Delhi District Court
R.S.Live Media Pvt Ltd vs Shahzad Ahmad on 7 November, 2025
Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad
IN THE COURT OF JUDICIAL MAGISTRATE FIRST CLASS(NI
ACT-02), SOUTH EAST DISTRICT, SAKET COURT COMPLEX,
NEW DELHI
(Presided over by Ms. Shruti Sharma-I)
DLSE020051252014
Criminal Complaint No.630473/2016
R. S. Live Media Pvt. Ltd. .......................... Complainant
Vs.
Shahzad Ahmad ....................... Accused
Sr.No Particulars Details
A. Name and address of R. S. Live Media Pvt. Ltd. Office at 3 rd Floor,
the Complainant: 13, Sant Nagar, East of Kailash, Kalkaji,
New Delhi-110019.
B. Name and address of Shahzad Ahmad S/o Late Syed Rizaul Karim
the Accused. R/o 148, Ami Chand Khand, Giri nagar,
Kalkaji, New Delhi-1100019.
C. Offence complained of U/s 138 NIAct
D. Plea of the accused Pleaded not guilty.
E. Final order Acquittal
F. Date of institution 14.11.2014
G. Date of pronouncement 07.11.2025
Digitally signed
by SHRUTI
SHARMA
Page no.1/26 SHRUTI Date:
SHARMA 2025.11.07
16:46:17
+0530
Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad
JUDGMENT
1. By way of the present judgment, this Court proceeds to adjudicate and dispose of the complaint instituted by R. S. Live Media Pvt. Ltd. (hereinafter referred to as "the complainant") represented by Rajiv Sethi against Shahzad Ahmad (hereinafter referred to as "the accused"), alleging commission of the offence punishable under Section 138 read with Section 142 of the Negotiable Instruments Act, 1881 ("NI Act"). The proceedings originate from the alleged dishonour of a cheque bearing no. 086183 dated 05.09.2014, drawn by the accused on his account at ICICI Bank, Vasant Kunj, New Delhi, for an amount of ₹2,00,475/-, purportedly issued in favour of the complainant towards discharge of a legally enforceable liability arising from a loan transaction. The complainant asserts that the cheque in question was handed over by the accused in discharge of his liability towards an advance salary loan, which she had sought from the complainant by way of financial assistance. The said cheque was returned unpaid upon presentation to the bank due to 'Funds Insufficient'. The subsequent failure of the accused to make payment within the statutory period after service of legal demand notice has given rise to the present cause of action, leading to prosecution under the NI Act.
2. It has been categorically averred by the complainant that the accused was employed in his firm and was drawing an annual salary of ₹3,00,000/-. The complainant has further stated that on various occasions during the years 2013 and 2014, the accused approached him seeking advance salary by way of a loan, which the complainant, on account of their employer-employee relationship, duly extended. It was mutually agreed that the said loan would be adjusted against the accused's salary and that a sum of ₹5,000/- would be deducted every month towards repayment of the advance.
3. It is the complainant's assertion that the accused had availed a total advance of ₹3,42,000/-, out of which an amount of ₹1,41,525/- stood adjusted or repaid. For Digitally signed Page no.2/26 SHRUTI by SHRUTI SHARMA SHARMA Date: 2025.11.07 16:46:23 +0530 Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad the remaining outstanding liability, the accused is stated to have issued the cheque in question towards full and final settlement of the dues, assuring the complainant that the said cheque would be duly honoured upon presentation.
4. However, to the complainant's utter shock and dismay, when the aforesaid cheque (i.e., the cheque in question) was presented for encashment through his banker, ICICI Bank, E-4, Jhandewalan Extension, Delhi, it was returned unpaid vide return memo dated 10.09.2014 with the remark "Funds Insufficient." The dishonour of the cheque, despite the prior assurance furnished by the accused, constituted the cause of action for the present complaint under Section 138 of the Negotiable Instruments Act, 1881.
5. Upon being apprised of the dishonour of the cheque, the complainant promptly contacted the accused, who initially resorted to evasive explanations and assurances of imminent payment. However, despite repeated requests and opportunities, the accused ultimately refused to honour his commitment and failed to discharge the liability arising from the cheque.
6. Subsequent to the dishonour of the cheque, and in adherence to the statutory requirements enshrined under Section 138 of the Negotiable Instruments Act, 1881, the complainant, through its engaged counsel, caused to be issued a legal demand notice dated 06.10.2014, which was dispatched to the accused via courier and speed post. Through the said notice, the accused was unequivocally called upon to pay the dishonoured cheque amount of ₹2,00,475/- within the prescribed statutory period of fifteen days from the date of receipt. The legal notice was addressed to the residential address of the accused, as furnished by him and reiterated in the body of the complaint.
7. As per the postal records placed on record, the notice was duly dispatched to the accused on 09.10.2014. However, despite the service of the legal notice and the lapse of the mandatory statutory period, the accused neither made the payment of Digitally signed Page no.3/26 SHRUTI by SHRUTI SHARMA SHARMA Date: 2025.11.07 16:46:49 +0530 Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad the cheque amount nor issued any written reply or response controverting the liability. The deliberate failure of the accused to comply with the legal demand notice, even after the dishonour of the cheque, prompted the complainant to invoke the penal provisions of the NI Act. Accordingly, the complainant instituted the present complaint under Sections 138 and 142 of the Negotiable Instruments Act, 1881, seeking penal consequences against the accused for wilful default and for the enforcement of the statutory presumption of liability arising from the dishonoured negotiable instrument.
