Delhi District Court
Balwinder Singh Sethi vs Gurjeet Singh on 11 April, 2026
IN THE COURT OF SH. GAURAV UJJWAL,
JUDICIAL MAGISTRATE FIRST CLASS/NI ACT-01/WEST/TIS
HAZARI COURT/DELHI
C.T. Cases no.15993/2016
CNR No.DLWT020018512012
Sh. Balwinder Singh Sethi,
S/o Late Sh. Narinder Singh Sethi,
R/o A-2/1, Rajouri Garden,
New Delhi-110027 .....Complainant
Vs.
Sh. Gurjeet Singh,
S/o Sh. Inderjeet Singh,
R/o 81, Third Floor,
Furniture Block, Kirti Nagar,
New Delhi-110015
Also At:
87, Furniture Block,
Kirti Nagar, Main Road,
New Delhi-110015 ....Accused
::J U D G M E N T:
:
Date of institution of case : 19.07.2012
Date of reserving the judgment : 28.02.2026
Ct. Cases No.15993/2016 Balwinder Singh Sethi Vs. Gurjeet Singh Pg. no. 1/18
Digitally signed
GAURAV by GAURAV
UJJWAL
UJJWAL Date: 2026.04.11
16:56:51 +0530
Date of pronouncement of judgment : 11.04.2026
Offence complained or proved : 138 N.I. Act
Plea of Accused : "Not Guilty"
Final Order : Conviction
Date of Final Order : 11.04.2026
BRIEF FACTS
1. The present case has arisen out of a complaint filed under section 138
r/w Section 142 of Negotiable Instrument Act , 1881 (hereinafter referred to
as N.I. Act) by one Sh. Balwinder Singh Sethi, (hereinafter referred to as
‘the Complainant’) for dishonor of one cheque i.e. cheque bearing no.
476837 dt. 15.03.2012 of Rs.16,00,000/- drawn on Syndicate Bank, Phase –
I, Community Centre, Mayapuri, New Delhi Branch (hereinafter referred to
as ‘the cheque in question’) issued by one Sh. Gurjeet Singh, (hereinafter
referred to as ‘accused’) in favor of the complainant.
2. Brief facts of the case are that the complainant and accused are known
to each other for last several years. It is alleged that accused approached
complainant for a loan of Rs.16,00,000/- for short term period and in view of
the relations, complainant agreed to the same and accordingly arranged
amount of Rs.16,00,000/- and gave friendly loan of the same to accused on
01.03.2012 in cash for making the payment with regards to purchase of
some property. It is further alleged that after expiry of the period,
complainant asked to return the loan amount however on one pretext or the
other accused avoided to return the same and ultimately accused issued the
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by GAURAV
GAURAV UJJWAL
UJJWAL Date:
2026.04.11
16:56:54 +0530
cheque in question (cheque bearing no. 476837 dt. 15.03.2012 of
Rs.16,00,000/- drawn on Syndicate Bank, Phase – I, Community Centre,
Mayapuri, New Delhi Branch) as full and final settlement of the aforesaid
loan with assurance that same shall be honoured on presentation. However
when cheque in question was presented for encashment same got
dishonoured with remarks “insufficient funds” vide return memo dt.
16.05.2012. Thereafter, the complainant issued the legal demand notice
dated 28.05.2012 under section 138(b) NI Act. The present complaint came
to be filed by the complainant when the accused failed to pay the amount of
the cheques despite receipt of the legal demand notice.
3. The court, on finding a prima facie case against the accused and
summoned her before the court on 19.07.2012.
COMPLAINANT`S EVIDENCE
4. The complainant thereafter examined himself as CW-1 on 19.07.2012
and tendered his evidence on affidavit which was exhibited as Ex. CW1/A.
He also placed reliance on the following documents: –
(a) Ex. CW1/1 is the cheque in question.
(b) Ex. CW1/2 is the return memo dt. 16.05.2012.
(c) Ex. CW1/3 is the legal demand notice dt. 28.05.2012.
(d) Ex. CW1/4 are the postal receipt dt. 30.03.2012.
(e) Ex.CW1/5 is the courier receipt.
(f) Ex.CW1/6 is the tracking report.
