Delhi District Court
Case No. 223/12 Madhav ... vs Alamgeer 1 Of 20 on 22 February, 2014
Author: Sh. Manu Kharb
        IN THE COURT OF Ms. MANU GOEL KHARB
     METROPOLITAN MAGISTRATE, DWARKA COURTS, 
                     NEW DELHI 
                 In Re:                  Case No. : 223/12
                                         (Old CC no. 2663/1 dated 03.10.07)
                                   U/s. 138 Negotiable Instrument Act
1.
      CC No.                                        : 223/12
2.      Date of Institution                                 : 03.10.2007
3.      Name of the complainant,                            :  The Madhav Co−operative 
        parentage and residence                                Urban Thrift & Credit 
                                                               Society Ltd.,  E−17, East
                                                               Uttam Nagar, Near Pali 
                                                               Factory, Uttam Nagar, 
                                                               New Delhi−59 (Through 
                                                               Sh. Satish Kumar Garg 
                                                               S/o Sh. Ghanshyam Dass 
                                                               Gupta, President/AR)
4.        Name of accused                                   :  Sh. Alamgeer 
          his parentage                                        S/o Sh. Rafiq Ahmad 
          and residence                                        R/o B−254, JJ Colony,
                                                               Hastsal, Uttam Nagar,
                                                               New Delhi−59
Case No. 223/12                    Madhav Co−operative Vs Alamgeer                1 of 2
5.      Date when Judgment                       
         was reserved                              :  12.02.2014
6.      Date when Judgment 
         was pronounced                             : 22.02.2014
7.     Offence complained of                   : U/s. 138 NI Act
8.     Plea of accused                               : Not guilty
9.     Final Judgment                              : Convicted 
Case No. 223/12 Madhav ... vs Alamgeer 1 Of 20 on 22 February, 2014
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                                    − :: JUDGMENT :: −
                       BRIEF FACTS AND REASONS FOR 
                           DECISION OF THE CASE
1. By way of the present judgment, I shall decide the complaint case U/s 138 Negotiable Instrument
Act 1881 (as amended up to date) filed by the complainant The Madhav Co−operative Urban Thrift
and Credit Society Ltd through its President/AR Sh. Satish Kumar Garg against the accused Sh.
Alamgeer S/o Sh. Rafiq Ahmad.
2. The facts in brief necessary for the disposal of the present case Case No. 223/12 Madhav Co−
operative Vs Alamgeer 2 of 20 are that as per the allegations in the complaint, on 11.08.04, the
accused took a loan of Rs.25,000/− from the complainant society vide loan account no. 2564 at
interest of 18% per annum with the promise that the same shall be returned with interest and the
accused executed loan agreement in this regard. The accused was irregular in making the payment
of installments and therefore, settled his account upto 18.07.2007 for a sum of Rs.29,200/−. The
accused for discharge of the said liability issued cheque bearing no. 284229 drawn on ICICI Bank,
B−1, Milap Nagar, Najafgarh Road, Uttam Nagar, New Delhi in favour of the complainant. On
presentation of the above said cheque the same was returned unpaid with the reasons
"INSUFFICIENT FUNDS" vide cheque return memo dated 21.07.2007. Thereafter, the complainant
served the legal notice of demand dated 13.08.2007 to the accused which was sent by Speed post
with AD thereby calling upon the accused to make the payment in lieu of dishonored cheque. It is
alleged that accused has failed to pay any sum in response to the legal notice of demand. In
consequence thereof the complainant has filed the instant complaint for prosecution of the accused
U/s 138 Negotiable Instruments Act.
Case No. 223/12 Madhav Co−operative Vs Alamgeer 3 of 20
3. After the complaint was filed, the President/Authorized Representative of the complainant society
led his pre−summoning evidence by way of an affidavit and after hearing the AR for the complainant
and considering the entire material and documents on record, summons were issued against the
accused vide order dated 03.10.2007 for the offence U/s 138 Negotiable Instrument Act 1881. On
appearance of the accused, a separate notice U/s 251 Cr.P.C. dated 09.02.2012 was given to the
accused to which he pleaded not guilty and claimed trial and the matter was fixed for complainant
evidence.
