Delhi District Court
Manmohan Singh vs Rajeev Luthra on 8 August, 2025
IN THE COURT OF MS. SURBHI GUPTA ANAND,
JUDICIAL MAGISTRATE FIRST CLASS, DIGITAL COURT-05,
SOUTH-WEST DISTRICT, DWARKA, NEW DELHI
EARLIER: JUDICIAL MAGISTRATE FIRST CLASS, (NI ACT)-07
SOUTH-WEST DISTRICT, DWARKA COURTS, NEW DELHI
Ct. Case No.3085/2020
CNR No. DLSW-003784-2020
Manmohan Singh .........Complainant
Through: Sh. Amit Kumar Singh, Advocate
Versus
Rajeev Luthra ..............Accused
Through: Sh. S.B. Singh, Advocate
(1) Name of the Manmohan Singh
complainant
S/o Sh. S.D. Daljeet Singh
R/o 16/18 Tilak Nagar,
New Delhi 110018.
(2) Name of the accused Rajeev Luthra
persons
S/o Sh. S.K. Luthra
R/o H. No. 137 Bhera Enclave,
Paschim Vihar,
New Delhi 110063.
Sheena Luthra (discharged vide
order dated 24.05.2016)
W/o Sh. Rajeev Luthra
R/o H. No. 137 Bhera Enclave,
Paschim Vihar,
New Delhi 110063.
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(3) Offence complained of Section 138, Negotiable
or proved Instruments Act, 1881
(4) Plea of accused Pleaded not guilty
(5) Date of institution of 20.01.2020
case
(6) Date of conclusion of 19.05.2025
arguments
(7) Date of Final Order 08.08.2025
(8) Final Order CONVICTION
JUDGMENT
1. The complainant Manmohan Singh has instituted
this complaint u/s 138 Negotiable Instruments Act, 1881
(hereinafter referred to as ‘NI Act‘) against the accused on
18.01.2020.
2. The factual matrix as can be culled out from the
complaint is that the complainant and accused no.1 were both
engaged in business of property dealing and had been doing
transactions related to construction, sale and purchase of property
with each other since 2013. They had thereby developed friendly
relations with each other. In the first week of February 2015,
accused no.1 along with his wife i.e. accused no.2 (subsequently
discharged vide order dated 24.05.2016) approached the
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complainant for a friendly loan of Rs.15,00,000/- to clear some
market and bank debts. Complainant was reluctant at first due to
the unfavorable market conditions, but upon the insistence of the
accused, complainant agreed to help them. Reaching beyond his
limits, complainant lent a sum of Rs.10,00,000/-, in cash, to the
accused on 25.02.2015 at an interest of 2% per annum for a
period of 7 months. In discharge of their liabilities, accused
issued 3 post-dated cheques drawn upon their joint account and
to which accused no.1 was the signatory, totaling Rs.
10,40,000/-, with assurance that they shall be honored upon
presentation. Accused also assured to pay Rs.1,00,000/- as part
interest to the complainant in the last week of March, 2015. The
details of the post-dated cheques are: cheque bearing no. 000002
dated 25.08.2015 for a sum of Rs.6,40,000/-, cheque bearing no.
000005 dated 30.09.2015 for a sum of Rs.2,00,000/- and cheque
bearing no. 000006 dated 28.09.2015 for a sum of Rs.2,00,000/-,
all drawn on HDFC Bank, Sector 23 A, Gurgaon Branch,
Haryana. The cheques bearing nos. 000005 dated 30.09.2015
and 000006 dated 28.09.2015 for a sum of Rs.2,00,000/- each
are the subject matter of the present complaint (i.e. the ‘cheques
in question’). Accused paid Rs.1,00,000/- to the complainant in
the last week of March 2015, as promised. However, to the
complainant’s dismay, when the cheques in question were
presented for encashment, they were returned unpaid with
remarks “Funds Insufficient” vide return memos dated
18.11.2015, by the banker of the complainant. The complainant
was constrained to issue a legal demand notice dated 14.12.2015,
calling upon the accused to pay the cheque amounts within 15Ct. Case No. 3085/2020
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days from the receipt thereof but accused failed to make the
payment and the instead sent reply dated 22.12.2015 denying
their liability altogether. The complainant was thus constrained to
file this complaint u/s 138 NI Act seeking redress against the
dishonor of the cheques in question.
3. With a view to establish a prima facie case and to
enable the court to summon the accused, complainant led pre-
summoning evidence by way of affidavit Ex. CW-1/1. The
complainant relied upon following documentary evidence:
(a) Original cheques bearing nos. 000006 dated 28.09.2015
and 000005 dated 30.09.2015 for a sum of Rs.2,00,000/- each
drawn on HDFC Bank, Sector 23 A, Gurgaon Branch, New
Delhi, i.e. Ex. CW-1/A and Ex. CW-1/B.
