Shardha Nand Bansal v. Ashok Kumar Bhalla

16. Thus, it is submitted that both the ld. MM and the ld. ASJ have passed well-reasoned judgments based on a proper appreciation of evidence on record, which do not suffer from any illegality, perversity, or jurisdictional error. Submissions Heard and Record Perused.

17. The central issue that arises for consideration is whether the concurrent findings of conviction recorded by the courts below suffer from any material illegality or perversity, particularly concerning the Petitioner’s primary defense that the cheques were issued for a time-barred debt.

18. The essential ingredient for an offence under Section 138 of the NI Act is that the dishonored cheque must have been issued in discharge, in whole or in part, of a “debt or other liability.” The Explanation to Section 138 clarifies that this phrase means a “legally enforceable debt or other liability”. Whether there existed a Legally Enforceable Debt:

19. The first assertion of the Petitioner is that there existed no legally enforceable debt as the impugned cheque was a Security cheque given in 2013 which has been misused by the Respondent in 2018.

20. To comprehend this aspect, it is pertinent to observe that admittedly the First Mortgage Deed dated 25.07.2013 was executed between the parties, wherein it was specifically stated that the Petitioner had taken a loan of Rs.25 lakhs and had executed the Mortgage Deed dated 25.07.2013 in respect of Freehold property Basement bearing XV-5352-8 situated at Latu Ghati, Paharganj, New Delhi. It was specifically recorded that the advance/loan taken by the Petitioner shall be payable till 23.07.2014 along with interest @ 2% per month. This Mortgage Deed was supported with a Digitally receipt dated 25.07.2013 Ex.CW1/A[1] wherein it was admitted that a sum of Rs.25 lakhs were accepted by the Petitioner as loan through two cheques in the sum of Rs.18 lakhs and Rs.[5] lakhs respectively and Rs.[2] lakhs in cash.

21. Thereafter, admittedly when the loan was not paid, the Second Mortgage Deed dated 22.07.2014 was executed in respect of the Shop No.5 & 6 (First floor) Commercial Complex, Sona Place property bearing No.5476, Ward No.12, Chandrawal, Near Multi Level Car Parking, Kamla Nagar, Delhi through an Agreement to Sell under collaboration Agreement with Shri Neel Pal and M/s Path Finder India (Pvt.) Ltd. through its Director Sharda Nand Bansal. In this Mortgage Deed as well, there was a mention of loan of Rs.25 lakhs being taken by the Petitioner and it was specifically recorded that the said amount shall be payable on or before 08.08.2015 along with interest @ 2% per month by the Petitioner to the Complainant.

22. This Mortgage Deed was followed by a Letter dated 10.06.2015 Ex.CW1/A[3] by Respondent Ashok Kumar Bhalla to M/s Path Finder India (Pvt.) Ltd. through Mr. Sharda Nand Bansal, the Petitioner, wherein again a reference was made to the two Mortgage Deeds and it was stated that for the last two months the Respondent had been requesting the Petitioner to arrange the refund of entire amount on the due date of 08.08.2015.

23. Though much has been contended on behalf of the Petitioner that the original Mortgage Deeds had been returned by the Respondent for which reason only the photocopy of the two Mortgage Deeds has been produced, but the Petitioner has clearly admitted the execution of two Mortgage Deeds as well as taking of loan of Rs.25 lakhs on 25.07.2013.

24. The Respondent No.2 Ashok Kumar Bhalla/Complainant in his testimony as CW[1] had deposed that the loan amount was not paid and Digitally consequently two postdated Cheques dated 16.08.2018 and 24.08.2018 in the sum of Rs.25 lakhs and 14 lakhs (being towards the interest amount) were given by the Petitioner in March, 2018 which on presentation got dishonoured.

25. In response to the Notice under Section 251 Cr.P.C the Petitioner had admitted taking loan of Rs.25 lakhs from the Complainant. He claimed that both the Cheques were given as security for the loan amount. He further asserted that he has already paid the loan amount to the Complainant.

26. Pertinently, while in response to the Notice, the Petitioner has claimed that this was given as security for the loan amount, he has failed to step into the witness box in defence to prove that these were the security cheques. Pertinently, no date has been mentioned by the Petitioner on which these alleged security cheques had been handed over. There is also no suggestion given to the Complainant in his cross-examination that the two impugned cheques were given as security. Also, the Petitioner has failed to state and give the date when these alleged security cheques had been handed over to the Complainant. Pertinently, if the contention of the Petitioner is accepted that these were security cheques then they would have been given in 2013 when the loan was admittedly, given. If this contention was to be accepted, then there is no reason whatsoever, why there would have been no mention in the two Mortgage Deeds or in the Receipt dated 25.07.201executed at the time of giving the Loan or subsequently executed Receipt Ex.DW1/2 dated 01.11.2018 vide which allegedly the Payment was made. On the other hand, the Respondent/Complainant in his testimony had deposed that these two postdated cheques had been handed over to him in the month of March, 2018.Therefore, it is held that the Petitioner has not been able to substantiate Digitally its defense that the cheques were only Security Cheques and that there was no existing legally enforceable debt against him.

