Delhi District Court
M/S M.R. Appearels Pvt. Ltd vs Sh. Vivek Sharma on 13 August, 2025
In The Court of Sh. Divyam Lila, Municipal Magistrate, East, Delhi
JUDGEMENT
DLET20049802016
CC NI ACT/57831/2016
Date of Filing : 15-12-2015
Date of Registration : 19-12-2015
Date of Disposal : 13-08-2025
____________________________________________________________
(Complainant): M/s M.R. Apparels Pvt. Ltd.
Digitally
represented through its authorized signatory Sh. Sangram Singh signed by
DIVYAM
Versus DIVYAM LILA
LILA Date:
(Accused) Sh. Vivek Sharma, 2025.08.13
16:24:02
+0530
Designated partner of VTS IT Solutions LLP.
_______________________________________________________________
Advocate appearing for Complainant: Sh. Abhay Mani Tripathi
Advocate appearing for the Accused: Sh. Naveen Singhla
Offence punishable under : Section 138 of Negotiable Instruments Act,
1881
Final Order : Acquittal under Section 138 NI Act
________________________________________________________________
-:Index of Judgment:-
1. Introduction:-…………………………………………………………………………………….. 2
2. Brief Facts of the Case:-……………………………………………………………………… 2
3. Notice Framed on the Accused and Plea of the Accused………………………..3
4. Issues for Determination:……………………………………………………………………. 3
5. Evidence on Record……………………………………………………………………………. 4
6. Legal Position:…………………………………………………………………………………….8
7. Arguments of the parties:…………………………………………………………………..10
8. Analysis and Findings:……………………………………………………………………… 14
10. Conclusion and Reason for decision:……………………………………………….. 27
11. Order:……………………………………………………………………………………………..28
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi
1. Introduction:-
a. This judgement arises out of a complaint filed under Section 138 of
the Negotiable Instruments Act, 1881 (hereinafter referred to as
“NI Act“) by the complainant against the accused for dishonour of
cheque based on the sale deed deferred payment as debt.
2. Brief Facts of the Case:-
a. This case arises from two connected Complaints Nos. 48468/2016
(for cheque bearing no. Nos. 000007 dated 15.09.2015 for Rs.
75,00,000/-) and 57831/2016 (for cheque bearing no.000008 dated
15.03.2016 for Rs. 70,00,000/-, and 000010 dated 16.03.2016 for
Rs. 8,40,000/-) filed under Section 138 of the Negotiable
Instruments Act, 1881, by complainant M/s M.R. Apparels Pvt.
Ltd., represented through its authorized signatory Sh. Sangram
Singh, against accused Sh. Vivek Sharma.
b. In the present case the complainant alleged dishonor of three
post-dated cheques bearing Nos. 000007 dated 15.09.2015 for Rs.
75,00,000/-, 000008 dated 15.03.2016 for Rs. 70,00,000/-, and
000010 dated 16.03.2016 for Rs. 8,40,000/- issued as part payment
for the sale of an industrial leasehold property bearing Plot No.
D-247/1, Sector-63, Noida, Uttar Pradesh, executed via a Transfer
Deed cum Sale Deed dated 18.03.2015 for a total consideration of
Rs. 6.5 Crores.
c. This case pertains to the cheques no. 57831/2016 (for cheque
bearing no.000008 dated 15.03.2016 for Rs. 70,00,000/- and
000010 dated 16.03.2016 for Rs. 8,40,000/- (hereinafter called
as “cheque(s) in question”). The complainant asserts that these
cheques, dishonored with the remark “Payment stopped by
drawer,” represent a legally enforceable debt, supported by demand
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 2/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi
notice. The legal demand notice remained unpaid. Hence the
present case came to be filled.
d. The cognizance in the present matter was taken, and the accused
was summoned for the purpose of trial.
3. Notice Framed on the Accused and Plea of the Accused
a. The accused was served notice under Section 251 Cr.P.C and
pleaded “not guilty”.
b. The accused admitted that the cheques were issued to the
complainant, however stated that the property was taken by the
complainant on rent. The accused also stated that the complainant
removed fixtures, AC etc and payment of Rs 15,00,000/- by RTGS
to the complainant.
c. The accused denied receiving legal notice from the complainant.
4. Issues for Determination:
a. The cheque was issued in discharge of a legally enforceable debt or
liability.?
b. The cheque was presented within the period of validity of three
months?.
c. The cheque was dishonoured for insufficiency of funds.?
d. A legal notice was duly served.?
e. The accused failed to make payment within the prescribed period.
f. Whether the case is maintainable without impleading the LLP firm
of the accused Vivek Sharma on whose account the cheque is
issued?
g. The accused has successfully rebutted the statutory presumption
under Sections 118 and 139 of the NI Act.?
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 3/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi
5. Evidence on Record
a. Complainant’s Evidence:
i. In support of his case, the complainant examined himself as
CW-1 by way of affidavit, wherein he reiterated the
averments made in the complaint. During cross-examination
conducted on 24.07.2017 and 30.10.2018, CW-1, CW-1
admitted that the Agreement (Ex. CW1/X1) required
supplying documents listed in Schedule A, and
acknowledged receiving an email from the accused
demanding these, but provided no proof of compliance. He
confirmed handing over possession in a well-furnished
condition post-Transfer Deed (Mark-X), but admitted taking
three floors (Basement, Ground, First) on rent from the
accused on 10.04.2015, vacating by May 2015. He claimed
rent payments were made in cash without receipts or
acknowledgments. CW-1 initially stated this cheque was
issued at the time of the sale deed, but later contradicted
himself, saying it was handed over 4-5 days after
registration. He claimed it as lump-sum interest on Rs. 1.45
Crores with no fixed rate or written document, and admitted
not mentioning it in the initial demand notice (Ex. CW1/4)
for CC No. 48468/2016, though referenced in CC No.
