Delhi District Court
Om Prakash Sherawat vs Ajay Sharma on 14 May, 2025
IN THE COURT OF MS. NISHTHA MEHTANI,
JUDICIAL MAGISTRATE (NI ACT), DIGITAL COURT-03
NEW DELHI DISTRICT, PHC, NEW DELHI
1.
Complaint Case : 322/2020
number
2. Name & address of the : Om Prakash Sherawat
complainant S/o Sh Ajeet Singh, R/o H No. 544, Gali No
15, Block- L, Mahipalpur Entn. New Delhi
110070
3. Name and address : Ajay Sharma,
of the accused S/o Sh Vijay Sharma, r/o C-8/8298, Vasant
Kunj, New Delhi - 110070
A Offence complained : Section 138, Negotiable Instruments
Act, 1881.
5. Plea of the guilt : Pleaded not guilty
6. Final Order : Convicted
7. Date of institution : 09.12.2020
8. Date on which : 14.04.2025.
reserved for judgment
9. Date of judgment : 14.05.2025
Digitally
NISHTHA signed by
MEHTANI NISHTHA
MEHTANI
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 1 of 25
BRIEF STATEMENT OF FACTS
1. Vide this judgement, this court shall dispose of the aforementioned complaint case
filed by the complainant namely Om Prakash Sherawat, against the accused, namely
Ajay Sharma, in respect of the dishonour of the cheque bearing no.000105 dated
30.10.2020 for an amount of Rs.9,50,000/- (Rs. Nine lakh fifty thousand only) , drawn
on HDFC Bank , Bamnoli village, Near Dwarka sector 28, New Delhi- 110077
(hereinafter referred to as the “cheque in question”).
2. Succinctly put, it is the case of the complainant that complainant was known to the
accused from last 7-8 years and had friendly relations with him . That in August 2017,
the accused approached the complainant for a friendly loan of Rs.9,50,000/- . That the
complainant infomred the accused that he had sold one of his properties situated in
Garhganga, UP and the sale proceeds were likely to come in his hands and on receipt
of sale proceeds he would give the loan to him. That in December 2017 , the said loan
was handed over in cash by the complainant to the accused and the accused promised
the complainant that he will repay the loan amount within a period of one year. That
in November 2018, the complainant approached the accused to repay the loan amount
but the accused requested the complainant to give him some more time to repay the
loan amount till the end of 2019 as his business was not yielding profits. That again
the complainant approached the accused in the month of December 2019 to repay the
loan amount but this time again the accused expressed his inability to repay the loan
and on insistence by the complainant, the accused issued the cheque in question in
favour of the complainant and requested to deposit the same after three months. That
in March 2020, the complainant asked the accused whether he had arranged for funds
for encashment of cheque to which accused expressed his inability . That on
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 2 of 25
Digitally
NISHTHA signed by
MEHTANI NISHTHA
MEHTANI
19.10.2020, the accused called the complainant and told him that he will be repaying
the loan amount within next two days while on the other hand in connivance with his
father , he sent a false notice dated 24.10.2020 to which complainant sent reply dated
06.11.2020 to the father of accused.
3. That the complainant then presented the cheque in question on 30.10.2020 which was
dishonoured vide return memo dated 04.11.2020 for the reasons ‘funds insufficient’.
4. That thereafter the complainant issued a legal notice dated 06.11.2020 which was
served upon the accused by speed post with respect to dishonor of cheque calling
upon the accused to pay the cheque amount within 15 days from the receipt of the
notice. Accused sent a false and frivolous reply dated 17.11.2020 to the notice .
5. Since the accused failed to pay the amount of the cheque in question within the
statutory period of 15 days from the receipt of legal demand notice, hence, the
complainant has moved this court with the present complaint under Section 138 of the
Negotiable Instruments Act, 1881 (hereinafter referred to as the “NI Act“).
PROCEEDINGS BEFORE THE COURT
PRE-SUMMONING EVIDENCE:
6. That in order to prove a prima-facie case, the Complainant led pre-summoning
evidence by way of affidavit i.e., Ex. CW-1/1 wherein the Complainant affirmed the
facts stated in the present complaint and relied upon the following documents:
1. Cheque issued by accused is Ex.CW-1/A
2. Notice dated 24.10.2020 is Ex. CW-1/B.
3. Reply dated 06.11.2020 is Ex. CW-1/C.
Digitally
4. Cheque returning memo is Ex. CW-1/D. NISHTHA signed by
MEHTANI NISHTHA
MEHTANICC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 3 of 25
5. Legal demand notice dated 06.11.2020 is Ex. CW-1/E.
6. Postal receipt is Ex. CW-1/F.
7. Internet generated tracking report is Ex. CW-1/G.
8. Reply to statutory notice dated 17.11.2020 is Ex. CW-1/H.
COGNIZANCE & SUMMONING OF THE ACCUSED:
7. That, after considering the Pre-summoning evidence led by the Complainant and the
submissions made by him, the Court took cognizance and issued summons to the
accused. The accused appeared before this court on 19.01.2021. He was then admitted
to bail on furnishing bail bonds in the sum of Rs. 10,000/- with a surety in like
amount. Bail bonds were furnished and accepted.
