Delhi District Court
State Bank Of India vs Sanjeev Kumar on 28 February, 2025
IN THE COURT OF SH. RISHABH TANWAR,
JUDICIAL MAGISTRATE FIRST CLASS/NI ACT-01/WEST/DELHI
Ct. Case 10601/2016
CNR No.DLWT020062822015
State Bank of India (earlier State Bank of Tranvancore)
Through its Authorised Representative
Sh. Amit Shanker Pandey,
Having Office at Poojapura, Thiruvananthapuram,
Kerela-695012
Branch office at: Pachim Vihar,
New Delhi-110063 .........Complainant
Vs.
Sh. Sanjeev Kumar,
S/o Late Sh. Satprakash Jindal,
R/o H.No.48 & 83, JK Apartment,
Block A3, Paschim Vihar,
New Delhi-110063 .......Accused
Date of institution of case : 09.10.2015
Date of reserving the judgment : 06.02.2025
Date of pronouncement of judgment : 28.02.2025
JUDGMENT
CC No.10601/2016 State Bank of Travancore Vs. Sanjeev Kumar pg. no. 1/25
Digitally signed
by RISHABH
TANWAR
RISHABH Date:
TANWAR 2025.02.28
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1. Offence complained or proved : 138 N.I. Act
2. Plea of Accused : "Not Guilty"
3. Final Order : CONVICTION
4. Date of Final Order : 28.02.2025
BRIEF FACTS AND REASONS FOR DECISION
1. Vide this judgment, this Court shall dispose of the present complaint
filed by State Bank of Tranvancore, through its AR Sh. Amit Shanker
Pandey (hereinafter ‘the Complainant’) against one Sh. Sanjeev Kumar,
(hereinafter ‘the accused’) under section 138 read with section 142 of
Negotiable Instrument Act, 1881 (hereinafter referred to as N.I. Act).
2. The complainant has inter alia alleged that the accused issued two
cheques bearing nos. 033852 and 264726, both dt. 01.06.2015 for an amount
Rs.2,80,000/- each, drawn on Allahabad Bank Jawalaheri Main Market,
Paschim Vihar, New Delhi Branch and Indus Ind Bank, Sector-7, Rohini,
Delhi respectively, both in favour of Haryana Food Corporation (India), a
proprietorship concern of the accused himself, having a current account no.
67278537473 with complainant bank. The complainant bank has alleged that
M/s. Haryana Food Corporation (India) through its proprietor requested the
complainant to purchase the above-said cheques and in pursuance of his
request, the complainant purchased the abovesaid cheques for consideration
and the cheque amount was credited in the account of M/s. Haryana Food
Corporation (India) account No. 67278537473. The complainant has further
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by RISHABH
RISHABH TANWAR
TANWAR Date:
2025.02.28
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alleged that the amount was withdrawn and utilized by M/s. Haryana Food
Corporation (India). The complainant has further alleged that accused after
withdrawal of cheques amount acknowledged his liability by virtue of letter
dt. 25.07.2015 and after purchase of said cheques from M/s. Haryana Food
Corporation (India), the complainant became holder in due course for the
value and was entitled to receive the cheques amount from the accused.
3. The complainant further alleges that when the complainant bank
presented the cheques for payment, it were returned dishonored with the
remarks “exceeds arrangement” and “payment stopped by drawer”
respectively. Thereafter the complainant requested the account holder M/s.
Haryana Food Corporation (India) to liquidate the said amounts, however
the latter informed the bank that the accused was liable to pay the cheques
amount. Thereafter, the complainant sent a legal notice dt. 25.08.2015 under
section 138 (b) NI Act to the accused which was served upon him, and he
had failed to satisfy the legal demand made in the said notice within the
stipulated period of 15 days from the date of receipt of notice as per section
138 (c) NI Act. Thus, it is alleged that the accused has committed an offence
U/s. 138 of the Negotiable Instrument Act. Hence, the present complaint has
been filed.
4. The pre-summoning evidence of the authorized representative
(hereinafter ‘AR’) of the complainant bank was recorded on 19.11.2015
wherein the AR examined himself as CW-1 and relied upon his evidence by
way of affidavit Ex.CW1/1. He also relied upon the documents:
(a) Ex. CW1/A is the copy of gazette notification dt. 04.05.1996.
