Delhi District Court
Alag Impex Pvt Ltd vs Manjeet Singh on 6 November, 2025
IN THE COURT OF MS. JAYANTI CHANDER,
JUDICIAL MAGISTRATE FIRST CLASS (NI ACT) - 07,
SOUTH DISTRICT, SAKET COURTS, NEW DELHI.
1 Complaint Case Number : Ct. Case No. 1798/2017
2 Name & Address of Complainant : M/s Alag Impex Pvt. Ltd.
R/o- 304 B, Apra Olaza, Plot No.
28, Road No. 44, Community
Center, Pitampura, New Delhi -
110034.
3 Name & Address of Accused : Sh. Manjeet Singh
R/o H no. 103, Village Dariyapur
Kalan, Delhi-110039.
4 Offence complained of : Section 138 r/w142,
Negotiable Instruments Act 1881
5 Plea of guilt : Pleaded not guilty
6 Date of institution : 09.03.2017
7 Date on which case was reserved : 15.10.2025
for judgment
8 Date of judgment : 06.11.2025
9. Decision : Acquittal
JUDGMENT
1. Vide this judgement, this court shall dispose of the aforementioned complaint case filed by the complainant M/s Alag Impex Pvt. Ltd., a company incorporated under The Indian Companies Act 1956, against the accused, namely Sh. Manjeet Singh in respect of the dishonour of cheques bearing number 004283 dated 15.11.2016 and bearing number 004284 dated Ct. Case No. 1798/2017 Page no. 1 of 14 Digitally signed by JAYANTI JAYANTI CHANDER CHANDER Date:
2025.11.06 04:32:02 +0500 15.12.2016 respectively both for an amount of Rs. 30,00,000/- each (Rupees Thirty Lakhs), both drawn on Axis Bank Ltd., Hudson Lane, New Delhi-110009 (hereinafter referred to as the "cheques in question").
BRIEF FACTS OF THE CASE
2. Succinctly, it is the case of the complainant that the accused represented to the Complainant that he is the absolute owner of land measuring 4 Bigha, out of Khasra No. 87/4 min (1-12), South-West back side, 87/12 min (2-08), Western side, situated in revenue estate or village Dariapur Kalan, Narela District, Delhi-110039 (hereinafter referred to as "said land"). The accused allegedly purchased the said land vide sale deed dated 14.08.2013 (Registration no. 4217, Book no., Vol. 3114, page no. 97-103, Sub Registrar VI B) and allegedly induced the Complainant to purchase the said land due to his Bonafide needs. Allegedly, the accused executed a sale deed however, never handed over the original sale deed to the Complainant. The Complainant sent several legal notices to the accused to give the original sale deed. Subsequently, when the Complainant was about to initiate legal proceedings, the accused allegedly executed a settlement agreement to pay the market value of Rs 1,20,00,000/- (One Crore and Twenty Lakhs only) for the said land in 4 monthly instalments starting from 10.08.2016.
3. The accused issued the four cheques, all drawn on Axis Bank Ltd., Hudson Lane, New Delhi, including the cheques in question, as follows.
Sr Cheque Cheque Return Memo Reason for return
No Number Dated dated
.
1. 004281 15.09.2016 19.10.2016 Drawer's Signature Differ
2. 004282 15.10.2016 19.10.2016 Drawer's Signature Differ
3. 004283 15.11.2016 30.12.2016 Drawer's Signature Differ
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4. 004284 15.12.2016 30.12.2016 Drawer's Signature Differ
4. On presentment, all the four cheques including the cheques in question, that is, Cheque bearing number 004283 exhibited as Ex CW1/3 and Cheque bearing number 004284 exhibited as Ex CW1/4 were returned with same remarks "Drawer's Signature Differ" vide same return memo dated 30.12.2016 exhibited as Ex.CW1/5. Thereafter, notice of demand dated 24.01.2017 was sent calling upon the accused to pay the cheque amount within 15 days. The legal notice, postal receipt and tracking report confirming delivery on 27.01.2017 are exhibited as Ex. CW1/6 (colly). Complainant avers that despite service of legal notice, the accused failed to make the payment, hence, the complainant moved to the court with the present complaint under section 138 of the Negotiable Instruments Act, 1881, (here in after referred to as the "NI Act"). The Complainant adduced a copy Board resolution exhibited as Ex CW1/1 appointing Authorised representative Sh. Dhalchand Saini for Complainant Company. Complainant also adduced a copy of Non-judicial E- stamp and agreement as Ex. CW1/2.
