Delhi District Court
Sarbjit Singh vs Mandeep Singh on 10 September, 2025
IN THE COURT OF MS. JAYANTI CHANDER,
JUDICIAL MAGISTRATE FIRST CLASS (NI ACT) - 07,
SOUTH DISTRICT, SAKET COURTS, NEW DELHI.
DLST020113482017
1 Complaint Case Number : Ct. Case No. 6960/2017
2 Name & Address of : Sh. Sarabjit Singh
Complainant S/o- Late Sh. Jogeshwer
Singh
R/o- 90/57, Top Floor,
Malviya Nagar, New Delhi
3 Name & Address of : Sh. Mandeep Singh
Accused S/o- Sh. Balwinder Singh
R/o- H-15/1, First Floor,
Malviya Nagar, New Delhi-
110017.
4 Offence complained of : Section 138 r/w142,
Negotiable Instruments Act
1881
5 Plea of guilt : Pleaded not guilty
6 Date of institution : 28.06.2017
7 Date on which case was : 07.08.2025
reserved for judgment
8 Date of judgment : 10.09.2025
9. Decision : Conviction
CT Cases 6960/2017
Sarabjit Singh. Vs. Mandeep Singh Page 1 of 13
Digitally signed by
JAYANTI JAYANTI
CHANDER
CHANDER Date: 2025.09.10
17:55:08 +0530
JUDGMENT
1. Vide this judgement, this court shall dispose of the aforementioned complaint case filed by the complainant Sh. Sarabjit Singh against the accused, namely Sh. Mandeep Singh in respect of the dishonour of cheque bearing No. 000034 dt. 15.03.2017 for an amount of Rs. 2,00,000/- (Two Lakhs), drawn on Punjab & Maharashtra, Co-operative Bank, Ltd, Malviya Nagar Branch, New Delhi (here and after referred to as the "cheques in question").
BRIEF FACTS OF THE CASE
2. Succinctly, it is the case of the complainant sh. Sarabjit Singh that an agreement cum receipt dt. 06.03.2017 was executed by the accused Sh. Mandeep Singh as per which the mentioned goods/items were to be delivered by the accused. Allegedly, the amount of Rs. 2 lakhs was paid to the accused in cash as mentioned in the agreement.
3. Complainant avers that in order to discharge his legal liability in compliance of the aforesaid agreement the accused allegedly issued the cheque in question bearing no. 000034 dt. 15.03.2017 for an amount of Rs. 2,00,000/- exhibited as Ex. CW1/2. Subsequently, on presentment, the cheque was dishonoured and returned with remarks "Funds Insufficient" vide returning memo dated 05.04.2017 exhibited as Ex.CW1/3. Thereafter, complainant sent a notice of demand dated 29.04.2017 Ex. CW1/4 calling upon the accused to pay the cheque amount within 15 days. The postal receipts and envelope CT Cases 6960/2017 Sarabjit Singh. Vs. Mandeep Singh Page 2 of 13 Digitally signed by JAYANTI JAYANTI CHANDER CHANDER Date: 2025.09.10 17:55:13 +0530 exhibited as Ex.CW1/5 and Ex. CW1/6 respectively. 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 documents including, agreement cum receipt dt. 06.03.2017 Ex. CW1/1.
4. Upon prima facie consideration of the pre-summoning evidence, the accused was summoned vide order dated 22.07.2017 and directed to furnish bail bond and surety bond.
5. Upon the appearance of the accused, notice under section 251, Code of Criminal Procedure 1973 (hereinafter referred to as "CrPC") was framed on 02.04.2019 to which the accused pleaded not guilty. The accused stated that no agreement Ex. CW1/1 was executed between him and the complainant to purchase any articles or utensils. The agreement does not bear his signatures. The accused stated that he took a loan of Rs. 1 lakh in cash from the complainant for which the cheque of double amount was duly filled by me and given to the complainant. The accused stated that an interest of Rs. 1000/- per day for 3-4 months on the loan amount of Rs. 1 lakh was duly paid to the complainant. The accused further stated that amount of Rs. 1 lakh was returned by way of cheque to the complainant for which the relevant entries are present in the bank account statement that I can produce. The accused stated that he did not receive the legal notice.
