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2023 SCC OnLine Del 6499

In the High Court of Delhi at New Delhi

(BEFORE SWARANA KANTA SHARMA, J.)

Siddharth Duggal … Petitioner;

Versus
State (Govt, of NCT of Delhi) and Others …
Respondents.
W.P. (CRL.) 557/2023 and CRL.M.A. 5086/2023
Decided on October 12, 2023, [Reserved on : 10.07.2023]
Advocates who appeared in this case:
Mr. Varun Tyagi and Mr. Bharat Gupta, Advocates alongwith
petitioner
Ms. Nandita Rao, ASC for the State along with Mr. Amit Peswani and
Mr. Saransh, Advocates
Mr. Naman Joshi, Ms. Ritika Vohra, Mr. Guneet Sidhu, Mr. Rohan
Agarwal and Mr. Anirudh Singh, Advocates for R-2.
The Judgment of the Court was delivered by
SWARANA KANTA SHARMA, J.:— By way of present writ petition filed
under Article 226 of the Constitution of India read with Section 482 of
the Criminal Procedure Code, 1973 (‘Cr.P.C.’), the petitioner seeks
following reliefs:
i. setting aside of order dated 17.10.2019 passed by learned
Metropolitan Magistrate-05, Patiala House Courts, Delhi(‘learned
Magistrate’) in Complaint Case No. 4157/2016, as well as order
dated 23.01.2023 passed by learned Additional Sessions Judge-
07, Patiala House Courts, Delhi (‘learned ASJ’) in Criminal
Revision Petition No. 106/2020 dismissing the revision petition
filed by the petitioner;
ii. allowing the application filed by petitioner under Section 243 read
with Section 293 of Cr. P.C. read with Section 45 and 73 of Indian
Evidence Act, 1872 seeking examination of the cheque in question
by Government Scientific Expert and another application seeking
summoning of the witnesses as mentioned in the application.
2. The factual background of the present case, in brief, is that
respondent no. 2/complainant ‘M/s. Rakesh Press’ had filed a complaint
under Section 138 of Negotiable Instruments Act, 1881 (‘NI Act’)
whereby it was stated that the complainant was engaged in the
business of printing books, magazines and other periodicals for
respondent no. 3/accused i.e. ‘M/s. Duggals Print House’, a sole
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proprietorship concern, and as on 02.07.2014, there was an

outstanding balance to the tune of Rs. 11,08,802/- against respondent
no. 3. It was alleged that towards the said liability, the sole proprietor
of respondent no. 3 i.e. Mr. Siddharth Duggal (petitioner herein) had
acknowledged his liability as on 31.03.2016 and letters were also
exchanged between the complainant and the accused. Eventually, as
alleged, a cheque bearing no. 166360 dated 17.08.2016 of Rs.
2,00,000/- drawn on Union Bank of India, Rajouri Garden branch, New
Delhi was issued towards discharge of liability of respondent no. 3 as
part-payment and the petitioner had assured respondent no. 2 that he
would clear the outstanding dues. However, upon presentation of the
cheque, the same had got dishonoured vide return memo dated
19.08.2016 with remarks “Account Closed/Transferred To”. Thereafter,
respondent no. 2 had issued legal notice calling upon the accused
persons to make the payment of cheque amount and upon their failure
to do so, the present complaint case was filed before Patiala House
Courts, New Delhi on 20.10.2016.
3. Pursuant to filing of complaint case, the petitioner was summoned
vide order dated 20.10.2016, and notice under Section 251 Cr. P.C. was
framed against him on 06.03.2018. Thereafter, the
complainant/respondent no. 2 was examined and discharged on
02.07.2018 and the statement of petitioner was recorded on
05.07.2018 under Section 313 of Cr. P.C.On 23.07.2018, the petitioner
had moved two applications before the learned Magistrate, the first
application being filed under Section 243 read with Section 293 of Cr.
P.C. read with Section 45/73 of Indian Evidence Act, 1872 for referring
the cheque in question to FSL, and second application being for
summoning of certain defence witnesses. However, learned Magistrate
vide order dated 17.10.2019 had dismissed both the applications. The
relevant portions of the said order read as under:
“6. Therefore, it is clear from the above discussion that as long as
the drawer admits his/her signature on the cheque, other details of
the cheque not filled by him or filled by a different ink at a later time
would not amount to ‘material alternation’ and the cheque would be
a valid cheque for the purposes of S. 138 NI Act. In the present
case, the signatures of the cheque has never been denied by the
accused. In response to Notice u/s 251 CrPC dated 06.03.2018,
accused no. 2 has stated that “I have signed the dishonoured
cheque in question in the capacity of authorized signatory”.
Hence, since the signature is admitted by the accused, no further
examination of the cheque by government scientific expert is needed
in view of the above discussion. Application seeking examination of
cheque by government scientific expert is hereby dismissed.
7. Arguments on another application moved by Ld. Counsel for
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accused for summoning of witnesses heard. Witness mentioned at

