Delhi District Court
Onkar Nath Tiwari vs Nps Gill on 9 October, 2025
In The Court Of Ms. Kavita Bist: JMFC Mahila Court-01/PHC/NDD
Onkar Nath Tiwari VS. NPS Gill
Ct Cases No. 5860/2017
u/s 138 Negotiable Instruments Act, 1881
1. CIS number : 5860/2017
2. Name of the Complainant : Sh. Onkar Nath Tiwari
S/o Sh. G.N Tiwari
R/o H.No. 469, Gali no.15, Block
-L, Mahipalpur, New Delhi
3. Name of the accused, : Sh. N.P.S Gill
parentage & residential address S/o Sh. B.S Gill
R/o 1081/17-B, IFFCO Colony,
Gurugram, Haryana
4. Offence complained of or : u/s 138 Negotiable Instruments
proved Act, 1881
5. Plea of the accused : Pleaded not guilty and claimed
trial.
6. Final Judgement / order : Acquitted
7. Date of Judgement / order : 09.10.2025
Date of Institution : 01.04.2017
Date of Reserving Judgement / Order : 09.09.2025
Date of Pronouncement of Judgement/ Order : 09.10.2025
Digitally
signed by
KAVITA
KAVITA BIST
BIST Date:
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Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 1/25
JUDGEMENT
1.) By way of the present Judgement, this court shall dispose of the present complaint filed by Shri Onkar Nath Tiwari (herein after referred to as 'Complainant') against Shri N.P.S Gill (herein after referred to as 'accused') u/s 138 Negotiable Instruments Act, 1881 r/w section 142 Negotiable Instruments Act, 1881 (herein after referred to as "N.I. Act" in short).
Factual Matrix
2.) The brief facts as alleged by the Complainant in the complaint are that he is the owner of property measuring 300 square yards with its boundary wall, out of Khasra bearing no.425/1, Village Malikpur Kohi, Rangpuri Tehsil, Vasant Vihar, Delhi wherein small wooden house has been constructed. It is further stated that the accused had approached the complainant to take his wooden house on rent for commercial purpose and after negotiations, finally complainant had agreed to lend his wooden house i.e portion measuring 100 square yards to the accused on security deposit of Rs. 3 lakh and monthly rent of Rs. 30,000/-. It is further stated that on 24.08.2016, the complainant rented out his above-mentioned property to the accused and a rent agreement to the said effect was also executed between the complainant and accused. It is further stated that the accused paid a sum of Rs. 1 lakh in cash and issued a PDC bearing no. 063613 (herein after referred to as 'cheque in question') amounting to Rs. 2 lakh Digitally signed by KAVITA BIST KAVITA Date:
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Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 2/25
drawn on Union Bank of India, Samalka Branch, New Delhi in favour of complainant towards the security amount.
When the Complainant presented the said cheque, (herein after referred to as 'cheque in question') through his banker IDBI Bank, Mahipalpur, Delhi branch, the same was returned unpaid by the banker of the accused vide returning memo dated 27.01.2017 with the remarks "Funds Insufficient".
The Complainant thereafter issued a legal demand notice on 13.02.2017 through Counsel calling upon the accused to pay the said cheque amount within a period of 15 days from receipt thereof. The said notice was duly served upon the accused and the accused failed to pay the aforesaid cheque amount within the statutory period.
Hence, the present complaint u/s 138 N.I.Act was filed on 01.04.2017 by the complainant, praying for the accused to be summoned, tried and punished for commission of the offence u/s 138 N.I.Act. The Complainant has averred that the present complaint is within the period of limitation and fall within the territorial limit of this Court's jurisdiction; thus, being tenable at law.
