Delhi District Court
Puneet Saluja vs Sbi Global Factors Ltd on 28 August, 2025
IN THE COURT OF SH. ATUL AHLAWAT
ADDL. SESSIONS JUDGE, NDPS ACT (SPECIAL JUDGE)
NEW DELHI DISTRICT, PATIALA HOUSE COURTS,
NEW DELHI
IN RE:
Crl. Appeal No. 174/2019
CNR No. DLND010148912019
Brief Details of the Case & Memo of Parties
PUNEET SALUJA VS. SBI GLOBAL FACTORS LTD.
Date of Institution : 22.08.2019
Date of Arguments : 08.08.2025,
12.08.2025 &
13.08.2025
Date of Order : 28.08.2025
Memo of Parties
Puneet Saluja
Sole Proprietor of M/s Ena International
Office at: B-18, Swami Nagar,
New Delhi. ......Appellant
Vs.
M/s SBI Factors Ltd.
(Earlier Known as SBI Global Factors Ltd.
& previously also known as SBI Factors and Commercial
Services Pvt. Ltd.)
Regd. Office at:
906-907, 9th Floor,
Narain Manzil,
23, Brakhamba Road,
Connaught Place, New Delhi-110001. ......Respondent
PS- Connaught Place
Digitally signed
by ATUL
ATUL AHLAWAT
AHLAWAT Date:
2025.08.28
CA 174/2019 11:16:32 +0530
CNR No. DLND01-014891-2019
Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 1/45
JUDGMENT
(Pronounced on the 28th Day of August, 2025)
1. Vide the present Criminal Appeal moved u/s 374(3) Cr.PC, 1973, the appellants have assailed the impugned Judgment and Order on Sentence dated 17.07.2019 and 27.07.2019, passed by the Court of Ld. MM-04, PHC, New Delhi, in CC no. 22089/2016 in case titled as "SBI Global Factors Ltd. (Earlier known as SBI Factors and Commercial Services Pvt. Ltd.) Vs Puneet Saluja".
2. Perusal of the record shows that the present appeal was filed within time.
3. As per the impugned Judgment dated 01.03.2024, the appellant was convicted for committing the offence punishable u/s 138 NI Act, 1881. Vide the Order on Sentence dated 12.03.2024, the Ld. Trial Court had sentenced the appellant to undergo 6 months Simple Imprisonment and to pay a compensation of Rs.6,00,00,000/- (Rupees Six Crores) to the complainant/respondent within one month from the date of the said order. Furthermore, in default of paying the compensation amount of Rs.6,00,00,000/-, she was sentenced to undergo further Simple Imprisonment for a period of six months.
Digitally signed by ATUL AHLAWAT ATUL Date:
AHLAWAT 2025.08.28
CA 174/2019 11:16:37
+0530
CNR No. DLND01-014891-2019
Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 2/45
4. TCR was received. The same was perused carefully.
5. It is submitted by Ld. Counsel for the appellant that the relationship between the parties is not disputed. The respondent company was engaged in providing Financial Factoring Services and the proprietorship firm of the appellant was engaged in the business of exporting goods to its clients based out of India. The appellant approached the respondent for availing Export Factoring facilities, which was duly provided to the firm of the appellant.
6. It is submitted by Ld. Counsel for the appellant that the parties entered into the factoring agreement, first in the year 2007, when the application of the appellant was sanctioned by the respondent vide Sanction Letter dated 21.06.2007. The factoring facilities were reviewed and the sanction limits were increased by the respondent vide letter dated 20.08.2007. Thereafter, the sanction qua the enhanced factoring limits was done vide letter dated 10.04.2008. As per the Sanction Letter dated 10.04.2008, the Debt Purchase limit was Set to Rs 5.5 Crores and Pre-Payment Limit was set to Rs 4.4. Crores. As per the said sanction letter, the appellant was required to issue Undated Cheques (UDCs) for entire Export Factoring Limit alongwith the suitable covering letter.
Digitally signed by ATUL ATUL AHLAWAT
AHLAWAT Date:
CA 174/2019 2025.08.28
11:16:43 +0530
CNR No. DLND01-014891-2019
Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 3/45
7. It is submitted by Ld. Counsel for the appellant that although the agreement executed between the parties was termed as Export Factoring Agreement-With Recourse at few places, however, it is the settled law that the agreement has to be read as a whole, to understand its true meaning and purport. If the said agreement is read as a whole, then it was crystal clear that the agreement was Without Recourse to the client (the present appellant), and the respondent had purchased the debt from the appellant firm and had assumed all the powers to get the said debt recovered from the customers (purchasers of appellant's goods) situated at Dubai, UAE. The said customers were already pre-approved by the respondent and as per the Factoring Agreement, in case of default, only the respondent could have gone against them for recovery, and no right/option was left with the appellant. The appellant has relied on the decision of the Hon'ble Allahabad High Court in "Manju Lata Sharma Vs Vinay Kumar Dubey", AIR 2004 Allahabad 92.
8. It is submitted by Ld. Counsel for the appellant that instead of following the procedure agreed between the parties, the respondent misused the UDCs given to them by the appellant and the same were presented for encashment, while fully knowing that they were provided only for the performance security of the factoring agreement and the respondent chose not Digitally signed by ATUL ATUL AHLAWAT CA 174/2019 AHLAWAT Date:
2025.08.28 CNR No. DLND01-014891-2019 11:16:48 +0530 Puneet Saluja Vs. M/s SBI Factors Ltd.Page No. 4/45
to proceed against the default customers based out of Dubai, and chose to illegally encash the said security cheques. There was no liability which was legally enforceable against the appellant and therefore, no prosecution on the basis of said security un-dated cheques could have lied under the Act. The appellant has relied on the decision of the Hon'ble Supreme Court in "Sampelly Satyanarana Rao VS IREDA Ltd", (2016) 10 SCC 458; Dashrathbhai Trikambhai Patel Vs Hitesh Mahendrabhai Patel & Anr, 2023(1) SCC 578 and "Sripati Singh Vs State of Jharkhand @ Anr.", 2021 SCC OnLine SC 1002.
9. It is submitted by Ld. Counsel for the appellant that the complaint u/s 138 of the Act was filed by the respondent through it's the then AR Mr. Rajeev Saxena and upon the Pre-Summoning Evidence Affidavit of said witness, the Ld. Trial Court had issued summons to the appellant. Few documents were annexed along with the complaint and they were exhibited during the Pre- Summoning evidence of the said witness, CW-1 Rajeev Saxena. However, during the pendency of the complaint, the respondent company got amalgamated into a different juristic entity namely SBI Global Factors Ltd. and the respondent moved an application seeking substitution of AR and to bring on record the new name of the respondent. The said application was allowed by the Ld. Trial Court and fresh Post-Summoning Evidence was led through the new AR, Sh. Ashutosh Goel. In addition to the earlier Digitally signed by ATUL AHLAWAT ATUL Date:
AHLAWAT 2025.08.28 11:16:53 CA 174/2019 +0530 CNR No. DLND01-014891-2019 Puneet Saluja Vs. M/s SBI Factors Ltd.Page No. 5/45
documents, certain other documents were sought to be brought on record by the respondent company, in the said evidence affidavit. The new AR, CW-1 Ashutosh Goel was not having any personal knowledge of the transaction in question and the documents relied upon by the respondent company, could not have been brought on record in his testimony. During his cross examination, CW-1 Ashutosh Goel had categorically admitted that he was not having any personal knowledge of the transactions between the parties. Therefore, the documents relied upon by the respondent company were not proved in accordance with the law. The appellant has relied on the decision of the Hon'ble Supreme Court in "A.C. Narayanan Vs State of Maharashtra & Anr", (2014) 11 SCC 790. Since, the POA holder/AR of the respondent company did not have any personal knowledge about the transactions, he could not have been examined before the Ld. Trial Court.