8. The complainant has categorically asserted that the conduct of the accused, in issuing a cheque that was returned unpaid on the ground of "Funds Insufficient,"
squarely attracts the penal provisions of Section 138 of the Negotiable Instruments Act, 1881. It is further alleged that the act of the accused reflects a deliberate failure to honour his financial commitment despite due notice, thereby constituting a clear breach of the statutory mandate envisaged under the Act.
9. This deliberate act of default, when viewed in conjunction with the dishonour of the cheque on the ground of insufficiency of funds, made the complainant believe that the accused never possessed a bona fide intention to honour his financial commitments. The complainant has asserted that the sequence of events -- from the issuance of the cheque to its eventual dishonour -- unmistakably reveals a conscious and wilful breach of a legally enforceable obligation by the accused. Such conduct, as per the complainant, is not a mere instance of inadvertence or financial mismanagement but a deliberate evasion of liability, thereby squarely attracting the penal provisions of Section 138 of the Negotiable Instruments Act, 1881.
10. Upon a careful perusal of the material placed on record along with the complaint, and after due examination of the complainant by way of pre-summoning evidence in accordance with the mandate of Section 200 of the Code of Criminal Procedure, Digitally signed Page no.4/26 SHRUTI by SHRUTI SHARMA SHARMA Date: 2025.11.07 16:46:52 +0530 Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad this Court was satisfied that a prima facie case was made out against the accused for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act, 1881. The evidence adduced at the pre-summoning stage sufficiently disclosed the existence of a legally enforceable liability and the issuance of the cheque in question by the accused towards its discharge, followed by its dishonour due to insufficiency of funds. Accordingly, vide order dated 18.11.2014, this Court was pleased to take cognizance of the offence and summoned the accused to face trial for the alleged dishonour of cheque issued in discharge of a debt or liability, as contemplated under the statutory scheme of the NI Act.
11. The accused appeared on 23.07.2015 with his counsel, and was granted bail by this Court on the very same date. Pursuant to the grant of bail, the accused was directed to furnish requisite bail bonds, and accordingly, he had furnished his bail bonds which were accepted. Subsequently, upon satisfaction that a prima facie case existed warranting trial, this Court proceeded to frame notice under Section 251 of the Code of Criminal Procedure, 1973 ( CrPC), which was duly served upon the accused on 09.02.2017. Upon being apprised of the substance of accusation, including the specific allegations pertaining to issuance and dishonour of the cheque in question, the accused pleaded not guilty and claimed trial, thereby necessitating the recording of evidence in the matter in accordance with law.
12. Thereafter, in support of its case, the complainant had earlier examined Sh. Shailesh Jha at the stage of pre-summoning evidence. Further, the complainant examined Sh. Rajiv Sethi being representative of complainant itself as CW-1 during the stage of post-summoning evidence. CW1 Sh. Rajiv Sethi entered the witness box with the following documents in support of his case:-
Digitally signed by SHRUTI SHARMA SHRUTI Date:
SHARMA 2025.11.07
Page no.5/26 16:46:55
+0530
Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad
Sr. No. Exhibits Particulars
1. Ex.CW-1/A Evidence by way of Affidavit
2. Ex.CW-1/1 Board resolution dated 15.03.2010.
3. Ex.CW-1/2 Letter of authorization letter
4. Mar A Copies of money advanced to the accused in
form of cheques. (Copies of cheques)
5. Ex.CW-1/3(Colly.) Salary deduction vouchers from 01.07.2013 to 01.05.2014.
6. Ex.CW-1/4 Original cheque bearing no. 086183 dated 05.09.2014 for Rs. 2,00,475/-.
7. Ex.CW1/5 Cheque returning memo dated 10.09.2014 with "funds Insufficient"
8. Ex.CW1/6 Legal demand notice dated 06.10.2014.
9. Ex.CW1/7 Postal receipts
10. Ex.CW1/8 Courier Slips of legal demand notice
11. Ex.CW-1/9 & Tracking report of delivery.
Ex.CW-1/10
12. Ex.CW-1/11 Copy of ledger account from 01.04.2013 to 30.09.2014
13. Ex.CW-1/12 Statement of account of complainant from 01.04.2013 to 31.03.2014.
13. The said testimony was followed by an extensive cross-examination of CW-1 conducted on behalf of the accused. Upon conclusion of the complainant's evidence, the complainant's evidence was formally closed on 29.08.2019.
Page no.6/26 Digitally signed by
SHRUTI SHRUTI SHARMA
SHARMA Date: 2025.11.07
16:46:57 +0530
Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad
14. As the complainant did not wish to examine any other witness, hence the matter fixed for recording of statement of accused u/s 313 CrPC and subsequent to the conclusion of the complainant's evidence, and in compliance with the procedural mandate under Section 313 of the Code of Criminal Procedure, 1973, the statement of the accused was recorded by the Court on 16.01.2020, thereby affording him an opportunity to personally explain the incriminating circumstances appearing against him in the prosecution evidence.
15. Thereafter, the accused was afforded an opportunity to lead his defence, pursuant to which he entered the witness box as DW-1. After the recording of his deposition, no further evidence was led, and the defence evidence was accordingly closed on 16.02.2023. The matter was thereafter listed for and proceeded with final arguments.
Final Arguments
16. Thereafter, this Court heard the final arguments advanced on behalf of the both parties on 08.10.2025.
17. Learned counsel for the complainant has submitted that the case at hand straightforwardly establishes that the accused, in a clear act of dishonesty and with dishonest intention, issued the cheque in question in discharge of a legally enforceable liability. Despite the execution of the cheque and the assurance given by the accused that it would be honored upon presentation, the cheque was dishonoured due to "Funds Insufficient," as evidenced by the return memo on record. The accused, during the proceedings, did not deny his signature on the cheque. Instead, he sought to falsely assert that the cheque was given as a security against a prior loan and that this amount had been repaid, which is belied by the record and the unchallenged facts.
