Delhi District Court
Musarrat Ali vs Irfan Label on 26 March, 2025
IN THE COURT OF MS. VANSHIKA MEHTA
JMFC (NI ACT) DIGITAL COURT - 02 SHD/KKD/DELHI
CC no. 2092/2021
Unique Case ID No. DLSH02-0102472021
In the matter of: -
Mr. Musarrat Ali
S/o Sh. Muzaffar Ali
R/o H. No. 316, Pratap Khand,
Viswakarma Nagar, Jhilmil, Delhi-110095
...........Complainant
Versus
Mr. Irfan Label,
R/o 215-11, Chhabra, Gali no.5,
Ambedkar Basti, Maujpur,
New Delhi-110053
.............Accused
Date of Institution : 14.12.2021
Offence Punishable Under Section : U/s 138 Negotiable Instrument Act, 1881
Plea of Accused : Not guilty
Date of filing : 18.11.2021
Date of Decision : 26.03.2025
Final Order : convicted
Argued by: : Mr. Ashutosh Singhal, Ld. Counsel for the complainant.
: Mr. Naeem Ahmed, Ld. Counsel for the accused.
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Digitally signed by
VANSHIKA VANSHIKA MEHTA
MEHTA Date: 2025.03.26
16:45:10 +0530
Table of Contents
INTRODUCTION AND FACTUAL MATRIX..............................................................3
EVIDENCE LED BY THE COMPLAINANT...............................................................4
STATEMENT OF THE ACCUSED................................................................................6
EVIDENCE LED BY THE DEFENCE..........................................................................6
ARGUMENTS ADVANCED BY THE PARTIES..........................................................7
ANATOMY OF FACTS AND FINDINGS THEREON.................................................9
APPLICATION OF LAW..............................................................................................11
DISCUSSION OF EVIDENCE.....................................................................................12
PLEA CONCERINING LEGAL NOTICE..............................................................12
PLEA CONCERNING THE CHEQUES GIVEN TO RAMESHWAR RANA AND
THE APPLICABILITY OF SECTION 56 OF THE ACT....................................... 14
CONTRADICTION OF THE STATEMENT OF CW-1..........................................17
BANK STATEMENT OF ACCUSED.........................................................................20
DECISION...................................................................................................................... 21
Digitally signed
by VANSHIKA
VANSHIKA MEHTA
MEHTA Date:
2025.03.26
16:45:24 +0530
CC No. 2092/2021 Musarrat Ali Vs. Irfan Label page no. 2 of 22
JUDGMENT
"If we do not maintain justice, justice will not maintain us." - Francis Bacon INTRODUCTION AND FACTUAL MATRIX
1. Accused is produced before the court to stand trial for the offence punishable u/s 138 of the Negotiable Instruments Act, 1881 ("Act" or "NI Act"). He was summoned by this court to face the trial vide order dated 25.03.2022.
2. Tersely put, it is the case of the complainant that in January 2021, the accused, in the capacity of a friend, sought a friendly loan of Rs.2,00,000/- (Rupees Two Lakh only) for six months, which the complainant granted in good faith based on the accused's assurances. Upon the loan's maturity in July 2021, the complainant approached the accused for repayment, but the accused expressed inability to pay and requested a one-month extension.
However, after the extended period lapsed in August 2021, the accused again failed to make cash payment and instead issued two cheques--Cheque No. 770441 dated 23.08.2021 and Cheque No. 770442 dated 05.09.2021, both for Rs.1,00,000/- each, drawn on Punjab National Bank, Darya Ganj, Delhi, in favor of the complainant. The accused assured that the cheques would be honored upon prior confirmation. Relying on this assurance, the complainant presented both cheques for encashment, but both were dishonored on 14.09.2021 with the remark "Payment Stopped by Drawer."
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Digitally signed by
VANSHIKA VANSHIKA MEHTA
MEHTA Date: 2025.03.26
16:45:38 +0530
Consequently, the complainant issued a legal demand notice on 08.10.2021 via registered speed post, demanding repayment within 15 days, which was duly delivered on 11.10.2021. Despite this, the accused failed to make payment within the statutory period.
