Delhi District Court
Hcl Infosystems Ltd vs Amtrak Technologies Pvt Ltd on 10 April, 2026
Ct case no. 3006/2019
M/s HCL Infosystems Ltd. Vs. Amtrak Technologies Pvt. Ltd.
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)
DLSE020092892019
Criminal Complaint No. 3006/2019
M/s HCL Infosystems Ltd. ....................... Complainant
Vs.
Amtrak Technologies Pvt. Ltd. .......................Accused
Sr.No Particulars Details
A. Name and address of the M/s HCL Infosystems Ltd. Office at 806,
Complainant: Sidhartha, 96 Nehru Place, New Delhi-110019
through its AR Sh. Prabhakar Tiwari
B. Name and address of the Amtrak Technologies Pvt. Ltd. representated
Accused. by Sh. Sandeep Arya, Office at 6, Community
Centre, East of Kailash, New Delhi-110065.
C. Offence complained of U/s 138 NIAct
D. Plea of the accused Pleaded not guilty.
E. Final order ACQUITTED
F. Date of institution 12.03.2019
G. Date of pronouncement 10.04.2026
Digitally signed
by SHRUTI
SHARMA
SHRUTI Date:
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JUDGMENT
1. This Court, by the present detailed judgment, adjudicates the complaint instituted by M/s HCL Infosystems Ltd., a reputed IT services, solutions and distribution company represented by its Authorised Representative (AR) Sh. Prabhakar Tiwari (hereinafter "Complainant"). The complaint targets Amtrak Technologies Pvt. Ltd. (Accused No. 1), and its Director Sh. Sandeep Arya (Accused No. 2) (collectively "Accused"), for offences punishable under Section 138 r/w Section 142 of the Negotiable Instruments Act, 1881 ("NI Act"). The prosecution stems from the dishonour of a cheque issued by the Accused(s) in purported discharge of a legally enforceable debt i.e. Cheque bearing No. 165418 dated 24.01.2019 for Rs. 25,80,438/- drawn on Bank of India, Lajpat Nagar, Delhi. The cheque, handed over as part-payment of an accumulated liability from services rendered, was presented for encashment via ICICI Bank, Jhandewalan, New Delhi, but returned unpaid on 25.01.2019 with the bank endorsement "Payment stopped by Drawer". Despite statutory legal demand notice and the accused's failure to remit payment within the prescribed 15-day window, the cause of action crystallized, warranting invocation of NI Act's penal provisions.
2. It is the case of the complainant that the accused no. 1, being a company incorporated under the Companies Act, acting through accused no. 2, its Director and the person in charge of and responsible for the conduct of its day-to-day business affairs, approached the complainant with a proposal to enter into a commercial arrangement for the marketing and sale of IT and electronic consumer products. Relying upon the representations and assurances extended by the accused regarding their financial standing and business capabilities, the complainant entered into a Partnership Agreement dated 09.01.2018 with accused no. 1.
3. In furtherance of the said arrangement, the accused placed purchase orders dated 30.01.2019 for the supply of "Microfocus (HP Software)" products. Pursuant thereto, the complainant duly supplied the said products, which were received and Digitally signed Page no.2/25 SHRUTI by SHRUTI SHARMA SHARMA Date: 2026.04.10 16:49:10 +0530 Ct case no. 3006/2019 M/s HCL Infosystems Ltd. Vs. Amtrak Technologies Pvt. Ltd.
accepted by the accused without any protest or demur. Corresponding invoices, both dated 13.03.2018, each for a sum of Rs. 12,90,219/-, were raised by the complainant. It is averred that a running and mutual account was maintained between the parties, and as on 01.02.2019, a sum of Rs. 32,93,903/- stood outstanding and payable by the accused to the complainant.
4. In acknowledgment and partial discharge of the aforesaid subsisting and legally enforceable liability, the accused issued a cheque bearing no. 165418 dated 24.01.2019 for an amount of Rs. 25,80,438/-, drawn on Bank of India, Lajpat Nagar Branch, New Delhi, in favour of the complainant. It is further averred that at the time of issuance of the said cheque, the accused unequivocally assured the complainant of its due encashment upon presentation.
5. However, upon presentation of the said cheque through the complainant's banker, the same was returned unpaid vide return memo dated 25.01.2019 with the remarks "Payment Stopped by Drawer," thereby causing grave prejudice and financial loss to the complainant.