4. In order to prove the case, Sh. Satish Kumar Garg, President/AR of the complainant got himself
examined as CW−1 and reiterated the contents of the complaint on oath before this court and
tendered his affidavit in evidence which is Ex. CW−1/X. He got exhibited the original cheque
bearing no. 284248 dated 19.07.2007 of Rs.29,200/− drawon on ICICI Bank, B−1, Milap Nagar,
Najafgarh Road, Uttam Nagar, New Delhi as Ex. CW1/A, Original cheque return memo dated
21.07.2007 as Ex. CW1/B, Copy of notice dated Case No. 223/12 Madhav Co−operative Vs Alamgeer
Case No. 223/12 Madhav ... vs Alamgeer 1 Of 20 on 22 February, 2014
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4 of 20 13.08.2007 as Ex. CW1/C, Postal receipt and acknowledgment Card is Ex. CW1/D and Ex.
CW1/E. Sh. Satish Kumar Garg was cross− examined by the ld. Counsel for the accused. Thereafter,
the complainant evidence was closed by the Ld. Counsel for the complainant.
Thereafter, counsel for the complainant moved an application under section 311 CrPC for calling a
bank witness to prove the dishonor of cheque. This application was allowed and Sh. Bikesh Sharma,
Customer Service Officer, ICICI Bank Ltd was examined as CW2. He brought statement of account
of the accused and exhibited the same as Ex. CW2/X and also identified the original cheque Ex.
CW1/A and return memo already Ex. CW1/B. CW2 Bikesh Sharma was cross−examined by the ld.
Counsel for the accused. Thereafter, the complainant evidence was closed by the Ld. Counsel for the
complainant and the case was fixed for statement of the accused.
5. In his statement recorded U/s 313 Cr.P.C r/w Sec. 281 CrPC, all the incriminating evidence along
with exhibited documents Case No. 223/12 Madhav Co−operative Vs Alamgeer 5 of 20 were put to
the accused Alamgeer in which he stated that he had issued the cheque in question as a blank signed
cheque for security purpose and admitted the receipt of legal notice of demand. He further stated
that he complainant has mis−used the blank signed cheque given by him to the complainant prior to
the disbursement of loan. Thereafter, the case was fixed for defence evidence.
6. Ld. counsel for the accused moved an application U/s 315 Cr.PC for allowing the accused to
appear in his defence. The aforesaid application was allowed and accused himself deposed as DW1.
Accused deposed that he was sanctioned a loan of Rs. 25000/− by the complainant and the latter
also took one blank signed cheque from him at the time of disbursement of loan. He admitted the
receipt of legal demand notice. Accused did not tender any document in support of his defence.
Accused was cross−examined by the ld. Counsel for the complainant wherein he admitted that he
did not give any reply to the legal notice of demand.
In his defence, accused also examined his wife Shama Begum as DW2 who exhibited the payment
receipts as Ex. DW2/A(15 pages Case No. 223/12 Madhav Co−operative Vs Alamgeer 6 of 20 colly).
DW2 deposed that she was present at the time of loan and on complainant's demand, her husband
Alamgeer gave them one blank signed cheque for loan. She also deposed that on some occasions no
receipt was issued by the complainant. DW2 was cross−examined by the ld. Counsel for the
complainant. No other defence witness was produced on behalf of the accused. Thereafter, defence
evidence was closed at request of Ld. counsel for the accused and the case was fixed for final
arguments.
7. Final arguments were addressed on behalf of both the parties.
I have heard Ld. counsels for both the parties and perused the entire record of the case file and the
evidence on record. In order to bring home the conviction of the accused, the complainant has to
show not only unbroken chain of events leading to commission of actual offence on record but also
the ingredients of the offence complained of.
