Delhi District Court
Jagdish Chander vs Richa Gupta on 15 July, 2025
DLST020125722020
IN THE COURT OF SH. NITIN SHAH, JMFC-05, N.I. ACT,
SOUTH DISTRICT, SAKET, NEW DELHI
CC No. : 5796/2020
U/s : 138 N. I. Act
PS : Saket
Jagdish Chander vs. Richa Gupta
JUDGMENT
1. CC No. : 5796
2. Date of institution of the case : 23.11.2020
3. Name of complainant : Jagdish Chander
Sh. Naubat Singh,
R/o L-593, Gali No. 8,
Sangam Vihar,
New Delhi.
4. Name of accused, parentage
and address : Richa Gupta
d/o Sh. Vijay Gupta
R/o F-1/335, Madangir,
New Delhi.
5. Offence complained of : 138 N. I. Act
6. Plea of accused : Accused pleaded not guilty
7. Final order : Conviction
8. Date on which order was : 12.06.2025
reserved
9. Date of pronouncement : 15.07.2025
THE CONVICT HAS THE RIGHT TO AVAIL FREE LEGAL AID AS PER
ENTITLEMENT IN ORDER TO PURSUE REMEDY BEFORE THE APPELLATE
COURT/APPROPRIATE FORUM OF LAW.
THE CONVICT MAY CONTACT THE FOLLOWING :
O/o Ld. Secretary, DLSA-South, Room No. 309,
3rd Floor, Saket Court Complex, New Delhi.
Contact No. 011-29562440, [email protected] CC No. 5796/2020 (Nitin Shah) Jagdish Chander vs. Richa Gupta Page no 1 of 18 JMFC-05 (NI Act)/South DLST020125722020 FACTUAL BACKGROUND OF THE CASE
1. Vide this judgment, this Court shall dispose off the present complaint
case instituted by the Complainant invoking the provisions of Section 138 of the
Negotiable Instruments Act, 1881(as in after referred to as NI Act).
2. The facts giving rise to the instant complaint case, as per the
complainant, may be summarized as hereafter: That accused came in contact with
the complainant through one Smt. Raj in the year 2018 and thereafter accused
started visiting the house of the complainant frequently and thus developed a good
friendly relationship with the complainant and his wife. That accused told the
complainant to help her in business in order to gain profits and starting taking loan
in cash from the complainant since the month of October 2018. After taking loan
amounts from the complainant, accused used to given undertakings in her own
handwriting into the diary of the complainant. That in the month of December
2018, accused discussed with the complainant about some bigger plan to do the
business of surgery and care cosmetic items from Germany, in the name of ‘Richa
Global Export’ and allured the complainant to invest money at huge margin of
profit. That complainant agreed for the said proposal of accused and provided total
sum of Rs. 6,50,000/- in cash to the accused. That in the month of January 2019,
the accused paid a sum of Rs. 1,13,750/- in cash to the complainant as profit
margin on the principal amount of Rs. 6,50,000/- and thus allured the complainant
to invest further amount and thereafter the complainant further provided a sum of
Rs. 10 lacs in cash to the accused on 20.01.2019 and again provided a sum of Rs. 5
lacs in cash to the accused on 17.02.2019. The accused promised to return the saidCC No. 5796/2020 (Nitin Shah)
Jagdish Chander vs. Richa Gupta Page no 2 of 18 JMFC-05 (NI Act)/South
DLST020125722020further amount of Rs. 15 lacs to the complainant within 12 months alongwith huge
margin of profit of Rs. 13 lacs. At the same time on the instance of the
complainant, accused entered into a written agreement with the complainant on
08.02.2019 against the total sum of Rs. 21,50,000/- received by the accused from
the complainant. That accused paid the profit margin @ of Rs. 1,13,750/- for the
month of January 2019 and February 2019 but did not pay any further profit
margin on either investment nor returned the principal amount till date. That after
the lapse of period of 12 months, complainant asked the accused to return the
principal amount of Rs. 15 lacs and Rs. 6.50 lacs alongwith all the dues
installments of profit margin, however accused kept on postponing the payment.
