Delhi District Court
Rajiv Rathi vs Keval Ram And Sons on 2 February, 2026
IN THE COURT OF JUDICIAL MAGISTRATE FIRST CLASS, (NI ACT)-04,
SOUTH, SAKET, NEW DELHI
Presided over by- Sh. Shiva Parashar, DJS
In the matter of :-
RAJIV RATHI DLST020058752024
S/o Lt. Sh. R.C. Rathi, R/o 25, Sadhna Enclave,
New Delhi- 110017
.... Complainant
VS.
M/S KEVAL RAM & SONS
Through its Partner
.... Accused no.1
RISHI KHURANA,
Partner, M/s Keval Ram & Sons
S/o Lt. Sh. Gopal Krishan Khurana,
R/o 25/26, Ground Floor, East Patel Nagar,
New Delhi-110008
.... Accused no.2
1. Name of Complainant : Rajiv Rathi
1. M/s Keval Ram & Sons
2. Name of Accused :
2. Rishi Khurana
Offence complained of or
3. : Section 138, Negotiable Instruments Act, 1881
proved
4. Plea of Accused : Not Guilty
5. Date of Filing : 23.02.2024
6. Date of Reserving Order : 12.01.2026
7. Date of Pronouncement : 02.02.2026
8. Final Order : Acquittal
Argued by: - Sh. Anil Kumar Gupta, Ld. Counsel for the complainant.
Sh. Uma Aggarwal, Ld. counsel for the accused.
CC NI Act 2402/2024 Rajiv Rathi vs. M/s Keval Ram & Sons & anr. 1
Digitally signed
by SHIVA
PARASHAR
SHIVA
Date:
PARASHAR 2026.02.02
16:09:42
+0530
BRIEF STATEMENT OF REASONS FOR THE DECISION:-
FACTUAL MATRIX
1. The present complaint is filed against the accused Keval Ram & sons,
a partnership firm as well as its partner Rishi Khurana S/o late Sh. Gopal Krishan
Khurana under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter
referred to as "NI Act"). The substance of allegations and assertions of the
complainant, Rajiv Rathi, is that the accused is a tenant of the complainant at two
premises of the complainant. The said premises now stand merged by the accused.
Thereafter, accused no. 2 has approached the complainant and requested him to
permit the accused to sublet the merged tenanted premises for a period of 3 years.
The complainant allowed sub-tenancy at his merged tenanted premises and in
consideration, the accused had agreed to pay a sum of Rs. 45,000/- per month as
rent for sub-tenancy. Accused no. 2 had made a payment of Rs. 1,35,000/- to the
complainant as a security deposit and additionally, in order to discharge its
monthly liability, accused no. 2 had handed over 12 post- dated cheques of Rs.
45,000/- each to the complainant.
2. In order to recover the due amount, the complainant presented two
cheques of the accused for encashment. The present litigation revolves around the
two cheques bearing nos. 296719 and 296626 dated 01.11.2023 and 08.12.2023 for
an amount of Rs. 45,000/- (Forty Five Thousand Rupees) each, drawn on South
Indian Bank, Chandni Chowk, Delhi (hereinafter referred to as "cheques in
question"). The said cheques, when presented, were returned unpaid vide return
memo dated 11.12.2023 by the bank with remarks, "Payment Stopped by Drawer".
The complainant then issued demand notice dated 06.01.2024, through his counsel
CC NI Act 2402/2024 Rajiv Rathi vs. M/s Keval Ram & Sons & anr. 2
Digitally signed
by SHIVA
PARASHAR
SHIVA
Date:
PARASHAR 2026.02.02
16:09:47
+0530
upon the accused. Even after the receipt of the demand notice, the accused failed to
pay the cheque amount within the stipulated period and hence, the present
complaint.
3. On finding a prima facie case against the accused, they were
summoned to face trial vide order dated 27.02.2024 and after their appearance,
notice of accusation under Section 251, Code of Criminal Procedure, 1973
(hereinafter referred to as "CrPC") was served upon them on 19.04.2024. In reply
to the notice of accusation, the accused pleaded not guilty and claimed trial.
Accused no. 2 stated that he is signatory to the cheques in question but disputed the
liability on the ground that a rent agreement between the parties could not be
materialised.