5. Upon prima facie consideration of the pre-summoning evidence, the accused was summoned vide order dated 12.05.2017 and directed to furnish bail bond and surety bond. Upon the appearance of the accused, the case was referred to mediation, which was received unsettled vide order dated 12.07.2017.
6. The statement of notice under section 251, Code of Criminal Procedure 1973 (hereinafter referred to as "CrPC") was framed on 09.04.2024 to which the accused pleaded not guilty. The accused admitted his signatures on the cheques in question and stated that the cheques were issued on instructions of his father as security for a transaction between the Complainant and accused's father. The Ct. Case No. 1798/2017 Page no. 3 of 14 Digitally signed by JAYANTI JAYANTI CHANDER CHANDER Date:
2025.11.06 04:32:20 +0500 accused stated that contents of the cheques in question were also filled by him. The accused denied having received the legal notice.
COMPLAINANT EVIDENCE
7. On allowing the application under section 145(2) of the Act, the substituted Authorised Representative Sh. Arun Aggarwal placed on record his evidence by way of affidavit Ex CW2/A tendering the documents relied upon, stating all exhibits. In the cross-examination, CW-2 deposed that the he has full knowledge of the case, although he is not an employee in the Complainant Company. CW-2 deposed that the registry of the said land was done at the time of purchase. CW-2 deposed that he had done less than five deals with the father of the accused, namely, Sh. Dharmbir Singh. It was deposed that CW-2 purchased a land which was owned by wife of Sh. Dharmbir Singh. CW-2 admitted that the stamp paper Ex CW1/2 was purchased by Complainant Company and the name of accused is not mentioned therein. CW-2 further admitted that there is no date and signature from the side of the Complainant in the agreement Ex CW1/2. CW-2 deposed that the signature of accused and the cheques in question were taken as a measure of security from the accused. CW- 2 denied all the suggestions.
8. Complainant closed his evidence vide order dated 16.01.2024 and thereafter, matter was fixed for recording of statement of accused.
STATEMENT UNDER SECTION 313 CRPC
9. On 25.04.2024 the statement of the accused under section 313, CrPC, read with section 281 CrPC was recorded wherein the entire incriminating evidence was put to him. The accused stated that he sold the said land to complainant in 2014-2015 for approximately Rs 40 Lakhs to 45 lakhs. The amount was received in his bank account from the Complainant. The accused stated that he issued four cheques to repurchase the property for Rs Ct. Case No. 1798/2017 Page no. 4 of 14 Digitally signed by JAYANTI JAYANTI CHANDER CHANDER Date:
2025.11.06 04:32:40 +0500 1,20,00,000/- (One Crore and Twenty Lakhs only) and signed the agreement, however, no one signed the same on behalf of the Complainant. The accused stated that he never received a copy of the same and the Complainant is extorting money from him.
10. The accused opted to lead Defence Evidence, however, despite several opportunities the accused did not lead DE. The right to lead DE was closed vide order dated 26.03.2025.
