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Delhi District Court

Pradeep Kumar Verma vs Manoj Gupta on 17 November, 2025

      In The Court of Sh. Divyam Lila, Municipal Magistrate, East, Delhi
                             JUDGEMENT

DLET020042692020 CT CASE/ 1488/2020 Date of Filing​ ​ :​ 22-07-2020 Date of Registration ​ :​ 23-07-2020 Date of Disposal ​ ​ :​ 17-11-2025 ________________________________________________________________ (Complainant): Sh. Pradeep Kumar Verma, S/o Sh. Rajender Kumar Verma, R/o 75, Gopal Park, Ram Nagar, Delhi-51.

Versus DIVYAM (Accused) : Sh. Manoj Gupta, S/o Late Sh. Bhure Lal Gupta, R/o X/3774/4, Gali No. 8, Shanti Mohalla, Gandhi Nagar, Delhi-110031. LILA _____________________________________________ Digitally signed by Advocate appearing for Complainant:​ ​ Sh. Sanjay Gupta DIVYAM LILA Date: 2025.11.17 Advocate appearing for the Accused:​ ​ Sh. Mithan Lal 17:12:33 +0530 Offence punishable under : Section 138 of Negotiable Instruments Act, 1881 Final Order : Conviction of accused under Section 138 NI Act ________________________________________________________________

-:Index of Judgment:-

1. Introduction:-.................................................................................................. 2

2. Brief Facts of the Case:-................................................................................. 2

3. Notice Framed on the Accused and Plea of the Accused.............................3

4. Issues for Determination:............................................................................... 4

5. Evidence on Record........................................................................................ 4

6. Legal Position:.................................................................................................7

7. Arguments of the parties:...............................................................................9

8. Analysis and Findings:................................................................................. 12

10. Conclusion and Reason for decision:........................................................ 20

11. Order:...........................................................................................................21 In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi

1.​ Introduction:-

a.​ This judgement arises out of a complaint filed under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "NI Act") by the complainant against the accused for dishonour of cheque based on the friendly loan as debt.

2.​ Brief Facts of the Case:-

a.​ The case of the complainant in brief is that he is a garment businessman with a friendly acquaintance with the accused, who is the brother-in-law of his friend Sh. Mukesh Kumar Gupta. On October 1, 2018, at his shop in Delhi, the complainant advanced an interest-free cash loan of Rs. 11,50,000 to the accused for business needs, witnessed by Sh. Joginder Berri. The accused executed a promissory note acknowledging the loan, repayable within one year. On October 1, 2019, upon demand, the accused provided an undertaking to repay within 3-4 months and issued two post-dated cheques in fully filled condition.

b.​ The case pertains to the cheques bearing No. 037348 dated January 31, 2020, for Rs. 6,00,000, and No. 037349 dated January 31, 2020, for Rs. 5,50,000, drawn on Axis Bank Ltd., Gandhi Nagar Branch, Delhi. (hereinafter called as "cheque in question") The aforesaid cheques were presented by the complainant for encashment through his banker at Union Bank, Chander Nagar, Delhi, on February 5, 2020. However, they were returned unpaid on February 6, 2020, accompanied by separate returning memos from the accused's bank, bearing the endorsement "Funds Insufficient." In compliance with thR/o X/3774/4, Gali No. 8, Shanti Mohalla, Gandhi Nagar, Delhi-110031.e statutory CT CASE/1488/2020​ ​ Pradeep Kumar Verma vs Manoj Gupta​ ​ ​ Page 2/ 21 In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi requirements, the complainant caused a legal demand notice dated February 14, 2020, to be served upon the accused via speed post at his correct residential address, which was duly received by the accused on February 15, 2020. The notice demanded payment of the total cheque amount of Rs. 11,50,000 within 15 days of receipt, failing which proceedings under Section 138 would ensue. It is pertinent to note that the notice inadvertently mentioned the amount of the second cheque as Rs. 5,00,000 instead of Rs. 5,50,000, though the overall demand clause correctly reflected the aggregate sum. Despite service of the notice, the accused failed to make the requisite payment within the stipulated period, thereby giving rise to the cause of action.

