Delhi District Court
Shriram Transport Finance Co. Ltd vs Sunil Kumar Yadav on 9 June, 2025
THE COURT OF Ms. RAVISHA SIDANA
JUDICIAL MAGISTRATE FIRST CLASS, NI ACT,
DIGITAL COURT, NORTH-EAST
KKD, DELHI
(Reserved Judgment on Transfer vide order dt. 30.05.2025)
CC NO. 244/2021
Shriram Transport Finance Ltd.
Regd. Office at 3rd floor, Mookambika
Complex no. 4, Lady Desika Road, Mylapore
Chennai-600004 ......... Complainant
vs.
Sunil Kumar Yadav
S/o Sh. Ramesh Kumar Yadav
R/o H. No. 128, Shahidnagar Block G, Ghaziabad,
Near Chunabhatti Road, Ghaziabad
Uttar Prader-201001 ............ Accused
1.Offence complained of Section 138 of Negotiable or proved Instruments Act, 1881 (NI Act)
2. Date of Filing 09.03.2021
3. Plea of Accused Not Guilty
4. Date of Reserving Order 03.05.2025
5. Date of Pronouncement 09.06.2025
6. Final Order Acquittal Argued by :-
Ld. counsel for the complainant Sh. Dinesh Kumar. Ld. counsel for the accused Sh. Devender Gupta and Sh. Ram Babu.
Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.09 17:01:26 +0530 BRIEF STATEMENT OF REASONS FOR THE DECISION:- FACTUAL MATRIX
1. Vide this judgment the present complaint case for an offence punishable U/S.138 of the Negotiable Instruments Act, 1881 (hereinafter "the NI Act") is being decided.
2. It is case of the complainant that complainant is a registered company in the name & style of "Shriram Transport Finance Company Ltd." having its registered office at 14A, South Phase Industrial Estate, Guindy Chennai and having its branch office at C-1/5A, First Floor, Yamuna Vihar, Delhi and is engaged in the business of financing, leasing amongst other business. The complainant has appointed Sh. Gyan Singh as authorised representative to appear before/institute and prosecute any suit or criminal complaint, verify and sign all the legal document, vakalatnama, plaints and affidavit on behalf of the company before any court of judicial authorities.
3. The accused had approached to the complainant for financial assistance of a loan for vehicle bearing no. HR38L2744 and on his request, the complainant sanctioned and disbursed the amount financed in terms of agreement MAYUV0305220002 duly signed by the accused, repayable in monthly installments alongwith other charges stipulated in the agreement from time to time. The accused failed to repay the regular installments in contrast to agreed terms of aforesaid agreement.
4. In discharge of his outstanding liability as per the running loan amount, the accused had issued a cheque bearing no. 000012 dt. 18.12.2020 for Rs. 4,00,000/- drawn on Bank of Baroda, Surya Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.09 17:01:33 +0530 Nagar, Ghaziabad, U.P in favour of the complainant with assurance that the said cheque will be encashed on its presentation.
5. On the assurance of the accused, the complainant presented the abovesaid cheque for encashment with his bank but the said cheque was dishonoured and returned unpaid with remarks "Funds Insufficient" vide return memo dated 11.01.2021.
6. The complainant had sent a legal notice dated 27.01.2021 to the accused through his counsel regarding the dishonour of the aforesaid cheque through registered AD & speed post but the accused has neither discharged his liability nor make payment of the cheque amount and therefore, the present complaint is filed by the complainant against the accused for the offence under Section 138 of the NI Act.
7. On being satisfied of the prima facie ingredients of Section 138 of the NI Act, cognizance was taken and summons were directed to be issued against the accused vide order dated 07.04.2021.
8. Accordingly, on 05.03.2022 notice under Section 251 Cr.PC r/w Section 263(g) Cr.P.C was framed and served upon the accused to which he pleaded not guilty and claimed trial. While putting forth his plea of defence, accused admitted his signatures on the cheque in question, however denied the other particulars of the cheque being filled by him. He also disputed the receipt of legal demand notice. He further raised his defence as follows:
Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.09 17:01:39 +0530 "Yes, I had taken the vehicle loan from the complainant company for the amount of Rs. 4,53,000. Approx. I have repaid the amount of approximately Rs. 2,80,000 to the complainant. Complainant had not issued me any receipt. My truck had met with an accident. Complainant company assured me to get insurance claim. I get the same repaired by Kamal Body Builder and spent around Rs 2,50,000 for its repai,however the complainant kept the insurance claim with them. The vehicle had been taken by Kamal Body builder. I do not owe the cheque liability towards the complainant. The cheque in question had been given to the complainant as a security cheque signed in blank alongwith other blank signed cheques as security. I do not want to say anything else.".
