Delhi District Court
Sunita Gupta vs Manish Dutt Sharma on 24 May, 2025
IN THE COURT OF MS. SURBHI GUPTA ANAND,
METROPOLITAN MAGISTRATE, (NI ACT)-07
SOUTH-WEST DISTRICT, DWARKA COURTS, NEW
DELHI
Ct. Case No.35402/2019
CNR No. DLSW02- 049414-2019
Sunita Gupta .........Complainant
Through: Mr. Saksham Gupta, Advocate
Versus
Manish Dutt Sharma ..........Accused
Through: Mohd. Anas, Advocate
(1) Name of the Sunita Gupta
complainant
W/o Late Sh. Jai Kumar
Gupta
R/o RZF-371/6, Raj Nagar
Part-II, Palam Colony, New
Delhi-110077.
(2) Name of the accused Manish Dutt Sharma
S/o Sh. Brahm Sharma
R/o RZF-232, Gali no.4, Raj
Nagar-II, Palam Colony,
New Delhi-110077.
(3) Offence complained of Section 138 Negotiable
or proved Instruments Act, 1881
(4) Plea of accused Pleaded not guilty
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(5) Date of institution of 21.09.2019
case
(6) Date of conclusion of 09.04.2025
arguments
(7) Date of Final Order 24.05.2025
(8) Final Order CONVICTED/HELD
GUILTY
JUDGMENT
1. The complainant Sunita Gupta has instituted this
complaint u/s 138 Negotiable Instruments Act, 1881 (hereinafter
referred to as ‘NI Act‘) against accused Manish Dutt Sharma on
20.09.2019.
2. The factual matrix as can be culled out from the
complaint is that the mother of the accused Smt. Sarla and the
complainant were family friends and shared cordial relations. In the
month of July 2018, the accused along with his mother Smt. Sarla
and his father Sh. Brahm Sharma approached the complainant for a
loan of Rs.8,50,000/- for a period of one year for the purpose of
construction and renovation of their house. At joint request of the
accused and his parents, and considering the family relations, the
complainant advanced Rs.8,50,000/- to the accused and his parents
in the last week of July 2018 as friendly loan and in good faith, by
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arranging the money from compensation received by the
complainant upon the death of her husband under victim
compensation scheme and from friends and relative. At the same
time, accused handed over a post dated cheque bearing no.018752
dated 30.07.2019 for a sum of Rs.1,60,000/- drawn on Axis Bank,
Sector 7, Dwarka, New Delhi-110077 and the father of the accused
handed over a post dated cheque amounting to Rs.3,00,000/- to the
complainant, with the promise of their encashment upon
presentation. The accused and his parents also promised to pay
remaining amount of Rs.3,90,000/- to the complainant either by way
of cash or by bank transfer within the one year period. However,
only Rs.1,40,000/- has been paid back to the complainant till date.
When the complainant demanded the repayment of the remaining
amount, the accused asked him to present the aforestated cheques
for payment with the assurance that the same shall be honored on
their presentation. However, to the complainant’s dismay the said
cheque bearing no. 018752 amounting to Rs.1,60,000/- was
returned unpaid with remarks “Account blocked” vide return memo
dated 31.07.2019. The complainant then issued a legal demand
notice dated 21.08.2019 calling upon the accused to pay the cheque
amount within 15 days from the receipt thereof, but the accused
failed to make the payment, thus, constraining the complainant to
file this complaint u/s 138 Negotiable Instruments Act, 1881
(hereinafter referred to as ‘NI Act‘) seeking redress against the
dishonor of the cheque in question.
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3. With a view to establish a prima facie case in order to
enable the court to summon the accused, complainant led pre-
summoning evidence by way of affidavit Ex. CW-1/A. The
complainant relied upon following documentary evidence:
(a) Original cheque bearing no. 018752 dated 30.07.2019 for a sum
of Rs. 1,60,000/- drawn on Axis Bank, Sector 7, Dwarka, Delhi,
which is Ex. CW-1/1.
