Delhi District Court
Ajay Singh vs Naresh Kumar Kasana on 25 January, 2025
DLST020087032019
IN THE COURT OF SH. AAKASH MOHAN SINGH, JMFC-05,
N.I. ACT, SOUTH DISTRICT, SAKET, NEW DELHI
CC No. : 3179/19
U/s : 138 N. I. Act
PS : Hauz Khas
Ajay Singh vs. Naresh Kumar Kasana
JUDGMENT
1. CC No. : 3179
2. Date of institution of the case : 14.03.2019
3. Name of complainant : Ajay Singh
Lt. Sh. Shiv Charan Singh,
Flat No. C-2, 2nd Floor,
Devli, New Delhi.
4. Name of accused, parentage
and address : Naresh Kumar Kasana
S/o Sh. Bharat Singh Kasana
R/o H. No. 10, Village-
Mandala, Loni, Ghaziabad, UP.
5. Offence complained of : 138 N. I. Act
6. Plea of accused : Accused pleaded not guilty
7. Final order : Acquittal
8. Date on which order was : 09.01.2025
reserved
9. Date of pronouncement : 25.01.2025
CC No. 3179/19 (Aakash Mohan Singh)
Ajay Singh vs. Naresh Kumar Kasana Page no 1 of 16 JMFC-05 (NI Act)/South
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 complainant and accused are
childhood friends. That in the month of December 2016, accused approached the
complainant for financial help as the accused was in financial crunch. That
complainant from December, 2016 onwards transfer money for financial help as
per requirement of the accused. That in December 2016, complainant had given
Rs. 25,000/- to the accused in cash and after that different amounts were
transferred by the complainant on the instructions of the accused through online
banking. That in the month of January 2018, complainant demanded back his
money from the accused, accused told that he is under process of getting Rs. 7 lacs
as loan from private bank and assured that the deal would be finalised within few
days. That in the month of February 2018, the accused further raised a demand of
Rs. 1,70,000/- for sanction of loan however complainant has no money for this
purpose but complainant had arranged the said amount from his friends and family
and given to the accused in cash. That when the amount demanded by the accused
from the complainant being handed over to the accused in cash, accused signed a
receipt and promissory note both dt. 25.02.2018 in which accused had agreed to
repay the sum with terms given in promissory note and on failure the accused had
to pay penal interest on the amount received by the accused. That it was promised
by the accused to complainant that he would return the loan amount by April 2018.
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That after 25.04.2018, when complainant approached the accused to return his
money back, accused has issued two post dated cheques to complainant bearing no.
850313 dt. 24.12.2018 for Rs. 1,20,000/- and 850314 dt. 24.12.2018 for Rs.
4,40,932/- both drawn on PNB Bank, Loni Ghaziabad Branch (hereinafter referred
as cheques in question) in favour of the complainant. That when complainant
presented the abovesaid cheques in question for encashment, same were returned
unpaid with remarks “Funds Insufficient”. Thereafter, complainant requested
several times to accused to return his money back, however accused did not pay
any heed to the same. Lastly, complainant issued a legal demand notice dated
25.01.2019 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) Cheques in question Ex. CW1/1, CW1/2 b) Return memo Ex. CW1/3, CW1/4 c) Legal demand notice Ex. CW1/5 d) Postal receipts Ex. CW1/6 & CW1/7 e) Tracking reports Ex. CW1/8 & CW1/9 f) Promissory note dt. 25.02.2018 Ex. CW1/10 g) Receipt of amount Ex. CW1/11 h) Account statement Ex. CW1/12 CC No. 3179/19 (Aakash Mohan Singh) Ajay Singh vs. Naresh Kumar Kasana Page no 3 of 16 JMFC-05 (NI Act)/South
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 04.12.2021 to which he pleaded not guilty and
claimed trial. The accused took the defence he had taken a loan of about Rs.
75,000/- from the complainant and complainant had taken 6 cheques including
cheques in question as security from me alongwith two blank signed papers. He
further deposed that cheques were given in blank signed condition and he had
already repaid Rs. 30,000/- to the complainant. He further deposed that he did not
receive the legal demand notice from the complainant.
5. Thereafter, plea of accused under Section 145 (2) of NI Act was
allowed vide order dated 04.12.2021 and the accused was granted opportunity to
cross examine the complainant as well as his witnesses, if any.
6. The complainant has only examined himself as CW1. In the post
summoning evidence, the complainant (CW1) has adopted his pre- summoning
evidence. The complainant was cross examined at length by the Ld. Counsel for
accused. CE was closed vide order dated 01.04.2023.
7. Accused was, thereafter, examined U/s 281 r/w Sec 313 Criminal
Procedure code, 1872 on 03.06.2023 wherein entire incriminating evidence was
put to him. The accused took defence that he has no liability towards the cheque in
question.