4. During the trial, the complainant has led the following oral and
documentary evidence against the accused to prove its case beyond reasonable
doubt:-
ORAL EVIDENCE
CW 1 : Rajiv Rathi (Complainant)
DOCUMENTARY EVIDENCE
Ex.CW1/1 (OSR) : Aadhar Card
Mark-A : GST details of accused
Ex.CW1/2 : Cheque bearing no. 296719
Ex.CW1/3 : Cheque bearing no. 296626
Ex.CW1/4 : Return memo
Ex.CW1/5 : Return memo
Ex.CW1/6 : Bank statement
Ex.CW1/7 : Legal Demand Notice dated 06.01.2024
CC NI Act 2402/2024 Rajiv Rathi vs. M/s Keval Ram & Sons & anr. 3
Digitally
signed by
SHIVA
SHIVA PARASHAR
PARASHAR Date:
2026.02.02
16:09:51
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Ex.CW1/8 (Colly) : Original postal receipts
Ex.CW1/9 (Colly) : Tracking reports
Ex.CW1/10 (Colly) : Returned envelopes
Ex.CW1/11 : Reply to legal demand notice
Ex.CW1/12 (Colly) : WhatsApp chat
Ex.CW1/13 : Agreement for permission to sublet
Ex.CW1/14 (Colly) : Rent agreements
Ex.CW1/15 (Colly) : Photographs
Ex.CW1/16 : Pen drive
Ex.CW1/17 : Certificate u/s 65B
Ex.CW1/18 : Certificate u/s 65B
Ex.CW1/19 : Certificate u/s 65B
Ex.CW1/20 : Certificate u/s 65B
Ex.CW1/A : Evidence by way of affidavit of CW-1
5. Thereafter, before the start of defence evidence, in order to allow the
accused to personally explain the incriminating circumstances appearing in
evidence against them, the statement of the accused was recorded without oath
under Section 313 Cr.P.C. In reply, accused no. 2 accepted the dishonour of
cheques in question; however, he denied their liability.
Thereafter, accused had led the following evidence in its defence.
ORAL EVIDENCE
DW 1 : Rishi Khurana (Accused no. 2)
DOCUMENTARY EVIDENCE
Ex.CW1/D1 (Colly) : Letter dated 01.12.2023
Ex.CW1/D2 (Colly) : Letter dated 13.12.2023
Ex.CW1/D3 (Colly) : Letter dated 08.12.2023
Ex.CW1/D4 : Letter dated 18.12.2023
CC NI Act 2402/2024 Rajiv Rathi vs. M/s Keval Ram & Sons & anr. 4
Digitally signed
by SHIVA
PARASHAR
SHIVA
Date:
PARASHAR 2026.02.02
16:09:55
+0530
ARGUMENTS-
6. The final arguments were heard in the matter. I have heard the ld.
counsels appearing for the parties and have given my thoughtful consideration to
the material appearing on record.
7. It has been argued by the ld. counsel for the complainant that all the
ingredients of the offence are fulfilled in the present case. He has argued that it is
proved from the material on record that the complainant had entered into a sub-
tenancy agreement with the accused and the same is proved through documentary
evidence appended along with the complaint. Further, the case of complainant is
proved through documentary evidences such as the agreements, WhatsApp
communication and photographs to show the presence of a sub-tenant and the
liability of accused to make the payment. As such, the accused has failed to raise a
plausible defence whereas the case of complainant is proved through the
documents itself. In addition, accused no. 2 has raised disparate defences in his
Notice under Section 251 Cr.P.C. and in his statement recorded under Section 313
Cr.P.C. Ld. Counsel for complainant has relied upon Sanjabij Tari Vs. Kishore S
Borcar 2025(4) ACR 499. As such, it is prayed that the accused be punished for the
said offence.
8. Per contra, ld. counsel for the accused has argued that the complainant
has failed to establish his case beyond reasonable doubt. She submits that the
accused has no legally enforceable liability towards the complainant as the
complainant has failed to prove an agreement of sub-tenancy. The agreements
CC NI Act 2402/2024 Rajiv Rathi vs. M/s Keval Ram & Sons & anr. 5
Digitally
signed by
SHIVA
SHIVA PARASHAR
PARASHAR Date:
2026.02.02
16:09:59
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relied upon by the complainant are merely drafts and the same does not comply
with the requirements of law as well. Further, the case of the accused is that the
accused had approached the complainant for taking another property on rent,
however, the deal could not materialise and the same is proven through the letters
sent to the complainant. As such, it is prayed that the accused be acquitted.