(b) Return memo dated 31.07.2019, which is Ex. CW-1/2.
(c) Office copy of legal notice dated 21.08.2019, which is Ex. CW-
1/3.
(d) Postal receipt and courier receipt both dated 22.08.2019, which
are Ex. CW-1/4 (colly).
(e) Tracking reports, which are Ex.CW1/5.
Complainant closed her pre-summoning evidence on 04.10.2019.
4. On the basis of above material and finding a prima
facie case made out against the accused, the accused was summoned
vide order dated 04.10.2019. Accused entered his first appearance,
through his counsel on 07.03.2020.
5. Notice u/s 251 Cr.P.C. was framed against accused on
20.07.2022 stating out to him the substance of accusation, to which
he pleaded not guilty and claimed trial. His defence was recorded at
the stage of framing of notice in compliance of directions passed by
Hon’ble High Court of Delhi in Rajesh Aggarwal v. State 171
(2010) DLT 51. The accused took defence that the cheque in issue
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bears his signatures and the other details except the amount in words
and figures have not been filled by him. He had given the cheque in
issue to his mother Smt. Sarla Sharma and after filing of the present
case, he came to know that his mother had given the cheque to the
complainant towards the chit fund committee as security. His
mother was a friend of the complainant. He did not receive legal
demand notice, however, it bears his correct address of his premises,
but he resides on the first floor and the same has not been mentioned
in the legal demand notice. He does not know the complainant. He
does not owe any liability towards the complainant. In the year
2016-2017, he had lost a bag which had a cheque book and the
cheque in question was a part of such cheque book, & he had
instructed his bank to stop payment for all the unutilized cheques in
that cheque book.
6. Accused was granted right to cross-examine the
complainant on an oral prayer preferred u/s 145(2) NI Act by
accused vide order dated 20.07.2022. The complainant was
examined as CW-1 thereby adopting her pre-summoning evidence
as post-summoning evidence and was duly cross-examined and
discharged. Vide separate statement of complainant, complainant
evidence was closed on 04.09.2023.
7. Statement of accused was recorded u/s 313 Cr.P.C. r/w
section 281 Cr.P.C. on 04.09.2023 wherein all the incriminating
evidence was put to the accused and he was granted an opportunity
to explain the circumstances appearing against him at trial. While
explaining the circumstances appearing in evidence against him,
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accused stated without oath that he did not borrow any money from
the complainant. He gave the cheque in question to his mother.
After filing of this case, he came to know that his mother gave his
cheque to the complainant as she was a member in the committee of
the complainant. The accused admitted his signatures on the cheque
in question as well as the amount in words and figures. However, he
stated that he did not fill in the date and the name of the payee. He
did not receive legal demand notice however the same bears his
correct but incomplete address as the first floor is not mentioned
thereon. Accused preferred to lead evidence in his defence.
8. CW1 was recalled for re-examination vide order dated
06.01.2024, whereupon she was duly examined, cross examined and
discharged on 13.03.2024.
9. Additional statement of accused u/s 313 r/w 281 Cr.PC
was also recorded separately on 02.07.2024.
10. At the stage of defence evidence, the accused submitted
that he does not wish to lead any evidence in his defence.
Accordingly, DE stood closed, vide separate statement of accused
on 09.01.2025.
11. At the stage of final arguments, Ld. counsel for
complainant filed written submissions and submitted that accused
has admitted his signatures as well as filling up the amount, both in
figures and in words, in the cheque in question, the address
mentioned on the legal notice is the same as that furnished by
accused, but no reply to the legal notice was sent by accused which
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should be construed as admission of accused with respect to
contents of the notice, accused and his family are known to the
complainant for a long time and asked for the alleged loan for repair
and construction of their house, and on account of cordial and
almost family like relations, the complainant gave the loan in good
faith upon the belief that since the accused and his family shared
good relations, they would return back the amount within the time
promised, that all the basic ingredients are made out to raise
presumption against accused. That the plea taken by the accused
that the complainant runs a chit fund committee business is
completely without any basis and the accused has failed to establish
any such transaction between the complainant and himself or his
mother. Further, the accused has himself admitted that he gave his
cheque to his mother after filling the amount therein. The accused
has also taken a false plea that he had issued stop payment
instructions to his bank as the cheque in question was allegedly lost.
