Delhi District Court
Azhar Ali vs Maqsood Ali on 26 September, 2025
IN THE COURT OF SH. ANMOL NOHRIA, DJS, JUDICIAL
MAGISTRATE FIRST CLASS-02, NORTH-EAST,
KARKARDOOMA COURTS, DELHI
CC No. : 1110/2018
U/s : 138 N. I. Act
P.S : Seelampur
Azhar Ali Faridi vs. Maqsood Ali
CNR No. : DLNE020023342018
- : J U D G M E N T :-
1. CC No. : 1110/2018
2. Date of institution of the case : 19.07.2018
3. Name of complainant : Azhar Ali Faridi,
S/o Sh. Jafar Faridi
R/o H. No. J-37,
New Seelampur, Delhi-53
4. Name of accused, parentage
and address : Maqsood Ali
S/o Shaukat Ali
Digitally
signed by
R/o H. No. V-17/7, Gali
ANMOL
ANMOL
NOHRIA No. 15, Vijay Park,
NOHRIA Date:
2025.09.26
15:28:44
Maujpur, Delhi-53
+0530
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Azhar Ali Faridi vs. Maqsood Ali Page no 1 of 28 (Anmol Nohria)
JMFC-02/NE/KKD Courts
5. Offence complained of : 138 N. I. Act
6. Plea of accused : Accused pleaded not guilty
7. Final order : ACQUITTED
8. Date on which order was
reserved : 12.06.2025
9. Date of pronouncement : 26.09.2025
1. The instant matter has originated out of a complaint under
section 200 Cr.PC read with Section 142 Negotiable Instruments Act
(hereinafter referred to as the 'N I Act'), filed by the complainant
company against the accused under Section 138 N I Act alleging that
cheques bearing number- 003878 dated 05.05.2018 amounting to Rs.
7,50,000/-& bearing number 003877 dated 19.04.2018 amounting to
Rs. 5,00,000 both drawn on ICICI Bank, Shahdara, Delhi issued by the
accused in favour of the complainant, in discharge of a legal debt or
other liability, has been dishonored and the accused has not paid the
said amount even after receiving the prescribed legal demand notice. By
Digitally
signed by virtue of this judgment, the present complaint is being disposed off.
ANMOL
ANMOL NOHRIA
NOHRIA Date:
2025.09.26
15:28:48
+0530
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JMFC-02/NE/KKD Courts
BRIEF REASONS FOR THE DECISION OF THE CASE
FACTUAL BACKGROUND OF THE CASE:
2. Briefly stated facts of this case as per complaint are that accused is having cordial property business relations with the complainant and is an old acquaintance; and on 09.03.2018 an agreement was executed between complainant, accused and Nasir Ahmed in which accused and Nasir Ahmed had to give Rs. 24,00,000 to the complainant and accused in furtherance of the same accused issued the impugned cheques to the complainant. However, on presentation the same were returned unpaid with remarks "fund insufficient" vide return memo dated 08.05.2018. Complainant got issued a legal notice dated 31.05.2018; but, no payment was made by the accused and hence, the present complaint was filed.
PROCEEDINGS BEFORE COURT
3. On the basis of pre-summoning evidence, accused was summoned by the court for the offence under Section 138 of Negotiable Instrument Act. The accused put in his own appearance and thereafter notice under Section 251 Cr.P.C. was framed upon the accused on 14.11.2018 to which accused pleaded not guilty and claimed trial. In his Digitally plea of defence, the accused stated that he has liability towards the signed by ANMOL ANMOL NOHRIA complainant and he had stood as witness in transaction between the NOHRIA Date:
2025.09.26 15:28:46 +0530 complainant and Nasir Saifi, who was his business partner, and issued CC No. 1110/2018 Azhar Ali Faridi vs. Maqsood Ali Page no 3 of 28 (Anmol Nohria) JMFC-02/NE/KKD Courts the cheques as security but no payment has been made by Nasir Saifi and complainant has misused his security cheques to file the present case. Statement under Section 294 Cr.P.C of the accused was also recorded on 14.11.2018, wherein he has admitted his signatures on the cheque in question and receiving legal demand notice.