INGREDIENTS OF OFFENCE AND DISCUSSION
9. Before dwelling into the facts of the present case, it would be apposite
to discuss the legal standards required to be met by both sides. In order to establish
the offence under Section 138 of NI Act, the prosecution must fulfil all the
essential ingredients of the offence. Perusal of the bare provision reveals the
following necessary ingredients of the offence:-
First Ingredient: The cheque was drawn by a person on an account maintained
by him for payment of money and the same is presented for payment within a
period of 3 months from the date on which it is drawn or within the period of its
validity;
Second Ingredient: The cheque was drawn by the drawer for discharge of any
legally enforceable debt or other liability;
Third Ingredient: The cheque was returned unpaid by the bank due to either
insufficiency of funds in the account to honour the cheque or that it exceeds the
amount arranged to be paid from that account on an agreement made with that
bank;
Fourth Ingredient: A demand of the said amount has been made by the payee or
holder in due course of the cheque by a notice in writing given to the drawer
within thirty days of the receipt of information of the dishonour of cheque from
the bank;
Fifth Ingredient: The drawer fails to make payment of the said amount of
money within fifteen days from the date of receipt of notice.
CC NI Act 2402/2024 Rajiv Rathi vs. M/s Keval Ram & Sons & anr. 6
Digitally signed
by SHIVA
PARASHAR
SHIVA
Date:
PARASHAR 2026.02.02
16:10:04
+0530
10. The accused can only be held guilty of the offence under Section 138
NI Act if the above-mentioned ingredients are proved by the complainant co-
extensively. Additionally, the conditions stipulated under Section 142 NI Act have
to be fulfilled.
11. The proof of first and third ingredient is not disputed. The
complainant has proved the original cheques, Ex.CW1/2 and Ex.CW1/3 which the
accused has not disputed as being drawn on its account. It is not disputed that the
cheques in question were presented within the validity period. The cheques in
question were returned unpaid vide return memo, Ex. CW1/4 and Ex. CW1/5 due
to the reason, "Payment Stopped by Drawer". As such, on the basis of the above,
the first and third ingredient of the offence under Section 138 NI Act stands
proved.
12. With regard to the fourth and fifth ingredient, the complainant has
proved on record legal notice Ex. CW1/7, original postal receipts Ex. CW1/8
(Colly), tracking report Ex.CW1/9 (Colly) and reply of accused to the legal notice
Ex.CW1/11. The cheques in question were dishonoured vide return memo
Ex.CW1/4 and Ex.CW1/5 dated 11.12.2023. The legal notice was addressed to the
accused and sent by the counsel for complainant is dated 06.01.2024. A reply to
the notice has also been received by the complainant. The receipt of legal demand
notice is admitted by accused no.2 in his statement u/s 251 Cr.P.C. as well as in his
statement u/s 313 Cr.P.C. Therefore, it is proved that the legal notice was delivered
to the accused. No dispute was raised on this issue by the counsel for the accused
during arguments. The fact that the payment was not made within 15 days of the
CC NI Act 2402/2024 Rajiv Rathi vs. M/s Keval Ram & Sons & anr. 7
Digitally signed
by SHIVA
SHIVA PARASHAR
PARASHAR Date:
2026.02.02
16:10:09 +0530
receipt of the legal notice is also not disputed. Therefore, the fourth and the fifth
ingredient of the offence also stands proved.
13. Now it remains to be ascertained if the second ingredient is proved or
not. As far as the proof of second ingredient is concerned, it has to be proved that
the cheque in question was drawn by the drawer for discharging a legally
enforceable debt. In the present case, the signature of the accused on the cheques in
question is not denied. In the plea of accused recorded u/s 251 Cr.P.C, the accused
no.2 has admitted being a signatory to the cheques in question. Signatures were
also admitted by accused no.2 when his statement under Section 313 Cr.P.C. was
recorded. Under the NI Act, once the accused admits his signatures on the cheque,
certain presumptions are drawn, which result in shifting of onus. Section 118(a) of
the NI Act lays down the presumption that every negotiable instrument was made
or drawn for consideration. The second presumption is contained under Section
139 of NI Act which casts a reverse onus upon the accused. The provision lays
down the presumption that the holder of the cheque received it for the discharge, in
whole or part, of any debt or other liability.
14. It has been held by a three-judge bench of the Hon'ble Apex Court in
the case of Rangappa vs. Sri Mohan (2010) 11 SCC 441 that the presumption
contemplated under Section 139 of NI Act includes the presumption of existence
of a legally enforceable debt. Once the presumption is raised, it is for the accused
to rebut the same by establishing a probable defence on the standard of
preponderance of probabilities to prove that there was no legally enforceable debt
or other liability. In order to rebut the presumption, it is open for the accused to
CC NI Act 2402/2024 Rajiv Rathi vs. M/s Keval Ram & Sons & anr. 8
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signed by
SHIVA
SHIVA PARASHAR
PARASHAR Date:
2026.02.02
16:10:13
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rely on evidence led by him or the accused can also rely on the materials submitted
by the complainant in order to raise a probable defence and it is not necessary for
the accused to come in the witness box in support of his defence. In the present
case, the contentions raised by the ld. counsel for the accused to rebut the
presumptions are discussed below.
