Delhi District Court
Akhand Cooperative Urban Thrift And … vs Nisha Singh on 10 March, 2025
IN THE COURT OF MS. JAYANTI CHANDER,
JUDICIAL MAGISTRATE FIRST CLASS (NI ACT), DIGITAL COURT - 03.
NORTH WEST, ROHINI COURT, DELHI
1 Complaint Case Number : 937/2022
2 Name & Address of Complainant : Akhand Co-operative Urban Thrift
and Credit Society Ltd.
Through its AR Sh. Raj Kumar
R/o G-9/38, Sector-16, Rohini,
Delhi-110089.
3 Name & Address of Accused : Smt. Nisha Singh
D/o Sh. Chhangur Singh
R/o House No.C-1/175, Ground
Floor, Sector -16, Rohini,
Delhi-110089.
4 Offence complained of : Section 138 r/w142,
Negotiable Instruments Act 1881
5 Plea of guilt : Pleaded not guilty
6 Date of institution : March 29, 2022
7 Date on which case was reserved : 18.02.2025
for judgment
8 Date of judgment : 10.03.2025
JUDGMENT
1. Vide this judgment, this court shall dispose of the aforementioned
complaint case filed by the complainant society against the accused, namely
Smt. Nisha Singh in respect of the dishonour of cheque bearing number 101051
C.C. No.937/2022
Akhand Co-operative Urban Thrift and Credit Society Ltd. Vs. Smt. Nisha Singh Page no.1 of 12
Digitally
signed by
JAYANTI
JAYANTI CHANDER
CHANDER Date:
2025.03.10
16:14:34
+0530
dated 23.01.2022 for an amount of ₹99,772/- drawn on Canara Bank, Sector 15,
Rohini, Delhi Branch (here and after referred to as the “cheque in question”).
BRIEF FACTS OF THE CASE
2. Succinctly, it is the case of the complainant society that the
accused is the member of complainant society vide membership no.449. The
accused applied for a loan vide loan application dated 10.04.2018 from the
complainant society. The accused was provided the loan of Rs.70,000/- vide
cheque no.698832 dated 10.04.2018 at the interest rate of 18% per annum. It
was agreed that the loan was to be repaid in 40 instalments and 3% penal
interest on unpaid instalments. The accused executed surety bond dated
10.04.2018 for making the repayment of loan.
3. It further states that accused made some payment only till the
month of June, 2019 and thus, accused is liable to make the payment of
outstanding amount of Rs.99,772/- along with interest. Complainant avers that
upon pursuance the accused allegedly issued a cheque bearing number 101051
dated 23.01.2022 for an amount of ₹99,772/- drawn on Canara Bank, Sector 15,
Rohini, Delhi Branch, exhibited as Ex.CW1/G. Subsequently, on presentment
on 24.01.2025, the cheque was dishonoured and returned with remarks “funds
insufficient” vide returning memo dated 25.01.2022 exhibited as Ex.CW1/H
(OSR). Thereafter, complainant sent a notice of demand dated 14.02.2022
Ex.CW1/J calling upon the accused to pay the cheque amount within 15 days.
The postal receipt is exhibited as Ex.CW1/K and tracking report as Ex.CW1/L
confirming delivery on 15.02.2022. It is further states that despite service of
legal notice, the accused failed to make the payment, hence, the complainant
moved to the court with the present complaint under section 138 of the
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Akhand Co-operative Urban Thrift and Credit Society Ltd. Vs. Smt. Nisha Singh Digitally Page no.2 of 12
signed by
JAYANTI
JAYANTI CHANDER
CHANDER Date:
2025.03.10
16:14:38
+0530
Negotiable Instruments Act, 1881, (here in after referred to as the “NI Act“).
The Complainant adduced documents including the Registration of
Complainant Society Ex. CW1//A, Membership Application of accused Ex.
CW1/B, Copy of Loan Application Form Ex. CW-1/C, Aadhaar Card of accused
CW-1/D, surety bond Ex CW-1/E, Outstanding statement of Loan amount of
accused Ex. CW1/F.
4. Upon prima facie consideration of the pre-summoning evidence,
the accused was summoned vide order dated 26.06.2022 and directed to furnish
bail bond and surety bond.
5. Upon the appearance of the accused, notice under section 251,
Code of Criminal Procedure 1973 (hereinafter referred to as “CrPC“) was
framed on 08.08.2023 to which the accused pleaded not guilty. The accused
admitted her signatures on the cheque. She stated that she issued the blank
signed Cheque along with two such other cheques to the Complainant as a
security for obtaining a loan of Rs 70,000/- from the Complainant. The accused
stated that substantial part of loan was repaid while she is ready to pay the
remaining small amount. Complainant dropped two witnesses CW-2 and CW-3.
