Bangalore District Court
N Venkatanarayan vs Chandramohan Guntimadugu on 9 March, 2026
KABC020501532024
IN THE COURT OF THE XXII ADDL. JUDGE, COURT OF
SMALL CAUSES AND ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY
(SCCH-24)
Presided Over by Smt. Roopashri, B.Com., LL.B.,
XXII ADDL., SCJ & ACJM,
MEMBER - MACT,
BENGALURU.
Dated: On this day of 9th day of March 2026
CC NO.19619/2024
1. Sl.No. of the Case : 19619 of 2024.
2. The date of 05-08-2024
commission of the
offence
3. Name of the : Sri.N Venkatanarayan,
Complainant S/o Late. Narayan,
Aged about 41 years,
Residing at No.14, I Main,
'B' Sector, Subramanya Block,
Amruthnagara,
Sahakaranagara Post,
Bangalore-560092.
(By Sri. Ramesh Gouda.K
Advocate)
4. Name of the Sri. Chandramohan
Accused Guntimadugu,
S/o. Sri. Divyanathan,
SCCH-24 2 C.C.19619/2024
Aged about 37 years,
Residing at No.22,
16th Cross,
Bhuvaneshwari Nagara,
Hebbal Kempapura,
Bangalore-560024.
(By Sri. B G Chandra Shekar,
Advocate)
5. The offence complained : Under Section 138 of the
of or proves Negotiable Instrument Act.
6. Plea of the accused and : Pleaded not guilty.
his examination
7. Final Order : Accused found guilty
8. Date of such order for : 09-03-2026
the following
JUDGMENT
This complaint is filed under Sec. 200 of Cr. P. C. for
the offence punishable under Section 138 of the
Negotiable Instruments Act.
2. It is the case of the complainant that:
The case of the complainant is that; The complainant
is doing construction and real estate business since
several years. The accused is his cousin. The accused is
the owner of the Agricultural property bearing Sy
No.48/2, measuring 2, acres, situated at Yarthiganahalli
Village, Kasaba Hobli, Devanahalli Taluk (hereinafter
SCCH-24 3 C.C.19619/2024called the schedule property). The accused had entered in
to a Memorandum of Understanding with the complainant
on 18.05.2015, wherein the accused had agreed and
undertaken to allot plot measuring 30×40 in the layout to
be formed in the above referred property to the
complainant for a sale consideration of Rs.11,00,000/-.
Accordingly, the complainant had paid sale consideration
amount of Rs. 10,00,000/- to the accused and balance
amount of Rs.1,00,000/- agreed to pay at the time of
registration of the sale deed and to execute the registered
sale deed within 10 months from the date of
Memorandum of Understanding dated 18.05.2015, failure
to execute the registered sale deed, accused agreed to
refund the amount. Due to the litigation raised by third
parties with respect of the property owned by the accused,
the accused was unable to form layout in the property and
was not able to execute the necessary conveyance deed in
favour of the complainant. The accused had come forward
to resolve the dispute. As per the terms of compromise,
accused had undertaken to provide or to get a D.C.
converted site measuring 30×40 feet in the name of
complainant worth Rs.20,00,000/- from any layout within
the vicinity of Yarthiganahalli Village or adjacent village,
Devanahalli Taluk on or before 31.12.2021, preferably
North or East facing site to make good of the
SCCH-24 4 C.C.19619/2024Memorandum of Understanding dated 18.05.2015. The
complainant had agreed to take the D.C. converted site
measuring 30×40 feet from the accused and have entered
in to a Memorandum of Understanding which is in
continuation of the MOU dated 18.05.2015 to 25.02.2021.
Even after entering in to a compromise as per the MOU
dated 25.02.2021 the accused had failed to allot site in
the name of the complainant as agreed and undertaken by
the accused and even after expiry of 31.12.2021. The
accused had come forward to refund the amount of
Rs.10,00,000/- received by him under MOU dated
18.05.2015 with interest at 1.5% on the sale
consideration amount paid by the complainant from
15.05.2015 to 30.12.2013 and agreed to pay interest at
the rate of 2% from 30.12.2023 till realization of the
amount along with all costs, damages, charges and
expenses incurred by the complainant incidental to the
MOU. Hence the accused had agreed to refund total
amount of Rs.30,00,000/-. The accused had issued two
cheques bearing No.009605 and 009606 both the cheques
were drawn on Union Bank, Hebbal branch, Bangalore
and agreed to repay the said amount within April 2024.
But the accused failed to make the payment. As per the
instruction of the accused the complainant presented the
cheque bearing no. 009606 through his banker Induslnd
SCCH-24 5 C.C.19619/2024
Bank Ltd., Sahakara Nagara branch, Bangalore for
Rs.15,00,000/-. But same was dishonored for the reason
“Funds insufficient” dated 20.06.2024. Thereafter, the
complainant got issued legal notice on 29.06.2024
through RPAD to the residential address of the accused
and the said notice was returned with shara “unclaimed”
on 08.07.2024. The complainant has also sent the legal
notice to the accused to his whatsapp No 6363065097 on
01.07.2024 and same was received by the accused and
read the contents of the notice. In spite of the receipt of
the legal notice the accused failed to comply the demand
made by the complainant. Hence, the accused has
committed an offence punishable under Sec.138 of N.I
Act, hence, the complaint.
3. After recording the sworn statement of the
complainant and also verifying the documents, cognizance
was taken against the accused for the offence punishable
under Sec. 138 of N.I. Act. The accused on receiving the
summons appeared before the court through his counsel.
