Delhi District Court
Nitin Sharma vs J.Mithyleshwar on 6 May, 2026
IN THE COURT OF JUDICIAL MAGISTRATE FIRST CLASS (NI ACT),
SHAHDARA, KARKARDOOMA COURT, DELHI
Presiding Officer - Manisha Bhau, Delhi Judicial Service
CT Case No. 12811/2016
CNR NUMBER DLSH020034722016
In the matter of
NITIN SHARMA
S/o Hanuman Prasad Sharma
R/o D-45, Ramprastha Colony.
Ghaziabad, U.P. - 201011 ...Complainant
versus
J. MITHYLESHWAR
S/o Late Sh. V.N. Jayaraam
R/o 49, Ward No.30, Vinag Mansion,
Vadde Nagappa Compound, Old Market Road,
Cantonment Bellary, Bellary,
Karnataka-583104 ...Accused
Under offence Section 138, NI Act, 1881
Date of institution 05.09.2016
Plea of accused Not guilty
Date of reserving of judgment 22.01.2026
Date of pronouncement 06.05.2026
Decision Conviction
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CT Case No. 12811/2016 Nitin Sharma v. J. Mithyleshwar
TABLE OF CONTENTS
Sr. Heading Page number
A Case of the Complainant 2
B Proceedings before the Court 3
C Submissions 8
D Applicable Law 11
E Questions for Consideration 13
F Decision 22
JUDGEMENT
1. Vide this judgment, this Court shall dispose of the aforementioned complaint
instituted by the complainant against the accused for the offence punishable
under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter
referred to as “NI Act“).
A. CASE OF THE COMPLAINANT
2. The substance of allegations, as contained in the complaint, are as follows:
a. The complainant has known the accused since a long period as the
accused is the son of the friend of the father of the complainant. The
accused contacted the complainant and his family regarding financial
help, and considering their old relations, the complainant provided a
financial help in the sum of Rs. 20,00,000/- through cheque bearing no.
690765 dated 16.04.2015 and cheque bearing no. 690766 dated
17.04.2015 each for Rs. 10,00,000/- both drawn on Karnataka Bank Ltd.,
Sarita Vihar, Delhi – 110092, against promissory notes and receipts.
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CT Case No. 12811/2016 Nitin Sharma v. J. Mithyleshwar
b. Subsequently, the accused, in discharge of his liability, issued a cheque
bearing no. 000069 dated 03.03.2016 for Rs. 20,00,000/-, drawn on
HDFC Bank, Kakatiya Residency, Ward no. 18, Kappagal Road Bellary,
Bellary, Karnataka – 583103 in favour of the complainant (hereinafter
referred to as “the cheque” or “cheque in question”).
c. Upon presentment with the bank of the complainant, i.e., Karnataka Bank
Ltd., Sarita Vihar, Delhi – 110092, the cheque of the accused returned
unpaid with the remark “Account blocked” vide bank memo dated
19.03.2016.
d. The complainant issued a legal demand notice to the accused on
12.04.2016 through speed post, which was duly served upon the accused.
However, since no payment was received of the cheque amount in terms
of the legal demand notice within 15 days, the complainant filed the
present complaint under Section 138, NI Act.
B. PROCEEDINGS BEFORE THE COURT
3. The accused entered appearance on 05.09.2016 through his counsel.
4. On 22.02.2019, the substance of accusation was explained to him, and notice
under Section 251 of the Code of Criminal Procedure, 1973 (hereinafter
referred to as “CrPC“) was framed. The accused pleaded not guilty to the
offence, and stated the following defence:
“(…)
A3. The cheque bears my signature but I have not filled the contents
of the same. The cheque was given as security.
Q/4 Did you receive legal demand notice dated 12.04.2016 Ex.
CW1/8?
A4. Yes.
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Q5. Do you have anything else to say
A5. The cheque was given as security and property transactions
were going on between the parties.”
5. On 28.08.2021, the accused was granted an opportunity to cross-examine the
complainant after his application under Section 145(2), NI Act, was allowed.
6. It was stated in the application under Section 145(2), NI Act, as follows:
a. The accused had approached Mr. Hanuman Prasad Sharma, father of the
complainant, as he was in need of a loan of Rs. 2,00,00,000/-, and Mr.