9. In Complainant's evidence, the AR for complainant (CW-1) stand as CW1 and relied upon the following documents:
i) Ex. CW1/A is Evidence of complainant by way of affidavit.
ii) Ex. CW1/1 is Complaint.
iii) Ex. CW1/2 is Cheque in question (Admitted U/s. 294 Cr.P.C.)
iv) Ex. CW1/3 is Cheque Returning memo (Admitted U/s. 294 Cr.P.C.)
v) Ex. CW1/4 is Legal demand notice. (Admitted U/s. 294 Cr.P.C.)
vi) Ex. CW1/5 is Postal receipt
vii) Ex. CW1/6 is Tracking Report
viii) Ex. CW1/7 is Certificate u/s 65 B CW1/AR of complainant was cross examined on behalf of the accused and the CE was closed vide Order i.e. 09.02.2024.
10. The accused was then examined under Section 313 Cr.P.C., 1973 wherein all the incriminating evidence were put to the accused and accused has admitted the transaction of the alleged loan from the complainant and stated that he borrowed around sum Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.09 17:01:44 +0530 of Rs 4 Lakhs. The cheque in question alongwith six other blank and signed cheques had been given to the complainant at the time of disbursement of the aforesaid loan. He had denied having received legal notice. He had admitted his signature on the cheque and denied having filled the other details in the cheque in question. The accused opted to lead defence evidence by stating that he has returned Rs 2,80,000 as installments and further that the complainant has not cleared amount of Rs 2,50,000 as insurance when his vehicle got damaged. Therefore, he does not owe any liability towards the complainant company.
11. Vide order dt. 21.12.2024, upon submission of ld counsel for the accused that he does not wish to lead DE in the present matter, the DE was closed and the matter was listed for final arguments.
12. It has been argued by Ld. Counsel for the complainant that the case of the complainant is proved and the cheque is also in the favour of the complainant, therefore, the accused must be convicted and the amount should be recovered. On the other hand, Ld. Counsel for the accused has argued that the accused has been falsely implicated in this case and that the complainant has not been able to prove its case beyond reasonable doubt against the accused.
13. I have heard ld counsel for the complainant and Ld. Defence counsel for the accused & considered the respective arguments as well as gone through the case file very carefully.
Digitally
signed by
RAVISHA
RAVISHA SIDANA
SIDANA Date:
2025.06.09
17:01:50
+0530
14. 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 as laid down by Hon'ble supreme court in Gimpex Private Limited vs. Manoj Goel(2022) 11 SCC 705:
1. 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;
2. Second Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability;
3. 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;
4. 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;
5. Fifth Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice.
15. It is settled law that once the execution of cheque is admitted, Presumption under section 139 of NI act is raised in favour of the complainant. The presumption raised is a rebuttable presumption and the onus on the accused to raise a probable defence. The standard of proof for rebutting, the presumption is that of preponderance of probabilities.
RAVISHA SIDANA Digitally signed by RAVISHA SIDANA Date: 2025.06.09 17:01:56 +0530 [Basalingappa Vs. Mudibasappa (AIR 2019 SC 1983) See also Kumar Exports Vs. Sharma Carpets (2009) 2 SCC 513]
16. The phrase "unless the contrary is proved" u/s 139 is of vital importance clarifying that the rebuttal of the presumption has to be supported by proof and not mere plausible explanation. The liberty is granted to the accused to either rely on evidence led by him in his support or the material relied by the complainant to raise his probable defence. In addition to the materials brought on record, the circumstances relied upon can also draw the inference of preponderance of probability lying in the favour of the accused.
17. In the case at hand, the proof of the first and third ingredient are disputed. The complainant has although proved the original cheque (Ex. CW1/2) pertaining to the being drawn on the account of the accused. It is disputed that the cheque in question was presented within the validity period of the debt. Further, the cheque in question was returned unpaid vide return memo (Ex. CW1/3) due to the reason, "Funds Insufficient", which does falls strictly within the purview of section 138 NI Act. As such, the first and third ingredient of the offence under Section 138 NI Act stand proved.
