Delhi District Court
Jaskaranjit Singh Hayre vs Gaurav Chamaira on 26 July, 2025
IN THE COURT OF MS. SHEETAL CHAUDHARY PRADHAN
ADDL. SESSIONS JUDGE-02 : SOUTH EAST DISTRICT
SAKET COURT : NEW DELHI
Criminal Appeal No. 310/2014
PS- K.M. Pur
U/Sec. 138 NI Act
In The Matter Of :-
Jaskaranjit Singh Hayre
S/o Sh. Kamaljit Singh Hayre
R/o H. No. 326, Chhoti Baradari Part- II
Garha Jalandhar, Punjab- 144022
........ Appellant
Versus
Gaurav Chamaria
S/o Sh. Nirmal Kumar Chamaria
R/o C-55, Ground Floor
South Extn. Part- I
New Delhi -110049
.......Respondents
Date of Institution : 26.09.2024
Date of Arguments : 03.07.2025
Date of pronouncement : 26.07.2025
Decision : Appeal Dismissed.
Judgment & Order On
Sentence by Ld. Trial Court,
Stands Upheld.
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JUDGMENT
1. Appellant namely Jaskranjit Singh Hayre has filed present appeal
thereby challenging judgment of conviction dated 06.07.2024 and Order
on Sentence dated 07.09.2024 passed by Ld. Trial Court in Complaint
Case No. 41869/2019 titled as “Gaurav Chamaria Vs. Jaskaranjit Singh
Hayre” vide which accused/ appellant was held guilty of the offence
punishable u/sec. 138 NI Act, and sentenced to simple imprisonment for
a period of three months and to compensation of Rs. 56,00,000/- with a
simple interest @ 9% per annum from the date of filing of the complaint
till making the actual payment of compensation and in default, further
simple imprisonment of one month.
2. Appellant/ convict herein was the accused and respondent herein
was the complainant before Ld. Trial Court. In order to avoid any
confusion, both the parties shall be referred with the same nomenclature
with which they were referred before Ld. Trial Court, in my subsequent
paragraphs.
3. The factual backdrop giving rise to the present challenge, in brief
are that :-
“That the complainant had provided various services/
consultancy to the accused related to launch, marketing
and operations of his business/brand “Papa Whiskey”.
The services were provided between the period April
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2018 to December 2018 for which an amount of Rs.
56,00,000 was agreed to be paid by the accused to the
complainant. An agreement to that effect executed on
08.03.2019. As per the agreement, monthly
installment(s) starting from 03.09.2019 and ending on
03.09.2024 along with 14% interest was to be paid.
Towards which 6 post-dated cheques were provided by
the accused to the complainant. Subsequent to the
execution of agreement, on 04.09.2019 the accused
approached the complainant and offered a one-time
settlement then accused handed him over two cheques
of Rs. 28,00,000 each dated 01.09.2019 bearing nos.
622045 and 622046 drawn on PNB, Defence Colony,
Jalandhar, in favour of the complainant in discharge of
his liability, with assurance that both the cheques shall
be honoured on presentation. On presentation, both the
aforesaid cheques returned unpaid with reason “account
blocked” vide return memo dated 06.09.2019.
Complainant got issued a legal notice dated
21.09.2019. Notice was duly delivered to the accused
but no payment was made by him. Hence, being
aggrieved, the Complainant filed the present complaint
under section 138 of the NI Act.”
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4. Thereafter, pre-summoning evidence was led by the complainant
and accused was summoned vide order dated 19.03.2021.
5. On 04.11.2022, accused tendered his appearance and he was
admitted to bail vide said order and thereafter Notice u/sec. 251 CrPC
was framed against him by Ld. Trial Court on 03.12.2022. Accused did
not plead guilty and claimed trial. In his plea of defence, accused had
stated that “The complainant had to provide the services as per the
agreement entered between me and the complainant. The complainant did
not provide me any service which he was required to provide under the
agreement. As per the agreement, my installments had to start from
03.09.2019 after providing of services by the complainant. On
04.09.2019, the complainant presented both the cheques and got them
bounced. The agreement was 05 years agreement starting from
03.09.2019 till 2024. The cheques in question were security cheques
which were to be presented after 2024 if I did not pay, had the
complainant given services.”.
6. In the meanwhile, an application u/sec. 143A NI Act was filed by
the complainant which was allowed with the direction to the accused to
pay interim compensation of Rs. 5,60,000/- to the complainant within 60
days from passing of said order i.e. 17.05.2023, which was challenged by
the accused and thereafter Ld. Sessions Court vide its order dated
08.08.2023, aforesaid interim compensation was reduced to Rs.2,80,000/-
being 5% of the cheque amount. Thereafter, on 13.10.2023, aforesaid
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reduced amount of Rs. 2,80,000/- was paid by way of Demand Draft to
the complainant by the accused. Matter was then fixed for complainant
evidence.
7. During trial, complainant examined only himself as CW1 and
tendered in evidence his affidavit Ex.CW1/7 and also relied upon the
documents viz :-
Ex.CW1/2- Cheque bearing no. 622046 dated 01.09.2019.
Ex.CW1/3- Cheque bearing no. 622045 dated 01.09.2019.
Ex.CW1/4- Cheque return memo dated 06.09.2019.
Ex.CW1/5- Complaint.
Ex.CW1/6- Certificate u/sec. 65B of Indian Evidence Act.
Ex.CW1/7- Evidence by way of affidavit.