57831/2016. CW-1 acknowledged Rs. 15,00,000/- via RTGS
from the accused’s father to Sanjay Singh Rana, but denied it
as sale consideration adjustment, offering no explanation for
its purpose. He admitted filing an application with Noida
Authority to cancel the Transfer Memorandum, but claimedCC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 4/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhino knowledge of related outcomes. CW-1 denied having any
knowledge of emails demanding documents, issued
security/rent cheques (Nos. 014791 & 014792) to the
accused without clarifying liability, and denied fixture
removal despite vacating the rented floors.
b. Statement of accused: The statement of the accused under Section
313 Cr.P.C. was recorded wherein accused admitted issuing the
impugned cheques (Nos. 000007 dated 15.09.2015 for Rs.
75,00,000/- and 000008 dated 15.03.2016 for Rs. 70,00,000/-) as
part payment for the purchase of the industrial leasehold property
(Plot No. D-247/1, Sector-63, Noida) from the complainant for Rs.
6.5 Crores. He confirmed the dishonor with the remark “Payment
stopped by drawer” (Ex. CW1/3) and receipt of the demand notice
dated 04.11.2015 (Ex. CW1/4), to which he claimed to have
replied. The accused justified the stop payment, stating that the
complainant failed to perform its obligations under the Agreement
to Transfer Leasehold Rights dated 30.01.2015 (Ex. CW1/X1),
including non-delivery of essential documents (e.g., Completion
Certificate, SSI Certificate, Functional Certificate, Sanctioned
Map). He opted to lead defense evidence to substantiate his claims.
c. Defence Evidence: The accused examined 4 witness on his behalf,
one being himself as DW-1, DW-2 and DW-3 being independent
witnesses and DW-4 being a bank witness:
i. DW1 stated that the property was shown in January 2015 as
under construction but “as is” basis by agents Sonu Sharma
and Swadesh Sharma. An Agreement to Transfer was
executed on 30.01.2015 for Rs. 8.95 Crores (reduced to Rs.
6.5 Crores in Transfer Deed dated 18.03.2015, Mark-X). Rs.
3 Crores was paid to release documents from DHFL, but keyCC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 5/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhidocuments (Completion Certificate, SSI, Functional
Certificate, Sanctioned Map) were missing despite promises.
Transfer Memorandum (TM) was issued on 17.03.2015. A
Rent Agreement dated 10.04.2015 (Ex. DW1/8) leased three
floors (Basement, Ground, First) to the complainant’s sister
concern (Future World Green Homes Pvt. Ltd.) with a
36-month lock-in and Rs. 2.16 Lakhs monthly rent. The
Disputes arose when lessee denied access to upper floors,
failed to upgrade electricity load and did not pay rent. Lessee
vacated prematurely in May-June 2015, removing fixtures
(e.g., workstations, ACs, glass partitions, false ceiling) worth
over Rs. 50 Lakhs, deploying gunmen to block entry. Police
complaint lodged on 16.05.2015. Rent Agreement canceled
on 05.06.2015. Additional Rs. 15 Lakhs paid via RTGS on
23.09.2015 (Ex. DW1/2-3) to Sanjay Singh Rana for
documents, but only partial compliance. Stop payment
instructed on 14.09.2015 (email/letter, Ex. DW1/9-11) due
to breaches. Noida Authority issued show-cause for TM
cancellation on 07.04.2016 (influenced by complainant, Ex.
DW1/4; rejected). Civil suit filed for stay (granted
16.10.2015). FIR u/s 420/506 by complainant (bail granted).
Had sufficient funds in joint account (Ex. DW1/12).
Exhibited: Loss summary/bills (Ex. DW1/5), rent loss (Mark
DW1/6), photos (Ex. DW1/7), Rent Agreement (Ex.
DW1/8), stop payment docs (Ex. DW1/9-11), bank form
(Ex. DW4/A). Claimed no liability due to misuse and
breaches. In cross-examination (various dates), DW1
admitted purchasing “as is” under construction but clarified
three floors were furnished. Confirmed self-obtainment of
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 6/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi
documents, Rs. 8.4 Lakhs for load (Rent Clause 9), no
recovery suit as amounts adjusted. Denied concoction;
reiterated TM issued with complainant’s support but later
sought cancellation.
ii. Evidence of DW2 (Sh. Raghunandan Sharma) testified that
in April 2015, the accused approached for security at the
property (Sector-63, Noida). He surveyed the fully furnished
building and provided an estimate for 24-hour guards in
shifts. Guards were deployed from 19.05.2015. Upon arrival,
the office was damaged; lights, AC units, false ceiling, and
glass work were removed. During duty, persons removed
glass partitions and cabin work; attempts to stop failed.
Complaint security (including gunmen) was present initially
but left after removal. He was informed by supervisor
Veerpal Singh Chauhan (DW3) telephonically but did not
witness personally. In cross-examination, DW2 admitted no
written security agreement or inventory produced, no
personal witnessing of removal, no vehicle details or names
noted, no photos taken, and no police complaint filed by him
or staff.
iii. Evidence of DW3 (Sh. Veerpal Singh Chauhan) stated he
was deployed alone from 19.05.2015 and found the office
damaged: lights/ACs/false ceiling/glass work removed. 2 or
3 days later, persons (from Sh. Sangram Singh, including
gunman Murari Singh) removed glass partitions, cabins, and
AC copper pipes in two small trucks. He informed DW2
telephonically; DW2 visited after 45 minutes but left.