4. Vide order dated 14.11.2018 the accused to cross examine the complainant and request has been allowed to cross examine the complainant.
5. During the trial, complainant has led the oral and documentary evidence against the accused to prove his case beyond reasonable doubt. The following evidence are as under :-
Oral Evidence CW1 Azhar Ali Faridi (Complainant) Documentary Evidence Ex. CW1/1 Evidence Affidavit Mark CW/A Agreement Ex. CW1/B Original Cheque Digitally signed by Ex. CW-1/C Original Cheque ANMOL ANMOL NOHRIA NOHRIA Date:
2025.09.26 Ex. CW-1/D Cheque return memo 15:28:48 +0530 CC No. 1110/2018 Azhar Ali Faridi vs. Maqsood Ali Page no 4 of 28 (Anmol Nohria) JMFC-02/NE/KKD Courts Ex. CW-1/E Cheque return memo Ex. CW-1/F Legal demand notice Ex.CW-1/G (colly) Postal receipts Ex. CW-1/H Track report
6. The complainant was cross examined at length by the counsel for the accused on 22.08.2019, 15.12.2021, 31.08.2022 and 29.05.2024. Thereafter the complainant's evidence was closed.
Statement of accused was recorded under Section 313 of The Code of Criminal Procedure, 1973 read with Section 281 of The Code of Criminal Procedure, 1973 on 08.08.2024. Incriminating evidence was put to him wherein he has admitted, signatures on cheque, denied receipt of legal demand notice and stated that he does not have any liability and the same is of Nasir Ahmed with whom is having a property dispute.
7. Thereafter, the matter was listed for defence evidence, however, accused vide statement dated 16.04.2025 stated that he does not want to lead DE. Thereafter, DE was closed and matter was listed for final arguments.
Digitally
signed by
ANMOL
ANMOL NOHRIA
NOHRIA Date:
2025.09.26
15:28:44
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Azhar Ali Faridi vs. Maqsood Ali Page no 5 of 28 (Anmol Nohria)
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8. Afterwards, final arguments were heard on behalf of both the parties and after hearing the arguments, trial was concluded.
9. It has been argued that the complainant has been able to prove his case by way of presumptions in his favor and the accused has failed to rebut the same by leading any cogent evidence. It has been further argued that the accused has not been able to rebut the presumptions of law and nothing has been brought out in the cross examination. It has been further argued that the accused failed to discharge the burden cast upon him and has put forward a false defence; and has failed to prove his defence to rebut the version of the complainant; consequently, the case of the complainant stands proved in view of the same.
10. Per contra, it has been argued that the case of the complainant is false one. Further, it has been argued that the complainant has not been able to prove his case beyond reasonable doubt for securing a conviction; and the accused by way of cross examination of the complainant, has been able to dislodge the version of the complainant. It is submitted that the accused is defending the case upon the following grounds:
Digitally signed by i. The impugned cheque was blank signed security cheque;
ANMOL
ANMOL NOHRIA
NOHRIA Date:
2025.09.26
ii. The accused has no liability towards the complainant.
15:28:46
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11. I have heard the counsels for both the parties; perused the record and have gone through relevant provisions of the law and the judgments relied upon by both the parties.
INGREDIENTS OF OFFENCE AND DISCUSSION-
12. Now, before dwelling into the facts of the present case, it would be apposite to discuss the legal standards required to be met by both sides. In order to establish the offence under Section 138 of NI Act, the prosecution must fulfill all the essential ingredients of the offence. Perusal of the bare provision reveals the following necessary ingredients of the offence:-
First Ingredient: The cheque was drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;
Second Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability;
Third Ingredient: The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;
Digitally signed by Fourth Ingredient: A demand of the said amount ANMOL ANMOL NOHRIA has been made by the payee or holder in due NOHRIA Date:
2025.09.26 15:28:47 course of the cheque by a notice in writing given +0530 CC No. 1110/2018 Azhar Ali Faridi vs. Maqsood Ali Page no 7 of 28 (Anmol Nohria) JMFC-02/NE/KKD Courts to the drawer within thirty days of the receipt of information of the dishonour of cheque from the bank;
Fifth Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice.
