# Ashok Ram Dular Vishwakarma @ Ashok Kumar Vishwakarma v. State of U.P. & Anr

- **Citation:** (2021) 2 ILRA 607
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-01-21
- **Case number:** Application U/S 482 Cr.P.C. No. 25059 of 2019
- **Bench:** Mrs. Manju Rani Chauhan
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ashok-ram-dular-vishwakarma-ashok-kumar-vishwakarma-v-state-of-u-p-anr-46855
- **Pages:** 21

## Headnote

(A) Criminal Law - Negotiable Instrument
Act - Sections 118 - Presumptions as to
negotiable instruments , Sections 138 -
Dishonour of cheque for insufficiency, etc.,
of funds in the account , Sections 139 -
Presumption
in
favour
of
holder
-
Complainant being holder of cheque and
the signature appended on the cheque
having not been denied by the Bank -
presumption shall be drawn that cheque
was issued for the discharge of any debt
or other liability - Presumption under
Section 139 is a rebuttable presumption
(Para - 13)

Present matter relates to dishonour of cheque -
accused-applicant caused wrongful loss to the
complainant - failed to make payment of
cheques as demanded by the legal notice -
hence a case for the offence punishable under
Section 138 N.I. Act is made out against him -
Application filed for quashing the summoning
order as well as the entire proceedings of the
Complaint Case under Section 138 of Negotiable
Instrument Act, pending in the Court of
Additional Chief Judicial Magistrate.

HELD:- This Court does not deem it proper to
have a pre-trial before the actual trial begins .
The perusal of the complaint case filed by
opposite party no.2 and the statements of the
complainant and her witnesses under Sections
200 and 202 Cr.P.C. makes out a prima facie
case against the accused at this stage and
there appear to be sufficient ground for
proceeding
against
the
accused.
No
justification to quash the summoning order
and the entire proceedings of the aforesaid
complaint
case
initiated
against
the
applicant.(Para -33)

Application u/s 482 Cr.P.C. rejected. (E-6)

List of Cases cited:-

## Text

_Characters 0–39,989 of 71,857. This is a partial read: ask again with offset=39989 for what follows._

2 All. Ashok Ram Dular Vishwakarma @ Ashok Kumar Vishwakarma Vs. State of U.P. & Anr. 607
(2021)02ILR A607
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 21.01.2021

BEFORE

THE HON'BLE MRS. MANJU RANI
CHAUHAN, J.

Application U/S 482 Cr.P.C. No. 25059 of 2019

Ashok Ram Dular Vishwakarma @ Ashok
Kumar Vishwakarma ...Applicant
Versus
State of U.P. & Anr. ...Opposite Parties

Counsel for the Applicant:
Sri Ram Manohar Mishra, Smt. Ushma
Mishra, Ms. Monika Jaiswal, Sri Sarveshwari
Prasad

Counsel for the Opposite Parties:
A.G.A., Sri Ganesh Shanker Srivastava, Sri
Om Prakash Kannaujia

(A) Criminal Law - Negotiable Instrument
Act - Sections 118 - Presumptions as to
negotiable instruments , Sections 138 -
Dishonour of cheque for insufficiency, etc.,
of funds in the account , Sections 139 -
Presumption
in
favour
of
holder
-
Complainant being holder of cheque and
the signature appended on the cheque
having not been denied by the Bank -
presumption shall be drawn that cheque
was issued for the discharge of any debt
or other liability - Presumption under
Section 139 is a rebuttable presumption
(Para - 13)

Present matter relates to dishonour of cheque -
accused-applicant caused wrongful loss to the
complainant - failed to make payment of
cheques as demanded by the legal notice -
hence a case for the offence punishable under
Section 138 N.I. Act is made out against him -
Application filed for quashing the summoning
order as well as the entire proceedings of the
Complaint Case under Section 138 of Negotiable
Instrument Act, pending in the Court of
Additional Chief Judicial Magistrate.

HELD:- This Court does not deem it proper to
have a pre-trial before the actual trial begins .
The perusal of the complaint case filed by
opposite party no.2 and the statements of the
complainant and her witnesses under Sections
200 and 202 Cr.P.C. makes out a prima facie
case against the accused at this stage and
there appear to be sufficient ground for
proceeding
against
the
accused.
No
justification to quash the summoning order
and the entire proceedings of the aforesaid
complaint
case
initiated
against
the
applicant.(Para -33)

Application u/s 482 Cr.P.C. rejected. (E-6)