Hanuman Prasad Sharma used to provide loans by keeping gold
ornaments or properties as mortgage. The accused only had land parcels
available, and he was informed by Mr. Hanuman Prasad Sharma that in
exchange of providing a loan, he and his family members will enter into
a sale deed with the accused but only pay him the circle rate to safeguard
the loan, and not the market value.
b. The accused transferred his ancestral land in favour of Mr. Hanuman
Prasad Sharma, Mrs. Shakuntla Sharma (wife of Mr. Hanuman Prasad
Sharma), and Mr. Sunil Sharma (son of Mr. Hanuman Prasad Sharma),
and the accused received a total of Rs. 1,22,48,000/- from Mr. Hanuman
Prasad Sharma and his wife, though his original demand was for Rs.
2,00,00,000/-.
c. Mr. Hanuman Prasad Sharma also took five blank signed cheques from
the accused, and obtained his signature on blank promissory notes and
blank receipts, which were returnable upon repayment of the loan.
d. Since the accused was still in need of more funds, he informed Mr.
Hanuman Prasad that he intended to sell the properties mortgaged with
Mr. Hanuman Prasad, as such a sale would also provide the accused-4-
CT Case No. 12811/2016 Nitin Sharma v. J. Mithyleshwarsufficient money to repay the loan. However, Mr. Hanuman Prasad told
the accused that he should not sell the properties to any third-party, and
in view of his needs, the family of Mr. Hanuman Prasad Sharma will
provide him a loan of Rs. 50,00,000/-, and the remaining value of the
mortgaged properties, which was calculated at less than 10% of the
market value, will be paid by 31.12.2015 by Mr. Hanuman Prasad.
e. Mr. Hanuman Prasad Sharma also confirmed that the blank and signed
cheques, promissory notes, and receipts were in the safekeeping in his
bank locker in Delhi and the same would be also returned.
f. The abovesaid sum of Rs. 50,00,000/- was paid by Mr. Hanuman Prasad
Sharma and his family, out of which there was an RTGS of Rs.
10,00,000/- received from Mr. Hanuman on 21.01.2015, and two cheques
of Rs. 10,00,000/- (each) received from Mr. Nitin Sharma on 16.04.2015
and 17.04.2015. However, no cash transaction took place between the
accused and the complainant.
g. However, when the accused, in January, 2016, approached Mr. Hanuman
Prasad Sharma for the balance amount towards the sale of his properties,
he made vague excuses and avoided the accused, and eventually, the
complainant spoke to the accused on the phone and abused him.
h. The complainant in connivance with his family members manipulated
the accused, and caused him severe emotional and financial loss, and
misused his blank security cheques.
7. In order to prove the case, the complainant led the evidence as follows:
Oral Evidence
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CT Case No. 12811/2016 Nitin Sharma v. J. MithyleshwarCW1 Complainant (by way of affidavit i.e., Ex. CW1/A)
CW2 Mr. Shams Tabrej, Bank Official, HDFC Bank,
Vishwas Nagar, Shahdara, Delhi – 110032
Documentary Evidence
Ex. CW1/1 Original Account statement / passbook of the
complainant
Ex. CW1/2 Original Promissory Note dated 16.04.2015
Ex. CW1/3 Original Promissory Note dated 17.04.2015
Ex. CW1/4 Original Receipt dated 17.04.2015
Ex. CW1/5 Original Receipt dated 16.04.2015
Ex. CW1/6 Original cheque bearing no. 000069
Ex. CW1/7 Original bank return memo dated 19.03.2016
Ex. CW1/8 Legal notice dated 12.04.2026
Ex. CW1/9 Original postal receipt
Ex. CW1/10 Tracking report
Ex. CW2/A Authorization letter issued by competent bank officer,
Certificate u/s 65B of IEA, Certificate under Banker’s
Books Evidence Act, and Account statement of bank
account no. 1760193xxxx208 maintained in the name
of Sh. J. Mithyleshwar
8. On 18.11.2021, the complainant/CW1 was examined and partly cross-
examined. He was cross-examined and discharged on 30.11.2021.
9. On 09.12.2023, CW2, Bank witness from HDFC Bank, Vishwas Nagar,
Shahdara, was examined, cross-examined, and discharged.
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CT Case No. 12811/2016 Nitin Sharma v. J. Mithyleshwar
10. The statement under Section 313, CrPC of the accused was recorded on
09.12.2023, after all the incriminating material on record was put to him. He
stated as follows:
“…Ans. I know the complainant since 2014-15 as father of complainant
was classmate of my father. I did not take any loan from the
complainant whatsoever. Cheque in question belongs to me and it bears
my signature. However, I did not fill the particular cheque in question.