NOTICE U/S- 251 CR.P.C:
8. On 28.01.2021, Notice u/s- 251 of the Code of Criminal Procedure, 1973 (for short
‘Cr.P.C.’) containing the substance of accusation, for the offence under Section 138 of
the Act was served upon the Accused to which he pleaded not guilty and claimed trial.
He admitted that the cheques in question bear his signature but denied filling of the
other particulars on the cheques in question. In his plea of defence, he stated that in
the year 2017, he had taken a loan from the complainant for an amount of Rs
6,00,000/- at the interest of 6% per month and he paid back the total amount by Feb.
2020. He also stated that in March 2020, the complainant gave him a call threatening
him to pay more money, or he would present the cheque in dispute (which the accused
had given to the complainant as a security cheque in May 2017) and would file a case
against him. He further stated that he and his father, had filed a police complaint
against the complainant at P.S Vasant Kunj North in this regard and even served a legal
Digitally
NISHTHA signed by
MEHTANI NISHTHA
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 4 of 25 MEHTANI
notice to the complainant through their counsel. He admitted the receipt of the legal
demand and admitted replying to it.
EVIDENCE OF THE COMPLAINANT:
9. After an application under Section 145(2) NI Act moved on behalf of the accused
was allowed on 25.02.2021, the complainant was re-called for his examination. He
relied upon his affidavit filed at the stage of pre-summoning evidence at the post
summoning stage as well and deposed as CW-1. He relied upon all the documents
earlier exhibited. He was then cross-examined on 10.11.2021, 24.02.2022 and
21.11.2022. During cross-examination, the witness was confronted with his ITR for
AY- 2018-19 marked as Ex. CW-1/I (Colly), Audio recording along with transcript Ex.
CW-1/D1, Audio recording along with transcript Ex. CW-1/D2, Audio recording
Mark X , Audio recording Mark Y and Bank account statement of complainant
marked as Mark Z (colly). No other witness was examined on behalf of the
Complainant, thus, Complainant’s evidence stood closed. That being the case, the
matter was then listed for statement of the Accused u/s 313 Cr.P.C read with Section
281 Cr.P.C.
STATEMENT OF THE ACCUSED:
10. That in order to give an opportunity to the Accused to personally explain all the
incriminating circumstances appearing in evidence against him, statement of the
Accused under Section 313 Cr.P.C read with Section 281 Cr.P.C was recorded on
25.04.2023 without oath wherein all the incriminating circumstances appearing in
evidence against the accused were put to him . He stated that he never approached the
complainant for friendly loan of Rs.9,50,000/- and in 2017, he had taken a loan ofDigitally
NISHTHA signed by
MEHTANI NISHTHA
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 5 of 25 MEHTANI
Rs.6 lakhs from him in various installments by way of cash which was already repaid
by him with interest in installments by way of cash. He stated that the last installment
of Rs.2 lakhs was given by him in the year 2019. He stated that in June 2017, the
complainant had given the 1st installment of Rs.1 lakh to him and at that time, the
complaiant had taken the cheque in question by way of security. He also stated that
Rs.50,000/- of the 1st installment were repaid by him within one month only. He
further stated that after he repaid the last installment in the year 2019, the
complainant again started asking him the interest amount and thereafter, his father
sent a legal notice to the complainant dated 24.10.2020 and also lodged a police
complaint on 08.08.2020 against the complainant. He informed that the complainant
again threatened him and presented the cheque in question in his bank. He denied any
liability towards the complainant.
11. That afterwards, the matter was scheduled for defence evidence. The Accused himself
entered the witness box and was examined as DW-1 (Defence Witness-1) on
08.05.2023. He was then cross-examined on 11.08.2023 and 14.09.2023 and was
discharged. Further the accused got examined his father as DW-2 on 14.09.2023 and
his brother as DW-3 on 04.10.2023. Both were duly cross examined and discharged.
Following the completion of evidence, the case was set for final arguments.
FINAL ARGUMENTS
12. Oral arguments were furnished on behalf of both the parties and written arguments
were also filed by both the sides. Ld. Counsel for the complainant argued that the
accused has already admitted his signatures on the cheque in question and hence the
presumption of the cheques in question having been issued in discharge of a legally
enforceable debt or liability has arisen in favour of the complainant in terms of section
118 (a) read with section 139 of the NI act.
Digitally
NISHTHA signed by
MEHTANI NISHTHA
MEHTANI
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 6 of 25
13. He futher argued that that a false notice was sent to the complainant by the father of
the accused dated 24.10.2020 alleging that the loan amount had already been paid by
the accused and despite the same the cheque of the accused was not being returned by
the complainant and he was causing mental and physical torture, emotional distress
and loss of reputation to the accused . He further submitted that the notice was duly
replied to by the complainant refuting all the allegations made by the father of the
accused and the sole purpose of this notice was only to evade the liability of the
accused towards the complainant and to pre empt any action by the complainant with
respect to the same.