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GAURAV Digitally signed by
GAURAV UJJWAL
UJJWAL Date: 2026.04.11
16:56:57 +0530
PLEA OF DEFENCE
5. The defense of the accused under section 251 Cr.P.C. was recorded,
after serving upon him the substance of accusation on 01.10.2014 wherein
the accused, while pleading not guilty, explained his defence by stating that
cheque in question bears his signatures however he had not filled up the
other particulars on the same. He further stated that his sister in law had
some business transaction with the complainant’s brother and she gave two
cheques to the tune of Rs.8,00,000/- to complainant’s brother. He further
stated that he also gave the cheque in question as security to the
complainant’s brother. He further stated that complainant’s brother never
supplied any cloth to his sister in law in pursuance of transaction and
complainant’s brother has never returned the cheques to him inspite of being
asked to do so. He further stated that he had never entered into any
transaction with the complainant. He further denied receiving legal demand
notice.
6. This court had allowed the accused to cross-examine the complainant
u/s.145(2) NI Act on 01.10.2014 however vide order dt. 05.11.2015 right of
accused to cross examine the complainant was closed as despite multiple
opportunities accused did not cross-examine the accused.
STATEMENT OF ACCUSED
7. The Statement of accused u/s. 313 Cr.P.C. r/w Section 281 CrPC was
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GAURAV by GAURAV
UJJWAL
UJJWAL Date: 2026.04.11
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recorded on 16.02.2019 wherein he admitted his signatures on cheque in
question, however denied filling up any other particulars on the same. He
further stated that he had given the cheque in question to his sister in law
namely Smt. Kumsi Ubhi at her request. He further stated that he had never
met with the complainant before meeting him in the Court and is not liable
to pay any amount to complainant including in the present matter. He further
stated that present matter alongwith another complaint pending against Smt.
Kumsi Ubhi was settled with complainant. He denied receiving legal
demand notice and stated that complainant had filed a false case and he does
not owe any liability towards the complainant qua the cheque in question.
DEFENCE EVIDENCE
8. The accused examined himself as DW-1 under section 315 Cr.P.C on
11.01.2018 wherein he was duly cross-examined by Ld. counsel for the
complainant, which shall be discussed later in the judgement. Accused had
also examined one Sh. Yogesh Kumar as DW-2 and he was also duly cross-
examined by Ld. counsel for the complainant, which shall be discussed later
in the judgement and vide order dt. 17.02.2020 accused had closed his
evidence and subsequently, the case was put up for final arguments.
FINAL ARGUMENTS
9. Sh. Sudhir Saneja, Ld. counsel for the complainant has argued that the
accused has admitted his signatures on the cheque in question and has even
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GAURAV by GAURAV
UJJWAL
UJJWAL Date: 2026.04.11
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admitted issuance of same to the complainant in para-2 of his application u/s
145(2) NI Act. Further, the complainant has been able to prove all the pre-
requisites of Section 138 NI Act against the accused and the accused has
failed to rebut the presumption u/s. 139 NI Act. Therefore, accused is liable
to be convicted.
10. Per contra, Sh. Ajay Khanna and Sh. Harry Bir, Ld. Counsels for the
accused has argued that the complainant has not annexed even a single
document as evidence to prove the alleged advancement of friendly loan to
the accused, whereas the accused has consistently denied receipt of any loan
from the complainant. Ld. Counsels further argues that the complainant has
also failed to prove his financial capacity to advance such amount.
Therefore, accused has successfully rebutted the presumption by raising
probable defence and should be acquitted accordingly.
THE APPLICABLE LAW
11. Before appreciating the facts of the case in detail for the purpose of
decision, let relevant position of law be discussed first. It is well settled
position of law that to constitute an offence under S.138 N.I. Act, the
following ingredients are required to be fulfilled:
(i) That the cheque in question has been drawn by a person on an
account maintained by him with a banker, for payment to another
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GAURAV GAURAV UJJWAL
UJJWAL Date: 2026.04.11
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person from out of that account for discharge in whole/part any debt
or liability.
(ii) That the said cheque has been presented to the bank within a
period of six months (now three months) from the date on which it is
drawn or within the period of its validity whichever is earlier.
(iii) That the cheque was returned dishonoured by the drawee bank for
want of sufficient funds or the same exceeded any arrangement with
the banker to pay the sum covered by the cheque.
(iv) That the complainant gave 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 demanding payment
of the cheque amount.
(v) Lastly that the accused failed to make payment to the payee (the
complainant), or the holder in due course, the cheque amount within
15 days of the receipt of the notice.
12. It is only when all the aforementioned ingredients are satisfied that the
person who had drawn the cheque can be said to have committed an offence
under Section 138 of the NI Act.
