Delhi District Court
Chandni Singh vs Abdul Hakim Khan on 6 June, 2025
IN THE COURT OF MS. SHRADDHA TRIPATHI,
JUDICIAL MAGISTRATE FIRST CLASS (NI ACT), DIGITAL COURT-03.
NORTH WEST, ROHINI COURT, DELHI JUDGMENT
C.C. No.4321/2020
Chandni Singh v. Abdul Hakim Khan
JUDGMENT
1 Date of Institution of complaint : 06.03.2020
2 Name & Address of Complainant : Chandni Singh,
W/o Sh. Ashok Singh,
R/o F- 139, Jawahar Park,
New Delhi- 110062
3 Name & Address of Accused : Abdul Hakim Khan
S/o Ali Hussain,
R/o DD- 166/B, 2nd Floor, Krishna
Park, Devli, New Delhi- 110062
4 Offence complained of Act : u/s 138 NI Act
5 Plea of guilt : Not guilty and claimed trial
6 Decision Qua Accused : Acquitted
7 Date of judgment : 06.06.2025
CASE OF THE COMPLAINANT
1. These proceedings have been initiated by the complainant under section
138, Negotiable Instruments Act, 1882 (hereinafter ‘NI Act‘). Briefly stated, it
is the case of complainant that the accused approached her in February, 2018 for
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a friendly loan of Rs 1,20,000/- for some urgent personal necessity. Upon his
request, the complainant advanced the said loan in cash which was agreed to be
returned in 22 months. To repay the same, the accused issued the following
cheques in question which got dishonoured vide return memos dated 20.01.2020
and 24.01.2020.
Cheque Cheque amount and date Reason for dishonour
Number
812060 15,000/- dated 17.01.2020 Funds Insufficient
812061 31,370/- dated 21.01.2020 Funds Insufficient
812062 51,934/- dated 17.01.2020 Funds Insufficient
2. Upon receiving the knowledge of dishonour of the above cheques, the
complainant served a legal demand notice dated 12.02.2020 upon the accused
requiring him to make the necessary payment. However, upon the failure of the
accused to pay the cheque amount within 15 days, the present proceedings
under section 138 NI Act were initiated by the complainant against the accused.
3. To fortify her case, the complainant tendered her evidence by way of
affidavit which is Ex.CW1/1A and relied upon the following documentary
evidences:
Sr. No Document Exhibit Number 1. Cheques in question Ex CW1/1, Ex CW1/2, Ex CW1/3 2. Return memos Ex CW1/4, Ex CW1/5, Ex CW1/6 Chandni Singh v. Abdul Hakim Khan Page 2 of page 16 Digitally signed by shraddha shraddha tripathi tripathi Date: 2025.06.06 15:19:48 +0530 3. Copy of legal notice dated Ex CW1/7 12.02.2020 4. Postal Receipt Ex CW1/8 5. Tracking Report Ex CW1/9 Case Proceedings
1. Upon the appearance of accused, notice of accusation under section 251
of the Code of Criminal Procedure, 1973 (hereinafter ‘CrPC‘) was framed
on 19.05.2023 and substance of allegations against the accused was
accordingly explained to him to which the accused pleaded not guilty and
claimed trial. The same was duly recorded alongwith his plea of defence.
2. Thereafter, upon permitting the accused to cross-examine CW1 under
section 145 (2), NI Act, and CW-1 was cross-examined and discharged
on 25.10.2023.
3. On 16.11.2023, the Statement of Accused was recorded as per the terms
of Sec 313 CrPC r/w Sec 281 CrPC explaining the incriminating
substances, that appear in evidence against him. The accused explained
that the cheques in question bear his signatures however he has not taken
any friendly loan from the complainant. He explained that he was in
urgent need pf a loan and the husband of complainant assured him of
helping him avail a loan as he has contacts in 3-4 banks. On the pretext
the husband of complainant took three blank signed security cheques and
some forms. He also stated that he confided in the husband of
complainant because even earlier the latter stood as his guarantor in a
loan availed by him for his car. He stated that he does not know why the
present case has been filed against him. He also stated that he owes no
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liability towards the complainant. Post the recording of statement of
accused, the matter was fixed for leading Defence Evidence. The accused
moved an application under Section 315 CrPC alongwith a list of
witnesses which was allowed on 10.07.2024. Accordingly, DW 1, DW 2
and DW 3 were examined, cross-examined and discharged on
19.07.2024, 07.09.2024 and 20.11.2024. Thereafter, the matter was fixed
for final arguments.
