Delhi District Court
Amarjeet Singh vs Rajesh Ghai on 30 May, 2025
IN THE COURT OF MS. ANSHUL AGNIHOTRI
JUDICIAL MAGISTRATE FIRST CLASS (NI Act)-03
SOUTH EAST, SAKET COURTS, NEW DELHI
1. Complainant case number 3399/2019
2. Name of the complainant Sh. Amarjeet Singh
S/o Late Harbans Singh
R/o S-66/13, Pratap Camp,
Nehru Nagar, New Delhi-110065
3. Name, Parentage and address Sh. Rajesh Ghai
of the accused person S/o N.K.Ghai
R/o H.no.377, Sector-48,
Faridabad, Haryana
4. Offence complained of Section 138 of the Negotiable Instruments
Act, 1881
5. Plea of the accused Pleaded not guilty and claimed trial
6. Final order Accused is acquitted
7. Date of institution 22.01.2019
8. Date of reserving the judgment 20.05.2025
9. Date of pronouncement 30.05.2025
ANSHUL
AGNIHOTRI
Digitally signed
by ANSHUL
AGNIHOTRI
Date: 2025.05.30
15:23:53 +0530
CC No. 3399/2019
Amarjeet Singh v. Rajesh Ghai Page 1 of 13
-:JUDGEMENT:-
1. The present complaint under section 138 Negotiable Instruments Act, 1881
(hereinafter referred to as the "NI Act") has been filed by Sh. Amarjeet Singh
(hereinafter referred to as the 'complainant') against Sh. Rajesh Ghai (hereinafter
referred to as the 'accused')
BRIEF FACTS OF THE CASE
2. Brief facts of the complaint is that the accused is a childhood friend of the complainant. Accused approached complainant for a friendly loan for purchase of some property. It is stated that complainant gave friendly loan for total amount of Rs. 33,00,000/- to the accused on several occasions i.e. Rs.3,00,000/- on 29.07.2015, Rs.5,00,000/- on 13.04.2016, Rs. 5,00,000/- on 03.05.2016 and Rs.20,00,000/- on 11.06.2017. Further, accused had repaid an amount of Rs. 13,00,000/- to the complainant wherein Rs. 3,00,000/- was given by way of cash and Rs. 10,00,000/- by way of friend's cheque. It is alleged that the outstanding liability remaining to be paid by the accused is an amount of Rs. 20,00,000/- to the complainant. Finally, in order to discharge his part liability, accused issued three cheques bearing number 000015 dated 15.01.2019 for sum of Rs.5,00,000/-, bearing number 000016 dated 19.01.2019 for sum of Rs.5,00,000/- and bearing number 000017 dated 25.01.2019 for sum of Rs.5,00,000/- all drawn on HDFC Bank, Central Market, New Delhi-110024.
3. Upon presentation of the aforesaid cheques (hereinafter referred to as the 'cheques in question'), same got dishonoured with the remarks "Account Closed" vide three return memos dated 29.01.2019. Thereafter, a legal demand notice dated 15.02.2019 was duly sent to accused by the complainant at its available address. The demand CC No. 3399/2019 Digitally signed by Page 2 of 13 ANSHUL Amarjeet Singh v. Rajesh Ghai ANSHUL AGNIHOTRI AGNIHOTRI Date:
2025.05.30 15:23:58 +0530 notice was duly served to the accused on 19.02.2019. Further, accused sent his reply dated 23.02.2019 to the complainant The accused failed to pay the amount qua cheques in question within the statutory period. Hence, the present complaint under Section 138 NI Act was filed against the accused.
4. On issuance of summons, accused entered his appearance in the present matter for the first time on 30.10.2019 and was admitted to bail. Further, it was ensured that copy of complaint with relevant documents has been supplied to accused. Thereafter, notice u/s 251 of Code of Criminal Procedure, 1973 (hereinafter referred to as the 'Cr.P.C.') was served upon the accused on 11.03.2022 to which he pleaded not guilty and claimed trial.