10. It is submitted by Ld. Counsel for the appellant that the Ld. Trial Court vide the impugned judgment dated 17.07.2019, had failed to appreciate that through the testimony of DW-1 Sh. Anjani Kumar Singh, the appellant had duly brought on record that the respondent company had duly protected itself from the exposure of any default, by entering into the an Insurance Agreement with New India Assurance Co. Ltd. Since, the agreement with the appellant was an agreement without recourse, Digitally signed by ATUL ATUL AHLAWAT CA 174/2019 AHLAWAT Date:
CNR No. DLND01-014891-2019 2025.08.28
11:16:57 +0530
Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 6/45
and since the ownership of the debts/invoices receivables rested with the respondent company and the same was also a secured/insured debt/asset, therefore, the respondent could not have gone ahead with encashing the security UDCs.
11. It is submitted by Ld. Counsel for the appellant that the appellant moved an application u/s 391 of Cr.P.C., 1973, which was allowed by the Ld. Predecessor of this Court. The appellant had brought on record the certified copies of the consumer complaints, filed by the respondent before the Hon'ble NCDRC against the New India Assurance Co. Ltd. In the said consumer complaints, the respondent had categorically stated that the default amount from the account of the customers/buyers namely M/s Desert Trip and M/s Efran Trading, were insured debt under the policy taken by the respondent, since the invoices were overdue more than the credit period given to the buyer. The said claims are still pending adjudication before the Hon'ble NCDRC. In the meanwhile, the respondent has also filed a civil suit against the appellant for recovery of money, which is also pending adjudication before the Hon'ble High Court of Delhi. Although, it is no longer res integra that parallel proceedings u/s 138 NI Act and the civil suit for recovery of money can lie, however, the conduct of the respondent in illegally encashing the security UDCs and also pursuing the remedy against the assurer/insurer, after claiming the overdue amount as insured Digitally signed by ATUL AHLAWAT CA 174/2019 ATUL Date:
AHLAWAT 2025.08.28 CNR No. DLND01-014891-2019 11:17:02 Puneet Saluja Vs. M/s SBI Factors Ltd. +0530 Page No. 7/45 debt, amounts to unjust enrichment. In view of the categorical admission by the respondent that the debts were purchased by it, by virtue of entering into factoring/receivable agreement with the appellant and consequently the respondent had "interest and title of the ownership of the insured debt". Therefore, the respondent cannot be allowed to blow hot and cold at the same, wherein it is claiming itself to be the owner of the insured debt, which could only be in case of Factoring Agreement without recourse. Therefore, its claim before the Ld. Trial Court that the agreement with the appellant was With Recourse, becomes fallacious.
12. It is submitted by Ld. Counsel for the appellant that the appellant has successfully discharged its burden on preponderance of probabilities and the reverse onus clause u/s 118 and 139 of the Act, stands duly established in the present case. Therefore, the impugned Judgment and Order on Sentence are liable to be set aside.
13. It is submitted by Ld. Counsel for the respondent that the respondent had forwarded the services of a factor, vide a Factoring Agreement-With Recourse to the client/seller (present appellant.) The appellant had duly admitted the Balance Outstanding on its account on 30.09.2008, Ex. CW-1/19 dated 01.10.2008 and on 31.03.2009, Ex. CW-1/20 dated 02.04.2009.
Both the said documents were addressed to the appellant and it Digitally signed by ATUL AHLAWAT ATUL Date:
CA 174/2019 AHLAWAT 2025.08.28
11:17:07
CNR No. DLND01-014891-2019 +0530
Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 8/45
bears her signatures in acknowledgement. The said documents evidencing the legally enforceable debt/liability, is not disputed by the appellant. Furthermore, in pursuance of the said liability, when the respondent approached the appellant, it issued the impugned four cheques, viz. Ex CW-1/D to Ex. CW-1/D-3, respectively. All the said cheques were dated 13.03.2009, in discharge of its legally enforceable liability, in view of the settled terms between the parties.
14. It is submitted by the Ld. Counsel for the respondent that the appellant had duly admitted the signatures on the impugned cheques in the notice u/s 251 Cr.P.C, 1973. The liability was duly admitted by the appellant, as Ex CW-1/19 and Ex CW-1/20 were admitted documents. The legal notice was duly received by the appellant. The statutory presumptions u/s 118 and 139 of the Act had duly kicked in. The Ld. Counsel had placed the reliance on the decision of the Hon'ble Supreme Court in "Rajesh Jain Vs Ajay Singh", AIR 2023 SC 5018.
15. It is submitted by the Ld. Counsel for the respondent that there is no illegality or infirmity in the impugned judgment passed by the Ld. Trial Court as the Ld. Trial Court had correctly held the appellant guilty for committing the offence punishable u/s 138 NI Act, for dishonour of the impugned cheques, as the appellant could not rebut the statutory presumptions.
Digitally signed by ATUL AHLAWAT ATUL Date:
CA 174/2019 AHLAWAT 2025.08.28
11:17:12
CNR No. DLND01-014891-2019 +0530
Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 9/45
16. Thus, the appellant had raised the following grounds of appeal:
(i) Because, the judgment of the Ld. Trial Court is contrary to the law, weight of evidence and probabilities of the case.
(ii) Because, the Ld. Trial Court has failed to appreciate the evidence in favour of the appellant, since the appellant was able to rebut the presumption under section 139 of NI Act, 1881.
(iii) Because, the Ld. Trial Court had failed to correctly appreciate the terms and conditions of the entire Export Factoring Agreement dated 19.04.2018, and had relied upon only one clause, i.e 8(a), while ignoring the other clauses enshrined therein. Their was no legally enforceable debt/liability, since the entire payment were due from the approved buyers of the appellant, and it was to be directly recovered by the Respondent.
(iv) Because, the Ld. Trial Court failed to ignore that the impugned cheques were Undated Signed Cheques and they were security cheques. There was no legally enforceable liability and the respondent had misused the Digitally signed by ATUL ATUL AHLAWAT CA 174/2019 AHLAWAT Date: 2025.08.28 11:17:16 +0530 CNR No. DLND01-014891-2019 Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 10/45said security cheques. The alleged admission of the outstanding amount is not the admission of legally enforceable liability. The said document merely reflects the outstanding balance on the account of factoring facilities offered by the respondent. Vide the said documents, the appellant had not admitted that the said amount represented the debt, which was payable by the appellant. As per the agreement, the debts were purchased by the respondent as the Factoring Agreement was without recourse.
(v) Because, the Ld. Trial Court ignored the fact that the appellant had successfully rebutted the presumption raised by the exhibited documents through the cross examination of CW-1, wherein, he had categorically admitted that he did not have any personal knowledge of the transactions in question. His testimony could not have been recorded. Even if recorded, same cannot be relied upon and none of the documents relied by the respondent were proved in accordance with the law. Therefore, no prosecution u/s 138 of NI Act, could have lied in the present case.