Submissions on behalf of Complainant
1. Ld counsel for the complainant submitted that the accused had availed a
loan of Rs 1,20,000/- from the complainant in February, 2018 in cash
which was agreed to be returned in 22 months. He submitted that three
cheques were given by the accused to return the said amount all of which
were dishonoured and a legal demand notice was sent within 30 days to
the accused demanding him to pay the cheque amount.
2. He argued that no substantial defence has been taken by the accused on
his plea of defence.
3. He further submitted that there are contradictions in his plea of defence
taken at the stage of framing of notice under Section 251 CrPC and
Section 313 CrPC.
4. He submitted that the complainant has stood firm and consistent in her
testimony even at the stage of cross-examination. No inconsistency can
be noticed in the case of complainant and the defence of accused remains
unsubstantiated.
5. It has also been submitted by Ld counsel that in lieu of the presumptions
of Sec 139, NI Act in favour of the complainant and the fact that the same
remains unrebutted, all the ingredients under section 138 NI Act have
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been duly met and the liability of the accused has been established and
thus he be convicted of the offence.
Submissions on behalf of Accused
1. Ld counsel for the accused opposed the case of complainant that the
accused has never availed any loan from her.
2. He submitted that the cheques in question were handed over to the
complainant’s husband as the latter had assured that he would help the
accused in getting a loan sanctioned for the accused. He submitted that
alongwith these cheques, three blank signed papers were also taken by the
complainant.
3. He submitted that the cheques in question are of a series and the cheque
amount is also very vague. He submitted that no person would give
cheques of such an odd amount as mentioned on them,
4. Ld counsel for the accused highlighted inconsistencies in the case of
complainant. He submitted that in her legal demand notice she stated that
the purpose of loan was to repay the loan of IndusInd Bank and personal
necessity. However, in her complaint she stated that loan was needed for
a personal necessity. Contrastingly during her cross-examination she
stated that loan was taken for a dairy farming business.
5. He further submitted that via the loan document, the accused has also
been able to establish that the complainant’s husband was known to the
accused and even stood as a guarantor for the accused.
6. He also submitted that the case of accused has been corroborated by an
independent witness namely Rajiv Kataria who appeared as DW 2 in the
witness box.
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7. He submitted that the complainant did not bring her husband as a witness
to prove her case.
8. Ld counsel for the accused submitted that the accused has successfully
rebutted the presumption under section 139 NI Act to the extent of
preponderance of probabilities thus the accused be acquitted.
Analysis and findings
1. Learned counsels of both the parties have been heard at length and
documents on record have been perused.
2. Sec 138, NI Act was introduced with the objective of inculcating faith in
the efficacy of banking operations and giving credibility to negotiable
instruments in business transactions. The provision intends to discourage people
from not honouring their commitments by way of payment through cheques. To
attract liability under section 138, NI Act, the following ingredients are required
to be fulfilled:
First Ingredient: The cheque was drawn by a person 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 and the same be presented to
the bank within a period of three months from the date on which it is
drawn or within the period of its validity whichever is earlier;
Second Ingredient: The cheque was drawn by the drawer for discharge, in
whole or in part, of any legally enforceable debt or other liability;
Third Ingredient: The cheque is returned by the bank unpaid, either
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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.
Fourth Ingredient: A demand of the said amount has been made by the
payee or the holder in due course of the cheque by giving a notice in
writing, to the drawer of the cheque, within 30 days of the receipt of
information by him from the bank regarding the dishonour of cheque.
Fifth Ingredient: 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.
