Delhi District Court
Swati vs Amit Kumar on 28 April, 2025
COPY OF THE JUDGMENT OF CONVICTION IN
COMPLIANCE WITH
"SUHAS CHAKMA VS. UNION OF INDIA & ORS" W.P
(C)1082/20
COVERSHEET TO THE COPY OF JUDGMENT
The convict has been informed that the convict may avail
free legal aid facilities for pursuing higher remedies. The
following Authority may be contacted for seeking
appropriate guidance:
District Legal Services Authority, North-East District
Address of the Authority: Room No. 35, Karkardooma
Courts, Delhi
Phone Number: 9667992794, 011-22101335
E-mail: northeast-dlsa@nicin Digitally signed
RAVISHA by RAVISHA
SIDANA
SIDANA Date: 2025.04.28
18:01:48 +0530
(RAVISHA SIDANA)
JMFC-NI ACT (DIGITAL COURT)
NORTH EAST;KKD COURTS;DELHI 28.04.2025
CC No. 319/2021 Swati v. Amit Kumar Page No.1 of 24
IN THE COURT OF JUDICIAL MAGISTRATE
FIRST CLASS, (NI ACT), DIGITAL COURT,
NORTH EAST, KKD, NEW DELHI
Presided over by-Ms. Ravisha Sidana, DJS
DLNE020021242021
CC NO. 319/2021
Smt. Swati
D/o Late Sh. Deep Chand
R/o H.No. 149, Gali No. 6,
Karawal Nagar,
Sadat pur Extention
Delhi-110094
........ Complainant
vs
Sh. Amit Kumar
S/o Sh. Lalta Singh
R/o H.No. 180-A, Gali No. 8
Karawal Nagar,
Sadat pur Extention
Delhi-110094
........ Accused
1.Offence complained of Section 138 of Negotiable or proved Instruments Act, 1881 (NI Act)
2. Date of Filing 15.04.2021
3. Plea of Accused Not Guilty
4. Date of Reserving Order 24.03.2025
5. Date of Pronouncement 28.04.2025 CC No. 319/2021 Swati v. Amit Kumar Page No.2 of 24 Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
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6. Final Order Conviction Argued by :- Ms. Babita Rana, Ld. counsel for the complainant Sh. Vinay Modi, Ld. counsel for the accused BRIEF STATEMENT OF REASONS FOR THE DECISION:-
FACTUAL MATRIX
1. The present complaint has been filed against the accused under section 138 Negotiable Instruments Act,1881 ( hereinafter referred as "NI Act" ). Briefly, the substratum of the complaint is that the accused was well acquainted with the father of the complainant namely Sh. Deep Chand. On 11th September 2019, the accused came at the house of the complainant and approached the father of the complainant and demanded a sum of Rs.2,70,000/- (Rupees Two Lacs Seventy Thousand only) from the father of the complainant as friendly loan as the accused was facing some financial crises in his business,while running a Coaching Centre. The father of the complainant arranged the amount of Rs.2,70,000/- (Rupees Two Lacs Seventy Thousand only) and handed over to the accused in cash in the month of September 2019 itself for a period of eleven months i.e. 11.09.2019 to 10.08.2020, and at the time taking the friendly loan amount, the accused also assured to the father of the complainant that he would return the said amount within a period of eleven month. The friendly loan was given to the accused by the late father of the complainant in the presence of Mr. Rohtash S/o Sh.
Jai Chand. In this regard, a Loan agreement was also executed between the accused and father of the complainant and the same was duly signed by both the father of the complainant and the accused, duly notarized on 11.09.2019 and the accused also CC No. 319/2021 Swati v. Amit Kumar Page No.3 of 24 Digitally signed by RAVISHA SIDANA RAVISHA Date:
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handed over a post dated cheque bearing No.055348, amount of Rs.2,70,000/-, drawn on Bank of Maharastra, Chandni Chowk, Delhi-110006, in view to discharge his legal liability, as per the terms of the agreement. Due to the unfortunate death of the father of the complainant on 18.04.2020, the father of the complainant left behind his legal heirs and the complainant is one of the legal heirs of her late father. After the expiry of eleven months, the complainant on behalf of other legal heirs of the late father of the complainant asked the accused to repay the said friendly loan amount back, then the accused gave permission to the complainant namely Smt. Swati to present the cheque in her own account and upon assurance of the accused, she presented the said cheque in her bank account for the purpose of encashment and also assured to the complainant that the same would be encashed on its presentation.
