Delhi District Court
Shriram Transport Finance Co. Ltd vs Yogesh Kumar on 12 June, 2025
THE COURT OF Ms. RAVISHA SIDANA
JUDICIAL MAGISTRATE FIRST CLASS, NI ACT,
DIGITAL COURT, NORTH-EAST
KKD, DELHI
(Reserved Judgment on Transfer vide order dt. 30.05.2025)
CC NO. 1134/2022
Shriram Transport Finance Co. Ltd.
Regd. Office at C-1/5A, Ist Floor, Above SBI Bank,
Yamuna Vihar, Delhi-110053 .........
Complainant
vs.
Yogesh Kumar S/o Sh. Rajbir Singh
R/o H. No. C-319/1, Street No. 14, Min Mall Shop,
Bhajan Pura, Delhi-110053 ............
Accused
1.Offence complained of Section 138 of Negotiable or proved Instruments Act, 1881 (NI Act)
2. Date of Filing 28.09.2022
3. Plea of Accused Not Guilty
4. Date of Reserving Order 06.05.2025
5. Date of Pronouncement 12.06.2025
6. Final Order Acquittal Argued by :-
Ld. counsel for the complainant Sh. L.P. Singh. Ld. counsel for the accused Sh. Rahul Tomar.
Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.12 16:02:06 +0530 BRIEF STATEMENT OF REASONS FOR THE DECISION:- FACTUAL MATRIX
1. Vide this judgment the present complaint case for an offence punishable U/S.138 of the Negotiable Instruments Act, 1881 (hereinafter "the NI Act") is being decided.
2. It is case of the complainant that complainant is a registered company in the name & style of "Shriram Transport Finance Company Ltd." having its registered office at 14A, South Phase Industrial Estate, Guindy Chennai and having its branch office at C-1/5A, First Floor, Yamuna Vihar, Delhi and is engaged in the business of financing, leasing amongst other business. The complainant has appointed Sh. Gyan Singh as authorised representative to appear before/institute and prosecute any suit or criminal complaint, verify and sign all the legal document, vakalatnama, plaints and affidavit on behalf of the company before any court of judicial authorities.
3. The accused had approached to the complainant for financial assistance of a loan for vehicle and on his request, the complainant sanctioned and disbursed the amount financed in terms of agreement YMNUVRO802260009 duly signed by the accused, repayable in monthly installments alongwith other charges stipulated in the agreement from time to time. The accused failed to repay the regular installments in contrast to agreed terms of aforesaid agreement.
4. In discharge of his outstanding liability as per the running loan amount, the accused had issued a cheque bearing no. 000005 dt. 11.07.2022 for Rs. 1,31,200/- drawn on DCB Bank Ltd, Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.12 16:02:16 +0530 Yamuna Vihar, Delhi in favour of the complainant with assurance that the said cheque will be encashed on its presentation.
5. On the assurance of the accused, the complainant presented the abovesaid cheque for encashment with his bank but the said cheque was dishonoured and returned unpaid with remarks "Payment stopped by drawer" vide return memo dated 19.08.2022.
6. The complainant had sent a legal notice dated 23.08.2022 to the accused through his counsel regarding the dishonour of the aforesaid cheque through registered AD & speed post but the accused has neither discharged his liability nor make payment of the cheque amount and therefore, the present complaint is filed by the complainant against the accused for the offence under Section 138 of the NI Act.
7. On being satisfied of the prima facie ingredients of Section 138 of the NI Act, cognizance was taken and summons were directed to be issued against the accused vide order dated 15.11.2022.
8. Accordingly, on 04.09.2023 notice under Section 251 Cr.PC r/w Section 263(g) Cr.P.C was framed and served upon the accused to which he pleaded not guilty and claimed trial. While putting forth his plea of defence, accused admitted his signatures on the cheque in question, however denied the other particulars of the cheque being filled by him. He also disputed the receipt of legal demand notice. He further raised his defence as follows:
Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.12 16:02:23 +0530 "Yes, I had taken the vehicle loan of Rs 2 Lacs from the complainant company and had returned more than Rs 1,00,000 to the complainant as security. Some laon amount is pending against me and I am ready to pay the same.".