Maintained a register (not produced) with details but
couldn’t recall specifics. No call to the accused or police. In
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 7/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi
cross-examination, DW3 admitted no prior visit before
19.05.2015, no proof of deputation (e.g.,
documents/photos/vehicle numbers), and no police
complaint.
iv. Evidence of DW4 (Ms. Monika Rathore) produced the joint
bank account opening form in the name of Vivek Sharma
and Dulari Sharma (Ex. DW4/A, colly), confirming the
accused as joint holder. She testified that the account had
sufficient funds at the time of dishonor, as per the statement
(Ex. DW1/12).
6. Legal Position:
a. In order to constitute an offence under Section 138 of the
Negotiable Instruments Act, 1881, the following essential elements
must be satisfied as per the judgement in Kusum Ingots & Alloys
Ltd. Vs. Pennar Peterson Securities Ltd. AIR 2000 SC 954
,both in the complaint and the evidence presented by the
complainant:
i. Drawing of the Cheque: The accused must have drawn a
cheque on an account maintained by them, for the payment
of a legally enforceable debt or liability to another person.
ii. Timely Presentation: The cheque must be presented to the
bank for payment within three months from the date on
which it was drawn, or within the period of its validity,
whichever is earlier.
iii. Dishonour of the Cheque: The cheque must be dishonoured
by the bank due to either insufficient funds in the account or
because the amount exceeds the arrangement made with the
bank.
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 8/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhiiv. Notice of Demand: The payee or holder of the cheque must
issue a written demand for payment to the drawer, within 30
days of receiving information from the bank regarding the
dishonour.
v. Failure to Pay: The drawer must fail to make payment within
15 days of receiving the notice of demand.
b. Additionally, the provisions of Sections 139 and 118 of the Act
further strengthen the case for the complainant. Section 139 creates
a presumption in favour of the holder of the cheque, mandating that
the court shall presume, unless proven otherwise, that the cheque
was issued for the discharge of a debt or other liability. Section
118, on the other hand, provides that there is a presumption that
every negotiable instrument, including a cheque, was made for
consideration, and that it was transferred for consideration.
c. In the case of Basalingappa v. Mudibasappa (2019) 5 SCC 418;,
the Hon’ble Supreme Court has laid down that once the execution
of the cheque is admitted, Section 139 imposes a rebuttable
presumption in favour of the complainant, establishing that the
cheque was issued for the discharge of a debt or liability. The
presumption is rebuttable and the accused has the opportunity to
raise a probable defence. The standard of proof for rebutting this
presumption is based on the preponderance of probabilities.
d. The court further held that it is not mandatory for the accused to
enter the witness box to prove their defence. They may rely on the
evidence presented by the complainant or any other available
materials. The onus to rebut the presumption lies on the accused,
but it is important to note that this is an evidentiary burden, not a
persuasive one.
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 9/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi
e. Thus, Section 138 operates on the principle of reverse onus of
proof – once the complainant proves the essential elements of
dishonour, the burden shifts to the accused to raise a plausible
defence. The presumption of guilt is strong, but not irrebuttable,
and the accused is entitled to challenge it through a preponderance
of evidence.
f. In the backdrop of legal position as enunciated above, it is to be
examined by this Court that whether the accused on a scale of
preponderance of probabilities has been able to rebut the
presumption which has been raised against him and in favour of the
complainant, or has been able to demolish the case of the
complainant to such extent so as to shift the onus placed upon the
accused again on the complainant. As held by Hon’ble Supreme
Court of India in case of Kumar Exports vs Sharma Carpets
(2009) 2 SCC 513, the accused can either prove the non−existence
of the consideration and debt by direct evidence or by bringing on
record such facts and circumstances, upon consideration of which,
the Court may either believe that the consideration and debt either
did not exist or their non−existence was so probable that a prudent
man may act upon the plea that they did not exist. If the Court
comes to the conclusion that the accused has not been able to rebut
the presumption raised against him by failing to bring on record
direct evidence or by even failing to sufficiently perforate the case
of the complainant, the complainant is entitled to a decision in his
favour.
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 10/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi
7. Arguments of the parties:
a. Arguments by Ld. Counsel for the Complainant: The learned
counsel for the complainant submitted that the case is squarely
covered under Section 138 of the Negotiable Instruments Act,
1881, and the accused is liable for the dishonour of the cheque. The
counsel for the complainant has also filed a set of written
arguments. The key arguments advanced by the counsel urged the
court to convict the accused, are as follows:
i. Legally Enforceable Debt Established by Documentary
Evidence: The complainant asserts that the impugned
cheques (Nos. 000007, 000008, and 000010) were issued in
discharge of a legally enforceable debt arising from the sale
of the industrial property for Rs. 6.5 Crores, as explicitly
recorded in the Transfer Deed cum Sale Deed dated
18.03.2015 (Mark-X). The deed lists the cheques as part of
the consideration, invoking the presumption under Section
139 NI Act that they were for a valid debt. CW-1’s affidavit
and testimony confirmed all obligations were met, including
document supply per Schedule A (Ex. CW1/X2) and vacant
possession handover (Mark-X Clause 3). Demand notices
(Ex. CW1/4) were served, and non-payment within 15 days
triggered liability.
