Mool Singh v. Sudarshana Ahuja

15. Aggrieved by the impugned Judgment dated 16.01.2026, present Appeal has been filed on behalf of the Appellant / Defendant.

16. The grounds of challenge are that the defence raised by the Appellant was rejected, on the touchstone of proof and evidentiary standard, rather than examining whether the defence disclosed triable issues warranting adjudication. It is contended that the approach adopted by the learned Trial Court, defeats the very object and purpose of the summary procedure and is contrary to the settled principles of law governing such proceedings.

17. Reliance has been placed on IDBI Trusteeship Services Ltd. vs. Hubtown Ltd. (2017) 1 SCC 568 and it was asserted that principles laid down therein, had not been appreciated correctly. The defence raised by the Appellant clearly falls within the category of a fair, reasonable and plausible defence raising triable issues, entitling the Appellant to leave to defend. Digitally

18. Reliance has also been placed on B. L. Kashyap and Sons Ltd. vs. JMS Steels and Power Corporation and Ors., MANU/SC/0048/2022.

19. It is further contended that the learned District Judge erroneously treated the defence of the Appellant as frivolous and illusory, despite the Appellant having categorically denied the alleged loan transaction and specifically raised the plea of misuse of cheques. It is submitted that such pleas constituted substantial and bona fide triable issues, which necessarily required adjudication upon leading of evidence by the parties.

20. Furthermore, it is stated that the case of the Plaintiff itself was vague, inconsistent and unsupported by any cogent documentary evidence, inasmuch as, no specific date, time or particulars of the alleged loan of Rs.12,00,000/- had been disclosed in the Plaint.

21. Reliance is placed on Raj Duggal vs. Ramesh Kumar Bansal, MANU/SC/0393/1990, wherein it was held that the Court should not reject the defence of the Defendant, merely, because of its inherent implausibility or its inconsistency.

22. The learned District Judge observed that no complaint or report regarding the missing cheques had been placed on record by the Appellant, despite the Appellant having specifically averred those information/ Complaints had been lodged with the police authorities as well as the concerned bank.

23. It is further contended that the learned District Judge, without any cogent basis, discarded the plea regarding the invalidity of the cheques arising out of the merger of Dena Bank with Bank of Baroda and the consequent discontinuation of the old cheque books. Digitally

24. Reliance is placed on Smt. Archana Singh Gautam vs. State of U.P. and Anr., Application No. 9536/2024 and Vidya Projects Private Limited vs. Essel Infra Projects Limited and Ors., MANU/DE/6168/2025.

25. Moreover, it is stated that the learned District Judge failed to consider that the CC No.574/2022 dated 30.09.2024 under Section 138 NI Act, arising out of these very cheques, has culminated in acquittal of the Appellant, on the ground that the Respondent was unable to prove the legally enforceable debt.

26. In view of the above, it is stated that the learned Trial Court has effectively conducted a mini-trial, at the stage of deciding the Application for Leave to Defend and given findings on the disputed questions of facts, which indeed required evidence to be led.

27. Furthermore, attention is drawn towards the parallel proceedings in CS 167/2023 arising out of same set of cheques, wherein, the Leave to Defend has been granted, by the Co-ordinate Court.

28. Reliance is placed on Santosh Kumar vs. Bhai Mool Singh, AIR 1958 SC 321, wherein the Supreme Court held that where there are bona fide and triable issues, unconditional Leave to Defend must ordinarily be granted.

29. It is further submitted that the learned District Judge, had also dismissed the Application under VII Rule 11 of CPC on 04.02.2026, even though the present proceedings arise out of Order XXXVII of CPC.

30. It is contended that the impugned Judgment is a non-speaking order devoid of proper reasoning. The Appellant has prayed for setting aside the impugned Judgment dated 04.02.2026, for grant of leave to defend, and for remand of the matter for trial. Digitally Submissions heard and record perused.

31. The case of the Plaintiff/ respondent was that the Appellant had issued three cheques bearing Nos.021002, 826924 and 931232, all dated 29.11.2021, amounting to Rs.10,00,000/-, Rs.1,00,000/- & Rs.1,00,000/respectively, in discharge of the loan of Rs. 12,00,000/- given from 2013-

2016. However, all these cheques, on presentation, got dishonored with the remarks ‘funds insufficient’.

32. Appellant has denied having availed any loan from the Respondent and has further asserted that she was not known to him. However, in the same breath, he admits that he knew the Respondent through her son, Mr. Sunil Kumar Ahuja. More importantly, while denying any financial transaction with the Respondent, the Appellant has admitted that he had borrowed a sum of Rs. 5,00,000/- from Mr. Sunil Kumar Ahuja, which, according to him, was repaid during the years 2015–2016. Thus, the Appellant’s plea that the Respondent was unknown to him and that no loan transaction ever existed is clearly contradicting his own averments in the Leave to Defend Application.