(b) Cheque returning memos dated 18.11.2015, i.e. Ex. CW-
1/C and Ex. CW-1/D, qua the cheques in question.
(c) Office copy of legal demand notice dated 14.12.2015, i.e.
Mark F.
(d) Postal Tracking Reports i.e. Mark G to J.
(e) Returning envelopes, i.e. Mark K to M.
(f) Reply to the legal demand notice dated 22.12.2015 i.e.
Mark N.
(g) Copy of cheque dated 25.08.2015 i.e. Mark A along with
its return memos i.e. Mark B to E.
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(Note: Originals of Mark A to N have been retained in the
connected case file i.e. CC No. 40673/2019)
Complainant closed his pre-summoning evidence on 21.01.2016.
4. On the basis of above material and finding a prima
facie case made out against the accused, accused no.1 and 2 were
summoned vide order dated 21.01.2016. Accused no.1 and 2
entered their first appearance on 24.05.2016. On the same date,
accused no.2 was discharged. Thus, hereinafter ‘accused’ refers
only to accused no.1 i.e. Rajeev Luthra.
5. Notice u/s 251 Cr.P.C. was framed against the
accused on 01.09.2016, stating out to him the substance of
accusation, to which he pleaded not guilty and claimed trial. His
defence was recorded at the stage of framing of notice in
compliance of directions passed by Hon’ble High Court of Delhi
in Rajesh Aggarwal v. State (2010) 171 DLT 51. Accused took
the defence that cheques in question belong to him and bear his
signatures but he has not filled up the other particulars; he knows
the complainant, but he didn’t issue the cheques in question to
him; he didn’t take the alleged loan from the complainant;
complainant and him are property dealers and knew each other
for a long time; complainant used to visit his office and the
cheques in question were kept in his drawer; complainant has
obtained the cheque without his consent and has misused them;
he received the legal demand notice and replied to the same; he
has lodged the police complaint against the complainant at PS
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Palam Vihar; he has no liability towards the complainant qua the
cheques in question.
6. Accused was granted right to cross-examine the
complainant upon an oral prayer made u/s 145(2) of NI Act vide
order dated 01.09.2016 but subsequently he also filed an
application u/s 145(2) NI Act. The complainant was examined as
CW-1, thereby adopting his pre-summoning evidence as post-
summoning evidence. CW-1 was duly cross-examined and
discharged. Bank witness from the bank of the accused was
examined as CW-2 and bank witness from the bank of the
complainant was examined as CW-3. CW-2 and CW-3 were duly
cross-examined and discharged. Vide a separate statement of
CW-1/complainant, complainant evidence stood closed on
28.06.2018.
7. Statement of the accused was recorded u/s 313
Cr.P.C. r/w section 281 Cr.P.C. on 14.08.2018 wherein all the
incriminating evidence was put to him, and he was granted an
opportunity to explain the circumstances appearing against him
at trial. While doing so, accused stated, without oath, that the
signatures on the cheques in question belong to him but he has
not filled in the remaining particulars; he and the complainant are
in property dealing and therefore they knew each other; the
complainant had visiting terms with him in his office; he had
some signed cheques in his office drawer and the complainant
stole the cheques in question along with another cheque from his
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office; he and his wife have not borrowed any money from the
complainant; he had received the legal demand notice and had
replied to it; he has also filed a complaint against the complainant
at PS Palam Vihar; the complainant has filed a false complaint
against him after stealing and misusing his cheques; he does not
owe any liability towards the complainant qua the cheques in
question. Accused preferred to lead defence evidence.
8. At the stage of defence evidence, accused no. 1
examined himself as DW-1, and was partly cross-examined.
After complainant failed to complete the cross-examination of
DW-1 despite repeated opportunities, vide separate statement of
the DW-1/accused recorded in this behalf, defence evidence was
closed on 08.08.2023.
9. An application u/s 311 Cr.P.C was filed on behalf of
the complainant on 20.09.2023 seeking an opportunity to further
cross-examine DW-1/accused as the opportunity was closed on
08.08.2023. The application was disposed off as dismissed vide
order dated 27.02.2024.
Thereafter, another application u/s 311 Cr.P.C was
filed on behalf of the accused for re-opening defence evidence
and seeking an opportunity to examine another witness i.e.
Deepak Chaudhary as DW-2. The application was allowed vide
order dated 04.06.2024.
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DW-2 was examined, duly cross-examined and
discharged. Vide separate statement of DW-1/accused recorded
in this behalf, defence evidence stood closed on 06.08.2024.
10. At the stage of final arguments, Ld. counsel for
complainant submitted that accused borrowed a loan of Rs.
