Delhi District Court
Bansi Lal Sharma vs Bal Gobind Kushwaha on 28 November, 2025
IN THE COURT OF MR. HARGURVARINDER SINGH JAGGI,
ADDL. SESSIONS JUDGE (FTC- 01), SOUTH DISTRICT,
SAKET COURTS, NEW DELHI
CA No.: 286/2025
CNR No.: DLST010120522025
Police Station: Sangam Vihar
u/Section(s): 372, CrPC :: 413, BNSS
138, NI Act, 1881
IN THE MATTER OF:
BANSI LAL SHARMA ... Appellant
Through - Mr. Vinod Yadav, Advocate
v.
BAL GOBIND KUSHWAHA ... Respondent
Through - Mr. Ekansh Mishra, Advocate
Date of filing of appeal: 04.08.2025
Date of reserving judgment: 15.11.2025
Date of pronouncement of judgment: 28.11.2025
JUDGMENT
28.11.2025
1. Bansi Lal Sharma (Sharma) has preferred an appeal under Section 372 of the Code of Criminal Procedure, 1973 (CrPC) :: Section 413 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) challenging the judgment dated 23.04.2025 (impugned judgment) passed by the Court of Judicial Magistrate First Class, (NI Act)-07, South District, Saket Courts, New Delhi (Trial Court), wherein the Trial CA No. 286/2016 Page No. 1/33 Court has acquitted Bal Gobind Kushwaha (Kushwaha) in a complaint case under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) titled as Bansi Lal Sharma v. Bal Gobind Kushwaha - CC No. 6416/2023.
2. Notice of appeal was issued by the Court vide order dated 08.08.2025 and the respondent, Kushwaha filed appearance before the Court. The trial court record (TCR) was also requisitioned by the Court.
3. For the sake of convenience and avoidance of any confusion, Sharma is also referred as the complainant and Kushwaha is referred as the accused, interchangeably, as per their rank and status before the Trial Court.
Legal sojourn
4. The Trial Court dismissed the complaint filed by Sharma against Kushwaha alleging that the cheque issued by Kushwaha towards discharge of his liability against a friendly loan advanced by Sharma of ₹3,00,000/- was dishonoured. After careful examination and weighing the evidence led by the parties, the Trial Court acquitted Kushwaha for the alleged commission of offence under Section 138, NI Act, of dishonour of cheque for an amount of ₹2,50,000/- for insufficient funds in the account.
5. The Trial Court found that the accused discharged the burden of statutory presumption (reverse presumption) under Section 118, 139 of the NI Act, by raising a probable defence. On the other hand, the Trial CA No. 286/2016 Page No. 2/33 Court found that the complainant failed to lead cogent evidence, to prove the advancement of loan, source of alleged cash funds available with him and existential discrepancies in the testimonies of the complainant' witnesses.
Grounds of appeal
6. On being aggrieved by the impugned judgment, Sharma in his appeal has urged eleven grounds in total. However, on careful reading of the grounds for appeal 'A' to 'L', the same are summarized as below:
(a) The Trial Court failed to appreciate that there were glaring contradictions in the statements of Kushwaha recorded on 26.09.2023 and 30.03.2024. On 26.09.2023 at the time of framing of notice under Section 251 of the Code of Criminal Procedure, 1973 (CrPC, 1973), Kushwaha answered that he gave a blank cheque to Sharma for investment in the Laxmi Somity, an unregistered trust, run by Sharma and it was Sharma, who filled the amount and other particulars of cheque. Whereas on 30.03.2024, Kushwaha recorded his statement on the line that he is not liable to pay any amount to Sharma as he did not take any loan from him, rather he had taken a loan of ₹1,30,000/-
from Laxmi Somity, which he will pay and the case filed by Sharma against him is a false case.
(b) The Trial Court failed to consider and appreciate that the defence urged by Kushwaha is marred by contradictions, CA No. 286/2016 Page No. 3/33 as in his statement under Section 313, CrPC, 1973, he said that he had given a blank signed undated cheque to Laxmi Somity society, which was run by three persons, including Sharma.
(c) The Trial Court failed to appreciate that Kushwaha in his statement under Section 313 CrPC, 1973, stated that he had taken a loan of ₹1,30,000/- from the society and whereas his own witness, Ashok Kumar Mehta admitted during his cross-examination that he was present along with Kushwaha when ₹1,00,000/- was handed over to him on 09.06.2021 at the house of Sharma.
(d) The Trial Court failed to appreciate that Kushwaha in his defence evidence filed false and fabricated documents and without any supporting certificate under section 65B of the Indian Evidence Act, 1872 (Evidence Act).
(e) The Trial Court failed to appreciate that Kushwaha had taken different stances at different stages of the case and yet the Trial Court ruled against Sharma.
(f) The Trial Court failed to appreciate the submission advanced by the counsel for Sharma that he is an illiterate person, who cannot use computer, laptop for typing, and he had never used WhatsApp application on Android CA No. 286/2016 Page No. 4/33 phone for sending messages or any other documents to Kushwaha.