List of Cases cited:-

1. Kali Ram Vs St. of H.P. , (1973) 2 SCC 808

2.
Bharat
Barrel
&
Drum
Manufacturing
Company Vs Amin Chand Pyarelal , (1999) 3
SCC 35

3. M.S. Narayana Menon @ Mani Vs St. of
Kerala & anr. , (2006) 6 SCC 39

4. Krishna Janardhan Bhat Vs Dattatraya G.
Hegde , (2008) 4 SCC 54

5. Kumar Exports Vs Sharma Carpets , (2009) 2
SCC 513

6. Rangappa Vs Sri Mohan , (2010) 11 SCC 441

7. Dashrath Rupsingh Rathod Vs St. of Mah. ,
MANU/SC/0655/2014

8. R.P. Kapur Vs. St. of Punj. , AIR 1960 SC 866

9. St. of Har. & ors. Versus Ch. Bhajan Lal &
ors. , 1992 Supp.(1) SCC 335

10. St.of Bihar & anr. Vs. P.P. Sharma & anr. ,
1992 Supp (1) SCC 222

11. Zandu Pharmaceuticals Works Ltd. & ors.
Vs. Mohammad Shariful Haque & anr. , 2005 (1)
SCC 122
608 INDIAN LAW REPORTS ALLAHABAD SERIES
12. M. N. Ojha Vs Alok Kumar Srivastava , 2009
(9) SCC 682

13. Mohd. Allauddin Khan Vs The St. of Bihar &
ors. , 2019 0 Supreme (SC) 454

14. Nallapareddy Sridhar Reddy Vs The St. of
A.P. & ors. , 2020 0 Supreme (SC) 45

15. Rajeev Kaurav Vs Balasahab & ors. , 2020 0
Supreme (SC) 143

(Delivered by Hon'ble Mrs. Manju Rani
Chauhan, J.)

1. This application U/S 482 Cr.P.C.
has been filed for quashing the summoning
order dated 13th March, 2019 as well as the
entire proceedings of the Complaint Case
No. 14 of 2019 (Smt. Gyan Devi Vs. Ashok
Ram Dular Vishwakarma) under Section
138 of Negotiable Instrument Act, Police
Station-Aurai, District-Bhadohi, pending in
the Court of Additional Chief Judicial
Magistrate, Bhadohi, Gyanpur. Further it
has been prayed that during the pendency
of the present application, the further
proceedings of the aforesaid criminal case
be stayed.

2. On 28th June, 2019, a Coordinate
Bench of this Court passed following order:

"Heard learned counsel for the
applicant and learned A.G.A. for the State.

It is submitted by learned counsel
for the applicant that the present matter
relates to dishonour of cheque and the said
matter
can
be
well
considered
by
Mediation Centre of this Court.

It is directed that applicant shall
deposit a sum of Rs. 15,000/- within two
weeks from today with the Mediation
Centre of which 50% shall be paid to the
opposite party no. 2 for appearance before
the Mediation Centre.

The matter is remitted to the
Mediation Centre with the direction that
same may be decided after giving notices to
both the parties.

It is directed that Mediation
Centre
shall
decide
the
matter
expeditiously preferably within a period of
three months. Thereafter the case shall be
listed before appropriate Bench in the
second week of September, 2019.

Till the next date of listing, arrest
of the applicant in Complaint Case No.14
of 2019, (Smt. Gyan Devi Vs. Ashok Ram
Dular Vishwakarma), under Section 138 of
Negotiable Instrument Act, Police Station
Auraiya, District Bhadhoi, pending in the
Court of the Additional Chief Judicial
Magistrate, Bhadohi, Gyanpur, shall be
kept in abeyance.

After depositing the amount,
aforesaid, notice shall be issued to the
parties and in the case the aforesaid
amount is not deposited within the
aforesaid period, the interim protection
granted above shall automatically be
vacated."

3. On 3rd September, 2020, this
Bench passed following order:

"A mention has been made by Ms.
Monika Jaiswal, Advocate holding brief of
Smt. Ushma Mishra, learned counsel for
the applicant to pass over the case.

Learned counsel for the opposite
party no.2 states that on 28.06.2019, the
matter was referred to Mediation Centre,
however, the mediation between the parties
has failed as is also clear from the
Mediation
Report
dated
04.12.2019.
Learned counsel for the opposite party no.2
further states that he has served a copy of
counter affidavit to the learned counsel for
the applicant on 09.12.2019.
2 All. Ashok Ram Dular Vishwakarma @ Ashok Kumar Vishwakarma Vs. State of U.P. & Anr. 609

Two weeks' time is granted to the
learned counsel for the applicant to file
rejoinder affidavit.

Put up on 18th September, 2020
in the additional cause list.

Interim order, if any, is extended
till the next date of listing.

It is made clear that on the next
date, the case will not be adjourned on any
ground."

On
3rd
November,
2020,
following order was passed by this Bench:

"By order dated 28.06.2019,
matter was referred to Mediation Centre.

As per the report of Mediation
Centre dated 04.12.2019, mediation has
failed, after which, matter was listed on
03.09.2020. However, a mention was made
on behalf of Smt. Ushma Mishra on that
date to pass over the case for the day and
two weeks' time was granted to the learned
counsel for the applicant to file rejoinder
affidavit and it was made clear that on the
next date, the case will not be adjourned on
any ground and the matter was posted for
18th September, 2020.