He was enlarged on bail and his plea was recorded. The
accused pleaded not guilty and claimed to be tried. Hence,
the case was posted for evidence of the complainant.
SCCH-24 6 C.C.19619/2024
4. The complainant got examined himself as PW.1
and got marked documents as Exs.P1 to 11 Then, the
case was posted for recording the statement of accused
under Sec.313 Cr.P.C. In the statement U/s 313 Cr.P.C.,
the accused has denied all the incriminating evidence
appearing against him and claimed to be tried. The
accused got examined himself as DW.1 and got marked
Ex.D1 to Ex.D3.
5. Heard arguments of learned counsel for
complainant and accused and perused the materials
placed on record. The following points that arise for my
consideration;
POINTS
1. Whether complainant proves beyond
all reasonable doubt that accused
has committed an offence
punishable under Section 138 of
Negotiable Instruments Act?
2. What order?
6. My findings to the above points are:
Point No.1:- In the Affirmative.
Point No.2:- As per the final order,
for the following ;
SCCH-24 7 C.C.19619/2024
REASONS
7. POINT NO.1: It is the case of the complainant
that, towards the discharge of legally recoverable debt,
accused has issued cheque and when the said cheque was
presented, same was dishonoued for the reason “Funds
Insufficient”. Though the said fact was brought to the
notice of the accused by issuing legal notice but accused
has failed to repay the cheque amount.
8. In order to substantiate the said contention, the
complainant got examined himself as Pw1 and given
evidence in consonance with the averments of the
complaint. If the documents placed on record is perused,
ExP1 is the cheque issued by the accused which relates to
his account. It is deposed by Pw1 that cheque in question
was issued towards discharge of liability. The cheque in
question was presented by the complainant through his
banker which was returned with memo dated: 21.0.2024
as per ExP2 and Ex.P3 stating ‘Funds Insufficient’. Hence,
he got issued legal notice through RPAD as per Ex.P.4.
The postal receipt is marked at Ex.P.5. Unserved Postal
Cover is marked at Ex.P6. Notice inside the postal cover is
marked at Ex.P7. Memorandum of Undertakings are
SCCH-24 8 C.C.19619/2024
marked at Ex.P8 to 10. Bank statement is marked at
Ex.P11.
9. The accused while admitting his relationship
with the complainant as the cousin brother of the
complainant and while admitting the avocation of the
complainant as his running construction business and
while admitting that he is also running real estate
business and while admitting his agreed to allot plot to the
complainant in the layout going to be formed by him, has
denied sum of Rs.10,00,000/- given by the complainant
towards part sale consideration and stated that towards
part sale consideration the complainant had given only
sum of Rs.5,00,000/- but not Rs.10,00,000/- . The
accused while admitting his signature in the Ex.P8 to
Ex.P10 and his signature in the disputed cheque at Ex.P1
has taken the defence that during the year 2020 the
complainant had obtained the signatures on the blank
papers at Amruthahalli Police station and no MOU as per
Ex.P8 to Ex.P10 was entered into between them and
complainant forcibly had taken two cheques from him at
the ACP office and by misusing the said cheques, has
lodged false complaint against him. The accused while
admitting the transaction held between him and
complainant in respect of site has stated that civil suit is
SCCH-24 9 C.C.19619/2024
still pending before the jurisdictional court and that he too
had invested money in the said property and his future is
depending on the result of the civil suit.
10. In order to substantiate the defence, the accused
got examined himself as DW.1 and got marked documents
as Ex.D1 to Ex.D3.
11. On going through the evidence placed on record
it can be said that accused has admitted the disputed
cheque relates to his account so also his signature in the
Ex.P1. Now at this juncture it would be relevant refer here
the judgment relied by the complainant regarding
presumption u/Sec. 139 of NI Act.
12. In 2021 (5) SCC 283 between Kalamani Tex &
Anr., Vs. P Balasubramanian it was held that “when
accused admits his signature in the cheque it require to
presume that cheque was issued as consideration for a
legally enforceable debt. Defence plea that only a blank
cheque and signed blank stamp paper were given to the
complainant held immaterial. The presumption as to
legally enforceable debt would be available against the
accused even in case when he voluntarily signed and
handed over a blank cheque leaf towards some payment”.
SCCH-24 10 C.C.19619/2024
13. In (2020) 12 SCC 724 between APS Forex Service
Private Limited Vs. Shakti International Fashion Liners, it
was held one accused admitted issuance of cheque which
bore his signature, presumption exists of a legally
enforceable debt or liability u/Sec. 139. Though such
presumption is rebuttal, accused is required to lead
evidence therefor. In absence of any such evidence,
version put forward by the accused that cheques were
given by way of security not believable.
14. In 2019 Supreme (HP) 5115 it was observed
that “accused is able to establish a probable defence
which creates doubt about the existence of a legally
enforceable debt or liability, the prosecution can fail. The
accused can rely on the materials submitted by the
complainant in order to raise such a defence and it is
inconceivable that in some cases the accused may not
need to adduce the evidence of his/her own. If however,
the accused/drawer of a cheque in question neither raises
a probable defence nor able to contest existence of a
legally enforceable debt or liability, obviously statutory
presumption under Section 139 of the NI Act regarding
commission of the offence comes into play if the same is
SCCH-24 11 C.C.19619/2024
not rebutted with regard to the materials submitted by the
complainant”.
15. At the same time regarding presumption u/Sec.
139 of NI Act, the learned defence counsel has referred the
judgment in Basalingappa Vs. Mudibasappa wherein it
was observed that “the presumption u/Sec. 139 is
rebuttable on preponderance of probabilities. Court
cannot insist on a person to lead negative evidence. Even
if accused admits his signature on the cheque but if the
complainant fails to prove the financial capacity then the
presumption stands rebutted by the accused”.
