Delhi District Court
Manju Kapoor vs Milky Singh on 26 February, 2026
IN THE COURT OF MS. SONAM SINGH-II, JMFC (MAHILA COURT)-01, EAST DISTRICT,
KARKARDOOMA COURTS, DELHI
A. Case No. 1626/2020
B. Date of Institution 04.08.2020
C. Name and address of Complainant Smt. Manju Kapoor
W/o Sh. Bharat Bhushan Kapoor
R/o A-3, Taxila Apartments, IP
Extension, Opposite Batla
Apartment, Delhi-110092
D. Name and address of Accused Milky Singh
S/o Sh. Kuldeep Singh
B-9, Second Floor, Ashok Nagar,
Ghaziabad- 201001
E. Case filed under Section Section 138/142 of NI Act, 1881
F. Plea of accused Pleaded not guilty
G. Date on which final order reserved 05.02.2026
H. Date of final order 26.02.2026
I. Final order Convicted
Digitally signed
by SONAM
SONAM SINGH
Date:
SINGH 2026.02.26
17:32:50
+0530
Ct Case No. 1626/2020 Manju Kapoor v. Milky Singh Page 1 of 21
JUDGMENT
1. The present complaint has been filed by Smt. Manju Kapoor (hereinafter
referred to as ‘Complainant’) under Section 138/142 of The Negotiable
Instruments Act (hereinafter referred to as ‘NI Act‘) against Milky Singh
(hereinafter ‘accused’).
2. The substance of the allegations as mentioned in Complaint petition are as
follows: That accused was having friendly relations with the neighbors of
complainant & through whom he came in contact with complainant &
developed friendly relations. It is averred that after some time the accused
approached complainant through her neighbor in the month of February
2017 for a friendly loan on the pretext of urgent need of money for some
business purpose and requested complainant to arrange Rs. 10 lakhs as
friendly loan for three months. It is averred that considering the request of
accused & believing on his assurance complainant arranged the money and
gave accused Rs. 10 lakhs as friendly loan to be repaid after three months,
thereafter, accused never turned up for returning back the aforesaid
friendly loan amount of Rs. 10 lakhs and despite several requests &
reminders accused failed to honor his words. It is further averred that
complainant demanded back the money a number of times from accused
but he always showed inability on the pretext of bad financial condition
and requested to grant some more time to make payment of aforesaid loan
amount. It is further averred that after complainant’s repeated requests,
accused in order to discharge the aforesaid legally enforceable
debt/liability issued a cheque bearing no. 907178 for Rs.10 ,00,000/- dated
Digitally signed
by SONAM
SONAM SINGH
SINGH Date:
2026.02.26
17:32:59 +0530Ct Case No. 1626/2020 Manju Kapoor v. Milky Singh Page 2 of 21
04.02.2020 at ICICI Bank in favor of complainant. It is further averred that
when the aforesaid cheque was presented for encashment by complainant
through her bank account maintained with Punjab National Bank,
Madhuban, Delhi it was returned unpaid by the bank of accused due to
reason “Funds Insufficient” vide memo dated 04.02.2020 and as such
accused had bad intention to cheat complainant thereby causing wrongful
loss to her. Thereafter, complainant sent a legal demand notice dated
27.02.2020 to the above named accused at his aforementioned addresses
by speed post on 29.02.2020 through her counsel within 30 days of
receiving the information regarding dishonor of cheque requiring him to
pay the amount covered by the said cheque within fifteen days from the
date of receipt of notice and the same was returned back with remarks
“Despite repeated visits and despite intimation addressee not met at the
time of delivery on 2.3.2020, 03.03.2020 and 04.03.2020” which is
deemed to be served upon accused as it was sent to his last known correct
address. It is further averred that accused was also personally intimated
about the dishonor of aforesaid cheque & was duly served through
whatsapp message on his mobile, however, he failed to make payment of
the dishonored cheque. It is further averred that the present complaint was
filed within the period of limitation as extended by the Hon’ble Supreme
Court of India vide its order dated 06.05.2020 in case titled Suo Moto Writ
(Civil) No.3 of 2020 in view of situation due to COVID-19.
