Delhi District Court
Kuldeep Singh vs Badlu Ram on 9 June, 2025
IN THE COURT OF SH. ABHISHEK GOYAL, ADDITIONAL
SESSIONS JUDGE-03, CENTRAL DISTRICT, TIS HAZARI
COURTS, DELHI
CNR No.: DLCT01-003828-2023
CRIMINAL APPEAL No.: 63/2023
SHRI. KULDEEP SINGH,
S/o. Shri. Shyam Singh,
R/o. H. No. B-120,
Delhi Administrative Flats,
Timarpur, Delhi-110054. ... APPELLANT
VERSUS
SHRI. BADLU RAM,
S/o. Late Shri. Sohan Lal,
R/o. H. No. 68, Gali No. 1,
Harijan Basti, Shahdat Pur,
Karawal Nagar, Delhi-100094. ... RESPONDENT
Date of filing : 16.03.2023
Date of institution : 17.03.2023
Date when judgment was reserved : 26.03.2025
Date when judgment is pronounced : 09.06.2025
JUDGMENT
1. The present appeal has been preferred in terms of the provisions under Section 374 of the Code of Criminal Procedure, 1973 (hereinafter referred to as 'Cr.P.C./Code') against the judgment dated 23.01.2023 (hereinafter referred to as 'impugned judgment'), passed by learned Metropolitan Magistrate-01 (NI Act)/Ld. MM-01 (NI Act), Central, Tis Hazari Courts, Delhi in case bearing; 'Badlu Ram v. Kuldeep Singh, Ct. Case No. 9259/2017', convicting the appellant for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act') and the consequent order on sentence dated 16.02.2023 (hereinafter referred to as 'impugned order'), passed by the Ld. Trial Court, awarding the appellant rigorous imprisonment for a period of 04 (four) months along with CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 1 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.06.09 16:42:47 +0530 fine of Rs.1,60,000/- (Rupees One Lakh Sixty Thousand only), to be paid/released as compensation to the respondent/complainant. It was further directed that in the default of payment of the fine amount, the appellant was directed to undergo rigorous imprisonment for a further period of 02 (two) months (hereinafter impugned judgment and impugned order are collectively referred to as the 'impugned judgment and order').
2. Succinctly, the genesis of the present proceedings is a complaint filed/on behalf of the respondent/complainant before the Ld. Trial Court, wherein the respondent inter alia asserted that the appellant, at the relevant point of time, was a government employer in the District Court, Delhi. As per the respondent, initially, in the year 2012, the appellant approached the respondent, requesting him for a friendly loan of Rs. 50,000/- (Rupees Fifty Thousand only). Consequently, the respondent proclaimed that persuade by the request(s) of the appellant, he/the respondent gave a friendly loan of Rs. 50,000/- (Rupees Fifty Thousand only) to the appellant against an undertaking/agreement dated 20.01.2012, with an understanding that the said loan amount would be repaid by the appellant to the respondent by June, 2012. The complaint further records that the appellant made part payment against the said loan amount and again requested the respondent to lend him a further sum/loan of Rs. 1,00,000/- (Rupees One Lakh only) as he was in urgent need of money for the admission of his son in higher studies as well as for the marriage of his niece. At that point of time, as per the respondent, the appellant had asserted that he was bed-ridden due to his accident and was unable to arrange for the said amount. Consequently, considering the request of the appellant, the respondent obtained a personal loan of Rs. 1,00,000/- (Rupees One Lakh only) from Sanjeevani Cooperative CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 2 of 41 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2025.06.09 16:42:51 +0530 Urban T&C Society Ltd. (hereinafter referred to as the 'Co- operative Society') and after receipt/withdrawal of the same from his bank, the respondent had lent out a sum of Rs. 1,00,000/- (Rupees One Lakh only), in cash, to the appellant. The respondent further avowed that after taking such friendly loan, the appellant had assured to the respondent that the same would be repaid as soon as possible along with interest, as charged by the said Co- operative Society, after his recovery from injuries and upon him/the appellant joining his duty. Ergo, under such assurances from the appellant, the respondent is asserted to have waited for several months, however, no payment was made by the appellant. In fact, it is the case of the respondent that the appellant kept on delaying/postponing the payment of due amount to the respondent on one or the other pretext. However, as per the respondent, only part payment to a tune of Rs. 15,000/- (Rupees Fifteen Thousand only), against interest on said loan amount, was made by the appellant to the respondent in the year 2015. Consequently, it is averred by the respondent that left with no option when the respondent repeatedly asked the appellant to clear his dues in the end of January, 2017, the appellant is asserted to have issued a post-dated cheque bearing no. 005510, dated 29.03.2017 for a sum of Rs. 1,00,000/- (Rupees One Lakh only), drawn on SBI, Tis Hazari Courts, Delhi (hereinafter referred to as the 'cheque in question/dishonoured cheque') in favour of the respondent, towards discharge/debt of his liability. At that point of time, as per the respondent, he was assured by the appellant that as and when the said cheque would be presented for encashment, same would be honored. Consequently, the respondent is asserted to have deposited the said cheque with his banker, i.e., Allahabad Bank, Timarpur Branch, Delhi for encashment on 30.03.2017, upon the CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 3 of 41 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2025.06.09 16:42:56 +0530 request of the appellant. However, upon its presentation and re- presentation, the said cheque returned dishonoured vide memos dated 03.04.2017 and 03.05.2017 (hereinafter referred to as the 'return memos/cheque return memos') both time, with the remarks, "Funds Insufficient". Subsequently, the respondent issued a legal demand notice dated 31.05.2017 ( hereinafter referred to as the 'legal demand notice/legal notice') to the appellant inter alia seeking payment of the dishonoured cheque amount within a period of 15 (fifteen) days from the said notice. Remarkably, the said notice was duly replied by the appellant vide his reply dated 14.06.2017 (hereinafter referred to as 'reply to the notice'), denying his liability towards the respondent. However, aggrieved by the failure of the appellant abide by the terms of the undertaking as well as considering the non-payment of dishonoured cheque amount, the respondent filed the aforenoted complaint before the Ld. Trial Court, in terms of the provisions under Section 200 Cr.P.C. read with Sections 138/142 NI Act, against the appellant herein.
2.1. Notably, consequent upon pre-summoning evidence having been recorded and thereupon, Ld. Trial Court's taking cognizance of the offence on 24.07.2017, summons was issued to the appellant/accused. Subsequently, upon the appellant's entering appearance before the Ld. Trial Court and on compliance of the provision of Section 207 Cr.P.C., notice under Section 251 Cr.P.C. was framed against the appellant vide order dated 19.01.2019, to which, the appellant pleaded not guilty and claimed trial, besides the appellant admitted certain documents, in terms of the provisions under Section 294 Cr.P.C. on the said date. Relevantly, during the course of trial, the respondent examined himself as CW-1, while adopting his pre-summoning evidence/evidence by CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 4 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.06.09 16:43:00 +0530 way of affidavit (Ex.CW1/1) as well as relying on the documents, i.e., photocopy of undertaking dated 20.01.2012 (Ex. CW1/A); photocopy of loan-cum-account of Sanjeevani Cooperative Urban T&C Society Ltd. (Ex. CW1/B); cheque bearing no. 005510, dated 29.03.2017 for a sum of Rs. 1,00,000/- (Rupees One Lakh only), drawn on SBI, Tis Hazari Courts, Delhi (Ex. CW1/C); cheque return memo dated 03.04.2017 (Ex. CW1/D); cheque return memo dated 03.05.2017 (Ex. CW1/E); legal demand notice dated 31.05.2017 (Ex. CW1/F); postal receipt (Ex. CW1/G) and proof of delivery (Ex. CW1/H). Subsequently, on conclusion of respondent's evidence, recording of statement of the appellant under Section 313/281 Cr.P.C. on 30.03.2022, as well as on conclusion of arguments on behalf of the parties, as aforementioned, the Ld. Trial Court vide impugned judgment and order, while holding the appellant, guilty of the offence punishable under Sections 138 NI Act, sentenced him in the manner, as noted hereinabove.