c.​ Hence, the cognizance in the present matter was taken, and the accused was summoned for the purpose of trial. The accused pleaded not guilty and claimed trial.

d.​ Complainant's evidence closed with the examination-in-chief and cross-examination of CW-1 (Sh. Pradeep Kumar Verma), thereafter the accused, in his statement under Section 313 Cr.P.C., reiterated the defense but declined to lead any evidence. The matter was then slated for arguments of case, and I have heard the arguments advanced by the learned counsel for both sides and perused the record. The matter is now taken up for final adjudication on merits.

3.​ Notice Framed on the Accused and Plea of the Accused a.​ The accused was served notice under Section 251 Cr.P.C and pleaded "not guilty".

b.​ The accused, in his response to the notice under Section 251 Cr.P.C., confirmed understanding the notice but denied the CT CASE/1488/2020​ ​ Pradeep Kumar Verma vs Manoj Gupta​ ​ ​ Page 3/ 21 In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi allegations. The accused admitted signing the cheques and their association with his bank account but denied filling other particulars. The accused denied receipt of the legal notice despite acknowledging the correctness of the address. He= refuted that the cheques were issued to discharge any legal liability; and pleaded not guilty, claiming trial while asserting a business relationship with the complainant wherein the cheques were provided as security for supplied goods, which had been largely paid for with only Rs. 40,000 to Rs. 50,000 potentially outstanding, and alleging misuse of the cheques with no subsisting liability towards the complainant.

4.​ Issues for Determination:

a.​ The cheque was issued in discharge of a legally enforceable debt or liability.?

b.​ The cheque was presented within the period of validity of three months?.

c.​ The cheque was dishonoured for insufficiency of funds.? d.​ A legal notice was duly served.?

e.​ The accused failed to make payment within the prescribed period. f.​ The accused has successfully rebutted the statutory presumption under Sections 118 and 139 of the NI Act.?

g.​ Whether the accused no.1 company was struck off and if the same would have any effect liability and outcome of the offence.?

5.​ Evidence on Record a.​ Complainant's Evidence:

i.​ In support of his case, the complainant examined himself as CW-1 by way of affidavit, wherein he reiterated the contents CT CASE/1488/2020​ ​ Pradeep Kumar Verma vs Manoj Gupta​ ​ ​ Page 4/ 21 In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi of the complaints and supported the case of the complainant. In cross-examination, the complainant was cross-examined by Ld. Counsel for the accused Sh. M.L. Gupta. The complainant affirmed being an income tax payer with an annual income of Rs. 4 to 5 lakhs in 2018 and stated that the Rs. 11.5 lakhs loan was provided in cash from personal savings at home and in his shop, which were not reflected in his balance sheet or income tax records. He confirmed advancing the entire amount in one transaction at his shop on October 1, 2018, around 3-4 PM, and having executed a promissory note in the presence of his friend Sh. Joginder Berry, whose signature appeared thereon, with no additional receipt issued. He also volunteered that the accused provided a handwritten acknowledgment (Ex. CW-1/B), which he denied was forged. The complainant rejected suggestions of no loan transaction or business dealings with the accused, though he admitted traveling once to Bangalore with the accused for cloth purchases and to Surat with the accused's brother Sh. Ashok for materials for his wife, and having given money to Sh. Ashok. He maintained no prior transactions before October 1, 2018, and denied joint business investments. Further, he acknowledged visiting the accused's house multiple times post-cheque dishonor to demand repayment but not prior to the loan; he informed his friend Sh. Mukesh Kumar Gupta about the loan in January 2019. The complainant confirmed maintaining a bank account at Union Bank, Chander Nagar, from which no withdrawals were made for the loan, and suggested the cash might have originated from a property sale, though he could CT CASE/1488/2020​ ​ Pradeep Kumar Verma vs Manoj Gupta​ ​ ​ Page 5/ 21 In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi not recall details at the time, denying it was an afterthought. He stated the cheques were received fully filled at his shop in October 2019, denied knowing the handwriting thereon, and refuted claims of business relations involving unstitched cloth or misuse of blank signed security cheques.