Digitally signed
by SONAM
SONAM SINGH
Date:
SINGH 2026.02.26
17:33:09
+0530
Ct Case No. 1626/2020 Manju Kapoor v. Milky Singh Page 3 of 21
Pre-Summoning Evidence & Notice:
3. Pre-summoning evidence was led by complainant on 21.10.2020 by way
of evidence affidavit Ex. CW1/1 wherein reliance was placed upon
documents Ex. CW1/A to Ex. CW1/E. Upon finding of the prima facie
case, cognizance of offence under Section 138 of NI Act was taken against
accused and summons was issued to him v.o.d 21.10.2020.
4. Perusal of record reveals that vide order dated 15.09.2022 Notice of
accusation under Section 251 of CrPC was framed against accused to
which he pleaded not guilty and claimed trial. At this stage, the accused
admitted his signature on cheque in question and stated that the cheque in
question belongs to him but denied to have filled up any contents therein.
Accused further stated that he didn’t receive the legal demand notice,
however, he admitted his address as mentioned on legal notice. In his
defence the accused stated that he had taken a loan of Rs 2 lakhs from
complainant in the year 2017 & to have given two blank signed cheques at
that time including the cheque in question and also gave two blank signed
cheques of his wife to complainant as security. Accused further stated to
have not repaid the said loan of Rs 2 lakhs to complainant till date and also
stated that complainant has misused his blank signed cheque in question
by filling up its contents and that he does not have the liability of cheque
amount towards complainant.
5. On 15.09.2022 separate statement of accused u/s 294 of CrPC was also
recorded wherein he admitted the cheque in question belonging to him and
well as its dishonor, however, he didn’t admit its contents. Thereafter, oral
Digitally signed
by SONAM
SONAM SINGH
Date:
SINGH 2026.02.26
17:33:17
+0530Ct Case No. 1626/2020 Manju Kapoor v. Milky Singh Page 4 of 21
application moved on behalf of accused under Section 145(2) of NI Act to
cross-examine the complainant was allowed on 15.09.2022.
Complainant’s Evidence (CE):
6. During her post-summoning evidence, CW-1/Ms. Manju Kapoor adopted
her pre-summoning evidence tendered by way of affidavit Ex. CW1/1
wherein she relied upon the following documents:
Ex. CW1/A Original cheque bearing no. 907178 dated
04.02.2020 for Rs 10,00,000/-
Ex. CW1/B Original Return Memo
Ex. CW1/C (colly) Legal notice dated 27.02.2020
Ex. CW1/D Original postal receipt
Ex. CW1/E Original returned envelop
It is pertinent to mention here that CW-1 (Complainant) was partly cross-
examined by the Ld. Counsel for accused on 29.11.2024 and vide
detailed order dated 24.01.2025 the right of accused to cross-examine
complainant was closed by the Ld. Predecessor of this Court and cost of
Rs 20,000/- was imposed upon accused on account of delay caused in the
trial & also for inconvenience caused to the complainant by him.
Thereafter, vide separate statement of complainant CE was closed on the
same date i.e. 24.01.2025 and matter was fixed for SA. Digitally signed
by SONAM
SONAM SINGH
Date:
SINGH 2026.02.26
17:33:25
+0530Ct Case No. 1626/2020 Manju Kapoor v. Milky Singh Page 5 of 21
Statement of Accused:
7. On 26.04.2025 statement of accused was recorded under Section 313 of
CrPC wherein all incriminating evidence led by complainant were put to
him. In the said statement accused denied taking friendly loan of Rs 10
lakhs from complainant in February 2017 for three months, he further
denied issuing cheque no. 907178 dated 04.02.2020 drawn on ICICI Bank
for Rs 10 lakhs in favor of complainant to discharge his liability and he
also denied to have received the legal demand notice but stated that the
address mentioned therein belongs to him. Accused also admitted the
dishonor of cheque for reason “funds insufficient”. Accused further stated
that he had taken a loan of Rs 2 lakhs from complainant in January 2017
for four months & to have given two blanks signed cheques bearing no.