4. The fulfilment of first and third ingredient is not disputed. The cheques in
question were presented for honour within the stipulated time and the same was
returned as dishonoured vide return memos dated 20.01.2020, and 24.01.2020
for reasons “Funds Insufficient”. Upon receipt of the same, the complainant
served a legal demand notice dated 12.02.2020 within 30 days. Thus, the fact of
fulfilment of first and third ingredient is decided in favour of the complainant
and against the accused.
5. Qua the fulfillment of fourth ingredient, it was stated by the accused in
his statement of admission and denial of documents recorded under Section 294
CrPC that he did not receive the legal demand notice. At no stage, the accused
has disputed the correctness of address mentioned in the legal demand notice.
Further, summons issued upon the accused were received on the same address
on which the legal demand notice was sent as per the report of the process
server. Section 114 of the Indian Evidence Act, 1872 (hereinafter ‘IEA’) is
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applicable to communications sent by post in full force and it enables the court
to presume that in the common course of natural events, the communication
would have been delivered at the address of the addressee. Section 27 of the
General Clauses Act envisages that when a registered notice is posted, it is
presumed to have been served unless rebutted. In the instant case too, the same
remains unrebutted.
In CC Alavi Haji v. Palapetty Muhammed & Anr (2007) 6 SCC 555, Hon’ble
Apex Court held,
“Any drawer who claims that he did not receive the notice sent by post,
can, within 15 days of receipt of summons from the court in respect of
the complaint under Section 138 of the Act, make payment of the cheque
amount and submit to the Court that he had made payment within 15
days of receipt of summons (by receiving a copy of complaint with the
summons) and therefore, the complaint is liable to be rejected. A person
who does not pay within 15 days of receipt of the summons from the
Court along with the copy of the complaint under Section 138, by
ignoring statutory presumption to the contrary under Section 27 of the
G.C. Act and Section 114 of the Evidence Act.”
6. In lieu of the above observations and dictum of the Hon’ble Supreme
Court, I am of the opinion that legal demand notice Ex CW1/7 was duly served
upon the accused. Thus, the fourth ingredient is also decided in favour of the
complainant and against the accused.
7. Since the accused failed to make the payment within 15 days of the
receipt of legal demand notice, the complainant instituted the present
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proceedings within the stipulated time. Thus, the fulfilment of fifth ingredient is
also decided in favour of the complainant and against the accused.
8. It is pertinent to note that once signatures on the cheque are admitted by
the accused presumptions under Section 118 and Section 139 NI Act take the
forefront. The presumption under Section 118 and Section 139 NI Act relate to
the fact that the cheque in question was issued in lieu of consideration and for a
legally recoverable debt/liability. The stipulated provisions incorporate the word
‘shall’, thereby making the presumption a mandatory presumption. However,
loading the provision with the phrase “unless the contrary is proved” clarifies
that albeit the presumption is a mandatory presumption, it is rebuttable and the
onus to rebut the presumption lies upon the accused.
9. Regarding the strength and nature of presumption raised under section
139 NI Act, it is worthwhile to peruse the ruling of the Hon’ble Apex Court in
Rangappa vs Sri Mohan (2011 (1) SCC (CRI) 184) wherein it ruled,
“As noted in the citations, this is of course in the nature of a rebuttable
presumption and it is open to the accused to raise a defence wherein the
existence of a legally enforceable debt or liability can be contested.
However, there can be no doubt that there is an initial presumption which
favours the complainant. Section 139 of the Act is an example of a
reverse onus clause that has been included in furtherance of the
legislative objective of improving the credibility of negotiable
instruments. While Section 138 of the Act specifies a strong criminal
remedy in relation to the dishonour of cheques, the rebuttable
presumption under Section 139 is a device to prevent undue delay in the
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course of litigation. However, it must be remembered that the offence
made punishable by Section 138 can be better described as a regulatory
offence since the bouncing of a cheque is largely in the nature of a civil
wrong whose impact is usually confined to the private parties involved in
commercial transactions. In such a scenario, the test of proportionality
should guide the construction and interpretation of reverse onus clauses
and the accused/defendant cannot be expected to discharge an unduly
high standard or proof. In the absence of compelling justifications,
reverse onus clauses usually impose an evidentiary burden and not a
persuasive burden. Keeping this in view, it is a settled position that when
an accused has to rebut the presumption under Section 139, the standard
of proof for doing so is that of `preponderance of probabilities’.