16. In Krishna Janardhan Bhat Vs. Dhattatraya G
Bhat while referring Sec. 101 of Evidence Act in referance
to Sec. 138 of NI Act it was observed that “An accused
need not examine himself for discharging the burden of
proof placed upon him under a statue. He may discharge
his burden on the basis of the materials already brought
on records. An accused has a constitutional right to
maintain silence. Standard of proof on the part of an
accused and that of the prosecution in a criminal case is
different”.
SCCH-24 12 C.C.19619/2024
17. In the light of the observation made in the
aforesaid judgments coupled with the very admission of
the accused of his signature in the Ex.P1, the court can
raise presumption u/Sec. 118 and 139 of NI Act regarding
issuance of cheque towards discharge of legally
enforceable debt. Now it is for the accused to prove the
defence with preponderance of probabilities.
18. Though the accused in his evidence in chief has
not disputed the financial capacity of the complainant and
also not disputed the service of legal notice to him but
during the cross examination of Pw.1 and during the
course of argument has disputed the financial status of
the complainant to pass the alleged consideration amount
of Rs.10,00,000/- and has seriously disputed the service
of legal notice to him.
19. Coming to the dispute raised as to the service of
legal notice is concerned, as per the case of complainant
he had issued legal notice to the accused through RPAD
and whats App. To evidence the said fact, the complainant
has relied upon Ex.P4 to Ex.P7. Ex.P4 is the office copy of
the legal notice dated 05-06-2024. Ex.P5 is the postal
receipt for having send the legal notice through RPAD.
Ex.P6 is the unserved postal cover and Ex.P7 is the copy
SCCH-24 13 C.C.19619/2024
of the legal notice sent to the accused which was inside
the unserved postal cover. If Ex.P6 is perused, the legal
notice was returned with shara “Unclaimed”. The accused
nowhere has disputed the correctness of the address
mentioned in the legal notice. Further if the address of the
accused given in his evidence in chief is compared with
the address of the accused stated in the legal notice, they
are one and the same. Hence, it can safely be held that the
complainant has issued the legal notice to the correct
address of the accused. It is nowhere the case of the
accused that at the time of issuance of legal notice he was
not residing in the said address. The Learned counsel for
complainant at this juncture has referred the judgment
reported in 2014 AIR SCW 4321 between M/s Ajeet Seeds
Ltd., Vs. K Gopala Krishnaiah wherein by referring
Sec.114 of Evidence Act and Sec. 27 of the General
Clauses Act has observed that “Section 114 of the
Evidence Act enables the Court to presume that in the
common course of natural events, the communication
would have been delivered at the address of the addressee.
Section 27 of the General Clauses Act gives rise to a
presumption that service of notice has been effected when
it is sent to the correct address by registered post. It is not
necessary to aver in the complaint that in spite of the
return of the notice unserved, it is deemed to have been
SCCH-24 14 C.C.19619/2024
served or that the addressee is deemed to have knowledge
of the notice. Unless and until the contrary is proved by
the addressee, service of notice is deemed to have been
effected at the time at which the letter would have been
delivered in the ordinary course of business”.
20. In view of the observation made in the aforesaid
judgment coupled with the very provision u/Sec. 27 of
General Clauses Act and U/Sec. 114 of Evidence Act, it
can be said without any hesitation that the legal notice
was duly served to the accused.
21. So far as the legal notice issued through whats
App is concerned, at first the complainant has not
produced the screen shot of the notice issued through
whats App. The learned counsel for accused has
vehemently submitted that issuance of notice through
whats App is not a proper way of communication and
notice issued through whats App cannot be considered as
a valid mode of communication of notice. The Learned
counsel at this juncture has referred the judgment
rendered in Satender Kumar Antil Vs. Central Bureau of
Investigation & Anr. In the said case, it was observed that
“Usage of electronic communication is not a valid mode of
service of notice u/Sec. 35 of BNSS 2023 since its
SCCH-24 15 C.C.19619/2024
conscious omission is a clear manifestation of legislative
intent. It is further observed that “summons issued by
Court is a judicial act, whereas notice issued by
Investigating Agency is an executive act. Procedure
prescribed for a judicial act cannot be read into procedure
prescribed for an executive act”.
22. If the judgment above referred is read in whole,
the said observation is made only in reference to the police
notice issued during the course of investigation by the
investigation Officer for arrest of the accused but not with
regard to the judicial act. Hence, the observation made in
the aforesaid judgment has no application to the case in
hand.
23. On the point of dispute raised by the accused
regarding validity of legal notice issued through whats App
is concerned the learned counsel for complainant has
referred the judgment reported in 2025 SCC online SC
2069 between Sanjabij Tari Vs. Kishore S Borcar & Anr.,
wherein it was observed that “In all cases filed under
section 138 of the Negotiable Instruments Act, service of
summons shall not be confined through prescribed usual
modes but shall also be issued desti, ie., summons shall
be served upon the accused by the complainant in
SCCH-24 16 C.C.19619/2024
addition. This direction is necessary as a large number of
section 138 cases under the Negotiable Instruments Act,
are filed in the metropolitan cities by the financial
Institutions, by virtue of section 142 (2) of the Negotiable
Instrument Act, against accused who may not be
necessarily residing within the territorial jurisdiction of
the court where the complaint has been filed. The trial
courts shall further resort to service of summons by
electronic means in terms of the applicable
Notifications/Rules, if any, framed under sub-sections (1)
and (2) of section 64 and under clause (i) of section 530
and other provisions of the Bhartiya Nagarik Suraksha
Sanhita, 2023 (for short “BNSS, 2023″) like Delhi BNSS
(Service to Summons and Warrants) Rules, 2025. For this
purpose, the complainant shall, at the time of filing the
complaint, provide the requisite particulars including e-
mail address, mobile number and /or whats App
number/messaging application details of the accused,
duly supported by an affidavit verifying that the said
particulars pertain to the accused/respondent”.