Throughout, he denied suggestions of lacking financial capacity, fabricating documents, or extorting money, and closed his evidence without additional witnesses. b.​ Statement of accused: The statement of the accused under Section 313 Cr.P.C. was recorded wherein the accused reiterated his denial of any liability towards the Complainant, and denied availing a friendly loan of Rs. 11,50,000 from the complainant. The accused asserted that a business relationship with the complainant, in the trade of clothes, wherein the cheques in question were misused. He claimed no execution of any promissory note or written undertaking, alleging forgery and fabrication thereof by the complainant, and maintained no liability for the cheque amounts.

While admitting the cheques belonged to him and bore his signature, he denied filling the particulars and stated they were taken without his knowledge from his workplace. He further denied receipt of the legal notice despite confirming the address's accuracy and initially expressed intent to lead defense evidence. Subsequently, the accused recorded a further statement without oath, declaring that, after consultation with his counsel, he did not wish to lead any defense evidence, examine himself or other witnesses, and accordingly closed his evidence, whereupon the matter was listed for final arguments.

In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi

6.​ Legal Position:

a.​ In order to constitute an offence under Section 138 of the Negotiable Instruments Act, 1881, the following essential elements must be satisfied as per the judgement in Kusum Ingots & Alloys Ltd. Vs. Pennar Peterson Securities Ltd. AIR 2000 SC 954 ,both in the complaint and the evidence presented by the complainant:

i.​ Drawing of the Cheque: The accused must have drawn a cheque on an account maintained by them, for the payment of a legally enforceable debt or liability to another person. ii.​ Timely Presentation: The cheque must be presented to the bank for payment within three months from the date on which it was drawn, or within the period of its validity, whichever is earlier.

iii.​ Dishonour of the Cheque: The cheque must be dishonoured by the bank due to either insufficient funds in the account or because the amount exceeds the arrangement made with the bank.

iv.​ Notice of Demand: The payee or holder of the cheque must issue a written demand for payment to the drawer, within 30 days of receiving information from the bank regarding the dishonour.

v.​ Failure to Pay: The drawer must fail to make payment within 15 days of receiving the notice of demand.

b.​ Additionally, the provisions of Sections 139 and 118 of the Act further strengthen the case for the complainant. Section 139 creates a presumption in favour of the holder of the cheque, mandating that the court shall presume, unless proven otherwise, that the cheque was issued for the discharge of a debt or other liability. Section 118, on the other hand, provides that there is a presumption that CT CASE/1488/2020​ ​ Pradeep Kumar Verma vs Manoj Gupta​ ​ ​ Page 7/ 21 In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi every negotiable instrument, including a cheque, was made for consideration, and that it was transferred for consideration. c.​ In the case of Basalingappa v. Mudibasappa (2019) 5 SCC 418;, the Hon'ble Supreme Court has laid down that once the execution of the cheque is admitted, Section 139 imposes a rebuttable presumption in favour of the complainant, establishing that the cheque was issued for the discharge of a debt or liability. The presumption is rebuttable and the accused has the opportunity to raise a probable defence. The standard of proof for rebutting this presumption is based on the preponderance of probabilities. d.​ The court further held that it is not mandatory for the accused to enter the witness box to prove their defence. They may rely on the evidence presented by the complainant or any other available materials. The onus to rebut the presumption lies on the accused, but it is important to note that this is an evidentiary burden, not a persuasive one.

e.​ Thus, Section 138 operates on the principle of reverse onus of proof - once the complainant proves the essential elements of dishonour, the burden shifts to the accused to raise a plausible defence. The presumption of guilt is strong, but not irrebuttable, and the accused is entitled to challenge it through a preponderance of evidence.