serial no. 1 is Director, Forensic Science Laboratory. Since, the
application seeking scientific examination of the cheque is dismissed
above, examination of this witness is automatically disallowed. No
purpose will be served by examination of the witness mentioned at
serial no. 2, bank witness as the signature of the cheque has already
been admitted by accused no. 2 in response to Notice u/s 251 CrPC
dated 06.03.2018, hence, the said witness is disallowed as well.
Status of the accused firm has not been in dispute, hence witness
mentioned at serial no. 3, VAT department is also disallowed…”
4. Aggrieved by the aforesaid order, the petitioner had preferred a
revision petition before the learned ASJ. By way of order dated
23.01.2023, the learned ASJ had alsodismissed the revision petition
filed by the petitioner on the ground that there was no infirmity in the
order of learned Magistrate and that neither the examination of cheque
was required as there was no material alteration in the same, nor the
witnesses as mentioned in the application were necessary to be called
for the adjudication of present case.
5. The present writ petition has been preferred assailing both the
aforesaid orders of learned ASJ dated 23.01.2023 and learned
Magistrate dated 17.10.2019.
6. The case set out by the petitioner is that upon receiving the
summons in the present case, he had appeared before the learned
Magistrate and had taken a defense that accused no. 1 i.e. respondent
no. 3 was a sole proprietorship concern of his mother and therefore,
there was no liability on the part of petitioner. It was also stated that
respondent no. 3 in complete discharge of its liability had issued a
cheque bearing number 166359 dated 10.07.2014 amounting to Rs.
1,50,000/- which had been duly encashed in the year 2014, and along
with the said cheque, the present cheque in question had also been
issued for security purposes in the month of July, 2014 which had been
signed by the petitioner only in the capacity of authorised signatory of
respondent no. 3. It was also stated that thereafter, in September,
2014, a partition had taken place in the family of petitioner and the
petitioner had ceased to be the authorised representative/signatory of
respondent no. 3. It is stated that pursuant to petitioner having cross-
examined the authorised representative of complainant and recording
of statement of petitioner under Section 313 of Cr. P.C., the petitioner
had expressed his intention to lead further evidence and had filed two
separate applications for the same before the learned Magistrate i.e.
one seeking scientific examination of the cheque in question by a
government scientific expert and the other seeking summoning of
witnesses. The contention of the petitioner while filing such applications
was that the cheque in question was issued in the year July, 2014 only
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as a security cheque and the same was an undated cheque which had
been filled later on by the complainant on 17.08.2016 and forensic
examination of the ink used on the cheque would have revealed that a
security cheque issued in the year 2014 was misused by the
complainant in the year 2016. To further prove that petitioner was not
the proprietor of respondent no. 3, he had filed an application seeking
summoning of witnesses wherein he had sought to summon Director,
FSL, to prove FSL result of cheque in question; officials from concerned
Bankto prove the status and nature of bank account and bank account
holder; and officials from VAT department to prove the status of
respondent no. 3 i.e. whether it was a sole proprietorship or otherwise
and as to who was the sole proprietor of the said firm.
7. Learned counsel for the petitioner argues that the cheque in
question was issued by respondent no. 3 which was the sole
proprietorship firm of petitioner's mother and though the cheque had
been signed by the petitioner herein, the same had been done only in
the capacity of authorised signatory of the accused firm, and since he
was/is not the proprietor of the accused firm, he is not liable to pay any
amount to the complainant. It is also stated that the impugned order
passed by learned ASJ suffers from illegality especially on the ground
that the learned ASJ wrongly held that the petitioner being authorised
signatory of the proprietorship firm would be liable in view of the
provisions of Section 141 of NI Act. In this regard, it is argued by
learned counsel that Section 141 has no application to a sole
proprietorship firm and even the complaint filed by the respondent no.
2 was only under Section 138 of NI Act and not under Section 141. It is
stated that the petitioner had already brought to the knowledge of
complainant, when he had issued the reply to legal notice, that
petitioner was not the sole proprietor but only an authorised
representative of her mother, who was the sole proprietor of the
accused no. 1/respondent no. 3.
8. On the other hand, learned counsel for respondent no.
2/complainant submits that the present petition has been filed only to
delay the trial of the present case and the petitioner before the learned
Magistratehas already admitted the issuance of cheque as well as his
signatures on the cheque and, thus, presumption under Section 139 of
NI Act has already arisen in favour of the complainant. It is also stated
that filling of date on a cheque, as also held by learned ASJ, does not
fall within the ambit of material alteration and, thus, no scientific
examination of the cheque was required to be carried out. Therefore, it
is prayed that present petition be dismissed.
9. This Court has heard arguments addressed by learned counsel for
petitioner as well as learned counsels for respondents and the material
on record has been perused.
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10. With respect to the first issue, i.e. whether the application filed
under Section 243 read with Section 293 of Cr. P.C. read with Section
45/73 of Indian Evidence Act, 1872 for sending the cheque in question
to FSL for ink dating needs to be allowed, this Court notes that the
petitioner herein had admitted before the learned Magistrate, at the
stage of framing of notice under Section 251 of Cr. P.C. as well as the
time of recording of his statement under Section 313 of Cr. P.C., that
he had signed the cheque in question. He had also admitted that the
name of the payee as well as the amount in figures and words had been
filled in his handwriting, however, he had stated that the date on
cheque had not been filled by him. The petitioner had also admitted
that there was outstanding liability of about Rs. 4 lacs towards the
complainant. In such facts and circumstances, the learned ASJ vide
impugned order dated 23.01.2023 had observed as under:
11. In Ravi Chopra v. State, (2008) 102 DRJ 147, Hon'ble High
Court of Delhi has held:
“18. Section 20 NI Act talks of “inchoate stamped instruments”
and states that if a person signs and delivers a paper stamped in
accordance with the law and either wholly blank or have written
thereon an incomplete negotiable instrument such person thereby
gives prima facie authority to the holder thereof to make or
complete as the case may be upon it, a negotiable instrument for
any amount specified therein and not exceeding the amount
covered by the stamp. Section 49 permits the holder of a
negotiable instrument endorsed in blank to fill up the said
instrument by writing upon the endorsement, a direction to pay
any other person as endorsee and to complete the endorsement
into a blank cheque, it makes it clear that by doing that the
holder does not thereby incur the responsibility of an endorser.
Likewise, Section 86 states that where the holder acquiesces in a
qualified acceptance, or one limited to part of the sum mentioned
in the bill, or which substitutes a different place or time for
payment, or which, where the drawee are not partners, is not
signed by all the drawees, all previous parties whose consent has
not been obtained to such acceptance would stand discharged as
against the holder and those claiming under him, unless on notice
given by the holder they assent to such acceptance. Section 125
NI Act permits the holder of an uncrossed cheque to cross it and
that would not render the cheque invalid for the purposes of
presentation for payment. These provisions indicate that under
the scheme of the NI Act an incomplete cheque which is
subsequently filled up as to the name, date and amount is not
rendered void only because it was so done after the cheque was
signed and delivered to the holder in due course.
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19. The above provisions have to be read together with Section