Mark A Agreement dated 08.03.2019
Mark E Copy of legal notice dated 21.09.2019, postal receipt and
tracking report.
Mark F Print of reply of legal notice.
8. Complainant was cross-examined at length after which,
complainant evidence was closed vide order dated 06.12.2023 and matter
was fixed for recording of statement of u/sec. 313 CrPC, in which all the
incriminating evidence was put to him upon in which, he denied the case
of the complainant completely and preferred not to lead evidence in his
defence.
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9. Matter was then reserved for pronouncement of judgment after
hearing final arguments.
10. Vide impugned judgment and order on sentence, accused/appellant
was held guilty of the offence punishable u/sec. 138 NI Act, and
sentenced to simple imprisonment for a period of three months and to
compensation of Rs. 56,00,000/- with a simple interest @ 9% per annum
from the date of filing of the complaint till making the actual payment of
compensation and in default, further simple imprisonment of one month.
11. Feeling aggrieved by aforesaid judgment and order on sentence
passed by Ld. Trial Court, present appeal was preferred by the accused
on the followings grounds :-
a) That impugned order has been passed in a most mechanical
manner and the same is otherwise bad, unsustainable, erroneous,
injudicious, illegal and unreason both fact and law and as such liable to
be set-aside.
b) That Ld. Trial court failed to appreciate that the
respondent/complainant has failed to establish the existence of any debt
or liability against the appellant.
c) That Ld. Trial court did not appreciate that the appellant has no
liability towards the complainant. The complainant has filed a false case
against the appellant.
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d) That Ld. Trial court did not appreciate that there exist no legally
enforceable debt and liability against the accused to pay the cheques
amount to the complainant.
e) That accused is engaged in operations of the Restaurants under the
name and style of ‘Papa Whiskey’ (Unit of M/s. HP Hospitality
Partnership and M/s. PH Hospitality Partnership) at various locations
within and outside Punjab.
f) That Ld. Trial court did not appreciate that in the month of March
2019, the complainant had visited the office of accused and represented
and claimed that he is an Service Provider and having an office in Delhi
and he induced and lured the accused by claiming that he can assist /help
the accused in promoting/boosting the aforesaid business at Jalandhar
and Ludhiana and the accused believing upon the representation and
claims made by complainant, got agreed to render the service of the
complainant as ‘Service Provider’.
g) That Ld. Trial Court did not appreciate that on 08.03.2019, the
complainant came to the office of accused and obtained signature of
accused on an agreement and which was a unilateral agreement prepared
by complainant with the intention to commit cheating and fraud upon the
accused and the complainant also took two cheques bearing no. 622045
and 622046 for a sum of Rs. 28,00,000/- each as security and later, the
complainant with his dishonest and malafide intention, has misused the
said cheques by presenting the same to the bank.
h) That said cheques were taken undated and was kept as security
during the period of the agreement and the cheques were not given in
discharge of any liability nor there exist any debt and liability owes by
the accused.
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i) That Ld. Trial Court did not appreciate that due to the aforesaid
illegal act and conduct of the complainant, the accused has lodged a
complaint with Asstt Commissioner of Police, Model Town, Jalandhar
vide Complaint No.3906-PTM dated 11.9.2019. Without prejudice and
without admitting the allegations and contentions made by the
complainant in the present complaint, no such alleged service was
provided by the complainant hence the accused is not liable to pay any
amount as per the payment schedule.
j) That Ld. Trial Court did not appreciate that complainant himself
has alleged in his complaint that on 08.03.2019, accused and complainant
have entered into settlement agreement vide which accused agreed to pay
the said amount of Rs 56 Lacs within a period of 05 years in installments
from September 2019 to September 2024. Hence, it is clear that
complainant has misused the said cheques and presented the same for
encashment before expiry of the agreed period of 5 years.
k) That Ld. Trial court did not appreciate that no such settlement
agreement dated 08.03.2019 was executed between the complainant and
accused and same is nothing but sham, bogus, forged and fabricated.
l) That Ld. Trial court did not appreciate that the present complaint
is false, misconceived and liable to be dismissed as the complainant has
infact misused the cheques in question which was obtained as security
and moreover at the time of presentation of cheques to the banker by the
complainant, no liability of Rs.56,00,000/- accrued against the accused.
m) That Ld. Trial Court did not appreciate that in terms of
explanation of Section 138 of NI Act, the most essential ingredients is
that the liability must be “legally enforceable debt” or “other liability”. It
is indicated that the complainant has failed to prove that he is legally
entitled for the amount claimed by him in the present case.
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12. Ld. Counsel for appellant/ accused has argued that Ld. Trial Court
did not appreciate the falsity in the claim of complainant and impugned
judgment and order on sentence are based on conjectures and surmises.
The impugned judgment has been passed in flagrant violation of the
principle of natural justice. The case of complainant as alleged creates a
doubt in the issuance of the cheques in question which proves that he has
no legal liability against the complainant. It has been argued that
agreement is in question was bogus and sham and hence did not come in
the lap of Evidence act and hence could not be relied for any practical
purposes. It has been argued that Ld. Trial Court did not appreciate the
evidence led by the parties properly. It has been further argued that
impugned judgment of conviction and Order on Sentence passed by Ld.
Trial Court is bad in law and is not sustainable in the eyes of law and
hence is liable to be set-aside. He has relied upon the case laws viz. S.