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RISHABH TANWAR
TANWAR Date:
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(b) Ex. CW-1/B and Ex.CW1/C are the cheques in question.
(c) Ex. CW-1/D is the statement of account.
(d) Ex. CW-1/E(OSR) is the letter of acknowledgment dt. 25.07.2015
written by the accused.
(e) Ex. CW-1/F and Ex.CW1/G are the return memos dt. 19.08.2015.
(f) Ex. CW-1/H is the legal notice dt. 25.08.2015.
(g) Ex. CW-1/I (Colly) is postal receipts.
(h) Ex. CW-1/J (Colly) is the tracking report.
5. After taking pre-summoning evidence on 19.11.2015, this Court took
cognizance of the offence under section 138 NI Act on the same day and
directed issuance of summons against accused. The accused thereafter
appeared on 15.02.2016. A notice under Section 251 Criminal Procedure
Code, 1973 (hereinafter referred to as “Cr.P.C.” for the sake of brevity) was
framed upon the accused on 17.10.2016 where he pleaded not guilty and
claimed trial and further stated that he did not have any legal liability against
the complainant as the amount of the cheques had already been debited from
the account on 25.07.2015. He further stated that post 25.07.2015 the
complainant bank did not have the competence to present or retain the
cheques as it had become stale and without consideration. He further stated
that the cheques in question were misused by the complainant. He admitted
his signatures on the cheques in question but denied receiving the legal
notice.
6. The accused was granted opportunity to cross-examine the
complainant on 17.10.2016. The complainant’s evidence on affidavit (Ex.
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RISHABH by RISHABH
TANWAR
TANWAR Date: 2025.02.28
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CW-1/1) was read as his examination in chief under section 145(1) NI Act
and he relied on the documents exhibited by him at the time of pre-
summoning evidence. CW-1 was duly cross-examined by Ld. Counsel for
the accused wherein the reply of the objections u/s.13(3A) of SARFAESI
Act issued by the complainant bank was marked as Ex.CW1/D1(OSR) and
Ex.CW1/D2(OSR). The relevant portion of the cross-examination shall be
discussed later in the judgment.
7. The Statement of accused u/s. 313 Cr.P.C. was recorded on
28.03.2024 wherein the accused reiterated her defense taken u/s.251 CrPC.
8. The accused did not lead any defense evidence, and the case was
listed for final arguments, however this Court had felt the requirement to
examine the bank witness with respect to the internal statement of the
account of the complainant bank wherein the cheque in question were
presented. Accordingly, CW-1 was again re-examined by this court wherein
he had brought the internal account statement and same was marked as Ex.
P1 along with certificate u/s.65B Indian Evidence Act, 1872. The witness
was cross-examined by Ld. counsel for the accused.
THE APPLICABLE LAW
9. Before appreciating the facts of the case in detail for the purpose of
decision, let relevant position of law be discussed first. It is well settled
position of law that to constitute an offence under S.138 N.I. Act, the
following ingredients are required to be fulfilled:
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RISHABH Date:
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(1) That the cheque in question has been drawn by a person on an
account maintained by him with a banker, for payment to another
person from out of that account for discharge in whole/part any debt
or liability.
(2) That the said cheque has been presented to the bank within a
period of six months (now three months) from the date on which it is
drawn or within the period of its validity whichever is earlier.
(3) That the cheque was returned dishonoured by the drawee bank for
want of sufficient funds or the same exceeded any arrangement with
the banker to pay the sum covered by the cheque.
(4) That the complainant gave a notice in writing to the drawer of the
cheque within 30 days of the receipt of information by him from the
bank regarding the return of the cheque as unpaid demanding payment
of the cheque amount.
(5) Lastly that the accused failed to make payment to the payee (the
complainant), or the holder in due course, the cheque amount within
15 days of the receipt of the notice.
10. It is only when all the aforementioned ingredients are satisfied that the
person who had drawn the cheque can be deemed to have committed an
offence under Section 138 of the N I Act. The Act also raises two
presumptions in favour of the holder of the cheque namely first, in Section
118(a) which says that every negotiable instrument was made or drawn for
consideration, and, second, a presumption under Section 139, that the holder
of cheque receiving the same of the nature referred to in Section 138 for
discharge, in whole or in part, of any debt or other liability. Analysing all the
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by RISHABH
RISHABH TANWAR
TANWAR Date:
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concerned provisions of law and various pronouncements in this regard, the
Hon’ble Apex Court in ‘Basalingappa v. Mudibasappa, AIR 2019 SC 1983′,
noted at para 23 Bharat Barrel and Drum Manufacturing Company v. Amin
Chand Pyarelal, (1999) 3 SCC 35; M.S. Narayana Menon alias Mani v. State
of Kerala and another, (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]:
(i) 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.
