Delhi District Court
Vikram Saberwal vs M/S S.G. Fabrics Pvt. Ltd on 6 April, 2026
IN THE COURT OF MANU VEDWAN, ADDITIONAL SESSION JUDGE-02,
SPECIAL JUDGE (NDPS), EAST DISTRICT, KARKARDOOMA COURT,
DELHI
CNR Number DLET01-000026-2025
Criminal Appeal Number 05/2025
Sh. Vikram Saberwal
S/o Sh. Baldev Raj
R/o Flat Number 105, Vidya Vihar,
Jawaharlal Nehru Co-operative,
Corporation Housing Society,
Plot Number 5, Enclave Pitampura,
Delhi-110034 .......Appellant
Versus
M/s S.G. Fabrics Pvt. Ltd.
9/1544, Mikesh Gali,
Gandhi Nagar, Delhi-110031 .......Respondent
Date of Institution : 08-01-2025
Date of Argument : 04.04.2026
Date of Judgment : 06.04.2026
JUDGEMENT
1.1 The present criminal appeal has been preferred by the appellant against
the judgment, dated 05.11.2024 and order on sentence, dated 04.12.2024 passed by
the Learned Judicial Magistrate First Class, Karkardooma Courts, Delhi, in
complaint case titled M/s S.G. Fabrics Pvt. Ltd. vs. Sh. Vikram Sabharwal, arising
out of proceedings under Section 138 read with Section 141 of the Negotiable
Instruments Act, 1881 (hereinafter referred to as NI Act). For sake of convenience
complainant before the learned trial court shall now be referred as respondent and
accused there is appellant here.
2. Brief facts of the complaint
2.1 Briefly stated, the case of the complainant/respondent before the
Learned Trial Court was that the accused/appellant and the complainant/respondent
were having business dealings with each other. It is stated that the accused/appellant
had been purchasing cloth of various quality and quantity which was duly sold and
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delivered to the accused/appellant and six bills were raised in the name of the
proprietorship of the accused/appellant. As per the statement of account maintained
by the complainant/respondent, a sum of rupees 26,18,866/- was stated to be due and
payable by the accused/appellant towards the complainant/respondent. It was further
the case of the complainant/respondent that in discharge of the aforesaid alleged
liability, the accused/appellant had issued a cheque bearing number 000020, dated
14.05.2014, for a sum of rupees 26,18,866/-, drawn on HDFC Bank, Pushpanjali
Enclave, Delhi. Upon presentation, the said cheque was dishonoured vide return
memo, dated 16.05.2014, with the remarks “Funds Insufficient”. Thereafter, the
complainant/respondent had issued a legal demand notice, dated 28.05.2014, to the
accused/appellant calling upon him to make payment of the cheque amount within
the statutory period. It is further stated that as the accused/appellant had not paid any
amount against the bounced cheque even after the passing of the statutory 15 days
complainant/respondent had filed the present case.
3. Notice
3.1 Accused/appellant was summoned and notice under Section 251 of the
Court of Criminal Procedure was framed against him. During the course of framing
of the notice, accused/appellant had admitted his signatures in the cheque-in-
question though at the same time, he had submitted that the other entries were not
filled by him. It is also submitted by him at that time that the aforesaid cheque was
issued as security cheque. Alongwith this, it was also mentioned by the
accused/appellant that complainant/respondent had supplied defective goods to him
which were returned.
4. Evidence led before Learned Trial Court
4.1 Thereafter, matter was listed for taking the evidence on behalf of the
parties in accordance with the application moved by the accused/appellant under
Section 145 (2) of the Negotiable Instruments Act. Complainant/respondent had
adopted his pre-summoning evidence and relied upon the documents which are
photocopy of Certificate of Incorporation (Ex.CW1/1), photocopy of invoice (Ex.
CW1/2), Minutes of Meeting of Board of Directors of M/s S.G.Fabrics Pvt. Ltd. (Ex.
