Delhi District Court
Mukesh Kumar Mehto vs Rajiv And Anr on 31 January, 2025
IN THE COURT OF SHRI KUMAR RAJAT,
ADDL. SESSIONS JUDGE-07, SHAHDARA DISTRICT,
KARKARDOOMA COURTS, DELHI.
CA No. 132/2022
CNR No. DLSH01-006383-2022
MUKESH KUMAR MEHTO,
S/o Late Sh. Laxman Prasad Mehto,
R/o A-127, 3rd Floor, Gali No. 8,
Madhu Vihar, Delhi-92. ...Appellant
Vs.
1. RAJIV,
S/o Sh. Ved Prakash,
R/o A-26, Madhu Vihar,
Delhi-92.
2. STATE,
(Govt. of NCT of Delhi)
...Respondents
Present:- Sh. A K Choudhary, Ld. counsel for appellant along
with appellant.
Sh. Vivek Kumar, Ld. Counsel for R1 appeared
through VC.
R1 Rajiv in person.
Sh. Ghanshyam, Ld. Substitute Addl. PP for the
State/R2.
JUDGMENT
1. It is submitted by Ld. Counsel for the appellant that
the present appeal has been filed against the impugned judgment
dated 30.07.2022 and order on sentence dated 01.09.2022 passed
by Ld. MM-02, Shahdara Karkardooma Courts, Delhi vide which
appellant was convicted and sentenced to undergo SI for 6
months and directed to pay the fine of Rs. 1,75,000/- as
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KUMAR by KUMAR
RAJAT
RAJAT 14:32:51
Date: 2025.01.31
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compensation within 30 days and in default, shall undergo SI for
1 month.
2. It is submitted by Ld. Counsel for the appellant that
appellant has two minor children and he has worked in Insurance
Sector as Sales Officer with different companies from 2006 to
2020 and since then he is doing business of consultancy in
sectors like Insurance, Finance, Loans etc., and he was residing
at Vaishali, Ghaziabad upto February, 2013 and then shifted to
Mandawali, Delhi and stayed as tenant till January, 2015 and then
shifted to IP Extension, Delhi and resided there as tenant till
January, 2016 and then, they returned to his parental house at
Madhu Vihar, IP Extension, Delhi-92 and he never received any
legal notice dated 14.12.2013 and he came to know about the
present case through his brother when the police reached his
parental house for execution of warrants.
3. It is also submitted that on 25.01.2014, complainant
Rajiv filed the complaint case u/s 138 NI Act against the
appellant for the cheque of Rs. 1,00,000/- dated 14.11.2013. On
15.11.2014, the said complaint case was directed to be returned
to him due to jurisdictional issue in the light of judgment of
Dashrath Roop Singh Rathore. On 06.01.2015, complainant
Rajiv again filed the same criminal complaint case. On
16.01.2015, complainant examined himself as CW1 in pre-
summoning evidence and he was the only witness examined.
The notice u/s 251 Cr.P.C./274 BNSS was framed on 07.04.2018.
On 09.12.2019 opportunity was given to appellant to cross-
examine the complainant subject to cost as he had sought
adjournments on previous dates and not paid the previous costs
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KUMAR RAJAT
RAJAT Date:
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and when cross-examination was not done, the CE was closed on
that date as no other witness was to be examined. Ld. Counsel for
appellant was present to examine the complainant, but he was not
allowed by Ld. MM on the ground that he had not paid the cost.
4. It is also submitted that on 13.01.2020, SA of the
appellant was recorded and on 24.11.2021 and 05.04.2022,
appellant examined three defence witnesses i.e. DW1 Mukesh
Kumar Mehto himself, DW2 Ganeshi Devi, mother and DW3
Sharma Mehto, brother. On 29.07.2022, appellant filed an
application for re-calling witnesses, but it was dismissed vide
order dated 30.07.2022 and impugned judgment was pronounced
on same day and appellant was held guilty and vide order dated
01.09.2022, appellant was sentenced to SI for 6 months and to
pay the fine of Rs. 1,75,000/- as compensation to the complainant
and in default, SI for 1 month.
5. It is further submitted that the impugned judgment
dated 30.07.2022 and order on sentence dated 01.09.2022 of Ld.
MM are against the law and based on assumption or presumption
and deserves to be set aside as Ld. MM ignored the material
facts, circumstances and law. The present case is full of doubts,
contradictions and provisions of law, but Ld. MM has not
appreciated the relevant materials available on record as well as
the evidence so recorded during the course of trial and required
ingredients of Section 138 NI Act are not fulfilled, therefore, the
conviction of appellant is wrong, incorrect and illegal in the eyes
of law and he deserves to be acquitted.