(ii) 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.
(iii) To rebut the presumption, it is open for the accused to rely on
evidence led by him or 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.
(iv) That it is not necessary for the accused to come in the witness box
in support of his defence, Section 139 imposes an evidentiary
burden and not a persuasive burden.
(v) It is not necessary for the accused to come in the witness box to
support his defence.
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Digitally signed
by RISHABH
TANWAR
RISHABH Date:
TANWAR 2025.02.28
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ARGUMENTS ADVANCED ON BEHALF OF THE PARTIES
11. Sh. Ajay Shanker, Ld. counsel for the complainant has argued that the
complainant has been able to prove all the pre-requisites of Section 138 NI
Act against the accused and the accused has failed to rebut the presumption
u/s. 138 NI Act. Ld. counsel has prayed that the accused be convicted of the
offence u/s. 138 NI Act.
12. Per contra, Sh. Bhagat Singh, Ld. Counsel for the accused has argued
that the complainant bank cannot be called the holder in due course within
the meaning of section 9 NI Act, which should be read with section 15 and
16 of the NI Act, on the ground that all the cheques given by the accused
were crossed cheques and an endorsement was required on the cheque in
favour of the complainant bank, in the absence of which the complainant
bank cannot call itself a holder in due course. It was further argued that the
complainant bank has not brought any proof of purchase of cheque as well
as the dishonor of the cheque. Ld. Counsel for the accused has also argued
that the alleged acknowledgment Ex. CW-1/10 is not an acknowledgment as
it does not contain the details of the cheque in question. It was further argued
that the legal notice was not served upon the accused as per law. Ld. Counsel
for the accused had vehemently argued that the cheque purchase transaction
was not declared as a ‘non-performing asset’ (NPA) by the complainant bank
as no such liability had existed and there was no default. It was lastly argued
that the amount credited was adjusted/withdrawn from the bank account of
the proprietorship by the bank itself and no other civil suit or recovery suit
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RISHABH TANWAR
TANWAR Date:
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has been filed by the bank to recover its alleged dues against the accused. It
was lastly prayed that the complainant bank has failed to prove its case
beyond the shadow of reasonable doubt.
POINTS OF DETERMINATION
13. The following points of determination arise in the present case:
A. Whether the complainant has successfully proven the facts which
would raise the presumption u/s. 118 r/w Section 139 of NI Act by
proving that the cheque in question bears the signature of the accused?
B. If yes, whether the accused has been successful in raising a probable
defence to rebut the presumption under section 139 NI Act?
C. If yes, whether the complainant has proved its case, beyond the
shadow of reasonable doubt, without taking the aid of presumption
under section 139 NI Act?
FINDINGS OF THE COURT
Points of determination number A:
14. The accused at the time of framing of notice under section 251 Cr.P.C.
has not disputed that the cheques in question i.e., Ex.CW1/1 bear his
signature. Accordingly, once the signature upon the cheque in question has
been admitted by the accused, the presumption u/s. 139 NI Act becomes
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TANWAR
RISHABH Date:
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operative in favour of the complainant. In another words, it is presumed that
the holder of a cheque received the cheque of the nature, as mentioned in
Section 138 NI Act, for the discharge, in whole or in part, of any debt or
other liability, based on the law discussed in paragraph no. 10 and sub-
paragraph no. (i).
15. Accordingly, the point of determination number A is decided in the
affirmative.
Points of determination number B:
16. Now coming to the factual matrix of the present case, it has to be seen
if the accused has been able to prove his defense on the scale of preponder-
ance of probabilities by blowing holes in the story of the complainant – as
admittedly the accused has not led any defense in the present case.
Defense no. 1: Lack on endorsement on the cheque and issue of complainant
bank being a holder in due course.