24. In the light of the observation made in the
aforesaid judgment it can be said that legal notice can be
issued even through whats App and sending legal notice
SCCH-24 17 C.C.19619/2024
through whats App is one of the valid mode of
communication.
25. Even if it is taken for a while for the sake of
discussion that the legal notice stated to have been issued
to the accused through whats App was not communicated
to him even then also it would not go to the root of the
case of the complainant for the reason that the legal notice
issued through RPAD was duly served to the accused. In
spite of service of legal notice, the accused not thought it
necessary to give reply to the said notice and to take the
defence at the thresh hold by way of reply which he has
taken now.
26. So far as the dispute raised as to the financial
capacity of the complainant is concerned, if the cross
examination of PW.1 is perused, PW.1 has deposed that
he is running real estate and construction business since
20 years and he is having bank account in ICICI bank and
Induslnd bank. The complainant during the course of trial
has produced statement of account pertaining to Axis
Bank marked as Ex.P11 to prove his financial capacity.
The learned counsel for accused has argued much on the
document at Ex.P11 produced by the complainant stating
that the complainant having stated that he has account in
SCCH-24 18 C.C.19619/2024
two banks ie., ICICI bank and Induslnd bank and that he
has no objection to produce the bank statement of
aforesaid two banks, instead of producing the bank
statement of the said two banks has produced bank
statement of different bank in respect of which he has not
made any whisper in his evidence. Hence Ex.P11 cannot
be relied upon. But this court is of the opinion that merely
because during the cross examination the PW.1 has
referred the bank statement only of two banks maintained
by him it cannot be said that Ex.P11 is not a genuine
document. Further the accused nowhere has disputed the
correctness and genuineness of Ex.P11. Hence, Ex.P11
can very well be relied upon. As per the evidence of PW.1
he is an Income Tax assessee but he has not disclosed the
disputed transaction in his Income Tax return. The
learned counsel for accused has cross examined the PW.1
on the point of alleged cash transaction of Rs.10,00,000/-
and posed suggestion that there is rule under Income Tax
Act that the transaction of any amount exceeding
Rs.20,000/- has to be done through cheque or DD or
RTGS and money transaction has to be disclosed in the
Income Tax Return.
27. The learned counsel in further by referring
Ex.P11 has argued that as on 18-05-2015 no amount was
SCCH-24 19 C.C.19619/2024
withdrawn by the complainant leave apart sum of
Rs.10,00,000/- hence there is no ground to believe that
the complainant had given sum of Rs.10,00,000/- on 18-
05-2015.
28. If the averments of the complaint, legal notice
and the evidence of PW.1 is read in whole nowhere it is the
case of the complainant that by withdrawing money from
the bank he had given sum of Rs.10,00,000/- to the
accused. Hence, the question of finding entry in the
Ex.P11 regarding withdrawal of Rs.10,00,000/- on 18-05-
2015 does not arise. Hence, the judgment relied by the
Learned counsel reported in 2025 Supreme (SC) 1131 has
no application to the case in hand.
29. The learned counsel for accused has referred
the judgment reported in 2007 Supreme (Madars) 1053. In
the said case, accused was acquitted on the ground that
the complainant has failed to prove lending of loan.
30. Coming to the evidence of PW.1, the PW.1 has
deposed that in the year 2024 he had borrowed sum of
Rs.1,00,00,000/- from Perimila Bank towards
construction purpose and during the year 2014-2015 he
had borrowed hand loan of Rs.34,00,000/- from his
SCCH-24 20 C.C.19619/2024
relatives and the said hand loan was cleared by him. From
the evidence of Pw.1 it can be gathered that the aforesaid
loan was raised for the construction business of the
complainant. It is quite natural that the builders/
contractors/ business man raises loan for the
development of business and it will be cleared as and
when bill amount is received and raising loan from the
financial Institution or from Private person is for the turn
over of money by the business man for business purpose.
Hence, merely because the complainant had raised loan
from the Private person it cannot be said that he is not
financially sound. Further the accused himself has
admitted the avocation of the complainant of his running
construction business. It is further relevant to state here
that the accused during his evidence while admitting the
transaction in respect of property held between him and
the complainant has stated that complainant had parted
with only sum of Rs.5,00,000/- towards sale consideration
but not sum of Rs.10,00,000/- and admitted that he had
not allotted or sold any property to the complainant of the
value of Rs.5,00,000/- received by him from the
complainant. From the aforesaid evidence of accused it
can be gathered that the accused has admitted the part
consideration received by him from the complainant. Now
it is for the accused to prove that he had received only
SCCH-24 21 C.C.19619/2024
sum of Rs.5,00,000/- but not sum of Rs.10,00,000/- from
the complainant. When as admitted by accused, the
complainant was in a position to give sum of
Rs.5,00,000/- to the accused towards part consideration
amount, under such circumstances there is every reason
to believe that complainant being a business man running
construction business is financially sound to give sum of
Rs.10,00,000/-. Further the transaction between the
complainant and accused is not a loan transaction and
sum of 10,00,000/- was given not by way of hand loan but
the said amount was invested by the complainant in the
property of the accused. When complainant is running
real estate and construction business, the major part of
the business of the complainant lies in investing money in
the property. Hence, considering the avocation of the
complainant, the admission of the accused regarding sum
of Rs.5,00,000/- received by him towards property
business and considering the business in which the
complainant had invested money etc, it can be said that
complainant is financially sound enough to invest sum of
Rs.10,00,000/- on the property by paying said sum to the
accused.