It is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the NI Act
13. The accused can only be held guilty of the offence under Section 138 NI Act if the above-mentioned ingredients are proved by the complainant co-extensively. Additionally, the conditions stipulated under Section 142 NI Act have to be fulfilled.
APPRECIATION OF EVIDENCE-
14. Notably, there is no dispute qua the proof of first and fifth ingredient. The complainant had proved the original cheques vide Ex. CW1/B & Ex. CW1/C which the accused had not disputed as being drawn on the account of the accused. It was not disputed that the cheque in question was presented within its validity period. Notably, no dispute has been raised qua the fifth ingredient as such the same is Digitally deemed to be proved that no payment has been made after issuance of signed by ANMOL ANMOL NOHRIA NOHRIA Date:
legal demand notice.
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15. As far as the third ingredient is concerned, the complainant is only required to prove the dishonor of the cheque for the reasons attributable to the accused. In the instant case, the cheque in question was returned unpaid vide return memos Ex. CW1/D & Ex. CW1/E. At this stage a reference can be drawn from Section 146 of NI Act as per which the court shall on production of bank's slip or memo having thereon the official mark denoting that the cheque has been dishonoured, presume the fact of dishonour of such cheque, unless and until such fact is disproved. In the instant case perusal of the cheque return memo Ex. CW1/D & Ex. CW1/E shows that they bear a stamp of the bank with signature and date. Further, neither any question as to the factum of dishonor has been put to the complainant in the cross examination nor any evidence regarding the same has been brought in the defence. Thus, no evidence has been led to disprove the fact of dishonor. Further, the Hon'ble Delhi High Court in the case of Guneet Bhasin vs State of NCT of Delhi & Anr. & Ors; 2022/DHC/005048, has observed that the purpose of the cheque return memo is to give the information of the holder of the cheque that his cheque on presentation could not be encashed due to the variety of reasons as mentioned in the cheque return memo. From the discussion above it can be concluded that there is no need for the complainant to examine any Digitally signed by bank witness to prove the cheque return memo if it falls in the ambit of ANMOL ANMOL NOHRIA NOHRIA Date:
2025.09.26 Section 146 NI Act. Ergo, the factum of dishonor stands proved in view 15:28:46 +0530 CC No. 1110/2018 Azhar Ali Faridi vs. Maqsood Ali Page no 9 of 28 (Anmol Nohria) JMFC-02/NE/KKD Courts of Section 146 and consequently third ingredient stands proved.
16. So far as the legal demand notice is concerned it is one of the statutory requirements in order to bring home the guilt of the accused under section 138. Any defect in the statutory requirement would go to the very root of the proceedings as such it is essential to first discuss whether the legal notice issued by the complainant in compliance with the provisions of section 138 or not. Provisio (b) appended to Section 138 with respect to legal demand notice is reproduced below for ready reference:
(a) "The payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid;"
17. As such, it is necessary that the payee or holder in due course makes demand of money due by giving a notice to the drawer, in writing, within 30 days of receipt of information from the bank regarding the return of the cheque is dishonoured. The object of notice is to give a chance to the door of the cheque to rectify his omission and Digitally also to protect an honest drawer. Reliance is placed upon, Central Bank signed by ANMOL ANMOL NOHRIA of India vs Saxons Farms, 1999(39) ACC891(SC). NOHRIA Date:
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18. In the factual matrix of the present case, the accused in his statement u/S 294 has admitted receiving the legal demand notice but in his statement u/S 313 r/w 281 Cr.P.C has denied receiving the legal demand notice.
19. However, perusal of the cross examination of the complainant, shows that no question qua the legal demand notice or the address of the accused has been put by the accused to deny the service. Further, no suggestion that no legal notice was sent which has been denied by the complainant. Further, the summons have also been served to the accused at; bails bonds have been furnished from; vakaltnama has been filed from the same address as mentioned upon legal demand notice Ex. CW1/F.