Saktivel (dead) by LRs Vs. M. Venugopal Pillai & Ors. (2000) 7 SCC
104 and (2) Krishna Janardhan Bhat Vs. Dattatraya G. Hegde, AIR 2008
SC 1325.
13. Per contra, Ld. Counsel for complainant/ respondent has argued
that impugned judgment and order on sentence needs no interference and
appeal must be dismissed. It has been argued that cheque in question was
issued by the accused only and it was signed by the accused and the said
fact has also been corroborated by the accused in his statement recorded
u/sec. 313 CrPC. It has been argued that complainant has succeeded in
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proving his case by leading evidence. It has also been argued that once
the cheque was signed and handed over by accused, it would attract
presumption u/sec. 139 NI Act. It has further been argued that accused
had himself handed over the cheque in question therefore, the question of
misuse of aforesaid cheque, does not arise. Lastly, it has been argued that
accused has failed to dislodge the case of complainant by leading any
cogent evidence during trial. It has been prayed that the presumption as
stated u/sec. 118 and 119 of the NI Act, 1881 are against accused. It has
been argued that accused did not dispute the agreement dated 08.03.2019
even relied upon by him during trial. It has been argued that complainant
has already provided the services as agreed between the parties and
cheque in question was given towards the one time settlement, which was
returned unpaid and therefore, it was never misused by the complainant.
It has been prayed that conviction of accused be upheld and appeal must
be dismissed.
14. I have heard Ld. Counsel for accused/ appellant, Ld. Counsel for
complainant/ respondent and have carefully gone through the record.
15. In order to appreciate and decide present appeal, I find it relevant
to mention here law relating to Section 138 NI Act and with respect to
the presumptions U/s. 118 (a) and 139 NI Act. The said provisions and
the interpretations given by higher echelon of Judiciary, are relevant.
Therefore, they are mentioned below :-
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“138 Dishonour of cheque for insufficiency, etc., of
funds in the account,- Where any cheque drawn by a
person on an account maintained by him with a banker
for payment of any amount of money to another person
from out of that account for the discharge, in whole or in
part, of any debt or other liability, is returned by the bank
unpaid, either because of the amount of money standing
to the credit of that account is insufficient to honour the
cheque or that it exceeds the amount arranged to be paid
from that account by an agreement made with that bank,
such person shall be deemed to have committed an
offence and shall, without prejudice to any other
provisions of this Act, be punished with imprisonment
for (a term with may be extended to two years), or with
fine which may extend to twice the amount of the
cheque, or with both: Provided that nothing contained in
this section shall apply unless-
(a)the cheque has been presented to the bank within a
period of six months from the date on which it is drawn
or within the period of its validity, whichever is earlier;
(b)the payee or the holder in due course of the cheque, as
the case may be, makes a demand for the payment of the
said amount of money by giving a notice in writing, to
the drawer of the cheque, (within thirty days) of the
receipt of information by him from the bank regarding
the return of the cheque as unpaid; and
(c)the drawer of such cheque fails to make the payment
of the said amount of money to the payee or, as the case
may be, to the holder in due course of the cheque, within
fifteen days of the receipt of the said notice.”
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16. Hon’ble Apex Court had the occasion to appreciate and interpret
aforesaid provision in case titled as Kusum Ingots and Alloys Ltd. Vs.
Pennar Peterson Securities Ltd. (2000) 2 SCC 745. In the said judgment
Hon’ble court observed that in order to successfully prosecute the drawer
of a cheque for an offence U/s. 138 NI Act, following facts are required
to be proved successfully.
“a) A person must have drawn a cheque on an account
maintained by him in a bank for payment of a certain
amount of money to another person from out of that
account for discharge of any debt or other liability.
b) That cheque has been presented to the bank
within a period of six months from the date on which it is
drawn or within the period of its validity, which ever is
earlier.
c) That cheque is returned by the bank unpaid,
either because the amount of money standing to the credit
of the account is insufficient to honour the cheque or that it
exceeds the amount arranged to be paid from that account
by an agreement made with the bank.
d) The payee or the holder in the due course of the
cheque makes a demand for the payment of the said amount
of money by giving a notice in writing to the drawer of the
cheque, within 15 days of the receipt of the information by
him from the bank regarding the return of the cheque as
unpaid.
e) The drawer of such cheque fails to make
payment of the said amount of money to the payee or the
holder in due course of the cheque within 15 days of the
receipt of said notice……….”
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“………….Judicial statements have deferred as to the
quantum of rebutting evidence required. In Kundun Lal
Rallaram Vs. Custodian, Evacuee Property, Bombay AIR
1961 SC 1316, this Court held that the presumption of law
under Section 118 of presumption of fact raised under
Section 114 of the Evidence Act. The decision must be
limited to the facts of that case. The more authoritative
view has been laid down in the subsequent decision of the
Constitution Bench in Dhanvantrai Balwantrai Desai v.
State of Maharashtra : 1964 Cri. L 1437 : 1964 Cril 1437,
where this Court reiterated the principle enunciated in State
of Madras v. Vaidyanath Iyer (supra) and clarified that the
distinction between the two kinds of presumption lay not
only in the mandate to the Court, but also in the nature of
evidence required to rebut the two. In the case of a
discretionary presumption the presumption if drawn may be
rebutted by an explanation which “might reasonably be
true and which is consistent with the innocence” of
accused. On the other hand in the case of mandatory
presumption “the burden resting on the accused person in
such a case would not be as light as it is where a
presumption is raised under S.114 of the Evidence act and
cannot be held to be discharged merely by reason of the fact
that the explanation offered by the accused is reasonable
and probable. It must further be shown that the explanation
is a true one. The words ‘unless the contrary is proved’
which occur in this provision make it clear that the
presumption has to be rebutted by ‘proof’ and not by a bare
explanation which is merely plausible. A fact is said to be
proved when its existence is directly established or when
upon the material before it the court finds its existence to be
so probable that a reasonable man would act on the
supposition that it exists. Unless, therefore, the explanation
is supported by proof, presumption created by provision
cannot be said to be rebutted….”