27. It is, therefore, established that there existed a legally enforceable liability to repay the loan of Rs.25 lakhs along with the agreed interest. Whether the Debt was Time Barred:

28. In the instant case, the learned Trial Court and the learned ASJ have concurrently held that there exists a legally enforceable debt. However, the Petitioner claims that since the debt was time barred, there existed no legally enforceable debt on the day when the cheque was presented.

29. Thus, it is imperative ascertain whether the debt in lieu of which the cheque was presented, had become time-barred on the date of presentation of the cheques, on 25.08.2018.

30. The defense of the Petitioner is that the loan was allegedly given on 25.07.2013 which was repayable before 23.07.2014. Thus, the three-year limitation period expired on 22.07.2017. It is argued that even if the contention of the Complainant is accepted that there was a debt, even then it cannot be ignored that the debt had become time barred and the Complaint was not maintainable.

31. The contention that the debt being time barred, is completely demolished by the fact that the Loan was payable by 08.08.2015 while the two impugned Cheques had been handed over to the Petitioner in March, 2018, which amounts to an acknowledgement of the existing debt. Furthermore, the cheques dated 24.08.2015 and 16.08.2015 even if considered to have been issued in respect of time barred debt which was payable till 07.08.2018, then too Section 25(3) Indian Contract Act, 1872 provides that a promise made in writing and signed by the person to be Digitally charged therewith, to pay wholly or in part, a debt of which the creditor might have enforced payment but for the law for the limitation of suits, is a valid and enforceable contract. A cheque is a promise to pay made in writing and signed by the drawer.

32. The position of law came to crystalised over the years and for this reference has to made to the case of Mr. Dinesh B. Chokshi vs Rahul Vasudeo Bhatt, in Criminal Appl. No.2933/2007 decided on 19.10.2012, wherein the Division Bench of Bombay High Court has observed as under: “On plain reading of Section 13 of the said Act of 1881, a negotiable instrument does contain a promise to pay the amount mentioned therein. The promise is given by the drawer. Under Section 6 of the said Act of 1881, a cheque is a bill of exchange drawn on a specified banker. The drawer of a cheque promises to the person in whose name the cheque is drawn or to whom the cheque is endorsed, that the cheque on its presentation would yield the amount specified therein. Hence, it will have to be held that a cheque is a promise within the meaning of Sub-section (3) of Section 25 of the Contract Act. … What follows is that when a cheque is drawn to pay wholly or in part, a debt which is not enforceable only by reason of bar of limitation, the cheque amounts to a promise governed by the Sub-section (3) of Section 25 of the Contract Act. Such promise which is an agreement becomes exception to the general rule that an agreement without consideration is void. Though on the date of making such promise by issuing a cheque, the debt which is promised to be paid may be already time barred, in view of Sub-section(3) of Section 25 of the Contract Act, the promise/agreement is valid and, therefore, the same is enforceable.” Digitally

33. As held by the Apex Court in A.V. Murthy vs. B.S. Nagabasavanna (2002)

ALL MR (Cri) 709 (S.C.), the promise to pay time barred debt becomes a valid contract. It was observed as under:

34. The same has been reiterated by the coordinate Bench of this Court in Rajeev Kumar vs The State NCT Of Delhi & Anr., in Crl. L.P. 212/2021 decided on 11.09.2024, wherein the court held as under: Digitally “The furnishing of a cheque of a time-barred debt effectively resurrects the debt itself by a fresh agreement through the deeming provision under section 25(3) of ICA. The original debt therefore, through section 25(3) of the ICA, becomes legally enforceable to the extent of the amount the cheque has been given. This resonates also with practical considerations. Persons, who have chosen to escape liability, can draw a cheque, in order to clear an earlier debt upon persuasion by the creditor. By the act of drawing a cheque, the promisor i.e. the drawer, is effectively stating that he has a liability to pay the drawee. Drawing of the cheque in itself is acknowledgment of a debt or liability. It is the resurrection or the revival of the prior debt which would trigger the provisions under section 138 of NI Act. To deny a complainant/drawee of invoking the penal provisions under section 138 of NI Act, despite the categorical premise of section 25(3) of the ICA recognizing a fresh agreement to pay, would be an unfortunate disentitlement.”

35. Therefore, the issuance of the cheques in 2018 by the Petitioner, even it taken to be for a time-barred debt, constitute a fresh promise which creates a new and legally enforceable liability.

36. Even on merits, the defence of the Petitioner is that the impugned cheque was issued as an undated security cheque back in July, 2013 when the loan was secured. However, it is pertinent to note that this is a defence that was taken for the first time before the Ld. ASJ.

37. There were two Mortgage deeds, first dated 25.07.2013 and the second dated 23.07.2014 and there is not a whisper of any undated blank security cheque being issued to the Complainant, even though the deeds are very detailed. It is highly improbable that such a crucial element of transaction between the parties would be casually ignored by the Accused and not pressed to be mentioned in either of the deeds. Digitally

38. Now, the most important aspect pertaining to existence of a legally enforceable debt is “whether the debt, as extended in the form of a loan on 25.07.2013 by the Complainant, became time barred and thus, there existed no debt in lieu of which the impugned cheque could have been presented”.