7. Sharma has prayed to the Court in his appeal, to set aside the impugned judgement passed by the Trial Court and convict Kushwaha under Section 138, NI Act, and sentence him for two years imprisonment and direct Kushwaha to pay a sum of ₹5,00,000/- i.e. double the cheque amount to Sharma and/or pass any other order as deem fit and appropriate.
Reply, objections to appeal
8. Kushwaha filed his written reply/objections to the appeal. The stance urged by Kushwaha in his reply against the appeal is that firstly, the scope of appeal against acquittal is a narrower scope and the appellate court must be slow to interfere. Secondly, he had taken a loan from the Laxmi Somity society, and had given a blank cheque to the society as a security cheque. As per Kushwaha, no personal loan was taken by him from Sharma. Thirdly, Sharma being in control of the society, Laxmi Somity misused his position by filling in particulars on the blank cheque and filed a false complaint under Section 138, NI Act against him. Fourthly, Sharma failed to lead evidence before the Trial Court about advancement of loan of ₹3,00,000/- and availability of funds with him. Fifthly, Kushwaha has also urged in his defence that Sharma misused his position in the society by filling in the blank cheque and the fact of misuse stands proven before the Trial Court, as the Trial Court rightly found the existence of different inks on the cheque vis-à- vis signature on the cheque and other particulars are in different inks.
CA No. 286/2016 Page No. 5/33Lastly, Kushwaha in his reply has urged that Sharma took contradictory and self-serving stances before the Trial Court.
Submission by Counsels
9. On 16.10.2025, Mr. Vinod Yadav learned counsel for Sharma advanced arguments for the appeal and why impugned judgment passed by the Trial Court must be interfered by this Court. On 15.11.2025, Mr. Ekansh Mishra learned counsel for Kushwaha advanced rebuttal arguments and Mr. Yadav rejoined his arguments.
10. Mr. Vinod Yadav opened his arguments on the note that the impugned judgment passed by the Trial Court suffers from perversity and infirmity as the Trial Court failed to consider that Kushwaha took three different contrary defences, to deny that the cheque in question was not issued by him towards the discharge of his liability. Mr. Yadav submitted that the Trial Court failed to appreciate that with no reply on behalf of Kushwaha to the statutory notice issued by Sharma, Kushwaha at the time of framing of notice under Section 251 CrPC, 1973 that the cheque given by him to Laxmi Samiti society, an unregistered trust, run by Sharma was a blank cheque, Kushwaha had just signed the same and the other name and amount was filled by Sharma himself.
11. Mr. Yadav further submitted that on the other hand, Kushwaha in his statement under Section 313, CrPC, 1973 stated that he had given a signed undated cheque in the Laxmi Somity society, which was run by three persons, including the complainant and he had taken a loan of CA No. 286/2016 Page No. 6/33 ₹1,30,000/- from the society, Laxmi Somity. Kushwaha further stated that he had given the cheque and he continued to pay interest for the same but could not pay the principal amount.
12. Mr. Yadav submitted that the impugned judgment passed by the Trial Court deserves to be set aside as the Trial Court miserably failed to consider the unabashed contradictory stances taken by Kushwaha at different stages of the proceedings. Mr. Yadav further submitted that the Trial Court failed to consider that without the certificate under Section 65B of the Evidence Act, the evidence tendered by Kushwaha in the form of screenshots of WhatsApp Group chat messages was inadmissible.
13. Mr. Yadav submitted that the Trial Court erred in its finding, particularly at the paragraph number 23 of the impugned judgment by failing to consider that minor discrepancy is not fatal to the prosecution's case. The learned counsel cited Section 145 of the Evidence Act in his support and also placed reliance upon the law report of the Hon'ble High Court of Madhya Pradesh in the case of Vikram Singh Vs Prakash Chander, order dated 24.04.2024.
14. Further, Mr. Yadav submitted that the Trial Court erred in its finding about the loan advanced by Sharma to Kushwaha being an unsecured loan and without any written agreement on loan document between the parties. To buttress his submission, the learned counsel placed reliance upon the law report of Bir Singh v. Mukesh Kumar - 2019 INSC 149.
CA No. 286/2016 Page No. 7/3315. Mr. Yadav submitted that the Trial Court failed to consider and appreciate that Kushwaha had no plea of defence as the same is apparent from his reply/statement recorded in relation to notice under Section 251, CrPC. The learned counsel further submitted that Kushwaha failed to lead any evidence before the Trial Court with regard to proof of mode of payment.
16. Mr. Yadav submitted that one of the defence witnesses, namely, Ashok Kumar Mehta (DW-2) stated that on 09.06.2021 the loan of ₹1,00,000/- was given in his presence by Sharma to Kushwaha and the security cheque was handed over against the said loan. Mr. Yadav further submitted that the Trial Court failed to appreciate that DW-3, namely, Damodar Mahto is the brother of Kushwaha and an interested witness. The Trial Court also erred to appreciate and consider that there were contradiction in stance of Kushwaha and his brother Damodar (DW-3).
