Delhi District Court
Sarita Balhara vs Ghanshyam Singh on 17 May, 2025
IN THE COURT OF SHRADDHA TRIPATHI, JUDICIAL
MAGISTRATE FIRST CLASS - 02, N.I.ACT, SOUTH DISTRICT,
SAKET COURTS, NEW DELHI
CT Cases 5665/2023
SARITA BALHARA VS. GHANSHYAM SINGH
A. CNR No. DLST020125142023
B. Date of Institution 10.07.2023
C. Name of complainant Mrs. Sarita Balhara,
W/o Sh. Mahesh Balhara,
R/o 200, Main Road, Neb Sarai, Delhi-
110062.
D. Name of the accused, his Ghanshyam Singh
parentage and address
S/o Sh. Badan Singh,
R/o Gali No. 4, Harijan Basti, Main Road, Neb
Sarai, New Delhi-110062.
E. Offence complained of Under Section 138 Negotiable Instruments
Act, 1881
F. Plea of the accused Pleaded not guilty and claimed trial
G. Date of judgment 17.05.2025
H. Final Order Convicted
Factual Background
1.These proceedings have been initiated by the complainant under section 138 of Negotiable Instruments Act, 1882 (hereinafter 'NI Act'). It is the case of complainant that the accused approached her for a friendly loan of Rs 1,50,000/- on account of his urgent need. Upon his request, the complainant provided the requisite financial help of Rs 1,50,000/- in cash at 5% interest rate to be CT case 5665/2023 1 of 15 SARITA BALHARA VS. GHANSHYAM SINGH returned in two to four months. To return the aforesaid loan amount, the accused issued the following cheques in question bearing the following details which got dishonored vide return memos dated 22.03.2023.
Sr. Cheque No. and date Cheque Reason for No amount dishonour 1. 784517 dated 13.03.2023 Rs. 50,000/- Funds Insufficient 2. 784518 dated 13.03.2023 Rs 1,00,000/- Funds Insufficient
2. Upon receiving the knowledge of dishonour of the above cheques, the complainant served a legal demand notice dated 19.04.2023 upon the accused requiring him to make the necessary payment. However, upon the failure of the accused to pay the cheque amount within 15 days, the present proceedings under section 138 NI Act were initiated by the complainant against the accused.
3. To fortify his case, the complainant tendered his evidence by way of affidavit which is Ex CW 1/1 and relied upon the following documentary evidences:
Sr. No Document Exhibit Number
1. Cheque bearing no. 784517 dated Ex CW1/A (colly) 13.03.2023 and Cheque bearing no.
784518 dated 13.03.2023
2. Return memos Ex CW1/B (colly)
3. Copy of legal demand notice Ex CW1/C (colly)
4. FIR dated 04.05.2023 Ex CW1/D CT case 5665/2023 2 of 15 SARITA BALHARA VS. GHANSHYAM SINGH
5. Pen Drive Ex CW1/E
6. Transcription Certificate Ex CW1/G (colly)
7. Certificate under Section 65 B Ex CW1/F Case Proceedings
4. Upon the appearance of accused, notice of accusation under section 251 of the Code of Criminal Procedure, 1973 (hereinafter 'CrPC') was framed on 26.10.2023 and substance of allegations against the accused was accordingly explained to him to which the accused pleaded not guilty and claimed trial. The same was duly recorded alongwith his plea of defence.
5. Thereafter, upon permitting the accused to cross-examine CW1 under section 145 (2), NI Act, CW1 was cross-examined and discharged on 01.06.2024. The complainant further brought CW-2 Mahesh Balhara as a witness who was examined, cross-examined and discharged on 01.06.2024
6. On 01.07.2024, the Statement of Accused was recorded as per the terms of Section 313 CrPC read with Section 281 CrPC explaining the incriminating evidence, that appear in evidence against him. The accused explained that he had availed a loan of Rs. 35,000/- from the complainant. He explained that the complainant told him that she is borrowing Rs 35,000/- from someone to lend him and this person requires a security cheque due to which the same were given. He stated that the present case is a false case and filed out of vengeance. Post the recording of statement of accused, the accused moved an application under Section 315 CrPC which was allowed on 23.08.2024. DW1 (accused) was examined, cross-examined and discharged on 11.09.2024. The accused had also CT case 5665/2023 3 of 15 SARITA BALHARA VS. GHANSHYAM SINGH filed a list of witnesses wherein he prayed that he be allowed to examine his wife as DW-2 which was allowed. DW2 was examined, cross-examined and discharged on 11.09.2024. Thereafter an oral application under Section 311 CrPC was moved by the complainant which was allowed on 28.01.2025 and CW1 was examined, cross-examined and discharged on 28.01.2025. Therefore, the matter was later fixed for final arguments.