39. It must be noted that the ground of debt being time-barred and thus, not being payable was not raised before the Trial Court. The ld. Trial Court held that the Accused was unable to rebut the statutory presumption and could not substantiate the defense that the loan was fully repaid.

40. The accused in his Appeal before the learned ASJ raised the issue of debt being time-barred. However, the Ld. ASJ rejected the ground and held that although the original mortgage deed stipulated a repayment date of July, 2014, but the subsequent documents, such as the demand for a refund which was made by the Complainant in a letter dated 10.06.2015 (Ex.CW1/A[3]) point to the fact that the “repayment of loan was kept open and final date of repayment of the loan was to be determined by the [arties as per their will”.

41. Furthermore, the Ld. ASJ noted the Complainant’s testimony during cross-examination that he had received the post-dated cheques in March,

2018. The cheques in question, therefore, were issued for the discharge of this new liability, bringing them squarely within the ambit of Section 138 of the NI Act. Repayment of Loan vide Receipt Dated 01.11.2018:

42. The next defense of the Petitioner was that the loan stood repaid, for which reliance was placed on the Receipt dated 01.11.2018 Ex. DW1/1.

43. The Petitioner interestingly has not stepped into the witness box to prove his defence that the loan stood paid vide Receipt dated 01.11.2018. However, in his defence, he examined DW[1] Shri Nitesh Srivastava who was Digitally witness to the Receipt and who deposed that he had paid a sum of Rs.14 lakhs to the Respondent/Complainant on behalf of the Petitioner vide Receipt dated 01.11.2018 Ex.DW1/1.

44. The Petitioner herein had categorically stated in his Statement under Section 313 Cr.P.C that he had repaid the loan of Rs.25 lakhs to the Complainant; Rs.[9] lakhs were paid by way of cheque and Rs.14 lakhs had been given by cash to the Complainant. The Petitioner has nowhere asserted that this cash amount had been paid for and on his behalf by DW[1] Nitesh Srivastava. Clearly, the testimony of DW1/Nitesh Srivastava is not in consonance with the defence of the Petitioner. There is a serious discrepancy about who paid the amounts and when. The source from where this alleged cash of Rs.14 lakhs had been arranged by either the Petitioner or his witness Nitesh Srivastava, has also not been explained. The testimony of DW[1] is therefore, of no credence.

45. The second piece of evidence which has been led by the Respondent in support of his defence of alleged repayment of the cheque amount is the payment receipt dated 01.11.2018 Ex.DW1/1. Pertinently, this Receipt states that a balance sum of Rs.14 lakhs has been given in cash by Dr. Sharda Nand Bansal. Interestingly, it nowhere states that this money had been received from Nitesh Srivastava on behalf of the Petitioner, as has been asserted by him. Pertinently, this payment Receipt also does not mention about the cheque of Rs.[9] lakhs given to the Complainant in partial discharge of the loan of Rs.25 lakhs. Also, the Petitioner did not appear in the witness box to prove this payment receipt. Digitally

46. Clearly, the defence taken by the Petitioner of repayment of Loan, is contrary and not supported either by the Receipt or the testimony of DW1/Nitesh Srivastava.

47. Moreover, the Complaint was filed on 18.10.2018. It is highly improbable that if a full and final settlement was made on 01.11.2018 i.e. after the filing of Complaint, the Petitioner would not have stated about this crucial fact when Notice under Section 251 Cr.P.C. was framed on 09.08.2019. This clearly reflects that this defense is an afterthought and devoid of credibility, as has been correctly observed by the learned ASJ.

48. Moreover, aside from making bald assertions of repayment vide this alleged Receipt of re-payment Ex.DW1/1, the Petitioner has failed to produce any other cogent evidence like Bank Statements, to prove the alleged repayment.

49. The Petitioner has thus, failed to rebut the statutory presumption under Section 139 of the NI Act. The burden was on him to show on a preponderance of probabilities, that there was no existing legally enforceable debt. A mere assertion of repayment or misuse of security cheques, without corroborative evidence, is insufficient to dislodge this presumption. Conclusion:

50. The concurrent findings of the learned MM and the learned ASJ are based on a proper and judicious appreciation of the evidence on record. This court finds no perversity, jurisdictional error, or manifest illegality in impugned judgments.

51. Accordingly, the impugned judgment dated 23.01.2025 passed by the learned Additional Sessions Judge, North-West, Rohini Courts, Delhi, in CA Digitally No. 276/2023, upholding the judgment of conviction dated 18.11.2023 and the order on sentence dated 22.11.2023 passed by the learned M.M. in CC No. 12599/2018, is affirmed and upheld.

52. The Criminal Revision Petition is hereby, dismissed. Pending Application(s), if any, are disposed of accordingly.

53. A copy of this judgment be sent to the learned Trial Court for information and necessary action.

JUDGE SEPTEMBER 25, 2025 N Digitally