Delhi District Court
Religare Finvest Limtied vs Sourabh Steel Udhyog on 16 January, 2026
IN THE COURT OF MS. NEELMANI SHARMA
JUDICIAL MAGISTRATE FIRST CLASS, (NI ACT)-04
(SOUTH WEST) DISTRICT, DWARKA COURTS:
NEW DELHI
CC NO: 5006362/2016
CNR No.DLSW020152392016
Religare Finvest Limited
Through AR
Registered Office at
D3, P3B, District Centre
Saket, New Delhi-110017 .... Complainant
Versus
1. Saurabh Steel Udyog
11A, Ground Floor, Gali No.9
Shalimar Village, Delhi-110088 .....Accused No.1
2. Sh. Sudershan Kumar Jain
S/o late Sh. Bharat Singh Jain
101 Block PU, Pitampura
Delhi-110034
Also at:
Q-1/603, Usha Towers, Kundali
Sonepat, Haryana. .....Accused No.2
Offence Complained of or proved : U/s 138 of Negotiable
Instruments Act, 1881
Plea of the Accused : Pleaded not guilty
Date of filing : 22.11.2016
Date of Institution : 23.11.2016
Date of reserving judgment/order : 10.11.2025/ 09.01.2026
Final Order/Judgment : Conviction
Date of pronouncement : 16.01.2026
Digitally
signed by
Argued by :- Sh. Arun Dhiman, Ld. Counsel for the complainant. NEELMANI
Sh. Anjani Kumar, Ld. Counsel for the accused. NEELMANI SHARMA
SHARMA Date:
2026.01.16
16:53:51
+0600
CC NO: 5006362/2016 Religare Finvest Limited Vs. Saurabh Steel Udyog Page no.1 of 14
JUDGMENT
Factual Matrix
1. This is a complaint under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter "NI Act"), filed by the complainant Religare Finvest Limited through its AR (hereinafter referred to as the "complainant") against Saurabh Steel Udyog(accused no. 1) and Sh. Sudershan Kumar Jain(accused no. 2) (hereinafter referred to as the "accused persons").
2. Briefly stated, as per the complaint, the complainant is a Non- Banking Financial Company incorporated under the Companies Act, 1956 and in pursuance of its business of providing financial facilities, had disbursed a loan of Rs.35,20,000/- under the category of Small and Medium Enterprises Loan to the accused vide Loan Agreement No. XSMEPNG00071661(Application ID No. 652817). The accused failed to comply with the terms and conditions of the loan agreement and defaulted on the payment of EMIs as per agreed schedule and the loan facility was recalled by the complainant company. Accused no. 2 for and behalf of accused no. 1 issued a cheque for discharge of legally enforceable debt in favor of the complainant. When the cheque in question no. 110812 dated 28.09.2016 for Rs. 36,58,500/-, drawn on IDBI Bank, was presented for encashment by the complainant, the said cheque was returned dishonored vide memo dated 01.10.2016 with the remarks "account closed". The complainant then sent a legal notice dated 20.10.2016 which was delivered to the accused as per delivery report. When even after due service, the accused failed to make payment, the present case was filed by the complainant.
3. A prima facie case was established and the accused was summoned. On 05.12.2018, notice u/s- 251 of the Code of Criminal Procedure, 1973 (hereinafter 'Cr.P.C.') containing the substance of accusation was put to the Digitally signed by CC NO: 5006362/2016 Religare Finvest Limited Vs. Saurabh Steel Udyog NEELMANI Page no.2 of 14 NEELMANI SHARMA SHARMA Date:
2026.01.16 16:54:03 +0600 accused no.2 (also representing accused no.1) to which he pleaded not guilty and claimed trial. In his plea of defense, the accused submitted that he had taken a loan of Rs. 35 lakhs (approx.) from the complainant. Initially loan of Rs. 15 lakh was granted and later it was increased to Rs. 22 lakhs and subsequently it was increased to Rs. 35 lakhs. He further submitted that he had repaid an amount of Rs. 24-25 lakhs. The blank signed cheque in question was taken by the complainant at the time of loan as security and it bore his signatures. He submitted that he does not owe any liability to the cheque amount and that he used to pay the EMIs through ECS. He submitted that he does not remember if he had received the legal demand notice from the complainant.