However, neither did the accused filed any police complaint nor has
he furnished any details with respect to the lost cheque book. The
reply filed to application u/s 143 A NI Act also pointed at previous
knowledge of the accused with respect to the handing over of the
cheque in question to the complainant and prayed to convict the
accused.
Per contra, Ld. counsel for accused submitted that the
complainant has not furnished any details with respect to the date on
which the alleged loan was given by her to the accused or his
family. She has also not been able to bring on record any
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satisfactory proof with respect to her financial capacity in lending a
huge sum of Rs.8.5 Lakhs to the accused. Source of funds is neither
mentioned in her complaint nor has she been able to examining any
friend or family who has provided the loan to the complainant. The
complainant also did not file any proof of demand made with
respect to the balance amount of Rs.3,90,000/-. No loan
agreement/acknowledgment/receipt has been proved to have been
executed between the parties. The cheque in question bears different
handwritings and the address mentioned on the legal demand notice
is not the correct and complete address of the accused. Ld. counsel
for the accused relied on the judgment passed by Hon’ble Supreme
Court in the case of Basalingappa v. Mudibasappa: (2019) 5 SCC
418, K. Prakashan Vs. P.K. Surenderan, Appeal (Crl.) 1410 of
2007 and K Subramani vs K Damodara Naidu, 2015 AIR SCW 64
and prayed to acquit the accused.
In his rebuttal, Ld. counsel for the complainant relied
on the judgment passed by Hon’ble Supreme Court in the case of
Ashok Singh v. State of U.P. & Anr., Crl. Appeal No.4171 of 2024 ,
to submit that the complainant is not required to prove her financial
capacity at the very threshold and the onus is upon the accused to
prove the same by producing independent material.
12. After hearing the arguments advanced on behalf of both
the parties and perusing the record carefully, the appreciation of
evidence and findings of the court are as below.
13. The legal position serving as base to the offence
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underlying Section 138 NI Act, as held by Hon’ble Supreme Court
in the case titled as Kusum Ingots & Alloys Ltd. v. M/s Pennar
Peterson Securities Ltd.: (2000) 2 SCC 745 is :
(i) that 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 of any debt or other
liability;
(ii) that the cheque has been presented to the bank within a period of six
months from the date on which it is drawn or within the period of its
validity whichever is earlier;
(iii) that the cheque is returned by the bank unpaid either because of the
amount of money standing to the credit of the 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 the bank;
(iv) that the payee or the holder in due course of the cheque makes a
demand for the payment of the said amount of money by giving a notice
in writing, to the drawer of the cheque, within thirty days of the receipt
of information by him from the bank regarding the return of the cheque
as unpaid;
(v) that 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;
The above legal requirements are cumulative, meaning
thereby that only if all the aforementioned ingredients are satisfied
can the person who had drawn the cheque be held liable for offence
u/s 138 NI Act.
14. Burden of proof: The claim based under the provisions
of Negotiable Instruments Act is an exception to the general rule of
law that burden of proof lies on the prosecution. The two specific
provisions viz. Section 118 (a) and 139 of NI Act contemplate that a
presumption is attached in regard to each and every negotiable
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instrument that the same was drawn and issued against due
discharge of liability and thus, whenever any claim is made on the
basis of a negotiable instrument, the presumption has to be drawn in
favor of the holder of the cheque (drawee) and the law has put the
burden to rebut the presumption on the accused that the cheque was
not issued by him against discharge of a debt or a liability. In case,
the accused is not able to rebut the presumption and fails to prove
his defence, the presumption becomes absolute and it has to be
assumed that the cheque was issued by the accused in discharge of
debt or liability and consequently, accused is assumed guilty of the
offence.
