ADVERTISEMENT
Bangalore District Court
M Jayaram vs M K Harshith Kumar on 2 April, 2026
KABC0C0579392024
IN THE COURT OF XIV ADDL.CHIEF JUDICIAL
MAGISTRATE, MAYOHALL UNIT, BENGALURU
Dated this the 2nd day of April, 2026
Present: SANTHOSH S.KUNDER., B.A.,LL.M.,
XIV Addl. C.J.M., Bengaluru.
JUDGMENT UNDER SECTION 355 of Cr.P.C
C.C.No.68448/2024
Complainant Mr.M.Jayaram,
S/o Munivenkatappa,
Aged about 63 years,
R/at No.37, 2nd Cross,
Near Sree Rama Temple Road,
Govindapura, Arabic College Post,
Bengaluru-560 045.
(By M/s Legal Axis, Advocates)
V/s
Accused Mr.M.K.Harshith Kumar,
S/o Kalaiah,
Aged about 43 years,
R/at No.347, 8th Cross,
1st Main, Avalahalli,
BDA Layout, Girinagar,
Bengaluru South-560 085.
(By Sri.M.C.Venkatarangaiah, Advocate)
Offence U/s 138 of Negotiable Instruments Act.
Plea of the Pleaded not guilty
accused
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Final Order Accused is held guilty & convicted
This complaint is filed under Section 200 of Cr.P.C,
for the offence punishable under Section 138 of the
Negotiable Instruments Act.
2. Complaint averments in brief:
Complainant, accused and one Mr.Laxman G.
Aursang, are associated with each other since long. Due
to close proximity, accused and Mr.Laxman G. Aursang,
have sought for hand loan of ₹20,00,000/- from the
complainant. Accused has assured and promised to
return the same within a short period. Accordingly, both
have executed an agreement in favour of the complainant
showcasing their intent to avail the hand loan. In
furtherance thereof, the accused has issued a cheque on
11.03.2024 bearing No.000013 drawn on M/s Fincare
Small Finance Bank Limited, V.V.Puram branch for
₹9,00,000/-, assuring the complainant that the cheque
would be honoured on its presentation. However, when
the cheque was deposited with complainant's banker, the
same was dishonored on 12.03.2024 for the reason 'funds
insufficient'. Despite all the efforts taken by the
complainant, the accused has not reverted to the problem
and thereby failed to discharge his liability. Left with no
other option, complainant has got issued a legal notice
dated 15.03.2024 calling upon the accused to pay the
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amount covered under the cheque within 15 days from
the date of service of notice. The said notice was served on
the accused on 18.03.2024. But, he has failed to pay the
cheque amount. Hence, this complaint is filed.
3. This court took cognizance of the offence
punishable under Section 138 of N.I.Act. Complainant
was examined on oath. As prima facie case made out,
criminal case was registered and accused was summoned.
4. Pursuant to the process, accused has
appeared before the court and admitted to bail. After
compliance of Section 207 of Cr.P.C, this court recorded
his plea. He has pleaded not guilty and claimed to be
tried.
5. Sworn statement affidavit of complainant
treated as evidence post-cognizance stage. Documents at
Ex.P-1 to 8 marked for complainant.
6. Accused was examined under Section 313 of
Cr.P.C. He has denied the incriminating evidence.
7. In defence, accused has examined himself as
DW-1. 'Nil' documents marked.
8. Advocate for complainant addressed argument
and produced case-laws. Defence counsel has filed written
argument along with case-laws.
9. Gist of argument addressed by the
complainant is:-
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To prove the debt, complainant has
produced loan agreement at Ex.P1. Accused
has not disputed his signature on Ex.P1;
Signature on the cheque is admitted;
Accused has not issued reply to legal
notice; and
To substantiate the defence of theft/loss
of cheque, the accused has not lodged
complaint to police.
10. Counsel for the complainant has relied on
following judgments:-
(i) H.G Suman V/s Vincent Pinto,
Crl.R.P.No.1021/2021 C/w
Crl.R.P.No.1058/2021, DD 07.01.2025;
(ii) Sri.Shivanna V/s Sri.B.S.Ashok Kumar,
Criminal Revision Petition No.1515/2019, DD
25.01.2025;
(iii) Ashok Singh V/s State of U.P, 2025 INSC
427;
(iv) Dr.K.M.Venkataramana and another V/s
Dr.G.Narayana and another, R.F.A.No.362 of
2013(SP), DD 24.06.2021; and
(v) Sri.C.Boregowda V/s Sri.M.Prakash,
Cri.A.No.999/2014(A), DD 28.11.2024.
11. On the other hand, gist of the written
argument filed by the learned defence counsel is:-
Complainant has not proved his financial
capacity;
No document(s) produced to prove
existence of debt much less legally recoverable
debt;
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Initial burden is on the complainant to
demonstrate by acceptable evidence to prove
existence of legally recoverable debt and his
financial capacity; and
Accused has rebutted the presumption
and onus is on the complainant to prove
existence of legally enforceable debt.
12. Accused has placed reliance on following
judgments:-
(i) Smt.Annapoorna V/s S.P.Nandish,
2023(1) KCCR 83;
(ii) Basalingappa V/s Mudibasappa,
AIR 2019 SC 1983;
(iii) Anvar P.V., V/s P.K.Basheer and others,
(2014) 10 SCC 473;
(iv) K.Vijayakumar V/s Pushparaj,
Crl.A(MD).No.662 of 2007 DD 06.01.2018; and
(v) Dattatraya V/s Sharanappa, (2024) 8
SCC 573.