17. To buttress his arguments, the learned counsel placed reliance upon the law reports of Superior Courts, as below:
(i) Sanjabij Tari v. Kishore S. Borcar & Anr. - 2025 INSC 1158
(ii) Bir Singh v. Mukesh Kumar - 2019 INSC 149
(iii) Ashok Singh v. State of Uttar Pradesh & Anr. - 2025 INSC 427
(iv) Anvar P. V. (s) v. P. K. Basheer and Ors. (2014) 10 SCC 473 CA No. 286/2016 Page No. 8/33
(v) Simmi Anand v. State & Anr. - 2025 DHC 6748
(vi) Satish Chand Sharma v. Mukesh Kumar - 2025 DHC 5877
18. Mr. Ekansh Mishra learned counsel for Kushwaha valiantly challenged the submissions advanced by Mr. Yadav. Mr. Mishra submitted that to prove the commission of an offence punishable under Section 138, NI Act all three key ingredients must co-exist. The learned counsel placed reliance upon the law report of the Apex Court in the case of Basalingappa v. Mudibasappa - (2019) 5 SCC 418.
19. Mr. Mishra submitted that the impugned judgment merits no interference by this Court, as the Trial Court rightly found and held that Kushwaha dispelled the presumption of law under Sections 118, 139 of the NI Act and it was Sharma, who failed to prove his case thereafter. The learned counsel placed reliance upon the law report of the Apex Court in the case of Ranjit Sarkar v. Ravi Ganesh - (2025) 7 SCC 234.
20. The learned counsel contended that no legally enforceable debt existed to be discharged by Kushwaha in favour of Sharma. The learned counsel read the statement of Kushwaha recorded by the Trial Court under Section 313, CrPC and reply to notice framed under Section 251, CrPC. The learned counsel further submitted that Kushwaha had been consistent with his stance before the Trial Court from the word 'go' that he availed a loan from Laxmi Somity and gave a blank signed cheque to the society, which was confirmed by DW-2 in his testimony. The CA No. 286/2016 Page No. 9/33 learned counsel further submitted that Sharma being the person managing the society, misused the signed blank cheque by filling the details such as amount and name of the holder and this fact was proven before the Trial Court, when the Trial Court found and observed the different inks of the cheque in question.
21. Mr. Mishra urged that no loan of ₹3,00,000/- was provided by Sharma to Kushwaha. The learned counsel further submitted that it was Sharma's own witness, namely, Kamal Rai (CW-2), who testified that he does not know, if Sharma runs the Laxmi Somity. The learned counsel further submitted that the Trial Court rightly held that there were material inconsistencies between the complainant's evidence about the schedule of repayment of loan. The learned counsel further submitted that adverse inference must be drawn against Sharma for dropping witness before the Trial Court.
22. Mr. Mishra submitted that it is the complainant, Sharma, who imposed his case from what was initially urged in the statutory notice and a completely new story before the Trial Court. The learned counsel further submitted that no demand be it written or oral was made by Sharma to Kushwaha, to repay the loan.
23. The issue before the Court is to ascertain, whether the impugned judgment passed by the Trial Court merits interference by this Court in exercise of appellate powers under proviso to Section 372, CrPC, 1973 ::
413, BNSS, 2023.CA No. 286/2016 Page No. 10/33
Legal provision and legal principles
24. The present appeal emanates from a complaint filed by Sharma under Section 138 of the NI Act, wherein the Trial Court acquitted Kushwaha. Thus, it is imperative to set out the legal standard by referring to the appropriate legal provisions and legal principles.
25. The Apex Court in Rohitbhai Jivanlal Patel v. State of Gujarat & Anr. - 2019 INSC 393 (RJ Patel's case) while holding a clear view with regard to the conviction of the accused-appellant for the offence under Section 138 NI Act, the impugned judgment and order dated 08.01.2018 does not call for any interference but, on the facts and in the circumstances of the case, modified the punishment as awarded by the High Court. The Apex court emphasized that, ordinarily, an appellate court will not upset a judgment of acquittal if the view taken by the trial court is one of the possible views of the matter. The appellate court may only interfere if it arrives at a clear finding that the judgment of the trial court is perverse, i.e., not supported by evidence on record, contrary to what is regarded as normal or reasonable, or wholly unsustainable in law.
26. The relevant extract of paragraph 11 of the RJ Patel's case is reproduced in verbatim as below:
"11. According to the learned counsel for the accused- appellant, the impugned judgment is contrary to the principles laid down by this Court in the case of Arulvelu CA No. 286/2016 Page No. 11/33 (supra) because the High Court has set aside the judgment of the Trial Court without pointing out any perversity therein.
The said case of Arulvelu (supra) related to offences under Sections 304-B and 498-A IPC. Therein, on the scope of the powers of Appellate Court in an appeal against acquittal, this Court observed as follows:
"36. Carefully scrutiny of all these judgments lead to the definite conclusion that the appellate court should be very slow in setting aside a judgment of acquittal particularly in a case where two views are possible. The trial court judgment cannot be set aside because the appellate court's view is more probable. The appellate court would not be justified in setting aside the trial court judgment unless it arrives at a clear finding on marshalling the entire evidence on record that the judgment of the trial court is either perverse or wholly unsustainable in law."