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8. Accused has not examined any witness in his defence and DE was
closed 17.02.2024 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, Ld. Counsel for 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
in view of Ex.CW1/10 & Ex.CW1/11, the accused be convicted of the offence.
11. Per contra, Ld. Counsel for accused argued that the essential
ingredients of Section 138 NI Act are not fulfilled in order to constitute a valid
complaint as the accused have no liability towards the complainant to pay the
cheque amount as the accused had only sought a loan/committee amount of
Rs.75,000/- which has been repaid. He further submitted that the cheque in
question and the promissory note/receipt were signed as blank documents by the
accused. He prayed that the accused be acquitted in the present case.
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
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Ajay Singh vs. Naresh Kumar Kasana Page no 5 of 16 JMFC-05 (NI Act)/South
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 to
be paid from that account on an agreement made with that
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.
CC No. 3179/19 (Aakash Mohan Singh) Ajay Singh vs. Naresh Kumar Kasana Page no 6 of 16 JMFC-05 (NI Act)/South PROVING OF INGREDIENTS
14. Notably, there is no dispute qua the proof of first, third and fifth
ingredient. The complainant had proved the original cheques vide Ex. CW1/1 to
Ex.CW1/2 which the accused had 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 memos
Ex. CW1/3 to CW1/4 which has also not been disputed. The fifth ingredient as
such the same is deemed to be proved that no payment has been made after
issuance of legal demand notice.
15. With respect to the proving of fourth ingredient i.e. the service of
legal demand notice is concerned, the accused has denied the same in his statement
u/s 251 CrPC while admitting in examination u/s 313 CrPC. Further, the accused
has admitted the address mentioned in the legal demand notice to be correct in
S.251 notice. Notably, the address of the accused mentioned in his v/n and bail
bonds is the same as mentioned in the legal demand notice. Further, in view of the
presumption u/s 27 of the General Clauses Act, 1897, Ex.CW1/5 to Ex.CW1/9
(legal notice, postal receipt and tracking report) alongwith the ratio laid down in
the case of “C. C. Alavi Haji Vs. Palapetty Mohd. & Anr(Supra), I am of the
considered opinion that the fourth ingredient of the offence stands proved.
RAISING OF PRESUMPTION
16. The accused has also admitted his signatures over the cheques in
question in his notice u/s 251 CrPC as well as in his examination u/s 313 CrPC.
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17. 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.
18. 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
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.
19. Therefore, in the instant case, since the accused has admitted his
signatures over the cheques 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)
CC No. 3179/19 (Aakash Mohan Singh)
Ajay Singh vs. Naresh Kumar Kasana Page no 8 of 16 JMFC-05 (NI Act)/South
20. 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 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.”
21. In the instant case, the complainant has sought to enforce the liability
of the accused on the strength of having granted a friendly loan to the accused in
various tranches. It has been pleaded that the cheque was issued in discharge of the
said liability. Since a presumption as envisaged u/s 118 and 139 of the Negotiable
Instruments Act is attracted in favour of the Complainant as such, it is now
incumbent upon the accused to rebut the said presumption on the basis of
preponderance of probabilities.
CC No. 3179/19 (Aakash Mohan Singh) Ajay Singh vs. Naresh Kumar Kasana Page no 9 of 16 JMFC-05 (NI Act)/South
22. The rebuttal of presumption can be done in two ways, i.e. either the
accused punches hole in the case of the complainant and shakes the leg of the
complainant’s case or the accused brings some evidence to prove his own case.
Since the accused chosen not to lead his own evidence, he left to impeach the case
of the complainant.
23. In order to rebut the aforementioned presumptions, the accused has
sought to assail the grant of the alleged loan by enquiring about the
whereabouts/source for the grant of the same. The complainant has stated in his
cross-examination that the part sum was borrowed from his father and payments
were made between March, 2017 to November, 2017. It has also been admitted
that the father of the complainant had expired in September 2016. The
inconsistency has not been explained. Further, it has been held in the judgment of
Kajal v Vikas Marwah, Crl.A.870/2013 of the Hon’ble High Court of Delhi that
“Even otherwise, it would be difficult to accept that the complainant would have
raised loan from several persons, not for her personal needs, but for advancing
loan to the respondent from time to time. In the normal course of human conduct,
no one is likely to take obligation of others just to give loan to another person,
unless he/she obtains a substantial advantage, by undertaking exercise of this
nature. He/she would know that even if the person whom he/she lends money does
not return the loan amount, she would have to return the loan, to the persons from
whom it is taken. Therefore, he/she won’t take such a risk, except for strong
reasons.”. The contention that a loan was extended by borrowing the same from
another persons in absence of any special circumstances appears to be very
improbable.