3. The accused was summoned vide order dated 25.03.2022 and on 27.09.2023, notice was framed against the accused u/s 251 Cr.P.C for the offence punishable u/s 138 of the NI Act. The accused pleaded not guilty and claimed trial. The accused admitted signature on the cheque in question and denied the handwriting of particulars on the cheque in question. He denied the receipt of the legal notice, however, admitted the address on the said legal notice as correct.
The accused contended that the cheques in question were issued in favor of Rameshwar Rana as security in lieu of receiving cash; however, the said amount was never provided to the accused. Despite failing to provide the agreed cash, Rameshwar Rana did not return the cheques, leaving the accused with no option but to stop the payment to prevent their unauthorized use. Further that, the complainant, having no lawful claim over the cheques, has misused the same.
EVIDENCE LED BY THE COMPLAINANT
4. The complainant in order to prove its case, examined himself as CW-1. CW-1 tendered in evidence by way of affidavit Ex. CW-1/A and relied upon the following documents:
I. Copy of Adhar Card is Ex. CW-1/1 (OSR).
II. Cheque bearing no. 770442 dt. 23.08.2021 whic is Ex. CW1/2.
III. Cheque bearing no. 770441 dt. 05.09.2021 is Ex. CW1/3.
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Digitally signed by
VANSHIKA VANSHIKA MEHTA
MEHTA Date: 2025.03.26
16:45:50 +0530
IV. Cheque return memo dated 14.09.2021 which is Ex. CW1/4.
V. Cheque return memo dated 14.09.2021 which is Ex. CW1/5.
VI. Legal demand notice dated 06.10.2021 which is Ex. CW1/6 (Colly.) VII. Postal receipts which is Ex. CW1/7.
VIII. Tracking Report which is Ex. CW1/8.
Upon his cross-examination, complainant CW-1, inter alia, stated that no one else was present when he advanced the loan to the accused, who had approached him at his factory in May/June 2021 seeking financial assistance. He further stated to have given the loan 3-4 days after the accused's request, though he did not recall the exact date of advancement, but maintained that the loan was ultimately given in January 2021. CW1 further deposed that the cheque provided by the accused was already filled, except for the name, which he filled in the accused's presence, as the accused permitted the lender to write his name.
CW1 admitted that he had not filed Income Tax Returns (ITR) for the past 2-3 years but had done so before that. He explained that he arranged the loan amount from multiple persons, including his brother, wife, and friends--Shami Kapoor and Raju Rautela, collecting the money in cash.
Regarding Rameshwar Rana, CW1 identified him as a friend, but denied the suggestion that he received the disputed cheques from Rameshwar Rana or that the accused had handed over four cheques (Nos. 770439 to 770442) to Rameshwar Rana in his presence in exchange for cash. He further denied any knowledge of transactions between the accused and Rameshwar Rana. CW1 disputed the claim CC No. 2092/2021 Musarrat Ali Vs. Irfan Label page no. 5 of 22 Digitally signed by VANSHIKA VANSHIKA MEHTA MEHTA Date: 2025.03.26 16:45:59 +0530 that he had only advanced Rs.1,00,000/- to the accused, maintaining that the entire loan was given in January 2021.
STATEMENT OF ACCUSED
5. Thereafter, on 17.05.2024, the statement of the accused under Section 313 Cr.P.C., read with Section 281 Cr.P.C., was recorded, wherein the accused stated that the complainant had filed a false evidence affidavit (Ex. CW-1/A) and disputed its contents. While the accused did not comment on the Aadhar Card (Ex. CW-1/1), he categorically denied issuing the cheques in question (Ex. CW-1/2 & Ex. CW-1/3) to the complainant, asserting that these cheques were, in fact, issued to Rameshwar Rana and not the complainant. However, the accused acknowledged the authenticity of the cheque return memos (Ex. CW-1/4 & Ex. CW-1/5). The accused further submitted that he never received the legal demand notice (Ex. CW- 1/6 colly) and, therefore, was unaware of any demand made by the complainant. Additionally, the accused did not comment on the postal receipts (Ex. CW-1/7) and tracking report (Ex. CW-1/8), as he had no knowledge of their contents.
