IN THE COURT OF CHIEF JUDICIAL, MAGISTRATE AT

LOVELY PROFESSIONAL UNIVERSITY, PHAGWARA

PCR NO: - 204/2019

CC No. : - 2019

In the Matter of:

Harjinder Singh ………… Complainant

Versus

Sukhwinder Singh ……….. … Accused

WRITTEN ARGUMENTS ON BEHALF OF COMPLAINANT

Most Respectfully Showeth:

The council most humbly submits the following written submission under various headings.

The council submits that the Complainant Harjinder singh resident of house no.220 chotti
baradari part -2, opposite PIMS garha road, Jalandhar 144001

The council further submits that a complaint has been filed by the complainant under section 138
and 142 of the Negotiable Instrument act, 1881 for dishonor of cheque as alleged by the
complainant towards the accused
Facts

 Sukhwinder Singh had borrowed Rs.10 lakh in cash from Harjinder Singh on 5.3.2018
who was his friend for a period of one year in presence of Balwinder Singh a friend of
Sukhwinder Singh.
 It was orally agreed that for one year Sukhwinder has to pay 10% interest on principal
amount and by adding interest amount of Rs. 1 lakh Sukhwinder had issued post cheque
of Rs.11 lakh dated 5.3.2019 drawn Bank of Baroda Jalandhar City main branch as
security purpose and agreed that he would pay the amount of Rs.11 lakh in cash on
5.3.2019.
 He would collect the said cheque.
 Sukhwinder Singh failed to pay Rs.11 lakh cash on 5.3.2019.
 Harjinder Singh deposited the said cheque in his account in State Bank of India Jalandhar
City main branch.
 The said cheque was dishonoured and his bank had issued “bank memo” dated 9.3.2019
showing reason of dishonor of said cheque as “ Fund Insufficient”.
 Harjinder Singh had issued notice under Section 138 of NI Act (Statutory Notice) to
Sukhwinder Singh on 25.3.2109.
 1. Whether complaint filed under section 200 of the crpc is maintainable or not?

Its humble submitted before this honble court that Section 200 in The Code Of Criminal
Procedure, 1973 Section 200- Examination of complainant.

A Magistrate taking cognizance of an offence on complaint shall examine upon oath the
complainant and the witnesses present, if any, and the substance of such examination shall be
reduced to writing and shall be signed by the complainant and the witnesses, and also by the
Magistrate: Provided that, when the complaint is made in writing, the Magistrate need not
examine the complainant and the witnesses-

(a) if a public servant acting or- purporting to act in the discharge of his official duties or a Court
has made the complaint; or

(b) if the Magistrate makes over the case for inquiry or trial to another Magistrate under section
192: Provided further that if the Magistrate makes over the case to another Magistrate under
section 192 after examining the complainant and the witnesses, the latter Magistrate need not re-
examine them.1

In the current case the complaint has been filed by the complainant as per the section 200 of the
Cr. PC and all the ingredients of the section 200 has been fulfill. As it’s a case of 138 negotiable
instrument act 1881 so it’s necessary to file a case under section 200 of the Cr.PC and fulfill all
the procedure given in the both of the section.

Dashrath Rupsingh Rathod  v.  State of Maharashtra2.The ingredients of the offence under
Section 138 are:

(a)  cheque is drawn by the accused on an account maintained by him with a banker;
(b)  the cheque amount is in discharge of a debt or liability; and
(c)   the cheque is returned unpaid for insufficiency of funds or that the amount exceeds the
arrangement made with the bank, the offence standing committed the moment the cheque is
returned unpaid.

1
https://indiankanoon.org/doc/444619/
2
(2014) 9 SCC 129.
Further steps laid down by way of the proviso are distinct from the ingredients of the offence
which the enacting provision creates and makes punishable. Thus, an offence within the
contemplation of Section 138 is complete with the dishonor of the cheque but taking cognizance
of the same by any court is forbidden so long as the complainant does not have the cause of
action to file a complaint in terms of clause (c) of the proviso read with Section 142.