9. In Complainant's evidence, the AR for complainant (CW-1) stand as CW1 and relied upon the following documents:
i) Ex. CW1/A is Evidence of complainant by way of affidavit.
ii) Ex. CW1/1(OSR) is Copy of Power of attorney.
iii) Ex. CW1/2 is Cheque in question (Admitted U/s. 294 Cr.P.C.)
iv) Ex. CW1/3 is Cheque Returning mem (Admitted U/s. 294 Cr.P.C.)
v) Ex. CW1/4 is Legal demand notice and postal receipt (Admitted U/s. 294 Cr.P.C.)
vii) Mark A is Tracking Report (Admitted U/s. 294 Cr.P.C.) CW1/AR of complainant and CW2/ post office witness were cross examined on behalf of the accused and the CE was closed vide Order i.e. 02.08.2024.
10. The accused was then examined under Section 313 Cr.P.C., 1973 wherein all the incriminating evidence were put to the accused and accused denied documents Ex.CW1/4 and Mark A. The accused denied the alleged transaction pertaining to disbursement of loan of Rs 3,86,447 by the complainant company and stated that he only borrowed Rs 2,70,000 as vehicle loan. He denied having received legal notice but admitted the address to be Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.12 16:02:29 +0530 correct. He had admitted his signature on the cheque and denied having filled the other details in the cheque in question. He stated that he issued the impugned blank signed cheque to the complainant company at the time of disbursement of loan amount. Therefore, he does not owe any liability towards the complainant company. He opted not to lead DE and the matter was listed for final arguments.
11. It has been argued by Ld. Counsel for the complainant that the case of the complainant is proved as the transaction is admitted and the cheque is also in the favour of the complainant, therefore, the accused must be convicted and the amount should be recovered. On the other hand, Ld. Counsel for the accused has argued that AR for the complainant is not competent witness. Further, the accused has been falsely implicated in this case and that the complainant has not been able to prove its case beyond reasonable doubt against the accused as no loan documents are filed on the record.
12. I have heard ld counsel for the complainant and Ld. Defence counsel for the accused & considered the respective arguments as well as gone through the case file very carefully.
13. 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 fulfil all the essential ingredients of the offence as laid down by Hon'ble supreme court in Gimpex Private Limited vs. Manoj Goel(2022) 11 SCC 705:
Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.12 16:02:35 +0530
1. 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;
2. Second Ingredient: The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability;
3. 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;
4. Fourth 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;
5. Fifth Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice.
14. It is settled law that once the execution of cheque is admitted, Presumption under section 139 of NI act is raised in favour of the complainant. The presumption raised is a rebuttable presumption and the onus on the accused to raise a probable defence. The standard of proof for rebutting, the presumption is that of preponderance of probabilities.
[Basalingappa Vs. Mudibasappa (AIR 2019 SC 1983) See also Kumar Exports Vs. Sharma Carpets (2009) 2 SCC 513]
15. The phrase "unless the contrary is proved" u/s 139 is of vital importance clarifying that the rebuttal of the presumption has to be supported by proof and not mere plausible explanation. The liberty is granted to the accused to either rely on evidence led by him in his support or the material relied by the complainant to raise his probable defence. In addition to the materials brought on record, Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.12 16:02:43 +0530 the circumstances relied upon can also draw the inference of preponderance of probability lying in the favour of the accused.
16. In the case at hand, the proof of the first and third ingredient are disputed. The complainant has although proved the original cheque (Ex. CW1/2) pertaining to the being drawn on the account of the accused. It is disputed that the cheque in question was presented within the validity period of the debt. Further, the cheque in question was returned unpaid vide return memo (Ex. CW1/3) due to the reason, "Payment stopped by drawer", which does falls strictly within the purview of section 138 NI Act. As such, the first and third ingredient of the offence under Section 138 NI Act stand proved.