20. In the landmark decision of Hon'ble Supreme Court of India in matter of "C. C. Alavi Haji Vs. Palapetty Mohd. & Anr." reported in (2007) 6 Supreme Court Cases 555 held that as under:-
"16. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint Any drawer who claims that Digitally he did not receive the notice sent by post, can, signed by ANMOL within 15 days of receipt of summons from the ANMOL NOHRIA NOHRIA Date:
2025.09.26 court in respect of the complaint under Section 15:28:45 +0530 CC No. 1110/2018 Azhar Ali Faridi vs. Maqsood Ali Page no 11 of 28 (Anmol Nohria) JMFC-02/NE/KKD Courts 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person 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 obviously 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 G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation, of the proviso would defeat the very object of the legislation. As observed in Bhaskarans case (supra), if the giving of notice in the context of Clause (b) of the proviso was the same as the receipt of notice a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act."
21. The perusal of the address mentioned on the memo of parties, the legal demand notice Ex. CW1/F, summons, vakalatnama, bails bonds that addresses are same. Also, the accused in his statement u/S 294 Cr.P.C has admitted to the receipt of the same. Hence, placing reliance upon Hon'ble Supreme Court of India in matter of "C. C. Alavi Digitally signed by ANMOL Haji Vs. Palapetty Mohd. & Anr(Supra), there is a deemed delivery of ANMOL NOHRIA NOHRIA Date:
2025.09.26 legal demand notice. Consequently, the legal demand notice Ex. CW1/4 15:28:45 +0530 CC No. 1110/2018 Azhar Ali Faridi vs. Maqsood Ali Page no 12 of 28 (Anmol Nohria) JMFC-02/NE/KKD Courts and postal receipts Ex. CW1/5 and POD Ex. CW1/6 is deemed to be proved. Hence, the requirements of fourth ingredient stand complied with.
22. As far as the proof of second ingredient is concerned, the complainant has to prove that the cheque in question was drawn by the drawer for discharging a legally enforceable debt. However, as per the scheme of the NI Act, once the accused admits signature on the cheque in question, certain presumptions are drawn, which result in shifting of onus. Section 118(a) of the NI Act lays down the presumption that every negotiable instrument was made or drawn for consideration. Another presumption is enumerated in Section 139 of NI Act. The provision lays down the presumption that the holder of the cheque received it for the discharge, in whole or part, of any debt or other liability.
23. The combined effect of these two provisions is a presumption that the cheque was drawn for consideration and given by the accused for the discharge of debt or other liability. Both the sections use the expression "shall", which makes it imperative for the court to raise the presumptions, once the foundational facts required for the Digitally signed by same are proved. Reliance is placed upon the judgment of the Hon'ble ANMOL ANMOL NOHRIA NOHRIA Date:
2025.09.26 15:28:45 +0530 CC No. 1110/2018 Azhar Ali Faridi vs. Maqsood Ali Page no 13 of 28 (Anmol Nohria) JMFC-02/NE/KKD Courts Supreme Court, Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16.
24. Further, it has been held by a three-judge bench of the Hon'ble Apex Court in the case of Rangappa vs. Sri Mohan (2010) 11 SCC 441 that the presumption contemplated under Section 139 of NI Act includes the presumption of existence of a legally enforceable debt. Once the presumption is raised, it is for the accused to rebut the same by establishing a probable defence. The principles pertaining to the presumptions and the onus of proof were recently summarized by the Hon'ble Apex Court in Basalingappa vs. Mudibasappa (2019) 5 SCC 418 as under:
"25. We having noticed the ratio laid down by this Court in the above cases on Section 118(a) and 139, we now summarize the principles enumerated by this Court in the following manner:
25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise probable defence. The standard of proof for rebutting the presumption is that of Digitally preponderance of probabilities.
ANMOL signed by ANMOL NOHRIA 25.3. To rebut the presumption, it is open for the NOHRIA Date:
2025.09.26 accused to rely on evidence led by him or the 15:28:46 +0530 CC No. 1110/2018 Azhar Ali Faridi vs. Maqsood Ali Page no 14 of 28 (Anmol Nohria) JMFC-02/NE/KKD Courts accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
25.4. That it is not necessary for the accused to come in the witness box in support of his defence. Section 139 imposed an evidentiary burden and not a persuasive burden. 25.5. It is not necessary for the accused to come in the witness box to support his defence."