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17. Section 118 (a) and Section 139 of NI Act are mentioned in
verbatim below :-
“Section 118 : Presumptions as to negotiable
instruments,- Until the contrary is proved, the following
presumptions shall be made :-
(a)of consideration – that every negotiable instrument
was made or drawn for consideration, and that every such
instrument, when it has been accepted indorsed,
negotiated or transferred, was accepted, was indorsed,
negotiated or transferred for consideration;”
“Section 139 : Presumption in favour of holder – It shall
be presumed, unless the contrary is proved, that the
holder of a cheque received the cheque of the nature
referred to in Section 138 for the discharge, in whole or
in part, of any debt or other liability.”
18. It is a well settled legal position that presumptions U/s. 118 and
139 NI Act are rebuttable presumptions and burden lies on accused to
prove that he had no liability/debt on the date of issue of cheque. It is also
a settled principle of law that to bring home an offence under any of the
penal provisions, it is essential to prove the case beyond reasonable doubt
and ingredients of offence should be satisfied. Hon’ble Apex court had
the occasion to appreciate said provisions in certain case laws which are
relevant for purpose of adjudication of appeal. Relevant observations of
said case laws are mentioned in my subsequent paragraphs.
19. In case titled as M.S.Narayana Menon Vs. State of Kerala 6 SCC
39 it was held that ;
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“While dealing with that aspect in a case under Section
138 of the Negotiable Instruments Act, 1881, this court
held that presumptions under sections 118 (a) and 139 of
the Act are rebuttable and the standard of proof required
for such rebuttal is preponderance of probabilities and
not proof beyond reasonable doubt. The Court observed:
In terms of section 4 of the Evidence Act whenever it is
provided by the Act that the court shall presume a fact, it
shall regard such fact as proved unless and until it is
disproved. The words “proved” and “disproved” have
been defined in section 3 of the Evidence Act (the
interpretation clause).
Applying the said definitions of “proved or “disproved”
to the principle behind section 118 (a) of the Act, the
court shall presume a negotiable instrument to be for
consideration unless and until after considering the
matter before it, it either believes that the consideration
does not exist or considers the non-existence of the
consideration so probable that a prudent man ought,
under the circumstances of the particular case, to act
upon the supposition that the consideration does not
exist. For rebutting such presumption, what is needed is
to raise a probable defence. Even for the said purpose,
the evidence adduced on behalf of the complainant could
be relied upon.
The standard of proof evidently is preponderance of
probabilities. Inference of preponderance of probabilities
can be drawn not only from the materials on record but
also by reference to the circumstances upon which the
relies.
Therefore, the rebuttal does not have to be conclusively
established but such evidence must be adduced before the
court in support of the defence to exist or consider its
existence to be reasonable probable, the standard of
reasonability being that of the “prudent man”.
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20. Further, in Bharat Barrel and Drum Manufacturing Company Vs.
Amin Chand Pyarelal (1999) 3 SCC 35 it was observed as under :-
“Upon consideration of various judgments as noted
hereinabove, the position of law which emerges is that
once execution of the promissory note is admitted, the
presumption under Section 118(a) would arise that it is
supported by a consideration. Such a presumption is
rebuttable. The defendant can prove the non-existence of
a consideration by raising a probable defence. If the
defendant is proved to have discharged the initial onus of
proof showing that the existence of consideration was
improbable or doubtful or the same was illegal, the onus
would shift to the plaintiff who will be obliged to prove it
as a matter of fact and upon its failure to prove would
disentitle him to the grant of relief on the basis of the
negotiable instrument. The burden upon the defendant of
proving the non-existence of consideration can be either
direct or by bringing on record the preponderance of
probabilities by reference to the circumstances upon
which he relies. In such an event, the plaintiff is entitled
under law to rely upon all the evidence led in the case
including that of the plaintiff as well. In case, where the
defendant fails to discharge the initial onus of proof by
showing the non-existence of the consideration, the
plaintiff would invariably be held entitled to the benefit
of presumption arising under Section 118(a) in his
favour. The court may not insist upon the defendant to
disprove the existence of consideration by leading direct
evidence as the existence of negative evidence is neither
possible nor contemplated and even if led, is to be seen
with a doubt. The bare denial of the passing of the
consideration apparently does not appear to be any
defence. Something which is probable has to be brought
on record for getting the benefit of shifting the onus of
proving to the plaintiff. To disprove the presumption, the
defendant has to bring on record such facts and
circumstances upon consideration of which the court may
either believe that the consideration did not exist or itsCA No. 310/2024 Jaskaranjit Singh Hayre Vs. Gaurav Chamaria Page 16 of 32
non-existence was so probable that a prudent man would,
under the circumstances of the case, shall act upon the
plea that it did not exist.”