3. Ld. Counsel for the appellant vehemently contended that the impugned judgment and order were passed by the Ld. Trial Court on mere conjunctures, surmises and in contravention of the settled principles of law, deserving their setting aside at the outset. As per the Ld. Counsel, the impugned judgment is incorrect both on facts as well as in law, making the same liable to be set aside at the outset. It was further submitted that the Ld. Trial Court erred in not appreciating the facts and circumstances of the present case, nor the submissions of/on behalf of the appellant, while passing the impugned judgment and order. In this regard, Ld. Counsel submitted that the impugned judgment as passed by the Ld. Trial Court, unmindful of several material aspects, in particular, as per the Ld. Counsel, the Ld. Trial Court erred in holding the appellant CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 5 of 41 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2025.06.09 16:43:03 +0530 guilty of the offence under Section 138 NI Act, only on the basis of presumption and without taking in consideration of any evidence of respondent/complainant. It was further submitted that the Ld. Trial Court did not consider that no evidence was led by/on behalf of the respondent/complainant to demonstrate that cheque in question was issued by the appellant against discharge of any legal debt and/or liability. Correspondingly, it was asserted that the Ld. Trial Court erred in not allowing the appellant to cross examine the respondent and the right of the appellant to cross examination the respondent was closed, without any rhyme or reason, leading to miscarriage of justice. Further, as per the Ld. Counsel, the Ld. Trial Court overlooked the material on record and cited various judgments/dictates, which were not applicable in the present case. 3.1. Ld. Counsel for the appellant further strenuously contended that the Ld. Trial Court further overlooked that alleged transaction in question pertained to the year 2012 and admittedly an agreement/undertaking between the parties existed in this regard, besides the respondent had taken two cheques from the appellant at the time of advancing loan which could have been utilized by the respondent for recovery of the amount, however, all in vain. Ld. Counsel further submitted that while passing the finding of guilt of the appellant, the Ld. Trial Court did not consider that the material placed on record, in particular, the passbook of the Cooperative Society, which clearly indicates that no withdrawal had taken place from the account of respondent, besides it was not considered that the respondent had not filed another any passbook/document to show withdrawal of the said amount. As per the Ld. Counsel, the Ld. Trial Court did not apply its judicial mind by passing the impugned judgment of conviction of the appellant only on the ground that the cheque in question was CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 6 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.06.09 16:43:07 +0530 issued by the appellant and taking recourse to the provisions under Section 139 NI Act. However, it was asserted that the Ld. Trial Court did not consider the respondent's admission in his complaint, pre-summoning evidence/examination, evidence, etc. Correspondingly, it was submitted by the Ld. Counsel that Ld. Trial Court further overlooked the material on record, in particular, respondent's cross-examination where the respondent never disclosed of multiple loans between him/the respondent and the appellant. Further, as per the Ld. Counsel, the correct facts of the instant case were not appreciated by the Ld. Trial Court, rather, the Ld. Trial Court premised its findings only in the concocted version, put forth by the respondent. In this regard, Ld. Counsel asserted that the correct facts of the present case are that the respondent had provided a loan to the appellant in the year 2012 and it is admitted between the parties that the respondent had obtained two blank cheques from the appellant. Correspondingly, Ld. Counsel asserted that after such loan was disbursed to the appellant, the respondent continued to pay interest to the respondent regularly and the appellant paid off the entire due amount to the respondent, with the appellant making the last payment against installment to the respondent on 07.12.2012. However, as per the Ld. Counsel, to his utter shock, he/the appellant received a legal demand notice from the respondent in the year 2017, without there being any debt or liability. Ld. Counsel further asserted that the said legal demand notice was duly responded by him, despite which the respondent persevered to raise unjust/illegal claims against the appellant and maliciously initiated the complaint proceedings against the appellant. Even otherwise, it was submitted by the Ld. Counsel that the Ld. Trial Court failed to consider that no liability could have been attributed to the appellant for time barred debt, CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 7 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.06.09 16:43:11 +0530 considering that as per the respondent's own version the cheque in question pertained to the year 2012, while the same was allegedly dishonoured in the year 2017, way beyond the statutory prescribed period of limitation.
3.2. Learned Counsel for the appellant further submitted that the impugned judgment is manifestly erroneous in as much as the Ld. Trial Court failed to consider the defence of the appellant, while reaching a conclusion of appellant's guilt. In this regard, Ld. Counsel fervently argued that while the appellant in his defence, clearly stated that only one loan of Rs. 1,00,000/- (Rupees One Lakh only) was obtained by him, which he had already repaid to the respondent along with interest, however, the said fact was not considered by the Ld. Trial Court under the impugned judgment. In fact, as per the Ld. Counsel, even the respondent admitted the receipt of sum of Rs. 15,000/- (Rupees Fifteen Thousand only) and Rs. 45,000/- (Rupees Forty Five Thousand only) from the appellant against the said loan, however, the said facts have not been duly given weightage by the Ld. Trial Court, while reaching a finding of appellant's guilt in the instant case. It was further submitted that the Ld. Trial Court has further gone wrong in holding the appellant guilty, as he could not lead any evidence in his defence. Correspondingly, as per the Ld. Counsel, the Ld. Trial Court erred in not holding that the cheque in question was issued as a security and not against discharge of any legal debt and/or liability, which the appellant had asserted at the time of framing of notice under Section 251 Cr.P.C. Further, as per the Ld. Counsel for the appellant, the Ld. Trial Court reached its conclusion of guilt of the appellant, while failing to appreciate that there is no cogent, credible and reliable evidence on record for reaching an unambiguous conclusion towards the guilt of the appellant. Even CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 8 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.06.09 16:43:16 +0530 otherwise, as per the Ld. Counsel, the impugned order on sentence was passed by the Ld. Trial Court, inconsiderate of the correct factual scenario, awarding an exorbitant sentence/fine and compensation to the appellant. Consequently, the Ld. Counsel inter alia prayed that the present appeal be allowed, and the impugned judgment and order be set aside, and the appellant be acquitted of the alleged charges. In support of the said contentions, reliance was placed upon the decisions in; Dashrathbhai Trikambhai Patel v. Hitest Mahendrabhai Patel & Anr., Crl. Appeal No. 1497/2022, dated 11.10.2022 (Hon'ble Supreme Court); M/s. Jage Ram Karan Singh & Anr. v. State & Anr., Crl.
Rev. Pet. No. 82/2013, dated 31.07.2019 (Hon'ble DHC); Sri. Dattatraya v. Sharanappa, Crl. Appeal No. 3257/2024, dated 07.08.2024 (SC); M/s. Rajco Steel Enterprises v. Kavita Saraff & Anr., (2024) 2 SCR 255; M/s. Vijay Polymers Pvt. Ltd. v. M/s. Vinnay Aggarwal, Crl. MC No. 1682/2008, dated 24.04.2009 (Hon'ble DHC); Prajan Kumar Jain v. Ravi Malhotra, Crl. MC No. 1869/2007, dated 26.10.2009 (Hon'ble DHC); Rajender Valecha & Anr. v. Satpal & Anr., RFA No. 590/2016, dated 02.02.2018 (Hon'ble DHC); Netrapal Singh v. Ravinder kumar Kalyanai & Anr., CRP no. 37/2019, dated 25.03.2019 (Hon'ble DHC); Satish Kumar v. State of NCT of Delhi, Crl. LP 95/2006, dated 01.08.2013 (Hon'ble DHC); R. Manikannu v. AR Bathruddin, Crl. A. No. 253/2015, dated 20.09.2021 (Hon'ble Madras HC); Sri. Dattatraya v. Sharanappa, Crl. Appeal No. 200193/2019, dated 03.03.2023 (Hon'ble Kerala HC); K. Shiju v. Nalini & Anr., Crl. Rev. Pet. No. 1251/2005, dated 26.11.2016 (Hon'ble Kerala High Court); Gopal, S/o. Vithalrao Bagade v. Sumant, S/o. Ganpatrai Bagade, Crl. Appln. 1183/2007, dated 16.02.2008 (Hon'ble Bombay High Court); Girdhari Lal Rathi v. PTV Ramanujachari CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 9 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.06.09 16:43:21 +0530 & Anr., (1997) 01 AP CK 0034; and C. Rajasekaran v. S. Padmavathi, Crl. RC No. 537/2019 & Crl. MP No. 7309- 7311/2019, dated 31.01.2022 (Hon'ble Madras High Court).