18. It was further argued that the legal requisites under Section 138 of the Negotiable Instruments Act have been fully satisfied: issuance of the cheque, the return of the Digitally signed by Page no.7/26 SHRUTI SHRUTI SHARMA SHARMA Date: 2025.11.07 16:47:00 +0530 Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad cheque unpaid, within the statutory period, and non-payment after receipt of the legal demand notice. The accused's attempt to defend by claiming that the liability was settled is baseless, unsupported by evidence, and clearly a deliberate attempt to evade repayment.
19. It was further submitted that the accused's conduct amounts to cheating, as he issued the cheque with full knowledge of insufficient funds, with the ulterior motive to mislead and defraud the complainant. The conduct is condemnable, and the legal consequences mandated under the NI Act are clear and unambiguous.
20. Learned counsel has argued that the accused has failed to rebut the statutory presumption under Section 139 of the NI Act. It is submitted that the defence raised by the accused--namely that the cheque was a blank security cheque and that repayments had been made--are not supported by any cogent evidence. It is emphasized that the issuance of a cheque, even by way of security, does not absolve the accused if the cheque is presented against an existing liability, as held by way of catena of judgments.
21. Per contra, learned counsel for the accused has submitted that the complainant has failed to discharge its burden of proving that the cheque in question was issued towards a legally enforceable debt. It is contended that the said cheque was handed over to the complainant at the time of disbursal of loan as security, and that the complainant has filled in an exaggerated amount without the consent of the accused. It is submitted that the complainant has selectively presented documents and suppressed material facts, thereby disentitling himself to any relief under Section 138.
22. Lastly, it was submitted that the no independent or supporting witnesses have been examined by the complainant, further weakening the complainant's credibility and leaving all allegations unsubstantiated and without corroboration. It was further submitted that the complainant has failed to prove the case beyond reasonable Digitally signed Page no.8/26 SHRUTI by SHRUTI SHARMA SHARMA Date: 2025.11.07 16:47:02 +0530 Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad doubt. The cheque stands as misused, and the complainant's account fails the evidentiary and credibility tests. It is therefore humbly prayed that the accused be acquitted of all charges in the interest of justice.
Legal Analysis & Findings:-
23. I have heard at considerable length the detailed arguments advanced by the learned counsel appearing for the complainant as well as the learned counsel representing the accused. Their respective submissions have been carefully analysed in the context of the factual matrix and the legal principles applicable to the case. This Court has also undertaken a thorough and meticulous scrutiny of the entire judicial record, which includes the contents of the complaint, the affidavits and supporting documents annexed thereto, the oral testimonies of the complainant's and the defence witnesses recorded during the course of trial, and all exhibits relied upon by the respective parties. Each piece of evidence has been examined individually as well as in conjunction with the other evidence on record so as to assess its evidentiary value, credibility, and probative strength. The rival submissions have been objectively evaluated against the backdrop of the statutory framework and the well-settled legal position governing proceedings under Section 138 of the Negotiable Instruments Act, 1881. The Court has, therefore, endeavoured to reach a reasoned and just determination by adopting a holistic and balanced appreciation of the evidence and circumstances presented before it.
24. Before embarking upon a discussion on the merits of the present case, it is considered apposite to first delineate the legal framework governing the offence of dishonour of cheque, as encapsulated under Section 138 of the Negotiable Instruments Act, 1881. The legislative intent behind enacting Section 138 is to instill greater financial discipline and sanctity in contractual obligations by deterring the issuance of cheques without sufficient funds or without adequate arrangements with the banker. The provision prescribes penal consequences in the Page no.9/26 Digitally signed SHRUTI by SHRUTI SHARMA SHARMA Date: 2025.11.07 16:47:04 +0530 Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad event of dishonor of a cheque on grounds of insufficiency of funds or if the amount exceeds the arrangement with the bank, thereby recognizing the cheque as a legitimate instrument of payment in the eyes of the law.
25. In order to fasten criminal liability upon an accused under Section 138 of the Negotiable Instruments Act, 1881, it is incumbent upon the complainant to plead and prove the existence of certain foundational ingredients through the averments made in the complaint and the evidence led during the course of trial. The essential ingredients that must be cumulatively satisfied are as follows:
a. That the accused must have drawn a cheque on an account maintained by him with a banker, for the payment of a certain sum of money to another person, and such payment must have been intended for the discharge, in whole or in part, of a legally enforceable debt or other liability;
b. That the said cheque must have been presented to the bank within a period of three months from the date on which it was drawn, or within the period of its validity, whichever is earlier;
c. That upon such presentation, the cheque must have been returned unpaid by the bank, either due to insufficiency of funds in the drawer's account or because the amount exceeded the arrangement made by the drawer with the bank;
d. That the payee or the holder in due course of the cheque must have issued a written statutory demand notice to the drawer, seeking payment of the cheque amount, within 30 days from the date of receipt of information from the bank regarding the return of the cheque unpaid;
e. That the drawer of the cheque, despite the receipt of such legal notice, failed to make payment of the cheque amount to the payee or holder in due course within 15 days from the date of such receipt. Digitally signed SHRUTI by SHRUTI SHARMA Page no.10/26 SHARMA Date: 2025.11.07 16:47:06 +0530 Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad
26. Only upon proof of the aforementioned ingredients does the offence under Section 138 stand attracted, subject to the operation of statutory presumptions under Sections 118 and 139 of the NI Act. These presumptions, however, are rebuttable and impose a reverse burden upon the accused to dislodge the same on a preponderance of probabilities.