FINAL ARGUMENTS
11. Final arguments were heard on 18.09.2025 on behalf of both the parties. Learned counsel for the Complainant argued that the all the ingredients of offence u/s 138 NI Act are made out. Further, the accused has admitted issuance of the cheque and his signatures on the cheque in question and thus the dishonour of cheque is proved by way of presumption. Learned Counsel for the Complainant argued that the accused has not led evidence in defence to rebut the presumption or the agreement placed on record. Learned Counsel for Complainant submitted that the accused has presented two different versions in his statement of notice under section 251 CrPC and his statement under section 313, CrPC. Ld. Counsel for the complainant relied on the case of APS Forex Services Pvt. Ltd. Vs. Shakti Internation Fashion Linkers and Ors (2020) 12 SCC 724, Bir Singh Vs. Mukesh Kumar (2019) 4SCC 197, Rajesh Jain Vs. Ajay Singh (2023) 10 SCC 148, Amit Jain Vs. Sanjeev Kumar Singh and Ors. Crl.A.1248/2019, Sripati Singh Vs. State of Jharkhand and Ors. (2022) 18 SCC 614 in support of his arguments on the fulfilment of ingredients of Section 138 NI Act for a security cheque and the onus on the accused to rebut the presumption.
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12. Learned Counsel for the accused has submitted his arguments on two aspects. Firstly, that there is a lack of consideration, that is, legally recoverable debt in the instant case. Secondly, that there is a lack of jurisdiction of the Court as the Complainant has himself deposed that he maintains his Bank Account in Punjabi Bagh Branch, Delhi. Ld. counsel for the accused relied on the case of M/s Indus Airways Pvt. Ltd and Ors. Vs. M/s Magnum Pvt. Ltd and Anrs 2014 (12) SCC 539, Union of India Vs. Raman Iron Foundry 1974 (2) SCC 231 and Employees Welfare Fund and Ors. Vs. KRA Infrastructure Developers Pvt. Ltd.
(2019) 4 JCC 4120 in support his arguments.
13. Rival submissions have been considered and record of the case has been perused.
INGREDIENTS OF OFFENCE UNDER SECTION 138 NI ACT
14. Before delving into the factual matrix of the present case, it is significant to underpin the essential ingredients to be established in order to attract the liability under section 138, NI Act as follows:
(i) The accused issued a cheque on an account maintained by him with a bank.
(ii) The said cheque has been issued in discharge, in whole or in part, of any legal debt or other liability, which is legally enforceable.
(iii) The said cheque has been presented to the bank within a period of three months from the date of cheque or within the period of its validity.
(iv) The cheque in question, when presented for encashment, was returned unpaid.
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(v) The payee of the cheque issued a legal notice of demand to the drawer within 30 days from the receipt of information by him from the bank regarding the return of the cheque.
(vi) The drawer of the cheque failed to make the payment within 15 days of the receipt of aforesaid legal notice of demand.
APPRECIATION OF EVIDENCE
15. The accused can be held guilty of the offence under Section 138 NI Act only if the above-mentioned ingredients are proved by the complainant co- extensively. Moreover, conditions stipulated under Section 142 NI Act have to be fulfilled in addition to above-mentioned ingredients.
With Respect to First, Third and Fourth Ingredient
16. The Complainant has adduced by way of documentary evidence the original cheque Ex CW1/3 and Ex CW1/4 were dishonoured vide same returning memo Ex CW1/5 mentioning same reason of dishonour as "Drawer's signature differ" for both the cheques. It has been held that in a Catena of cases that "funds Insufficient" is a genus that incorporated other reasons of dishonour of cheque as well. The date of return on returning memo 13.12.2016 show that the cheque was presented within 3 months of issuance. The accused has admitted his signatures on the cheque in question in the statement of notice framed under section 251, CrPC. The accused has also admitted issuance of the cheque in question as a security at the instance of his father due to a transaction between the complainant and his father. Accused denied receipt of legal notice and any outstanding liability towards the complainant.
17. It is a cardinal principle of evidence that documentary evidence is given primacy over oral testimony as enshrined under section 64, Indian Evidence Act 1881(for brevity "IEA"). Moreover, the fact that the cheque in question was Ct. Case No. 1798/2017 Page no. 7 of 14 Digitally signed by JAYANTI JAYANTI CHANDER CHANDER Date:
2025.11.06 04:33:01 +0500 signed and given to the complainant shows that the accused voluntarily allowed the complainant to use the cheque in question. An inference can be drawn that the cheque was 'duly issued' to the Complainant for an outstanding legal liability. Therefore, requirement of first, third and fourth ingredients stand fulfilled in the present matter.