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CW1/3), e-Stamp (Ex. CW1/4), Ledger Account of S.G.Fabrics (Ex. CW1/5),
Photocopies of invoices/Challans of S.G.Fabrics (Ex. CW1/7 to Ex. CW1/25),
original cheque bearing no. 000020 dated 14.05.2014 given by appellant to the
respondent amounting to Rs. 26,18,866/- (Ex. CW1/26), Cheque returning memo
dated 16.05.2014 (Ex. CW1/27), legal notice dated 28.05.2014, (Ex. CW1/28),
Postal receipt (Ex. CW1/29), Courier slip of DTDC (Ex. CW1/30) and AD card
(Ex.CW1/31). Complainant/respondent was cross-examined at length by the learned
Counsel for the accused/appellant. During the course of his cross-examination,
CW-1 Sh. Sunil Jain stated that the complainant/respondent company had made
endorsements showing delivery of goods to the accused/appellant. CW1 further
submitted that invoice Ex. CW1/6 to Ex. CW1/21 bear signatures at point ‘X’
regarding the receipt of goods which belonged to an employee of the appellant. He
further stated that invoices Ex. CW1/22 and Ex. CW1/25 bear the signatures of the
appellant.
4.2 After the completion of complainant’s evidence, statement of
accused/appellant was recorded in which, he had stated that he had issued the
cheque in question to the complainant/respondent only for the purpose of security
and not towards discharge of any legally enforceable debt or liability. He further
stated that he had not received any legal demand notice allegedly sent by the
complainant/respondent.
4.3 Thereafter, accused/appellant had led the defence evidence and got
examined himself as DW-1. DW-1, Sh. Vikram Sabharwal, in his examination-in-
chief, deposed that he was engaged in the business of garments and was carrying on
his business in the name and style of M/s V.S. Enterprises, which was a partnership
firm engaged in manufacturing readymade shirts (menswear). He deposed that he
had already made payment for the fabric received from the respondent and that the
respondent had taken the cheque in question, Ex. CW1/26 as a security cheque. He
further stated that although the cheque bears his signatures, the remaining particulars
were not filled in by him. He categorically deposed that he did not receive the legal
notice Ex. CW1/28 and that the address mentioned therein was incorrect. He further
stated that the goods supplied by the respondent were defective and had been
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returned by him. DW1 was cross-examined at length. During the course of his cross-
examination, DW-1 was confronted with the certified copy of arbitration
proceedings dated 12.09.2015 (Ex. DW1/C-1 colly). DW-1 in his cross-examination
admitted that he did not bring any record to show that he had returned the allegedly
defective goods to the complainant. He further admitted that he had not made any
written request to the complainant for return of the cheque. DW1 also expressed his
inability to recall the exact dates when the defective goods were received. In the
later part of his cross-examination, the DW-1 stated that he had not brought any
documents regarding return of fabric to the complainant and explained that due to
shifting of his office, the relevant documents, including bill books and order books
had been misplaced. He also admitted that he had not lodged any police complaint
regarding the missing of such documents.
5. Findings given by Learned Trial Court
5.1 Learned Trial Court after the appreciation of evidence, rejected the
defence of the accused/appellant and held that having regard to Section 118 and 139
of the Negotiable Instruments Act, the complainant/respondent is entitled for
presumption that the cheque was issued for consideration and towards the discharge
of the liability and accused/appellant had failed to rebut the said presumption.
Learned Trial Court has observed that undisputedly Sh. Sunil Jain is the Director in
the complainant company and as such asking for specific authorization from him to
depose would be a hyper- technical approach. Learned Trial Court had further
observed that the contention that the appellant had not filed the remaining entries in
the cheque is also devoid of any merit and deserves to be rejected. Learned Trial
Court had also observed that it has been time and again clarified by the Hon’ble
Supreior Courts that whenever a cheque is issued, it is presumed to be issued in
discharge of liability on the part of the accused and that liability may be an existing
liability or a liability which would crystalize in future. Learned Trial Court had
further observed that there is no corroboration of the fact that the goods supplied by
the respondent was defective and allegedly returned back. It was also observed that a
person who failed to pay within 15 days of the receipt of summons from the court
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alongwith the copy of the complaint cannot contend that there was no proper service
of notice as required under Section 138 of the NI Act. Ultimately, Learned Trial
Court convicted the appellant/accused for the offence punishable under Section 138
of the Negotiable Instruments Act and awarded the compensation of rupees
49,75,845/- to the complainant. In the event of failure to pay the compensation, he
shall undergo simple prisonment of 01 year.