2. As per commitment and assurance given by the accused, the above stated cheque bearing No.055348, amount of Rs.2,70,000/-, drawn on Bank of Maharastra, Chandni Chowk, Delhi-110006 was presented by the complainant on 11.01.2021 with her banker i.e. Bank of Baroda, Bhajanpura Branch, Delhi, but the cheque was return unpaid on 16.01.2021 with the remarks "Drawer's signature illegible". After no satisfactory response to several intimation and requests, the complainant sent a legal notice dated 06.03.2021 through speed post, which was duly served upon the accused on 11.03.21 but accused failed to repay the amount of dishonoured cheque within 15 days. Hence, the present complaint.
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3. Vide order dated 11.10.2021, after being satisfied that prima facie ingredients of Section 138 NI Act are made out and taking additional documents i.e. death certificate of father of the complainant, her birth certificate, Aadhar Card and her PAN card, the cognizance was taken and summons were directed to be issued against the accused. Accused entered into appearance with counsel on 08.03.2022 and he was admitted to bail. Thereafter, notice under Section 251 Cr.PC was framed and served upon the accused to which he pleaded not guilty and claimed trial on 07.04.2022. The accused denied the signature on the cheque to be his, in addition to filling the other particulars on the impugned cheque. During his plea of defence, the accused stated as follows:
"Yes. I know the complainant. She is the daughter of late Sh. Deepa Chand. late Sh. Deepa Chand was a small financier and I used to do job at his office. He had three partners and I had joined the job in the year 2016. I did not borrow any amount from late Sh Deep Chand, father of the complainant. I used to manage his accounts. When I had joined the job late Sh Deepa Chand had asked for some security and on his saying, I gave my original pass book, cheque book, aadhar card and PAN Card to him as I knew him well being resident of the same vicinity. Late Sh Deepa Chand was not keeping well for last 2-3 years prior to his death and he was hospitalized before his death and I was not allowed to meet him, whenever I tried to. I did not take any money from the father of the complainant. I do not owe any liability towards the complainant. I did not give cheque in question to the complainant. I do not want to say anything else."
4. The matter was then listed for Complainant Evidence. CW-1 (complainant) relied on his evidence by way of affidavit in post CC No. 319/2021 Swati v. Amit Kumar Page No.5 of 24 Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.04.28 18:02:11 +0530 summoning evidence (CW-2/A) and relied on following documents:
i) Original Agreement dated 11.09.2019: Ex. CW-1/A.
ii) Original Cheque dt. 07.01.2021 : Ex. CW-1/B
iii) Bank Return memo dated 16.01.2021: Ex. CW-1/C.
iii) Bank Return memo dated 02.03.2021: Ex. CW-1/D.
iv) Legal Demand Notice dated 06.03.2021: Ex. CW-
1/E(colly).
iv) Speed post Receipts dated 06.09.2021: Ex. CW-1/F
v) Tracking Report - Ex. CW1/G 4.1 The Complainant was examined as CW-1. During her cross-examination dt. 14.11.22, She deposed that she is a graduate and her counsel prepared her evidence by way of affidavit upon her instructions. She knows the accused through her father as he resides in her neighbourhood. She denied the suggestion that the accused never used to visit her house. She deposed that her father was working in Rajan Babu TB Hospital and he was a government servant, who retired on 31.03.2017. She further denied the suggestion that her father runs a shop for giving loans to the people and that the accused used to work part time as an accountant with her father from 6.00 pm to 9.00 pm or CC No. 319/2021 Swati v. Amit Kumar Page No.6 of 24 Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.04.28 18:02:16 +0530 that the accused used to maintain the accounts, which were given as loan by her father to other people.
4.2 Regarding the cheque in question, she states that it was given by the accused to her father and not to her as her father had given loan to the accused on 11.09.2019. Her father had given a loan to the accused after taking money from her. She denied that she was married on 11.09.2019. Rather, she stated to have been working as a teacher in a private school in City Morden Public School, Sadatpur. Her salary was Rs. 8000/- per month. She denied the suggestion that she was not able to give money to her father for providing loan to the accused at that time. She denied the suggestion that her father used to keep the passbook, cheque book and PAN card and aadhar card of his employees and voluntarily stated that her father had no financial business for giving loans.
