consequences of Section 138 of the Act.”
24. From the above observations, it is amply clear that here
also the burden lies on the accused to show that he has not
received the legal demand notice. In the present case, nothing has
been proved to discharge his burden except his mere statement
under Section 313 Cr.P.C. which is no evidence. Moreover, the
address on the legal demand notice is the correct address of the
accused which even he admits. The accused has not examined the
postal witness to disprove the service. In a celebated judgment
titled as K. Bhaskaran Versus Sankaran Vaidhyan Balan 1999
Cri LJ 4606, the Apex court observed:
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 21 of 29
“23. No doubt Section 138 of the Act does not require that
the notice should be given only by “post”. Nonetheless the
principle incorporated in Section 27 (quoted above) can
profitably be imported in a case where the sender has
despatched the notice by post with the correct address written
on it. Then it can be deemed to have been served on the
sendee unless he proves that it was not really served and that
he was not responsible for such non-service. Any other
interpretation can lead to a very tenuous position as the
drawer of the cheque who is liable to pay the amount would
resort to the strategy of subterfuge by successfully avoiding
the notice.”
25. It is well settled that a notice refused to be accepted
by the addressee can be presumed to have been served on him
(vide Harcharan Singh v. Shivrani (1981 (2) SCC 535) and
Jagdish Singh v. Natthu Singh ((1992 (1) SCC 647).
26. In these facts and circumstances, this court has no
hesitation to hold that the accused was deemed served with the
legal demand notice. The ingredient as to legal demand notice
also stands satisfied. No payment has been made by the accused
within 15 days of receipt of that legal notice.
27. Now, what remains to be seen is whether the
appellant/accused has been able to rebut the presumptions u/s
118(a) and 139 NI Act standing against him in the wake of all
ingredients of section 138 NI Act being satisfied as noted in the
foregoing paras.
28. The defence taken by the appellant /accused to rebut
these presumptions is that he does not have to make any payment
to the complainant as he has already made the entire payment
after six months as per the agreement. At the outset, it is noted
that the accused in his plea of defence and statement U/s 313
Cr.P.C. admitted the agreement Ex. CW1/2 executed between
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 22 of 29
him and the complainant. One of the grounds of appeal taken is
that the said agreement Ex. CW1/2 is a forged document filed by
the complainant as the complainant has manipulated the said
document by obliterating the endorsement regarding the receipt
of Rs. 2 Lac on the front page of the said agreement and by
obliterating the name of the witnesses on the second page of the
said agreement. Ld. Counsel for the appellant/accused argued
that there is a receiving of Rs. 2 lacs on the front page of the
agreement showing that accused had repaid an amount of Rs. 2
lacs out of the amount taken from the complainant. Ld. Counsel
also argued that now only Rs. 1 lac remains to be repaid out of
Rs. 3 lacs. This ground taken by the accused cannot sustain,
firstly, in wake of the fact that no such challenge has been raised
in his plea of defence during the trial. Secondly, there is no cross-
examination of complainant/CW-1 conducted nor any defence
evidence is led by him. It was for the accused to have led
evidence in support of his contention. In absence thereof, the
ground taken is a bare one without any support or substance.
Since the accused took the plea in his defence recorded U/s 251
Cr.P.C. that he has already made the entire payment after six
months as per the agreement, the onus lay upon him to lead
cogent and reliable piece of evidence in this regard, but he did
not even cross-examine the complainant. The argument by the
Ld. Counsel for appellant/accused that now only Rs. 1 lac
remains to be repaid is also contrary to the plea of defence made
during the framing of notice U/s 251 Cr.P.C. The accused could
have challenged the agreement Ex. CW-1/2 on two occasions,
firstly at the time of taking his plea of defence during the framing
of notice U/s 251 Cr.P.C and secondly, at the time of recording
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 23 of 29
of his statement U/s 313 Cr.P.C but no such challenge has been
raised on these occasions, therefore, the challenge to agreement
Ex. CW-1/2 that there are obliterations on it, are not sustainable
at this stage. The filing of some photocopy document alleging the
same to be copy of the same agreement and attempting to show
some endorsement on it in order to prove repayment and to show
some kind of forgery on the original agreement, is of no help to
the accused/appellant in light of the above reasoning.