Evidence of the Complainant
4. The complainant furnished his affidavit CW-1/1A and relied upon the following documents:
i. Ex. CW-1/A: Power of Attorney (OSR)
ii. Ex. CW-1/B: Original cheque in question.
iii. Ex. CW-1/C: Original returning memo
iv. Ex. CW-1/D: copy of legal notice
v. Ex. CW-1/E: original receipt of postal department
vi. Ex. CW-1/F: Tracking report and envelope
The complainant was then cross examined and the loan agreement (Ex-
CW/X1 and statement of account (Ex- CW/X2) were also brought on record.
Statement of the Accused
5. All the incriminating evidence was put before the accused to give him an opportunity to personally explain the evidence against him at the time of recording the statement u/s 313 Cr.PC on 22.01.2025. The accused admitted to Digitally signed by NEELMANI NEELMANI SHARMA CC NO: 5006362/2016 Religare Finvest Limited Vs. Saurabh Steel UdyogSHARMA Date: Page no.3 of 14 2026.01.16 16:54:14 +0600 having availed a loan of Rs 15 lakhs initially from the complainant. He submitted that he had repaid Rs. 20 to 22 lakhs approx. to the complainant. Further that in 2017-18, some person who claimed to be a representative of the complainant company received two EMIs on behalf of the company. But no receipts were issued by him for this repayment. He further submitted that the cheque in issue had been issued by him in blank signed manner as security at the time of loan formalities. It was submitted that the accused did not receive the legal notice but the address mentioned on the legal notice was his correct address. The particulars on the cheque in question were not filled by the accused but the signature belonged to him.
Defence Evidence
6. The accused opted to lead DE and examined himself as a witness on 21.05.2025 and DE was closed.
Final Arguments
7. Oral arguments were advanced on behalf of both the parties. Both the parties also filed written submissions which were duly taken on record. Ld. Counsel for the complainant argued that all essential ingredients u/s 138 NI Act were made out. There was a presumption of legally enforceable debt or liability unless rebutted and therefore accused be convicted.
8. Per contra, Ld. Counsel for the accused has strongly opposed the submissions of the complainant. He contends that the initial disbursement of a loan amounting to Rs.15 lakhs by the complainant to the accused took place in the year 2013. This material fact was deliberately concealed by the complainant in the complaint and was subsequently admitted by the Authorized Representative (AR) of the complainant during cross-examination dated Digitally signed by NEELMANI CC NO: 5006362/2016 Religare Finvest Limited Vs. Saurabh Steel UdyogNEELMANI SHARMA Page no.4 of 14 SHARMA Date:
2026.01.16 16:54:25 +0600 13.07.2022. Further, during cross-examination dated 25.10.2023, the AR stated that he does not recall the date of the loan agreement. The complainant has also failed to place on record any document prior to the year 2016. It is further submitted that the loan number and application ID mentioned in the complaint differ from those mentioned in the loan agreement filed on record. Moreover, the application ID appears to have been struck off and altered by the complainant. It is asserted that a top-up loan was extended by the complainant nearly three years after the original disbursement, which would not have been possible had the accused defaulted on repayment. The complainant has filed two separate statements of account (SOAs) i.e. one for the period from 29 February 2016 to 02 May 2023 and another from 29 February 2016 to 23 October 2023.
The submission of two different statements is alleged to be an attempt to mislead the court. Furthermore, statements have not been filed in compliance with the Bankers' Books Evidence Act, as both are not attested. Therefore, it is submitted that the complainant has failed to establish the outstanding liability against the accused. It is also submitted that the complainant has not shown how the cheque amount was calculated. The cheque in question was issued as a security in the year 2013 and not in 2016 and has been misused by the complainant. The cheque amount exceeds the alleged liability of the accused and therefore the accused is liable to be acquitted. Lastly, it is submitted that no loan recall notice was issued to the accused, nor was any notice served regarding enhancement of the interest rate in accordance with RBI guidelines. The accused has thus successfully raised a probable defense on the standard of preponderance of probabilities, and accordingly, prays for acquittal.
9. I have heard the counsels for both the parties. Additionally, I have reviewed and considered the evidence led by them carefully along with the entire court record. Digitally signed by NEELMANI NEELMANI SHARMA SHARMA Date:
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10. To establish the offence u/s 138 of NI Act, the complainant must fulfil all the essential ingredients of the offence. In Gimpex Private Limited vs. Manoj Goel (2022) 11 SCC 705 the Hon'ble Supreme Court of India has reiterated the following requirements:
"1st Ingredient: The cheque was drawn by a person on an account maintained by him/her 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;
2nd Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability; 3rd 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; 4th Ingredient: A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in writing given to the drawer within thirty days of the receipt of information of the dishonour of cheque from the bank;
5th Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice."
