Delhi District Court
Rati Ram Saini vs Vishal Modi And Ors on 9 June, 2025
IN THE COURT OF SH. ABHISHEK GOYAL, ADDITIONAL
SESSIONS JUDGE-03, CENTRAL DISTRICT, TIS HAZARI
COURTS, DELHI
CNR No.: DLCT01-001006-2020
CRIMINAL APPEAL No.: 39/2020
VISHAL MODI,
S/o. Shri. Shiv Kumar Modi,
R/o. C-73, 2nd Floor,
Greater Kailash-I,
New Delhi-110048
Director of; M/s. Seabuck Ayurveda Pvt. Ltd.,
Having its registered office at;
87-1st Floor, Chopra Building,
Zamrudpur, Greater Kailash-I,
New Delhi-110048. ... APPELLANT
VERSUS
RATI RAM SAINI,
S/o. Shri. Kishan Lal,
Proprietor of; M/s. Rajay Dyes & Chemicals,
Shop No. 2280/4, Mahesh Market,
Gali Hinga Beg, Tilak Bazar,
Delhi-110006. ... RESPONDENT
Date of filing : 22.01.2020
Date of institution : 23.01.2020
Date when judgment was reserved : 03.04.2025
Date when judgment is pronounced : 09.06.2025
AND,
CNR No.: DLCT01-004953-2020
CRIMINAL APPEAL No.: 114/2020
RATI RAM SAINI,
Shop No. 2280/4, Mahesh Market,
Gali Hinga Beg, Tilak Bazar,
Delhi-110006. ... APPELLANT
VERSUS
1. VISHAL MODI (DIRECTOR)
M/s. Seabuck Ayurveda (Pvt.) Ltd.,
87-1st Floor, Chopra Building,
Zamrudpur, Greater Kailash-I,
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Digitally signed
by ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.09
16:38:53 +0530
New Delhi-110048,
Email: [email protected].
2. M/s. SEABUCK AYURVEDA (PVT.) LTD.,
Factory Address; Y-28,
Okhla Industrial Area, Phase-II,
Near Okhla Metro Station,
New Delhi.
Email: [email protected].
3. STATE (GNCT of DELHI),
Through its Public Prosecutor. ... RESPONDENTS
Date of filing : 20.08.2020
Date of institution : 21.08.2020
Date when judgment was reserved : 03.04.2025
Date when judgment is pronounced : 09.06.2025
JUDGMENT
1. The present common judgment shall determine the
aforenoted criminal appeals, bearing; Crl. Appeal No. 39/2020 and
Crl. Appeal No. 114/2020. At the outset, it is noted that the
criminal appeal bearing; Crl. Appeal No. 39/2020 (hereinafter
referred to as the ‘accused’s appeal’) has been preferred by the
accused1, namely, Vishal Modi (hereinafter referred to as the
‘accused’) under Section 374 of the Code of Criminal Procedure,
1973 (hereinafter, referred to as ‘Cr.P.C./Code’) against the
judgment dated 10.12.2019 (hereinafter referred to as ‘impugned
judgment’), passed by learned Metropolitan Magistrate-01 (NI
Act)/Ld. MM-01 (NI Act), Central, Tis Hazari Courts, Delhi
(hereinafter referred to as the ‘Ld. Trial Court/Ld. MM’) in case
bearing, ‘Rati Ram Saini v. Vishal Modi, CC No. 530052/2016’,
arising out of a complaint under Section 200 Cr.P.C. read with
Section 138 of the Negotiable Instruments Act, 1881 ( hereinafter
1 For purposes of coherence, appellant namely Vishal Modi in Crl. Appeal No. 39/2020 and the appellant, namely,
Rati Ram Saini in Crl. Appeal No. 114/2020 are referred throughout this judgment as the accused and the
complainant, respectively (as they were before the Ld. Trial Court).
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ABHISHEK GOYAL Date: 2025.06.09 16:38:59 +0530
referred to as ‘NI Act‘), convicting the accused for the offence
under Section 138 NI Act, and the consequent order of sentence
dated 24.12.2019 (hereinafter referred to as ‘impugned order’),
passed by the Ld. Trial Court, directing the accused to compensate
the complainant, namely, Rati Ram Saini ( hereinafter referred to
as the ‘complainant’) to a tune of Rs. 1,00,000/- (Rupees One Lakh
only) within a period of 30 (thirty) days of the said order/impugned
order, failing which, it was directed that the accused would
undergo, simple imprisonment for a period of 01 (one) month
(hereinafter impugned judgment and impugned order are
collectively referred to as the ‘impugned judgment and order’).
2. Markedly, the cross appeal, i.e., criminal appeal
bearing; Crl. Appeal No. 114/2020 has been preferred by the
complainant (hereinafter referred to as the ‘complainant’s
appeal’), in terms of the provisions under Section 372 Cr.P.C.
against the impugned order/order of sentence dated 24.12.2019
inter alia seeking setting aside of the impugned order of sentence
awarded to the accused along with the enhancement of sentence
awarded to the accused, i.e., seeking award/sentence of
imprisonment for a term which may extend to two years, or with
fine which may extend to twice the amount of the cheques in
question, to the accused. Here, it is apposite to reproduce the
prayer clause of the instant appeal, as under;
“…It is therefore, humbly prayed that the Hon’ble
Appellate Court to;
(a) Set aside the impugned order on sentence dated
24th day of December, Year 2019 (24.12.2019) passed
by the Smt. ****, Ld. MM-01 (NI Act)/District:
Central, in Criminal Complaint Case No.
530052/2016 titled, ‘Rati Ram Saini versus Vishal
Modi & Anr.” after calling of the records, examining
the legality, validity, propriety and correctness of the
impugned order;
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ABHISHEK GOYAL
GOYAL Date: 2025.06.09
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(b) Enhance the punished of Respondent with
imprisonment for a term which may be extended to
two years, or with fine which may extend to twoce the
amount of the cheque or with both;
(c) Any other and further relief may be granted in
favour of the Appellant/victim and against the
respondent, in the interest of justice…”
(Emphasis supplied)
3. Pithily put, the genesis of the present proceedings is
the complaint, filed by the complainant before the Ld. Trial Court
in terms of the provisions under Section 200 Cr.P.C. read with
Section 138 of NI Act. Under the said complaint, the complainant
inter alia asserted that he was the proprietor of M/s. Rajat Dyes &
Chemicals and authorized distributor of chemicals and dyes. As
per the complainant, the accused, Vishal Modi, was the owner of
Seabuck Ayurveda (Pvt.) Ltd. (hereinafter referred to as the
‘accused company’), whereupon, as per the complainant all the
affairs of Seabuck Ayurveda (Pvt.) Ltd. were managed by the
accused. It was further asserted under the complaint that the
complainant, in good faith, supplied goods worth Rs. 49,988/-
(Rupees Forty Nine Thousand Nine Hundred and Eighty Eight
only), Rs. 12,580/- (Rupees Twelve Thousand Five Hundred and
Eighty only), Rs 38,640/- (Rupees Thirty Eight Thousand Six
Hundred and Forty only), Rs 19,396/- (Rupees Nineteen Thousand
Three Hundred and Ninety Six only) and Rs. 60,866/- (Rupees
Sixty Thousand Eight Hundred and Sixty Six only) to the accused
company on 24.08.2015 vide bill bearing no. 56/2784, on
25.08.2015 vide bill bearing no. 56/2785, on 02.09.2015 vide bill
bearing no. 56/2791, on 02.09.2015 vide bill bearing no. 56/2792
and on 16.09.2015, vide bill bearing no. 57/2802, respectively
[hereinafter all the said bills are collectively referred to as the
‘bills’; which cumulatively amount to Rs. 1,81,470/- (Rupees One
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GOYAL Date: 2025.06.09
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Lakh Eight One Thousand Four Hundred and Seventy only)]. It
was further proclaimed by the complainant that the
accused/accused company, in part discharge of their liability
issued the cheques bearing nos. 000402, dated 23.10.2015 for a
sum of Rs. 62,568/- (Rupees Sixty Two Thousand Five Hundred
and Sixty Eight only); 000418, dated 01.11.2015 for a sum of Rs.
58,036/- (Rupees Fifty Eight Thousand and Thirty Six only); and
000518, dated 16.11.2015 for a sum of Rs. 60,866/- (Rupees Sixty
Thousand Eight Hundred and Sixty Six only), cumulatively
amounting to Rs. 1,81,470/- (Rupees One Lakh Eight One
Thousand Four Hundred and Seventy only), all drawn on HDFC
Bank, Kailash Colony branch (hereinafter the said cheques are
collectively referred to as the ‘dishonoured cheques/cheques in
question’). It is further averred under the complaint that when the
accused/accused company did not clear the said liability, the
complainant presented the said cheques/dishonoured cheques with
its banker, i.e., Kotak Mahindra Bank Ltd., No. 4079, Ground
Floor, Naya Bazaar, New Delhi 110006 for encashment. However,
the said cheques are stated to have returned dishonoured on
27.10.2015, 07.11.2015 and 17.11.2015, respectively, all with the
remarks, “Funds Insufficient”. Thereafter, the complainant is
asserted to have informed the accused of the dishonour of the
cheques in question, as well as requested the accused to make
payment of Rs. 1,81,470/- (Rupees One Lakh Eighty One
Thousand Four Hundred and Seventy only), being the dishonored
cheque amount, however, to no avail. Subsequently, the
complainant is avowed to have issued legal demand notice dated
21.11.2015 (hereinafter referred to as the ‘legal demand
notice/legal notice’) to the accused as well as accused company,
however, neither any payment was made by the accused, nor the
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ABHISHEK GOYAL
GOYAL Date:
2025.06.09
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legal demand notice replied. Ergo, under such circumstances, the
complainant filed the aforenoted complaint in terms of the
provisions under Section 138 NI Act before the Ld. Trial Court.
3.1. Notably, consequent upon pre-summoning evidence
by way of affidavit having been tendered by the complainant and
thereupon, Ld. Trial Court’s taking cognizance of the offence on
07.01.2016, summons were issued to the accused. Subsequently,
upon the accused entering appearance before the Ld. Trial Court
on 23.12.2016, notice under Section 251 Cr.P.C. was framed
against the accused and the accused company vide order dated
16.02.2018, to which, the accused as well as accused company
plead not guilty and claimed trial. Relevantly, during the course of
proceedings before the Ld. Trial Court, accused as well as accused
company moved an application under Section 145(2) NI Act,
seeking permission to cross examine the complainant, which was
disposed of by the Ld. Trial Court vide order dated 12.10.2018
inter alia under the following observations;
“…2. In gist, it is submitted vide application in
question u/s 145(2) NI Act and oral submissions by
accused side that complainant side has stated accused
no. 1 is the owner of the accused no 2. same is legally
not correct since accused no. 2 is the company and
further the accused side made payment of Rs. 50,000/-
through NEFT on 28.10.2015 to the complainant side,
therefore the complaint is not maintainable, and their
application be allowed.
3. On the other hand, in gist, it is submitted by Ld.
Counsel for complainant vide reply and oral
submissions that application of the accused side is
devoid of merits and has been filed only to delay the
outcome of trial, therefore, application of accused u/s
145(2) NI Act be rejected.
4. Submissions of both sides considered.
5. In the opinion of this court, the defence side has
raised probable defence vide application in question
which can be decided only by way of cross
examination of complainant evidence. No evidence is
complete till, it passes the test of cross examination
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and moreover, since application u/s 145(2) NI Act has
to be necessarily allowed once moved as per judgment
of Hon’ble Supreme Court of India in matter of
Mandvi Cooperative Bank Ltd. Vs. Nimesh B. Thakar
2010(3) SCC 83, therefore, application of the accused
side for allowing cross examination of complainant
evidence stands allowed.