CC No. 3179/19 (Aakash Mohan Singh) Ajay Singh vs. Naresh Kumar Kasana Page no 10 of 16 JMFC-05 (NI Act)/South
24. Further, the complainant has stated that the accused had defaulted in
the repayment of the first installment of Rs.25,000/-. However, it has not been
explained as to why the complainant was inclined to grant a further loan in absence
of non-payment of the previous dues. The same also appears to be unnatural
especially in view of no witnesses to the grant of loan in cash form.
25. Further, in order to enforce part liability of the accused, the
complainant has relied upon Ex.CW1/10 viz. promissory note & Ex.CW1/11 viz.
receipt. The same have been disputed and denied by the accused vide suggestions
during cross-examination of CW1. Now, it was incumbent upon the complainant to
prove the same. However, the complainant failed to do. Notably, there are no
witnesses to the execution of the said documents. Further, the interest chargable on
the loan amount appears to be 120% per annum compoundable annually which is
usury and appears to be an unconscionable bargain for the accused. Under the
circumstances, it was incumbent upon the complainant to prove the actual
execution of the same in view of denial. The complainant has also not filed any
application seeking forensic/expert examination of the signatures of the accused on
the said document. The same has also not been proved by other means.
26. It has also not been explained as to why the complainant had gotten
executed a pro-note & receipt viz. Ex.CW1/10 & Ex.CW1/11 qua part liability of
the accused and not the entire liability. The document is dated 25.02.2018 i.e. after
the payment of the entire alleged loan amount of Rs.2,85,185/- till November
CC No. 3179/19 (Aakash Mohan Singh)
Ajay Singh vs. Naresh Kumar Kasana Page no 11 of 16 JMFC-05 (NI Act)/South
2017. The grant of the alleged loan amount not in a rounded off figure also appears
to be incredible and unnatural.
27. The complainant has also not distinctly averred the exact liability of
the accused in his complaint and has merely stated the grant of loan of Rs.25
thousand and 1.70 Lacs in cash form. The details of payments made vide bank
transaction has not been furthered and are vague.
28. More so, qua cheque in question no.850313 for a sum of
Rs.1,20,000/-, the demand has been made vide a calculation filed today Ex. C-1.
However, the break up of the same reveals that the liability of the accused comes to
Rs.1,10,185/- and another Rs.9,815/- have been sought qua ‘extra monetary
benefit’. However, such a fact has not been mentioned in the legal demand notice
Ex.CW1/5 and a demand for a liability greater than the actual liability of the
accused has been made without any bifurcation. Reference is craved to the
judgment of the Hon’ble High Court of Delhi in M/S Alliance Infrastructure
Project Pvt Ltd vs Vinay Mittal, Crl.M.C. No. 2224/2009 wherein the same is
impermissible in absence of any endorsement to the effect. The relevant paras are:-
“8……If it is held that the expression „amount of money‟
would necessarily mean the amount of cheque in every case,
the drawer of the cheque would be required to make
arrangement for more than the admitted amount payable by
him to the payee of the cheque……If the drawer of the cheque
is made to pay more than the amount actually payable by him,
the inevitable result would be that he will have to chase the
payee of the cheque to recover the excess amount paid by him.
9……Therefore, even if two views in the matter are possible,
the Court should lean in favour of the view which is beneficialCC No. 3179/19 (Aakash Mohan Singh)
Ajay Singh vs. Naresh Kumar Kasana Page no 12 of 16 JMFC-05 (NI Act)/South
to the accused. This is more so, when such a view will also
advance the legislative intent, behind enactment of this
criminal liability.
12…….The expression „amount of money‟ used in Section
138(b) of Negotiable Instrument Act, to my mind, in a case of
this nature would mean the amount actually payable by the
drawer of the cheque to the payee of the cheque.”
29. Similar has been held by the Hon’ble Kerela High Court in Joseph
Sartho v Gopinathan, MANU/KE/0342/2008 and Hon’ble High Court of Gujarat in
Shree Corporation v. Anilbhai Puranbhai Bansal, MANU/GJ/0379/2018 . The view
has been endorsed by the Hon’ble Supreme Court in Dashrathbhai Trikambhai
Patel vs. Hitesh Mahendrabhai Patel and Ors., MANU/SC/1294/2022.
30. Furthermore, the entries reflected in the bank account statement of the
complainant does not find mention of the name of the accused and the highlighted
entries are shown to have been credited in the account of “XXX580PUNB”. No
evidence has been adduced to establish the correlation between such an account
and the account of the accused. Further, certain entries such as for Rs. 2,584/- have
been made in the said account. The same also appears incredible.
