Delhi District Court
Akansha Arora vs Harjeet Kain on 11 July, 2025
IN THE COURT OF SH. ASHISH RASTOGI
ADDITIONAL SESSIONS JUDGE- 05
EAST, KARKARDOOMA COURTS, DELHI
CA No.80/2025
Ms. Akansha Arora
D/o Sh. Jugal Kishore Arora
R/o A-1294, Gharoli Dairy Farm,
Mayur Vihar Phase-III,
Delhi-110096
.... Appellant
Vs.
Sh. Harjeet Kain
S/o Sh. D.S. Kain,
R/o C-43, Kondli Extension,
Delhi-110096
.... Respondent
Date of Institution : 23.04.2025
Arguments heard : 04.06.2025
Date of order : 11.07.2024
JUDGMENT
Factual Matrix
1. The case in brief of the Respondent/Complainant is that on
28.11.20215, the accused/appellant took a friendly loan of
Rs.5,21,000/- from Respondent for a period of 12 months.
In discharge of the said liability, accused/appellant issued a
post dated cheque No.089650 dated 01.05.2017 of
Rs.5,21,000/- drawn on Bank of Maharashtra, Branch
Mayur Vihar Phase-III, Delhi, in favour of the complainant.
A notarized loan agreement dated 04.02.2016 to that effect
was also executed between complainant and the accused.
Ashish
2. It is alleged that after expiry of the said loan period, the
Rastogi complainant presented the said cheque to his banker but
Digitally signed
by Ashish Rastogi
Akansha Arora vs Harjeet Kain
Date: 2025.07.11 CA No.80/2025 1 of 27
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same was returned unpaid vide returning memo dated
03.05.2017 with remarks “Refer to Drawer”. Thereafter, on
assurance of the accused/appellant, the complainant again
presented the said cheque with his banker but the same
again got dishonored with the remarks “Funds Insufficient”
vide cheque returning memo dated 16.05.2017.
3. After receiving the said cheque return memo, the
complainant sent a legal demand notice dated 02.06.2017 to
the accused advising him to pay the amount of the cheque.
The said demand notice was stated to have been served
upon the accused on 03.06.2017. As the accused did not
pay the amount within the said period from the date of
service of the notice, the present Criminal Complaint was
filed.
4. Thereafter, after the pre-summoning evidence of the
complainant, the notice U/s 251 Cr.P.C was framed against
the appellant/accused on 07.09.2017 wherein he relied as
under:-
Question: Did you issue the said cheque to the complainant?
Ans. No. I did not issue the cheque to the complainant.
Question: Did you receive the legal notice?
Ans. No. I did not receive the legal notice from the
complainant.
Q. Do you plead guilty or have any defence to be made?
Ans. No. I do not plead guilty and claim trial. Complainant
had family relations with us and used to visit our house. I have
not given the cheque to the complainant. I do not know know
Digitally
signed by how complainant came into possession of my cheque.
Ashish
Ashish Rastogi
Rastogi Date:
2025.07.11
15:16:46 Admission/denial of the documents U/s 294 Cr.P.C.
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Question: Does the cheque in question bear your signature?
Akansha Arora vs Harjeet Kain CA No.80/2025 2 of 27
Ans. No. The cheque does not bear my signature, however, it
pertains to my account. This account has been closed four years
back.
Question: Do you admit execution of Ex.CW1/1(OSR)?
Ans. No.
5. Thereafter, the matter was proceeded for complainant’s
evidence which concluded on 25.01.2023 and thereafter,
statement of accused/appellant was recorded U/s 313
Cr.P.C 08.06.2023 wherein she took almost similar defense
as taken by her at the time of framing of notice U/s 251
Cr.P.C and stated that she never any took loan from the
complainant. The agreement Ex.CW1/1 bears her signature
but the contents are wrong. She further stated that the
complainant took her signatures forcibly on multiple
documents and threatened to blackmail her and misused
some pictures to create acrimony in her married life. She
has not signed the cheque in question and none of the
particulars have been filled by her, however, the cheque
pertains to her account. She further stated that the
complainant once kicked her when she was in market and
forcibly snatched her purse and took blank cheque book.
She does not have any liability towards the complainant.
6. Accused opted to lead defence evidence and accordingly,
matter was listed for defence evidence. Despite opportunity,
accused/appellant did not lead defence evidence and on
28.08.2023, on request of Ld. Counsel for
appellant/accused, defence evidence was closed and matter
was posted for final arguments. The final arguments were
Digitally
signed by
Ashish
Ashish Rastogi
heard and the Appellant/Accused was convicted for the
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charged offences vide judgment dated 08.02.2024. Vide
Order on sentence dated 29.03.2024, appellant/accused was
directed to pay Rs.7 lakhs/- as compensation to the
complainant within a period of 30 days, in default of
payment of the same, the accused/appellant was directed to
undergo Simple Imprisonment for a period of three months.
Against the said impugned Judgment and order on
sentence, the Appellant has filed this instant Appeal.
7. Ld. Counsel for the Appellant has argued that as per loan
agreement Ex.CW1/1, the loan was taken on 28.11.2015
while the loan agreement was executed on 04.02.2016 i.e.
after a gap of two months. Moreover, it’s noteworthy to
mention that in the legal notice sent by the respondent to
the appellant, it is written that the loan was taken on
18.11.2015 but the stamp paper has been purchased on
04.02.2016 and the date of notarization is also 04.02.2016.