With Respect To fifth and sixth Ingredient
18. Perusal of document Ex-CW1/6 (colly) reveals that legal demand notice was delivered at the address of the accused on 27.01.2017. The accused has denied the receipt of legal notice but admitted the address mentioned in the legal notice to be his correct address in the statement of notice framed u/s 251 Cr.P.C. The Hon'ble Supreme Court in the case of C.C Alavi Haji vs. Palapetty Muhd. & Anr.1 held that any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint under Section 138 of the Act, cannot contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the General Clauses Act and Section 114 of the Evidence Act. This court finds that despite due service of the legal demand notice and summons in the present case, the accused has failed to repay the legal debt with 15 days of receipt of legal notice and subsequently, within 15 days of service of summons respectively. Hence, fifth and sixth ingredient also stand fulfilled.
19. Once the ingredients mentioned in the forgoing, paragraph are established by the complainant, then as soon as the execution of impugned cheque is admitted by the accused, a fact base is established to invoke the 1 2007 6 Supreme Court Cases 555 (Decided on May 18, 2007).
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presumption of cheque having been issued in discharge of a legally recoverable debt. No additional evidence is required for presuming the existence of legally enforceable debt.
With respect to second ingredient
20. As per the scheme of NI Act and recent precedents, once the accused admits signature on the cheque in question, presumption of law under section 139 of the Act shall be drawn. The conjoint reading of Section 118 and Section 139 NI Act raises a presumption that the cheque was drawn for consideration and given by the accused for the discharge of debt or other liability. The 'presumption of law' makes it imperative for the court to raise such presumptions. In the recent judgment, Kalamani Tex v. P. Balasubramaniyan,2 the larger bench of the Hon'ble Supreme Court, held that:
"U/s 118 & 139, once issuance of cheque and signature admitted, it is required to presume that the cheque was issued as consideration for a legally enforceable debt."
The same was re-iterated in the case of Hiten P. Dalal vs. Bratindranath Banerjee.3 Thus, the second ingredient is also proved.
21. The words "unless contrary is proved"4 under sections 118 and 139 of the Act read with sections 3 of the IEA raises reverse onus on the accused, thereby shifting the onus on accused to prove that there was no subsisting legally recoverable debt. To discharge the evidentiary onus of proof under section 102, IEA, the accused may rely on the complainant evidence to rebut the existence of legally enforceable debt as was enunciated in the case of Rangappa Vs. Sri Mohan5. However, the evidence should create doubt to the standard of preponderance of probabilities. The accused can rely on 2 (2021) 5 SCC 283.
3(2001) 6 SCC 16 (Decided on July 11, 2001).
4Kumar Exports vs. Sharma Carpets, 2009 2 Supreme Court Cases 513.
5(2010) 11 Supreme Court Cases 441.
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2025.11.06 04:33:19 +0500 circumstances, inconsistencies in the complainant's evidence, documentary evidence or circumstantial evidence to tip the scale.6 In the present case, the accused has chosen to make pigeon holes in the version of the Complainant in his cross examination and has not led any evidence.
22. In the final arguments, learned counsel for the Complainant argued that the all the ingredients of offence u/s 138 NI Act are made out. Further, the accused has admitted issuance of the cheque and his signatures on the cheque in question and thus the dishonour of cheque is proved by way of presumption. Learned Counsel for the Complainant argued that the accused has not led evidence in defence to rebut the presumption or the agreement placed on record. Learned Counsel for Complainant submitted that the accused has presented two different versions in his statement of notice under section 251 CrPC and his statement under section 313, CrPC. Ld. Counsel for the complainant relied on the case of APS Forex Services Pvt. Ltd. Vs. Shakti Internation Fashion Linkers and Ors (2020) 12 SCC 724, Bir Singh Vs. Mukesh Kumar (2019) 4SCC 197, Rajesh Jain Vs. Ajay Singh (2023) 10 SCC 148, Amit Jain Vs. Sanjeev Kumar Singh and Anrs. Crl.A.1248/2019, Sripati Singh Vs. State of Jharkhand and Anrs. (2022) 18 SCC 614 in support of his arguments on the fulfilment of ingredients of Section 138 NI Act for a security cheque and the onus on the accused to rebut the presumption.
