Interim Order 7

Order Details: COPY OF JUDGMENT
Pdf Text: CC NI ACT No. 2796/2024
Divya Unnati Cooperative Urban Thrife & Credit Society Ltd. Vs. Sanjeet Kumar
1 Out of 15
IN THE COURT OF SH. ANKIT SOLANKI : JMFC NI
EAST DISTRICT, KARKARDOOMA COURTS COMPLEX
DIVYA UNNATI COOPERATIVE URBAN THRIF &
CREDIT SOCIETY LTD.
Vs.
Vs. SANJEET KUMAR
CC NI ACT No. 2796/2024
U/S 138 Negotiable Instruments Act, 1881
1. CC NI Act number : 2796/2024
2. Name of the complainant : Divya Unnati Cooperative Urban
Thrift & Credit Society Ltd.
3. Name of the accused : Sanjeet Kumar
4. Offence complained of or proved : U/S 138 of Negotiable Instruments
Act, 1881
5. Plea of the accused : Pleaded not guilty and claimed trial
6. Final Judgment/order : Convicted
7. Date of judgment/order : 23.03.2026
Date of Institution: 09.12.2024
Date of Reserving Judgment/Order: 16.03.2026
Date of Pronouncement of Judgment/Order : 23.03.2026
JUDGMENT
1. Vide this Judgment, this court shall dispose of the present
complaint filed by Divya Unnati Cooperative Urban Thrift &
Credit Society Ltd. (hereinafter referred to as 'the complainant')
-- 1 of 15 --
CC NI ACT No. 2796/2024
Divya Unnati Cooperative Urban Thrife & Credit Society Ltd. Vs. Sanjeet Kumar
2 Out of 15
against Sanjeet Kumar (hereinafter referred to as 'the accused')
U/S 138 of Negotiable Instruments Act, 1881 r/w Section 142
Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI
Act').
Brief facts:
2. It is the case of the complainant, that the complainant
provides a benefit of loan to its members and the accused is also
one of the member of the complainant, vide the accused a/c no.
3108 as on 24.08.2020, the accused approached the complainant
and urged to take a loan of Rs.1,00,000/- ( One Lakh Rupees
only) and the complainant provided the accused a sum or
Rs.1,00,000/- as a loan with the condition that if the accused fails
to pay any installment of the principal loan on due date (15th each
month), then interest will be charged @ 1.5% per month. It was
also agreed between the accused and the complainant as per
scheme that if interest is not paid from 15th to 30th of the month,
then Rs.100/- would be paid by the accused as penalty. However,
as per scheme any member of the society can pay the principal
amount in installment. That as a borrower of the loan, the
accused was always expected to comply with terms and
conditions of the loan and strictly adhere to the repayment
schedules. However, by the passage of time, the accused failed
-- 2 of 15 --
CC NI ACT No. 2796/2024
Divya Unnati Cooperative Urban Thrife & Credit Society Ltd. Vs. Sanjeet Kumar
3 Out of 15
to pay the loans in agreed installments and as such defaulted in
repayment. That thereafter, the complainant many times
contacted the accused and requested to pay the said loan but the
accused always ignored the complainant and the complainant
also gave the accused final intimation to pay interest as well as
principal amount and since then till now the complainant is
regularly requesting the accused to pay the aforesaid loan
amount with interest, but the accused ignored with malafide
intention in order not to pay/discharge his aforesaid loan
liability. That untimately in discharge of his aforesaid liability,
the accused had issued a cheque bearing no. 124677 dated
27.09.2024 of Rs.1,05,000/- drawn on Union Bank of India,
Branch-Khoda, Colony Braanch Noida-201301, including
interest amount in favour of the complainant and assured the
complainant that the cheque would be honoured on its
presentation.
2.2 That the complainant presented the abvoe said cheque
before his banker i.e. Canara Bank, Branch-Branch Mayur Vihar,
Phase-II, Delhi-110091 for encashment, bu;t the said cheque was
returned unpaid as dishonoured with the remarks, “Funds
Insufficient” vide bank returning memo dated 30.09.2024. That
after receiving the return memo, the complainant approached to
the accusd and infomed the accused about the dishonouored of
-- 3 of 15 --
CC NI ACT No. 2796/2024
Divya Unnati Cooperative Urban Thrife & Credit Society Ltd. Vs. Sanjeet Kumar
4 Out of 15
the cheque but the accused die not give satisfactory reply to the
complainant. That the accused intentionally and deliberately
issued the said cheque, even knowing that the accused had no
sufficient funds in his account to honour the aforesadi cheque,
even then the accused issued the said cheque to the complainant,
no double that his solo motive to cheat and defraud the
complainant. That in these compelling circumstances the
complainant left with no other opetion except got legal notice
dated 18.10.2024 u/s 138 of the NI Act issued the accused
through his counsel, which was dispatched on 19.10.2024
through speed post vide receipts no. ED913805236IN and
ED913805369IN, which was duly served upon the accused on
26.10.2024 and another notice was returned as per tracking
report and teh notice was sent on the address of the accused was
last known address and available in the record of the
complainant but despite the service of the same, the accused
neither replied the same nor complied the same. Hence the
accused has committed the offence punishable under section138
NI Act hence the present case.