“Section 139 of the Act is an example of reverse onus
clause that has been included in furtherance of the
legislative objective of improving the credibility of
negotiable instruments. While Section 138 of the Act
specifies a strong criminal remedy in relation to the
dishonour of cheques, the rebuttable presumption under
Section 139 is a device to prevent undue delay in the
course of litigation. However, it must be remembered
that the offence made punishable by Section 138 can be
better described as a regulatory offence since the
bouncing of a cheque is largely in the nature of a civil
wrong whose impact is usually confined to the private
parties involved in commercial transactions.”
“In the absence of compelling justification, reverse onus
clauses usually impose an evidentiary burden and not a
persuasive burden. Keeping this in view, it is settled
position that when an accused has to rebut the
“preponderance of probabilities”. Therefore, if the
accused is able to raise a probable defence which creates
doubts about existence of a legally enforceable debt or
liability, the prosecution can fail. As clarified in citations,
the accused can rely on materials submitted by
complainant in order to raise such a defence and it is
conceivable that in some cases accused may not need to
adduce evidence of his/her own.”
21. In Case titled as M/s. Kumar Exports Vs. M/s. Sharma Carpets Crl.
Appeal No. 2045 of 2008 passed by Hon’ble Supreme Court of India, it
was held as under :-
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“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. The accused in a trial under Section
138 of the Act has two options. He can either show that
consideration and debt did not exist or that under the
particular circumstances of the case the non-existence of
consideration and debt is so probable that a prudent man
ought to suppose that no consideration and debt existed.
To rebut the statutory presumptions an accused is not
expected to prove his defence beyond reasonable doubt
as is expected of the complainant in a criminal trial. The
accused may adduce direct evidence to prove that the
note in question was not supported by consideration and
that there was no debt or liability to be discharged by
him. However, the court need not insist in every case that
the accused should disprove the non-existence of
consideration and debt by leading direct evidence
because the existence of negative evidence is neither
possible nor contemplated. At the same time, it is clear
that bare denial of the passing of the consideration and
existence of debt, apparently would not server the
purpose of the accused. Something which is probable has
to be brought on record for getting the burden of proof
shifted to the complainant. To disprove the presumptions
the accused should bring on record such facts and
circumstances, upon consideration of which, the court
may either believe that the consideration and debt did not
exist or their non-existence was so probable that a
prudent man would under the circumstances of the case,
act upon the plea that they did not exist. Apart from
adducing direct evidence to prove that the note in
question was not supported by consideration or that he
had not incurred any debt or liability, accused may also
rely upon circumstantial evidence and if the
circumstances so relied upon are compelling, the burden
may likewise shift again on to the complainant. TheCA No. 310/2024 Jaskaranjit Singh Hayre Vs. Gaurav Chamaria Page 18 of 32
accused may also rely upon presumptions of fact, for
instance, those mentioned in Section 114 of the Evidence
Act to rebut the presumptions arising under Sections 118
and 139 of the Act. The accused has also an option to
prove the non-existence of consideration and debt or
liability either by letting in evidence or in some clear and
exceptional cases, from the case set out by the
complainant, that is, the averments in the complaint, the
case set out in the statutory notice and evidence adduced
by the complainant during the trial. Once such rebuttal
evidence is adduced and accepted by court, having regard
to all the circumstances of case and preponderance of
probabilities, evidential burden shifts back to
complainant and thereafter, presumptions under Sections
118 and 139 of the Act will not again come to the
complainant’s rescue.”
22. In Case titled as John K. John v. Tom Varghese 2007 (4) Civil
Court Cases 690 (SC), it was held as under :-
“…..Presumption raised in terms of Section 139 of
the Act is rebuttable. If, upon analysis of the
evidence brought on records by the parties, in a fact
situation obtaining in the instant case, a finding of
fact has been arrived at by the High Court that the
cheques had not been issued by the respondent in
discharge of any debt, in our opinion, the view of
the High Court cannot be said to be perverse
warranting interference by us in exercise of our
discretionary jurisdiction under Article 136 of the
Constitution of India. The High Court was entitled
to take notice of the conduct of the parties. It has
been found by the High Courts of fact that the
complainant did not approach the court with clean
hands. His conduct was not that of a prudent man.
Why no instrument was executed although a huge
sum of money was allegedly paid to the respondent
was a relevant question which could be posed in theCA No. 310/2024 Jaskaranjit Singh Hayre Vs. Gaurav Chamaria Page 19 of 32
matter. It was open to the High Court to draw its
own conclusion therein. Not only no document had
been executed, even no interest had been charged…”
23. The net result in the light of above dictum is that complainant in a
case filed U/s. 138 NI Act has to prove the ingredients of said provision,
beyond reasonable doubt. The presumptions U/Sec. 118 (a) and 139 NI
Act do favour complainant but those presumptions are rebuttable.
Accused can rebut those presumptions based on preponderance of
probabilities. Accused can rebut the aforesaid presumptions on the basis
of material brought on record by complainant.
24. Keeping in mind above mentioned law and understanding of law, I
am proceeding further with the case in hand.
25. It should be noted that there exists a statutory presumption in
favour of the complainant regarding the existence of a legally enforceable
debt. It is for the accused to rebut the said presumption. The burden of
proof to prove that no debt was due upon accused, lies on the accused.
26. Ld. Counsel for accused has argued that Ld. Trial Court did not
appreciate the fact that no settlement agreement dated 08.03.2019 was
executed between the parties as the said agreement was sham, bogus,
forged and fabricated. Further, it has been argued that no services have
been provided by the complainant to the accused and thus cheques in
question were misused by the complainant.