On 29.09.2020 again a request
was made for further time on behalf of the
applicant to file rejoinder affidavit and two
weeks' further time was granted to file
rejoinder affidavit.

Mr.
Sarveshwari
Prasad,
Advocate informs that he has been
instructed by the husband of Smt. Ushma
Mishra, learned counsel for the applicant
to get the matter adjourned. Counsel is
standing
here
and
requesting
for
adjournment without the file and is not
aware of the earlier orders as well as brief
facts of the case.

Learned counsel for opposite
party no. 2 has pointed out that on earlier
occasions also just to linger on the matter,
a request has been made on behalf of the
applicant to pass over the case.

In such a situation, though the
case is passed over but the interim order
granted earlier on 28.06.2019 stands
vacated.

The concerned court below may
proceed with the case in accordance with
law.

List
this
matter
on
25th
November, 2020. "

4. This Bench heard Mr. Sarveshwari
Prasad, Advocate assisted by Mrs. Ushma
Mishra, learned counsel for the applicant,
Sri Ganesh Shanker Srivastava, learned
counsel for complainant/opposite party
no.2 and Mr. Pankaj Srivastava, learned
A.GA. for the State as well as perused the
entire material available on record.

5. The relevant facts, as are borne out
from the records of the present application
are as follows:

"A complaint case has been
moved by opposite party no.2, namely,
Mrs. Gyan Devi Brijlal Bharti on on 3rd
January,
2019
before
the
Court
of
Additional
Chief
Judicial
Magistrate,
Bhadohi at Gyanpur under Section 138 of
the Negotiable Instruments Act, 1881
(hereinafter referred to as the "N.I. Act").
In the said complaint case, it has been
alleged by the complainant that the
accused-applicant was running a business
in
the
name
and
style
of
"M/s.
Vishwakarma Dish Ends Work" (for short
"firm"), which was a partnership firm
having its address at 81-B, General Block,
MIDC, Bhosari, Pune. The accusedapplicant was also running another business
in the name and style of " M/s. Proficient
Industries India Private Ltd." (for short
"company") at the aforesaid place, which
was a private limited company. The
accused-applicant was a partner of the said
610 INDIAN LAW REPORTS ALLAHABAD SERIES
firm and company having the post of
Director and another partner of the said
firm and company was Mr. Phunairam
Chandrikaprasad
Vishwakarma.
The
accused-applicant needed money to expand
his business. The complainant being family
friend was well known to the accusedapplicant.
The
accused-applicant
approached the complainant and requested
her to invest money in the business of the
aforesaid firm/company. The accusedapplicant assured the complainant that if
she invested Rs. 80,00,000/- (rupees eighty
lacs only) in the said firm, he would make
her co-partner in the said firm and give her
50% of the profit of the said firm on yearly
basis. Apart from the above, the accusedapplicant also assured the complainant that
he will give her 25% share in the land
which was owned by the said firm and 25%
profit of every financial year of the said
firm. The complainant was also assured by
the accused-applicant that entire investment
made by the complainant will also be
refunded to her without any deduction at
the time of her retirement from the said
company. On believing the aforesaid
proposal and assurance given by the
accused-applicant,
the
complainant
invested Rs. 80,00,000/- in the said
company through the accused-applicant for
the month September, 2013 to July, 2016.
In the meantime, the business of the said
firm was heavily affected, therefore, all the
transactions and work of the said firm was
stopped
thereafter.
Henceforth,
the
accused-applicant assured the complainant
that she should have no worry, as he will
include her name as director of the said
company and ultimately on 8th November,
2016, the accused-applicant included her
name as director of the said company for
which a Memorandum of Understanding
dated 17th August, 2017 was introduced,
which was duly signed by the complainant
and
accused-applicant.
The
said
memorandum of understanding was also
notarized by Advocate and Notary, namely,
Mr. Bhalachandra Anandrao Patil on 17th
August, 2017.

It has further been alleged in the
aforesaid complaint that due to financial
hardship faced by the said company for the
year 2016-2017, the accused-applicant also
promised the complainant that he would
pay her Rs. 1,00,000/- (rupees one lac only)
per month from April, 2016 but the
accused-applicant
failed
to
pay
the
aforesaid money. Further the accusedapplicant was not loyal in disclosing the
day to day working towards complainant,
hence she used to request the accusedapplicant to disclose the books of accounts,
balance-sheet, profit but he always refused
to disclose the same to her and also used to
abuse her with wrong words. The accusedapplicant had also refused to give 25%
share in the land of the firm and value of
the machinery of the said firm, due to
which a dispute was arisen between the
complainant
and
accused-applicant.
Thereafter due to non-fulfillment of the
terms and conditions of the memorandum
of understanding so introduced between
them, the complainant threatened the
accused-applicant that she will file police
complaint against him and she will also go
to the court for the wrongful acts and
cheating done by him.