33. It is not denied that the three cheques, having the signatures of the Appellant, in the total sum of Rs.12,00,000/- were signed by him and on presentation by the Plaintiff to the Bank have been returned for the reason „funds insufficient‟.

34. The Appellant has taken the defence that the cheques in question, were undated cheques kept in his drawer, which were allegedly stolen by the Plaintiff’s son, in the year 2021. However, it is noteworthy that the Appellant has admitted his signatures on the cheques and has further Digitally admitted that the amounts mentioned therein, were filled in by him. In such circumstances, the plea that the cheques were blank unnamed cheques, duly signed and kept in the drawer, which were subsequently stolen by the Plaintiff’s son, is ex facie patently untenable and devoid of merit.

35. The Appellant claimed that he had duly informed the concerned bank as well as the police authorities, regarding the alleged theft of the cheques. However, no copy of any such complaint was placed on record, along with the Application seeking leave to defend. The said complaints have now been filed along with the present Appeal, bearing the receiving stamps of the Bank and the SHO, dated 23.03.2026. This clearly demonstrates that the complaints were lodged only after dismissal of the leave to defend Application, evidently with the sole object of creating a defence in the present proceedings.

36. Had the cheques in fact been stolen, as alleged by the Defendant, there was no plausible reason for him to not have lodged complaints immediately, upon the alleged theft. Furthermore, if the cheques had indeed been stolen, there was equally no justification for the Defendant not to have issued stop-payment instructions in respect thereof. The true position, however, is that upon presentation, the cheques were dishonoured on account of “funds insufficient”.

37. The Appellant has failed to furnish any explanation as to why signed cheques, with the amounts already filled in, were allegedly kept in his drawer, and further, why no stop-payment instructions were issued or complaint lodged with the police immediately upon the alleged theft of the cheques. The conduct of the Appellant clearly demonstrates that the plea of Digitally the cheques having been stolen and misused by the Plaintiff, is a mere afterthought, raised solely with the intention of creating a defence where none exists. In fact, from the averments contained in the Application seeking leave to defend, it is evident that the cheques bore the genuine signatures of the Appellant and that the amounts therein, had also been filled in by him.

38. The Appellant has taken a plea that Dena Bank and Bank of Baroda merged w.e.f. 01.04.2019 and the impugned cheques, had become invalid. However, even though these two Banks had been merged, the three cheques, on presentation, were not dishonored for the reason that they were invalid but for the reasons of „funds insufficient‟. This ground taken by the Appellant of the cheques being invalid is therefore, not valid on the face of it.

39. The last defence, that had been taken by the Appellant, was that allegedly the loan had been taken during the period from 2013-2016 and therefore, had become time barred on the date when the alleged cheques were issued in the year 2021 and the Suit has been filed in the year 2023.

40. In this regard, it is pertinent to note that a cheque, by its very nature, constitutes a promise to pay a specified sum. Once the validity and execution of the cheque itself are not disputed, the same amounts to an acknowledgment of liability towards the Plaintiff. Accordingly, the period of limitation has to be reckoned from the date of issuance of the cheques and not from the date on which the loans were advanced. Therefore, it cannot be contended that the cheques were unsupported by any legally enforceable debt, particularly when there are specific averments that the loans had been advanced between the years 2013 and 2016 and that the cheques were issued Digitally towards repayment thereof.

41. This proposition of law was comprehensively examined in the case of A.V Murthy vs. B.S. Nagabasavanna (2002) 2 SCC 642, wherein it was held as under:-

42. Further, under Sections 20, 87, 118 and 139 of the Negotiable Instruments Act, 1881, a statutory presumption arises that a cheque is issued towards discharge of a legally enforceable liability, by the maker of the instrument, unless the same is rebutted by cogent and credible evidence to the contrary. This proposition of law was comprehensively examined in the case of Bir Singh vs. Mukesh Kumar, (2019) 4 SCC 197, wherein the Apex Court observed:

43. In the present case, the execution of the cheques and the signatures thereon, are admitted. The claim of the Appellant that there was no legally enforceable debt, is not tenable as the cheques themselves constitute an agreement to pay, and therefore, the contention of there being no legally enforceable debt, is not tenable. The cheques, clearly indicate acknowledgment and discharge of liability, and the Appellant has failed to rebut the statutory presumptions available in favour of the Respondent.

44. Furthermore, the Appellant has contended that the Plaintiff/ Respondent had filed the Complaint under Section 138 NI Act on the basis of same dishonoured cheques, but the Complaint under Section 138 NI Act has been rejected by observing that the Plaintiff failed to prove any legally enforceable debt. It is asserted that the findings of the Criminal Court are binding in the present proceedings since they pertain to the same fact in issue.