6. Grounds of Appeal
6.1 As, learned trial court had convicted the accused, therefore he had
moved the present appeal and in the grounds of appeal accused/appellant apart from
reiterating the contents of complaint stated that the Hon’ble Court had passed the
impugned order without applying the judicial mind as well as without the presence
of any relevant piece of evidence. It is further stated that impugned judgment is
completely based on the presumption under Section 139 of the NI Act which is not a
right legal approach. It is further stated that no relevant documents
supporting/corroborating his case was provided by the respondent qua the raising of
the presumption. It is further stated that the learned Trial Court had considered that
since the appellant has admitted that he has signed the cheque in question the
presumption under Section 139 of the Act is raised and must be disproved by the
appellant in the light of preponderance of probability. Although, the Learned Trial
Court has discharged the onus probandi on the respondent to state that appellant is
the holder in due course of the said cheque. It is further stated that it was alleged
that there existed an enforceable legal debt/liability upon the appellant against which
the appellant issued the cheque in question is based upon the statement of the
respondent only. It is pertinent to mention here that the presumption as under
Section 139 of the Act works as a presumption of evidence and in no way the same
can conflict the presumption of innocence which requires the prosecution to prove
their case beyond reasonable doubt.
6.2 It is further stated that Learned Trial court had failed to appreciate that
on, 15.07.2017, one Sunil Jain was cross examined by the appellant counsel and he
had admitted that he had not been authorised to depose as a witness. It is furtherPage Number 5
stated that the respondent in his testimony had admitted that he could not say if the
address of the appellant mentioned in the legal notice Ex. CW1/28 is the correct
address of the appellant or not. Therefore, the delivery of notice itself is
questionable. It is further stated that in order to constitute the offence under Sec 138
N I Act service of the notice u/s 138 NI Act is a must and in the absence of the same
ingredients of the offence U/S 138 NI Act is missing. It is further stated that
admittedly it is on record that the respondent was having the another address of the
appellant but he deliberately chose not to send the legal notice on that address of
Pitampura, Delhi. Therefore, it can be said that the pre-condition of the filling of the
complaint u/s 138 NI Act has not been satisfied. It is further stated that on
24.02.2018, appellant had deposed that he had not received legal notice Ex. CW1/28
from the respondent as the address mentioned on the same is incorrect and the
counsel for the respondent had also failed to give any suggestion regarding the
receipt of legal notice.
6.3 It is further stated that the cheque in question was not issued towards
recovery of a legally recoverable debt or lability and the respondent had misused the
blank signed security cheque. The trial court has wrongly convicted the appellant on
the basis of incorrect appreciation of evidence on record. It is further stated that only
invoices did not establish any liability of the appellant. It is pertinent to mention here
that the respondent had admitted that the vehicle number by which goods were
delivered was not mentioned on the invoices, the unsigned and unacknowledged
invoices did not establish the case of the respondent. It is stated that respondent had
not filed any account statement to prove the liability of the appellant and this
lacunae is fatal in nature. It is stated that the respondent did not file any Resolution,
Authority, Power of attorney etcetra as the complainant is a company and it can
only authorise somebody to depose on its behalf. The appellant has assailed the
impugned judgment primarily on the grounds of improper appreciation of evidence,
absence of proof of legally enforceable liability, and non-compliance of mandatory
requirements under the Negotiable Instruments Act, including service of legal
demand notice. It is therefore requested to admit the present Appeal against the
judgment dated 05.11.2024 and order of sentence dated 04.12.2024 passed by thePage Number 6
court of SH. Pritu Raj, Learned Judicial Magistrate First Class and set-aside the
impugned judgment dated 18.09.2023 and order of sentence dated 18.09.2023
passed by the court of Sh. M.Z KHAN, learned Judicial Magistrate First Class in the
case titled as Kuldeep Singh VS. Vikram Sabherwal.