It was held by Hon’ble Supreme Court in the case of
Rangappa v. Mohan: 2010 (11) SCC 441 that presumption of
Section 139 of N.I. Act also includes the existence of legally
enforceable debt or liability.
Hon’ble Supreme Court, in the case of Hiten P. Dalal
v. Bratindranath Banerjee: 2001 (6) SCC 16 held that the
presumption mentioned in the section 139 NI Act is a presumption
of law and not a presumption of fact and thus, this presumption has
to be drawn in favor of the drawee and the burden to rebut the
presumption with the probable defence is on the accused.
This is indeed an instance of the rule of ‘reverse onus’,
where it is incumbent on the accused to lead what can be called
‘negative evidence’ i.e. to lead evidence to show non-existence of
liability. Keeping in view that this is a departure from the cardinal
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rule of ‘presumption of innocence’ in favor of the accused and that
negative evidence is not easy to be led by its very nature, it is now
settled that the accused can displace this presumption on a scale of
preponderance of probabilities and the lack of consideration or a
legally enforceable debt need not be proved to the hilt or beyond all
reasonable doubts. The accused can either prove that the liability did
not exist or make the non-existence of liability so probable that a
reasonable person, ought under the circumstances of the case, act on
the supposition that it does not exist. He can do so either by leading
own evidence in his defence or even by punching holes in the case
of the complainant in the testing ordeal of cross-examination. This
can be deciphered from relevant para no.21 of Hiten P. Dalal
(supra):
21. In other words, provided the facts required to form the basis of a
presumption of law exist, no discretion is left with the Court but to
draw the statutory conclusion, but this does not preclude the person
against whom the presumption is drawn from rebutting it and proving
the contrary. A fact is said to be proved when, “after considering the
matters before it, the Court either believes it to exist, or considers its
existence so probable that a prudent man ought, under the
circumstances of the particular case, to act upon the supposition that
it exists”. Therefore, the rebuttal does not have to be conclusively
established but such evidence must be adduced before the Court in
support of the defence that the Court must either believe the defence to
exist or consider its existence to be reasonably probable, the standard
of reasonability being that of the ‘prudent man’.
Further, in Bharat Barrel v. Drum Manufacturing:
AIR 1999 SC 1008 Hon’ble Supreme Court held that the accused
has to rebut the presumption and mere denial of passing of
consideration is no defence.
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It is, thus, clear that in cases of Section 138 NI Act,
upon proof of foundational facts, law presumes in favor of drawee
that the cheque was issued by the accused in discharge, wholly or in
part, of legally enforceable debt or liability and the burden to rebut
the same is upon the accused. The burden does not have to be
conclusively established but the accused has to prove his defence on
preponderance of probability.
15. Now applying the above law to the facts of the present
case, it has to be adjudged whether the legal requirements laid down
hereinabove have been fulfilled in the instant case.
15.1. The first legal requirement is:
“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 of any debt or other
liability.”
At the outset, it has to be proved that the accused had
issued the cheque in question on his account maintained with a bank
for discharge of any debt or other liability.
In the instant case, accused has admitted his signatures
on the cheque in question in his statement recorded u/s 313 Cr.P.C.
and in notice framed u/s 251 Cr.P.C. The cheque in question has
also been drawn on the account maintained by him with Axis Bank,
Sector-7, Dwarka Branch, Delhi. The said fact has not been denied
by accused at any stage of proceeding.
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It was held in the case of Kalamani Tex & anr. v. P.
Balasubramanian: 2021 SCC Online SC 75 Hon’ble Supreme
Court held that:
“14. Adverting to the case in hand, we find on a plain reading of its
judgment that the trial court completely overlooked the provisions
and failed to appreciate the statutory presumption drawn under
Section 118 and Section 139 of NI Act. The statute mandates that
once the signature(s) of an accused on the cheque/negotiable
instrument are established, then these ‘reverse onus’ clauses become
operative. In such a situation, the obligation shifts upon the accused
to discharge the presumption imposed upon him.”
The above said principle has also been crystallized by
Hon’ble Supreme Court in the case of Basalingappa v.