13. I have perused the records.
14. Points for consideration:-
1. Whether the complainant has proved
that the accused has issued cheque
bearing No.000013 dated 11.03.2024 for
₹9,00,000/- drawn on M/s Fincare Small
Finance Bank Limited, Basavanagudi
branch, towards discharge of legally
recoverable debt/liability and the said
cheque was dishonored for the reason
'funds insufficient' and in spite of service
of statutory notice dated 15.03.2024, he
has failed pay the amount covered under
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the cheque and thereby committed the
offence punishable under Section 138 of
N.I.Act?
2. What order?
15. The above points are answered as under:-
Point No.1 : In the Affirmative.
Point No.2 : As per final order; for the following:
REASONS
16. Point No.1:- The complainant is contending
that he has lent hand loan of ₹20,00,000/- to accused
and one Mr.Laxman G.Aursang, and in partial discharge
of said debt, accused has issued the subject cheque for
₹9,00,000/- which came to be dishonored for the reason
'funds insufficient' and that in spite of service of statutory
demand notice, he has failed to pay the dishonored
cheque amount to the complainant.
17. In order to prove the case, the complainant has
offered his evidence and produced documents at Ex.P1
to 8. Ex.P-1 is certified copy of hand loan agreement dated
10.10.2023; Ex.P2 is subject cheque; Ex.P-3 is bank
endorsement; Ex.P-4 is copy of the demand notice dated
15.03.2024; Ex.P-5 is postal receipt; Ex.P-6 is unserved
postal cover; Ex.P7 is copy of WhatsApp screenshot; and
Ex.P8 is Certificate under Section 65(B) of Indian
Evidence Act.
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18. On the other hand, in order to substantiate the
defence, accused has stepped into witness-box to examine
himself as DW-1. He has not produced any document.
19. Now coming to cross-examination of PW-1,
where it is elicited that complainant is a pensioner, getting
pension of ₹3,417/-. PW-1 has asserted that he knows the
accused since four years. PW-1 has asserted that accused
has requested for hand loan in A2B hotel situated in
Ganganagara. At that time, Mr.Laxman G.Aursang
accompanied the accused. PW-1 has stated that he gave
money in very hotel in cash in the presence of said
Mr.Laxman G.Aursang.
20. When it was questioned with regard to source
for lending money to the accused, PW-1 has answered
that he was working in MICO Bosch Company as
Production Operator where he was earning ₹60,000/- per
month and that he had savings. He has denied the
suggestion that he had no source of income to lend huge
sum of money and that he is deposing falsely. He has
denied the suggestion that accused has given singed
blank cheque and all the contents are filled by the
complainant. He has further denied the suggestion that he
has filed false complaint by misusing the signed blank
cheque.
21. Coming to chief-examination of accused/
DW-1, who has deposed that money transaction was not
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KABC0C0579392024
taken place between him and the complainant. He has
stated that he has not given the cheque at Ex.P2 to the
complainant. The said cheque was lost. After receiving
warrant from the court, he realized that his cheque is
misused. He has deposed that he has not received notice
from the complainant and summons from the court. He
came to know about the case only after receiving the
warrant. He has further deposed that he had been to
police station to lodge complaint regarding loss of cheque.
But, the police refused to receive the complaint and asked
him to sort out the case which is pending before the court.
22. During cross-examination, DW-1 has admitted
his signatures on Ex.P1 and 2. He has also admitted that
the notice at Ex.P4 was sent to the very address which is
shown in the cause-title of the complaint. He has admitted
the suggestion that he has not taken any action against
the complainant in relation to the cheque and that he has
not lodged complaint to police regarding loss of cheque.
However, he has denied the suggestion that he and
Mr.Laxman G.Aursang have jointly borrowed loan of
₹20,00,000/- from the complainant and the cheque was
issued towards discharge of said debt.
23. After having gone through the evidence on
record, it is forthcoming that the accused is not disputing
his signature on the agreement and the cheque which are
marked at Ex.P1(a) and Ex.P2(a). Nevertheless, he is
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KABC0C0579392024
denying borrowing of loan from the complainant. In order
to prove lending of money, complainant has produced
agreement at Ex.P1 which reads as under:-
"ಕೈಸಾಲ ಹಿಂತಿರುಗಿಸುವ ಮುಚ್ಚಳಿಕೆ ಪತ್ರ
ಸನ್ ಎರಡು ಸಾವಿರದ ಇಪ್ಪತ್ತ್ಮೂರನೇ ಇಸವಿ ಮಾಹೆ
ಅಕ್ಟೋಬರ್ ತಾರೀಖು ಹತ್ತು ರಲೂ ಬೆಂಗಳೂರು -560045,
ಗಿರಿನಗರ, ಬಿಡಿಎ ಬಡಾವಣೆ, ಅವಲಹಳ್ಳಿ 1 ನೇ ಮುಖ್ಯ ರಸ್ತೆ,
8 ನೇ ಕ್ರಾಸ್, ನಂ.347 ರಲ್ಲಿ ವಾಸವಾಗಿರುವ ಕಾಳಯ್ಯ ರವರ
ಮಗನಾದ ಶ್ರೀ ಎಂ.ಕೆ.ಹರ್ಷಿತ್ ಕುಮಾರ್ ಮತ್ತು ಬೆಂಗಳೂರಿನಲ್ಲಿ
ವಾಸವಾಗಿರುವ ಡಾ|| ಲಕ್ಷ್ಮಣ್.ಜಿ ಅರಸಂಗ್ ಆದ ನಾವುಗಳು
ಬರೆದುಕೊಟ್ಟ ಬೆಂಗಳೂರು -560045 ಅರೇಬಿಕ್ ಕಾಲೇಜ್
ಅಂಚೆ, 2 ನೇ ಕ್ರಾಸ್, ನಂ.37 ಎಂ.ಜಯರಾಮ ಅವರಿಂದ
ಸುಮಾರು ಎರಡು ವರ್ಷಗಳ ಹಿಂದೆ ಸಾಲವಾಗಿ
ರೂ.20,00,000/-(ರೂಪಾಯಿ ಇಪ್ಪತ್ತು ಲಕ್ಷ) ಗಳನ್ನು
ಇವರಲ್ಲಿ ಪಡೆದುಕೊಂಡಿದ್ದೇವು. ಹಣ ಪಡೆದುಕೊಂಡಿರುವುದಕ್ಕೆ
ಭದ್ರತೆಗಾಗಿ ಹರ್ಷಿತ್ ಕುಮಾರ್ ಮತ್ತು ಡಾ|| ಲಕ್ಷ್ಮಣ್.ಜಿ
ಅರಸಂಗ್ ಆದ ನಾವಿಬ್ಬರು ಬ್ಯಾಂಕ್ ಚೆಕ್ ಗಳನ್ನು ನೀಡಿರುತ್ತೇವೆ.