6. It is further submitted that Ld. MM fell in a grave
error while appreciating the facts and law particularly about theCA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 3 of 27
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KUMAR by KUMAR
RAJATRAJAT 2025.01.31
Date:
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alleged claim of the complainant that he had given the alleged
loan of Rs. 1 lakh to the accused/appellant, but the date and mode
of payment of alleged loan are not mentioned and in order to
discharge the liability, the accused/appellant has given the cheque
bearing no. 062536 dated 14.11.2013 of Rs. 1,00,000/- to the
complainant, which appeared to be very odd or unrealistic and on
the other hand, the claim of the appellant/accused appeared to be
genuine or plausible that said cheque in question were misused
by the complainant.
7. It is further argued that complainant did not produce
any books of accounts or any other proof to show that he got so
much money from the bank and this fact is not mentioned in the
complaint nor any written document is filed nor any witness to
this effect has been examined. Apart from this, Ld. Trial Court
failed to notice that ordinarily in terms of Section 269-SS of
Income Tax Act, any advance taken by way of any loan of more
than Rs. 20,000/ was to be made by way of an account payee
cheque only, but this statutory provision was completely ignored
by Ld. MM while passing the impugned judgment and it is
punishable u/s 271-D IT Act. Thus, the complainant failed to
prove his case from its inception as he has given the alleged loan
in cash and Ld. MM failed to properly appreciate these facts and
law.
8. Complainant claimed that cheque in question was
returned by the banker vide returning memo dated 14.11.2013
and he sent a legal notice dated 13.12.2013 through speed post as
well as courier, which were received back unserved on
17.12.2013 and said legal notice was duly served upon the
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KUMAR by KUMAR
RAJAT
RAJAT Date: 2025.01.31
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accused/appellant, but as per annexed copy of speed post envelop
and the track of the courier, it is clearly reflected that the items
booked through such postal department and courier was returned
being unclaimed and the shop/premises found closed, but the
complainant has not produced any document or examine any
witness to that effect during trial that it was duly served upon the
appellant and this fact was not appreciated by Ld. MM and he
presumed that the alleged legal notice dated 13.12.2013 was duly
served or received because it reached at the given address
without going into the inquiry that same remained unserved.
Hence, complainant has failed to prove his case from its
inception on this aspect also, which is basic requirement of NI
Act for proving the alleged claim of the complainant that alleged
notice was served upon accused/appellant. The said legal notice
was never served on the appellant and Ld. MM ignored that
address of complainant and appellant were same and appellant
has no knowledge about the pendency of present complaint as no
such legal notice was received.
9. It is further argued that in the light of Dashrath Roop
(Supra), the complaint case was filed beyond limitation and no
condonation of delay application was filed and no opportunity to
cross-examine the complainant was given to the appellant only
for non payment of cost, which is against principles of natural
justice and due to inadequate legal advice and financial
weakness, the appellant could not engage a better defence lawyer.
The complainant did not examine any other witness mentioned
in the list of witnesses i.e. bank official, postal department
official, courier provider etc., and in statement u/s 313
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by KUMAR
KUMAR RAJAT
RAJAT Date:
2025.01.31
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Cr.P.C./351 BNSS material incriminating evidence was not put to
the accused by the Ld. Trial Court.
10. It is also argued that the judgments cited by Ld.
Counsel for appellant were ignored and the judgments cited in
the judgment are of different facts and circumstances and Ld.
MM did not appreciate that appellant belonged to poor family
and has clean antecedents. The appellant has filed the written
submissions and mentioned therein that after returning of
complaint case, complainant had to file it within 30 days, but he
re-file the case on 06.01.2015 after delay of 52 days and
complaint case was time barred as per judgment of Dashrath
(Supra) and even no application for condonation was filed or
allowed. Complainant has not disclosed specific mode of giving
said loan and that it was not a legally recoverable debt against the
appellant and he has not disclosed his financial capacity and
source for arranging the loan and he has not filed any ITRs for
the relevant period of extending loan and legal notice dated
13.12.2013 is not valid as it was signed by some Ram Narayan
Bajaj instead of complainant Rajiv and no corrigendum was sent
and concerned advocate was not examined as witness and said
legal notice was sent at wrong address, which was never served
and fair and proper opportunity was not given to the appellant to
cross-examine the complainant and no legal aid counsel was
provided. Complainant had never given any loan and he misused
the said cheque and appellant had given multiple blank signed
security cheques including present one to Sh. Ram Narayan Bajaj
as security at the time when appellant’s deceased father had taken
funds from Ram Narayan Bajaj, who is real brother-in-law of
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KUMAR KUMAR RAJAT
Date:
RAJAT 2025.01.31
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complainant Rajiv and DWs were examined by the appellant to
prove his version.