I received the legal demand notice. The cheque question was given as
security to the father of the complainant namely Sh. Hanuman Prasad
Sharma at the time of conditional sale in the Dec 2014. CW2/A is matter
of record only.
(…)
Ans. My family runs a Cinema Theatre at Karnataka Ballari and also
have several agricultral lands as well as plots. In Dec 2014, I had
entered into conditional sale/mortgage agreement with respect to Plot
No. 2,3,32,48,49,50,52,53 situated at V. Nagappa Colony, Hospet
Road, Cantonment Ballari, Karnataka. My mother Smt. Shantalaxmi
Jayaram had also entered into conditional sale/mortgaged of open site
measuring 15224 Sq fts situated at Akula Chalamaya Street, Gandhi
Nagar, Ballari against which I have received Rs. 38,40,000/- into my
account from Sh. Hanuman Prasad and Rs. 38,40,000/- received into
my account from Smt. Shakuntala Sharma (wife of Sh. Hanuman Prasad
Sharma). Rs. 45,68,000/- was received into my mother’s bank account
from Sunil Sharma. Against the same, I had given 5 signed blank
security cheques and blank signed promissory note and receipt to Sh.
Hanuman Prasad Sharma. I have paid Rs. 90,00,000/- in cash against
interest over a period of 15 months in several cash installments made
to two persons of complainant namely Mohan and Laxman who did not
give any receipt. I was given 3 years time to make payment commencing
from Dec 2014 yet my blank signed security cheques were presented by
the complainant. Further, despite my timely payment of interest, Sh.
Hanuman Prasad Sharma and Ms. Shakuntala Sharma have sold above
mentioned 8 plots without my consent to third party and the remaining
open site measuring 15224 Sq fts situated at Akula Chalamaya Street,
Gandhi Nagar, Ballari is presently in the name of Mr. Sunil Sharma,
whereas the documents executed were only with respect to conditional
sale/ mortgage and the properties had to be returned to me upon
payment of entire amount. I have not received any cash from Sunil
Sharma and Ritu Sharma and also I am not liable to pay any amount to
Sunil Sharma, Ritu Sharma or any of their family members. They have
misused my cheque, promissory note and receipt. All the property
transactions were entered into at Ballari, Karnataka and I can produce
the same.”
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CT Case No. 12811/2016 Nitin Sharma v. J. Mithyleshwar
11. On 06.12.2024, the application of the accused under Section 315, CrPC, was
allowed and the accused was examined-in-chief on the same date. Accused
tendered the following documents in his defence evidence:
a. Certified copy of sale deed executed by Smt. J. Shantha Lakshmi
Jayaram in favour of Mr. Sunil Sharma, alongwith its translation
(Ex.DW1/1)b. Certified copy of sale deed executed by the accused in favour of Mr.
Hanuman Prasad Sharma (Ex.DW1/2)c. Certified copy of sale deed executed by the accused in favour of Mrs.
Shakuntala Sharma (Ex.DW1/3)d. Certified copy of sale deed executed by Mr. Haurman Prasad Sharma
(GPA of Nitin Sharma) in favour of Y Mallikarjuna Raddy & Mrs. G.
Vidya Lakshmi (Ex.DW1/4)e. Certified copies of three sale deeds executed by Mrs. Shakuntala
Sharma in favour of Kushwalth Raddy (Ex.DW1/5, Ex.DW 1/6, and
Ex.DW1/7)f. Certified copy of sale deed executed by Mrs. Shakuntala Sharma in
favour of Soma Setty Hanumantha and Mrs. S. Gouthami Priya
(Ex.DW1/8)
12. During examination-in-chief, the Ld. Counsel for complainant raised an
objection that certified copies are copies, and not original sale deeds.
13. The accused was not cross-examined, as his right for defence evidence was
closed on 23.04.2025. The right for defence evidence was re-opened by the
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CT Case No. 12811/2016 Nitin Sharma v. J. Mithyleshwar
order of the Ld. ASJ-07, Shahdara, vide order dated 16.01.2026, however,
since the accused again remained absent on the date fixed for defence evidence
before this Court, his right was closed for defence evidence for a second time
vide order dated 22.01.2026.