15. SUB TENANCY AGREEMENT IS NOT PROVED BEFORE THE COURT.
15.1. Ld. Counsel for the accused has argued that the complainant has failed
to prove the existence of a sub-tenancy agreement between the parties.
15.2. Firstly, a perusal of the agreements Ex.CW1/13 and Ex.CW1/14
(Colly) reveal that the same does not bear the signatures of either of the parties.
Further, certain other particulars and dates are also left blank upon the agreements.
15.3. Secondly, the agreements Ex.CW1/13 and Ex.CW1/14 (Colly) does
not mention the name of the sub-tenant sought to be inducted by the accused.
15.4. Thirdly, it is the case of the complainant that the sub-tenancy
agreement was executed for a period of 3 years and a reference to Section 17(1)( d)
of the Registration Act, 1908 reveal that lease of immovable property for a term
exceeding one year shall necessarily be registered. However, neither the
agreements Ex.CW1/13 and Ex.CW1/14 (Colly) bear the stamp of registration nor
it shows the payment of stamp duty by the parties. Further, the e-stamp certificate
number mentioned upon each page of Ex.CW1/13 and Ex.CW1/14 (Colly) is left
blank as well.
CC NI Act 2402/2024 Rajiv Rathi vs. M/s Keval Ram & Sons & anr. 9
Digitally
signed by
SHIVA
SHIVA PARASHAR
PARASHAR Date:
2026.02.02
16:10:17
+0530
15.5. Fourthly, the complainant has relied upon the WhatsApp chats
Ex.CW1/12 (Colly) to prove the factum of sub-tenancy, however, a perusal of the
WhatsApp chats does not reveal that an agreement of sub-tenancy was materialised
between the parties. On the contrary, in a message dated 22.11.2023, the accused
has stated, "This agreement is not ok at all". As such, the complainant has failed to
show the meeting of minds of the parties upon the aspect of tenancy/sub-tenancy
on the date of presentation of the cheques in question.
15.6. Fifthly, it is the case of the complainant that a sub-tenancy agreement
dated 01.11.2023 was executed between the parties and in this regard, 12 post
dated cheques for the period 01.11.2023 to 31.10.2024 were handed over to the
complainant. However, a perusal of WhatsApp chats Ex.CW1/12 (Colly) reveal
that even on 22.11.2023 and 04.12.2023, the agreement of tenancy/sub-tenancy
could not be materialised between the parties. Thus, the complainant has not
shown how the liability of accused has arisen when the agreement between the
parties did not even materialise on the date of the presentation of cheques in
question.
15.7. As such, the agreements relied upon by the complainant lack the
following particulars:
i. signatures of both the parties as well as the witnesses is absent,
ii. the agreements are undated,
iii. it is an unregistered document which requires compulsory registration since the
parties had agreed for a lease of 03 years,
iv. the e-stamp certificate number is left blank
v. the whatsapp chats show that the parties lacked consensus upon the agreements on
the date of presentation of cheques in questionZ
CC NI Act 2402/2024 Rajiv Rathi vs. M/s Keval Ram & Sons & anr. 10
Digitally signed
by SHIVA
SHIVA PARASHAR
PARASHAR Date:
2026.02.02
16:10:22 +0530
In view of the above discussion it is clear that the agreements relied
upon by the complainant were merely drafts shared between the parties for
discussion and deliberation and at no point, the tenancy/sub-tenancy agreement
was finalised between the parties. Hence, a new relationship of landlord and sub-
tenant was not created between the parties.
16. ACCUSED HAD GIVEN THE CHEQUES IN QUESTION TO THE
COMPLAINANT FOR A NEW TENANCY.
16.1. It is argued by ld. Counsel for accused that the accused had given the
cheques in question for taking another premise of the complainant on rent and the
same is proved through the documentary proof placed on record by the accused.