14. He further submitted that the fact of the accused being a member of a committee run
by the complainant has been duly admitted by the accused in his cross examination
dated 11.08.2023 and any money paid by the accused to the complainant was towards
the installment of the committee only and not towards the repayment of the loan
granted by the complainant to the accused. He further argued that as per the version of
the accused, the complainant threatened him in March 2020, however he did not file
any complaint against the alleged threatening at that time and the same was filed by
the father of the accused only in August 2020, which clearly shows that the same was
filed only to evade the liability of the accused towards the complainat. The Ld. counsel
for the complainant stated that the accused himself admitted that on 19.10.2020, he
told the complainant that he would repay the loan amount . The Ld. Counsel for the
complainant drew the attention of the court to the following relevant portion of the
cross examination of DW-1 held on 11.08.2023.
“It is correct that on 19.10.2020, I had told the complainant that I would repay the
loan amount within 2 days.
15. The Ld. Counsel for the complainant further submitted that the testimony of the
witnesses DW-2 and DW-3 are contradictory to the testimony of the accused and the
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 7 of 25 Digitally
NISHTHA signed by
MEHTANI NISHTHA
MEHTANI
accused has not been able to show any repayment towards the loan amount to the
complainant. He further submitted that payment of the loan amount in cash would not
vitiate the transaction in its entirety and consequences if any, will be under the
appropriate tax laws. He concluded by stating that the presumption of the cheque in
question having been issued in discharge of a legally enforceable debt/ liability is
resting in favour of the complainant which the accused has failed to rebut and hence
he deserves to be convicted.
16. Per Contra, the Ld. Counsel for the accused argued that there is no legally enforceable
debt or liability to the tune of the amount on the cheque in question due against him
and in favour of the complainant as on the date of its presentation. He further
submitted that despite the repayment of the entire principal amount of Rs.6,00,000/-
along with the interest, the complainant coerced the accused to keep on paying the
interest amount, as a result of which the father of the accused had filed a police
complaint against the complaiant at PS Vasant Kunj north dated 08.08.2020 and also
sent a legal demand notice dated 24.10.2020 to the complainant. He further argued
that only after the notice was received by the complainant, the blank security cheque
of the accused was filled and presented by the complainant and was misused by him.
He further added that the alleged loan was given at an interest by the complainant,
who later also wanted to extort unreasonable interest from the accused and threatened
the accused for it. He stated that the voice in the audio recording Ex.CW1/D1,
Ex.CW-1/D2, mark X and mark y, had been duly admitted by the complainant to be
his own and duly shows that he charged interest and also threatened the accused to pay
more money to him. He further stated that no proof of granting loan to the accused or
asking for its return before sending the legal demand notice under section 138 NI act ,
has been brought on record by the complainant and no adjustment was made by the
complainant from the committee amount towards the loan amount.
Digitally
NISHTHA signed by
MEHTANI NISHTHA
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 8 of 25 MEHTANI
17. It was further argued by the Ld. counsel for the accused that the complainant was also
in possession of two cheques of the brother of the accused and also threatened the
accused to misuse these cheques as well . He further submitted that the complainant
had misused the cheques of other persons namely Mr Rambir Sherawat and Jaipal
Bhargav in order to extort interest amount from them also. He further submitted that
the repayment of the loan amount made by the accused has been duly shown by his
bank account statement Ex. DW-1/1 on record and the same was not towards the
payment of the committee amount. He further added that the father of the accused was
examined as DW 2 who supported the version of the accused that multiple people had
come to the house of the accused for threatening him and therefore he had sent a
notice to the complainant. He also stated thatEx.DW-3/1, brought on record by the the
brother of the accused , also shows the interest charged by the complainant on the loan
amount and the version of DW-3 also supports the case of the accused. He thus
concluded by stating that the accused has been successful in proving the non-existence
of any debt /liability against him and the issuance of the cheque in question in
discharge of it by a preponderance of probabilities and hence he deserves to be
acquitted . He also stated that any contradictory statements made by the accused at
different stages of the trial are minor in nature and the accused deserves to be
acquitted .
18. Ld. Counsel for the accused placed reliance upon two judgments titled as Bir Singh v.
Mukesh Kumar (2019) 4 SCC 197 of the Hon’ble Apex Court and Rangappa Vs
Mohan (AIR 2010 SC 1898).
19. I have carefully considered the submissions made on behalf of both the parties.
Additionally, I have meticulously reviewed the entire case record, including the written
submissions provided by the complainant and the accused.
Digitally
NISHTHA signed by
MEHTANI NISHTHA
MEHTANI
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 9 of 25
LEGAL POSITION:
20. In order to constitute an offence u/s.138 of the Negotiable Instruments Act, 1881, the
following legal requirements must be satisfied from the averments in the Complaint as
well as the evidence of the Complainant1: –
(a) a person must have drawn a cheque, on an account maintained
by him in a bank for payment of a certain amount of money to
another person from out of that account for the discharge, in whole
or in part, of any legally enforceable debt or other liability;
(b) that the cheque has been 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;
(c) that the cheque has been returned by the drawee bank unpaid,
either for the reason that 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;
(d) that the payee or the holder in due course of the cheque has
made a demand for the payment of the said amount of money by
giving a notice in writing, to the drawer of the cheque, within 30
days of the receipt of information from the bank regarding the return
of the cheque as unpaid;
(e) that the drawer of such cheque fails to make the payment of the
said amount of money to the payee or holder in due course within 15
days of receipt of the said notice.