C. SUBMISSIONS
14. Ld. Counsel for complainant made the following submissions:
a. The accused has admitted the sign on the cheque, promissory notes, and
the receipts. The receipt of the legal demand notice is also admitted by
the accused. Thus, the presumption under Section 139, NI Act, arises in
favour of the complainant, and the same has not been rebutted by the
accused.
b. The accused has raised the most improbable defence. It is stated by the
accused that the cheque and promissory notes were issued blank upon a
conditional sale with family member of the complainant, however, this
fact has not been proved by the accused during his evidence or during
cross-examination of the complainant.
c. It is not disputed that the accused did not take any steps for getting back
his documents, such as the cheque, promissory note, and receipt.
d. In his application under Section 145(2), NI Act, the accused admitted
receipt of the sum of Rs. 50,00,000/- from Mr. Hanuman Prasad Sharma
and his family members.
e. The contention that the complainant has not shown the loan in his ITR is
irrelevant as the applicable ITR form, i.e., Form ITR V does not have any-9-
CT Case No. 12811/2016 Nitin Sharma v. J. Mithyleshwarcolumn for loans advanced. In any case, the acceptance of the loan is not
in dispute.
f. The loan transaction stands proved by way of the promissory note and
statement of bank account of the complainant. The accused has not
disproved this fact, and has only dragged the proceedings over a course
of ten years to evade his liability.
g. In his statement under Section 313, CrPC, the accused for the first time
took the defence that he had paid interest of Rs. 90,00,000/- in cash,
however, such a defence was neither taken in the application under
Section 145(2), NI Act, nor during the cross-examination of the
complainant.
h. The sale deeds tendered by the accused in his examination-in-chief do
not mention any condition to the sale, as alleged by the accused, and the
same are not admissible as evidence.
15. Per contra, Ld. Counsel for accused, submitted the following written
arguments:
a. This is a false case which has been instituted by the complainant by
misusing the security cheque of the accused. The accused had
approached the father of the complainant for a loan, namely, Mr.
Hanuman Prasad Sharma, who used to disburse loans to people by
keeping their gold ornaments or property as mortgage.
b. The accused took a loan from Mr. Hanuman Prasad, and executed a
conditional / mortgage sale deed with him and Mr. Hanuman Prasad
imposed the condition that he and his family members would only pay
the circle rate of the properties and not their market value.
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CT Case No. 12811/2016 Nitin Sharma v. J. Mithyleshwar
c. Mr. Hanuman obtained five signed and blank cheques of the accused,
along with blank signed promissory notes and blank receipts, and gave
the assurance to the accused that all these documents will be returned to
the accused upon repayment of the loan. The total loan demanded by the
accused was Rs. 2,00,00,000/-, but the amount given by Mr. Hanuman
Prasad was only Rs. 1,22,48,000/-.
d. Thereafter, the accused decided to sell the properties mortgaged to Mr.
Hanuman Prasad to repay his loan, and as he was still in need of funds,
however, Mr. Hanuman Prasad requested the accused to not sell the
properties, and assured him a payment of Rs. 50,00,000/- and the
payment of the remaining amount (i.e., 10% below the market value) by
31.12.2015.
e. The amount of Rs. 50,00,000/- was paid to the accused i.e., through
RTGS of Rs. 10,00,000/- on 21.01.2015 and two cheques of Rs.
10,00,000/- from the complainant but the remaining amount was never
paid to the accused despite requests. The complainant misused the blank
documents and converted them into an alleged sale at 10% below the
market value.
f. The accused has raised a probable defence, and rebutted the presumption
in favour of the complainant. The complainant has not disclosed the
alleged loan in his ITR and he also not revealed his income during his
examination. Such a testimony casts a serious doubt on his case and his
financial capacity.
g. The complainant deposed that except the alleged loan amount, there was
no other transaction between him and the accused, whilst admitting that
his mother, father, brother, and sister-in-law also had multiple
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CT Case No. 12811/2016 Nitin Sharma v. J. Mithyleshwar
transactions with the accused, including property transactions. This
shows that the complainant has deliberately concealed material facts
about all the transactions with the accused.
h. The complainant stated that the loan was advanced in Bellary, Karnataka,
whereas, the cheques were handed over in Delhi in his office in
February/March, 2016, thereby creating serious inconsistency in his
testimony.
D. APPLICABLE LAW: INGREDIENTS AND PRESUMPTIONS UNDER NI ACT
16. Section 138 of the NI Act reads as under:
“138. Dishonour of cheque for insufficiency, etc., of funds in the
account.– 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 provision 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.