4.3 Regarding the particulars of the impugned cheque, She admitted that the cheque in question was signed and amount in figures was filled by the accused but the cheque in question was not signed in her presence. The cheque in question was given to her by her father. She further admitted that the amount in words was filled by her in front of the accused on 11.01.2021. She received the cheque in question from her father on 11.09.2019.
She denied the suggestion that the accused never gave any cheque in question to her father or borrowed any loan from her father.
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2025.04.28 18:02:21 +0530 4.4 With regard to Rohtas, she stated to have known him as his neighbour and not maternal uncle (mama) and denied the suggestion that Rohtas was her maternal uncle. She denied the suggestion that her father and Rohtas were running the business of providing loans as partners. She is not aware of the criminal background of Rohtas.
4.5 Regarding the presentation of the Cheque in question, she presented the aforesaid cheque in bank on 11.01.2021. When she received the return memo of the cheque on 16.01.2021 with remarks "drawer signature illegible". After receiving the return memo, she contacted the accused on 16.01.2021 about the cheque bounce and the accused told her to deposit the said cheque again due to some technical issue. Thereafter, she again presented the cheque in question to the bank on 02.03.2021.
Accused told her to present the cheque after one month and assured her that if the amount would not clear the second time, then he would go with her to the bank and pay the amount at that time. She denied the suggestion she has filed a false case against the accused and that the accused has no liability towards her.Regarding the difference between post dated cheque and security cheque, she was unaware of the same.
4.6 Regarding the Authority to file the present case, she stated that her father died on 18.04.2020. She has one brother and mother in the family apart from her, totalling to three legal heirs after death of her father but voluntarily stated that her mother is an illiterate housewife and her brother works in a hospital and it CC No. 319/2021 Swati v. Amit Kumar Page No.8 of 24 Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.04.28 18:02:28 +0530 is upon the instructions of her mother and her elder brother that she has filed the present case against the accused. She does not remember whether her counsel told her that she cannot file the present case without authority.
5. Rohtash was examined as CW2. He stated to have known Late Sh. Deep Chand for the last 15-20 years and Late Sh. Deep Chand is the father of the complainant. Late Deep Chand opened the cloth shop in the market almost 5 years ago. The father of the complainant died in 2020. He denied the suggestion that the name of the shop is Balaji Finance or the complainant used to give money on interest.
5.1 Regarding the transaction in question, the amount of Rs 2,70,000/- was given at the house of Late Sh. Deep Chand. He voluntarily states that the aforesaid amount was given in the presence of the complainant. The agreement was made after giving the amount of Rs 2,70,000/-. on 11.09.2019 at approx 12:00 noon. The agreement was made at Nand Nagri Court. He was called by Late Sh. Deep Chand for making him the guarantor as accused was borrowing the money from the father of the complainant. He admitted that the loan was given by Late Sh. Deep Chand. The cheque was given at the same time and it was given to Late Sh. Deep Chand. He admitted that the agreement was not made in his presence and he is not aware about the terms and conditions of the agreement or whether the amount was to be paid to Late. Sh. Deep Chand as per the agreement. As per his CC No. 319/2021 Swati v. Amit Kumar Page No.9 of 24 Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.04.28 18:02:33 +0530 information, the accused took the loan from Late. Sh. Deep Chand.
5.2 Upon confrontation with the agreement (Ex CW1/A), he admitted that the agreement was made between the father of the complainant and the accused. The amount given in cash was in denominations of Rs 500 notes. He knew the father of the complainant as he was his neighbour. He denied the suggestion that he along with Late. Sh. Deep Chand and Satpal @ Satte used to run a business by the name of Balaji Finance Company or they all used to lend money to people and used to take cheques from them as security. He further denied the suggestion that the accused namely Amit used to work at a part time job in their office i.e Balaji Finance Company or he used to collect the cash from the customers, deposit it in the office and maintain the accounts of their company. He denied the suggestion that they took the original bank passbook, original cheque book and photocopy of the AADHAAR card and PAN Card as security in case the accused runs away along with cash that he used to recover from the customers.
5.3 Upon confrontation with the cheque in question (Ex CW1/B), he admitted that the amount, signature and the date were filled by the accused in his presence. He admitted that the father of the complainant had two children and he died prior to the tenure of the agreement ended. He stated to have visited the house of the father of the complainant 2-3 times before his death but father of the complainant never met the accused at his CC No. 319/2021 Swati v. Amit Kumar Page No.10 of 24 Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.04.28 18:02:41 +0530 residence after the said agreement was made. Thereafter, the CE was closed.