Therefore, if the accused is able to raise a probable defence which creates
doubts about the existence of a legally enforceable debt or liability, the
prosecution can fail. As clarified in the citations, the accused can rely on
the materials submitted by the complainant in order to raise such a
defence and it is conceivable that in some cases the accused may not
need to adduce evidence of his/her own.”
10. Thus, it is a settled legal position that in order to rebut the statutory
presumption under Section 118 and Section 139 NI Act, the accused ought to
take the responsibility on his shoulders and clear himself of the cloud of legal
liability cast upon him by the complainant to the extent of preponderance of
probabilities. The accused can choose to do so either by cross-examining the
complainant and complainant witnesses or by leading his defence evidence or
both. Here the accused has admitted his signatures. Therefore, presumptions
under Section 139 read with Section 118 NI Act shall operate.
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11. What remains for judicial scrutiny before this court is whether the
accused has rebutted the presumption of existence of a legally enforceable debt
to the extent of preponderance of probabilities.
12. The foundation of the instant case is a friendly loan of Rs.1,20,000/-
given by the complainant to the accused in February, 2018. However, certain
cracks emerge from a very nascent stage in this case.
13. At the time of filing of complaint, the complainant placed on record her
evidence by way of affidavit Ex CW1/1A as well as legal demand notice.
Perusal of the same brings to surface certain inconsistencies in the case of
complainant qua the purpose of loan.
14. The complainant has deposed in her evidence by way of affidavit Ex
CW1/1A that the accused had approached her for a friendly loan of Rs
1,20,000/- for “personal necessity” only. In para 2 of Ex CW1/1A, she has
deposed,
“That the accused has approached to the complainant for friendly loan
some urgent need for money for personal necessity in the month of
February, 2018”
15. On the other hand, prior to this in the legal demand notice dated
12.02.2020 which is Ex CW1/7 sent by the complainant through her advocate it
is stated in para 1 that the accused had approached her for a friendly loan ‘to
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tripathi Date:
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repay the loan of IndusInd Bank and personal necessity’ . The relevant portion
of para 1 has been produced below,“That you had taken a friendly loan of Rs 1,20,000/- from my above said
client to repaid the loan Indusand Bank Ltd and other personal
necessity…”
16. However, during her cross-examination when she was interrogated about
the purpose of loan, the complainant deposed a completely different purpose of
loan which was not taken by her earlier. She deposed that the loan was taken for
dairy farming business. The relevant portion is listed below,“It is correct that the accused was in the business of dairy farming and he
requested for financial help for his dairy farming business.”
17. The purpose of loan as revealed by the complainant herself at this stage is
strikingly different from that as stated by her in her legal demand notice,
complainant and evidence by way of affidavit. It is pertinent to note that the
complainant has even failed to explain these inconsistencies surfaced at the
beginning of trial itself. Further, the instant case is that of a loan of Rs
1,20,000/- advanced in cash. Therefore, it was all the more important for the
complainant to explain the same but no steps have been taken by her.
18. Adverting to the defence of the accused, at the outset it must be noted that
contrary to the case of complainant, the accused has remained consistent in his
defence at all stages, i.e. stage of framing of notice; statement under Section 313
CrPC and Defence Evidence.
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shraddha Digitally signed by
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tripathi Date: 2025.06.06
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19. When the accused stepped into the witness box as DW1, it was his
defence that he was in need of money at the relevant time for his dairy business
for which he had approached the complainant’s husband namely Ashok Singh.
Ashok Singh had stood as a guarantor to a car loan availed by the accused from
IndusInd Bank because of which he shared a relationship of trust and faith with
him. Thereafter, he deposed that Ashok Singh assured to help him in availing a
loan due to reach in 3-4 banks and persuaded him to give three blank signed
cheques, signed forms and blank signed papers for the purposes of loan. It was
on this assurance of Mr Ashok Singh that the accused handed over three blank
signed security cheques and three blank letter head papers to him. It is these
cheques which have now been misused by the complainant.
