Okay, here is a draft Moot Memorial for the Petitioner (Mr.

A) based on the provided facts and

issues.

[START OF MEMORIAL]

IN THE COURT OF THE LEARNED JUDICIAL MAGISTRATE FIRST CLASS, PURVA PRADESH

CRIMINAL CASE NO. _______ OF 2020

UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881

MR. A

(S/o ...)

(R/o ...)

... COMPLAINANT / PETITIONER

VERSUS

MR. B

(S/o ...)

(R/o ...)

... ACCUSED / RESPONDENT

MEMORIAL ON BEHALF OF THE PETITIONER

TABLE OF CONTENTS

1. List of Abbreviations ....................................................................... [Page No.]

2. Index of Authorities ......................................................................... [Page No.]

o Cases Cited

o Statutes Referred

o Books / Other Authorities (Optional)

3. Statement of Jurisdiction ................................................................. [Page No.]

4. Statement of Facts .......................................................................... [Page No.]

5. Statement of Issues .......................................................................... [Page No.]

6. Summary of Arguments ................................................................... [Page No.]

7. Arguments Advanced ....................................................................... [Page No.]

o ISSUE 1: WHETHER THE COMPLAINANT PROVES THAT MR. B HAS ISSUED THE
CHEQUE? .................................................................. [Page No.]

 [1.1] The existence of a legally enforceable debt is established.

 [1.2] The cheque was issued by the Accused in discharge of the said debt.
  [1.3] Statutory presumptions under the Negotiable Instruments Act favour
the Complainant.

o ISSUE 2: WHETHER MR. B PROVES THAT THE CHEQUE PRESENTED BY MR. A WAS A
STOLEN CHEQUE FROM B AND A FORGED CHEQUE? ........ [Page No.]

 [2.1] The burden of proving theft and forgery lies heavily upon the
Accused.

 [2.2] The Accused has failed to discharge the burden of proving theft.

 [2.3] The Accused has failed to discharge the burden of proving forgery.

 [2.4] The Accused's conduct contradicts the claim of theft and forgery.

8. Prayer ............................................................................................. [Page No.]

1. LIST OF ABBREVIATIONS

Abbreviation Full Form

& And

§ / S. Section

AIR All India Reporter

Anr. Another

CrPC Code of Criminal Procedure

Ed. Edition

Hon’ble Honourable

NI Act Negotiable Instruments Act

Ors. Others

Rs. Rupees

SC Supreme Court

SCC Supreme Court Cases

 U/s Under Section

V. / Vs. Versus

2. INDEX OF AUTHORITIES

CASES CITED:

1. K.N. Beena v. Muniyappan, AIR 2001 SC 2895 / (2001) 8 SCC 458 ........... [Page No.]

2. Rangappa v. Sri Mohan, (2010) 11 SCC 441 ......................................... [Page No.]

3. Hiten P. Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16 .................... [Page No.]

4. Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513 ........................... [Page No.]

5. M.S. Narayana Menon @ Mani v. State of Kerala, (2006) 6 SCC 39 .......... [Page No.]

6. T. Nagappa v. Y. R. Muralidhar, (2008) 5 SCC 633 .............................. [Page No.]

7. Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197 .................................... [Page No.]

8. Rohitbhai Jivanlal Patel v. State of Gujarat & Anr., (2019) 18 SCC 106 ..... [Page No.]

9. Basalingappa v. Mudibasappa, (2019) 5 SCC 418 ................................. [Page No.]

STATUTES REFERRED:

1. The Negotiable Instruments Act, 1881

2. The Indian Evidence Act, 1872

3. The Code of Criminal Procedure, 1973

3. STATEMENT OF JURISDICTION

The Hon’ble Court has the jurisdiction to try the instant matter under Section 142 of the
Negotiable Instruments Act, 1881, read with Section 190(1)(a) and Section 200 of the Code of
Criminal Procedure, 1973. The complaint has been filed within the prescribed limitation period
following the dishonour of the cheque and the failure of the Accused to pay the amount despite
receiving the statutory notice.

4. STATEMENT OF FACTS

1. The Complainant (Mr. A) and the Accused (Mr. B) are merchants in the same locality. Mr. A
deals in cloth, and Mr. B deals in wool.

2. On 01/01/2020, Mr. A lent a sum of ₹20,00,000/- (Rupees Twenty Lakh only) to Mr. B.
 3. In consideration of this loan, Mr. B handed over a cheque dated 01/01/2020 for
₹20,00,000/-, drawn on Bank of Baroda, Mysore Branch, to Mr. A. Mr. B agreed to repay
the loan before the expiry of the cheque's validity.

4. On 01/04/2020 (within the validity period), Mr. A presented the cheque to his bank for
encashment.

5. The cheque was dishonoured by the bank with the reason "Insufficient Funds".

6. Mr. A informed Mr. B about the dishonour. Mr. B made excuses and promised to pay the
amount in cash within 15 days but failed to do so.