Secondly, the complainant, in his examination in chief,
mentioned that he works with a private builder and earns
Rs.20,000/- per month and is not an income tax payee and
therefore, he is not in financial capacity to advance loan of
Rs.5,21,000/- and that too in cash. He further submitted
that the loan amount has not been reflected in the ITR of
the Respondent. Moreover, the version of the appellant is
that she has not signed the cheque in question and that has
been the constant stand of the appellant at the time of
framing of notice U/s 251 Cr.P.C. as well as recording of
statement U/s 313 Cr.P.C. It is further submitted that as per
the appellant, her cheque books were stolen and misused. In
Digitally
signed bythis regard, Ld. Counsel for appellant further submitted that
Ashish
Ashish Rastogi
Rastogi Date: even CW2 who is the Bank Manager, in her cross-
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examination, stated that there is slight difference between
alphabet ‘K’ and ‘H’ in the signatures of the accused which
further prove the point of the appellant that the signatures
on the cheque were not hers. Ld. Counsel for
accused/appellant has relied upon the following case laws
in support of his claim and contentions:
(a) Mallavarapu Kasivisweswara Rao vs thadikonda Ramulu
Firm & Ors 16 May 2008
(b) Pine Product Industries & Anr. Vs M/s R.P. Gupta & Sons
& Anr 2007 I AD (Cr.) (DHC) 213
(c) M/s Total Finaelf India Ltd vs Smt. Rashmi Parnami 03
May 2013
(d) Krishna Janardhan Bhat vs Dattatraya G. Hedge (2008) 4
Supreme Court Cases 54
(e) Pawan Singhal & Ors vs Gauri Shankar Deora & Anr 2012
(7) LRC 352 (Del)
(f) K. Prakashan vs P.K. Surenderan 200794) RCR (Criminal)
865
(g) Vipul Kumar Gupta vs Vipin Gupta 2012 V AD (CRI.)
DHC 189
(h) M.S. Narayana Menon Alias Mani vs State of Kerla and
Another (2006) 6 Supreme Court Cases 39
(i) Kumar Exports vs Sharma Carpets (2009) 1 Supreme Court
Cases (Cri) 823
(j) M. Senguttuvan vs Mahadevaswamy 12 March 2007
8. Ld. Counsel for the respondent contested the present appeal
by filing reply to the present appeal wherein it is inter alia
stated that the appeal filed by the appellant is devoid of
merits, frivolous, misconceived and is based on false and
untenable grounds and hence deserves to be dismissed with
heavy costs. It is further stated that the defence of the
appellant regarding financial incapacity of the respondent
Digitally
and non-reflection of the said loan in ITR is without any
signed by
Ashish
Ashish Rastogi
Rastogi Date: legal force. He further argued that it is settled law that mere
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non-filing of ITRs or account books does not ipso facto
discredit the version of the complainant when documentary
evidence support the transaction and in this regard, he has
relied upon the case law reported as ” Bir Singh vs Mukesh
Kumar (2019) 4 SCC 197″.
9. It is further argued that the judgment of the Ld. Trial Court
is a very well reasoned judgment where each and every
aspect pertaining to the case and all the evidence on record
have been considered in detail. He further argued that the
Ld. Counsel for the appellant has not been able to point out
any illegality or perversity in the reasoning of the Ld. Trial
Court. It is further argued that in the light of evidences on
record, there is no doubt that all the requirements for the
operation of the presumption under Section 139 r/w Section
118 NI Act and the case of the Respondent stood proved.
The stand of the Appellant cannot be said to be a probable
defence by any stretch of imagination which can result in
rebuttal of the said presumption and hence this appeal is
liable to be dismissed with heavy costs.
Analysis:
Appeal against Conviction: –
10.Before moving on the findings, it is pertinent to discuss in
brief as to the nature of Jurisdiction which is to be
exercised by the High Court in Appeals under Section
374(2) CRPC. The Hon’ble Apex Court in ” Jogi v. State of
Madhya Pradesh; Criminal Appeal No 1350 of 2021 ” has
observed: –
Digitally
signed by
Ashish “The High Court was dealing with a substantive
Ashish Rastogi
Rastogi Date: appeal under the provisions of Section 374 of the
2025.07.11
15:17:13 Code of Criminal Procedure 1973 1. In the exercise
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of its appellate jurisdiction, the High Court was
required to evaluate the evidence on the record
independently and to arrive at its own findings as
regards the culpability or otherwise of the accused on
the basis of the evidentiary material.”
11.Therefore, the task of this Court in the course of deciding
the said appeal is to independently assess and appreciate the
evidence on record and arrive at its own finding along with
the reasons to agree/disagree with the findings of the Ld.
Trial Court.
12.Before moving further, it shall be pertinent to mention the
relevant provisions of NI Act as the same shall be pressed
into service for deciding the subject matter of this dispute.
Purpose and relevant provisions of NI Act:
13.The purpose of NI Act is to safeguard the sanctity of
Negotiable Instruments and to make sure that they do not
become a paper tiger and also to curb their widespread
misuse. With the gradual increase in the financial
transactions between the parties, the need was felt to enact
a legal framework wherein transactions could freely be
concluded between the parties and payments could be done
with the help of Negotiable Instruments. For the same, it
was very necessary that there should be a confidence in
public at large that a legal framework exists which can get
the Negotiable Instruments enforced. With this salutary
purpose in mind, the provisions of the NI Act mainly
Section 138 and 139 NI Act were enacted. The same hold
as under:-
138. Dishonour of cheque for insufficiency, etc., of funds
Digitally
signed by
in the account.–Where any cheque drawn by a person on
Ashish
Ashish Rastogi an account maintained by him with a banker for payment
Rastogi Date:
2025.07.11 of any amount of money to another person from out of
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that account for the discharge, in whole or in part, of any
debt or other liability, is returned by the bank unpaid,
either because of the amount of money standing to the
credit of that 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 that bank, such
person shall be deemed to have committed an offence and
shall, without prejudice to any other provision of this Act,
be punished with imprisonment for [a term which may be
extended to two years’], or with fine which may extend to
twice the amount of the cheque, or with both:
Provided that nothing contained in this section
shall apply unless–(a) 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;
(b) the payee or the holder in due course of the
cheque, as the case may be, 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; and
(c) the drawer of such cheque fails to make the
payment of the said amount of money to the
payee or, as the case may be, to the holder in due
course of the cheque, within fifteen days of the
receipt of the said notice.