6. During the recording of the statement under section 313 CRPC, the accused denied the transaction in question. He further denied that the cheque in question bears his signature including the other particulars. He opted to lead DE.
7. Vide Order dt. 01.04.2024, upon the submission of the proxy counsel for the accused as well as the accused that they do not wish to lead DE, DE was closed and the matter is listed for final arguments.
8. It has been argued by Ld. Counsel for the complainant that the case of the complainant is proved and the cheque is also in the favour of the complainant, therefore, the accused must be convicted and the amount should be recovered. On the other hand, Ld. Counsel for the accused has argued that the accused has been falsely implicated in this case and that the complainant has not been able to prove its case beyond reasonable doubt against the accused.
9. I have heard ld counsel for the complainant and Ld. Defence counsel for the accused & considered the respective arguments as well as gone through the case file very carefully.
10. Before dwelling into the facts of the present case, it would be apposite to discuss the legal standards required to be met by both sides. In order to establish the offence under Section 138 of NI Act, the prosecution must fulfil all the essential ingredients of the CC No. 319/2021 Swati v. Amit Kumar Page No.11 of 24 Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.04.28 18:02:47 +0530 offence as laid down by Hon'ble supreme court in Gimpex Private Limited vs. Manoj Goel(2022) 11 SCC 705 :
1. First Ingredient: The cheque was drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;
2. Second Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability;
3. Third Ingredient: The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;
4. Fourth Ingredient: A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in writing given to the drawer within thirty days of the receipt of information of the dishonour of cheque from the bank;
5. Fifth Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice.
11. It is settled law that once the execution of cheque is admitted, Presumption under section 139 of NI act is raised in favour of the complainant. The presumption raised is a rebuttable presumption and the onus on the accused to raise a probable defence. The standard of proof for rebutting, the presumption is that of preponderance of probabilities. [Basalingappa Vs. Mudibasappa (AIR 2019 SC 1983) See also Kumar Exports Vs. Sharma Carpets (2009) 2 SCC 513] CC No. 319/2021 Swati v. Amit Kumar Page No.12 of 24 Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
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12. The phrase "unless the contrary is proved" u/s 139 is of vital importance clarifying that the rebuttal of the presumption has to be supported by proof and not mere plausible explanation. The liberty is granted to the accused to either rely on evidence led by him in his support or the material relied by the complainant to raise his probable defence. In addition to the materials brought on record, the circumstances relied upon can also draw the inference of preponderance of probability lying in the favour of the accused.
13. In the case at hand, the proof of the first and third ingredient is not disputed. The complainant has proved the original cheque (Ex. CW1/B), which the accused has not disputed as being drawn on his account. It is not disputed that the cheque in question was presented within the validity period. Therefore, first ingredient of the alleged offence stands proved. Further, the cheque in question was returned unpaid vide return memo (Ex. CW1/C) & (Ex. CW1/C) due to the reason, "Signature illegible", which does not fall strictly within the purview of section 138 NI Act. As such, on the basis of the above, third ingredient of the offence under Section 138 NI Act is disputed.
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14. Ld. Counsel for the accused submits that the remarks on the returning memos dt 16.01.2021 & 02.03.2021 "drawers signature illegible " makes the impugned cheque invalid and therefore, the essential ingredient u/s 138 NI Act is not fulfilled in the present case.
14.1 The legal position juxtaposed with the real scenario is that the cheque upon presentment for encashment at the bank may be returned unpaid for myriad reasons other than 'insufficient funds' which may include indorsements like 'Account closed', 'mutilated', 'Drawer's signature incomplete/illegible', 'mismatch of signatures', inter alia, other technical grounds which might inevitably result into dishonor of cheques. However, the most pertinent ground and perhaps, the fulcrum of the prosecution case against the drawer for dishonor of cheque is that of insufficiency of funds to the credit of drawer's account to honor the cheque.