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8. Before proceeding further let us go through the relevant provisions of law. The main ingredient of
Section 138 of the Negotiable Instruments Act are as follows:− Case No. 223/12 Madhav Co−
operative Vs Alamgeer 7 of 20
(a) The accused issued a cheque on an account maintained by him with a bank.
(b) The said cheque has been issued in discharge of any legal debt or other liability.
(c) The cheque has been presented to the bank within the period of six months from the date of the
cheque or within the period of its validity.
(d) When the aforesaid cheque was presented for encashment, the same was returned unpaid/
dishonoured.
(e) The Payee of the cheque issued a legal notice of demand within 30 days from the receipt of
information by him from the Bank regarding the return of the cheque.
(f) The Drawer of the cheque failed to make the payment within 15 days of the receipt of the
aforesaid legal notice of demand.
If the aforesaid ingredients are satisfied then the drawer of the cheque shall be deemed to have
committed an offence punishable u/s 138 Negotiable Instruments Act.
9. Now let us deal with the each ingredient of the section 138 of Negotiable Instruments Act to see
whether the case against the Case No. 223/12 Madhav Co−operative Vs Alamgeer 8 of 20 accused
has been proved or not.
10. WHETHER THE CHEQUE WAS ISSUED OR NOT The accused has himself admitted to have
signed the cheque in question while answering to the question at the time of framing of notice U/s
251 Cr. PC. Further while answering to the question U/s 313 Cr.PC the accused has admitted to have
given the cheque in question to the complainant but he stated that the same was given in blank only
after putting his signatures there for purpose of security at the time of taking the loan from
complainant. Therefore, so far as signing and delivery of the cheque in question by the accused is
concerned the same is not disputed.
Moreover, in Jaipal Singh Rana Vs. Swaraj Pal 149 (2008) DLT 682 it was held by Delhi High Court
that "by putting the amount and the name there is no material alteration on the cheque U/s 87 of
the Negotiable Instruments Act. In fact there is no alteration but only adding the amount and the
date.
It was further observed in the aforesaid judgment that there is no rule of banking business that the
name of the payee as well as the Case No. 223/12 Madhav Co−operative Vs Alamgeer 9 of 20
amount should be written by the drawer himself. No law provides that in case of cheques the entire
body has to be written by the drawer only."
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In view of the evidence on record it stands proved that the cheque in question was issued by the
accused.
11. WHETHER THE CHEQUE WAS PRESENTED WITHIN THE PERIOD OF VALIDITY Perusal of
the record reveals that the cheque in question which is Ex. CW−1/A is dated 19.07.2007 which got
dishonored vide cheque returning memo which is Ex. CW−1/B dated 21.07.2007 which is not
disputed by the accused clearly shows that the cheque has been presented within period of its
validity i.e. within six months from the date of issuance of the cheque.
12. DISHONOUR OF CHEQUE IN QUESTION In the instant case, Satish Kumar Garg who has
appeared as complainant's witness has got exhibited the cheque returning memo which is Ex.
CW1/B to prove the fact of dishonour of the cheque in Case No. 223/12 Madhav Co−operative Vs
Alamgeer 10 of 20 question. Complainant also examined bank witness Sh. Bikesh Sharma, to prove
the dishonor of the cheque who correctly identified the cheque Ex. CW1/A and return memo Ex.
CW1/B and stated that the same was issued by their bank mentioning 'insufficiency of funds' as the
reason of dishonor. He produced the statement of account of the accused as Ex. CW2/X and stated
that as the balance of the accused was not sufficient, so the entry of dishonor is not reflected in the
statement of account.
The dishonor of the cheque in question has not been disputed by the accused nor the cheque
returning memo has been challenged by the accused.
Therefore considering the entire evidence on record it stands duly proved that the cheque in
question was dishonored vide cheque returning memo dated 21.07.2007 which is Ex. CW1/B with
the reason "Insufficient Funds".