CT Cases 6960/2017 Sarabjit Singh. Vs. Mandeep Singh Page 3 of 13 Digitally signed by JAYANTIJAYANTI CHANDER CHANDER Date: 2025.09.10 17:55:18 +0530 COMPLAINANT EVIDENCE
6. On allowing the application under section 145(2) of the Act, the Complainant stepped in witness box as CW-1 and tendered his post-summoning affidavit of evidence reiterating almost all facts of complaint, stating all exhibits. Thereafter CW- 1 cross-examined by the counsel for the accused. In his cross- examination, he deposed that he works in real estate and earning Rs. 50,000/- to Rs. 60,000/- per month. He deposed that he does not remember the source of the amount of Rs. 2 lakhs lend to the accused. The complainant deposed that he used to visit Singh foods once or twice a month. He further deposed that Ex. CW1/1 was signed by Sh. Prakash Malicha @ Malik.
7. Complainant closed his evidence vide his separate statement recorded dated 21.08.2024 and thereafter, matter was fixed for recording of statement of accused.
STATEMENT UNDER SECTION 313 CRPC
8. On 29.01.2025 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. In response, the accused reiterated the defence taken in the notice framed under section 251, CrPC. Additionally, he stated that he did not receive the legal notice, however, the address mentioned on the legal notice is his correct address. The accused further stated that he had signed the cheque in question but not filled any other particulars. The accused stated that the complainant used to visit his shop daily when he used to pay the interest amount of CT Cases 6960/2017 Sarabjit Singh. Vs. Mandeep Singh Page 4 of 13 Digitally signed by JAYANTI JAYANTI CHANDER CHANDER Date:
2025.09.10 17:55:23 +0530 Rs. 500/- per day. The accused further stated that the principal amount of loan of Rs. 1 lakh is paid in cash to the complainant.
9. The accused opted to lead defence evidence, however, subsequently, close the defence evidence on 15.05.2025 without leading any evidence in defence.
FINAL ARGUMENTS
10. Final arguments were heard on 07.08.2025 on behalf of both the parties. Learned counsel for the complainant submitted that firstly, the ingredients of the offence of dishonour of cheque are made out. Learned Counsel for the Complainant further argued that secondly, the accused has taken contradictory stance in statement of notice framed u/s 251 Cr.P.C and his version of story in statement u/s 313 Cr.P.C. The accused stated that duly filled cheque was given by him to the complainant in statement u/s 251 Cr.P.C, however, denied filling the cheque in question in the statement u/s 313 Cr.P.C. Further, the accused stated that the amount of Rs. 1 lakh was re-paid by way of cheque to the complainant in the statement of notice u/s 251 Cr.P.C, however, the accused stated that Rs. 1 lakh was paid to the complainant in various installments in cash.
11. Learned counsel for the accused argued that the accused has denied his signatures and execution of the agreement Ex CW1/1. The complainant has not proved the due execution of this agreement. Ld. Counsel for the accused further argued that the complainant is a money lender who is lending money without licence, thereby, rendering the present transaction illegal. Ld. CT Cases 6960/2017 Sarabjit Singh. Vs. Mandeep Singh Page 5 of 13 Digitally signed by JAYANTI JAYANTI CHANDER CHANDER Date:
2025.09.10 17:55:28 +0530 Counsel for the accused further argued that Sh. Prakash Malicha who has signed the agreement Ex. CW1/1 was not examined by the complainant to prove his case. Ld. Counsel for the accused argued that the legal notice for an amount of Rs. 2 lakhs was sent including the interest amount beyond the principal amount. Ld. Counsel for accused has relied on the judgment in the case of M/s Kumar Exports Vs. M/s Sharma Carpets (Crl. Appeal No. 2045/2018), PC Hari Vs. Shine Varghese and Ors. (Crl. Revision Petition No. 408/2024) and Rajendra Anant Varik Vs. Govind B Prabhugaonkar.