That on 05.07.2020 after repeated requests made by the complainant, accused
visited the house of complainant at Chattarpur and handed over two signed cheques
bearing no. 049404 dt. 13.07.2020 for a sum of Rs. 7 lacs as part payment against
the profit margin and another cheque bearing no. 127848 for a sum of Rs.
21,50,000/- against the total liability of the principal amount of Rs. 21,50,000/-,
drawn on Axis Bank, Pushp Vihar Branch, (hereinafter referred as cheque in
question) in favour of the complainant in the presence of Sh. Joginder Singh, Smt.
Kamlesh and the wife of complainant. That accused requested the complainant to
present the cheque in the month of August 2020. That as per assurance of the
accused, complainant presented the first cheque of Rs. 7 lacs, however the same
was returned unpaid with remarks ‘drawer signatures differ’. That when
complainant presented the second cheque of Rs. 21,50,000/- for encashment, same
was returned unpaid with remarks “drawer signatures differ”. That complainant
contacted the accused several times but accused kept avoiding the payment. That
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when accused did not pay the said amount after repeated requests, complainant
issued a legal demand notice dated 04.09.2020 calling upon the accused to pay the
amount of the aforesaid cheque within the stipulated period but the accused did not
make the payment within the statutory period.
PROCEEDINGS BEFORE COURT
3. The complainant tendered his evidence by way of affidavit and relied
upon following evidences:-
a) Pension payment order Ex. CW1/A (OSR)
b) Handwritten receipt Ex. CW1/B1 to
CW1/B7(OSR)
c) Annexure B-1 Mark CW1/C
d) Annexure-C Ex. CW1/D1 & Ex.
CW1/D2 (OSR)
e) Annexure-D Ex. CW1/E1 to CW1/E3
(OSR)
f) Agreement regarding investment and profit Ex. CW1/F
g) Copy of previous cheque Ex. CW1/G (OSR)
h) Cheque in question Ex. CW1/H
i) Return memo Ex. CW1/I (OSR) &
CW1/J
j) Legal demand notice dt. 04.09.2020 Ex. CW1/K
k) Postal receipt Ex. CW1/L
l) Tracking report Ex. CW1/M
m) Reply to legal demand notice Ex. CW1/N
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n) Evidence affidavit Ex. CW1/X
4. Upon appreciation of pre-summoning evidence, accused was
summoned for an offence punishable under Section 138 of NI Act and notice under
Section 251, Code of Criminal Procedure, 1973 (herein after referred to as Cr.P.C.)
was served upon accused on 10.11.2021 to which he pleaded not guilty and
claimed trial. The accused took the defence that she had taken various loans from
the complainant amounting to Rs. 3-3.5 lacs. She further deposed that at the time
of availing the loan, she had handed over various blank signed cheques to the
complainant. She further deposed that she had repaid all the loan amount including
penalty as well as interest and even then the complainant did not return the cheque
to her. She further deposed that complainant ensured to destroy these cheques,
however the cheques has been misused by the complainant. She further deposed
that she has no liability towards the complainant.
5. Thereafter, application u/s 145(2) NI Act was allowed on 06.12.2021
and accused was granted opportunity to cross examine the complainant as well as
his witnesses, if any, under Section 145 (2) of NI Act.
6. The complainant has examined himself as CW-1, Smt. Sushma Devi
as CW-2, Smt. Kamlesh Devi as CW-3 and Smt. Prem Kumari as CW-4. In the
post summoning evidence, the complainant (CW1) has adopted his pre-summoning
evidence. The complainant and his witnesses were examined by the Ld. Counsel for
accused. CE was closed vide order dated 08.02.2023.
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7. Accused was, thereafter, examined U/s 281 r/w Sec 313 Criminal
Procedure code, 1872 on 04.03.2023 wherein entire incriminating evidence was put
to her. The accused took defence that she has no liability towards the cheque in
question.
8. Accused has examined himself as DW-1 after allowing the application
u/s 315 CrPC, Sh. Dayanand as DW-2 and Sh. Santosh Kumar as DW-3.
The defence evidence was closed vide order dt. 06.06.2024 and the
matter was fixed for final arguments.
9. I have considered the rival submissions of the parties and perused the
entire evidence led by the parties and the material available on record.