Mudibasappa: (2019) 5 SCC 418, by observing that:
“25. We having noticed the ratio laid down by this Court in above
cases on Sections 118(a) and 139, we now summarize 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.”
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15.2. In the instant case, the accused having admitted his
signature on the cheque in question and the said cheque being drawn
on his bank account, a mandatory presumption automatically arises
in favor of complainant by virtue of Section 118(a) r/w 139 NI Act
that the cheque in question was issued by him in discharge of, whole
or part of, legally enforceable debt or liability.
15.3. Now the burden shifts upon accused to rebut the above
presumption by raising a probable defence, by leading evidence or
bringing such facts on record in the cross-examination of the
complainant that could make the latter’s case improbable. If, in such
a case, the accused is proved to have discharged the initial onus of
proof placed on him by showing that the existence of consideration
was improbable or doubtful or illegal, then the onus will again shift
back to the complainant who will then be under an obligation to
prove it as a matter of fact and failure to do so will disentitle him to
any relief on the basis of the negotiable instrument (as held in Satish
Sharma v. State NCT of Delhi & anr.: (2013) 204 DLT 289).
15.4. The accused has chosen to do so by cross-examining
the complainant. The complainant was examined as CW-1 and has
proved her documents such as her affidavit, the cheque in question
and its return memo, the legal notice issued to the accused as well as
the postal receipts of the same. During cross-examination,
CW-1/complainant deposed, in brief, that she has passed 12th
standard, has never done any job at any point of time, there were
four members in her family including her husband, a son and a
daughter, her husband ran a kiryana shop but he unfortunately
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expired in 2013, at a time when her daughter was studying to be a
CA and her son was in school, but due to her husband’s death her
daughter had to discontinue her studies whereas her son completed
his graduation, after the death of her husband she used to do
stitching work from her home itself and had no shop, her monthly
earning from stitching was Rs.5,000/- to Rs.6,000/- per month. In
the year 2017-18, her son started working and had a salary of Rs.15-
16 thousand per month and therefore, she has stopped doing
stitching work for the last 3-4 years, she is not an income tax
assessee and has never filed ITR. She solemnized the marriage of
her daughter towards the end of 2018, in the year 2018-19, her
monthly family income was about Rs.15-16 thousand from all
sources. Later, she said that this was the income of her son and that
she was also earning Rs.5,000/- per month. CW1 further deposed
that she has known the family of the accused since she got married
and came to her matrimonial house in 1991, the accused was earlier
working in the Air Force, but later started his own work of stitching
from his house, she arranged the sum of Rs.8.5 Lakhs partly i.e.
Rs.2,00,000/- from her brother Jai Kishan (now deceased) and
Rs.4.6 Lakhs out of the insurance amount received upon the death
of her husband, whereas the remaining amount was arranged from
stitching business, she has not mentioned this fact in her complaint,
she has not filed any proof of receiving of insurance amount, the
date and place when the alleged sum was advanced to the accused is
not mentioned in the complaint or evidence affidavit, however, she
told her counsel about the same, she does not know the
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denomination of the currency notes in which the loan amount was
allegedly given to the accused, written
agreement/receipt/acknowledgment was not executed at the time of
giving loan.
CW1 deposed that it is incorrect that no loan was ever
advanced to the accused by her and that’s why she is not able to
answer the question with respect to the currency notes, the reason
for non-execution of any written agreement/acknowledgment is not
that loan was never advanced, it is incorrect that the cheque was not
handed over to her in completely filled condition or that the date and
name of the payee have been filled by her. Further accused along
with his mother and father came to handover the cheque to the
complainant, she did not sent any written notice/message
demanding the balance amount of Rs.3,90,000/- from the accused as
she had made an oral demand, she has not instituted any case in
respect of Rs.3,90,000/-, she verbally informed the accused before
presenting the cheque in question, the cheque in question was given
to her at the time of advancing of the loan, she is not running and
has never ran a chit fund committee at any point of time wherein
each participant was required to deposit blank security cheque, the
mother of the accused was not a member of the said committee in
years 2016-17 and she has not deposited two blank security cheques
including the cheque in question with her, the mother of the accused
did not make continuous payment towards the committee, she has
not misused the blank security cheques to usurp the amount due to
the mother of the accused at the end of the committee, she had
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financial capacity or means to advance the alleged amount, the
names of the relatives/sources from which the alleged loan amount
was arranged have not been purposely withheld from the complaint,
the handwriting of the name and date in the cheque in question is
not different and she had not filled in the said particulars and she
has not filed any recovery suit against the accused.
