[ad_1]
Delhi District Court
Sanjay Gupta vs Shivam Jindal on 25 July, 2025
IN THE COURT OF
ADDITIONAL SESSIONS JUDGE (FTC)
SOUTH-WEST DISTRICT, NEW DELHI
PRESIDED BY : Mr. SHARAD GUPTA
CA No. 2132/2024
CNR No. DLSW010089482024
IN THE MATTER OF
Sanjay Gupta
S/o Late Sh. Krishan Lal Gupta,
R/o H.No. 137, Pocket C-7,
Sector-7, Rohini, Delhi-110085.
Presently At:
R/o H.No.297-298, Pocket B-7,
Sector-7, Rohini, Delhi-110085.
.......APPELLANT
VERSUS
Shivam Jindal
S/o Sh. Raj Kumar,
R/o H.No.82, FF, Pocket D-11,
Sector-7, Rohini, Delhi-110085.
......RESPONDENT
Date of institution : 19.09.2024
Date on which reserving : 10.07.2025
Date of pronouncement : 25.07.2025
JUDGMENT
1. The present appeal has been preferred against the
judgment dated 31.07.2024 and the order on sentence dated
SHARAD
GUPTA 24.08.2024, both passed by the court of Ms. Aakanksha, Ld.
Digitally signed
by SHARAD Sanjay Gupta vs. Shivam Jindal
GUPTA
Date: 2025.07.25
CA No. 2132/2024 Page 1 of 21
16:07:11 +0530
JMFC (NI Act-07), South West, Dwarka, Delhi, whereby the
appellant had been convicted for the offence punishable U/s 138
NI Act and sentenced to undergo SI for three months and to pay
fine of Rs.6,00,000/-, which shall be paid to the complainant as
compensation, IDSI three months.
2. On notice of the appeal having been issued to the
respondent Mr. Shivam Jindal, he entered appearance and
contested the appeal.
3. For the sake of clarity, the parties are being referred
to hereinafter with their respective nomenclature before the Ld.
Trial Court.
4. It has been argued on behalf of the appellant that the
judgment passed by the Ld. Trial Court is legally unsustainable,
arbitrary, and contrary to the settled principles of law. It is added
that while passing the impugned order, Ld. Trial Court failed to
properly evaluate the evidence. That the Ld. Trial Court failed to
appreciate that the complainant failed to establish the existence
of legal debt or liability or any legally recoverable debt. That the
Ld. Trial Court failed to appreciate that the complainant has not
shown the loan amount in his ITR. That the complainant was
running a committee of which, the accused was a member and
Rs.4,00,000/- was not the amount of friendly loan but was the
amount of the committee. That the Ld. Trial Court failed to
appreciate that the appellant/accused has already repaid the
committee amount in cash to the complainant. That there were no
friendly relations between the complainant and the accused and
the complainant failed to tell the names of daughters or wife of
SHARAD
GUPTA
Sanjay Gupta vs. Shivam Jindal
Digitally signed by
SHARAD GUPTA
CA No. 2132/2024 Page 2 of 21
Date: 2025.07.25
16:07:20 +0530
the accused and failed to tell the month or year when he had
visited the house of the accused. That the Ld. Trial court failed to
consider that the complainant is a habitual litigant and has filed
various other litigations against other persons also. That the
complainant misused the blank signed cheque given as security
by the appellant. It is accordingly, prayed that the impugned
judgment and order on sentence be set aside.
5. Ld. Counsel for the complainant has vehemently
opposed the contentions of the Ld. Counsel for the accused. That
the amount was paid to the accused in two installments i.e.