18 With regard to the fourth and fifth ingredient, the complainant has proved on record legal notice Ex. CW1/4 and postal receipt Ex. CW1/5. The postal receipt Ex. CW1/5 was addressed to the accused and sent by the counsel for the complainant dated 27.01.2021, which confirms the delivery of the same at the 'Sahibabad SO' on 02.02.21. In Ergo, the accused has denied receipt of the legal demand notice in his Notice framed u/s 251 Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.09 17:02:03 +0530 Cr.P.C. as well as in his Statement recorded u/s 313 Cr.P.C, although the address mentioned in the legal demand Notice is not disputed. The fact that the payment was not made within 15 days of the receipt of the legal notice also becomes disputed. Therefore, the fourth ingredient requires adjudication subject to which, the fifth ingredient of the offence shall stand proved.
C. DELIVERY OF LEGAL DEMAND NOTICE
19. The perusal of Legal Demand Notice Ex. CW1/D dt 21.01.21 reflects the address of the accused to be "House no. 128, Shahidnagar, Block G, Ghaziabad, near chunnabhatti road, Uttar Pradesh, 201001".
20. The legal demand notice Ex. CW1/D dt 21.01.21 is stated to be delivered on 02.02.2021 at the Sahibabad SO as per Postal receipt & Tracking report Ex. CW1/F. 20.1 The aforesaid address is admitted by the accused during the stage of notice framing and the same also finds corroboration from the admission of sending of the legal demand notice by the complainant u/s 294 Cr.PC.
20.2 Reliance is placed upon the observations of the Hon'ble Supreme Court in C.C. Alavi Haji vs Palapetty Muhammed & Anr.
VI (2007) SLT 442, that when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of clause (b) of the proviso to Section 138 of the NI Act stands complied with. 20.3 Therefore, the defence of the accused that he had not received the legal demand notice is negated as it does not hold any Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.09 17:02:08 +0530 ground. In the light of aforesaid observations, the fourth and the fifth ingredient also stand proved.
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
21. During the stage of notice framing under 251 Cr.PC and admission and denial of documents u/s 294 Cr.PC & section 313 Cr.PC, the accused had admitted his signatures on the cheque in question that has been drawn in favour of the complainant. Hence, the presumption under 139 NI Act read with Section 118 NI Act is drawn in favour of the complainant.
22. The accused in the present case has relied on the following line of main defences to rebut the presumption:
A. The blank signed cheque was misused by the complainant B. Accused has repaid substantial loan amount to the complainant company 22.1 To analyse these defences in the right perspective, the following Issues need to be adjudicated:
i) Whether the accused issued his blank signed cheque to the complainant
ii) Whether the impugned cheque is in discharge of his outstanding liability of Rs 4,00,000 Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.09 17:02:14 +0530 BLANK SIGNED CHEQUE
23. The first defence taken by the accused is the cheque in question was his blank signed cheque, which he never issued to the complainant but the complainant has misused her cheque by filling the particulars of the same before presenting it.
23.1 Section 20 of the NI Act talks about inchoate instruments. As per this provision if a person gives a duly signed cheque which is either blank or partly filled then he is deemed to have given implied authority to the holder to fill up the particular in it and complete the cheque, thus making the drawer liable for the payment mentioned in it. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provision of section 138 would be attracted 23.2 On this point, it is profitable to mention the judgment of Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd., (2016) 10 SCC 458, Sripati Singh vs. State of Jharkhand & Anr., 2021 SCC Online SC 1002 and Sunil Todi vs. State of Gujarat & Anr., 2021 SCC Online SC 1174 , wherein it has been held that merely because a cheque has been issued for only security purposes will not absolve the accused from the liability under Section 138 NI Act. It has been further held that a cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. It has been held by the Hon'ble Court that the accused would very much be liable under Section 138 NI Act for RAVISHA SIDANA Digitally signed by RAVISHA SIDANA Date: 2025.06.09 17:02:20 +0530 issuance of a security cheque also, if on the date of the presentation of such cheque, there has not been a prior discharge of debt, or if the cheque has not been given towards advance payment, the goods in respect of which have not been received by the other party, or if other than this there has been change in circumstances which precludes the complainant from depositing the cheque with the bank.