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CT Case No. 12811/2016 Nitin Sharma v. J. Mithyleshwar
Explanation.–For the purposes of this section, “debt of other liability”
means a legally enforceable debt or other liability.”
17. In order to establish the offence under Section 138, NI Act, the following
necessary ingredients of the offence must be fulfilled:
First A person issued 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;
Second The cheque was issued for the discharge, in whole or in
part, of any debt or other liability;
Third The cheque was presented to the bank within a period of
three months from the date on which it is drawn or within
the period of its validity whichever is earlier;
Fourth The cheque returned 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;
Fifth The payee or the holder in due course of the cheque made
a demand for the payment of the said amount of money 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;
Sixth The drawer of such cheque failed to make payment of the
said amount of money to the payee or the holder in due
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course of the cheque within 15 days of the receipt of the
said notice.
E. QUESTIONS FOR CONSIDERATION
18. The accused admitted the signature on the cheque. The cheque dated
03.03.2016 was presented within its validity period. As per original bank
return memo dated 19.03.2016, the cheque returned unpaid with the remark
“Account blocked”.
19. The Hon’ble Supreme Court of India in M/s Laxmi Dyechem v. State of
Gujarat, 2012(13) SCC 375, has observed that the dishonour of a cheque for
the reason such as account closed is duly covered by the scope of Section
138, NI Act. It was held that if the drawer of the cheques closes his account
after issuance of a cheque, then it must be presumed that his account did not
have sufficient funds for encashment of the cheque. Accordingly, the first,
third, fourth ingredient are fulfilled.
20. The legal demand notice dated 12.04.2016 was dispatched within 30 days of
the receipt of information by the complainant regarding the dishonour of the
cheque, and the complainant demanded the cheque amount from the accused
in the said notice. The accused has admitted that he received the legal demand
notice. Therefore, the fifth ingredient also stands fulfilled.
21. It is not in dispute that no payment was made by the accused to the
complainant in lieu of the demand made by the complainant in the legal
demand notice. Therefore, the sixth ingredient stands fulfilled.
22. Now, the only ingredient left to be examined is whether the cheque was
issued in discharge of a legally enforceable debt or liability. It is necessary to
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examine the scope and ambit of the presumptions as envisaged by the
provisions of Section 118, NI Act, and Section 139, NI Act.
23. Section 139, NI Act, reads as follows:
“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 debt or other liability”
24. Further, Section 118(a) of the NI Act, states:
“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 consideration;
(b) as to date: that every negotiable instrument bearing a date was
made or drawn on such date;
(c) as to time of acceptance: that every accepted bill of exchange was
accepted within a reasonable time after its date and before its maturity;
(d) as to time of transfer: that every transfer of a negotiable instrument
was made before its maturity;
(e) as to order of indorsements: that the indorsements appearing upon
a negotiable instrument were made in the order in which they appear
thereon;
(f) as to stamps: that a lost promissory note, bill of exchange or cheque
was duly stamped;
(g) that holder is a holder in due course: that the holder of a negotiable
instrument is a holder in due course:
Provided that, where the instrument has been obtained from its lawful
owner, or from any person in lawful custody thereof, by means of an
offence or fraud, or has been obtained from the maker or acceptor
thereof by means of an offence or fraud or for unlawful consideration,
the burden of proving that the holder is a holder in due course lies upon
him.”
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25. The Hon’ble Supreme Court of India, in Kumar Exports v. Sharma Carpets,
(2009) 2 SCC 513, interpreted the aforesaid provisions as follows:
“19. The use of the phrase “until the contrary is proved” in Section
118 of the Act and use of the words “unless the contrary is proved”
in Section 139 of the Act read with definitions of “may presume” and
“shall presume” as given in Section 4 of the Evidence Act, makes it at
once clear that presumptions to be raised under both the provisions
are rebuttable…
20. …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…”
[Emphasis supplied]
26. On the issue of presumption arising in favour of the complainant, the
following observations of the Hon’ble Supreme Court of India in
Basalingappa v. Mudibasappa, (2019) 5 SCC 418 are reproduced for
reference:
“25. We having noticed the ratio laid down by this Court in the above
cases on Sections 118 (a) and 139, we now summarise the principles
enumerated by this Court in 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 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.
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CT Case No. 12811/2016 Nitin Sharma v. J. Mithyleshwar
25.3. To rebut the presumption, it is open for the accused to rely on
evidence led by him or the 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.