ಅದರ ವಿವರ ಹೀಗೆ ಇರುತ್ತದೆ.
1. ಎಂ.ಕೆ.ಹರ್ಷಿತ್ ಕುಮಾರ್ ಖಾತಾ ಸಂಖ್ಯೆಃ
18100004249943 ಚೆಕ್ ಸಂಖ್ಯೆಃ 000013
FINCARE SMALL FINANCE BANK
ಬಸವನಗುಡಿ ಶಾಖೆ ಬೆಂಗಳೂರು-560004
2. ಲಕ್ಷ್ಮಣ್ ಜಿ.ಅರಸಂಗ್ ಖಾತಾ ಸಂಖ್ಯೆಃ
03671000027792, ಚೆಕ್ ಸಂಖ್ಯೆಃ 000055
HDFC Bank ಶೇಷಾದ್ರಿಪುರ ಬೆಂಗಳೂರು-560
020.
ತದನಂತರ, ಎಂ.ಜಯರಾಮ ರವರಿಂದ ಕೊಟ್ಟಿರುವ
ಸಾಲದ ಹಣವನ್ನು ಹಿಂತಿರುಗಿಸಬೇಕೆಂದು ಬೇಡಿಕೆ
ಬಂದಿರುತ್ತದೆ. ನಾವುಗಳು ಹಣವನ್ನು ಹೊಂದಿಸಲು
ನಮಗಳ ಸ್ನೇಹಿತರಾದ ಶ್ರೀಯುತ ಅನಿಲ್ ಕುಮಾರ್
ಜಿ.ಸಿ ರವರಲ್ಲಿ ಸಾಲದ ವಿಷಯವನ್ನು ಪ್ರಸ್ತಾಪಿಸಿ
ಸಾಲವನ್ನು ಮರುಪಾವತಿಸಲು ಹಣದ ಸಹಾಯವನ್ನು
ಕೇಳಿಕೊಂಡಿರುತ್ತೇವೆ. ಅದಕ್ಕೆ ಅನಿಲ್ ಕುಮಾರ್ ಜಿ.ಸಿ.
ರವರು ನಮ್ಮಗಳ ಸಾಲದ ಮೊತ್ತವನ್ನು ಬ್ಯಾಂಕ್ ಚೆಕ್
10
C.C.No.68448/2024
KABC0C0579392024
ಮೂಲಕ ಜಯರಾಮ್ ರವರ ಹೆಸರಿಗೆ ಕೊಡುತ್ತೇವೆ
ಎಂದು ಒಪ್ಪಿ ದಿನಾಂಕಃ 06-10-2023 ರಂದು
ಕೊಟ್ಟಿರುತ್ತಾರೆ ಅದರ ವಿವರಗಳು ಹೀಗಿರುತ್ತದೆ
3. ಅನಿಲ್ ಕುಮಾರ್ ಜಿ.ಸಿ. ಖಾತಾ ಸಂಖ್ಯೆಃ
30236318466 ಚೆಕ್ ಸಂಖ್ಯೆಃ 477780,
SBI BANK ಬನಶಂಕರಿ ಶಾಖೆ, ಬೆಂಗಳೂರು-560
085, ಚೆಕ್ದಿನಾಂಕಃ 16-10-2023 ಆಗಿರುತ್ತದೆ.
ಅನಿಲ್ ಕುಮಾರ್ ಜಿ.ಸಿ ರವರು ಕೊಟ್ಟ
ರೂ.20,00,000/- ಗಳ ಬ್ಯಾಂಕ್ ಚೆಕ್ ನ್ನು ಪಡೆದುಕೊಂಡು
ಎಂ.ಕೆ.ಹರ್ಷಿತ್ ಕುಮಾರ್ ಮತ್ತು ಡಾ|| ಲಕ್ಷ್ಮಣ್.ಜಿ.
ಅರಸಂಗ್
ಅದ ನಾವುಗಳು ದಿನಾಂಕಃ 10-10-2023 ರಂದು
ಎಂ.ಜಯರಾಮ್ ರವರಿಗೆ ಕೊಟ್ಟು ನಾವಿಬ್ಬರು ಕೊಡಬೇಕಾಗಿರುವ
ಸಾಲವನ್ನು ಮರುಪಾವತಿಸಿರುತ್ತೇವೆ ಎಂದು ತಿಳಿಸುತ್ತೇವೆ.