6. Consequently, the complainant, through its counsel, issued a statutory legal demand notice dated 08.02.2019 to the accused, calling upon them to make payment of the cheque amount within the statutory period of 15 days from the date of receipt thereof. The said notice was duly dispatched at the correct addresses of the accused and is stated to have been served upon them. Despite receipt of the said notice, the accused failed to liquidate the outstanding liability within the prescribed period.
7. It is, thus, the categorical case of the complainant that the cheque in question was issued in discharge of a legally enforceable debt, and that the dishonour thereof, coupled with the failure of the accused to make payment within the statutory period despite due notice, constitutes the commission of an offence punishable under Section 138 read with Sections 141 and 142 of the Negotiable Instruments Act, 1881. The complainant has, therefore, prayed that this Court be pleased to take Digitally signed Page no.3/25 SHRUTI by SHRUTI SHARMA SHARMA Date: 2026.04.10 16:49:12 +0530 Ct case no. 3006/2019 M/s HCL Infosystems Ltd. Vs. Amtrak Technologies Pvt. Ltd.
cognizance of the aforesaid offence and to summon, try, and punish the accused in accordance with law, along with granting appropriate compensation in favour of the complainant.
8. 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, 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 payment stopped by drawer. Accordingly, vide order dated 11.12.2019, 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.
9. The accused appeared on 18.03.2021 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 personal 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 27.05.2022. 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.
10. Thereafter, in support of its case, the complainant adopted the pre-summoning evidence of CW-1 in post summoning evidence. Further more, the complainant Digitally signed SHRUTI by SHRUTI SHARMA Page no.4/25 SHARMA Date: 2026.04.10 16:49:13 +0530 Ct case no. 3006/2019 M/s HCL Infosystems Ltd. Vs. Amtrak Technologies Pvt. Ltd.
examined only one witness as CW-1. CW1/ AR Sh. Prabhakar Tiwari entered the witness box and relied on the following documents in support of his case:-
Sr. Exhibits Particulars
No.
1. Ex.CW-1/A Evidence by way of Affidavit
2. Ex.CW-1/1 Copy of board resolution dated 09.06.2006.
3. Ex.CW-1/2 General Power of Attorney
4. Ex.CW-1/3 Copy of the GST registration certificate of
accused no. 1.
5. Ex.CW-1/4(Colly) Copies of purchase orders by the accused and
& copy of tax invoices.
Ex.CW-1/5(Colly)
6. Ex.CW-1/6 Copy of ledger account maintained by the
complainant for accused.
7. Ex.CW-1/7 Original cheque in question bearing no.
165418 dated 24.01.2019 for Rs. 25,80,438/-.
8. Ex.CW-1/8 Cheque returning memo dt. 25.01.2019 with
remarks 'payment stopped by Drawer'.
9. Ex.CW-1/9(Colly) Legal demand notice dated 08.02.2019.
10. Ex.CW-1/10(Colly) Tracking reports
11. Ex.CW-1/11 Complaint u/s 138 NI Act filed by the
complainant.
11. The aforesaid stage was thereafter followed by an extensive examination-in-chief of CW-1, who was subjected to a detailed and searching cross-examination on behalf of the accused on 10.11.2022 and 23.11.2022 . Upon completion of such Page no.5/25 Digitally signed by SHRUTI SHRUTI SHARMA SHARMA Date: 2026.04.10 16:49:15 +0530 Ct case no. 3006/2019 M/s HCL Infosystems Ltd. Vs. Amtrak Technologies Pvt. Ltd.
cross-examination, and no further questions remaining to be put to the witness by either side, CW-1 was formally discharged by the Court on the very same day, i.e., 23.11.2022, in accordance with law.
12. Upon completion of the complainant evidence and as the complainant did not wish to examine any other witness, hence the matter fixed for recording of statements of accused(s) 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 statements of the accused(s) were recorded by the Court on 09.02.2023, thereby affording him an opportunity to personally explain the incriminating circumstances appearing against him in the prosecution evidence.
13. Thereafter, the accused(s) were afforded a full and fair opportunity to lead evidence in defence. However, the accused stated in his statement recorded u/s 313 CrPC that he did not wish to examine any defence witnesses. Consequently, the right of the accused to lead defence evidence was closed, and the matter was accordingly directed to proceed to the stage of final arguments.