1
Kusum Ingots & Alloys Ltd. Vs. Pennar Peterson Securities Ltd. AIR 2000 SC 954,
Delivered by Honorable Division Bench of Justice K.T.Thomas & Justice D.P.Mohapatra,
Supreme Court of India on 30-03-2011.*modified in consonance with the amendments brought
subsequent to the judgement dated 23.02.2000 in the NI Act.
NISHTHA
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 10 of 25 MEHTANI
Digitally signed
by NISHTHA
MEHTANI
21. That the legal requirements mentioned hereinabove are cumulative in nature, i.e. only
upon fulfilment of all the aforementioned ingredients, the drawer of the cheque is
deemed to have committed an offence under s. 138 of the Negotiable Instruments Act.
22. The provision of Sec.138 is further supported by Sec.139 and Sec.118 of the Act. Sec.
139 of the Act provides presumption in favour of the Complainant and mandates that
the court shall presume, that the holder of a cheque received the cheque of the nature
referred to in Sec.138 for the discharge, wholly or in part of any debt or other liability.
Sec.118 of the Act provides presumptions as to negotiable instruments; that the court
shall presume, until the contrary is proved, 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.
23. Elaborating further on this point, the Apex Court in Basalingappa v. Mudibasappa2
summarised the law. The following was laid down in para 25: (SCC p. 433-434)
“25. We have noticed the ratio laid down by this Court in the above
cases on sections 118(a) and 139, we now summarise the principles
enumerated by this Court in following manner:
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 the
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
2
(2019) 5 SCC 418; Delivered by Honorable Division Bench of Justice Ashok Bhushan &
Justice K.M.Joseph, Supreme Court of India on 09-04-2019.
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 11 of 25 NISHTHA Digitally
signed by
MEHTANI NISHTHA
MEHTANI
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.
25.4 That it is not necessary for the Accused to come in
the witness box in support of his defence, section 139
imposed an evidentiary burden and not a persuasive
burden.
25.5 It is not necessary for the Accused to come in the
witness box to support his defence.
24. What emerges from the abovesaid discussion is that the offence u/s 138 of the
Negotiable Instruments Act operates on reverse onus of proof theory; once a given set
of facts are shown to exist, the presumptions u/s 139 and Sec.118 of the Act mandate
the court to draw them. The same is evident by the language used, i.e., “Shall
Presume”. However, the said presumptions are in the nature of rebuttable
presumptions, i.e. it is open for the defence to shift the onus on the Complainant by
raising a probable/ plausible defence.
APPRECIATION OF EVIDENCE AND FINDINGS:
25. I shall now proceed to analyse the legal elements involved in this case, evaluating
whether the oral and documentary evidence satisfy the legal requirements. To streamline
the discussion, it is important to distinguish between contested and admitted issues, thus
narrowing the scope of the controversy.
Digitally
NISHTHA signed by
MEHTANI NISHTHA
MEHTANI
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 12 of 25
26. Concerning ingredients no. two and three, these are evidently satisfied by
examination of the cheque in question dated 30.10.2020 (Ex. CW-1/A) and its return
memo dated 04.11.2020 (Ex. CW-1/D) indicating “Funds Insufficient”. The defence has
presented no contrary evidence; hence, these ingredients stand established against the
Accused.
27. That it is a trite law that in order to maintain a complaint u/s-138 NI Act, serving
of legal demand notice to the Accused before filing the case is imperative. As regards the
service of legal demand notice, the Complainant has dispatched the same, Ex.CW-1/E
dated 06.11.2020 to the Accused. Original postal receipt Ex. CW-1/F and tracking report
Ex. CW-1/G corroborate this. The Accused had admitted the receipt of the legal demand
notice Ex. CW-1/E at the time of the framing of the notice u/s 251 Crpc and also
admitted that he had replied to the same. Hence the fourth ingredient also stands fulfilled.
28. The fifth ingredient also stands satisfied against the Accused as in the instant case, it
is an admitted position that the Accused has failed to pay the amount due under the
cheque in question, on the ground that he does not owe any liability towards the
Complainant.
29. In view of the above, the only point for determination in the present matter remains
is that of existence of legally enforceable debt or liability for which the cheque in question
was issued by the Accused, i.e., the first ingredient.
30. At the outset, the alleged liability of the Accused stems from the issuance of the
cheque in question, to the Complainant in discharge of his legal liability i.e., towards the
payment of the loan amount to the complainant. It is pertinent to note that the Accused
admitted his signature on the cheque in question and that the same is drawn on his bank
account. He denied filling the body of the cheque in question. In a recent judgement titled
as Rajesh Jain v. Ajay Singh, SLP Crl. No. 12802 of 2022, the Apex court held as
following:
Digitally
NISHTHA signed by
MEHTANI NISHTHA
MEHTANI
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 13 of 25
“……37. Recently, this Court has gone to the extent of holding that presumption takes
effect even in a situation where the Accused contends that ‘a blank cheque leaf was
voluntarily signed and handed over by him to the Complainant. [Bir Singh v. Mukesh
Kumar (2019) 4 SCC 197]. Therefore, mere admission of the drawer’s signature, without
admitting the execution of the entire contents in the cheque, is now sufficient to trigger
the presumption.”