CA No. 310/2024 Jaskaranjit Singh Hayre Vs. Gaurav Chamaria Page 20 of 32
27. The basic limb of the case in hand is the agreement dated
08.03.2019. To deal with this issue, I must mention here the relevant
paragraphs of the aforesaid agreement, in verbatim below :-
(A) The Promoter is involved in operations of the
restaurants under the name and style of “Papa Whiskey
(Unit of M/s HP Hospitality Partnership and M/s PH
Hospitality Partnership)” at various locations within and
outside Punjab;
(B) The Promoter approached the Service Provider to
provide Services (as defined below) in relation to launch,
marketing and operations of: (1) the brand “Papa
Whiskey”; and (ii) “Papa Whiskey” restaurants in
Jalandhar and Ludhiana, being the “Identified
Restaurants” (the “Agreed Scope”);
(C) Pursuant to the above, the Service Provider provided
the following services in relation to the Agreed Scope
between the period April 2018 and December 2018 (the
“Services”) :-
(a) Marketing of the brand and the Identified
Restaurants, on social media, and within his circle of
contacts;
(b) Assistance in setting up, launch and operations the
Identified Restaurants, including but not limited to: (A)
Multiple visits to evaluate suitability of site, which
helped select the optimal site to set up the Identified
Restaurants; (B) Assistance and guidance on negotiation
of rent with landlords, and for other costs with vendorsCA No. 310/2024 Jaskaranjit Singh Hayre Vs. Gaurav Chamaria Page 21 of 32
and suppliers, which lead to a material reduction in set-
up costs for the Identified Restaurants; (C) Assistance in
recruitment and training of staff at the Identified
Restaurants; (D) Review of proposed sites of “Papa
Whisky” restaurants in Delhi, Mumbai and Pune for
expansion plans; (E) Multiple visits to the Identified
Restaurants as a paying customer to evaluate service
quality and give feedback to the Promoter; and (F)
Multiple discussions with, and guidance to, the Promoter
on other aspects concerning the above and the Agreed
Scope from time to time.
(E) The Promoter acknowledges and agrees that the
Service Provider has provided Services to his complete
satisfaction as per Agreed Scope and parameters, and
that no further Services of any nature are due from him –
however, the Service Provider (who has spent substantial
sums of money on his own to provide the Services) has
not yet received any payments in lieu of his Services.
(F) The Promoter acknowledges and agrees that it does
not have any complaints or concerns or disputes or
differences on the quality or purpose of Services
provided by the Service Provider, and does not dispute
the fact that the Service Provider has not paid, and
further does not dispute the amount of Service Provider
Dues (set forth in Clause 1) being due and payable to the
Service Provider for the Services. The Promoter
acknowledges the Service Provider as a bonafide and
acknowledged Debtor for Services provided by him as
described herein.
CA No. 310/2024 Jaskaranjit Singh Hayre Vs. Gaurav Chamaria Page 22 of 32
1. TERMS OF PAYMENT AND SETTLEMENT
(a) The Promoter agrees to pay the Service Provider
Dues (defined below) within the Payment Period (as
defined below) as per the Payment Schedule (as defined
below).
“Service Provider Dues” shall mean an amount of Rs.
56,00,000 (Rupees Fifty Six Lakhs Only) plus an interest
of 14% per annum (compounded quarterly) from August
1, 2018 on a reducing balance basis.
“Payment Period” shall mean the period from September
3, 2019 to September 3, 2024.
“Payment Schedule” shall mean the payment schedule as
set forth in Annexure 1, providing for payment of equal
monthly amounts on the 3rd (third) day of each month,
commencing from September 3, 2019 and ending on
September 3, 2024
(f) The Promoter shall, simultaneous with the execution
of this Agreement, provide 6 undated cheques of Rs
8,50,000 each towards the principal amount of Service
Provider dues. In the event of a non-payment by the
Promoter to the Service Provider on a due date for
payment as per Annexure 1, then in addition to other
rights and remedies set forth herein and available under
applicable law, the Service Provider shall be entitled to
insert the relevant date in the cheques and deposit one or
more of these cheques towards realising the Service
Provider Dues. It is clarified that the cheques are not
provided by way of security but as discharge towards the
Promoters admitted payment liability of Service Provider
Dues.
CA No. 310/2024 Jaskaranjit Singh Hayre Vs. Gaurav Chamaria Page 23 of 32
28. The perusal of the aforesaid contents of the agreement dated
01.09.2019 shows that the complainant has provided his services to the
accused as stated above.
29. Further, the relevant paragraphs of the reply to the Legal Notice
dated 21.09.2019, by the accused is also necessary to reproduce herein
verbatim below :-
“The fact is that my client entered into a agreement with
your client on 08.03.2019 and in the said agreement a
duly signed payment schedule-Annexure-I was attached
which was signed by both the parties in which the mode
of payment and the time duration of the payment to be
made has been duly explained. More so in the agreement
în para no.1 the payment period has also been explained
which was start from September, 3, 2019 and will last in
September, 3, 2024, So there was no occasion for your
client to present the cheques in question for encashment
as my client was not under any obligation to pay above
said amount of the cheques in question to your client.
The fact is that my client has given the cheques in
question as security to your client in lieu of the above
mentioned agreement and the same were not for any
obligation as my client does not owe anything to your
client as alleged in the notice.
Reply Para wise :-
2. That Para No.2 is admitted to the extent that there was
an agreement dated 08.03.2019 between your client and
my client but my client never approach your client in
April, 2018.