907178 & 907180 as security to complainant, he further stated that his
wife had also given two blank signed cheques to complainant for this
purpose. Accused further stated that he had returned Rs 24,000/- to
complainant through account transfer from his wife’s account on
08.02.2017 & also returned Rs 26,000/- in cash on the same day. Accused
further stated that as per the terms of their loan agreement/understanding
he had to return Rs 50,000/- per month to complainant starting from
February 2017, thereafter he was unable to pay remaining amount and had
requested complainant to extend time for repayment, however,
complainant misused the security cheques given to her and as such
accused has no liability as alleged. Accused also stated that two blank
signed cheques of his wife are still lying with complainant. Accused also
opted to lead evidence in his defence. Digitally signed
by SONAM
SONAM SINGH
SINGH Date:
2026.02.26
17:33:32 +0530Ct Case No. 1626/2020 Manju Kapoor v. Milky Singh Page 6 of 21
8. After SA matter was fixed for Defence Evidence (DE), however, despite
multiple opportunities accused failed to lead any evidence in his defence
and as such DE was closed vide order dated 08.01.2026. Matter was
thereafter fixed for final arguments.
9. I have heard final arguments advanced on behalf of complainant and also
gone through her written arguments. No arguments were advanced on
behalf of accused and despite liberty given accused did not file any written
submissions. Matter was thereafter fixed for clarifications/judgment.
10. I have carefully perused the record including written submission filed on
record.
11. Before delving into the facts of present case, it would be pertinent to
discuss the legal standards required to be met by both sides. In order to
establish the offence under Section 138 of NI Act, the complainant must
fulfil all the essential ingredients of the offence as highlighted below
beyond reasonable doubt:
Firstly: The cheque was drawn by a person on an account main-
tained by him/her for payment of money and the same is presented for
payment within a period of three months from the date on which it is
drawn or within the period of its validity;
Secondly: The cheque was drawn by the drawer for discharge of any
legally enforceable debt or other liability;
Thirdly: The cheque was returned unpaid by the bank due to either
Digitally signed
by SONAM
SONAM SINGH
Date:
SINGH 2026.02.26
17:33:41
+0530Ct Case No. 1626/2020 Manju Kapoor v. Milky Singh Page 7 of 21
insufficiency of funds in the account to honour the cheque or that it ex-
ceeds the amount arranged to be paid from that account on an agreement
made with that bank;
Fourthly: A demand of the said amount has been made by the payee or
holder in due course of the cheque by a notice in writing given to the
drawer within thirty days of the receipt of information of the dishonour of
cheque from the bank;
Fifthly: The drawer fails to make payment of the said amount of
money within fifteen days from the date of receipt of notice.
12. Section 118(a) of NI Act and Section 139 of NI Act dictate how this Court
must appreciate the evidence by drawing presumptions of law. Same are
reproduced hereinafter for easy reference:
Section 118: Presumptions as to negotiable instruments
Until the contrary is proved, the following presumptions shall
be made:
(a) of consideration: that every negotiable instrument was made
or drawn for consideration, and that every such instrument,
when it has been accepted, indorsed, negotiated or transferred,
was accepted, indorsed, negotiated or transferred for considera-
tion.
Section 139: Presumption in favour of holder
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
Digitally signed
by SONAM
SONAM SINGH
Date:
SINGH 2026.02.26
17:33:59
+0530Ct Case No. 1626/2020 Manju Kapoor v. Milky Singh Page 8 of 21
debt or other liability.
13. The combined effect of Section 118 (a) of NI Act and Section 139 of NI
Act is that a presumption exists that the cheque was drawn for considera-
tion and was given by the accused for discharge of debt or other liability.