118 NI Act which sets out various presumptions as to negotiable
instruments. The presumption is of consideration, as to date, as to
time of acceptance, as to transfer, as to endorsement, as to
stamp. The only exception to this is provided in proviso to Section
118 which reads as under : 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.
20. A collective reading of the above provisions shows that
even under the scheme of the NI Act it is possible for the drawer
of a cheque to give a blank cheque signed by him to the payee
and consent either impliedly or expressly to the said cheque being
filled up at a subsequent point in time and presented for payment
by the drawee. There is no provision in the NI Act which either
defines the difference in the handwriting or the ink pertaining to
the material particulars filled up in comparison with the signature
thereon as constituting a ‘material alteration’ for the purposes of
Section 87 NI Act. What however is essential is that the cheque
must have been signed by the drawer. If the signature is altered
or does not tally with the normal signature of the marker, that
would be a material alteration. Therefore, as long as the cheque
has been signed by the drawer, the fact that the ink in which the
name and figures are written or the date is filled up is different
from the ink of the signature is not a material alteration for the
purposes of Section 87 of NI Act.”
12. In the present case, the revisionist had admitted his
signatures on the cheque in question and that the particulars have
also been filled by him in his own handwriting except the date. Even
if, the contention of the revisionist that the date was not filled by
him is considered as correct, for the sake of arguments, the same
cannot be considered as ‘material alteration’. Section 138 NI Act
does not contemplate that whenever any cheque is issued then the
drawee must fill all the details in the cheque in his own handwriting
for its validity u/s 138 NI Act. Even if, the contention of the
revisionist is accepted as regard undated cheque, the same would be
covered within the provision of Section 138 NI Act, so long as, the
revisionist has admitted his signatures on the cheque. Therefore, the
Ld. MM was fully justified in dismissing the application of the
revisionist for sending the cheque in question to FSL. I do not find
any infirmity in the order of the Ld. MM dismissed the first
application of the revisionist…”
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11. In this regard, a reference can also be made to the decision of