Final Arguments
14. Thereafter, this Court heard and considered the final arguments advanced on behalf of both the parties on 17.02.2026. Upon conclusion of the said submissions, the matter was reserved for pronouncement of judgment.
15. The complainant has contended that the contractual relationship between the parties is governed by the Agreement dated 09.01.2018, the terms whereof unequivocally establish that the accused was under a binding obligation to purchase and pay for the goods supplied. It is submitted that the clauses relating to purchase, inconsistency, delivery, and general terms clearly stipulate that (i) the terms of the Agreement would prevail over any purchase order, (ii) any discrepancy in goods supplied was required to be intimated within 24 hours, failing which no objection Digitally signed by SHRUTI Page no.6/25 SHRUTI SHARMA SHARMA Date:
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could be entertained, and (iii) unsold stock could neither be returned nor compensated without the complainant's approval. The accused, having failed to raise any objection within the stipulated time and having accepted delivery without demur, is estopped from disputing its liability.
16. It is further argued that the documentary record, particularly the email correspondence, clearly demonstrates that the accused had granted prior approval for supply of the products and that the licences/keys of the software were duly delivered to the end user. Once such delivery, especially e-delivery of software licences, was effected, the transaction stood completed and the liability to pay crystallized. The subsequent plea of cancellation of purchase orders on account of issues with the end customer is stated to be wholly irrelevant vis-à-vis the complainant, as the complainant was neither concerned with nor responsible for the accused's arrangements with its end customer.
17. The complainant has emphasized that software licences, once delivered, are incapable of being reversed or retrieved, and thus the liability arising therefrom is absolute. The accused, despite acknowledging the outstanding dues, failed to discharge the same and, after considerable delay of more than one year, issued the cheque in question towards partial discharge of its legally enforceable debt. The dishonour of the said cheque on the ground "Payment Stopped by Drawer,"
followed by failure to make payment within the statutory period despite receipt of legal demand notice, completes the ingredients of the offence under Section 138 of the Negotiable Instruments Act.
18. Reliance has been placed upon the statutory presumption under Section 139 of the Act, it being submitted that once the issuance of cheque and signatures thereon are admitted by the accused, a presumption arises in favour of the complainant that the cheque was issued in discharge of a legally enforceable debt. It is argued that the accused has failed to rebut this presumption, having neither led any defence evidence nor established the non-existence of liability. Digitally signed by SHRUTI SHARMA SHRUTI Page no.7/25 SHARMA Date:
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19. The complainant has further contended that even if the cheque is assumed to have been issued as a security, the same would nonetheless attract the provisions of Section 138 once a legally enforceable debt existed on the date of its presentation. In support of this proposition, reliance has been placed upon judicial precedents including Bir Singh v. Mukesh Kumar, Kalamani Tex v. P. Balasubramanian, Sunil Todi v. State of Gujarat, and Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel, wherein it has been held that the crucial test is the existence of legally enforceable debt at the time of encashment of the cheque.
20. Per contra, the accused has assailed the case of the complainant on both procedural and substantive grounds. At the outset, it is contended that certain additional affidavit(s) and documents filed by the complainant at the pre-summoning stage were neither relied upon during post-summoning evidence nor supplied to the accused in a timely manner, and hence cannot be read in evidence. It is argued that the complainant, having consciously abandoned reliance upon such documents, is estopped from invoking the same at the stage of final arguments.
21. It is further submitted that the said documents have not been proved in accordance with law. The complainant's witness (CW1), in his cross-examination, has admitted lack of personal knowledge regarding crucial aspects of the transaction and has failed to produce foundational documents such as the partner registration checklist and other prerequisite records. It is thus argued that mere exhibition of documents does not amount to proof thereof, particularly when the witness himself disclaims knowledge of their contents.
22. The accused has also contended that the terms of the purchase orders, including payment terms, govern the transaction, and that the participation agreement does not override such terms. It is urged that as per the admitted position in cross- examination, the payment terms were "bill to bill," thereby indicating that liability was contingent and not absolute.
Digitally
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23. It is further argued that the purchase orders were put on hold or cancelled, and that the complainant was duly informed in this regard. According to the accused, the existence of disputes regarding supply, acceptance, and liability negates the existence of a legally enforceable debt, which is a sine qua non for the offence under Section 138 of the Act. It is contended that in the presence of such disputes, the benefit of doubt must enure to the accused.