27. It is also pertinent to note that, as per the Explanation appended to Section 138 of the Negotiable Instruments Act, the expression "debt or other liability" refers exclusively to a legally enforceable debt or other liability. This legal clarification is of critical significance, as it makes clear that mere issuance of a cheque is not sufficient to attract penal liability under the statute. The dishonoured cheque must have been issued in discharge of a debt or liability which is subsisting and legally enforceable at the time of its issuance. A cheque issued as a gift, donation, or towards a time-barred or non-existent liability will not fall within the purview of Section 138. Thus, the complainant must establish that at the time the cheque was drawn, there existed a valid and enforceable obligation in law for which the cheque was issued.
28. It is well-settled in law that the aforementioned ingredients must co-exist and be satisfied cumulatively in order to constitute the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. The absence or non-fulfilment of even one of these statutory requirements is fatal to the prosecution's case and would disentitle the complainant from invoking penal liability against the drawer of the cheque.
29. Complainant examined CW-1, Mr. Rajiv Sethi in support of its case. He deposed that he is duly authorised to represent the complainant company, R.S. Live Media Pvt. Ltd., by virtue of a Board Resolution dated 15.11.2017 and an authorization letter dated 24.11.2017 issued by the Managing Director, Mr. Rajan Mehta. He stated that the complainant company is engaged in providing advertising services Digitally signed by SHRUTI SHARMA SHRUTI Page no.11/26 SHARMA Date:
2025.11.07 16:47:15 +0530 Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad to various corporate clients through display screens installed at hotels, restaurants and public places.
30. CW-1 deposed that the accused was employed with the complainant as Manager (Operations-Live Engage) since 2011 on an annual salary package of ₹3,00,000/-. He stated that during 2013-2014, the accused repeatedly sought advance salary/loan from the complainant, which was granted from time to time through cheques, and the accused agreed to monthly deductions of ₹5,000/- from his salary towards repayment. According to CW-1, a total sum of ₹3,42,000/- was advanced to the accused, of which ₹3,22,000/- was paid through cheques (Mark A) and ₹20,000/- in cash.
31. He further stated that deductions totalling ₹1,41,525/- were made from the accused's salary, as reflected in salary vouchers exhibited as Ex. CW-1/3 (colly). For the remaining liability of ₹2,00,475/-, the accused issued cheque no. 086183 dated 05.09.2014 drawn on ICICI Bank, Vasant Kunj, which is exhibited as Ex. CW-1/4. Upon presentation, the cheque was dishonoured for "Funds Insufficient"
vide memo dated 10.09.2014, exhibited as Ex. CW-1/5.
32. CW-1 stated that despite repeated reminders, the accused failed to clear the outstanding amount. A legal notice dated 06.10.2014 was issued to the accused demanding payment within 15 days. He deposed that despite service of notice, the accused neither replied nor made payment of the cheque amount. He asserted that the cheque was issued dishonestly and with knowledge of insufficient funds, thereby constituting an offence under Section 138 NI Act and also attracting Section 420 IPC. He affirmed that the accused remains liable to pay ₹2,00,475/-, being the cheque amount.
33. During the course of his cross-examination, the complainant witness CW-1, stated that he is a graduate and works as Advisor (Operations) with the complainant company. He admitted that he does not know the annual turnover of the company but stated that the company maintains records of loans and salary Page no.12/26 Digitally signed SHRUTI by SHRUTI SHARMA SHARMA Date: 2025.11.07 16:47:17 +0530 Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad paid to employees. He stated that loans may be granted on verbal request or through emails, and that the company maintains records of loans given to employees, including the accused. He added that the company can advance fresh loans even if earlier loans remain outstanding. CW-1 stated that he has seen the record of loans advanced to the accused and volunteered that the cheques given to the accused are already on record.
34. CW-1 denied the suggestion that the accused had taken only ₹1,60,000/- as loan or that the accused had repaid the entire amount before leaving employment. He stated that the accused had repaid approximately ₹1,41,000/- and that the total loan disbursed to him was ₹3,42,000/-. He denied that two months' salary of about ₹57,000/- had been adjusted towards repayment. He further explained that loans to employees are approved by the CEO and identified the authorized signatories for the cheques marked on record. He admitted that apart from the cheques, the complainant had no other document filed on record to show that loans were given, but volunteered that bank statements, account statements and ledgers were maintained by the company and could be produced if directed.
35. CW-1 stated that employees must submit a written notice before resigning. His cross-examination was deferred for the production of bank statements, account statements and ledgers for the relevant period.
36. Upon recall, CW-1 produced the ledger account (Ex. CW1/11) and the statement of account of the complainant company for 01.04.2013 to 31.03.2014 (Ex. CW1/12). He denied that the ledger was forged or fabricated, though he admitted that no certificate under Section 65B of the Evidence Act had been filed in support of the document. He explained the company's practice of reimbursing site-related expenses directly to employees through bank transfers and, in small amounts, by cash, though he was unsure whether acknowledgments were taken for cash payments.
Digitally signed by SHRUTISHRUTI SHARMA SHARMA Date:
2025.11.07 16:47:19 +0530 Page no.13/26 Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad
37. CW-1 stated that he could identify signatures of departmental heads from the period of his service. He confirmed that the cheques in Mark A were issued to the accused. He stated that if the ledger showed that certain cheques were issued for Mahindra & Mahindra or Talwalkars GSB campaigns, then they would have been issued for those respective purposes. He expressed lack of knowledge regarding voucher numbers reflected in the ledger, clarifying that he is not from the accounts department. He denied the suggestion that the ledger or account statements had been fabricated to falsely implicate the accused.