Submissions on behalf of Complainant
7. Ld LAC for the complainant submitted that the cheques in question were handed over to the complainant in lieu of a loan of Rs 1,50,000/- which was to be returned in 2-4 months.
8. Ld counsel submitted that the even previously a loan of Rs 35,000/- was lent to the accused however that was a separate loan and the accused has falsely stated that the cheques in question were given for the said purpose. He stated that there is no logic as to why two cheques would be given for a loan of Rs 35,000/-.
9. He further submitted that the testimony of complainant is unimpeached.
10. He submitted that no cogent evidences have been produced by the accused that could rebut the presumption under Section 139 read with Section 118 NI Act.
11. Ld counsel also submitted that the accused had admitted his signatures on the cheque in question. It has also been submitted by Ld counsel that in lieu of the presumptions of Sec 139, NI Act in favour of the complainant and the fact that the same remain unrebutted, all the ingredients under section 138 NI Act have been duly met and the liability of the accused has been established and thus he be convicted of the offence.
CT case 5665/2023 4 of 15 SARITA BALHARA VS. GHANSHYAM SINGH Submissions on behalf of Accused
12. Ld counsel for the accused submitted that the name on the cheque sis Savita Balhara but the case has been filed by Sarita Balhara. Therefore, she is not a competent witness.
13. He submitted that the legal notice was not delivered to the accused.
14. He submitted that the complainant alleged that a friendly loan was given but then why did she charge in interest rate.
15. He submitted that the cheques in question were given for a loan of Rs 35,000/- only.
16. Ld counsel submitted that the voice recordings in pendrive which is Ex CW1/E is inadmissible as it has not been filed as per the statutory requirement so Section 65 B.
17. Ld counsel submitted that there are inconsistencies in the testimonies of CW1 and CW2 and therefore, the same cannot be relied upon.
18. Ld counsel for the accused submitted that the accused has successfully rebutted the presumption under Section 139 NI Act to the extent of preponderance of probabilities. Ld counsel submitted that due to insufficiency of evidences of the complainant, she has failed to prove the existence of a legally enforceable debt and thus the accused be acquitted.
Analysis and findings
19. Learned counsels of both the parties have been heard at length and documents on record have been perused.
20. Section 138, NI Act was introduced with the objective of inculcating faith in the efficacy of banking operations and giving credibility to negotiable CT case 5665/2023 5 of 15 SARITA BALHARA VS. GHANSHYAM SINGH instruments in business transactions. The provision intends to discourage people from not honouring their commitments by way of payment through cheques. To attract liability under section 138, NI Act, the following ingredients are required to be fulfilled:
First Ingredient: The cheque was drawn by a person on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account and the same be presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity whichever is earlier; Second Ingredient: The cheque was drawn by the drawer for discharge, in whole or in part, of any legally enforceable debt or other liability; Third Ingredient: The cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank.
Fourth Ingredient: A demand of the said amount has been made by the payee or the holder in due course of the cheque by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the bank regarding the dishonour of cheque. Fifth Ingredient: The drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
21. The fulfilment of first, third and fifth ingredient is not disputed. The cheques dated 13.03.2023 were presented for honour within the stipulated time and the same was returned as dishonoured vide return memo dated 23.03.2023 for reason "Funds Insufficient. Upon receipt of the same, the complainant served a legal demand notice dated 19.04.2023 within 30 days and upon the failure of the accused to make good the payment within 15 days, the complainant instituted the present proceedings within the stipulated time. Thus, the fact of fulfilment of first, third and fifth ingredient is decided in favour of the complainant and against the accused.