20. To establish his defence, the accused summoned the concerned bank
witness of IndusInd Bank who appeared as DW 3 alongwith loan documents
which are Ex DW3/1. Perusal of the loan documents reflects that Ashok Singh
who happens to be the husband of complainant indeed stood as a guarantor for
the loan account of accused. Thus, the oral testimony of accused is supported by
documentary evidence Ex DW3/1 brought on record by DW 3. This further
reflects that it is not the case that the husband of complainant and the accused
were not known to each other but shared a good relationship. Had it not been
the case, it is unlikely for any person to stand as a guarantor for a stranger’s
loan.
21. Another distinguishable fact is that the defence of accused is corroborated
by an independent witness DW 2 namely Rajiv Kataria. In his deposition, he
has corroborated the version of accused deposing that he was present at the time
when the cheques in question were handed over to the husband of complainant.
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DW 2 is therefore a direct witness to the instance of handing over the cheques
in question to Mr Ashok Singh and not the complainant. He even deposed that
upon enquiry from the accused, he found out that the accused shared a
relationship of trust with the husband of complainant and hence cheques were
given.
22. At this stage it is relevant to refer to the ruling of Hon’ble Supreme Court
in Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 wherein it has been
held that the accused need not produce direct evidence in every case. The
Hon’ble Court held,
“… 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.”
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23. Either the accused produces direct evidence controverting the allegations
of complainant or he proves such facts and circumstances, via which the court
may believe the consideration or legally enforceable debt did not exist or its
existence was improbable in the eyes of a prudent person. Any fact is said to be
proved when it is directly established or such circumstances exist which would
show its existence probable in the eyes of any prudent person.
24. The phrase ‘Unless the contrary is proved’ explicates that a bare denial is
insufficient. In other words, the fact of non-existence of a legally enforceable
debt has to be supported by some proof. In the instant case, the accused has
been able to establish such facts and circumstances which tilt this court to
believe that non-existence of debt is probable. He has not only remained
consistent in his defence but corroborated the same via an independent witness
DW 2 Rajiv Kataria. Secondly, the loan documents on record wherein the
husband of complainant Mr. Ashok Singh can be seen as his guarantor supports
the fact that the two have shared a friendly equation in the past and
circumstances which may have lead the accused to hand over the cheques in
question to him. Contrastingly, inconsistency qua the purpose of loan emerges
in the case of complainant and remains unexplained throughout the trial. This
lessens the credence of the complainant’s version. However, the existence of
facts and circumstances shown by the accused creates a doubt in the case of
complainant and shows probabilities of non-existence of a legally enforceable
debt.
25. Prosecution must stand on its own legs. It is also a settled legal principle
that to attribute culpability a person ‘must be guilty’ and not ‘may be guilty’.
For reasons stated above, a ‘doubt’ is cast in the case of complainant the benefit
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of which must be given to the accused. Due to this doubt cast on the
complainant’s case by probability of circumstances as shown by the accused,
the court is of the opinion that the accused has successfully rebutted the
existence of a legally enforceable debt. The second ingredient is decided in
favour of the accused and against the complainant.
Conclusion
1. All the legal requirements constituting an offence punishable under
Section 138 NI Act are cumulative in nature. Since all the ingredients
necessary to bring home the guilt of accused have been proved, accused
Abdul Hakim Khan S/o Ali Hussain is hereby held ‘not guilty’ and
consequently acquitted of the offence under Section 138 NI Act.
2. This judgment contains 16 pages. This judgment has been pronounced by
the undersigned in the open court and each page bears the signatures of
the undersigned.
3. Let a copy of the judgment be uploaded on the official website of District
Courts, forthwith.
Announced in open court on 06.06.2025
Digitally signed
shraddha by shraddha
tripathi
tripathi Date: 2025.06.06
15:22:47 +0530
(Shraddha Tripathi)
JMFC (NI ACT) Digital Court-03 (N/W),
Rohini Courts, Delhi, 12.06.2025
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