139. Presumption in favour of holder. –It shall be
presumed, unless the contrary is proved, that the
holder of a cheque received the cheque of the nature
referred to in section138 for the discharge, in whole or
in part, of any debt or other liability.
14.In addition, Section 118 of NI Act engrafts an additional
presumption in favor of the holder of the Negotiable
Instrument and that is that it shall be presumed that every
Negotiable Instrument was drawn for consideration.
Digitally
signed by
Ashish Section 118(a) of NI Act holds as under:-
Ashish Rastogi
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118. Presumptions as to negotiable instruments. —
Until the contrary is proved, the following
presumptions shall be made: —
(a) of consideration: –that every negotiable instrument
was made or drawn for consideration, and that every such
instrument, when it has been accepted, indorsed,
negotiated or transferred, was accepted, indorsed,
negotiated or transferred for consideration;
(b) as to date: –that every negotiable instrument bearing
a date was made or drawn on such date;
(c) as to time of acceptance: –that every accepted bill of
exchange was accepted within a reasonable time after its
date and before its maturity;
(d) as to time of transfer: –that every transfer of a
negotiable instrument was made before its maturity;
(e) as to order of endorsements: –that the endorsements
appearing upon a negotiable instrument were made in the
order in which they appear then on;
(f) as to stamp: — that a lost promissory note, bill of
exchange or cheque was duly stamped;
(g) that holder is a holder in due course: –that the
holder of a negotiable instrument is a holder in due course:
PROVIDED that, where the instrument has been obtained
from its lawful owner, or from any person in lawful
custody thereof, by means of an offence or fraud, or has
been obtained from the maker or acceptor thereof by
means of an offence or fraud, or for unlawful
consideration, the burden of proving that the holder is a
holder in due course lies upon him.
15.Effect of the presumption under Section 139 NI Act:- The
combined effect of both these Sections when read in
consonance with each other is that once the basic ingredients
of Section 138 NI Act are satisfied, the presumption under
Section 139 automatically kicks in. The said essential
ingredients are as follows:-
1. Issuance of a Cheque: The first requirement is the
issuance of a cheque by the drawer, which could be in
favor of the payee.
Digitally
signed by
Ashish 2. Presentation of the Cheque: The payee must
Ashish Rastogi present the cheque to the bank within a period of three
Rastogi Date:
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Akansha
+0530 Arora vs Harjeet Kain CA No.80/2025 9 of 27
months from the date of issue. It is essential to adhere
to this timeline, as a delayed presentation might
weaken the case.
3. Dishonoured Cheque: If the bank dishonours the
cheque due to insufficient funds or other specified
reasons, it is considered a dishonoured cheque.
4. Notice to the Drawer: The payee must serve a legal
notice to the drawer within 30 days of receiving the
information about the dishonoured cheque from the
bank. The notice should demand the payment of the
cheque amount within 15 days from the receipt of the
notice.
5. Failure to Make Payment: If the drawer fails to
make the payment within the stipulated 15-day
period, the payee can proceed with filing a complaint.
16.Once the said presumption kicks in, it is presumed that the
cheque was issued for or in discharge of some legally
enforceable liability. In “Bir Singh v. Mukesh Kumar ;
(2019) 4 SCC 197″, this Court held that presumption under
Section 139 of the Act is a presumption of law. The Court
held as under:-
“20. Section 139 introduces an exception to the general
rule as to the burden of proof and shifts the onus on the
accused. The presumption under Section 139 of the
Negotiable Instruments Act is a presumption of law, as
distinguished from presumption of facts. Presumptions are
rules of evidence and do not conflict with the presumption
of innocence, which requires the prosecution to prove the
case against the accused beyond reasonable doubt. The
obligation on the prosecution may be discharged with the
help of presumptions of law and presumptions of fact
unless the accused adduces evidence showing the
reasonable possibility of the non-existence of the
presumed fact as held in Hiten P. Dalal [Hiten P. Dalal v.
Bratindranath Banerjee, (2001) 6 SCC 16 : 2001 SCC
(Cri) 960] .
17.The words used in the said Section are “shall be
presumed”. The same, hence, is a mandatory presumption
of law. Regarding the purport of the said expression, it has
Digitally
signed by
Ashish been observed by the Hon’ble Supreme Court in Neeraj
Ashish Rastogi
Rastogi Date:
2025.07.11
15:17:36
Akansha
+0530 Arora vs Harjeet Kain CA No.80/2025 10 of 27
Dutt Vs. State, SLP(Crl.) No. 6497/2020 as under: –
“………Courts are authorized to draw a particular
inference from a particular fact, unless and until the
truth of such inference is disproved by other facts.
The court can, under Section 4 of the Evidence Act,
raise a presumption for purposes of proof of a fact. It
is well settled that a presumption is not in itself
evidence but only makes a prima facie case for a party
for whose benefit it exists. As per English Law, there
are three categories of presumptions, namely, (i)
presumptions of fact or natural presumption; (ii)
presumption of law (rebuttable and irrebuttable); and
(iii) mixed presumptions i.e., “presumptions of mixed
law and fact” or “presumptions of fact recognized by
law”. The expression “may presume” and “shall
presume” in Section 4 of the Evidence Act are also
categories of presumptions. Factual presumptions or
discretionary presumptions come under the division
of “may presume” while legal presumptions or
compulsory presumptions come under the division of
“shall presume”.