Rs.3,00,000/- through RTGS on 10.08.2015 and Rs.1,00,000/-
through NEFT on 17.08.2015 and the complainant duly proved
the same by his statement of account. That the defence of
accused was of committee, however, he failed to produce on
record anything to show that in fact a committee was being run
other than his bald assertions. That the accused even failed to
prove on record any complaint made by him against the
complainant and also failed to bring any committee member in
his defence. That the Ld. Trial Court rightly evaluated the
evidence on record. It is urged that the Ld. Trial Court rightly
convicted the accused for offence U/s 138 NI Act vide the
impugned judgment which is a detailed and well reasoned
judgment. That all the contentions of the accused have been dealt
with by the Ld. Trial Court in the impugned judgment. That the
accused admitted his signatures on the cheque in question and the
Ld. Trial Court rightly drew the presumptions U/s 118 A and 139
NI Act against him. It is stated the the complainant proved his
SHARAD case before the Ld. Trial Court against the accused, whereas the
GUPTA
Digitally signed by Sanjay Gupta vs. Shivam Jindal
SHARAD GUPTA CA No. 2132/2024 Page 3 of 21
Date: 2025.07.25
16:07:29 +0530
accused failed to prove his defence before the Ld. Trial Court.
6. Before proceeding further, it would be appropriate
here to refer to the facts of the present case culminating in the
present adjudication. Briefly stated it is the case of the
complainant that the accused being well known to him
approached him for a friendly loan of Rs.4,00,000/- in the first
week of August, 2015 and the complainant transferred
Rs.3,00,000/- through RTGS into the account of the accused on
10.08.2025 and Rs.1,00,000/- through NEFT on 17.08.2015. That
in discharge of his legal liability towards the loan amount, the
accused handed over cheques bearing no. 000265 dated
02.09.2016 for a sum of Rs.1,00,000/- and 000261 dated
05.09.2016 for a sum of Rs.3,00,000/- both drawn on Kotak
Mahindra Bank Limited, Defence Colony Branch, New Delhi
which when presented for encashment were returned dishonored
vide return memos dated 12.09.2016 with the remarks ”Funds
Insufficient”. That despite issue of legal notice dated 16.09.2016
to the accused, the accused failed to pay the cheque amount
within the statutory period, consequent whereto the complainant
filed a complaint U/s 138 NI Act.
7. The complainant examined himself in pre-
summoning evidence and proved on record documents i.e.
Affidavit Ex.CW1/A and documents Ex.CW1/1 to Ex.CW1/9.
The accused was summoned to face trial. Notice of accusation
was served upon the accused on 13.11.2018, in which the
accused admitted that the cheque in question bore his signatures
but stated that he did not fill in the particulars. He stated that the
SHARAD
GUPTA
Sanjay Gupta vs. Shivam Jindal
Digitally signed by
SHARAD GUPTA CA No. 2132/2024 Page 4 of 21
Date: 2025.07.25
16:07:39 +0530
cheques in question were given as security as the complainant
was running a committee which was for a sum of Rs.4,00,000/-.
He further stated that he had not taken the loan of Rs.4,00,000/-
and had not received the legal demand notice. The accused
examined cross-examined the complainant. Statement of accused
U/s 313 Cr.P.C. was recorded in which he stated that the amount
of Rs.4,00,000/- in two installments was disbursed into his
account but it was not amount of loan but of committee. He
admitted his signatures on the cheques in question but stated that
they were given as blank signed cheques. That he was not aware
about the dishonour of the cheques and did not receive any legal
notice although the address mentioned on the legal notice was
correct. He stated that the complainant had misused his cheques
and wanted to extort money from him. That he had nothing to
pay to the complainant. He examined himself in his own defence
and closed the defence evidence. Vide the impugned judgment,
the accused was convicted for offence U/s 138 NI Act and was
sentenced separately.
8. The record has been carefully and thoroughly
perused. The respective submissions of learned counsel for
appellant and learned counsel for the respondent have been duly
considered.
9. At the outset, it has been observed that the accused
in the present case had admitted his signatures on the cheque in
SHARAD question in reply to notice of accusation as well as in his
GUPTA statement U/s 313 Cr.P.C. as also in his statement as DW-1. His
contention throughout the trial was that the cheques in question
Digitally signed by
SHARAD GUPTA
Date: 2025.07.25
16:07:48 +0530
Sanjay Gupta vs. Shivam Jindal
CA No. 2132/2024 Page 5 of 21
were handed over as blank signed security cheques towards
committee amount. In these circumstances, the statutory
presumption U/s 118 and 139 NI Act was rightly drawn against
the accused. It would be appropriate here to refer to the settled
preposition of law. In Basalingappa vs. Mudibasappa, (2019) 5
SCC 418, it was held as under :-
23. We having noticed the ratio laid down by this
Court in above cases on Sections 118(a) and 139, we
now summarise the principles enumerated by this
Court in following manner:-
(i) Once the execution of cheque is admitted Section
139 of the Act mandates a presumption that the
cheque was for the discharge of any debt or other
liability.