10,00,000/- from the complainant on 25.02.2015 and issued 3
post-dated cheques towards repayment of the loan amount and
part interest, but all 3 cheques were dishonored upon
presentation. The cheques in question were returned dishonored
time for the reason ‘funds insufficient’ even though the accused
claimed that he had issued stop payment instructions to his bank.
Accused has admitted his signatures on the cheques in question,
and he was aware of the cheques being presented for encashment
after the loan amount became due. Accused has failed in raising a
probable defence in his favor due to the contradictory and
inconsistent stands taken by him during trial. Accused has
concocted a story involving Mr. Deepak Chaudhary, which is
false and fabricated as DW-2 has himself contradicted same
during his cross-examination. Accused admitted that there were
several past transactions between the parties and that those
transactions ran in lakhs of rupees but has still challenged the
financial capacity of the complainant. Accused did not place the
complaint filed by him against the complainant in PS Palam, on
record. Complainant has established his case and accused has
failed to prove repayment of the loan amount. Ld. Counsel for
the complainant submitted that all the ingredients u/s 138 NI Act
being made out in his favor, and the accused’s failure in raising a
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probable defence in his favor points towards his guilt and has
prayed to convict the accused for the offence u/s 138 NI Act qua
the cheques in question.
Per contra, Ld. counsel for accused prayed to acquit
the accused on the ground that that there is no documentary
proof/ witness to substantiate the allegations of complainant and
complainant has not come with clean hands as he has obtained
the possession of the cheques in question without the knowledge
and consent of the accused i.e. by stealing the same from office
of the accused. Complainant stole and misused the blank signed
cheques of the accused as he had easy access to the office of the
accused due to the friendly relations shared by them.
Complainant’s case has various lacunas such as the rate of
interest on which the alleged loan was advanced as complaint
mentions the same to be at 2% whereas the legal demand notice
mentions it to be at 3%, complainant has failed to establish his
financial capacity to advance the alleged loan, date on the
cheques in question appear to be tampered i.e. month ‘4’ has
been changed to ‘9’, complainant has not reflected the alleged
loan in his ITRs, complainant has taken contrary stands with
respect to the source of funds in his complaint and in his cross-
examination, accused has taken the stand that cheques in
question were stolen from his office since before the inception of
this case i.e. from the reply to the legal demand notice itself,
DW-2 has proved that accused informed him of stealing of his
cheques, and therefore, accused has been successful in rebutting
the presumption against him and raising a probable defence in his
favor, whereas complainant has failed to establish existence of a
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legally enforceable debt. There is no question of repayment as
accused never borrowed the alleged loan from the complainant.
11. After hearing the arguments advanced on behalf of
both the parties and perusing the record carefully, and upon
appreciation of evidence, the findings of the court are as below.
12. The legal position serving as base to the offence
underlying Section 138 NI Act as has been outlined by the
Hon’ble Supreme Court in the case of Kusum Ingots & Alloys
Ltd. v. M/s Pennar Peterson Securities Ltd.: (2000) 2 SCC 745
is:
(i) that a 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 for the discharge
of any debt or other liability;
(ii) that the cheque has been presented to the bank within a period
of six months from the date on which it is drawn or within the period
of its validity whichever is earlier;
(iii) that the 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;
(iv) that 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 thirty days of
the receipt of information by him from the bank regarding the return
of the cheque as unpaid;
(v) that 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;
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The above legal requirements are cumulative,
meaning thereby that only if all the afore-mentioned ingredients
are satisfied can the person who had drawn the cheque be held
liable for committing an offence u/s 138 NI Act.
13. Burden of proof: The claim based under the
provisions of NI Act is an exception to the general rule of law
that burden of proof lies on the prosecution. In view of the two
specific provisions viz. Section 118 (a) and 139 of NI Act, a
presumption is attached to each negotiable instrument that the
same was drawn and issued against due discharge of liability and
thus, whenever any claim is made based on a negotiable
instrument, the presumption has to be drawn in favor of the
holder of the cheque (drawee). Law has put the burden to rebut
the presumption on the accused that the cheque was not issued by
him against discharge of a debt or a liability. In case, the accused
cannot rebut the presumption and fails to prove his defence, the
presumption becomes absolute, and accused is assumed guilty of
the offence.
It was held by Hon’ble Supreme Court in the case of
Rangappa v. Mohan: 2010 (11) SCC 441 that presumption of
Section 139 of N.I. Act also includes the existence of legally
enforceable debt or liability. The said presumption is a
presumption of law and not a presumption of fact and thus,
presumption has to be drawn in favor of the drawee and the
burden to rebut the presumption with the probable defence is on
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the accused. (Hiten P. Dalal v. Bratindranath Banerjee: 2001
(6) SCC 16)This is indeed an instance of the rule of ‘reverse
onus’, where it is incumbent on the accused to lead what can be
called ‘negative evidence’ i.e. to lead evidence to show non-
existence of liability. Since this is a departure from the cardinal
rule of ‘presumption of innocence’ in favor of the accused and
that negative evidence is not easy to be led by its very nature, it is
now settled that the accused can displace this presumption on a
scale of preponderance of probabilities and the lack of
consideration or a legally enforceable debt need not be proved to
the hilt or beyond all reasonable doubts. 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. He can do so either by leading own evidence in his defence
or even by punching holes in the case of the complainant in the
testing ordeal of cross-examination.