17. Ld. counsel for the accused has argued that the cheque in question
does not bear any endorsement in favor of the complainant bank and the
complainant bank cannot be called a ‘holder in due course’ within the mean-
ing of section 9 of NI Act. Ld. Counsel for the accused has further argued
that section 9 with section 15 and 16 NI Act would have to be read together.
In this regard, CW-1 had admitted in his cross-examination that there was no
endorsement on the cheque in question in favour of the complainant bank.
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by RISHABH
RISHABH TANWAR
TANWAR Date:
2025.02.28
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18. Section 9 of NI Act lays down the definition of “Holder in due
course” as ‘any person who for consideration became the possessor of a
promissory note, bill of exchange or cheque if payable to bearer, or the
payee or indorsee thereof, if payable to order, before the amount mentioned
in it became payable, and without having sufficient cause to believe that any
defect existed in the title of the person from whom he derived his title.
19. Prime facie perusal of section 9 NI Act imposes only three conditions,
i.e., One, the possessor or the payee of the cheque, in cases of bearer or ac-
count payee cheques respectively, pays a consideration for the cheque; sec-
ond, the consideration is paid before the amount mentioned in the cheque
has become payable and third, he does not have any sufficient cause to be-
lieve that any defect existed in the title of the person from whom he derived
his title. Apart from these three conditions, there are no other conditions em-
bodied in section 9 NI Act. In another words, there is no specific stipulation
that the holder in due course should necessarily have an endorsement in his
favor.
20. The aforesaid conclusion could be verified by examining the kinds of
parties mentioned in section 9 NI Act. If there was any requirement that the
holder in due course must necessarily have an endorsement made in his fa-
vor, such a requirement would have been mentioned in section 9. On the
contrary, section 9 NI Act defines the phrase ‘holder in due course’ in three
categories. A) a possessor, in cases of bearer cheques, B) a payee, if payable
to order and C) an endorsee, if payable to be order. It clearly shows that
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apart from an endorsee, who has an endorsement in his favor made on a
cheque, even a ‘bearer’ and ‘payee’ can be called a holder in due course if
aforementioned three conditions are satisfied. Therefore, even in this way
the conclusion in the preceding paragraph is satisfied.
20. The defense of the accused can be countered, and the interpretation of
section 9 NI Act by the undersigned can be buttressed, by the judgment of
the Hon’ble High Court at Delhi passed in the case of ‘Bank of India vs
State & Ors.’ CRL.M.C. 2452/2009 decided on 10.10.2010, wherein in a
similar controversy, the Hon’ble High Court had held that:
“5. It is apparent from this definition that for being a ‘holder in due
course’ of a bill or a cheque it was not necessary that there should be an en-
dorsement on the bill or cheque. ‘Holder in due course’ has been defined as
any person, who for consideration, becomes the possessor of the promissory
note or cheque. There is no doubt that endorsee or the payee of such a bill or
cheque are also considered as ‘holder in due course’, but, it is not the case
that payee or endorsee alone are holders in due course. A person whose
banking account is overdrawn if negotiates with his bankers a cheque, drawn
by a third party, to reduce the overdraft, the banker becomes a holder for
value of the cheque. The pre-existing debt of the overdraft is a sufficient
consideration for the negotiation of a cheque to the banker. If a person han-
dovers cheque to the bank with the clear understanding to the bank that
cheque is towards the debt payable by the company, though the cheque re-
mains in the name of the company but the bank becomes holder of the
cheque in due course. What is to be seen is that whether the bank has come
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into possession of the cheque for a value pursuant to a contract between the
parties express or implied. The credit given by a bank to its customer can be
discharged by any third person and when the third person issues cheque in
the name of the customer assuring bank that this would wipe out the over-
draft or the other dues payable by the customer then the cheque in the hands
of the bank is for consideration and the bank is ‘holder in due course’. It is
not necessary that the cheque should be endorsed in favour of the bank.
What is to be seen is if the bank becomes holder for value and comes in pos-
session of the instrument for consideration. The existing debt is always con-
sidered as a valid consideration.”