11. Ld. Counsel for the R1 has filed the written
submissions and argued that R1/complainant and appellant are
permanent resident of Madhu Vihar, Delhi since childhood, hence
very well known to each other and for the last so many years,
respondent helped the appellant due to friendly relations and
appellant always returned the amount as per his assurances, but
in the first week of July, 2013, he did not return the amount and
handed over cheque bearing no. 062536 of Rs. 1 lakh drawn at
Axis Bank Ltd. dated 14.11.2013 to discharge the liability, but
the same was returned dishonoured with returning memo dated
14.11.2013 and thereafter when no positive response was given
by the appellant to return the amount, the legal notice dated
13.12.2013 was got issued by the respondent through his counsel
through speed post and courier, but the notice sent through speed
post returned unserved as unclaimed by the accused and the
notice sent by courier did not return to the counsel for respondent
and service was deemed fit and complaint was filed, but as per
directions of Hon’ble Supreme Court file was returned due to
jurisdiction issue and it was re-filed.
12. It is further argued that the conduct of appellant is
also very much clear as he did not receive the notice issued by
the Court and started to appear when NBWs were issued against
him and several adjournments were sought by the appellant for
cross examination of respondent and several times costs were
imposed for non-examination of the witness, but the same are
still unpaid.
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KUMAR RAJAT
Date:
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13. It is further submitted that the defence taken by the
appellant was that “the cheque involved in the present case was
handed over to Ram Narayan Bajaj, who had filed another case
against the appellant and the series of cheque are different and
under that circumstances it can not be presumed that the cheque
involved in the present case was misused by the respondent in
another case namely Ram Narayan Bajaj and the witnesses
produced by the appellant also did not support his version. The
said defence of appellant was not supported by any satisfactory
documentary evidences and the issuance of cheque as well as the
signatures are admitted by the accused. The appellant also did not
place on record any mortgaged deed as stated by him during his
examination in chief and under that circumstances when the
transaction between the appellant and Ram Narayan was
different, the said transaction had no concerned with this case.
14. The conduct of the appellant is very much clear that
he accepted the cases filed against him by Ram Narayan Bajaj
and Rajiv Kumar and one another case filed by one Sh. Amar
Singh, to whom he also issued the cheque for a sum of Rs.
75,000/-, but as per the details available with the respondent
some other cases are also pending or filed against the appellant in
different courts.
15. It is further submitted that the above said
circumstances are sufficient to show the conduct and nature of
the accused, who is habitual of issuance of cheques to several
persons including the respondent and the cases u/s 138 NI Act are
still pending for and few are settled. In the present matter by
going through with the facts and circumstances of the case the
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KUMAR RAJAT
RAJAT Date:
2025.01.31
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judgment was passed by the Ld. Trial Court and appellant was
held guilty. It is further submitted that the appeal of impugned
order is based on false, frivolous and bogus grounds only with
the motive to harass the respondent appeal be dismissed.
16. I have heard the rival contentions and perused the
record.
17. The present complaint was filed by complainant
Rajiv u/s 138 NI Act against appellant Mukesh Kumar Mehto,
wherein it was alleged that accused was having good relations
with complainant and since accused/appellant was in need of
money, he requested complainant to extend financial help in first
week of July, 2013 and complainant agreed to the same and
accused took a friendly loan of Rs. 1,00,000/- from complainant
on 14.07.2013. In discharge of his legal liability towards the said
payment, the accused had issued a cheque bearing no. 062536
dated 14.11.2013 for a sum of Rs. 1 lakh drawn on Axis Bank,
Yamuna Vihar, Delhi to the complainant, Ex.CW1/A with
assurance of encashment on presentation.
18. On his assurance, the said cheque was deposited in
said bank of complainant, but same was returned unpaid on
presentation for the reason “Funds Insufficient” vide return
memo dated 14.11.2023, Ex.CW1/B, which was returned to the
complainant on 15.11.2013. The complainant contacted accused,
but he refused to make payment as he became dishonest.
19. It is also mentioned in the complaint that the
complainant sent legal notice dated 13.12.2023, Ex.CW1/C
through speed post and courier dated 14.12.2023 on the correct
address mentioned in the complaint, but notice sent through
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KUMAR KUMAR RAJAT
Date:
RAJAT 2025.01.31
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Speed Post returned back with remarks dated 17.12.2013 as
unclaimed, while notice through courier did not return and
deemed to be served, but no reply or payment was made by the
appellant intentionally with ulterior and malafide reasons.
20. Then, on failure to pay the cheque amount within
statutory period, the complaint u/s 138 NI Act was filed. The
cheque was presented within the period of 3 months and legal
notice was issued within 30 days of receipt of return memo dated
17.12.2013 and after the service of the legal notice on the
appellant, the complaint was filed after the expiry of 15 days
from the date of receipt of the said notice.
21. Upon service of summons, accused entered
appearance and notice u/s 251 Cr.P.C./274 BNSS was framed on
07.04.2018 against him and accused was allowed to cross-
examine the complainant u/s 145 (2) of NI Act. The accused at
that time had taken a plea that he had not received any legal
notice and cheque in question was given by him to Ram Narayan
as security and he did not know complainant and he had no
transaction with him and had no liability towards the cheque in
question, but he admitted his signature on the said cheque.