25. Thus, the presumptions raised under Section 118(b) and Section 139 NI Act are rebuttable presumptions. A reverse onus is cast on the accused, who has to establish a probable defence on the standard of preponderance of probabilities to prove that either there was no legally enforceable debt or other liability.
26. In this case, the accused in his plea of defence has stated that he has liability towards the complainant and he had stood as witness in transaction between the complainant and Nasir Saifi, who was his business partner, and issued the cheques as security but no payment has been made by Nasir Saifi and complainant has misused his Digitally security cheques to file the present case. Consequently, the accused has signed by ANMOL ANMOL NOHRIA raised the following defences to rebut the presumptions:
NOHRIA Date:
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a) The cheque in question is blank security cheque;
b) The accused does not have liability as per the version of the complainant.
27. I will be discussing both the defences separately.
a.) The cheque in question is blank security cheque:
28. It has been stated by the accused that the cheque in question was a blank security cheque and he has never filled any particulars on the same and was only issued as security for transaction between complainant and Nafis Ahmed.
29. At this stage reference can be drawn from Section 20 of the NI Act talks about inchoate instruments. As per this provision if a person gives a duly signed cheque which is either blank or partly filled then he is deemed to have given implied authority to the holder to fill up the particular in it and complete the cheque, thus making the drawer liable for the payment mentioned in it. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provision of section 138 would be attracted Digitally signed by 30. The Hon'ble Supreme Court in the case of Bir Singh vs. ANMOL ANMOL NOHRIA NOHRIA Date:
2025.09.26 Mukesh Kumar (2019) 4 SCC 197 wherein the Apex Court while 15:28:47 +0530 CC No. 1110/2018 Azhar Ali Faridi vs. Maqsood Ali Page no 16 of 28 (Anmol Nohria) JMFC-02/NE/KKD Courts upholding the validity of blank signed cheque in a proceeding u/s 138 of the Act has interalia held the following:
"If a signed blank cheque is voluntarily presented to a payee,towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence."
31. Notably, in the case of Suresh Chandra Goyal Vs. Amit Singhal, Crl.L.P. 706/2014, it was held by the Hon'ble Delhi High Court that:
"The appellant was well within his rights to en- force the security in respect whereof the cheques in question were issued and to seek to recover the outstanding debt by encashment of the said cheques. Since the cheques in question were dis- honoured upon presentation, the accused suffered all consequences as provided for in law and the appellant became entitled to invoke all his rights as created by law. Thus, the appellant was entitled to invoke Section 138 of the NI Act; issue the statutory notice of demand, and; upon failure of the accused to make payment in terms of notice of demand - to initiate the complaint under Section 138 of the NI Act."
Digitally signed by ANMOL ANMOL NOHRIA NOHRIA Date:
32. It is noteworthy that the Hon'ble Apex Court in the case of 2025.09.26 15:28:47 +0530 CC No. 1110/2018 Azhar Ali Faridi vs. Maqsood Ali Page no 17 of 28 (Anmol Nohria) JMFC-02/NE/KKD Courts Sripati Singh Vs. The State of Jharkhand and Ors., AIR 2021 SC 5732 , has held that:
"16. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated Under Section 138 and the other provisions of N.I. Act would flow.
17.When a cheque is issued and is treated as 'security' towards repayment of an amount with a time period being stipulated for repayment, all that it ensures is that such cheque which is issued Digitally signed by as 'security' cannot be presented prior to the loan ANMOL ANMOL NOHRIA or the instalment maturing for repayment towards NOHRIA Date:
2025.09.26 15:28:48 which such cheque is issued as security. Further, +0530 CC No. 1110/2018 Azhar Ali Faridi vs. Maqsood Ali Page no 18 of 28 (Anmol Nohria) JMFC-02/NE/KKD Courts the borrower would have the option of repaying the loan amount or such financial liability in any other form and in that manner if the amount of loan due and payable has been discharged within the agreed period, the cheque issued as security cannot thereafter be presented. Therefore, the prior discharge of the loan or there being an altered situation due to which there would be understanding between the parties is a sine qua non to not present the cheque which was issued as security. These are only the defences that would be available to the drawer of the cheque in a proceedings initiated Under Section 138 of the N.I. Act. Therefore, there cannot be a hard and fast Rule that a cheque which is issued as security can never be presented by the drawee of the cheque. If such is the understanding a cheque would also be reduced to an 'on demand promissory note' and in all circumstances, it would only be a civil litigation to recover the amount, which is not the intention of the statute. When a cheque is issued even though as 'security' the consequence flowing therefrom is also known to the drawer of the cheque and in the circumstance stated above if the cheque is presented and dishonoured, the holder of the cheque/drawee would have the option of initiating the civil proceedings for recovery or the criminal proceedings for punishment in the fact situation, but in any event, it is not for the drawer of the cheque to dictate terms with regard to the Digitally nature of litigation."