f.​ In the backdrop of legal position as enunciated above, it is to be examined by this Court that whether the accused on a scale of preponderance of probabilities has been able to rebut the presumption which has been raised against him and in favour of the complainant, or has been able to demolish the case of the complainant to such extent so as to shift the onus placed upon the accused again on the complainant. As held by Hon'ble Supreme CT CASE/1488/2020​ ​ Pradeep Kumar Verma vs Manoj Gupta​ ​ ​ Page 8/ 21 In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi Court of India in case of Kumar Exports vs Sharma Carpets (2009) 2 SCC 513, the accused can either prove the non−existence of the consideration and debt by direct evidence or by bringing on record such facts and circumstances, upon consideration of which, the Court may either believe that the consideration and debt either did not exist or their non−existence was so probable that a prudent man may act upon the plea that they did not exist. If the Court comes to the conclusion that the accused has not been able to rebut the presumption raised against him by failing to bring on record direct evidence or by even failing to sufficiently perforate the case of the complainant, the complainant is entitled to a decision in his favour.

7.​ Arguments of the parties:

a.​ Arguments by Ld. Counsel for the Complainant: The learned counsel for the complainant submitted that the case is squarely covered under Section 138 of the Negotiable Instruments Act, 1881, and the accused is liable for the dishonour of the cheque. The key arguments advanced by the counsel urged the court to convict the accused, are as follows:

i.​ Statutory Presumption under the Negotiable Instruments Act: Pursuant to Sections 118 and 139 of the Negotiable Instruments Act, 1881, a presumption arises in favor of the complainant upon proof of issuance and dishonor of the cheques, establishing that they were drawn for a legally enforceable debt. Given the accused's admission of his signature on the cheques and their association with his bank CT CASE/1488/2020​ ​ Pradeep Kumar Verma vs Manoj Gupta​ ​ ​ Page 9/ 21 In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi account, this presumption stands unrebutted, as the accused failed to adduce any evidence to the contrary. ii.​ Proof of Debt and Transaction: The counsel emphasize the complainant's consistent testimony and documentary evidence, including the promissory note (Ex. CW1/B) executed on October 1, 2018, in the presence of witness Sh. Joginder Berri, and the subsequent undertaking on October 1, 2019, which corroborates the friendly loan of Rs. 11,50,000 advanced in cash. These documents, coupled with the issuance of the cheques in fully filled condition, demonstrate a clear discharge of liability, negating the accused's unsubstantiated claims of forgery or business dealings.

iii.​ Weaknesses in the Accused's Defense: The counsel point out the inconsistencies in the accused's statements, initially claiming the cheques were given as security in a business relationship with only Rs. 40,000-50,000 outstanding, later alleging unauthorized removal and forgery, rendering them unreliable. The accused's decision not to lead defense evidence, despite initial intent, fails to rebut the presumption, leaving the complainant's case unchallenged. iv.​ Admissions by the Accused: The counsel would rely on the accused's admissions under Sections 251 and 313 Cr.P.C., including the correctness of the notice address and cheque signatures, which strengthen the presumption of service and validity, while his denial of notice receipt lacks credibility in light of postal evidence.

b.​ Arguments by Ld. Counsel for the Accused : The learned counsel for the accused vehemently argued that the complainant CT CASE/1488/2020​ ​ Pradeep Kumar Verma vs Manoj Gupta​ ​ ​ Page 10/ 21 In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi has failed to prove the existence of a legally enforceable debt, and the case is based on a fabricated narrative to extort money. The key arguments advanced by the counsel, while praying for the acquittal of the accused, are as follows:

i.​ Lack of Legally Enforceable Debt: The counsel for the accused would argue that no legally enforceable debt or liability exists, as the accused consistently denied availing any friendly loan of Rs. 11,50,000, asserting instead a business relationship involving the supply of goods for which payments were largely made, with only a nominal outstanding of Rs. 40,000 to Rs. 50,000. The presumption under Sections 118 and 139 of the Negotiable Instruments Act, 1881, is rebuttable, and the accused's statements under Sections 251 and 313 Cr.P.C. provide sufficient grounds to demonstrate the absence of such debt, shifting the onus back to the complainant to prove the transaction beyond reasonable doubt.