4. Per contra Ld. Counsel for the respondent submitted that the impugned judgment and order were passed by the Ld. Trial Court after due appreciation of the facts and circumstances of the case as well as in consonance with the settled judicial precedents. As per the Ld. Counsel, grounds of appeal in the instant case are falsely created and based on a concocted story. On the contrary, as per the Ld. Counsel, the impugned judgment and order passed by the Ld. Trial Court are correct and the appellant was correctly convicted as well as sentenced. It was further contended by the Ld. Counsel that the material brought on record explicitly and cogently point out towards the only finding of guilt of the appellant and nothing has been placed on record to show that the appellant rebutted the presumption under law/Section 118/139 NI Act. Correspondingly, it was submitted by the Ld. Counsel that cheque in question was issued by the appellant to the respondent against his debt/liability towards the complainant/respondent in the year 2017, in terms of the provisions under Section 25(3)1 of the Indian Contract Act, 1872 (hereinafter referred to as the 'Contract Act'), which was eventually dishonoured despite assurance. Even otherwise, it was submitted by the Ld. Counsel that the appellant kept on postponing the refund of loan to the respondent even after repeated requests made by the respondent and made part payment of interest to Cooperative Society only in the year 2014 and further issued the cheque in question in the year 2014. As per the Ld. 1 Section 25. Agreement without consideration void, unless it is in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt barred by limitation law- "An agreement made without consideration is void, unless-*** (3) it is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorised in that behalf, to pay wholly or in part..." (Emphasis supplied) CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 10 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.06.09 16:43:25 +0530 Counsel, during the trial proceedings, the appellant could not prove contrary to his legally enforceable debt/liability and also did not put any question towards the aspect of limitation in recovery/presentation of cheques in question and has only raised the said issue for the first time in the present appeal. Even otherwise, as per the Ld. Counsel, with the issuance of cheque by the appellant to the respondent, his liability stands fortified inter alia in terms of the provisions under Section 25(3) of the Contract Act and the appellant is precluded now to take advantage of his own wrong.
4.1. Ld. Counsel for the respondent further submitted/strenuously reiterated that the appellant led no evidence to rebut the presumption under Section 139 NI Act nor produce any witness/evidence in support of his contention that the cheque in question was misused by the respondent. On the contrary, as per the Ld. Counsel, the respondent proved its case, beyond reasonable doubt against the appellant. Further, Ld. Counsel fervently restated that the facts and circumstances put forth as well as the evidence placed on record, unerringly point out towards the guilt of the appellant and that no fault can be attributed to the findings of the Ld. Trial Court, which are based on proper appreciation of facts as well as law. Accordingly, Ld. Counsel for the respondent submitted that the present appeal deserves to be dismissed at the outset, as grossly malicious and devoid of merits. In support of the said contentions, reliance was placed upon the decisions in; S. Natarajan v. Sama Dharman, Crl. Appeal No. 1524/2014, dated 15.07.2014 (Hon'ble SC); K. Hymavathi v. State of AP & Anr., SPL (Crl.) No. 7455/2019, dated 06.09.2023 (SC); and A.V. Murthy v. Nagabasavanna, AIR 2002 SC 985.
5. The arguments of Ld. Counsel for the appellant as CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 11 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.06.09 16:43:30 +0530 well as that of Ld. Counsel for the respondent, heard and the record(s), including the Trial Court Record, written submission/written arguments as well as the case laws, relied upon by the parties have been thoroughly perused.
6. At the outset, this Court deems it prudent to enunciate the extent of jurisdiction of this Court in appeal/appellate jurisdiction. In this regard, this Court it is pertinent to outrightly make a reference to the decision of the Hon'ble Supreme Court in Padam Singh v. State of U.P., (2000) 1 SCC 621 , wherein the Hon'ble Court, while delving into the ' scope and ambit' of appellate court's jurisdiction inter alia noted as under;
"2. ... It is the duty of an appellate court to look into the evidence adduced in the case and arrive at an independent conclusion as to whether the said evidence can be relied upon or not and even if it can be relied upon, then whether the prosecution can be said to have been proved beyond reasonable doubt on the said evidence. The credibility of a witness has to be adjudged by the appellate court in drawing inference from proved and admitted facts. It must be remembered that the appellate court, like the trial court, has to be satisfied affirmatively that the prosecution case is substantially true and the guilt of the accused has been proved beyond all reasonable doubt as the presumption of innocence with which the accused starts, continues right through until he is held guilty by the final court of appeal and that presumption is neither strengthened by an acquittal nor weakened by a conviction in the trial court..."
(Emphasis supplied)
7. Correspondingly, the Hon'ble Apex Court in Narendra Bhat v. State of Karnataka, (2009) 17 SCC 785, iterated in respect of the foregoing as under;
"3. This Court has in a series of judgments held that a court exercising appellate power must not only consider questions of law but also questions of fact and in doing so it must subject the evidence to a critical scrutiny. The judgment of the High Court must show that the Court really applied its mind to the facts of the case as particularly when the offence alleged is CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 12 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.06.09 16:43:35 +0530 of a serious nature and may attract a heavy punishment."
(Emphasis supplied)
8. Quite evidently, from a conjoint reading of the aforenoted judicial dictates it is perspicuously deduced that the jurisdiction of this Court in an appeal extends to reappreciation of the entire material placed on record of the trial court and to arrive at an independent conclusion as to whether the said evidence can be relied upon or not. In fact, as aforenoted, court(s), while exercising appellate power is not only required to consider the question of law, rather, also question of facts to affirmatively reach a conclusion of guilt or innocence of an accused. In fact, it is trite law1 that non-re-appreciation of the evidence on record in an appeal may affect the case of either the prosecution or even the accused. Needless to reemphasize that the appellate court is to be further wary of fact that presumption of innocence of an accused, even extents until an accused is held guilty by the final court of appeal and that such a presumption is neither strengthened by an acquittal nor weakened by a conviction in the trial court.
9. Therefore, being cognizant of the aforesaid principles, however, before proceeding with the determination of the rival contentions of/on behalf of the parties, this Court deems it pertinent to reproduce the relevant provisions under law/NI Act, for the purpose of present adjudication, as under;
"118. 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;1
State of Gujarat v. Bhalchandra Laxmishankar Dave, (2021) 2 SCC 735.
CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 13 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.06.09 16:43:40 +0530 *** *** *** (e) as to order of indorsement: that the
indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
*** *** *** Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.
*** *** ***
138. Dishonour of cheque for insufficiency, etc., of funds in the account-Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that 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 that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless-
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice.
Explanation-For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.
CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 14 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.06.09 16:43:45 +0530
139. 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."
(Emphasis supplied)
10. At the outset, this Court observes that the objective behind the introduction of the provision(s) under Section 138 under the NI Act, by virtue of amendment/insertion in the year 1989 is to inculcate faith in the efficacy of banking operations and credibility in transacting business on negotiable instrument. Notably, at the time of introduction of the said provision(s), the legislature was cognizant of the fact that the civil remedies were proving to be inadequate to curb the menace on the part of unscrupulous persons and a need was felt for introduction of a penal provision to cease the propensity on the part of dishonest persons to exploit negotiable instruments for personal gains. Consequently, being wary of the imminent requirement for a penal provision to bring about faith in monetary transactions, Chapter XVII was introduced in the NI Act, comprising of the provisions from Sections 138 to 148. In particular, penal provisions under Section 138 NI Act were designed to1, "safeguard the faith of the creditor in the drawer of the cheque, which is essential to the economic life of a developing country like India. The provision has been introduced with a view to curb cases of issuing cheques indiscriminately by making stringent provisions and safeguarding interest of creditors". Notably, the Hon'ble Supreme Court in Goa Plast (P.) Ltd. v. Chico Ursula D'Souza, (2004) 2 SCC 235 , while inter alia analyzing the intent of introduction of Section 138 NI Act as well as scope and objective of the said provision(s) observed as under;
1Vinay Devanna Nayak v. Ryot Sewa Sahakari Bank Ltd., (2008) 2 SCC 305.
CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 15 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.06.09 16:43:50 +0530
"26. The object and the ingredients under the provisions, in particular, Sections 138 and 139 of the Act cannot be ignored. Proper and smooth functioning of all business transactions, particularly, of cheques as instruments, primarily depends upon the integrity and honesty of the parties. In our country, in a large number of commercial transactions, it was noted that the cheques were issued even merely as a device not only to stall but even to defraud the creditors. The sanctity and credibility of issuance of cheques in commercial transactions was eroded to a large extent. Undoubtedly, dishonour of a cheque by the bank causes incalculable loss, injury and inconvenience to the payee and the entire credibility of the business transactions within and outside the country suffers a serious setback. Parliament, in order to restore the credibility of cheques as a trustworthy substitute for cash payment enacted the aforesaid provisions. The remedy available in a civil court is a long-drawn matter and an unscrupulous drawer normally takes various pleas to defeat the genuine claim of the payee."
(Emphasis supplied)
11. Relevantly, in order to attract culpability under the provisions of 138 NI Act, the prosecution is inter alia required to prove1 that; (a) the cheque was issued/drawn by a person on an account maintained by him for payment of any sum of money to another person from out of that account; (b) the cheque must have been issued against the discharge, either in whole or in part, of any debt or other liability, though, in the absence of proof to the contrary, it shall be presumed that it was issued for the same; and
(c) the cheque was returned by the bank unpaid either because the amount of money standing to the credit of that account is insufficient to honour the cheque; or because it exceeds the amount arranged to be paid from the account by an agreement with that bank. Reference in this regard is further made to the decision of Hon'ble Supreme Court in Kusum Ingots & Alloys Ltd. v. Pennar Peterson Securities Ltd., (2000) 2 SCC 745 , wherein the Hon'ble 1 N. Doraisamy v. Archana Enterprises, 1995 SCC OnLine Mad 25 CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 16 of 41 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2025.06.09 16:43:54 +0530 Court, while conscientiously analyzing the provisions under Section 138 NI Act inter alia explicated the ingredients of the said provision/offence, as under;
"10. On a reading of the provisions of Section 138 of the NI Act it is clear that the ingredients which are to be satisfied for making out a case under the provision are:
(i) a person must have drawn a cheque 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 for the discharge of any debt or other liability;
(ii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(iii) that cheque is returned by the bank unpaid, either because 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;
(iv) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(v) 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."
(Emphasis supplied)
12. Here, it is further pertinent to observe that the statute/NI Act also provides for raising of a presumption/statutory presumption, casting/permitting a reverse burden on an accused and requiring the accused to prove the non-existence of the presumed fact. Quite evidently, Section 139 NI Act provides for/creates one such exception(s) to the general rule as to the burden of proof and shifts the onus on an accused to rebut the presumption envisaged under law, against him. Another such presumption under law being, under Section 118 NI Act.
CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 17 of 41
Digitally signed
by ABHISHEK
ABHISHEK GOYAL
GOYAL Date: 2025.06.09
16:43:59 +0530
Reference in this regard, is made to the decision of the Hon'ble Supreme Court in Rajesh Jain v. Ajay Singh, (2023) 10 SCC 148 , wherein the Hon'ble Court noted in regard the foregoing as under;
"33. The NI Act provides for two presumptions:
Section 118 and Section 139. Section 118 of the Act inter alia directs that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or drawn for consideration. Section 139 of the Act stipulates that "unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque, for the discharge of, whole or part of any debt or liability". It will be seen that the "presumed fact" directly relates to one of the crucial ingredients necessary to sustain a conviction under Section 138...
34. Section 139 of the NI Act, which takes the form of a "shall presume" clause is illustrative of a presumption of law. Because Section 139 requires that the Court "shall presume" the fact stated therein, it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. But this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary as is clear from the use of the phrase "unless the contrary is proved"..."
(Emphasis supplied)
13. Strikingly, the Hon'ble Supreme Court in Rangappa v. Sri Mohan, (2010) 11 SCC 441, while painstakingly evaluating the intent and purpose behind the introduction of Section 139 under the Statute books/NI Act, observed as under;
"26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat [(2008) 4 SCC 54: (2008) 2 SCC (Cri) 166] may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. 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.
CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 18 of 41
Digitally signed
ABHISHEK by ABHISHEK
GOYAL
GOYAL Date: 2025.06.09
16:44:03 +0530
However, there can be no doubt that there is an initial presumption which favours the complainant.
27. 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 defendant-accused cannot be expected to discharge an unduly high standard or proof."
(Emphasis supplied)
14. Markedly, it is observed from above that the presumption envisioned under Section 139 NI Act not only pertains to the fact that the cheque in question was drawn in discharge of debt or liability, rather, also includes a presumption that there exists a legally enforceable debt or liability at the time of such drawing. Congruently, Section 118(a) NI Act provides for a presumption in favour of the complainant1 inter alia to the effect that the negotiable instrument or the endorsement was made or endorsed for consideration. Indisputably2, the burden to rebut the presumption lies on an accused, by establishing probable defence. Needless to further observe here that, though, in order to rebut the statutory presumptions3, "an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial", however, the law is settled4 that a bare denial of the passing of the consideration or of existence of 1 Kundan Lal Rallaram v. Custodian, Evacuee Property, 1961 SCC OnLine SC 10.
2Rajaram v. Maruthachalam, 2023 SCC OnLine SC 48.
3Rohitbhai Jivanlal Patel v. State of Gujarat, (2019) 18 SCC 106.
4Kishan Rao v. Shankargouda, (2018) 8 SCC 165.
CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 19 of 41
Digitally signed by
ABHISHEK ABHISHEK GOYAL
GOYAL Date: 2025.06.09
16:44:07 +0530
debt/liability by an accused, would not serve the purpose or come to the aid/rescue of an accused. In fact, law is well settled that under such circumstances, it is expected from an accused to bring 'something which is probable', on record for getting the burden of proof shifted to the complainant. Reference in this regard is made to the decision in Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513, wherein the Hon'ble Apex Court, explicated the law in regard the foregoing as under;
"20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. 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. 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. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 20 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.06.09 16:44:11 +0530 rebut the presumptions arising under Sections 118 and 139 of the Act."
(Emphasis supplied)
15. Similarly, the Hon'ble Supreme Court in Basalingappa v. Mudibasappa, (2019) 5 SCC 418, summarized the principles governing the raising as well as rebuttal of statutory presumption, provided under the law/NI Act, in the following terms;
"25. We having noticed the ratio laid down by this Court in the above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:
25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence.
Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
25.4. That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.
25.5. It is not necessary for the accused to come in the witness box to support his defence."
(Emphasis supplied)
16. Ergo, being cognizant of the aforenoted principles, this Court would now proceed with the assessment of the rival contentions by/on behalf of the appellant and the respondent. Pertinently, Ld. Counsel for the appellant outrightly and vehemently contended that the cheque in question pertained to CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 21 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL Date: GOYAL 2025.06.09 16:44:17 +0530 time barred debt, for which, no criminality can be attributed to/against the appellant herein. In particular, it is the case of the appellant, whilst the complainant/respondent under his complaint and cross-examination asserted that a sum of Rs. 1,00,000/- (Rupees One Lakh only) was advanced by the respondent to the appellant in 2013, upon him/the respondent's procuring the said amount on loan from the Cooperative Society, however, the cheque in question was issued only in the year 2017. Consequently, as per the Ld. Counsel for the appellant, since the dishonoured cheque pertains to a period beyond the statutory period of limitation, i.e., against time barred debt, the appellant cannot be held liable under Section 138 NI Act. However, the said contention of the Ld. Counsel for the appellant does not find favour with this Court in view of the dictate of the Hon'ble High Court of Delhi in Rajeev Kumar v. State (NCT of Delhi) & Anr., Crl. L.P. 212/2021 & Crl. M.A. 20429/2021, dated 11.09.2024 , wherein the Hon'ble Court whist confronted with an akin conundrum, noted in unambiguous terms/remarked that furnishing of a cheque of a time-barred debt effectively resurrects the debt itself by a fresh agreement through the deeming provision under Section 25 of the Contract Act. In fact, as per the Hon'ble Court, under such situation, the original debt, by aid of the provisions under Section 25(3) of the Contract Act, becomes legally enforceable to the extent of the amount the cheque has been given. In this regard, it is pertinent to make reference to the relevant extracts from the said dictate as under;
"20. The plea of 'time bar', in that the cheque was issued on 31st December 2015, after four years of the disbursement of loan in October 2011, is also incorrectly analyzed by the Trial Court. The concept relating to limitation in situations of Section 138 of NI Act is that the furnishing of the cheque/negotiable instrument in itself invites a presumption of liability.
CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 22 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.06.09 16:44:21 +0530
The liability even if of a previous period, gets revived, due to the furnishing of the cheque, acknowledging therefore, that the repayment is to take place.
21. The law relating to a time-barred debt and the revival by virtue of furnishing a cheque by the drawer, is well settled. This is based upon the concept that a promise to pay wholly or in part a debt which cannot be enforced by the creditor being barred by the law of limitation, is a valid agreement, if it is made in writing and signed by the person. This is encapsulated in Section 25(3) of the Indian Contract Act, 1872 ('the ICA') which when read along with Illustration (e), crystallizes the concept clearly...
*** *** ***
31. In the opinion of this Court, the provisions of Section 25(3) of ICA are squarely applicable. A cheque as per section 6 of the NI Act is a "bill of exchange", which in turn is defined in section 5 of the NI Act as an instrument in writing signed by the maker directing payment of certain sum of money to a certain person. The maker of the cheque is the 'drawer' and the person to be paid is the 'drawee' as per section 7 of the NI Act.
32. Therefore, a priori the cheque itself becomes a promise made in writing signed by the person to pay wholly or in part debt, which otherwise, may not be payable due to law of limitation. Per section 25(3) of the ICA, this would be an agreement in itself. Section 139 presumption under the NI Act which presumes that the cheque is in discharge in whole or part liability of any debt or liability would therefore, actually come into play. The contrary position of the accused that no debt or liability subsists having extinguished by the law of limitation, would be then unmerited and untenable, since a fresh agreement comes into operation by the tendering of the cheque. By issuing the cheque, the drawer is acknowledging a legally enforceable liability and he ought not be entitled to claim that the debt had become barred by limitation.
*** *** ***
37. The furnishing of a cheque of a time-barred debt effectively resurrects the debt itself by a fresh agreement through the deeming provision under section 25(3) of ICA. The original debt therefore, through section 25(3) of the ICA, becomes legally enforceable to the extent of the amount the cheque has been given. This resonates also with practical considerations. Persons who have chosen to escape liability, can draw a cheque, in order to clear an earlier debt upon persuasion by the creditor. By the act of CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 23 of 41 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2025.06.09 16:44:25 +0530 drawing a cheque, the promisor i.e. the drawer, is effectively stating that he has a liability to pay the drawee. Drawing of the cheque in itself, is acknowledgment of a debt or liability. It is the resurrection or the revival of the prior debt which would trigger the provisions under section 138 of NI Act. To deny a complainant/drawee of invoking the penal provisions under section 138 of NI Act, despite the categorical premise of section 25(3) of the ICA recognizing a fresh agreement to pay, would be an unfortunate disentitlement..."
(Emphasis supplied)
17. Clearly, it is seen from above that the Hon'ble Court in unequivocal terms observed that issuance of cheque, itself becomes a promise in writing, signed by the person to pay wholly or in part debt, which otherwise, may not be payable due to law of limitation, in terms of the provisions under Section 25(3) of the Contract Act. As a corollary, it was held by the Hon'ble Court, quite lucidly that furnishing of a cheque of a time-barred debt effectively resurrects the debt itself by a fresh agreement through the deeming provision under section 25(3) of Contract Act, attracting criminality against an accused. Here, this Court deems it further pertinent to make a reference to decision of the Hon'ble Bombay High Court in Narendra V. Kanekar v. Bardez-Taluka Co- operative Housing Society Ltd. & Anr., 2006 SCC OnLine Bom 457: 2006 Cri. LJ 3111, wherein the Hon'ble Court remarked that the principles enunciated under Section 25(3) of the Contract Act are applicable to proceedings under Section 138 NI Act, with equal vigor and force as they apply to civil proceedings. In particular, the Hon'ble Court, noted in this context as under;
"10. Mere giving a cheque, without anything more, will not revive a barred debt, because cheque has to be given, as contemplated by the explanatory in discharge of a legally enforceable debt. There is not doubt that in terms of the Indian Limitation Act, 1963, a signed acknowledgement of liability made in writing before the expiration of period of limitation, is enough to start a fresh period of limitation. Likewise, CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 24 of 41 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2025.06.09 16:44:29 +0530 when a debt has become barred by limitation, there is also Section 25(3) of the Contract Act, by which, a written promise to pay, furnishes a fresh cause of action. In other words, what Clause (3) of Section 25 of the Indian Contract Act in substance does is not to revive a dead right, for the right is never dead at any time, but to resuscitate the remedy to enforce payment by suit, and if the payment could be enforced by a suit, it means that it still has the character of legally enforceable debt as contemplated by the explanation below Section 138 of the Act. As far as this aspect of the case is concerned, the learned Division Bench observed that to determine as to whether or not a liability is legally enforceable, the provisions of the Contract Act cannot be said to be irrelevant. This can provide a cause for a legal liability. Although the primary question answered by the Division Bench was that a cheque becomes a promise to pay under Section 25(3) of the Contract Act, this view need not be followed by this Court in the light of judgment of this Court in the case Ashwini Satish Bhat v. Shrijeevan Divakar Lolienkar (supra) and the other two judgments referred to hereinabove. Nevertheless, the Division Bench judgment is relevant to the extent that it holds that a promise to pay in writing as per Section 25(3) of the Indian Contract Act, 1872, matures into an enforceable contract, which can be enforced by filing a Civil Suit. If a suit could be filed pursuant to a promise made in writing and signed by the person to be charged therewith, as contemplated by Clause (3) of Section 25 of the law of Contract, then, in my view, the debt becomes legally enforceable and if a cheque is given in payment of such debt is dishonored and subsequently, the statutory notice is not complied with, then the person making promise in writing and issuing the cheque, would still be liable to be punished under Section 138 of the Act..."
(Emphasis supplied)
18. Proceeding further with the evaluation of the contention of the Ld. Counsel for the parties, it is noted that it is asserted by the appellant before the Ld. Trial Court at the time of recording of notice under Section 251 Cr.P.C. on 19.01.2019 that the cheque in question and the name mentioned therein were filled- in by him/the appellant, however, the date of the cheque is not in his/appellant's handwriting. Nonetheless, the appellant has CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 25 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.06.09 16:44:33 +0530 conceded that the cheque in question bears his signatures. Apposite to reproduce the relevant extracts of the said notice under Section 251 Cr.P.C. as under;
"...Q. Have the particulars in the cheque filled by you?
A. Yes. The amount and the name has been filled by me. I had not filled the date in cheque in question (after perusal of cheque).
Q. Did you issue/sign the cheque in question? A. The cheque in question bears my signatures..."
(Emphasis supplied)
19. However, it is seen from a conscientious perusal of the statement of the appellant/accused, recorded under Section 313/218 Cr.P.C. on 30.03.2022 that the appellant asserted therein that the cheque in question bears his signatures and that the "other details have not been filled by me...". Strikingly, under such factual scenario, Ld. Counsel for the appellant has endeavored to build up a case that no liability under Section 138 NI Act can be attributed/attracted against the appellant, especially when (as per the Ld. Counsel for the appellant) the particulars appearing on the dishonoured cheque were not filled by the appellant. However, in this regard, it is outrightly noted that the said contention is contradictory to the assertion of the appellant at the time framing of notice under Section 251 Cr.P.C. vis-à-vis that at the time of recording of the appellant's statement under Section 313/281 Cr.P.C., as aforenoted. Nevertheless, this Court decidedly notes that the said contention (even otherwise) fails to impress this Court, especially when the law is settled that filling of particulars of cheque by any person, other than the drawer does not invalidate the cheque and the liability under Section 138 NI Act/presumption under Section 139 NI Act would still be attracted under such situation(s), when the signatures on the cheque in question is duly CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 26 of 41 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2025.06.09 16:44:37 +0530 admitted by the drawer/accused. Reference in this regard is made to decision in Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197, wherein the Hon'ble Supreme Court observed as under;
"33. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. 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.
34. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.
*** *** ***
36. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act , in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."
(Emphasis supplied)
20. Markedly, under the present situation, when both the appellant and the respondent affirm that the cheque in question/dishonoured cheque was signed and handed over by the appellant to the respondent, the contention of the Ld. Counsel for the appellant/appellant's assertion under his statement recorded under Section 313/281 Cr.P.C. that the cheque in question was not filled in the appellant's handwriting, i.e., the date of cheque, other particulars and/or the payee's details thereon were not filled by the appellant, albeit only subsequent, would not, in the considered opinion of this Court, come to any aid/rescue of the appellant, in view of the aforenoted judicial dictate(s). Needless to reiterate that CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 27 of 41 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2025.06.09 16:44:42 +0530 the law is well settled that even when a signed blank cheque is voluntarily presented to a payee towards some payment, the payee may fill up the amount and other particulars and that the same would not, in itself, invalidate the cheque. On the contrary, even under such circumstances, presumption under Section 139 NI Act would be attracted, burden lying on the drawer of cheque to rebut the same as per law/by preponderance of probabilities.
21. Apropos the present discourse, this Court deems it pertinent to deal with the contention of the Ld. Counsel for the appellant inter alia to the effect that the dishonoured cheque was not issued by him to the respondent against discharge of any debt or liability. In order to deal with the said contention, it is apposite to outrightly make a reference to the appellant's defence/plea of defence, raised/made at the time of framing of notice under Section 251 Cr.P.C. on 19.01.2019, as under;
"...Q. Do have any defence to make, if yes, what is your plea of defence?
A. I had taken a loan of Rs. 1,00,000/- from the complainant in the year 2010. The cheque in question was handed over to the complainant as security cheque at the time of advancement of loan. I had repaid the entire amount to the complainant by December 2012. I had paid an amount of Rs. 30,000/- & Rs. 20,000/- to the complainant in cash in the year 2010-11. Thereafter, I made payment of Rs. 50,000/- by way of cheque in December 2012. I can also prove the same. I requested the complainant to return the cheque in question to me. However, complainant did not return the same and I also trusted the complainant as he is very old acquaintance.
Q. Do you have any liability towards the complainant?
A. No, I do not have any liability towards the complainant..."
(Emphasis supplied)
22. Correspondingly, in the statement of the accused persons, recorded in terms of the provisions under Section 313/281 CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 28 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.06.09 16:44:46 +0530 Cr.P.C. on 30.03.2020, the appellant asserted, as under;
"...I had taken loan from the complainant of Rs. 1 lac and had issued two cheques as blank signed security cheques. I have already repaid whole of the loan amount to the complainant with interest. I am aware that my cheque was bounced. The receipt Ex. CW1/A had been executed by me for Rs. 50,000/-. The other amount of Rs. 50,000/- was given to me without any receipt and I have repaid the same in cash. I have also transferred Rs. 45,000/- from my bank account.
Qn. Do you want to say anything else? Ans. I have no liability towards the complainant. Qn. Do you want to lead defence evidence? Ans. No..."
(Emphasis supplied)
23. Notably, from a conjoint reading of the above, it is observed that the appellant admitted his signatures on the dishonoured cheque as well as the execution and issuance thereof/cheque in question. Undoubtedly, under such circumstances, presumption under Section 139 NI Act would arise in the instant case. However, in order to rebut the said presumption appellant merely contended that the cheque in question was issued as a security cheque and the entire liability for the earlier loan of Rs. 1,00,000/- (Rupees One Lakh only) was already paid by him. However, in this regard, this Court outrightly notes that as a general proposition of law1, repeated affirmed by superior courts, the question whether a post-dated cheque is for 'discharge of debt or liability' depends on the nature of the transaction. Consequently, where on the date of the cheque, liability or debt exists or the amount has become legally recoverable, the provisions under Section 138 NI Act would be attracted in a given case, otherwise not. Reference in this regard is further made to the recent dictate of the Hon'ble Supreme Court in Sripati Singh (since deceased) 1 Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd., (2016) 10 SCC 458. CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 29 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.06.09 16:44:51 +0530 through his Son Gaurav Singh v. State of Jharkhand & Ors., MANU/SC/1002/2021, wherein the Hon'ble Court, while revaluating the issue regarding the maintainability of the proceedings under Section 138 NI Act in the event of dishonour of security cheque(s), noted as under;
"16. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated Under Section 138 and the other provisions of N.I. Act would flow."
(Emphasis supplied)
24. Evidently, it is only when legal debt or liability exists against a drawer on the date of presentation of cheque, which eventually gets dishonoured, provisions under Section 138 NI Act would be attracted in a case. As a corollary, no liability can be attributed to a drawer where a security cheque is presented prior to the loan or installment maturing for repayment against which the cheque was issued or where the liability or debt is discharged prior to such presentation or in the cases of (altered) understanding in relation to such presentation. Consequently, for a drawer to avoid its liability under Section 138 of the NI Act on the basis of 'security deposit' defence, is required to be demonstrated that on the date of the cheque, no legally recoverable debt or liability was CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 30 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL Date: GOYAL 2025.06.09 16:44:57 +0530 under existence. As aforenoted, in the instant case, the respondent has asserted that the cheque in question was issued by the appellant in the year 2017 against the respondent's past liability towards loan of Rs. 1,00,000/- (Rupees One Lakh only) issued/given by the respondent to the appellant, in terms of the provisions under Section 25(3) of the Contract Act. Clearly, as hereinunder observed, on the date of issuance of said cheque/cheque in question when the appellant's liability stands resurrected in view of the said provision/provision under Section 25(3) of the Contract Act, it does not lie in the mouth of the appellant to assert that on the date of presentation of the dishonoured cheque for encashment, no debt or liability existed or that the said cheque was merely issued as 'security'.
25. Here, it is further pertinent to note that though, on one hand, the appellant opted not to lead any evidence in his defence before the Ld. Trial Court, on the other hand, nothing material has emerged even from the cross examination of the respondent. In this regard, it is pertinent to reproduce the relevant extracts from the respondent's/CW-1's cross-examination, as under;
"...The accused approached me for loan in the year 2013. He had come for loan alone. I do not remember the exact date, month and year when I gave the loan to accused. Vol. I have already filed the documentary proof of same on record. I have no family relation with the accused. There were only friendly relations with the accused. I had given a loan of Rs. 1,00,000/- to the accused personally after borrowing from the society in my name. One another loan was given by the society to the accused upon my insistence of Rs. 1,00,000/- in which, I was the guarantor and on default of the accused to repay the same that was also recovered from me by the society. I had given the loan to the accused in cash after withdrawing from bank account. I had given the loan to the Accused at the house of accused as the accused was bed-ridden due to accident. I do not remember the exact date of the accident of accused. The wife of accused and his two kids were also present in the same CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 31 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.06.09 16:45:03 +0530 house at the time of giving loan. The accused had taken the loan since he needed money for higher study of his son and due to his accident and also the Bhanji of accused was getting married. The accused had returned some money in year 2013-14 by way of cheque of Rs. 45,000/-. No cash was given to me by accused. I was not an income tax payee in year 2012. I have not intimated my department for giving loan. I had not taken any receipt from the accused for the loan advanced to him. I have no licence for money lending. I had given the loan without interest for one year. Vol. The accused had promised to pay the society interest. It is correct that the at the time of advancing the loan I had taken two blank signed cheques from the accused apart from the cheque in question. The cheque in question was given by accused in year 2017. It is incorrect that I had taken any other cheque from accused. It is wrong to suggest that I had not given the loan to the accused by taking the same from society. It is wrong to suggest that accused had repaid Rs. 1,05,000/- to me. It is wrong to suggest that the cheque in question was for security. It is wrong to suggest that I have misused the cheque in question in order to extort the money from the accused in any manner. It is wrong to suggest that I am deposing falsely..."