31. Applying the ratio of the above-said judgement, the undisputed execution of the
cheque in question and the legal principles previously discussed leads to an inference
under Section 139 read with Section 118 of the Act. This presumption suggests that the
cheque was issued for settling a legally enforceable debt or liability owed to the
Complainant. With this presumption raised against the accused, the onus shifts to him to
counteract it by presenting a plausible defence and also examined DW-2 and DW-3 in his
support. To this end, the Accused has conducted cross-examination of the AR of the
Complainant, referred to as CW-1. Additionally, the Accused himself testified as DW-1 in
his defence. The fundamental issue to be addressed is whether the Accused has effectively
put forward a credible defence to overturn the presumption against him.
32. For substantiating the complaint, it is crucial that CW-1 (the Complainant)
provides consistent testimony regarding the key elements of the transaction with the
Accused. During cross-examination, no substantial information emerged that could
significantly undermine the reliability of the Complainant.
33. It is the case of the complainant that he extended a friendly loan of Rs.9,50,000/- in
cash to the accused in December 2017 for a period of one year and an undated cheque
(cheque in question) was issued in lieu of the payment of the same in December 2019 by
the accused and it was requested that the same be presented after 3 months. Whereas it is
the case of the accused that he never took a loan of Rs. 9,50,000/- from the complainant,
rather he took a loan of Rs.6,00,000/- in tranches at an interest of 6% per month in the
NISHTHA
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 14 of 25 MEHTANI
Digitally
signed by
NISHTHA
MEHTANI
year 2017 from the complainant which was duly paid by him along with the interest by
February 2020.
34. At the time of the framing of the notice under section 251 Crpc, the accused took the
defence that the cheque in question was given as a security cheque to the complainant
against the loan taken by him in the year 2017, and even after due payment of the loan
amount along with the interest, the complainant threatened him to pay more money as a
result of which a police complaint was filed against the complainant and legal notice was
also served to him through the accused’s counsel.
It is an admitted position between the parties that the parties were known to each other
and a loan was given by the complainant to the accused. The accused, in the present case,
has failed to prove his defence on the touchstone of preponderance of probabilities for the
reasons discussed below.
35. In the reply to the legal demand notice of the complainant , Ex.CW-1/H, in para
number 7, it is stated by the accused that the complainant had misused the cheque of the
accused with the malafide intention to cheat and play fraud upon him by forging his
signature and filling up the amount. However the accused, while framing of the notice
under section 251 Crpc , categorically admitted that the cheque in question was signed by
him, which is in stark contradiction to what he had stated in Ex.CW-1/H.
36.Also, the accused in the notice framed under section 251 Crpc, had stated that he had
taken an amount of Rs.6,00,000/- at the interest of 6% per month in the year 2017 from
the complainant. Thereafter at the time of the recording of his statement under section
313 Crpc, it was stated by him that he had taken a loan of Rs.6,00,000/- from the
complainant in various installments by way of cash . It is pertinent to note that there was
no mention of any interest supposedly charged by the complainant on the loan taken by
the accused. The number of instalments and the amount of each instalment, in which the
loan was given, also did not find any mention . Thereafter , at the time of the examination
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 15 of 25 Digitally
NISHTHA signed by
MEHTANI NISHTHA
MEHTANI
in chief of the accused recorded on 08.05.2023 , he altogether created a different narrative
and deposed that he borrowed Rs.1,00,000/- from the complainant in the year 2017 and
again in the year 2018, he borrowed Rs.6,00,000/- from the complainant. This time he
improvised his earlier version and stated that he had borrowed Rs.6,00,000/- from the
complainant in four parts of Rs.1,50,000 each/-. The relevant portion of the examination
in chief of the accused is as follows
“The complainant has filed a false and frivolous case against me, In May-June 2017, a
friend of mine was in need of loan. Accordingly I borrowed Rs.1 lakh from the
complainant and at that time he took the cheque in dispute(only signed) from me by way
of security. In the year 2018, I was in need of loan then I borrowed Rs.6,00,000/- from the
complainant in 4 parts of Rs.1,50,000/- each.”
36. With respect to the repayment of the loan amount, again contradicting stands have
been taken by the accused at different stages of the trial. At the time of the framing of the
notice under section 251 Crpc, it was stated by the accused that the total loan amount
along with the interest was paid back by him to the complainant by February 2020.
However in stark contradiction to his plea taken at the time of the framing of the notice,
he stated that the last installment of Rs.2,00,000/- was paid by him in the year 2019. The
same was stated by him both in the statement recorded under section 313 Crpc and in his
examination in chief held on 08.05.2023.