It has further been alleged that for
settling the disputes, which had arisen
between the accused-applicant and the
complainant,
the
accused-applicant
promised the complainant that he will
return
initially
investment
of
Rs.
80,00,000/-. He further promised her that
he will also pay Rs. 87,00,000/- towards
shares against the investment made by the
complainant to the accused-applicant. In
consideration of profit, four cheques
2 All. Ashok Ram Dular Vishwakarma @ Ashok Kumar Vishwakarma Vs. State of U.P. & Anr. 611
bearing nos. 041564 dated 7th September,
2018, 041565 dated 14th September, 2018,
041566 dated 21st September, 2018 and
041567 dated 28th September, 2018m
amounting to Rs. 80,00,000/- drawn on
Dena Bank, Bhosari Branch-Pune, which
had been duly signed by the accusedapplicant, were issued in favour of the
complainant and he also requested the
complainant to deposit the same in her
bank accounts for withdrawal. It is also
alleged
that
the
accused-complainant
accepted
his
legal
liability
of
Rs.
87,00,000/- to complainant towards legal
debt and for the said liability, the accusedapplicant issued and handed over various
cheques amounting to Rs. 87,00,000/- to
complainant for discharging his legal
liability to the complainant. On 21st
October, 2018, the complainant deposited
the aforesaid four cheques, which were
issued by the accused-applicant, in Kashi
Gomti Sanyukt Gramin Bank, BranchUgapur, District Bhadohi, wherein the
saving bank account of the complainant
was maintained, for withdrawal of the
money, but same have been dishonoured
and returned from her bank with a remark
"FUNDS INSUFFICIENT" as on 31st
October, 2018 and an intimation of the
same has duly been received by the
complainant on 16th November, 2018 from
her Bank. Thereafter the complainant had
issued legal notice to the accused-applicant
through her Advocate on 22nd November,
2018 at his official address i.e. 81-B/11,
General Block, MIDC, Bhosari, Pune411026, which has also been received on
26th November, 2018. A notice has also
been sent to the accused-applicant at his
residential address i.e. Negla Pagaria Plaza,
Flat No. 43, Pune Nashik Road Bhosari,
Pune-411039, which has been returned
with a remark "unclaimed" R/S dated 10th
December, 2018. It is further alleged that
despite the aforesaid legal notice, the
accused-applicant
has
not
made
any
payment to the complainant in respect of
aforesaid dishonoured cheques. Therefore
such intention of the accused-applicant is to
commit and perpetuate a fraud upon the
complainant and indulge into cheating and
criminal misappropriation. The accusedapplicant caused wrongful loss to the
complainant. The accused-applicant has
failed to make payment of cheques as
demanded by the legal notice, hence a case
for the offence punishable under Section
138 N.I. Act is made out against him.

After filing of the aforesaid
complainant in the court of Additional
Chief Judicial Magistrate, Bhadohi at
Gyanpur under Section 138 N.I. Act,
complainant/opposite party no.2 filed an
affidavit under Section 200 Cr.P.C. on 2nd
January,
2019.
Thereafter,
witnesses,
namely, Devashish Bharti and Sant Lal, in
support of the aforesaid complaint, have
also filed their affidavits under Section 202
Cr.P.C. on 28th January, 2019. The said
complaint case has been registered as
Complaint Case No. 14 of 2019 (Smt. Gyan
Devi Vs. Ashok Ram Dular Vishwakarma)
under Section 138 of Negotiable Instrument
Act,
Police
Station-Aurai,
DistrictBhadohi,
pending
in
the
Court
of
Additional
Chief
Judicial
Magistrate,
Bhadohi,
Gyanpur.
Considering
the
complaint and the affidavits of the
complainant and her witnesses under
Sections 200 and 202 Cr.P.C. respectively,
the
concerned
Magistrate
has
taken
cognizance and summoned the applicant to
face trial under Section 138 N.I. Act vide
order dated 13th March, 2019. It is against
the summoning order dated 13th March,
2019 as well as the entire proceedings of
the aforesaid complaint case that the
present application under Section 482
Cr.P.C. has been filed.
612 INDIAN LAW REPORTS ALLAHABAD SERIES

It is the case of the applicant that
complainant/opposite party no.2 has also
filed a complaint under Section 138 N.I. Act
on
6th
December,
2018
at
Pune
(Maharashtra) in the court of Judicial
Magistrate, First Class-Pinpri at Pinpri for
dishonour of cheque of the accused-applicant
issued in favour of the complainant for a sum
of Rs. 7,00,000/- (rupees Seven lacs only).
The applicant has also filed a civil suit on
30th April, 2019 in the court of Civil Judge
(Senior Division), Pune seeking a direction
upon the complainant/opposite party no.2 to
pay the amount of Rs. 38 lacs to the accusedapplicant at the rate of 18% per annum, a
copy of the plaint dated 30th April, 2019 has
been enclosed as Annexure-6 to the affidavit
accompanying the present application.