(ii) The presumption under Section 139 is a
rebuttable presumption and the onus is on the accused
to raise the probable defence. The standard of proof
for rebutting the presumption is that of preponderance
of probabilities.
(iii) To rebut the presumption, it is open for the
accused to rely on evidence led by him or accused
can also rely on the materials submitted by the
complainant in order to raise a probable defence.
Inference of preponderance of probabilities can be
drawn not only from the materials brought on record
by the parties but also by reference to the
circumstances upon which they rely.
(iv) That it is not necessary for the accused to come
in the witness box in support of his defence, Section
139 imposed an evidentiary burden and not a
persuasive burden.
(v) It is not necessary for the accused to come in the
witness box to support his defence.
24. Applying the preposition of law as noted above,
in facts of the present case, it is clear that signature
on cheque having been admitted, a presumption shall
be raised under Section 139 that cheque was issued in
discharge of debt or liability. The question to be
looked into is as to whether any probable defence was
raised by the accused. …”
10. Further in M/S Kumar Exports vs M/S Sharma
SHARAD Carpets, AIR 2009 SUPREME COURT 1518, it was held as
GUPTA
Sanjay Gupta vs. Shivam Jindal
Digitally signed by
SHARAD GUPTA CA No. 2132/2024 Page 6 of 21
Date: 2025.07.25
16:08:01 +0530
under :-
9. In order to determine the question whether
offence punishable under Section 138 of the Act is
made out against the appellant, it will be necessary to
examine the scope and ambit of presumptions to be
raised as envisaged by the provisions of Sections 118
and 139 of the Act. In a suit to enforce a simple
contract, the plaintiff has to aver in his pleading that
it was made for good consideration and must
substantiate it by evidence. But to this rule, the
negotiable instruments are an exception. In a
significant departure from the general rule applicable
to contracts, Section 118 of the Act provides certain
presumptions to be raised. This Section lays down
some special rules of evidence relating to
presumptions. The reason for these presumptions is
that, negotiable instrument passes from hand to hand
on endorsement and it would make trading very
difficult and negotiability of the instrument
impossible, unless certain presumptions are made.
The presumption, therefore, is a matter of principle to
facilitate negotiability as well as trade. Section 118 of
the Act provides presumptions to be raised until the
contrary is proved (i) as to consideration, (ii) as to
date of instrument, (iii) as to time of acceptance, (iv)
as to time of transfer, (v) as to order of indorsements,
(vi) as to appropriate stamp and (vii) as to holder
being a holder in due course. Section 139 of the Act
provides that it shall be presumed, unless the contrary
is proved, that the holder of a cheque received the
cheque of the nature referred to in Section 138 for the
discharge, in whole or in part, of any debt or other
liability. Presumptions are devices by use of which
the courts are enabled and entitled to pronounce on an
issue notwithstanding that there is no evidence or
insufficient evidence. Under the Indian Evidence Act
all presumptions must come under one or the other
class of the three classes mentioned in the Act,
namely, (1) “may presume” (rebuttable), (2) “shall
presume” (rebuttable) and (3) “conclusive
presumptions” (irrebuttable). The term `presumption’
is used to designate an inference, affirmative or
disaffirmative of the existence a fact, conveniently
called the “presumed fact” drawn by a judicial
tribunal, by a process of probable reasoning from
some matter of fact, either judicially noticed or
admitted or established by legal evidence to the
satisfaction of the tribunal. Presumption literally
SHARAD means “taking as true without examination or proof”.
GUPTA
Sanjay Gupta vs. Shivam Jindal
Digitally signed by
SHARAD GUPTA CA No. 2132/2024 Page 7 of 21
Date: 2025.07.25
16:08:14 +0530
Section 4 of the Evidence Act inter-alia defines the
words `may presume’ and `shall presume as follows: –
“(a) `may presume’ – Whenever it is provided by this
Act that the Court may presume a fact, it may either
regard such fact as proved, unless and until it is
disproved or may call for proof of it. (b) `shall
presume’ – Whenever it is directed by this Act that the
Court shall presume a fact, it shall regard such fact as
proved, unless and until it is disproved.” In the
former case the Court has an option to raise the
presumption or not, but in the latter case, the Court
must necessarily raise the presumption. If in a case
the Court has an option to raise the presumption and
raises the presumption, the distinction between the
two categories of presumptions ceases and the fact is
presumed, unless and until it is disproved.