6. Be put up for appearance of complainant/cross
examination of CE on…”
(Emphasis supplied)
3.2. Consequently, during the trial, the complainant was
examined as CW-1 and cross-examined on behalf of the accused.
Notably, during his deposition the complainant/CW-1 tendered his
evidence by way of affidavit (Ex. CW1/A) as well as proved the
documents, i.e., cheques in question/cheques bearing Nos.
000402, dated 23.10.2015 (Ex. CW1/1), 000418, dated 01.11.2015
(Ex. CW1/2) and 000518, dated 16.11.2015 (Ex. CW1/3); cheque
return memos dated 27.10.2015 (Ex. CW1/4), 07.11.2015 (Ex.
CW1/5), 17.11.2015 (Ex. CW1/6); legal demand notice dated
21.11.2015 (Ex. CW1/7); postal receipts (Ex. CW1/8 & Ex.
CW1/9) and speed post receipts (Ex. CW1/10 to Ex. CW1/12); and
bills (Ex. CW1/13 to Ex. CW1/17). Subsequently, on conclusion
of complainant’s evidence, recording of statement of the accused
under Section 313/281 Cr.P.C. on 17.07.2019, as well as on
conclusion of arguments on behalf of the parties, as
aforementioned, the Ld. Trial Court vide impugned judgment and
order, while holding the accused guilty of the offence punishable
under Sections 138 NI Act, sentenced him in the manner, as noted
hereinabove, respectively. Apposite to note that though during the
course of trial, the accused proposed to lead defence evidence,
however, subsequently, on the submissions/written statement of
the accused, right of the accused to lead defence evidence/DE was
closed by the Ld. Trial Court on 22.10.2019.
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GOYAL Date: 2025.06.09 16:39:18
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4. Ld. Counsel for the accused vehemently contended
that the impugned judgment and order were passed by the Ld. Trial
Court on mere conjunctures, surmises and in contravention of the
settled principles of law, deserving their setting aside at the outset.
As per the Ld. Counsel, the impugned judgment is incorrect both
on facts as well as in law, making the same liable to be set aside at
the outset. It was further submitted that the Ld. Trial Court erred in
not appreciating the facts and circumstances of the present case,
nor the submissions of/on behalf of the accused, while passing the
impugned judgment and order. In this regard, Ld. Counsel
submitted that the impugned judgment as passed by the Ld. Trial
Court, unmindful of several material aspects, in particular,
overlooking the fact that while the complainant under his cross-
examination asserted that he had supplied branded material of IGL
company to the accused, however, failed to adduce any evidence to
the effect that the material supplied to the accused were branded.
Correspondingly, though, the complainant under his cross-
examination asserted that a sum of Rs. 50,000/- (Rupees Fifty
Thousand only) was transferred by the accused to the
complainant’s account of HDFC Bank, Kailash Colony, New
Delhi on 28.10.2015 through NEFT transaction against the
purchase order for goods/order worth Rs. 2,50,000/- (Rupees Two
Lakhs Fifty Thousand only), however, no purchase order to the
said effect was placed on record by the complainant. On the
contrary, it was asserted that the complainant admitted under his
cross-examination that he destroyed the purchase order as he did
not intend to supply further material to the accused. Further, as per
the Ld. Counsel for the accused, there is contradiction as to the
capacity/status of the accused in the instant case, wherein the
complainant has proclaimed the accused as the owner of M/s.
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Seabuck Ayurveda Pvt. Ltd. at certain places, whilst the
complainant deposed at the time of his evidence that accused was
the one of the directors of M/s. Seabuck Ayurveda Pvt. Ltd. Ergo,
Ld. Counsel strenuously contended that the Ld. Trial Court erred in
not considering that a perusal of the cross-examination of the
complainant would demonstrate that the same is replete with
contradictions, material improvements and variance, besides the
same does not proves, fortifies or substantiates the complainant’s
case in any manner. In fact, as per the Ld. Counsel for the accused,
the complainant filed a false complaint against the accused despite
the fact that the accused had no legally enforceable debt or liability
payable to the complainant.
4.1. Ld. Counsel for the accused further submitted that the
finding of the Ld. Trial Court is not based on any cogent material
and the Ld. Trial Court, as per the Ld. Counsel, passed the
impugned judgment and order, mechanically. Further, as per the
Ld. Counsel, the Ld. Trial Court erred in appreciating the evidence
led in the case as well as ignored the fundamental shortcoming in
the case put forth by the complainant. Even otherwise, as per the
Ld. Counsel, the Ld. Trial Court did not consider that it was
proved/admitted by the complainant that a sum of Rs. 50,000/-
(Rupees Fifty Thousand only) was received by the complainant
towards the goods supplied by him against the invoices and as
such, the amount of the cheque in question was more than the
alleged liability of the accused. In this regard, it was further
submitted that the amount specified under the cheques in question,
cumulatively amounts to Rs. 1,81,470/- (Rupees One Lakh Eighty
One Thousand Four Hundred and Seventy only), which do not take
into consideration a sum/amount of Rs. 50,000/- (Rupees Fifty
Thousand only), admittedly received by the complainant from the
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GOYAL
GOYAL Date: 2025.06.09
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accused, way prior to the issuance of legal notice/legal demand
notice to the accused, negating any legal debt or liability for the
entire cheques amount. Correspondingly, as per the Ld. Counsel,
Ld. Trial Court failed to consider that in the instant case, the
complainant has not proved its case, beyond reasonable doubt
against the accused. On the contrary, as per the Ld. Counsel, the
defence raised by the accused is plausible, besides the accused has
been able to raise reasonable doubt in the case of the complainant.
In this regard, it was further submitted that the Ld. Trial Court also
failed to appreciate that in the cross examination of complainant,
the accused was able to rebut the presumption of 139 NI Act and
had further put forward his defence, as mandated under law on
preponderance of probabilities. Accordingly, Ld. Counsel for the
accused reiterated that not only did the Ld. Trial Court failed to
consider the truth of circumstances and passed the impugned
judgment in haste, rather, did not properly appreciate/examine the
facts of the present case, wrongly holding the accused guilty of the
aforenoted offence/offence under Section 138 NI Act.
4.2. Ld. Counsel for the accused further submitted that the
Ld. Trial Court reached its conclusion of guilt of the accused,
while failing to appreciate that there is no cogent, credible and
reliable evidence on record for reaching such an unambiguous
conclusion of accused’s guilt. Even otherwise, as per the Ld.
Counsel, the impugned order on sentence was passed by the Ld.
Trial Court, inconsiderate of the correct factual scenario, awarding
an exorbitant sentence/fine and compensation against the accused.
In so far as the cross appeal, preferred by the complainant is
concerned, Ld. Counsel for the accused vehemently contested the
maintainability of the said appeal under Section 372 Cr.P.C. In this
regard, Ld. Counsel for the accused strenuously contended that as
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per the said provision, no appeal can be preferred at the behest of
the complainant, considering that the proviso to Section 372
Cr.P.C. confers limited right of appeal to a victim against an order
passed by court, acquitting an accused or convicting for a lesser
offence or imposing inadequate compensation. Correspondingly,
as per the Ld. Counsel, the complainant is not analogous to a
victim and in the instant case, no appeal under Section 372 Cr.P.C.
can be entertained at the behest of a complainant of cheque
dishonour chase, who fails to qualify as a victim under the proviso
to the said provision. Even otherwise, as per the Ld. Counsel, such
right is limited even for a victim and no appeal lies against the
inadequacy of sentence awarded to an accused, even at the behest
of a victim. Accordingly, Ld. Counsel for the accused inter alia
prayed that the accused’s appeal be allowed, and the impugned
judgment and order be set aside, and the accused be acquitted of
the allegations/charge(s) levelled against him. Correspondingly, it
was entreated that the cross appeal, preferred at the behest of the
complainant be outrightly dismissed as not maintainable in view of
the bar contained under Section 372 Cr.P.C. In support of the said
contentions, reliance was placed upon the decisions in;
Basalingappa v. Mudibasappa, (2019) 5 SCC 418; Dashrathbhai
Trikambhai Patel v. Hitest Mahendrabhai Patel & Anr., Crl.
Appeal No. 1497/2022, dated 11.10.2022 (SC); Alliance
Infrastructure Projects Pvt. Ltd. v. Vinay Mittal, 2010 ILR 111
Del. 459: (2010) 1 JCC (NI) 1998; Pawan Enterprises v. Satish H.
Verma, 2003 Cri.LJ 2164 (Bom.); State of Maharashtra v. Kaipal
Bhaskar Gadhave, (2010) 1 NIJ 25 (Bom.); S.E. Investments Ltv.
V. Prem Singh, (2010) 1 JCC 860 (Del.), Starkey Laboratories
India Pvt. Ltd. v. Sanjay Gujral, Crl. LP No. 492/2017, dated
24.09.2019 (DHC); Lyca Finance Ltd. v. State, (2016) 7 DEL CK
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139; Parvinder Kansal v. State of NCT of Delhi & Anr., SLP (Crl.)
No. 3928/2020, dated 28.08.2020 (SC); Kushal Kawaduji
Singanjude v. Ramnarayan Durgaprasad Agrawal, Crl. Appln.
(Appa.) No. 201/2018, dated 23.08.2019 (Bom. HC); and
Bhajanpiura Co-operative Urban Thrift & Credit Society Ltd. v.
Sushil Kumar, Crl. Appeal No. 972/2012, dated 03.09.2014
(DHC).
5. Per contra Ld. Counsel for the complainant submitted
that the impugned judgment and order were passed by the Ld. Trial
Court after due appreciation of the facts and circumstances of the
case as well as in consonance with the settled judicial precedents.
Even otherwise, Ld. Counsel for the complainant outrightly
contended that the accused preferred its appeal against the
impugned judgment and order of sentence, with a sole endeavor to
cause delay in compliance of the order of sentence as well as to
cause undue harassment to the complainant. Further, as per the Ld.
Counsel, the accused is guilty of persistently playing a fraud upon
the complainant, manifest from his conduct. Ld. Counsel further
submitted that in the instant case, the accused admitted the cheques
in question belonged to his company and bore his/accused’s
signatures as the company’s authorized signatory, which is
sufficient enough to attribute/attract liability against the accused
for the offence under Section 138 NI Act. Further, as per the Ld.
Counsel, the accused, while responding to question at the time of
framing of notice under Section 251 Cr.P.C. stated that the
dishonoured cheques were deliberately dishonoured as the goods
supplied by the complainant were found defective, which fact, as
per the Ld. Counsel needs to be read against the accused as his
admission. Even otherwise, as per the Ld. Counsel, despite such
assertion by the accused, neither the ‘ so-called’ defective goods
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were ever returned by the accused to the complainant nor were any
steps taken by the accused for stoppage of payment against the
alleged misused cheques. Correspondingly, Ld. Counsel asserted
that no particulars of any vendors of the accused regarding the
alleged defective products or the particulars of said ‘defective’
goods/products have been brought on record by the accused.
Further, as per the Ld. Counsel, the accused deliberately opted not
to lead any evidence in defence by calling any person, staff,
distributor, books of accounts to support his version regarding
supply of faulty or low-quality products by the complainant,
despite an opportunity having been granted to him by the Ld. Trial
Court. Ergo, Ld. Counsel asserted that the defence of the accused
has not been proved since no documentary evidence of defective or
low-quality goods could be established by him, especially when
the cheques in question were dishonored for the reason of
‘Insufficient Funds’ and not for the reason of stoppage of payment.