It is, thus, clear that in cases of Section 138 NI Act,
upon proof of foundational facts, law presumes in favor of
drawee that the cheque was issued by the accused in discharge,
wholly or in part, of legally enforceable debt or liability and the
burden to rebut the same is upon the accused. The burden does
not have to be conclusively established but the accused must
prove his defence on preponderance of probability.
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14. Now applying the above law to the facts of the
present case, it has to be adjudged whether the legal requirements
laid down hereinabove have been fulfilled in the instant case.
14.1. The first legal requirement is:
“A 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 for the
discharge of any debt or other liability.”
At the outset, it has to be proved that the accused
had issued the cheques in question on his account maintained
with a bank for discharge of any debt or other liability.
In the instant case, accused has admitted his
signatures on the cheques in question in his notice framed u/s 251
Cr.P.C as well as his statement recorded u/s 313 Cr.P.C. The
cheques in question have also been drawn on the joint account
maintained by the accused and his wife in HDFC Bank, Sector
23 A, Gurgaon Branch, Haryana. The said fact has not been
denied by the accused at any stage of proceeding.
14.2. It was held in the case of Kalamani Tex & anr. v. P.
Balasubramanian: 2021 SCC Online SC 75, the Hon’ble
Supreme Court held that once the signature(s) of an accused on
the cheque/negotiable instrument are established, then the
‘reverse onus’ clauses become operative and the obligation shifts
upon the accused to discharge the presumption imposed upon
him.
The above said principle has also been crystallized by
Hon’ble Supreme Court in the case of Basalingappa v.
Mudibasappa: (2019) 5 SCC 418, by observing that:
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“25. We having noticed the ratio laid down by this Court in above
cases on Sections 118(a) and 139, we now summarize the
principles enumerated by this Court in following manner:
(i) Once the execution of cheque is admitted Section 139 of the Act
mandates a presumption that the cheque was for the discharge of
any debt or other liability.
(ii) The presumption under Section 139 is a rebuttable
presumption and the onus is on the accused to raise the probable
defence. The standard of proof for rebutting the presumption is
that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the accused to rely on
evidence led by him or accused can also rely on the materials
submitted by the complainant in order to raise a probable defence.
Inference of preponderance of probabilities can be drawn not only
from the materials brought on record by the parties but also by
reference to the circumstances upon which they rely.
(iv) That it is not necessary for the accused to come in the witness
box in support of his defence, Section 139 imposed an evidentiary
burden and not a persuasive burden.
(v) It is not necessary for the accused to come in the witness box to
support his defence.”
In the instant case, accused having admitted his
signatures on the cheques in question and the said cheques being
drawn on the joint bank account of the accused, a mandatory
presumption automatically arises in favor of complainant by
virtue of Section 118(a) r/w 139 NI Act that the cheques in
question were issued by him in discharge of, whole or part of,
legally enforceable debt or liability.
14.3. Now the burden shifts upon accused to rebut the
above presumption by raising a probable defence, by leading
evidence or bringing such facts on record in the cross-
examination of the complainant that could make the latter’s case
improbable. If, in such a case, the accused is proved to have
discharged the initial onus of proof placed on him by showing
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that the existence of consideration was improbable or doubtful or
illegal, then the onus will again shift back to the complainant
who will then be under an obligation to prove it as a matter of
fact and failure to do so will disentitle him to any relief on the
basis of the negotiable instrument (as held in Satish Sharma v.
State NCT of Delhi & anr.: (2013) 204 DLT 289).
14.4. Accused has chosen to do so by cross-examining the
complainant’s witnesses.
14.4.1. Notable facts that were brought on record during the
cross-examination of CW-1/complainant are, in brief, that:
a) accused and his family had cordial relations with the
complainant and his family,
b) accused borrowed money from him in 2015 due to huge
slump in the property dealing business that year, but complainant
was not facing any financial difficulty at that time,
c) he gave Rs.10 lakhs to accused in 2015 at interest of 2%
per annum for the first time,
d) loan amount was arranged partly from his personal savings
(i.e. Rs. 4 lakhs) & partly from the share received from his
father’s savings upon his death on 10.07.2011 (i.e. Rs. 6 lakhs),
e) he has been in property business for 10-12 years &
has been filing ITRs for 4-5 years, but there is no entry of Rs.4
lakhs belonging to his personal funds and Rs.6 lakhs belonging to
his father in any of his ITRs,
f) no loan agreement or pronote was executed with the
accused with respect to the alleged loan,Ct. Case No. 3085/2020
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g) he had not objected to handing of the cheques in question
i.e. two cheques dated 28.09.2015 and 30.09.2015 of
Rs.2,00,000/- each instead of a single cheque of Rs.4,00,000/- as
the accused had told him that he was going to receive his
payments on different dates.