Sd/- Sd/-
ಹರ್ಷಿತ್ಕುಮಾರ್ ಡಾ|| ಲಕ್ಷ್ಮಣ್ಜಿ.ಅರಸಂಗ್
ಮೊಃ 9513636166 ಮೊಃ 9164900059
Sd/-
ಎಂ.ಜಯರಾಮ್
ಮೊ.7259634785"
24. Recitals of the agreement indicate that about
two years before its execution, accused and Mr.Laxman
G.Aursang have together borrowed loan of ₹20,00,000/-
from the complainant and issued the cheques as security
for the loan. Under the said agreement, accused and
Mr.Laxman G.Aursang have acknowledged the loan that
was borrowed from the complainant. It is pertinent to note
that neither in the evidence nor in the cross-examination
of PW-1, accused has disputed his signature on the
agreement. His defence is that money transaction has not
11
C.C.No.68448/2024
KABC0C0579392024
at all taken place between him and the complainant. It is
pertinent to note that Ex.P1 runs into three pages and
each and every page has been signed by the complainant,
accused and one Mr.Laxman G.Aursang. As noted above,
accused is not disputing none of the signatures appearing
on the agreement. On the other hand, he has admitted his
signature on the document. It is trite law that admission
is the best piece of evidence and admission of a document
means admission of facts contained in the document.
Once signature on a document is admitted and that
contents of document has not been disputed, document
shall be taken as proved. In this regard, reliance is placed
on the judgment of Division Bench of Hon'ble High Court
of Karnataka rendered in Dr.K.M.Venkataramana and
another V/s Dr.G.Narayana and another;
(R.F.A.No.362 of 2013; DD 24.06.2021) where the
Hon'ble High Court has relied the judgments of Hon'ble
Supreme Court in Narayan Bhagwantro Gosavi Blajiwale
V/s Gopal Vinayak Gosavi and others; AIR 1960 SC 100
and Sitaram Motilal Kalal V/s Santanuprasad jaishanker
Bhatt; AIR 1966 SC 1697; Machindranath Kernath Kasar
V/s D.S.Mylarappa & Ors; AIR 2008 SC 2545; Union of
India V/s Ibrahimuddin; (2012) 8 SCC 148. Thus, the fact
that the complainant has lent money to the accused and
Harshith Kumar is proved from Ex.P1.
12
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25. Significantly, accused has not disputed his
signature on the cheque. On the other hand, in the cross-
examination of PW-1 at para No.8 a suggestion was given
to the effect that the cheque was lifted from the Hotel and
that it has been misused to file the present complaint. In
this regard, it is useful to extract the relevant portion of
cross-examination of PW-1 at para No.6 which is as
under:-
"6. XXXX ನಿಪಿ-2 ಚೆಕ್ಕು ರೂ.9 ಲಕ್ಷದ್ದೆಂದರೆ ಸರಿ.
ಚೆಕ್ಕಿನಲ್ಲಿ ನನ್ನ ಹೆಸರು ಮತ್ತು ದಿನಾಂಕವನ್ನು ನಾನೇ ಬರೆದಿದ್ದು,
ಚೆಕ್ಕಿನ ಮೊತ್ತ ಮತ್ತು ಸಹಿ ಆರೋಪಿಯ ಹಸ್ತಾಕ್ಷರದಲ್ಲಿರುತ್ತದೆ.
ಚೆಕ್ಕನ್ನು ಆರೋಪಿ ನನಗೆ ಕೊಟ್ಟೇ ಇಲ್ಲ ಮತ್ತು ನಾನು ಅದನ್ನು
ಆರೋಪಿಗೆ ಗೊತ್ತಿಲ್ಲದ್ದ ಹಾಗೆ ಎತ್ತಿಕೊಂಡಿದ್ದೇನೆ ಎಂದರೆ
ಸರಿಯಲ್ಲ. XXXX"
26. On the contrary, during chief-examination,
accused has deposed that his cheque was lost. In the
cross-examination when he was questioned as to whether
he has lodged complaint to police regarding loss of
cheque, he has answered in the negative. It is elicited that
he has not taken any action against the complainant for
misuse of cheque. He has also not taken any action after
Ex.P1 came to his knowledge. Relevant portions of
deposition of DW-1 extracted as under:-
"XXXX ನಿಶಾನೆ ಪಿ.2 ಚೆಕ್ಕು ನನ್ನದೆ ಇರುತ್ತದೆ. ಆದರೆ
ಅದರಲ್ಲಿರುವ ಬರವಣಿಗೆ ನನ್ನದಲ್ಲ. ಆ ಚೆಕ್ಕನ್ನು ನಾನು
ದೂರುದಾರಿಗೆ ಕೊಟ್ಟಿಲ್ಲ. ಆ ಚೆಕ್ಕು ಕಳೆದು ಹೋಗಿತ್ತು. ಆ ಚೆಕ್ಕನ್ನು
ದುರ್ಬಳಕೆ ಮಾಡಿಕೊಳ್ಳಲಾಗಿದೆ ಎಂದು ನ್ಯಾಯಾಲಯದಿಂದ
ವಾರೆಂಟ್ಬಂದ ನಂತರ ನನಗೆ ಮನವರಿಕೆ ಆಯಿತು. ವಾರೆಂಟ್ಬರುವ
ಮೊದಲು ನನಗೆ ದೂರುದಾರರಿಂದ ನೋಟೀಸ್ ಮತ್ತು
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ನ್ಯಾಯಾಲಯದಿಂದ ಸಮನ್ಸ್ ಬರಲಿಲ್ಲ. ನನ್ನ ಚೆಕ್ಕು ಕಳೆದು ಹೋದ
ಬಗ್ಗೆ ನಾನು ಪೊಲೀಸರಿಗೆ ದೂರು ಕೊಡಲು ಹೋದಾಗ, ಕೇಸು
ನ್ಯಾಯಾಲಯದಲ್ಲಿರುವುದರಿಂದ ಅಲ್ಲೇ ಬಗೆಹರಿಸಿಕೊಳ್ಳಿ ಎಂದು
ಪೊಲೀಸರು ನನಗೆ ಸಮಜಾಯಿಸಿ ನೀಡಿದ್ದಾರೆ. XXXXX"
27. At one breath accused is contending that
cheque was lost and on the other hand, he is asserting
that complainant has stolen the cheque. Assuming for
argument sake that the cheque was stolen by the
complainant or lost, an ordinary prudent man will not
keep quite without lodging complaint to police when a
document like cheque is lost/stolen. It is to be noted that
accused is a Contractor by profession. His conduct in
keep in quite without lodging complaint to police/bank
regarding loss/theft of cheque, does not inspire the
confidence of the court.