FINAL ARGUMENTS
10. During the course of final arguments, complainant argued that all the
essential ingredients of section 138 NI Act are fulfilled and there exists enforceable
liability towards the complainant on behalf of the accused as the accused has failed
to rebut the presumption of law raised against her. He further argued that it is well
established if the transaction is not reflected in the ITR, it will not render the
transaction unenforceable u/s 138 NI Act. He further argued that the complainant is
able to prove payment receipts and agreement with the complainant signed by the
accused and lastly prayed that the accused be convicted of the offence.
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11. Per contra, Ld. Counsel for the accused has argued that the offence is
not made out as the accused has no liability to pay the cheque amount as the
accused had not sought only Rs. 3.5 lacs from the complainant which was repaid
and handed over blank signed cheques to the complainant for security purpose
which were misused by the complainant. He further argued that when the receipts
and the agreement were signed, the accused did not have stable mental conditions
due to her matrimonial dispute. He further contended that complainant had failed
to show transaction in his ITR and the complainant was running money lending
business without licence, therefore the accused be acquitted of the offence.
INGREDIENTS OF OFFENCE AND DISCUSSION
12. Before dwelling into the facts of the present case, it would be apposite
to discuss the legal standards required to be met by both sides. In order to establish
the offence under Section 138 of NI Act, the prosecution must fulfill all the
essential ingredients of the offence. Perusal of the bare provision reveals the
following necessary ingredients of the offence: –
First Ingredient: The cheque was drawn by a person on an
account maintained by him for payment of money and the
same is presented for payment within a period of 3 months
from the date on which it is drawn or within the period of its
validity.
Second Ingredient: The cheque was drawn by the drawer for
discharge of any legally enforceable debt or other liability;
Third Ingredient: The cheque was returned unpaid by the
bank due to either insufficiency of funds in the account to
honour the cheque or that it exceeds the amount arranged toCC No. 5796/2020 (Nitin Shah)
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bank;
Fourth Ingredient: A demand of the said amount has been
made by the payee or holder in due course of the cheque by a
notice in writing given to the drawer within thirty days of the
receipt of information of the dishonour of cheque from the
bank;
Fifth Ingredient: The drawer fails to make payment of the
said amount of money within fifteen days from the date of
receipt of notice.
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 NI Act
13. The accused can only be held guilty of the offence under Section 138
NI Act if the above-mentioned ingredients are proved by the complainant co-
extensively. Additionally, the conditions stipulated under Section 142 NI Act have
to be fulfilled.
PROVING OF INGREDIENTS
14. Notably, there is no dispute qua the proof of first, third, fourth and
fifth ingredient. The complainant had proved the original cheque vide Ex.CW1/H
which the accused has not disputed as being drawn on the account of the accused. It
was not disputed that the cheque in question was presented within its validity
period. The cheque in question was returned unpaid vide return memo Ex. CW1/J
which has also not been disputed. With regard to the proving of fourth ingredient
i.e. the service of legal demand notice Ex. CW1/K shows that notice was served
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upon the accused and no evidence has been adduced by the accused to disprove the
same. Further, in view of the presumption u/s 27 of the General Clauses Act, 1897,
Ex.CW1/K & Ex.CW1/L (legal notice and postal receipt) alongwith the ratio laid
down in the case of “C. C. Alavi Haji Vs. Palapetty Mohd. & Anr 2007 AIR SCW
3578, I am of the considered opinion that the fourth ingredient of the offence
stands proved. The fifth ingredient as such the same is deemed to be proved that no
payment has been made after issuance of legal demand notice.
RAISING OF PRESUMPTION
15. The accused has admitted the signatures on the cheque in question in
her notice u/s 251 r/w 294 CrPC.
16. As per the scheme of the NI Act, once the accused admits signature on
the cheque in question, certain presumptions are drawn, which result in shifting of
onus. Section 118(a) of the NI Act lays down the presumption that every negotiable
instrument was made or drawn for consideration. Another presumption is
enumerated in Section 139 of NI Act laying down the presumption that the holder
of the cheque received it for the discharge, in whole or part, of any debt or other
liability.