CW-1 denied the suggestions that the accused did
not give him Rs.1,00,000/- in March 2015 as partial interest;
cheques in question were not handed to him by accused; accused
had not filled the cheques; he had taken cheques from accused’s
office without his consent; accused has no liability towards him;
he is liable to pay Rs.45,500/- to accused; cheques have been
forged by him; content of his affidavit is
false/baseless/misleading.
14.4.2. Concerned official from bank of the accused was
summoned as CW-2 and placed on record certified bank
statement of the joint account of the accused and his wife from
01.05.2015 to 30.05.2018 with certificate u/s 65B Indian
Evidence Act and account opening form with KYC documents
(Ex. CW-2/A) and details with respect to the cheques in question
were marked as D and E. CW-2 was duly cross-examined, and
deposed in brief that upon dishonor of any cheque an intimation
is generally sent to the client via SMS, but he does not have
personal knowledge regarding the cheques in question or whether
any SMS was sent to the accused after dishonor of the cheques in
question.
14.4.3. Concerned official from bank of the accused was
summoned as CW-3 and placed on record certified bank
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statement of the complainant from 01.07.2015 to 30.11.2015
with certificate u/s 65B Indian Evidence Act. CW-3 was duly
cross-examined, and deposed in brief that upon dishonor of any
cheque, generally the bank sends intimation to the parties via
SMS, but no SMS is sent to the person who has drawn the
cheque; he does not have personal knowledge regarding the
cheque in question or whether any SMS was sent to the
complainant after dishonor of the cheque in question.
14.5. In the present case, the complainant has set up a
claim of Rs.4,00,000/- i.e. total of the two cheques in question,
against the accused alleging that he had borrowed Rs.
10,00,000/- from him at an interest of 2% per annum for a period
of 7 months in February 2015. It is the case of the complainant
that the accused handed him the cheques in question in a fully
filled up manner towards part repayment of the said loan amount
including partial interest, but the same were dishonored upon
presentation. Further, the accused has not repaid a single penny
towards the loan till date, though he paid Rs.1,00,000/- towards
part interest in March 2015.
It is an admitted fact that parties to the present case
were known to each other through property dealing business, had
regular transactions with each other and thus, shared
friendly/family like relations.
Accused has admitted his signatures on the cheques
in question, but he has denied his liability towards the
complainant.
Digitally
Ct. Case No. 3085/2020 signed by
SURBHI
Manmohan Singh Vs Rajeev Luthra SURBHI GUPTA
GUPTA ANAND
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14.6. In Bharat Barrel v. Drum Manufacturing: AIR
1999 SC 1008, Hon’ble Supreme Court has held that mere denial
of passing of consideration is no defence, and the accused has to
rebut the presumption by bringing on record some factual
circumstance which lays out a probable defence that either the
consideration did not exist, or existence of consideration was so
improbable in the case at hand that any prudent person would
believe that it did not exist.
The test being that of a prudent person, it was not
necessary for the accused to have led any evidence in his
defence, and he could have discharged the burden by making out
a probable case in his favour by punching holes in the case of the
complainant.
