Appearance not given v. STATE THROUGH SHO ANR

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/03/2025 at 11:46:51 Respondent No. 2, a friend of the Appellant, had approached her in September 2014 seeking a friendly loan of ₹5.5 lakh, citing urgent financial need and assuring repayment within six months. Relying on this assurance, the Appellant extended a loan of ₹4 lakh in cash and an additional ₹1.5 lakh through cheque No. 746491 dated 17th September, 2014.

2.2 In the first week of April 2015, Respondent No. 2 issued two post- dated cheques in favour of the Appellant towards repayment of the loan– cheque No. 974175 dated 20th April, 2015 for ₹2 lakh and cheque No. 974174 dated 21st April, 2015 for ₹3.50 lakh, both drawn on HDFC Bank.

2.3 At the time of issuing these cheques, Respondent No. 2 had allegedly assured the Appellant they would be cleared upon presentation. However, both these cheques were dishonoured with the remarks ‘Alteration require drawer authentication’ and ‘Payment stopped by drawer.’

2.4 The Appellant immediately informed Respondent No. 2 about the dishonour, but no payment was made. Consequently, the Appellant issued a legal notice dated 5th May, 2015, demanding payment of the amounts covered by the dishonoured cheques. Despite receipt of the notice, Respondent No. 2 failed to comply, leading the Appellant to initiate proceedings under Section 138 of the NI Act.

2.5 Following the summoning of Respondent No. 2, a notice under Section 251 CrPC was served on 25th July, 2017, wherein Respondent No. 2 presented her defence, which was duly recorded.

2.6 In support of her case, the Complainant examined herself as CW-1, and the Deputy Manager of HDFC Bank, Patel Nagar, New Delhi as CW-2. The statement of Respondent No. 2 was also recorded under Section 313 CrPC. In her defence, Respondent No. 2 examined herself as DW-1 and one CRL.L.P. 167/2025 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/03/2025 at 11:46:52 Mr. Arvind Kumar as DW-2.

2.7 Upon consideration of the evidence and arguments advanced, the Trial Court rendered the impugned judgment, dismissing the complaint and acquitting Respondent No. 2. Appellant’s Case

3. The Appellant assails the impugned judgment on the following grounds:

3.1 The impugned order is based on conjecture and lacks cogent reasoning. The Trial Court’s findings are speculative, and contrary to established legal principles.

3.2 The Appellant has duly proved all the essential ingredients required to establish an offence under Section 138 of the NI Act. The cheques in question were drawn from Respondent No. 2’s account and issued in discharge of an admitted debt. Despite receiving a legal notice, Respondent No. 2 failed to make the requisite payment, thereby attracting liability under the NI Act.

3.3 The statutory presumption under Section 139 of the NI Act, which mandates that cheques are presumed to have been issued in discharge of a legally enforceable debt, was clearly applicable in this case. Respondent No. 2 not only failed to rebut this presumption but, in fact, admitted to issuing the cheques and signing them.

3.4 Respondent No. 2 presented inconsistent and contradictory defences. Initially, in her statement under Section 251 CrPC, she outrightly denied taking any loan from the Appellant. However, she later conceded to making a partial repayment of ₹1.50 lakh– claiming to have paid ₹50,000/- to the Appellant’s husband and ₹1 lakh to the Appellant herself. CRL.L.P. 167/2025 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/03/2025 at 11:46:52

3.5 The Trial Court erred in relying on the bank statement of the Appellant’s husband to support Respondent No. 2’s claim of repayment. Not only did this document fail to corroborate the alleged repayment of ₹50,000/-, but the actual payments made by Respondent No. 2 amounted to only ₹46,000/- and were entirely unrelated to the loan. These payments were made as reimbursement for personal assistance extended to her by the Appellant’s husband, not towards the discharge of the loan.

3.6 During cross-examination, Respondent No. 2 contradicted her earlier assertion, admitting that no payment of ₹50,000/- was ever made to the Appellant’s husband.