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 a persuasive burden.
25.5. It is not necessary for the accused to come in the witness box to
support his defence…”
[Emphasis supplied]
27. In the present case, the execution of the cheque, i.e., the signature on the
cheque has been admitted by the accused. Accordingly, the presumption
under Section 139, NI Act, is raised in favour of the complainant.
28. At the outset, it is to be noted that a mere defence that a cheque was issued
as security cheque or as a blank cheque is not sufficient to rebut the
presumption under Section 139, NI Act. In this regard, the following
observations of the Hon’ble Supreme Court in Bir Singh v. Mukesh Kumar,
(2019) 4 SCC 197, are reproduced for reference:
“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 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.
(…)
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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.”
(Emphasis supplied)
29. Thus, the burden was on the accused to prove that there did not exist any
legally enforceable debt or liability towards the complainant as on the date of
presentment of his security cheque.
30. In the application of the accused under Section 145(2), NI Act, it is admitted
that he received a total of Rs. 50,00,000/- from Mr. Hanuman Prasad and his
family, including the amount in question of Rs. 20,00,000/- from the
complainant. The complainant also independently filed his bank attested
statement of account, showing the advancement of Rs. 20,00,000/- through
two separate cheques of Rs. 10,00,000/- (each) to the accused. Thus, the
factum of advancement of Rs. 20,00,000/- by the complainant to the
accused is admitted.
31. In his examination-in-chief, the accused did not depose any facts, and he only
tendered Ex.DW1/1 to Ex.DW1/8 in evidence i.e., certified copies of sale
deeds pertaining to his ancestral land in Karnataka.
32. The accused has only explained the incriminating circumstances in his
statement under Section 313, CrPC and put forth his defence in his
application under Section 145(2), NI Act. However, neither of the two
amount to substantive evidence and cannot be considered as cogent evidence
in the absence of oral testimony by the accused.
33. Now, with respect to Ex.DW1/1 to Ex.DW1/8, this Court has to determine
whether these copies of sales deeds are admissible in evidence in absence of
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CT Case No. 12811/2016 Nitin Sharma v. J. Mithyleshwar
the originals, in view of the objection raised by Ld. Counsel for the
complainant during the examination.
34. A perusal of Ex.DW1/1 to Ex.DW1/8 shows that though the said documents
were tendered in evidence as “certified copies”, they do not bear any stamp
or signature from the Office of the Sub-Registrar which would prove that they
were obtained from the concerned authority as true and certified copies.
35. The accused did not furnish any explanation with regard to the non-
production of the original sale deeds, and after an objection was raised by Ld.
Counsel for complainant, the accused stated that these copies are printouts of
the digital copies. The accused has not filed any certificate under Section
65B, Indian Evidence Act, 1872 / Section 63(4), Bharatiya Sakshya
Adhiniyam, 2023, in support of Ex.DW1/1 to Ex.DW1/8. There is nothing
on record to prove the authenticity and genuineness of the contents of these
documents. Thus, Ex.DW1/1 to Ex.DW1/8 are not admissible in evidence.
36. However, the complainant admitted during his cross-examination that there
were certain property transactions between his family members and the
accused. Notwithstanding this, the admission or the existence of property
transactions between the accused with family of the complainant does not by
itself discredit the case of the complainant when the accused has not put forth
any evidence, oral or documentary, to prove that the payment of Rs.
20,00,000/- received from the complainant was repaid by him or that the
time-period for its repayment had not lapsed or that the amount was to be
adjusted towards any sale of property.
37. The accused raised a defence for the first time during his statement under
Section 313, CrPC that he had paid interest of Rs. 90,00,000/- to the
complainant, through one Mr. Mohan and Laxman. He also stated during his
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CT Case No. 12811/2016 Nitin Sharma v. J. Mithyleshwar
statement under Section 313, CrPC, that it was agreed that he would be given
three years’ time for repayment, however, his blank signed security cheques
were presented by the complainant. The said facts were not stated during his
examination-in-chief. The said defence was also not mentioned in his
application under Section 145(2), NI Act, and nor did he summon Mr. Mohan
and Laxman as witnesses to prove the payment of interest. The accused has
also not shown any documentary proof as to the source of the said Rs.
90,00,000/- such as any cash withdrawal from his bank account.