CT case 5665/2023 6 of 15 SARITA BALHARA VS. GHANSHYAM SINGH
22. The accused has denied the service of legal demand notice. However, the stated that the address details are correct. Only the house number is missing. The postal receipt on record clearly reflects the name of accused on the same thereby clarifying that it was properly served upon the accused.
23. Section 114 of the Indian Evidence Act, 1872 (hereinafter 'IEA') is applicable to communications sent by post in full force and it enables the court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee. Section 27 of the General Clauses Act envisages that when a registered notice is posted, it is presumed to have been served unless rebutted. In the instant case too, the same remains unrebutted.
24. In CC Alavi Haji v. Palapetty Muhammed & Anr (2007) 6 SCC 555, Hon'ble Apex Court held, "Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act."
25. In the instant case, the address is correct and the postal receipt reflects the name of accused. In lieu of the above observation and the dictum of the Hon'ble Supreme Court, the court is of the opinion that legal demand notice Ex CW1/C was duly served upon the accused and this defence of accused remains a namesake defence. The fact of non-payment within a period of 15 days of receipt of legal demand notice is also not disputed. Thus, this limb of the CT case 5665/2023 7 of 15 SARITA BALHARA VS. GHANSHYAM SINGH defence of the accused lacks the strength to outway the force of above settled position of law. Thus, the fourth and ingredient is also decided in favour of the complainant and against the accused.
26. It is pertinent to note that once signatures on the cheque are admitted by the accused presumptions under Section 118 and Section 139 NI Act take the forefront. The presumption under Section 118 and Section 139 NI Act relate to the fact that the cheque in question was issued in lieu of consideration and for a legally recoverable debt/liability. The stipulated provisions incorporate the word 'shall', thereby making the presumption a mandatory presumption. However, loading the provision with the phrase "unless the contrary is proved" clarifies that albeit the presumption is a mandatory presumption, it is rebuttable and the onus to rebut the presumption lies upon the accused.
27. Regarding the strength and nature of presumption raised under section 139 NI Act, it is worthwhile to peruse the ruling of the Hon'ble Apex Court in Rangappa vs Sri Mohan (2011 (1) SCC (CRI) 184) wherein it ruled, "As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly CT case 5665/2023 8 of 15 SARITA BALHARA VS. GHANSHYAM SINGH high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
28. Thus, it is a settled legal position that in order to rebut the statutory presumption under Section 118 and Section 139 NI Act, the accused ought to take the responsibility on his shoulders and clear himself of the cloud of legal liability cast upon him by the complainant to the extent of preponderance of probabilities. The accused can choose to do so either by cross-examining the complainant and complainant witnesses or by leading his defence evidence or both. In the instant case the accused has adopted both the avenues to establish his innocence.
29. What remains for judicial scrutiny before this court is whether the accused has successfully rebutted the presumption of Section 139 read with Section 118 NI Act and shown that no legally enforceable debt existed.
30. The premise of the present case is a friendly loan of Rs 1,50,000/- advanced to the accused by the complainant in cash. It is the defence of accused that the cheques in question were given at the time of availing a loan of Rs 35,000/- and that he has never availed a loan of Rs 1,50,000/-. They were handed over as blank signed security cheques. It is also his defence that he has already returned Rs 35,000/- to the complainant.
CT case 5665/2023 9 of 15 SARITA BALHARA VS. GHANSHYAM SINGH
31. To establish the factum of payment, the complainant has also placed on record several voice recordings which is Ex CW/E wherein as per the complainant the wife of the accused can be heard accepting the liability of Rs 1,50,000/-. The Hon'ble SC has clarified in Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantayal, (2020) 7 SCC 1, that electronic evidence shall be admissible in evidence only when accompanied with a certificate under Section 65B, Indian Evidence Act, 1872 (hereinafter 'IEA'). The relevant paragraph from the ruling is reproduced below:
"If the original digital device in which original information is first stored is physically produced in court with its owner / operator stepping into the witness box, no certificate under Section 65-B(4) is necessary as the original document itself stands is produced in the court, but if the original digital device in which original information is first stored is part of a "computer system" or "computer network" incapable of being physically produced before the court, the only way of proving the said information is in accordance with Section 65-B(1), together with the requisite certificate under Section 65-B(4)."