15.5. Vide order dated 06.01.2024, an application u/s 311
Cr.PC filed on behalf of the complainant was allowed and she was
permitted to be re-examined to prove her financial capacity and to
be cross examined thereupon.
CW1/complainant relied upon her passbook and
account statements from 01.04.2013 till 31.03.2014 as
Ex.CW1/6(OSR). She stated that the money received by her in
July-August 2013 was spent/transferred/withdrawn by 14.08.2013,
she was also receiving widow pension of Rs.2,500/- per month and
that she had not mentioned the same in her previous cross
examination, she had not filed any documentary proof of her son’s
employment, her brother Jai Kishan expired during the second wave
of Covid, she had not cited her brother in the list of witnesses, she
has not filed any document to prove that she had the said amount at
the relevant time to lend to the accused, she is not deposing falsely
about arranging the money from his brother as he is no more, she is
not deposing falsely.
15.6. Additional statement of the accused was recorded on
02.07.2024, upon the re-examination of the complainant, wherein,
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he stated that he has nothing to say with respect to the bank account
statements Ex.CW1/6 (OSR) as he did not receive any money from
the complainant.
15.7. Accused did not lead evidence in his defence.
15.8. In the present case, the complainant has set up a claim
against accused for borrowing a sum of Rs.8,50,000/- from her as a
friendly loan in presence of his family members and handing over
the cheque in question towards part payment of the amount of loan.
The accused has admitted his signatures as well as
filling in the amount, in figures and words, in the cheque in
question. He has also admitted that the complainant shared friendly
relations with his mother, but, has taken the defence that he did not
know the complainant, did not borrow any loan from her and
therefore, did not issue cheque in question to complainant.
However, he has stated that he had handed over the signed cheque
after filling in the amount, in words and in figures, to his mother,
and he came to know that his mother had handed over his cheque to
the complainant as security for the purpose of the committee run by
the complainant in which his mother was allegedly a member, only
after the filing of the present case. The accused has also challenged
the financial capacity of the complainant to lend a huge amount of
Rs.8,50,000/- as the alleged friendly loan to the accused and his
family in light of her own financial status.
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15.9. The accused was not burdened to prove his defence
beyond reasonable doubt. Proof of a fact in negative is also not
always feasible. However, in light of presumption of existence of
debt/liability in favour of complainant, accused was burdened to lay
on record some such fact in order to make the court believe that
either the consideration did not exist or existence of consideration
was so improbable that one ought to act on the supposition that it
did not exist. The test was only that of preponderance of probability.
15.10. In an effort to prove his defence, accused cross-
examined complainant to prove that the complainant ran a chit fund
committee business and that the mother of the accused was a
member of her committee. The mother of the accused and the
complainant are stated to be good friends for the last many years,
however, the accused has expressed his unawareness with respect to
his mother participating in the committee of the complainant or her
handing over his cheque to the complainant until the filing of the
present case.
In such a scenario, the mother of the accused Smt. Sarla
Sharma would have been instrumental in establishing the defence of
the accused that it was her who had handed over of the cheque in
question to the complainant for the purpose of the committee run by
the complainant. However, the accused has failed to examine his
mother as a witness to testify in favour of defence.