10. Section 118 of the Act inter alia directs that it
shall be presumed, until the contrary is proved, that
every negotiable instrument was made or drawn for
consideration. Section 139 of the Act stipulates that
unless the contrary is proved, it shall be presumed,
that the holder of the cheque received the cheque, for
the discharge of, whole or part of any debt or liability.
Applying the definition of the word `proved’ in
Section 3 of the Evidence Act to the provisions of
Sections 118 and 139 of the Act, it becomes evident
that in a trial under Section 138 of the Act a
presumption will have to be made that every
negotiable instrument was made or drawn for
consideration and that it was executed for discharge
of debt or liability once the execution of negotiable
instrument is either proved or admitted. As soon as
the complainant discharges the burden to prove that
the instrument, say a note, was executed by the
accused, the rules of presumptions under Sections
118 and 139 of the Act help him shift the burden on
the accused. The presumptions will live, exist and
survive and shall end only when the contrary is
proved by the accused, that is, the cheque was not
issued for consideration and in discharge of any debt
or liability. A presumption is not in itself evidence,
but only makes a prima facie case for a party for
whose benefit it exists.
11. The use of the phrase “until the contrary is
proved” in Section 118 of the Act and use of the
words “unless the contrary is proved” in Section 139
SHARAD of the Act read with definitions of “may presume”
GUPTA
Sanjay Gupta vs. Shivam Jindal
Digitally signed by
SHARAD GUPTA CA No. 2132/2024 Page 8 of 21
Date: 2025.07.25
16:08:24 +0530
and “shall presume” as given in Section 4 of the
Evidence Act, makes it at once clear that
presumptions to be raised under both the provisions
are rebuttable. When a presumption is rebuttable, it
only points out that the party on whom lies the duty
of going forward with evidence, on the fact presumed
and when that party has produced evidence fairly and
reasonably tending to show that the real fact is not as
presumed, the purpose of the presumption is over.
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
Digitally
signed by
SHARAD
SHARAD GUPTA
GUPTA Date: Sanjay Gupta vs. Shivam Jindal
2025.07.25
16:08:31 CA No. 2132/2024 Page 9 of 21
+0530
the Act. The accused has also an option to prove the
non-existence of consideration and debt or liability
either by letting in evidence or in some clear and
exceptional cases, from the case set out by the
complainant, that is, the averments in the complaint,
the case set out in the statutory notice and evidence
adduced by the complainant during the trial. Once
such rebuttal evidence is adduced and accepted by the
court, having regard to all the circumstances of the
case and the preponderance of probabilities, the
evidential burden shifts back to the complainant and,
thereafter, the presumptions under Sections 118 and
139 of the Act will not again come to the
complainant’s rescue.”
11. Thus, once the execution of cheques is admitted by
the accused, statutory presumptions U/s 118 and Section 139 NI
Act are to be drawn against him. Section 118 of the Act inter alia
directs that it shall be presumed, until the contrary is proved, that
every negotiable instrument was made or drawn for
consideration. Section 139 of the Act stipulates that unless the
contrary is proved, it shall be presumed, that the holder of the
cheque received the cheque, for the discharge of, whole or part of
any debt or liability. Once the presumptions are drawn, a reverse
onus is placed on the accused and it is for the accused to rebut
the same by either cross-examining the complainant or by
leading defence evidence or by pointing out inherent
improbabilities in the case of the complainant. Further, mere
denial by the accused is not sufficient to rebut the presumption.