COMPLAINANT EVIDENCE
6. On allowing the application under section 145(2) of the Act, the
AR for the Complainant stepped in witness box as CW-1 and adopted his
affidavit of pre-summoning as his evidence reiterating almost all facts of
complaint, stating all exhibits. The CW-1 deposed that a statement of account is
maintained for the loan sanctioned along with a consent form obtained by the
applicant. The CW-1 denied any repayment of Rs 40,000, Rs 10,000, Rs 7,000
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signed by
JAYANTI
JAYANTI CHANDER
CHANDER Date:
2025.03.10
16:14:42
+0530
and Rs 10,000 by the accused to the Complainant Society. The witness deposed
that the duly filled cheque was given by the accused to the Complainant.
Learned counsel for the accused duly cross-examined complainant. The
Complainant denied the suggestions put to him.
7. Complainant closed his evidence vide his separate statement dated
21.11.2023. Thereafter, matter was fixed for recording of statement of accused.
STATEMENT UNDER SECTION 313 CRPC
8. On 23.01.2024 the statement of the accused under section 313,
CrPC, read with section 281 CrPC was recorded wherein the entire
incriminating evidence was put to her. In response, the accused reiterated the
defence taken in the notice framed under section 251, Code of Criminal
Procedure (hereinafter “CrPC“). Additionally, the accused stated that the
accused was not told about the penal interest instead Rs.1,050/- per month was
to be paid as interest on the principal amount of Rs.2,000/-, 3,000/-. The
accused alleged that the complainant took Rs.7,000/- at the time of disbursing
the loan and Rs.30,000/- have been repaid to the complainant through recurring
deposit of Rs.500/-. The accused stated the cheque in question was given to the
complainant at the time of taking membership of the Complainant Society.
Thereafter, accused did opted to lead defence evidence.
9. On allowing the application under section 315, CrPC, the accused
for the Complainant stepped in witness box as DW-1. In the examination-in-
chief, DW-1 reiterated the submissions made in statement under section 313,
CrPC. The DW-1 admitted that Rs.70,000/- was credited by the Complainant
Society in her account and admitted signatures at point ‘A’ on Ex CW 1/B to
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Digitally
signed by
JAYANTI
JAYANTI CHANDER
CHANDER Date:
2025.03.10
16:14:47
+0530
CW1/E, that is, the application form of membership Ex CW 1/B, the loan
application form Ex CW 1/C, copy of Aadhar card Ex CW 1/D, surety bond for
repayment of loan with interest of 18% per annum Ex CW 1/E. The accused
deposed to have not read the terms and conditions of the loan agreement before
signing the Ex CW1/E and that the purpose of loan was written by the
Complainant but not on her instructions as the Complainant already knew the
purpose. The DW-1 admitted her hand writing on Ex CW1/D, that is, copy of
Adhaar Card. DW1 admitted to not have made any payment after dishonour of
cheque. The DW1 admitted receipt of legal notice.
FINAL ARGUMENTS
10. Final arguments were heard on 03.02.2025 on behalf of both the
parties. Learned counsel for the complainant submits that accused borrowed
Rs.70,000/- from the complainant. The loan amount was agreed to be repaid
within two and a half years from 03.11.2018. Upon default in repayment by the
accused, the Complainant subsequently approached the accused for repayment
on two occasions. The requests for repayment were of no avail. The impugned
cheque was presented in the ICICI Bank on 02.08.2021 which got dishonoured
on 11.08.2021 for reason of “funds insufficient. The application form and surety
bond were signed with agreement to repay the loan amount at the interest rate
@18% per annum. The accused admitted borrowing the aforesaid loan amount
and her signatures on the cheque and the loan application form. It was further
argued that no evidence of amount repaid by the accused has been adduced by
the accused whereas the loan account statement showing the liability of the
accused has been placed on record by the complainant.
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JAYANTI
JAYANTI CHANDER
CHANDER Date:
2025.03.10
16:14:50
+0530
11. Learned counsel for the accused argued that the accused has repaid
substantial loan amount. Ld. Counsel for the accused submitted that the accused
could not repay the entire amount due to financial hardships in COVID-19. The
Counsel for the accused further submitted that the accused and four other
members have been made surety of each other and the complainant society
defrauds innocent persons.
12. Rival submissions have been heard and record of the case has been
perused.
INGREDIENTS OF OFFENCE UNDER SECTION 138 NI ACT
13. Before delving into the factual matrix of the present case, it is
significant to underpin the essential ingredients to be established in order to
attract the liability under section 138, NI Act as follows:
(i) The accused issued a cheque on an account maintained by him
with a bank.
(ii) The said cheque has been issued in discharge, in whole or in part,
of any legal debt or other liability, which is legally enforceable.