11. Section 138 is further strengthened by Sections 139 and 118 of the NI Act. Section 139 provides a statutory presumption in favor of the complainant that the holder of a cheque received it for the discharge of legally enforceable debt or liability. This results in shifting of the onus on the accused to rebut the presumption. Section118(a) of the NI Act lays down the presumption that every negotiable instrument was made or drawn for consideration.
12. The Hon'ble Supreme Court of India in Basalingappa v.
Digitally signed by NEELMANI CC NO: 5006362/2016 Religare Finvest Limited Vs. Saurabh Steel Udyog NEELMANI SHARMA Page no.6 of 14 SHARMA Date:
2026.01.16 16:54:51 +0600 Mudibasappa (2019) 5 SCC 418 has summarized the law as follows:
"25. We have noticed the ratio laid down by this Court in the above cases on sections 118(a) and 139, we now summarise the principles enumerated by this Court in 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 the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. 25.3 To rebut the presumption, it is open for the Accused to rely on evidence led by him or the 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."
13. Therefore, it is clear from the above discussion that the complainant must first establish the offence u/s 138 NI Act successfully for the presumption u/s 139 NI Act to operate. The onus then shifts on the accused to rebut the presumption by presenting credible evidence and raising a probable defence.
Digitally signed by NEELMANI NEELMANI SHARMA SHARMA Date:
2026.01.16 16:54:59 +0600 CC NO: 5006362/2016 Religare Finvest Limited Vs. Saurabh Steel Udyog Page no.7 of 14 Appreciation Of Evidence and Findings
14. In the notice u/s 251 and statement u/s 313 Cr.P.C. the accused has admitted his signatures on the cheque in question. Though he has denied filling the particulars. As per Section 20 of the NI Act, the holder of a signed cheque has authority to complete the instrument. It can be derived from this admission that cheques in question were issued from a bank account maintained and belonging to the accused. The correctness of the cheque in question has nowhere been disputed. The cheque was presented within period of validity.
The first ingredient, therefore, stands fulfilled.
15. Cheques was returned unpaid vide return memo dated 01.10.2016 for the reason "account closed". As per section 146 of the NI Act, on a presentation of stamped bank slip or memo, the court will presume the dishonor unless proved otherwise. No contrary evidence has been presented by the defense to dispute the bank return memo; hence, third ingredient also stands established.
16. The legal demand notice dated 20.10.2016 was sent to the accused and the postal receipts and tracking report have been submitted by the complainant to corroborate the same. The accused in the notice u/s 251 Cr.P.C. has submitted that he did not remember if he had received the legal notice and has denied the receipt in statement u/s 313 Cr.P.C. However, he has submitted that the address on the legal notice is his correct address and also given the same address in notice u/s 251 and statement u/s 313 Cr.P.C. Section 27 of the General Clauses Act, 1897, and section 114 of the Indian Evidence Act, 1872, support the presumption of effective service when a document is sent by registered post unless proven otherwise. Therefore, a mere denial by the accused persons does not invalidate the service of the legal notice. Hence, the fourth ingredient also stands fulfilled. Digitally signed by NEELMANI NEELMANI SHARMA SHARMA Date:
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17. The fifth ingredient is also satisfied, since the accused failed to make the payment within 15 days of receipt of the legal demand notice.
18. Considering the foregoing discussion, the sole issue left for determination in the present case is whether a legally enforceable debt or liability existed against which the cheque in question was issued by the accused.
19. The accused, at the stage of issuance of notice under Section 251 CrPC has acknowledged having signed the cheque in question. Accordingly, the presumptions under Sections 118 and 139 of the NI Act are attracted, leading to the inference that the cheque in question was issued for valid consideration in discharge of a legally enforceable debt or liability. This presumption in favor of the complainant now shifts the onus on the accused to rebut the presumption by raising a plausible defense. The standard of proof to be met is that of preponderance of probabilities, and the accused may punch holes in the story of the complainant by relying on circumstantial evidence.