13. There is no dispute with regard to ingredient no. (ii) and (iii) as the
accused has not questioned the same. Further presumption in favour of
complainant has to be drawn in terms of Sec-146 NI Act. Ingredient no. (v)
is also satisfied as the accused has denied having any outstanding liability
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GAURAV Digitally signed by
GAURAV UJJWAL
UJJWAL Date: 2026.04.11
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towards complainant, therefore question of payment after receipt of legal
demand notice by the accused does not arise.
14. Accused has denied the receipt of legal demand notice in his statement
u/s- 251 & 313 Cr.pc, however during his cross-examination as DW-1 dt.
11.01.2018 has admitted that the legal demand notice Ex.CW1/3 bears his
correct address. The burden to prove that he had not received the legal notice
was on the accused. Section 103 I.E.A. lays down the rule that the burden of
proving a particular fact is on the person who asserts that fact. Since the
accused admitted that the address on the legal notice was correct, there was
limited scope for her to prove that the legal notice was not served upon her.
Section 27 of the General Clauses Act establishes a presumption of service
with respect to letters or documents sent through post and states: “… the
service shall be deemed to be effected by properly addressing, pre-paying,
and posting by registered post, a letter containing the document, and, unless
the contrary is proved, to have been effected at the time at which the letter
would be delivered in the ordinary course of post. ” There has been no
dispute regarding the complainant sending the legal demand notice to the
accused via prepaid registered post. The accused has also acknowledged that
her address on the legal demand notice was correct. Therefore, the
presumption under section 27 of the General Clauses Act applies in this case,
and it can be assumed that the legal demand notice was served upon the
accused in the ordinary course of business.
15. Moreover, the Hon’ble Supreme Court in the case of “C.C. Alavi Haji vs
Palapetty Muhammad & Anr AIR 2007 SC (SUPP) 1705″ held that:
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by GAURAV
GAURAV UJJWAL
Date:
UJJWAL 2026.04.11
16:57:14
+0530
“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.”, thus, ingredient no. (iv) is also satisfiedPOINTS OF DETERMINATION
(A). Whether the complainant has successfully proven the facts which
would raise the presumption u/s. 118 r/w Section 139 of NI Act by proving
that the cheque in question bears the signature of the accused?
(B). If yes, whether the accused has been successful in raising a probable
defence or in another words, whether he had been able to prove that the
cheques were not issued towards any legally recoverable debt or any other
liability?
Ct. Cases No.15993/2016 Balwinder Singh Sethi Vs. Gurjeet Singh Pg. no. 9/18
Digitally signed
by GAURAV
GAURAV UJJWAL
UJJWAL Date:
2026.04.11
16:57:17 +0530
REASONS AND FINDINGS OF THE COURT
16. It is settled law that once the signature upon the cheques in question
has been admitted by the accused, certain presumptions are drawn, which
result in shifting of onus. Section 118(a) of the NI Act lays down the
presumption that every negotiable instrument was made or drawn for
consideration. Another presumption is enumerated in Section 139 of NI Act,
which lays down the presumption that the holder of the cheque received it
for the discharge, in whole or part, of any debt or other liability.
17. The combined effect of these two provisions is a presumption that the
cheque was drawn for consideration and given by the accused for the
discharge of debt or other liability. Both the sections use the expression
“shall”, which makes it imperative for the court to raise the presumptions,
once the foundational facts required for the same are proved. Reliance is
placed upon the judgment of the Hon’ble Supreme Court in ‘Hiten P. Dalal
vs. Bratindranath Banerjee (2001) 6 SCC 16′.
18. In the present case, the accused at the time of framing of notice u/s 251
and statement recorded u/s 313 Cr.P.C has admitted his signatures on the
cheques in question. Once signatures are admitted, the presumption under
section 118(a) r/w 139 NI Act has to be raised in favour of the complainant
in the present case.
19. Accordingly, the point of determination number A is decided in the
affirmative.
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GAURAV Digitally signed by
GAURAV UJJWAL
UJJWAL Date: 2026.04.11
16:57:21 +0530
Points of determination number (B):
20. Analysing all the concerned provisions of law and various
pronouncements in this regard, the Hon’ble Apex Court in ‘Basalingappa v.