7. Mr. A issued a statutory legal notice to Mr. B within 30 days [assuming "within 15 days" in
the prompt was meant to be "within 30 days" as per S.138(b), but proceeding as per
prompt's text] from the date of dishonour, demanding payment of the cheque amount.

8. Mr. B failed to make the payment within 15 days of receiving the said legal notice.

9. Consequently, Mr. A filed a private complaint before this Hon'ble Court, which was
registered as a criminal case under Section 138 of the NI Act.

10. Mr. B obtained bail and has taken the defense that the signature on the cheque was forged
and that the cheque was stolen by Mr. A.

5. STATEMENT OF ISSUES

ISSUE 1:

WHETHER THE COMPLAINANT PROVES THAT MR. B HAS ISSUED THE CHEQUE?

ISSUE 2:

WHETHER MR. B PROVES THAT THE CHEQUE PRESENTED BY MR. A WAS A STOLEN CHEQUE FROM
B AND A FORGED CHEQUE?

6. SUMMARY OF ARGUMENTS

ISSUE 1: WHETHER THE COMPLAINANT PROVES THAT MR. B HAS ISSUED THE CHEQUE?

It is humbly submitted that the Complainant has successfully proven that the Accused, Mr. B,
issued the cheque in question. The loan transaction establishes a legally enforceable debt. The
cheque was handed over by Mr. B himself in discharge of this debt. Furthermore, the statutory
presumptions under Sections 118(a) and 139 of the NI Act operate strongly in favour of the
Complainant, establishing that the cheque was issued for consideration and in discharge of a
legally enforceable debt. The initial burden on the Complainant has been discharged.

ISSUE 2: WHETHER MR. B PROVES THAT THE CHEQUE PRESENTED BY MR. A WAS A STOLEN
CHEQUE FROM B AND A FORGED CHEQUE?

It is humbly submitted that the Accused, Mr. B, has miserably failed to prove his defense that the
cheque was stolen and forged. The burden to prove these affirmative claims lies entirely on the
Accused. The Accused has offered mere bald assertions without any corroborative evidence, such
as a police complaint regarding the alleged theft or an expert opinion regarding the alleged
forgery. The bank's reason for dishonour ("Insufficient Funds") contradicts the forgery claim.
Moreover, the Accused's conduct post-dishonour, including his promise to pay, negates his current
defense. The Accused has failed to rebut the statutory presumptions on a preponderance of
probability.

7. ARGUMENTS ADVANCED

ISSUE 1: WHETHER THE COMPLAINANT PROVES THAT MR. B HAS ISSUED THE CHEQUE?

It is humbly submitted before this Hon'ble Court that the Complainant, Mr. A, has successfully
established that the Accused, Mr. B, issued the cheque bearing No. [Cheque Number, if available],
dated 01/01/2020, for a sum of ₹20,00,000/-, drawn on Bank of Baroda, Mysore Branch.

[1.1] The existence of a legally enforceable debt is established.

 The foundational fact is the loan of ₹20,00,000/- extended by the Complainant to the
Accused on 01/01/2020. This transaction created a legally enforceable debt owed by the
Accused to the Complainant.

 The facts clearly state that Mr. A lent the sum to Mr. B, establishing a debtor-creditor
relationship. There is no dispute raised by the Accused regarding the initial loan
transaction itself in his defense plea; his defense only concerns the cheque's origin and
signature.

[1.2] The cheque was issued by the Accused in discharge of the said debt.

 Contemporaneously with the loan transaction on 01/01/2020, the Accused handed over
the specific cheque in question to the Complainant. This act signifies the issuance of the
cheque by the Accused.

 The cheque amount precisely matches the loan amount (₹20,00,000/-).

 The Accused explicitly agreed to repay the loan before the expiry of the cheque, directly
linking the cheque to the loan repayment obligation.

 The definition of "issue" involves the first delivery of the instrument, complete in form, to
a person who takes it as a holder$^1$. Here, the Accused (drawer) delivered the cheque to
the Complainant (payee) in relation to the debt.

[1.3] Statutory presumptions under the Negotiable Instruments Act favour the Complainant.

 Section 118(a) of the NI Act mandates a presumption that every negotiable instrument was
made or drawn for consideration$^2$. Once the issuance of the cheque is admitted or
proved, the presumption of consideration arises.

 Section 139 of the NI Act raises a further presumption that the holder of a cheque received
it for the discharge, in whole or in part, of any debt or other liability$^3$. This
presumption is crucial and operates strongly in favour of the Complainant.

 The Hon'ble Supreme Court in K.N. Beena v. Muniyappan$ ^4$ held that the burden of
proving that the cheque was not issued for a debt or liability is on the accused. The court
 stated, " ...the burden of proving that the cheque had not been issued for any debt or
liability is on the accused..."