EVIDENCE LED BY THE DEFENCE
7. The accused was examined as DW-1 on 20.01.2025, and stated that he had issued four cheques to Rameshwar Rana, out of which two cheques (Nos. 770439 and 770440) were encashed by Rameshwar Rana and Tanvi Grover. Regarding the two remaining cheques (Nos. 770441 and 770442), the accused submitted that the amount was filled by Rameshwar Rana in his presence, but no other details were completed. Rameshwar Rana assured the accused that he did not have cash at that moment and would fill in the remaining details later, promising to provide the cash CC No. 2092/2021 Musarrat Ali Vs. Irfan Label page no. 6 of 22 VANSHIKA Digitally signed by VANSHIKA MEHTA MEHTA Date: 2025.03.26 16:46:09 +0530 within two days. However, Rameshwar Rana failed to return the said two cheques or provide the agreed cash.
He further deposed that on 22.06.2023, the accused filed a police complaint at PS Vivek Vihar against the complainant and Rameshwar Rana for cheating. Additionally, after filing the complaint, the complainant intimidated the accused, compelling him to file another complaint at PS Vivek Vihar regarding the threats During cross-examination, the accused admitted that he received cash from the complainant and returned the same on 18.06.2021 through RTGS mode, stating that he had borrowed the amount approximately a week or ten days prior. He also admitted that he had deliberately stopped the payment of the cheque in question.
However, the accused denied having taken Rs.2,00,000/- from the complainant in January 2021 and refuted the claim that he had issued cheque numbers 770441 and 770442 to the complainant as repayment of such an amount. He further stated that these cheques were related to Rameshwar Rana.
ARGUMENTS ADVANCED BY THE PARTIES
8. Ld. Counsel for the complainant argued that the cheque in question was issued by the accused towards repayment of the loan obtained by the accused. He further argued that the accused has admitted his signatures on the cheque in question. He further argued that the accused has not been able to rebut the presumption of law in favour of the complainant and accordingly, he is liable to be convicted.
9. Per contra, it is argued on behalf of the accused that the Complainant failed to substantiate his claims and contradicted himself regarding the date of the alleged CC No. 2092/2021 Musarrat Ali Vs. Irfan Label page no. 7 of 22 Digitally signed by VANSHIKA VANSHIKA MEHTA MEHTA Date: 2025.03.26 16:46:25 +0530 friendly loan. In his initial complaint, he asserted that the loan was advanced in January 2021 for six months, whereas, during cross-examination, he stated that the loan was extended in May/June 2021.
10. It is further submitted that the Legal Notice dated 06.10.2021 was not conclusively delivered to the Accused, as the postal report does not confirm the identity of the recipient.
11. In response to the misuse of the present impugned cheques, the Accused lodged a criminal complaint dated 02.06.2023 before the SHO, PS Vivek Vihar, Delhi, against the Complainant and Rameshwar Rana for cheating, fraud, and misappropriation of cheques. A subsequent complaint for criminal intimidation led to the registration of NCR No.0009/2024 dated 16.01.2024 under Section 506 IPC at PS Vivek Vihar, Delhi. Furthermore, the Accused filed a complaint under Section 156(3) Cr.P.C., registered as CC No.195/2024, titled Mohd. Irfan vs. Musarrat Ali & Anr., wherein the Learned Trial Court, vide order dated 09.07.2024, directed the SHO to file an ATR. The matter is currently pending adjudication, with the next hearing scheduled for 19.02.2025.
The Accused has placed on record documentary evidence, including his bank statement, the complaint dated 02.06.2023, NCR No.0009/2024, the order dated 09.07.2024, and the IO's reply dated 25.09.2024.