17. The combined effect of these two provisions is a presumption that the
cheque was drawn for consideration and given by the accused for the discharge of
debt or other liability. Both the sections use the expression “shall”, which makes it
imperative for the court to raise the presumptions, once the foundational facts
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required for the same are proved. Reliance is placed upon the judgment of the
Hon’ble Supreme Court, Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC
16, Kumar Exports vs. Sharma Carpets (2009) 2 SCC 513 and Bir Singh vs.
Mukesh Kumar (2019) 4 SCC 197.
18. Therefore, in the instant case, since the accused has admitted his
ssignatures on the cheque in question, the aforementioned statutory presumptions
would be raised in favour of the complainant regarding the fact that the impugned
cheque has been drawn for consideration and issued by the accused in discharge of
legally enforceable debt.
APPRECIATION OF EVIDENCE QUA SECOND INGREDIENT
(EXISTENCE OF LEGALLY ENFORCEABLE DEBT/LIABILITY)
19. The presumptions contemplated in the NI Act are rebuttable
presumptions and once the same are raised, it is for the accused to rebut the same
by establishing a probable defence. The principles pertaining to the presumptions
and the onus of proof were recently summarized by the Hon’ble Apex Court in
Basalingappa vs. Mudibasappa (2019) 5 SCC 418 as under:
“25.1. 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.
25.2. The presumption under Section 139 is a rebuttable
presumption and the onus is on the accused to raise
probable defence. The standard of proof for rebutting the
presumption is that of preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused
to rely on evidence led by him or the accused can also relyCC No. 5796/2020 (Nitin Shah)
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DLST020125722020on 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.”
Therefore, the accused can rebut the presumption u/s 139 NI Act
either by cross-examination of complainant and complainant witnesses or by
leading his defence evidence or both.
20. In the instant case, the accused has raised following defences:
20.1) The complainant did not have financial capacity to advance a loan of
Rs. 21,50,000/- to the accused.
20.2) That only Rs. 3.5 lacs were taken from the complainant and same has
been returned.
20.3) The complainant was running committee business.
20.4) That the transaction in question is not reflected in ITR.
20.5) the complainant is running money lending businessDefence that the complainant did not have financial capacity: –
21. Insofar as first defence of the accused is concerned, it has been argued
by the Ld. Counsel for the accused that the complainant had deposed in his cross-
examination that he had used retirement fund for the purpose of granting loan to
the accused. However, the account statement of the accused Ex. CW-1/X1 and Ex.
CW-1/X2 does not reflect the same. To controvert the aforesaid contention, Ld.
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Counsel for the complainant submitted that the complainant has made his position
clear in his cross-examination date 04.03.2022. Perusal of the same shows that it
has been deposed by the complainant that out of his retirement fund, he had given
the same to his relatives also in the year 2015,2016,2017 after withdrawal from his
bank and at the time advancing loan to the accused, he had collected the said
money from his relatives. It is also stated by the complainant in his cross-
examination dated 16.07.2022 that on 17.02.2019 he had given an amount of Rs.
5,00,000/- by using savings which were available with him in cash at his home.
Thus, the complainant has been able to prove that he had financial capacity to
advance loan amount to the accused.
Defence that only Rs. 3.5 lacs were taken from the complainant: –
22. In addition to it, it must be seen whether the accused has been able to
prove that the only Rs. 3.5 lacs were taken from the complainant and same were
returned to the complainant. Now, during the cross-examination of the
complainant, the complainant was confronted with a document Ex. CW1/D1. He
has affirmed his handwriting on this document and admitted receiving of Rs.
1,00,000/- advanced to the accused on 20.05.2019. However, he voluntarily stated
that this transaction pertains to a separate loan. In order to prove separate
transaction, the complainant has placed on record receipts noted in a diary Ex.
CW1/B-1 (OSR) to Ex. CW1/B-7(OSR). The accused DW-1 in her cross-
examination has admitted her signature on these documents and also admitted that
amount was returned to the complainant as per Ex. CW1/B-1 (OSR) to Ex.
CW1/B-7(OSR).