“May presume” leaves it to the discretion of the court
to make the presumption according to the
circumstances of the case but “shall presume” leaves
no option with the court, and it is bound to presume
the fact as proved until evidence is given to disprove
it, for instance, the genuineness of a document
purporting to be the Gazette of India. The expression
“shall presume” is found in Sections 79, 80, 81, 83,
85, 89 and 105 of the Evidence Act.”
18.The accused at the time of framing of notice and thereafter
in his statement U/s 313 Cr.P.C denied the receipt of the
legal notice. However, accused has not denied the contents
of the legal demand notice. It is noteworthy to mention here
that the address mentioned on the legal notice and the
summons issued to the accused by the Ld. Trial Court after
pre-summoning evidence, are same. Even the address on
the customer information form, copy of Voter I-Card of her
Digitally
father (Ex.CW2/1 colly) and bail bond furnished by the
signed by
Ashish
Ashish Rastogiaccused is same. Accused has not disputed the address
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mentioned on the legal demand notice, the summons etc.
and postal receipt (Ex.CW1/5) are same.
19.In this regard, Ld. Trial Court relying on the judgment of
“CC Alavi Haji vs Palapetty Muhammed, 2007 (6) SCC
555″, has observed that the mandatory statutory legal notice
has been served on the accused in the present case as the
service of legal demand notice as Ex. CW1/4 and original
postal receipt Ex.CW1/5 and tracking report is Ex. CW1/6
and the same is showing “item delivered”. The accused has
denied the receipt of the same but not disputed the address
of legal demand notice, therefore, section 27 of General
Clause Act section 114 of the Evidence Act automatically
comes into play role. Section 27 of General Clause Act read
as under:-
27. Meaning of service by post.–Where any [Central Act]
or Regulation made after the commencement of this Act
authorizes or requires any document to be served by post,
whether the expression “serve” or either of the expressions
“give” or “send” or any other expression is used, then,
unless a different intention appears, the service shall be
deemed to be effected by properly addressing, pre-paying
and posting by registered post, a letter containing the
document, and, unless the contrary is proved, to have been
effected at the time at which the letter would be delivered
in the ordinary course of post.
20.In light of the above-mentioned provisions, there is a
presumption regarding successfully delivery of documents
sent by post, the especially in the light of fact that she did
not dispute the address on which the legal demand notice
was served.
21.It is admitted fact that she did not make any payment
Ashish within 15 days of the service of summons. The Hon’ble
Rastogi Supreme Court in “C.C. Alavi Haji v. Palapetty
Digitally signed by
Ashish Rastogi
Date: 2025.07.11
Muhammad, 2007(6) SCC 555″, held that the true intent
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behind the service of legal demand notice is to be seen as a
precursor to launch of prosecution against the Accused and
that is providing ample opportunity to the Accused to repay
the cheque amount and avoid the legal proceedings against
him. The Service of summons upon the Accused fulfills the
said purpose and provides ample opportunity to the
Accused to pay the amount in dispute. Any Accused who
fails to pay the said amount within 15 days of service of
summons cannot hide behind this technical plea of non-
service of legal demand notice, to evade his liability. The
reasoning as provided by the Ld. Trial Court that the legal
demand notice was sent on the correct address of the
accused through speed post which got delivered with postal
remarks “item delivered” cannot be faulted and hence no
interference is warranted on the said finding as the same is
based upon established principles of law occupying this
field.
22.Further in view of the settled law even if the service of
legal notice has not been proved, the service of notice of
complaint also amounts to sufficient compliance of notice
u/s 138 NI Act and in case the accused failed to pay the
cheque amount despite service of notice of complaint, he is
guilty of offence u/s 138 NI Act. In this regard, this court is
supported by the recent case law reported as Balak Ram vs
Ashok Kumar Nagar, CRL. A. 897/2017. Relevant para of
the judgment reads as under:-
“5. Further, as held by the Supreme Court in the
decision reported as (2007) 6 SCC 555 C.C. Alavi
Haji vs. Palapetty Muhammed & Anr. the Supreme
Digitally
signed by Court reverting to Provisos (b) & (c) to Section 138
Ashish
Ashish Rastogi NI Act held that the course open to the drawer
Rastogi Date:
2025.07.11
where he claims that he has not received the notice
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sent by post but received copy of the complaint
with the summons is that he can within 15 days of
the receipt of summons make payment of the
cheque amount and on that basis submit to the
Court that the complaint be rejected. On service of
summons in the complaint he cannot contend that
there was no proper service of notice.”
23.Hence, all the ingredients i.e. issuance of cheque, dishonor
of cheque, notice to drawer and failure to make payment
stand satisfied and therefore the presumption 139 and 118
of NI Act automatically becomes operative in this case i.e.
that the cheques were issued in discharge of a legally
enforceable debt.