12. Rival submissions have been considered and record of the case has been perused.
INGREDIENTS OF OFFENCE UNDER SECTION 138 NI ACT
13. 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.CT Cases 6960/2017 Sarabjit Singh. Vs. Mandeep Singh Page 6 of 13 Digitally signed
by JAYANTI JAYANTI CHANDER CHANDER Date: 2025.09.10 17:55:33 +0530
(iv) The cheque in question, when presented for encashment, was returned unpaid.
(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
14. 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
15. The Complainant has adduced by way of documentary evidence the agreement cum receipt Ex. CW1/1, the original cheque Ex CW1/2 was dishonoured vide returning memo CW1/3 mentioning reason of dishonour as "Funds Insufficient". The accused has admitted his signatures on the cheque in question in statement under section 313, CrPC specifically.
16. The accused has denied due execution of the agreement Ex. CW1/1 by oral averments. The accused has specifically stated issuance of duly filled cheque to the tune of Rs. 2 lakh to the complainant in the statement of notice u/s 251 Cr.P.C. It is a cardinal principle of evidence that documentary CT Cases 6960/2017 Sarabjit Singh. Vs. Mandeep Singh Page 7 of 13 Digitally signed by JAYANTI JAYANTI CHANDER CHANDER Date: 2025.09.10 17:55:38 +0530 evidence is given primacy over oral testimony as enshrined under section 64, Indian Evidence Act 1881(for brevity "IEA"). 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
17. Perusal of document Ex-CW1/4 reveals that legal demand notice was delivered at the address of the accused admitted to be the correct address in his statement under section 313 CrPC. However, the accused denies having received the legal notice. 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 1 2007 6 Supreme Court Cases 555 (Decided on May 18, 2007).
CT Cases 6960/2017 Sarabjit Singh. Vs. Mandeep Singh Page 8 of 13 Digitally signedby JAYANTI JAYANTI CHANDER CHANDER Date: 2025.09.10 17:55:45 +0530 subsequently, within 15 days of service of summons respectively. Hence, fifth and sixth ingredient also stand fulfilled.
18. 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 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
19. 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. Moreover, the accused has himself admitted payment of Rs 500 per day as an interest to the Complainant, thereby supporting the version of the Complainant regarding the alleged loan transaction. 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."
2 (2021) 5 SCC 283.
CT Cases 6960/2017DigitallySarabjit signed Singh. Vs. Mandeep Singh Page 9 of 13 by JAYANTI CHANDER JAYANTI Date:
CHANDER 2025.09.10 17:55:52 +0530 The same was re-iterated in the case of Hiten P. Dalal vs. Bratindranath Banerjee.3Thus, the second ingredient is also proved.
20. 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 may rely on circumstances, inconsistencies in the complainant's evidence, documentary evidence or circumstantial evidence to tip the scale.
21. In the instant case, accused did not step into the witness box but has rebutted the Complainant's case by impeaching the credit of the Complainant witness in cross examination.
22. Learned counsel for the complainant submitted that firstly, the ingredients of the offence of dishonour of cheque are made out. Learned Counsel for the Complainant further argued that secondly, the accused has taken contradictory stance in
3 (2001) 6 SCC 16 (Decided on July 11, 2001). 4 (2010) 11 SCC 441.
5 (2010) 11 SCC 441.
CT Cases 6960/2017 Sarabjit Singh. Vs. Mandeep Singh Page 10 of 13 Digitally signed byJAYANTI JAYANTI CHANDER CHANDER Date: 2025.09.10 17:55:57 +0530 statement of notice framed u/s 251 Cr.P.C and his version of story in statement u/s 313 Cr.P.C. The accused stated that duly filled cheque was given by him to the complaiant in statement u/s 251 Cr.P.C, however, denied filling the cheque in question in the statement u/s 313 Cr.P.C. Further, the accused stated that the amount of Rs. 1 lakh was re-paid in cash to the complainant in the statement of notice u/s 251 Cr.P.C, however, the accused stated that Rs. 1 lakh was paid to the complainant in various installments in cash.