12. In the facts of the present case, the accused having
admitted his signatures on the cheque in question at every stage
of trial, the Ld. Trial Court rightly relied upon the
pronouncements in Rangappa v. Sri Mohan, (2010)11 SCC 441;
SHARAD Hiten P. Dalal Vs. Bratindranath Banerjee, 2001 (6) SCC 16;
GUPTA
Digitally signed Sanjay Gupta vs. Shivam Jindal
by SHARAD
GUPTA CA No. 2132/2024 Page 10 of 21
Date: 2025.07.25
16:08:39 +0530
Bharat Barrel and Drum Manufacturing Company v. Amin Chand
Pyarelal, (1999) 3 SCC 35; Basalingappa v. Mudibasappa, AIR
2019 SC 1983; and Kalamani Tex and another vs. P.
Balashubramanian, 2021 SCC OnLine SC 75 and rightly drew
the statutory presumptions against the accused.
13. Furthermore, as per the complainant, the amount of
Rs.4,00,000/- was disbursed into the account of the accused i.e.
Rs.3,00,000/- through RTGS on 10.08.2025 and Rs.1,00,000/-
through NEFT on 17.08.2015. The complainant proved the said
transfers by his passbook Ex.CW1/1. Furthermore, the accused in
his statement U/s 313 Cr.P.C. stated that the said amount was not
towards loan but was amount of committee which was disbursed
by the complainant into his account. Thus in his statement U/s
313 Cr.P.C., the accused admitted receipt of Rs.4,00,000/- in his
bank account which corroborates the passbook of the
complainant showing transfer of Rs.3,00,000/- and Rs.1,00,000/-
respectively to the accused. Furthermore, even in his cross-
examination as DW-1 dated 10.05.2024, the accused admitted
that a sum of Rs.3,00,000/- was transferred to his account on
10.08.2015, while Rs.1,00,000/- was transferred on 17.08.2015.
He volunteered that the said amount was towards the committee
but he again said that the said amount was not transferred to his
account. The accused also failed to produce his statement of
account in support of his contention that no amount of
Rs.4,00,000/- was received by him. In the above circumstances,
the argument of the accused that the complainant failed to bring
SHARAD on record any loan agreement is liable to be rejected.
GUPTA
Digitally signed by
SHARAD GUPTA
Date: 2025.07.25 Sanjay Gupta vs. Shivam Jindal
16:08:47 +0530 CA No. 2132/2024 Page 11 of 21
14. The contention of the accused is that there were no
friendly relations between him and the complainant and the
complainant failed to tell the names of his daughters and wife or
the dates when he had visited the house of the accused. In this
context, the contention of the accused in his statement U/s 313
Cr.P.C. was that he knew the complainant. Furthermore, even
considering that the defence of the accused which he has been
unable to prove was that the complainant used to run a
committee, there is no serious dispute that the parties were in fact
not known to each other. In these circumstances, merely because
the complainant failed to tell the names of daughters and wife of
the accused or the dates when he visited the house of the accused
would not imply that the parties were not known to each other.
This argument of the accused is thus liable to be rejected.
15. The defence of the accused was two fold. The first
contention of the accused was that the complainant was running a
committee. Further contention was that he had repaid the amount
of committee in cash. It is well settled that bald assertions of the
accused are insufficient to rebut the statutory presumptions
against him. The contention of the accused that the complainant
was running a committee was rightly rejected by the Ld. Trial
Court. It is observed that the accused failed to bring on record
anything in black and white to show that the complainant was in
fact running a committee. The accused also failed to examine any
member of the committee to establish that the complainant was
in fact running a committee. The contention of the accused that
SHARAD the complainant had filed other complaint cases against other
GUPTA persons by itself is insufficient to establish that the complainant
Digitally signed by
SHARAD GUPTA Sanjay Gupta vs. Shivam Jindal
Date: 2025.07.25 CA No. 2132/2024 Page 12 of 21
16:08:57 +0530
was in fact running a committee. This is especially moreso when
the complainant had disclosed the names of Mr. Devender Kumar
and Ms. Madhu Dwivedi as the other persons against whom he
had filed complaints U/s 138 NI Act but the accused failed to
summon or examine any of the said persons in his defence. The
Ld. Trial Court also rightly observed that the cheques in question
were return unpaid with the remarks ‘insufficient funds’ and not
for stopping of payment of the cheques by the accused.