6. Following contentions have been
raised on behalf of the applicants:

I. The applicant had cordial
relations with opposite party no.2 and in the
guise of investment, she had tried by way of
investment to interfere not only in the
business of the applicant but also demanded
25% in the land and values of the machinery
of M/s. Vishwakarma Dish Ends Work and
M/s. Proficient Industries (India) Pvt. Ltd.
both situated at 81-B, General Block, MIDC
BHOSARI, Pune-411026.

II. Even though the amount is not
contested but it may be reverted by the
statement of Mr. Devashish Bharti as well as
Shiv Lal in the statements filed under Section
202 Cr.P.C. Opposite party no.2 has been
continuously threatening that she will file
police complaint and will go to the courts of
law, even after receiving the amount due
from the applicant between the period 7th
March, 2018 to 10th August, 2018.

III. Opposite party no.2 filed the
res judicata proceedings in Complaint Case
No. 14 of 2019 before the Additional Chief
Judicial Magistrate, Bhadohi at Gyanpur,
U.P. on 3rd January, 2019 on false,
frivolous and mala fide allegations that on
the assurance of the applicant, opposite
party no.2 has agreed to invest a sum of Rs.
80,00,000/- from the month of September,
2013 to July, 2016.

IV. Opposite party no.2 had
threatened the applicant to return not only
the principle amount due but also added Rs.
7 lacs over and above the principle amount
(which has already been paid) to which a
parallel proceedings were initiated by her
against
the
applicant
by
means
of
Complaint Case No. 2917 of 2018 before
the Judicial Magistrate, First Class Pimpri
at Pimpri, Pune (Maharashtra).

V. Prior to even establishing the
right to recovery from the cheques in
contention, it is disclosed that the entire
amount of Rs. 80 lacs had already been
paid to opposite party no.2 by the applicant
through four cheques i.e. (i) cheque no.
111185 amounting to Rs. 14,00,000/-, (ii)
cheque no. 36963 amounting to Rs.
25,00,000/-, cheque no. 36974 amounting
to Rs. 16,00,000/- and cheque no. 123523
amounting to Rs. 25,00,000/-, which were
issued from Dena Bank.

(VI) The agreement in the form
of memorandum of understanding dated
16/17th August, 2017 entered into between
the applicant and opposite party no.2,
which has been so heavily relied upon by
opposite party no.2 in support of her case is
mere a waste paper and has no relevance in
the eyes of law, as the same is an
unregistered document. The opposite no.2
has not been appointed as a Director of the
company either by any registered document
or by the minutes of the meeting of the
Board of Directors of the Company.

(VII) Even if it is accepted that
opposite party no.2 invested the money in
the company, the two parallel proceedings
2 All. Ashok Ram Dular Vishwakarma @ Ashok Kumar Vishwakarma Vs. State of U.P. & Anr. 613
initiated by opposite party no.2 against the
applicant in two parallel jurisdiction only
substantiate that she is not only trying to
threat the applicant but has also tried to
extort money from the applicant and
misuse the inhuman condition under which
the company and proprietor are under
going, by making various complaints
before the Police and courts of law.

(VII) the validity of the legal
notice sent by opposite party no.2 to the
applicant is also in question as the same
does not disclose the amount that has been
received by opposite party no.2 prior to the
issuance of cheques.

(VIII) A legal notice was sent to
the applicant by opposite party no.2
through her advocate at his residence at
Pune and thereafter she filed a complaint
on 6th December, 2018 in the court of
Judicial Magistrate, First Class, Pinpri,
Maharashtra under Section 138 N.I. Act
and subsequent to the same, for the similar
contentions, which have been made in the
aforesaid complaint, she filed a complaint
in the Court of Additional Chief Judicial
Magistrate, Bhadohi at Gyanpur (Uttar
Pradesh), which is illegal in the eyes of law
and the same should be quashed on the
ground jurisdiction.

(IX) Opposite party no.2 has not
been attentive in the legal proceedings prior
to the involvement of the Hon'ble High
Court. Either opposite party no.2 has to
admit that she had granted personal loan to
the applicant, which is not legal subject to
such heavy amount or else accept, as per
her own unregistered agreement which is
treated as Memorandum of Understanding
to be a financial creditor. If she is to be
treated as financial creditor and the money
was invested in the company situated at
Pune, she has alternative remedy, which is
available under Insolvency and Bankruptcy
Code.

Learned
counsel
for
the
applicants, therefore, submitted that the
present
criminal
proceedings
initiated
against
the
applicants
are
not
only
malicious but also amount to an abuse of
the process of the Court.

On the cumulative strength of the
aforesaid submissions, it is submitted by
learned counsel for the applicants that the
proceedings of the above mentioned
complaint case are liable to be quashed by
this Court.