13. SERVICE OF LEGAL NOTICE OF DEMAND UPON THE ACCUSED In the instant case, Satish
Kumar Garg who has appeared as complainant's witness has specifically stated in his examination in
Case No. 223/12 Madhav Co−operative Vs Alamgeer 11 of 20 chief that the complainant got issued
the legal notice of demand dated 13.08.2007 which is Ex. CW1/C and it was sent to the accused vide
Spped Post with Regd. AD which are Ex. CW−1/D and Ex. CW1/E respectively. The accused has also
admitted the receipt of legal notice of demand during framing of notice under section 251 CrPC and
while answering to the question during his statement U/s 313 r/.w 281 Cr.PC as well as his
examination in chief.
In light of the evidence on record and the admission made by the accused, it stands proved that legal
notice of demand was properly served upon the accused.
14. WHETHER THE CHEQUE IN QUESTION WAS ISSUED IN DISCHARGE OF ANY LEGAL
DEBT OR OTHER LIABILITY In the case in hand, Satish Kumar Garg who has appeared as
complainant's witness has specifically stated in his examination in chief by way of affidavit that the
accused was irregular in making payments and settled his account with the complainant for a sum of
Rs. 29,200/− and issued the cheque in question in discharge of that Case No. 223/12 Madhav Co−
operative Vs Alamgeer 12 of 20 liability.
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The accused has however deposed in his examination in chief that he had issued cheque in question
to the complainant before the disbursement of loan as blank signed cheque, by way of security only
and the same has been misused by the complainant.
Before deciding this issue let us go through the relevant provisions of law.
Section 46 of the Negotiable Instruments Act speaks of the delivery, it reads as follows:− "The
making, acceptance or endorsement of a promisory notice, bill of exchange or cheque is completed
by delivery, actual or constructive."
Section 118 (b) of the Negotiable Instruments Act provides that until the contrary is proved, the
following presumption shall be made.
(b) As to date − that every Negotiable Instrument bearing a a date was made or drawn on such date.
Moreover, there is a presumption in favour of the complainant Case No. 223/12 Madhav Co−
operative Vs Alamgeer 13 of 20 u/s 118 (a) Negotiable Instruments Act that until the contrary is
proved, it will be presumed that every negotiable instrument was drawn for consideration and every
such instrument when it has been accepted, endorsed, negotiated or transferred was accepted,
endorsed, negotiated or transferred for consideration.
Further Section 139 of the Negotiable Instruments Act, 1881 provides that it shall be presumed until
the contrary is proved that the holder of the cheque received the cheque of the nature referred in the
Section 138 for the discharge in whole or in part of his debt or liability.
Now the Court shall examine whether the accused is successful in rebutting the presumption as
contemplated by Section 118 (b) and Section 139 of Negotiable Instruments Act.
To rebut the presumption of section 139 of NI Act and section 118 (b) of NI Act, the sole ground of
defence taken by the Ld counsel for accused is that the cheque in question was given to the
complainant as blank signed cheque by way of security prior to the sanctioning of loan and that the
cheque in question was issued by the Case No. 223/12 Madhav Co−operative Vs Alamgeer 14 of 20
accused in blank with only his signatures.
To support this contention, the accused has failed to bring anything on record. DW2 Shama Begum,
who is the wife of the accused has also stated in her examination of chief that the accused gave the
cheque of ICICI Bank to the complainant for loan. A Security cheque if issued for any debt payable
in presenti but such payment has been deferred to a future debt can be subject matter of
proceedings under section 138 NI Act. In the present case, even it is presumed that the cheque has
been issued for security purpose, it was meant for discharge of debt but the payment of which has
been deferred to a future date. In this regard, the Hon'ble High Court of Delhi has observed in its
judgment titled as Krish International P. Ltd & Ors Vs. State & Ors. MANU/DE/0302/2013 as :− "9.