PLEA OF DEFENCE OF ACCUSED
5. In his plea of defence, accused admitted his signatures on the cheques in question. However, he stated that he had not filled particulars of cheque. Accused stated that he was introduced with the complainant by common friend namely Pankaj Ahuja and he had taken loan of Rs.3,00,000/- from the complainant for the purchase of a camera. In lieu of the above said loan, accused gave four blank signed cheques and some blank signed papers to the complainant as security. He further stated that he does not have any liability towards the complainant and admitted receiving of legal notice from the complainant. Thereafter, accused was granted an opportunity to cross- examine the complainant u/s 145(2) NI Act and matter was fixed for complainant's evidence.
COMPLAINANT'S EVIDENCE
6. In order to support its case, complainant stepped into the witness box as CW-1 and CC No. 3399/2019 Digitally signed by ANSHUL Amarjeet Singh v. Rajesh Ghai Page 3 of 13 ANSHUL AGNIHOTRI AGNIHOTRI Date:
2025.05.30 15:24:02 +0530 tendered evidence by way of an affidavit Ex.CW1/1 wherein averments made in the complaint were reiterated. He also relied upon various documents such as:-
S. Particulars Exhibits
No.
1 The original cheques Ex.CW-1/A(colly)
2 The Original Return Memos dated 28.01.2019 Ex.CW-1/B (dolly)
3 Copy of legal notice dated 15.02.2019 with Ex.CW1/C
postal receipt
4 Reply-cum-legal notice dated 23.02.2018 Ex.CW-1/D
5 Tracking report Ex.CW-1/E
6 Copy of Receipt/Undertaking (Original in CC Ex.CW-1/F
no. 684/2019)
7 Statement of Account of the complainant from Ex. CW-1/D1(Colly)
01.04.2014-31.03.2019 (OSR)
STATEMENT UNDER SECTION 313 Cr.P.C.
7. The statement of accused was recorded without oath under Section 313 of Cr.P.C.
read with Section 281 Cr.P.C. on 20.07.2024. All the incriminating evidences were put to accused. In his statement, accused admitted that he and complainant were childhood friends. He stated that he had purchased a property financed from DHFL in 2017. He had borrowed Rs.3,00,000/- from the complainant at the rate of 5% interest per month and in lieu of loan, accused had issued four blank signed cheques along with two blank signed papers as a security. He had already repaid the whole loan amount along with interest to the complainant in 2017. He stated that said cheques in question Ex.CW-1/A(colly) were issued to the complainant towards security.The accused further admitted that he had received legal notice from the complainant and also duly sent the reply Ex.CW-1/D to the complainant. Further, accused admitted his signatures on Ex.CW-1/F but stated that it is the part of two blank signed papers Digitally CC No. 3399/2019 signed by ANSHUL Amarjeet Singh v. Rajesh Ghai Page 4 of 13 ANSHUL AGNIHOTRI AGNIHOTRI Date:
2025.05.30 15:24:08 +0530 taken by the complainant during advancement of above said loan. In addition to this, the accused stated that he asked complainant to return the security cheques and blank signed papers but accused did not return the same. Thereafter, accused opted to lead defence evidence.
DEFENCE EVIDENCE
8. Ld. Counsel for the accused had examined two witnesses DW-1 and DW-2 for placing on record the court record of other complaint cases under Section 138 NI Act filed by the complainant against third parties. Accused did not examine himself as witness in the present case. At request of Ld. Counsel for accused, vide order dated 15.02.2025, defence evidence was closed.
9. Final arguments advanced by both the parties. I have perused the case file, documents placed on record by both the parties and duly considered the submission made by Ld. Counsels for both the parties.