Digitally signed by
VANSHIKA VANSHIKA
MEHTA
MEHTA Date: 2025.03.26
16:46:40 +0530
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ANATOMY OF FACTS AND FINDINGS THEREON
LEGAL JURISPRUDENCE
12. So far so good. Having considered all the submissions, it is apposite to have a quick glance at relevant position of law. Section 138 of the Act provides as under:
138. Dishonour of cheque for insufficiency, etc., of funds in the account. --
Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless--the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;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; andthe drawer of such cheque fails to make the payment of CC No. 2092/2021 Musarrat Ali Vs. Irfan Label page no. 9 of 22 Digitally signed by VANSHIKA VANSHIKA MEHTA MEHTA Date: 2025.03.26 16:47:01 +0530 the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation. --For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.]
13. It is a well-established principle of law that the Negotiable Instruments Act, 1881 (NI Act) provides for two critical presumptions--one under Section 118 and the other under Section 139.
Section 118 of the Act provides that it shall be presumed, until proven otherwise, that every negotiable instrument has been made or drawn for consideration. This presumption places the onus on the party challenging the instrument to disprove this presumption of consideration.
Section 139 of the Act further provides that, unless proven otherwise, it shall be presumed that the holder of the cheque received it for the discharge of, in whole or in part, any debt or liability. This creates a strong legal presumption in favor of the complainant, especially in cases involving dishonored cheques.
14. In this context, the Court is bound to presume that the cheque was issued to discharge a legally enforceable debt or liability under two circumstances:
1. Admission by the Drawer: When the drawer of the cheque admits to having issued or executed the cheque.
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2. Proof by the Complainant: When the complainant provides sufficient evidence to show that the cheque was issued in their favor by the drawer.
APPLICATION OF LAW
15. Applying the aforesaid law at hand to the facts of the case, the accused during framing of notice u/s 251 Cr.P.C on 27.09.2023, admitted his signature on the cheque. Thus, signature on the cheque is an undisputed fact. However, the accused denied the execution of particulars of the cheque.
A careful examination of the Negotiable Instruments Act's provisions, particularly Sections 20, 87, and 139, makes it abundantly evident that whoever signs a cheque and gives it to the payee is still accountable unless he provides proof to refute the assumption that the cheque was written to settle a debt or release a liability. In the event that the drawer has properly signed the cheque, it makes no difference who filled it out. The criminal provisions of Section 138 would apply if the cheque was otherwise legitimate.1 Thus, 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 provisions of Section 138 would be attracted.2
16. Suffice to say, the presumption qua the existence of legal liability as prescribed u/s 139 of the NI Act is liable to be attracted in the present case.
1 Basalingappa v. Mudibasappa, AIR 2019 SC 1983.
2 Bir singh Vs. Mukesh Kumar, (2019) 4 SCC 197.
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VANSHIKA VANSHIKA MEHTA
MEHTA Date: 2025.03.26
16:47:26 +0530
17. At this stage, the accused submits that he has no legal liability towards the complainant. Now, the effect of the presumption, in that sense, is to transfer the evidential burden on the accused of proving that the cheque was not received by the bank towards the discharge of any liability. Until this evidential burden is discharged by the accused, the presumed fact will have to be taken to be true, without expecting the complainant to do anything further.
18. It is worthwhile to note that the standard of proof to discharge this evidential burden is not as heavy as that usually seen in situations where the prosecution is required to prove the guilt of an Accused. The Accused is not expected to prove the non-existence of the presumed fact beyond reasonable doubt. The Accused must meet the standard of 'preponderance of probabilities', similar to a Defendant in a civil proceeding.3
19. Hence, it has to be seen as to whether the accused has been able to rebut the presumption of law on a scale of preponderance of probabilities during the course of the trial or not.
20. Thus, the basic and significant question for determination is: Whether the accused had issued the cheque in question in discharge of legally enforceable debt or liability?