ii. Rebuttal to Defense of Security Cheques and Fixture
Removal : The accused’s claim that the cheques were for
security and that fixtures were removed is falsified by
Mark-X Clauses 3 and 5, which state vacant possession was
handed over with no plant/machinery installed, indicating an
“as is” sale under construction. No prior communication or
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 11/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi
evidence supports fixture claims; the defense is an
afterthought raised post-notice.
iii. Rs. 15 Lakhs RTGS Not an Adjustment to Sale
Consideration: The Rs. 15 Lakhs transfer was from the
accused’s father to Sanjay Singh Rana personally, not to the
complainant company or as official adjustment. No prior
communication or document links it to the sale; CW-1
denied it as consideration. The accused testimony lack
corroboration, and Sanjay Singh’s non-examination is
irrelevant as the burden lies on the accused to rebut S.139
presumption.
iv. Rs. 8.4 Lakhs Cheque Issued as Interest on Deferred
Payment: The cheque (No. 000010) was for interest on the
deferred Rs. 1.45 Crores, issued at the time of the Transfer
Deed. No complainant obligation for electricity load existed
post-sale; the Rent Agreement (Ex. DW1/8) was with a
separate entity (Future World), and Clause 9 placed load
upgrade on the lessee. CW-1’s testimony confirmed
lump-sum interest; omission in initial notice (Ex. CW1/4)
was clerical, referenced in the second. The accused’s load
claim lacks evidence.
v. Failure to Prove Sufficient Funds Attracts Adverse
Presumption: The accused claimed sufficient funds but
produced only a joint personal account statement (Ex.
DW1/12), not the LLP’s (drawer). This withholding attracts
adverse presumption under S.114(g) Evidence Act, implying
insufficiency.
vi. Complaint Maintainable Against Accused as Designated
Partner: The accused is arrayed as designated partner who
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 12/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi
signed the cheques; S.26 LLP Act makes partners agents for
firm business, allowing prosecution without impleading the
LLP.
b. Arguments by Ld. Counsel for the Accused : The learned
counsel for the accused vehemently argued that the complainant
has failed to prove the existence of a legally enforceable debt, and
the case is based on a fabricated narrative to extort money. The
counsel for the accused has also filed a set of written arguments.
The key arguments advanced by the counsel, while praying for the
acquittal of the accused, are as follows:
i. Non-Joinder of LLP Vitiates Complaint Under S.141 NI Act:
Cheques issued by VTS IT Solutions LLP; accused only
partner arrayed without LLP impleaded or noticed. S.141
requires conjoint prosecution; failure fatal and Complaint
unsustainable at threshold.
ii. No Personal Debt; Transaction Firm-Specific: No averment
of personal debt; cheques LLP-issued for property purchase
(Transfer Deed Mark-X). LLPs are separate entities;
vicarious liability under S.141 fails without firm.
iii. No Enforceable Debt Due to Adjustments and
Part-Payments: Rs. 15 Lakhs RTGS (Ex. DW1/2-3) to
Sanjay Singh adjusts Rs. 1.45 Crores debt; CW-1 admitted
receipt but unexplained purpose (adverse inference S.114(g)
Evidence Act). Unendorsed cheques unenforceable for full
amount (Dashrathbhai Trikambhai Patel, 2022). Further
adjustments: delay penalties (Rs. 51.77 Lakhs, Agreement
Clause 6e), rent loss (Rs. 18.79 Lakhs, unproved cash
claims), fixture damages (Rs. 74.33 Lakhs, Ex. DW1/5,7).
Total exceeds debt, creating negative liability.
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 13/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhiiv. Breaches in Agreements Justify Stop Payment: Non-delivery
of Schedule A documents (CW-1 admission of email;
self-obtained Ex. DW1/4); breaches S.6 Agreement.
Possession not vacant. Rent non-payment (cash unproved;
breach Clause 3/17). Rs. 8.4 Lakhs for load (Rent Clause 9;
no interest clause in agreements). Emails (Ex. DW1/9-11)
notify breaches pre-dishonor. Presumption rebutted by
contractual non-performance.
v. Bona Fide Intent and Sufficient Funds Proven: Delayed stop
payment shows good faith despite breaches. Joint account
funds proved (Ex. DW1/12, DW-4); LLP statement absence
irrelevant as stop justified, not insufficiency.
vi. CW-1 Admissions/Contradictions Support Acquittal:
Admissions: Documents due, email, furnished possession,
Rs. 15 Lakhs, TM filing. Contradictions: Rs. 8.4 Lakhs
timing/omission in notice. Sanjay Singh’s non-examination
fatal. Rebuts S.139 beyond probabilities.
8. Analysis and Findings:
a. Issue 1 – Issuance of Cheque: This ingredient pertains to the
issuance of the cheque in question itself. The Accused, in his notice
of accusation has admitted his signature on the cheque in question
and that the cheque has been drawn on the account of the Accused
himself. Having admitted the basic ingredient, the presumption is
drawn against the accused and now the accused would have to
prove that the cheque in question was not issued by him; by way of
rebuttal of the presumption drawn against him. Whether the
accused was able to successfully rebut the adverse presumption is
dealt in detail in the issue no. 7; However, the issue no. 1 is decidedCC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 14/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhiin favour of the complainant and the presumption is drawn against
the accused.
b. Issue 2 – Presentation within Validity: This ingredient stands
satisfied on a bare perusal of the cheque in question and the return
memo being presented within the period of validity. The cheque is
also not dishonoured with the remark “instrument stale”; as the
cheque has been returned dishonoured with a return memo noting
the reason for return as “‘Payment stopped by drawer”. The defence
has led no evidence to contradict the same and hence, this
ingredient stands fulfilled as against the accused. Hence, this issue
is also decided in favour of the complainant and the cheque has
been proved to be dishonoured within the period of validity.