Hon'ble Apex Court in case of Bir Singh v. Mukesh Kumar, (2019) 4
SCC 197, in which it was held as under:
“33. A meaningful reading of the provisions of the Negotiable
Instruments Act including, in particular, Sections 20, 87 and 139,
makes it amply clear that a person who signs a cheque and makes it
over to the payee remains liable unless he adduces evidence to rebut
the presumption that the cheque had been issued for payment of a
debt or in discharge of a liability. It is immaterial that the cheque
may have been filled in by any person other than the drawer, if the
cheque is duly signed by the drawer. If the cheque is otherwise
valid, the penal provisions of Section 138 would be attracted.
34. If a signed blank cheque is voluntarily presented to a payee,
towards some payment, the payee may fill up the amount and other
particulars. This in itself would not invalidate the cheque. The onus
would still be on the accused to prove that the cheque was not in
discharge of a debt or liability by adducing evidence.
35. It is not the case of the respondent-accused that he either
signed the cheque or parted with it under any threat or coercion. Nor
is it the case of the respondent-accused that the unfilled signed
cheque had been stolen. 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 of the
Negotiable Instruments Act, in the absence of evidence of exercise of
undue influence or coercion. The second question is also answered in
the negative.
36. Even a blank cheque leaf, voluntarily signed and handed over
by the accused, which is towards some payment, would attract
presumption under Section 139 of the Negotiable Instruments Act,
in the absence of any cogent evidence to show that the cheque was
not issued in discharge of a debt.”
12. Though the Hon'ble ApexCourt in case of T. Nagappa v. Y.R.
Muralidhar, (2008) 5 SCC 633 had observed that the accused should be
given fair trial to lead evidence in his defence, however, it was also
categorically held that the Court being the master of the proceedings
has to determine as to whether the application of the accused in terms
of Section 243Cr.P.C. is bona fide or not or whether the accused intends
to bring on record a relevant material. The facts of the present case are,
undoubtedly, differentiable from the facts of the said case. In the
present case, not only the signatures had been admitted but even the
filling up of name of the payee as well as the amount had been
admitted by the petitioner. At the cost of repetition, it is also crucial to
note that even the petitioner had admitted that there was an existing
liability of about Rs. 4 lacs towards the complainant. The
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respondent/complainant had also relied upon a letter, which as per the