14.2 The conundrum, as to whether the dishonest or circuitous ploys employed by the drawer in order to overcome the two contingencies mentioned in Section 138 and also if any indorsement falling outside Section 138 would tantamount to dishonor of the Instrument, came before the SC in M/s Laxmi Dyechem v. State of Gujarat (2012) 13 SCC 375 by encompassing the other additional grounds besides the two contingencies, envisaged under Section 138 upon which the CC No. 319/2021 Swati v. Amit Kumar Page No.14 of 24 Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.04.28 18:03:04 +0530 cheque issued by the drawer for discharge of his legal obligations is likely to get dishonoured like issuing 'stop payment' instructions to the bank, on account of closure of bank account on which the cheque is drawn, mismatch of signatures with the specimen signatures available with the bank, inter alia other technical differences or endorsements upon which the cheque is returned unpaid by the bank, unless the contrary is proved as well as the presumption in favor of holder is rebutted by the bonafide drawer qua the sufficiency of funds or non-existence of any debt or liability for which the cheque was issued by the drawer under Section 139 of the NI Act at the trial by adducing cogent evidence, thereby fostering & preserving faith of creditors in the efficacy of banking operations and according credibility to frequent usage of negotiable instruments in business transactions. Lastly, this academic exercise would endorse the harmonious reading of Section 138 & Section 139 to vindicate the rights of the accused as well as to invoke deference to the statutory presumption in the favor of the holder epitomized in the scheme of the NI Act, 1881 and, moreover to delicately balance the statutory presumption envisaged under Section 139 with the quintessential rudimentary presumption of innocence until proven guilty of Criminal Law invoked in the regular trial to truly realize the objects of the NI Act 1881 and remedy the mischief which Section 138 seeks to obliterate, also thwarting any attempt of dishonouring the cheques issued by the drawer to CC No. 319/2021 Swati v. Amit Kumar Page No.15 of 24 Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.04.28 18:03:08 +0530 discharge legal obligations as well as to stave off any possibility of Section 138 becoming a dead letter on the Statute book.
14.3 Therefore, as per the Rules of the construction, it would be fallacious to employ a strict construction of Section 138, especially giving due regard to the object of the Negotiable Instruments Laws (Amendment) Act 1988 as also, the deeming fiction created in the aforesaid section, which is generally employed by the drafters of a statute to give it an expansive meaning as warranted by the exigencies of the facts and circumstances of a case accords leeway to circumscribe not only those contingencies inscribed in Section 138 upon which a cheque would be dishonored but also such endorsements returned unpaid by the bank that may not otherwise amount to dishonor, unless coupled with an oblique motive to protract payments so that such may lapse upon presentment to the bank and of course, the deficiency of funds to the credit of the drawer's account to honor the cheque. Hence, the argument of the Ld. Counsel for the accused is disallowed accordingly.
15. With regard to the fourth and fifth ingredient, the complainant has proved on record legal notice Ex. CW1/E and postal receipt Ex. CW1/F. The postal receipt Ex. CW1/F was addressed to the accused and sent by the counsel for the complainant dated 06.03.2021, which confirms the delivery of the same at the 'Karawal Nagar HO' on 11.03.21, not disputed by CC No. 319/2021 Swati v. Amit Kumar Page No.16 of 24 Digitally signed by RAVISHA SIDANA RAVISHA Date:
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the accused in his Notice framed u/s 251 Cr.P.C. as well as in his Statement recorded u/s 313 Cr.P.C. The fact that the payment was not made within 15 days of the receipt of the legal notice is also not disputed. Therefore, the fourth ingredient and the fifth ingredient of the offence stands proved.
Now, it remains to be ascertained if the second ingredient is proved or not. As far as the proof of second ingredient is concerned, it has to be proved that the cheque in question was drawn by the drawer for discharging a legally enforceable debt
16. During the stage of notice framing under 251 Cr.PC and his statement recorded under section 313 Cr.PC, the accused denied his signatures on the cheque including the other particulars on the impugned cheque but during his admission and denial of documents u/s 294 Cr.PC, he admitted his thumb impression as well as photograph on the loan agreement (Ex. CW1/A colly)
17. With respect to his aforesaid contention, no evidence was led by the accused to disprove his signatures on the impugned cheque. After perusing the entire record, it has been observed that the signatures of the accused on the notice framed against him under 251 Cr.PC & his admission and denial of documents u/s 294 Cr.PC are in English, whereas his signatures on the impugned cheque (Ex. CW1/B) & loan agreement (Ex. CW1/A colly) are in hindi. Since, the accused has admitted his thumb impression as well as photograph on the loan agreement CC No. 319/2021 Swati v. Amit Kumar Page No.17 of 24 Digitally signed by RAVISHA SIDANA RAVISHA Date:
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(Ex. CW1/A colly) during his admission and denial of documents u/s 294 Cr.PC and his signatures on the loan agreement are duly notarised by the notary public against his signatures, In accordance with the presumption u/s 114 (e) of Indian Evidence Act, 1872 that the judicial and the official acts are regularly performed, a presumption is drawn and raised as to the authenticity of the signatures of the accused on the loan agreement and the same signature on the impugned cheque. Further, it is pertinent to note that the application for examination of the handwriting including the signature on the impugned cheque was filed by the complainant and not by the accused.