Furthermore, a perusal of the agreement Ex. CW-1/2 shows no
sign of obliteration or defacement over the first page at the area
where the Ld. Counsel for accused/appellant attempted to
compare it with the photocopy (filed along with appeal)
containing repayment endorsement, neither any obliteration or
defacement can be seen at the second page over the area of
witnesses. Also, no separate application such as one U/s 391
Cr.P.C for taking further evidence in the form of said photocopy
has been moved on behalf of accused/appellant. Annexing the
said photocopy along with appeal and attempting to compare it
with the original agreement Ex. CW-1/2 contrary to the evidence
on record, is a futile and failed exercise on the part of the
accused/appellant.
29. The Ld. Counsel for appellant/accused relied upon
Ayaaubkhan Noorkhan Pathan Vs. State of Maharashtra & Ors.,
VIII (2012) SLT 428 Civil Appeal No. 7728 of 2012 decided on
08.11.2012. In the facts of the said case, the appellant’s caste
certificate of the Scheduled Tribes category was challenged and
the appellant was denied the opportunity to cross-examine the
witnesses and no order was passed with respect to his application
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 24 of 29
for recalling such witnesses for cross-examination before the
Caste Certificate Scrutiny Committee. However, in the case in
hand, as reflected from the trial court record, opportunities were
granted to the accused to cross-examine the complainant on
03.12.2018, 19.07.2019 and 11.10.2019. Cost was also imposed
upon the accused for his default. Despite the same, he did not
avail the opportunity to cross-examine the complainant and
finally on 09.12.2019, it was observed by the Ld. MM that
accused has been merely delaying the disposal of the case and
despite numerous opportunities, he has failed to cross-examine
the complainant and thereafter, the opportunity to cross-examine
the complainant was closed. The matter thereafter proceeded for
statement of the accused U/s 313 Cr.P.C. for which also accused
took numerous opportunities and finally his statement was
recorded U/s 313 Cr.P.C. in which he expressed his willingness
to lead DE and then the matter was kept pending at the stage of
DE again for many dates and even cost of Rs. 10,000/- was also
imposed on 16.03.2021. Despite the same, accused did not lead
any DE. It is further noted that during the entire trial, no
application for recalling any of the said orders (closing the
opportunity to cross-examine and lead DE) was filed. Thus, the
facts of the present case differentiates from the authority of
Ayaaubkhan (supra) and therefore, this authority is of no help to
the appellant/accused.
30. The Ld. Counsel also replied upon P. Sanjeeva Rao
Vs. State of A.P. V (2012) SLT 74 Crl. Appeal Nos. 874-875 of
2012 decided on 02.07.2012 by Hon’ble Supreme Court of
India. In the facts of this case, the appellant was working as Sub-
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 25 of 29
Divional Officer in BSNL and was facing prosecution under the
Prevention of Corruption Act, 1988 and around the time the
prosecution concluded its evidence, the appellant filed Crl. Misc.
Petitions U/s 242 & 311 Cr.P.C for recall of prosecution
witnesses for cross-examination. Respectfully, this case also
differs from the facts of the case in hand as has been observed
above that no application for recall of complainant/CW-1 was
ever filed and the orders as to closure of opportunities to cross-
examine and lead DE were also never challenged. The conduct of
the accused during trial is also to be noted as numerous
opportunities were granted to him for participating in the trial
and even costs were imposed upon him on different occasions,
but his delayed tactics led to a prolonged trial and therefore, this
disentitles him from getting any such benefit of cross-examining
the complainant/CW-1. Thus, the authority of P. Sanjeeva Rao
(supra) is also no help to the accused.
31. In one of the ground raised in the appeal it is stated
that the accused did not fill up the pay-in-slips for deposit of
Rs. 2 Lacs and Rs. 1 Lac in the account of the complainant.