5.1. Ld. Counsel for the complainant further fervently
argued that the accused neither led any evidence to rebut the
presumption under Section 139 NI Act nor adduced any
witness/evidence in support of his contention that the cheques in
question were misused by the complainant. On the contrary, as per
the Ld. Counsel, the complainant proved its case, beyond
reasonable doubt against the accused. It was further submitted that
as per the accused’s own version, the dispute between the
complainant and the accused was not settled and the accused was
still liable to pay for his liability regarding the sale goods. On the
contrary, as per the Ld. Counsel, in case the accused’s further
version that he had paid a sum of Rs. 50,000/- (Rupees Fifty
Thousand only) to the complainant towards settlement of liability
towards earlier orders is considered, the accused has produced no
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written correspondence in this regard. Correspondingly, it was
submitted that the accused admittedly did not even seek return of
the cheques in question from the complainant at any point in time,
prior to or during the trial before the Ld. Trial Court. Ergo, Ld.
Counsel further strenuously reiterated that the facts and
circumstances put forth as well as the evidence placed on record,
unerringly point out towards the guilt of the accused and that no
fault can be attributed to the finding of the accused’s guilt by the
Ld. Trial Court, which is based on proper appreciation of facts as
well as law. Accordingly, Ld. Counsel for the State submitted that
the appeal filed by the accused, deserves to be dismissed at the
outset, as grossly malicious and devoid of merits. In so far as the
complainant’s appeal is concerned, Ld. Counsel for the
complainant asserted that appeal is an imperative/important right
of a litigant in criminal justice system because it ensures a fair and
just legal system. Correspondingly, Ld. Counsel asserted that the
complainant is a victim in complaint case and the said
appeal/complainant’s appeal is maintainable at the behest of the
complainant as the sentence awarded to the accused does not
commensurate with the offence committed by him. As per the Ld.
Counsel, the sentence awarded to the accused is grossly
inadequate, considering the harassment/losses that have accrued
upon the complainant. In this regard, it was further contended the
superior courts have persistently asserted that the leniency can be
accorded to an accused, subject to fairly and adequately
compensating the victim in a given case. However, as per the Ld.
Counsel, even the award of compensation to the complainant is
grossly inadequate under the impugned order, necessitating
interference by this Court. In support of the said contentions,
reliance was placed upon the decisions in; Basalingappa v.
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Mudibasappa, (Supra.); Kali Ram v. State of Himachal Pradesh,
(1973) 2 SCC 808; Bharat Barrel & Drum Manufacturing
Company v. Amin Chand Pyarelal, (1999) 3 SCC 35; M.S.
Narayana Menon @ Mani v. State of Kerala, (2006) 6 SCC 39;
Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54;
Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513; Rangappa
v. Sri. Mohan, (2010) 11 SCC 441; Kishan Rao v. Shankargouda,
(2018) 8 SCC 165; M. Nasar v. Yoosuf Sidhique, III (2007) BC
(Ker.); Janagi v. Lakshmi Polymers, 2006 CrLJ 2489; and Mast
Ram Tiwari v. State of U.P., dated 19.01.2018 (Allahabad High
Court): AIR Online 2018 All. 49.
6. The arguments of Ld. Counsel for the accused as well
as that of Ld. Counsel for the complainant have been heard and the
record(s), including the Trial Court Record and the written
submissions/arguments and case laws, filed on behalf of the
parties, thoroughly perused.
7. At the outset, this Court deems it pertinent to observe
that though the appeal bearing Crl. Appeal No. 39/2020, has been
preferred on behalf of the accused with the statutory prescribed
period of limitation, however, the cross appeal bearing Crl. Appeal
No. 114/2020 of the complainant has been preferred with a delay.
Notably, under the application for condonation of delay
accompanying the said appeal/complainant’s appeal, the reason
for delay in preferring thereof, is specified as the complainant’s
inability to approach his legal counsel at the relevant point in time
due to his age factor, i.e., complainant being a senior citizen of 66
(sixty six) years of age and under risk of infection with covid-19,
as was prevailing/rapidly spreading at the relevant point in time.
Further, during the course of arguments, Ld. Counsel for the
complainant, while supplementing the said contention(s), further
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vehemently argued that the delay in preferring the complainant’s
appeal was accentuated by the fact that the complainant was taking
preventive measures at the relevant point in time as covid-19
pandemic was rapidly spreading and it only when the complainant
came in contact with his counsel, instructions for filing of the said
appeal could be given. Even otherwise, as per the Ld. Counsel in
case the delay in preferring the complainant’s appeal is not
condoned grave and irreparable loss would accrue upon the
complainant, whist, no loss/damage would be caused to the
accused, in case the prayer, as sought for is granted. Needless to
mention here, Ld. Counsel for the accused sternly objected to the
said prayer for condonation on the ground that considering the
period of delay in filing the said appeal, no relaxation/indulgence
may be granted in favour of the complainant, herein.
8. Apropos the present discussion and before delving
into the arguments addressed before this Court on the aspect of
delay, it would be relevant to make a reference to Section 5 the
Limitation Act, 1963 (hereinafter referred to as the ‘Limitation
Act‘), which provides for condonation of delay in certain cases on
demonstration of ‘sufficient cause’. Needless to mention here that
the said terms, ‘sufficient cause’ have been repeated asserted by
superior courts to be elastic and demand liberal construction, in the
interest of justice. In this regard, reference is made to the decision
of the Hon’ble Supreme Court in Esha Bhattacharjee v.
Raghunathpur Nafar Academy, (2013) 12 SCC 649 , wherein the
Hon’ble Court, while painstakingly collating the guiding
principles governing the exercise of court’s power to condone
delay as well as the meaning of the said words, ‘sufficient case’,
enunciated as under;
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“21. From the aforesaid authorities the principles
that can broadly be culled out are:
21.1. (i) There should be a liberal, pragmatic,
justice-oriented, non-pedantic approach while dealing
with an application for condonation of delay, for the
courts are not supposed to legalise injustice but are
obliged to remove injustice.
21.2. (ii) The terms “sufficient cause” should be
understood in their proper spirit, philosophy and
purpose regard being had to the fact that these terms
are basically elastic and are to be applied in proper
perspective to the obtaining fact-situation.
21.3. (iii) Substantial justice being paramount and
pivotal the technical considerations should not be
given undue and uncalled for emphasis.
21.4. (iv) No presumption can be attached to
deliberate causation of delay but, gross negligence on
the part of the counsel or litigant is to be taken note of.
21.5. (v) Lack of bona fides imputable to a party
seeking condonation of delay is a significant and
relevant fact.
21.6. (vi) It is to be kept in mind that adherence to
strict proof should not affect public justice and cause
public mischief because the courts are required to be
vigilant so that in the ultimate eventuate there is no
real failure of justice.
21.7. (vii) The concept of liberal approach has to
encapsulate the conception of reasonableness and it
cannot be allowed a totally unfettered free play.
21.8. (viii) There is a distinction between
inordinate delay and a delay of short duration or few
days, for to the former doctrine of prejudice is
attracted whereas to the latter it may not be attracted.
That apart, the first one warrants strict approach
whereas the second calls for a liberal delineation.
21.9. (ix) The conduct, behaviour and attitude of a
party relating to its inaction or negligence are relevant
factors to be taken into consideration. It is so as the
fundamental principle is that the courts are required to
weigh the scale of balance of justice in respect of both
parties and the said principle cannot be given a total
go by in the name of liberal approach.
21.10. (x) If the explanation offered is concocted
or the grounds urged in the application are fanciful,
the courts should be vigilant not to expose the other
side unnecessarily to face such a litigation.
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21.11. (xi) It is to be borne in mind that no one gets
away with fraud, misrepresentation or interpolation
by taking recourse to the technicalities of law of
limitation.
21.12. (xii) The entire gamut of facts are to be
carefully scrutinised and the approach should be
based on the paradigm of judicial discretion which is
founded on objective reasoning and not on individual
perception.
21.13. (xiii) The State or a public body or an entity
representing a collective cause should be given some
acceptable latitude.
22. To the aforesaid principles we may add some
more guidelines taking note of the present day
scenario. They are:
22.1. (a) An application for condonation of delay
should be drafted with careful concern and not in a
haphazard manner harbouring the notion that the
courts are required to condone delay on the bedrock of
the principle that adjudication of a lis on merits is
seminal to justice dispensation system.
22.2. (b) An application for condonation of delay
should not be dealt with in a routine manner on the
base of individual philosophy which is basically
subjective.
22.3. (c) Though no precise formula can be laid
down regard being had to the concept of judicial
discretion, yet a conscious effort for achieving
consistency and collegiality of the adjudicatory
system should be made as that is the ultimate
institutional motto.
22.4. (d) The increasing tendency to perceive
delay as a non-serious matter and, hence,
lackadaisical propensity can be exhibited in a
nonchalant manner requires to be curbed, of course,
within legal parameters…”
(Emphasis supplied)
9. Unmistakably, the rules of limitation, which are
premised on the principles enshrined in Latin maxim, ‘interest
reipublicae up sit finis litium1’, are designed, not to destroy the
legal rights of parties, rather, to ensure that the parties do not resort
to dilatory tactics. Ergo, considering the objective of the law and
1 It is for the general welfare that a period be put to litigation.
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further being wary of the fact that there is no presumption under
law that the delay in approaching courts was deliberate, courts 1
have repetitively professed for adopting a pragmatic, justice-
oriented approach, in variance to, technical interpretation, while
determining ‘sufficient cause’ in a case. Needless to mention that it
is equally a settled law2, “decisive factor for condonation of delay
is not length of delay but sufficiency and satisfactory
explanation.” Apposite in regard the foregoing to make a reference
to the decision of the Hon’ble Supreme Court in State of U.P. v.
Satish Chand Shivhare & Brothers, 2022 SCC OnLine SC 2151 ,
wherein the Hon’ble Court, while professing for the adoption of a
balanced as well as liberal approach in the determination of a
prayer for limitation/condonation of delay, asserted as under;
“22. When consideration of an appeal on merits is
pitted against the rejection of a meritorious claim on
the technical ground of the bar of limitation, the
Courts lean towards consideration on merits by
adopting a liberal approach towards ‘sufficient cause’
to condone the delay. The Court considering an
application under Section 5 of the Limitation Act may
also look into the prima facie merits of an appeal.
However, in this case, the Petitioners failed to make
out a strong prima facie case for appeal. Furthermore,
a liberal approach, may adopted when some plausible
cause for delay is shown. Liberal approach does not
mean that an appeal should be allowed even if the
cause for delay shown is glimsy. The Court should not
waive limitation for all practical purposes by
condoning inordinate delay caused by a tardy
lackadaisical negligent manner of functioning.”
(Emphasis supplied)
10. Consequently, in light of the aforenoted judicial
dictates/principles governing limitation; arguments addressed by
the Ld. Counsel for the complainant and Ld. Counsel for the
accused; as well as upon appreciation of the facts and
1 J.M. Ramachandra & Sons v. Customs Excise & Gold (Control) Appellate Tribunal, 2001 SCC OnLine Del 1082.
2 Dineshbhai Rameshbhai Minama v. State of Gujarat, 2018 SCC OnLine Guj 2610.
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circumstances brought forth, this Court is of the considered
opinion that the complainant’s prayer for condonation of delay in
filing the complainant’s appeal, deserves to be allowed. As
aforenoted, the reasons for delay in the said case/complainant’s
appeal are stated to have been attributed to the factors of
complainant’s age factor as well as prevalence/spread of covid-19
pandemic at the relevant point in time, as well as complainant’s
inability to seek proper legal assistance owing to such incapacities.