28. After the dishonor of cheque, complainant has
issued a demand notice as per Ex.P4 to his address which
is shown in the cause-title of the complaint. Ex.P7 proves
that the notice was also sent through WhatsApp which is
not in dispute. Postal cover at Ex.P6 shows that the
registered notice returned unserved. Nevertheless, during
cross-examination, DW-1 has admitted that the notice
was sent to his correct address. In this regard, it is useful
to extract the relevant portion of deposition of DW-1 which
is as under:-
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"1. XXXX ದೂರಿನ ಶಿರೋನಾಮೆಯಲ್ಲಿ ನಮೂದಾಗಿರುವ
ವಿಳಾಸದಲ್ಲಿ ನಾನು ವಾಸವಾಗಿದ್ದೇನೆ ಎಂದರೆ ಸರಿ. ಆ ವಿಳಾಸ
ನಿ.ಪಿ.4 ರಲ್ಲೂ ನಮೂದಾಗಿದೆ ಎಂದರೆ ಸರಿ."
29. Section 27 of General Clauses Act deals with
the presumption of service of documents sent by post. It
provides that, where any Central Act or Regulation
authorizes or requires any document to be served by post,
service is deemed to be effected by properly addressing,
pre-paying and posting document by registered post.
Unless a different intention appears, this service is
considered as complete. As noted above, the accused has
admitted that the notice was sent to his correct address.
Indisputably, notice was sent through registered post.
Accused has not produced evidence to the contrary to
rebut the presumption under Section 27 of the Act.
Therefore, by virtue of Section 27 of the General Clauses
Act, service is deemed to be affected. Therefore, it is
proved that notice was served on the accused. Admittedly,
he has not issued reply to the statutory notice.
30. In MMTC Ltd., and Another V/s Medchl
Chemicals & Pharma (P) Ltd. And Another, (2002) 1
SCC 234, Hon'ble Supreme Court has held that when a
statutory notice is not replied, it has to be presumed that
the cheque was issued towards the discharge of liability.
Thus, failure on the part of the accused to issue reply
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itself assumes much significance to disbelieve the defence
set up by him.
31. In matters relating to offence under Section
138 of the Act, the complainant is required to establish
that the cheque is genuine, presented within time and
upon it being dishonoured, due notice was sent within 30
days of the receipt of information from the bank regarding
such dishonour, to which repayment must be received
within 15 days, failing which a complaint can be preferred
by the complainant within one month as contemplated
under Section 142(1)(b) of the Act.
32. In Gimpex Private Limited vs. Manoj Goel,
[(2022) 11 SCC 705], Hon'ble Supreme Court has
highlighted the ingredients forming the basis of the
offence under Section 138 of the NI Act in the following
structure:
"(i) The drawing of a cheque by person on
do account maintained by him with the
banker for the payment of any amount of
money to another from that account;
(ii) The cheque being drawn for the
discharge in whole or in part of any debt or
other liability;
(iii) Presentation of the cheque to the bank
arranged to be paid from that account;
(iv) The return of the cheque by the drawee
bank as unpaid either because the amount
of money standing to the credit of that
16
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account is insufficient to honour the cheque
or that it exceeds the amount;
(v) A notice by the payee or the holder in
due course making a demand for the
payment of the amount to the drawer of the
cheque within 30 days of the receipt of
information from the bank in regard to the
return of the cheque; and;
(vi) The drawer of the cheque failing to
make payment of the amount of money to
the payee or the holder in due course
within 15 days of the receipt of the notice."
33. In K. Bhaskaran v. Sankaran Vaidhyan
Balan, [(1999) 7 SCC 510], the Hon'ble Court had
summarised the constituent elements of the offence in
similar terms by holding:
"14. The offence Under Section 138 of the
Act can be completed only with the
concatenation of a number of acts. The
following are the acts which are
components of the said offence: (1) drawing
of the cheque, (2) presentation of the
cheque to the bank, (3) returning the
cheque unpaid by the drawee bank, (4)
giving notice in writing to the drawer of the
cheque demanding payment of the cheque
amount, (5) failure of the drawer to make
payment within 15 days of the receipt of
the notice."
34. The NI Act provides for two presumptions:-
Section 118 and Section 139. Section 118 of the Act inter
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alia directs that it shall be presumed, until the contrary is
proved, that every negotiable instrument was made or
drawn for consideration. Section 139 of the Act stipulates
that "unless the contrary is proved, it shall be presumed,
that the holder of the cheque received the cheque, for the
discharge of, whole or part of any debt or liability".