 In Rangappa v. Sri Mohan$ ^5$, the Supreme Court clarified that the presumption under
Section 139 includes the existence of a legally enforceable debt or liability and is a
rebuttable presumption. However, the initial burden lies on the Accused to rebut it. The
court observed, "...the presumption mandated by Section 139 of the Act does indeed
include the existence of a legally enforceable debt or liability."1

 The Complainant has fulfilled the initial requirements: proving the existence of the loan,
the handing over of the cheque by the Accused, the presentation within validity, the
dishonour for insufficient funds, the issuance of the statutory notice, and the failure of the
Accused to pay. These facts trigger the presumptions under Sections 118(a) and 139.

 The Hon'ble Supreme Court in *Rohitbhai Jivanlal Patel v. State of Gujarat & Anr.*$ ^6$
reiterated that once the presumptions are invoked, the burden shifts to the accused, who
must disprove the complainant's case by demonstrating a preponderance of probability.

Therefore, based on the facts and the powerful statutory presumptions, the Complainant has
successfully proved that the Accused issued the cheque in discharge of a legally enforceable debt.

ISSUE 2: WHETHER MR. B PROVES THAT THE CHEQUE PRESENTED BY MR. A WAS A STOLEN
CHEQUE FROM B AND A FORGED CHEQUE?

It is humbly submitted that the Accused, Mr. B, has completely failed to discharge the burden of
proving his defense that the cheque was stolen and that his signature was forged. These are
affirmative defenses that must be established by the Accused through credible evidence.

[2.1] The burden of proving theft and forgery lies heavily upon the Accused.

 When an accused in a Section 138 NI Act case raises specific defenses like theft of the
cheque or forgery of the signature, the burden of proving these allegations lies squarely
upon him$^7$. These are not mere denials but positive assertions requiring proof.

 The standard of proof for the accused to rebut the statutory presumptions under Sections
118 and 139, or to establish a defense, is that of 'preponderance of probabilities'$ ^8$.
However, this requires presenting some credible evidence, not just making bald
statements.

 The Hon'ble Supreme Court in Kumar Exports v. Sharma Carpets$ ^9$ stated that the
accused "may also rely upon presumptions of fact, for instance, those mentioned in Section
114 of the Indian Evidence Act, 1872." However, "...bare denial of the passing of the
consideration and existence of debt, apparently would not serve the purpose of the
accused."2

[2.2] The Accused has failed to discharge the burden of proving theft.

 The Accused claims the cheque was stolen by Mr. A. However, the facts presented provide
absolutely no evidence to support this claim.

 Prudence dictates that a person whose cheque has been stolen, especially one for a large
sum like ₹20 Lakhs, would immediately take certain actions:
 o File a police complaint (First Information Report - FIR).

o Instruct their bank to 'Stop Payment' on the specific cheque leaf.

 The facts provided do not mention any such action taken by the Accused. The absence of a
police complaint or a 'stop payment' instruction severely undermines the credibility of the
theft allegation.

 Furthermore, the claim of theft directly contradicts the initial transaction where the
Accused handed over the cheque to the Complainant in the context of the loan.

[2.3] The Accused has failed to discharge the burden of proving forgery.

 The Accused alleges that his signature on the cheque was forged. Again, this is a serious
allegation requiring substantiation.

 The standard procedure to prove forgery involves:

o Comparing the disputed signature with admitted signatures of the Accused.

o Obtaining the opinion of a handwriting expert (under Section 45 of the Indian

Evidence Act, 1872).

 The Accused has presented no expert opinion or any other evidence to suggest forgery.
The right to request examination by an expert is available to the accused, as noted in T.
Nagappa v. Y. R. Muralidhar$

ue′sdishonour,asprovidedbytheBankofBaroda,MysoreBranch,was ∗∗′InsufficientFunds
^{10}.Failuretoexercisethisrightweakenstheforgerydefense.∗Crucially,thereasonforthecheq

′∗∗.Itwas∗not∗′SignatureDiffers′or′Drawer′sSignatureMismatch
′.Ifthesignaturewasindeedforged,thebankwouldlikelyhaveflaggeditduringtheverificationpro
cess.Thebankreturningthechequeforlackoffundsimpliesthat,primafacie,thesignaturewasacc
eptedasgenuinebythebank

′bleSupremeCourtin∗BirSinghv.MukeshKumar∗ ^{11}$ emphasized that a signed cheque

′sverificationsystem.Thisfactstronglymilitatesagainsttheforgeryclaim.TheHon

voluntarily handed over implies authority unless proven otherwise.

[2.4] The Accused's conduct contradicts the claim of theft and forgery.

 After the cheque was dishonoured and the Complainant notified the Accused, the Accused
did not immediately claim theft or forgery. Instead, he "started to give lame excuses and
agreed to pay the cheque amount through cash within 15 days."

 This subsequent promise to pay the amount acts as an implicit admission of liability and
contradicts the defenses now being raised. If the cheque was genuinely stolen or forged, a
reasonable person would immediately protest on those grounds upon being notified of the
dishonour, rather than promising to pay the amount.