24.Therefore, the combined implication of both Section 138
and 139 NI Act is that once the essential ingredients of
Section 138 are satisfied and the presumption under Section
139 is pressed into service then the case against of the
Complainant against the Respondent stands proved that the
negotiable instrument was issued in discharge of a legally
enforceable debt and now it is upto him to rebut the
presumption drawn against him by leading evidence to the
Contrary. The burden which the Accused has to discharge
in rebutting the said presumption is “preponderance of
probabilities” while the Complainant has to prove his case
beyond reasonable doubt. Therefore, what has been
envisaged is that the Accused should raise a probable
defence which is an expression i.e. different from possible
defence. In “Kumar Exports v. Sharma Carpets; (2009) 2
SCC 513″, it was held that mere denial of existence of debt
will not serve any purpose but accused may adduce
evidence to rebut the presumption. This Court held as
Digitally
signed by
Ashish
Ashish Rastogi
Rastogi Date: under:-
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“20. The accused in a trial under Section 138 of the
Act has two options. He can either show that
consideration and debt did not exist or that under the
particular circumstances of the case the non-existence
of consideration and debt is so probable that a prudent
man ought to suppose that no consideration and debt
existed. To rebut the statutory presumptions an
accused is not expected to prove his defence beyond
reasonable doubt as is expected of the complainant in
a criminal trial. The accused may adduce direct
evidence to prove that the note in question was not
supported by consideration and that there was no debt
or liability to be discharged by him. However, the
court need not insist in every case that the accused
should disprove the non-existence of consideration
and debt by leading direct evidence because the
existence of negative evidence is neither possible nor
contemplated. At the same time, it is clear that bare
denial of the passing of the consideration and
existence of debt, apparently would not serve the
purpose of the accused. Something which is probable
has to be brought on record for getting the burden of
proof shifted to the complainant. To disprove the
presumptions, the accused should bring on record
such facts and circumstances, upon consideration of
which, the court may either believe that the
consideration and debt did not exist or their non-
existence was so probable that a prudent man would
under the circumstances of the case, act upon the plea
that they did not exist. Apart from adducing direct
evidence to prove that the note in question was not
supported by consideration or that he had not incurred
any debt or liability, the accused may also rely upon
circumstantial evidence and if the circumstances so
relied upon are compelling, the burden may likewise
shift again on to the complainant. The accused may
also rely upon presumptions of fact, for instance,
those mentioned in Section 114 of the Evidence Act to
rebut the presumptions arising under Sections 118 and
139 of the Act.”
25.Therefore, in order to travel from the point of possible
defence to probable defence, the Accused has to have some
credible material on record so as to raise a doubt on the
Ashish
version of the Complainant.
Rastogi
Digitally signed by
26.With the above factual and legal background in mind, the
Ashish Rastogi
Date: 2025.07.11
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task cut out for this court is to undertake and independent
analysis of evidence on record to determine that whether
the accused has successfully rebutted the said presumption
by demonstrating the inconsistency/untrustworthiness in
the testimony of the Prosecution witnesses or by
successfully proving his own defence by his defence
evidence.
27.The first leg of discussion is the independent analysis of
evidence and relevant facts so as to come to a conclusion
whether the Respondent has infact produced sufficient
material before the consideration of this court to prove his
case beyond reasonable doubt and whether the Appellant
has able to successfully rebut the same.
28.In this connection, it would be apt if all the arguments
advanced by the Ld. Counsel for the Appellant are dealt one
by one.
Cheque does not bear Appellant’s signature
29.The Appellant in the notice under Section 251 Cr.P.C has
mentioned in her plea of defence that she did not issue the
cheque in question and the cheque does not bear her
signature. In addition, she further mentioned that she does
not know how the cheque in question came in the
possession of the Respondent. In this connection, it is
noteworthy to mention that the cheque in question placed at
Ex-CW1/2 bears her signature. The said cheque was duly
Ashish presented for payment and the reason as per the cheque
Rastogi return memo placed at Ex-CW-1/3 is “funds insufficient”
Digitally signed
by Ashish Rastogi and not signature mismatch. The cheque in question was
Date: 2025.07.11
15:18:07 +0530 drawn on bank of Maharashtra and the Respondent gotAkansha Arora vs Harjeet Kain CA No.80/2025 16 of 27
examined CW-2, the Branch Manager of Bank of
Maharashtra who testified that there was insufficient
balance as on May, 2017 when the cheque was presented
for payment. She further in her cross examination
mentioned that it appears that the cheque has been signed
by the Appellant. The Counsel for Appellant harps on the
point that the witness mentioned that there is slight
difference in the alphabet “k” and “h” in the signature of
the accused when compared with the signature on record
but in the same breath she has also mentioned that the same
may be due to lapse of time as the account was opened in
2008. Be that as it may, the Loan Agreement dated
04.02.2016 i.e. Ex-CW-1/1 is also on record. The same is
executed between the Appellant and the Respondent. The
said loan Agreement mentions the details of cheque in
question and also mentions that if the Appellant does not
return an amount of Rs 5,21,000 within a period of 12
months from the date of the Agreement, then the
Respondent shall have the right to recover the said amount
by using the cheque in question. The signatures on the said
Agreement have been admitted by the Appellant but the
contents are denied. In these circumstances, the burden of
proving that the signatures on the cheque are not hers was
on the Appellant as she has asserted this fact. The Court in
this regard is guided by Section 103 of Indian Evidence
Act, 1872 which holds as under:
103. Burden of proof as to particular fact. –The
Digitally burden of proof as to any particular fact lies on
signed by
Ashish that person who wishes the Court to believe in its
Ashish Rastogi existence, unless it is provided by any law that the
Rastogi Date:
2025.07.11
15:18:12
proof of that fact shall lie on any particular person.
+0530Akansha Arora vs Harjeet Kain CA No.80/2025 17 of 27
30.The said burden could have been discharged by the
Appellant by examining any handwriting expert etc. in her
defence evidence. Not only the same has not been done, the
Appellant has failed to lead any defence evidence during
the trial. Hence, the stand that the signature is not of the
Appellant is nothing but a bald assertion which is not
substantiated by any evidence on record.