Proceedings before the Court
3.) Pre-summoning evidence of the complainant:- To prove prima-facie case, the complainant led pre-summoning evidence by way of affidavit, exhibit CW1/A. Digitally signed by KAVITA BIST KAVITA Date:
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Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 3/25
4.) Documentary Evidence of the complainant: To prove his
prima-facie case, the complainant has relied upon the following documents:
a.) Copy of rent agreement dated 06.08.2016 exhibited as Ex CW-1/1.
b.) Cheque in question bearing no. 063613 exhibited as Ex. CW1/2.
c.) Returning memo dated 27.01.2017 exhibited as Ex. CW1/3.
d.) Legal demand notice dated 13.02.2017 exhibited as Ex.
CW1/4.
e.) Speed postal receipt exhibited as Ex. CW1/5.
f.) Tracking report for the legal demand notice exhibited as Ex.
CW1/6.
g.) Reply of legal demand notice exhibited as Ex. CW1/7.
5.) After perusing the complaint and hearing the argument of the Complainant on the point of summoning of the accused, prima-facie it appeared that the offence u/s 138 N.I.Act has been committed. Hence, cognizance of the offence u/s 138 N.I.Act was taken on 15.04.2017.
6.) Framing of notice and plea of defence: Notice u/s 251 Cr.P.C was framed against the accused on 24.01.2020 to which he pleaded not guilty and claimed trial. The plea of defence of the accused was also recorded where he admitted his signature on the cheque in question and stated that he has taken lease of the premises from the complainant and complainant had some goods and articles in the said premises for which he had given a security cheque to the complainant. He further stated that it was agreed that if he use the goods, then the complainant can encash the Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 4/25 Digitally signed by KAVITA BIST KAVITA Date:
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cheque and further, if he does not use the goods then complainant shall return his cheque. He further stated that he never used the goods and articles and complainant did not return his cheque. He further stated that all the details in the cheque in question have been filled by him. He further stated that he had requested the complainant to collect the goods but complainant did not collect the same. He also submits that he had received the legal notice.
7.) Evidence of the complainant: After framing of notice, application u/s 145(2) N.I. Act was allowed by the Ld. Predecessor of this court and hence, the case was tried as a summons case and accused was granted permission to cross examine the complainant. Thereafter, the complainant was cross-examined by the accused and discharged. No other witnesses were examined by the complainant. Thereafter, complainant evidence was closed, and the matter was put up for statement of accused u/s 313 r/w Section 281 Cr.P.C.
8.) Statement of the accused: Statement of accused was recorded u/s 313 r/w Sections 281 Cr.P.C on 19.10.2024, wherein all the incriminating circumstances appearing in evidence against the accused were put to him to which, he admitted his signature on the cheque in question and stated that he is the tenant and the complainant is his landlord.
He further stated that he has given Rs. 3 lakh in cash to him at the time of execution of rent agreement. He further stated that the cheque in question was given as a security cheque. He further stated that he was paying Rs. 30,000/- as rent to the complainant and when he got an offer of Rs. 60,000/- from a third party, he presented the aforesaid cheque and get it bounced as Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 5/25 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.10.09 16:55:06 +0530 a pressure tactic to vacate the said premises. He further stated that the complainant has unlawfully taken the furniture from the said premises. He further stated that he has filed the civil case against the complainant and the same was adjudicated in his favour. He further stated that he will bring the documents of the same during his evidence. He also stated that he has not received the legal demand notice. He further stated that he wants to lead defence evidence and the present case is a false and fabricated case.
9.) Defence evidence: The accused has examined himself as DW1 in the present case and no other witnesses were examined by the accused. Thereafter, defence evidence was closed, and the matter was put up for final arguments.
10.) Final Arguments: Final arguments were advanced by both sides. I have heard the submission of Ld. Counsel for the complainant as well as the accused. I have also perused the record.