32. In the present case even though an affidavit stated to be filed under Section 65 B has been filed, same is not in compliance with the statutory requirement of Section 65 B, IEA. Since, such is not the case, the voice recordings in pendrive which is Ex CW1/E is inadmissible in evidence and cannot be considered for any purposes whatsoever.
33. Nonetheless, since the accused has admitted his signatures on the cheque, presumptions under Section 139 read with Section 118 NI Act still operate.
34. To prove that the accused had not taken a loan of Rs 1,50,000/-, he attempted to prick holds in the complainant's case by bringing her financial capacity under scrutiny. The complainant deposed that she had lent the alleged loan amount from her personal savings. She further deposed that her husband earns around Rs. 35,000/- to 40,000/- per month. Likewise, her husband CT case 5665/2023 10 of 15 SARITA BALHARA VS. GHANSHYAM SINGH appeared as CW-2 and corroborated her testimony and further clarified that the complainant's savings were owed to the rent she was receiving from his shop. This, does not raise any doubts upon the capacity of the complainant to lend a loan of Rs 1,50,000/- It is not unlikely that over the years, the complainant was able to create a corpus which enabled her to advance a loan of Rs 1,50,000/- to the accused. Apart from this interrogation, nothing else has been placed on record to oust the financial capacity of the complainant. No documentary proofs were produced or summoned to be produced in court to exhibit that the complainant does not have the requisite financial capacity. Thus, the court finds no merit in this limb of defence of the accused.
35. It is also his defence that he had availed a loan of Rs 35,000/- only and not Rs 1,50,000/-. The complainant as well as her husband has accepted that the accused had sought for a financial help for Rs 35,000/- earlier which was provided by them and the same stands repaid already. However, the accused has defended himself by stating that the cheques in question were given as security for this loan. One of the cheques was for 15,000/- and another was for Rs 20,000/-. During the cross-examination of complainant, a suggestion to this effect was given by Ld counsel for the accused, the relevant portion is reproduced below, "It is wrong to suggest that the cheques have been wrongly presented for an amount of Rs 1.5 lacs though they were originally issued as security amounting to Rs 35,000/- (two cheques of Rs 15,000/- and Rs 20,000/- respectively)"
36. Even when accused appeared in the witness box as DW-1 he deposed, "In lieu of the amount, I have issued two cheques for security to the complainant in the tune of amount of RS 15,000/- and Rs 20,000/-."
37. To corroborate his testimony his wife appeared as DW-2 and deposed the following, CT case 5665/2023 11 of 15 SARITA BALHARA VS. GHANSHYAM SINGH "The husband of complainant had taken two cheques from my house one of Rs 20,000/- and one of Rs 15,000/-"
38. Albeit the accused has consistently raised his defence that he had issued two cheques in lieu of a loan of Rs 35,000/- wherein one cheque was for Rs 15,000/- and another for Rs 20,000/-. However, he fails to explain that if these cheques were given for a specific amount of Rs. 15,000/- and 20,000/-, why was this specific amount not filled in the cheques and then handed over to the complainant. Mentioning of a specific amount by the accused for which the cheques were issued, raises eyebrows on the defence of accused as it yearns for an explanation for non-filling in the exact amount at the time of handing over the cheque in question. Section 103 of the Indian Evidence Act, 1872, is clear on the point that the onus to prove a fact lies upon the person who wants the court to believe in its existence. Therefore, the onus to prove that these cheques were issued only for the recovery of Rs 35,000/- (one for Rs 15,000/- and another for Rs 20,000/-) was upon the accused only. No other evidence for instance an agreement, promissory note, undertaking or so on is on record which could show that the cheques in question were given to recover an amount of Rs 15,000/- and 20,000/- only in lieu of a loan of Rs 35,000/-.