Cheque was issued in discharge of a legally enforceable debt
31.Since, all the ingredients are satisfied, the presumption
under Section 139 r/w 118 NI Act kicks in i.e. that the
cheque was issued in discharge of a legally enforceable
debt. Hence, the analysis, as per the settled law in this
regard, is limited to ascertaining whether the Appellant has
successfully rebutted the said presumption on the
touchstone of preponderance of probabilities. As already
referred earlier, the Agreement placed at Ex-CW-1/1 has
been entered into between the Appellant and the
Respondent which is the documentary evidence in support
of the fact that the cheque was issued in discharge of
legally enforceable liability. The Appellant in her statement
u/s 313 Cr.P.C. said that the Respondent blackmailed her
and took her signatures forcibly on multiple documents and
that she never took loan from the Respondent. She further
stated that the Complainant/Respondent once kicked him in
the market and forcibly snatched her purse and took blank
cheque book. In this connection, it is observed that the
firstly there is a presumption that the Agreement was
entered on 04.02.2016 since the stamp paper bears that date
Digitally
signed by
Ashish
Ashish
Rastogi
and the said Agreement is also notarized. In this
Rastogi Date:
connection, Section 114 of Indian Evidence Act, 1872 holds
2025.07.11
15:18:20
+0530Akansha Arora vs Harjeet Kain CA No.80/2025 18 of 27
as under:
114. Court may presume existence of certain facts.
— The Court may presume the existence of any
fact which it thinks likely to have happened, regard
being had to the common course of natural events,
human conduct and public and private business, in
their relation to the facts of the particular case.
32. Illustration (e) of the said Section holds as under:
as to illustration (e) — a judicial act, the regularity of
which is in question, was performed under exceptional
circumstances;
33.Now, if the version of the Appellant is to be believed then
this court cannot help but observing that firstly there is a
contradiction between the statements of the Appellant since
at the time of framing of Notice u/s 251 Cr.P.C. she stated
that she does not know how the Respondent got into the
possession of cheque in question but in her statement u/s
313 Cr.P.C. she changes her stance and says that
Respondent snatched her purse which contained her blank
cheque book. Secondly, even if her version is believed then
at least two incidents happened. First being that
Respondent first snatched her purse which had the cheque
book. Then he purchased the stamp paper, mentioned the
details of one of the leafs of the chequebook in the
agreement and then again caught hold of the Appellant,
forcibly took the signatures of the Appellant on the
Agreement and got the same notarized. The story apart
from being unworthy of inspiring confidence at the first
brush is also entirely unsubstantiated as no complaint of the
said acts of the Respondent has been preferred by the
Digitally
signed by
Ashish
Ashish Rastogi
Appellant. The FIR placed at Ex-CW1/7 does not even
Rastogi Date: mention the said incidents that her cheque book was
2025.07.11
15:18:25
+0530
Akansha Arora vs Harjeet Kain CA No.80/2025 19 of 27
snatched and her signatures were taken on multiple
documents against her will etc. Moreover, the timing of the
FIR also raises suspicions since the FIR has been registered
on 28.04.2017 i.e. just two days before the last date for
payment as mentioned in the Agreement. In addition, Ld.
Counsel for the Appellant did not cross examine the
Complainant on the said Agreement at all and hence the
said Agreement as rightly noted by the Ld. Trial Court
remains an unimpeachable and uncontroverted piece of
evidence. Also, the Appellant did not present any evidence
from her side to challenge the veracity of the said
Agreement in her defense evidence. She did not even enter
the witness box as defense witness neither did she lead any
defense evidence.
Lack of Financial Capacity:
34.Appellant has also in the course of the arguments
challenged the financial capacity of the Respondent to
advance loan of Rs. 5,21,000 and that too in cash. Ld.
Counsel for the Appellant submitted that it has clearly
come out in the cross examination that the Respondent
earns around Rs 25,000 a month and hence there is no way
that he could advanced a loan of Rs 5,31,000. Before,
evaluating the contention of the counsels regarding the
financial capacity, it is pertinent to first discuss the position
of law in relation to financial capacity. It is a settled
position of law that in case of cash transactions,
showcasing that complainant did not have adequate
Digitally
signed by
financial capacity to lend money to the accused amounts to
Ashish
Ashish Rastogi
Rastogi Date:
a probable defense and can help in rebutting the
2025.07.11
15:18:30
+0530Akansha Arora vs Harjeet Kain CA No.80/2025 20 of 27
presumption that is accrued to the benefit of the
complainant in cheque dishonor cases.
35.The Hon’ble Supreme Court in the case of M/S. Aps Forex
Services Pvt. Ltd. vs Shakti International Fashion 2020
SCC Online SC 193, observed as under: –
“20…In the present case, the accused never questioned
the financial capacity of the complainant. We are of the
view that whenever the accused has questioned the
financial capacity of the complainant in support of his
probable de- fence, despite the presumption
under Section 139 of the N.I. Act about the
presumption of legally enforceable debt and such
presumption is rebuttable, thereafter the onus shifts
again on the complainant to prove his financial
capacity and at that stage the complainant is required to
lead the evidence to prove his financial capacity, more
particularly when it is a case of giving loan by cash and
thereafter issuance of a cheque. That is not a case
here.”
36.The crux of the aforesaid decisions of the Hon’ble Supreme
Court has been summarized by the Hon’ble Kerala High
Court in Sunitha vs Sheela Antony, 2020 SCC Online Ker
1750 wherein it was held as under:
“The complainant has no obligation, in all cases under
Section 138 of the Act, to prove his financial capacity.