14.7. To establish his defence, accused examined himself
as DW-1, was duly cross-examined and deposed, in brief, that:
a) he and the complainant were in the business of property
dealing and shared friendly relations as they did various deals
together,
b) he took a friendly loan of Rs.5,00,000/- from the
complainant on 11.02.2015 for a few months as he was in dire
need of money and complainant advanced the said loan through 2
cheques of Rs. 2,50,000/- each,
c) he repaid the said loan, partly by way of cheque i.e. Rs. 4
lakhs and the remaining Rs. 1,00,000/- by way of cash, on
05.03.2015, along with an additional Rs. 2,50,000/- as loan to the
complainant as he needed the same to finalise a deal,Ct. Case No. 3085/2020 Digitally
signed by
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d) complainant returned the extra Rs. 2,50,000/- on
09.03.2015,
e) Complainant again approached him in 3rd week of March
2015 and told him that he needed Rs. 7,50,000/- before
20.03.2015 for a period of 3-4 months to finalise another deal,
f) he approached his friend Mr. Deepak Chaudhary
(hereinafter DW-2) to help the complainant with an amount of
Rs. 7,50,000/-,
g) DW-2 agreed to advance the loan of Rs. 7,50,000/- to the
complainant upon his (accused’s) guarantee and asked him to
deposit his (accused’s) cheques as security,
h) he handed over 3 cheques from the joint account
maintained by him and his wife i.e. cheque no. 000002 & cheque
nos. 000005 and 000006 (cheques in question), in blank signed
manner to DW-2 as security on behalf of the complainant,
i) in the 2nd week of July 2015, complainant came to him
with Rs. 7,50,000/- for repaying the same to DW-2,
j) he went with the complainant to DW-2 to return the loan
amount,
k) upon repayment, DW-2 returned his 3 security cheques
and he came back to his office along with the complainant,
l) he kept his 3 blank signed cheques in his office drawer in
the presence of the complainant,
m) few days thereafter, when he couldn’t find the said
cheques, he instructed his banker to stop payment of the said
cheques,
n) upon receipt of the legal demand notice dated 14.12.2015,
he came to know that complainant had stolen his blank signedCt. Case No. 3085/2020
Manmohan Singh Vs Rajeev Luthra
Digitally
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SURBHI
SURBHI GUPTA
GUPTA ANAND
Date:
ANAND 2025.08.08
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cheques from his office drawer as he had easy access to the same,
and had forged the particulars with respect to the name, date and
amount to misuse the cheques,
o) complainant admitted to the removal/stealing of the
cheques when he contacted him after receiving the legal demand
notice and demanded Rs. 10,00,000/- for return of the cheques,
p) he has lodged a police complaint against the complainant
in PS Palam Vihar but the same has not been placed on record
and he does not remember the date of filing of the complaint,
q) he had been running a business from a rented place in
Palam Vihar from 2014 to 2016/2017 and no CCTVs were
installed inside the said premises.
14.8. Ever since his reply to the legal demand notice sent
by the complainant and throughout the trial, accused has taken
the stand that he had borrowed only a sum of Rs. 5,00,000/- from
the complainant in February 2015, which he had repaid in its
entirety by March 2015. He did not borrow the loan in question,
and it was in fact the complainant who had approached him for a
loan of Rs.7,50,000/- in March 2015 as he needed the same to
finalise a business deal. Accused had in turn approached his
friend DW-2/Deepak Chaudhary to arrange the said amount.
DW-2 had lent Rs. 7,50,000/- to the complainant against the
guarantee of the accused. Accused had deposited 3 blank signed
cheques including the cheques in question as security with DW-2
against the said loan. When complainant returned the money,
DW-2 returned the 3 cheques to the accused in the presence of
the complainant and accused had kept the same in his office
drawer. Complainant was aware of the said fact, and he stole the
Ct. Case No. 3085/2020
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signed by
SURBHI
SURBHI GUPTA
GUPTA ANAND
Date:
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same from accused’s office without his knowledge. After a few
days, when accused could not find his cheques, he issued ‘stop
payment’ instructions to his bank. It was only upon receipt of the
legal demand notice dated 14.12.2015 that the accused got to
know about the theft of his cheques by the complainant and
therefore, he lodged a complaint with PS Palam Vihar against the
complainant.
14.9. Deepak Chaudhury has been attributed an important
role in the defence raised by the accused, and accordingly,
accused examined him as DW-2 to establish his case.
DW-2 was duly cross-examined and deposed, in
brief, that:
a) he is in crockery business and files ITR, he had an income of
more than Rs.20,00,000/- per annum between 2014-2016,
b) accused is his friend, and complainant is friend of the
accused,
c) accused approached him in March 2015 for a loan of
Rs.7,50,000/- on behalf of the complainant,
d) he agreed to give the said loan upon the guarantee of the
accused,
e) he does not remember the exact date, but the next day, he
gave the accused Rs. 7,50,000/- in cash and the accused in
turn gave him 3 blank signed cheques drawn on his bank
account without him asking for the same, and accused was
accompanied by the complainant at that time,Digitally
signed by
SURBHI
SURBHI GUPTA
Ct. Case No. 3085/2020 GUPTA ANAND
Date:
ANAND
Manmohan Singh Vs Rajeev Luthra 2025.08.08
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+0530
Page 21 of 29
f) he did not maintain any written record of the said transaction
as it was a friendly loan, and there were no witnesses to that
transaction,
g) it was agreed that accused would pay him 18% per annum as
interest on the said amount,
h) in April 2015, accused paid to him an interest of Rs. 31-
32,000/- in cash, and complainant was not present at the time,
i) he did not lend any other amount to the accused during the
said period,
j) in July 2015, complainant and accused came to him to return
the amount of loan,
k) he returned the 3 security cheques given by the accused on
the next day and accused was not accompanied by the
complainant at that time,
l) 15-25 days thereafter, accused informed him that he could
not find his cheques.
14.10. As far as the loan of Rs.7,50,000/- allegedly taken
by the complainant from DW-2 is concerned, there are
contradictions inherent in DW-2’s own testimony, and when read
with the testimony of the accused.