21. It is also pertinent to note that the argument of the Ld. Counsel for the
accused that section 9 NI Act should be read with section 15/16 NI Act can-
not be accepted as in the aforementioned case of ‘Bank on India’, Hon’ble
High Court at Delhi had further held that ” With due respect to Punjab &
Haryana High Court, I consider that the view of Punjab &; Haryana High
Court was not correct. Punjab & Haryana High Court had read Section 9 of
the Negotiable Instrument Act along with Section 15 and 16 thereof. Section
9 of N.I. Act is an independent provision under Negotiable Instrument Act
and it cannot be confused with the provision regarding endorsee or endorse-
ment. ‘Holder in due course’ has to be considered independent to the en-
dorsee or endorsement and where a cheque is issued by a Director to dis-
charge the debt of the company payable towards the bank, I consider that the
bank is ‘holder in due course’, even if there is no endorsement made on the
cheque, because, the moment amount of the cheque had gone to the account
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RISHABH TANWAR
TANWAR Date:
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of the company, it was to go the bank towards the loan taken by the com-
pany.” (Emphasis is of the undersigned).
22. Therefore, to be considered a ‘holder in due course’, an endorsement
is not a necessary per-requisite and the argument of the Ld. Counsel for the
accused in this regard has to be rejected for the reasons stated above.
Defense no. 2: the dishonor memo has not been brought on record and proof
of purchase of cheques.
23. The Ld. Counsel for the accused has further argued that the com-
plainant bank has not produced any bank dishonor memo to show that the
cheque issued by the accused was dishonored. In this regard, it is pertinent to
note that complainant is a bank itself and not an ordinary person who goes to
a bank and collects a dishonor memo. The complainant bank had presented
the cheque in question in its internal account and had produced the dishonor
memo. CW-1 had deposed, when he was examined as a court witness under
section 165 Indian Evidence Act 1872 (In short ‘I.E.A.’), that all the cheques
were presented in the internal account of the complainant bank on
15.07.2015 and they were dishonored on 16.07.2015. He had further de-
posed that the cheques were again represented on 19.08.2015 and they were
again dishonored on 20.08.2015. To prove the fact of presentation and dis-
honor of cheques, the witness had brought the account statement of the
branch transaction routing account bearing no. 67207933796 maintained by
the complainant bank and proved it as Ex. P1, along with a certificate under
section 65B I.E.A. By proving the aforesaid account statement, the com-
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plainant bank, through the court witness, had proven the date of presentation
of cheque and its dishonor.
24. The account statement has been supported with a certificate under sec-
tion 65B I.E.A. The ld. Counsel for the accused has argued that it was not
supported by the certificate given by the person who had taken the print out
and it bore the signature of the witness. In this regard it is pertinent to read
the heading of the certificate. It reads ” CERTIFICATE UNDER SECTION
2A OF THE BANKER’ BOOKS EVIDENCE ACT ” along with handwritten
heading which reads “Readwith section 64(B) of Indian Evidence Act.”
(sic). Section 2A of the Bankers’ Books Evidence Act, 1891 (in short
‘BBEA’) lays down the conditions which shall accompany the printout re-
ferred to in sub-section (8) of section 2 of the Act. It reads as follows:
“2-A. Conditions in the printout.–A printout of entry or a copy of
printout referred to in sub-section (8) of section 2 shall be accompanied by
the following, namely: —
“(a) a certificate to the effect that it is a printout of such entry or a
copy of such printout by the principal accountant or branch manager;
(b) a certificate by a person in-charge of computer system containing a
brief descriptions of the computer system and the particulars of–
(A) the safeguards adopted by the system to ensure that data is
entered or any other operation performed only by authorised
persons;
(B) the safeguards adopted to prevent and detect unauthorised
change of data;
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(C) the safeguards available to retrieve data that is lost due to
systemic failure or any other reasons;
(D) the manner in which data is transferred from the system to
removable media like floppies, discs, tapes or other electro-
magnetic data storage devices;
(E) the mode of verification in order to ensure that data has
been accurately transferred to such removable media;
(F) the mode of identification of such data storage devices;
(G) the arrangements for the storage and custody of such stor-
age devices;
(H) the safeguards to prevent and detect any tampering with the
system; and any other factor which will vouch for the integrity
and accuracy of the system.
(c) a further certificate from the person in-charge of the computer sys-
tem to the effect that to the best of his knowledge and behalf, such
computer system operated properly at the material time, he was pro-
vided with all the relevant data and the printout in question represents
correctly, or is appropriately derived from, the relevant data.”
25. The contents of the certificate (Ex. P1) are hereby reproduced for
quick reference:
“It is certified that the statement of account No.