Proceedings before the Court:
3. The complaint was received by assignment in this Court. After
perusing the complaint and hearing the arguments of the
-- 4 of 15 --
CC NI ACT No. 2796/2024
Divya Unnati Cooperative Urban Thrife & Credit Society Ltd. Vs. Sanjeet Kumar
5 Out of 15
complainant on the point of summoning of the accused, prima
facie it appeared that the offence U/S 138 NI Act, has been
committed. Hence, cognizance of the offence U/S 138 NI Act
was taken against the accused on 14.08.2025 and summons were
issued to the accused.
4. Notice U/S 251 Cr.P.C. was framed against the accused on
09.02.2026 to which the accused pleaded not guilty and claimed
trial. Thereafter, considering the defence stated at the time of
framing of notice by the accused, plausible defence has been
raised for which an opportunity or cross-examination of the
comlainant is fit to be given to the accused u/s 145(2) NI Act.
The need for filing a formal application stands dispensed with.
Cross-examination Nil. Opportunity Given. Statement of the
accused U/S 313 CrPC was recorded on 09.02.2026 wherein the
accused has opted not to lead defence evidence. Thereafter, the
case was listed for final arguments. On 16.03.2026, final
arguments were heard on behalf of the complainant and accused
and the case was reserved for judgment.
Arguments of both parties:
5. Ld. counsel for the complainant while reiterating the
contents of the complaint has argued that all the requirements of
-- 5 of 15 --
CC NI ACT No. 2796/2024
Divya Unnati Cooperative Urban Thrife & Credit Society Ltd. Vs. Sanjeet Kumar
6 Out of 15
Section 138, NI Act have been fulfilled by the complainant in
the present case. He argued that the cheque in question was
issued by the accused towards his legally enforceable liability.
He further argued that when the cheque was presented before
the bank for encashment, the same was dishonored on
presentation vide return memo dated 30.09.2024 for reasons
'Funds Insufficient'. Thereafter the legal notice dated
18.10.2024 was sent to the accused to make the payment within
the 15 days stipulated period, but no payment was made by the
accused. Thus, all the ingredients of section 138 NI Act, have
been duly satisfied and thus presumption U/S 139 NI Act, has
been validly raised against the accused. Ld. Counsel submits
that the accused has failed to raise any probable defence to
disprove the case of complainant and to rebut the presumption
U/S 139 NI Act.
Appreciation of evidence:
6. I have heard counsels on behalf of both the sides, perused the
record as well as relevant provisions of law.
7. Before appreciating the facts of the case in detail for the
purpose of decision, let relevant position of law be discussed
first. Section 138, NI provides as under:
“Section 138.- Dishonour of cheque for insufficiency, etc., of
funds in the account.-
-- 6 of 15 --
CC NI ACT No. 2796/2024
Divya Unnati Cooperative Urban Thrife & Credit Society Ltd. Vs. Sanjeet Kumar
7 Out of 15
Where any cheque drawn by a person on an account maintained
by him with a banker for payment of any amount of money to
another person from out of that account for the discharge, in
whole or in part, of any debt or other liability, is returned by the
bank unpaid, either because of the amount of money standing to
the credit of that account is insufficient to honour the cheque or
that it exceeds the amount arranged to be paid from that account
by an agreement made with that bank, such person shall be
deemed to have committed an offence and shall, without
prejudice to any other provisions of this Act, be punished with
imprisonment for a term which may be extended to two years, or
with fine which may extend to twice the amount of the cheque,
or with both:”
Provided that nothing contained in this section shall apply
unless:
(A) 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;
(B) The payee or the holder in due course of the cheque, as the
case may be, 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;
and
(C) The drawer of such cheque fails to make the payment of the
said amount of money to the payee or, as the case may be, to the
holder in due course of the cheque, within fifteen days of the
receipt of the said notice.
Explanation — for the purposes of this section, “debt or other
liability” means a legally enforceable debt or other liability.
-- 7 of 15 --
CC NI ACT No. 2796/2024
Divya Unnati Cooperative Urban Thrife & Credit Society Ltd. Vs. Sanjeet Kumar
8 Out of 15
11. It is well settled position of law that to constitute an offence
under Section 138, NI Act, the following ingredients are required
to be fulfilled:
I. drawing of the cheque by a person on an account maintained
by him with a banker,
II. The cheque was issued for payment to another person for
discharge in whole/part any debt or liability;
III. 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. RBI in its notification
DBOD.AML BC.No.47/14.01.001/2011-12 has reduced the
aforesaid period from 6 months to 3 months.