Kusum Ingots & Alloys Ltd. v. Pennar Peterson Securities Ltd3

wherein this Court said that the following ingredients are required to be satisfied for making out
a case under Section 138 of the NI Act: (SCC p. 753, para 10)

(i) 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 the discharge of any
debt or other liability;

(ii) 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, whichever is earlier;

(iii) 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;

(iv) the payee or the holder in 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 information by him from the bank regarding the return of the cheque as unpaid;

(v) 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 the said notice."

DashrathRupsinghRathod v. State of Maharashtra4.The ingredients of the offence under

Section 138 are:

(a)  cheque is drawn by the accused on an account maintained by him with a banker;
(b)  the cheque amount is in discharge of a debt or liability; and

3
(2000) 2 SCC 745 : 2000 SCC (Cri) 546 : AIR 2000 SC 954
4
(2014) 9 SCC 129.
(c)   the cheque is returned unpaid for insufficiency of funds or that the amount exceeds the
arrangement made with the bank, the offence standing committed the moment the cheque is
returned unpaid.
Further steps laid down by way of the proviso are distinct from the ingredients of the offence
which the enacting provision creates and makes punishable. Thus, an offence within the
contemplation of Section 138 is complete with the dishonour of the cheque but taking
cognizance of the same by any court is forbidden so long as the complainant does not have the
cause of action to file a complaint in terms of clause (c) of the proviso read with Section 142.

In the same case there is dishouner of the cheque which give right to the complainant to sue the
accused for the liability/money.
 2. Whether accused is liable under section 138 of negotiable instrument act?

It is humbly submitted that the accused is liable under section 138 of the negotiable instrument
act. Section 138 of NI ACT state that-

Dishonor 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 honor 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 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,  [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.

Section 138 of the Negotiable Instruments Act attracts strict liability of penal nature only. Strict
liability of 138 can be enforced only when it is a case of discharge of a legally enforceable debt
or liability5.

5
Sam Daniel v john 2005 128 comp cas 17
MSR Leathers v. S. Palaniappan

There are three distinct conditions precedent, which must be satisfied before the dishonor of a
cheque can constitute an offence and become punishable.

(i) The cheque ought to have been presented to the bank within a period of 6 months [3 months]
from the date on which it is drawn or within the period of its validity, whichever is earlier.

(ii) The  payee or the holder in due course of the cheque, as the case may be, ought to make a
demand for the payment of the said amount of money by giving a notice in writing, to the drawer
of the cheque, within 30 days of the receipt of information by him from the bank regarding the
return of the cheque as unpaid.

(iii) The drawer of such a cheque should have failed to make 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 15
days of the receipt of the said notice.

It is only upon the satisfaction of all the three conditions mentioned above and enumerated under
the proviso to Section 138 as clauses (a), (b) and (c) thereof that an offence under Section 138
can be said to have been committed by the person issuing the cheque6