67207933796(handwritten) of ___(blank)_____ handed over on
___(blank)___ is a true extract in printed form of the relevant data
created in the usual and ordinary course of business and stored on the
Hard Disk of the Computer Systems installed at Branch of the bank.
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It is further certified that the Access to the Computer System
and the data stored thereon is controlled by pre-defined user permis-
sions exercised through unique user-id and associated passwords;
that physical access to the computer/server room is prevented
by locking the server room and the branch after office hours. Detec-
tion of any unauthorised changes in the data after day-end and before
day-begin activity is carried through procedures which are built into
the application program. Unauthorized changes in the data during reg-
ular working hours are prevented/detected through verification of out-
puts with authorized inputs;
that in case of system failure, the data is retrieved from the
back-up kept on tape/floppy/cartridge/hard disk, which is under the
control of System Administrator/ designated employee of the branch;
that back-up is verified by the system during the process of transfer of
data to back-up media;
that physical and logical labels identify the data storage de-
vices;
that back-up devices and media are kept under lock and key
which are in the custody of a designated staff member; and that physi-
cal and logical access controls are in place as safeguards against tam-
pering of the systems.
It is further certified that to the best of our knowledge and be-
lief, the Computer System that generated and stored this information
operated properly at the time of such generation/storage of the data
and the printout represents correctly the relevant data.”
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RISHABH TANWAR
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26. It is not in doubt that Ex. P1 is a certified copy within the meaning
section 2(8) BBEA. A holistic reading of the content of Ex. P1 in compari-
son with the conditions laid down in section 2(8) read with 2A BBEA would
show that Ex. P1 broadly conforms with the requirements of section 2A
BBEA and the same has been brought on record by Branch manager of the
complainant bank. Such a certificate is not to be given by a person who
merely prints the document from a computer system, but by a person having
effective control over the computer system. It was stated by the court wit-
ness during his cross-examination that the central system of the complainant
bank can be accessed by any officer, as records are available in the core
banking system. It is further pertinent to note that no specific suggestion was
given to the court witness by Ld. Counsel for the accused that either he was
not authorized to prove the certificate accompanying the document Ex. P1 or
that such a certificate was not as per law. The only suggestion given was that
it was a ‘created document’. Such a suggestion is inconsequential as every
document is a created document – created by any person or computer. There-
fore, this court finds that Ex. P1 conforms to the requirements of law and the
statement Ex. P1 cannot be negated for hyper technical and inconsequential
defects in the certificate accompanying Ex. P1.
27. Furthermore, the next argument that the complainant bank has not
brought any document to show dishonor of cheques is not tenable as Ex. P1
shows both the details of presentation of cheques in question as well as of its
dishonor. Ld. Counsel for the accused has also argued that the complainant
bank has not brought any proof of purchase of cheque. The said argument
also does not hold any water as the account statement Ex. CW-1/C belonging
CC No.10601/2016 State Bank of Travancore Vs. Sanjeev Kumar pg. no. 18/25
Digitally signed
by RISHABH
RISHABH TANWAR
TANWAR Date:
2025.02.28
15:20:56 +0530
to the proprietorship of the accused showed a credit entry of an amount
equivalent to the amount of the cheque in question, which in itself is proof of
payment being made by the bank towards purchase of the cheque in ques-
tion. Moreover, no suggestion was given to this effect and CW-1 was not
confronted with the account statement Ex. CW-1/H to insinuate that it did
not contain any proof of purchase of cheque.
Defense no. 3: Legal demand notice not served upon the accused.
28. The accused has further taken a defense that he had not received the
legal notice allegedly sent by the complainant. In this regard, it would be rel-
evant to discuss the judgement of the Hon’ble Supreme Court in “C.C. Alavi
Haji vs Palapetty Muhammad & Anr AIR 2007 SC (SUPP) 1705″ wherein it
was held that: “17. It is also to be borne in mind that the requirement of giv-
ing 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 com-
plaint under Section 138 of the Act, cannot obviously contend that there was
no proper service of notice as required under Section 138, by ignoring statu-
CC No.10601/2016 State Bank of Travancore Vs. Sanjeev Kumar pg. no. 19/25
Digitally signed
by RISHABH
TANWAR
RISHABH Date:
TANWAR 2025.02.28
15:21:00
+0530
tory presumption to the contrary under Section 27 of the G.C. Act and Sec-
tion 114 of the Evidence Act.”