However, this ground is directly contrary to the statement of the
accused recorded U/s 313 Cr.P.C wherein he himself stated that
the two pay-in-slips for Rs. 2 Lacs and Rs. 1 Lac Ex. CW1/1 &
Ex. CW1/3 respectively, were filled up by him. There is no
justification offered for taking a contrary plea now. Furthermore,
the receiving of the sum of Rs. 3 Lacs by the accused from the
complainant is otherwise not disputed in the plea of defence
recorded during framing of notice U/s 251 Cr.P.C. and in the
statement of accused recorded U/s 313 Cr.P.C. Rather, in the
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 26 of 29
statement U/s 313 Cr.P.C, accused admits of the deposit of Rs. 2
lacs and Rs. 1 lac i.e. total Rs. 3 lacs in his account by pay-in-
slips in his own handwriting.
32. The plea raised by the accused is that he returned the
money after six months as per the agreement. Here, the onus to
prove this defence was upon the accused, but he utterly failed to
discharge the same. No cross-examination of the complainant/
CW1 has been conducted, no defence evidence has been led and
no document has been filed in support of this defence that he
returned the money to the complainant. Even, no date / month /
year has been stated as to when he returned the money. The mode
of return is also not mentioned. The accused in his statment U/s
313 Cr.P.C. mentioned that he had demanded the cheque from
the complainant but he refused to do so. It looks improbable that
accused took no steps upon thereupon. No notice is served to the
complainant for not returning the cheque, no police complaint is
lodged and even no instructions given to his banker for stop
payment of the cheque. The date/ month/ year of such demand of
cheque is also not disclosed. Thus, accused gains nothing from
out of this bald statement that he had demanded back his cheque
from the complainant.
33. In his statement U/s 313 Cr.P.C., the accused stated
that the cheque was given as a security and to express his
willingness to the complainant to purchase the said flat jointly
with the complainant. However, there is no evidence filed by the
accused to this effect.
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 27 of 29
34. In the case of I.C.D.S. Ltd. v. Beena Shabbir & Anr.
reported in AIR 2002 SC 3014, the Hon’ble Supreme Court has
observed as follows :
“………The commencement of the Section stands with the
words “where any cheque”. The above noted three words are
of extreme significance, in particular, by reason of the user of
the word “any” the first three words suggest that in fact for
whatever reason if a cheque is drawn on an account
maintained by him with a banker in favour of another person
for the discharge of any debt or other liability, the highlighted
words if read with the first three words at the commencement
of Section 138, leave no manner of doubt that for whatever
reason it may be, the liability under this provision cannot be
avoided in the event the same stands returned by the banker
unpaid. The legislature has been careful enough to record not
only discharge in whole or in part of any debt but the same
includes other liability as well..”
35. Thus, even if the dishonoured cheque in question
was issued as a security cheque, it will still come under the ambit
of Section 138 of the Act. The only condition is that the cheque
must be backed by some form of legally enforceable debt or
liability towards the holder. Admittedly, the accused took the
amount of Rs. 3 Lacs from the complainant. As already
discussed, the cheque in question has also been drawn by the
accused. Therefore, the presumption of legally enforceable debt
arises against the accused, to which he has failed to rebut.
36. The discussion in the foregoing paras and the
appreciation of evidence leads to the conclusion that appellant
has failed to set up a probable defence and to fulfill the standard
of proof by the test of preponderance of probability.
Consequently appellant /accused has failed to rebut the
presumptions u/s 118(a) and 139 Negotiable Instruments Act,
1881 standing against him.
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 28 of 29
37. I therefore find no illegality or infirmity in the
judgment dated 24.02.2023 passed by the Ld. Trial Court thereby
convicting the appellant/accused for the offence punishable under
Section 138 NI Act.
38. Accordingly, the judgment dated 24.02.2023 passed
by Ld Trial Court is upheld and the accused/appellant is
convicted for the offence punishable U/s 138 NI Act, 1881.
39. The present appeal is devoid of any merits and the
same is hereby dismissed.
40. Be heard separately on the point of sentence.
(Announced in Open Court Digitally
signed by
th
on 15 January, 2025) PRANJAL
PRANJAL
ANEJA
ANEJA Date:
2025.01.15
18:44:01
+0530
(PRANJAL ANEJA)
Special Judge, NDPS-02,
Central District,Tis Hazari Court,
Delhi/15.01.2025 (vp)
CA No. 75/2023 Gulshan Thakur Vs. Manish Kumar Page 29 of 29