7. ARGUMENTS
7.1 Submissions heard on behalf of both the parties. All the relevant
judgments alongwith judicial precedents perused carefully. During the course of oral
submissions, Learned Counsel for the appellant/ accused submits that accused has
successfully rebutted the presumption under Section 139 of Negotiable Instruments
Act and had raised the plausible defence which was not accepted by the Learned
Trial Court. Learned Counsel for the accused/appellant has also raised questions
regarding the delivery of goods and submitted that defective goods were already
returned and now appellant has no liability towards the respondent. It is also
contended by appellant that the there is no mandatory service of legal notice. On the
other hand, Learned Counsel for the respondent/ complainant has refuted the
submissions of Learned Counsel for the appellant/ accused and contended that
Learned Trial Court has passed the well reasoned order. It is also submitted that
legal notice was well served upon the appellant as it was sent on correct address. It
is also submitted that in the overall circumstance there is no mandatory requirement
of resolution in favour of appellant.
7.2 Ld. Counsel for the appellant has also filed the detailed written
submissions in which once again apart from reiterating the contents of the complaint
and appeal, it is stated that the Learned Trial Court had failed to appreciate that on
15.07.2017 one Sunil Jain who was cross-examined by the learned counsel for the
accused/appellant had admitted that he was not authorized to depose as a witness
and volunteered to file proper documents in that regard though on the same date
evidence of the complainant/respondent was closed by the counsel for the
complainant/respondent. It is further stated that the respondent in his testimony had
also admitted that he could not say if the address of the accused/appellant mentioned
in the legal notice Ex. CW 1/28 is the correct address of the accused/appellant or
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not. It is further stated that in order to constitute the offence under Section 138 NI
Act service of the notice under Section 138 NI Act is a must and in the absence of
the same ingredients of the offence under Section 138 NI Act is missing. It is further
stated that on 24.02.2018 the accused/appellant had deposed that he has not received
legal notice Ex. CW 1/28 from the respondent and the address mentioned on the
same is incorrect. The Learned Counsel for the respondent had not given any
suggestion regarding the receipt of the legal notice. It is further stated that the
cheque-in-question was not issued towards recovery of a legally recoverable debt or
liability and the respondent had misused the blank signed security cheque. It is
further stated that the respondent had admitted that the vehicle number by which
goods were delivered was not been mentioned on the invoices. The unsigned and
unacknowledged invoices did not establish the case of the respondent. It is further
stated that the respondent had also not filed any ledger account to show the liability
of the accused/appellant and this lacuna is fatal in nature and therefore the Trial
court has wrongly convicted the accused/appellant on the basis of incorrect
appreciation of evidence. It is further stated that the respondent has not filed any
resolution, authority, power of attorney etcetra especially, when the respondent itself
admitted that he had not been authorized to depose as witness. It is further stated that
the accused/appellant was having another address and respondent deliberately chose
not to send the legal notice on House Number 105, Vidya Vihar, West Enclave,
Pitampura, Delhi. Reliance is placed upon following judgments viz RL Verm &
Sons (HUF) vs. PC Sharma, AIR Online 2019 DEL 940, Ms. Narayan Menon @
Mani vs. State of Kerala, 2006 (2) JCC (NT) 198; Lalit Narayan Thakkar vs.
Narendra Gajanan Sharma on 1st April, 2024 (2024:BHC-AUG:6882); A. C.
Narayanan Vs. State of Maharashtra & Anr. on 13 September 2013, (2019
(3( JCC1988). All these judgments have been perused very carefully vis-a-vis the
facts of the case.