But, when the case of the complainant is that he lent
money to the accused by cash and that the accused
issued the cheque in discharge of the liability, and if the
accused challenges the financial capacity of the
complainant to advance the money, despite the
presumption under Section 139 of the Act, the
complainant has the obligation to prove his financial
capacity or the source of the money allegedly lent by
him to the accused. The complainant has no initial
burden to prove his financial capacity or the source of
the money. The obligation in that regard would arise
only when his capacity or capability to advance the
money is challenged by the accused”.
37.In this context, it is also noteworthy to mention that it is
also a settled law that the proceedings under Negotiable
Instruments Act are not in the nature of a civil suit and the
Digitally
signed by
AshishComplainant is under no obligation to demonstrate his
Ashish Rastogi
Rastogi Date:
Akansha Arora vs Harjeet Kain
2025.07.11 CA No.80/2025 21 of 27
15:18:34
+0530
financial capacity unless the same is set up as a defence by
the Accused. The said defence has to be set up at an earliest
possible opportunity i.e. in reply to statutory legal notice
which is sent to the Accused. The law in this regard has
been laid down by the Hon’ble Supreme Court in Tedhi
Singh v. Narayan Dass Mahant, SLP(Crl.) 1963/2019,
wherein it is held as under:
“9. The Trial Court and the First Appellate Court have
noted that in the case under Section 138 of the N. I. Act
the complainant need not show in the first instance that
he had the capacity. The proceedings under Section 138
of the N. I. Act is not a civil suit. At the time, when the
complainant gives his evidence, unless a case is set up
in the reply notice to the statutory notice sent, that the
complainant did not have the wherewithal, it cannot be
expected of the complainant to initially lead evidence
to show that he had the financial capacity. To that
extent the Courts in our view were right in holding on
those lines. However, the accused has the right to
demonstrate that the complainant in a particular case
did not have the capacity and therefore, the case of the
accused is acceptable which he can do by producing
independent materials, namely, by examining his
witnesses and producing documents. It is also open to
him to establish the very same aspect by pointing to the
materials produced by the complainant himself. He can
further, more importantly, achieve this result through
the cross examination of the witnesses of the
complainant. Ultimately, it becomes the duty of the
Courts to consider carefully and appreciate the totality
of the evidence and then come to a conclusion whether
in the given case, the accused has shown that the case
of the complainant is in peril for the reason that the
accused has established a probable defence.”
38.It is in this background the factual matrix of this case and
the argument regarding lack of financial capacity of the
Respondent is to be approached. It is a matter of record that
no reply to the legal notice sent by the Respondent has been
given by the Appellant. In the cross examination also, the
only question which was asked was regarding the salary of
Digitally
signed by
Ashish
Ashish Rastogithe Respondent to which he replied that he earns roughly
Rastogi Date:
2025.07.11
15:18:42
+0530
Akansha Arora vs Harjeet Kain CA No.80/2025 22 of 27
Rs 25,000 per month in cash and at that time he had his
mother, father, wife, children and brother in his family but
they were not dependent on his salary. Towards the end of
his cross examination, Respondent i.e. CW-1 further
mentioned that he arranged the loan amount by getting Rs 2
Lakhs as loan from his friend and roughly Rs 3-3.5 Lakhs
from the society loan. Here, no further question regarding
the sources of funds from which he arranged the loan
allegedly given to the Appellant were asked. He was not
asked as to whether he can produce any document by which
he can prove that the loan was procured from the society.
The Ld. Counsel for the Appellant merely argued that the
society cannot advance a loan of Rs 3-3.5 Lakhs without
any paperwork etc. but this is merely an argument which
was not substantiated during the cross examination of the
Respondent despite there being an ample opportunity to do
so. Not even a suggestion is given that the Respondent did
not have the financial capacity to advance the loan or that
he availed no loan from either his friend or any society.
Apart from mere questioning the complainant//Respondent,
accused did not bring any evidence on record which
questions or throws light upon the financial inability or
incapacity of the complainant to have lent the loan amount
in question to the accused. No account statement/other
document was called for by the Appellant to impeach the
testimony of the complainant/Respondent regarding the fact
that he was financially unsound or lacked financial
capacity. The Appellant had merely asked questions about
Digitally
the money advanced and the complainant has given specific
signed by
Ashish
Ashish Rastogi answers to them in his cross examination. The accused has
Rastogi Date:
2025.07.11
15:18:46
+0530
Akansha Arora vs Harjeet Kain CA No.80/2025 23 of 27
failed to bring out any contradiction or any inconsistencies
in the cross examination of the complainant, questioning
his financial ability to lend the amount in question. Further,
accused has also not brought any material or document on
record to disprove or question the financial capacity of the
complainant.
39.Reliance can also be based on the judgement of the Hon’ble
Delhi High Court in a case titled as Sanjay Arora vs
Monika Singh Crl. A. 98/2017 wherein it has been held
that:
“Mere admission of the complainant that he was
earning only Rs. 12,000/- per month from his small
business or his failure to file income tax returns, or his
omission to produce the bank passbook or to examine
Chhotu as a witness in corroboration, are
inconsequential. In order to rebut the statutory
presumption, it was the burden of the respondent to
prove the facts that she had pleaded in answer to the
no- tice under Section 251 Cr.P.C. No material in
support of such plea having come on record, the
statutory presumption under section 139 Negotiable
Instruments Act in the case at hand has not been
rebutted.”
40.In light of the above discussion, the argument of the
Appellant regarding lack of financial capacity of the
Respondent to advance loan for which cheque in question
was given, falls flat on its face.
Failure to file Income Tax Returns:
41.Ld. Counsel for the Appellant advanced another argument
that the transaction was not shown in the ITR. In fact, it has
been admitted by the Respondent himself in his cross
examination that he did not file any Income Tax returns at
the relevant time. The said issue is no more re-integra in
Digitally
signed bylight of catena of decisions.