11.) Before deciding the present complaint case u/s 138 of N.I Act, 1881, the following legal requirements must be satisfied from the averments in the complaint as well as the evidence of complainant.
a.) That a person has drawn a cheque, on an account maintained by him with the banker for payment of any amount of money in other person from out of that account for the discharge, in whole or in part, of any legally enforceable debt or other liability;
b.) That the cheque has been presented to the bank with in a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier;
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c.) That the cheque has been returned by the drawee bank unpaid,
for the reason that the amount of money standing to be credit of that account is insufficient to honor the cheque or that it exceeds the amount arranged to be paid from that account by agreement made with that bank;
d.) That the payee or holder in due course has made a demand for payment of the said amount of money by giving the notice in writing to the drawer of the cheque within 30 days of receipt of information from the bank regarding the return of the cheque as unpaid;
e.) That the drawer of the cheque fails to make the payment of the said amount of money to the payee or holder in due course within 15 days of the receipt of the said notice;
The aforesaid legal requirements are cumulative in nature, i.e only when all of the aforementioned ingredients are duly proved is the drawer of the cheque deemed to have committed an offence u/s 138 of N.I Act.
The provision of section 138 N.I is buttressed by section 139 and section 118(a) of the N.I. Act. Section 139 of the Act provides that the court shall presume, that the holder of a cheque received the cheque for the discharge, wholly or in part of any debt or other liability. Section 118(a) of the Act provides interalia that the court shall presume, until the contrary is proved, that every Negotiable Instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration.
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12.) It is a well settled principle of criminal jurisprudence that a
criminal trial proceeds on the presumption of innocence of the accused i.e an accused is presumed to be innocent unless proved guilty. Thus, normally the initial burden to prove is on the complainant/prosecution to prove the guilt of the accused. Also, the standard of prove is beyond reasonable doubt. However, in offences u/s 138 of the N.I Act, there is a reverse onus clause contained in section 118(a) and section 139 of the N.I Act. The presumption u/s 139 and section 118(a) of the N.I Act mandate the court to draw them, when a given set of facts are shown to exist. The same is evident by the peremptory language "Shall presume" used. However, the said presumptions are rebuttable in nature, i.e it is open for the defence to disprove the same by establishing facts to the contrary.
In the case of Hiten P. Dayal Vs. Bratindranath Bannerjee (2001) 6 SCC 16, the Hon'ble Supreme Court had occasion to examine the confines of the presumptions u/s 139 of the Act wherein, it held as follows:
"because both section 138 and 139 require that the court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras Vs. A. Vaidyanatha Iyer AIR 1958 SC 61, it is obligatory on the court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused. The obligation on the prosecution may be discharged with the help of presumptions of law or facts Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 8/25 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.10.09 16:55:20 +0530 unless the accused adduces the evidence showing the reasonable possibility of the non existence of the presumed fact. Therefore, the rebuttal does not have to be conclusive establish but such evidence must be adduced before the court in support of the defence that court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of 'prudent man'"
13.) It is a settled proposition of law that the standard of proof which is required from the accused to rebut the statutory presumption u/s 118(a) r/w section 139 of the N.I Act is preponderance of probabilities. The accused is not required to prove his case beyond reasonable doubt. This onus on the accused can be discharged from the materials available on record and from the circumstantial evidences. At this point, the Hon'ble Supreme Court in M.S Narayan Menon Vs. State of Kerala (2006) 6 SCC 39 has interalia held the following:
"The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from materials on record but also by reference to the circumstances upon which he relies."
14.) It is not always mandatory for the accused to examine its own witness in order to rebut the said statutory presumption. At this point, reliance may be placed on the decision of the Hon'ble Supreme Court in the case of Krishna Janardhan Bhat Vs. Dattatraya G. Hegde AIR Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 9/25 Digitally signed by KAVITA BIST KAVITA Date:
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2008 SC 1325, wherein the Hon'ble Court has categorically held the following:
"Accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. As accused has a constitutional right to remain silent. Standard of proof on the part of an accused and that of the prosecution in a criminal case is different."
15.) With regard to the factors taken into account for rebutting the presumption u/s 139 r/w Section 118(a) of the Act, the Judgment of Hon'ble Delhi High Court in V.S Yadav Vs. Reena, 172 (2010) DLT 561, assumes importance, wherein, it was held that:
"Mere pleading not guilty and stating that the cheques were issued as security, would not amount to rebutting the presumption raised u/s 139 of N.I Act. The accused, by cogent evidence, has to prove the circumstance under which cheques were issued."