Clearly, in light of the foregoing, the reasons for preferring the
complainant’s appeal by/on behalf of the complainant cannot be
treated to be malicious or dilatory in any manner. Correspondingly,
this Court unswervingly observes that the prayer for condonation
of delay in filing the complainant’s appeal deserves to be allowed
and the period of 65 (sixty five) days1 be condoned. Consequently,
for the foregoing reasons, this Court allows the complainant’s
prayer for condonation of delay in preferring the complainant’s
appeal/Crl. Appeal No. 114/2020 and the period of 65 (sixty five)
days in filing/preferring the said appeal/complainant’s appeal is,
hereby, condoned.
11. Proceeding further, this Court deems it apposite at
this stage to enunciate the scope of jurisdiction of this Court in an
appeal against conviction. In this regard, this Court deems it
pertinent to outrightly make a reference to the decision of the
Hon’ble Supreme Court2 in Atley v. State of U.P., 1955 SCC
1 Notably, the instant appeal was filed during the period when covid-19 restrictions were ongoing. However, the
earlier period of delay till 15.03.2020 deserves to be condoned in the interest of justice and for the reasons stated
herein. Reference is further the decision of the Hon’ble Supreme Court in Re: Cognizance for Extension of
Limitation, Suo Motu Writ Pet. (C) No. 3/2020, dated 10.01.2022 in this regard wherein the Hon’ble Court inter alia,
directed, “*** I. The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated
08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand
excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all
judicial or quasi judicial proceedings. ***III. In cases where the limitation would have expired during the period
between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons
shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation
remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply…” (Emphasis
supplied)
2 Reference further made to; Padam Singh v. State of U.P., (2000) 1 SCC 621.
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OnLine SC 51, wherein the Hon’ble Court, while delving into the
‘scope and ambit’ of appellate court’s jurisdiction, against an
appeal against acquittal or an appeal against conviction, inter alia
noted as under;
“8. … It is also well settled that the Court of appeal
has as wide powers of appreciation of evidence in an
appeal against an order of acquittal as in the case of an
appeal against an order of conviction, subject to the
riders that the presumption of innocence with which
the accused person starts in the trial court continues
even up to the appellate stage and that the appellate
court should attach due weight to the opinion of the
trial court which recorded the order of acquittal. If the
appellate court reviews the evidence, keeping those
principles in mind, and comes to a contrary
conclusion, the judgment cannot be said to have been
vitiated. (See in this connection the very cases cited at
the Bar, namely, Surajpal Singh v. State [1951 SCC
1207: AIR 1952 SC 52]; Wilayat Khan v. The State of
Uttar Pradesh [1951 SCC 898: AIR 1953 SC 122]. In
our opinion, there is no substance in the contention
raised on behalf of the appellant that the High Court
was not justified in reviewing the entire evidence and
coming to its own conclusions….”
(Emphasis supplied)
12. Correspondingly, the Hon’ble Apex Court in
Narendra Bhat v. State of Karnataka, (2009) 17 SCC 785, iterated
in respect of the foregoing as under;
“3. This Court has in a series of judgments held
that a court exercising appellate power must not only
consider questions of law but also questions of fact
and in doing so it must subject the evidence to a
critical scrutiny. The judgment of the High Court must
show that the Court really applied its mind to the facts
of the case as particularly when the offence alleged is
of a serious nature and may attract a heavy
punishment.”
(Emphasis supplied)
13. Quite evidently, from a conjoint reading of the
aforenoted judicial dictates it can be perspicuously deduced that
the jurisdiction of this Court in an appeal against conviction
extends to re-appreciation of the entire material placed on record
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of the trial court and to arrive at an independent conclusion as to
whether the said evidence can be relied upon or not. In fact, as
aforenoted, court(s), while exercising its appellate jurisdiction, is
not only required to consider the question of law, rather, also
question of facts to affirmatively reach a conclusion of guilt or
innocence of an accused. In fact, it is trite law 1 that non-re-
appreciation of the evidence on record in an appeal may affect the
case of either the prosecution or even an accused. Needless to
reemphasize that an appellate court is to be further wary of fact that
presumption of innocence of an accused, even extents until an
accused is held guilty by the final court of appeal and that such a
presumption is neither strengthened by acquittal nor weakened by
a conviction in the trial court.
14. Therefore, being cognizant of the aforesaid
principles, however, before proceeding further with the
appreciation of the merits of the case(s) at hand, as well as rival
contentions of/on behalf of the parties, this Court deems it
pertinent to outrightly reproduce the relevant provisions under
law/NI Act, for the purpose of present adjudication, as under;
“118. Presumptions as to negotiable instruments-
Until the contrary is proved, the following
presumptions 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;
(c) as to time of acceptance: that every accepted
bill of exchange was accepted within a reasonable
time after its date and before its maturity;
(d) as to time of transfer: that every transfer of
negotiable instrument was made before its maturity;
1 State of Gujarat v. Bhalchandra Laxmishankar Dave, (2021) 2 SCC 735.
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(e) as to order of indorsement: that the
indorsements appearing upon a negotiable instrument
were made in the order in which they appear thereon;
(f) as to stamp: that a lost promissory note, bill of
exchange or cheque was duly stamped;
(g) that holder is a holder in due course: that the
holder of a negotiable instrument is a holder in due
course:
Provided that, where the instrument has been
obtained from its lawful owner, or from any person in
lawful custody thereof, by means of an offence or
fraud, or has been obtained from the maker or
acceptor thereof by means of an offence or fraud or for
unlawful consideration, the burden of proving that the
holder is a holder in due course lies upon him.
*** *** ***
138. Dishonour of cheque for insufficiency, etc., of
funds in the account-Where any cheque drawn by a
person on an account maintained by him with a banker
for payment of any amount of money to another
person from out of that account for the discharge, in
whole or in part, of any debt or other liability, is
returned by the bank unpaid, either because of the
amount of money standing to the credit of that account
is insufficient to honour the cheque or that it exceeds
the amount arranged to be paid from that account by
an agreement made with that bank, such person shall
be deemed to have committed an offence and shall,
without prejudice to any other provision of this Act, be
punished with imprisonment for a term which may
extend 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.
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Explanation-For the purposes of this section, “debt
or other liability” means a legally enforceable debt or
other liability.
139. 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 for the discharge, in whole
or in part, of any debt or other liability.”
(Emphasis supplied)
15. At the outset, this Court observes that the objective
behind the introduction of the provision(s) under Section 138
under the NI Act, by virtue of amendment/insertion in the year
1989 is to inculcate faith in the efficacy of banking operations and
credibility in transacting business on negotiable instrument.
Notably, at the time of introduction of the said provision(s), the
executive was cognizant of the fact that the civil remedies were
proving to be inadequate to curb the menace on the part of
unscrupulous persons and a need was felt for introduction of a
penal provision to cease the propensity on the part of dishonest
persons to exploit negotiable instruments for personal gains.
Consequently, being wary of the imminent requirement for a penal
provision to bring about faith in monetary transactions, Chapter
XVII was introduced in the NI Act, comprising of the provisions
from Sections 138 to 148. In particular, penal provisions under
Section 138 NI Act were designed to1, “safeguard the faith of the
creditor in the drawer of the cheque, which is essential to the
economic life of a developing country like India. The provision
has been introduced with a view to curb cases of issuing cheques
indiscriminately by making stringent provisions and safeguarding
interest of creditors”. Notably, the Hon’ble Supreme Court in Goa
Plast (P) Ltd. v. Chico Ursula D’Souza, (2004) 2 SCC 235 , while
inter alia analyzing the intent of introduction of Section 138 NI Act
1 Vinay Devanna Nayak v. Ryot Sewa Sahakari Bank Ltd., (2008) 2 SCC 305.
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as well as scope and objective of the said provision(s) observed as
under;
“26. The object and the ingredients under the
provisions, in particular, Sections 138 and 139 of the
Act cannot be ignored. Proper and smooth functioning
of all business transactions, particularly, of cheques as
instruments, primarily depends upon the integrity and
honesty of the parties. In our country, in a large
number of commercial transactions, it was noted that
the cheques were issued even merely as a device not
only to stall but even to defraud the creditors. The
sanctity and credibility of issuance of cheques in
commercial transactions was eroded to a large extent.
Undoubtedly, dishonour of a cheque by the bank
causes incalculable loss, injury and inconvenience to
the payee and the entire credibility of the business
transactions within and outside the country suffers a
serious setback. Parliament, in order to restore the
credibility of cheques as a trustworthy substitute for
cash payment enacted the aforesaid provisions. The
remedy available in a civil court is a long-drawn
matter and an unscrupulous drawer normally takes
various pleas to defeat the genuine claim of the
payee.”
(Emphasis supplied)
16. Relevantly, in order to attract culpability under the
provisions of 138 NI Act, the prosecution is inter alia required to
prove1; (a) that the cheque was issued/drawn by a person on an
account maintained by him for payment of any sum of money to
another person from out of that account; (b) the cheque must have
been issued against the discharge, either in whole or in part, of any
debt or other liability, though, in the absence of proof to the
contrary, it shall be presumed that it was issued for the same; and
(c) the cheque was returned by the bank unpaid either because the
amount of money standing to the credit of that account is
insufficient to honour the cheque; or because it exceeds the amount
arranged to be paid from the account by an agreement with that
bank. Reference in this regard is further made to the decision of
1 N. Doraisamy v. Archana Enterprises, 1995 SCC OnLine Mad 25
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Hon’ble Supreme Court in Kusum Ingots & Alloys Ltd. v. Pennar
Peterson Securities Ltd., (2000) 2 SCC 745 , wherein the Hon’ble
Court, while conscientiously analyzing the provisions under
Section 138 NI Act inter alia explicated the ingredients of the said
provision/offence, as under;
“10. On a reading of the provisions of Section 138
of the NI Act it is clear that the ingredients which are
to be satisfied for making out a case under the
provision are:
(i) a person must have drawn a cheque on an
account maintained by him in a bank for payment of a
certain amount of money to another person from out
of that account for the discharge of any debt or other
liability;
(ii) that 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;
(iii) that cheque is returned by the bank unpaid,
either because the amount of money standing to the
credit of the 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 the
bank;
(iv) the payee or the holder in due course of the
cheque 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 15 days of the receipt of
information by him from the bank regarding the return
of the cheque as unpaid;
(v) the drawer of such cheque fails to make
payment of the said amount of money to the payee or
the holder in due course of the cheque within 15 days
of the receipt of the said notice…”
(Emphasis supplied)
17. Here, it is further pertinent to observe that the
statute/NI Act also provides for raising of a presumption/statutory
presumption, casting/permitting a reverse burden on an accused
and requiring the accused to prove the non-existence of the
presumed fact. Quite evidently, Section 139 NI Act provides
for/creates one such exception(s) to the general rule as to the
burden of proof and shifts the onus on an accused to rebut the
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ABHISHEK GOYAL
GOYAL Date: 2025.06.09
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presumption envisaged under law, against him. Another such
presumption under law being, under Section 118 NI Act.