(iii) The said cheque has been presented to the bank within a period of
three months from the date of cheque or within the period of its
validity.
(iv) The cheque in question, when presented for encashment, was
returned unpaid.
(v) The payee of the cheque issued a legal notice of demand to the
drawer within 30 days from the receipt of information by him
from the bank regarding the return of the cheque.
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signed by
JAYANTI
JAYANTI CHANDER
CHANDER Date:
2025.03.10
16:14:55
+0530
(vi) The drawer of the cheque failed to make the payment within 15
days of the receipt of aforesaid legal notice of demand.
APPRECIATION OF EVIDENCE
14. The accused can be held guilty of the offence under Section 138 NI
Act only if the above-mentioned ingredients are proved by the complainant co-
extensively. Moreover, conditions stipulated under Section 142 NI Act have to
be fulfilled in addition to above-mentioned ingredients.
With Respect to First, Third and Fourth Ingredient
15. The Complainant has adduced by way of documentary evidence
the original cheque Ex CW1/G and the return memo Ex CW1/H mentioning
reason of dishonour as “funds insufficient”. In the notice framed under section
251, CrPC and statement recorded under section 313, CrPC, the accused admits
her signatures on the cheque in question and its issuance as a security cheque
along with two other cheques for borrowing a loan amount of Rs 70,000/- from
the Complainant. The accused admits her signatures on all the documents
including loan application form Ex.CW1/C and surety bond Ex.CW1/E in her
Cross examination as DW-1, thereby admitting legal liability towards the
Complainant. The accused avers that substantial amount of loan has been repaid
through various instalments, however, no proof of payment has been placed on
record. It is a cardinal principle of evidence that documentary evidence is given
primacy over oral testimony as enshrined under section 64, Indian Evidence Act
1881(for brevity “IEA”). An inference can be drawn that the cheque was duly
issued to the Complainant for an outstanding legal liability. The statement of
outstanding loan account of the accused Ex. CW1/F depicts an outstanding
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JAYANTI
JAYANTI CHANDER
CHANDER Date:
2025.03.10
16:14:58
+0530
liability of Rs 99519/- of the accused as on 28.02.2022. Therefore, requirement
of first, third and fourth ingredients stand fulfilled in the present matter.
With Respect To fifth and sixth Ingredient
16. Perusal of document Ex-CW1/L reveals that legal demand notice
was sent on the address which was admitted by the accused to be her correct
address. Therefore, due service of notice to the accused is established. The
Hon’ble Supreme Court in the case of C.C Alavi Haji vs. Palapetty Muhd. &
Anr1 has also upheld the above view. Hence, fifth and sixth ingredient also stand
fulfilled.
17. Once the ingredients mentioned in the forgoing, paragraph are
established by the complainant, then as soon as the execution of impugned
cheque is admitted by the accused, a fact base is established to invoke the
presumption of cheque having been issued in discharge of a legally recoverable
debt.
With respect to second ingredient
18. As per the scheme of NI Act and recent precedents, once the
accused admits signature on the cheque in question, presumption of law under
section 139 of the Act shall be drawn. The conjoint reading of Section 118 and
Section 139 NI Act raises a presumption that the cheque was drawn for
consideration and given by the accused for the discharge of debt or other
liability. The ‘presumption of law’ makes it imperative for the court to raise
such presumptions. In the recent judgment, Kalamani Tex v. P.
Balasubramaniyan,2 the larger bench of the Hon’ble Supreme Court, held that:
1
2007 6 Supreme Court Cases 555 (Decided on May 18, 2007).
2
(2021) 5 SCC 283.
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Digitally
signed by
JAYANTI
JAYANTI CHANDER
CHANDER Date:
2025.03.10
16:15:01
+0530
“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.”
The same was re-iterated in the case of Hiten P. Dalal vs. Bratindranath
Banerjee.3 Thus, the second ingredient is also proved. Nothing significant has
come out in the cross-examination of the complainant. Further, all the
suggestion put by Ld. Counsel for accused were denied by the complainant.
19. The words “unless contrary is proved”4 under sections 118 and 139
of the Act read with sections 3 of the IEA raises reverse onus on the accused,
thereby shifting the onus on accused to prove that there was no subsisting
legally recoverable debt. To discharge the evidentiary onus of proof under
section 102, IEA, the accused may rely on the complainant evidence to rebut the
existence of legally enforceable debt as was enunciated in the case of Rangappa
Vs. Sri Mohan5. However, the evidence should create doubt to the standard of
preponderance of probabilities.