c. Issue 3 – Dishonour of Cheque: The bank return memo records
state that the cheque in question has been returned dishonoured for
the reason “Payment stopped by Drawer”. The defence has led no
evidence to controvert the same and hence, this ingredient also
stands satisfied as against the accused. Hence, this issue is also
decided in favour of the complainant and the cheque has been
proved to be dishonoured.
d. Issue 4 – Legal Notice: Service of the legal notice is the legal
fiction which constitutes the major ingredient of the offence
u/s-138 NI Act. The objective of serving legal demand notice to the
Accused before filing the case is to allow the accused to make the
payment. As regards the service of legal demand notice, the
Complainant has sent the same to the accused. That the Accused
has denied receiving the legal demand notice in his notice of
accusation u/s 251 Cr.P.C. However accused admitted receiving the
legal notice in the statement of accused u/s 313 CrPC and sending a
reply to the same. Thus, in absence of any evidence against theCC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 15/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhipresumption of service and admission of the accused with respect
to receipt of the legal notice; this issue is also decided in favour of
the complainant and the service of legal notice has been proved.
e. Issue 5 – Non-Payment within 15 Days: In the present case, after
the issue no. 4 is against the accused, the case of the accused is that
he does not have any liability towards the complainant and his
cheque was misused. Hence, it is an admitted position that no
payment for the cheque in question was made and thus this
ingredient of non-payment within 15 days also stands satisfied.
Hence, this issue is also decided in favour of the complainant and
the cheque has been proved to be not paid by the accused despite
service of notice.
f. Issue 6 – Maintainability of case without arraying the LLP firm
of the accused Vivek Sharma:
i. The accused has vehemently argued against the
maintainability of the case without arraigning the LLP as the
accused and the partner/ designated partner as the accused
persons. On other hand, the complainant has argued that the
case is maintainable as the firm and the partners are not
separate entities, and the firm and the partner are agents of
each other; hence even if the firm is not arrayed the same is
not fatal to the case.
ii. It is an admitted position that the cheque(s) in question is
issued on the account of the firm ‘VTS IT Solutions LLP’.
Under Section 2(1)(d) of the Limited Liability Partnership
Act, 2008, an LLP is a “body corporate” with perpetual
succession and a separate legal personality distinct from its
partners. This makes it analogous to a company rather than a
general partnership firm.
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 16/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhiiii. Section 141 imposes vicarious liability on persons (including
partners) who were in charge of and responsible for the
conduct of the business of the “company” at the time of the
offence. The Explanation to Section 141 defines “company”
to include any “body corporate,” which encompasses LLPs.
For such entities, the Hon’ble Supreme Court in Aneeta
Hada v. Godfather Travels & Tours Pvt. Ltd. (2012) 5 SCC
661 held that the company (or body corporate) must be
impleaded as the primary accused for vicarious liability to
attach to its officers/directors/partners. Without arraigning
the entity, proceedings against individuals cannot proceed, as
the offence is committed by the entity, and individual
liability is derivative.
iv. In the Judgment of P. Dhanasingh v. K. Chandrasekar &
Anr., decided on July 14, 2025 by Hon’ble Supreme Court, It
clarified that for general partnership firms (governed by the
Indian Partnership Act, 1932), complaints under Section 138
can proceed against partners alone without impleading the
firm, as partnerships lack separate legal personality and
partners have joint and several liability. However, It
explicitly distinguishes partnerships from incorporated
entities like companies, where the entity must be prosecuted
first. Even if the cheque was signed by one partner, their
liability is vicarious and depends on the LLP being held
accountable.
v. In the present case, the drawer of the cheque is an LLP firm,
and the cheque has been signed by the accused Vivek
Sharma as designated partner of the firm. The underlying
transaction of transfer of lease deed, rent agreement and the
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 17/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi
agreement to lease deed were all executed between the LLP
firm and the complainant company. It is not the case of the
complainant that the cheque was issued by the accused vivek
sharma to discharge the debt of the personal transaction. The
legal notice is also not issued to the principal drawer being
LLP firm nor the same has been arrayed as accused in this
case. The law is clear, the LLP being a separate juristic
person and a body corporate is covered in the principle of
Aneeta Hada judgement. Hence, with the above observations
of the law on this aspect, this court finds weightage in the
arguments of the counsel for the accused and finds that the
present complaint is not maintainable. The LLP firm is a
body corporate and separate juristic entity, and non
impleadment of the LLP itself is fatal to the complainant’s
case and therefore this court does not find itself in agreement
to the arguments of the counsel for complainant. This issue
is decided in favour of the accused and against the
complainant, and held that this complaint is not maintainable
on failure to array the LLP firm of the accused on whose
account the cheque(s) in question has been drawn and who
was party to the said underlying transaction.
9. Issue 7 : Defence of the Accused and Rebuttal of Presumption: The
above ingredients being satisfied, the court would have to look at the
defence brought out by the accused by way of cross examination of the
complainant’s evidence and the rebuttal by way of defence evidence. In
the present case, the accused had made following attempts towards
rebuttal of the statutory presumption against him; and with the following
observations, it is held that the issue no. 7 is decided against the
complainant and in favour of the accused:
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 18/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhia. Existence of Black Money and Cash Transactions Admitted
Through the Agreement Undermines the Complainant’s Case:
On perusal of the testimony and the documentary evidence it has
come to light that the complainant has suppressed critical details
about the transaction’s financial structure, including cash
components and discrepancies that suggest unaccounted money/
cash involvement. Under Section 138 NI Act, the complainant
must prove a legally enforceable debt beyond the mere issuance of
cheques, and any suppression of facts that could alter the case’s
outcome erodes credibility and rebuts the presumption under
Section 139. Here, the complainant’s affidavit and
cross-examination (CW-1) omit explanations for cash dealings,
creating reasonable doubt and shifting the evidential burden back.