7.3 Ld. Counsel for the respondent has also filed the written submissions in
which once again apart from reiterating the contents of complaint, his testimony it is
stated that appellant is habitual defaulter and many cases are pending against him. It
is further stated that the appellant has always avoided to appear în person even
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before this Hon’ble Court. The attention of the Hon’ble Court is brought to the
application dated 5.3.2025 of the appellant accompanied by the medical certificate,
wherein the appellant has given his address of 105, Vidya Vihar, Western Enclave,
Pitampura, Delhi and had gone to the doctor at Gaur Plaza. Shalimar Garden,
Extension II, Sahibabad, Ghaziabad. It is raised that appellant was so sick that he
was unable to come to the court but went to the doctor several kilometers away
which is not understandable. It is further stated that the appellant has concealed
material facts regarding his participation in arbitration proceedings. It is further
stated that the learned Trial Court had passed the order of conviction and sentence
the Ld. Trial Court after considering evidence and sufficient documents filed on
behalf of the respondent. It is further stated that in the cross examination of Sunil
Jain the director of the complainant company which took place after almost 7 years
of filing of the complaint, the Authorized Representative might not have
remembered the facts of authorization as all relevant documents including the
certificate of incorporation, list of directors and the resolution were on record. It is
further stated that the appellant had received the legal notice which was addressed at
the same address as was appearing on the bills raised by the respondent upon the
appellant and there is on record the Acknowledgment Card signed by the appellant.
It is stated that the cheque in question was issued towards legally recoverable debt
and the respondent had never misused the cheque. The cheque was issued after the
fabric was delivered to the appellant and few of the bills bear the signatures of the
appellant himself and few are signed by the staff of the appellant. It is further stated
that the outstanding bills were for the year 2013 and the cheque is of date
14.05.2014 as such by any stretch of imagination the cheque cannot be treated as a
security cheque.
8. Reasons & Analysis
8.1 First, of all, it seems relevant that questions with respect to appeal filed by the
appellant/ accused be formulated. Accordingly, following questions are hereby
framed, (a) Whether the impugned judgment, dated 05.11.2024 and order of
sentence dated 04.12.2024, are tenable in the eyes of law ? (b) Whether the
complainant has proved his contentions qua the cheque in question beyond the
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reasonable doubt or whether the accused is successful in proving his defence in
terms of the preponderance of probabilities? Doubtless that a presumption has to
be raised under Negotiable Instruments Act, regarding every instrument, under this
Act was made or drawn and that it was executed for discharge of debt or liability for
consideration by applying Section 3 of the Indian Evidence Act to the provision of
Section 118 and 139 of the Act. Upon the discharge of burden of proof by the
complainant qua the execution of note by the accused, the rules of presumptions
under Sections 118 and 139 of the Act help him shift the burden on the accused. The
use of the phrase “until the contrary is proved” in Section 118 of the Act, and use of
the words “unless the contrary is proved” in Section 139 of the Act read with
definitions of “may presume” and “shall presume” as given in Section 4 of the
Evidence Act, makes it at once clear that presumptions to be raised under both the
provisions are rebuttable. In order to draw the presumption under Section 118 read
with Sections 139 and 138, the complainant has to show 1) that he had the requisite
funds for advancing the sum of money to the accused; 2) that the issuance of cheque
by the accused for repayment of money advanced was true; 3) that the accused was
bound to make the payment as he had agreed to do so while issuing the cheque in
favour of the complainant.