39. At this juncture, it is pertinent to refer to the ruling of Hon'ble Supreme Court of India in Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 wherein it has been held, "... The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused.
CT case 5665/2023 12 of 15 SARITA BALHARA VS. GHANSHYAM SINGH Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist."
40. The above authority stipulates that bare denial of consideration or existence of a legally enforceable debt is insufficient. Either the accused produces direct evidence controverting the allegations of complainant or he proves such facts and circumstances, via which the court may believe the consideration or legally enforceable debt did not exist or its existence was improbable in the eyes of a prudent person. Thus, the accused traverses throughout the trial with the baggage of placing direct evidence or showing facts and circumstances which could tilt the court to believe what he says is true. For reasons already stated above, there is no reason for this court to believe that the cheque in question was issued for the purpose of loan of Rs 35,000/-.
41. The accused also alleged that the complainant has misused his cheques, however no complaint has been filed against her. As an extension of his defence, the accused has also stated that not only had he taken a loan of Rs. 35,000/- but also returned the same in September, 2022. To prove this, he has placed on record screenshots of payment which has been admitted by CW 2 during his evidence. But on the basis of these screenshots it cannot be concluded that the cheques in question were given for the repayment of loan of Rs 35,000/- only and not Rs 1,50,000/-. Even for arguendo, if the version of accused is believed, the next question that emerges by default is why were these cheques not demanded back or why no legal notice was sent to the complainant or a police complaint was filed against the complainant if the entire debt stood repaid. On the same note, the accused has failed to explain that if these cheques CT case 5665/2023 13 of 15 SARITA BALHARA VS. GHANSHYAM SINGH were retained by the complainant and not returned why no stop payment direction were given to the bank or a letter regarding this was given to the bank. Failure of the accused in taking these steps does not bring enough facts and circumstances that could lead the court to believe that these cheques were issued for the amounts as stated by the accused even to the extent of preponderance of probabilities.
42. Lastly, as far as the issue of disputing the locus of complainant is concerned the argument holds no ground. The cheques mention the name 'Savita' while the complaint has been filed in then name of 'Sarita'. Throughout the trial the accused has not disputed the identity of complainant, Rather, he has accepted that he had given the cheques to her. Further, the evidence of complainant distinctly mentions her name as 'Savita'. Merely mentioning of wrong name in the complaint and case title does not take way the locus of complainant in filing this case.
43. In such a situation where the execution of a Negotiable Instrument has been admitted, the signature on the instrument has been admitted, then the presumptions under Section 118 and Section 139 NI Act burden the accused with their weight and it was for the accused to push them off with the force of cogent evidences. In the absence of requisite evidences, the presumptions loom in favour of the complainant. Thus, the fact of existence of a legally enforceable debt stands proven.
44. In the teeth of above analysis, I have no hesitation in holding that the accused has failed to rebut the presumption of law and discharge the burden of proof by raising a probable defence that the cheque in question was not issued in discharge of any legally enforceable liability. Therefore, the fulfillment of CT case 5665/2023 14 of 15 SARITA BALHARA VS. GHANSHYAM SINGH second ingredient is also decided in favour of the complainant and against the accused.
Conclusion
45. All the legal requirements constituting an offence under Section 138 NI Act are cumulative in nature. Since all the ingredients necessary to bring home the guilt of accused have been proved, accused Ghanshyam is hereby held 'guilty' and consequently convicted of the offence under Section 138 NI Act.
46. This judgment contains 15 pages. This judgment has been pronounced by the undersigned in the open court and each page bears the signatures of the undersigned.
47. Let a copy of the judgment be uploaded on the official website of District Courts, Saket, forthwith.
Digitally signed by shraddha shraddha tripathi tripathi Date:
Announced in Open Court 2025.05.17
15:13:57
+0530
on 17.05.2025 (SHRADDHA TRIPATHI)
JUDICIAL MAGISTRATE
FIRST CLASS-02/NI ACT(SD)
SAKET/NEW DELHI/17.05.2025
CT case 5665/2023 15 of 15
SARITA BALHARA VS. GHANSHYAM SINGH