This suppression not only conceals potential illegality but also
prevents the court from assessing the true enforceability of the
debt. CW-1 claimed in cross-examination of rent payments in cash
without receipts or acknowledgments, claiming monthly payments
for the leased-back floors. However, no bank records, ledgers, or
witnesses (e.g., Sanjay Singh Rana) were produced to substantiate
this. This suppression is material, as cash rent could disguise the
true nature of the transaction. A glaring suppression is the
unexplained reduction in sale consideration from Rs. 8.95 Crores in
the Agreement to Transfer Leasehold Rights dated 30.01.2015 (Ex.
CW1/X1) to Rs. 6.5 Crores in the Transfer Deed dated 18.03.2015
(Mark-X) being a gap of Rs. 2.45 Crores. CW-1’s affidavit and
cross-examination offer no explanation for this discrepancy. The
Agreement to Transfer (Clause 6) conditions the deferred payment
of Rs. 1.45 Crores of NBFC financing securitized against “actual
rent” from three leased-back floors. CW-1 suppressed anyCC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 19/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhiexplanation for abandoning NBFC (fallback to cheques) or the
circular rent flow, which could mask unaccounted cash flow/
transaction. This unexplained structure suggests intent to conceal
underlying transactions tied to a benami-like lease-back (same
director). The complainant’s pattern of suppression of unexplained
cash rent, price gap, NBFC abandonment indicates deliberate
concealment of underlying and actual transaction. CW-1’s
contradictions and admissions (cash rent without proof, Rs. 15
Lakhs receipt unexplained) attract adverse inference, fracturing
credibility. The complainant’s suppression of cash components,
price gaps, and NBFC details conceals potential black money,
opaque financing structures, eroding credibility and fracturing the
case.
b. Complicated Sale-Leaseback Transaction Resulting in Civil
Dispute Rebuts Presumption of Enforceable Debt: The
underlying transaction is a sale of the industrial leasehold property
for Rs. 6.5 Crores followed by an immediate lease-back of three
floors to the complainant’s sister entity exemplifies a complicated
sale-leaseback structure that has resulted in multiple civil disputes.
The transaction began with the Agreement to Transfer Leasehold
Rights dated 30.01.2015 (Ex. CW1/X1), setting a consideration of
Rs. 8.95 Crores (reduced unexplained to Rs. 6.5 Crores in the
Transfer Deed cum Sale Deed dated 18.03.2015, Mark-X). Clause
6 of the Agreement conditioned the deferred Rs. 1.45 Crores on
NBFC financing securitized against “actual rent” from three floors
(Basement, Ground, First). Immediately post-sale, the Rent
Agreement dated 10.04.2015 (Ex. DW1/8) leased these floors back
to the complainant’s sister entity (Future World Green Homes Pvt.
Ltd., sharing director Sanjay Singh Rana) for 60 months with a
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 20/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi
36-month lock-in, at Rs. 2.16 Lakhs/month (totaling Rs. 1.43
Crores over 5 years). The Rent Agreement’s 36-month lock-in
(Clause 17) was breached by early cancellation on 05.06.2015, just
two months after commencement, violating the commitment and
undermining the “actual rent” basis for NBFC financing
(Agreement Clause 6). Clause 9 required the lessee to upgrade the
electricity load from 5KW to 100KW, but this was not done,
further frustrating the financing model and rendering the space
unrentable (DW-1 testimony; rent loss Ex. DW1/6). CW-1 admitted
renting back the floors (cross-examination 30.10.2018),
contradicting the vacant possession claim in the Transfer Deed
(Clause 3), which escalated to possession fights, including gunmen
deployment by the complainant (DW-1, DW-2, DW-3 testimony;
police complaint 16.05.2015). These breaches created a bona fide
dispute, as the lease-back was integral to the sale’s economics. The
Sale Lease Back’s collapse led to multiple disputes in the form of
possession fights (gunmen blocking entry, fixture removal causing
damage), TM cancellation attempts by complainant (Ex. DW1/4,
dated 07.04.2016, rejected), and property damage (false ceiling,
pipes), Accused obtained civil stay on 16.10.2015 against
interference (Suit No. 1456/15), complainant’s FIR u/s 420/506
IPC (bail granted to accused), and Noida show-cause influenced by
complainant. These indicate a genuine contractual dispute, not
evasion. This complexity, combined with breaches and parallel
litigations, rebuts the statutory presumption under Section 139 NI
Act that the impugned cheques were issued in discharge of a
legally enforceable debt.
c. Non-Existence of Any Clause for Interest on the Rs. 8,40,000
Cheque Indicates No Enforceable Liability: In the present case,
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 21/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi
the Rs. 8,40,000 cheque (No. 000010 dated 16.03.2016) is central
to the alleged debt, claimed by the complainant as interest on the
deferred Rs. 1.45 Crores sale consideration. Neither the Agreement
to Transfer Leasehold Rights dated 30.01.2015 (Ex. CW1/X1) nor
the Transfer Deed cum Sale Deed dated 18.03.2015 (Mark-X)
contains any provision for interest on deferred payments via a
separate cheque. The Transfer Deed is silent on interest and lists
the cheques as pure consideration, without qualifiers. CW-1
(complainant witness) admitted in cross-examination that there was
no written document or specific rate for the Rs. 8,40,000 as
“lump-sum interest,” and it was omitted from the initial demand
notice (Ex. CW1/4) in CC No. 48468/2016, though referenced in
the second. This admission underscores the lack of contractual
support, rendering the claim post-facto and unsubstantiated. The
accused’s defense is consistent across testimony /DW-1, emails
(Ex. DW1/11), and written submissions that ties the cheque to
electricity load upgrade per Clause 9 of the Rent Agreement dated
10.04.2015 (Ex. DW1/8), which obligated the lessee
(complainant’s sister entity) to upgrade from 5KW to 100KW.