16.) Now, I shall proceed with the legal ingredients one by one and give my finding on whether the evidence on record satisfies the legal ingredients in question or not:-
a.) "That a person has drawn a cheque, on an account maintained by him with the banker for payment of any amount of money in other person from out of that account for the discharge, in whole or in part, of any legally enforceable debt or other liability."Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 10/25
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16.1) This condition pertains to the issuance of the cheque itself. It
is pertinent to note that the accused in his notice of accusation u/s 251 Cr.P.C as well as statement recorded u/S 313 Cr.P.C has admitted his signature on the cheque in question. Further, the cheque has been drawn on the account of accused. This leads to drawing of an inference u/s 139 r/w section 118 of the Act, that the cheque was issued in discharge of a legally recoverable debt or other liability.
16.2) The presumption, having been raised against the accused, it falls upon him to rebut it. The accused has taken a defence that he had taken lease of the premises from the complainant and when he got the possession of the said premises from the complainant, certain items of complainant were already lying there and he had given the cheque in question to the complainant on 31.10.2016 for security of using those items. He further stated that the cheque in question was duly filled by him.
He further stated that it was orally decided between them on 31.10.2016 that he can use those items for his business of dhaba and after 31.10.2016, he had used those items for his dhaba for a period of three months and after three months, he had asked the complainant to collect all of his items from the premises and to return the cheque in question to him as the said cheque was given only for security of those items and it was not decided that he has to pay for the same also. He further stated after that the complainant had collected some of the items from the said premises without his consent and without returning the cheque in question to him and has also misused the cheque in question for the present complaint. He has also stated that he does not have any liability to make any payment to the complainant Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 11/25 Digitally signed by KAVITA BIST KAVITA Date:
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towards the cheque in question. He further stated that he has received the legal demand notice issued by the complainant. The accused has cross- examined CW1 and examined himself as DW1 in his defence.
16.3) The standard of proof for rebuttal is on preponderance of probabilities. As held by the Hon'ble Supreme Court in decision as K.N Beena Vs. Muniyappan and Anr. (2001) 8 SCC 458, in order to rebut the presumption, mere denial by the accused will not suffice. The accused must prove by leading cogent evidence that there was no debt or liability.
16.4) In case of M/s Kumar Exports Cas Vs. M/s Sharma Carpets Crl. A.No. 2045/2008, the Hon'ble Supreme Court has held:
"The accused u/s 138 N.I Act has two options. He can either show that the consideration and debt did not exist or that under the particular circumstances of the case, the non existence of consideration and debt is so probable that the prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumption, an accused is not expected to prove his defence beyond reasonble doubt as it is expected of the complainant in a criminal trial. The accused may adduced direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharge by him. However, the court need not insist in every case that the accused should disprove the non existence of consideration and debt by leaving direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration an existence of debt, apparenlty Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 12/25 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.10.09 16:55:35 +0530 would not serve the purpose of the accused. The accused may also rely upon presumptions of fact, for instance, those mentioned in section 114 of the Evidence Act to rebut the presumptions arises u/s 118 and 139 of N.I Act."
16.5) Major defence led by the Ld. Counsel for accused is that the accused had taken lease of premises from the complainant and when the accused got the possession of said premises from the complainant, certain items of complainant were already lying there and the accused had given the cheque in question to the complainant on 31.10.2016 for security of using those items. He further stated that the cheque in question was duly filled by the accused. He further stated that it was orally decided between them on 31.10.2016 that the accused can use those items for his business of dhaba and after 31.10.2016, the accused had used those items for his dhaba for a period of three months and after three months, the accused had asked the complainant to collect all of his items from the premises and to return the cheque in question to him as the said cheque was given only for the security of those items and it was not decided that he has to pay for the same also. He further stated after that the complainant had collected some of the items from the said premises without the consent of accused and without returning the cheque in question to accused and has also misused the cheque in question for the present complaint. He has also stated that the accused does not have any liability to make any payment to the complainant towards the cheque in question. In the present case, the onus to prove that accused has not issued the cheque in question for any legally enfroceable debt or liability in favour of the complainant primarily lied on Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 13/25 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.10.09 16:55:39 +0530 the accused. Section 103 of Indian Evidence Act, 1872, enunciates that the person who asserts a fact must prove the same unless the law otherwise provides.