DISCUSSION OF EVIDENCE PLEA CONCERINING LEGAL NOTICE 3 Rangappa v. Mohan, MANU/SC/0376/2010 : AIR 2010 SC 1898.
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Digitally signed by
VANSHIKA VANSHIKA MEHTA
MEHTA Date: 2025.03.26
16:47:38 +0530
21. During the course of final arguments, ld. Counsel for accused has extensively argued that the Legal Notice dated 06.10.2021 was not conclusively delivered to the accused, as the postal report does not confirm the identity of the recipient.
On perusal of the record, accused has denied the acceptance of legal notice during the stage of framing of notice under Section 251 Cr.PC, however, the accused has admitted that the address on the legal notice is correct. The accused has also not lead any evidence to disprove the presumption of the service under Section 27 of General Clauses Act.
22. It is a settled law that the true intent behind serving a legal demand notice as a precursor to prosecution is to provide the accused with an opportunity to pay the cheque amount and evade prosecution. The court has held that the service of summons is sufficient opportunity for the accused to make the payment. Any accused who fails to pay the amount within 15 days of the service of summons cannot shield themselves behind the technical argument of non-service of a legal notice.
23. If a drawer claims that he did not receive the notice sent by post, he still has the opportunity to make the cheque payment within 15 days of receiving the court summons related to the complaint under Section 138 of the Act. By doing so and informing the court that the payment was made within this period (upon receiving a copy of the complaint with the summons), he can argue that the complaint should be dismissed. However, if the payment is not made within 15 days of receiving the summons and the complaint copy, the accused cannot claim improper service of notice under Section 138. This is because statutory presumptions under Section 27 CC No. 2092/2021 Musarrat Ali Vs. Irfan Label page no. 13 of 22 Digitally signed VANSHIKA by VANSHIKA MEHTA MEHTA Date: 2025.03.26 16:47:54 +0530 of the General Clauses Act and Section 114 of the Evidence Act establish a contrary presumption regarding service of notice.4
24. Thus, in view of the above said law, the fact that the legal notice is shown to be served on the accused as per the tracking report and further summons on the accused were also served. The mandatory statutory legal notice is deemed to have been served on the accused in the present case. Institution of the complaint within limitation is also not in dispute. In any which case, the accused has also failed to lead any evidence to rebut the presumption of service under section 27 of general clauses act.
PLEA CONCERINING THE CHEQUES GIVEN TO RAMESHWAR RANA AND THE APPLICABILITY OF SECTION 56 OF THE NI Act
25. The accused contended that the cheques in question were issued in favor of Rameshwar Rana as security in lieu of receiving cash; however, the said amount was never provided to the accused. The accused also argued that the disputed cheques were not returned by Rameshwar Rana and therefore, payment had been stopped at the time of presentation, as evidenced by his bank records.
26. The accused further submitted that he lodged a criminal complaint (Ex. RW- 1/1) dated 02.06.2023 before the SHO, PS Vivek Vihar, Delhi, against the complainant and Rameshwar Rana for cheating, fraud, and misappropriation of cheques. A subsequent complaint for criminal intimidation led to the registration of NCR No.0009/2024 (Ex. RW-1/2) dated 16.01.2024 under Section 506 IPC at PS Vivek Vihar, Delhi. Furthermore, the accused filed a complaint under Section 156(3) Cr.P.C., registered as CC No.195/2024, titled Mohd. Irfan vs. Musarrat Ali 4 C.C. Alavi Haji Vs. Palapetty Muhammed, 2007 (6) SCC 555.
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Digitally signed
VANSHIKA by VANSHIKA
MEHTA
MEHTA Date: 2025.03.26
16:48:04 +0530
& Anr., wherein the Learned Trial Court, vide order dated 09.07.2024 (Ex. RW- 1/2), directed the SHO to file an ATR.
27. Before proceeding further, it is important to take a brief look at the rules of evidence. The burden of proof refers to the responsibility placed on a party to establish the existence of certain facts or elements essential to their case. On the other hand, the onus of proof pertains to the duty of adducing evidence or presenting proof of specific facts alleged by a party. Unlike the burden of proof, which remains constant, the onus of proof can shift during the trial based on the evidence presented by each party.