Although, Ld. counsel for the accused gave a suggestions
to the complainant pertaining to the continuous and regular
Ct. Case No.35402/2019
Sunita Gupta v. Manish Dutt Sharma
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payments made by the mother of the accused in the alleged
committee and the complainant misusing the security cheques at a
time when amount from the committee pool became due to the
mother of the accused, however, the accused has not placed any
proof of such payments made by the mother of the accused towards
the committee. Moreover, it can be reasonably expected of a prudent
person that he would know the purpose for which he was handing
over the cheque to any person, after filling in a specific amount in
the cheque. The accused has also failed to examine any other
committee member. Testimony of any independent committee
member testifying existence of any such committee would have
been the best evidence to prove the defence of accused in the facts
of this case, however despite cross examining CW1 no steps were
taken by accused to summon the said persons to prove his defence.
Thus, the accused has not been able to prove that the complainant
ran a committee, let alone that the cheque in question was handed
over for that purpose.
Another contradiction arising out of the defence of the
accused is that he stated that he issued stop payment directions to
his bank with respect to all the unutilised cheques, including the
cheque in question, in his cheque book which was allegedly lost by
him in 2016-2017, however, the reason for return in the return
memo is ‘Account Blocked’. The accused has neither examined any
bank witness in support of his plea nor furnished any independant
evidence to establish his claim, thereby, he has failed in
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Sunita Gupta v. Manish Dutt Sharma
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controverting or furnishing any explanation with respect to the said
contradiction.
In light of the aforesaid discussion, the defence of the
accused that the cheque in question was not handed over in the
discharge of the loan advanced by the complainant can be said to be
nothing but one hanging in the air and devoid of any substance.
15.11. Accused has also challenged the financial capacity of
complainant. Showcasing that complainant did not have adequate
financial capacity to lend money to accused amounts to a probable
defence and can help in rebutting the statutory presumption that is
accrued to the benefit of complainant [Basalingappa v.
Mudibasappa (2019)5 SCC 418].
Accused has attempted to establish that at the time when
the complainant allegedly lent a huge sum of Rs. 8,50,000/- to
accused and his parents, she was only earning a meagre sum of
Rs.5000-6000 per month from stitching work, and Rs. 2500/- per
month from widow pension, and that she had no other source of
income at or around the time when the loan is claimed to have been
advanced.
The present case is a case of two persons enjoying
friendship that would encourage one to give friendly loan to
another. The complainant has deposed that the alleged loan was
handed over in July 2018, by which time her son had already started
working and was earning about Rs.15-16,000/- per month in
addition to her own income. Also, the complainant has admitted that
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Sunita Gupta v. Manish Dutt Sharma
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she arranged the loan money not entirely out of her own savings but
had also borrowed an amount of Rs.2,00,000/- from her brother who
expired during the second wave of COVID-19. She has further
deposed that she arranged another Rs.4,60,000/- from the
compensation received from the insurance upon her husband’s
death, and that her daughter was married in the last month of 2018
by which time the alleged loan had already been handed over. Non-
examination of brother of the complainant is self-explanatory, as he
is stated to be no more alive. The complainant has placed copy of
her passbook in support of insurance amount received by her upon
the death of hear husband. The fact that the amount of insurance
money was already withdrawn by the complainant before the loan is
alleged to have been advanced by her does not prove that she had
already spent that amount and therefore had no financial capacity to
lend the loan amount.
Therefore, the complainant has been able to establish
sufficient financial capacity to be able to advance the loan in
question to the accused and his family.
15.12. Thus, accused has been unable to rebut the presumption
of law and discharge the burden of proof by raising a probable
defence that the cheque in question was not issued to complainant in
discharge of his liability.
The first legal requirement is, thus, proved in favor
of accused and against the complainant.
16. The second legal requirement is:
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Sunita Gupta v. Manish Dutt Sharma
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“That cheque has been presented to the bank within a period of six
months from the date on which it is drawn or within the period of its
validity whichever is earlier.”
The cheque in question Ex. CW-1/1 is dated
30.07.2019 and returning memo Ex. CW-1/2 is dated 31.07.2019,
which proves that the cheque in question was presented within the
period of its validity. Further, defence has failed to controvert the
said fact.
Thus, the second legal requirement is adjudicated in
favor of complainant.