Clause 9 of the Rent Agreement explicitly requires the lessee to
“apply and pay for upgradation of sanctioned load to 100 KW on
behalf of the LESSOR,” with reimbursement by the lessor
(accused) by 21.10.2015. The accused’s emails (Ex. DW1/11)
corroborated by DW-1’s testimony that the lessee’s
non-compliance of no upgrade amid broader breaches in the
property transaction justified stop payment. The lessee’s failure to
do so frustrated the transaction, and the cheque’s purpose aligns
with this clause, not interest. CW-1’s contradictions (initially
claiming issuance at sale, later 4-5 days post-registry) further erode
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 22/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi
credibility, as no evidence rebuts the accused’s version. The
absence of an interest clause means the cheque does not discharge
a “specified liability,” failing the S.138 requirement. On thorough
examination of the underlying agreements, evidence, and CW-1’s
testimony reveals no contractual clause supporting this interest
claim. This absence, coupled with the cheque’s linkage to
electricity load upgrade in the Rent Agreement and the
complainant’s vague assertions, rebuts the presumption under
Section 139 NI Act that the cheque was issued for a legally
enforceable debt.
d. Payment of Rs. 15,00,000 by the Accused Remains Unexplained
by the Complainant, Adjusting the Debt: The payment of Rs.
15,00,000 was made via RTGS on 23.09.2015 from the account of
the accused’s father (Chandra Prakash Sharma) to Sanjay Singh
Rana’s personal account, as proved by the bank statement and
RTGS details (Ex. DW1/2-3). The accused’s testimony claim this
was an adjustment towards obtaining missing documents
post-DHFL loan release, as per the Agreement to Transfer
Leasehold Rights dated 30.01.2015 (Ex. CW1/X1, Clause 6b
requiring document release). The said transfer has not been denied
by the complainant as CW-1 admitted the receipt in
cross-examination dated 30.10.2018, confirming: “Sanjay Singh
was one of the directors in the complainant company. I do not
know whether accused had transferred Rs.15,00,000/- (Fifteen lacs
only) by way of RTGS from account of his father into the account
of Sh. Sanjay Singh… It is wrong to suggest that the aforesaid
payment of Rs.15,00,000/- was made with respect to execution of
sale deed Mark-X.” This admission establishes the payment but
denies its linkage to the sale, without explanation for its purpose.
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 23/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi
CW-1 denied it as sale adjustment but offered no alternative
purpose creating a vacuum that implies deliberate concealment.
Sanjay Singh Rana, the recipient and key director involved in the
transaction was not examined as a witness, despite being the a key
witness for clarifying the payment’s nature. This non-examination
attracts adverse inference under Section 114(g) of the Indian
Evidence Act, 1872, presuming the evidence would be unfavorable
to the complainant. The Rs. 15,00,000 reduces the alleged debt
from Rs. 1.45 Crores to Rs. 1.3 Crores, as claimed in the accused’s
testimony (intended for documents post-DHFL). No endorsement
on the cheques reflects this adjustment, violating Section 56 NI
Act, which requires part-payments to be noted on the instrument.
The accused rebutted S.139 by proving the payment and its
adjustment purpose, shifting burden to the complainant. The Rs.
15,00,000 payment, admitted but unexplained, adjusts the debt,
violating S.56 and rebutting S.139.
e. Complainant’s Failure to Prove Supply of Documents as per
Annexure A of the Agreement: Clause 6 of the Agreement (Ex.
CW1/X1) mandates the complainant to supply all documents listed
in Schedule A (Ex. CW1/X2) upon payment of Rs. 3 Crores (to
release from DHFL) and before Transfer Deed execution. Schedule
A enumerates 20 specific documents, including: Allotment Letter,
Lease Deed, Possession Letter, Functional Certificate, Completion
Certificate, SSI Registration, Sanctioned Building Plan/Map, and
corporate records (e.g., Director changes, Forms 32/7B). Clause 6f
allows revocation/refund if inconsistencies arise, and Clause 6g
places onus on the complainant for Transfer Memorandum (TM)
documents. This makes document supply a condition precedent to
the deferred Rs. 1.45 Crores payment (Clause 6i), tying it to NBFC
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 24/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi
financing or cheques. CW-1 claimed in affidavit and examination
that documents were supplied, but provided no proof of the same.
In cross-examination CW-1 admitted: “It is correct that as per
schedule-A of the agreement Ex. CW1/X1(colly for 7 pages) the
complainant had to be supplied all the documents which are
mentioned in schedule A of the agreement… It is correct that the
accused had sent a email to the complainant company for the said
purpose.” Despite this, CW-1 produced no evidence of compliance,
vaguely stating documents were supplied without specifics and
proofs. This highlights the complainant’s failure to fulfill,
breaching Clause 6. The lack of proof infers suppression, attracting
adverse inference under Section 114(g) of the Indian Evidence Act,
1872. The emails (Ex. DW1/9), detailing non-delivery of
Completion Certificate, Sanction Map, etc. and testimony (DW-1)
assert repeated demands unmet. The complainant’s unproved
supply, amid admissions and withholding, breaches Clause 6,
rebutting S.139.
f. Non-Payment of Rent by the Complainant and Unproved Cash
Payments Further Rebut Debt Enforceability: The Rent
Agreement dated 10.04.2015 (Ex. DW1/8) was executed between
the accused’s firm, VTS IT Solutions LLP (lessor), and the
complainant’s sister entity, Future World Green Homes Pvt. Ltd.