ii.​ Misuse of Cheques: The counsel would contend that the cheques were not issued to discharge any liability but were either provided as blank signed security in the course of business dealings or taken unauthorizedly from the accused's workplace.

iii.​ Forgery and Fabrication of Documents: The counsel would highlight the accused's allegations that the promissory note (Ex. CW1/B) and undertaking were forged and fabricated by the complainant, pointing to inconsistencies in the complainant's testimony, such as the lack of reflection in income tax records and the inability to recall details of cash CT CASE/1488/2020​ ​ Pradeep Kumar Verma vs Manoj Gupta​ ​ ​ Page 11/ 21 In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi sources, which suggest an attempt to fabricate a loan narrative to extort money.

iv.​ Inconsistencies in Complainant's Testimony: The counsel would draw attention to material contradictions in the complainant's cross-examination, including admissions of trips to Bangalore and Surat with the accused or his brother for cloth purchases, which corroborate the accused's claim of business relations rather than a mere friendly loan. Additionally, the complainant's low declared annual income of Rs. 4-5 lakhs casts doubt on his financial capacity to advance Rs. 11,50,000 in unreported cash, undermining the credibility of the transaction.

v.​ Failure to Prove Financial Capacity and Source of Funds:

The counsel would emphasize that the complainant's inability to substantiate the source of the cash loan, admitting it was from unreported savings not withdrawn from his bank account and possibly from an unrecallable property sale, renders the entire transaction improbable, warranting acquittal on grounds of insufficient evidence.

8.​ Analysis and Findings:

a.​ Issue 1 - Issuance of Cheque: This ingredient pertains to the issuance of the cheque in question itself. The Accused person had in his notice of accusation admitted the signature on the cheques in question. It is observed that the plea of the accused that the particulars of the cheque in question were not filled by him is of no help; as the signature of the accused on the cheque is not disputed. Reliance can be placed, at this juncture, wherein Hon'ble High CT CASE/1488/2020​ ​ Pradeep Kumar Verma vs Manoj Gupta​ ​ ​ Page 12/ 21 In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi Court of Delhi in Ravi Chopra Vs. State and Anr. (2008) 102DRJ147, held: "Section 20 NI Act talks of "inchoate stamped instruments" and states that if a person signs and delivers a paper stamped in accordance with the law and "either wholly blank or have written thereon an incomplete negotiable instrument" such person thereby gives prima facie authority to the holder thereof "to make or complete as the case may be upon it, a negotiable instrument for any amount specified therein and not exceeding the amount covered by the stamp." "A collective reading of the above provisions shows that even under the scheme of the NI Act it is possible for the drawer of a cheque to give a blank cheque signed by him to the payee and consent either impliedly or expressly to the said cheque being filled up at a subsequent point in time and presented for payment by the drawee. There is no provision in the NI Act which defines the difference in the handwriting or the ink pertaining to the material particulars filled up in comparison with the signature thereon as constituting a 'material alteration' for the pur- poses of Section 87 NI Act. What, however, is essential is that the cheque must have been signed by the drawer." Further, in Bir singh Vs. Mukesh Kumar, (2019) 4 SCC 197 it was held that:-"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 provisions of Section 138 would be attracted." Hence, In the present case, Prima facie the ingredient that the cheque was issued to the complainant has been satisfied as the accused admitted his signature on the cheque and the account being maintained by him. Having admitted the basic ingredient, the presumption is drawn against the accused and now the accused would have to prove that the cheque in question was CT CASE/1488/2020​ ​ Pradeep Kumar Verma vs Manoj Gupta​ ​ ​ Page 13/ 21 In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi not issued by him; by way of rebuttal of the presumption drawn against him. Whether the accused was able to successfully rebut the adverse presumption is dealt in detail in the issue no. 6; However, the issue no. 1 is decided in favour of the complainant and the presumption is drawn against the accused.