45. There has been a controversy since long about whether the Civil Judgments are binding on the Criminal Courts or vice versa. The genesis of this arguments lies in the observations of the Supreme Court in the case of M/s Karam Chand Ganga Prasad & Anr. Vs. Union of India & Ors. (1970) 3 SCC 694, wherein it was held “it is a well-established principle of law that the decision of the civil courts are binding on the criminal courts. The Digitally converse is not true.”

46. Similar view was taken by the Supreme Court in the case of V.M. Shah vs. State of Majharashtra and Anr. (1995) 3 SCC 767, wherein it was held that the Civil Court after full dressed trial recorded the finding that the Appellant had not come into possession through the Company, but had independent tenancy rights from the principal landlord, and, therefore, the decree of eviction was negatived. Until that finding is duly considered by the Appellate Court after weighing the evidence afresh and if it so warranted reversed, the findings bind the parties. The findings, recorded by the criminal court, stand superseded by the findings recorded by the civil court.

47. The laws as laid down in M/s Karam Chand Ganga Prasad & Anr. (supra) and V.M. Shah (supra) was re-considered by the Supreme Court in the case of K.G. Premshanker vs. Inspector of Police & Anr. (2002) 8 SCC 87, wherein a reference was made to the case of M.S. Sheriff vs. State of Madras AIR 1954 SC 397. The Supreme Court in the case of M.S. Sheriff (supra) held as under: “(15) As between the civil and the criminal proceedings we are of the opinion that the criminal matters should be given precedence. There is some difference of opinion in the High Courts of India on this point. No hard and fast rule can be laid down but we do not consider that the possibility of conflicting decision in the civil and criminal Courts is a relevant consideration. The law envisages such an eventuality when it expressly refrains from making the decision of the Court binding on the other, or even relevant, except for certain limited purposes, such as sentence or damages. The only relevant consideration here is the likelihood of embarrassment. (16) Another factor which weighs with us is that a civil Digitally suit often drags on for years and it is undesirable that a criminal prosecution should wait till everybody concerned has forgotten all about the crime. The public interests demand that criminal justice should be swift and sure; that the guilty should be punished while the events are still fresh in the public mind and that the innocent should be absolved as early as is consistent with a fair and impartial trial. Another reason is that it is undesirable to let things slide till memories have grown too dim to trust. This, however, is not a hard and fast rule. Special considerations obtaining in any particular case might make some other course more expedient and just. For example, the civil case or the other criminal proceeding may be so near its end as to make it inexpedient to stay it in order to give precedence to a prosecution ordered under S. 476. But in this case we are of the view that the civil suits should be stayed till the criminal proceedings have finished.”

48. The observation made in M.S. Sheriff (supra) were fully endorsed and in K.G. Premshanker (supra), it was held as under:

49. In K.G. Premshanker (supra), the Apex Court clarified that conflicting civil and criminal court decisions would not be a relevant consideration, except for the limited purpose of sentence or damage.

50. Similar observations were made by the Supreme Court in Kishan Singh(Dead) through LRs vs. Gurpal Singh & Ors. (2010) 8 SCC 775, wherein it was reiterated that there is no hard and fast rule about the binding nature of the civil proceedings in the criminal cases. Special considerations in any particular case might make some other courts more expedient and just.

51. In P. Swaroopa Rani vs. M. Hari Narayana alias Hari Babu (2008) 5 Digitally SCC 765, the Apex Court held that the civil and the criminal proceedings can proceed simultaneously. [In Vishnu Dutt Sharma vs. Daya Sapra (2009) 13 SCC 729 while considering this aspect it was held that M/s Karam Chand Ganga Prasad & Anr. (supra) was overruled in K.G. Premshanker (supra)].

52. This issue has been laid to rest by the Constitution Bench of this Court in Iqbal Singh Marwah vs. Ms. Meenakshi Dahiya Marwah (2005) 4 SCC 370, wherein it was observed as under:

53. Even in K.G. Premshanker (supra), where parallel civil and criminal proceedings arose out of the same dishonoured cheques, the Supreme Court observed that the effect of findings rendered in one proceeding upon the other would depend upon the facts and circumstances of each case and the Digitally extent to which such findings are otherwise relevant in law. There is no law that the judgment in criminal case is always binding in the Civil proceedings, but facts of each case has to be considered independently.

54. In view of the settled legal position, the acquittal of the Appellant in the proceedings under Section 138 of the Negotiable Instruments Act cannot, by itself, operate as a bar to the present civil claim nor can it be treated as conclusive proof against the Respondent.

55. The facts in the present case, as discussed above, do not disclose any triable issue in the Leave to Defend Application. Accordingly, the learned District Judge rightly concluded that the defences raised by the Appellant, neither disclose any bona fide nor any substantial triable issue, warranting grant of leave to defend. The Leave to Defend Application was, therefore, correctly dismissed.

56. In view of the foregoing discussion, this Court finds no infirmity in the impugned judgment and decree. The present Appeal is devoid of merit and is accordingly dismissed, along with all pending Applications.

JUDGE MAY 18, 2026 Digitally