 This conduct strengthens the Complainant's case and suggests that the defenses of theft
and forgery are afterthoughts, raised strategically only after the initiation of criminal
proceedings. As held in Basalingappa v. Mudibasappa$ ^{12}$, the accused must show
probable circumstances that question the existence of consideration or debt, which the
accused has failed to do here; his conduct suggests the opposite.
Therefore, the Accused has failed to produce any credible evidence, let alone proof on a
preponderance of probabilities, to support his claims of theft and forgery. These defenses are
unsubstantiated, contradicted by the bank's reason for dishonour, and negated by the Accused's
own subsequent conduct. The statutory presumptions remain unrebutted.

8. PRAYER

WHEREFORE, in light of the issues raised, arguments advanced, authorities cited, and facts
established, it is most humbly prayed that this Hon'ble Court may be pleased to:

1. Hold that the Complainant has successfully proved that the Accused issued the cheque
dated 01/01/2020 for ₹20,00,000/- in discharge of a legally enforceable debt.

2. Hold that the Accused has failed to prove his defense that the cheque was stolen and
forged.

3. Hold the Accused, Mr. B, guilty of the offence punishable under Section 138 of the
Negotiable Instruments Act, 1881.

4. Sentence the Accused in accordance with the law and direct the Accused to pay
compensation to the Complainant as deemed fit by this Hon'ble Court, up to twice the
amount of the cheque, under Section 138 NI Act and Section 357 of the CrPC.

5. Pass any other order(s) as this Hon'ble Court may deem fit in the interest of justice, equity,
and good conscience.

And for this act of kindness, the Petitioner as in duty bound shall ever pray. 3

Respectfully Submitted,

(Counsel for the Petitioner)

Date: [Date of Filing]

Place: Purva Pradesh

FOOTNOTES:

1 See Section 7, Negotiable Instruments Act, 1881 regarding "Drawer" and "Payee", and
discussions on "issue" in legal commentaries.

2 The Negotiable Instruments Act, 1881, § 118(a).

3 The Negotiable Instruments Act, 1881, § 139.

4 K.N. Beena v. Muniyappan, AIR 2001 SC 2895 / (2001) 8 SCC 458.

5 Rangappa v. Sri Mohan, (2010) 11 SCC 441.

6 Rohitbhai Jivanlal Patel v. State of Gujarat & Anr., (2019) 18 SCC 106.

7 See generally principles under the Indian Evidence Act, 1872, Sections 101-103 regarding Burden
of Proof.
8 M.S. Narayana Menon @ Mani v. State of Kerala, (2006) 6 SCC 39.

9 Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513.

10 T. Nagappa v. Y. R. Muralidhar, (2008) 5 SCC 633.

11 Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197.

12 Basalingappa v. Mudibasappa, (2019) 5 SCC 418.

[END OF MEMORIAL]

Petitioner's Memorial: Mr. A v. Mr. B - Case Concerning Dishonour of Cheque

1. Cover Page:

Moot Court Competition

Case Concerning Dishonour of Cheque

Course Name: Criminal Law / Negotiable Instruments Law

Team Members:

Institution Name: [Institution Name]

Year: 2024

2. Table of Contents:

[Automatically Generated]

3. Index of Authorities:

 Statutes:

o Negotiable Instruments Act, 1881 (Sections 6, 118, 138, 139, 142, 146, 147)

 Case Laws:

o Electronics Trade &... v. Indian Technologists..., AIR 1996 SC 2339 1

o Dashrath Rupsingh Rathod v. State of Maharashtra, (2014) 9 SCC 129 2

o Indian Bank Association And Others v. Union Of India And Others, (2014) 5 SCC 590 1

o Laxmi Dyechem v. State Of Gujarat And Others, (2012) 13 SCC 375 1

o Ashok Singh v. State of Uttar Pradesh & Anr., 2025 INSC 427 5

o Kusum Ingots and Alloys Ltd. Vs Pennar Peterson Securities Ltd, (2000) 2 SCC 745 6

o Krishna vs. Dattatraya, 2008(4) Mh.L.J.354 (Supreme Court) 6

o Somnath vs. Mukesh Kumar, 2015(4) Law Herald 3629 (P&H) 6

o Shri Datta Rai v Shri Nappa, (2024) 8

o Rohitbhai Jivanlal Patel v. State of Gujarat, (2019) 18 SCC 106 5

 o BIR SINGH v. MUKESH KUMAR, (2019) 4 SCC 197 5

o RAJESH JAIN v. AJAY SINGH, (2023) 10 SCC 148 5

o Kishan Rao v. Shankargouda, (2018) 8 SCC 165 5

o Utam Ram v. Devinder Singh Hudan, (2019) 10 SCC 287 5

o Tedhi Singh v. Narayan Dass Mahant, (2022) 6 SCC 735 5

o Raj Kumar Khurana v. State Of (Nct Of Delhi) And Another, (2009) 6 SCC 72 11

o Sayed Babalal H v. State of Karnataka, (2014) 8 SCC 731 14

o K. Bhaskaran v. Sankaran Vaidhyan Balan, (1999) 7 SCC 510 15

o Dalmia Cement (Bharat) Ltd. v. M/s. Galaxy Traders, AIR 2001 SC 676 15

o Meters and Instruments (P) Ltd. v. Kanchan Mehta, (2018) 1 SCC 560 4

o Shakti Travel & Tours v. State of Bihar, (2002) 9 SCC 415 3

o Expeditious Trial of Cases Under Section 138 of NI Act, 1881, In re, 2022 SCC OnLine
SC 649 18

o Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel, (2023) 1 SCC 578 7

o Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency

Limited, (2016) 10 SCC 458 1

o I.C.D.S. Ltd. v. Beena Shabbir & Anr., AIR 2002 SC 3014 7

o Yogender Singh vs Ashok Kumar, 2023 19

o Rita Kumari vs Sandeep Kumar, 2024 20

o Sri Dattatraya v. Sharanappa, 8 S.C.R. 121 21

o Rishipal Singh v. State Of Uttar Pradesh And Another, (2014) 22

o SUKHDEV SINGH v. DALJIT SINGH, (2017) 22

o Rajeev Ranjan Sinha v. Sushil Kumar Saxena, 2022 SCC OnLine Del 1577 12

4. Statement of Jurisdiction:

The present complaint has been filed by the Complainant, Mr. A, before the Hon'ble Magistrate
Court in Purva Pradesh. This Court possesses the authority to adjudicate the present complaint as
outlined in Section 142(2) of the Negotiable Instruments Act, 1881. This section specifies that an
offence under Section 138 is triable by a Judicial Magistrate of the first class or a Metropolitan
Magistrate within whose local jurisdiction the cheque was delivered for collection through an
account or where the cheque was presented for payment by the payee or holder in due course.14 The
registration of the case as a criminal matter by the learned Magistrate in Purva Pradesh signifies the
Court's acceptance of its jurisdictional competence based on the facts presented in the complaint.
The legal framework concerning cheque dishonour cases, particularly Section 138 of the Negotiable
Instruments Act, aims to ensure the trustworthiness and reliability of transactions conducted
through cheques in commercial and financial dealings.24
5. Statement of Facts:

Mr. A, the Complainant, operates a business dealing in cloth, while Mr. B, the Accused, is engaged in
the wool business within the same locality. On January 1, 2020, Mr. A extended a loan amounting to
Rs. 20,00,000 (Rupees twenty lakh) to Mr. B. In return for this financial assistance, Mr. B provided a
cheque drawn on the Bank Of Baroda, Mysore branch, for the identical sum of Rs. 20,00,000, with
the date of issue being January 1, 2020. Mr. B assured Mr. A that the loan would be repaid before the
expiry date of the cheque. Subsequently, on April 1, 2020, when Mr. A presented the aforementioned
cheque to his bank for encashment, it was dishonoured by the bank. The reason for the dishonour, as
indicated by the bank's 'shara' or endorsement, was 'insufficient funds'.2 Upon being notified of the
cheque's dishonour, Mr. B resorted to providing vague excuses for his inability to honour the
payment. However, he did commit to repaying the entire cheque amount in cash within a period of
15 days.25 Despite this assurance, Mr. A did not receive the promised payment from Mr. B.
Consequently, within 15 days from the date of the cheque's dishonour, Mr. A dispatched a legal
notice to Mr. B, formally demanding the payment of the outstanding cheque amount.2 As Mr. B failed
to comply with the demands made in the legal notice and did not make the payment, Mr. A was
compelled to file a private complaint before the learned Magistrate Court in Purva Pradesh. 4 The
learned Magistrate, upon perusal of the complaint and accompanying documents, deemed it
appropriate to register the case as a criminal case. Subsequently, Mr. B obtained bail in the said
criminal proceedings and has now taken the defence that the signature on the cheque was forged
and that the cheque was stolen from him by Mr. A.11

6. Issues Presented:

1. Whether the complainant proves that Mr. B has issued a cheque.

2. Whether Mr. B proves that the cheque presented by Mr. A was a stolen cheque from B and a
forged cheque.

7. Summary of Arguments:

The Complainant, Mr. A, has successfully demonstrated that Mr. B issued the cheque in question. The
statutory presumption under Section 139 of the Negotiable Instruments Act, 1881, operates in
favour of the Complainant, as Mr. B's defence implicitly admits his signature on the cheque.
Furthermore, the presentation of the cheque and its subsequent dishonour due to insufficient funds
establish a prima facie case under Section 138 of the said Act. Mr. B's initial agreement to repay the
cheque amount in cash further corroborates the Complainant's claim. The Complainant also
complied with all the statutory requirements by issuing a timely legal notice to Mr. B.

Conversely, Mr. B has failed to provide sufficient and credible evidence to prove his defence that the
cheque was stolen and forged. He has not produced any police complaint regarding the alleged theft,
nor has he presented any expert evidence to support his claim of forgery. The delay in raising this
defence, coupled with its inherent contradictions, renders it unreliable and unsustainable in law.
Therefore, the Complainant has successfully proven that Mr. B issued the cheque, and Mr. B has
failed to prove his purported defence.