There is no dispute that the proposition of law as laid down in M/s Collage Culture that a cheque
issued not for an existing due but issued by way of security would not attract the provisions of
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Section 138 of the Act. In M/s Collage Culture the learned Single Judge of this Court (Pradeep Case
No. 223/12 Madhav Co−operative Vs Alamgeer 15 of 20 Nandrajog, J.) drew distinction between a
cheque issued for a debt in present but payable in future and second for a debt which may become
payable in future upon the occurance of a contingent event. Paras 20 to 24 of the report in M/s
Collage Culture are extracted hereunder :−
20. A post dated cheque may be issued under 2 circumstances. Under circumstance one, it may be
issued for a debt in presenti but payable in future. Under Second circumstance it may be issued for a
debt which may become payable in future upon the occurrence of a contingent event.
21. The difference in the two kinds of post−dated cheques would be that the cheque issued under
first circumstance would be for a debt due, only payable being postponed. The latter cheque would
be by way of a security.
22. The word 'due' means 'outstanding at the relevant date'. The debt has to be in existence Case No.
223/12 Madhav Co−operative Vs Alamgeer 16 of 20 as a crystallized demand akin to a liquidated
damages and not a demand which may or may not come into existence; coming into existence being
contingent upon the happening of an event." Hence, it is sufficiently proved on record that the
cheque in question was not issued by way of security but for payment of the amount received by the
accused from the complainant.
Further, even if we assume that the cheque in question was issued by the accused in blank with only
his signatures, even then the law has been clearly laid down in this regard by Hon'ble Delhi High
Court in M/s Jammu & Kashmir Bank vs. Abhishek Mittal, 2012 CD DCR 189, that :− "When a blank
cheque is signed and handed over, it means that the person signing it has given the implied
authority to the holder of the cheque, to fill up the blanks which he has left. A person issuing a blank
cheque is supposed to understand the consequences of Case No. 223/12 Madhav Co−operative Vs
Alamgeer 17 of 20 doing so. He cannot escape his liability only on the ground that blank cheque has
been issued by him."
"Once issuance of the cheque been admitted or stands proved, a presumption arises in favour of the
holder of the cheque that he had received the cheque of the nature referred to under Section 138 of
the Act for the discharge, in whole or in part of any debt or any other liability. This presumption
arises in favour of the holder under Section 139 of the Act which envisages that it shall be presumed
unless the contrary is proved that the holder of a cheque received the cheque of the nature referred
to under Section 138 of the Act for discharge, in whole or in part of any debt or any other liability. Of
course, this presumption is a rebuttable presumption and same can be rebutted only by the person
who had drawn the cheque."
Thus, the accused has failed to rebut the presumption under section 118 (b) of Negotiable
Instruments Act. Therefore, presumption under section 118 (b) holds good and according to which
cheque was issued by the accused in discharge of his legal Case No. 223/12 Madhav Co−operative Vs
Alamgeer 18 of 20 liability.
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Therefore, Court is of the considered opinion that the complainant has sufficiently been able to
prove its case that the cheque in question was issued by the accused in discharge of his legal debt or
liability.
15. THE DRAWER OF THE CHEQUE HAS FAILED TO MAKE THE PAYMENT WITHIN 15 DAYS
OF THE RECEIPT OF SAID NOTICE In the instant case Sh. Satish Kumar Garg who has appeared
as complainant's witness has deposed in his examination in chief by way of affidavit that despite
service of legal notice of demand accused has failed to pay the cheque amount.
Considering the evidence on record it stands proved that the accused has failed to make the
payment of the cheque amount within 15 days of the receipt of legal notice of demand.
16.In view of the aforesaid discussion, I am of the considered Case No. 223/12 Madhav Co−operative
Vs Alamgeer 19 of 20 opinion that the complainant has sufficiently proved its case against the
accused. All the ingredients of Section 138 of Negotiable Instruments Act have been duly proved on
record. Accordingly, accused Alamgeer S/o Sh. Rafiq Ahmed is hereby convicted of the offence u/s
138 Negotiable Instruments Act. Let copy of this judgment be given free of cost to the convict.
Announced in the open court 
today i.e. 22.02.2014                                     (MANU GOEL KHARB)
                                                METROPOLITAN MAGISTRATE 
                                                 DWARKA COURTS, NEW DELHI 
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