11.1 The principles aforesaid are not of much debate. In other words, ordinarily, the Appellate Court will not be upsetting the judgment of acquittal, if the view taken by Trial Court is one of the possible views of matter and unless the Appellate Court arrives at a clear finding that the judgment of the Trial Court is perverse, i.e., not supported by evidence on record or contrary to what is regarded as normal or reasonable; or is wholly unsustainable in law. Such general restrictions are essentially to remind the Appellate Court that an accused is presumed to be innocent unless proved guilty beyond reasonable doubt and a judgment of acquittal further strengthens such presumption in favour of the accused. However, such restrictions need to be visualised in the context of the particular matter before the Appellate Court and the nature of inquiry therein. The same rule with same rigour cannot be applied in a matter relating to the offence under Section 138 of the NI Act, particularly where a presumption is drawn that the holder has received the cheque for the discharge, wholly or in part, of any debt or liability. Of course, the accused is entitled to bring on record the relevant material to rebut such presumption and to show that preponderance of probabilities are in favour of his defence but while examining if the accused has brought about a probable defence so as to rebut the presumption, the CA No. 286/2016 Page No. 12/33 Appellate Court is certainly entitled to examine the evidence on record in order to find if preponderance indeed leans in favour of the accused."
27. In summary, while appellate courts should be cautious in overturning acquittals, they are empowered to do so where the Trial Court's decision is perverse, unsustainable, or contrary to law, especially in cases involving statutory presumptions like those under the Negotiable Instruments Act, 1881.
28. The Parliament amended the NI Act by insertion of Chapter XVII, Of Penalties in case of Dishonour of Certain Cheques for Insufficient of Funds in the Accounts by the Act 66 of 1988 w.e.f. 01.04.1989. Section 138 of the NI Act reads as below:
"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 provision of this Act, be punished with imprisonment for [a term which may be extended to two years']1, 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--1
Subs. by Act 55 of 2002, s. 7, for certain words (w.e.f. 06.02.2003).CA No. 286/2016 Page No. 13/33
(a) 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;
(b) 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] 2 of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of 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 of other liability" means a legally enforceable debt or other liability."
29. The NI Act enlists three essential conditions, which ought to be fulfilled before Section 138 can be invoked. Firstly, the cheque ought to have been presented within the period of its validity. Secondly, a demand of payment ought to have been made by the presenter of the cheque to the issuer, and lastly, the drawer ought to have had failed to pay the amount within a period of 15 days of the receipt of the demand.
30. These principles and pre-requisites stand well established through judgment of the Apex Court in Sadanandan Bhadran v. Madhavan Sunil Kumar - (1998) 6 SCC 514. There is an explicit limitation of 30 days, beginning from period when the cause of 2 Subs. by s. 7, ibid., for "within fifteen days" (w.e.f. 06.02.2003).
CA No. 286/2016 Page No. 14/33action arose, prescribed by Section 142(b) of the NI Act, to initiate the proceedings under Section 138 of the NI Act.
31. His Lordship Dr. Dhananjay Y. Chandrachud, J., (As His Lordship then was) in Gimpex Private Limited vs. Manoj Goel
- 2021 INSC 637, culled out the ingredients forming the basis of the offence under Section 138 of the NI Act in the following structure:
(i) The drawing of a cheque by person on the account maintained by him with the banker for the payment of any amount of money to another from that account;
(ii) The cheque being drawn for the discharge in whole or in part of any debt or other liability;
(iii) Presentation of the cheque to the bank arranged to be paid from that account;
(iv) The return of the cheque by the drawee bank as unpaid either because the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount;
(v) A notice by the payee or the holder in due course making a demand for the payment of the amount to the drawer of the cheque within 30 days of the receipt of information from the bank in regard to the return of the cheque, and CA No. 286/2016 Page No. 15/33
(vi) The drawer of the cheque failing to make payment of the amount of money to the payee or the holder in due course within 15 days of the receipt of the notice.
27. The Superior Courts have expounded that the issuance of cheque towards a liability, the presentation of the cheque within the prescribed period, its return on account of dishonour, notice to the accused, and failure to pay within 15 days thereof, stand as sine qua non for an offence under Section 138 of the NI Act.
28. At this stage, a reference to Section 118 of the NI Act is also relevant as it lays down special rules for evidence to be adduced with the scheme of the NI Act. Section 118 is reproduced in verbatim as below:
"118. Presumptions as to negotiable instruments.--Until the contrary is proved, the following presumptions shall be made: --
(a) of consideration:--that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;
(b) as to date:--that every negotiable instrument bearing a date was made or drawn on such date;
(c) as to time of acceptance:--that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;
(d) as to time of transfer:--that every transfer of a negotiable instrument was made before its maturity;CA No. 286/2016 Page No. 16/33
(e) as to order of indorsements:--that the indorsements appearing upon a negotiable instrument were made in the order in which they appear then on;
(f) as to stamp:-- that a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course:--that the holder of a negotiable instrument is a holder in due course:
provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him."
29. The above-quoted legal provision of Section 118 showcases, it raises a rebuttable presumption as against the drawer to the extent that the concerned negotiable instrument was drawn and subsequently accepted, indorsed, negotiated, or transferred for an existing consideration, and the date so designated on such an instrument is the date when the concerned negotiable instrument was drawn. It is also further presumed that the same was transferred before its maturity and that the order in which multiple indorsements appear on such an instrument, that is the deemed order thereon. Lastly, the holder of a negotiable instrument is one in its due course, subject to a situation where the concerned instrument while being obtained from a lawful owner and from his or her lawful custody thereof through undertaking of an offence as contemplated under any statute or through the means of fraud, the burden to prove him or her being a holder in due course, instead, lies upon such a holder - See Sri Dattatraya v. Sharanappa - 2024 INSC 586.