In order to create doubts in the complainant's claim, the accused has adopted the abovesaid defences and I shall deal with all the defences separately.
(i) Non usage of furniture:-
The accused has taken a defence which deserves the attention of this court is that the cheque in question was given for security for usage of furniture lying at the shop of complainant, however, the same has not been used by him.
In this regard, firstly, it is important to draw attention on the notice framed u/S 251 Cr.P.C wherein the accused has admitted that he had taken lease of the premises from the complainant and some goods and articles were already lying at that premises and it was agreed between them that if he will use those goods then the complainant can encash the cheque in question, however, as he never used those goods, he is not liable for the cheque in question and he has also stated that despite his requests to the complainant to collect the goods, he failed to do so.
It is also important to draw attention on the copy of rent agreement Ex. CW1/1 dated 24.08.2016 executed between the complainant and accused, wherein, the complainant has agreed to let the 100 square yard of said property to the accused for a monthly rent of Rs. 30,000/-, however, as far as usage of goods, articles or furniture is concerned, Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 14/25 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.10.09 16:55:43 +0530 nothing is specifically mentioned in the said agreement. It is also important to note here that the rent agreement is a mere photocopy, however, the same has never been disputed by the accused rather he has admitted the fact of execution of same and as such, the same can be relied upon.
In this regard, it is also important to draw attention on the cross-examination of complainant, wherein, he has admitted that he had given the rented property as fully furnished to the accused and he has also admitted that it was orally agreed between them that the goods/furniture can be used by the accused but he has nowhere stated or admitted that the said cheque in question was given for the security of those goods/furniture.
It is also important to mention here that the accused has stated in his notice of accusation u/S 251 Cr.P.C that he never used the goods and article which were lying at the rented premises, however, during his testimony, he has specifically stated that he used those items for his Dhaba for a period of 03 months. He has also stated in his notice of accusation u/S 251 Cr.P.C that when he asked the complainant to collect his goods, the complainant did not collect the same, however, during his testimony, he has stated that the complainant has collected some of the items without his consent and without returning the cheque in question to him.
It is also important to mention here that the accused has also stated in his notice of accusation u/S 251 Cr.P.C that it was agreed between them that the cheque in question can be encashed by the complainant, if he uses those goods, however, during his testimony, he has stated that it was agreed that the cheque in question is only given for security of those items and it was not decided that he has to pay for those goods and articles also.
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KAVITA
KAVITA BIST
BIST Date:
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As far as, the present defence of accused is concerned, firstly, the accused has failed to prove that the cheque in question was given for security for the usage of those goods as the same is neither mentioned in the rent agreement Ex. CW1/1 nor it was ever admitted by the complainant during his testimony. Moreover, the accused has himself taken inconsistent pleas at different stage of trial which further raises doubt on the plea taken by him.
In this regard, it is also important to draw attention on the judgment of M/s Kumar Exports Case Vs. M/s Sharma Carpets Crl. A.No. 2045/2008, wherein the Hon'ble Supreme Court of India has observed that the circumstantial evidence has to be seen from the point of reasonable/prudent man. Hence, when the accused had given the cheque in question to the complainant for security for the usage of those goods and complainant has misused the cheque in question, why he has not taken any legal action against the complainant which further raises doubt on the plea taken by the accused.
In the above-said findings, the court is of considered view that the defence taken by the accused that the cheque in question was given for security for usage of furniture lying at the shop of complainant, is a bare averment, unsubstantiated by any cogent evidence.