24. The accused has also emphasized that the complainant has failed to discharge the initial burden of proving the existence of a legally enforceable debt. It is argued that the presumption under Section 139 of the Act does not obviate the requirement of proving foundational facts and that, in the present case, such foundational facts remain unestablished.
25. In view of the aforesaid submissions, the accused has prayed for dismissal of the complaint and acquittal, contending that the complainant has failed to prove its case beyond reasonable doubt.
Legal Analysis & Findings:-
26. 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, if any, 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 Digitally signed by SHRUTI Page no.9/25 SHRUTI SHARMA SHARMA Date:
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framework and the well-settled legal position governing proceedings under Section 138 of the Negotiable Instruments Act, 1881. The Court has, therefore, endeavored to reach a reasoned and just determination by adopting a holistic and balanced appreciation of the evidence and circumstances presented before it.
27. 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 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.
28. 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;Digitally signed by SHRUTI SHARMA
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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.
29. 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.
30. 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 Digitally signed was issued. by SHRUTI SHARMA SHRUTI Date:
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31. 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.
32. CW-1, Mr. Prabhakar Tiwari, the Authorized Representative of the complainant company, M/s HCL Infosystems Ltd., tendered his evidence by way of affidavit. He deposed that the complainant is a company incorporated under the Companies Act, having its registered office at Nehru Place, New Delhi, and that he was duly authorized to institute and prosecute the present complaint on its behalf by virtue of a Board Resolution and a General Power of Attorney. He reiterated the contents of the complaint in his examination in chief.
33. In his cross-examination, he deposed that he has been associated with the complainant company since 1992 and was serving as Deputy Manager (Commercial) in the year 2017, and is presently working as a Consultant. However, he candidly admitted that he does not possess personal knowledge of the standard policies or terms governing distributorship or partnership agreements executed by the complainant with its business partners, and that his knowledge is derived only from perusal of records.
34. CW-1 admitted that the participation agreement is available on the company portal and that the copy placed on record is only a standard format and not specifically tailored to the present transaction. He further acknowledged that, as per standard procedure, a checklist for enablement of a new partner is required, which would ordinarily include documents such as partner registration forms, credit applications, signature verification letters, and PAN declarations. However, he admitted that he neither produced such checklist nor had personal knowledge as to what documents were obtained from the accused prior to execution of the partnership agreement.
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35. With respect to the suggestion that blank security cheques are generally taken from partners, CW-1 stated that such practice is not mandatory in all cases and expressed inability to confirm whether any such cheque was obtained from the accused, stating that he had no personal knowledge in this regard. He further admitted that he could not produce any such cheque or related document.
36. CW-1 was confronted with email correspondence dated 20.12.2017 and other documents. While he admitted that certain emails were sent from the complainant's official email address, he expressed inability to admit or deny their contents due to lack of personal knowledge. He also sought time initially to respond to certain email chains and subsequently admitted that some of the documents pertained to correspondence between the complainant and the accused.
37. He admitted that subsequent to the execution of the agreement dated 09.01.2018, purchase orders were placed by the accused and that the payment terms in the purchase orders stipulated "bill-to-bill" payments. He further conceded that invoices raised were tax invoices but expressed lack of knowledge regarding the actual deposit of taxes in relation thereto.
38. Importantly, CW-1 admitted that vide email dated 05.02.2018, the accused had requested the complainant to hold the purchase orders on account of the end customer putting the project on hold. He further admitted that there was no clause in the purchase orders prohibiting cancellation or rescission thereof.
39. On the aspect of delivery, CW-1 stated that the software is delivered through an online portal and becomes usable only upon issuance of a licence key. However, he admitted that he could not produce any document to show the exact date of upload of the software, issuance of licence key, or its access by the end user. He also admitted that he had no knowledge as to whether the end customer actually installed or used the software in question.
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40. CW-1 further conceded that he could not produce any document evidencing acceptance of goods by the accused without demur. He reiterated that such transactions are carried out through an online portal but failed to substantiate the same through documentary proof.
41. With regard to financial dealings, CW-1 admitted that payments were made invoice-wise and that even the ledger reflected cheque payments corresponding to specific invoices. He further admitted that as per the participation agreement, payment terms were governed by the purchase orders. He also acknowledged that there was no mutual, open, and running account involving reciprocal demands between the parties.