CA No. 286/2016 Page No. 17/3330. Another relevant provision of the NI Act is Section 139, which reads as below:
"139. Presumption in favour of holder.--It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section138 for the discharge, in whole or in part, of any debt or other liability."
31. Section 139, NI Act, mandates the presumption, which involves an obligation on the Court conducting the trial for an offence under Section 138 of the NI Act, to presume that the cheque in question was issued by the drawer or accused for the discharge of a particular liability. The use of expression "shall presume" sets out the right of the accused to present evidence for the purpose of rebutting the said presumption. The presumption under Section 139 of the NI Act is a rebuttable one - See Rangappa v. Sri Mohan - 2010 INSC 500 (Rangappa's case). The effect of the presumption under Section 139 NI Act is that on filing of the complaint along with supporting documents, thereby prima facie establishing the case against the drawer (accused), the onus of proof shifts on the drawer or accused to adduce cogent material and evidence for rebutting the said presumption based on preponderance of probabilities - See Laxmi Dyechem v. State of Gujarat and Others - 2012 INSC 546.
32. At this juncture, it is relevant to expound upon the landmark judgment of the Apex Court in the Rangappa's case. The three Judges Bench of Hon'ble Supreme Court examined the liability under Sections 138 and 139 of the NI Act, in a cheque-dishonour case involving stop- payment instructions on a post-dated cheque. The Court clarified that CA No. 286/2016 Page No. 18/33 Section 138 applies even when payment is countermanded and that Section 139 raises a rebuttable presumption of a legally enforceable debt once the drawer's signature is admitted. The Apex Court emphasized that the accused must raise a probable defence on the preponderance of probabilities to rebut the statutory presumption, not an unduly high standard of proof. Applying these principles, the Court upheld the High Court's conviction because the accused failed to present a credible, timely defence and did not contest existence of the debt convincingly.
33. Hon'ble Supreme Court in the case of Basalingappa v. Mudibasappa - 2019 INSC 500 (Basalingappa's case), while dealing with a criminal appeal concerning a hand loan of ₹6,00,000/- culled out legal principles after reviewing the evidentiary presumptions under Sections 118(a) and 139 of the Act, assessing whether the accused rebutted the presumption that the cheque discharged a debt and whether the complainant proved lending capacity. The Apex Court held that the defence evidence raised a probable doubt about the complainant's financial capacity and contradictions in his testimony.
34. The legal principles culled out in Basalingappa's case are reproduced for ready reference as below:
"23. We having noticed the ratio laid down by this Court in above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:-CA No. 286/2016 Page No. 19/33
(i) 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.
(ii) 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.
(iii) To rebut the presumption, it is open for the accused to rely on evidence led by him or 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.
(iv) 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.
(v) It is not necessary for the accused to come in the witness box to support his defence."
35. A neat question arose before Hon'ble Supreme Court in the case of Rajesh Jain v. Ajay Singh - 2023 INSC 888 (Rajesh Jain's case) that since the execution of the cheque is admittedly, not under dispute, whether the accused can be said to have discharged his evidential burden, for the Courts below to have concluded that the presumption of law supplied by Section 139, NI Act had been rebutted.
36. His Lordship Aravind Kumar, J., in Rajesh Jain's case analysed the proper application of the statutory presumption under Section 139, NI Act, how it shifts the evidential burden onto the accused once the cheque's execution is established. The Apex Court found errors in Trial CA No. 286/2016 Page No. 20/33 Court and High Court's reasoning and held that the accused failed to rebut the presumption on preponderance of probabilities and allowed the appeal, convicted the accused and sentenced him to a fine and alternative imprisonment.
37. In Rajesh Jain's case, the Supreme Court clarified and reinforced several key legal principles regarding prosecutions under Section 138 of the NI Act, particularly concerning the operation of statutory presumptions and the burden of proof:
37.1 Presumption Under Section 139 and Shifting Burden:
(i) Once execution/signature on the cheque is admitted, the presumption under Section 139 NI Act is automatically activated. This presumption is that the cheque was issued in discharge of a debt or liability.
(ii) The evidential burden then shifts to the accused.
The accused must rebut the presumption, either by leading defence evidence or by establishing, on a preponderance of probabilities, that no debt or liability existed at the time of cheque issuance.
37.2 Nature and Standard of Rebuttal: The accused can rebut the presumption by - leading direct evidence to prove non- existence of debt, liability or relying on circumstances and probabilities arising from the case record, including the CA No. 286/2016 Page No. 21/33 complainant's own evidence. The standard of proof for the accused is not "beyond reasonable doubt" but the lesser standard of "preponderance of probabilities"-- like a civil case.
37.3 Role of the Court in Evaluating Evidence: Once the presumption is activated, the Court's focus must shift to the accused's case and whether the accused has discharged the evidential burden. If the accused fails to discharge this burden, the presumption stands, and the complainant is not required to do anything further. If the accused does discharge the burden, the complainant must independently prove the existence of debt/liability, without the aid of the presumption. The proper approach is to first determine if the accused has rebutted the presumption; only then, if rebutted, does the onus shift back to the complainant.