7. Per contra, learned A.G.A. has
opposed the contentions raised on behalf of
the applicant by submitting that there is no
illegality or infirmity in the impugned
summoning order and the proceedings
initiated by opposite party no.2 against the
applicant under Section 138 N.I. Act. He,
therefore,
submits
that
the
present
application is liable to be rejected.

8. On the other-hand, learned counsel
for opposite party no.2 raised following
contentions
for
rejecting
the
present
application under Section 482 Cr.P.C.:

(i)
The
accused-applicant
is
carrying business under the name and style
of "M/s. Vishwakarma Dish Ends Works",
which is a partnership firm and "M/s.
Proficient Industries India Pvt. Ltd.", which
is a private company. Both the firms are
running at 81-B, General Block, MIDC
Bhosari, Pune. The accused-applicant, who
is one of the partner of the said firm and
company, is a director and another director
of the firm and company. The accusedapplicant was in need of some finance for
development of the said firm and company.
Therefore, accused-applicant approached
opposite party no.2, who was his family
friend and well known to him. The
accused-applicant requested opposite party
614 INDIAN LAW REPORTS ALLAHABAD SERIES
no.2 to invest money in the said firm and
company. The accused-applicant promised
opposite party no.2 that if she invests Rs.
80 lacs in the said firm, he will include her
as one of the partner in the said firm and
give her 50% profit of the said firm on
yearly basis. The accused-applicant also
promised opposite party no.2 that he will
also give 25% share in the land owned by
the said firm and 25% share in the value of
the machinery of the firm. The accusedapplicant also promised opposite party no.2
that he will refund entire investment made
by opposite party no.2 without any
deduction at the time of her retirement from
the said firm. On believing the said promise
made by the accused-applicant, opposite
party no.2 invested Rs. 80 lacs from
September, 2013 to July, 2016 in the firm
through
accused-applicant.
In
the
meantime, the business of the said firm was
hugely affected, hence all the transactions
and work of the said firm were stopped
thereafter. Seeing the down fall of the said
firm, when opposite party no.2 asked the
accused-applicant that now her money will
be drowned, he assured her not to worry, as
he will appoint her as one of the Director of
the said company and thereafter on 8th
November,
2016,
accused-applicant
appointed opposite party no.2 as director of
the said company. All the terms and
conditions were dully reduced in writing by
both the accused-applicant and opposite
party no.2 titled as "Memorandum of
Understanding" dated 17th August, 2017.
The accused-applicant had also assured that
due to hardship faced by the said company,
he would pay Rs. 1,00,000/- per month to
opposite party no2. from April, 2016 but he
has not paid any single penny to her till
date. A dispute arose between the accusedapplicant regarding disclosure of books of
accounts and balance-sheet, profit of the
company by the accused-applicant to her.
He had also refused to give 25% share in
the land and value of the machinery of the
said firm. When opposite party no.2
exerted
pressure
upon
the
accusedapplicant that she will file police complaint
against him and will also go to court of
laws praying for justice against the
wrongful acts and cheating done by the
accused-applicant, he again promised her
that he will return initial investment of Rs.
80,00,000/- to her which she had invested
and he further promised to pay Rs. 87,
00,000/- to her towards shares against
investment made by opposite party no.2 on
assurance of the accused-applicant. In
consideration of the aforesaid assurance
given by the accused-applicant, he gave
four cheques to her amounting to Rs.
80,00,000/- which were duly signed and
issued by the accused-applicant in favour
of opposite party no.2 in the capacity of
one of the Director of the said firm and
company. The accused applicant also
accepted
his
legal
liability
to
Rs.
87,00,000/- to opposite party no.2 against
legal debt and against the said liability, he
had issued and handed over various
cheques amounting to Rs. 87,00,000/- to
opposite party no.2 for discharging his
legal liability. When the aforesaid four
cheques amounting to Rs. 80,00,000/- were
deposited by opposite party no.2 on 20th
October, 2018 for encashment of the same
in Kashi Gomti Smyut Gramin Bank,
Branch Ugapur, Bhadohi where her bank
account was maintained, the aforesaid four
cheques were dishonoured and returned
from the said bank with reasons "Funds
Insufficient" as on 31st October, 2018 and
intimation in that regard was duly received
by opposite party no.2 on 16th November,
2018 from the said bank. Thereafter, on
22nd November, 2018, opposite party no.2
had issued legal notice through her
advocate by registered A.D. to the accused-
2 All. Ashok Ram Dular Vishwakarma @ Ashok Kumar Vishwakarma Vs. State of U.P. & Anr. 615
applicant
at
his
official
address
as
mentioned above, which was duly received
by
the
accused-applicant
on
26th
November, 2019, a copy of which has been
enclosed as Annexure-C.A.-2 to the counter
affidavit filed on behalf of opposite party
no.2. A legal notice has also been sent to
the accused-applicant at his residential
address, which was returned with remark
unclaimed. Despite the legal notice having
been received by the accused-applicant, he
has not made any effort to make payment
in respect of the above four dishonored
cheques. It is further submitted that the said
intention of the accused-applicant is to
commit and play a fraud upon opposite
party no.2 and indulge into cheating and
criminal
misappropriation.
Thus,
the
accused-applicant caused wrongful loss to
opposite party no.2 and wrong gain to him.
Hence the accused-applicant has committed
an offence of cheating. He has also failed to
make payment of four dishonoured cheques
which were issued by him in favour of
opposite party no.2 despite legal notice
being received by him, which makes out a
case for an offence punishable under
Section 138 N.I. Act against the accusedapplicant, due to which she filed a
complaint under Section 138 N.I. Act in the
Court
of
Additional
Chief
Judicial
Magistrate, Bhadohi at Gyanpur on 3rd
January, 2019.