22. The complainant examined himself as CW1 and led
evidence by way of affidavit, Ex.CW1/1 reiterating the facts of
complaint and proved the following documents/exhibits:
Documentary Evidence
Ex.CW1/A Cheque no. 062536 dated 14.11.2013 of
Rs.1,00,000/- of Axis Bank, Yamuna Vihar New
Delhi-53.
Ex.CW1/B Returning Memo dated 14.11.2013
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by KUMAR
KUMAR RAJAT
RAJAT Date:
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Ex.CW1/C Legal Demand Notice dated 13.12.2013Ex.CW1/D Postal Receipt
Ex.CW1/E Slip of DTDC Courier
Ex.CW1/F Envelop of Speed Post
CW1 tendered his evidence by way of affidavit,
Ex.CW1/1 and relied upon the above documents, Ex.CW1/A to
Ex.CW1/F and reiterated the facts of the complaint.
23. The main contentions of the appellant in the present
appeal are that:
(i) That the cheque amount was not given by
complainant to the appellant and he had not taken any loan.
(ii) The complainant could not prove that he had
capacity and means to pay the cash amount of Rs. 1,00,000/- to
the accused and has not revealed the source of the same.
(iii) That no legal notice was served on the appellant
and he has not shown the transaction in his ITRs and he could not
have paid that much amount in cash, which is barred under IT
Act.
24. Section 138 NI Act: Dishonour of cheque for
insufficiency, etc. of funds in the accounts 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
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by KUMAR
KUMAR RAJAT
RAJAT Date:
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with imprisonment for [a term with 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.
25. The accused/appellant was allowed to cross-
examine the CW1/complainant, but despite various opportunities
he could not cross-examine the complainant as he did not pay the
previous costs imposed on him on various dates from 07.10.2017
to lastly on 16.07.2019 for a total sum of Rs. 15,000/- and on
several dates either counsel or complainant was not available and
appellant was given opportunity to cross-examine the
CW1/complainant on 07.04.2018, but on the next several dates
neither he paid the cost nor cross-examined CW1/complainant
and CE was closed on 09.12.2019 and accused had not
challenged the said order dated 09.12.2019, rather he led DE and
examined 3 witnesses including himself. Thus, the testimony of
CW1 by way of affidavit, Ex.CW1/1 is unrebutted as he was not
cross-examined.
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by KUMAR
KUMAR RAJAT
RAJAT Date:
2025.01.31
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26. In his SA recorded u/s 281/313 Cr.P.C. (316/351
BNSS) appellant submitted that he had not filled the particulars
of cheque in question and did not receive legal demand notice
and said cheque was given to Ram Narayan and not to the
complainant and he did not know complainant nor he took any
loan from him and cheque was given as security.
27. Appellant examined himself as DW1 and deposed
that he was LIC Freelancer Commissioner Agent and did not
know complainant Rajiv and his father had taken loan of Rs. 4
lakh from Ram Narayan and his shop at A-127, Ground Floor,
Gali No.8, Madhu Vihar, Delhi-92 was mortgaged to Ram
Narayan and issued blank cheque as security to him and Ram
Narayan sold the said shop.
28. In his cross-examination, DW1 stated that he saw
complainant Rajiv as he was residing in the same colony, but he
was not having any relationship with him. DW2, who is mother
of appellant deposed that she did not know Rajiv, but father of
appellant had taken loan from Rajiv for sum of Rs. 1 lakh, which
is contrary to the stand of DW1 that his father had taken loan of
Rs. 4 lakh from Ram Narayan and that DW1 has not deposed, if
his father has taken any loan from Rajiv. DW3 is the brother of
appellant, who has deposed that he knew Rajiv, who was the
complainant in the present case and in his cross, he stated that he
knew Rajiv for last 4-5 years being friends and house of Rajiv
was 200-300 m. from his house at A-227, Madhu Vihar, Delhi
and DW3 also stated that he met Rajiv 5-6 years after completion
of his education in 1996. Testimony of DW2 and DW3 shows
that they knew complainant Rajiv and thus, it cannot be said that
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signed by
KUMAR KUMAR RAJAT
Date:
RAJAT 2025.01.31
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appellant was not known to the complainant.
CW1 was not cross-examined and his plea that
accused had taken the friendly loan of Rs. 1 lakh remain
unrebutted and there is no evidence about his incapacity or that
complainant had not tendered any friendly loan to appellant.
29. The documents, Ex.CW1/A to Ex.CW1/F are proved
as there is no question asked in the cross-examination of CW1
qua these documents as he was not cross-examined by appellant.
30. Accused at the time of his SA and notice u/s 251
Cr.P.C./274 BNSS has denied that he has received any legal
notice, Ex.CW1/C dated 13.12.2013 sent through Speed Post and
Courier vide receipts Ex.CW1/D & Ex. CW1/E respectively.
Legal notice was sent to the correct address of accused i.e.