(vi) Because, the Ld. Trial Court had failed to appreciate the testimony of CW-1 and DW-1. The debt is question was a secured insured debt and the respondent had tried to Digitally signed by ATUL ATUL AHLAWAT CA 174/2019 AHLAWAT Date:
CNR No. DLND01-014891-2019 2025.08.28
11:17:21 +0530
Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 11/45
take advantage of its own wrongs, by illegally presenting the UDCs. Furthermore, the attempt of the respondent is to cause undue and unjust enrichment, by taking two separate recourses, against the same alleged debt.
(vii) Because, the Ld. Trial Court had failed to appreciate that the appellant had successfully rebutted the presumption u/s 118 and 139 of NI Act, through the cross examination of the complainant. Once the presumption was successfully rebutted, the onus had shifted back upon the complainant/respondent to establish its case of the cheques being issued for discharge of legally enforceable debt/liability or that the agreement was with recourse, however, the respondent failed to discharge the said onus. Since, the appellant was merely required to show his defense on the scale of preponderance of the probabilities and not as per the standard of proof beyond reasonable doubt, which he had duly done, therefore, the impugned Judgment and Order on Sentence are liable to be set- aside.
17. I have heard the submissions and gone through the material available on record.
18. I have also perused the TCR and the impugned Judgment Digitally signed by ATUL CA 174/2019 ATUL AHLAWAT CNR No. DLND01-014891-2019 AHLAWAT Date: 2025.08.28 11:17:25 +0530 Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 12/45dated 17.07.2019 and the impugned Order on Sentence dated 27.07.2019 carefully.
19. Before, appreciating the evidence brought on record by the prosecution before the Ld. Trial Court, this court deems it fit to discuss the relevant case laws applicable to appreciating the evidence in the present case.
20. It is trite law that the accused persons can be convicted on the basis of credible evidence brought on record and the appreciation of the said evidence must be done in correct and true perspective manner and in the natural course of events, what would have been occurred. Appreciation of evidence beyond reasonable doubt does not mean that it should be assessed beyond any iota of doubt. Beyond Reasonable Doubt means that the prosecution is required to place evidence at a higher degree of preponderance of probabilities compared to what is degree of preponderance of probability in civil cases. The theory of Beyond Reasonable Doubt means expecting higher degree of preponderance of probabilities and the natural conduct of human beings, as held by the Hon'ble High Court of Karnataka in "State of Karnataka Vs Venkatesh @ Venkappa & Anr" , Criminal Appeal No. 100492 of 2021, decided on 18.12.2023.
21. Section 3 of the Indian Evidence Act defines "evidence".
Digitally signed by ATULCA 174/2019 ATUL AHLAWAT
CNR No. DLND01-014891-2019 AHLAWAT Date:
2025.08.28
Puneet Saluja Vs. M/s SBI Factors Ltd. 11:17:30 +0530
Page No. 13/45
The evidence can be broadly divided into oral and documentary.
"Evidence" under the Act can be said to include the means, factor or material, lending a degree of probability through a logical inference to the existence of a fact. It is an adjective law highlighting and aiding the substantive law. Thus, it is neither wholly procedural nor substantive, though trappings of both could be felt.
22. The definition of the word "proved" though gives an impression of a mere interpretation, in effect, is the heart and soul of the entire Act. This clause, consciously speaks of proving a fact by considering the "matters before it". The importance is attached to the degree of probability in proving a fact through the consideration of the matters before the court. What is required for a court to decipher is the existence of a fact and its proof by a degree of probability, through a logical inference.
23. Matters are necessary, concomitant material factors to prove a fact. All "evidence" would be "matters" but not vice versa. In other words, matters could be termed as a genus of which evidence would be a species. Matters also adds strength to the evidence giving adequate ammunition in the Court's sojourn in deciphering the truth. Thus, the definition of "matters" is exhaustive, and therefore, much wider than that of "evidence". However, there is a caveat, as the court is not supposed to Digitally signed by ATUL ATUL AHLAWAT CA 174/2019 AHLAWAT Date: 2025.08.28 11:17:35 +0530 CNR No. DLND01-014891-2019 Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 14/45consider a matter which acquires the form of an evidence when it is barred in law. Matters are required for a court to believe in the existence of a fact.
24. Matters, do give more discretion and flexibility to the court in deciding the existence of a fact. They also include all the classification of evidence such as circumstantial evidence, corroborative evidence, derivative evidence, direct evidence, documentary evidence, hearsay evidence, indirect evidence, oral evidence, original evidence, presumptive evidence, primary evidence, real evidence, secondary evidence, substantive evidence, testimonial evidence, etc.
25. In addition, they supplement the evidence in proving the existence of a fact by enhancing the degree of probability. As an exhaustive interpretation has to be given to the word "matter", and for that purpose, the definition of the expression of the words "means and includes", meant to be applied for evidence, has to be imported to that of a "matter" as well. Thus, a matter might include such of those which do not fall within the definition of Section 3, in the absence of any express bar.
26. What is important for the court is the conclusion on the basis of existence of a fact by analyzing the matters before it on the degree of probability. The entire enactment is meant to Digitally signed by ATUL AHLAWAT ATUL Date:
AHLAWAT 2025.08.28 CA 174/2019 11:17:40 +0530 CNR No. DLND01-014891-2019 Puneet Saluja Vs. M/s SBI Factors Ltd.Page No. 15/45
facilitate the court to come to an appropriate conclusion in proving a fact. There are two methods by which the court is expected to come to such a decision. The court can come to a conclusion on the existence of a fact by merely considering the matters before it, in forming an opinion that it does exist. This belief of the court is based upon the assessment of the matters before it. Alternatively, the court can consider the said existence as probable from the perspective of a prudent man who might act on the supposition that it exists. The question as to the choice of the options is best left to the court to decide. The said decision might impinge upon the quality of the matters before it.
27. The word "prudent" has not been defined under the Act. When the court wants to consider the second part of the definition clause instead of believing the existence of a fact by itself, it is expected to take the role of a prudent man. Such a prudent man has to be understood from the point of view of a common man. Therefore, a judge has to transform into a prudent man and assess the existence of a fact after considering the matters through that lens instead of a judge. It is only after undertaking the said exercise can he resume his role as a judge to proceed further in the case.
28. The aforesaid provision also indicates that the court is concerned with the existence of a fact both in issue and relevant, Digitally signed by ATUL AHLAWAT ATUL Date:
AHLAWAT 2025.08.28 11:17:45 +0530 CA 174/2019 CNR No. DLND01-014891-2019 Puneet Saluja Vs. M/s SBI Factors Ltd.Page No. 16/45
as against a whole testimony. Thus, the concentration is on the proof of a fact for which a witness is required. Therefore, a court can appreciate and accept the testimony of a witness on a particular issue while rejecting it on others since it focuses on an issue of fact to be proved. However, the evidence of a witness as whole is a matter for the court to decide on the probability of proving a fact which is inclusive of the credibility of the witness. Whether an issue is concluded or not is also a court's domain.