16.2. During the cross-examination of complainant dated 07.11.2024, ld.
counsel for accused has confronted the complainant with a letter dated 01.12.2023
(Ex. CW1/D1). The complainant has admitted the receipt of Ex. CW1/D1. In the
said letter, the accused has stated that since the deal between the parties could not
be finalised, the cheques in question were deemed to be cancelled. The
complainant was thereafter confronted with reply to letter dated 01.12.2023
(Ex.CW1/D3). The complainant has admitted his signatures upon Ex.CW1/D3. A
perusal of the same reveals that a copy of said letter was also sent to one Ronak
Ramesh Bafna. In his complaint, the complainant has claimed that the said Ronak
Ramesh Bafna is the sub-tenant inducted by the accused. Then, Ld. Counsel for
accused has also confronted the complainant with reply dated 18.12.2023 of Ronak
Ramesh Bafna (Ex.CW1/D4). Therein, the said Ronak Ramesh Bafna has denied
CC NI Act 2402/2024 Rajiv Rathi vs. M/s Keval Ram & Sons & anr. 11
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signed by
SHIVA
SHIVA PARASHAR
PARASHAR Date:
2026.02.02
16:10:27
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any landlord-tenant or sub-tenant relationship with either of the parties. A perusal
of the above letter communications between both the parties reveal that prior to the
presentation of the cheque in question, the accused had written a letter to the
complainant and cancelled the cheques which were exchanged between the parties.
Thereafter, the so-called sub-tenant had also denied any kind of relationship with
either of the parties. Moreover, the reliance placed by the complainant upon
Sanjabij Tari (supra) is misconceived as it does not support the case of the
complainant and additionally, the same does not address the defence raised by the
accused.
16.3. Accordingly, the accused has led sufficient documentary proof of
letter communications between the parties to show the absence of a sub-tenancy
agreement between the parties. Additionally, the accused had informed the
complainant that he had cancelled the cheques in question even prior to their date
of presentation and the complainant has, thus, knowingly presented the cheques in
question for encashment.
17. In the facts of the present case, the accused has been able to raise a
probable defence of the absence of any sub-tenancy agreement and the
complainant has been unable to rebut the same. Therefore, in view of the
discussion in the foregoing paragraphs, the inevitable conclusion is that the
accused has been successful in proving that there was no legally enforceable debt
towards the complainant on the date of presentation of cheque in question.
Therefore, the second ingredient is not fulfilled in the present case.
As such, the accused has been able to rebut the presumptions under
CC NI Act 2402/2024 Rajiv Rathi vs. M/s Keval Ram & Sons & anr. 12
Digitally signed
by SHIVA
SHIVA PARASHAR
PARASHAR Date:
2026.02.02
16:10:31 +0530
Sections 118 & 139. However, the complainant has not been able to prove a sub-
tenancy agreement between the parties. In absence of any material to the contrary,
it can be safely presumed that the agreements exchanged between the parties were
merely drafts which could never be finalised between the parties and the same is
proven through the whatsapp chats and letter communications between the parties.
Further, the said draft agreements were undated, unsigned and did not comply with
the other provisions of law. Therefore, the accused has been able to punch holes in
the version of the complainant and the complainant has failed to prove that the
cheque in question was issued in lieu of a sub-tenancy agreement.
CONCLUSION -
18. To recapitulate the above discussion, the accused has been successful
in establishing a probable defence on a standard of preponderance of probabilities
to rebut the presumption under Section 118 and Section 139 of NI Act by punching
holes in the case of the complainant and making the version of the complainant
doubtful. Cogent evidence is required to be proved beyond reasonable doubt to
secure conviction in a criminal trial. The accused has been successful in
establishing a probable defence from the evidence of the complainant and the
circumstances of the case that there was no legal liability of the cheque amount.
This court has no hesitation to hold that the case of the complainant is more
unlikely than that of the accused. The complainant has been unable to rebut or
refute the defence of absence of any documentation regarding the sub-tenancy
agreement.
19. As such, the complainant has failed to prove the offence beyond
CC NI Act 2402/2024 Rajiv Rathi vs. M/s Keval Ram & Sons & anr. 13
Digitally signed
by SHIVA
PARASHAR
SHIVA
Date:
PARASHAR 2026.02.02
16:10:35
+0530
reasonable doubt and the accused has been able to raise a probable defence.
Resultantly, the complaint of the complainant is dismissed and the accused no.1
M/s Keval Ram & Sons and accused no.2 Rishi Khurana are hereby acquitted of
the offence of Section 138 of the Negotiable Instruments Act, 1881.
ORDER:- ACQUITTED Digitally signed by SHIVA SHIVA PARASHAR PARASHAR Date:
2026.02.02 Pronounced in open court on 02.02.2026. 16:10:42 +0530 (Shiva Parashar) JMFC (NI Act)-04, South Saket, New Delhi Note: This judgment contains 14 pages and each page has been signed by me.
CC NI Act 2402/2024 Rajiv Rathi vs. M/s Keval Ram & Sons & anr. 14