(ii) Rent was paid One of the defence taken by the accused which deserves the Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 16/25 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.10.09 16:55:50 +0530 attention of this court is that he had paid rent for almost one year apart from security deposits of Rs. 3 lakh.
In this regard, it is important to draw attention on the statement recorded u/S 313 Cr.P.C of accused, wherein he has stated that he has given Rs. 3 lakh in cash to the complainant at the time of execution of rent agreement with him and he was also paying Rs. 30,000/- to the complainant, however, when the complainant got an offer of Rs. 60,000/- from a third party, he presented the cheque in question which was given as a security cheque just to create pressure on him to vacate the said property and it is also important to draw attention on his testimony, wherein he has reiterated that he has given an amount of Rs. 3 lakh in cash to the complainant towards the security of rent and apart from that he used to pay Rs. 30,000/- monthly to the complainant towards the rent from August 2016 till July-August 2017 and he has also stated that the complainant started pressurizing him for vacating the said property from January 2017 and he had also incurred expenses around Rs. 7-8 lakh towards the renovation of the said property as he was not having the appropriate infrastructure for running a Dhaba.
During the cross-examination of DW-1 i.e accused, he has stated that he does not have any receipt towards the rent paid by him to the complainant as the same was given in cash and has also failed to prove the factum of renovation done by him and the expenses bore by him as no bills regarding the said renovation was ever filed by him in the present matter and it is also pertinent to note here that he has also failed to disclose the exact dates when he had paid rent to the complainant, however, he has Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 17/25 Digitally signed by KAVITA BIST KAVITA Date:
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stated that he had paid rent of Rs. 80,000/- for the month of October till December 2016 by way of cheque in the month of December 2016 and Rs. 30,000/- in cash in that month only and he also used to pay rent to the complainant in cash apart from the said transactions.
On one hand, he has stated that he was paying Rs. 30,000/- monthly to the complainant towards the rent and on the other hand, he has stated that he has paid Rs. 80,000/- towards the rent of three months which is contradictory with each other and apart from that he has stated that he used to pay the rent in cash, however, in the same cross examination, he has stated afterwards that he had paid rent for three months by way of cheque which is again contradictory and which shows that the accused himself is not sure as to how and when he has paid the rent to the complainant.
It is also pertinent to note here that the accused has stated during his cross-examination that he has never sent any notice to the complainant for reimbursement of Rs. 7-8 lakh spent by him for renovation of the said property which further raises doubt on the plea taken by the accused.
In view of the above-said findings and considering the failure of accused to file any receipt regarding the payment of rent; failure of accused to file any bills to prove the factum of renovation; failure of accused to disclose the exact dates of payment of rent; contradiction regarding the mode of payment of rent; failure of accused to give any notice to claim reimbursement of alleged renovation, the court is of Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 18/25 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.10.09 16:55:58 +0530 considered view that the defence taken by the accused that he has duly paid the rent to the complainant, is a mere bald averment.
(iii) No legally enforceable liability One of the defence taken by the accused which deserves the close scrutiny of this court is that there was no legally enforceable liability of cheque amount on the date of presentation.
In this regard, firstly, it is important to draw attention on the complaint and evidence affidavit of the complainant Ex. CW1/A, wherein the complainant has stated that the cheque in question was given towards the security amount in his name.
Before deciding the present defence, it is also important to draw attention on the copy of rent agreement Ex. CW1/1, wherein, it has been specifically mentioned at clause 2 that the accused has also paid a sum of Rs. 3 lakh as security amount or 10 months advance rent which shall be refundable at the time of vacation of the said property.
The Ld. Counsel for the complainant has stated that the accused has paid a sum of Rs. 1 lakh in cash and issued a PDC i.e cheque in question for the remaining amount of Rs. 2 lakh towards the security amount of Rs. 3 lakh. The Ld. Counsel for the complainant has also stated that as per the rent agreement, the said amount was for security or 10 months advance rent and as the accused has not paid any rent after the execution of rent agreement, the cheque in question can be presented for arrear of rent as well, as per the rent agreement only.