Because Section 139 requires that the court "shall
presume" the fact stated therein, it is obligatory on the
court to raise this presumption in every case where the
factual basis for the raising of the presumption has been
establish. Therefore, the court will necessarily presume
that the cheque is issued towards discharge of a legally
enforceable debt/liability in two circumstances. Firstly,
when the drawer of the cheque admits issuance/execution
of the cheque and secondly, in the event where the
complainant proves that the cheque was issued/executed
in his favour by the drawer. The circumstances set out
above form the fact(s) which bring about the activation of
the presumptive Clause. [Bharat Barrel & Drum Mfg.Co.
V/s Amin Chand Pyarelal, (1999) 3 SCC 35].
35. Discussing the burden of proof and
presumptions, Hon'ble Supreme Court in Rajesh Jain
V/s Ajay Singh, [(2023) 10 SCC 148] held as under:-
"28. There are two senses in which the
phrase 'burden of proof' is used in the
Indian Evidence Act, 1872 ("Evidence Act,
hereinafter"). One is the burden of proof
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arising as a matter of pleading and the
other is the one which deals with the
question as to who has first to prove a
particular fact. The former is called the
"legal burden" and it never shifts, the latter
is called the 'evidential burden' and it
shifts from one side to the other. [See
Kundanlal v. Custodian (Evacuee
Property); AIR 1961 SC 1316.]
29. The legal burden is the burden of proof
which remains constant throughout a trial.
It is the burden of establishing the facts
and contentions which will support a
party's case. If, at the conclusion of the
trial a party has failed to establish these
to the appropriate standards, he would
lose to stand. The incidence of the burden
is usually clear from the pleadings and
usually, it is incumbent on the plaintiff or
complainant to prove what he pleaded or
contends. On the other hand, the
evidential burden may shift from one
party to another as the trial progresses
according to the balance of evidence given
at any particular stage; the burden rests
upon the party who would fail if no
evidence at all, or no further evidence, as
the case may be is adduced by either side
(See Halsbury's Laws of England, 4th
Edition para 13). While the former, the
legal burden arising on the pleadings is
mentioned in Section 101 of the Evidence
Act, the latter, the evidential burden, is
referred to in Section 102 thereof. [G.Vasu
V. Syed Yaseen Sifuddin Quadri; AIR
1987 AP 139. affirmed in Bharat Barrel &
Drum Mfg.Co. Vs. Amin Chand Payrelal;
(1999) 3 SCC 35]
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30. Presumption, on the other hand,
literally means "taking as true without
examination or proof". In Kumar Exports v.
Sharma Exports; (2009) 2 SCC 513, this
Court referred to presumption as "devices
by use of which courts are enabled and
entitled to pronounce on an issue
notwithstanding that there is no evidence
or insufficient evidence."
31. Broadly speaking, presumptions are of
two kinds, presumptions of fact and of
law. Presumptions of fact are inferences
logically drawn from one fact as to the
existence of other facts. Presumptions of
fact are rebuttable by evidence to the
contrary. Presumptions of law may be
either irrebuttable (conclusive
presumptions), so that no evidence to the
contrary may be given or rebuttable. A
rebuttable presumption of law is a legal
rule to be applied by the Court in the
absence of conflicting (Halsbury, 4th
Edition paras 111, 112). Among the class
of rebuttable presumptions, a further
distinction can be made between
discretionary presumptions ("may
presume") and compulsive or compulsory
presumptions ("shall presume")."
36. In P.Rasiya V/s Abdul Nazer and another;
(AIR Online 2022 SC 1373), the Hon'ble Apex Court
reiterated the position of law that once the complainant
discharges his initial burden of proving issuance of
cheque by the accused with his signature, the
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presumption under Section 139 of NI Act would arise and
burden shifts on the accused to rebut the same. Of
course, the degree of proof required to be proved by the
accused is not as high as the burden on the complainant
to prove the guilt of the accused, but he is required to
probabilize his defence. Hon'ble Supreme Court also
made it clear that once the initial burden of proving the
issuance of cheque by the accused with his signature is
proved by the complainant, the burden shifts on the
accused to prove the contrary and to rebut the
presumption.
37. In Rohitbhai Jivanlal Patel V/s State of
Gujarath [(2019) 18 SCC 106], the Hon'ble Apex Court
reiterated the legal position that once the complainant is
successful in discharging his initial burden to prove
issuance of cheque by the accused with his signature, the
presumption under Section 139 of NI Act would arise and
the burden shifts on the accused to rebut the legal
presumption. The Hon'ble Apex Court reiterated the
degree of proof to rebut the presumption on the part of
the accused and held in paragraph 18 as under:
"18. In the case at hand, even after
purportedly drawing the presumption
under Section 139 of the NI Act, the trial
court proceeded to question the want of
evidence on the part of the complainant
as regards the source of funds for
advancing loan to the accused and want
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of examination of relevant witnesses who
allegedly extended him money for
advancing it to the accused. This
approach of the trial court had been at
variance with the principles of
presumption in law. After such
presumption, the onus shifted to the
accused and unless the accused had
discharged the onus by bringing on record
such facts and circumstances as to show
the preponderance of probabilities tilting
in his favour, any doubt on the
complainant's case could not have been
raised for want of evidence regarding the
source of funds for advancing loan to the
appellant-accused....."