8.2 Section 139, however, helps the holder by drawing a presumption that the
cheque was issued to him in discharge of a debt or liability. The burden of proving
that this was not so is put on the drawer. Though, Hon’ble Supreme Court is by way
of many judgments has held that the presumption does not absolve the complainant
of burden of proving the details of the existing debt or liability. What was the
background transaction, what amount of debt or liability it created, what was the due
date for payment, et cetera essentials details cannot be left to the care of the
presumption. Thus, the role of Section 139 is very important and relevant as it raised
the presumption that a cheque is issued in discharge of debt or other liability. This
presumption can be rebutted by adducing evidence and burden on proof is on the
person who wants to rebut the presumption. An accused discharging this burden of
proof need not examine himself but may even rely upon the material already
brought on record. There also exists the concept of strict liability which is basically
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to promote the greater vigilance in financial matters and to safeguard the faith of the
creditor in the drawer of cheque which is essential to the economic life. Presumption
of innocence vis a vis the doctrine of reverse burden introduced by Section 139
should be delicately balanced. At the same time, it needs to be understood that a fact
is said to be proved, when after considering the matters before it, the court either
believe it to exist, or consider its existence so probable that a prudent man ought,
under the circumstances of certain case, to act upon the supposition that it exists.
Therefore, the rebuttal must be in the form that either you believe the defence to
exist or consider its existence to be reasonably probable, the standard of
reasonability being that of prudent mind.
8.3 To be specific, presumption arising under Section 139 of the Act can be
rebutted by adducing evidence and the burden of proof is on the person who wants
to rebut the presumption. Under Sections 139 and 118 NI Act, once the signatures
on the cheques have been admitted by the accused, there is a reverse onus on the
accused to prove that there was no existing debt or liability. When a presumption is
rebuttable, it only points out that the party on whom lies the duty of going forward
with evidence, on the fact presumed and when that party has produced evidence
fairly and reasonably tending to show that the real fact is not as presumed, the
purpose of the presumption is over. Something probable has to be brought on record.
A presumption is not in itself evidence, but only makes a prima facie case for a party
for whose benefit it exists. It needs to be mentioned/pinpointed that the standard of
proof lying upon the accused to rebut the presumption is preponderance of
probabilities. Inference of preponderance of probabilities can be drawn not only
from the materials on record but also by reference to circumstances upon which he
relies. Though, at the same time it needs to be clarified that prosecution must prove
the guilt of an accused beyond all reasonable doubt. Reliance is placed upon the
book titled as Banking & Negotiable Instruments written by Sh. Avtar Singh as well
as upon the judgments Goaplast (P) Ltd. v. Chico Ursula D’souza and another 2003)
3 M.S Nayanaa Menon Mani v. State of Kerala & Anr. (2006) 6 SCC 39, Krishna
Janardhan Bhat v Dattaraya G. Hedge (2008) 4 SCC 54, Kumar Exports v Sharma
Carpets (2009) 2 SCC 513, Rangappa v Sri Mohan 2010 VAD (SL), John K. John v.
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Tom Varghese 2007 (4) LR (218) SC, M/s Kushal Infraproject Industries India Ltd.
v. M/s RL Varma & Sons Cr. L.A. 657/2025 decided on 28.06.2025 by Hon’ble
Delhi High Court and Basanlingappa vs. Mudibasappa AIR 2019 Supreme Court
1983.
8.4 Thus, the main object of the Negotiable Instruments Act is to legalise the
system by which instruments contemplated by it would pass from hand to hand by
negotiatgion like any other goods. The purpose of the Act was to present an orderly
and authoritative statement of the leading rules of law relating to the negotiable
instruments. Now, adverting to the present appeal undoubtedly, the cheque in
question was dishonoured on presentation for encashment, vide returning memo,
dated 16.05.2014. Also, regarding the legal notice issued by the respondent after the
dishonour of the cheque in question doubtless that a properly served legal notice is a
must for maintainability of case of cheque bounce as laid in Shakti Travel & Tours v.
State of Bihar (2002) 9 SCC 415. The law regarding legal notice for cheque bounce
is elaborated in S.138(b) and (c) of the NI Act which reads as under. Section 138 (b)
of NI Act provides that “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.” Section 138 (c) of NI Act provides that “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.”