17.1 As per the fundamental canons of criminal law, the accused cannot be allowed to blow hot and the cold at the same time and therefore, it is discernible that the impugned cheque was signed by the accused. Hence, the presumption under 139 NI Act read with Section 118 NI Act is drawn in favour of the complainant.
18. The accused in the present case has relied on the following line of main defences to rebut the presumption:
A. The blank signed security cheque was misused by the complainant B. Accused has not borrowed any loan from the complainant 18.1 To analyse these defences in the right perspective, the following Issues need to be adjudicated:
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i) Whether the accused issued his blank signed cheque to the complainant
ii) Whether the impugned cheque is in discharge of his outstanding liability of Rs 2,70,000 BLANK SIGNED CHEQUE
19. The first defence taken by the accused is the cheque in question was his blank cheque, which he never issued to the complainant but the complainant has misused her cheque by filling the particulars of the same before presenting it. 19.1. Section 20 of the NI Act talks about inchoate instruments. As per this provision if a person gives a duly signed cheque which is either blank or partly filled then he is deemed to have given implied authority to the holder to fill up the particular in it and complete the cheque, thus making the drawer liable for the payment mentioned in it. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provision of section 138 would be attracted 19.2 On this point, it is profitable to mention the judgment of Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd., (2016) 10 SCC 458, Sripati Singh vs. State of Jharkhand & Anr., 2021 SCC Online SC 1002 and Sunil Todi vs. State of Gujarat & Anr., 2021 SCC Online SC 1174 , wherein it has been held that merely because a cheque has been issued for only security purposes will not absolve the accused from the liability u/s. 138 CC No. 319/2021 Swati v. Amit Kumar Page No.19 of 24 Digitally signed by RAVISHA SIDANA RAVISHA Date:
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NI Act. It has been further held that a cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. It has been held by the Hon'ble Court that the accused would very much be liable u/s. 138 NI Act for issuance of a security cheque also, if on the date of the presentation of such cheque, there has not been a prior discharge of debt, or if the cheque has not been given towards advance payment, the goods in respect of which have not been received by the other party, or if other than this there has been change in circumstances which precludes the complainant from depositing the cheque with the bank.
20. In the present case, it is the complainant's version that the cheque in question was issued by the accused upon the persistent requests and demands by the complainant after he failed to return the alleged loan granted by her father to the accused . It is the specific version of the complainant that the cheque in question was issued by the accused for the discharge of liability for Rs. 2,70,000.
21. As discussed, even in case of blank signed cheques, the statutory presumptions under section 118(a) and 139 would be raised in favour of the complainant. Therefore, in an instant case, since, the accused has admitted the execution of impugned cheque, the aforementioned statutory presumptions would be raised in favour of the complainant regarding the fact that the impugned cheque has been drawn for consideration and issued by the accused in discharge of legally enforceable debt.
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IMPUGNED CHEQUE WAS IN DISCHARGE OF LOAN AMOUNT OF RS 2,70,000
22. In the Complaint and PSE affidavit Ex.CW1/A, the complainant alleged that there was an agreement entered between the father of the Complainant and the accused dated 11.09.2019 for grant of loan of Rs 2,70,000 to the accused by her father. It has never been the case of the complainant that she had lent the aforesaid amount to the accused. The context of the word " any cheque; any debt or liability" u/s 138 NI Act assumes significance.