Reference in this regard, is made to the decision of the Hon’ble
Supreme Court in Rajesh Jain v. Ajay Singh, (2023) 10 SCC 148 ,
wherein the Hon’ble Court noted in regard the foregoing as under;
“33. The NI Act provides for two presumptions:
Section 118 and Section 139. Section 118 of the Act
inter alia directs that it shall be presumed, until the
contrary is proved, that every negotiable instrument
was made or drawn for consideration. Section 139 of
the Act stipulates that “unless the contrary is proved, it
shall be presumed, that the holder of the cheque
received the cheque, for the discharge of, whole or
part of any debt or liability”. It will be seen that the
“presumed fact” directly relates to one of the crucial
ingredients necessary to sustain a conviction under
Section 138…
34. Section 139 of the NI Act, which takes the
form of a “shall presume” clause is illustrative of a
presumption of law. Because Section 139 requires that
the Court “shall presume” the fact stated therein, it is
obligatory on the Court to raise this presumption in
every case where the factual basis for the raising of the
presumption had been established. But this does not
preclude the person against whom the presumption is
drawn from rebutting it and proving the contrary as is
clear from the use of the phrase “unless the contrary is
proved”…”
(Emphasis supplied)
18. Strikingly, the Hon’ble Supreme Court in Rangappa
v. Sri Mohan, (Supra.), while painstakingly evaluating the intent
and purpose behind the introduction of Section 139 under the
Statute books/NI Act, observed as under;
“26. In light of these extracts, we are in agreement
with the respondent claimant that the presumption
mandated by Section 139 of the Act does indeed
include the existence of a legally enforceable debt or
liability. To that extent, the impugned observations in
Krishna Janardhan Bhat [(2008) 4 SCC 54: (2008) 2
SCC (Cri) 166] may not be correct. However, this
does not in any way cast doubt on the correctness of
the decision in that case since it was based on the
specific facts and circumstances therein. As noted inCA No. 39/2020 Vishal Modi v. Rati Ram Saini
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the citations, this is of course in the nature of a
rebuttable presumption and it is open to the accused to
raise a defence wherein the existence of a legally
enforceable debt or liability can be contested.
However, there can be no doubt that there is an initial
presumption which favours the complainant.
27. Section 139 of the Act is an example of a
reverse onus clause that has been included in
furtherance of the legislative objective of improving
the credibility of negotiable instruments. While
Section 138 of the Act specifies a strong criminal
remedy in relation to the dishonour of cheques, the
rebuttable presumption under Section 139 is a device
to prevent undue delay in the course of litigation.
However, it must be remembered that the offence
made punishable by Section 138 can be better
described as a regulatory offence since the bouncing
of a cheque is largely in the nature of a civil wrong
whose impact is usually confined to the private parties
involved in commercial transactions. In such a
scenario, the test of proportionality should guide the
construction and interpretation of reverse onus clauses
and the defendant-accused cannot be expected to
discharge an unduly high standard or proof.”
(Emphasis supplied)
19. Markedly, it is observed from above that the
presumption envisioned under Section 139 NI Act not only
pertains to the fact that the cheque in question was drawn in
discharge of debt or liability, rather, also includes a presumption
that there exists a legally enforceable debt or liability at the time of
such drawing. Indisputably1, the burden to rebut the presumption
lies on an accused, by establishing a probable defence. Needless to
further observe here that, though, in order to rebut the statutory
presumptions2, “an accused is not expected to prove his defence
beyond reasonable doubt as is expected of the complainant in a
criminal trial”, however, the law is settled3 that a bare denial of the
passing of the consideration or of existence of debt/liability by an
1 Rajaram v. Maruthachalam, 2023 SCC OnLine SC 48.
2 Rohitbhai Jivanlal Patel v. State of Gujarat, (2019) 18 SCC 106.
3 Kishan Rao v. Shankargouda, (2018) 8 SCC 165.
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accused, would not serve the purpose or come to the aid/rescue of
an accused. In fact, law is well settled that under such
circumstances, it is expected from an accused to bring ‘something
which is probable’, on record for getting the burden of proof
shifted to the complainant. Reference in this regard is made to the
decision in Kumar Exports v. Sharma Carpets, (Supra.) , wherein
the Hon’ble Apex Court, explicated the law in regard the foregoing
as under;
“20. The accused in a trial under Section 138 of the
Act has two options. He can either show that
consideration and debt did not exist or that under the
particular circumstances of the case the non-existence
of consideration and debt is so probable that a prudent
man ought to suppose that no consideration and debt
existed. To rebut the statutory presumptions an
accused is not expected to prove his defence beyond
reasonable doubt as is expected of the complainant in
a criminal trial. The accused may adduce direct
evidence to prove that the note in question was not
supported by consideration and that there was no debt
or liability to be discharged by him . However, the
court need not insist in every case that the accused
should disprove the non-existence of consideration
and debt by leading direct evidence because the
existence of negative evidence is neither possible nor
contemplated. At the same time, it is clear that bare
denial of the passing of the consideration and
existence of debt, apparently would not serve the
purpose of the accused. Something which is probable
has to be brought on record for getting the burden of
proof shifted to the complainant. To disprove the
presumptions, the accused should bring on record
such facts and circumstances, upon consideration of
which, the court may either believe that the
consideration and debt did not exist or their non-
existence was so probable that a prudent man would
under the circumstances of the case, act upon the plea
that they did not exist. Apart from adducing direct
evidence to prove that the note in question was not
supported by consideration or that he had not incurred
any debt or liability, the accused may also rely upon
circumstantial evidence and if the circumstances so
relied upon are compelling, the burden may likewise
shift again on to the complainant. The accused may
also rely upon presumptions of fact, for instance,
those mentioned in Section 114 of the Evidence Act to
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Date:
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rebut the presumptions arising under Sections 118 and
139 of the Act.”
(Emphasis supplied)
20. Similarly, the Hon’ble Supreme Court in
Basalingappa v. Mudibasappa, (Supra.), summarized the
principles governing the raising as well as rebutting statutory
presumption, as provided under the law/NI Act, in the following
terms;
“25. We having noticed the ratio laid down by this
Court in the above cases on Sections 118(a) and 139,
we now summarise the principles enumerated by this
Court in following manner:
25.1. Once the execution of cheque is admitted
Section 139 of the Act mandates a presumption that
the cheque was for the discharge of any debt or other
liability.
25.2. The presumption under Section 139 is a
rebuttable presumption and the onus is on the accused
to raise the probable defence. The standard of proof
for rebutting the presumption is that of preponderance
of probabilities.
25.3. To rebut the presumption, it is open for the
accused to rely on evidence led by him or the accused
can also rely on the materials submitted by the
complainant in order to raise a probable defence.
Inference of preponderance of probabilities can be
drawn not only from the materials brought on record
by the parties but also by reference to the
circumstances upon which they rely.
25.4. That it is not necessary for the accused to
come in the witness box in support of his defence,
Section 139 imposed an evidentiary burden and not a
persuasive burden.
25.5. It is not necessary for the accused to come in
the witness box to support his defence.”
(Emphasis supplied)
21. Ergo, being cognizant of the aforenoted
principles/judicial dictates, this Court would now proceed with the
assessment of the rival contentions of the accused and the
complainant. In this regard, it is outrightly noted that one of the
pleas of the accused before the Ld. Trial Court was that the legal
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demand notice/notice dated 21.11.2015 was never received by the
accused as well as by the accused company. However, in this
regard, this Court deems it pertinent to refer the relevant extracts of
the notice framed against the accused as well as accused company
on 16.02.2018, as under;
“…It is alleged against you Seabuck Ayurveda
Pvt. Ltd. (through its authorized
representative/director Sh. Vishal Modi) that in
discharge of your liabilities/financial obligations…
*** *** ***
Q. Have your company received the legal demand
notice?
A. We had not received the same, however, though
one of main address provided is our correct address,
but, there are number of office in same building
bearing same address…
*** *** ***
It is alleged against you Vishal Modi (Director of
Seabuck Ayurveda Pvt. Ltd.) that in charge of
liabilities/financial obligations of your company
towards complainant
*** *** ***
Q. Have your company received the legal demand
notice?
A. We had not received the same, however, though
one of main address provided is our correct address,
but, there are number of office in same building
bearing same address…”
(Emphasis supplied)
22. Markedly, it is observed from above that, though, the
accused/accused company denied the receipt of legal notice/legal
demand notice from the complainant as per the mandate of Section
138 NI Act, however, under the notice framed in terms of the
provisions under Section 251 Cr.P.C., it was affirmed by the
accused/accused company that one of the main the addresses,
mentioned on the legal demand notice was the correct address of
the accused. Quite palpably, except for a bare denial of receipt of
legal demand notice/notice dated 21.11.2015, the accused opted
neither to lead any evidence in support of his/their said assertion
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GOYAL Date:
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nor is anything forthcoming from the cross-examination of the
complainant to demonstrate that the legal demand notice was not
issued and/or received by the accused, as mandated under law.
Concomitantly, in respect of this foregoing, this Court deems it
pertinent to make a reference to the provisions under Section 94 of
the NI Act at this stage, which provides as under;
“94. Mode in which notice may be given-Notice of
dishonour may be given to a duly authorized agent of
the person to whom it is required to be given, or,
where he has died, to his legal representative, or,
where he has been declared an insolvent, to his
assignee; may be oral or written; may, if written, be
sent by post; and may be in any form ; but it must
inform the party to whom it is given, either in express
terms or by reasonable intendment that the instrument
has been dishonoured, and in what way, and that he
will be held liable thereon; and it must be given within
a reasonable time after dishonour, at the place of
business or (in case such party has no place of
business) at the residence of the party for whom it is
intended.
If the notice is duly directed and sent by post and
miscarries, such miscarriage does not render the
notice invalid.”
(Emphasis supplied)
23. Congruently, reference is made to Section 27 of the
General Clauses Act, 1897 (hereinafter referred to as the ‘GC
Act‘), which provides as under;
“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.”
(Emphasis supplied)
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24. Consequently, upon a conscientious analysis of the
aforesaid provisions, further in light of the provisions under
Section 1141 of the Indian Evidence Act, 1872 ( hereinafter
referred to as the ‘Evidence Act‘), this Court unwaveringly reaches
a conclusion that once notice is sent by registered post by correctly
addressing to the drawer of the cheque, the service of notice is
deemed to have been affected under law. However, it is only upon
a drawer of cheque in question, under such circumstances, to rebut
this presumption by leading evidence to the contrary. Reference in
this regard is made to the decision of the Hon’ble Supreme Court2
in N. Parameswaran Unni v. G. Kannan & Ors.,
MANU/SC/0327/2017, wherein the Hon’ble Court, whilst
confounded with an akin situation, remarked as under;
“13. It is clear from Section 27 of the General
Clauses Act, 1897 and Section 114 of the Indian
Evidence Act, 1872, that once notice is sent by
registered post by correctly addressing to the drawer
of the cheque, the service of notice is deemed to have
been effected. Then requirements under proviso (b) of
Section 138 stands complied, if notice is sent in the
prescribed manner. However, the drawer is at liberty
to rebut this presumption.”
(Emphasis supplied)
25. Apposite in this regard to further make a reference to
the decision in C.C. Alavi Haji v. Palapetty Muhammed & Ors.,
MANU/SC/2263/2007, wherein the Hon’ble Apex Court, in
similar context, observed as under;
“15. As noticed above, the entire purpose of
requiring a notice is to give an opportunity to the1 “114. Court may presume existence of certain facts-The Court may presume the existence of any fact which it
thinks likely to have happened, regard being had to the common course of natural events, human conduct and public
and private business, in their relation to the facts of the particular case.”