It is humbly submitted that accused is liable under the NI ACT for the breach of the oral
agreement and its proved from the fact contended and evidence given that there was oral
agreement and there complainant given 10,00,000 rupees to the accused had given a postdated
cheque bearing number -556964, to my client of Rupees-11,00,000/- dated 5.3.2019 as security
purpose in favor of complainant. Which presented before the court as a evidence. but and also in
the cross the accuse was unable to contradict the same . complainant served a legal notice to the
accuse within limitation period specified under section 138 (b) but accused refuse to pay the
amount and he is liable under section 138 of the negotiable instrument act 1881 and the section
139 of the section state that whenever any cheque is given to other person then it shall be
presumed that cheque is received by the person for discharge of the debt and liability.in reply to
legal notice ,contents of Para 3 stated that ‘the amount is already paid on the due date that is on
05-03-2019 due to which I had not kept the balance “in bank account and as a result when it was
6
 (2013) 1 SCC 177.
deposited it was dishonor due to insufficient fund’. Also as per section 140 it says that when a
person issue a cheque then he shell not takes the defence that at time of issuing cheque he had no
reason to believe that cheque may be dishonored7. I humbly submitted that the accused should
me made liable under section 138 of negotiable instrument act 1881.
The sentence prescribed under Section 138 is up to two years or with fine which may extend to
twice the amount or with both. What needs to be noted is the fact that power under Section
357(3) CrPC to direct payment of compensation is in addition to the said prescribed sentence, if
sentence of fine is not imposed. The direction to pay compensation can be enforced by default
sentence under Section 64 IPC  and by recovery procedure prescribed under Section 431
CrPC, Meters and Instruments (P) Ltd. v. Kanchan Mehta, (2018) 1 SCC 560.8
Where a person who was entrusted with the custody of a certain sale consideration issues a
cheque to the beneficiary in lieu of such settlement, it is considered to be a legally recoverable
debt/liability as under Section 138 of the Negotiable Instruments Act9.

In Goa Plast (P) Ltd. v. Chico Ursula D'Souza: (2004) 2 SCC 235, this Court, while dealing
with the objects and ingredients of Sections 138 and 139 of the Act, observed as follows: The
object and the ingredients under the provisions, in particular, Sections 138 and 139 of the Act
cannot be ignored. Proper and smooth functioning of all business transactions, particularly, of
cheques as instruments, primarily depends upon the integrity and honesty of the parties.10

Basalingappa v. Mudibassapa Once the execution of cheque is admitted, Section 139 creates a

presumption that the holder of a cheque receives the cheque in discharge, in whole or in part, of
any debt or other liability.11
Bir Singh v. Mukesh Kumar, The existence of a fiduciary relationship between the payee of a
cheque and its drawer, would not disentitle the payee to the benefit of the presumption under
Section 139, in the absence of evidence of exercise of undue influence or coercion,  12
7
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.
8
Meters and Instruments (P) Ltd. v. Kanchan Mehta, (2018) 1 SCC 560.
9
Philip mk vs gainmore investment 2006 cri lj 3175 kerela
10
MANU/SC/0940/2003
11
2019 SCC online SC 491
12
(2019) 4 SCC 197.
 3. Whether there is any agreement between the parties?

Its humble submitted before this hon’ble court that Yes, there was oral agreement between the
parties and there accuse had borrowed Rs.10 lakh from complainant on 5.3.2018 . It was orally
agreed that accuse has to pay 10% interest on principal amount, meanwhile accuse issued a
postdated cheque of rupees 11 lakh to the complainant. but Inpara 1 of reply of legal notice
accuse stated that there was no oral agreement but in para 2 of the reply he again stated that he
issued the cheque which contain same number and same amount as claimed by the complainant
meanwhile in cross he is not able to proveth same and also in para 3 accused stated that he
already paid the amount but no evidence as related to that has been given by him in the court.
His act shows that he is trying to escape from his liability.

S.V. Narayanaswamy vs. Savithramma13 Thus, oral agreements, although may sound like a
bag of quagmire, can be proved in a court of law, through several circumstantial evidence.

PRAYER

It is most humbly submitted that the complaint filed by the complaint is admissible and has been
introduced before the Hon’ble court to achieve social justice which is infringed by the accused. It
is therefore prayed that to upheld the following issues raised by the complainant in the said
complaint
13
2013R.F.A. No. 1163 of 2002 c/w R.F.A.No.1164 of 2002
It is therefore, most respectfully prayed that this Hon’ble court may please to:-

a) Pass Judgement in favor of the complainant party and against accused party. It is,
therefore, prayed that the accused person may kindly be summoned, tried and punished
for the offence u/s 138 of the Negotiable Instrument Act read with Section 420 IPC.
b) Grant such other relief as this Hon’ble court deems fit under the circumstances of case in
the interest of Justice, equity and good conscience

PLACE- JALANDHAR

DATE -