1 Answer
Dear Client,
Do not admit ₹5 lakh on record. Under Section 139, NI Act, admitting the cheque triggers a presumption of a legally enforceable debt. An admission helps in settlement talks, but if talks fail you have conceded part of the case while the presumption still runs on the full amount.
Secondly, the blank cheque alone is no defence. Under Section 20, NI Act, a signed blank cheque authorises the holder to fill it in. You could argue it was security for ₹5 lakh and was filled in for ₹10 lakh.
Thirdly, her own documents are your best defense. Her bank statement shows only ₹5 lakh left her account, and she cannot now deny a document she herself filed. She is also non-working and has filed no ITR. In Basalingappa v. Mudibasappa (2019), the Supreme Court held that a complainant can be questioned on whether she had the money to lend in the first place, and that the accused can rebut the presumption using answers drawn out in cross-examination, without stepping into the witness box. The standard is only the preponderance of probabilities. So press her to prove where the other ₹5 lakh came from. Since no summons has been issued yet, oppose it now. If her complaint and statement do not make out the offence for the full amount, it is quicker and cheaper to raise that objection at this stage than after summons. Lastly, this offence can be compounded at any stage. Put every offer in writing and mark it without prejudice so it cannot later be treated as an admission. Her ₹9 lakh demand is likely to come down once the gap between her claim and her own bank records is on the record.