(lessee, sharing director Sanjay Singh Rana), leasing three floors
(Basement, Ground, First) for 60 months with a mandatory
36-month lock-in period. The agreed rent was Rs. 2.16 Lakhs per
month, totaling approximately Rs. 1.43 Crores over five years,
while Clause 17 imposed a lock-in from 21.04.2015 to 20.04.2018,
restricting early termination. However, the lessee failed to honor
this commitment. The DW-1’s testimony detailed non-payment
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 25/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi
from April to December 2015, calculating a loss of Rs. 18.79
Lakhs. The agreement was canceled prematurely on 05.06.2015,
breaching the lock-in, as corroborated by emails (Ex. DW1/9-11)
linking this to broader disputes over possession and document
non-supply. DW-1 further testified that the lessee’s refusal to pay
rent, coupled with fixture removal and access denial, rendered the
premises unrentable. CW-1 claimed in cross-examination that rent
was paid in cash, asserting: “I had paid the rent in cash… I had not
taken any acknowledgement from the accused for payment of
rent.” However, no receipts, bank statements, ledgers, or other
records were produced to substantiate this, despite the substantial
sum involved. Moreover, Sanjay Singh Rana, the lessee’s director
and signatory to the Rent Agreement, was not examined as a
witness, despite his pivotal role in managing the sister entity and
receiving rent-related instructions. This non-examination attracts
an adverse inference under Section 114(g) of the Evidence Act,
presuming the evidence would be unfavorable to the complainant.
The complainant’s counsel has argued that the non-payment of rent
by the future world company has no bearing on the transaction
between the complainant company and the accused. This court
does not agree with the contention of the counsel for the
complainant as the agreement to transfer lease specifically referred
to deferred payment subject to NBFC financing on the basis of
“actual rent of three floors”. The subsequent leasing/ renting by the
sister concern of the said three floors reflect that the leasing
agreement was an integral part of the whole sale/ lease transfer
agreement. Therefore non payment of rent has bearing on the
underlying transaction itself irrespective of the transaction being
entered by sister concern. The early cancellation of the Rent
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 26/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi
Agreement breached36-month lock-in, a material violation
rendering the lessee prima facie liable for rent. DW-1’s testimony
detailed non-payment, with the accused suffering a loss of Rs.
18.79 Lakhs remained unrefuted by the complainant. Here, the Rs.
18.79 Lakhs loss, combined with other adjustments raises dispute
of civil liability and uncrystallized debt creating no enforceable
liability. The non-payment of rent, unproved cash claims, and
breaches rebut S.139 presumption.
g. Sufficient Funds Proven in Joint Account: The accused
demonstrated sufficient funds through a joint bank account with his
mother, Dulari Sharma, as evidenced by the account statement (Ex.
DW1/12) and account opening form (Ex. DW4/A, tendered by
DW-4, Ms. Monika Rathore, HDFC Bank Manager). The
complainant argued that the accused failed to produce the LLP’s
account statement, attracting adverse presumption under Section
114(g) of the Indian Evidence Act, 1872. However, this is
irrelevant, as the stop payment was not due to insufficient funds but
abovemention breaches.
10.Conclusion and Reason for decision:
a. The Issue no. 1, 2, 3, 4 and 5 were decided in favour of the
complainant and the presumption was drawn against the accused.
However, In the issue no. 6 and 7, The accused was tacitly able to
rebut the presumption drawn against him by fracturing the case of
the complainant by rigorous cross examination to expose the latent
defects, whereas the complainant has failed to discharge the burden
of proving that the accused owed a legally enforceable debt or that
the cheque was issued to discharge such a liability. The issue no. 6CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 27/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhiand 7 are proved against the complainant. The accused is able to
cross the threshold of preponderance of probabilities to prove his
innocence and the complainant is unable to shift back the burden.
Hence, the benefit of doubt has to be extended to the accused, and
thus the case of the complainant does not survive the rigours of
trial, despite having statutory presumption against the accused.
11.Order:
a. The accused has raised a probable defence and successfully
rebutted the presumption under Sections 118 and 139 of the NI
Act. The complainant has failed to prove his case beyond
reasonable doubt. Hence, the accused Sh. Vivek Sharma is
acquitted of the offence under Section 138 NI Act.
b. The bail bonds of the accused and the sureties (in any), that are
already filed in the court for the purpose of bail, are retained for the
purpose of section 437 A Cr.P.C for the period of six months from
today.
c. The signed copy of the judgement be uploaded on the CIS
immediately.
d. Let the file be consigned to the record room, after due compliance.
e. Pronounced in open court and in presence of both the parties/
or their Counsels.Digitally
signed by (DIVYAM LILA)
DIVYAM
DIVYAM LILA Municipal Magistrate, East District
LILA Date:
2025.08.13 Karkardooma Court/Delhi
16:24:18
+0530
Date: 13.08.2025
CC NI ACT/57831/2016 M R Apparels vs Vivek Sharma page 28/ 29
In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi
___________________________end of the document_____________________
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