8. Arguments Advanced:

 Issue 1: Whether the Complainant Proves that Mr. B has Issued a Cheque

o Sub-argument 1.1: The presumption under Section 139 of the Negotiable

Instruments Act, 1881, favours the complainant.
Section 139 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'NI Act'), lays
down a crucial legal principle by establishing a mandatory presumption in favour of the holder of a
cheque. This provision stipulates that unless the contrary is proven, it shall be presumed that the
holder of a cheque received it for the discharge, in whole or in part, of any debt or other liability.5
This presumption acts as a cornerstone in cheque dishonour cases, placing an initial burden on the
issuer of the cheque to disprove the existence of a legally enforceable debt or liability. The Hon'ble
Supreme Court has, in numerous instances, reiterated the significance of this provision in ensuring
the efficacy of negotiable instruments in commercial transactions.24

In the case of BIR SINGH v. MUKESH KUMAR and RAJESH JAIN v. AJAY SINGH, as highlighted in the
commentary on Section 138 of the NI Act 5, the Apex Court has clearly established that once the
person who drew the cheque admits their signature on it, a presumption of debt or liability arises
under Sections 118 and 139 of the Act. This means that the court will initially assume that the
cheque was issued for a valid reason, and the onus shifts to the accused to prove otherwise.

Applying this legal principle to the facts of the present case, it is pertinent to note that Mr. B's
defence hinges on the assertion that the cheque was stolen from him by Mr. A. This defence, by its
very nature, does not deny the authenticity of Mr. B's signature on the cheque. Instead, it contests
the circumstances under which the cheque came into the possession of Mr. A. By claiming theft, Mr.
B implicitly acknowledges that the signature on the cheque is indeed his own. Therefore, in light of
the admitted signature, the initial statutory presumption under Section 139 of the NI Act stands
firmly in favour of Mr. A, presuming that the cheque was issued by Mr. B for the discharge of a legally
enforceable debt. This presumption remains operative unless and until Mr. B adduces cogent and
credible evidence to rebut it.

o Sub-argument 1.2: The presentation of the cheque and its dishonour due to
insufficient funds establish a prima facie case under Section 138 of the NI Act.

Section 138 of the NI Act specifically addresses the issue of dishonour of cheques for insufficiency of
funds in the drawer's account. It makes such dishonour a criminal offence, subject to the fulfilment
of certain conditions.2 These conditions include the presentation of the cheque within its validity
period, the dishonour of the cheque by the bank due to insufficient funds or the amount exceeding
the arrangement made with the bank, the issuance of a legal notice to the drawer demanding
payment, and the failure of the drawer to make the payment within the stipulated period.

In the present scenario, Mr. A presented the cheque, which was issued by Mr. B and dated January 1,
2020, to his bank on April 1, 2020. This presentation occurred well within the period of three months
from the date of its issue, which is the validity period for cheques as per the guidelines issued by the
Reserve Bank of India.6 The cheque was subsequently returned unpaid by the bank with the explicit
reason stated as 'insufficient funds'. This dishonour, duly evidenced by the bank's return memo,
constitutes a prima facie establishment of the commission of an offence under Section 138 of the NI
Act. The very purpose of Section 138, as highlighted by the Hon'ble Supreme Court in Electronics
Trade &... v. Indian Technologists... 1, is to penalize the accused in cases of dishonour of cheques for
insufficiency of funds.

Furthermore, Section 146 of the NI Act provides a crucial evidentiary rule. It clearly states that in any
proceeding under Chapter XVII of the Act (which includes Section 138), upon the production of the
bank's slip or memo having thereon the official mark denoting that the cheque has been
dishonoured, the fact of such dishonour shall be presumed by the Court. This presumption holds
unless and until the contrary is disproved.29 In this case, Mr. A possesses the bank's memo indicating
the dishonour of Mr. B's cheque due to insufficient funds, which further strengthens the prima facie
case against Mr. B.

o Sub-argument 1.3: Mr. B's subsequent conduct of agreeing to repay the cheque
amount in cash constitutes an admission of his liability.

Following the dishonour of the cheque, when Mr. A brought this fact to the notice of Mr. B, Mr. B did
not immediately claim that the cheque was stolen or that the signature was forged. Instead, he
offered 'lame excuses' for the dishonour and unequivocally agreed to repay the entire cheque
amount of Rs. 20,00,000 in cash to Mr. A within a period of 15 days.25 This conduct on the part of
Mr. B strongly suggests an initial acknowledgment of his liability towards the debt for which the
cheque was originally issued. It is highly improbable that an individual whose cheque had been
genuinely stolen and whose signature had been forged would readily agree to make the payment for
the said cheque. Such an agreement to repay the amount directly contradicts the later defence of
theft and forgery.