A-127, Madhu Vihar, Delhi-92, but vide Speed Post the Envelop,
Ex.CW1/F returned unclaimed, but the courier did not return and
it was the last known address of the appellant and he has given
the said address at the time of his examination as DW1 and same
is also mentioned in the complaint filed before the concerned
court and there is also one report of Process Server dated
03.05.2014, which is part of the record, as per which, he visited
the said address of appellant and appellant had read the summons
and copy of complaint, but he refused to receive and the person
on the ground floor identified said person as appellant Mukesh
Kumar Mehto, which shows that appellant had knowledge of the
proceedings, but he deliberately refused to receive the summons
and he was residing at the same address, on which notice was
sent.
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KUMAR
KUMAR RAJAT
RAJAT Date:
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31. Section 27 of The General Clauses Act, 1897.
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,
pre-paying 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 delivered in the ordinary course of post.
In C Niranjan Yadav & D Ravi Kumar 2024 Livelaw
(Kar) 313, Hon’ble Karnataka High Court held that notice u/s
138 NI Act is valid if sent to last known address of accused and
onus is on the accused to say why he did not receive it and also
held as follows:
29. Presumption under the General Clauses Act, 1897, would
go to show that if a person has addressed a registered letter to the last known
address that was known to a particular person, it is deemed to have been
served.
30. Under such circumstances, admission, i.e. obtained in the
cross-examination attributable to the complainant is not that significant
enough to hold that the entire case of the complainant is to be discarded. As
is referred to supra, since the purpose of issuing notice is to save the
bonafide drawer of the cheque, nothing prevented the accused to pay the
money after he appeared before the learned trial Magistrate or at least at the
stage of the appeal, or at least before this Court.
31. Therefore, the arguments put forward on behalf of the
petitioner that improper service of notice should result in dismissal of the
complaint cannot be countenanced in law.
32. DW1/appellant in his cross-examination admitted
that from the very beginning till he was examined on 24.11.2021,CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 15 of 27
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by KUMAR
KUMAR RAJAT
RAJAT Date:
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he was residing at A-127, Madhu Vihar, Delhi i.e. the address on
which legal notice was sent through different modes by the
complainant. Thus, the complainant has proved that legal notice,
Ex.CW1/C was served on the last known address of the
appellant.
33. Ld. Trial Court rightly held that the defence of the
accused that he did not receive legal demand notice without any
merits as in decision in C.C. Alvi Haji V. Palpetty Muhammad &
Anr. (2007) 6 SCC 555, which states that in case, drawer of
cheque raises an objection that he never received legal notice,
he/she can within 15 days of the receipt of the summons make
payment of cheque amount and in case, he does not do so, he
cannot complain that there was no proper service of legal notice
u/s 138 NI Act.
34. Accused examined himself as DW1 and other two
other DWs and he could have rebutted the presumptions by
preponderance of probabilities and not by the defence beyond
reasonable doubt, but he failed to do so. The accused examined
himself as DW1, but he has not deposed in his examination in
chief that he was not residing at A-127, GF, Madhu Vihar, Delhi
at the time when legal notice was issued at the said address to
him and even he has not deposed about the financial capacity of
complainant.
35. The contention of the accused is that he had not
received the legal notice, but no such question is asked in the
cross-examination of CW1, who had sent the legal notice,
Ex.CW1/C to the accused at his address i.e. A-127, GF, Madhu
Vihar, Delhi and he has not proved that he was not residing at theCA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 16 of 27
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Date:
RAJAT
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said address nor he produced any evidence qua his residing at
Ghaziabad and Mandawali, Delhi during the period claimed by
him and the legal notice was signed by Ram Narayan, but the
particulars of complainant Rajiv is mentioned and that it was sent
on behalf of Rajiv by the counsel, who had signed the same and
DW1 admitted in his cross that one case u/s 138 NI Act was filed
against him by Ram Narayan. Inadvertently the legal notice in
case titled Ram Narayan Vs. Mukesh Kumar Mehto was got
signed by counsel from Rajiv and in case titled as Rajiv Vs.
Mukesh Kumar Mehto, the legal notice was got signed by Ram
Narayan. The purpose of sending notice is to make the party
aware of his liability to repay the loan and particulars of Rajiv
are mentioned in the same and thus, there is no defect in notice,
which was deemed to be served on the appellant. The defence of
accused was a sham one and cannot be relied upon.
36. There are presumptions under Negotiable
Instruments Act and the relevant ones are as follows:
Section 118 NI Act: Presumption 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, indorsed, negotiated or transferred, was accepted,
indorsed, negotiated or transferred for consideration;
(b) as to date – that every negotiable instrument bearing a
date was made or drawn on such date;
(g) that holder is a holder in due course – that the holder of a
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negotiable instrument is a holder in due course;
Section 139 NI Act: Presumption in favour of
holder-
It shall be presumed, unless the contrary is proved, that the
holder of a cheque received the cheque of the nature referred to in section
138 NI Act for the discharge, in whole or in part, of any debt or other
liability.