37.4 Consistency and Credibility in Defence: The Court emphasized that the defence set up by the accused must be credible and consistent. Contradictory or implausible defences, unsupported by evidence or reasonable explanation, will not suffice to rebut the presumption.
37.5 General Principles on Presumptions and Burden of Proof: The Court reiterated the distinction between legal burden (remains on complainant) and evidential burden CA No. 286/2016 Page No. 22/33 (can shift during trial). Section 139 is a "shall presume"
provision, meaning the court is compelled to raise the presumption once basic facts are established.
38. His Lordship Amit Mahajan, J., of Hon'ble High Court of Delhi in a latest judgment in the case of Manoj Kumar Panchal v. Mahender Kumar Panchal - 2025 DHC 4537 dismissed a leave-to-appeal against an acquittal under Section 138 of the NI Act, concerning a disputed cheque for ₹1,68,000 and conflicting claims about an alleged loan between relatives engaged in an aluminium fabrication business. The Trial Court acquitted the respondent after finding the complaint lacked material particulars and the complainant's statements inconsistent.
39. On appeal, the High Court analysed statutory presumptions under Sections 118 and 139, examined handwriting and FSL evidence, and applied Supreme Court precedent on rebutting presumptions - See Rajesh Jain's case. Finding no perversity in the Trial Court's evaluation and that the respondent successfully raised a probable defence, the High Court dismissed the petition.
Analysis
40. Now coming to the case at hand with the above-said legal standards as anchor point, to ascertain whether the impugned judgment is marred by perversity and ought to be interfered with. Sharma is aggrieved that with him advancing a friendly loan of ₹3,00,00/- to Kushwaha, which was returned by Kushwaha through a cheque of ₹2,50,000/- but the cheque bounced on presentation with the banker. On CA No. 286/2016 Page No. 23/33 the other hand, Kushwaha says that he never availed a friendly loan of ₹3,00,000/- from Sharma, rather he took a smaller loan from an informal lending society of whom Sharma is one of the managing members and the security cheque given by him as a blank security cheque has been misused by Sharma. It was on this premise, Sharma knocked the doors of the Trial Court and filed a complaint against Kushwaha under Section 138, NI Act.
41. The position in law is well settled that there exists a statutory presumption under Sections 118 and 139 of the NI Act. The default setting is that once you admit the signature on the cheque as yours, the Court automatically presumes that there exists a legally enforceable debut. However, the law also provides that the accused can rebut the presumption by raising a probable defence on a preponderance of probabilities to show that there existed no debt in the manner so pleaded and urged by the complainant in his complaint, demand notice or evidence. Once the accused has successfully raised a probable defence to the satisfaction of the Court, his burden is discharged and the default setting i.e. presumption vanishes and the burden now shifts on the complainant, to prove the existence of a legally enforceable debt as a matter of fact.
42. So the entire mission of Kushwaha before the Trial Court was to rebut the presumption, which he successfully did. Sharma has urged in his appeal that the Trial Court faltered at this juncture, because Kushwaha held shifting sand stances before the Court at the time of CA No. 286/2016 Page No. 24/33 recording reply to notice under Section 251, CrPC, recording of statement of accused under Section 313, CrPC and also contradictions in the testimony of defence witnesses led by Kushwaha, which the Trial Court miserably failed to consider.
43. To assess, whether the Trial Court faltered at considering Kushwaha raised a probable defence, let us examine the findings of the Trial Court in the impugned judgment.
44. Kushwaha from the word 'go' always said that the cheque in question was a security cheque for a loan he availed form an unregistered society, Laxmi Somity. Kushwaha in his defence did place in evidence photocopies of documentation, such as ledger entries, screenshots of WhatsApp messages/group. The case record reveals that right from the time of the framing of notice under Section 251, CrPC, statement of accused under Section 313, CrPC and during the course of trial, Kushwaha has been consistent in his stance of admitting the signature on the subject cheque but vociferously denied that the same was issued to Sharma. It is Kushwaha's defence that he had issued a blank security cheque towards the loan availed by him from Laxmi Somity society, however, Sharma being the president of the society has misused the blank security cheque.
45. Kushwaha has remained so steadfast at his stance that in his statement under Section 313, CrPC he stated that Sharma has filed a false case against him. Further, he is not liable to pay anything personally to Sharma as he had not taken any loan from him. Kushwaha CA No. 286/2016 Page No. 25/33 further stated that he had taken a loan of ₹1,30,000/- from the Lakshmi Samiti, which he will pay.
46. On perusal of the material on record, it is apparent nay evident that Kushwaha held his defence terra firma that he never availed a loan of ₹3,00,000/- from Sharma and he had availed a loan of smaller amount from Laxmi Somity of whom Sharma is one of the active, managing members and the blank security cheque given by him to Laxmi Somity has been misused by Sharma by filing a false complaint case under Section 138, NI Act against him.