28. The aforesaid (Ex. RW-1/1) and (Ex. RW-1/2) bear the proper stamp and prima facie appear to be original. Notably, the complainant has neither disputed (Ex. RW- 1/1) and (Ex. RW-1/2) nor made any effort to cross-examine the accused regarding the same. It is a settled principle of law that a fact not expressly denied or challenged in cross-examination amounts to deemed admission. Hence, in view of the aforesaid discussion, (Ex. RW-1/1) and (Ex. RW-1/2) stand proved.5
29. A perusal of the record shows that the present impugned cheques were dishonored on 14.09.2021 with the remark "Payment Stopped by Drawer." Consequently, the complainant issued a legal demand notice on 08.10.2021 and subsequently instituted the present case on 20.11.2021. However, the accused lodged a criminal complaint (Ex. RW-1/1) against the complainant and Rameshwar Rana for cheating, fraud, and misappropriation of cheques only on 02.06.2023.
30. No explanation is forthcoming as to why the accused did not reach out to state machinery as soon as he became aware on 14.09.2021 that the cheques had been 5 Section 58 of Indian Evidence Act, 1872.
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Digitally signed by
VANSHIKA VANSHIKA MEHTA
MEHTA Date: 2025.03.26
16:48:14 +0530
misused. Furthermore, the accused took no action even after receiving the legal notice was delivered on 11.10.2021. Even if the accused's plea that he did not receive the legal demand notice is prima facie believed to be true, this court fails to comprehend why no steps were taken after the present case was instituted on 20.11.2021. The accused only lodged the criminal complaint on 02.06.2023, almost 1.5 years after the present case was instituted. No reasonable explanation has been provided for such a delay. Moreover, the criminal complaint filed by the accused appears to be an afterthought. Furthermore, the accused has not adduced any evidence to substantiate his plea that the present cheques were issued to Rameshwar Rana, except for making a bald statement.
31. Additionally, the accused has taken contradictory stands, as, on one hand, he consistently stated that the present cheques were issued as security cheques to Rameshwar Rana, while on the other hand, his counsel vehemently argued in paragraph 4 of his written submissions:-
"That without the right and contention of the Accused, the Complainant has raised a controversy regarding the advancement of a loan of Rs.2,00,000/- in January 2021, though this issue is not relevant to the present case. It is otherwise proved by the Bank Statement of the Accused that the Accused had paid a part payment of Rs.1,00,000/- to the Complainant on 18.06.2021 through RTGS. However, the Complainant has mingled and concealed this fact in the present case. If the loan was indeed advanced in January 2021, the alleged cheque in question could not have been presented for the total sum of Rs.2,00,000/-. It is well-settled law that the Complainant must have endorsed the cheque with the consent of the Accused before presenting it for adjustment. If this was not done by the Complainant and the fact was concealed, an offence under Section 138 of the NI Act shall not be CC No. 2092/2021 Musarrat Ali Vs. Irfan Label page no. 16 of 22 Digitally signed by VANSHIKA VANSHIKA MEHTA MEHTA Date: 2025.03.26 16:48:29 +0530 made out." (Dashrathbhai Trikambhai Patel vs. Hitesh Mahendrabhai Patel & Anr., 2022 LiveLaw (SC) 830).
32. Additionally, the accused's counsel suggested to CW-1 during his cross- examination on 19.01.2024 that only Rs.1,00,000/- was advanced as a loan to the accused, which was denied by the complainant. Thereafter, DW-1 (the accused), during his cross-examination on 20.01.2025, admitted that he had taken cash from the complainant and repaid the same on 18.06.2021 through RTGS.
33. Thus, on one hand, the learned counsel for the accused argues that the impugned cheques were given as security to Rameshwar Rana, while on the other hand, he contends that the complainant should have endorsed the cheques under Section 56 of the NI Act before presenting them for encashment. Although these two arguments are mutually destructive, even if the latter plea of the accused is taken into consideration, no evidence has been adduced to show that only Rs.1,00,000/- was advanced by the complainant.