37. The onus to prove whether the cheque in question
was issued by the appellant in discharge of his liability in whole
or in part lies on the complainant, but once the issuance of the
cheque is established and the signatures on the cheque is
admitted, then the presumption u/s 139 of NI Act is to be raised
against the accused. The appellant has admitted his signatures on
the said cheque of Rs. 1,00,000/- dated 14.11.2013 issued in the
name of complainant, Ex. CW1/A, but he stated that he had not
filled the particulars therein.
38. Section 4 of Indian Evidence Act:
“Shall presume”: Whenever it is directed by this Act that
the court shall presume a fact, it shall regard such fact as proved, unless and
until it is disproved.
Section 102 Evidence Act: On whom burden of
proof lies
The burden of proof in a suit or proceeding lies on that
person who would fail if no evidence at all were given on either side.
Illustration
(b) A sues B for money due on a bond.
The execution of the bond is admitted, but B says that it was
obtained by fraud, which A denies.
In no evidence were given on either side, A would succeed,
as the bond is not disputed and the fraud is not proved.
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Therefore the burden of proof is on B.
39. The accused has not disputed his signature on the
cheque and thus, it shall be presumed that the holder of the
cheque received the same for the discharge in whole or in part of
any debt or other liability. The moment, the signature and
issuance of cheque is admitted, the onus shifts on the appellant to
disprove the allegations made against him by the complainant in
the complaint. The usage of word ‘shall’ in Section 118 and 139
NI Act cast a duty on the Court to raise presumption particularly
when the signature on cheque is admitted by the appellant.
40. In case Kashmir Singh v. Satnam Singh, (Punjab and
Haryana) 2024 (1) R.C.R. (Criminal) 407, Hon’ble P & H High
Court has upheld the conviction of the accused u/s 138 NI Act
passed by Ld. Trial Court and held,
“Para 14. That in the instant case, the petitioner has not
denied his signature on the cheque. His contention is that the contents of the
body of the cheque had been filled up and therefore, the cheque in question
was a forged one. It may be relevant to mention here that once the
signatures on the cheque are admitted, a rebuttable presumption arises that
the said cheque has been issued in the discharge of a legally enforceable
debt. The accused has led absolutely no evidence to rebut the said
presumption either independently or by virtue of the cross examination of
the complainant. In fact the petitioner has been unable to explain as to how
the cheque has come into possession of the complainant and as to what was
the enmity between the parties because of which he (petitioner) had been
falsely implicated. It is also relevant to mention here that though the
question of the financial capability of the complainant to pay the amount in
question cannot be questioned once the issuance of cheque is established,
however, in the instant case, the complainant has been able to establish his
financial capacity by leading evidence to the effect that he was the owner ofCA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 19 of 27
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60 acres of agricultural land…”
41. Hon’ble Supreme Court in Rangappa Vs. Sri Mohan
reported as (2010) SCC 11 441 held that presumption u/s 139 of NI
Act would also include within its ambit the presumption regarding existence
of legally enforceable debt or liability.
42. The appellant could have rebutted the presumptions
u/s 118 and 139 NI Act, but he failed to do so as he had not made
any complaint against the complainant or Ram Narayan that they
had misused the cheque to the police or other authority or
withheld the cheque in question as security and even he did not
make any representation to the concerned bank in this regard that
complainant might misuse the said cheque nor he sent any legal
notice to the complainant to return the said cheque by claiming
that he had no legal liability towards the complainant.
43. The defence witnesses are of no help to the
appellant as they failed to rebut any presumption, rather they
have made the case of complainant more strong and admittedly
the complainant was facing trial for 4-5 such cases.
44. Appellant claimed that he had only signed the
cheque and not filled the particulars therein, which is not tenable.
Section 20 NI Act: Inchoate stamped instruments
Where one person signs and delivers to another a paper
stamped in accordance with the law relating to negotiable instruments then
in force in [India], and either wholly blank or having written thereon an
incomplete negotiable instrument, he thereby gives prima facie authority to
the holder thereof to make or complete, as the case may be, upon it a
negotiable instrument, for any amount specified therein and not exceeding
the amount covered by the stamp. The person so signing shall be liable upon
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such instrument, in the capacity in which he signed the same, to any holder
in due course for such amount.
45. It is pertinent to mention here that as per judgment
in Bir Singh Vs. Mukesh Kumar (Crl. Appeal No.230-231 of
2019), Hon’ble Supreme Court has observed that:
“37. A meaningful reading of the provisions of the
Negotiable Instruments Act including, in particular, Sections 20, 87 and 139,
makes it amply clear that a person who signs a cheque and makes it over to
the payee remains liable unless he adduces evidence to rebut the
presumption that the cheque had been issued for payment of a debt or in
discharge of a liability. It is immaterial that the cheque may have been filled
in by any person other than the drawer, if the cheque is duly signed by the
drawer. If the cheque is otherwise valid, the penal provisions of Section 138
would be attracted.