Furthermore, Ld. Trial Court also rightly observed that although
the accused took the defence that he had filed a complaint
regarding misuse of cheques at PS Rohini, however, he failed to
prove the said complaint on record or even to produce a copy of
the same on record. Thus, the Ld. Trial Court rightly disbelieved
the defence of the accused that the complainant was running a
committee. As regards the defence that the accused had repaid
the entire amount in cash, the accused failed to bring on record
anything to support his assertions in this regard. Thus, the
accused even failed to establish that he had repaid the entire
amount.
16. The contention of the accused is also that he did not
receive the legal demand notice. The legal notice was issued on
the address of the accused i.e. House no. 137, Pocket C-7, Sector-
7, Rohini, Delhi. The same address was given by the accused in
his personal bond as well as in his surety bond furnished before
the Ld. Trial Court. However, the accused mentioned his address
as of First Floor in his surety bond. The accused admitted that the
address mentioned on the legal notice was correct in his
SHARAD
statement U/s 313 Cr.P.C. as also in his statement as DW-1.
GUPTA
Digitally signed by
SHARAD GUPTA Sanjay Gupta vs. Shivam Jindal
Date: 2025.07.25 CA No. 2132/2024 Page 13 of 21
16:09:07 +0530
However, he also stated during his cross-examination that he was
residing on the first floor and also that the whole building of the
address mentioned in the legal notice belongs to his family and is
occupied by his family. Thus, legal notice was sent on the correct
address of the accused. It is well settled that legal notice
addressed on the correct address of the accused is deemed to be
duly served upon him. Furthermore, it is also well settled that an
accused who had not received the legal notice cannot be claim
benefit of defence of non-receipt of the same as once summons
are served upon him, it is his duty to make payment of the
cheque amount within 15 days of receiving summons from the
court. Reliance in this regard can be placed on the judgment of
Hon’ble Supreme Court of India, in case of C.C. Alavi Haji vs.
Palapetty Muhammed, (2007) 6 SCC 555, wherein it has been
held as follows:
” It is also to be borne in mind that the requirement of
giving of notice is a clear departure from the rule of
Criminal Law, where there is no stipulation of giving
of a notice before filing a complaint. 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 of the Act, cannot obviously contend that
there was no proper service of notice as required 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. In our view, any other
interpretation of the proviso would defeat the very
object of the legislation. As observed in Bhaskarans
SHARAD case (supra), if the giving of notice in the context of
Clause (b) of the proviso was the same as the receipt
GUPTA
Digitally signed by Sanjay Gupta vs. Shivam Jindal
SHARAD GUPTA
Date: 2025.07.25
CA No. 2132/2024 Page 14 of 21
16:09:15 +0530
of notice a trickster cheque drawer would get the
premium to avoid receiving the notice by adopting
different strategies and escape from legal
consequences of Section 138 of the Act.
17. Further contention of the accused is that the cheque
in question was issued as a security cheque. It is, however, well
settled in the case of I.C.D.S. Ltd. v. Beena Shabbir & Anr.
reported in AIR 2002 SC 3014 , by the Hon’ble Supreme Court as
follows.
“…..The commencement of the Section stands with
the words “where any cheque”. The above noted three
words are of extreme significance, in particular, by
reason of the user of the word “any” the first three
words suggest that in fact for whatever reason if a
cheque is drawn on an account maintained by him
with a banker in favour of another person for the
discharge of any debt or other liability, the
highlighted words if read with the first three words at
the commencement of Section 138, leave no manner
of doubt that for whatever reason it may be, the
liability under this provision cannot be avoided in the
event the same stands returned by the banker unpaid.
The legislature has been careful enough to record not
only discharge in whole or in part of any debt but the
same includes other liability as well….”