38. CW-1 denied that the complainant never paid ₹15,000/- or ₹5,000/- to the accused on 22.04.2014 and 23.04.2014, respectively. He also denied the suggestion that the accused had taken only ₹1,60,000/- as loan and had repaid the same. With respect to the "no dues form" (Mark DA), CW-1 stated that it is a routine document issued to all employees who resign, and that even employees who have not cleared their loans receive it. He stated that the finance department verifies the dues at the end, and that the absence of specific remarks under the finance column in Mark DA does not imply that the accused had no outstanding dues.
39. CW-1 stated that he could not say whether the cheque in question was filled by the accused, and added that the accounts department could clarify that aspect. He denied the suggestion that the cheque was a security cheque given against a loan of ₹1,60,000/- and that the company had manipulated it. He denied the suggestion that no dues were pending from the accused as alleged.
40. Insofar as the statutory ingredients (b), (c), (d), and (e) under Section 138 of the Negotiable Instruments Act are concerned--namely, (b) the presentation of the cheque within its validity period, (c) its dishonour by the bank due to insufficiency of funds, (d) the issuance of a legal demand notice within 30 days of receiving intimation of dishonour, and (e) the drawer's failure to make payment within 15 days of receipt of the said notice--this Court finds that the complainant has successfully discharged the burden of proof in respect thereof. These facts Digitally signed by Page no.14/26 SHRUTI SHRUTI SHARMA SHARMA Date: 2025.11.07 16:47:22 +0530 Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad stand duly established through unimpeached documentary evidence placed on record, which includes the original cheque, the cheque return memo, the legal demand notice, the postal receipts, and the online tracking report confirming service. There is no rebuttal to the presumption of service, and hence, the requirements under clauses (b) to (e) of Section 138 stand conclusively fulfilled.
41. It is also not in dispute that the accused failed to make payment of the cheque amount to the complainant within the statutory period of 15 days from the date of receipt of the legal demand notice. The record clearly reflects that the notice was dispatched to the accused, as evidenced by the postal receipts placed on record. Significantly, the accused, during his statement recorded under Section 313 CrPC, admitted that the notice was duly served upon him. Despite being afforded the statutory opportunity under the mandate of Section 138 of the NI Act, the accused did not tender the cheque amount within the prescribed period of 15 days, thereby fulfilling the last statutory condition for attracting penal liability under the said provision.
42. The Court shall now proceed to examine the most crucial ingredient under Section 138 of the Negotiable Instruments Act, 1881, which constitutes the very foundation of the present prosecution--namely, whether the impugned cheque was issued by the accused in discharge of a legally enforceable debt or other liability. This aspect is of paramount significance, as the existence of such a liability is the sine qua non for attracting the statutory presumption under Section 139 of the NI Act.
43. In this background, this Court now undertakes a detailed and careful evaluation of the rival contentions and the evidence on record, to determine whether the said essential ingredient stands proved to the requisite standard in the present matter.
44. It is well-settled that once the complainant establishes that the cheque was drawn by the accused and that it was returned unpaid, a presumption arises under Sections 118(a) and 139 of the Act that the cheque was issued for the discharge of Digitally signed Page no.15/26 SHRUTI by SHRUTI SHARMA SHARMA Date: 2025.11.07 16:47:24 +0530 Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad a legally enforceable debt or liability. The initial burden upon the complainant is merely to prove the foundational facts--namely, the execution and dishonour of the cheque. Once this is done, the burden shifts upon the accused to rebut the presumption. Such rebuttal may be established either by leading positive evidence or by pointing out inconsistencies, improbabilities, or material contradictions in the complainant's case, which may raise a reasonable doubt as to the existence of the alleged liability.
45. For ready reference, the relevant provisions are reproduced as under:
Section 118(a), NI Act - "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."
Section 139, NI Act - "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.
46. This presumption, though statutory, is rebuttable in nature. The law places the initial evidentiary burden upon the accused to dislodge this presumption by raising a probable defence. It is now well-settled that the accused is not required to rebut the presumption beyond reasonable doubt; rather, the standard of rebuttal is that of preponderance of probabilities. The accused may discharge this burden either by adducing direct evidence or by relying on material inconsistencies, improbabilities, or contradictions in the complainant's case, elicited during cross- examination or otherwise. However, unless such rebuttal is successfully established, the presumption continues to operate in favour of the complainant.
Digitally signed Page no.16/26 SHRUTI by SHRUTI
SHARMA
SHARMA Date: 2025.11.07
16:47:26 +0530
Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad
47. This is a classic illustration of the principle of 'reverse onus' in operation, wherein the statutory scheme obligates the accused to rebut the presumption in favour of the complainant by leading what may be termed as 'negative evidence'. The accused is not required to affirmatively prove a particular fact; rather, he must bring on record material to demonstrate the non-existence of a legally enforceable debt or liability.
48. Since this reverse burden deviates from the general principle of criminal jurisprudence--namely, the presumption of innocence in favour of the accused-- the law has correspondingly tempered the standard of rebuttal. Recognizing the inherent difficulty in leading negative evidence, the standard prescribed is not that of proof beyond reasonable doubt, but of preponderance of probabilities. As held by the Hon'ble Supreme Court in Sangappa v. Mohan, (2010) 11 SCC 441, the accused need not conclusively disprove the existence of consideration or liability; it is sufficient if he can raise a probable defence which renders the existence of such liability doubtful or improbable in the mind of the Court.