38. If a signed blank cheque is voluntarily presented to a
payee, towards some payment, the payee may fill up the amount and other
particulars. This in itself would not invalidate the cheque. The onus would
still be on the accused to prove that the cheque was not in discharge of a
debt or liability by adducing evidence. In Ravi Chopra vs State & Anr Vs.
Hon’ble High Court of Delhi held that Section 20 NI Act talks of inchoate
stamped instruments; and states that if a person signs and delivers a paper
stamped in accordance with the law and;either wholly blank or have written
thereon an incomplete negotiable instrument, such person thereby gives
prima facie authority to the holder thereof to make or complete as the case
may be upon it, a negotiable instrument for any amount specified therein
and not exceeding the amount covered by the stamp.”
XXX XXX XXX “A collective reading of the above
provisions shows that even under the scheme of the NI Act it is possible for
the drawer of a cheque to give a blank cheque signed by him to the payee
and consent either impliedly or expressly to the said cheque being filled up
at a subsequent point in time and presented for payment by the drawee.
There is no provision in the NI Act which either defines the difference in the
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handwriting or the ink pertaining to the material particulars filled up in
comparison with the signature thereon as constituting a material alteration
for the purposes of Section 87 NI Act. What however is essential is that the
cheque must have been signed by the drawer;”
46. The accused had taken the plea that he had given the
cheque as security to Ram Narayan. It is hard to believe as to
why appellant(DW1) will give cheque as security to Ram
Narayan for the loan secured by his father from him when the
shop was mortgaged by his father, which was sold by Ram
Narayan and DW1 failed to examine any witness in this regard
nor he has filed any complaint against Ram Narayan that he had
misused the cheque and gave it to Rajiv. Rajiv was known to his
brother and mother and no complaint was made against Ram
Narayan for misuse of cheque.
47. In ICD Vs. Beena Shabir & Anr. 2002 (6) SCC 426
the Hon’ble Supreme Court held that the security cheques would also
fall within the purview of Section 138 NI Act and a person cannot escape
his liability merely by stating that the cheque has been given as security. As
such when there is existence of debt on the date of pretension of cheque and
the security cheque issued is dishonoured, the accused would be liable u/s
138 NI Act. Similar view was taken by Hon’ble Delhi High Court
in Wilson Mathew Vs. State of NCT of Delhi Crl. Rev. P.
188/2015 dated 15.09.2015.
48. The complainant had paid a sum of Rs. 1,00,000/-,
which is not a huge amount to question his financial capacity
particularly in the absence of his cross-examination and it is
common between friends, family friends and relatives to make
cash payments in the needy time and in this case, the accused
required the money towards financial help and out of good faith,CA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 22 of 27
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the complainant had given the said amount as friendly loan.
In view of the above, it cannot be said that the
complainant did not have capacity or means to pay the said
amount and thus, this contention of the appellant is not tenable.
49. One more legal point required consideration was
non mentioning of loan transaction in the Income Tax Return on
payment of more than Rs. 20,000/- in cash by complainant. It is
pertinent to mention here that The Hon’ble Supreme Court in the
case of Krishna Janardhan Bhat Vs. Dattataraya G. Hegde
reported as (2008) 4 SCC 54 has discussed section 269SS of ITA
in the realm of section 138 of NI Act. Relevant extract of the
Judgment reproduced below:
“19. The court’s below failed to notice that ordinarily in terms
of section 269SS of ITA, any advance taken by way of any loan of more
than Rs 20,000/- was to be made by way of an account payee cheque only”.
50. It should be noted that the Hon’ble Supreme Court in
Rangappa Vs. Sri Mohan reported as (2010) SCC 11 441 has
expressly overruled the observations in Krishna Janardhan Bhatt
(Supra) to a limited extent that presumption u/s 139 of the Act
would also include within its ambit the presumption regarding
existence of legally enforceable debt. Although, the Apex Court
did not specifically deal with the issue of advancing of loan
amount of more than Rs. 20,000/- in cash, it nonetheless upheld
the conviction of accused in the case which involved loan
transaction of Rs. 45,000/- in cash. At this stage, it would be
prudent to refer decision of Hon’ble Bombay High Court in case
of Krishna P. Morajkar Vs. Joe Ferrato reported as 2013 SCC
OnLine Bom 862, wherein it was held that Hon’ble Supreme
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Court has impliedly overruled Krishna Janardhan Bhatt Case on
the aspect that loan of more than Rs. 20,000/- could not be
advanced in cash. Observations made by the Hon’ble Supreme
Court in Krishna Janardhan Bhatt case regarding loan transaction
of more than Rs 20,000/- in cash was made in peculiar facts and
circumstances. The said observation cannot be considered as a
blanket prohibition on loan transactions of more than Rs.