2 Reference is further made to the decision in Ajeet Seeds Ltd. v. K. Gopala Krishnaiah, MANU/SC/0630/2014,
wherein the Hon’ble Apex Court, iterated, “10. It is thus clear that Section 114 of the Evidence Act enables the Court
to presume that in the common course of natural events, the communication would have been delivered at the address
of the addressee. Section 27 of the GC Act gives rise to a presumption that service of notice has been effected when it
is sent to the correct address by registered post. It is not necessary to aver in the complaint that in spite of the return of
the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the
notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at
the time at which the letter would have been delivered in the ordinary course of business.” (Emphasis supplied).
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drawer to pay the cheque amount within 15 days of
service of notice and thereby free himself from the
penal consequences of Section 138. In Vinod
Shivappa (supra), this Court observed:
One can also conceive of cases where a well-
intentioned drawer may have inadvertently missed to
make necessary arrangements for reasons beyond his
control, even though he genuinely intended to honour
the cheque drawn by him. The law treats such lapses
induced by inadvertence or negligence to be
pardonable, provided the drawer after notice makes
amends and pays the amount within the prescribed
period. It is for this reason that Clause (c) of proviso to
Section 138 provides that the section shall not apply
unless the drawer of the cheque fails to make the
payment within 15 days of the receipt of the said
notice. To repeat, the proviso is meant to protect
honest drawers whose cheques may have been
dishonoured for the fault of others, or who may have
genuinely wanted to fulfil their promise but on
account of inadvertence or negligence failed to make
necessary arrangements for the payment of the
cheque. The proviso is not meant to protect
unscrupulous drawers who never intended to honour
the cheques issued by them, if being a part of their
modus operandi to cheat unsuspecting persons.
16. It is also to be borne in mind that the
requirement of giving of notice is a clear departure
from the rule of Criminal Law, where there is no
stipulation of giving of a notice before filing a
complaint Any drawer who claims that he did not
receive the notice sent by post, can, within 15 days of
receipt of summons from the court in respect of the
complaint under Section 138 of the Act, make
payment of the cheque amount and submit to the
Court that he had made payment within 15 days of
receipt of summons (by receiving a copy of complaint
with the summons) and, therefore, the complaint is
liable to be rejected. A person who does not pay
within 15 days of receipt of the summons from the
Court along with the copy of the complaint under
Section 138 of the Act, cannot obviously contend that
there was no proper service of notice as required
under Section 138, by ignoring statutory presumption
to the contrary under Section 27 of the G.C. Act and
Section 114 of the Evidence Act. In our view, any
other interpretation, of the proviso would defeat the
very object of the legislation. As observed in
Bhaskarans case (supra), if the giving of notice in the
context of Clause (b) of the proviso was the same as
the receipt of notice a trickster cheque drawer would
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GOYAL Date:
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get the premium to avoid receiving the notice by
adopting different strategies and escape from legal
consequences of Section 138 of the Act.”
(Emphasis supplied)
26. Ergo, in light of the foregoing and considering the
objective of mandating the issuance of legal demand notice, i.e.,
“protect honest drawers whose cheques may have been
dishonoured for the fault of others, or who may have genuinely
wanted to fulfil their promise but on account of inadvertence or
negligence failed to make necessary arrangements for the payment
of the cheque”, this Court is in concurrence with the finding of the
Ld. Trial Court that the averment of the Ld. Counsel for accused
regarding non-receipt of demand notice/legal demand notice by
him would not come to the aid and rescue of the accused in the
instant case. Needless to reiterate that the accused not only
admitted that one of the addresses/main addresses, specified under
the legal demand notice dated 21.11.2015, was the correct address
of the accused, rather, the accused failed to adduce any evidence in
order to rebut the presumption under law. Further, the accused did
not even reply to the said notice within the statutory prescribed
period. Clearly, the accused is precluded from taking advantage of
his own wrong. Needless to further reiterate that in light of the
aforenoted judicial dictates, legal provisions as well as the facts
and circumstances hereinunder noted, the contention of the
accused regarding alleged non-receipt of legal notice demand
notice/legal notice dated 21.11.2015 would not come to his aid and
rescue, in the considered opinion of this Court.
27. Proceeding further, this Court would deal with the
contention of Ld. Counsel for the accused that on the date of
presentation of the cheques in question, liability of the accused
was not as specified under the said cheques/dishonoured cheques.
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However, in order to deal with the said contention, this Court
deems it pertinent to reproduce the relevant extract(s) of the notice
dated 16.02.2018, under Section 251 Cr.P.C., wherein it was inter
alia proclaimed by the accused as under;
“… Q. Whether your company has drawn the
above said cheques?
A. Yes, the cheques in question belongs to our
company, it bears my signatures as its authorized
signatory and were issued being duly filled.
Q. Whether the cheques were dishonored vide
above-said returned memos?
A. Yes, they were so dishonoured since the goods
supplied by complainant were found defective in
nature or of low quality, therefore, we deliberately got
them dishonored.
*** *** ***
Q. Do your company had liability towards
complainant equivalent to cheques amount in question
on the dates mentioned on the cheques?
A. The liability of our company was less than the
cheques amount on the dates mentioned on the
cheques due to reason above-stated and we have also
transferred amount of Rs. 50,000/- through NEFT
subsequently to dishonorment of cheques also.
*** *** ***
Q. What is plea of defence of your company?
A. As stated above, and as would be disclosed in
my application under Section 145(2) NI Act…”
(Emphasis supplied)
28. Relevantly, under his application under Section
145(2) of the NI Act, the accused inter alia asserted as under;
“…2. It is submitted that it has been incorrectly
and wrongly alleged by the complainant that the
accused Vishal Modi is owner of Seabuck Ayurveda
Pvt. Ltd. On the contrary it is submitted that Seabuck
Ayurveda Pvt. Ltd. is a company duly incorporated
under the Companies Act, 1956 and is a natural and
juristic person having its own separate and individual
entity in the eyes of law. The accused No.2 is one of
the Directors of the said company Seabuck Ayurveda
Pvt. Ltd. impleaded as Accused No. 1 herein.
3 It is submitted that the provision of Section 138
NI Act are attracted and maintainable only for the
cheques which are towards the legally enforceable
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debt or liability. The present complaint against the
accused is against the cheques for a sum of Rs.
1,81,470/-. It is submitted that the accused had
admittedly made a payment of Rs. 50,000/- by NEFT
on 28.10.2015 through their bankers HDFC Bank,
Kailash Colony Branch, New Delhi to the
complainant.
4. That as the subject matter of the complaint i.e.
cheques in question are more than the amount due to
the complainant, the provisions of Section 138 is not
attracted and maintainable in view of the judgments
passed by the Hon’ble courts. And as such the present
complaint is not maintainable and is liable to be
dismissed…”
(Emphasis supplied)
29. Significantly, it is seen from above that the accused
asserted at the time of his notice that on the date of presentation of
the cheques in question, liability was not, as specified under the
dishonoured cheques. Correspondingly, as aforenoted, the accused
reiterated under his application under Section 145(2) NI Act that
on the date when the cheques in question were dishonoured,
liability of the accused company was less than the dishonoured
cheques/cheques in question as a sum of Rs. 50,000/- (Rupees
Fifty Thousand only) was paid by the accused/accused company to
the complainant by NEFT (National Electronic Funds Transfer) on
28.10.2015, through its bankers HDFC Bank, Kailash Colony
Branch, New Delhi. In fact, even the complainant, under his cross
examination dated 18.02.2019, acknowledged the receipt of the
said amount/sum of Rs. 50,000/- (Rupees Fifty Thousand only)
from the accused, however, (the complainant) avowed that the said
amount was transferred to his account/complainant’s account as
the accused had placed a further order to a tune of Rs. 2,50,000/-
(Rupees Two Lakhs Fifty Thousand only). Correspondingly, the
complainant also asserted under his cross-examination that at the
time of receipt of the said amount, he had clarified to the accused
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that he would supply the said order only when the earlier/pending
dues are cleared. However, the complainant affirmed that he had
not placed the said purchase order against further/proposed sale of
Rs. 2,50,000/- (Rupees Two Lakhs Fifty Thousand only) and
proclaimed that he had already destroyed the said purchase order
as he/the complainant had no intention to supply the said goods
worth Rs. 2,50,000/- (Rupees Two Lakhs Fifty Thousand only) to
the accused on him/the complainant becoming aware of the
‘image’ of the accused. Pertinent to note that the complainant
further declared under his cross-examination that, in fact, there
was no purchase order as the said order for further/proposed sale of
2,50,000/- (Rupees Two Lakhs Fifty Thousand only) was placed
orally by the accused. Here, it is apposite to reproduce the relevant
extracts from the cross-examination dated 18.02.2019 of the
complainant, as under;
“XXXXXX by Ms. ***, Ld. Counsel for accused.
*** *** ***
It is wrong to suggest that I requested the accused
to transfer an amount of Rs. 50,000/- to me against the
expenses that I incurred for the supply of the material
and also promised him that I will compensate him for
the defective material and the loss suffered by him due
to the same. It is correct that an amount of Rs 50,000/-
was transferred to my account through NEFT on
28.10.2015, through HDC Bank, Kailash colony, New
Delhi. Vol. However, the same was transferred to my
account as the accused had placed a further order to
the tune of Rs. 2,50,000/- and I made it very clear that
I will supply the said order only if the accused clears
the pending dues. It is wrong to suggest that I have
deposed falsely that accused has placed an order of
Rs. 2,50,000/- and that is why the accused transferred
an amount of Rs. 50,000/- through NEFT. I have not
placed the purchase order of Rs. 2.50,000/- placed by
the accused on record. Vol. I destroyed the purchase
order as I did not intent to supply the further material
to the accused, as I had come to know about his image
in the market. Again said, the purchase order was
placed verbally through telephonic call. It is wrong to
suggest that I presented the cheques in question for
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encashment against my promise that I would not
present the cheques for encashment…”
(Emphasis supplied)
30. Quite evidently, despite the admission of receipt of
Rs. 50,000/- (Rupees Fifty Thousand only) from the
accused/accused company by the complainant through NEFT
transaction on 28.10.2015, the complainant avowed that the said
amount was transferred to his account/complainant’s account by
the accused as the accused had placed further order to a tune of Rs.
2,50,000/- (Rupees Two Lakhs Fifty Thousand only). However,
despite such assertion, complainant did not place any document on
record to corroborate the factum of accused’s/accused company’s
placing of any further order/proposed order to a tune of Rs.
2,50,000/- (Rupees Two Lakhs Fifty Thousand only), on the
complainant. On the contrary, it is reiterated that the complainant
initially avowed that he had destroyed the said purchase order, on
him becoming aware of the ‘image’ of the accused. However,
subsequently, it was proclaimed by the complainant that the said
purchase order was oral in nature. Correspondingly, the
complainant nowhere during the trial or his deposition before the
Ld. Trial Court, declared the eventual fate of the said amount of
Rs. 50,000/- (Rupees Fifty Thousand only), admittedly received
by him from the accused/accused company via NEFT transfer
mode on 28.10.2015. In fact, it is not even the case of the
complainant that the said amount was ultimately returned to the
accused/accused company upon him/the complainant’s becoming
aware of the ‘image’ of the accused, as asserted under his cross
examination. Unmistakably, said non-disclosure on the part of the
complainant is a significant factor, which creates a doubt in the
version put forth by the complainant, rather, acts in favour of the
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signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.09
16:41:34
+0530
accused, especially when the cheques bearing nos. 000418, dated
01.11.2015 for a sum of Rs. 58,036/- (Rupees Fifty Eight
Thousand and Thirty Six only) and 000518, dated 16.11.2015 for a
sum of Rs. 60,866/- (Rupees Sixty Thousand Eight Hundred and
Sixty Six only), were admittedly dishonoured subsequently, i.e.,
on 07.11.2015 and 17.11.2015, respectively, post receipt of the
said admitted NEFT transfer amount by the complainant from the
accused/accused company on 28.10.2015. Needless to mention, as
aforenoted, against the total (alleged) liability to a tune of Rs.