49. In order to discharge the burden cast upon him under the reverse onus clause, the accused is required to either prove the non-existence of the alleged liability or demonstrate that the existence of such liability is so improbable or doubtful that a prudent person would conclude that no such obligation existed. This can be achieved by the accused either by leading direct evidence or relying upon circumstantial evidence in his defence. Alternatively, the accused may choose to effectively challenge the complainant's case by eliciting material contradictions or inconsistencies during cross-examination, thereby undermining the credibility of the prosecution's version.
50. If the accused succeeds in creating such a doubt, the burden then shifts back to the complainant, who must establish the existence of liability independent of the statutory presumptions. In such a scenario, the presumptions under Sections 118(a) and 139 of the NI Act would cease to operate in favour of the complainant Digitally signed by SHRUTI Page no.17/26 SHRUTI SHARMA SHARMA Date:
2025.11.07 16:47:28 +0530 Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad and cannot be relied upon as conclusive proof. The complainant would then have to establish the liability on the strength of his own evidence.
51. In the light of the foregoing statutory provisions and the settled principles of law governing the operation and rebuttal of presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act, this Court shall now proceed to critically examine the defence set up by the accused. The pivotal issue for consideration at this stage is whether the defence raised by the accused is plausible, probable, and legally sustainable--such as would be sufficient to rebut the presumption regarding the existence of a legally enforceable debt or liability.
52. The defence may be founded either on direct evidence adduced by the accused or may emerge from material inconsistencies, omissions, or inherent improbabilities discernible within the complainant's version, particularly as elicited during cross- examination. However, to succeed, the defence must be cogent enough to inspire confidence and must raise a credible doubt regarding the true purpose behind the issuance of the impugned cheque. In this context, the Court now undertakes a holistic and careful analysis of the defence evidence on record, as well as the explanations tendered by the accused, to assess whether the statutory presumption stands effectively rebutted in the present case.
53. It is an admitted position on record that the cheque in question pertains to the bank account of the accused and bears his admitted signatures. This fact stands acknowledged by the accused himself during the his statement recorded under Section 313 CrPC. Once the execution of the cheque and its ownership are admitted, the statutory presumption under Sections 118(a) and 139 of the Negotiable Instruments Act automatically comes into play. The law mandates that the court shall presume, unless the contrary is proved, that the cheque was issued for the discharge, in whole or in part, of a legally enforceable debt or liability. Thus, by his own admission of execution, the accused is deemed to have drawn the cheque in favour of the complainant towards satisfaction of an existing Digitally signed Page no.18/26 by SHRUTI SHRUTI SHARMA SHARMA Date:
2025.11.07 16:47:30 +0530 Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad liability, and the initial burden of proof shifts upon him to rebut the said presumption by leading cogent, credible, and convincing evidence. Mere denial or ipse dixit assertions are legally insufficient to discharge this onus.
54. Despite having admitted the issuance of the cheque in question and the affixation of his signature thereon, the accused has sought to rebut the statutory presumption under Section 139 of the Negotiable Instruments Act by projecting the defence which has been examined in the light of his statement recorded under Section 251 of the Code and statement recorded u/s 313 CrPC.
55. In his statement recorded u/s 251 CrPC, he stated that he had understood the notice and pleaded not guilty, claiming trial. He submitted that although he was employed with the complainant, the cheque in question had been handed over in blank, duly signed, merely as security, and that he had already repaid the entire amount and owed no liability to the complainant. He further denied receipt of the legal demand notice. The accused expressed his desire to lead defence evidence.
56. In his examination under Section 313 Cr.P.C., the accused denied the incriminating circumstances put to him. He disputed the complainant's assertion that he had taken advance salary/loan of Rs. 3,42,000/-, stating instead that he had only availed an advance of Rs. 1,60,000/-, against which monthly deductions of Rs. 5,000/- were made from his salary. He further stated that upon leaving employment, his last two months' salary was withheld on the ground that the loan account stood settled, and that he was issued a "no dues certificate,"
indicating no outstanding liability. He admitted having handed over a blank signed cheque as security at the time of taking the loan and alleged that the complainant had misused the same for filing the present case. The accused admitted the dishonour of the cheque in question for the reason of insufficient funds. With respect to service of legal notice, he acknowledged having visited the complainant's office but denied subsistence of any liability towards the cheque amount. He termed the present case as false and reiterated that he owed no legally Page no.19/26 Digitally signed SHRUTI by SHRUTI SHARMA SHARMA Date: 2025.11.07 16:47:33 +0530 Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad enforceable debt to the complainant. He expressed willingness to lead defence evidence.
57. In his examination-in-chief, DW-1 deposed that he was employed as a Manager with the complainant company. He stated that he had taken a loan of Rs. 1,60,000/- from the complainant, against which monthly deductions of Rs. 5,000/- were made from his salary. He claimed that when he left the company, his last two months' salary was adjusted towards the remaining amount of the said loan and thereafter no dues remained payable by him. He asserted that the complainant had issued him a "No Dues Certificate," and despite that, the complainant failed to return the blank signed security cheque that he had handed over at the time of availing the loan. He further deposed that upon receipt of a notice from the complainant regarding alleged outstanding dues, he visited the office and was assured that the notice would be withdrawn; however, the present case was filed instead. He maintained that, apart from the loan of Rs. 1,60,000/-, the amounts reflected in the ledger pertained to official expenses incurred by him for promotional activities and payments to vendors, and were not personal borrowings. He described the present complaint as false and frivolous.