20,000/- in cash. A bare reading of the provision enshrined in
section 269SS of the IT Act would suggest that there is a
prohibition in accepting or taking loan by a data for an amount of
more than Rs. 20,000/- in cash. It is more of a regulatory
provision in nature which regulates the mode of accepting
deposits or loans. It does not per se declare all transactions in
cash above the threshold of Rs. 20,000/- illegal. No similar
prohibition has been made regarding advancing of such loan by
the lender or creditor. If the loan of more than Rs. 20,000/- in
cash has been accepted by the debtor then he cannot seek
protection u/s 269SS of the IT Act to argue that the said loan
transaction is illegal and nothing could be recovered from him.
At this stage, I also find support from Rangappa case and
Krishna P. Morajkar case wherein transactions of more than Rs.
20,000/- in cash loan were upheld by the Hon’ble courts.
Therefore, I am of the view that there is no blanket provision on
advancing a loan of more than Rs. 20,000/- in cash. Courts
cannot remain oblivious of the fact that loan transactions in cash
specially between the family members and friends are very
common. Rendering all such transactions illegal would frustrate
the very basic purpose of section 138 NI Act and could prove toCA. No. 132/2022 Mukesh Kumar Mehto Vs. Rajiv & Anr. Page 24 of 27
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be heaven for unscrupulous debtors. Thus, it cannot be said that
the whole transaction is vitiated, if done in cash for amount of
more than Rs. 20,000/- and if it is so, then the family
members/relatives/close friends may take advantage of the
relations and escape from their legal liability towards the person,
who had advanced the loan.
This plea as well as the plea of Limitation in re-
filing was not taken before Ld. Trial Court nor challenged the
same, thus taking such pleas in appeal will not help the appellant.
51. The judgment of Ld. Trial Court is well reasoned
and supported by various judicial precedents on the issues raised
by the accused before the Ld. Trial Court and as such the
appellant is not entitled to any relief in the present appeal and
accordingly, the judgment dated 30.07.2022 and order on
sentence dated 01.09.2022 of the Trial Court are upheld.
52. The complainant had proved that the said amount of
Rs. 1,00,000/- was the legally enforceable debt as explained in
Section 138 of NI Act and also all the ingredients, the offence u/s
138 NI Act have been proved against the appellant before the Ld.
Trial Court and the same do not require any interference from
this Court.
53. The defence taken by the appellant before the Ld.
Trial Court in his statement u/s 313 Cr.P.C./351 BNSS that the
complainant has misused the cheque, which was given as a
security to Ram Narayan, is not plausible as he could not rebut
the presumptions or could bring on record any evidence to
substantiate the said claim.
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CONCLUSION
54. In view of the discussion above, the appeal of the
appellant Mukesh Kumar Mehto is dismissed and the judgment
dated 30.07.2022 and order on sentence dated 01.09.2022 passed
by Ld. MM, Shahdara Karkardooma Courts, Delhi are upheld i.e.
his sentence for a period of SI for 6 months compensation of Rs.
1,75,000/- to the complainant and in default sentence for 1 month
SI for non payment of compensation.
55. In R. Vijayan Vs. Baby (2012) 1 SCC 260, the
Hon’ble Supreme Court held that in all cases where there is a
conviction, there should be a consequential levy of fine of an
amount sufficient to cover the cheque amount and interest
thereon at a fix rate of 9% per annum interest.
56. The appellant is directed to pay the further 9%
interest on the cheque amount of Rs. 1,00,000/- from the date of
Ld. Trial Court’s order on sentence i.e. 01.09.2022 till the date of
realization of the said amount apart from the said compensation
of Rs. 1,75,000/- as ordered by the Ld. Trial Court within 30 days
and in default appellant has to undergo SI for 1 month. The
appellant is also directed to pay the pending costs of Rs. 15,000/-
imposed by Ld. Trial Court, if not paid till now.
Further, the default sentence against the
compensation or fine cannot be a solution for the complainant
and the accused may escape his financial liability by serving the
default sentence. The solution lies u/s 421/431 Cr.P.C. (461/471
BNSS) under which the compensation/fine may be made
recoverable and the law in this regard has been laid down in
Kumaran Vs. State of Kerala 2017 (7) SCC 471.
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The compensation amount as well as the interest
accrued and the cost imposed shall be recoverable u/s 421/431
Cr.P.C. (461/471 BNSS), if not paid.
57. With these observations, the present appeal is
dismissed and accordingly, disposed of.
Appellant/convict on bail is taken into custody. The
surety/bail bonds cancelled. Surety discharged.
Copy of judgment be sent to Ld. Trial Court with
TCR and be given to the convict/appellant free of cost.
The appeal file be consigned to Record Room after
Digitally signed
by KUMAR
necessary compliance. KUMAR RAJAT
Date:
RAJAT 2025.01.31
14:35:27
+0530
(Kumar Rajat)
ASJ-07/SHD/KKD Courts/Delhi
31.01.2025
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