31. The complainant has also admitted that there were no witnesses to the
grant of alleged loan. Statedly, the loan has been granted in various
tranches/installments. However, there is no witness for even a single transaction. It
has also not been explained as to why the remainder amount was not directly
transferred into the bank account of the accused but given in cash form.
CC No. 3179/19 (Aakash Mohan Singh) Ajay Singh vs. Naresh Kumar Kasana Page no 13 of 16 JMFC-05 (NI Act)/South
32. Therefore, in the totality of circumstances, the accused has been
sucessful in raising a probable doubt that the impugned loan was granted. Further,
the complainant has also failed to independently establish the grant of the alleged
loan as there is no supporting witnesses to prove the same. Ergo, the accused by
pointing out the loopholes in the case of the complainant has been able to bring out
circumstances which rebut such presumptions.
33. It has been held by Hon’ble High Court of Delhi in ‘Satish Sharma v.
State NCT of Delhi & Anr. [(2013) 204 DLT 289]’ –
“8. …. If the accused is proved to have discharged the
initial onus of proof placed on him by showing that the
existence of consideration was improbable or doubtful or
illegal, then the onus will shift back to the complainant who
will then be under an obligation to prove it as matter of fact
and failure to do so will disentitle him to any relief on the
basis of the negotiable instrument.”
34. In light of the aforementioned facts and circumstances, since the
accused has successfully punched holes in complainant’s version, the onus of proof
would shift back upon the complainant.
35. It has been argued by the complainant that there are various infirmities
in the version of the accused in his notice u/s 251 CrPC and examination u/s 313
CrPC. However, it is a cardinal principle of the criminal jurisprudence “that the
prosecution has to prove its case beyond reasonable doubt by leading reliable,
cogent and convincing evidence; and the subtle proposition of criminal law that in
order to successfully bring home the guilt of the accused, the prosecution is
CC No. 3179/19 (Aakash Mohan Singh)
Ajay Singh vs. Naresh Kumar Kasana Page no 14 of 16 JMFC-05 (NI Act)/South
supposed to stand on its own legs and it cannot derive any benefits whatsoever
from the weakness, if any, in the defence of the accused.”. It is also a settled
position of law that in criminal trials the guilt of the accused has to be proved
beyond any shadow of doubt; and the criminal trial stand on a different pedestal
than that of a civil case where any suspicious circumstance arising will certainly
give advantage to the accused. Reliance is placed upon Veena Rani Chabra vs.
Manju Rohida, MANU/DE/3067/2008.
36. In the facts of the present case, the complainant has not lead any
further evidence and no explanation has been brought forward by the complainant
to fill the loopholes created by the accused in the version of the complainant.
37. Hence, in the light of discussion and the authorities cited in the
aforegoing para(s), it is apparent that the case of the complainant that the cheque in
question was issued to him by the accused for the purpose repaying the loan
amount advanced by the former to the latter is unworthy of credit and fails to
inspire the confidence of the Court. The finding that the version put forward by the
complainant is full of infirmities and the failure of the complainant to bring on
record anything to cure the infirmities is fatal to the case of the complainant. It can
be concluded that the accused has successfully rebutted the presumption raised
under Section 139 of NI Act. Consequently, it can be said that no legal liability
exists in favour of the complainant qua the cheque amount, thus, the second
ingredient to the offence under section 138 of NI Act does not stand proved.
CC No. 3179/19 (Aakash Mohan Singh) Ajay Singh vs. Naresh Kumar Kasana Page no 15 of 16 JMFC-05 (NI Act)/South CONCLUSION:
38. To recapitulate the above discussion, the accused has been successful
in establishing a probable defence on the standard of preponderance of
probabilities to rebut the presumption under section 118 and 139 of the NI Act.
Cogent evidence is required to be proved beyond reasonable doubt to secure
conviction in a criminal trial. The accused has been successful in establishing a
probable defence and thereby proving that the cheque was not given in discharge
of legal debt or liability owed to the complainant. In the result of the analysis of
the present case, the accused Naresh Kumar Kasana is hereby acquitted of the
offence punishable under Section 138, Negotiable Instruments Act, 1881.
39. This judgment contains 16 pages. This judgment has been signed and
pronounced by the undersigned in open court.
40. Copy of this Judgment be given dasti free of cost as per rules.
Digitally signed
AAKASH by AAKASH
MOHAN SINGH
MOHAN Date:
SINGH 2025.01.25
16:33:45 +0530ANNOUNCED IN THE OPEN (AAKASH MOHAN SINGH)
COURT ON 25.01.2025 JMFC-05/NI ACT/SOUTH/DELHI
NEW DELHICC No. 3179/19 (Aakash Mohan Singh)
Ajay Singh vs. Naresh Kumar Kasana Page no 16 of 16 JMFC-05 (NI Act)/South
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