20. To rebut the presumption, the Ld. Counsel for the accused has undertaken the cross examination of the AR of the complainant (CW-1). During cross- examination, the AR of complainant was asked to bring on record the loan agreement and statement of account. The submission of the statement of account was objected to by Ld. Counsel for the accused on the ground that it was not as per Bankers Books Evidence Act, 1891, as it has not been duly attested. Perusal of the statement of account shows that it is supported by a certificate u/s 65B of the Indian Evidence Act but lacks attestation/seal of the complainant company. Perusal of certificate u/s 65B of the Indian Evidence Act filed by the complainant expressly certifies that the statement of account is a true copy of records maintained in the usual and ordinary course of business. The certificate is in line with the terms of Section 2(8) of the Bankers Books Digitally signed by NEELMANI CC NO: 5006362/2016 Religare Finvest Limited Vs. Saurabh Steel Udyog NEELMANI SHARMA Page no.9 of 14 SHARMA Date:
2026.01.16 16:55:24 +0600 Evidence Act, but no separate certificate has been filed as per the Bankers Books Evidence Act. Further the statement of account is not attested or sealed. The certificate u/s 65B Indian Evidence Act is also not signed by the AR. In the absence of a certificate as required u/s 2(8) of the Bankers Books Evidence Act, the statement of account relied upon by the complainant is inadmissible and cannot be read in evidence. The filing of a certificate u/s 65B of the Indian Evidence Act is insufficient to dispense with mandatory statutory compliance under the Bankers Books Evidence Act. In criminal matters strict proof is necessary and uncertified document cannot be relied upon. Therefore, the statement of account produced by the complainant is inadmissible.
21. The next contention raised by the Ld. counsel for the accused is that the initial loan was advanced in the year 2013/2014 and that the cheque in question was issued merely as a security at the time of the said loan. It is argued that this material fact has been deliberately concealed in the complaint and that the complainant has misused the security cheque. In his statement u/s 313 Cr.P.C., as well as at the time of framing of notice u/s 251 Cr.P.C., accused No. 2 asserted that the cheque in question was issued as a security at the time of availing the loan. While deposing as a defence witness, accused no. 2 further submitted that he had taken a loan from the complainant in the year 2014 and had handed over three blank signed cheques as security. He also stated during his cross-examination that no documentation was executed with respect to the alleged top-up loan, which, according to him, was disbursed in the year 2016.
22. However, the version put forth by the accused suffers from inherent inconsistencies. As per his own assertion, the cheque in question was handed over at the time of the initial loan disbursal in 2014. A perusal of the cheque reveals that the date "04-Nov-2015" is printed on the left-hand side of the cheque, which denotes the year of issuance of the cheque book. This clearly Digitally signed by CC NO: 5006362/2016 Religare Finvest Limited Vs. Saurabh Steel Udyog NEELMANIPage no.10 of 14 NEELMANI SHARMA SHARMA Date:
2026.01.16 16:55:35 +0600 establishes that the cheque was printed in the year 2015 and therefore could not have been issued by the accused in 2014 at the time of the original loan, as alleged. Consequently, the defense taken by the accused that the cheque was issued as a security in 2014 is factually impossible and untenable.
23. During cross-examination, the AR of the complainant admitted that the loan in question was a carry-forward loan, adjusted from a previous loan availed by the accused at his own request. He further admitted that this fact was not specifically disclosed in the complaint and that no document relating to the earlier loan was placed on record, as the said loan had already been closed. It was contended by the Ld. counsel for the accused that the complainant would not have sanctioned a top-up loan had there been any default on the part of the accused. In response, the AR of the complainant placed on record the loan agreement, exhibited as Ex. CW1/X1. Although it is noted that the loan agreement number on the first page of the document appears to have been struck off and altered by hand, the execution of the agreement itself remains undisputed. Accused No. 2, while deposing as a defense witness, stated that no documentation was executed at the time of availing the top-up loan in 2016. However, during his testimony, he admitted that the signatures appearing on the loan agreement, including those on page no. 9, were his. Although he claimed that page no. 9 was blank at the time of signing, no evidence has been produced to support this assertion. The accused has failed to place any material on record to establish that the loan agreement is forged or fabricated. Apart from making a bald allegation that the agreement was not executed in the year 2016, no cogent evidence has been led to prove the alleged time of execution or to rebut the authenticity of the document. Accordingly, the accused has failed to disprove the validity and genuineness of the loan agreement relied upon by the complainant. Digitally signed by NEELMANI NEELMANI SHARMA SHARMA Date:
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24. It is also relevant to note that the accused stated that he had availed the initial loan in the year 2014 and had paid only two EMIs after the alleged top-up of the loan in 2016, thereafter discontinuing the repayment of EMIs. He further admitted that he had not received any loan recall notice from the complainant, yet he stopped paying the EMIs on his own accord. This admission casts serious doubt on the conduct of the accused. At the stage of framing of notice u/s 251 Cr.P.C., the accused submitted that he had taken a loan of approximately Rs.35 lakhs from the complainant and had repaid around Rs. 24-25 lakhs. However, the accused has failed to place on record any bank statement, receipt, or documentary proof to substantiate the alleged repayment. Admittedly, the accused has not repaid the entire loan amount. Significantly, there is no dispute raised by the accused with respect to the disbursement of the loan and the dispute is confined only to the extent of liability arising from the cheque in question. Although the statement of account produced by the complainant has been held to be inadmissible, the accused too has failed to bring on record any documentary evidence showing repayment of the alleged amounts. Consequently, the bald assertion of repayment remains unsubstantiated.