(ii) The Additional Chief Judicial
Magistrate, Bhadohi at Gyanpur has the
jurisdiction to try the complaint made by
opposite party no.2 under Section 138 N.I.
Act, as the four cheques amounting to Rs.
80,00,000/- duly signed and issued by the
accused-applicant in favour of opposite
party no.2 have been deposited at Kashi
Gomti Smyut Gramin Bank, Branch
Ugapur, Bhadohi where her bank account
was maintained and the same have been
dishonoured and returned to her with a
remark "Funds Insufficient" as on 31st
October, 2018 and information in that
regard has been received by her on 16th
November, 2019 from the Bank.

(iii) The Additional Chief Judicial
Magistrate, Bhadohi at Gyanpur, after
recording statement of the complainant
under Section 200 Cr.P.C. and her
witnesses under Section 202 Cr.P.C.,
perusing the entire evidence and after
hearing the learned counsel for the
applicant, has found that a prima facie case
under Section 138 N.I. Act is made out
against the accused-applicant. Thereafter,
the
The
Additional
Chief
Judicial
Magistrate, Bhadohi at Gyanpur has issued
process of law against the applicant vide
order dated 13th March, 2019, which is
legal and justifiable in the eyes of law.

(iv) Opposite party no.2 has also
filed another complaint bearing Complaint
Case No. 2917 of 2018 before Judicial
Magistrate, First Class, Pimpri, at Pimpri,
Pune for dishnouring of cheque no. 000015
dated 31st August, 2018 amounting to Rs.
7,00,000/- which was also duly signed and
issued by accused-applicant in favour of
opposite party no.2, a copy of the
complaint no. 2917 of 2018 has been
enclosed as Annexure No.-C.A-6 to the
counter affidavit filed on her behalf. In the
said complaint case, non-bailable warrant
has also been issued against the accusedapplicant by the Judicial Magistrate, First
Class, Pimpri. The said complaint case has
been filed by the complaint at Pimpri Pune
because the cheque no. 000015 amounting
to Rs. 7,00,000/- drawn on 4111485003
Kotak Mahindra Bank Ltd. and as per the
Bank rules, the jurisdiction of the Kotak
Mahindra Bank is limited to territory of
Maharashtra. Kotak Mahindra Bank is a
private Bank.

(v)
After
selling
properties,
opposite
party
no.2
invested
Rs.
616 INDIAN LAW REPORTS ALLAHABAD SERIES
80,00,000/- in the firm and company of the
accused-applicant on his promise and the
total
liability
is
of
Rs.87,00,000/-.
Therefore, opposite party no.2 filed the
present complaint case for dishonouring of
four cheques amounting to Rs. 80,00,000/-
at Bhadohi at Gyanpur and filed another
complaint at Pimpri, Pune for dishnouring a
cheque amounting to Rs. 7,00,000/-. Both
the proceedings are separate proceedings
initiated by opposite party no.2 against the
accused-applicant for different cause of
action. Therefore, the plea of learned
counsel for the applicant that opposite party
no.2 has initiated res judicta proceedings by
means of present complaint filed by
opposite no.2 has no legs to stand.

(v) The accused-applicant did not
give any reply to the legal notice sent by
opposite party no.2 for dishonouring of
aforesaid four cheques amounting to Rs.
80,00,000/-. He has neither paid the same nor
gave any reason for the same. In filing of the
present complaint, opposite party no.2 has
adopted all procedures known to law.

On the cumulative strength of the
aforesaid contentions, learned counsel for
opposite party no.2 has lastly submitted that
the court below has not committed any error
in passing the impugned order, therefore, do
not call for any interference by this Court.
Hence, he submits that the present application
is liable to be rejected.

9. I have considered the submissions
made by the learned counsel for the
applicants and have gone through the records
of the present application.