31. Now at this juncture it would be opt to refer the
judgment relied by the learned counsel for complainant
SCCH-24 22 C.C.19619/2024
reported in Tedhi Singh Vs. Narayan Dass Mahan wherein
it was held that ” the accused has the initial burden to set
up a defence in his reply to the demand notice that the
complainant did not have the financial capacity to
advance the loan. The proceedings under Sec. 138 of NI
Act is not a civil suit. At the time when the complainant
gives his evidence, unless a case is set up in the reply
notice to the statutory notice sent, that the complainant
did not have the wherewithal, it cannot be accepted of the
complainant to initially to lead evidence to show that he
had the financial capacity”.
32. In the present case also the accused by not
giving reply to the statutory notice has not taken the
defence of financial incapacity of the complainant to give
sum of Rs.10,00,000/-. Hence, initial burden will not be
upon the complainant to prove the financial capacity. But
accused has the right to demonstrate that the
complainant did not have the capacity by examining the
witnesses and producing documents. It is also open to the
accused to establish the very same accept by pointing to
the materials produced by the complainant himself. But in
the present case as observed supra, the accused has failed
to prove the financial incapacity of the complainant.
SCCH-24 23 C.C.19619/2024
33. In M.M.T.C Limited Vs. Medchi Chemicals and
Pharma Pvt. Ltd., it was held that “when a statutory notice
is not replied, it has to be presumed that cheque was
issued towards the discharge of liability”.
34. Hence, considering the materials placed on
record, it can be said the complainant was financially
sound enough to invest sum of Rs.10,00,000/- in the
property of the accused.
35. If the evidence of the accused, the line of cross
examination done to the PW.1 and the documents placed
on record is perused, it is not in dispute that the schedule
property was purchased by the accused and five others by
virtue of the Sale Deed dated 04-03-2016. From the order
sheet maintained in OS No. 742/2015 as per Ex.D1 it can
be gathered that one Palacharala Harichandra Reddy has
filed Civil suit on 07-10-2015 against the vendors of the
accused in respect of the schedule property for the relief of
cancellation, declaration and permanent injunction. In the
said suit interim injunction was granted against the
defendants. But when the temporary injunction order was
inforce, the defendants sold the schedule property in
favour of the accused and others. Hence, in the said suit,
SCCH-24 24 C.C.19619/2024
the accused and five others who have purchased the
schedule property were impleaded as defendants.
36. From the evidence of Dw.1 it can be gathered
that himself and his partners had purchased the schedule
property for the formation of layout. The accused himself
in his evidence has deposed that in the year 2015 the
complainant approached him for purchase of site
measuring 30X40 in the schedule property. According to
the accused towards the purchase of site, the complainant
had paid only sum of Rs.5,00,000/-. But according to the
complainant he had given sum of Rs.10,00,000/- towards
part consideration agreeing to pay balance sum of
Rs.1,00,000/- at the time of registration of the sale deed.
During the cross examination of Dw.1 at one breath the
DW.1 admitted the MOU as per Ex.P8 dated 18-05-2015
entered between him and the complainant towards the
site. But at the later stage, DW.1 denied the Negotiation
held between him and the complainant for the sale of
30X40 feet site for a consideration of Rs.11,00,000/-. It is
not in dispute that in view of the suit in OS No. 742/2015
pending on the file of the Senior Civil Judge at Devanahalli
it could not possible to form layout in the schedule
property. Since, it could not possible to form layout in the
schedule property, the accused could not execute sale
SCCH-24 25 C.C.19619/2024
deed in respect of the site measuring 30X40 in favour of
the complainant.
37. It is the definate case of the complainant that
the accused being the owner of the schedule property
entered into MOU dated 18-05-2015 as per Ex.P8 wherein
the accused agreed and undertaken to allot plot
measuring 30X40 to the complainant for a consideration
of Rs.11,00,000/-, out of which Rs.10,00,000/- was paid
on the date of Ex.P8 and due to the litigation raised in
respect of the schedule property, the accused was unable
to form layout as such was not able to execute conveyance
deed in favour of complainant. Hence, accused come
forward to resolve the dispute and undertaken to provide a
DC converted site measuring 30X 40 feet in the name of
complainant worth Rs.20,00,000/- from any layout within
the vicinity of Yarthiganahalli Village or adjacent village,
on or before 30-12-2021 to make good of the MOU dated
18-05-2015 and as per the terms of agreement, they have
entered into MOU as per Ex.P9 dated 25-02-2021 which is
in continuation of Ex.P8. It is the further case of the
complainant that since the accused failed to allot site in
the name of complainant as agreed and undertaken by
him under Ex.P9, the accused has come forward to refund
the sale consideration amount received by him on interest
SCCH-24 26 C.C.19619/2024
at the rate of 1.5% on the sale consideration amount of
Rs.10,00,000/- paid by the complainant from 18-05-2015
to 30-12-2023 and agreed to pay interest at the rate of 2%
from 30-12-2023 till realization of amount with cost
charges and expenses incurred by the complainant which
comes around Rs.30,00,000/-. According to the
complainant towards payment of Rs.30,00,000/-, the
accused has issued two cheques for Rs. 15,00,000/- each
out of which the disputed cheque is the one.