Firstly, while on one hand DW-2 stated that the loan
was given as a friendly loan and therefore he did not maintain
any written record of the same, at the same time he has also
stated that it was agreed that he would charge an interest of 18%
per annum on the loan amount, and accused had in fact handed
him Rs.31-32,000/- in April 2015 towards the said interest.
Ct. Case No. 3085/2020
Manmohan Singh Vs Rajeev Luthra Digitally
signed by
Page 22 of 29 SURBHI
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Secondly, during his cross-examination, accused
stated that DW-2 had asked for his blank signed cheques as
security, but DW-2 has stated to the contrary that accused gave
him 3 blank signed cheques drawn on his bank account without
him asking for the same.
Thirdly, accused stated that in July 2015, when
complainant repaid the loan amount to DW-2, DW-2 returned his
3 security cheques in the presence of the complainant, whereafter
he came back to his office and kept the cheques in his office
drawer also in the presence of the complainant. On the other
hand, DW-2 has deposed that he returned accused’s cheques on
the next day of repayment when the accused was not
accompanied by the complainant.
14.11. It is clear from the abovementioned contradictions in
the testimony of the defence witnesses that the story of the
accused involving loan from DW-2/ Deepak Chaudhury and
therefore, also of stealing of his cheques by the complainant is
inherently doubtful. This is further fortified by the fact that
although accused has claimed that he filed a complaint against
the complainant in PS Palam Vihar, he never placed the same on
record, and during his cross-examination, he could not even
remember the date on which he filed the complaint.
14.12. Accused has also stated that complainant misused
his blank signed cheques by filling in the particulars with respect
the name of the payee, date and amount, however, accused never
applied for examination of the cheques in question by a
handwriting expert/FSL examination.
Ct. Case No. 3085/2020
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Digitally signed
by SURBHI
SURBHI GUPTA
ANAND
GUPTA Date:
ANAND 2025.08.08
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+0530
On the other hand, accused alleged that the cheques
in question appear to have been tampered with, during his final
arguments. It was submitted by the accused that the dates on both
the cheques in question appear to have been changed i.e. the
month ’04’ has been changed to ’09’.
The abovementioned submissions are contrary to
each other as on one hand accused has taken the stand that
complainant misused the blank signed cheques by filling in the
dates, among other particulars, and on the other hand, he has
submitted that the cheques were tampered with, suggesting that
the cheques were issued after filling in the date before it was
tampered with by the complainant.
14.13. Another defence taken by the accused is that he had
issued ‘stop payment’ instructions to his bank when he realised
that he had misplaced his blank signed cheques, i.e. shortly after
he had kept them in his office drawer i.e. in July 2015. DW-2 has
also deposed that 15-25 days after repayment of the loan
advanced by him i.e. sometime in July/August 2015, accused
informed him that he could not find his cheques. However, upon
perusal of the return memos at Ex. CW-1/C and Ex. CW-1/D and
points D and E in the statement of accounts of the accused at Ex.
CW-2/A, it is clear that the cheques in question were returned
dishonored for the reason ‘funds insufficient’ on 18.11.2015.
Accused has also failed to prove the exact date/time on which he
issued ‘stop payment’ instructions to his bank.
14.14. Lastly, accused has challenged the financial capacity
of the complainant in advancing the loan in question.
Ct. Case No. 3085/2020 Digitally Manmohan Singh Vs Rajeev Luthra signed by SURBHI Page 24 of 29 SURBHI GUPTA GUPTA ANAND Date: ANAND 2025.08.08 16:33:29 +0530
It was held by the Hon’ble Supreme Court in Ashok
Singh vs State Of U.P & Anr, Criminal Appeal No.4171 of 2024
that the complainant need not show in the very first instance that
he had the financial capacity to advance the loan in question
unless the accused sets up a case in the reply to the statutory
notice sent by the complainant that he did not have the such
capacity. The case of the accused is acceptable when he produces
independent materials, namely, by examining his witnesses and
producing documents, or by pointing to the materials produced
by the complainant himself. He can also do so by cross-
examination of the complainant witnesses.
In the case at hand, accused questioned the financial
capacity of the complainant for the first time during the cross-
examination of CW-1 although he had filed an application u/s
145(2) NI Act as a precursor to this cross-examination, wherein
he did not even broach this subject. Accused did not produce any
independent evidence to support his claim though he himself
stepped into the witness box as DW-1. Moreover, accused has
admitted that he had been involved in joint deals with the
complainant and in fact, also that he took a loan of Rs.5,00,000/-
from the complainant in February 2015.
Thus, in view of the established position of law and
the facts on record, it can be concluded that accused has failed in
disputing the financial capacity of the complainant to advance the
alleged loan.