IV. Returning of the cheque unpaid by the drawee bank for want
of sufficient funds to the credit of the drawer or any arrangement
with the banker to pay the sum covered by the cheque;
V. Giving notice in writing to the drawer of the cheque within 30
days of the receipt of information by the payee from the bank
regarding the return of the cheque as unpaid demanding payment
of the cheque amount;
VI. Failure of the drawer to make payment to the payee or the
holder in due course of the cheque, of the amount covered by the
cheque within 15 days of the receipt of the notice.
The offence under Section 138, NI Act is made out against the
drawer of the cheque, only when all the aforementioned
ingredients are fulfilled.
8. In the present case at hand, the complainant has filed on
record the original cheque, i.e., bearing no.124677 dated
27.09.2025 drawn on Union Bank Bank of India, Khoda Colony
Branch, Noida 201 301. In notice under Section 251 CrPC, the
accused has admitted to issuing the cheque in question to the
-- 8 of 15 --
CC NI ACT No. 2796/2024
Divya Unnati Cooperative Urban Thrife & Credit Society Ltd. Vs. Sanjeet Kumar
9 Out of 15
complainant and admitted the signatures on the cheque.
Therefore, ingredient number I stands fulfilled in the present
case.
9. As per the RBI guidelines, it is essential for the cheque in
question be to presented within a period of three months from
the date on which they are drawn and the same be returned as
unpaid by the drawee bank for want of sufficient funds to the
credit of the drawer or any arrangement with the banker to pay
the sum covered by the cheque. In the case at hand, the cheque in
question was returned vide return memo dated 30.09.2024 due to
the reason “Funds Insufficient.” By implication thereof, the
cheques were presented within three months and the same were
returned for Drawer Signature Differ. Therefore, Ingredient
number III & IV stand fulfilled in the present case.
10. The legal notice in the present case was sent to the accused
on 18.10.2024 i.e., within 30 days of return of the bank memo
indicating cheque in question being unpaid. The accused has not
admitted to the receipt of legal demand notice in notice u/s 251
CrPC. As per the presumption raised under Section 114 of Indian
Evidence Act, 1872 and Section 27 of General Clauses Act, if
the legal demand notice is sent at thorrect address, then the same
shall be deemed to have been duly served.
As per the precedent laid down by the Hon’ble Supreme
Court in C.C. Alavi Haji v. Palapetty Muhammed, (2007) 3 SCC
(Cri), "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 GC Act and Section 114 of the
Evidence Act."
-- 9 of 15 --
CC NI ACT No. 2796/2024
Divya Unnati Cooperative Urban Thrife & Credit Society Ltd. Vs. Sanjeet Kumar
10 Out of 15
In K. Bhaskaran vs Sankaran Vaidhyan Balan and Anr,
Appeal (crl.) 1015 of 1999 (SC) (hereinafter referred to as “K.
Bhaskaran”), the Hon'ble SC observed:
“On the part of the payee he has to make a demand by
`giving a notice' in writing. If that was the only requirement to
complete the offence on the failure of the drawer to pay the
cheque amount within 15 days from the date of such `giving' the
travails of the prosecution would have been very much lessened.
But the legislature says that failure on the part of the drawer to
pay the amount should be within 15 days `of the receipt' of the
saidnotice. It is, therefore, clear that `giving notice' in the context
is not the same as receipt of notice.” The burden of giving notice
within 30 days of return of bank memo, falls on the
complainant/payee to constitute the offence u/s 138, NI Act. If
the notice is served on the correct address, then the presumption
u/s 27 General Clauses Act and Section 114, Indian Evidence
Act arises in the favour of the complainant/payee. Therefore, it is
deemed that the legal notice was duly served on the accused
person. The ingredient number V also stands fulfilled in the
present case.
11. Moving on, it is not disputed that the accused has not made
the payment of the cheque amount within 15 days of the receipt
of legal demand notice. Therefore, ingredient number VI also
stands fulfilled in the present case.
12. Let us now move on to ingredient number II,
12.1. The NI Act raises two presumptions in favour of the holder
of the cheque, i.e., complainant; firstly, with regard to the
issuance of cheque for consideration, as contained in Section
118(a) and secondly, with regard to the fact that the holder of
cheque received the same for discharge, in whole or in part, of
any debt or other liability, as contained in Section 139 of the Act.