38. Hon'ble Apex Court in Sanjabij Tari V/s
Kishore S.Borcar & Another; (2025) SCC OnLine SC
2069, held as under:-
"15. In the present case, the cheque in
question has admittedly been signed by the
Respondent No.1-Accused. This Court is of the
view that once the execution of the cheque is
admitted, the presumption under Section 118
of the NI Act that the cheque in question was
drawn for consideration and the presumption
under Section 139 of the NI Act that the holder
of the cheque received the said cheque in
discharge of a legally enforceable debt or
liability arises against the accused. It is
pertinent to mention that observations to the
contrary by a two Judges Bench in Krishna
Janardhan Bhat vs. Dattatraya G. Hegde,
(2008) 4 SCC 54 have been set aside by a
three Judges Bench in Rangappa (supra).
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16. This Court is further of the view that by
creating this presumption, the law reinforces
the reliability of cheques as a mode of
payment in commercial transactions.
17. Needless to mention that the presumption
contemplated under Section 139 of the NI Act,
is a rebuttable presumption. However, the
initial onus of proving that the cheque is not in
discharge of any debt or other liability is on
the accused/drawer of the cheque [See: Bir
Singh vs. Mukesh Kumar, (2019) 4 SCC 197].
XXXXX
21. This Court also takes judicial notice of the
fact that some District Courts and some High
Courts are not giving effect to the
presumptions incorporated in Sections 118
and 139 of NI Act and are treating the
proceedings under the NI Act as another civil
recovery proceedings and are directing the
complainant to prove the antecedent debt or
liability. This Court is of the view that such an
approach is not only prolonging the trial but is
also contrary to the mandate of Parliament,
namely, that the drawer and the bank must
honour the cheque, otherwise, trust in cheques
would be irreparably damaged."
39. Thus, it is settled proposition of law that the
complainant is required to discharge his initial burden of
issuance of cheque by the accused with his signature to
raise the legal presumption under Section 139 of NI Act.
When the legal presumption arises, the burden shifts on
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the accused to rebut the same by probabilizing his
defence.
40. In the present case, complainant has proved
the hand loan agreement and that signature on the
cheque is not in dispute. Prima facie, cheque at Ex.P-2 is
drawn from the bank account of the accused.
Indisputably, cheque was presented for encashment well
within its validity and dishonoured for the reason
'insufficient funds' which is appearing from bank
endorsement at Ex.P3 dated 12.03.2024. Thereafter,
complainant has issued notice dated 15.03.2024, copy of
which is at Ex.P4 calling upon the accused to pay the
amount covered under the dishonored cheque. Evidence
on record proves that the demand notice served on the
accused. Therefore, by statutory fiction, offence is deemed
to have committed. Accused have failed to probabilize his
defence regarding theft/loss of cheque to shift the onus
back upon the complainant to prove the existence of
legally enforceable debt.
41. It is true that suggestion was given to PW-1 in
his cross-examination disputing his financial capacity. In
this context it is noted that onus is not on the
complainant at threshold to prove his financial capacity to
make the payment in discharge of which the cheque is
issued. Only if an objection is raised that the complainant
was not in a financial position to pay the amount so
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claimed by him to have been given as a loan to the
accused, only then the complainant would have to bring
before the court cogent material to indicate that he had
financial capacity and had actually advanced the amount
in question by way of loan.
42. In Ashok Singh (supra), Hon'ble Supreme
Court has observed as under:-
"22. The High Court while allowing the
criminal revision has primarily proceeded on
the presumption that it was obligatory on the
part of the complainant to establish his case
on the basis of evidence by giving the details
of the bank account as well as the date and
time of the withdrawal of the said amount
which was given to the accused and also the
date and time of the payment made to the
accused, including the date and time of
receiving of the cheque, which has not been
done in the present case. Pausing here, such
presumption on the complainant, by the High
Court, appears to be erroneous. The onus is
not on the complainant at the threshold to
prove his capacity/financial wherewithal to
make the payment in discharge of which the
cheque is alleged to have been issued in his
favour. Only if an objection is raised that the
complainant was not in a financial position to
pay the amount so claimed by him to have
been given as a loan to the accused, only then
the complainant would have to bring before
the Court cogent material to indicate that he
had the financial capacity and had actually
advanced the amount in question by way of
loan. XXXX"
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43. In Ashok Singh's case, Hon'ble Supreme
Court has relied on the judgment in M/s S. S. Production
v. Tr. Pavithran Prasanth, 2024 INSC 1059, where it
was held that:-
"8. From the order impugned, it is clear that
though the contention of the petitioners was
that the said amounts were given for
producing a film and were not by way of
return of any loan taken, which may have
been a probable defence for the petitioners in
the case, but rightly, the High Court has
taken the view that evidence had to be
adduced on this point which has not been
done by the petitioners. Pausing here, the
Court would only comment that the reasoning
of the High Court as well as the First
Appellate Court and Trial Court on this issue
is sound. Just by taking a counter-stand
to raise a probable defence would not
shift the onus on the complainant in
such a case for the plea of defence has to
be buttressed by evidence, either oral or
documentary, which in the present cases,
has not been done. Moreover, even if it is
presumed that the complainant had not
proved the source of the money given to
the petitioners by way of loan by
producing statement of accounts and/or
Income Tax Returns, the same ipso facto,
would not negate such claim for the
reason that the cheques having being
issued and signed by the petitioners has
not been denied, and no evidence has
been led to show that the respondent
lacked capacity to provide the amount(s)
in question."
