IN THE COURT OF SH.

BHAVYA KARHIL,
MM-02, NI ACT, TIS HAZARI COURTS, DELHI
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Ct. Case No. 2080/2016

SANIDHYA TYAGI Vs. VIJAY GUPTA
PS Kirti Nagar
U/s. 138 Negotiable Instrument Act

MR. SANIDHYA TYAGI,

S/o H. ASHOK TYAGI,
R/o WZ-55, BASAI DARA PUR,
NEW DELHI.
........................ COMPLAINANT

Vs.
MR. VIJAY GUPTA,
S/o SH. SATENDER PRAKASH GUPTA,
R/o D-36, D-BLOCK,
SUDARSHAN PARK,
NEW DELHI-110015.
…............................. ACCUSED

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PS Kirti Nagar Page No. 1 of 14
U/s. 138 Negotiable Instrument Act
 JUDGMENT

1) Offence complained of : Section 138 Negotiable

Instrument Act

2) Plea of accused : Pleaded not guilty

3)Date of institution of the case: 01.12.2014

4) Final order : CONVICTED.

5) Date of reserving of order

for judgment : 29.11.2023

6) Date of final order : 11.12.2023

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 CASE OF THE COMPLAINANT:-
1) Complainant claims that he had given friendly loan of
Rs 30,00,000/- to one Upender Gupta (brother of the
accused). One loan agreement was also executed in this
regard. Upender Gupta issued 9 Post Dated Cheques for
sum of Rs. 2,00,000/- each. When the complainant
presented three of the above cheques, same got returned
due to insufficient funds. Thereafter, when contacted,
the accused undertook to pay the loan amount on behalf
of his brother and issued one cheque bearing no.
352593 dated 18/10/2013 in the amount of Rs.
30,00,000/- drawn upon HDFC Bank,Palam Vihar,
Gurgaon, Haryana with assurance that same shall be
duly encashed on its presentment. However, much to
the dismay of the complainant, the said cheque got
dishonoured because of “FUNDS INSUFFICIENT”.
In pursuance thereof, the complainant sent a legal
notice through his counsel, calling upon the accused to
pay the Cheque amount. Aggrieved by non compliance,
the complainant was compelled to approach this court
seeking action against the accused u/s 138 NI Act.

2) In his Pre-summoning evidence, the complainant had

relied upon:-
a. Statement of account (Ex-CW1/1) (colly),
b. Loan Agreement (Ex. CW-1/2),

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U/s. 138 Negotiable Instrument Act
 c. Promissory Note (Ex.CW1/3),
d. Return memo (Ex-CW1/4)(colly),
e. Cheque in question (Ex. CW-1/5),
f. The return memo (Ex-CW1/6),
g. Legal Notice (Ex-CW-1/7),
h. Postal Receipt (Ex CW-1/8), and
i. Tracking Report (Ex CW-1/9).

3) When called upon to face the trial, the accused pleaded

not guilty and claimed trial.

4) The complainant adopted his evidence by way of

affidavit and was cross examined by the defence
counsel. The complainant also examined CW-2 Javed
Khan who supported the case of the complainant and
stated that Rs. 30 Lacs were given to Upender Gupta in
his presence and that one loan agreement was also
executed.

5) After examination of complainant’s witnesses, the

statement of accused was recorded u/s 313 CrPC,
wherein he stated that no cheque was ever issued to the
complainant and further he never undertook to repay
the loan taken by his brother. He further stated that the
cheque in question is not signed by him. He further
wished to lead DE. However, vide separate statement
dated 30/01/2023 he closed his DE without examining
any witness.

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U/s. 138 Negotiable Instrument Act
 6) Applicable Legal Provisions :
The ingredients which needs to be satisfied for bringing
culpability under s. 138 of Negotiable Instrument Act
has been expounded by the Hon'ble Apex court in the
case of Kusum Ingots & Alloys Ltd. vs. Pennar
Peterson Securities Ltd. And Others (2000) 2 SCC
745; the same is reproduced below:
(i) 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 cheque has been presented to the bank within a
period of six months from the date on which it is drawn
of within the period of its validity whichever is earlier;
(iii) 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;
(iv) 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 15 days of the receipt of information
by him from the bank regarding the return of the
cheque as unpaid;

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 (v) 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 only upon the concatenation of the aforementioned

ingredients that the culpability under s. 138 of
Negotiable Instrument Act can be secured.