3.7 The Trial Court also failed to appreciate that the defence presented by Respondent No. 2, claiming to have repaid the sum of INR 1 lakh in cash, was not substantiated by the following facts: (i) In her statement under Section 251 CrPC, her reply to the legal notice, and the complaint that she allegedly lodged against the Appellant, Respondent No. 2 consistently stated that she had personally paid ₹1 lakh in cash to the Appellant. However, she later changed her stance, claiming that the amount was paid through one Arvind Kumar, a person not mentioned in any of her prior statements. (ii) Respondent No. 2 failed to provide any documentary proof of the alleged ₹1 lakh payment made on 10th April, 2015. Even during cross- examination, when specifically asked to produce a statement of account reflecting a loan of ₹1 lakh from her employer (which she claimed was the source of the repayment), she initially asserted that she could provide it, but ultimately failed to do so. (iii) The testimony of DW-2 did not support Respondent No. 2’s defence, CRL.L.P. 167/2025 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/03/2025 at 11:46:52 and the defences presented by both DW-1 and DW-2 were entirely inconsistent and failed to establish any defence. (iv) DW-2 did not stand by his own statement, and his cross-examination contradicted Respondent No. 2’s defence. He failed to recall the exact date when the alleged payment was made at the Appellant’s office, and could not even specify the denominations of the currency notes allegedly handed over to the Appellant. Analysis

4. The Court has considered the aforenoted contentions and perused the impugned order. This case arises under Section 138 of the NI Act, where statutory presumptions operate in favour of the cheque holder. Under Section 118(a) of the Act, once the execution of the cheque is admitted, a presumption arises cheque was issued for consideration. Additionally, Section 139 strengthens this presumption by deeming that the cheque was received in discharge, either wholly or partially, of a debt or liability. These provisions collectively shift the burden onto the accused to rebut the presumption of a legally enforceable liability.

5. However, the Supreme Court has consistently held that the standard for establishing such a probable defence is based on a preponderance of probabilities.2 This means that the accused does not need to conclusively prove their defence, but must demonstrate that their version is reasonably probable, thereby shifting the burden back to the complainant.

6. The standard for rebuttal is not proof beyond reasonable doubt, as required in a criminal trial, but on the scale of preponderance of probabilities. The accused has two possible avenues to rebut CRL.L.P. 167/2025 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/03/2025 at 11:46:52 presumption––either to prove that no consideration or debt existed, or to demonstrate that, in the specific facts of the case, the non-existence of such liability is so probable that a prudent person would be compelled to conclude that no debt ever arose. The accused may discharge this burden either by leading direct evidence or by relying on the material already on record.3

7. A perusal of the impugned order in light of the aforementioned legal principles demonstrates that the Trial Court has thoroughly examined the evidence, and appropriately applied the well-established legal principles set forth by the Supreme Court. In fact, the Trial Court duly acknowledged that the presumptions stood attracted in favour of Appellant. Accordingly, upon reaching this conclusion, the Trial Court proceeded to assess whether the presumption in favour of the Appellant was rebutted by Respondent No. 2, based on the principles of preponderance of probabilities. In this regard, it is pertinent to highlight the following observations made in the impugned judgment: “15. The case of the complainant is that the accused took a loan of Rs. 5,50,000/- from her and thereafter, issued the cheques in question to return the loan amount, which subsequently got dishonored upon presentation. During the course of trial, the accused has admitted her signatures over the cheque in question and as discussed previously, the legal presumption u/s 118 (a) /139 of the NI Act are attracted to the present case. Once Section 139 of the Negotiable Instruments Act comes into picture, the Court presumes that the cheque was issued in discharge, in whole or in part, of any debt or liability. At this stage, with the help of presumption under Section 139 of the Negotiable Instruments Act, the case of the complainant stands proved. The Court, at this stage, is completely in concurrence with the judgments relied upon by Ld. Counsel for complainant on the point of presumption.