17. With regard to the fourth and fifth ingredient, the complainant has proved on record legal notice & postal receipt Ex. CW1/4. The postal receipt was addressed to the accused and sent by the counsel for the complainant dated 26.08.2022, which confirms the delivery of the same at the 'Seelampur SO' on 27.08.2022. In Ergo, the accused has denied receipt of the legal demand notice in his Notice framed u/s 251 Cr.P.C. as well as in his Statement recorded u/s 313 Cr.P.C, although the address mentioned in the legal demand Notice is not disputed. The fact that the payment was not made within 15 days of the receipt of the legal notice also becomes disputed. Therefore, the fourth ingredient requires adjudication subject to which, the fifth ingredient of the offence shall stand proved.
C. DELIVERY OF LEGAL DEMAND NOTICE
Digitally
signed by
RAVISHA
RAVISHA SIDANA
SIDANA Date:
2025.06.12
16:02:49
+0530
18. The perusal of Legal Demand Notice Ex. CW1/D dt 23.08.22 reflects the address of the accused to be "House no. C-319/1, Street no.14, Bhajanpura, Mini mall shop, North east-110053".
19. The legal demand notice Ex. CW1/D dt 23.08.22 is stated to be delivered on 27.08.2022 at the Seelampur SO as per Tracking report Mark A. 19.1 The aforesaid address is admitted by the accused during the stage of notice framing and statement of accused. The said address also finds corroboration from the admission of sending of the legal demand notice, postal receipt and tracking report by the accused u/s 294 Cr.PC. The bail bonds furnished by the accused mentions the same address.
19.2 Reliance is placed upon the observations of the Hon'ble Supreme Court in C.C. Alavi Haji vs Palapetty Muhammed & Anr. VI (2007) SLT 442, that when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of clause (b) of the proviso to Section 138 of the NI Act stands complied with.
Therefore, the defence of the accused that he had not received the legal demand notice is negated as it does not hold any ground. In the light of aforesaid observations, the fourth and the fifth ingredient also stand proved.
Now, it remains to be ascertained if the second ingredient is proved or not. As far as the proof of second ingredient is concerned, it has to be proved that the cheque in question was drawn by the drawer for discharging a legally enforceable debt Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.12 16:02:55 +0530
20. During the stage of notice framing under 251 Cr.PC and admission and denial of documents u/s 294 Cr.PC & section 313 Cr.PC, the accused had admitted his signatures on the cheque in question that has been drawn in favour of the complainant. Hence, the presumption under 139 NI Act read with Section 118 NI Act is drawn in favour of the complainant.
21. The accused in the present case has relied on the following line of main defences to rebut the presumption:
A. The blank signed cheque was misused by the complainant B. AR for the complainant company is not a competent witness
i) Authority to file the present case
ii) No personal knowledge of transaction in question 21.1 To analyse these defences in the right perspective, the following Issues need to be adjudicated:
i) Whether the accused issued his blank signed cheque to the complainant
ii)Whether the impugned cheque is in discharge of his outstanding liability of Rs 1,31,200 BLANK SIGNED CHEQUE
22. The first defence taken by the accused is the cheque in question was his blank signed cheque, which he never issued to the complainant but the complainant has misused her cheque by filling the particulars of the same before presenting it.
22.1 Section 20 of the NI Act talks about inchoate instruments. As per this provision if a person gives a duly signed cheque which Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.12 16:03:02 +0530 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 22.2 On this point, it is profitable to mention the judgment of Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd., (2016) 10 SCC 458, Sripati Singh vs. State of Jharkhand & Anr., 2021 SCC Online SC 1002 and Sunil Todi vs. State of Gujarat & Anr., 2021 SCC Online SC 1174 , wherein it has been held that merely because a cheque has been issued for only security purposes will not absolve the accused from the liability under Section 138 NI Act. It has been further held that a cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. It has been held by the Hon'ble Court that the accused would very much be liable under Section 138 NI Act for issuance of a security cheque also, if on the date of the presentation of such cheque, there has not been a prior discharge of debt, or if the cheque has not been given towards advance payment, the goods in respect of which have not been received by the other party, or if other than this there has been change in circumstances which precludes the complainant from depositing the cheque with the bank.
Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.12 16:03:10 +0530
23. In the present case, it is the complainant's version that the cheque in question was issued by the accused upon the persistent requests and demands by the complainant It is the specific version of the complainant that the cheque in question was issued by the accused for the discharge of liability of her husband for Rs. 1,31,200 23.1 In Ergo, the stance of the accused during his Notice framing u/s 251 Cr.PC is that his blank signed cheque was misused by the complainant as it was issued at the time of disbursement of the loan amount. During the cross-examination of the Complainant dt. 26.03.24, CW1 (AR of the complainant company) admitted the difference in the handwriting in the amount written in words and the name of the payee in the impugned cheque, which is in contrast with his averments in the complaint and the PSE affidavit CW1/A. 23.2 As discussed, even in case of blank signed cheques, the statutory presumptions under section 118(a) and 139 would be raised in favour of the complainant. Therefore, in an instant case, since, the accused has admitted the execution of impugned cheque, the aforementioned statutory presumptions would be raised in favour of the complainant regarding the fact that the impugned cheque has been drawn for consideration and issued by the accused in discharge of legally enforceable debt.
IMPUGNED CHEQUE WAS IN DISCHARGE OF LEGALLY ENFORCEABLE DEBT FOR RS 1,31,200
24. The case of the complainant is that the impugned cheque was issued for the outstanding liability for the vehicle loan of Rs Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.12 16:03:17 +0530 3,86,447 including interest for vehicle bearing no. DL5CP-662 availed by the accused vide agreement No. YMNUVRO802260009 dated 27.02.2018 and the impugned cheque was issued for the part liability of the outstanding liability of Rs. 5,79,006. The defence of the accused is that impugned blank signed cheque has been misused by the complainant company as the actual loan amount disbursed by the accused was for Rs 2,70,000 and he has repaid Rs 1 lac towards the aforesaid loan.
25. COMPETENCY OF AR FOR THE COMPLAINANT A. AUTHORITY TO FILE CASE 25.1 Ld. counsel of the accused has questioned the legal authority of Sh. Tushar Chandra Mishra, appearing as the authorised representative on behalf of the complainant company on the ground that this particular case number is not mentioned in the Special Power of Attorney (Ex.CW1/1) filed on behalf of the complainant company.
25.2 During the cross-examination dated 26.03.2024, AR (CW1) deposed that the special power of attorney (Ex.CW1/1) dated 12.01.2022 is filed in his name and further clarified that although the present case is not mentioned in Ex.CW1/1 because it is issued as a common document for prosecuting and deposing in all the cases by the complainant company.
25.3 It is noteworthy that the Special Power of Attorney was produced in original and returned back, as a consequence, its exhibition is done as (Ex.CW1/1 OSR). Therefore, the relevant SPA is admissible in law. Further, it mentions the authority in Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.12 16:03:23 +0530 favour of Tushar Chandra Mishra to represent and file the present case. This Court is in agreement with the clarification of AR for the complainant that his authority is not nullified due to non- mentioning of the present case in the special power of authority and he is a competent witness as far his authority to file and prosecute the present complaint is concerned.
B. PERSONAL KNOWLEDGE OF TRANSACTION
26. Ld. counsel for the accused submits that CW1 being the authorised representative of the complainant is bound to know the transaction in question. Further, the details pertaining to the vehicle are not mentioned in complaint or PSE affidavit and CW1 is not aware about the details of the loan agreed between the parties and repayments made by the accused.
26.1 The perusal of the judicial record and reading the testimony of CW1 as a whole, this Court finds that CW1 does not remember the exact disbursed amount, the actual repayments by the accused, tenure of loan, vehicle number and date on which the cheque was deposited. Initially, he did not remember whether the factum of total loan amount, balance amount and repayment by the accused was mentioned anywhere in the complaint and evidence by way of affidavit but later admitted that these facts do not find mention in the aforesaid documents.
26.2 Upon confrontation with the Judicial file, he admitted that no documents pertaining to legal liability of the accused i.e. Loan agreement, disbursement letter, sanctioned letter and Account statement have been filed. There is contradiction in the year of the grant of the vehicle loan in the cross-examination of CW1 as year Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.12 16:03:29 +0530 2018 or 2019. Further, the contradiction as to the actual amount disbursed to the accused being Rs 3,00,000 or Rs 3,86,447 cannot be brushed aside. The factum that the repayments were paid by the accused qua the alleged transaction is not denied by CW1 but it does not finds mention in the legal demand notice which prejudices the defence of the accused and turns fatal to the case of the complainant. There is an equivocal admission by CW1 that a top-up loan was also added to the outstanding liability and forms a component of it, which is not mentioned in the original complaint, Evidence affidavit or the legal notice. It hinges upon the foundation of the present case as there is discrepancy as to the loan amount advanced to the accused and the outstanding amount containing the top-up loan.