29. While appreciating the evidence as aforesaid along with the matters attached to it, evidence can be divided into three categories broadly namely, (i) wholly reliable, (ii) wholly unreliable and (iii) neither wholly reliable nor wholly unreliable. If evidence, along with matters surrounding it, makes the court believe it is wholly reliable qua an issue, it can decide its existence on a degree of probability. Similar is the case where evidence is not believable. When evidence produced is neither wholly reliable nor wholly unreliable, it might require corroboration, and in such a case, court can also take note of the contradictions available in other matters. The aforesaid principle of law has been enunciated in the authority of Hon'ble Supreme Court of India in "Vadivelu Thevar v. State of Madras", 1957 SCR 981 wherein it is held as under:
"In view of these considerations, we have no hesitation in Digitally signed CA 174/2019 ATUL by ATUL AHLAWAT CNR No. DLND01-014891-2019 AHLAWAT Date: 2025.08.28 Puneet Saluja Vs. M/s SBI Factors Ltd. 11:17:50 +0530 Page No. 17/45 holding that the contention that in a murder case, the court should insist upon plurality of witnesses, is much too broadly stated. Section 134 of the Indian Evidence Act has categorically laid it down that "no particular number of witnesses shall in any case, be required for the proof of any fact". The legislature determined, as long ago as 1872, presumably after due consideration of the pros and cons, that it shall not be necessary for proof or disproof of a fact to call any particular number of witnesses. In England, both before and after the passing of the Indian Evidence Act, 1872, there have been a number of statutes as set out in Sarkar's Law of Evidence -- 9th Edn., at pp. 1100 and 1101, forbidding convictions on the testimony of a single witness. The Indian Legislature has not insisted on laying down any such exceptions to the general rule recognized in s.134 quoted above. The section enshrines the well-recognized maxim that "Evidence has to be weighed and not counted".
Our Legislature has given statutory recognition to the fact that administration of justice may be hampered if a particular number of witnesses were to be insisted upon. It is not seldom that a crime has been committed in the presence of only one witness, leaving aside those cases which are not of uncommon occurrence, where determination of guilt depends entirely on circumstantial evidence. If the Legislature were to insist upon plurality of Digitally signed by ATUL AHLAWAT CA 174/2019 ATUL Date:
CNR No. DLND01-014891-2019 AHLAWAT 2025.08.28 11:17:54 Puneet Saluja Vs. M/s SBI Factors Ltd. +0530 Page No. 18/45 witnesses, cases where the testimony of a single witness only could be available in proof of the crime, would go unpunished. It is here that the discretion of the presiding judge comes into play. The matter thus must depend upon the circumstances of each case and the quality of the evidence of the single witness whose testimony has to be either accepted or rejected. If such a testimony is found by the court to be entirely reliable, there is no legal impediment to the conviction of the accused person on such proof. Even as the guilt of an accused person may be proved by the testimony of a single witness, the innocence of an accused person may be established on the testimony of a single witness, even though a considerable number of witnesses may be forthcoming to testify to the truth of the case for the prosecution. Hence, in our opinion, it is a sound and well-established rule of law that the court is concerned with the quality and not with the quantity of the evidence necessary for proving or disproving a fact. Generally speaking, oral testimony in this context may be classified into three categories, namely:
(1) Wholly reliable.
(2) Wholly unreliable.
(3) Neither wholly reliable nor wholly unreliable.
In the first category of proof, the court should have no Digitally signed by ATUL ATUL AHLAWAT CA 174/2019 AHLAWAT Date:
2025.08.28 CNR No. DLND01-014891-2019 11:17:59 +0530 Puneet Saluja Vs. M/s SBI Factors Ltd.Page No. 19/45
difficulty in coming to its conclusion either way -- it may convict or may acquit on the testimony of a single witness, if it is found to be above reproach or suspicion of interestedness, incompetence or subornation. In the second category, the court, equally has no difficulty in coming to its conclusion. It is in the third category of cases, that the court has to be circumspect and has to look for corroboration in material particulars by reliable testimony, direct or circumstantial. There is another danger in insisting on plurality of witnesses. Irrespective of the quality of the oral evidence of a single witness, if courts were to insist on plurality of witnesses in proof of any fact, they will be indirectly encouraging subornation of witnesses. Situations may arise and do arise where only a single person is available to give evidence in support of a disputed fact. The court naturally has to weigh carefully such a testimony and if it is satisfied that the evidence is reliable and free from all taints which tend to render oral testimony open to suspicion, it becomes its duty to act upon such testimony. The law reports contain many precedents where the court had to depend and act upon the testimony of a single witness in support of the prosecution. There are exceptions to this rule, for example, in cases of sexual offences or of the testimony of an approver; both these are cases in which the oral testimony Digitally signed by ATUL ATUL AHLAWAT CA 174/2019 AHLAWAT Date:
2025.08.28 CNR No. DLND01-014891-2019 11:18:03 +0530 Puneet Saluja Vs. M/s SBI Factors Ltd.Page No. 20/45
is, by its very nature, suspect, being that of a participator in crime. But, where there are no such exceptional reasons operating, it becomes the duty of the court to convict, if it is satisfied that the testimony of a single witness is entirely reliable. We have, therefore, no reasons to refuse to act upon the testimony of the first witness, which is the only reliable evidence in support of the prosecution."
30. It is trite law that there is a statutory presumption of law, wherein, as per the provisions of section 139 of NI Act, 1881, the court shall presume that the cheque in question was issued in discharge of, whole or part of any debt or liability, unless the contrary is proved.
31. The nature of the statutory presumption and the corresponding burden of proof u/s 139 of NI Act, 1881 is in addition to the statutory presumption u/s 118 of the Act, whereby, it shall be presumed, until the contrary is proved that every negotiable instrument was made or drawn for consideration.
32. The Hon'ble Supreme Court of India had recently held in "Bir Singh Vs. Mukesh Kumar", (2019) 4 SCC 197, that on mere admission of the drawer's signature, without admitting the execution of the entire contents in the cheque, is now sufficient to Digitally signed by ATUL ATUL AHLAWAT AHLAWAT Date:
CA 174/2019 2025.08.28 11:18:09 +0530 CNR No. DLND01-014891-2019 Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 21/45trigger the presumption u/s 139 of NI Act, 1881. As soon as the complainant discharges the burden to prove that the instrument, i.e. a cheque was issued by the accused for discharge of debt, the presumptive device u/s 139 of the Act, helps shift the burden upon the accused. The effect of the presumption is that, the evidentiary burden is then shifted upon the accused to prove that the cheque was not received by the banker towards the discharge of any legally enforceable right or liability. The burden upon the accused is only in the form of reverse onus clause and the evidentiary burden is not as heavy as upon the threshold of beyond reasonable doubt and if the accused is able to meet the standard of "preponderance of probabilities" , similar to that of in civil cases. Reliance is placed upon the judgment of the Hon'ble Supreme Court of India in "Rangappa Vs. Shree Mohan", AIR 2010 SC 1898.
33. In order to rebut the presumption and to prove the contrary, it is open to the accused to raise a probable defense wherein, he can raise the question upon the existence of legally enforceable debt or liability. The words "until the contrary is proved "
occurring in section 139 of NI Act, 1881 does not mean that in every case, the accused must necessarily prove by leading cogent and positive evidence that the cheque was not issued in discharged of any debt or legally enforceable liability, however, the accused also had an option for the court to consider the non-Digitally signed
by ATUL ATUL AHLAWAT AHLAWAT Date: 2025.08.28 CA 174/2019 11:18:13 +0530 CNR No. DLND01-014891-2019 Puneet Saluja Vs. M/s SBI Factors Ltd.Page No. 22/45
existence of such debt or liability so probably that no prudent person, ought under the circumstances of the case could have acted upon the supposition that such debt or liability did not exists. Reliance is placed upon the judgment of the Hon'ble Supreme Court of India in "Basalingappa Vs. Mudibasappa", AIR 2019 SC 1983 and in "Kumar Exports Vs. Sharma Carpets", (2009) 2 SCC 513.