INGREDIENTS OF OFFENCE UNDER SECTION 138 NI ACT
10. The factual position being thus, now let us quickly run through the legal benchmark which is to be satisfied in order to constitute an offence under Section 138 NI Act :-
(i) Person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;
(ii) The 5should have been issued for the discharge, in whole or in part, of any debt or other liability;
(iii) That cheque has been presented to the bank within a period of three Digitally signed CC No. 3399/2019 by ANSHUL AGNIHOTRI Page 5 of 13 ANSHUL Amarjeet Singh v. Rajesh Ghai AGNIHOTRI Date:
2025.05.30 15:24:11 +0530 months from the date on which it is drawn or within the period of its validity whichever is earlier;
(iv) That cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the 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 the bank;
(v) The payee or the holder in due course of the cheque 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 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
(vi) The drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.
APPRECIATION OF EVIDENCE
11. Being cumulative, it goes without saying that it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act.
With Respect to first, third and fourth ingredient:-
12. It is pertinent from the averments and evidence adduced by the parties there is no dispute regarding first, third and fourth ingredients. The complainant has proved the original cheques in question vide Ex.CW-1/A(colly) that the accused had not disputed as being drawn on his account and were duly signed by him. During framing of notice under Section 251 Cr.P.C. and statement under Section 313 Cr.P.C., accused Digitally CC No. 3399/2019 signed by ANSHUL Amarjeet Singh v. Rajesh Ghai Page 6 of 13 ANSHUL AGNIHOTRI AGNIHOTRI Date:
2025.05.30 15:24:14 +0530 had duly admitted that the cheques in question were given to complainant as blank signed security cheques. It is not disputed that the cheques in question were presented within period of validity. The cheques in question were returned unpaid vide three return memos Ex.CW-1/B(colly) with the remarks "account closed". The said reason is duly covered within the scheme of NI Act. Therefore, requirement of first, third and fourth ingredients stand fulfilled in the present matter.
With Respect to fifth and sixth ingredient:-
13. As far as proof of fifth and sixth ingredients are concerned, accused sent the reply to the legal notice and during framing of notice under Section 251 Cr.P.C. as well as recording of statement under Section 313 Cr.P.C., he admitted receiving of legal notice. Therefore, the legal demand notice in the present case is served to the accused. Furthermore, it is also clear from the record that accused has failed to make payment within 15 days of receipt of notice. Therefore, the requirement of fifth and sixth ingredients also stand fulfilled.
With Respect to second ingredient:-
14. The core question in the present case is that whether the cheques in question hasve been issued by the accused in discharge of a legal liability or not ?
15. For that, let us again briefly recapitulate that accused, at the stage of framing of notice under Section 251 Cr.P.C., admitted that cheques in question Ex. CW1/A (colly) drawn it on a bank account maintained in his name and bear his signatures. Now once these foundational facts are admitted, by virtue of Section 118(a) and Section 139 of the NI Act, a presumption arises in favour of complainant that the cheques in question were issued by accused to discharge a legally enforceable Digitally CC No. 3399/2019 signed by Page 7 of 13 ANSHUL Amarjeet Singh v. Rajesh Ghai ANSHUL AGNIHOTRI AGNIHOTRI Date:
2025.05.30 15:24:18 +0530 liability. In the recent judgment, M/s Kalamani Tex & Anr. v. P. Balasubramaniyan,1 three Judges bench of the Supreme Court, held that:
"U/s 118 & 139, once issuance of cheque and signature admitted, it is required to presume that the cheque was issued as consideration for a legally enforceable debt."
Reliance in this regard can also be placed upon the judgment of the Hon'ble Supreme Court in Basalingappa v. Mudibasappa2.
16. As per the scheme of the NI Act, on proof of foundational facts - a presumption arises as to the cheque having been issued in discharge of a legal liability, and the burden of proof lies upon the accused to rebut the said presumption. It is now fairly well settled that the accused can displace this presumption on a scale of preponderance of probabilities. Reliance in this regard can be placed upon Rangappa v. Sri Mohan,3 wherein Hon'ble Supreme Court held that:
"where the fact of signature on the cheque is acknowledged, a presumption has to be raised that the cheque pertained to a legally enforceable debt or liability, however, this presumption is of a rebuttal nature and the onus is then on the accused to raise a probable defence."