In sum, the accused has merely made bald pleas--whether regarding the cheques being issued to Rameshwar Rana or regarding the alleged requirement for an endorsement under Section 56 of the NI Act--without any substantive evidence to support his claims.
CONTRADICTION IN THE STATEMENT OF CW-1
34. It is the case of the accused that complainant In his initial complaint categorically stated that the loan was advanced in January 2021 for six months. However, during cross-examination, he asserted that the loan was given in CC No. 2092/2021 Musarrat Ali Vs. Irfan Label page no. 17 of 22 VANSHIKA Digitally signed by VANSHIKA MEHTA MEHTA Date: 2025.03.26 16:48:45 +0530 May/June 2021, creating a fundamental inconsistency in his version of events. Furthermore, CW-1's statement that the accused approached him at his factory in May/June 2021 seeking financial assistance, and that the loan was given 3-4 days later, is in direct conflict with his assertion that the loan was ultimately given in January 2021.
35. The minor inconsistencies in CW-1's testimony regarding the exact date of the loan's advancement do not invalidate the substance of his claim but rather demonstrate the natural fallibility of human memory, especially concerning informal financial transactions. CW-1 has consistently maintained that the accused approached him for financial assistance, and he extended a loan accordingly. While the precise date may have varied in his statements, the fundamental fact remains unchanged--that the accused received the loan and issued a cheque as repayment.
36. This gains further importance in light of previous loan transaction involved between the parties. It is not in dispute that accused has previously taken a loan from the complainant. The CW-1 in his cross examination dated 19.01.2024 stated interalia:-
"The accused had approached in the month of May/June, 2021 for seeking financial assistance and I had advanced him money 3-4 days after he had approached me, however, I do not remember the exact date of advancement or approach. I had advanced the loan in January. The cheque was filled except the name when brought to me, however, the name was filled by me in his presence as he had told me the person who is giving me loan can fills his name. The previous transaction dates back to May, 2021. The present advancement was given after the return of previous transaction."
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37. CW-1's statement, when viewed holistically, maintains internal consistency. While there may be some variance in recalling the precise timeline, he has been steadfast in asserting that a loan was given, and a cheque was issued as security.
38. Furthermore, CW-1's assertion that the cheque was pre-filled except for the name, which he completed in the presence of the accused with his explicit permission, reinforces the credibility of the complainant's version. This indicates that the accused had full knowledge of and consented to the issuance of the cheque, thereby acknowledging the debt.
39. The accused has further asserted that CW-1, in his cross-examination dated 19.01.2024, claimed that the loan was borrowed from third parties, namely his brother, wife, and friends (Shami Kapoor and Raju Rautela), before being given to the accused. However, this assertion was neither mentioned in the complaint filed under Section 138 of the NI Act nor corroborated by any witness testimony despite ample opportunity.
40. This argument has no merit, as once the witness has provided an answer to a question, it does not, by itself, place a burden of proof upon him to substantiate his response during cross-examination. It is only when a suggestion is made that the court may draw an adverse inference against the witness, shifting the burden of proof onto the complainant. In the absence of such a situation, the submission that the complainant has not examined any witnesses holds no merit.
Digitally signed by VANSHIKA VANSHIKA MEHTA MEHTA Date: 2025.03.26 16:49:08 +0530 CC No. 2092/2021 Musarrat Ali Vs. Irfan Label page no. 19 of 22 BANK STATEMENT OF THE ACCUSED
41. The Learned Counsel for the accused further submitted that the bank statements produced by the accused demonstrate a sound financial standing during the relevant period, thereby negating any necessity for the alleged loan.
Before addressing this contention, it is important to review the application dated 04.02.2025, filed by the Learned Counsel for the accused, seeking rectification of a "typographical error" that had inadvertently appeared in DW-1's statement.