29. It is an admitted position that the accused has not paid the amount of
the cheque in question within 15 days of his appearance in this court. More-
over, it is not his case that the demand notice Ex. CW-1/F does not bear his
correct address, as in his statement under section 251 Cr.P.C., the accused
had admitted that the demand notice bore the correct address. Furthermore,
the tracking report Ex. CW-1/H shows that the same was delivered. There-
fore, in light of the aforesaid case, the accused cannot now content that he
had not received the legal notice or there was not proper service of the same
upon her. Hence, this defense of the accused is liable to be dismissed.
Defense no. 4: cheque purchase transaction was not declared as NPA by the
complainant bank.
30. Ld. Counsel for the accused has taken a defense that the complainant
bank did not declare the cheque purchase transaction as NPA despite al-
legedly not receiving the amount of the cheque in question, as no such de-
fault had existed in the first place. In this regard it is pertinent to note that
when AR of the complainant was questioned in this regard, he had deposed
that the cheque purchase transaction was not declared as an NPA, as cheque
purchase transaction cannot be declared an NPA. Only bank accounts can be
declared as an NPA. CW-1 was confronted with the RBI guidelines (Ex.
CW-1/A1) in this regard. As per Clause 2.2.2(iii), those bills which remain
overdue for a period of more than 90 days in the case of bills purchased and
CC No.10601/2016 State Bank of Travancore Vs. Sanjeev Kumar pg. no. 20/25
Digitally signed
by RISHABH
TANWAR
RISHABH Date:
TANWAR 2025.02.28
15:21:03
+0530
discounted can be certified as NPA. However, even if it is presumed that the
complainant bank was supposed to declare the cheque purchase transaction
as NPA, any failure to do so would only entail actions by the Reserve Bank
of India upon the complainant bank. By no stretch of imagination, it could
be conclusively held that the omission of the complainant bank to declare
the cheque purchase transaction as a NPA establishes that no such transac-
tion had existed in the first place. This court does not agree with the argu-
ment as it is a settled position that absence of evidence is not evidence of ab-
sence.
Defense no. 5: Amount credited by the bank has been withdrawn and ad-
justed by the bank.
31. The main argument taken by the Ld. Counsel for the accused is that
the amount has been withdrawn by the complainant bank from the bank ac-
count of the proprietorship concern after the dishonor of cheques and post
withdrawal, the complainant bank did not have the authority to present the
cheque in question. Ld. Counsel for the accused has relied upon bank ac-
count statement Ex. CW-1/C itself as it contained entry with respect named
‘DDP adjusted’. It is pertinent to note that the accused has not disputed the
fact that the amount, equivalent to the cheque amount, was credited in the
bank account of the proprietorship belonging to the accused. The said
amount has been transferred to certain account numbers, which CW-1 admit-
ted during his cross-examination that the same belonged to the complainant
bank.
CC No.10601/2016 State Bank of Travancore Vs. Sanjeev Kumar pg. no. 21/25
Digitally signed
by RISHABH
TANWAR
RISHABH Date:
TANWAR 2025.02.28
15:21:09
+0530
32. In this regard, it is pertinent to note that there are three parties in-
volved in the present case, namely: the complainant bank, the accused and
the proprietorship concern, in whose bank account the amount of the cheque
has been credited. Now if the amount from the bank account of the propri-
etorship concern has gone out to, admittedly, the bank account of the com-
plainant bank, it cannot be a conclusively held that the complainant bank has
withdrawn the said amount to realize the amount of the cheque in question.
The amount could not have been transferred from the said account without
the authorization of the account holder, which in the present case was the ac-
cused, as the proprietorship belonged to the accused. One can credit an
amount in the bank account of others, however without the consent of the
account holder, any amount cannot be debited from his or her bank account.
If such an amount was transferred from the bank account, it is no proof that
the bank has unilaterally withdrawn the amount, rather it goes to show that
the amount was utilized by the accused. The onus was upon the accused to
prove that the amount was not utilized by him as the presumption under sec-
tion 139 NI Act is operating in favour of the complainant.