8.4(a) The basic object of notice is to give a chance to the drawer of the cheque to
rectify his omission and also to protect an honest drawer. Service of notice of
demand in clause (b) of the proviso to Section 138 is a condition precedent for filing
a complaint under section 138. Though no form of notice is prescribed in clause (b)
of the proviso to Section 138, the requirement is that the notice shall be given in
writing within fifteen days (now 30) of the receipt of information from the bank
regarding return of the cheque as unpaid and in the notice a demand for payment of
the amount of the cheque has to be made. Qua receipt of notice within the meaning
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of Section 27 of the General Clauses Act a service by post becomes effective at the
time at which the letter would be delivered in the ordinary course of post. The Act
does not prescribe any mode of service. Deemed service is to be accepted on the
facts of each case. Where the notice was despatched by the sender by post with
correct address, the court said it could be deemed served unless the addressee proved
that it was not really served. In the present case, respondent had relied upon one
acknowledgment card allegedly signed by the appellant and not disputed by the
latter at any stage of case. It is also to be noted that some of the bills which were
undisputedly (as never questioned either in the cross-examination of CW1 or
explained at any other stage) signed by the appellant also contained the same address
as that of the legal notice and the acknowledgment card. Further, it is not wrong to
point out here that the drawer who says that he did not receive the notice but has
received a copy of the complaint can make payment within 15 days and on that
basis can make a prayer that the complaint be not proceeded with. Thereafter, he
would not be able to say that he did not receive notice. Reliance is placed upon K.
Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510: (1999) SCC (Cri) 1284,
Mujaffar Hussain Mansoor v. Devendra Trivedi, 2008 SCC OnLine MP 629, Fatima
Begum v. Mohd. Sajid Alam Chowdhury, 2007 SCC OnLine Gau 59, Indo
Automobiles v. Jai Durga Enterprises (2008) 8 SCC 529, (2001) 3 SCC 609 and
C.C.Alavi Haji v. Palapetty Muhammed, (2007) 6 SCC 555: (2007).
8.4(b) Respondent has also raised allegations with respect to the status of Sh. Sunil
Kumar Jain who according to the respondent had deposed without any authority. It
is to be noted that Sh. Sunil Kumar Jain alongwith Ms. Alka Jain are part of the
certificate of incorporation of the respondent company S.G.Fabrics Pvt. Ltd. and the
documents in question have already been exhibited as Ex. CW1/1 and Ex. CW1/2.
Also, as according to the Minutes of Meeting of Board of Directors of S.G.Fabrics
Pvt. Ltd. Sh. Sunil Kumar Jain was authorized to file the criminal complaint as well
as given the authority to defend the cases against Sh. Vikram Sabharwal. General
Power of Attorney in favour of Sh. Sunil Kumar Jain has also addressed various
aspects qua the delegation of power by the company to him regarding the
appearance/presence/taking care of litigation and the relevant documents in that
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regard are Ex. CW1/3 and Ex. CW1/4 respectively. Reliance is placed upon Surana
Securities Ltd. v. G.Kamalakar, 2007 SCC OnLine AP 944, Meghnath Sarika v.
Xinmin, 2008 SCC OnLine Gau 649 and J.K.Industries Ltd. v. Babu Tyres, AIR
2008 (NOC) 2288 (Mad). Further, it needs to be pinpointed that respondent has
relied upon various entries pertaining to the ledger account of Vikram Sabharwal
and some of the entries are signed by the appellant himself. The fact which is
neither denied by the appellant nor the respondent was cross-examined on that point
and thus his testimony remains unassailable regarding the same. Therefore, raising
presumption in favour of respondent is not wholly wrong or in another way it can be
said that the presumption do arise in favour of the respondent. Though, at the same
time, it should not be out of sight that appellant had also raised his defence as per the
scheme of the Act. Appellant had stated in his statement recorded under Section
313 of the Code of Criminal Procedure that he had given the cheque in question for
security purpose and also deposed similarily in his defence evidence though without
exactifying the sequence of the events that when and what was the occasion to hand
over the alleged security cheque to the respondent. It is deposed by
appellant/accused that cheque in question was given as security cheque and that he
had already made the payment of goods received and further that he had also
returned back the defective goods. Apart from making the sham submissions no
relevant document/piece of evidence put forward to act upon by the appellant. Had
there been any such apprehension appellant would have asked the respondent to
return back his cheque or raise complaint before appropriate forum in that regard if
respondent was not returning the same. Nothing has been put on record by the
appellant despite having opportunities to substantiate his claim of either having
made the complete payment of goods delivered or even qua alleged return of
defective goods. There is no iota of evidence viz. any books of account, slip, notice,
photograph etcetera in that aspect placed on record by the appellant. Also, if a
signature on the cheque stands admitted, it assumes to be a sufficient trigger to make
presumption under Sectioin 139 of the Negotiable Instruments Act. It is also to be
noted that failure to honour the cheque at any stage even when originally
issued as security is deemed as a commission of an offence under
Page Number 14
Section 138 of the Negotiable Instruments Act. Reliance is placed upon ICDS Ltd.