42. On the aspect of the cheque in question, CW-1 admitted that he could not specify the exact date on which the cheque was handed over by the accused and gave only an approximate timeframe. He denied the suggestion that the cheque was issued as a security instrument at the time of execution of the agreement or that it was subsequently filled in by the complainant without consent.
43. CW-1 further admitted that a demand notice under the Insolvency and Bankruptcy Code had been issued to the accused and that a reply thereto was received. He also stated that, to his knowledge, no claim was pursued thereafter before the NCLT.
44. 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 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 confirming dispatch. There is no rebuttal to the Digitally signed Page no.14/25 SHRUTI by SHRUTI SHARMA SHARMA Date: 2026.04.10 16:49:49 +0530 Ct case no. 3006/2019 M/s HCL Infosystems Ltd. Vs. Amtrak Technologies Pvt. Ltd.
presumption of service, and hence, the requirements under clauses (b) to (e) of Section 138 stand conclusively fulfilled.
45. 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, and under section 251 CrPC also, the accused admitted that his address mentioned on the notice was his correct address. 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.
46. 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.
47. 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.
48. 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 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 Digitally signed by SHRUTI Page no.15/25 SHRUTI SHARMA SHARMA Date:
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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.
49. 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.
50. 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.
51. 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 Digitally signed by SHRUTI SHARMA SHRUTI Page no.16/25 SHARMA Date:
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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.
52. 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.
53. 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.
54. 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 and cannot be relied upon as conclusive proof. The complainant would then have to establish the liability on the strength of his own evidence.
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SHRUTI SHARMA
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55. 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.
56. 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.
57. 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 251 CrPC and u/s 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 liability, and the initial burden of proof shifts upon him to rebut the said presumption by leading Digitally signed by SHRUTI SHARMA SHRUTI Date:
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cogent, credible, and convincing evidence. Mere denial or ipse dixit assertions are legally insufficient to discharge this onus.
58. 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.
59. In his statement recorded u/s 251 CrPC, he admitted knowledge of the complainant and acknowledged that the cheque in question bore the signatures of Accused No. 2 on behalf of Accused No. 1. However, it was categorically stated that the particulars on the cheque, including the date and name of the payee, were not filled by them. The accused denied receipt of the legal demand notice, though they admitted that the address mentioned therein was correct. The principal defence disclosed at this stage was that a general business/participation agreement had been executed between the parties, pursuant to which two blank signed cheques were handed over to the complainant as security, one of which is the cheque in question. It was further stated that although a purchase order was subsequently issued, the same contained a stipulation that invoicing was not to be done prior to 15.02.2018. The accused asserted that vide email dated 05.02.2018, the purchase order was cancelled as the end customer had put the project on hold and was not willing to accept the material. It was thus alleged that the complainant misused the blank signed cheque.
60. In his statement recorded under Section 313 Cr.P.C. the accused reiterated that the participation agreement dated 09.01.2018 was executed between the parties, though it was asserted that the same was subject to specific terms and conditions reflected in email communications.
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SHRUTI SHARMA
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61. The accused admitted issuance of purchase orders dated 30.01.2018 (Ex. CW1/4), but emphasized that the terms contained therein governed the transaction. It was, however, denied that any goods were received pursuant to the said purchase orders, and it was stated that the purchase orders had already been cancelled vide email dated 05.02.2018, prior to the scheduled delivery, on account of the end customer putting the project on hold. The accused denied the correctness of the alleged outstanding liability and disputed the ledger account relied upon by the complainant. While admitting that the cheque in question was issued and bears the signatures of Accused No. 2, it was asserted that the same had been handed over as a blank signed security cheque at the time of execution of the participation agreement, pursuant to an email dated 20.12.2017. It was contended that the complainant subsequently filled in the particulars and misused the cheque despite there being no subsisting liability on the date mentioned therein. The accused further denied receipt of the legal demand notice, albeit admitting that the address mentioned therein was correct. It was specifically asserted that no legally enforceable debt existed on the date of presentation of the cheque, as the purchase orders had already been cancelled in 2018 and no goods had been accepted by the end customer.