20. In the instant case, accused stepped into the witness box and was
duly cross examined by the Learned Counsel for the Complainant. The version
of accused in the statement under section 313 CrPC, Code of Criminal
Procedure 1973 (hereinafter “CrPC“) is that the cheque in question was issued
at the time of taking membership of the Complainant Society. However, the
accused states in the notice framed under section 251, CrPC that the Cheque in
question was issued as a security for the loan amount of Rs 70,000/- borrowed
from the Complainant. It is significant to highlight the loan was borrowed three
3
(2001) 6 SCC 16 (Decided on July 11, 2001).
4
Kumar Exports vs. Sharma Carpets, 2009 2 Supreme Court Cases 513.
5
(2010) 11 Supreme Court Cases 441.
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Digitally signed
by JAYANTI
CHANDER
JAYANTI Date:
CHANDER 2025.03.10
16:15:05
+0530
years after the date of taking membership of the complainant society. The
contradictory versions of the accused cast a cloud on the veracity of the
accused. The accused admits that the aforesaid loan amount was borrowed from
the Complainant and the loan agreement form bears her signatures. The bond
specifies the rate of interest as 18% per annum. The only defence taken by the
accused is that she did not read the terms and conditions of the loan. It is a
principle of law and prudence that ignorance of law is not an excuse. Likewise,
lack of due care and caution by the accused is no excuse to evade from the legal
liability incurred.
21. The accused deposes that the time of borrowing the loan amount of
Rs.70,000/- was paid. Subsequently, substantial amount portion of the loan
amounting to Rs.30,000/- was paid to the complainant. However, these claims
are not substantiated by any material documentary evidence. The accused
admits that Rs.1,050/- was to be paid monthly to the Complainant and that she
paid instalments prior to COVID 19. On the other hand, the Complainant had
adduced documentary evidence of the statement of loan account of the accused
Ex. CW1/F mentioning details of the amount paid by the accused and the
outstanding amount as per the loan terms and conditions. The statement
mentions Rs 1050/- as the monthly amount paid in the month of April 2017,
which was not paid in its entirety from the subsequent months. Without any
cogent or clinching evidence, it is not sufficient to raise probable defence. The
accused has failed to rebut the presumption by substantive evidence.
22. In the final arguments, Ld. Counsel for the Complainant submitted
that since all the ingredients laid down under Section 138 NI Act are fulfilled,
the accused should be convicted.
C.C. No.937/2022 JAYANTI Akhand Co-operative Urban Thrift and Credit Society Ltd. Vs. Smt. Nisha Singh CHANDER Page no.10 of 12 Digitally signed by JAYANTI CHANDER Date: 2025.03.10 16:15:09 +0530
23. Per contra, the counsel for the accused submitted that Rs.7,000/-
was additionally paid to the complainant along with repayment of the
substantial portion of the loan amount. However, no independent material
witness has been examined to support the same. Also, no documentary proof has
been adduced of repayment of any amount to the complainant. The signature on
the impugned cheque has been admitted by the accused. Likewise, mere denial
of legal liability without any substantive evidence is not sufficient to rebut the
presumption raised under section 139, NIA read with section 118, IEA.
24. Furthermore, the admission of signatures by the accused, proof of
issuance and subsequent dishonour of cheque due to insufficient funds shows
that the accused had in fact issued the cheque duly. The allegations of the
accused are devoid of any substantial documentary proof or oral testimony. In
the instant case, the documentary evidence weighs more than oral allegations of
the accused.
25. In view of the above considerations, it can be said that accused has
failed to raise suspicion in the version narrated by the complainant by way of
cross-examination. Therefore, version of complainant is proved by force of the
presumption. Hence, all the ingredients to constitute the offence under section
138 of NI Act stands proved.
CONCLUSION
26. This court finds that the complainant has sufficiently discharged
her initial burden of proving the essential ingredients of offence under Section
138 of NI Act as per law. As such, the accused has failed to rebut the
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Digitally
signed by
JAYANTI
JAYANTI CHANDER
CHANDER Date:
2025.03.10
16:15:13
+0530
presumption raised against him and averments of the accused have not been
proved to the standard of preponderance of probabilities. Accordingly, the
offence under Section 138 of the Negotiable Instruments Act, 1881 remains
‘proved’.
27. Accordingly, the accused Smt. Nisha Singh D/o Sh. Chhangur
Singh
is convicted of the offence under Section 138 of the Negotiable Instruments
Act, 1881.
28. Copy of this judgment be given to the convict free of cost as per
rules. Convict be now heard on the quantum of sentence. Digitally
signed by
JAYANTI
Announced in open Court on 10.03.2025. JAYANTI CHANDER
CHANDER Date:
2025.03.10
16:15:17
+0530(Jayanti Chander)
JMFC (NI Act)-DC03,
Rohini Courts, North West RohiniThis judgment contains 12 signed
pages and each page has been
signed by the undersigned.
C.C. No.937/2022
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