38. The learned counsel for accused while disputing
the cheque in question issued by the accused towards
discharge of alleged debt and while disputing Ex.P8 to
Ex.P10 has vehemently argued that the complainant by
exercising coercion, undue influence, fraud and
misrepresentation has obtained the signature of the
accused in the Ex.P1 and Ex.P8 to Ex.P10 and that
signature in the Ex.P8 to Ex.P10 were obtained on the
blank papers at Amruthahalli Police Station in the year
2020 and two blank signed cheques were taken in the
office of ACP, hence the contract allegedly entered between
the complainant and accused is void contract which is not
enforceable under law. Learned counsel during the course
of argument has referred Sec. 14, 24, 26 and 58 of
Evidence of Act and Sec. 13 to 25 of the Contract Act .
SCCH-24 27 C.C.19619/2024
39. The learned counsel in further has argued that
Ex.P8 to Ex.P10 are unregistered documents and
insufficiently stamped documents. Hence, Ex.P8 to Ex.P10
cannot be relied upon for any purpose. The learned
counsel at this juncture has referred Sec. 17 of the Indian
Registration Act.
40. It is vehemently argued by the learned counsel
for accused that the first page of Ex.P8 does not bear the
signature of the accused and that the complainant has not
examined the witnesses to the Ex.P8 to Ex.P10 to prove
the due execution of Ex.P8 to Ex.P10 and that Ex.P8 bears
the signature only of one witness but not of two witnesses
and that MOU is to be compulsorily attested by attest two
witnesses. Hence, on that count also Ex.P8 to Ex.P10
cannot be relied upon.
41. In the light of the argument canvassed by the
learned defence counsel, if the materials placed on record
is perused, as per the own evidence of DW.1, he was called
to Amruthahalli Police Station in the year 2020 on the
basis of the complaint lodged by the complainant. If the
contention taken by the accused is accepted as true for
the sake of discussion that his signature was taken on
SCCH-24 28 C.C.19619/2024
blank papers at Amruthahalli Police station and thereafter
created Ex.P8 to Ex.P10 is concerned, if Ex.P8 is perused,
it is dated 18-05-2015. Stamp paper was purchased in the
name of accused. Ex.P8 is engrossed on a stamp paper of
Rs.100/-. Ex.P8 bears the signature of one witness. It is
true that the first page of Ex.P8 does not bear the
signature of accused.
42. Ex.P9 is dated 23-02-2021. Ex.P9 was
engrossed on a stamp paper of Rs.500/-. Stamp paper
was purchased in the name of complainant. Ex.P9 bears
the signature of two witnesses of whom one witness by
name Srinivas Raju is the partner of the accused and in
their joint names, the sale deed in respect of the schedule
property was executed. The accused has deposed that he
has no objection to examine Srinivas Raju one of the
witness to the Ex.P8.
43. Ex.P10 is dated 18-05-2023. Ex.P10 is
engrossed on a stamp paper of Rs.100/-. The stamp paper
on Ex.P10 was purchased by accused. Ex.P10 also bears
the signature of aforesaid Srinivas Raju and Ex.P10 is
attested by only one witness. In the Ex.P10 there is clear
mention about the two blank cheques issued by the
accused of which disputed cheuqe is the one. In the
SCCH-24 29 C.C.19619/2024
Ex.P10 there is reference about the MOU dated 18-05-
2015 and MOU dated 25-02-2021. Hence, it can be said
that Ex.P9 is the continuation of Ex.P8 and Ex.P10 is the
continuation of Ex.P8 and Ex.P9.
44. So far as the allegation made by the accused
that Ex.P8 to Ex.P10 were created by the complainant by
obtaining his signature on the blank papers at
Amruthahalli Police station in year 2020 is concerned, as
observed supra, the stamp paper on Ex.P8 was purchased
on 18-05-2015 and stamp paper on Ex.P9 was purchased
on 23-02-2021 and stamp paper on Ex.P10 was
purchased on 18-05-2023. Hence, it is unbelievable to say
that the signature of the accused was obtained in the year
2020 on the blank stamp paper which was printed much
subsequent to the year 2020 (ie.,) in the year 2021 and
2023. Further it is also not believable that stamp paper on
Ex.P8 which was purchased in the year 2015 was kept
alive till the year 2020 so as to obtain the signature on the
blank stamp paper of the year 2015 so as to create Ex.P8.
45. So far as obtaining the two blank signed cheque
from the accused in the year 2020 is concerned, if cheque
in question is carefully perused, it is printed on 13-05-
2022. When the cheque leaf of the disputed cheque was
SCCH-24 30 C.C.19619/2024
printed in the year 2022 and when the said cheque leaf
was not at all in existence in the year 2020, the question
of obtaining the blank signed cheque from the accused
during the year 2020 does not arise. Hence, there is no
reason to believe that the signature of the accused either
in the Ex.P1 or in the Ex.P8 to Ex.P10 were obtained by
exercising coercion, undue influence, fraud and
misrepresentation.
46. Admittedly accused is a MBA graduate, doing
real estate business and working as Supervisor in
Construction business. Hence, being an educated person
having worldly knowledge, there is no reason to believe
that he has signed the blank papers. No man of ordinary
prudence would venture to sign blank documents that too
highly qualified person like accused.