1,81,470/- (Rupees One Lakh Eight One Thousand Four Hundred
and Seventy only) for the bills/bills in question, it is the case of the
complainant that the accused/accused company issued the
dishonoured cheques, cumulatively corresponding to the said
liability of Rs. 1,81,470/- (Rupees One Lakh Eight One Thousand
Four Hundred and Seventy only). However, considering that it is
admitted by the complainant that a sum of Rs. 50,000/- (Rupees
Fifty Thousand only) was received by him from the
accused/accused company via NEFT transfer mode on 28.10.2015,
the said amount/received amount, ought to have been deducted
from the total liability, as specified under the legal demand notice
and the complaint filed by the complainant before the Ld. Trial
Court, especially when the complainant has failed to built-up a
case/demonstrate that the said amount of Rs. 50,000/- (Rupees
Fifty Thousand only) was returned to the accused/accused
company anywhere from any material placed on record. As a
corollary, in light of the foregoing facts and circumstances, this
Court is in agreement with the Ld. Counsel for the accused that as
on the date of dishonour of cheques in question, the liability of the
accused/accused company was not in consonance/did not
correspond with dishonoured cheques. Unmistakably, this Court
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ABHISHEK by ABHISHEK
GOYAL
GOYAL Date: 2025.06.09
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reiterates that the said factor would work in favour of the accused
herein in light of the decision of the Hon’ble Supreme Court in
Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel &
Anr., Crl. Appeal No. 1497 of 2022, dated 11.10.2022, wherein the
Hon’ble Court in an akin situation, explicated the law in an akin
case as under;
“30. In view of the discussion above, we
summarise our findings below:
(i) For the commission of an offence under Section
138, the cheque that is dishonoured must represent a
legally enforceable debt on the date of maturity or
presentation;
(ii) If the drawer of the cheque pays a part or whole
of the sum between the period when the cheque is
drawn and when it is encashed upon maturity, then the
legally enforceable debt on the date of maturity would
not be the sum represented on the cheque;
(iii) When a part or whole of the sum represented
on the cheque is paid by the drawer of the cheque, it
must be endorsed on the cheque as prescribed in
Section 56 of the Act. The cheque endorsed with the
payment made may be used to negotiate the balance, if
any. If the cheque that is endorsed is dishonoured
when it is sought to be encashed upon maturity, then
the offence under Section 138 will stand attracted;
(iv) The first respondent has made part-payments
after the debt was incurred and before the cheque was
encashed upon maturity. The sum of rupees twenty
lakhs represented on the cheque was not the ‘legally
enforceable debt’ on the date of maturity. Thus, the
first respondent cannot be deemed to have committed
an offence under Section 138 of the Act when the
cheque was dishonoured for insufficient funds; and
(v) The notice demanding the payment of the ‘said
amount of money’ has been interpreted by judgments
of this Court to mean the cheque amount. The
conditions stipulated in the provisos to Section 138
need to be fulfilled in addition to the ingredients in the
substantive part of Section 138. Since in this case, the
first respondent has not committed an offence under
Section 138, the validity of the form of the notice need
not be decided…”
(Emphasis supplied)
31. Noticeably, in the instant case, the amount of
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by ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.09
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dishonoured cheques/cheques in question are cumulative for an
amount, more than actual debt or liability on the date of
presentation of the said cheques. In particular, as aforenoted,
cheques bearing nos. 000418, dated 01.11.2015 for a sum of Rs.
58,036/- (Rupees Fifty Eight Thousand and Thirty Six only) and
000518, dated 16.11.2015 for a sum of Rs. 60,866/- (Rupees Sixty
Thousand Eight Hundred and Sixty Six only), were admittedly
dishonoured subsequently, i.e., on 07.11.2015 and 17.11.2015,
respectively, post receipt of the said admitted NEFT transfer
amount by the complainant from the accused/accused company on
28.10.2015. Correspondingly, since a consolidated legal notice
dated 21.11.2015/legal demand notice was issued for all the
dishonoured cheques/cheques in question, the conviction of
accused in the facts and circumstances of the present case, in the
considered opinion of this Court, cannot be sustained under law.
Needless to reiterate that the law is trite 1 that for liability under
Section 138 NI Act to arise, the cheque in question/dishonoured
cheque must be issued towards the discharge of either the whole
debt or part of the debt. However, in case such cheque is for more
than the amount of the debt due, provisions under Section 138 NI
Act cannot be attracted. Correspondingly, where the legal demand
notice was issued by the complainant to the accused for an amount,
more than the actual due debt/liability, the same, cannot, in the
considered opinion of this Court, be considered to meet the
mandatory requirement of issuance of legal demand notice as per
the provisions of Section 138 NI Act. In fact, the superior courts
have persistently avowed that where a notice/demand notice,
requires a drawer of cheque to make payment of the whole of the
1 Angu Parameswari Textiles (P) Ltd. & Ors. v. Sri. Rajam & Co., 2001 Company Cases (105) 186, Crl. OP No.
24075/2000, dated 24.01.2001 (Hon’ble Madras HC).
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cheque amount, despite having received a substantial amount
against that same/very cheque before the issuance of such notice,
same cannot be termed as a legal and valid notice, as envisaged in
Section 138(b) of NI Act. Reference in this regard is made to the
decision of the Hon’ble High Court of Delhi in M/s. Alliance
Infrastructure Project Pvt. Ltd. & Ors. v. Vinay Mittal, Crl. MC
No.2224/2009, dated 18.01.2010, wherein the Hon’ble Court in an
akin case, remarked as under;
“12. …Therefore, a notice of demand which
requires the drawer of the cheque to make payment of
the whole of the cheque amount, despite receiving a
substantial amount against that very cheque, much
before issue of notice, cannot be said to be a legal and
valid notice envisaged in Section 138(b) of
Negotiable Instrument Act. The expression “amount
of money” used in Section 138(b) of Negotiable
Instrument Act, to my mind, in a case of this nature
would mean the amount actually payable by the
drawer of the cheque to the payee of the cheque. Of
course, if the payee of the cheque makes some
demands on account of interest, compensation,
incidental expenses etc, that would not invalidate the
notice so long as the principal amount demanded by
the payee of the cheque is correct and is clearly
identified in the notice. When the principal amount
claimed in the notice of demand is more than the
principal amount actually payable to the payee of the
cheque and the notice also does not indicate the basis
for demanding the excess amount, such a notice
cannot be said to be a legal and valid notice envisaged
in Section 138(b) of Negotiable Instrument Act. In
such a case, it is not open to the complainant to take
the plea that the drawer of the cheque could have
escaped liability by paying the actual amount due
from him to the payee of the cheque. In order to make
the notice legal and valid, it must necessarily specify
the principal amount payable to the payee of the
cheque and the principal amount demanded from the
drawer of the cheque should not be more than the
actual amount payable by him though addition of
some other demands in the notice by itself would not
render such a notice illegal or invalid.
13. In Central Bank of India & Another vs. Saxons
Farms & Others 1999(8) SCC 221, the Hon’ble
Supreme Court observed that the object of the notice
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signed by
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ABHISHEK GOYAL
GOYAL Date:
2025.06.09
16:41:55
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under Section 138(b) of Negotiable Instrument Act is
to give a chance to the drawer of the cheque to rectify
his omission and also to protect the honest drawer. If
the drawer of the cheque is asked to pay more than the
principal amount due from him and that amount is
demanded as the principal sum payable by him, it is
not possible for an honest drawer of the cheque to
meet such a requirement…”
(Emphasis supplied)
32. Ominously, another glaring feature in the instant case
is that the Ld. Trial Court reached the find of guilt of the accused
herein, bereft of corresponding finding of guilt of the
company/accused company in the instant case. In fact, even the
impugned order of sentence, awards fine/compensation to be
payable by the accused, Vishal Modi only and no sentence was
directed towards the accused company. In this regard, this Court
deems it pertinent to reproduce the relevant extracts of the
impugned judgment/judgment dated 10.12.2019 of the Ld. Trial
Court, as under;
“…15. I accordingly, return a finding of guilt
against the accused Vishal Modi (director/signatory of
M/s. SeaBuck Ayurveda Pvt. Ltd.).
16. The convict is hereby convicted for the offence
as punishable under Section 138 NI Act 1881.
17. Let the accused be heard on the point of
sentence…”
(Emphasis supplied)
33. As aforenoted, under his complaint and evidence by
way of affidavit (Ex. CW1/A), the complainant proclaimed the
accused, Vishal Modi was the owner of Seabuck Ayurveda (Pvt.)
Ltd. and asserted that the affairs of Seabuck Ayurveda (Pvt.) Ltd.
was managed by accused Vishal Modi. However, upon being cross
examined, the complainant affirmed that Seabuck Ayurveda (Pvt.)
Ltd. was a company and accused, Vishal Modi was one of the
directors thereof by inter alia declaring as under;
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ABHISHEK ABHISHEK GOYAL
GOYAL Date: 2025.06.09
16:42:00 +0530
“XXXXXX by Ms. ***, Ld. Counsel for accused.
*** *** ***
It is correct that Ex. CW-1/A is my affidavit and
was prepared by my counsel under my instructions
and I have gone through the contents of the said
affidavit. It is wrong to suggest that I have mentioned
it wrongly in my affidavit that Vishal Modi is the
owner of Seabuck Ayurveda Pvt. Ltd. It is correct that
Seabuck Ayurveda (accused no. 2) is a private limited
company, it is correct that accused no. 1 is one of the
directors of accused no. 2…”
(Emphasis supplied)
34. Ergo, in light of the foregoing this Court
unambiguously reiterates that admittedly, the accused was one of
the directors of accused company, Seabuck Ayurveda (Pvt.) Ltd.
and in the absence of conviction/finding of guilt of the said
company/accused company by the Ld. Trial Court, the accused
Vishal Modi could not have been held liable for the offence under
Section 138 NI Act. Needless to mention that a conscientious
perusal of the cheques in question/dishonoured cheques would
demonstrate that the same were admittedly issued from the
account of the accused company/Seabuck Ayurveda (Pvt.) Ltd. and
not from the personal account of accused Vishal Modi,
negating/disavowing his conviction in the absence of finding of
guilt of accused person having been reached by the Ld. Trial Court
under the impugned judgment. Reference in this regard is made to
a recent decision of the Hon’ble Apex Court in Bijoy Kumar Moni
v. Paresh Manna, Crl. Appeal No. 5556/2024, dated 20.12.2024 ,
wherein the Hon’ble Court, remarked in unambiguous terms, as
under;
“62. It follows from a conspectus of the aforesaid
decisions that it is the drawer Company which must be
first held to be the principal offender under Section
138 of the NI Act before culpability can be extended,
through a deeming fiction, to the other Directors or
persons in-charge of and responsible to the Company
for the conduct of its business. In the absence of the
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ABHISHEK GOYAL
Date:
GOYAL 2025.06.09
16:42:04
+0530
liability of the drawer Company, there would
naturally be no requirement to hold the other persons
vicariously liable for the offence committed under
Section 138 of the NI Act.”