58. In his cross-examination, DW-1 admitted that he had been employed with the complainant from 2011 to 2014 and that his salary ranged from Rs. 25,000/- to Rs. 30,000/-, in addition to monthly incentives of Rs. 10,000/- to Rs. 15,000/-. He acknowledged that the cheques marked on record (Mark A) had been credited to his account, clarifying that only one cheque pertained to the loan he had taken, while the remaining cheques were issued for business-related expenses such as promotional activities and payments to labour and vendors. When confronted with salary slips (Ex. CW1/3), he stated that he could not verify them without checking his own records. He admitted that the legal demand notice shown to him (Ex. CW1/6) was the same notice he had referred to earlier.
Digitally signed by SHRUTI SHARMA SHRUTI Date:
Page no.20/26
SHARMA 2025.11.07
16:47:35
+0530
Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad
59. DW-1 further stated that vouchers for advance payments used to be signed by the complainant and maintained by the accounts department, and that he did not have copies of those vouchers. He did not remember the exact date of taking the loan but reiterated that Rs. 5,000/- was deducted monthly until he left the job and that his last two months' salary had been adjusted towards the loan. He admitted that he made no written complaint nor lodged any police report regarding the alleged misuse of his security cheque, though he claimed to have personally raised the issue with the company. He denied having taken a loan of Rs. 3,42,000/- or issuing the cheque in question towards repayment of Rs. 2,00,475/-, and rejected the suggestion that he owed any legally enforceable liability or that he was deposing falsely.
60. Upon a comprehensive and meticulous appraisal of the oral and documentary evidence adduced on record by both the complainant and the defence, this Court is constrained to observe that the complainant has fallen significantly short of discharging the statutory burden cast upon him under the scheme of the Negotiable Instruments Act, 1881. Although the statutory presumptions under Sections 118(a) and 139 do operate in favour of the complainant at the initial stage, the same are rebuttable in nature and can be displaced by the accused by creating a preponderance of probabilities in his favour. In the present case, the inconsistencies and material infirmities appearing in the complainant's version, coupled with the cogent and credible defence raised by the accused, sufficiently erode the evidentiary weight of the complainant's assertions.
61. The complainant has not been able to place before the Court any convincing, unimpeachable, or contemporaneous material demonstrating that, as on the date of presentation of the cheque in question, there existed a subsisting, crystallised, and legally enforceable debt or liability recoverable from the accused. The transactions relied upon by the complainant remain uncorroborated by independent documentation, and the ledger entries as well as other financial Digitally signed Page no.21/26 by SHRUTI SHRUTI SHARMA SHARMA Date:
2025.11.07 16:47:37 +0530 Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad records brought on record fail to inspire confidence or to align with the complainant's narrative regarding the alleged advancement of funds. More so, the defence has successfully pointed out material contradictions pertaining to the nature of the alleged liability, the purpose for which the cheque was issued, and the absence of any credible acknowledgment on the part of the accused regarding the alleged outstanding amount. These factors cumulatively cast serious doubt on the genuineness and legality of the alleged debt.
62. It stands as an undisputed factual position on record that the accused was employed with the complainant company and had tendered his resignation prior to the institution of the present complaint. Throughout the proceedings -- beginning with his plea of defence recorded under Section 251 Cr.P.C., followed by his statement under Section 313 Cr.P.C., and culminating in his evidence as DW-1 -- the accused has maintained a consistent stand that, upon cessation of his employment, he was duly issued a No Dues Certificate by the complainant company. This assertion is not only unwavering but is also supported by the documentary material placed on record.
63. The complainant has attempted to undermine the probative value of this No Dues Certificate by characterising it as a mere "routine form," contending that issuance of such a document does not necessarily signify the clearance of all financial liabilities. However, this line of argument does not withstand judicial scrutiny. In his cross-examination, CW-1 candidly admitted that the No Dues Certificate is issued only at the time of the exit of an employee and that, prior to such issuance, the relevant departmental heads -- including those responsible for finance and asset management -- are required to certify that no dues remain outstanding against the outgoing employee. This admission substantially diminishes the complainant's attempt to trivialise the document and, instead, reinforces the defence version that the accused had been formally discharged from all obligations towards the complainant company at the time of his departure.
Digitally signed Page no.22/26 by SHRUTI
SHRUTI SHARMA
SHARMA Date:
2025.11.07
16:47:40 +0530
Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad
64. Moreover, despite seeking to rely on a purported outstanding loan liability, the complainant has conspicuously failed to lead any independent, credible, or departmental evidence to demonstrate that the issuance of the No Dues Certificate was erroneous or that any financial dues were intentionally or inadvertently omitted during the clearance process. The complainant did not examine any official from the finance department, to show that a substantial loan liability continued to subsist even after the official clearance of the accused's accounts. This omission assumes even greater significance because the burden squarely rested upon the complainant to establish that, notwithstanding the formal issuance of the No Dues Certificate, the accused remained indebted in respect of the alleged loan.In the absence of such evidence, and in light of the admissions elicited from CW-1, this Court finds that the complainant has failed to dispel the presumption that the No Dues Certificate reflected a comprehensive financial clearance. Consequently, this document materially supports the accused's defence and substantially weakens the complainant's assertion regarding the existence of any legally enforceable debt at the time of presentation of the cheque in question.