10. Before expressing any opinion on
the merits of the case set up by both the
parties,
it
would
be
worthwhile
to
reproduce Sections 118, 138 and 139 of the
Negotiable Instrument Act, which are
quoted herein-below:

"118.
Presumptions
as
to
negotiable
instruments.
--Until
the
contrary
is
proved,
the
following
presumptions shall be made:--

(a) of consideration --that every
negotiable instrument was made or drawn
for consideration, and that every such
instrument, when it has been accepted,
indorsed, negotiated or transferred, was
accepted,
indorsed,
negotiated
or
transferred for consideration;

(b) as to date --that every
negotiable instrument bearing a date was
made or drawn on such date;

(c) as to time of acceptance --that
every accepted bill of exchange was
accepted within a reasonable time after its
date and before its maturity;

(d) as to time of transfer --that
every transfer of a negotiable instrument
was made before its maturity;

(e) as to order of indorsements --
that the indorsements appearing upon a
negotiable instrument were made in the
order in which they appear thereon;

(f) as to stamps --that a lost
promissory note, bill of exchange or cheque
was duly stamped;

(g) that holder is a holder in due
course --that the holder of a negotiable
instrument is a holder in due course:

Provided
that,
where
the
instrument has been obtained from its
lawful owner, or from any person in lawful
custody thereof, by means of an offence or
fraud, or has been obtained from the maker
or acceptor thereof by means of an offence
or fraud, or for unlawful consideration, the
burden of proving that the holder is a
holder in due course lies upon him.

138. Dishonour of cheque for
insufficiency, etc., of funds in the account.
--Where any cheque drawn by a person on
an account maintained by him with a
banker for payment of any amount of
2 All. Ashok Ram Dular Vishwakarma @ Ashok Kumar Vishwakarma Vs. State of U.P. & Anr. 617
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 19
[a term which 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, 20
[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.

Explanation.-- For the purposes
of this section, "debt or other liability"
means a legally enforceable debt or other
liability.]

139. Presumption in favour of
holder.--It shall be presumed, unless the
contrary is proved, that the holder of a
cheque received the cheque of the nature
referred to in section 138 for the discharge,
in whole or in part, of any debt or other
liability."

11. From the above, it is manifestly
clear that a dishonour would constitute an
offence only if the cheque is returned by
the bank ''unpaid' either because the amount
of money standing to the credit of the
drawer's account is insufficient to honour
the cheque or that the amount exceeds the
amount arranged to be paid from that
account by an agreement with that bank.
Now, for an offence under Section 138 NI
Act, it is essential that the cheque must
have been issued in discharge of legal debt
or liability by accused on an account
maintained by him with a bank and on
presentation of such cheque for encashment
within its period of validity, the cheque
must have been returned unpaid. The payee
of the cheque must have issued legal notice
of demand within 30 days from the receipt
of the information by him from the bank
regarding such dishonor and where the
drawer of the cheque fails to make the
payment within 15 days of the receipt of
the aforesaid legal demand notice, cause of
action under Section 138 NI Act arises.

12.

From
the
Chapter
XVII
comprising Sections 138 to 142 of the
Negotiable Instruments Act, which was
introduced in statute by Act 66 of 1988, it
is also apparently clear that the object
underlying the provision contained in the
said Chapter was aimed at inculcating faith
in the efficacy of banking operations and
giving credibility to negotiable instruments
in business and day to day transactions by
making dishonour of such instruments an
offence. A negotiable instrument, whether
the same is in the form of a promissory
note or a cheque is by its very nature a
618 INDIAN LAW REPORTS ALLAHABAD SERIES
solemn document that carries with it not
only a representation to the holder in due
course of any such instrument but also a
promise that the same shall be honoured for
payment. To that end Section 139 of the
Act raises a statutory presumption that the
cheque is issued in discharge of a lawfully
recoverable debt or other liability. This
presumption is no doubt rebuttable at trial
but there is no gain saying that the same
favours the complainant and shifts the
burden to the drawer of the instrument (in
case the same is dishonoured) to prove that
the instrument was without any lawful
consideration. It is also noteworthy that
Section 138 while making dishonour of a
cheque
an
offence
punishable
with
imprisonment and fine also provides for
safeguards to protect drawers of such
instruments where dishonour may take
place for reasons other than those arising
out of dishonest intentions. It envisages
service of a notice upon the drawer of the
instrument calling upon him to make the
payment covered by the cheque and
permits prosecution only after the expiry of
the statutory period and upon failure of the
drawer to make the payment within the said
period.

13. This Court having noticed the facts
of the case and the evidence on the record
needs to note the legal principles regarding
nature of presumptions to be drawn under
Section 139 of the Act and the manner in
which it can be rebutted by an accused.
Section 118 provides for presumptions as to
negotiable instruments. The complainant
being holder of cheque and the signature
appended on the cheque having not been
denied by the Bank, presumption shall be
drawn that cheque was issued for the
discharge of any debt or other liability. The
presumption under Section 139 is a rebuttable
presumption. Before this Court refers to
various judgments of the Apex Court
considering Sections 118 and 139, it is
relevant to notice the general principles
pertaining to burden of proof on an accused
especially in a case where some statutory
presumption regarding guilt of the accused
has to be drawn.

14.