b.​ Issue 2 - Presentation within Validity: This ingredient stands satisfied on a bare perusal of the cheque in question and the return memo being presented within the period of validity. The cheque is also not dishonoured with the remark "instrument stale"; as the cheque has been returned dishonoured with a return memo noting the reason for return as "Funds Insufficient". The defence has led no evidence to contradict the same and hence, this ingredient stands fulfilled as against the accused. Hence, this issue is also decided in favour of the complainant and the cheque has been proved to be dishonoured within the period of validity. c.​ Issue 3 - Dishonour of Cheque: The bank return memo records state that the cheque in question has been returned dishonoured for the reason "Funds Insufficient". The defence has led no evidence to controvert the same and hence, this ingredient also stands satisfied as against the accused. Hence, this issue is also decided in favour of the complainant and the cheque has been proved to be dishonoured.

d.​ Issue 4 - Legal Notice: Service of the legal notice is the legal fiction which constitutes the major ingredient of the offence u/s-138 NI Act. The objective of serving legal demand notice to the Accused before filing the case is to allow the accused to make the payment. As regards the service of legal demand notice, the Complainant has sent the same to the accused. The accused has denied receiving the legal demand notice in his notice of accusation CT CASE/1488/2020​ ​ Pradeep Kumar Verma vs Manoj Gupta​ ​ ​ Page 14/ 21 In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi u/s 251 Cr.P.C and in the statement of accused u/s 313 Cr.P.C read with Sec-281 Cr.P.C. However, the accused has admitted the correctness of the address mentioned on the legal notice. The accused has also not led any positive evidence to prove that the legal notice was not served on him, nor any evidence to prove that the address on the legal notice is incorrect. Thus, in absence of any evidence against the presumption of service and admission of the accused persons with respect to receipt of the legal notice, this issue is also decided in favour of the complainant and the service of legal notice has been proved.

e.​ Issue 5 - Non-Payment within 15 Days: In the present case, after the issue no. 4 is against the accused, the case of the accused is that he does not have any liability towards the complainant and his cheque was misused. Hence, it is an admitted position that no payment for the cheque in question was made and thus this ingredient of non-payment within 15 days also stands satisfied. Hence, this issue is also decided in favour of the complainant and the cheque has been proved to be not paid by the accused despite service of notice.

9.​ Issue 6 : Defence of the Accused and Rebuttal of Presumption: The above ingredients being satisfied, the court would have to look at the defence brought out by the accused by way of cross examination of the complainant's evidence and the rebuttal by way of defence evidence. In the present case, the accused had made following attempts towards rebuttal of the statutory presumption against him; and with the following observations, it is held that the issue no. 6 is decided against the accused and in favour of the complainant:

In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi a.​ Accused's Omission to Impugn the Promissory Note: The accused has demonstrably failed to mount a substantive challenge to the promissory note marked as Exhibit CW1/B, which forms the cornerstone of the complainant's evidentiary edifice substantiating the alleged underlying loan transaction of Rs. 11,50,000/-. This document, purportedly executed by the accused on October 1, 2018, in the presence of attesting witness Shri Joginder Berri, serves as prima facie evidence of the debt's genesis and enforceability. During the cross-examination of the complainant as CW-1, conducted by the learned counsel for the accused, no probing interrogatories were directed towards dissecting the veracity of the promissory note. Further, any inquiries delving into the attendant circumstances of its execution were also absent, such as the temporal and spatial particulars of the transaction, the role and credibility of the attesting witness, or the contemporaneous intent of the parties or the authenticity of the signatures appended thereto. Instead, the defense confined itself to a perfunctory and unsubstantiated suggestion that the instrument was forged and fabricated, devoid of any elicitation of contradictory admissions or inconsistencies from the witness that might lend credence to such an averment. This minimalist approach constitutes a glaring evidentiary lacuna, and this omission is not merely procedural but substantively prejudicial to the accused's defense, as it forfeits the opportunity to adduce material that could potentially create reasonable doubt regarding the document's genuineness. Judicial precedents, including those enunciated by the Hon'ble Supreme Court in State of U.P. v. Nahar Singh (1998) and Rangappa v. Sri Mohan Krishna (2010), underscores that bald denials or vague suggestions in cross-examination, unaccompanied by corroborative CT CASE/1488/2020​ ​ Pradeep Kumar Verma vs Manoj Gupta​ ​ ​ Page 16/ 21 In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi probing, are insufficient to discharge the onus of rebuttal, especially where documentary evidence is tendered without contemporaneous objection. Moreover, the promissory note, qualifying as a negotiable instrument within the ambit of the Negotiable Instruments Act, 1881, invokes the rebuttable presumption under Section 118(a) thereof, which posits 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. This statutory presumption operates in favor of the holder (complainant herein) and shifts the burden of proof squarely onto the accused to rebut it by adducing cogent, preponderance-of-probability evidence. In the present matter, the accused's bald denials in his statements recorded under Sections 251 and 313 of the Code of Criminal Procedure, 1973, alleging forgery without substantiation coupled with the abject absence of targeted cross-examination or affirmative defense evidence, palpably fails to meet this evidentiary threshold. The presumption thus endures unrebutted, fortifying the complainant's assertion of a legally enforceable debt and rendering the accused's defense untenable on merits. The accused's inaction herein, therefore, not only undermines the efficacy of his defense but also invites judicial censure for failing to uphold the adversarial imperatives of a fair trial, thereby tilting the scales inexorably towards conviction unless mitigated by other exculpatory factors.

b.​ Accused's Failure to Impugn the Veracity of the Alleged Loan Transaction: The accused has conspicuously failed to mount a credible challenge to the veracity of the underlying loan transaction asserted by the complainant, thereby allowing the complainant's CT CASE/1488/2020​ ​ Pradeep Kumar Verma vs Manoj Gupta​ ​ ​ Page 17/ 21 In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi narrative to subsist largely unchallenged and fortified by statutory presumptions under the Negotiable Instruments Act, 1881. While the complainant's evidence exhibits certain lacunae, most notably, his inability during cross-examination to furnish contemporaneous records substantiating the sale of property as a potential source of the Rs. 11,50,000/- cash advanced, coupled with the non-reflection of such funds in his income tax returns or banking statements; these deficiencies do not vitiate the overall probative force of his case. On the contrary, the complainant has cogently established a pre-existing relational nexus with the accused, predicated upon the accused being the brother-in-law of the complainant's acquaintance, Shri Mukesh Kumar Gupta, which undergirds the plausibility of an interest-free friendly loan. This relational foundation, corroborated by the complainant's testimony regarding multiple post-dishonor visits to the accused's residence for repayment demands and prior travels to Bangalore and Surat for cloth procurement, serves as the bedrock for the transaction's legitimacy. Critically, the accused's defense evinces profound analytical deficiencies, commencing with his abject failure to proffer any plausible explanation for how the cheques in question, and admittedly signed by him, came into the complainant's possession, or the circumstances under which such signatures were affixed. This omission is particularly egregious in light of the statutory presumption under Sections 118 and 139 of the Negotiable Instruments Act, which mandates that the accused rebut the inference of issuance for a legally enforceable debt through affirmative evidence, rather than mere denials. Furthermore, the accused's defense lacks unity and consistency, oscillating between assertions of a business relationship involving the supply and CT CASE/1488/2020​ ​ Pradeep Kumar Verma vs Manoj Gupta​ ​ ​ Page 18/ 21 In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi purchase of cloth materials; wherein the cheques were purportedly tendered as blank security for goods largely paid for, with only a nominal outstanding of Rs. 40,000/- to Rs. 50,000/ and an alternative claim that the instruments were surreptitiously removed from his workplace without authorization. Such vacillations not only erode the defense's credibility but also contravene the principle that a consistent and cogent rebuttal is imperative to displace the statutory presumption, as articulated in Bir Singh v. Mukesh Kumar (2019) by the Apex Court. Compounding this, the accused adduced no evidentiary substratum to buttress the business relations claim, such as invoices, payment receipts, or witness testimony from associates, despite initially expressing intent to lead defense evidence. This evidentiary vacuum renders the defense untenable, as mere suggestions during cross-examination, absent corroboration, fail to meet the preponderance-of-probability standard required for rebuttal. Equally unavailing is the accused's unsubstantiated allegation of cheque theft or misuse by the complainant, which remains bereft of any demonstrable proof. No contemporaneous complaint to law enforcement authorities, initiation of counter-legal proceedings, or even rudimentary efforts, such as notifying his banker of the purported theft or seeking stop-payment, have been evinced on record. This absence of proactive measures not only belies the theft narrative but also underscores a dereliction in discharging the onus under Section 106 of the Evidence Act, where facts peculiarly within the accused's knowledge demand explication. In summation, the accused's procedural and substantive lapses in challenging the loan's veracity such as marked by unaddressed evidentiary gaps in his own narrative, inconsistent defenses, and a failure to leverage CT CASE/1488/2020​ ​ Pradeep Kumar Verma vs Manoj Gupta​ ​ ​ Page 19/ 21 In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi cross-examination or defense evidence effectively; permit the complainant's account to prevail, reinforced by unrebutted presumptions. This analytical critique highlights the imperative for diligent contestation in adversarial proceedings, the neglect of which inexorably prejudices the accused's position and tilts adjudication towards conviction under Section 138 of the Negotiable Instruments Act.