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44. Further, in Tedhi Singh V/s Narayan Dass
Mahant, (2022) 6 SCC 735, Hon'ble Court held:-
"10. The trial court and the first appellate
court have noted that in the case under
Section 138 of the NI Act the complainant
need not show in the first instance that he
had the capacity. The proceedings under
Section 138 of the 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 expected of the complainant to
initially lead evidence to show that he had
the financial capacity. To that extent, the
courts in our view were right in holding on
those lines. However, the accused has the
right to demonstrate that the complainant in
a particular case did not have the capacity
and therefore, the case of the accused is
acceptable which he can do by producing
independent materials, namely, by
examining his witnesses and producing
documents. It is also open to him to establish
the very same aspect by pointing to the
materials produced by the complainant
himself. He can further, more importantly,
achieve this result through the cross
examination of the witnesses of the
complainant. Ultimately, it becomes the duty
of the courts to consider carefully and
appreciate the totality of the evidence and
then come to a conclusion whether in the
given case, the accused has shown that the
case of the complainant is in peril for the
reason that the accused has established a
probable defence."
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45. In the present case, as noted above,
complainant has produced agreement under which the
accused has not only acknowledged the debt but also
issued the cheque in question for security. Therefore, just
by taking the defence of financial incapacity of the
complainant, onus would not shift on the complainant
unless plea of defence of financial incapacity is buttressed
by evidence. It is pointed out above that, there is no
suggestion to PW-1 disputing the signature of accused on
Ex.P1 and that in the chief-examination accused has not
denied his signature on Ex.P1, under which accused has
acknowledged the debt. On the contrary, he has admitted
his signature on Ex.P1. Therefore, it does not lie in his
mouth to question the financial capacity of the
complainant.
46. Upon appreciation of evidence placed on
record, this court opines that the accused has failed to
probabilize any of his defence and thereby failed to
discharge the evidential burden casted on him. Under
these circumstances, judgments relied by him do not
come to his aid. Therefore, this court holds that the
complainant has proved that the accused has committed
the offence punishable under Section 138 of N.I.Act.
Accordingly, I answer Point No.1 in the Affirmative.
47. Point No.2:-Punishment prescribed for the
offence under Section 138 of Negotiable Instruments Act
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is imprisonment for a period which may extend to two
years or with fine which may extend to twice the amount
of the cheque or with both. Object of Chapter-XVII of the
Negotiable Instruments Act, which prescribes punishment
for the dishonour of the cheque is both punitive as well as
compensatory and restitutive. In R.Vijayan V/s Baby and
another (AIR 2012 SC 528), Hon'ble Supreme Court has
observed that Chapter-XVII of the N.I. Act is an unique
exercise which blurs the dividing line between civil and
criminal jurisdictions and it provides a single forum and
single proceeding for enforcement of criminal liability and
also for the enforcement of the civil liability i.e., for
realization of the cheque amount and thereby obviating
the need for the creditor to move to different forums for
the relief. Hon'ble Apex Court has reiterated that the
apparent intention is to ensure that not only the offender
is punished, but also ensure that the complainant
invariably receives the amount of cheque along with
compensation. Hon'ble Supreme Court has further
observed that a stage has reached when most of the
complainants in particular the financial institutions view
the proceedings under Section 138 of N.I. Act as a
proceeding for recovery of the cheque amount and
therefore, the punishment of the drawer of the cheque for
the offence of dishonour become secondary. The said
judgment is relied by Hon'ble High Court of Karnataka in
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M/s. Banavathy & Company V.s Mahaeer Electro Mech
(P) Ltd., and others, (NC: 2025:KHC:25140).
48. Keeping in mind the principles laid down in
the aforesaid judgments, sentence has to be passed. In
the present case, it is evident from the recitals of Ex.P1
that money was lent about two years prior to execution of
Ex.P1. Ex.P1 was executed on 10.10.2023. Therefore, in
all probability, money was lent in the year 2021. Cheque
is dated 11.03.2024. Having regard to the facts and
circumstances of the case, and keeping in mind the
provision contained in Section 80 of NI Act, this court
opines that it is a case to impose sentence of fine which is
quantified at ₹15,00,000/- and out of the said amount, it
is just and proper to award a sum of ₹14,90,000/- as
compensation to the complainant as provided under
Section 357(1)(b) of Cr.P.C and the remaining sum of
₹10,000/- shall be defrayed to State. In view of the
findings recorded above, I proceed to pass the following:
ORDER
Acting under Section 255(2) of Cr.P.C.,
accused is held guilty and convicted for the
offence punishable under Section 138 of
Negotiable Instruments Act.
Accused is sentenced to pay a fine of
₹15,00,000/-. In default to pay fine, accused
shall undergo simple imprisonment for a
period of seven months.
SPONSORED
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Out of the realized fine amount, a sum of
₹14,90,000/- is ordered to be paid to the
complainant as compensation and the
remaining sum of ₹10,000/- shall be defrayed
to State.
Bail bonds executed by accused shall
stand cancelled.
Office to supply a free copy of this
judgment to accused.
(Dictated to the Stenographer, transcript computerized by her, revised
corrected and then pronounced by me in the open Court on this the 2 nd day of
April, 2026)
( SANTHOSH S.KUNDER )
XIV Addl. C.J.M., Bengaluru.
ANNEXURE
List of witnesses examined for the complainant:
PW.1 M.Jayaram
List of documents marked for the complainant:
Ex.P.1 Certified copy of hand loan agreement
dated 10.10.2023
Ex.P.2 Cheque
Ex.P.2(a) Signature of the accused
Ex.P.3 Bank endorsement
Ex.P.4 Copy of demand notice dated
15.03.2024
Ex.P.5 Postal receipt
Ex.P.6 Unserved postal cover
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KABC0C0579392024Ex.P.7 Copy of WhatsApp screenshot
Ex.P.8 Certificate under Section 65(B) of Indian
Evidence Act
List of witness examined for the defence:
DW.1 M.K Harshith Kumar
List of documents marked for the defence: ‘NIL’
XIV Addl.C.J.M., Bengaluru.