Both the Sections use the expression “shall” which makes it imperative for
the Court to raise the aforesaid presumptions once the foundational facts
required for the same are proved. Further, it has been held by the Hon’ble
Supreme Court of India in Rangappa v. Sri Mohan (2010) 11 SCC 441 that
the presumption contemplated under Section 139 of NI Act includes the
presumption of existence of a legally enforceable debt. In order to rebut
the statutory presumption under Section 139 of NI Act the standard of
proof is that of preponderance of probabilities, by which the accused is re-
quired to raise a probable defence. To rebut the presumption, it is open to
the accused to rely on evidence led by him/her or the accused can also rely
on the materials submitted by the complainant or the circumstances upon
which the parties rely in order to raise a probable defence (Basalingappa v.
Mudibasappa (2019) 5 SCC 418). The relevant extract from Basalingappa
(supra) is as follows:
“25. We having noticed the ratio laid down by this Court in the
above cases on Section 118(a) and 139, we now summarise the
principles enumerated by this Court in the following manner:
25.1. Once the execution of cheque is admitted Section 139 of
the Act mandates a presumption that the cheque was for the
discharge of any debt or other liability.
25.2. The presumption under Section 139 is a rebuttable pre- Digitally signed
by SONAM
SONAM SINGH
Date:
SINGH 2026.02.26
17:34:08
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sumption and the onus is on the accused to raise probable de-
fence. The standard of proof for rebutting the presumption is
that of preponderance of probabilities.
25.3. To rebut the presumption, it is open for the accused to
rely on evidence by him or the accused can also rely on the ma-
terials 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 parties
but also by reference to the circumstances upon which they
rely.
25.4. That it is not necessary for the accused to come in the
witness box in support of his defence. Section 139 imposed an
evidentiary burden and not persuasive burden.”
Further, in Kishan Rao v. Shankargouda (2018) 8 SCC 165) quoting Ku-
mar Exports v. Sharma Carpets (2009) 2 SCC 513 the Hon’ble Apex Court
held as follows:
“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 dis-
prove the non-existence of consideration and debt by leading
direct evidence because the existence of negative evidence is
neither permissible nor contemplated. At the same time it is
clear that bare denial of the passing of the consideration and
existence of that, apparently would not serve the purpose of the
accused. Something which is probable has to be brought onDigitally
signed by
SONAM
SONAM SINGH
SINGH Date:
2026.02.26
17:34:17
+0530
Ct Case No. 1626/2020 Manju Kapoor v. Milky Singh Page 10 of 21
record for getting the burden of proof shifted to the com-
plainant. To disprove the presumption 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 the
plea that they did not exist. Apart from adducing direct evi-
dence 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 the complainant.”
At this stage, the Court also deems it relevant to discuss the observation
made in the case of Lekh Raj Sharma v. Yashpal Gupta (2015) 3 DLT
(Cri) 521 by the Hon’ble High Court of Delhi as under:
“The accused is obliged to set up a probable defence. The de-
fence cannot be only a “possible” defence. It cannot be
premised on the mere ipse dixit of the accused. There should be
some credible material or circumstance available on record
which should lead the Court to conclude that the defence/ex-
planation for issuance of the dishonoured cheque is a probable
one.”
14. Reverting to the present case, the accused herein has admitted that cheque
in question dated 04.02.2020 which is Ex. CW1/A belongs to him and has
further admitted his signature made therein. Accused has also admitted to
Digitally signed
by SONAM
SONAM SINGH
SINGH Date:
2026.02.26
17:34:29 +0530
Ct Case No. 1626/2020 Manju Kapoor v. Milky Singh Page 11 of 21
have given the signed cheque in question to the complainant as security. It
is also established that the said cheque was presented within three months
& same was returned due to “Funds Insufficient” vide memo bearing clear-
ing/lodgement date 04.02.2020 which is Ex. CW1/B. In his statement
recorded u/s 313 CrPC accused has admitted that the cheque in question
was dishonored for reason “funds insufficient”. The ingredient qua the de-
mand of the aforesaid cheque amount within 30 days of receipt of informa-
tion of its dishonor has also been proved vide Ex. CW1/C (colly), Ex.