As far as the said contention of accused is concerned, the Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 19/25 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.10.09 16:56:03 +0530 complainant has not stated anywhere either in his complaint or in his evidence affidavit that the said cheque in question has been presented for arrear of rent. Moreover, it is nowhere mentioned either in the complaint or in evidence affidavit as to how much rent was due on the date of presentation of cheque in question. On that Ld. Counsel for the complainant has stated that he has mentioned regarding the fact of arrear of rent in the legal demand notice Ex. CW1/4 issued by the complainant at para no.7. Perusal of same reveals that factum of arrear of rent is mentioned in the legal demand notice, however, it is not specifically mentioned that the cheque in question has been presented towards the arrear of rent rather it is mentioned that the cheque in question was given towards the part amount of security as mentioned in the rent agreement.
Be that as it may, even if we assume that the cheque in question was presented for claiming part security deposits of remaining Rs. 2 lakh or towards the arrear of rent, it is important to place reliance on the judgment of Suresh Chandra Goel Vs. Amit Singhal (2015) SCC Online DEL 6459, wherein the Hon'ble High Court of Delhi has observed that:
"Section 138 of N.I Act does not distinguished between a cheque issued by the debtor in discharge of his existing debt or other liability, or a cheque issued as a security cheque on the premise that on the due future date the debt which shall have crystallized by then, shall be paid. So long as there is a debt existing, in respect whereof the cheque in question is issued, in my view, the same would attract section 138 of N.I Act in case of its dishonor."Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 20/25
Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.10.09 16:56:07 +0530 It is also important to place reliance on the another case titled as Sripati Singh (D) Vs. State of Jharkhand 28.10.2021, wherein the Hon'ble Supreme Court of India held that:
"A cheque issued as a security pursuant to a financial transaction can not be considered as a worthless piece of paper under every circumstance. Security in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledge to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advance and borrower agrees to repay the amount in a specified time frame and issued a cheque as security to secure such repayment; if the loan amount is not repay in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplate u/s 138 and the other provisions of N.I Act would flow."
After considering the above-said judgments, it is clear that it is a well settled law that a cheque given towards security is not a worthless piece of paper, however, it is also a settled law that there should be existing ascertained and liquidated liability or debt on the date of presentation of cheque for encashment. Merely, a cheque given for the purpose of security Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 21/25 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.10.09 16:56:12 +0530 at the time of execution of rent agreement can not be presented in the absence of any liability or debt at the time of its presentation.
In the present case, even if we assume as averred by the complainant in his complaint that the cheque in question was given towards the security deposit, it can not be presented just for claiming security deposit as the same is not legally enforceable liability/debt as per Section 138 of N.I. Act specially considering the rent agreement Ex. CW1/1 wherein it is mentioned that the said amount shall be refunded at the time of vacation of the premises and as such, no such amount was due on the date of presentation of cheque in question and even if we assume that the cheque in question was presented towards the arrear of rent which is nowhere specifically mentioned either in complaint or in evidence affidavit or in legal demand notice, the same does not cover the amount mentioned on the cheque in question, as the said property was given on rent w.e.f 01.09.2016 as per the rent agreement Ex. CW1/1 and the cheque in question was presented for encashment on 25.01.2017 and the returning memo was issued on 27.01.2017 and considering the monthly rent of Rs.
30,000/-, the same comes around Rs. 1.5 lakh only and only the said amount of Rs. 1.5 lakh can be considered a legally enforceable liability on the date of presentation of cheque which is not so in the present case as the cheque in question was for Rs. 2 lakh and as such, on the date of presentation of cheque, there was no legally enforceable liability of Rs. 2 lakh.