24. In the present case, it is the complainant's version that the cheque in question was issued by the accused upon the persistent requests and demands by the complainant It is the specific version of the complainant that the cheque in question was issued by the accused for the discharge of liability of her husband for Rs. 4,00,000 24.1 In Ergo, the stance of the accused during his Notice framing u/s 251 Cr.PC is that his blank signed cheque was misused by the complainant as he had paid substantial amount to the complainant company and total six blank signed cheques were issued the time of disbursement of the loan amount. During the cross-examination of the Complainant dt.09.02.24, CW1 (AR of the complainant company) denied the suggestions put forth by the counsel for the accused that the accused never issued the impugned cheque to the complainant but also admitted that the company also takes cheques from the borrowers at the time of providing loan facility to them, which is in contrast with his averments in the complaint and the PSE affidavit CW1/A. 24.2 As discussed, even in case of blank signed cheques, the statutory presumptions under section 118(a) and 139 would be RAVISHA SIDANA Digitally signed by RAVISHA SIDANA Date: 2025.06.09 17:02:26 +0530 raised in favour of the complainant. Therefore, in an instant case, since, the accused has admitted the execution of impugned cheque, the aforementioned statutory presumptions would be raised in favour of the complainant regarding the fact that the impugned cheque has been drawn for consideration and issued by the accused in discharge of legally enforceable debt.
IMPUGNED CHEQUE WAS IN DISCHARGE OF LEGALLY ENFORCEABLE DEBT FOR RS 4,00,000
25. The case of the complainant is that the impugned cheque was issued for the outstanding liability of Rs 4,00,000 for the vehicle loan account availed by the accused vide his loan account no. MAYUVO305220002. The defence of the accused is that impugned blank signed cheque has been misused by the complainant company as the actual loan amount disbursed by the accused was for Rs 4,53,595 through cheque bearing no. 853123 dated 22.05.2013 drawn on Axis Bank.
26. It is noteworthy that the loan advanced and disbursed to the accused was not mentioned in complaint and PSE Affidavit. During the cross-examination dated 09.02.24, the AR representing the complainant (CW1) admitted document Mark A/D1 as per which amount of Rs 4,53,595 was lent to the accused and not amount of Rs 5,00,000. It hinges upon the foundation of the present case as there is discrepancy as to the loan amount advanced to the accused.
27. The documents pertaining to the legal liability of the accused i.e. Loan agreement (Ex.CW1/8) and the Statement of account (Ex.CW1/9) was not relied by the complainant rather it was Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.09 17:02:31 +0530 produced at the time of cross-examination and formed the part of evidence at the behest of the accused. Further, it is admitted by CW1 that the amounts repaid by the accused are reflected in Ex.CW1/9. Upon careful examination, the statement reflects receipts of Rs 3,14,046 on behalf of the accused, in consonance with the averment of the accused that he had paid the substantial loan amount to the complainant company. In this regard, a suggestion was also given to CW1 that more than 3 Lakhs has been repaid by the accused.
28. It is undisputed that the insurance of the impugned vehicle was done by the complainant company. The same also finds corroboration from (Ex.CW1/9) as alongwith the main loan account bearing no. MAYUVO305220002, two other concurrent insurance accounts YMNVR0405220047 & YMNVR0508070115 were also running against the aforesaid main loan account, which fortifies the claim of the accused that he duly paid his insurance premiums and therefore, he was duly entitled to the insurance claim after his vehicle had met with the accident in year 2014. The copy of the FIR P.S Modi Nagar, Ghaziabad, U.P dated 27.09.2014 (Mark X/D1 colly) mentions the aforesaid factum of the accident of the vehicle in question. Therefore, actual loss caused to the impugned vehicle of the accused and its repair of Rs 2,50,000 by the accused is proved. No repayment of the insurance amount to the accused reflects in the account statement of the accused (Ex.CW1/9).
29. The law under Negotiable Instruments allows penal action u/s 138 NI Act for the legally recoverable amount and not any amount claimed by the complainant. It is unfathomable and Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.09 17:02:37 +0530 unconvincing as to liability of the accused for the cheque amount after payments for the substantial installments and the premium amount were made by the accused.
30. The accused has raised a probable defence and has discharged the burden upon him that the impugned cheque was a blank signed cheque issued at the time of disbursement of the loan amount and misused by the complainant company. While at the same time complainant had failed to adduce convincing evidence to prove the liability of the accused qua the cheque in question. The complainant had failed to prove the existence of legal debt and the issuance of the cheque in question to discharge any legal liability once the evidential burden shifts back to the complainant.
31. Thus, on the ground of the reason for dishonour not satisfying the requirement of Section 138 NI Act and non fulfilment of ingredient no. 2 specifically, Accused SUNIL KUMAR YADAV is acquitted for the offence under Section 138 NI Act.
Announced by me in the open Court today on 09.06.2025 Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.09 17:02:44 +0530 (RAVISHA SIDANA) JMFC-NI ACT (DIGITAL COURT) NORTH EAST;KKD COURTS;DELHI This Judgment consists of fourteen pages and each page has been digitally signed by me