signed by ANMOL ANMOL NOHRIA NOHRIA Date:
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33. Further, in case of Credential Leasing & Credits Ltd. Vs. Shruti Investments & Ors., 2015 (4) JCC 252, it was held that:
"30. Thus, I am of the considered view that there is no merit in the legal submission of the respondent accused that only on account of the fact that the cheque in question was issued as security in respect of a contingent liability, the complaint under Section 138 of the NI Act would not be maintainable. At the same time, I may add that it would need examination on a case to case basis as to whether, on the date of presentation of the dishonoured cheque the ascertained and crystallised debt or other liability did not exist. The onus to raise a probable defence would lie on the accused, as the law raises a presumption in favour of the holder of the cheque that the dishonoured cheque was issued in respect of a debt or other liability. As settled by the Supreme Court, the said onus obliges the accused to raise a defence - either by picking holes in the case of the complainant and/ or by positively leading defence evidence which leads the Court to believe that there is a probable defence raised by the accused to the claim of the complainant with regard to the existence of the debt or other liability. The said onus does not cast as stringent an obligation on the accused, as it casts on the complainant, who has to prove beyond Digitally reasonable doubt the guilt of the accused."
signed by ANMOL ANMOL NOHRIA NOHRIA Date:
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34. Thus, it is a settled of the proposition of law that a check issued a security, pursuit of financial transaction, cannot be considered as a worthless piece of paper. It is given to ensure the fulfillment of an obligation undertaken. If a cheque is issued to secure repayment of a loan advanced and if the loan is not repaid on or before the due date, the drawee would be entitled to get the cheque for payment, and if such a cheque is dishonored, the consequences contemplated under section 138 NI act would follow. Reliance is placed upon Sripati Singh v. State of Jharkhand(Supra). Further as to the plea of cheque being a security check, it was held in ICDS v. Beena Shabir & Anr.(Supra), that security checks would also fall within the purview of section 138 NI act and a person cannot escape is liability unless he proves that the debt or liability for which cheque was issued as security is satisfied otherwise.
35. Ergo, in light of the above discussion, this court is of the considered view that, the ground that the cheque in question is a blank security cheque and not issued to the complainant does not hold water with this court and even in case of blank signed cheque, the statutory presumptions under section 118(a) and 139 would be raised in favour of the complainant. Therefore, in instant case, since, the accused has admitted the execution of impugned cheque, the aforementioned Digitally signed by statutory presumptions would be raised in favour of the complainant ANMOL ANMOL NOHRIA NOHRIA Date:
2025.09.26 regarding the fact that the impugned cheque have been drawn for 15:28:45 +0530 CC No. 1110/2018 Azhar Ali Faridi vs. Maqsood Ali Page no 21 of 28 (Anmol Nohria) JMFC-02/NE/KKD Courts consideration and issued by the accused in discharge of legally enforceable debt.
b). The accused does not have liability as per the version of the complainant.
36. Thus, the presumptions raised under Section 118(b) and Section 139 NI Act are rebuttable presumptions. A reverse onus is cast on the accused, who has to establish a probable defence on the standard of preponderance of probabilities to prove that either there was no legally enforceable debt or other liability. In this case, t the defence raised by the accused is that he does not have liability and the liability of of Nasir Ahmed and he has only issued cheques being a witness to the agreement; and the complainant has misused the same.