47. So far as the dispute raised as to the
admissibility of Ex.P8 to Ex.P10 because of non
registration of document and in sufficiently stamped
document is concerned, as rightly argued by the Learned
counsel for complainant, the complainant has filed the
present complaint u/Sec. 138 of NI Act based on the
disputed cheque. The complainant has relied upon Ex.P8
to Ex.P10 as collateral documents to prove that sum of
SCCH-24 31 C.C.19619/2024
Rs.10,00,000/- was given by him towards purchase of
property measuring 30X40 and the undertaking given by
the accused as per Ex.P9 to give alternative site and
agreed and undertaken to refund the sale consideration
with interest as per Ex.P10.
48. So far as the dispute raised as to insufficient
stamp duty paid on Ex.P8 to Ex.P10 is concerned, now the
question to be decided is whether section 33 and 34 of the
stamp act would apply even to the proceedings under
section 138 of NI Act.
49. Even though section 33 of the Stamp Act
provides for impounding of document if such documents
are insufficiently stamped, but proviso to section 33 of the
Act provides that nothing provided in section 33 of the act
shall be deemed to require any Magistrate or Judge of a
criminal court to examine or impound , if he does not
think fit so to do any instrument coming before him in the
course of any proceedings other than a proceeding under
chapter XII or Chapter XXXVI of the Code of Criminal
Procedure . Further clause © of section 34 of the Act also
makes it clear that the bar created under section 34 is not
applicable to any proceedings in a criminal court except
the proceedings under chapter XII or XXXVI of the Code of
SCCH-24 32 C.C.19619/2024
Criminal Procedure . Hence it can be said that the bar
created under section 34 of the Act not applicable to the
criminal prosecution initiated for the offence punishable
under section 138 of the NI Act. Hence even if it is taken
for a while for the sake of discussion that ExP8 to Ex.P10
are insufficiently stamped documents, the question of
impounding the document does not arise. Further as
observed supra the complainant is not claiming any right
on the basis of the ExP8 to Ex.P10 and complainant has
relied upon ExP8 to Ex.P10 in support of the contention
that cheque has been issued towards discharge of legally
enforceable debt. Complainant is not enforcing the
document to claim relief against the accused.
50. So far as non registration of Ex.P8 to Ex.P10 is
concerned, under the said documents the possession of
the property was not delivered. It is well settled that if
under the ‘sale agreement’ possession of the property was
delivered, then such agreement of sale required to be
registered otherwise there is no need to register the said
document. Ex.P8 to Ex.P10 are not the conveyance deed
so as to get the document registered. It is only an
agreement entered between the parties whereby the
accused agreed to sell the site measuring 30×40 in favour
of the complainant and there is no actual delivery of
SCCH-24 33 C.C.19619/2024
possession of immovable property has taken place. Hence,
this court is of the opinion that Ex.P8 to Ex.P10 are not
compulsorily registrable document.
51. So far as the argument canvassed by the
learned defence counsel that Ex.P8 and Ex.P10 are not
attested by two attesting witnesses is concerned , as
observed supra, Ex.P8 to Ex.P10 are not compulsorily
attestable documents. It is only the Gift, Will and
Mortgage deed are compulsorily attestable documents and
in order to prove the due execution of said three
documents one of the attesting witness must be examined.
Hence, the mere fact that Ex.P8 and Ex.P10 bears only the
signature of one witness it does not make the said
documents invalid. Further as observed supra, when the
case of the complainant is based on Ex.P1, burden is
upon the complainant only to prove that accused has
issued the disputed cheque towards the discharge of
legally enforceable debt.
52. The accused has stated that his signature was
obtained on blank papers and thereby created Ex.P8 to
Ex.P10. Then it is for the accused to say how could the
signature of his partner was obtained on the Ex.P8 to
Ex.P10 as witness. The accused could have examined
SCCH-24 34 C.C.19619/2024
Srinivas Raju as witness in support of the defence taken
by him. It is no where the case of the accused that even
the signature of Srinivas Raju was obtained by force on
the Ex.P8 to Ex.P10.
53. The learned defence counsel has argued much
on the evidence given by the PW.1 as PW.1 in his cross
examination has admitted that the accused has given
blank signed cheque and it was filled by him. It is relevant
to state here that PW.1 having stated that Ex.P1 was filled
by him, further stated that at the instruction of accused
and in the presence of accused he had filled the Ex.P1.
Now at this juncture it would be relevant to refer here the
judgment relied by the Learned counsel for complainant
reported in Kalamani Tex & Anr., Vs. P Balsubramanian
referred above wherein it was observed that presumption
as to legally enforceable debt would be available against
the accused even in case when he voluntarily signed and
handed over a blank cheque leaf towards some payment.
Defence plea that only a blank cheque and signed blank
stamp papers were given to the complainant held
immaterial.
54. In Bir Singh Vs. Mukesh Kumar (2019) 4 SCC
197 the Hon’ble Supreme Court has held that ” A person
SCCH-24 35 C.C.19619/2024
is liable for the commission of an offence punishable
u/Sec. 138 of NI Act even if cheque is filled by some other
person. If a signed blank cheque is voluntarily presented
to a payee, towards some payment, the payee may fill up
the amount and other particulars. This in itself would not
invalidate the cheque. The onus would still be on the
accused to prove that the cheque was not in discharge of a
debt or liability by adducing evidence”.
55. Hence, from the observation made in the
aforesaid judgment it can be said that even if accused has
issued blank signed cheque and it was filled by the
complainant it would not invalidate the cheque.
56. The learned counsel for accused has much
argued that the complainant has not disclosed the
disputed transaction in the Income Tax Return and there
is bar under the provision of Income Tax Act for cash
transaction exceeding Rs.20,000/-. Hence, according to
the learned counsel the theory put-forward by the
complainant of sum of Rs.10,00,000/- parted by him by
way of cash has no legs to stand.