42. Upon examining the order dated 12.02.2025, this Court held that the accused, through his application, sought to rectify errors in DW-1's statement. However, during submissions, the Learned Counsel for the accused pointed out that the bank passbook and other documents were not mentioned in DW-1's statement. Consequently, the application lacked merit, as it was filed for the rectification of typographical errors, whereas the accused was actually attempting to introduce new evidence that, according to his counsel, had been inadvertently omitted. Since the relief sought did not align with the actual intent, the application was dismissed. However, the accused was granted the liberty to file afresh application qua the same.
43. Despite this, no proper application was subsequently filed to bring the said evidence on record. Furthermore, a perusal of the submitted bank statement reveals that it was electronically generated but was not annexed with a certificate under Section 65B of the Indian Evidence Act. It is axiomatic that a certificate under Section 65B(4) of the Indian Evidence Act (IEA) is mandatory and a condition precedent to the admissibility of evidence by way of an electronic record.
CC No. 2092/2021 Musarrat Ali Vs. Irfan Label page no. 20 of 22
Digitally signed
VANSHIKA by VANSHIKA
MEHTA
MEHTA Date: 2025.03.26
16:49:36 +0530
In view of the aforesaid observations, the said document cannot be taken into consideration.
DECISION
44. It is axiomatic that the degree of proof expected from the accused is not as rigorous as that of the complainant. He could discharge his onus by making dents in the case of the complainant. Therefore, once the accused adduces evidence to the satisfaction of the Court that on a preponderance of probabilities there exists no debt/ liability in the manner pleaded in the complaint or the demand notice or the affidavit-evidence, the burden shifts to the complainant and the presumption 'disappears' and does not haunt the Accused any longer. The onus having now shifted to the complainant, he will be obliged to prove the existence of a debt/ liability as a matter of fact and his failure to prove would result in dismissal of his complaint case. Thereafter, the presumption under Section 139 of NI Act does not again come to the complainant's rescue. Once both parties have adduced evidence, the Court has to consider the same and the burden of proof loses all its importance.6
45. It is axiomatic that the accused is not required to conclusively prove his defense to rebut the presumption; however, he must present certain circumstances or lead evidence to the extent that the Court either believes in the existence of his defense or considers its existence so probable that a prudent man, under the circumstances of the case, would accept the same. However, the accused has failed to do so.
6 Basalingappa v. Mudibasappa, AIR 2019 SC 1983.
CC No. 2092/2021 Musarrat Ali Vs. Irfan Label page no. 21 of 22
Digitally signed by
VANSHIKA VANSHIKA MEHTA
MEHTA Date: 2025.03.26
16:50:40 +0530
46. To shift the burden of proof to the complainant, the accused must bring on record something that is at least probable. Without rebutting the presumption, the onus to prove the case does not shift to the complainant. It is evident that the accused has not produced any cogent evidence to rebut the presumptions under Sections 118 and 139 of the Act.
47. In view of the aforesaid discussions, the Court finds that the accused has failed to establish any probable defense and has not been able to rebut the presumption raised in favor of the complainant. Thus, despite minor discrepancies in date recall, the complainant's claim remains credible. The accused's lack of a substantive rebuttal, coupled with his issuance of the cheque, strongly supports the complainant's position. Accordingly, the complainant's case stands proven.
Accordingly, this court hereby convicts the accused, Mr. Irfan Label for the offence punishable u/s 138 of the Negotiable Instruments Act, 1881 in respect of cheque in question.
PRONOUNCED IN OPEN COURT ON 26.03.2025 Present judgment consists of 22 pages and each page bears my initials.
Digitally signed by
VANSHIKA VANSHIKA MEHTA
MEHTA Date: 2025.03.26
16:50:56 +0530
(VANSHIKA MEHTA)
JMFC (NI ACT) Digital Court-02
SHD/KKD/Delhi/26.03.2025
CC No. 2092/2021 Musarrat Ali Vs. Irfan Label page no. 22 of 22