(Emphasis supplied)
35. Consequently, in conspectus of above and
considering the arguments addressed before this Court, when the
material placed on record is scrupulously evaluated, this Court,
unambiguously reaches a conclusion that the complainant has
failed to demonstrate liability to a tune of the dishonoured cheques
amount/amount specified under the dishonoured cheques against
the accused on the date of presentation of the said cheques.
Consequently, in the considered opinion of this Court, the accused,
in the instant case, has been able to successfully rebut the
presumption under Section 139 NI Act by preponderance of
probabilities from the material placed on record by the
complainant as well as from the complainant’s cross examination,
reverting the burden back on the complainant in the instant case.
Further, as aforenoted, the complainant has been unable to prove
from the documents as well as material placed on record, liability
to a tune of the amounts specified under the cheques in
question/dishonoured cheques against the accused on the date of
presentation of cheque. Needless to mention that the complaint and
legal notice/demand notice were filed/issued for the consolidated
alleged dues of Rs. 1,81,470/- (Rupees One Lakh Eight One
Thousand Four Hundred and Seventy only), despite the admitted
factum of receipt of sum of Rs. 50,000/- (Rupees Fifty Thousand
only) by the complainant from the accused. Needless to further
reiterate that since the accused, Vishal Modi was arrayed as an
accused in his capacity as one of the directors of the accused
company, Seabuck Ayurveda (Pvt.) Ltd., in the absence of
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ABHISHEK GOYAL
Date:
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conviction/finding of guilt of the said company/accused company
under the impugned order by the Ld. Trial Court, the accused
Vishal Modi could not have been held liable for the offence under
Section 138 NI Act.
36. Conclusively, in light of the facts and circumstances
noted hereinabove, the complainant, in the opinion of this Court,
has not been able to unwaveringly and ‘beyond reasonable doubt’,
bring home the charge of offence under Section 138 NI Act against
the accused herein. On the contrary, as aforenoted, the accused, in
the instant case, has been able to successfully rebut the
presumption under Section 139 NI Act by preponderance of
probabilities, reverting the burden back on the complainant and
which the complainant failed to discharge by demonstrating
liability to a tune of the amounts specified under the cheques in
question/dishonoured cheques on the date of their presentation for
encashment. Apposite at this stage to note that, though, this Court
holds highest regard for the decisions relied upon by Ld. Counsel
for the parties, however, the same would not, in the considered
opinion of this Court come to the aid/rescue of the case put forth by
the complainant in the manner as prayed, as the facts and
circumstances of the present case are clearly, distinguishable.
37. Here, this Court deems it further pertinent to note that
in light of the foregoing discussion, the determination on the
complainant’s appeal has now become purely academic,
considering that this Court has already concluded that the
complainant has not been able to prove its case against the
accused, beyond reasonable doubt. However, this Court deems it
pertinent to nonetheless note that even otherwise, Section 372
Cr.P.C. creates and confers a limited right on the victim to prefer an
appeal only against an order, “…acquitting the accused or
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by ABHISHEK
ABHISHEK GOYAL
Date:
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+0530
convicting for a lesser offence or imposing inadequate
compensation…” In fact, the superior courts1 have repeatedly
affirmed that no right has been conferred to the
complainant/victim to file appeal for questioning the order of
sentence as inadequate. In this regard, reference is made to the
decision of the Hon’ble Supreme Court in Parvinder Kansal v.
State of NCT of Delhi & Ors., MANU/SC/0650/2020, wherein the
Hon’ble Court in akin context, remarked as under;
“A reading of the proviso makes it clear that so far
as victim’s right of appeal is concerned, same is
restricted to three eventualities, namely, acquittal of
the Accused; conviction of the Accused for lesser
offence; or for imposing inadequate compensation.
While the victim is given opportunity to prefer appeal
in the event of imposing inadequate compensation,
but at the same time there is no provision for appeal by
the victim for questioning the order of sentence as
inadequate, whereas Section 377, Code of Criminal
Procedure gives the power to the State Government to
prefer appeal for enhancement of sentence. While it is
open for the State Government to prefer appeal for
inadequate sentence Under Section 377, Code of
Criminal Procedure but similarly no appeal can be
maintained by victim Under Section 372, Code of
Criminal Procedure on the ground of inadequate
sentence. It is fairly well settled that the remedy of
appeal is creature of the Statute. Unless same is
provided either under Code of Criminal Procedure or
by any other law for the time being in force no appeal,
seeking enhancement of sentence at the instance of the
victim, is maintainable. Further we are of the view
that the High Court while referring to the judgment of
this Court in the case of National Commission for
Women v. State of Delhi and Anr.
MANU/SC/0831/2010 : (2010) 12 SCC 599 has
rightly relied on the same and dismissed the appeal, as
not maintainable…”
(Emphasis supplied)
38. Clearly, seen in light of the above, this Court
unambiguously notes/reiterates that while a victim is given a
right/opportunity to prefer an appeal in the event of imposition of
1 Girish Chand Singh v. State of U.P. & Ors., MANU/UP/1591/2024.
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ABHISHEK by ABHISHEK
GOYAL
GOYAL Date: 2025.06.09
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inadequate compensation, however, no appeal challenging
insufficiency of sentence can be preferred even by a victim, by
seeking recourse to the provisions under Section 372 Cr.P.C. Ergo,
in light of the foregoing, in so far as the appeal preferred by the
complainant1 is concerned, challenging the inadequacy of sentence
imposed to the accused, same is not maintainable in view of the
embargo contained under Section 372 Cr.P.C. However, this Court
concedes with the submission of Ld. Counsel for the complainant
that the complainant can be termed as a victim for the purposes of
Section 372 Cr.P.C., in view of the recent decision of the Hon’ble
Apex Court in M/s. Celestium Financial v. A. Gnanasekaran, etc.,
Special Leave Petition (Crl.) Nos. 137-139/2025, dated
08.04.2025. In fact, in the said decision, the Hon’ble Court noted
in unambiguous terms that a complainant under Section 138 NI
Act, qualifies as a victim for the purposes of proviso to Section 372
Cr.P.C. and can, thus, maintain an appeal in its own right. Pertinent
to reproduce the relevant extracts of the said dictate as under;
“9. In the circumstances, we find that Section 138
of the Act being in the nature of a penal provision by a
deeming fiction against an accused who is said to have
committed an offence under the said provision, if
acquitted, can be proceeded against by a victim of the
said offence, namely, the person who is entitled to the
proceeds of a cheque which has been dishonoured, in
terms of the proviso to Section 372 of the CrPC, as a
victim. As already noted, a victim of an offence could
also be a complainant. In such a case, an appeal can be
1 Father of the victim is also a victim. Reference is made to the decision of the Hon’ble High Court of Delhi in Ram
Phal v. State & Ors., MANU/DE/1687/201553, wherein the Hon’ble High Court noted, “53. To summarize, the
conclusions from the above discussion are:*** (i) “victim” in Section 2(wa), by virtue of being defined as “a person
who has suffered any loss or injury” must include a person who has suffered “harm caused to the mind’, given that
Section 2(y) of the Code of Criminal Procedure incorporates the definition of “injury” in Section 44 of the IPC into
the Code.*** (ii) The “means X and includes Y” clause in Section 2(wa) cannot be interpreted so as to result in the
included meaning Y excluding the actual meaning X of the term being defined; thus “legal heirs” who are included
within the definition of the term ‘victim’ cannot exclude those who actually fall within the definition of ‘victim’ by
virtue of emotional harm suffered, such as the father or siblings of a deceased victim or other categories of persons
(based on proximity) noted previously.*** (iii) The laws of inheritance, which decide one’s “legal heirs”, are not
intended to be solely determinative of the entitlement to exercise the rights of the victim, in the criminal trial/appeal,
on his/her death, application of Heydon’s mischief rule, given that the object of the 2008 Amendment Act was to
ensure the involvement of the victim, who has a presumably personal interest in the fair and efficient prosecution of
the trial/appeal. Resultantly, it is impermissible for an appellate court to shut out an appeal by a “legal heir” based
only on her/his not being an immediate heir, or being lower down in hierarchy vis-à-vis entitlement to the crime
victim’s estate.” (Emphasis supplied)
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by ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.09
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preferred either under the proviso to Section 372 or
under Section 378 by such a victim. In the absence of
the proviso to Section 372, a victim of an offence
could not have filed an appeal as such, unless he was
also a complainant, in which event he could maintain
an appeal if special leave to appeal had been granted
by the High Court and if no such special leave was
granted then his appeal would not be maintainable at
all. On the other hand, if the victim of an offence, who
may or may not be the complainant, proceeds under
the proviso to Section 372 of the CrPC, then in our
view, such a victim need not seek special leave to
appeal from the High Court. In other words, the victim
of an offence would have the right to prefer an appeal,
inter alia, against an order of acquittal in terms of the
proviso to Section 372 without seeking any special
leave to appeal from the High Court only on the
grounds mentioned therein. A person who is a
complainant under Section 200 of the CrPC who
complains about the offence committed by a person
who is charged as an accused under Section 138 of the
Act, thus has the right to prefer an appeal as a victim
under the proviso to Section 372 of the CrPC…”
(Emphasis supplied)
39. Conclusively, in view of the above discussion, the
accused’s appeal, bearing Crl. Appeal No. 39/2020 deserves to be
allowed for the foregoing reason and is hereby allowed. As such, in
light of the preceding discussion, this Court reiterates that from the
facts and circumstances placed on record, the accused cannot be
determined to be guilty ‘beyond reasonable doubt’ of offence
under Section 138 NI Act. Consequently, the judgment dated
10.12.2019 and consequential order of sentence dated 24.12.2019,
passed by Ld. MM-01 (NI Act), Central, Tis Hazari Courts, Delhi
in case bearing, ‘Rati Ram Saini v. Vishal Modi, CC No.
530052/2016’, arising out of a complaint under Section 200
Cr.P.C. read with Section 138 NI Act, convicting and sentencing,
respectively, the accused for the offence punishable under Section
138 NI Act, are hereby set aside. However, in so far as the
appeal/complainant’s appeal bearing, Crl. Appeal No. 114/2020,CA No. 39/2020 Vishal Modi v. Rati Ram Saini
CA No. 114/2020 Rati Ram Saini v. Vishal Modi & Ors. Page No. 50 of 51Digitally signed by
ABHISHEK ABHISHEK GOYAL
GOYAL Date: 2025.06.09
16:42:28 +0530
preferred by the complainant is concerned, same deserves to be
dismissed on merits for the foregoing reasons as also held to be not
maintainable in so far as the prayer for enhancement of the
sentence awarded to the accused is concerned in view of the
explicit provisions under Section 372 Cr.P.C. The accused, Vishal
Modi is hereby admitted to bail on him/the appellant furnishing of
a personal bond in the sum of Rs. 15,000/- (Rupees Fifteen
Thousand only) along with one surety of the like amount, as
required under Section 481 of the Bharatiya Nagarik Suraksha
Sanhita, 2023/BNSS (erstwhile Section 437A Cr.P.C.). As
requested, the bail bond be furnished within a period of one week
from today.
40. Accordingly, Crl. Appeal No. 39/2020 and Crl.
Appeal No. 114/2020 are disposed of in above terms.
41. Trial Court Record be sent back along with a copy of
this judgment.
42. Appeal file be consigned to record room after due
compliance.
Digitally
signed by
ABHISHEK
ABHISHEK GOYAL
GOYAL Date:
2025.06.09
16:42:33
+0530Announced in the open Court (Abhishek Goyal)
on 09.06.2025. ASJ-03, Central District,
Tis Hazari Courts, DelhiCA No. 39/2020 Vishal Modi v. Rati Ram Saini
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