57. As observed supra, admittedly, the complainant
has not disclosed the disputed transaction in his Income
SCCH-24 36 C.C.19619/2024
Tax Return. Further he has given sum of Rs.10,00,000/-
by way of cash.
58. The Learned counsel for complainant at this
juncture has referred the judgment reported in 2025 SCC
Online SC 2069 between Sanjabij Tari Vs. Kishore S
Borcar & Anr., In the said case, by over ruling the view
taken by the Hon’ble Keral High Court in PC Hari Vs.
Varghese has observed that ” any breach of section 269SS
of the Income-Tax Act, 1961 is subject to a penalty only
under section 271D of the Income -tax Act, 1961. Further
neither section 269SS nor 271D of the Income -tax Act,
1961 states that any transaction in breach thereof will be
illegal, invalid or statutorily void. Therefore, any violation
of section 269SS would not render the transaction
unenforceable under section 138 of the Negotiable
Instruments Act, or rebut the presumptions under
sections 118 and 139 of the Negotiable Instruments Act,
because such a person, assuming him/her to be the
payee/holder in due course, is liable to be visited by a
penalty only as prescribed”.
59. The Learned counsel in further on the very
same point has referred many number of judgments of
different High Courts. But when the judgment rendered by
SCCH-24 37 C.C.19619/2024
the Hon’ble Supreme court of the year 2025 is referred, it
is not necessary to refer, rest of the citations relied by the
learned counsel on the very same point. By relying upon
the judgment relied by the complainant referred above it
can be said that even if the complainant has not disclosed
the disputed transaction in the Income Tax returns and
even if Rs. 10,00,000/- was paid by way of cash it would
not affect the case of the complainant.
60. It is relevant to state here that DW.1 in his
cross examination at page no.4 has admitted the
suggestion posed to him by the learned counsel for
complainant that “under the Ex.P10, accused by agreeing
to pay sum of Rs.30,00,000/- has issued two post dated
cheques of which one cheque relates to the present case”.
By giving admission to the aforesaid effect, the accused
has admitted the whole case of the complainant. Hence,
the very admission of the signature of accused in the
Ex.P1, Ex.P8 to Ex.P10 coupled with the admission given
by the accused to the aforesaid effect and the admission
given by the accused that he had received sum of
Rs.5,00,000/- from the complainant towards part sale
consideration for sale of site measuring 30x 40 etc. would
suffice to prove the case of the complainant beyond all
reasonable doubt. The accused has miserably failed to
SCCH-24 38 C.C.19619/2024
probabalise the defence taken by him with cogent
evidence.
61. In the light of the discussion made herein
above, this court is of the considered opinion that
complainant has proved that accused has committed the
offence punishable under Section 138 of Negotiable
Instruments Act. Accordingly, I answered Point No.1 in
the Affirmative.
62. POINT No.2 :- The Negotiable Instruments Act is
a special enactment, and the provisions of the Act prevail
over the general provisions contained in Code of Criminal
Procedure. Therefore, keeping the relevant provisions of
the Act in mind the sentence is to be passed. In the light
of the reasons on the point No.1, I proceed to pass the
following;
ORDER
Acting under Sec. 278(2) of BNSS the
accused is found guilty of the offence
punishable under section 138 read with
section 142 of NI Act.
SCCH-24 39 C.C.19619/2024
Consequently, accused is sentenced to pay
fine of Rs.16,00,000/- (Rupees Sixteen Lakhs
only), out of which Rs.15,95,000/- shall be
paid as compensation to the complainant
under Sec.396 of BNSS and Rs.5,000/- shall
be payable to the State.
In the event of default in payment within a
period of one month, the accused shall be
convicted to simple imprisonment for a period
of 4 months.
It is made clear that in view of Sec.430 of
BNSS, even if the accused under goes the
default sentence imposed above, he is not
absolved of liability to pay the fine amount.
The bail bond of accused and that of surety
stands canceled.
Office to furnish the copy of this judgment
free of cost to the accused.
(Dictated to the stenographer directly on computer, corrected and
then pronounced by me in open court, on this the 9th day of March
2026.)
(ROOPASHRI)
XXII Addl.SCJ & ACJM
Bengaluru.
SCCH-24 40 C.C.19619/2024
:ANNEXTURE:
LIST OF WITNESSES EXAMINED ON BEHALF THE COMPLAINANT
P.W.1 : Sri. N.Venkatanarayan
LIST OF DOCUMENTS MARKED ON BEHALF COMPLAINANT:
Ex.P.1 : Original Cheque
Ex.P.1(a) : Signature of the accused.
Ex.P.2 & 3 : Endorsements.
Ex.P.4 : Copy of legal notice.
Ex.P.5 : Postal Receipt
Ex.P.6 : Unserved Postal Cover
Ex.P.7 : Notice inside the postal cover
Ex.P.8 to 10 : Certified copy of three Memorandum of
Undertakings
Ex.P.11 : Statement of account pertaining to Axis
Bank
LIST OF WITNESSES EXAMINED BY THE ACCUSED
DW.1 : Sri. Chandramohan Guntimadugu
LIST OF DOCUMENTS MARKED ON BEHALF OF ACCUSED:
Ex.D1 : – Certified copy of the Entire order
sheet of the OS No.742/2015
Ex.D2 : – Certified copy of the Entire Amended
plaint of the OS No.742/2015
Ex.D3 : – Certified copy of the Biappa Approval
copyXXII Addl. SCJ & ACJM
Bengaluru
Digitally
signed by
ROOPASHRI
ROOPASHRI Date:
2026.03.09
15:29:36
+0530