25. Another material inconsistency emerges from the statements made by the accused at different stages of the proceedings. In his statement u/s 313 Cr.P.C., the accused stated that he had repaid approximately Rs. 20-22 lakhs to the complainant, which materially contradicts his earlier submission at the stage of notice u/s 251 Cr.P.C., where he claimed repayment of Rs.24-25 lakhs. This discrepancy further undermines the credibility of the defence. Additionally, in his statement u/s 313 Cr.P.C., the accused alleged that a representative of the complainant had collected two EMIs from him during the years 2017-2018 without issuing any receipt. However, the accused has failed to produce any document or material on record to substantiate the payment of these alleged two Digitally signed by NEELMANI NEELMANI SHARMA CC NO: 5006362/2016 Religare Finvest Limited Vs. Saurabh Steel UdyogSHARMA Date: Page no.12 of 14 2026.01.16 16:55:56 +0600 EMIs. In the absence of any proof, this assertion also remains unverified and cannot be relied upon.
26. Ld. Counsel for the accused has argued that the cheque in question was a security cheque and misused by the complainant. The Hon'ble Supreme Court in Sripati Singh Vs. The State of Jharkhand and Ors. , AIR 2021 SC 5732 has observed that a cheque issued as security in a financial transaction can still attract liability u/s 138 of the NI Act if the underlying debt remains unpaid and no contrary agreement exists between the parties. Security cheques are, therefore, covered u/s 138 of the NI Act, and the drawer remains liable unless it is proven that the underlying debt or liability has been otherwise discharged which the accused in the present case has failed to prove.
27. The accused has admitted to availing the loan from the complainant and has also admitted his signatures on the cheque in question. He has failed to bring on record any documentary proof showing repayment. Moreover, his account of the events is marked by several inconsistencies, whereas the complainant's version has remained consistent throughout. Once the presumption u/s 139 NI Act is invoked in favor of the complainant, the burden shifts on the accused to rebut it. In the present case, the accused has failed to discharge this burden and not established absence of legally enforceable liability against him and failed to raise a plausible defence which supports his version of events. Further the complainant has successfully met all the essential ingredients of section 138 NI Act and his complaint is supported by documentary evidence whose authenticity has not been effectively rebutted by the accused.
28. Upon consideration of the evidence led, the documents placed on record, and the submissions made by both parties and in light of the foregoing Digitally signed by NEELMANI CC NO: 5006362/2016 Religare Finvest Limited Vs. Saurabh Steel Udyog NEELMANI SHARMA Page no.13 of 14 SHARMA Date:
2026.01.16 16:56:06 +0600 discussion, this Court finds that the accused no.1 Saurabh Steel Udyog (represented by accused no.2) and accused no.2 Sudarshan Kumar Jain S/o Sh. Bharat Singh Jain are guilty of the offence punishable u/s 138 of the Negotiable Instruments Act and is hereby convicted u/s 138 of the Negotiable Instruments Act.
29. Let the convict be heard separately on the quantum of sentence on Digitally signed by NEELMANI 02.02.2026. NEELMANI SHARMA Date: SHARMA 2026.01.16 16:56:18 +0600 Pronounced in the Open Court (Neelmani Sharma) on 16.01.2026 JMFC (N.I. Act) -04/DWK South West/New Delhi This Judgment consists of 1 4 pages and has been signed by me.
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