33. The question as to why the accused had issued the cheque in question
in favour of the proprietorship concern remained unanswered. In his state-
ment under section 251 Cr.P.C., the accused has not disputed the issuance of
the cheque. The only defense in this regard taken by him is that post
25.07.2015, the complainant bank did not have the competence to either
present or retain the cheques. Therefore, an admission of the accused can be
culled out to the effect that at least the accused has admitted issuance of
cheques to the proprietorship concern. The complainant bank has relied upon
CC No.10601/2016 State Bank of Travancore Vs. Sanjeev Kumar pg. no. 22/25
Digitally signed
by RISHABH
TANWAR
RISHABH Date:
TANWAR 2025.02.28
15:21:12
+0530
a letter dated 25.07.2015 (Ex. CW-1/D O.S.R.) wherein the accused had ad-
mitted that the account of his proprietorship has got overdrawn and there
was a total outstanding of Rs. 88,34,159/- and an assurance was given to the
complainant bank that the same will be paid within 40 days. The name of the
proprietorship, who was the original payee on the cheque in question, is the
same as mentioned in the letter Ex. CW-1/D. It is pertinent to note that Ex.
CW-1/D has not been disputed by the accused during the trial. The only sug-
gestion that was given to CW-1 was that it did not contain any reference to
the cheque-purchase transaction. Therefore, the letter Ex. CW-1/D has been
proved by deemed admission of the accused. There is also no dispute that
the accused had issued these cheques from his personal account in favour of
the proprietorship, so that the amount so deposited in the account of the pro-
prietorship that had availed overdraft and other facilities from the bank is
utilized for discharging dues of the bank. Otherwise, there was no reason for
the accused to issue the cheque in favour of proprietorship concern. No
transaction between the accused in his individual capacity and in the capac-
ity of the proprietor requiring issuance of these cheques has been proved by
the accused to justify the issuance of cheques.
34. On the basis of the aforementioned discussion, this court returns the
finding that the accused has failed to raise a probable defence, on the scale
of preponderance of probability and has failed to rebut the presumption un-
der section 139 NI Act. On the other hand, the complainant bank has been
able to prove all the necessary ingredients of the offence under section 138
NI Act.
CC No.10601/2016 State Bank of Travancore Vs. Sanjeev Kumar pg. no. 23/25
Digitally signed
by RISHABH
TANWAR
RISHABH Date:
TANWAR 2025.02.28
15:21:17
+0530
35. Since the point of determination no. (ii) has been decided in the nega-
tive, it would not be necessary to discuss the point of determination no. (iii).
36. It is trite law that when the accused has failed to rebut the presump-
tion under section 139 NI Act, the court can proceed to convict the accused.
reliance is placed upon the judgment of Hon’ble Supreme Court in Supreme
Court in ‘Rajesh Jain v. Ajay Singh, (2023) 10 SCC 148′, which discusses
the correct approach in dealing with presumption under Section 139 ob-
served as under; relevant extracts are reproduced hereunder:
“54. …Once the presumption under Section 139 was given effect to,
the courts ought to have proceeded on the premise that the cheque was, in-
deed, issued in discharge of a debt/liability. The entire focus would then nec-
essarily have to shift on the case set up by the accused, since the activation
of the presumption has the effect of shifting the evidential burden on the ac-
cused. The nature of inquiry would then be to see whether the accused has
discharged his onus of rebutting the presumption. If he fails to do so, the
court can straightaway proceed to convict him, subject to satisfaction of the
other ingredients of Section 138….”
CONCLUSION
37. Accordingly, this Court finds the accused Sanjeev Kumar ‘guilty’ of
the offence under section 138 NI Act and he is accordingly convicted of the
said offence.
CC No.10601/2016 State Bank of Travancore Vs. Sanjeev Kumar pg. no. 24/25 Digitally signed by RISHABH RISHABH TANWAR TANWAR Date: 2025.02.28 15:21:21 +0530
38. This judgment contains 25 pages, and each page has been signed by
the undersigned as per rules.
39. Let the copy of digitally signed judgment be uploaded on the website
of Tis Hazari District Court as per rules. Digitally
signed by
RISHABH
RISHABH TANWAR
TANWAR Date:
2025.02.28
15:21:26
+0530Announced in open Court (RISHABH TANWAR)
on 28th February 2025 JUDICIAL MAGISTRATE,
FIRST CLASS NI ACT-01/WEST/DELHICC No.10601/2016 State Bank of Travancore Vs. Sanjeev Kumar pg. no. 25/25
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