While it is true that an agreement to pay does not, in itself, establish the existence of a legally
enforceable debt as required under Section 138 of the NI Act 6, Mr. B's conduct of promising
repayment serves as a significant piece of circumstantial evidence. It lends credence to Mr. A's
contention that the cheque was indeed issued by Mr. B in discharge of a valid and existing liability.
This subsequent promise to pay indicates that Mr. B, at that point in time, recognized his obligation
to Mr. A concerning the amount represented by the dishonoured cheque. The shift in his stance to
claiming theft and forgery only after Mr. A initiated legal proceedings suggests that this later defence
is a mere afterthought, possibly concocted to evade the legal consequences of the cheque's
dishonour.

o Sub-argument 1.4: The legal notice issued by Mr. A was in compliance with the
statutory requirements under Section 138 of the NI Act.

Proviso (b) to Section 138 of the NI Act lays down a mandatory requirement that the payee or the
holder in due course of a dishonoured cheque must make 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 from
the date of receiving information from the bank regarding the return of the cheque as unpaid.2 This
legal notice is a crucial step in initiating proceedings under Section 138 of the Act, as emphasized by
the Hon'ble Supreme Court in Shakti Travel & Tours v. State of Bihar 3, which held that a properly
served legal notice is essential for the maintainability of a cheque bounce case.

In the present factual situation, Mr. A, after Mr. B failed to honour his promise of making a cash
payment within 15 days of the cheque's dishonour (which occurred on April 1, 2020), acted diligently
and promptly. He dispatched a legal notice to Mr. B within 15 days from the date of the dishonour,
which is well within the statutory period of 30 days. This demonstrates a clear adherence to the
procedural requirements stipulated under Section 138 of the NI Act. The purpose of this notice is to
afford the drawer of the cheque an opportunity to make the payment of the cheque amount within
15 days from the date of receiving the notice. If the drawer fails to do so, the payee then acquires the
legal right to institute a criminal complaint against the drawer for the offence of cheque dishonour. 2
By issuing a timely and legally sound demand notice, Mr. A has fulfilled all the necessary
preconditions for filing the present complaint before the learned Magistrate.

 Issue 2: Whether Mr. B Proves that the Cheque Presented by Mr. A was a Stolen Cheque from
B and a Forged Cheque.
 o Sub-argument 2.1: The accused has failed to provide sufficient and credible evidence
to substantiate the claim that the cheque was stolen from him by Mr. A.

In a legal proceeding under Section 138 of the NI Act, once the issuance of the cheque and the
signature thereon are admitted or presumed, the onus to rebut the statutory presumption under
Section 139 that the cheque was issued for a legally enforceable debt or liability lies squarely on the
accused.5 In the present case, Mr. B has taken the defence that the cheque in question was stolen
from him by Mr. A. To successfully establish this claim and thereby rebut the presumption against
him, Mr. B is required to adduce concrete and credible evidence.

One of the primary pieces of evidence that Mr. B would be expected to produce to support his claim
of theft is a copy of a First Information Report (FIR) or at the very least, a General Diary (GD) entry
lodged with the police promptly after the alleged discovery of the theft.14 Such a report would serve
as the initial and most crucial corroboration of his assertion that the cheque was indeed stolen. The
absence of any such police report, or a significant and unexplained delay in filing it, would severely
undermine the credibility and genuineness of his defence. While the provided material does not
explicitly detail the legal implications of not promptly reporting a stolen cheque 6, it is a well-
established principle of law that a delay in reporting a serious incident like theft can cast doubt on
the veracity of the claim. Furthermore, banking guidelines emphasize the importance of immediately
reporting the loss or theft of cheques to the bank to prevent misuse.45 Mr. B has not presented any
evidence indicating that he informed the Bank Of Baroda about the alleged theft of the cheque. The
failure to take this basic and necessary step further weakens his claim. The Hon'ble Supreme Court in
Rishipal Singh v. State Of Uttar Pradesh And Another 22 dealt with a case where the accused claimed a
signed cheque book was lost/stolen and misused, highlighting the importance of such claims being
substantiated. Similarly, in Yogender Singh vs Ashok Kumar 19, the accused's plea of a lost cheque was
considered in light of the evidence presented.

The mere assertion by Mr. B that the cheque was stolen by Mr. A, without any supporting evidence
such as a police complaint or communication with the bank, is insufficient to discharge the heavy
burden of proof that rests upon him to rebut the statutory presumption operating under Section 139
of the NI Act. The defence of theft must be supported by tangible proof and cannot be based on
mere bald allegations.

o Sub-argument 2.2: The accused has failed to provide sufficient and credible evidence
to substantiate the claim that the signature on the cheque was forged.