23. Learned counsel for the accused argued that the accused has denied his signatures and execution of the agreement Ex CW1/1. The complainant has not proved the due execution of this agreement. Ld. Counsel for the accused further argued that the complainant is a money lender who is lending money without licence, thereby, rendering the present transaction illegal. Ld. Counsel for the accused further argued that Sh. Prakash Malicha who has signed the agreement Ex. CW1/1 was not examined by the complainant to prove his case. Ld. Counsel for the accused argued that the legal notice for an amount of Rs. 2 lakhs was sent including the interest amount beyond the principal amount.
24. The due issuance of a cheque for a legal liability to the tune of Rs. 2 lakhs is admitted by the accused as per statement u/s 251 Cr.P.C and u/s 313 Cr.P.C. The contrary versions of the accused regarding whether the cheque was filled or not impeaches credibility of his statements. Furthermore, the accused stated that Rs. 1 lakh was re-paid to the complainant by way of a cheque for which he can produce the proof of his account CT Cases 6960/2017 Sarabjit Singh. Vs. Mandeep Singh Page 11 of 13 Digitally signed by JAYANTI JAYANTI CHANDER CHANDER Date: 2025.09.10 17:56:02 +0530 statements in the statement of notice u/s 251 Cr.P.C. Subsequently, the accused stated that the amount of Rs. 1 lakh was paid in several installments in cash to the complainant. The accused never produced the aforesaid account statement to support his earlier version. The material inconsistency and contrary versions in the statement of notice framed u/s 251 Cr.P.C and u/s 313 Cr.P.C clouds the version of the accused with doubts.
25. The accused has not denied the issuance of the cheque in question. In fact, the accused has denied execution of agreement cum receipt Ex. CW1/1. There is no defect in the cheque in question underpinned by the accused. The version of borrowing a loan from the complainant instead of the items/goods mentioned in agreement cum receipt Ex. CW1/1 has not been proved by cogent evidence. The documentary evidence is given more credence than the averments of the accused as per evidentiary principles.
26. The contention of the accused that the complainant is a money lender without any licence is not supported by any cogent evidence. Mere averments are not sufficient to declare the transaction illegal and not legally recoverable debt.
27. The conjoint reading of the cheque in question Ex. CW1/2, returning memo Ex. CW1/3, Legal notice Ex. CW1/4 lead to the inference of 'existing legal liability' to the tune of the cheque amount. The case of the Complainant is proved by way of presumption under section 139, NI Act. The accused has failed to CT Cases 6960/2017 Sarabjit Singh. Vs. Mandeep Singh Page 12 of 13 Digitally signed by JAYANTI JAYANTI CHANDER CHANDER Date: 2025.09.10 17:56:06 +0530 rebut the presumption to the hilt of preponderance of probabilities.
CONCLUSION
28. This court finds that the Complainant has proved the essential ingredients of offence under Section 138 of NI Act as per law. The accused has not raised a probable defence to discharge the burden. Accordingly, the offence under Section 138 of the Negotiable Instruments Act, 1881 remains 'proved'.
29. Accordingly, the accused Sh. Mandeep Singh is convicted of the offence under Section 138 of the Negotiable Instruments Act, 1881.
30. Copy of this judgment be given to the convict free of cost as per rules. Convict be now heard on the quantum of sentence.
31. This judgment contains 13 pages and each page has been signed by the undersigned.
Announced in open Court on 10th September 2025 Digitally signed by JAYANTI JAYANTI CHANDER CHANDER Date: 2025.09.10 17:56:16 +0530 Jayanti Chander JMFC (NI Act)-07/South District/Saket Courts/New Delhi 10.09.2025 CT Cases 6960/2017 Sarabjit Singh. Vs. Mandeep Singh Page 13 of 13