65. Further, a close scrutiny of the complainant's documentary evidence reveals material discrepancies that strike at the very root of the complainant's case. The ledger account Ex. CW1/11, which was produced only upon the recall of CW-1 and therefore assumes heightened evidentiary significance, does not support the complainant's narrative regarding the alleged loan disbursement of Rs. 3,42,000/-. The complaint as well as the affidavit Ex. CW1/A assert that this amount was advanced to the accused as a personal loan, yet the ledger entries on record tell an entirely different story. Certain entries corresponding to the cheques relied upon by the complainant are categorised not as "loan" or "employee advance," but as payments towards "incentive," "promotional activities," "vendor payments," and other business- or campaign-related expenditures.
Digitally
signed by
SHRUTI
SHRUTI SHARMA
Page no.23/26
SHARMA Date:
2025.11.07
16:47:43
+0530
Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad
66. In his cross-examination, CW-1 made a significant concession by acknowledging that it was part of the company's practice to route promotional, marketing, or operational expenses through the accounts of certain employees, including the accused, particularly when such employees were tasked with executing campaigns, coordinating with vendors, or handling field-level promotional activity. CW-1 further admitted that these credits were operational in nature and were not in the form of personal loans requiring repayment. This admission substantially undermines the complainant's claim that the entries in the ledger represent personal borrowings by the accused. Instead, it lends strong support to the defence contention that the amounts reflected therein were professional reimbursements or official advances provided strictly for business use.
67. The inconsistency between the complainant's pleadings and the actual nature of the entries in Ex. CW1/11 renders the complainant's version inherently unreliable. It also highlights that the complainant has failed to produce any corroborative documentation -- such as loan sanction approvals, repayment schedules, employee loan registers, or HR/Finance department authorisations -- which would ordinarily accompany a genuine employee loan of such magnitude. The absence of such essential material, coupled with the affirmative admissions made by CW-1, creates a serious dent in the credibility of the complainant's case and reinforces the probability of the defence version. Consequently, the ledger account, rather than supporting the complainant's allegations, in fact operates to displace the statutory presumption and strengthens the conclusion that no legally enforceable debt existed on the date of presentation of the cheque.
68. In the context of proceedings under Section 138 of the Negotiable Instruments Act, 1881, it is well settled that although the statutory presumptions contained in Sections 118(a) and 139 initially operate in favour of the complainant, these presumptions are not absolute. They are rebuttable in nature, and the law does not impose upon the accused the onerous burden of proving his defence beyond all Digitally signed by SHRUTI Page no.24/26 SHRUTI SHARMA Date: SHARMA 2025.11.07 16:47:47 +0530 Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad reasonable doubt. It is sufficient if the accused is able to bring on record a set of facts or circumstances which, when evaluated on the touchstone of preponderance of probabilities, create a reasonable doubt regarding the existence of a legally enforceable debt or liability.
69. In the present case, the accused has successfully discharged this limited burden by establishing a coherent and credible defence supported by documentary and oral evidence. The issuance of the No Dues Certificate at the time of cessation of employment -- a document which the complainant has neither invalidated nor explained through any reliable departmental witness -- materially weakens the complainant's allegation that a substantial loan liability continued to subsist against the accused. Further, the complainant's failure to produce any primary record pertaining to the sanction, approval, or disbursal of the alleged loan, such as internal loan authorisation, HR communication, finance department approvals, or repayment schedules, further erodes the evidentiary basis of the complainant's claim.
70. These infirmities are compounded by the glaring contradictions between the complainant's pleadings and affidavit on the one hand, and the ledger entries in Ex. CW1/11 on the other. Whereas the complaint and affidavit describe the impugned amount as a personal loan, the ledger reflects payments recorded as "incentive," "promotional expenses," and other operational or business-related outlays, thereby corroborating the defence version that the sums credited were not personal borrowings but official reimbursements or advances related to the complainant's business operations.
71. When considered cumulatively, these circumstances clearly establish a probable defence that successfully displaces the statutory presumption. Once such presumption stands rebutted, the evidentiary burden shifts back to the complainant to affirmatively prove the existence of a legally enforceable debt on the relevant date. The complainant, however, has failed to discharge this burden Digitally signed by SHRUTI SHARMA Page no.25/26 SHRUTI Date:
SHARMA 2025.11.07
16:47:49
+0530
Ct Case no.630473/2016 R.S Live Media Pvt. Ltd. Vs. Shahzad Ahmad
by producing any reliable, independent, or contemporaneous evidence in support of the alleged liability. Accordingly, the accused is entitled to the benefit of doubt, and the complainant's case cannot be said to have been proved to the requisite legal standard.
72. In light of these deficiencies, the accused has been able to rebut the statutory presumptions by raising a defence which is not only plausible but also supported by the overall circumstances emerging from the record. Once the presumption stands rebutted, the onus shifts back to the complainant to prove the existence of the debt beyond reasonable doubt -- a burden which the complainant has evidently failed to discharge. Consequently, this Court finds that the complainant has not succeeded in proving, to the required legal standard, the existence of any legally enforceable debt or liability against the accused at the time when the cheque was presented, thereby entitling the accused to an honourable acquittal.
Conclusion
73. In the light of the aforementioned discussion, the complainant has successfully proved all the ingredients of Section 138 NI Act. Accordingly, this court holds accused Mr. SHAHZAD AHMAD not guilty for committing the offence under section 138 of the NI Act and he is hereby acquitted.
74. The judgment duly digitally signed be uploaded on the CIS.
Announced in the open Digitally signed
on 07.11.2025 by SHRUTI
SHRUTI SHARMA
SHARMA Date:
2025.11.07
16:47:51 +0530
(Shruti Sharma-I)
JMFC (NI Act)-02, South-East,
Saket Courts, New Delhi 07.11.2025
Certified that this judgment contains 26 pages and each page bears my signature.
Page no.26/26