Mudibasappa, AIR 2019 SC 1983′, noted at para 23:
(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 imposes 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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21. Let us discuss the factual matrix of the present case. The accused in
his plea of defence recorded on 01.10.2014 has stated that his sister in law
had some business transaction with the complainant’s brother and she gave
two cheques to the tune of Rs.8,00,000/- to complainant’s brother. He further
stated that he also given the cheque in question as security to the
complainant’s brother. He further stated that complainant’s brother never
supplied any cloth to his sister in law in pursuance of transaction and
complainant’s brother has never returned the cheques to him inspite of being
asked to do so. He also stated that he had never entered into any transaction
with the complainant. Whereas, in his statement recorded u/s. 313 Cr.P.C.
r/w Section 281 CrPC 16.02.2019 he has stated that he had given the cheque
in question to his sister in law namely Smt. Kumsi Ubhi at her request and
had never met with the complainant before meeting him in the Court. He has
further stated that present matter alongwith another complaint pending
against Smt. Kumsi Ubhi was settled with complainant.
22. Accused examined himself as DW-1 dt. 11.01.2018, wherein he has
stated that he was not having any financial transaction with the complainant
and has not purchased any cloth from him, neither has taken any loan from
him. Rather his brother Sh. Harmeet Singh and his sister in law Smt.Kumsi
Ubhi were having transactions with him. He also states that he is not aware
how the cheque in question Ex.CW1/1 came in the possession of
complainant. The version of accused is not consistent with regard to the fact
i.e. how the cheque in question came in the possession of complainant. He
has stated different versions at different stages of trial. For instance, the
cheque was given as security to the complainant’s brother / same was given
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GAURAV by GAURAV
UJJWAL
UJJWAL Date: 2026.04.11
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to Smt. Kumsi Ubhi at her request. Moreover, as rightly pointed out by Ld.
Counsel for the complainant, the accused has even admitted issuance of
same to the complainant himself in para-2 of his application u/s 145(2) NI
Act Ex.DW1/DX, which admittedly bears his signatures. Accused has
brought nothing on record to prove any agreement regarding supply of cloth
by the complainant to his brother or to his sister in law, which he appears to
suggest. He has not produced on record any police complainant, not even
stated to have lodged any complaint against the complainant till date
regarding the alleged misuse of cheque in question. Thus, the defence raised
by the accused does not seem prima facie probable at this stage, as mere
statements without supporting evidences does not make a good defence.
23. Accused has not examined his brother Sh. Harmeet Singh and his sister
in law Smt.Kumsi Ubhi to prove his defence, rather has examined his family
driver Sh. Yogesh Kumar as DW-2 dt. 29.01.2020, who has stated that in
2012 as per instrutions of Smt.Kumsi Ubhi, he has collected one blank
signed cheque from the accused and has handed over the same to a sikh
gentlemen. He also states that the sikh gentlemen was not the complainant of
present matter, in the same breath has also stated that he has never seen the
complainant visiting the accused or his family. He admits that he do not
know the cheque number which was handed over by him and the purpose for
which it was given. Interestingly, the accused has never disclosed the name
of witness and the fact regarding the involvement of present witness in the
handing over of the cheque in question. Even if the testimony of witness is
belived, he has not stated that the cheque which he has allegedly handed
over to some unknown person, is also the cheque in question in present
Ct. Cases No.15993/2016 Balwinder Singh Sethi Vs. Gurjeet Singh Pg. no. 13/18
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by GAURAV
GAURAV UJJWAL
UJJWAL Date:
2026.04.11
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matter. Thus, his testimony does not support the defence taken by the
accused.
24. Accused has consistently stated that the cheque in question was handed
over by him as a blank signed security cheque. It is pertinent to mention that
Section 20 of the NI Act discusses inchoate instruments. As per this
provision if a person gives a duly signed cheque which is either blank or
partly filled then he is deemed to have given implied authority to the holder
to fill up the particular in it and complete the cheque, thus making the
drawer liable for the payment mentioned in it. 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 provision of section 138 would be attracted. Reliance is placed upon
the judgment of Hon’ble Supreme Court in the case of ‘Bir Singh vs.
Mukesh Kumar‘ (2019) 4 SCC 197 wherein the Apex Court while upholding
the validity of blank signed cheque in a proceeding u/s 138 of the Act has
interalia held that “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.”
25. Further, a security cheque is an instrument given to secure a future
liability. In the case of ‘Sripati Singh Vs. State of Jharkhand 2021 AIR(SC)
5632′ The Hon’ble Supreme Court had held that “If in a transaction, a loan
is advanced and the borrower agrees to repay the amount in a specified time
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by GAURAV
GAURAV UJJWAL
UJJWAL Date:
2026.04.11
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frame 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”. It is an established law that prosecution under Section 138 of the NI
Act is valid if, on the date the security cheques are presented, the amount
specified in the cheques matches the liability accrued against the drawer on
that date. Accordingly, the defence of accused that the cheque in question
was handed over by him to the complainant as a blank signed security
cheque for payment towards the goods supplied is also liable to be rejected.