CW1/D & Ex. CW1/E which are legal notice dated 27.02.2020 along with
postal receipt & original returned envelop containing legal demand notice
respectively. Even though accused has denied receiving the legal demand
notice, however, he has admitted that the address mentioned on legal no-
tice belongs to him. It is well settled that if notice is sent to the correct and
last known address of accused, it is deemed to be served to him. Reliance
on this point is placed upon order dated 13.10.2023 in case titled “Top Fill-
ing Point Proprietor Rakesh Agrawal v. State of U.P. and Another” . Re-
liance is also placed upon the case of C.C.Alavi Haji v. Palapetty
Muhammed & Anr decided on 18.05.2007 wherein the Hon’ble Supreme
Court held as under:
“15. …. In our opinion, therefore, when the notice is sent by
registered post by correctly addressing the drawer of the
cheque, the mandatory requirement of issue of notice in terms
of Clause (b) of proviso to Section 138 of the Act stands com-
plied with. It is needless to emphasise that the complaint must
contain basic facts regarding the mode and manner of the is-
suance of notice to the drawer of the cheque. It is well settled
Digitally signed
by SONAM
SONAM SINGH
Date:
SINGH 2026.02.26
17:34:38
+0530Ct Case No. 1626/2020 Manju Kapoor v. Milky Singh Page 12 of 21
that at the time of taking cognizance of the complaint un-
der Section 138 of the Act, the Court is required to be prima fa-
cie satisfied that a case under the said Section is made out and
the aforenoted mandatory statutory procedural requirements
have been complied with. It is then for the drawer to rebut the
presumption about the service of notice and show that he had
no knowledge that the notice was brought to his address or that
the address mentioned on the cover was incorrect or that the
letter was never tendered or that the report of the postman was
incorrect. In our opinion, this interpretation of the provision
would effectuate the object and purpose for which proviso
to Section 138 was enacted, namely, to avoid unnecessary
hardship to an honest drawer of a cheque and to provide him an
opportunity to make amends.
16. As noticed above, the entire purpose of requiring a notice is
to give an opportunity to the drawer to pay the cheque amount
within 15 days of service of notice and thereby free himself
from the penal consequences of Section 138. In Vinod
Shivappa (supra), this Court observed:
One can also conceive of cases where a well intentioned drawer
may have inadvertently missed to make necessary arrangements
for reasons beyond his control, even though he genuinely
intended to honour the cheque drawn by him. The law treats such
lapses induced by inadvertence or negligence to be pardonable,
provided the drawer after notice makes amends and pays the
amount within the prescribed period. It is for this reason that
Clause (c) of proviso to Section 138 provides that the section
shall not apply unless the drawer of the cheque fails to make the
payment within 15 days of the receipt of the said notice.
To repeat, the proviso is meant to protect honest drawers whose
cheques may have been dishonoured for the fault of others, or
who may have genuinely wanted to fulfil their promise but on
account of inadvertence or negligence failed to make necessary
arrangements for the payment of the cheque. The proviso is not Digitally signed
by SONAM
SONAM SINGH
SINGH Date:
2026.02.26
17:34:46 +0530Ct Case No. 1626/2020 Manju Kapoor v. Milky Singh Page 13 of 21
meant to protect unscrupulous drawers who never intended to
honour the cheques issued by them, it being a part of their
modus operandi to cheat unsuspecting persons.
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. In our view, any other interpretation of the
proviso would defeat the very object of the legislation. As
observed in Bhaskarans case (supra), if the giving of notice in
the context of Clause (b) of the proviso was the same as the
receipt 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.”