CA No. 310/2024 Jaskaranjit Singh Hayre Vs. Gaurav Chamaria Page 24 of 32
3. That said cheques were given as security and my
client never asked you to present the said cheques as my
client does not owe anything to you except the payment
schedule as described in the agreement dated
08.03.2019.”
30. Further, it brings me to the statement given in his defence while
framing Notice against him u/sec. 251 CrPC, wherein he has stated as
under :-
“The complainant had to provide the services as per the
agreement entered between me and the complainant. The
complainant did not provide me any service which he
was required to provide under the agreement. As per the
agreement, my installments had to start from 03.09.2019
after providing of services by the complainant. On
04.09.2019, the complainant presented both the cheques
and got them bounced. The agreement was 05 years
agreement starting from 03.09.2019 till 2024. The
cheques in question were security cheques which were to
be presented after 2024 if I did not pay, had the
complainant given services.”
31. Further, during the cross-examination of CW1- Gaurav Chamaria
(complainant), he has heavily relied upon the aforesaid agreement dated
08.03.2019. The said agreement was witnessed by witnesses namely
Vidur Kanodia and Abhimanyu Bhagat, who are also the business
partners of the accused as alleged by the complainant during his cross-
CA No. 310/2024 Jaskaranjit Singh Hayre Vs. Gaurav Chamaria Page 25 of 32
examination. To substantiate his defence, accused could have brought
them in the witness box to thrash the case of the complainant, but he
chose not to do so. Further, no question was put to the complainant
regarding forging of his signature on the said agreement and simply a
formal suggestion was given in this regard, which is not tenable in view
of the aforesaid contents of agreement. Further, the defence taken by
accused in his reply to the legal demand notice and while framing Notice
u/sec. 251 CrPC, is also not tenable in view of the aforesaid contents of
agreement. Apart from that, on one hand, accused is relying upon the
aforesaid agreement but at the same time, he is denying the execution of
the same as per his convenience, which is not acceptable. Thus, I am of
the considered view that aforesaid agreement was made between the
parties and services as decided between them as per said agreement, have
been rendered by the complainant. Therefore, the aforesaid arguments on
behalf of accused, is not tenable and discarded accordingly.
32. Record further reveals that after rendering the services by the
complainant, aforesaid agreement was executed and thereafter one time
settlement was made on 04.09.2019 and thus two cheques (both dated
01.09.2019) in question to the tune of Rs. 28 Lacs each were accordingly
issued by the accused to the complainant in discharge of his aforesaid
liability. On presentation, said cheques were got dishonoured due to
‘account blocked’.
CA No. 310/2024 Jaskaranjit Singh Hayre Vs. Gaurav Chamaria Page 26 of 32
33. In this case, the question of returning the cheque for ‘insufficient
funds’ does not arise. A cheque bounce due to a ‘account blocked’ is
indeed an offense under Section 138 of the Negotiable Instruments Act.
As seen from the cheque return memo, the reason is ‘account blocked’.
Under Section 138 of the Negotiable Instruments Act, on the reason as
mentioned by the Banker, the prosecution u/sec. 138 Negotiable
Instruments Act can be launched.
34. The case law dealing this issue in hand, is discussed herein below.
In the case of M/s Laxmi Dyechem Vs. State of Gujrat & Ors. CRA
No.1910-1949 /2012 Supreme Court wherein in para no.15 it has been
held that :-
“15. The above line of decisions leaves no room for holding
that the two contingencies envisaged under Section 138 of
the Act must be interpreted strictly or literally. We find
ourselves in respectful agreement with the decision in NEPC
Micon Ltd. (supra) that the expression “amount of money
…………. is insufficient” appearing in Section 138 of the
Act is a genus and dishonour for reasons such “as account
closed”, “payment stopped”, “referred to the drawer” are
only species of that genus. Just as dishonour of a cheque on
the ground that the ‘account has been closed’ is a dishonour
falling in the first contingency referred to in Section 138, so
also dishonour on the ground that the “signatures do not
match” or that the “image is not found”, which too implies
that the specimen signatures do not match the signatures on
the cheque would constitute a dishonour within the meaning
of Section 138 of the Act. This Court has in the
decisions referred to above taken note of situations andCA No. 310/2024 Jaskaranjit Singh Hayre Vs. Gaurav Chamaria Page 27 of 32
contingencies arising out of deliberate acts of omission or
commission on the part of the drawers of the cheques which
would inevitably result in the dishonour of the cheque issued
by them. For instance this Court has held that if after issue of
the cheque the drawer closes the account it must be
presumed that the amount in the account was nil hence
insufficient to meet the demand of the cheque. A similar
result can be brought about by the drawer changing his
specimen signature given to the bank or in the case of a
company by the company changing the mandate of those
authorised to sign the cheques on its behalf. Such changes or
alteration in the mandate may be dishonest or fraudulent and
that would inevitably result in dishonour of all cheques
signed by the previously authorised signatories. There is in
our view no qualitative difference between a situation where
the dishonour takes place on account of the substitution by a
new set of authorised signatories resulting in the dishonour
of the cheques already issued and another situation in which
the drawer of the cheque changes his own signatures or
closes the account or issues instructions to the bank not to
make the payment. So long as the change is brought about
with a view to preventing the cheque being honoured the
dishonour would become an offence under Section
138 subject to other conditions prescribed being satisfied.