62. The entire edifice of the complainant's case rests upon the testimony of CW-1, Sh.
Prabhakar Tiwari; however, a careful scrutiny of his cross-examination reveals significant infirmities which go to the root of the matter. CW-1 has repeatedly admitted lack of personal knowledge on material aspects of the transaction. He has candidly deposed that he is unaware of the standard procedures for onboarding partners, the nature of documents obtained from the accused prior to execution of the agreement, and the specific communications exchanged between the parties. His knowledge is admittedly derived only from perusal of records and not from any direct involvement in the transaction.
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63. More importantly, CW-1 has failed to produce or even identify crucial foundational documents such as the partner registration checklist, credit application forms, or other due diligence records which would ordinarily accompany such a transaction. He has also been unable to explain the circumstances under which the cheque in question came into the possession of the complainant, and could not even specify the date on which the cheque was allegedly handed over.
64. Such lack of personal knowledge on core aspects, coupled with absence of supporting documentary evidence, substantially diminishes the evidentiary value of the testimony of CW-1. In a prosecution under Section 138 of the Negotiable Instruments Act, where the existence of a legally enforceable liability is foundational, such deficiencies render the complainant's version susceptible to doubt and incapable of being accepted without reservation.
65. A company, being a juristic entity, can act only through human agency and is competent to initiate proceedings under Section 138 of the NI Act through an authorised representative. However, such representative must have either witnessed the transaction or possess direct knowledge thereof. A person who became associated with the company subsequent to the transaction and relies solely on records is not competent to prove execution of the cheque or the underlying transaction. Mere production of the cheque does not dispense with the requirement of proof of execution, which must be established either through admission of the accused or through credible evidence of a witness who actually witnessed the execution. A witness lacking knowledge of the circumstances of issuance cannot prove execution by relying on records alone (reliance placed on A. C. Narayanan Vs. State of Maharashtra & Anr." (2014) 11 SCC 790 ).
66. The complainant has asserted that goods in the nature of software licences were duly supplied and accepted by the accused without demur. However, this assertion remains unsubstantiated by cogent and reliable evidence. CW-1 has admitted that he is unable to produce any document to demonstrate the exact date of upload of Digitally signed Page no.21/25 SHRUTI by SHRUTI SHARMA SHARMA Date: 2026.04.10 16:50:12 +0530 Ct case no. 3006/2019 M/s HCL Infosystems Ltd. Vs. Amtrak Technologies Pvt. Ltd.
the software, issuance of licence keys, or the grant of access to the end user. He has further conceded that he has no knowledge as to whether the end customer actually installed or used the software. Crucially, he has also admitted that no document evidencing acceptance of the goods by the accused without protest has been placed on record.
67. It was incumbent upon the complainant to establish delivery and acceptance through contemporaneous digital records such as system logs, activation records, delivery confirmations, or acknowledgments. The absence of such primary evidence creates a significant lacuna in the complainant's case and renders the alleged delivery highly doubtful. This assumes greater significance in light of the defence taken by the accused that the deal itself was cancelled. In the absence of proof of delivery and acceptance, the very foundation of the alleged liability becomes uncertain, thereby weakening the complainant's case under Section 138 of the Negotiable Instruments Act.
68. A material admission emerges from the cross-examination of CW-1, wherein he has acknowledged that the accused, vide email dated 05.02.2018, had requested the complainant to keep the purchase orders on hold on account of the end customer putting the project on hold. This admission assumes considerable significance, as it indicates that the transaction had not attained finality and was subject to uncertainty even prior to the alleged delivery.
69. Further, CW-1 has admitted that there was no clause in the purchase orders prohibiting cancellation or rescission. In the absence of any such contractual restriction, the defence of the accused that the purchase orders were cancelled prior to execution or delivery cannot be brushed aside lightly. This position gains further strength when viewed in conjunction with the complainant's failure to produce any cogent evidence demonstrating actual delivery or acceptance of the software licences. Digitally signed by SHRUTI SHRUTI SHARMA Page no.22/25 SHARMA Date:
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70. Once the accused has been able to raise a probable defence that the purchase orders stood cancelled prior to delivery, and the complainant has failed to establish that goods were in fact delivered and accepted, the very substratum of the alleged liability becomes questionable. In such circumstances, the existence of a legally enforceable debt or liability, which is a sine qua non for an offence under Section 138 of the Negotiable Instruments Act, becomes doubtful.