-- 10 of 15 --
CC NI ACT No. 2796/2024
Divya Unnati Cooperative Urban Thrife & Credit Society Ltd. Vs. Sanjeet Kumar
11 Out of 15
12.2. Analysing all the concerned provisions of law and various
pronouncements in this regard, the Hon’ble Apex Court in the
case of
Basalingappa v. Mudibasappa [AIR 2019 SC 1983] held
that:
I. Once the execution of cheque is admitted, Section 139 of the
Act mandates that a presumption be drawn that the cheque in
question 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
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 imposes an
evidentiary burden and not a persuasive burden.
It is therefore implied that the law regarding the presumption for
the offence under Section 138, NI Act, the presumptions under
Section 118(a) and Section 139 have to be compulsorily raised as
soon as the execution of cheque by the accused is admitted or
proved by the complainant and thereafter the burden is shifted
upon the accused to prove otherwise.
12.3. These presumptions 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 etc. The
Hon’ble Apex Court in
Kumar Exports v. Sharma Carpets
[(2009) 2 SCC 513], has laid down the benchmark for the burden
-- 11 of 15 --
CC NI ACT No. 2796/2024
Divya Unnati Cooperative Urban Thrife & Credit Society Ltd. Vs. Sanjeet Kumar
12 Out of 15
of proof that the accused has to raise a doubt as to the
presumption under Section 139, NI Act.
"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 the Act. The accused has also an option to prove
-- 12 of 15 --
CC NI ACT No. 2796/2024
Divya Unnati Cooperative Urban Thrife & Credit Society Ltd. Vs. Sanjeet Kumar
13 Out of 15
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."
12.4. To put in a nutshell, the intent behind the NI Act is to
prevent financial frauds and affect the socio-economic well-
being of the country. If the burden is placed on the complainant
to prove the existence of liability against the accused, that would
be too harsh as most of these transactions are in the nature of
“friendly loan” and the accused would, in a normal
circumstance, always deny the liability. Therefore, the legislation
is drafted in a way so as to discharge the complainant from
proving the liability and a presumption is raised by virtue of
Section 139 read with Section 118(a) of the Act that the cheque
if issued by the accused, then the same is deemed to be in
discharge of some legally enforceable debt in favour of the
complainant. The presumption is rebuttable and the accused
“may” either prove that no legally enforceable debt existed or
punch holes in the story of the complainant and give rise to a
probable defence to rebut the presumption. As per the law
discussed above, the burden of proof on the accused to raise a
probable defence is that of “preponderance of probabilities”, and
not “beyond reasonable doubt.” Once a probable defence is
raised, then the onus is shifted to the complainant to establish
that a legally enforceable liability existed in his favour and the
burden of proof on complainant in this case is that of “beyond
reasonable doubt.”
-- 13 of 15 --
CC NI ACT No. 2796/2024
Divya Unnati Cooperative Urban Thrife & Credit Society Ltd. Vs. Sanjeet Kumar
14 Out of 15
12.5. The accused can rebut the presumption as raised under the
NI Act by (a) putting forth his defence at the time of framing of
notice u/s 251 CrPC; (b) cross-examining the complainant; (c)
when statement of accused is recorded u/s 313 CrPC; (d) or by
leading defence evidence, thereby demolishing the case of the
complainant. It is amply clear that the accused does not need to
discharge his or her liability beyond the shadow of reasonable
doubt. He just needs to create holes in the case set out by the
Complainant.
13. In light of the above discussions since the accused has
admitted to issuance of cheque, admitted the signature on the
Cheque and the legal demand notice what is left to be seen is
whether the accused has been able to rebut the presumption
against himself and that whether he has been able to raise a
probable defence in his favor or not.
14. However, it is a rebuttable presumption. But in order to rebut
the same the accused has to lead some cogent proof either to
prove his case or to punch holes in the version put forward by
the complainant. In the present matter the accused had not cross-
examined the complainant and therefore he has not been
successful in impeaching the credit of the complainant as a
witness.
15. The accused has not led DE in support of his defence and
there is nothing on record to discredit the version put forward by
the complainant.
16. The complainant has placed on record relevant documents
to prove his case. The complainant has been successful in
sufficiently proving his version. Presumption Under Section 118
is already in his favour. Therefore, the complainant has been able
to prove his case on the basis of preponderance of probability.
-- 14 of 15 --
CC NI ACT No. 2796/2024
Divya Unnati Cooperative Urban Thrife & Credit Society Ltd. Vs. Sanjeet Kumar
15 Out of 15
17. All the ingredients of Section 138 have been fulfilled.
Accordingly, the accused is found guilty of the abovesaid
offence.
18. Copy of this Judgment be given free of cost to the accused.
Announced in open Court
Today on this 23.03.2026
(Ankit Solanki)
Judicial Magistrate First Class
(NI ACT), East, Karkardooma
Courts, Delhi.
-- 15 of 15 --