Similar to the defence of theft, the responsibility of proving that the signature on the cheque
presented by Mr. A is a forgery lies entirely with Mr. B, who is seeking to negate his liability under
Section 138 of the NI Act.5 The most compelling and reliable piece of evidence to substantiate a
claim of forgery in such cases is a report from a qualified and recognized handwriting expert. This
expert would compare the signature on the disputed cheque with the admitted or specimen
signatures of Mr. B to determine whether they match. Mr. B has conspicuously failed to present any
such expert opinion or report before this Hon'ble Court.14 In the absence of any expert analysis
indicating that the signature on the cheque is not his own, Mr. B's assertion of forgery remains a bare
allegation, devoid of any factual or scientific basis.

This is particularly significant considering Mr. B's chosen line of defence. By claiming that the cheque
was stolen by Mr. A, Mr. B implicitly acknowledges that the signature on the cheque is indeed his. If
the signature were actually forged, the claim of theft would be logically unnecessary and redundant.
One does not typically steal a document with a forged signature; the act of forgery itself would
render the document invalid. The inherent contradiction between these two prongs of Mr. B's
defence further weakens their credibility. The Hon'ble Delhi High Court in Rajeev Ranjan Sinha v.
Sushil Kumar Saxena 12 held that the plea of a lost cheque needs to be proved at trial, suggesting that
mere assertion is insufficient. This principle would equally apply to the plea of forgery, which
requires even stronger corroboration, such as expert evidence. Without such evidence, the Court is
left with nothing but the uncorroborated statement of Mr. B, which is insufficient to overcome the
presumption in favour of the Complainant under Section 139 of the NI Act.

o Sub-argument 2.3: The delay in raising the defence of theft and forgery further
weakens its credibility.

The sequence of events following the dishonour of the cheque is highly pertinent to assessing the
credibility of Mr. B's defence. When Mr. A informed Mr. B about the cheque being dishonoured due
to insufficient funds, Mr. B's initial reaction was not to allege theft or forgery. Instead, he offered
'lame excuses' for the lack of funds and specifically agreed to repay the entire cheque amount in cash
to Mr. A within a period of 15 days.25 It was only after Mr. A, having not received the promised cash
payment, initiated legal proceedings by filing a private complaint before the learned Magistrate that
Mr. B raised the defence of the cheque being stolen and the signature being forged. This significant
delay in asserting such a serious defence casts a heavy shadow of doubt on its genuineness and
veracity.25

A person whose cheque has genuinely been stolen and whose signature has been forged would, in
the normal course of human conduct, be expected to raise this issue immediately upon being
confronted with the dishonour of the cheque. The fact that Mr. B initially acknowledged his liability
by promising to make payment and only later, after the commencement of legal action, resorted to
the defence of theft and forgery strongly suggests that this defence is a mere afterthought, possibly
contrived as a last-ditch attempt to evade his legal obligations under Section 138 of the NI Act. Such a
delayed assertion lacks the spontaneity and immediacy that would typically accompany a genuine
claim of theft and forgery, thereby significantly undermining its credibility before this Hon'ble Court.

o Sub-argument 2.4: The accused's defence is inherently contradictory and lacks a

plausible explanation.

Mr. B's defence in the present case rests on two distinct and, in fact, contradictory assertions: first,
that the cheque presented by Mr. A was stolen from him, and second, that the signature on the said
cheque was forged. These two claims are inherently inconsistent and lack a plausible explanation
when considered together. If the cheque was indeed stolen from Mr. B, it would logically imply that
the signature on it is his own genuine signature; otherwise, there would be no reason for Mr. A to
steal a cheque that already bore a forged signature. Conversely, if the signature on the cheque is
forged, the fact that the cheque might have been stolen becomes largely irrelevant, as a forged
instrument would not create any legal liability for Mr. B, regardless of how it came into Mr. A's
possession.

Mr. B has failed to provide any coherent or logical explanation for how Mr. A could have
simultaneously stolen the cheque and also forged his signature on it. This lack of consistency and the
inherent contradiction within his defence raise serious questions about its truthfulness and
reliability. The Hon'ble Supreme Court in Sri Dattatraya v. Sharanappa 21 emphasized the importance
of a valid explanation regarding the issuance and possession of the cheque for invoking proceedings
under Section 138 of the NI Act. Mr. B's contradictory defence not only fails to provide a valid
explanation but actively creates further ambiguity and doubt regarding his claims. This inherent
contradiction strongly suggests that Mr. B's defence is not based on factual accuracy but rather on a
desperate attempt to avoid the legal consequences of issuing a cheque that was subsequently
dishonoured due to insufficient funds.

9. Prayer:

In light of the facts presented, the arguments advanced, and the authorities cited, the Petitioner, Mr.
A, humbly prays that this Hon'ble Court be pleased to:

1. Hold that the Complainant has successfully proven that Mr. B has issued the cheque in
question.

2. Hold that Mr. B has failed to prove that the cheque presented by Mr. A was a stolen cheque
from B and a forged cheque.

3. Convict the Accused, Mr. B, for the offence punishable under Section 138 of the Negotiable
Instruments Act, 1881.

4. Pass any other order or orders as this Hon'ble Court may deem fit and proper in the interest
of justice.

Respectfully submitted,

[Counsel for the Petitioner]