23. Learned Counsel for the accused has submitted his arguments on two aspects. Firstly, that there is a lack of consideration, that is, legally recoverable debt in the instant case. Secondly, that there is a lack of jurisdiction of the Court as the Complainant has himself deposed that he maintains his Bank Account in Punjabi Bagh Branch, Delhi. Ld. counsel for the accused relied on the case of M/s Indus Airways Pvt. Ltd and Ors. Vs. M/s Magnum Pvt. Ltd and Anrs 2014 6 Basalingappa v. Mudibasappa [(2019) 5 SCC 418] Ct. Case No. 1798/2017 Page no. 10 of 14 Digitally signed by JAYANTI JAYANTI CHANDER CHANDER Date:
2025.11.06 04:33:25 +0500 (12) SCC 539, Union of India Vs. Raman Iron Foundry 1974 (2) SCC 231 and Employees Welfare Fund and Ors. Vs. KRA Infrastructure Developers Pvt.
Ltd. (2019) 4 JCC 4120 in support his arguments.
24. Ld. counsel for the accused argued that the complainant has not proved any outstanding legal liability as there is no consideration in the transaction. Ld. counsel for the accused further submitted that the claim for unliquidated damages cannot be considered to be a debt as held in Union of India Vs. Raman Iron Foundry 1974 (2) SCC 231. Learned Counsel for the Complainant highlighted on the memorandum of settlement Ex CW1/2 and submitted that the accused has admitted his signatures on Ex CW1/2 as per which the cheques in question were duly issued.
25. Ld. Counsel for the complainant further submitted that the statement of accused u/s 313 Cr.P.C cannot be read in evidence since the accused has not led evidence in defence. Ld. Counsel for the complainant has further argued that the accused stated that the cheque was issued on behalf of his father in the statement u/s 251 Cr.P.C, however, subsequently, stated that the cheque was issued in a transaction between him and the complainant in his statement u/s 313 Cr.P.C.
26. It is pertinent to note that the CW-1 deposed in his cross- examination that name of the accused is not mentioned on the stamp paper of the agreement Ex. CW2/1. CW-1 further deposed that the signature of the accused was taken in the agreement along with the cheque as a measure of security and assurance given by the accused as he has stated that the cheque will be cleared. CW-1 further admitted that there are no names of the witnesses on the agreement.
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27. The Court finds that the aforesaid admitted defects in the agreement Ex. CW1/2, which is a material document, indicate that the agreement has not been duly executed by both the parties. The document is a substantive document that would attach liability on the accused. However, since the document has neither been properly executed, nor signed by the witnesses, it cannot be executed in materially deficient form. It is pertinent to note that the stamp paper mentions first party as the complainant whereas the second party is mentioned as "not applicable". The first party and second party as shown in the agreement do not super impose on the parties shown on the stamp paper of the agreement. The accused stated in his statement u/s 313 Cr.P.C that the complainant misused the cheque and never executed the sale deed. The statement u/s 313 Cr.P.C is week evidence and of feeble probative value, however, the complainant has not clarified the irregularities indicated above in the cross-examination of the complainant.
28. It is significant to underpin that the complainant alleges that the original sale deed executed between him and the accused in 2013 was never handed over to him by the accused on the pretext that the Registrar had put objections on the sale deed. The alleged settlement agreement Ex. CW1/2 subsequently arrived at between the complainant and the accused specifically states issuance of four cheques including the two cheques in question for the alleged property amounting to Rs. 1.20 crores by the accused. The transaction in 2013 and the alleged agreement in 2016 are two different transactions. The complainant has averred that the sale deed was not handed over to him in 2016. A separate cause of action would lie for the handing over of the original sale deed by the accused to the Complainant.