37. In order to show the repayment of the loan amount, the accused had brought his bank
account statement Ex. DW-1/1 on record. Perusal of the same reflects that a total of
Rs.71,000/- was paid to the complainant in three instalments amounting to Rs.21,000/-,
Rs.25,000/- and Rs.25,000/- respectively. It is pertinent to note that that the accused had
admitted the fact of putting his money in the chit fund committees run by the complainant
along with his father and brother. It was also admitted by the accused in his cross
examination held on 11.08.2023 that the monthly instalment for each committee which he
Digitally
NISHTHA signed by
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 16 of 25 MEHTANI NISHTHA
MEHTANI
used to pay to the complainant was approximately Rs.18,000/-, which used to differ from
time to time and admitted that he also sometimes delayed in paying the same to the
complainant. The suggestion that the above stated payments made by the accused to the
complainant were towards the chit fund committee and not towards the repayment of the
loan was denied by the accused. However, mere denial of this suggestion by the accused
does not take the place of proof . No evidence, in oral and documentary form has been
brought forth by the accused to show the repayment of Rs.6,00,000/- stated to be taken
from the complainant. Even if it is presumed that Rs.71,000/- was given for the repayment
of the loan amount, nothing has been brought on record to show the payment of the
remaining amount to the complainant. The fact that the committee instalment dependend
upon profit and loss, coupled with the admission of the accused that the amount of the
instalment was approximately Rs.18,000/- which used to differ from time to time,
strengthens the version of the complainant that the amount which was given by the
accused as shown in his bank account statement was towards the committee amount and
not towards the repayment of any loan. The argument of the accused that if the loan
amount was not returned by the accused, the same could have been adjusted by the
complainant in the committee amount also does not lend any support to his defence as
the complainant had in his cross examination satisfactorily answered that at the request
of the accused he had given more time to him for the repayment of the loan amount and
no further question with respect to any adjustment from the committee amount was
thereafter put to the him in his cross examination.
38. Moreover, the accused’s testimony is filled with contradictions and the accused has
nowhere stated the number of instalments, the amount of each instalment , the mode of
payment of each instalment and the time /place at which these instalments were given to
the complainant for the repayment of the loan amount. Even after mentioning in his
testimony that he used to visit the house of the complainant when he used to pay the
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 17 of 25 Digitally
NISHTHA signed by
MEHTANI NISHTHA
MEHTANI
instalment amount to the complainant, no witness has been examined who could give
support to his defence that the payment which he made to the complainant at his house
was in lieu of the repayment of the loan amount.
39. In order to highlight the improbability in the case of the complainant, the accused also
showed him his ITR for the AY-2018-19 i.e. Ex.CW-1/I ( Colly) during his cross
examination and the complainant admitted the fact that the advancement of the alleged
loan amount and the profit earned from committees was not disclosed by him in his ITR.
In the opinion of this court, the fact of non disclosing of the loan amount in the ITR is not
itself fatal in the facts and circumstances of the case keeping in view the legal
presumption u/s 118 r/w s.139 of the NI Act. Non- disclosure may or may not be in
violation of any tax or any other applicable statute calling for appropriate action by the
concerned authorities. However , the same will not itself turn the case of the complainant
improbable or lead the court to the conclusion that there was no advancement of the
alleged loan of Rs.9,50,000/- , even if the other circumstances so indicate.
40. The accused has also taken a defence that the complainant used to threaten him to
present his cheque if he did not pay more money, over and above the principal and the
interest amount to the complainant. However the accused has not highlighted any specific
instances or details of the alleged threatening or harassment by the complainant as
alleged. The father of the accused deposed as DW-2 and stated that multiple people came
to his house for threatening his sons for payment, however no independent witness was
examined to substantiate the same. It appears quite improbable that when many people
had come to the house of the accused to threaten him, there was no neighbour or other
eyewitness, who would have witnessed the alleged threatening of the accused.
41. The accused at the stage of his defence evidence again improvised his version and
stated that the complainant also had the cheques of the brother of the accused, namely
Aditya Sharma, and he had also threatened to misuse the same. However, these cheques
NISHTHA
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 18 of 25 MEHTANI
Digitally signed
by NISHTHA
MEHTANI
never found any mention in the notice Ex. CW-1/B, sent by the father of the accused to
the complainant , nor in the reply to the legal demand notice Ex. CW-1/H, and not even
in the plea of defence that was taken by the accused , at the time of the framing of the
notice under section 251 Crpc. No instance or explanation has been given by the accused
as to how the cheques of his brother were misused by the complainant and the same
appears to be a mere afterthought. Even when the brother of the accused entered the
witness box and deposed as DW-3, he himself did not make a slight mention that some of
his cheques were misused by the complainant. Also the accused has not been able to
establish any nexus between the alleged misuse of the cheques of the accused by the
associates of the complainant and the current transaction of loan with the complainant.
During the cross examination of the complainant, the suggestion of the accused to the
complainant that he had also misused the checque of one Rambir Sehrawat and extorted
money from him does not lend any support to the accused being unrelated to the facts of
the current transaction. Even otherwise the above named person or any other person on
whom the complainant allegedly committed extortion, was never examined by the accused
and this appears to be only a bald averment.