26.3 Reliance in this regard is placed on the notable observations by the Hon'ble Supreme Court of India in A.C. Narayanan & anr.
v. State of Maharashtra & Ors (2014) 11 SCC 790 as reproduced hereafter:
"ii) The Power of Attorney holder can depose and verify on oath before the Court in order to prove the contents of the complaint. However, the power of attorney holder must have witnessed the transaction as an agent of the payee/holder in due course or possess due knowledge regarding the said transactions.
(iii) It is required by the complainant to make specific assertion as to the knowledge of the power of attorney holder in the said transaction explicitly in the complaint and the power of attorney holder who has no knowledge regarding the transactions cannot be examined as a witness in the case."
27. With regard to the defence of the accused had issued a blank signed cheque, CW1 deposed that admittedly, there is difference in Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.12 16:03:47 +0530 handwriting in amount filled in words, name of the payee but denied the suggestion that the complaint company had misused the blank signed cheque given as security from the accused at the time of granting the loan in question for the vehicle.
28. The documents pertaining to the legal liability of the accused i.e. Loan agreement and the Statement of account were not filed and produced on the record by the complainant despite questions being asked during the cross-examination.
29. In the present case, it is apparent from the entire testimony of the AR of the complainant that the AR had no knowledge about the transaction alleged in the complaint. Therefore, no credence can be given to the evidence tendered regarding the liability of the accused in the matter of transaction and execution of the cheques in question. In view of foregoing reasoning and settled position of law, the argument put forth by the accused that since the AR of the complainant had no knowledge of the present case and thus, his evidence cannot be weighed is not without merit.
30. It is pertinent to note that the officer of the complainant deposing on behalf of the company must be in direct knowledge of the facts stated in the complaint or PSE affidavit. The recent dictum of Hon'ble Kerala HC in Padma Conductors Pvt. Ltd vs Mirc Electronics on 7 February, 2024 is relied on in this behalf on the aforesaid ratio:
"In order to prove the transaction led to execution of a cheque, somebody who should have direct knowledge regarding the transaction, issuance and execution of the cheque must be examined. When the complainant limits the evidence as that of an officer of a company, who did not have any direct Digitally signed by RAVISHA RAVISHA SIDANA SIDANA Date:
2025.06.12 16:03:54 +0530 knowledge regarding the transaction and he did not witness the execution of the cheque, the evidence is insufficient to discharge the initial burden cast upon the complainant. So, it could not be held that the complainant succeeded in discharging his initial burden, to avail the benefit of presumptions under Section 118 and 139 of the N.I.Act."
31. The law under Negotiable Instruments allows penal action u/s 138 NI Act for the legally recoverable amount and not any amount claimed by the complainant. The accused has raised a probable defence and has discharged the burden upon him that the impugned cheque was a blank signed cheque issued at the time of disbursement of the loan amount and misused by the complainant company. While at the same time complainant had failed to adduce convincing evidence to prove the liability of the accused qua the cheque in question. The complainant had failed to prove the existence of legal debt and the issuance of the cheque in question to discharge any legal liability once the evidential burden shifts back to the complainant.
32. Thus, on the ground of the reason for dishonour not satisfying the requirement of Section 138 NI Act, Accused YOGESH KUMAR is acquitted for the offence under Section 138 NI Act.
Announced by me in the open Court today on 12.06.2025 Digitally signed by RAVISHA SIDANA RAVISHA Date:
SIDANA 2025.06.12
16:04:02
+0530
(RAVISHA SIDANA)
JMFC-NI ACT (DIGITAL COURT)
NORTH EAST;KKD COURTS;DELHI
This Judgment consists of sixteen pages and each page has been digitally signed by me