71. CW-1 has admitted that as per the purchase orders, the payment terms were "bill to bill," and that even the ledger maintained by the complainant reflects payments being made on an invoice-wise basis. He has further conceded that, in terms of the participation agreement, the payment obligations were governed by the purchase orders themselves. This admission assumes considerable significance, as it militates against the complainant's plea of a consolidated and crystallized liability. On the contrary, it indicates that any liability, if at all, was contingent upon individual invoices and would arise only upon corresponding delivery and acceptance of goods against each such invoice. In the absence of cogent proof regarding delivery and acceptance, the very existence of any enforceable liability becomes doubtful. Consequently, the foundational requirement under Section 138 of the Negotiable Instruments Act, namely the existence of a legally enforceable debt on the date of presentation of the cheque, remains unestablished.
72. The consistent defence of the accused has been that the cheque in question was issued as a blank signed security cheque at the time of execution of the agreement. This defence gains support from the cross-examination of CW-1, who has admitted that, in certain cases, cheques are taken at the time of onboarding partners, though he expressed lack of specific knowledge with respect to the present transaction. This admission, though general in nature, lends some plausibility to the defence version.
73. Further, CW-1 has been unable to state the date on which the cheque in question was allegedly issued or handed over, and no contemporaneous document has been Page no.23/25 Digitally signed SHRUTI by SHRUTI SHARMA SHARMA Date: 2026.04.10 16:50:16 +0530 Ct case no. 3006/2019 M/s HCL Infosystems Ltd. Vs. Amtrak Technologies Pvt. Ltd.
produced to demonstrate that the cheque was issued towards discharge of any specific, crystallized liability. The absence of such foundational evidence weakens the complainant's assertion regarding the purpose of issuance of the cheque.
74. It is well settled that even a cheque issued as security can attract the provisions of Section 138 of the Negotiable Instruments Act, provided that a legally enforceable debt or liability exists on the date of its presentation. However, in the present case, the existence of such a legally enforceable debt itself remains unproved and doubtful. In these circumstances, the defence of the accused assumes significance and cannot be brushed aside, as it successfully casts a reasonable doubt on the complainant's case.
75. The accused has also raised a substantive challenge to the admissibility and proof of certain documents, including additional affidavits and documents which were not relied upon or exhibited during the stage of post-summoning evidence. It is a settled principle of criminal jurisprudence that documents must be duly proved in accordance with law at the appropriate stage of trial so as to afford the opposite party an opportunity to test their authenticity through cross-examination. Documents sought to be introduced belatedly, without proper exhibition and proof, cannot be read in evidence. In the present case, the complainant has failed to satisfactorily establish such documents in accordance with law, thereby rendering them inadmissible.
76. In view of the aforesaid circumstances, this Court is of the considered opinion that the accused has been able to raise a probable defence by demonstrating, inter alia, absence of proof of delivery and acceptance of goods, prior cancellation or holding in abeyance of the purchase orders, lack of clarity regarding the circumstances and purpose of issuance of the cheque, and material inconsistencies and infirmities in the testimony of CW-1. These factors, when considered cumulatively, create a credible doubt regarding the existence of a legally enforceable liability and are Digitally signed SHRUTI by SHRUTI SHARMA Page no.24/25 SHARMA Date: 2026.04.10 16:50:17 +0530 Ct case no. 3006/2019 M/s HCL Infosystems Ltd. Vs. Amtrak Technologies Pvt. Ltd.
sufficient to rebut the statutory presumption under Section 139 of the Negotiable Instruments Act on the standard of preponderance of probabilities.
77. For all the foregoing reasons, this Court holds that the complainant has failed to prove, that the cheque in question was issued towards discharge of a subsisting and legally enforceable liability and that the accused has successfully rebutted the statutory presumptions under Sections 118(a) and 139 of the Act.
Conclusion
78. In the light of the aforementioned discussion, Accused No. 1, M/s Amtrak Technologies Pvt. Ltd., and Accused No. 2, Mr. Sandeep Arya, are hereby held not guilty and stand acquitted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881.
79. The judgment duly digitally signed be uploaded on CIS.
Announced in the open Digitally signed by
on 10.04.2026 SHRUTI SHRUTI SHARMA
SHARMA Date: 2026.04.10
16:50:19 +0530
(Shruti Sharma-I)
JMFC (NI Act)-02, South-East,
Saket Courts, New Delhi 10.04.2026.
Certified that this judgment contains 25 pages and each page bears my signature.
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