26. Complainant examined himself as CW-1 on 19.07.2012 and tendered
his evidence on affidavit Ex. CW1/A, as per which the accused approached
him for a loan of Rs.16,00,000/- for short term period and in view of the
friendly relations, complainant agreed to the same and gave friendly loan of
Rs.16,00,000/- to accused on 01.03.2012 in cash for making the payment
with regards to purchase of some property. It is further alleged that after
expiry of the period, complainant asked to return the loan amount and the
accused issued the cheque in question to discharge his liability, same got
dishonoured. The testimony of complainant remains unrebutted, as despite
ample opportunities being granted the accused has failed to cross-examine
the complainant and finally, vide order dt. 05.11.2015 right of accused to
cross examine the complainant was closed.
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GAURAV by GAURAV
UJJWAL
UJJWAL Date: 2026.04.11
16:57:49 +0530
27. Ld. Counsels for the accused at the stage of final arguments has
strongly argued that the complainant has not annexed even a single
document as evidence to prove the alleged advancement of friendly loan to
the accused, whereas the accused has consistently denied receipt of any loan
from the complainant. Ld. Counsels further argues that the complainant has
also failed to prove his financial capacity to advance such amount.
Therefore, accused has successfully rebutted the presumption by raising
probable defence.
28. At the very inception it is clarified that the complainant is not expected
to prove its case by leading supporting evidences, till the time accused rebuts
the negative presumption against him u/s 139 NI Act, as present complainant
is not a civil recovery proceeding where complainant is required to prove
the antecedent debt or liability. Reliance in this regard has been placed on
para-21 of judgment passed by Hon`ble Supreme Court in case titled “Sanjabij
Tari vs. Kishore S. Borcar and Another, 2025 SCC Online SC2069″. Moreover,
the burden to prove the fact that the complainant has no financial capacity to
advance such amount was also on the accused. Hon`ble Apex court in
Rajaram (deceased) Through LRs Vs. Maruthachalam (deceased) Through
LRs (2023) 16 SCC 125 has held that presumption u/s 118 and 139 of the NI
Act can be rebutted by the accused examining the Income Tax Officer and
bank official of the complainant/drawee. The accused has failed to led any
document or examine any independent witness to establish the financial
capacity of complainant. Thus, merely questioning the financial capacity of
complainant to advance loan cannot be equated to raising probable defence.
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by GAURAV
GAURAV UJJWAL
UJJWAL Date:
2026.04.11
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29. Based on the abovesaid discussion it can be finally said that the accused
has failed to rebut the presumption under section 139 NI Act by raising
probable defence either by highlighting material contradictions in
complainant`s case, leading defence evidence or by referring to the
circumstances.
30. It is trite law that when the accused has failed to rebut the presumption
under section 139 NI Act, the court can proceed to convict the accused.
Reliance is placed upon the judgment of Hon’ble Supreme Court in ‘Rajesh
Jain v. Ajay Singh, (2023) 10 SCC 148′, which discusses the correct
approach in dealing with presumption under Section 139 observed as under;
relevant extracts are reproduced hereunder:
“54. …Once the presumption under Section 139 was given effect to, the
courts ought to have proceeded on the premise that the cheque was, indeed,
issued in discharge of a debt/liability. The entire focus would then
necessarily have to shift on the case set up by the accused, since the
activation of the presumption has the effect of shifting the evidential burden
on the accused. The nature of inquiry would then be to see whether the
accused has discharged his onus of rebutting the presumption. If he fails to
do so, the court can straightaway proceed to convict him, subject to
satisfaction of the other ingredients of Section 138….”
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GAURAV by GAURAV
UJJWAL
UJJWAL Date: 2026.04.11
16:57:57 +0530
CONCLUSION
31. Accordingly, this Court finds the accused Sh. Gurjeet Singh, S/o Sh.
Inderjeet Singh, guilty of the offence under Section 138 NI Act and
accordingly he is convicted of the said offence.
32. This judgement contains 18 pages, and each page has been signed by
the undersigned as per rules. Let the copy of digitally signed judgment be
uploaded on the website of Tis Hazari District Court as per rules.
Digitally signed
by GAURAV
GAURAV UJJWAL
Announced in open Court UJJWAL Date:
2026.04.11
on 11h Day of April, 2026 16:58:01 +0530
GAURAV UJJWAL
JMFC (NI ACT-01)
WEST/THC
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