17. The third legal requirement is:
“That cheque is returned by the bank unpaid, either because of the
amount of money standing to the credit of the 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 the bank.”
Section 146 NI Act presumes the fact of dishonour of
cheque upon production of bank’s slip or memo having the official
mark denoting that the cheque in question has been dishonoured.
This is also a rebuttable presumption and upon production of such
bank memo, the burden shifts upon accused to disprove the same.
In the instant case, a presumption has been raised in
favor of complainant by virtue of Section 146 NI Act that the
cheque in question was dishonored for the reason stated therein viz.
‘Account Blocked’, which falls within the offence u/s 138 NI Act
and therefore, the burden now shifts upon the accused to rebut this
presumption by establishing some reasonable justification for the
same. But the accused has admitted his signature on the cheque in
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Sunita Gupta v. Manish Dutt Sharma
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question and has failed to controvert the reason for dishonor of the
cheque in question.
Thus, the third legal requirement is adjudicated in
favor of complainant.
18. The fourth legal requirement is:
“The payee or the holder in due course of the cheque makes a demand
for the payment of the said amount of money by giving a notice in
writing, to the drawer of the cheque, within thirty days of the receipt
of information by him from the bank regarding the return of the
cheque as unpaid.”
In the instant case, the cheque in issue was returned
dishonoured on 31.07.2019. The complainant sent a legal notice
dated 21.08.2019 (Ex. CW-1/3) addressed to the accused.
Post/courier receipts dated 22.08.2019 (Ex. CW-1/4) are also on
record, which proves that the legal notice was sent within the
prescribed period.
Accused has denied receiving of legal notice and he has
disputed his address to which the legal notice was addressed stating
in his notice framed u/s 251 NI Act as well as in his statement
recorded u/s 313 Cr.P.C. that his floor number is not mentioned
upon the notice. However, the tracking report reflects that the
courier was delivered to the addressee upon signatures and the
accused has been unable to rebut the same.
Thus, it can be said that the legal notice was properly
addressed to the correct address of accused and by virtue of
presumption u/s 27 General Clauses Act accused is deemed to have
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Sunita Gupta v. Manish Dutt Sharma
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received the legal notice, if the notice has been sent to correct
address by post.
18.1. Even otherwise, law expects a person pleading non-
receipt of any demand notice to prove his bonafides by making the
payment of the cheque amount within 15 days of receiving court
summons. This is crystallized by the verdict of Hon’ble Supreme
Court in the case titled as C.C. Alavi Haji v. Palapetty Muhammed
& anr.: (2007) 6 SCC 555:
“17. 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.”
18.2. In the case at hand, despite issuance of summons and
appearance of accused before the court, accused has failed to pay
the cheque amount to the complainant and thus is precluded from
raising the plea of non-service of demand notice. Thus, it is proved
that the legal notice was sent to accused within thirty days of receipt
of intimation of dishonor of cheque in issue.
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Sunita Gupta v. Manish Dutt Sharma
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The fourth legal requirement is, thus, adjudicated in
favor of complainant.
19. The fifth legal requirement is:
“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.”
It is an undisputed fact and also a matter of record that
the accused has failed to make the payment till date let alone
making payment within 15 days of receipt of notice.
Thus, the fifth legal requirement is adjudicated in
favor of complainant.
20. All the legal requirements constituting an offence u/s
138 NI Act have been proved in favour of complainant and against
the accused. Accordingly, accused Manish Dutt Sharma is held
guilty for the alleged offence u/s 138 NI Act.
21. Now to come up for arguments on quantum of
sentence. Copy of this judgment be given Dasti to the convict free
of cost as per rules.
Digitally signed Announced in the open SURBHI by SURBHI GUPTA court on 24th May 2025. GUPTA Date: 2025.05.24 17:33:26 +0530 (SURBHI GUPTA ANAND) Judicial Magistrate First Class (NI Act)-07 S/W District, Dwarka Courts, New Delhi Ct. Case No.35402/2019 Sunita Gupta v. Manish Dutt Sharma Page 26 of 26