38. Admittedly, the basic contents of the promissory notes and receipts placed on
record by the complainant are typed, and only the details of the parties, date,
and amount are filled in handwriting. When all transactions took place
between the parties through written agreements, i.e., alleged alleged sale
deeds, promissory notes, and loan receipts, then the defence of the accused
that he repaid a sum as large as Rs. 90,00,000/- without obtaining a single
acknowledgement from the complainant or his family is highly doubtful and
improbable.
39. In this regard, I find it relevant to refer to the following observations of the
Hon’ble High Court of Delhi in V.S. Yadav v. Reena, 172 (2010) DLT 561,
as follows:
“7. The respondent has placed reliance on Krishna Janardhan Bhat v.
Dattatraya G. Hegde, 2008 Crl. L.J. 1172, which is also the case relied
upon by the Trial Court. In this judgment itself Hon’ble Supreme Court
has specifically observed that Court should not be blind to the ground
realities and the rebuttal of presumption under Section 139 of N.I. Act
would largely depend upon the factual matrix of each case. The Trial
Court in this case turned a blind eye to the fact that every accused
facing trial, whether under Section 138 of N.I. Act or under any penal
law, when charged with the offence, pleads not guilty and takes a stand
that he has not committed the offence. Even in the cases where loan is
taken from a bank and the cheques issued to the bank stand
dishonoured, the stand taken is same. Mere pleading not guilty and
stating that the cheques were issued as security, would not give
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CT Case No. 12811/2016 Nitin Sharma v. J. Mithyleshwar
amount to rebutting the presumption raised under Section 139 of N.I.
Act. If mere statement under Section 313 Cr. P.C. or under Section 281
Cr. P.C. of accused of pleading not guilty was sufficient to rebut the
entire evidence produced by the complainant/ prosecution, then every
accused has to be acquitted. But, it is not the law. In order to rebut the
presumption under Section 139 of N.I. Act, the accused, by cogent
evidence, has to prove the circumstance under which cheques were
issued. It was for the accused to prove if no loan was taken why he did
not write a letter to the complainant for return of the cheque. Unless
the accused had proved that he acted like a normal
businessman/prudent person entering into a contract he could not
have rebutted the presumption u/s 139 N.I. Act. If no loan was given,
but cheques were retained, he immediately would have protested and
asked the cheques to be returned and if still cheques were not returned,
he would have served a notice as complainant. Nothing was proved in
this case.”
[Emphasis supplied]
40. Accordingly, the onus was on the accused to take necessary steps if despite
repayments of the loan, the father of the complainant was not providing him
any receipts/acknowledgements, especially when it is his case that the father
of the complainant was in possession of his blank signed cheques, and blank
signed promissory notes and receipts.
41. There is also no merit in the contention of the Ld. Counsel for accused that
the complainant has failed to prove his financial incapacity, as the same
stands duly proved by the statement of bank account of the complainant
which shows the sum of Rs. 20,00,000/- given to the accused by way of two
cheques.
42. On the other hand, the complainant has deposed in a credible manner, and he
has furnished relevant documentary proof in support of his case. The
signature of the accused on the promissory notes, as well as receipts, dated
16.04.2015 and 17.04.2015, is admitted. The complainant stated that the
cheques vide which the loan was advanced were handed over to the accused
on two different dates, and the same is supported by the promissory notes and
receipts. The complainant denied all suggestions put to him that the cheque
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CT Case No. 12811/2016 Nitin Sharma v. J. Mithyleshwar
in question was handed over as a security cheque. Overall, there is no material
inconsistency in the entire deposition of the complainant.
43. On the appreciation of the totality of the evidence, this Court finds that the
accused has failed to prove a plausible or probable defence. Accordingly, the
second ingredient with regard to issuance of the cheque against legally
enforceable debt or liability also stands fulfilled as the presumption in
favour of the complainant is unrebutted.
44. In conclusion, all ingredients necessary for constituting an offence under
Section 138, NI Act, are fulfilled in the present complaint.
F. DECISION
45. In view of the foregoing discussion, the accused, Mr. J Mithyleshwar, is
hereby convicted for the offence under Section 138 NI Act with respect to
the cheque in question in the present case.1
46. A copy of this judgement be given free-of-cost to the convict.
Digitally
signed by
MANISHA
MANISHA BHAU
BHAU Date:
2026.05.06
16:45:20
+0530
(MANISHA BHAU)
JMFC NI ACT
SHAHDARA, KKD
06.05.2026
1
Pronounced in open court on 06.05.2026
This judgement comprises of 22 pages, and each page has been signed by me.
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