18. Thus, even if the dishonoured cheque in question
was issued as a security cheque, it will still come under the ambit
of Section 138 of the Act. The only condition is that the cheque
must be backed by some form of legally enforceable debt or
liability towards the holder. In the facts of the case, the Ld. Trial
Court rightly drew the presumption U/s 118 and 139 NI Act
against the accused and the accused has not been able to rebut the
same. Thus, the mere argument that the cheque in question was
Digitally issued as a security cheque is of no help to the accused. The
signed by
SHARAD
SHARAD GUPTA
GUPTA Date:
2025.07.25
16:09:24 Sanjay Gupta vs. Shivam Jindal
+0530
CA No. 2132/2024 Page 15 of 21
Hon’ble Supreme Court in Sripati Singh (since deceased)
through Gaurav Singh vs State of Jharkhand & Anr, 2021 SCC
Online SC 1002, wherein the question was whether an offence
under Section 138 NI Act is not made out where the dishonour is
of the cheque issued by way of “security” and not towards
discharge of any debt or liability held as follows :-
“16. A cheque issued as security pursuant
to a financial transaction cannot be
considered as a worthless piece of paper
under every circumstance. ‘Security’ in its
true sense is the state of being safe and the
security given for a loan is something
given as a pledge of payment. It is given,
deposited or pledged to make certain the
fulfilment of an obligation to which the
parties to the transaction are bound. If in a
transaction, a loan is advanced and the
borrower agrees to repay the amount in a
specified timeframe and issues a cheque as
security to secure such repayment; if the
loan amount is not repaid in any other form
before the due date or if there is no other
understanding or agreement between the
parties to defer the payment of amount, the
cheque which is issued as security would
mature for presentation and the drawee of
the cheque would be entitled to present the
same. On such presentation, if the same is
dishonoured, the consequences
contemplated under Section 138 and the
other provisions of N.I. Act would flow.
17. When a cheque is issued and is treated
as ‘security’ towards repayment of an
amount with a time period being stipulated
for repayment, all that it ensures is that
such cheque which is issued as ‘security’
cannot be presented prior to the loan or the
instalment maturing for repayment towards
SHARAD which such cheque is issued as security.
GUPTA Further, the borrower would have theDigitally signed
by SHARAD Sanjay Gupta vs. Shivam Jindal
GUPTA CA No. 2132/2024 Page 16 of 21
Date: 2025.07.25
16:09:33 +0530
option of repaying the loan amount or such
financial liability in any other form and in
that manner if the amount of loan due and
payable has been discharged within the
agreed period, the cheque issued as
security cannot thereafter be presented.
Therefore, the prior discharge of the loan
or there being an altered situation due to
which there would be understanding
between the parties is a sine qua non to not
present the cheque which was issued as
security. These are only the defences that
would be available to the drawer of the
cheque in a proceedings initiated under
Section 138 of the N.I. Act. Therefore,
there cannot be a hard and fast rule that a
cheque which is issued as security can
never be presented by the drawee of the
cheque. …”.
19. Thus, as can be noticed from above, the only
defences with respect to a cheque deposited as a security which is
available with the accused is either the prior discharge of the loan
or there being an altered situation due to which there would be
understanding between the parties. Further, when a cheque is
issued and is treated as ‘security’ towards repayment of an
amount with a time period being stipulated for repayment, all that
it ensures is that such cheque which is issued as ‘security’ cannot
be presented prior to the loan or the installment maturing for
repayment towards which such cheque is issued as security.
20. In the present matter there is no prior discharge of
the liability. The accused has not been able to establish any
repayment. Further, there also existed no altered situation due to
Digitally
signed by
SHARAD which there was an understanding between the parties. The
SHARAD GUPTA
GUPTA Date:
2025.07.25 accused failed to either allege or establish the existence of any
16:09:41
+0530Sanjay Gupta vs. Shivam Jindal
CA No. 2132/2024 Page 17 of 21
altered situation or understanding between the parties. Thus, the
defence of cheques in question being issued as a “security” also
does not comes to the aid of the accused and stands rejected.
21. Further contention of the accused is that the
complainant had misused his blank signed cheque which was
given as security. However, even if this argument of the accused
is taken at its face value even then the accused cannot avoid his
liability U/s 138 NI Act. Section 20 NI Act deals with incohate
documents and provides that where one person signs and delivers
to another a paper in accordance with law related to Negotiable
Instruments either wholly blank or incomplete, he gives prima
facie authority to holder to make or complete the same. In this
regard, it would be appropriate to refer to the ratio in Bir Singh
vs Mukesh Kumar, AIR 2019 SUPREME COURT 2446 , wherein
it was held as under :-
“37. A meaningful reading of the provisions of
the Negotiable Instruments Act including, in
particular, Sections 20, 87 and 139, makes it
amply clear that a person who signs a cheque and
makes it over to the payee remains liable unless
he adduces evidence to rebut the presumption that
the cheque had been issued for payment of a debt
or in discharge of a liability. It is immaterial that
the cheque may have been filled in by any person
other than the drawer, if the cheque is duly signed
by the drawer. If the cheque is otherwise valid, the
penal provisions of Section 138 would be
attracted.