Moreover, the complainant has himself admitted that an amount of Rs. 1 lakh was given in cash to him by the accused towards the Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 22/25 Digitally signed by KAVITA KAVITA BIST BIST Date:
2025.10.09 16:56:16 +0530 part amount of security deposits at the time of execution of rent agreement and if that amount is also adjusted towards the arrear of rent, then the legally enforceable amount further reduced to merely Rs. 50,000/- which is again less than the amount mentioned on the cheque in question.
In view of the above-said findings; considering the above-said judgments; considering the unsurety of complainant regarding specific nature of claim vis a vis cheque in question and considering the arrear of rent due on the date of presentation of cheque in question, the court is of considered view that there was no legally enforceable liability of amount mentioned in the cheque in question on the date of its presentation.
The upshot of the above discussion is that the said ingredient remains unfulfilled as against the accused. Hence, considering the materials available on record, I am of the considered view that the accused has successfully rebutted the presumption of legally enforceable debt or liability in favour of the complainant.
b.) "That the cheque has been presented to the bank with in a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier;"
16.6) This requirement is satisfied on a perusal of the cheque in question Ex. CW1/2 dated 31.10.2016 and the returning memo Ex. CW1/3 which bears the date of 27.01.2017 i.e within a period of three months from the date of issuance of cheque in question. The defence has led no evidence to controvert the same and hence, the ingredient stands fulfilled as against the accused person.Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 23/25
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c.) "That the cheque has been returned by the drawee bank
unpaid, for the reason that the amount of money standing to be credit of that account is insufficient to honor the cheque or that it exceeds the amount arranged to be paid from that account by agreement made with that bank."
16.7) Section 146 of N.I Act, 1881 provides that the court shall, on production of bank's slip or memo having therein the official mark denoting that the cheque has been dishonored, presumed the fact of dishonor of such cheque, unless and until such fact is disproved. The bank returning memo Ex. CW1/3 is on record states that the cheque in question has been returned dishonored for the reason "Funds Insufficient." The defence has led no evidence to controvert the same, hence, this ingredient is also fulfilled as against the accused.
d.) "That the payee or holder in due course has made a demand for payment of the said amount of money by giving the notice in writing to the drawer of the cheque within 30 days of receipt of information from the bank regarding the return of the cheque as unpaid"
16.8) As regard the service of legal demand notice Ex. CW1/4, the complainant has sent the same to the accused through speed post. Speed postal receipt Ex. CW1/5 along with tracking report Ex. CW1/6 are also on record which shows the reason "Item delivered". Moreover, in his notice of accusation u/s 251 Cr.P.C, the accused has admitted that he had received the legal demand notice. Considering the admission on the part of accused in his notice of accusation u/S 251 Cr.P.C, I am of the considered view that Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 24/25 Digitally signed by KAVITA BIST KAVITA Date:
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the legal demand notice was duly received by the accused. So this ingredient is fulfilled as against the accused.
e.) That the drawer of the cheque fails to make the payment of the said amount of money to the payee or holder in due course within 15 days of the receipt of the said notice;
16.9) In the instant case, the accused has admitted that he has received the legal demand notice in his notice of accusation u/s 251 Cr.P.C. Hence, considering the admission of the accused that he had received the legal demand notice, it was open to the accused to make the payment due under the cheque in question within 15 days of receipt of legal demand notice of the instant case. However, the accused has admittedly failed to do so, on the ground that he does not owe the liability of cheque amount, a defence which he has been able to prove at the trial. Hence, this ingredient stands fulfilled as against the accused.
17.) Decision:
As all the ingredients of the offences are not cumulatively satisfied against the accused, the accused is hereby acquitted of the offence u/s 138 of N.I. Act in the present matter.
Copy of the judgment is handed over to the accused free of cost. Digitally signed by Announced in the open court KAVITA KAVITA BIST Date:
BIST 2025.10.09
on 09.10.2025. 16:56:27
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(Kavita Bist)
JMFC Mahila Court-01
PHC/NDD, NewDelhi
Ct Cases No. 5860/2017 Onkar Nath Tiwari VS. NPS Gill Page No. 25/25