34. As per the case of the respondent before the Ld. Trial court, the respondent company was engaged in the business of providing Export Factoring Facilities and the appellant, who was the sole proprietor of M/s Ena International had approached the respondent company to avail the export factoring facility. The parties entered into an "Export Factoring Agreement" dated 19.04.2008". The appellant availed the financial facility to the tune of USD 956357.87 (converted to Rs. 4,99,51,993.96/-) and the said outstanding stood as on 13.03.2009. The appellant issued 4 cheques bearing no. 493497 for a sum of Rs. 1,32,00,000/-; bearing no. 493496 for a sum of Rs. 1,00,00,000/-; bearing no. 517752 for a sum of Rs. 1,00,00,000/- and bearing no. 517751 for a sum of Rs. 1,08,00,000/-, all dated 13.03.2009, drawn on Bank of India, New Delhi Overseas Branch, Barakhamba Road, New Delhi.
35. As per the respondent, the said cheques were issued in Digitally signed by ATUL AHLAWAT ATUL Date:
AHLAWAT 2025.08.28 CA 174/2019 11:18:17 +0530 CNR No. DLND01-014891-2019 Puneet Saluja Vs. M/s SBI Factors Ltd.Page No. 23/45
discharge of legally enforceable debt/liability and upon presentation, the same were returned back with the remarks 'Funds Insufficient' vide cheque returning memo dated 13.09.2009. The respondent issued the statutory legal notice dated 25.03.2009, calling upon the appellant to make the payment within the prescribed time, however, the payment was not made within 15 days of the receipt of the said notices and on the basis of the same, the respondent company filed the complaint u/s 138 of NI Act before the Ld. Trial Court.
36. The entire basis of the case of the respondent company before the Ld. Trial Court was the export factoring agreement dated 19.04.2008, Ex.CW1/10. The case of the respondent company was that the said export factoring agreement was with recourse and as per clause 8 titled as 'Clients Undertakings' and sub-clause (a), the respondent (Factor) had the right of the recourse to the client (Appellant) to the fullest extent in respect of any debt purchase and/or prepaid by the respondent or any part thereof, if or any reason whatsoever the debt or any part thereof was unpaid on the date it comes due for payment or if there was a breach of any of the warranties and undertaking on the part of the appellant or if any even occurs which entitled the respondent to demand payment of any such debt or part thereof.
37. The Ld. Trial Court had based its decision on the Digitally signed by ATUL AHLAWAT ATUL CA 174/2019 Date:
AHLAWAT 2025.08.28 CNR No. DLND01-014891-2019 11:18:22 +0530 Puneet Saluja Vs. M/s SBI Factors Ltd.Page No. 24/45
interpretation of aforementioned clause (8) (a) to hold that the factoring agreement between the parties was with recourse and therefore, the respondent company could claim the payment of the outstanding amount from the appellant.
38. It is trite law that the cannons of interpretation calls for reading the entire agreement as a whole and not basing the decision on the basis of one or two clauses contained in the agreement.
39. In the present case, the parties had entered into the said export factoring agreement, after there was a sanction letter issued by the respondent company. The first sanction letter was issued by the respondent company on 21.06.2007, Ex.CW1/6, wherein the debt purchase limit was set as Rs. 2.6 crores and the prepayment limit was set as Rs. 2.08 crores. On the basis of the said sanction letter containing the terms and conditions for factoring/debts purchase in annexure A, the parties came to a mutual understanding regarding their respective rights and liabilities. Thereafter, vide further sanction/review of the credit limits dated 20.08.2007, Ex.CW1/7, the sanction limit was increased. The parties entered into the first export factoring agreement dated 05.09.2007, Ex.CW1/A.
40. After entering the first export factoring agreement, yet Digitally signed by ATUL CA 174/2019 ATUL AHLAWAT CNR No. DLND01-014891-2019 AHLAWAT Date:
2025.08.28 Puneet Saluja Vs. M/s SBI Factors Ltd. 11:18:27 +0530 Page No. 25/45 another sanction letter was issued by the respondent company on 10.04.2008, Ex.CW1/9, wherein the debt purchase limit was increased to Rs. 5.5 crores and the prepayment limit was increased to Rs. 4.4 crores. Vide the said sanction letter, the respondent also asked the appellant to switch the insurance cover from ECGC to their master policy for covering export transactions, i.e. New India Assurance Company Limited. Vide the said sanction letter the respondent company had approved two customers of the appellant namely: 1. Efran Trading UAE and 2. Desert Trip Trading LLC, UAE, wherein their respective sub-limits were set as Rs. 2.5 Crores and Rs. 3 Crores, respectively. The credit period time was set at 120 days for both the customers of the appellant.
41. As per the said sanction letter Ex.CW1/9, at clause 2 (D)
(e), the respondent called upon the appellant to issue undated cheques (UDCs cheques) for the entire export factoring limit. Therefore, the issuance of UDCs was the condition precedent for the parties to enter into the factoring agreement, as alleged by the appellant.
42. On the basis of the sanction letter, Ex.CW1/9, the parties entered into the second factoring agreement, Ex.CW1/10, which forms the basis of the entire transaction between the parties leading upto the filing of the complaint before the Ld. Trial Digitally signed by ATUL ATUL AHLAWAT CA 174/2019 AHLAWAT Date: 2025.08.28 CNR No. DLND01-014891-2019 11:18:32 +0530 Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 26/45Court.
43. It was not the case of the respondent that the impugned four cheques were UDCs or that the date was filled by the respondent after informing the appellant or that the instructions were issued by the appellant to fill the said dates and to present the cheques in question for encashment. On the other hand, the primary defence taken by the appellant was that the said cheques were issued in compliance of clause 2 (D) (e) of Ex.CW1/9 and there was no legally enforceable debt or liability at the time of its presentment and the said UDCs/security cheques were misused by the respondent.
44. Since, the title of the agreement Ex.CW1/10 did not mention whether the said agreement was with recourse or was without recourse, therefore, the entire agreement had to be read as a whole to understand its true meaning and purport. It is true that the appellant had undertaken in clause 8 (a) that the respondent would have right to recourse against the appellant, if for any reason whatsoever, the debt or any part thereof became due for payment or there was any breach of warranting and undertaking on part of the client (appellant). As per clause 8 (g), the appellant was supposed to make all payments of the amount intimated as payable and/or debited to the account of the appellant, forthwith upon the receipt of the intimation and/or Digitally signed by ATUL ATUL AHLAWAT CA 174/2019 AHLAWAT Date:
CNR No. DLND01-014891-2019 2025.08.28
11:18:36 +0530
Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 27/45
debit advice from the respondent company and the respondent was not required to take any steps or proceedings against the customers of the appellant, for recovery of any amount of the debt, before claiming such amount from the client.
45. However, the appellant was also required to take out insurance on any of the goods covered under the debt and was supposed to keep the said goods fully insured until payment in full was received by the respondent. The premium of the said insurance was supposed to be paid by the appellant. The said understanding was duly carved out in clause 8 (m) of the agreement.
46. As per clause 12 (A), the respondent was having the sole right of collecting and enforcing payment of all debts, in whatever manner the respondent in its absolute discretion considered necessary. The respondent was at liberty to engage an 'Import Factor' at the place in the country where the customers of the appellant were situated (carrying on business or residing) i.e. UAE in the present case. For enforcing the payment of all debts, the respondent was also at liberty into entering in another Inter- Factor Agreement and the said import factor would have been deemed to be the agent of the appellant.