47. The Trial Court found cracks in the Sharma's story. Well, the first big one was his financial credibility to advance a loan of ₹3,00,000/- to Kushwaha. As per Sharma's case, he retired as a driver in the year 2013 and he claimed to have lent a sum of ₹3,00,000/- in cash, which appears to be a huge sum for someone in his position. Crucially, Kushwaha in his defence urged and showed that Sharma did not disclose the cash transaction in his income tax returns.
48. Non-disclosure of friendly cash loans is pretty common and particularly in cheque dishonour cases. Does a tax violation automatically, invalidate the debt in Court? The answer to this question is no, not on its own. In the present case, the Trial Court did not rule on the ITR failure, as it was not the smoking gun, but it planted the first seed of doubt about the capacity of Sharma to lend a sum of ₹3,00,000/- to Kushwaha. The second dent being that why would someone who has CA No. 286/2016 Page No. 26/33 advanced a friendly loan of ₹3,00,00/- accept ₹2,50,000/- in return with no mention about the unpaid balance of ₹50,000/-.
49. The Trial Court in the larger picture also found a pattern of contradiction in Sharma's witnesses. Kamal Rai (CW-2) in his statement before the Trial Court gave completely different timelines for the loan. He stated about repayment of first tranche of loan of ₹1,50,000/- to be repaid by Kushwaha in seven or eight months, and the second tranche of ₹1,50,000/- to be repaid in three or four months. While Sharma in his complaint in paragraph No. 3 averred that the total loan of ₹3,00,000/- advanced by him was to be repaid by Kushwaha within one year. The Trial Court found that the story just wasn't straight.
50. The Trial Court also found the physical evidence about the cheque very tangible. Sharma insisted that the cheque was duly filled when Kushwaha handed him over the same. But the Trial Court found otherwise. On physical inspection of the cheque in question, the Trial Court noted, very clearly, that the ink used for the signature was different from the ink used for all the other details, such as date, amount. This finding by Trial Court directly supported Kushwaha's defence that he handed over a blank security cheque, which Sharma filled in himself later on.
51. The Court on careful examination of the TCR, particularly, the complaint and the demand notice dated 16.06.2023 filed by Sharma before the Trial Court and his testimony recorded as CW-1 on 14.02.2024 found a major fill-up attempt by Sharma. It is found that CA No. 286/2016 Page No. 27/33 there is no averment, plea in the complaint under Section 138, NI Act by Sharma about the repayment of balance ₹50,000/- against the total loan of ₹3,00,000. As a matter of fact, Sharma in paragraph No. 7 of his complaint urged as below:
"7. That the accused has total legal liability of Rs.3,00,000/- towards the complaint."
Whereas, Sharma on the question posed to him at the time of recording his testimony, about the same answered as below:
"Q. You have filed a cheque of amount of Rs.2,50,000/-, have you any other action against the accused to recover the outstanding amount of ₹50,000/-?
Ans. The accused had orally told me that he would given(sic) Rs.50,000/- to me and gave the cheque of the remainder amount. I presented the cheque when accused failed to make the payment.
I have not taken any other action against the accused for the recovery of amount of Rs.50,000/-"
52. On putting it all together, the synthesis is pretty clear, the Trial Court rightly held that Kushwaha rebutted the statutory presumption in his defence and created enough probability for any prudent person to doubt Sharma's story. And once that happened, Sharma could not prove his case beyond a reasonable doubt and the Trial Court rightly acquitted Kushwaha.
53. With all humility at my command and due deference to the law reports cited by Mr. Yadav learned counsel for the appellant, now I shall proceed to deal with the same.
CA No. 286/2016 Page No. 28/3354. The Apex Court in Sanjabij Tari v. Kishore S. Borcar & Anr. - 2025 INSC 1158 held that it is not the case that the complainant did not have wherewithal to advance loan to the accused and also ruled that the accused failed to rebut the statutory presumption. In the case at hand, the Trial Court rightly observed that Kushwaha rebutted the presumption under Section 139 and it was Sharma, who failed to prove his case as there was insufficient evidence and contradictions about repayment of loan.
55. In Bir Singh v. Mukesh Kumar - 2019 INSC 149 (Bir. Singh's case), the Apex Court addressed a criminal appeal under Section 138 of the Negotiable Instruments Act concerning dishonour of a cheque for ₹15,00,000/- and reviewed the legal questions about presumption under Section 139, NI Act. The Court affirmed that Section 139 creates a rebuttable presumption favouring the cheque holder and that revisional courts should not upset concurrent factual findings absent perversity. It reversed the High Court's acquittal, restored conviction, enhanced compensation to ₹16,00,000/- payable within eight weeks, and explained that fiduciary relationship or a signed blank cheque does not, without cogent evidence, negate the presumption of liability. This Court is in complete concurrence with the position in law culled out in Bir Singh's case that Section 139 provides reverse presumption. In the present appeal, the Trial Court proceeded only once the accused rebutted the presumption and Trial Court arrived at a finding that the complainant failed to lead any cogent evidence about him advancing CA No. 286/2016 Page No. 29/33 the loan and also about the tangible differences of ink on the cheque in question.