42. Moving on, in order to show that the complainant was charging interest from the
accused and was also coercing him, the Ld.Counsel for the accused confronted the
complainant with the audio recording Ex.CW-1/D1. The Complainant admitted that the
conversation was between him and the accused and stated that the interest talked about by
him in the conversation pertained to another loan which was facilitated by the
complainant for the brother of the accused through one of his friends namely Vicky
Garg. He was further confronted with Audio recording Ex. CW-1/D2, and he again
admitted his voice and stated that both the amounts in the voice recording pertained only
to the commiittee. No further question Or suggestion was put to the complainant to
dispute the same and it is trite law that the unchallenged part of the testimony of the
NISHTHA
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 19 of 25 MEHTANI
Digitally
signed by
NISHTHA
MEHTANI
witness is to be taken as admitted by the opposite party. Reliance in this regard is placed
on Lakshmi Bai Through L.R’s and another vs. Bhagwant buva through L.R’s3
43. Further to show that the complainant had threatened the accused and was also
charging interest from him, the Accused had confronted the complainant with the audio
recording Mark Y , however no question or suggestion with respect to the alleged
threatening or the interest charged , was put to the complainant and only a suggestion
with respect to the misuse of the cheque was put to the complainant which was denied by
him. It is only at the time of final arguments, it was stated by the Ld.Counsel for the
accused that the audio recording mark Y showed the attempt on the part of the
complainant to extort the interest amount from the accused. The audio recording rather
corroborates the version of the complainant that he had sold one of his properties and
had given a loan from the sale proceeds of the same ,which was not being returned to
him due to which he was about to initiate legal proceedings against the persons who had
not returned his money. Even if it is presumed that an interest was charged by the
complainant, the accused has not been successful in rebutting the presumption in favour
of the complainant and in showing that no legal debt/ liability existed against him and in
favour of the complainant as on the date of the presentation of the cheque in question.
44. The filing of the police complaint Ex. DW-2/1, by the father of the accused appears to
be a mere cover, in order to evade the liability of his son towards the complainant. The
father of the complainant i.e.DW-2 himself admitted that both his sons had several
financial transactions with multiple people and the brother of the complainant, who
deposed as DW- 3, also admitted that he and his brother had taken loans from various
people without knowledge of their father and various cases had been filed against them.
Further during his cross examination held on 11.08.2023, the accused stated that the
complainant had threatened him over a call in March 2020, but he did not file any
complaint against him. The consequent filing of the complaint by the father of the accused
3
[2013 SCC Online SC101]
NISHTHA
MEHTANI
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 20 of 25
Digitally signed
by NISHTHA
MEHTANI
against the complainant in August 2020, after a lapse of 5 months, clearly seems to be an
afterthought. The accused also admitted in his cross examination that on 19.10.2020, he
had told the complainant that he would repay the loan amount within 2 days. This is in
contradiction to his stand taken at previous stages of the trial that he had already paid the
entire amount to the complainant along with the interest. It also further confirms that only
in order to evade the liability of his son, the father of the accused further sent notice dated
24.10.2020 to the complainant. In view of the above discussion, the story of the
complainant gains credibility and shows that the version of the accused is filled with
infirmities.
45. Moving further, the 2 witnesses examined on behalf of the accused are not reliable
witnesses as even their testimonies failed to prove the defence of the accused which has
even otherwise remained quite inconsistent. These witnesses being interested witness, the
possibility of them being tutored cannot be ignored. Even otherwise, the testimony of
DW-3 is contradictory to that of the accused and he has categorically denied having
invested any money in the chit fund committee of the complainant along with his brother
and father. DW -3 also did not in any way support the defence of the accused and stated
that he had no knowledge if the amount that was given by him to the complainant on the
behalf of his brother was towards the payment of the loan. DW-2 also could not give
satisfactory answers when he was asked as to the total money that he had given to his
sons for handing over to the complainant. Thus the testimony of these witnesses lend no
support to the version attempted to be set up by the accused.
46. Another argument raised by the council for the accused was that the complainant has
not brought on record any proof of payment by which the loan amount was given to the
accused and the same has also been admitted by him in his cross examination that no
acknowledgement in writing was ever taken from the accused. The relations between the
parties are admitted and the fact that the accused used to regularly visit the complainant
NISHTHA
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 21 of 25 MEHTANI
Digitally signed
by NISHTHA
MEHTANI
for paying the committee amount has also been admitted. In these circumstances it is not
an odd scenario that no document was executed and no acknowledgement in writing was
given evidencing the loan transaction. In a recent judgement, the honourable Delhi High
Court held that in cases involving friendly loans, the absence of documentary evidence is
not, by itself, a sufficient ground for acquittal of the accused, particularly once a
presumption has arisen in favour of the complainant and the accused has failed to
substantiate his defence. Reliance in this regard is placed upon Amit Jain versus Sanjeev
Kumar Singh and another4
47. Qua the defence taken by the accused that the cheques in question were given as
security cheque to the complainant , it is pertinent to note that even if the same is
accepted, merely stating that the cheque in question was given as a security, does not help
the accused. Reliance in this regard is placed by this court on the judgments of Hon’ble
Supreme Court of India in Sampelly Satyanarayana Rao Vs. Indian Renewable Energy
Development Agency Ltd., (2016) 10 SCC 458, Sripati Singh Vs. State of Jharkhand &
Anr., 2021 SCC OnLine SC 1002 and Sunil Todi Vs. State of Gujarat & Anr., 2021 SCC
OnLine SC1174 wherein the Hon’ble Apex Court has held that merely because a cheque
has been given for security purposes does not mean that there is no legally enforceable
debt or liability in favour of the complainant, however, it does mean that the court has to
see whether there exists legally enforceable debt or liability as on the date mentioned on
the cheque or whether a legally enforceable debt or liability has arisen at the time of
presentation of the cheque. It has been held by the Hon’ble Court that the accused would
very much be liable under Section138 NI Act for issuance of a security cheque as well, if
on the date of the presentation of such cheque there has not been a prior discharge of
debt, or if the cheque has not been given towards advance payment, the goods in respect
of which have not been received, or if there has been change in circumstances which
precludes the complainant from depositing the cheque with the bank.