47. As per clause 13, upon the purchase and/or prepayment of Digitally signed CA 174/2019 ATUL by ATUL AHLAWAT CNR No. DLND01-014891-2019 AHLAWAT Date: 2025.08.28 11:18:42 +0530 Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 28/45any debt by the respondent, the benefit of all guarantees, indemnities, insurances and securities with respect to such debt and the goods to which it relates was to rest with the respondent. The appellant was directed to execute the assignment deed, upon demand from the respondent. Upon the execution of the said assignment deed, all rights, title and interest of the appellant in the goods covered by such debt was to be assigned and transferred to the respondent, including the rights of the appellant being the unpaid seller or otherwise. The appellant was supposed to execute the Deed of Assignment as per clause 16 of the agreement, whenever required by the respondent company.
48. Lastly, in the scheduled agreement, it was duly mentioned at sub-clause (ii) that the aggregate amount of the debts outstanding at any time by the factor during the said period was with recourse to the extent of Rs. 5.5 crores.
49. Since, the agreement Ex.CW1/10 was based upon the sanction letter Ex.CW1/9 and it contained all the charges levied by the respondent upon the appellant for availing the factoring services and also the details of the approved customers of the appellant and the issuance of certain documents, which were required to be pre-requisite for entering the main agreement, therefore, the terms of that sanction letter have to be read alongwith the main agreement.
Digitally signed by ATUL ATUL AHLAWAT
AHLAWAT Date:
2025.08.28
11:18:47 +0530
CA 174/2019
CNR No. DLND01-014891-2019
Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 29/45
50. As per the case of the respondent, the legally enforceable debt/liability was duly admitted by the appellant, when it had acknowledged the balance outstanding in its factoring account maintained by the respondent company on 31.03.2009, amounting to USD 956357.87 and the letter dated 02.04.2009, Ex.CW1/20 was duly acknowledged and admitted by the appellant by signing on the said documents as confirmation. Earlier also the balance outstanding on 30.09.2008, which was communicated vide letter dated 01.10.2008, Ex.CW1/9 was also similarly acknowledged by the appellant.
51. As per the main defence taken by the appellant, the factoring agreement could have become one with recourse, only in one condition i.e. if the stipulation under clause 2 (D) (i) of the annexure 'A' of the sanction letter Ex.CW1/6 dated 21.06.2007 was satisfied. Vide the said clause, if the debtor/customer rejected any goods or disputed or declined to pay a debt purchased by the respondent, or part thereof for any breach, actual or alleged contract of sale by the appellant, the appellant would have to re-purchase the said debt and repay forthwith the amount relating to that debt.
52. Furthermore, to substantiate its arguments the factoring agreement was without recourse, the respondent has sought to Digitally signed by ATUL ATUL AHLAWAT CA 174/2019 AHLAWAT Date: 2025.08.28 11:18:57 +0530 CNR No. DLND01-014891-2019 Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 30/45rely upon the contents of the complaints allegedly filed by the respondent company against the New India Assurance Company Ltd. before the Hon'ble NCDRC. The said documents were not before the Ld. Trial Court and same were brought on record after the application u/s 91 r/w 391 CrPC was allowed by the Ld. Predecessor of this Court. In the said documents, it is alleged by the respondent company that the debt in question was an insured debt therefore, since the respondent had obtained the insurable interest in the debts purchased, therefore, the respondent could not have proceeded against the appellant for the amount in question, since the two proceedings before two different forums amounts to unjust enrichment.
53. In the notice of acquisition framed by the Ld. Trial Court u/s 251 Cr.PC, the defense taken by the appellant was that the cheques in question were issued for the purpose of security and they were not issued for discharging any legally enforceable debt or liability. She admitted all the particulars on the cheque including her signatures, except for the dates on the impugned cheques. She further stated that the respondent had purchased the debt in question and the total outstanding debt was insured by the respondent company in their favour. The appellant admitted release of 80% of the invoice value and the remaining 20% was yet to be paid to her. She further stated that the invoices were fully covered under the credit protection policy taken by the Digitally signed by ATUL ATUL AHLAWAT CA 174/2019 AHLAWAT Date:
CNR No. DLND01-014891-2019 2025.08.28
11:19:01 +0530
Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 31/45
respondent through their insurer New India Assurance Company and their claim qua the liability in question, already seem to be settled.
54. She had not disputed the service of the statutory legal notice being sent by the respondent company, prior to filing the complaint u/s 138 of NI Act, 1881.
55. It is trite law that to initiate the proceedings relating to commission of the offence punishable u/s 138 of NI Act, the mandatory requirement is of sending a notice under proviso (b) of section 138 of the Act, whereby, the payee or 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 30 days of the receipt of information by him, from the bank regarding the return of the cheque as unpaid.
56. Therefore, the basis of the prosecution u/s 138 of NI Act, 1881, is based upon the notice which the payee sends to the drawer of the cheque. The expression, "the said amount of money" has been interpreted by the Hon'ble Supreme Court of India in the judgment of Dashrathbhai (Supra), wherein, it was held that the notice demanding the payment of the said amount of money has been interpreted by the judgments of the Hon'ble Digitally signed by ATUL ATUL AHLAWAT AHLAWAT Date: 2025.08.28 CA 174/2019 11:19:06 +0530 CNR No. DLND01-014891-2019 Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 32/45Supreme Court of India, to mean the cheque amount. It was further held by the Hon'ble Apex Court that the conditions stipulated in the proviso's to section 138 need to be fulfilled in addition to the ingredients in the substantive part of section 138.
57. Since, the signatures on the cheques were admitted and the receipt of statutory legal notice was not disputed, the statutory presumptions u/s 118 & 139 of NI Act, 1881 had kicked-in. The reverse onus was now cast upon the appellant to show the probable defence by either cross examining the complainants witnesses or by leading defence evidence.
58. As far as the first defence taken up by the appellant that the cheques in question were security cheques, the cross examination of CW1 Ashutosh Goel becomes important. In the said cross examination one suggestion was put to the witness that the cheques in question were given as security and there was nothing due from the appellant. The said suggestion was vehemently denied by the CW1. CW1 also vehemently denied that the goods in questions were covered under insurance or that the respondent company had received the amount from the insurance company and nothing was due from the appellant. He also did not admit that the respondent had obtained undated cheques to cover the eventualities. Nothing material qua the cheques being security cheques or undated cheques came out in Digitally signed by ATUL ATUL AHLAWAT CA 174/2019 AHLAWAT Date:
2025.08.28 CNR No. DLND01-014891-2019 11:19:11 +0530 Puneet Saluja Vs. M/s SBI Factors Ltd.Page No. 33/45
his cross examination.
59. As far as the submissions made by the Ld. Counsel for the respondent that the CW1 Ashutosh Goel was not having any personal knowledge of the transactions and in view of the decision of Hon'ble Supreme Court of India in A. C. Narayanan (Supra), he could not have been examined as a witness, the same has to be appreciated carefully. As far as the complaint is concerned, the same was filed by the previous AR of the respondent no.1 company, namely Rajiv Saxena, who was the then Vice President of the respondent company and he was also the executor of the documents in question. Therefore, the complaint was validly filed through him. During the pendency of the trial, the respondent company was amalgamated vide order dated 15.01.2010 passed by the Hon'ble High Court of Bombay and Certificate of Incorporation was issued by ROC, Mumbai on 18.03.2010, including the certificate issued by RBI. Thereafter, the substitution of AR was allowed by the Ld. Trial Court and the changed name of the respondent company was also brought on record.