case of complainant, reflects that the petitioner had admitted the
existence of liability towards the complainant in the year 2016.
13. Thus, this Court does not find any infirmity with the orders
passed by both the Courts below by way of which the application filed
by the petitioner under Section 243 read with Section 293 of Cr. P.C.
read with Section 45/73 of Indian Evidence Act, 1872 was dismissed.
Accordingly, the orders of dismissal of application seeking summoning
of Director, FSL also warrants no interference.
14. Needless to say, the issue as to whether the cheque was actually
issued in respect of any legally enforceable debt or was a security
cheque which had been misused shall be decided by the learned Trial
Court on the basis of material available on record, testimonies of the
witnesses and the arguments addressed before it at the final stage of
adjudication, as per law.
15. However, as regards the second issue i.e. whether the petitioner
can be held liable, by virtue of Section 141 of NI Act, even if it is
proved that he is not the sole proprietor of the accused firm, this Court
finds merit in the argument of learned counsel for petitioner that
Section 141 of NI Act has no application to a sole proprietorship firm,
and under Section 138 of the Act, no other person except the sole
proprietor can be held liable. In this regard, this Court takes note of the
observations of Hon'ble Apex Court in case of Raghu Lakshminarayanan
v. Fine Tubes, (2007) 5 SCC 103 whereby it was held as under:
“9. The description of the accused in the complaint petition is
absolutely vague. A juristic person can be a company within the
meaning of the provisions of the Companies Act, 1956 or a
partnership within the meaning of the provisions of the Partnership
Act, 1932 or an association of persons which ordinarily would mean a
body of persons which is not incorporated under any statute. A
proprietary concern, however, stands absolutely on a different
footing. A person may carry on business in the name of a
business concern, but he being proprietor thereof, would be
solely responsible for conduct of its affairs. A proprietary
concern is not a company. Company in terms of the
Explanation appended to Section 141 of the Negotiable
Instruments Act, means any body corporate and includes a
firm or other association of individuals. Director has been
defined to mean in relation to a firm, a partner in the firm. Thus,
whereas in relation to a company, incorporated and registered under
the Companies Act, 1956 or any other statute, a person as a Director
must come within the purview of the said description, so far as a
firm is concerned, the same would carry the same meaning as
contained in the Partnership Act.
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***
14. We, keeping in view the allegations made in the complaint
petition, need not dilate in regard to the definition of a “company” or
a “partnership firm” as envisaged under Section 34 of the Companies
Act, 1956 and Section 4 of the Partnership Act, 1932 respectively,
but, we may only note that it is trite that a proprietary
concern would not answer the description of either a company
incorporated under the Companies Act or a firm within the
meaning of the provisions of Section 4 of the Partnership Act.”
(Emphasis supplied)
16. Further, this Court also, in case of M.M. Lal v. State NCT of Delhi,
2012 (4) JCC 284, had expressed as under:
“4. It is well settled that a sole proprietorship firm has no
separate legal identity and in fact is a business name of the
sole proprietor. Thus any reference to sole proprietorship firm
means and includes sole proprietor thereof and vice versa.
Sole proprietorship firm would not fall within the ambit and
scope of Section 141 of the Act, which envisages that if the
person committing an offence under Section 138 is a company,
every person who, at the time of offence was committed, was in-
charge of, and was responsible to the company for the conduct of the
business of the company, as well as the company, shall be deemed
to be guilty of the offence and shall be liable to be proceeded against
and punished accordingly. Company includes a partnership firm and
any other association of individuals. The sole proprietorship firm
would not fall within the meaning of partnership firm or
association of individual. Vicarious liability cannot be fastened
on the employees of a sole partnership firm, by taking aid of
Section 141 of the Act, inasmuch as, no evidence has been led to
show that the business was run by the respondent no. 2…”
(Emphasis supplied)
17. Thus, a perusal of the aforesaid judicial precedents makes it
clear that is only the sole proprietor who can be held liable under
Section 138 of NI Actfor dishonour of a cheque, drawn on the account
maintained by the sole proprietorship firm and any other person cannot
be held vicariously liable inasmuch as Section 141 of NI Act has no
applicability in cases of sole proprietorship.
18. Therefore, the observations of the learned ASJ to the extent that
two out of three witness as mentioned in the second application filed by
the petitioner, i.e. the concerned bank official and the official from VAT
department to prove that the firm in question was a sole proprietorship
firm, were not required to be called for examination since the petitioner
being its authorized representative would be liable under Section 141 of
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NI Act, are set aside, being contrary to the settled law.

19. In this Court's opinion, the petitioner should not be denied an
opportunity during the course of trial to examine witnesses in defence
to prove the status of proprietorship firm and as to who was the sole
proprietor of the firm and in whose name was the bank account
maintained. In view of the same, this Court is of the opinion that the
application seeking summoning of defence witnesses, i.e. concerned
bank official and the official from VAT department, filed by the
petitioner ought to be allowed.
20. Accordingly, the learned Magistrate shall pass an order for
summoning of the abovesaid two witnesses as mentioned in application
filed by the petitioner before it.
21. It is, however, clarified that the observations made hereinabove
shall have no bearing on the merits of the case during the trial and the
learned Magistrate shall consider the evidence and arguments
addressed before it by both the parties in accordance with law.
22. In view of above terms, the present petition stands disposed of,
alongwith pending application.
23. The judgment be uploaded on the website forthwith.
———
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