29. Furthermore, the issuance of cheque qua the alleged agreement shall be for an outstanding legal liability. The Hon'ble Apex Court has Ct. Case No. 1798/2017 Page no. 12 of 14 Digitally signed by JAYANTI CHANDER JAYANTI CHANDER Date:
2025.11.06 distinguished the liability for advance payment in NI Act and Indian Contract Act and held that issuance of cheque towards advance payment for purchase orders which are not carried out to its logical end does not amount to the cheques being issued for an 'existing debt'.7 The Hon'ble High Court of Delhi has held that the cheques issued for payment of advance sale consideration along with an MOU entered to facilitate the transaction does not incur any liability under the said agreement under section 138, NI Act. 8 It has been held in a catena of cases that 'existing legal liability' referred to a some which is presently due and payable. In the present case the alleged post-dated cheques were in lieu of a concerned property. However, the alleged settlement agreement Ex CW1/2 does not provide for performance of the act by the First party in lieu of the post-dated cheques. Thus, the cheques in question were issued for performance of agreement that was never brought to a logical end. The transfer of the concerned property in the name of the accused is not done by the Complainant. Hence, it can be inferred that there is 'no existing liability' for which the cheques in question have been dishonoured.
30. The infirmities in Ex CW1/2 have been highlighted by Learned Counsel for the accused during the cross examination of CW1. Further, the cause of action of non-delivery of sale deed in 2013 and dishonour of cheques in question 2016 as per alleged memorandum of settlement Ex CW1/2 are two separate transactions. Therefore, there has to an existing liability for which the cheques in question were issued and not merely advance payment for a consideration that was never brought to an end. In the present case, the Complainant has not transferred the said land in the name of the accused to consider it as consideration or outstanding liability for which the cheques must have been issued.
7Indus Airways Pvt. Ltd and Ors. Vs. M/s Magnum Pvt. Ltd and Anrs 2014 (12) SCC 539.
8Employees Welfare Fund and Ors. Vs. KRA Infrastructure Developers Pvt. Ltd. (2019) 4 JCC 4120.
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31. Ld. counsel for the accused has punched holes in the testimony of CW-1 qua the sanctity of agreement Ex. CW1/2. The existence of 'outstanding legal liability' in terms of the alleged agreement Ex. CW1/2 has been questioned by Ld. counsel for the accused. Once the accused has proved that there are more inferences possible than merely the version of the complainant or the proof of any ingredient for the offence of dishonour of cheque is deficient, a probable defence is raised. Now the burden shifts on the Complainant to prove his case beyond reasonable doubt qua the aforesaid ingredients to activate the presumptive clause. The complainant has not rebutted the infirmity in the aforesaid agreement as highlighted by Ld. counsel for the accused. Therefore, version of complainant is neither proved by force of the presumption nor beyond reasonable doubt.
CONCLUSION
32. This court finds that the accused has raised a probable defence and the Complainant has not been able to discharge the burden of proving the essential ingredients of offence under Section 138 of NI Act as per law. Accordingly, the offence under Section 138 of the Negotiable Instruments Act, 1881 remains 'not proved'.
33. Accordingly, the accused Sh. Manjeet Singh is acquitted of the offence under Section 138 of the Negotiable Instruments Act, 1881.
34. This judgment contains 14 pages and each page has been signed by the undersigned.
Announced in open Court on 6th November 2025. Digitally signed by JAYANTI CHANDER JAYANTI CHANDER Date:
2025.11.06 04:33:50 +0500 Jayanti Chander JMFC (NI Act)-07/South District/Saket Courts/New Delhi 06.11.2025 Ct. Case No. 1798/2017 Page no. 14 of 14