15. It is also not disputed that no payment was made within 15 days of the re-
ceipt/delivery of the legal demand notice. Thus, the only ingredient which
remains to be proved is the second ingredient i.e. the cheque was drawn by
accused for discharge of a legally enforceable debt or other liability. As al-
ready stated above, the issuance of cheque in question Ex. CW1/A as well
Digitally signed
by SONAM
SONAM SINGH
Date:
SINGH 2026.02.26
17:34:57
+0530
Ct Case No. 1626/2020 Manju Kapoor v. Milky Singh Page 14 of 21
as the signature of accused thereon has not been denied. As per the scheme
of NI Act, since the accused has admitted his signature on the cheque in
question, it is presumed that the cheque in question Ex. CW1/A was issued
by him in discharge of a legally enforceable debt or liability. Once this pre-
sumption comes to the aid of complainant, the onus is on accused to estab-
lish his probable defence on preponderance of probabilities, however, the
accused need not necessarily step into the witness box to lead positive evi-
dence and he may discharge his onus of proof by pointing out deficiencies
in the case of the complainant through effective cross-examination as dis-
cussed in earlier paragraphs, however, in the present case accused has not
only failed to lead evidence in his defence, he has also not completely
cross-examined the complainant despite multiple opportunities and as such
his right to cross-examine CW-1 was closed v.o.d 24.01.2025. As such
nothing has come on record to establish the defence taken by accused at
the stage of framing of notice or at the stage of recording of his statement
under Section 313 of CrPC and the testimony of CW-1 Complainant has
gone unrebutted & uncontroverted by accused. Now, complainant in her
evidence affidavit Ex. CW1/1 has categorically deposed that the cheque in
question Ex. CW1/A was issued by accused in discharge of his liability
qua the friendly loan taken by him from complainant in February 2017 for
Rs 10,00,000/- however upon presentation by complainant, the cheque in
question was returned back with remarks “funds insufficient” vide return
memo Ex. CW1/B. Complainant/CW-1 has further deposed that despite le-
gal demand notice dated 27.02.2020 Ex. CW1/C issued to accused on his
Digitally
signed by
SONAM
SONAM SINGH
SINGH Date:
2026.02.26
17:35:03
+0530Ct Case No. 1626/2020 Manju Kapoor v. Milky Singh Page 15 of 21
correct last known address vide speed post Ex. CW1/D & returned en-
velop Ex. CW1/E which is deemed served upon accused, no payment has
been made by him. As already stated above, the testimony of CW-1 has
gone uncontroverted as accused failed to cross-examine complainant de-
spite opportunities given. Furthermore, accused has also failed to lead any
evidence in his defence despite multiple opportunities and therefore there
is no material on record which shows or proves his defence raised at the
time of framing of notice or at the time of recording of his SA. On the con-
trary, accused has made contradictory statements qua the alleged payment
made by him to complainant, that is, whereas at the stage of framing of
Notice accused has stated that he has not repaid the loan of Rs 2 lakhs to
complainant till the said date i.e. 15.09.2022, however, in his statement
recorded u/s 313 CrPC he has stated to have returned Rs 24,000/- to com-
plainant through account transfer & also returned Rs 26,000/- to her in
cash on 08.02.2017. Moreover, accused has also raised the defence that the
cheque in question was given as security to complainant. The Hon’ble
Supreme Court recently in the case of Sripati Singh (since deceased)
Through His son Gaurav Singh v. The State of Jharkhand & Anr (Cr. Ap-
peal Nos. 1269-1270 of 2021) dated 28.10.2021 has held that the dishonor
of cheque issued as a security can also attract offence u/s 138 of NI Act.
The Hon’ble Apex Court has observed as under:
“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
Digitally signed
by SONAM
SONAM SINGH
SINGH Date:
2026.02.26
17:35:12 +0530Ct Case No. 1626/2020 Manju Kapoor v. Milky Singh Page 16 of 21
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 which such cheque
is issued as security. Further, the borrower would have the
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
Digitally signed
by SONAM
SONAM SINGH
Date:
SINGH 2026.02.26
17:35:19
+0530Ct Case No. 1626/2020 Manju Kapoor v. Milky Singh Page 17 of 21
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. If
such is the understanding a cheque would also be reduced to an
‘on demand promissory note’ and in all circumstances, it would
only be a civil litigation to recover the amount, which is not the
intention of the statute. When a cheque is issued even though as
‘security’ the consequence flowing therefrom is also known to
the drawer of the cheque and in the circumstance stated above
if the cheque is presented and dishonoured, the holder of the
cheque/drawee would have the option of initiating the civil
proceedings for recovery or the criminal proceedings for
punishment in the fact situation, but in any event, it is not for
the drawer of the cheque to dictate terms with regard to the
nature of litigation.”