(Emphasis supplied)
26. Significantly, as noted herein, the appellant took a defence at the time of framing of notice under Section 251 Cr.P.C. that he took loan of Rs. 1,00,000/- (Rupees One Lakh only) from the respondent in 2010 and the cheque in question was handed to the respondent as security against such loan. Correspondingly, it is the case of the appellant that he paid a sum of Rs. 30,000/- (Rupees Thirty Thousand only) and Rs. 20,000/- (Rupees Twenty Thousand only) to the respondent in cash, in the year 2010-2011 and subsequently, made a payment of Rs. 50,000/- (Rupees Fifty Thousand only) by way of cheque in December 2012. Needless to mention that though, the appellant proclaimed at the time of framing of notice that he would prove the said facts during trial, however, from a scrupulous analysis of the material placed on record, it is observed that the appellant miserably failed to do so.
CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 32 of 41
Digitally signed by
ABHISHEK ABHISHEK GOYAL
GOYAL Date: 2025.06.09
16:45:08 +0530
On the contrary, during the cross examination of the respondent, the appellant took altogether a different stand by asserting that he had paid a sum of Rs. 45,000/- (Rupees Forty Five Thousand only) to the respondent through cheque in the year 2013-14 and even went ahead to suggest that he/the appellant paid a sum of Rs. 1,05,000/- (Rupees One Lakh Five Thousand only), cumulatively to the respondent, which respondent denied. Quite lucidly, under such circumstances, this Court is in concurrence with the finding of the Ld. Trial Court that the respondent, in the facts of the present case, has not been able to rebut the presumption under Section 139 NI Act, even on preponderance of probability(ies). As aforenoted, this Court further concurs with the observation of the Ld. Trial Court that the appellant took inconsistent/contradictory plea of defence before the Ld. Trial Court, besides averring that the loan of Rs. 1,00,000/- (Rupees One Lakh only) was obtained by him/the appellant from the respondent in the year 2010 for which he had executed an undertaking (Ex. CW1/A) in the year 2012. Clearly, under such circumstances, this Court also concedes that the occasion for execution of the undertaking dated 20.01.2012 (Ex. CW1/A) is not forthcoming from the material placed on record. Needless to reiterate, even in the considered opinion of this Court, a reasonably prudent man, similarly placed would not execute a receipt on 20.01.2012 for a loan which he allegedly took in the year 2010, with a specific undertaking under such receipt that the said amount of Rs. 50,000/- (Rupees Fifty Thousand only) was received co-terminus with such execution of receipt (Ex. CW1/A) on 20.01.2012. Ergo, under such circumstances, this Court further concurs with the finding of the Ld. Trial Court that the appellant's avowal that there was only one loan transaction between the respondent/complainant and him/appellant is exceedingly CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 33 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL Date: GOYAL 2025.06.09 16:45:12 +0530 improbable.
27. Harmoniously, this Court finds itself in concert/tandem with the finding of the Ld. Trial Court that the appellant admitted at the time of framing of notice under Section 251 Cr.P.C. that he had filled the amount in the dishonoured cheque, being the loan amount of Rs. 1,00,000/- (Rupees One Lakh only) as averred by the respondent under his complaint. Clearly, it does not appeal to the senses of this Court that once the appellant admitted the receipt Ex. CW1/A, indicating an amount of Rs. 50,000/- (Rupees Fifty Thousand only) as due and payable by the appellant to the respondent on such execution, the reason for filling an amount in the cheque/dishonoured cheque, otherwise than what was actually (allegedly) owed and payable, is neither forthcoming from any material placed on record nor does it appeal as a conduct of a reasonably prudent person. On the contrary, this Court further concedes with the observation of the Ld. Trial Court that from the material brought forth on record, that the loan transaction in question, i.e., loan of Rs. 1,00,000/- (Rupees One Lakh only) and that specified under receipt (Ex. CW1/A), are independent and separate transactions/loan transactions. Synchronously, this Court further records that the appellant failed to prove that the alleged payment of Rs. 45,000/- (Rupees Forty Five Thousand) to the respondent, which the respondent admitted under his cross examination, was for the loan in dispute and not for the earlier transaction, as specified under Ex. CW1/A. Notably, though, the appellant further proclaimed before the Ld. Trial Court that he had repaid the entire loan in December 2012, however, failed to adduce any independent witnesses in support of his said avowal. Correspondingly, though, the appellant proclaimed that besides the cheque in question, two other cheques were handed CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 34 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.06.09 16:45:16 +0530 over by him to the respondent, however, no material has been brought on record to demonstrate that the appellant at any point in time requested for the return of the said cheques from the respondent, except for mere oral assertion of the appellant before the Ld. Trial Court. Needless to mention that the appellant has also not brought on record, whether any complaint/criminal complaint and/or proceedings were initiated by him against the respondent upon the respondent's refusal to return the cheques. The same is notwithstanding the fact that the cheque in question was dishonored for the reason for insufficiency of funds, in contrast to the stoppage of payment by/at the behest of the appellant, upon respondent's alleged refusal to return the appellant's cheque(s).
28. Pertinent to further note that during the course of proceedings before the Ld. Trial Court, the appellant indirectly endeavored to challenge the financial capacity of the respondent to lend the loan of Rs. 1,00,000/- (Rupees One Lakh only). However, in this regard it is outrightly observed that the law in aspect is trite1 that it is not obligatory on the complainant to first assert his financial capacity in the case of cheque dishonour, unless an accused sets up a case regarding such complainant's wherewithal.
Reference in this regard is made to the decision of the Hon'ble Supreme Court in Tedhi Singh v. Narayan Dass Mahant, (2022) 6 SCC 735, wherein the Hon'ble Court expounded the law regarding the foregoing as under;
"10. The trial court and the first appellate court have noted that in the case under Section 138 of the NI Act the complainant need not show in the first instance that he had the capacity. The proceedings under Section 138 of the NI Act is not a civil suit. At the time, when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not 1 APS Forex Services (P) Ltd. v. Shakti International Fashion Linkers, (2020) 12 SCC 724; and K. Ilayarajalingam v. K. Karthikeyan, Crl. R.C. No. 1123 of 2017, dated 20.06.2022 (Madras HC).
CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 35 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date: 2025.06.09 16:45:20 +0530
have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. To that extent, the courts in our view were right in holding on those lines. However, the accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable which he can do by producing independent materials, namely, by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further, more importantly, achieve this result through the cross-examination of the witnesses of the complainant. Ultimately, it becomes the duty of the courts to consider carefully and appreciate the totality of the evidence and then come to a conclusion whether in the given case, the accused has shown that the case of the complainant is in peril for the reason that the accused has established a probable defence"
(Emphasis supplied)
29. Strikingly, in the instant case, the appellant did not challenge the financial capacity of the respondent to lend the amount even under its reply to legal demand notice dated 14.06.2017, however, merely posed certain question to the respondent in this regard under his cross examination, whereupon, the respondent asserted that he loaned the amount, after obtaining loan of Rs. 1,00,000/- (Rupees One Lakh only) from the Cooperative Society vide Ex. CW1/B. Needless to mention, nothing has been brought on record by the appellant to belie the said assertion of the respondent, except for a blatant denial. Clearly, under instant facts and circumstances, the appellant's feeble plea of 'so called' lack of financial capacity of the respondent would not operate to the benefit of the appellant, when the advance of loan is proved by credible material on record.
30. Conspicuously, in light of the foregoing, this Court unambiguously reiterates that the various pleas of defence of the appellant inter alia pertaining to the dishonoured cheque being CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 36 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.06.09 16:45:25 +0530 issued for security or there being no debt or liability as the amount against loan was allegedly repaid by the appellant to the respondent or that the cheque in question was misused by the respondent, do not appeal to the senses of this Court, for the reasons noted hereinabove. On the contrary, the said pleas of defence, in considered opinion of this Court, are not only afterthoughts, flimsy and insubstantial, rather, unbelievable, and unconvincing. Needless to reiterate that to rebut the statutory presumption under Section 118/139 NI Act, it is not expected from an accused/appellant herein to prove his defence ' beyond reasonable doubt' and that the same may be done by bringing 'something which is probable' on record for getting the burden of proof shifted to the complainant. However, in the instant case, the appellant has failed to bring forth any such facts and circumstances, upon consideration of which, this Court may either believe that the consideration and debt did not exist, or that its 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." On the contrary, as aforenoted, the inherent inconsistencies and discordances in the various versions put forth by the appellant in his defence, make the same highly implausible and trifling. Correspondingly, this Court concurs with the finding of the Ld. Trial Court that the appellant has not been able to rebut the initial presumption raised against him.