56. The Supreme Court in Ashok Singh v. State of Uttar Pradesh & Anr. - 2025 INSC 427 (Ashok Singh's case) overturned a High Court acquittal in a Section 138 Negotiable Instruments Act case, reinstating concurrent trial and appellate-court findings that a cheque for ₹22,00,000/- was issued in discharge of a loan and dishonoured. The Apex Court found the statutory presumptions under Sections 118, 139 NI Act, operate in the complainant's favour, and that the accused failed to rebut them with credible evidence. The said appeal resulted in conviction restoration with sentence modification: imprisonment was commuted to a monetary fine of ₹32,00,000 payable within four months, failing which the original sentence and full fine of ₹35,00,000 revived. The judgment applied precedent to assess corporate/partner liability and the burden of proof on cheque dishonour claims. In Ashok Singh's case, the Apex Court held that the evidence about the loan source was adequately scrutinized, and the complainant's failure to produce documentary proof at the outset did not invalidate his claim, given the statutory presumption and the lack of effective rebuttal by the accused. Whereas, in the case at hand, the Trial Court rightly held that the accused Kushwaha discharged the reverse presumption.
57. The law report of Anvar P. V. (s) v. P. K. Basheer and Ors. (2014) 10 SCC 473 (P.K. Basheer's case) was relied by the learned counsel for the appellant that the Apex Court has ruled that the production of CA No. 286/2016 Page No. 30/33 certificate under Section 65B(4) is mandatory. The Court finds that the reliance to this judgment must not be made in piece meal. Subsequent to the pronouncement of judgment in P.K. Basheer's case, the Apex Court in a subsequent judgment in the year 2017 in Sonu v. State - (2017) 8 SCC 570 held that the ratio of P.K. Basheer's case will apply prospectively unless the defence during trial raised objection to the admissibility of such evidence.
58. In the year 2020, a three Judges Bench of the Apex Court in Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal and Ors. - 2020 INSC 453 while overruling State of Delhi v. Navjot Sandhu - (2005) 11 SCC 600 and Shafhi Mohammad v. State of Himachal Pradesh - (2018) 2 SCC 801, upheld the ratio of P.K. Basheer's case and held issuance of certificate under Section 65B(4) is a condition precedent for admissibility of computer generated secondary evidence. In the case at hand, no such objection to the admissibility of secondary evidence was put to the defence witness. It is found that Kushwaha was cross-examined on the photostat copies/secondary evidence by the counsel for Sharma. Further, this Court has found substantial reasons as discussed in the preceding paragraphs of this judgment.
59. The law report of the Hon'ble High Court of Delhi in the case of Simmi Anand v. State & Anr. - 2025 DHC 6748 (Simmi Anand's case) is clearly distinguishable to the facts of the case at hand. In Simmi Anand's case the High Court observed that the complainant therein, in fact, placed on record documentary evidence to substantiate his CA No. 286/2016 Page No. 31/33 financial position, including rent agreements executed by him as landlord with various tenants. These rent agreements remained unchallenged by the accused. Additionally, the complainant therein also produced his income tax returns for the relevant assessment years, to show his rental income, whereas in the case at hand no such documentary evidence was led by Sharma before the Trial Court.
60. The law report of Satish Chand Sharma v. Mukesh Kumar - 2025 DHC 5877 (Satish Chand's case) also does not come to the aide of Sharma, as in Satish Chand's case, High Court observed that the complainant therein had placed on record receipts as proof of mode of part payment, whereas in the case at hand no such documentary evidence filed by Sharma and further, Sharma not only in his demand notice but also the complaint filed before the Trial Court stated that Kushwaha owes him ₹3,00,000/-
61. Hon'ble High Court in Manoj Kumar Panchal v. Mahender Kumar Panchal - 2025 DHC 4537 held that a decision of acquittal fortifies the presumption of innocence of the accused, and the said decision must not be upset until the appreciation of evidence is perverse. The case at hand of acquittal under challenge, is no different.
Conclusion
62. In view of the aforesaid legal principles, foregoing reasons and observations, this Court holds that there is neither any perversity in the impugned judgment passed by the Trial Court nor any merit in the appeal preferred by Bansi Lal Sharma in challenging the impugned CA No. 286/2016 Page No. 32/33 judgment dated 23.04.2025 passed by the Trial Court in Bansi Lal Sharma v. Bal Gobind Kushwaha - CC No. 6416/2023. This Court finds and rules that the Trial Court rightly acquitted, Bal Gobind Kushwaha for the alleged offence under Section 138 of the NI Act. Accordingly, the instant appeal is dismissed and the impugned judgment dated 23.04.2025 passed by the Trial Court is upheld and affirmed.
63. All pending applications, if any, also stand disposed of.
64. Let a copy of this judgment along with the TCR be transmitted to the Trial Court as per rules. File be consigned to the Record Room on compliance of directions and as per applicable rules.
Digitally signed by Hargurvarinder Hargurvarinder Singh jaggi Singh jaggi Date: 2025.11.28 16:10:10 +0530 Pronounced in the open Court (Hargurvarinder Singh Jaggi) on November 28, 2025 Addl. Sessions Judge (FTC-01) South District Saket Courts, New Delhi
Note: This judgment comprises of 33 pages in total. The electronic signature certificate (digital signature) of the Presiding Officer has been appended on the last page of the electronic or digital copy (PDF) of this document.
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