NISHTHA
4
. CRL. A. 1248/2019, decided on 16.08.2024. MEHTANI
Digitally
signed by
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 22 of 25 NISHTHA
MEHTANI
48. Thus, the legal position that emerges is that simply pleading the cheque in question to
have been given as a security cheque shall not in itself be sufficient to discharge the
burden caste upon the accused by law. The accused must also further establish that there
was no liability of the accused on the date when the cheque was presented for
encashment.
49. Mere denial of the case of the Complainant with oral averments, supported by no
documents or evidence, leave alone, cogent one is not going to assume any evidentiary
value. It is a trite law that a bare denial by the Accused in his notice of accusation and in
his examination under Sec.313 Cr.P.C read with Sec.281 Cr.P.C would not assume the
character of defence evidence as held in V.S Yadav v. Reena5 . The Accused has to prove
that there was no debt or liability towards the complainant, mere denial is not sufficient.
50. When considering these points as outlined, the evidence presented on behalf of the
Complainant gains credibility and instils confidence in the Court regarding the material
aspects of the Complaint. The narrative of the Complainant remains consistent and
coherent, in stark contrast to the inconsistent and contradictory accounts provided by the
Accused.
51. In conclusion, rather than substantiating the defence put forward by the accused,
the evidence and testimony presented have not even succeeded in undermining the case of
the Complainant or casting any reasonable doubt upon it. The Accused’s admission of his
signature on the cheques is pivotal, and when combined with the presumption raised
under Sections 118 and 139 of the Negotiable Instruments Act, all the necessary elements
of Section 138 of the same Act have been adequately established by the case of the
Complainant. The defence of the accused was primarily based on the assertion that no
legally enforceable liability existed on the date when the cheques in question were
presented, arguing that the cheques have been misused. However, the Accused has failed
to meet the burden of proof, failing to provide convincing evidence that tilts the balance
5
CRL. A. No. 1136 Of 2010.
NISHTHA
MEHTANI
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 23 of 25
Digitally
signed by
NISHTHA
MEHTANI
of probabilities in his favour. Consequently, the presumption raised against the accused
remains unchallenged and stands firm.
52. The culmination of the above analysis leads to the conclusion that all the essential
elements required under Section 138 of the Negotiable Instruments Act are satisfactorily
met with respect to the accused. The case of the Complainant stands on a firm foundation,
while the defence of the accused is riddled with inconsistencies and lacks persuasive
evidence, failing to create any reasonable doubt in the version put forth by the
Complainant.
53. In the opinion of court, consistency in the testimony of the Complainant especially
regarding material transaction aspects, remains unshaken despite cross-examination.
Witnesses for the defence lack credibility, failing to provide crucial details or
documentary evidence to support their claims. The testimonies of defence witnesses,
rather than reinforcing, erode the credibility of the Accused’s narrative. An overall
assessment of the record reveals contradictions and infirmities in the defence of the
accused, casting doubt on its credibility. The evolving narrative of the accused under
cross-examination, introducing new elements without prior indication, undermines the
trustworthiness of his defence. Discrepancies in the statements of the accused regarding
the issuance of the cheque further weaken his position.
54. When analysed comprehensively, the evidence led by the Complainant emerges as
more credible and consistent, leading to the conclusion that the all legal requirements are
met, and the defence of the accused lacks substantiation.
FINAL ORDER
55. In view of the above-discussion, considering all the facts and circumstances,
material/ evidence on record, as all the ingredients of the offence have been cumulatively
satisfied against the Accused, the Accused, Ajay Sharma S/o Sh Vijay Sharma is
hereby convicted of the offence u/s 138 of the Negotiable Instruments Act, 1881.
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 24 of 25 Digitally
NISHTHA signed by
MEHTANI NISHTHA
MEHTANI
56. This judgment contains 25 signed pages.
57. Announced in open court on 14.05.2025 in the presence of the Accused.
58. Copy of this judgment be given to the convict free of cost as per rules.
59. Convict be now heard on the quantum of sentence.
Digitally
NISHTHA signed by
MEHTANI NISHTHA
MEHTANI
Announced in open (Nishtha Mehtani)
Court on 14.05.2025 JMFC(NI Act),
(Digital Court- 03)/PHC/ND
CC No. 322/2020 Om Prakash Sharma Vs. Ajay Sharma 25 of 25