31. Conclusively, in conspectus of the above and inter alia keeping in view consistent testimony of the complainant/respondent/CW-1 as well as the documents and material placed on record, the only conclusion which can be arrived at in the facts and circumstances brought forth pertains to the guilt of the appellant for the commission of the offence under CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 37 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.06.09 16:45:31 +0530 Section 138 NI Act. Needless to reiterate that the defence/pleas of defence raised by the appellant are not only uninspiring and undeserving of any credence, rather, irreconcilable as well as lackluster. Accordingly, this Court has no hesitation in reasonably reaching a conclusion that the respondent/complainant has proved its case 'beyond reasonable doubt' against the appellant for the offence under Section 138 NI Act. On the contrary, the appellant has failed to raise a probable defence/defence by 'preponderance of probabilities' in his favour for the reasons hereinunder noted.
32. Significantly, in as much as the aspect of sentence awarded to the appellant by the Ld. Trial Court is concerned, this Court, at the outset, notes that the superior courts have persistently cautioned towards the grant of just and appropriate sentence, post- conviction, as well as cautioned1 that mere long pendency of case is no ground to award lesser sentence. In fact, in the instances of cheque dishonour cases, law is settled 2 that the sentence imposed must be such as to give proper effect to the object of the legislation and to dissuade unscrupulous drawers of such negotiable instruments from taking advantage of their own wrongs. In this regard, reference is made to the decision in Suganthi Suresh Kumar v. Jagdeeshan, (2002) 2 SCC 420, wherein the Hon'ble Apex Court unswervingly opined as under;
"12. The total amount covered by the cheques involved in the present two cases was Rs 4,50,000. There is no case for the respondent that the said amount had been paid either during the pendency of the cases before the trial court or revision before the High Court or this Court. If the amounts had been paid to the complainant there perhaps would have been justification for imposing a flea-bite sentence as had been chosen by the trial court. But in a case where the amount covered by the cheque remained unpaid it should be the lookout of the trial Magistrates that the 1 State of M.P. v. Ghanshyam Singh, (2003) 8 SCC 13.2
H. Pukhraj v. D. Parasmal, (2015) 17 SCC 368. CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 38 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.06.09 16:45:35 +0530 sentence for the offence under Section 138 should be of such a nature as to give proper effect to the object of the legislation. No drawer of the cheque can be allowed to take dishonour of the cheque issued by him light-heartedly. The very object of enactment of provisions like Section 138 of the Act would stand defeated if the sentence is of the nature passed by the trial Magistrate. It is a different matter if the accused paid the amount at least during the pendency of the case."
(Emphasis supplied)
33. Correspondingly, the Hon'ble Supreme Court in R. Vijayan v. Baby, (2012) 1 SCC 260 , while fervently professing towards the grant of reimbursement of the loss by way of compensation to the complainant/victim in cheque dishonour cases, avowed as under;
"17. The apparent intention is to ensure that not only the offender is punished, but also ensure that the complainant invariably receives the amount of the cheque by way of compensation under Section 357(1)
(b) of the Code. Though a complaint under Section 138 of the Act is in regard to criminal liability for the offence of dishonouring the cheque and not for the recovery of the cheque amount (which strictly speaking, has to be enforced by a civil suit), in practice once the criminal complaint is lodged under Section 138 of the Act, a civil suit is seldom filed to recover the amount of the cheque. This is because of the provision enabling the court to levy a fine linked to the cheque amount and the usual direction in such cases is for payment as compensation, the cheque amount, as loss incurred by the complainant on account of dishonour of cheque, under Section 357(1)
(b) of the Code and the provision for compounding the offences under Section 138 of the Act. Most of the cases (except those where liability is denied) get compounded at one stage or the other by payment of the cheque amount with or without interest. Even where the offence is not compounded, the courts tend to direct payment of compensation equal to the cheque amount (or even something more towards interest) by levying a fine commensurate with the cheque amount.
A stage has reached when most of the complainants, in particular the financing institutions (particularly private financiers) view the proceedings under Section 138 of the Act, as a proceeding for the recovery of the cheque amount, the punishment of the CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 39 of 41 Digitally signed by ABHISHEK ABHISHEK GOYAL GOYAL Date:
2025.06.09 16:45:40 +0530 drawer of the cheque for the offence of dishonour, becoming secondary.
18. Having reached that stage, if some Magistrates go by the traditional view that the criminal proceedings are for imposing punishment on the accused, either imprisonment or fine or both, and there is no need to compensate the complainant, particularly if the complainant is not a "victim" in the real sense, but is a well-to-do financier or financing institution, difficulties and complications arise. In those cases where the discretion to direct payment of compensation is not exercised, it causes considerable difficulty to the complainant, as invariably, by the time the criminal case is decided, the limitation for filing civil cases would have expired. As the provisions of Chapter XVII of the Act strongly lean towards grant of reimbursement of the loss by way of compensation, the courts should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy fine up to twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount as compensation. Direction to pay compensation by way of restitution in regard to the loss on account of dishonour of the cheque should be practical and realistic, which would mean not only the payment of the cheque amount but interest thereon at a reasonable rate. Uniformity and consistency in deciding similar cases by different courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice."
(Emphasis supplied)
34. Ergo, wary of the aforenoted judicial dictates, facts and circumstances of the present case as well as the arguments addressed by the Ld. Counsel for the appellant as well as the respondent, this Court unswervingly observes that the Ld. Trial Court has acted quite leniently with the appellant by awarding sentence/rigorous imprisonment for a period of 04 (four) months along with fine of Rs. 1,60,000/- (Rupees One Lakh Sixty Thousand only), to be paid/released as compensation to the respondent/complainant, in the default of payment of which, the appellant was directed to undergo rigorous imprisonment for a CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 40 of 41 Digitally signed ABHISHEK by ABHISHEK GOYAL GOYAL Date: 2025.06.09 16:45:45 +0530 further period of 02 (two) months. Needless to mention that in the instant case, substantial time has lapsed since the initiation of the complaint proceedings by the respondent in the year, 2017, culminating in its adjudication in the present appeal, the complainant/respondent, being embroiled in litigation for dishonoured cheque during the interregnum. Needless to further mention that the appellant has failed to demonstrate any mitigating factor, convincing this Court to grant any relaxation in his/appellant's favour.
35. Conclusively, in view of the above discussion, the present appeal deserves to be dismissed and is hereby dismissed. The judgment dated judgment dated 23.01.2023 and the consequent order of sentence dated 16.02.2023, passed by Ld. MM-01 (NI Act), Central, Tis Hazari Courts, Delhi in case bearing; 'Badlu Ram v. Kuldeep Singh, Ct. Case No. 9259/2017', convicting and sentencing the appellant, respectively, for the offence under Section 138 NI Act, are hereby upheld. Appellant is directed to surrender before the Ld. Trial Court within a period of seven days from today for serving the sentence/remainder period thereof.
36. Trial Court Record be sent back along with a copy of this order/judgment, with direction to proceed against the appellant as per law. Copy of this order/judgment be also given dasti to the appellant. Further, compliance of the decision of the Hon'ble Supreme Court in Suhas Chakma v. Union of India (UOI) & Ors., MANU/SC/1147/2024 has been carried out.
37. Appeal file be consigned to record room after due compliance. ABHISHEK by GOYAL Digitally signed ABHISHEK GOYAL Date: 2025.06.09 16:45:51 +0530 Announced in the open Court (Abhishek Goyal) on 09.06.2025. ASJ-03, Central District, Tis Hazari Courts, Delhi CA No. 63/2023 Kuldeep Singh v. Badlu Ram Page No. 41 of 41