60. Careful perusal of the post-summoning affidavit by way of evidence, Ex.CW1/1, it is apparently clear that all the details regarding the change of the constitution of the respondent company was duly brought on record. He had also deposed that Digitally signed by ATUL ATUL AHLAWAT CA 174/2019 AHLAWAT Date:
2025.08.28 CNR No. DLND01-014891-2019 11:19:16 +0530 Puneet Saluja Vs. M/s SBI Factors Ltd.Page No. 34/45
"That I have gone through the contents of the affidavit by way of evidence dated 25.04.2009 (i.e. Ex.CW1/A) sworn by Mr. Rajeev Saxena, the then AR of original complainant company and the same are true and correct". In the verification clause he had categorically stated that "the contents of above affidavit are true and correct to my personal knowledge based on official records available with the complainant company". Therefore, the said witness never deposed regarding his personal knowledge of the transactions in question and his knowledge was based on official records maintained by the company.
61. The reliance placed by the Ld. Counsel for the appellant that the CW1 Ashutosh Goel could not have been examined as a witness in the present case is ill-founded, since the said submissions are not made by correctly appreciating the ratio of the decision of A. C. Narayanan (Supra), since it was duly held by the Hon'ble Apex Court that the power of attorney holder can depose and verify on oath before the court in order to prove the contents of the complaint, however, the said power of attorney holder must have witnessed the transaction as agent of the payee/holder in due course or possess due knowledge regarding the said transactions. (emphasis supplied) The latter part of the ratio i.e. possessing due knowledge regarding the transactions is fully made out in the present case, since the witness had deposed that his knowledge was based on the official records available Digitally signed by ATUL ATUL AHLAWAT AHLAWAT Date:
CA 174/2019 2025.08.28 11:19:22 +0530 CNR No. DLND01-014891-2019 Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 35/45with the respondent company. The execution of the documents exhibited in his testimony were never disputed by the appellant and no objection regarding to its mode of proof was ever made before the Ld. Trial Court. The only suggestion given to the said witness was that the transactions had taken place prior to him joining the respondent company and that he did not have any personal knowledge about the facts of the present case. The said witness never deposed that he had executed the documents in question. As per his own affidavit, whatever was stated by him was based upon his knowledge obtained from the documents maintained by the respondent company. Therefore, he could have deposed and the documents were duly exhibited in his testimony. Therefore, the first limb of arguments advanced by the Ld. Counsel for appellant that since the CW1 did not have any personal knowledge, therefore, the foundation of the prosecution's case has been shaken and rendering his testimony unreliable, is devoid of any merits and it is hereby decided against the appellant.
62. Since, the appellant could not produce any probable defence even on preponderance of probabilities regarding the impugned cheques were security cheques or issued as UDCs, in the testimony of CW1, by cross examining him, the other avenue which was left for the appellant was to lead defence evidence to the said effect.
Digitally signed by ATUL AHLAWAT ATUL Date:
AHLAWAT 2025.08.28
11:19:27
CA 174/2019 +0530
CNR No. DLND01-014891-2019
Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 36/45
63. Perusal of the TCR reflects that the appellant only examined one witness in its defence i.e. DW1 Anjani Kumar Singh. The said witness was working as Assistant Manager, New India Assurance Company Limited and he had brought on record the duly attested copies of the proposal forms alongwith endorsements and credit limit decisions pertaining to the approved customers of the appellant namely Desert Trip and Efran Trading. He also brought on record the copies of the claimed from alongwith default summary pertaining to the said customers. He also brought on record, the copy of letter of claim repudiation dated 09.11.2020. Lastly, he also brought on record the policy covering the said customers and had deposed that there was a breach of condition no. 6 (M) mentioned in the policy, as a breach by the respondent company and the claims were not paid and the New India Assurance Company were absolved by the respondent of any claim.
64. Nowhere, in the testimony of DW1, it was brought on record that the cheques in question were UDCs or security cheques. The said witness did not depose or better worded as, could not have deposed regarding the impugned cheques in question, as he was brought to bring on record the insurance policies and claim repudiation forms etc, and not to depose qua the impugned cheques.
Digitally signed by ATUL AHLAWAT ATUL Date:
AHLAWAT 2025.08.28
CA 174/2019 11:19:31
CNR No. DLND01-014891-2019 +0530
Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 37/45
65. Therefore, it is abundantly clear that from the evidence brought on record before the Ld. Trial Court, the appellant could not bring on record any piece of evidence to establish its defence that the said cheques in question were security cheques. The main factoring agreement does not contain any stipulation qua the cheques being given by the appellant as security cheques or that the same was a requirement under the agreement. The only stipulation regarding the execution in the UDCs was contained in the sanction letter Ex.CW1/9 at clause 2(D) (e), which stated that the appellant was directed to execute and submit the documents including the UDCs alongwith a suitable covering letter giving details of the UDCs. No such covering letter containing the details of the UDCs were brought on record by the appellant, before the trial court or before this Court. Therefore, the defence of the appellant that the cheques in questions were UDCs or security cheques was not established, even on preponderance of probabilities.
66. The second defence taken by the appellant that prima facie on seeing from the naked eye, the handwriting on all the cheques was similar excepts for the date i.e. 13.03.2009 and the same raises an inference that it was inserted by the respondent without prior consultation, consent or notice to the appellant. Therefore, it amounts to material alteration under Section 87 of the Act. It is Digitally signed by ATUL AHLAWAT ATUL Date:
CA 174/2019 AHLAWAT 2025.08.28
11:19:35
CNR No. DLND01-014891-2019 +0530
Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 38/45
pertinent to mention here that no such question regarding the dates being filled on the cheque by the respondent, without the consent or notice to the appellant was put to the only complainant witness i.e. CW1 Ashutosh Goel. There was not even a suggestion to the said effect. The appellant did not bring any evidence through its own witness regarding the said defence of hers. Therefore, the reliance placed on the decision of Hon'ble High Court of Bombay in "M/s Pinak Bharat and Co. Vs. Anil Ram Rao Nayak", 2023 (2) MHLJ 547 is highly misplaced, since the facts of the present case are clearly distinguishable.
67. There is no merit in the submissions of the Ld. Counsel for the appellant that the factoring agreement was without recourse and it could have been made with recourse only if one stipulation contained in clause 2 (D) (1) of annexure A of the sanction letter was satisfied. First of all, the said annexure A pertains to the sanction letter dated 21.06.2007, Ex.CW1/6 that is the first sanction letter issued by the respondent company. On the basis of said sanction letter, separate export factoring agreement, Ex.CW1/8 was executed between the parties. There was no such stipulation contained in the said agreement.
68. Thereafter, the second sanction letter dated 10.04.2008, wherein the revised limits were set was given by the respondent and vide the said sanction letter Ex.CW1/9, there was no such Digitally signed by ATUL ATUL AHLAWAT CA 174/2019 AHLAWAT Date: 2025.08.28 CNR No. DLND01-014891-2019 11:19:39 +0530 Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 39/45annexure A, which was there with the earlier sanction letter Ex.CW1/6. However, since there was the mention of the annexure A of the earlier sanction letter, its terms were made part of the second sanction letter as well.
69. It is pertinent to point out that similar to the first factoring agreement, the second factoring agreement, Ex.CW1/10 which is the subject matter of the dispute in question, did not bear any such condition of the sanction of the facility being subject to the said condition.