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23. Further, the complainant has placed on record documents showing
business transaction CW/C, receipts of payment of Rs. 21,50,000/- by the
complainant to the accused Ex CW1/D-1(OSR)& Ex CW1/D-2(OSR), Ex CW1/E-
1(OSR) to Ex CW1/E-3(OSR), and agreement regarding investment & profit Ex
CW1/F.
24. Now, during the cross-examination of the accused DW-1, she was
confronted with these documents. She has admitted that Mark-C from point A1 to
A2 and from point B1 to B2 is in her handwriting. From A1 to A2, it is mentioned
that Rs. 6,50,000/- is allocated in cosmetic surgery and care cosmetics from
Germany and Rs. 15,00,000/- in making setup and some legal work for training
center for Canadian employees. From B1 to B2, it is written that there is a profit
margin of Rs. 1,13,750 from 31.03.2019 to 05.04.2019.
25. In addition to it, regarding Ex CW1/D-1(OSR)& Ex CW1/D-2(OSR),
Ex CW1/E-1(OSR) to Ex CW1/E-3(OSR) the accused DW-1 in her examination-
in-chief at paragraph 7 has deposed that the complainant used to do the calculations
in his diary and bring them and due to her poor mental condition, she was unable to
understand them, but she used to sign it. When these documents were confronted to
the accused in her cross-examination, she admitted her signatures on them.
26. Moreover, regarding agreement of investment & profit Ex CW1/F, the
accused in her examination-in-chief has admitted that she had executed the said
agreement with the complainant but she has not stated that the agreement was
blank, but only that she did not read it as the complainant had promised her that he
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would explain the terms of the agreement. When the said agreement was
confronted to the accused DW-1, she has identified her signatures on it. The
agreement broadly states that the accused Mrs. Richa Gupta had taken loan of Rs.
6,50,000/- from the complainant to start a business in January 2019 for a profit of
Rs 1,13,750 payable per month and installments of said profit has been paid for the
month of January and February 2019. The agreement also states that the accused
has also taken Rs. 15,00,000/- from the complainant and out of this balance of Rs.
5 lakhs will be paid on 20 th February 2019. However, just below this line, there is a
handwritten note which states that the accused has received balance five lakhs on
17th February 2019 and opposite to this note at point C1, the accused has identified
and admitted her signature. Moreover, CW-2 and CW-3 being attesting witness
have proved execution of the agreement Ex. CW1/F. However, nothing substantial
has been elicited from the cross-examination of these witnesses.
27. Since the accused has taken the defence that her mental condition was
not sound due to her matrimonial dispute due to which she could not understand
calculations on Ex CW1/D-1(OSR)& Ex CW1/D-2(OSR), Ex CW1/E-1(OSR) to
Ex CW1/E-3(OSR) and terms of agreement Ex CW1/F, however she has failed to
adduce any evidence regarding the same. Therefore, the accused has failed to prove
that only Rs. 3.5 lacs were taken from the complainant.
Defence that the complainant was running committee: –
28. Furthermore, Ld. Counsel for accused has also argued that the
complainant was also running a committee and some of the amount was invested in
the same committee. When a suggestion in this regard was put to the complainant
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in his cross-examination, he denied the suggestion of the Ld. Counsel for the
accused. He further deposed that it was being run by his wife, and she was not
having any licence. The complainant was also confronted with Mark- CW-1/C to
which he replied that entries in the said document was with respect to committee
run by his wife.
29. Complainant examined his wife in support of his evidence as CW-4. In
her cross-examination she deposed that she was running chit fund of 10 people, and
she did not have any license. And the accused also became the member of the said
committee of Rs. 1,00,000/- in October, 2019. In the bank statement of CW-4 some
transactions from the accused were also reflected. However, the accused could not
furnish any evidence in support of her defence that the complainant was running
committee where the accused was also a member. Therefore, the accused has failed
to prove this defence.
Defence that transaction in question is not reflected in ITR: –
30. Further, the accused has raised the defence that the transaction as
alleged by the complainant is not reflected in his income tax return and the
complainant has admitted the same in his cross-examination. Conversely, Ld.