There may indeed be situations where a mismatch between
the signatories on the cheque drawn by the drawer and the
specimen available with the bank may result in dishonour of
the cheque even when the drawer never intended to invite
such a dishonour. We are also conscious of the fact that an
authorised signatory may in the ordinary course of business
be replaced by a new signatory ending the earlier mandate to
the bank. Dishonour on account of such changes that may
occur in the course of ordinary business of a company,
partnership or an individual may not constitute an offence byCA No. 310/2024 Jaskaranjit Singh Hayre Vs. Gaurav Chamaria Page 28 of 32
itself because such a dishonour in order to qualify for
prosecution under Section 138 shall have to be preceded by a
statutory notice where the drawer is called upon and has the
opportunity to arrange the payment of the amount covered by
the cheque. It is only when the drawer despite receipt of such
a notice and despite the opportunity to make the payment
within the time stipulated under the statute does not pay the
amount that the dishonour would be considered a dishonour
constituting an offence, hence punishable. Even in such
cases, the question whether or not there was a lawfully
recoverable debt or liability for discharge whereof the
cheque was issued would be a matter that the trial Court will
examine having regard to the evidence adduced before it and
keeping in view the statutory presumption that unless
rebutted the cheque is presumed to have been issued for a
valid consideration.
35. In view of aforesaid appreciation and case law, it is held that
accused has closed the account against which the cheques in question
were issued, shows a malafide intention on the part of the accused.
Further, it is also not of any relevant significance in law to make a
distinction between a situation where the cheque is issued before the
closure of the account or subsequent to the closure of the account. In
other words, where the closure of the account precedes or succeeds, the
issuance of cheque in both the situations, it would be an offence
under Section 138 of the Negotiable Instruments Act. The said cheques
were not issued for any security purpose but were against the liability
upon the accused. The contentions raised by the accused in this regard,
are discarded accordingly.
CA No. 310/2024 Jaskaranjit Singh Hayre Vs. Gaurav Chamaria Page 29 of 32
36. In the present matter, it is not the case of accused that his signature
were forged on the cheques in question as well as on the agreement dated
08.03.2019, rather the same were admitted by accused himself. The
complainant has categorically mentioned the manner in which, cheques
in question were issued by the accused in favour of complainant against
the aforesaid liability. Once, the accused admitted his signature on the
cheques in question Ex.CW1/2 and Ex.CW1/3, the trial court has to
presume that cheques were issued as consideration for a legally
enforceable debt. Reliance in this regard is placed upon the case law
titled as Kalamani Tex & Anr. Vs. P. Balasubramanian (2021) 5 SCC
283. Therefore, in view of the aforesaid appreciation, it can be safely
concluded that cheques in question were issued by the accused in due
liability in favour of the complainant.
37. Further, once execution of the signature on cheques in question is
admittance by the accused, the presumption u/sec. 118(1) of the NI Act
applies in favour of the complainant. Reliance in this regard is placed
upon the case laws titled as Krishna Janardhan Bhat Vs. Dattaraya G.
Hegde (2008) 4 SCC 54. Thus, when the signature on a cheques are
admitted by the accused, there is a very strong view in favour of the
complainant. Where the accused has failed to satisfactorily explain or
proved the circumstances under which the cheques were issued by
accused or failed to explain as to how the given cheques were misused by
the complainant, then it can be safely inferred/ presumed that the cheques
CA No. 310/2024 Jaskaranjit Singh Hayre Vs. Gaurav Chamaria Page 30 of 32
were issued in discharge of legally recoverable debt/liability, in view of
the aforesaid discussion. Therefore, in my considered view, accused has
failed to rebut the said presumption.
38. Rest of the contentions raised by way of present and testimonies of
the parties were extensively dealt with by Ld. Trial Court vide its
impugned judgment, which are not repeated here for the sake of brevity.
39. So, the net result is that, accused did not put his specific case to the
complainant by way of suggestions or by way of putting questions or by
way of documentary evidence. The accused could not bring on record
any evidence or document which could demolish the claim of the
complainant. While cross-examining complainant, accused failed to rebut
the case of complainant and presumptions u/sec. 118/139 NI Act. There
was nothing unreasonable and improbable about the conduct, demeanor
and facts deposed by complainant in his testimony. I believed the
testimony of complainant, to be trustworthy and reliable. Therefore, in
my considered view, the defence raised by accused does not inspire
confidence or meet the standard of ‘preponderance of probabilities’.
40. The grounds of appeal as such, are vague in nature. In the absence
of any relevant material, accused failed to highlight any shortcoming in
the reasoning given by Ld. Trial Court in impugned judgment of
conviction, based on facts and law. Therefore, present appeal has been
filed just for the sake of it. Same did not help his cause.
CA No. 310/2024 Jaskaranjit Singh Hayre Vs. Gaurav Chamaria Page 31 of 32
41. In view of the aforesaid appreciation of record and discussion, I
am of the considered view there is no merit in the present appeal filed by
the accused and the same stands dismissed. Impugned judgment of
conviction dated 06.07.2024 and Order on Sentence dated 07.09.2024
passed by Ld. Trial Court stands upheld.
File be consigned to Record Room after due compliance.
Digitally signed
Announced In The SHEETAL by SHEETAL CHAUDHARY Open Court Today CHAUDHARY Date: 2025.07.26 16:31:58 +0530 [Sheetal Chaudhary Pradhan] ASJ-02, South-East/Saket/Delhi 26.07.2025 CA No. 310/2024 Jaskaranjit Singh Hayre Vs. Gaurav Chamaria Page 32 of 32