17. The accused can either prove that the liability did not exist or make the non existence of liability so probable that a reasonable person ought under the circumstances of the case - act on the supposition that it does not exist. Simply put, the accused has to make out a fairly plausible hypothesis. This the accused can do so either by leading defence evidence or even by punching holes within the case of the 1 (2021) 1 SCR 668 ANSHUL 2 (2019) 5 SCC 418 AGNIHOTRI 3 (2010) 11 SCC 441 Digitally signed by ANSHUL AGNIHOTRI CC No. 3399/2019 Date: 2025.05.30 Amarjeet Singh v. Rajesh Ghai Page 8 of 13 15:24:28 +0530 complainant in the testing ordeal of cross examination. In the present case, accused has extensively cross-examined the complainant and led defence evidence.
18. It is the case of complainant that accused, being a close friend, approached complainant for a friendly loan to purchase some property and in order to discharge his liability cheques in question were issued by the accused in favour of complainant. However, during cross-examination of complainant dated 02.11.2022, complainant stated that he was living in a jhuggi and accused had his own house in 2015. It is inconceivable that person living in a jhuggi would extend a loan of Rs.33,00,000/- to other person for purchasing of a house. In addition to this, complainant further admitted that accused has not repaid the previous instalment when further instalments of loan were given to the accused. Further, complainant deposed that no time was specified to return the loan amount. It is highly improbable that any prudent person would advance such a huge amount without even specifying the time within which the accused would have repaid the alleged loan to the complainant. Further, complainant stated in complaint that due to good friendship and relations, friendly loan at different occasions were extended to the accused. However, complainant admitted that he is not aware about the family members of the accused and the financial capacity of accused to return the said loan. In view of the above, complainant has failed to establish the factum of friendly relations with the accused. It appears highly improbable that a friendly loan of Rs. 33,00,000/- would be extended to a mere acquaintance without any substantial relationship or familiarity.
19. During cross examination, Ld. Counsel for accused has also questioned the financial capacity of the complainant to advance the alleged loan to the accused. The CC No. 3399/2019 Digitally signed by Page 9 of 13 ANSHUL Amarjeet Singh v. Rajesh Ghai ANSHUL AGNIHOTRI AGNIHOTRI Date:
2025.05.30 15:24:33 +0530 law laid down by Hon'ble Apex Court in recent judgment Tedhi Singh v. Narayan Das Mahant,4 "The proceedings under Section 138 of the N. I. Act is not a civil suit. At the time, when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. To that extent the Courts in our view were right in holding on those lines. However, the accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable which he can do by producing independent materials, namely, by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further, more importantly, achieve this result through the cross examination of the witnesses of the complainant." It is pertinent to note that during cross examination of complainant dated 02.11.2022, Ld. Counsel for accused questioned financial capacity of complainant and called for production of ITR but complainant deposed that he does not file ITR. It is very surprising that a person whose annual income is Rs. 8,00,000/- to 9,00,000/- would make an arrangement of Rs. 33,00,000/- and give the same as a friendly loan to mere acquaintance for buying a property without having the knowledge of his financial capacity to return the said loan. Reliance can be placed in this regard on catena of judgements passed by Hon'ble High Court of Delhi in Vipul Kumar Gupta v. Vipin ANSHUL AGNIHOTRI Digitally signed by ANSHUL AGNIHOTRI Date: 2025.05.30 4 (2022) 6 SCC 753 15:24:36 +0530 CC No. 3399/2019 Amarjeet Singh v. Rajesh Ghai Page 10 of 13 Gupta,5 Devender Kumar v. Khemchand,6 Ashok Baugh v. Kamal Baugh7 and Sanjay Verma v. Gopal Halwai,8 wherein it is held that factors like non-disclosure of source of funds/income, questionable capacity of the complainant to advance loan and non-mentioning of the factum of loan in the ITR etc, can create reasonable doubt on the version of complainant that the cheque was issued in discharge of an liability or a legal recoverable debt. However, it is a settled law that non-reflection of loan in ITR by complainant cannot be a sole ground to rebut the presumption raised in favour of complainant under Section 138 NI Act but coupled with other factors corroborative value can be attached to the said fact. In the present case, complainant deposed that he had kept Rs. 1.2 crores in cash at his house and source of the cash was the sale proceeds of 40-60 TSRs. At first, it is incomprehensible that any prudent person will keep such huge amount in cash at his jhuggi. Further, even if the version of complainant believed to be true, complainant has admitted that he has neither documents to prove the alleged sale of TSRs nor any receipt of payment received from buyers of TSRs. Further, complainant failed to disclose the name of alleged buyers who purchased TSRs from him. Hence, non-production of ITR and questionable financial capacity of complainant had shaken the veracity of the complainant and fatal to prosecution case.