38. If a signed blank cheque is voluntarily
presented to a payee, towards some payment, the
payee may fill up the amount and other
particulars. This in itself would not invalidate the
SHARAD cheque. The onus would still be on the accused to
prove that the cheque was not in discharge of a
GUPTA
Digitally signed by
SHARAD GUPTA Sanjay Gupta vs. Shivam Jindal
Date: 2025.07.25
16:09:51 +0530 CA No. 2132/2024 Page 18 of 21
debt or liability by adducing evidence.
39. It is not the case of the respondent-accused
that he either signed the cheque or parted with it
under any threat or coercion. Nor is it the case of
the respondent-accused that the unfilled signed
cheque had been stolen. The existence of a
fiduciary relationship between the payee of a
cheque and its drawer, would not disentitle the
payee to the benefit of the presumption under
Section 139 of the Negotiable Instruments Act, in
the absence of evidence of exercise of undue
influence or coercion. The second question is also
answered in the negative.
40. Even a blank cheque leaf, voluntarily
signed and handed over by the accused, which is
towards some payment, would attract presumption
under Section 139 of the Negotiable Instruments
Act, in the absence of any cogent evidence to
show that the cheque was not issued in discharge
of a debt.”
22. Further contention of the accused is that the loan
amount was never mentioned in the ITRs by the complainant and
the transaction is illegal. In this context, vide order dated
30.06.2015, passed by the Hon’ble Delhi High Court in Lekh Raj
Sharma vs Yash Pal Gupta, in Crl. L. P 567/2014, it was held as
under :-
21. 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. In this regard, reference
may be placed on the decisions of the Bombay
High Court in:
i) 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
SHARAD by him in his income tax returns. I do not think
GUPTA that every person who gives friendly loans does
Digitally signed by
SHARAD GUPTA Sanjay Gupta vs. Shivam Jindal
Date: 2025.07.25
16:10:00 +0530 CA No. 2132/2024 Page 19 of 21
in all cases show such loans in their income tax
returns more so if they are payable on demand
after short time. The learned acquitting J.M.F.C.
entirely lost sight of the several presumptions
which the law has enacted in favour of the
complainant.” (Emphasis Supplied)
ii) Mr. Krishna P. Morajkar vs. Mr. Joe Ferrao,
2013 CRIJ (NOC) 572 Bombay (Decided on
19.07.2013), wherein 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
SHARAD amounts becomes irrecoverable. At the cost of
GUPTA
Sanjay Gupta vs. Shivam Jindal
Digitally signed by
SHARAD GUPTA CA No. 2132/2024 Page 20 of 21
Date: 2025.07.25
16:10:10 +0530
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 have to be shown. Such
provision was not noticed by me and even the
learned Counsel for the respondent could not
show any such provision to me.” (Emphasis
Supplied)”
23. Thus, merely because the loan amount is not
mentioned in the ITR would not imply that offence U/s 138 NI
Act is not made out or that the transaction itself is illegal. The
arguments of the accused in this regard are thus liable to be
rejected.
24. In view of the aforesaid discussion, the impugned
judgment is found to be based upon fair appreciation of evidence
and deserves no intervention. I have also considered the
impugned order on sentence and do not find it be excessive or
unjustified. The present appeal is found to be without any merit
and is accordingly dismissed.
25. Copy of this judgment be sent along with the Trial
Court Record.
26. The appeal file be consigned to Record Room.
Announced in the open court
on: 25th July, 2025 (Sharad Gupta)
Additional Sessions Judge (FTC)
South-West District, Dwarka, N.D.
SHARAD
GUPTA
Digitally signed by
SHARAD GUPTA
Date: 2025.07.25
16:10:22 +0530
Sanjay Gupta vs. Shivam Jindal
CA No. 2132/2024 Page 21 of 21
[ad_2]
Source link