70. Even if believing that the stipulation in clause 2 (D) (i) of annexure A was applicable and made part of the factoring agreement, still it is not satisfied that it was the only condition upon which the respondent company would have had recourse against the appellant. In the said annexure A, at clause (E) it is clearly mention that any debt purchase or agreed to be purchased by the respondent was "with recourse". From the agreement Ex.CW1/10, specifically clauses 8 (a) and 8 (g), the right of the respondent to seek recourse against the appellant was unequivocal.
71. Only because as per clause 12 (A) of the main agreement, the respondent could have appointed/engaged an Import Factor at UAE for the purpose of collecting and enforcing payment of the Digitally signed by ATUL AHLAWAT ATUL Date:
CA 174/2019 AHLAWAT 2025.08.28
11:19:44
CNR No. DLND01-014891-2019 +0530
Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 40/45
debts, does not mean that it was the only way possible. That was an option given to the respondent company, since, the word used therein was 'may' and not 'shall'.
72. There was a default in payment of the invoice amount by the customers of the appellant. The respondent company had factored the invoices by forwarding the 80% of the payment to the appellant and since the factoring agreement was with recourse, therefore, the respondent was within its right to get the said amount recovered from the appellant/client.
73. The existence of the liability is not disputed. The appellant had duly admitted the prepayment outstanding amounts on 30.09.2008 and 31.03.2009, by duly signing the acknowledgment on letters dated 01.10.2008, Ex.CW1/19 and 02.04.2009, Ex. CW1/20. Since, the outstanding amount was admitted and the appellant could not prove that factoring agreement was without recourse, through the cross examination of CW1 or in the examination of DW1, therefore, the defence of the appellant that the respondent become the owner of the debt/invoices receivables is not established. Therefore, the reliance placed on the decisions of Hon'ble Supreme Court of India in Sripati Singh (Supra) and Dashrath Bhai (Supra) are highly misplaced. The legally enforceable debt existed on the date mentioned on the impugned cheques and even if the said cheques were security Digitally signed by ATUL AHLAWAT ATUL CA 174/2019 Date:
AHLAWAT 2025.08.28 CNR No. DLND01-014891-2019 11:19:49 +0530 Puneet Saluja Vs. M/s SBI Factors Ltd.Page No. 41/45
cheques, although, it is not established in the present case by the appellant, then also the invocation of Section 138 of NI Act was proper, since on the date of the cheques, the liabilities had duly existed.
74. Lastly, because the appellant had sought to bring on record the complaints filed by the respondent before the Hon'ble NCDRC against the New India Assurance Company, by filing an application u/s 91 r/w Section 391 CrPC, 1973 and the same being allowed by the Ld. Predecessor of this Court, does not mean that the documents and their contents were proved in accordance with the law. The appellant did not lead any evidence to bring on record the said documents. The documents and its contents relating to the stand taken by the respondent before the Hon'ble NCDRC is not established. Therefore, even on that account, the appellant had failed to raise any reasonable defence.
Therefore, even the prima facie finding on unjust enrichment as alleged by the appellant is not possible.
75. The appellant could not establish even on the light burden of preponderance of probabilities that the impugned cheques were security cheques or there was no legally enforceable debt or liability. The Ld. Trial Court has rightly appreciated the facts of the present case, after correctly applying the law of the land with regard to the liability vis-à-vis security cheques as held by the Digitally signed by CA 174/2019 ATUL ATUL AHLAWAT CNR No. DLND01-014891-2019 AHLAWAT Date: 2025.08.28 11:19:54 +0530 Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 42/45Hon'ble Apex Court in "Sampelly Satyanarana Rao VS IREDA Ltd", (2016) 10 SCC 458 and "Sripati Singh Vs State of Jharkhand @ Anr.", 2021 SCC OnLine SC 1002. Therefore, no ground is made out by the appellant to interfere with the impugned judgment dated 17.07.2019. The impugned judgment is hereby upheld.
76. The offence under section 138 of the NI Act,1881 is quasi- criminal in nature and it is not an offence against the society, however, it does not mean that the Court trying the said offence is merely a recovery Court primarily focusing on the aspect of fine and compensation to the complainant. The Hon'ble Supreme Court in "State of Himachal Pradesh Vs Nirmala Devi", 2017 (2) RCR (Criminal) 613 has held that the sentence imposed must be commensurate with the crime committed and in accordance with the jurisprudential justification such as deterrence, retribution and restoration. The mitigating and aggravating circumstances had to be both kept in mind.
77. After considering the material aspects of the present case and after considering the aggravating and mitigating circumstances, this court is of the view that the sentence awarded by the Ld. Trial Court vide impugned order dated 27.07.2019, commensurates with the offence in question and there is no ground made out to interfere with the same. The Digitally signed by ATUL ATUL AHLAWAT CA 174/2019 AHLAWAT Date: 2025.08.28 CNR No. DLND01-014891-2019 11:19:59 +0530 Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 43/45impugned order on sentence passed by the Ld. Trial Court is also upheld, except for the in-default sentence being the same as the substantive imprisonment term.
78. The appellant is directed to be taken into custody. The appellant is hereby sentenced to undergo Simple Imprisonment for a period of 6 months and to pay the fine amount of Rs. 6,00,00,000/- (Rupees Six Crores) including the interest amount, which shall be paid to the respondent as compensation u/s 357 (3) CrPC, 1973 (395 (3) BNSS, 2023), within 30 days from today. In default of payment of fine, she shall further undergo Simple Imprisonment for a period of 3 months.
79. The fine amount shall be recovered with under the provisions of 461 BNSS, 2023 (erstwhile 421 Cr.P.C., 1973).
80. The appellant shall be granted the benefit of the period of imprisonment already undergone by him in the present case, if any, in terms of section 468 BNSS, 2023 (erstwhile 428 Cr.P.C, 1973).
81. The appellant is directed to surrender before the Ld. Trial Court within one week from today. In case of default, the Ld. Trial Court shall take coercive measures to ensure she Digitally signed by ATUL ATUL AHLAWAT AHLAWAT Date:
2025.08.28 CA 174/2019 11:20:03 +0530 CNR No. DLND01-014891-2019 Puneet Saluja Vs. M/s SBI Factors Ltd.Page No. 44/45
is taken in custody and thereafter, appropriate orders qua the execution of the sentence are passed.
82. The present appeal stands disposed off accordingly. Let the copy of this judgment be given free of cost to the appellant. The covering letter in compliance of directions passed by Hon'ble Supreme Court of India in WP(C)1082/2020 titled as "Suhas Chakma Vs. Union of India & Ors ."
83. The case property, if any, be disposed off in accordance with law.
84. The Trial Court Record along with a copy of this Judgment be sent to the Ld. Trial Court for necessary information, record and compliance.
85. The file of the present appeal be consigned to the Record Room, after due compliance.
Announced in the open court on 28.08.2025.
This judgment consists of 45 pages and
All of them have been digitally signed by me. Digitally signed
by ATUL
ATUL AHLAWAT
AHLAWAT Date:
2025.08.28
11:20:08 +0530
(ATUL AHLAWAT)
ASJ NDPS Act (Special
Judge)/PHC/NDD
Delhi/28.08.2025
CA 174/2019
CNR No. DLND01-014891-2019
Puneet Saluja Vs. M/s SBI Factors Ltd.
Page No. 45/45