10.​Conclusion and Reason for decision:

a.​ The Issue no. 1, 2, 3, 4 and 5 were decided in favour of the complainant and the presumption was drawn against the accused. b.​ The accused has failed to rebut the presumptions drawn against him and issue no. 6 is decided against the accused.

c.​ Upon careful appreciation of the evidence on record, including the complainant's unrebutted testimony, documentary exhibits such as the promissory note (Ex. CW1/B) and dishonored cheques, and the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881, which the accused has failed to displace through cogent evidence or consistent defense, this Court finds that the ingredients of the offence under Section 138 stand duly established. The accused's admissions regarding his signatures on the cheques, coupled with his inability to explain their possession by the complainant or provide a unified narrative without adducing any defense evidence, further undermine his position and invite adverse inference. The minor lacunae in the complainant's evidence, such as unproduced property sale records, do not suffice to rebut the presumption of a legally enforceable debt, as the accused has not proven his assertions on a preponderance of probability. Hence, This Court finds that the prosecution has proved the offense beyond reasonable doubt.

In the court of Sh. Divyam Lila, MM/JMFC, East district, Karkardooma courts, Delhi

11.​Order:

a.​ Accordingly, the accused Manoj Gupta is held guilty and convicted under Section 138 of the Negotiable Instruments Act, 1881. b.​ The matter shall now be listed for arguments on sentence. c.​ The signed copy of the judgement be uploaded on the CIS immediately.

d.​ Pronounced in open court and in presence of both the parties/ or their Counsels.

                     Digitally
                     signed by                                   ​       (DIVYAM LILA)
                     DIVYAM
    DIVYAM           LILA                            Municipal Magistrate, East District
                                                            Karkardooma Court/Delhi
    LILA             Date:
                                                                     Date: 17.11.2025
                     2025.11.17
                     17:12:42
                     +0530

___________________________end of the document_____________________ CT CASE/1488/2020​ ​ Pradeep Kumar Verma vs Manoj Gupta​ ​ ​ Page 21/ 21