v. Beena Shabeer (2002) 6 SCC 426 and Bir Singh v. Mukesh Kumar (2019) 4 SCC
197. Once it was held that the cheque pertains to the account of the appellant/
accused and that was issued by him, the presumption under Section 118 of
Negotiable Instruments Act to the effect that cheque was issued for consideration
and the presumption under Section 139 of the NI Act that the cheque was issued for
discharge of liability arise. The appellant/accused failed to rebut the said
presumption by adducing cogent, consistent and acceptable evidence. Alongwith,
appellant/accused has also failed to rebut the presumption which was
raised/established in favour of respondent/complainant either by way of drawing
inference from the material brought on record by both parties or by reference to the
relevant circumstances. Therefore, it is held that Learned Trial Court has rightly
convicted appellant/ accused for the offence under Section 138 NI Act and no
ground is made out to interfere with the said judgment.
8.5 Lastly, during the course of oral arguments, Learned Counsel for the appellant
had also raised questions with respect to exaggerated amount of compensation and
relied upon Sanjabij Tari v. Kishore S. Borcar & Anr. 2025 Live law SC 952 and
Damodar S. Prabhu v. Sayed Babalal H. 2010 5 SCC 63. It is also submitted by the
Learned Counsel for the appellant that without any specific reason appellant can’t be
made to pay double the amount as compensation. It is further submitted that the
appellant had never shied from the court proceedings and this behaviour of him
respecting the court should also be taken into account while, considering his request
to amend the sentencing order. On the other hand, Ld. Counsel for the respondent
has requested that further strict punishment be given to the appellant. Keeping, in
view the overall circumtances, in the interest of justice and forwarding the ends of
justice, the sentencing order is modified to the extent that he should pay the fine of
rupees 26,18,866/- (Twenty Six Lakhs Eighteen Thousand Eight Sixty Six Rupees),
to be paid as compensation under Section 357(3) of the Code of Criminal Procedure
alongwith simple interest @ 9% per annum to the respondent from institution of the
original suit till its payment. In default of payment of same, the appellant shall
undergo simple imprisonment for the period of one year. Thus, order on the sentence
Page Number 15
is modfied to that limited extent. Reliance is placed upon Suresh Venkataraman Bhat
v. Rajashekharan Lowda in Ciminal Revision Petiton Number 1307/2010 dated
15.12.2020 by Hon’ble Karnataka High Court.
Mr. Vikram Sabharwal is thus directed to pay the entire compensation
amount to the respondent by 07.05.2026 failing which he shall surrender before the
Learned Trial Court on the said date at 2:00 PM. In the eventuality of his failure to
pay the compensation, Learned Trial Court shall enforce the sentence as per law.
Appeal of appellant is disposed off accordingly.
8.6 Trial Court record be segregated and returned to the Learned Trial Court with
copy of this judgment and thereafter, appeal file be consigned to Record Room.
(Manu Vedwan)
Additional Session Judge-2/
Special Judge (Narcotic Drugs And Psychotropic Substances)
East/Karkardooma/Delhi/06.04.2026
MANU
VEDWAN
Digitally signed
by MANU
VEDWAN
Date: 2026.04.06
16:51:37 +0530
Page Number 16
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