37. In the instant case, the version of the complainant in the complainant is that the accused has issued the impugned cheques in order to discharge his liability to as per the agreement dated 09.03.2018 and however, perusal of the documents filed by the complainant go to the very root cause of the complainant's case. Perusal of Mark CW/A, i.e. the agreement upon the liability is being claimed by the complainant shows that the same has never been produced in original in court and Digitally signed by not proved as per the provisions of Indian Evidence Act. Further Mark ANMOL ANMOL NOHRIA NOHRIA Date:
2025.09.26 CW/A, when perused shows that it is incomplete and despite 15:28:47 +0530 CC No. 1110/2018 Azhar Ali Faridi vs. Maqsood Ali Page no 22 of 28 (Anmol Nohria) JMFC-02/NE/KKD Courts mentioning that Nasir Ahmed has issued following cheques no details of such cheques or amount is mentioned; which itself puts a cloud upon the veracity of Mark CW/A, specially when the complainant has admitted that he has filed another case u/S 138 against Nasir Ahmed using the same incomplete agreement, the documents of which are Ex. CW1/D1.
38. Further, the complainant in his cross examination was asked to produce his ITR, when asked about his source for collecting the alleged amount from the accused which he states pertains to his business. However, the complainant has never produced the same before the court during the 5 years when in cross examination was conducted for the reasons best known to him. Interstingly, the complainant has himself admitted that he has filed ITR upto year 2018 and the transaction in question as per the agreement pertains to 09.03.2018 and thus must be reflecting in the ITR of the complainant for the said year.
39. Interestingly, perusal of the complaint shows that the complainant has not given any nature or mode of transaction or details of transaction between him and the accused which lead to the alleged Digitally signed by liability upon the accused leading upto the agreement Mark CW/A. ANMOL ANMOL NOHRIA NOHRIA Date:
2025.09.26 15:28:48 +0530 CC No. 1110/2018 Azhar Ali Faridi vs. Maqsood Ali Page no 23 of 28 (Anmol Nohria) JMFC-02/NE/KKD Courts
40. At this stage a reference may be drawn to section 114 of Indian Evidence Act which has conferred this court to presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case. Illustration (g) appended to the same reads as "that evidence which could be and is not produced would, if produced, be unfavorable to the person who withholds it ;". Hence, in view of non-production of ITR despite several opportunities coupled with the fact that no details of transaction between complainant and accused have been explained; a negative inference can be drawn against the complainant. The inference also draws support from the fact that there exists witness of the transaction namely Nasir Ahmed and he is the only witness of existence of transaction, yet he has not been produced/ examined by the complainant for reasons best known to him.
41. Interestingly, the accused has produced certified copy of the case filed by complainant against Nasir Ahmed as Ex. CW1/D1, which is also based upon the same agreement Ex. CW/A. The complainant in his cross examination has admitted that facts mentioned in para 2 and 4 of the same to be correct and perusal of the same shows Digitally signed by that in para 4 it is mentioned that complainant, accused and Nasir ANMOL ANMOL NOHRIA NOHRIA Date:
2025.09.26 Ahmed are engaged in business transactions and there are mutual 15:28:46 +0530 CC No. 1110/2018 Azhar Ali Faridi vs. Maqsood Ali Page no 24 of 28 (Anmol Nohria) JMFC-02/NE/KKD Courts financial transactions between them. Further para 6 though denied by complainant in his cross examination says that there are various property transactions between them and they were as a general practice exchanging/lending money to each other.
42. Since, the said notice which is part of Ex.CW1/D1 is part of the complaint filed by complainant against Nasir Ahmed, the requirement of specific admission by complainant qua its contents is not required; and when the same is read as a whole it is not in lines with deposition of complainant on 22.08.2019 wherein he has denied any property transactions in partnership as in para 8 of notice in Ex. CW1/D1 the same is specifically admitted the same. Thus, there is a clear contradiction in the version put forward by the complainant.