23. Reliance is placed upon ICDS Ltd. v. Beena Shabeer & Anr., (2002) 6 SCC 426 decided by the Hon'ble Supreme Court, it was held that:
"10. The language, however, has been rather specific as regards the intent of the legislature. The commencement of the section stands with the words "Where any cheque". The above noted three words are of extreme significance, in particular, by reason of the use of the word "any"-the first three words suggest that in fact for whatever reason if a cheque is drawn on an account maintained by him with a banker in favour of another person for the discharge of any debt or other liability, the highlighted words if read with the first three words at the commencement of Section 138, leave no manner of doubt that for whatever reason it may be, the liability under this provision cannot be avoided in the event the same stands returned by the banker unpaid. The legislature has been careful enough to record not only discharge in whole or in part of any debt but the same includes other liability as well".
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2025.04.28 18:03:40 +0530 23.1 Therefore, a cheque issued by the accused for his liability towards the father of the complainant would also come under the purview of Section 138 NI Act. Thus, the argument of the Ld. counsel for the accused that there was loan transaction with the father of the complainant and not the complainant does not hold ground, in view of the liberal interpretation and the object of engraftment of Section 138 NI Act.
24. The story of the complainant that the alleged transaction took place in the presence of CW2 has been corroborated by the testimony of CW2 in material particulars. The absence of the CW2 as a witness in the loan agreement (Ex.CW1/A colly) does not dilute his testimony regarding the alleged transaction between the father of the complainant and the accused.
25. The defence of the accused said that the father of the complainant used to run a small finance work , wherein all the pertinent documents including the impugned cheque were taken as security has not been culled out from the examination of CW1 and CW2. No evidence, oral or documentary, even admission surfaced during the entire trial to prove the partnership of the father of the complainant with CW2 for running of a small finance work.
26. Further, the credibility and reliability of the contents of loan agreement dt. 11.09.2019(CW1/A colly) is not doubtful, in light of the factum that the thumb impression and photograph on the said agreement is admitted u/s 294 Cr.PC. The loan agreement is duly stamped and notarised, in accordance with the CC No. 319/2021 Swati v. Amit Kumar Page No.22 of 24 Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.04.28 18:03:46 +0530 law. No suggestion/ question was raised with regard to the contents of the loan agreement.
27. The Partial admission of the accused with regard to borrowing of a certain amount from the father of the complainant corroborates the story of the complainant. Further, The attention is drawn upon the testimony of CW1 during her cross-
examination, wherein although the cheque in question was signed and the amount in figures was filled by the accused, the cheque in question was not signed in her presence. The cheque in question was given to her by her father. Further, that the amount in words was filled by her in front of the accused on 11.01.202, which is in contrast to the averments made in the complaint and PSE affidavit. She received the cheque in question from her father on 11.09.2019. These contradictions pointed out by the Ld. Counsel for the accused in the testimony of CW1 and CW2 are minor in nature and do not affect the foundational story of the complainant.
28. The call records supplied by the ld. Counsel for the complainant annexed with the written submissions at the stage of final arguments have not been considered for adjudication of merits of this case as the aforesaid records do not form the part of evidence adduced by the complainant.
29. In totality, the accused has not been successful in raising a cloud over the story of the complainant that the impugned cheque was not issued for the aforesaid friendly liability of Rs 2,70,000. Thus, evidence of the accused does not inspire CC No. 319/2021 Swati v. Amit Kumar Page No.23 of 24 Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.04.28 18:03:52 +0530 confidence due to these severe contradictions. As per the above discussion, it can be said that the cheque was drawn by the accused in favour of the complainant. Therefore, the essential ingredient (ii) as discussed in the preceding paragraph stands fulfilled.
30. The primary burden upon the accused was to punch holes in the version of the complainant in order to rebut the presumptions and the standard of proof required from him was preponderance of probabilities and the accused has not been able to do the same by bringing out the inconsistencies and contradictions in the version put forward by the complainant. The accused failed in discharging his burden of proof, in order to rebut the operation of the presumption.
31. In my view, the complainant has proved that the accused had issued the cheque in question in her favour for discharge of the legally enforceable liability and has proved his case against the accused for the offence under Sec. 138 Negotiable Instruments Act. Resultantly, the accused Amit Kumar, thus, stands convicted for the said offence.
32. This judgment contains 24 pages. This judgment has been signed and pronounced by the undersigned in open court.
Digitally signedRAVISHA by RAVISHA SIDANA SIDANA 18:03:57 Date: 2025.04.28 +0530 (RAVISHA SIDANA) JMFC-NI ACT (DIGITAL COURT) NORTH EAST;KKD COURTS;DELHI 28.04.2025 CC No. 319/2021 Swati v. Amit Kumar Page No.24 of 24