Conjoint reading of s. 118 (a) and 139 of the NI Act

would give rise to the presumption of the cheque
having been issued in discharge of a legally sustainable
liability and drawn for good consideration. S.139 of the
NI Act stands as an exception to the general rule as to
the burden of proof and shifts the onus on the accused.
The expression "unless the contrary is proved" endows
the accused with the opportunity to rebut the
presumption. It encapsulates the principle of "reverse
onus" and thus the determination of successful rebuttal
would be on the touchstone of proportionality. The
same has been settled in the authoritative
pronouncement by a three judge bench of the Hon'ble
Supreme Court in the case of Rangappa Vs. S.Mohan
(2010) 11 SCC 441. The relevant extract is reproduced:
"28...In the absence of compelling justifications,
reverse onus clauses usually impose an evidentiary

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 burden and not a persuasive burden. Keeping this in
view, it is a settled position that when an accused has to
rebut the presumption under Section 139, the standard
of proof for doing so is that of `preponderance of
probabilities'. Therefore, if the accused is able to raise a
probable defence which creates doubts about the
existence of a legally enforceable debt or liability, the
prosecution can fail. As clarified in the citations, the
accused can rely on the materials submitted by the
complainant in order to raise such a defence and it is
conceivable that in some cases the accused may not
need to adduce evidence of his/her own..."
Thus, in accordance with the above authoritative
mandate the accused has to 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. The accused can do so by either bringing
positive evidence on record or by using the existing
material on record.

The legal position being thus. Let us examine the

factual matrix on this legal touchstone.

7) Appreciation of evidence and marshalling of the facts :

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 Issuance of Cheque: The complaint beholds the onus
of proving the issuance of cheques in his favour and the
said issuance has to be done on an account maintained
by the accused. In this regard, complainant as CW-1
has disposed through his affidavit that accused in order
to discharge his liability has issued the cheques.
The accused has in his statement u/s 313 CrPC denied
issuing any cheque to the complainant, he denied his
signature on the cheque in question.

Ld. Counsel of accused had relied heavily upon the

FSL report as per which the signatures on the cheque
were found to be technically incomparable.
In para II of the said FSL report, it is stated that the
signatures on the cheque in question (Q1) are in capital
letters and the specimen signatures (S1 to S48) are
model pattern.
Further, while deciding this issue, this court must also
factor in that the specimen signatures were taken during
the pendency of the trail. The specimen signatures were
not contemporary with the signatures on the cheque in
question. The possibility that the accused might have
cunningly changed his signature also cannot be ruled
out.

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 The signatures were sent for comparison on application
of the accused. It is to be noted that no definitive
opinion is given by the handwriting expert as to the
similarity or dissimilarity of both the signatures. Thus it
is clear that accused cannot claim any benefit of the
FSL report as same is not in his favour.
No other evidence is lead by the accused to disprove his
signature on the cheque.
Thus the fact of issuance of cheques stands duly
proved.

Presentment and dishonour of cheque:

It has to be satisfied that the cheque was presented within
the statutorily prescribed time limit and further that upon
presentment for encashment the same were returned
unpaid by the bank. To this effect, Complainant as CW-1
through his affidavit has deposed that cheques in dispute
were presented for encashment but the same was
dishonoured due to “FUNDS INSUFFICIENT" in the
account of the accused. In order to evince the veracity of
his deposition CW-1 has brought on record Original
cheques and return memos showing the dishonour of
cheque due to “FUNDS INSUFFICIENT”. The return
memos have not been challenged by the accused.
Considering the above discussion it is safe to deduce that

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 the fact of presentment and dishonour of cheques is duly
established.

Legal demand Notice : It is the onus on the complainant to

manifest that he made a demand for the payment of the
cheque amount by giving a notice in writing, to the drawer
of the cheque, within 30 days of the receipt of information
by him from the bank regarding the return of the cheque as
unpaid. In this regard, CW-1 deposing through his affidavit
has brought on record the demand notice dated
26/10/2013, Postal Receipt of the same. Accused has in his
statement u/s 313 CrPC admitted receiving the legal
notice.
Thus the said fact stands duly proved.