Ashish
Ashish Rastogi
Rastogi Date:
2025.07.11
15:18:51
Akansha
+0530 Arora vs Harjeet Kain CA No.80/2025 24 of 27
42.Hon’ble High Court of Delhi in the case titled as Dilip
Chawla v. Ravinder Kumar and Ors., 2017 has held as
follows: –
“The advancement of loan in cash may entail negative
consequences for a party especially an Income Tax
assessee as his having acted in breach of Section
269SS of Income Tax Act, 1961. Chapter XXB
provides for the requirement as to the mode of
acceptance, payment or repayment in certain cases to
counteract evasion of tax. Section 269SS mandates that
no person, after the cut off date shall take or accept
from any other person any loan or deposit otherwise
than by an account payee cheque or an account payee
bank draft if the amount is more than Rs.10,000/¬.
Breach of Section 269SS of the Income Tax Act
provides penalty to which a person would be subjected
to under Section 271D.”
“However, Section 271D does not provide that such
transaction would be null and void. The payer of
money in cash, in violation of Section 269SS of the
Income Tax Act can always have the money
recovered.”
43.Reliance can also be placed on the judgment of the Hon’ble
High Court of Delhi in the case of Lekh Raj Sharma v.
Yash Pal Gupta (CRL.L.P 567/2014) decided on
30.06.2015, wherein it was held:
“The finding that, as the amount of loan disbursed to
the respondent was not shown in the balance sheet and
ITR, the appellant could not be said to have proved its
case beyond reasonable doubt, is also erroneous.
44.The Bombay High Court in Deelip Apte Vs. Nilesh P.
Salgaonkar & Anr., 2006 (6) BomCR 653 , wherein the
Court observed:
‘The learned J.M.F.C. has also held against the
complainant the fact that the complainant had not
shown the amount advanced by him in his income tax
returns. I do not think that every person who gives
Digitally
friendly loans does in all cases show such loans in their
signed by income tax returns more so if they are payable on
Ashish
Ashish Rastogi demand after short time. The learned acquitting
Rastogi Date: J.M.F.C. entirely lost sight of the several presumptions
2025.07.11
15:18:56 which the law has enacted in favour of the
+0530Akansha Arora vs Harjeet Kain CA No.80/2025 25 of 27
complainant.”(Emphasis Supplied)
45.Further, in Mr. Krishna P. Morajkar vs. Mr. Joe Ferrao,
2013 CRIJ (NOC) 572 Bombay, the Court observed:
“The underlined observations do not disclose as to
where can one find a prohibition on recovering
amounts not disclosed in income tax returns. With
utmost humility, I have to state that I have not come
across any provision of Income Tax Act, which makes
an amount not shown in the income tax returns
unrecoverable. The entire scheme of the Income Tax
Act is for ensuring that all amounts are accounted for.
If some amounts are not accounted for, the person
would be visited with the penalty or at times even
prosecution under the Income Tax Act, but it does not
mean that the borrower can refuse to pay the amount
which he has borrowed simply, because there is some
infraction of the provisions of the Income Tax Act.
Infraction of provisions of Income Tax Act would be a
matter between the revenue and the defaulter and
advantage thereof cannot be taken by the borrower. In
my humble view, to say that an amount not disclosed
in the income tax returns becomes irrecoverable would
itself defeat the provisions of Section 138 of the
Negotiable Instruments Act. Apart from the purpose of
this Act, which has been outlined by the learned Single
Judge in Shri Deelip Apte (supra) as well as in Sanjay
Mishra (supra), it ought to be seen that the moment a
person seeks to recover through a cheque an amount
advanced in cash it gets amounted for in the system
and the revenue authorities can keep a track of that and
if necessary tax the person. To brand an amount which
is not shown in Income Tax Act as unaccounted
money would be too farfetched and, therefore, I am in
respectful disagreement with the observations in
Sanjay Mishra (supra), which in fact amounts to
reading an additional requirement in Section 138 of
the Negotiable Instruments Act, and legislating that
such amounts becomes irrecoverable. At the cost of
repetition, for saying that an amount not disclosed in
income tax returns cannot be legally recoverable
liability, some provisions of law to that effect would
Ashish have to be shown. Such provision was not noticed by
me and even the learned Counsel for the respondent
Rastogi could not show any such provision to me.'” (Emphasis
Digitally signed by Supplied)
Ashish Rastogi
46.Thus, in view of the above ratio decidendi, it is held that
Date: 2025.07.11
15:19:08 +0530
non-disclosure of loan in ITR, does not make theAkansha Arora vs Harjeet Kain CA No.80/2025 26 of 27
transaction illegal/void; and hence the liability
under Section 138 NI Act, remains unaffected and thus the
argument advanced on behalf of the accused does not assist
his case.
47.In the light of above discussion and upon independent
appreciation of evidence in the instant matter, as has been
mandated while examining the Appeal against Conviction
U/s Section 374(3) Cr.P.C., this Court is of the considered
opinion that the judgment of the Ld. Trial Court is based
upon sound reasoning and analysis of all the material on
record. The reasoning of the Ld. Trial Court cannot be
faulted and no perversity can be found in the impugned
judgment so as to warrant interference in the same.
Accordingly present appeal stands dismissed.
48.TCR be sent back along with copy of this order.
49.Appeal file be consigned to the Record Room after due
compliance.
Announced in the open Court
on 11.07.2025
(Ashish Rastogi)
Additional Sessions Judge-05
Digitally
signedEast/Karkardooma
by Courts/Delhi
Ashish
Ashish Rastogi
Rastogi Date:
2025.07.11
15:19:13
+0530Akansha Arora vs Harjeet Kain CA No.80/2025 27 of 27