Counsel for the complainant has rebutted that same and has argued that it is not
mandatory to show in ITR loan given to anyone for the purpose of complaint case
u/s 138 NI Act. Reliance can be placed on judgment of Hon’ble Delhi High Court
in case of Barun Kumar v. State NCT of Delhi & anr CRL.REV. P. 398/2018
and it has been held that
“10. ………. Just by contending that the Income Tax Returns
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have not been filed or by stating that complaints have been filed by
the complainant against the accused does not rebut the
presumption of the petitioner even on preponderance of
probabilities. The fact that the loan has been given in violation of
Section 269 SS of the IT Act does not mean that the Court cannot
look into the documents at all. The learned counsel for the
petitioner is correct that Section 269 SS of the IT Act mandates
that loan in any amount over Rs.20,000/- has to be by way of
account payee cheque or account payee bank draft or by use of
electronic clearing system through a bank account. Offence Section
269 SS IT Act at best makes an offence under Section 271D of the
IT Act but it does not mean that the loan of Rs.15,00,000/- has not
been given by the complainant to the petitioner herein. ……”.
Therefore, in view of the aforesaid judgment, non-disclosure of the
loan in the ITR by the complainant to show the transfer of amount is not fatal to the
case of the complainant.
Defence that the complainant is running money lending business without
license: –
31. Furthermore, the accused has stated that the complainant is running a
money lending business through an unregistered firm “Yadav Finance”. When this
fact was asked from the complainant in his cross-examination, he deposed, “Yadav
finance is not any entity. However, whenever, I advanced money to anyone. I have
recorded their entries on a paper titled in the name of “Yadav Finance” which is
created just for the purpose of helping the needy people. However, it has no legal
entity neither it is registered, nor it is any firm/company/other entity.” He further
deposed that this card of “Yadav Finance” was taken from his nephew just as a
helping hand and he had no knowledge from where he had taken the said card. AndCC No. 5796/2020 (Nitin Shah)
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DLST020125722020he denied running any “Yadav Finance”. Therefore, the complainant has been able
to explain how the card of Yadav finance came into his possession and how the said
name was created just to help needy people, and it is not an entity/company/firm.
Moreover, Ld. Counsel for the complainant has further argued that even it is
assumed that the complainant is in money lending business, this, by itself, cannot
be a valid ground to restrain complainant to prosecute the accused, let alone
acquittal of the accused. He has placed reliance on judgment of Hon’ble Delhi High
court in Hansraj Bansal Vs. State & another CRL. M. A. 10831/2019 wherein it
has been held that,
“Had it been a money suit instituted by the money lender for
the recovery of the loan advanced by him together with interest
and for accounting all these submissions would have been
relevant. In a criminal proceeding u/s 138 NI Act these are not
relevant at all. In the instant matter a magistrate is to consider
whether the offence as alleged was committed or not and
whether evidence is sufficient to prove complainant’s case.
Legality or illegality of the contract and existence and non-
existence of money lending business by the complainant is not
a ground to throw the complainant’s case out of the
court………The accused remedy only to lead evidence by
examining witnesses and producing documents to prove that
there was no transaction with complainant or that he did not
issue any cheque in favour of the complainant and that there
was no existing debt or liability at the time of his entering into
defence and leading his evidence. ” Thus, the accused has
failed to prove this fact.
CONCLUSION:
32. In the result of the analysis of the present case, the accused Richa
Gupta is hereby CONVICTED of the offence punishable under Section 138,CC No. 5796/2020 (Nitin Shah)
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DLST020125722020Negotiable Instruments Act, 1881.
33. This judgment contains 18 pages. This judgment has been signed and
pronounced by the undersigned in open court.
34. Let a copy of the judgment be given free of cost to the convict.
35. Let a copy of the judgment be uploaded on the official website of
District Courts, South, Saket forthwith.
36. The convict has a right to suspension of sentence as per the statutory
period and to prefer an appeal against the present judgment. She is also at liberty to
avail the services of District Legal Services Authority, South as per entitlement in
case she cannot afford the professional fee of an advocate. The contact details of
the authority have been mentioned on the cover note of this judgment.
Digitally
signed by
NITIN NITIN SHAH
Date:
SHAH 2025.07.15
16:18:14
+0530
Announced in the open Court (NITIN SHAH)
on 15.07.2025 JMFC-05 (NI ACT) SOUTH/SAKET
NEW DELHI
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