8) Arguments of respective counsels :

Ld. Counsel for the accused has argued that the accused
has successfully rebutted the presumptions raised
against him. He has argued that as per the case of the
complainant himself, the friendly loan was given to the
brother of the accused and thus there is absence of
liability towards the complainant. He has further relied
upon the FSL result as per which the signatures on the
cheque in question is different from the signatures sent
to the FSL.

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 On the contrary, ld. Counsel for the complainant has the
evidence on record is enough to convict the accused.
Ld. Counsel has also place reliance upon judgement of
Hon’ble Supreme Court of India titled ICDS Ltd. v.
Beena Shabeer, (2002) 6 SCC 426 contending that
accused is liable u/s 138 NI act for the cheque issued by
him even though the loan was not taken by him.
Ld. Counsel for complainant has further stressed that
the accused has tried to evade the process of law by
changing his signatures for the purpose of comparison.

9) Reasoning;-
As observed earlier, the complainant has been able to
raise presumptions against the accused and thus it is for
the accused to rebut the same, either by way of
evidence or by way of cross examination.
The issue regarding the signature has already been
discussed above and needs not to be reiterated. It is
further to be noted that the cheque in question got
dishonoured due to FUNDS INSUFFICIENT and not
because signatures were different.

As regarding the question of liability, the judgement of

Hon’ble Supreme Court of India titled ICDS Ltd. v.
Beena Shabeer, (2002) 6 SCC 426 is very clear.

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 Relevant para of the said judgement is reproduced for
ready reference:-
The issue as regards the co-extensive liability of the
guarantor and the principal debtor, in our view, is
totally out of the purview of Section 138 of the Act,
neither the same calls for any discussion therein. The
language of the Statute depicts the intent of the law-
makers to the effect that wherever there is a default on
the part of one in favour of another and in the event a
cheque is issued in discharge of any debt or other
liability there cannot be any restriction or embargo in
the matter of application of the provisions of Section
138 of the Act: 'Any cheque' and 'other liability' are the
two key expressions which stands as clarifying the
legislative intent so as to bring the factual context
within the ambit of the provisions of the Statute. Any
contra interpretation would defeat the intent of the
legislature.
Thus it is clear that cheque issued by a person for
liability of another is also a valid instrument, which if
dishonoured will attract section 138 NI Act.

Further, the documents placed on record by the

complainant ie. Loan Agreement (Ex-CW1/2) and the
Promissory note (Ex-CW1/3) to prove the loan taken by
brother of accused namely Upender Gupta has not been

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 disproved by the accused, either by cross examination or
by bringing new evidence. It must be noted that the loan
agreement, receipt and the promissory note were attested
by Javed Khan (CW-2) and Kamlesh Gupta (mother of
accused) as attesting witness. Complainant has examined
Javed Khan as CW-2 who has supported the veracity of
such documents. But, the accused has no called Kamlesh
Gupta to refute such claim. Hence the above said
documents stands proved in absence of any evidence to the
contrary.
Contention of the accused that the cheque was misused by
the complainant has not been supported by any evidence.
The accused has not placed on record any complaint made
to any authorities in this regard.
Nothing favourable has been extracted by accused in cross
examination of the complaint and his witness.

Thus in toto, the accused has not been able to dent the
version of the complainant in order to rebut the
presumption raised against him.

Conclusion:
10) Thus the unequivocal conclusion that comes forth is
that the complainant has succeeded in establishing,
beyond any reasonable doubt, the culpability under s.
138 of the NI Act. Accordingly, accused Vijay Gupta

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 stands convicted of the offence under s. 138 of the NI
Act.

11) Let the convict be heard on the quantum of sentence on

next date of hearing. Copy of this judgment be given to
the convict Vijay Gupta.
Digitally signed by
Bhavaya Bhavaya Karhail

Karhail Date: 2023.12.11

17:22:51 +0530
Announced in open court (BHAVYA KARHAIL)
on 11.12.2023 MM(NI ACT)-02/West District
THC Courts/Delhi

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