20. The complainant has placed on reliance a acknowledgement receipt Ex. CW-1/F allegedly issued by accused admitting that he had availed loan of Rs. 20,00,000/-
5 ( 2012) 4 JCC 248
Digitally
signed by
6 2015 SCC Online Del 12578 ANSHUL
ANSHUL AGNIHOTRI
AGNIHOTRI Date:
7 2015 (4) JCC (NI 269) 2025.05.30
15:24:43
+0530
8 2019 (2) JCC 1490
CC No. 3399/2019
Amarjeet Singh v. Rajesh Ghai Page 11 of 13
form the complainant. However, accused has denied the execution as well as signatures on the said receipt. It is pertinent to note that the said receipt was not mentioned in the complaint, legal notice or in his evidence by way of affidavit. During cross examination dated 02.11.2022, complainant deposed that accused gave receipts on every occasion when the alleged loan was disbursed to the accused, however the said receipts were torn by the accused. The said fact has also been omitted from the complaint. Finally, onus shifted on the complainant to prove the said receipt but complainant has failed to prove the execution of said receipt by accused. Further, complainant stated that accused repaid 10,00,000/- to the complainant through friend of the accused but nowhere neither name of the friend has been mentioned nor any proof is placed on record to prove that the alleged 10,00,000/- was deposited in the account of complainant on behalf of the accused. It is also deposed that complainant has advance the loan in the presence of complainant's wife but complainant has failed to examine his wife as a witness to prove the alleged loan advanced to the accused.
21. It is a settled position that when an accused has to rebut the presumption under Section 118 read with 139 of NI Act, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail.
22. In the present factual matrix, the accused successfully raised a doubt as to the legal liability on the date the cheques in question were dishonoured and therefore second ingredient is not satisfied. Digitally signed by ANSHUL ANSHUL AGNIHOTRI AGNIHOTRI Date:
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CONCLUSION
23. To recapitulate the above discussion, accused has successfully established a probable defence on a standard of preponderance of probabilities to rebut the presumption raised under Section 139 read with Section 118 of NI Act by punching holes in the case of the complainant and making the case of the complainant doubtful. The accused has, thereby, proved that the cheques in question were not given in discharge of existing legal debt or liability. In the result of the analysis of the present case, accused Sh. Rajesh Ghai, is hereby acquitted of the offence punishable under Section 138 of NI Act.
This judgment contains 13 pages and each page bears the signature of the undersigned. Copy of the judgment be uploaded as per rules. Digitally signed by ANSHUL
ANSHUL AGNIHOTRI
AGNIHOTRI Date: 2025.05.30
Announced in the Open Court on 15:24:53 +0530
30th May 2025 (ANSHUL AGNIHOTRI)
JMFC(NI-Act)-03/SE/ND
CC No. 3399/2019
Amarjeet Singh v. Rajesh Ghai Page 13 of 13