43. The Hon'ble Supreme Court in the case of M.S. Narayana Menon @ Mani v. State of Kerala (2006) 6 SCC 39 has observed as under, "32. A Division Bench of this Court in Bharat Barrel & Drum Manufacturing Company v. Amin Chand Payrelal [(1999) 3 SCC 35] albeit in a civil case laid down the law in the following terms:
"Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory Digitally signed by note is admitted, the presumption under Section ANMOL ANMOL NOHRIA 118(a) would arise that it is supported by a NOHRIA Date:
2025.09.26 15:28:45 consideration. Such a presumption is rebuttable. +0530 CC No. 1110/2018 Azhar Ali Faridi vs. Maqsood Ali Page no 25 of 28 (Anmol Nohria) JMFC-02/NE/KKD Courts The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non- existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies."
43. Thus, the accused has been able to point out the circumstances which create a hole in the version of the complainant and it can be said that the accused has successfully rebutted the presumptions raised against him u/s139 & 118 of NI Act.
44. The complainant has not lead any additional evidence or pointed out to anything substantial on record to cure the infirmities and contradictions brought forward in his version and has failed to discharge the burden cast upon him and prove the existence of the facts asserted by him. To buttress his submission he has placed reliance on Digitally signed by the point that accused has himself failed to step into the witness box as ANMOL ANMOL NOHRIA NOHRIA Date:
2025.09.26 a witness.
15:28:47 +0530 CC No. 1110/2018 Azhar Ali Faridi vs. Maqsood Ali Page no 26 of 28 (Anmol Nohria) JMFC-02/NE/KKD Courts
45. However, it is a cardinal principle of criminal jurisprudence that "that the prosecution has to prove its case beyond reasonable doubt by leading reliable, cogent and convincing evidence; and the subtle proposition of criminal law that in order to successfully bring home the guilt of the accused, the prosecution is supposed to stand on its own legs and it cannot derive any benefits whatsoever from the weakness, if any, in the defence of the accused "; and in view of the discussion above the case of the complainant does not stand on its own legs, being full of infirmities and contradictions.
46. Ergo, this court is of the considered opinion that the complainant has not been able to prove the transactions with the accused and accused has been able to rebut the presumption of legally enforceable debt to the amount of cheque in question. Thereafter, the onus had shifted back upon the complainant to prove the ingredients of the offence under Section 138 of NI Act against the accused beyond reasonable doubt. The complainant has failed to discharge the said onus and prove beyond reasonable doubt, the factum of a legally enforceable debt upon the accused as contemplated under Section 138 of NI Act. Consequently, it can be said that no legal liability exists in favour of the complainant qua the cheque amount, thus, the second ingredient to the Digitally signed by offence under section 138 of NI Act does not stands proved.
ANMOL
ANMOL NOHRIA
NOHRIA Date:
2025.09.26
15:28:45
+0530
CC No. 1110/2018
Azhar Ali Faridi vs. Maqsood Ali Page no 27 of 28 (Anmol Nohria)
JMFC-02/NE/KKD Courts
CONCLUSION:
47. To recapitulate the above discussion, the accused has been successful in establishing a probable defence on a standard of preponderance of probabilities to rebut the presumption under section 118 and 139 of the NI Act. Cogent evidence is required to be proved beyond reasonable doubt to secure conviction in a criminal trial. The accused has been successful in establishing a probable defence by way of pointing out the material inconsistencies in the case of the complainant and thereby proving that the cheque was not given in discharge of legal debt or liability owed to the complainant. In the result of the analysis of the present case, the accused Maqsood Ali S/o Shaukat Ali is hereby acquitted of the offence punishable under Section 138, Negotiable Instruments Act, 1881.
48. This judgment contains 28 pages. This judgment has been signed and pronounced by the undersigned in open court.
49. Let a copy of the judgment be uploaded on the official website of District Courts, Karkardooma forthwith.
Digitally signed by Announced in the open (ANMOL NOHRIA) ANMOL ANMOL NOHRIA Court on 26th Sept., 2025 JMFC-02/NE/KKD COURTS NOHRIA Date:
2025.09.26 15:28:48 +0530 CC No. 1110/2018 Azhar Ali Faridi vs. Maqsood Ali Page no 28 of 28 (Anmol Nohria) JMFC-02/NE/KKD Courts