Further, the Hon’ble Delhi High Court in the case of Suresh Chand Goyal
v. Amit Singhal (2015) 3 BC 659 has also held as under:
“28. There is no magic in the word “security cheque”, such
that, the moment the accused claims that the dishonoured
cheque (in respect whereof a complaint under Section 138 of
the Act is preferred) was given as a “security cheque”, the
Magistrate would acquit the accused. The expression “security
cheque” is not a statutorily defined expression in the NI Act.
The NI Act does not per se carve out an exception in respect of
a ‘security cheque’ to say that a complaint in respect of such a
cheque would not be maintainable. There can be mirade situa-
tions in which the cheque issued by the accused may be called
as security cheque, or may have been issued by way of a secu-
rity, i.e. to provide an assurance or comfort to the drawee, that
Digitally signed
by SONAM
SONAM SINGH
Date:
SINGH 2026.02.26
17:35:27
+0530Ct Case No. 1626/2020 Manju Kapoor v. Milky Singh Page 18 of 21
in case of failure of the primary consideration on the due date,
or on the happening (or not happening) of a contingency, the
security may be enforced. While in some situations, the dis-
honor of such a cheque may attract the penal provisions con-
tained in Section 138 of the Act, in others it may not.”
16. Furthermore, the Hon’ble Supreme Court of India in the case of K.
Ramesh v. K. Kothandaraman (2024 SCC OnLine SC 531) in paragraph
no.5 of its Order has observed as under:
“5. In this regard our attention was drawn to paragraphs 32, 33, 34
and 36 of the judgment in Bir Singh, wherein it has been observed
that even if a blank cheque leaf is voluntarily signed and handed
over by the accused towards some payment would attract the pre-
sumption under Section 139 of the Act and in absence of any cogent
evidence to show that the cheque was not issued is discharge of the
debt, the presumption would hold good. The said paragraphs are ex-
tracted below:
“32. The proposition of law which emerges from the
judgments referred to above is that the onus to rebut
the presumption under Section 139 that the cheque has
been issued in discharge of a debt or liability is on the
accused and the fact that the cheque might be post-
dated does not absolve the drawer of a cheque of the
penal consequences of Section 138 of the Negotiable
Instruments Act.
33. 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
Digitally signed
by SONAM
SONAM SINGH
Date:
SINGH 2026.02.26
17:35:34
+0530Ct Case No. 1626/2020 Manju Kapoor v. Milky Singh Page 19 of 21
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.
34. 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 cheque. The onus would still be on
the accused to prove that the cheque was not in
discharge of a debt or liability by adducing evidence.
36. 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.”
17. Thus, in light of aforesaid settled legal position & upon the appreciation of
evidence on record, the Court finds that the accused has not been able to
establish any of the probable defence raised by him and has failed to con-
trovert the testimony of complainant and as such he has not been able to
rebut the presumption under Sections 118 r/w 139 of NI Act. Accordingly,
accused Milky Singh S/o Sh. Kuldeep Singh is hereby convicted of the of-
fence punishable under Section 138 of NI Act.
Digitally
signed by
SONAM
SONAM SINGH
SINGH Date:
2026.02.26
17:35:43
+0530
Ct Case No. 1626/2020 Manju Kapoor v. Milky Singh Page 20 of 21
18. Copy of this Judgment be given free of cost to the convict.
19. Let convict be heard on the point of sentence.
Digitally signed
by SONAM
Announced in the open Court SONAM SINGH Date: SINGH 2026.02.26 on 26.02.2026 17:36:09 +0530 (Sonam Singh-II) JMFC (Mahila Court)-01, East District KKD Courts, Delhi, 26.02.2026 Ct Case No. 1626/2020 Manju Kapoor v. Milky Singh Page 21 of 21