14.15. In light of accused having admitted his signatures on
the cheques in question, and the contradictory/inconsistent stands
Ct. Case No. 3085/2020 Digitally
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Manmohan Singh Vs Rajeev Luthra SURBHI
Page 25 of 29 SURBHI GUPTA
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taken by defence witnesses with respect to the loan of
Rs.7,50,000/- taken from DW-2 and consequent stealing/handing
over of the cheques, when taken in conjunction with failure of
the accused to raise doubts on the financial capacity of the
complainant to advance the loan in question, only leads to one
conclusion that defence of the accused is nothing but one
hanging in the air and devoid of any substance.
14.16. Thus, accused has been unable to rebut the
presumption of law and discharge the burden of proof by raising
a probable defence that the cheques in question were not issued
to complainant in discharge of his liability.
The first legal requirement is, thus, proved in
favor of the complainant.
15. The second legal requirement is:
“That cheque has been presented to the bank within a period
of six months from the date on which it is drawn or within the
period of its validity whichever is earlier.”
The cheques in question Ex. CW-1/A and Ex. CW-
1/B are dated 28.09.2015 and 30.09.2015, respectively and
returning memos qua these cheques i.e. Ex. CW-1/C and Ex.
CW-1/D are both dated 18.11.2015, which proves that the
cheques in question were presented within the period of their
validity. Further, defence has failed to controvert the said fact.
Thus, the second legal requirement is adjudicated
in favor of complainant.
Ct. Case No. 3085/2020 Digitally signed
Manmohan Singh Vs Rajeev Luthra SURBHI by SURBHI
GUPTA ANAND
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16. The third legal requirement is:
“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.”
Section 146 NI Act presumes the fact of dishonour
of cheque upon production of bank’s slip or memo having the
official mark denoting that the cheque in question has been
dishonoured. This is also a rebuttable presumption and upon
production of such bank memo, the burden shifts upon accused to
disprove the same.
In the instant case, a presumption has been raised in
favor of complainant by virtue of Section 146 NI Act that the
cheques in question were dishonoured for the reason stated
therein viz. ‘Funds Insufficient’. It is settled law that the reason
for dishonor of the cheque in question as stated in the return
memo falls squarely within the offence u/s 138 NI Act and
therefore, the burden now shifts upon the accused to rebut this
presumption by establishing some reasonable justification for the
same. But, accused has admitted his signatures on the cheques in
question and has failed to controvert the reason for dishonor of
the cheques in question.
Thus, the third legal requirement is adjudicated
in favor of complainant.
Digitally
Ct. Case No. 3085/2020 signed by
SURBHI
Manmohan Singh Vs Rajeev Luthra SURBHI GUPTA
Page 27 of 29 GUPTA ANAND
ANAND Date:
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17. The fourth legal requirement is:
“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
thirty days of the receipt of information by him from the bank
regarding the return of the cheque as unpaid.”
In the instant case, the cheques in issue were
returned dishonoured on 18.11.2015 (Ex. CW-1/C and Ex. CW-
1/D). Complainant sent a legal demand notice dated 14.12.2015
(Mark F – original retained in CC No. 47603/2019 along with
original postal receipts dated 14.12.2015) addressed to the
accused.
It is thus proved that the legal notice was sent to the
accused within thirty days of receipt of intimation of dishonor of
cheque in issue.
The fourth legal requirement is, therefore,
adjudicated in favor of complainant.
18. The fifth legal requirement is:
“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.”
In the case at hand, the accused has admitted
receipt of the legal demand notice and has even replied to the
same. It is an admitted fact that the accused did not make
payment of the amount of cheques in question within 15 days
of receipt of the legal demand notice.
Ct. Case No. 3085/2020
Manmohan Singh Vs Rajeev Luthra Digitally
signed by
Page 28 of 29 SURBHI
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It is also an undisputed fact and a matter of record
that the accused has failed to make the payment till date.
Thus, the fifth legal requirement is adjudicated in
favor of complainant.
19. All the legal requirements constituting an offence
u/s 138 NI Act have been proved in favor of the complainant
and against the accused. Accordingly, the accused Rajeev
Luthra is held guilty for the alleged offence u/s 138 NI Act
qua the two cheques in question.
20. Now to come up for arguments on quantum of
sentence. Copy of this judgment be given Dasti to the convict
free of cost as per rules.
Digitally signed
Announced in the open SURBHI by SURBHI
court on 8th August, 2025. GUPTA ANAND
GUPTA Date:
ANAND 2025.08.08
16:35:16 +0530(SURBHI GUPTA ANAND)
Judicial Magistrate First Class (NI Act) DC-05
S/W District, Dwarka Courts, New DelhiEarlier: Judicial Magistrate First Class (NI Act)-07
S/W District, Dwarka Courts, New DelhiCt. Case No. 3085/2020
Manmohan Singh Vs Rajeev Luthra
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