Bangalore District Court
Prakash V R vs Manjunatha K S on 16 April, 2026
KABC030371142023
Presented on : 19-08-2023
Registered on : 19-08-2023
Decided on : 16-04-2026
Duration : 2 years, 7 months, 28 days
IN THE COURT OF LII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY
PRESENT
SMT.LAVANYA.H.N, B.Sc., LL.B.,
LII Addl. Chief Judicial Magistrate,
Bengaluru.
Dated this the 16th day of April, 2026
C.C. No.20779/2023
COMPLAINANT: SRI.PRAKASH.V.R,
S/o.Late.Ramakrishna.V,
Aged about 58 years,
R/at No.904/A, 5th Main Road,
5th Cross, Vijayanagara,
Bengaluru - 560 040.
(Rep By: Sri.Ramesha.K.R - Advocate)
V/s.
ACCUSED: SRI.MANJUNATHA.K.S,
S/o.Shivananjegowda.T,
Aged about 62 years,
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C.C.No.20779/2023
R/at No.424, 5th Cross,
8th Main Road, Hampinagar
Vijayanagar, 2nd Stage,
Bengaluru North,
Bengaluru - 560 040.
(Rep By : Sri.Abhilash.H.S - Advocate)
Date of presenting 27.06.2023.
complaint
Date of arrest of accused NIL
Name of the SRI.PRAKASH.V.R.
Complainant
Date of commencement 13.10.2023.
of evidence
Date of closing evidence
01.12.2025.
Offence complained of Section 138 of Negotiable
Instruments Act, 1881.
Date of Judgment 16.04.2026.
Opinion of the Judge Accused found guilty.
:JUDGMENT:
This Complainant has presented the complaint on
27.06.2023 against the accused for the offense
punishable under Sec.138 of Negotiable Instruments Act,
1881 (hereinafter it is referred to as NI Act).
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C.C.No.20779/2023
2. THE BRIEF FACTS OF THE COMPLAINANT’S
CASE ARE AS UNDER:-
a) It is the case of the complainant that the
accused is his close friend. The accused is doing Civil
Contracts works from several years. The accused has
taken hand loan of Rs.27,00,000/- (Rupees Twenty Seven
Lakhs Only), from the 20.02.2021 to 28.09.2021 with
interest from the complainant. The accused agreed to
repay the same within short periods. Out of
Rs.27,00,000/-, Rs.8,50,000/- was not repaid by the
accused. For repayment of balance amount of
Rs.8,50,000/- the accused issued the Cheque bearing
No.001861 dated 27.03.2023, drawn on Union Bank of
India, RPC Layout Bangalore Branch Bangalore Urban-
560 040.
b) It is further case of the complainant that when
the complainant presented the said cheque through his
banker, The Bangalore City Co-op. Bank Ltd., Vijayanagar
Branch, the cheque was dishonored for the reason that
“PAYMENT STOPPED BY DRAWER” as per bank
endorsement dated on 09.05.2023.
c) It is further case of the complainant that the
complainant has issue a legal notice to accused on
23.05.2023, through R.P.A.D. but same was returned
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C.C.No.20779/2023
with shara dated 26.05.2023 and 27.05.2023. “DOOR
LOCKED INTIMATION DELIVERED” and “NOT CLAIMED”.
Since the accused has failed to comply with the statutory
demand under the notice, the complainant was
constrained to file this complaint.
3(a) After presenting the complaint cognizance of
the offense under Section 138 of N.I Act, was taken. As a
prima-facie case was made out against the accused, by
order dated 19.08.2023 Criminal Case was registered and
process was issued to the accused.
3(b) In response to the summons, accused has
caused his appearance through Sri.Abhilash.H.S –
Advocate and got obtained the bail on 13.10.2023. The
substance of accusation was recorded on 13.10.2023.
Since the accused pleaded not guilty and claimed to be
tried, the matter was posted for trial.
4. The sworn statement of the complainant was
treated as examination-in-chief of complainant and the
documents at Ex.P.1 to P.8 are marked through PW.1.
5. All the incriminating evidence appearing
against the accused in the evidence of PW.1 has been read
over and explained to the accused under Section 313 of
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C.C.No.20779/2023
Cr.P.C., and accordingly, answers given by the accused
were recorded.
6. The accused in order to prove his defense, he
himself examined as DW.1.
7. Having heard the arguments of learned
advocate for the complainant and learned advocate for the
accused and on perusal of the materials available on
record, the points that would arise for determination are
as under:-
POINTS
1) Whether the complainant proved that the
accused has issued cheque bearing
No.001861 for Rs.8,50,000/- dated
27.03.2023 drawn on Union Bank of India,
RPC Layout Branch in favour of the
complainant towards discharge of lawful
dues to the complainant?
2) Whether the Complainant proved that the
complainant has presented the said Cheque
within a period of its validity for encashment
through his banker, The Bangalore City Co-
op Bank Ltd., Vijayanagara Branch which
came to be dishonored with an endorsement
“PAYMENT STOPPED BY DRAWER” ?
3) Whether the Complainant proved that the
demand notice was issued within one month
from the date of endorsement of the Bank
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C.C.No.20779/2023
and accused has been duly served with the
demand notice ?
4) What order or sentence?
8. The answers to the above points are as follows:
Point No.1: In the AFFIRMATIVE;
Point No.2: In the AFFIRMATIVE;
Point No.3: In the AFFIRMATIVE;
Point No.4: As per final order
for the following:
REASONS
POINT No.1:
9(a) It is the argument of the Learned counsel for
the complainant that the accused has not disputed that
the cheque at Ex.P1 belongs to his account and has
admitted his signature thereon. When the accused
admits his signature on the cheque, the burden lies upon
him to rebut the presumption under Section 139 of the
N.I. Act. However, the accused has failed to rebut the
presumption favor the complainant that the cheque was
issued towards discharge of a legally recoverable debt.
9(b) Learned counsel for the complainant further
submits that an offence under Section 138 of the N.I. Act
is a statutory offence. In such cases, the accused must
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C.C.No.20779/2023
specifically plead and prove his defense. But, the accused
has failed to prove that the accused has borrowed loan of
Rs.12,00,000/- only but not Rs.27,00,000/- and cheque
in question was not issued towards repayment of
Rs.8,50,000/-. On the contrary, the complainant has
proved his case through oral and documentary evidence.
The learned counsel for the complainant in support of his
argument has placed reliance upon the following
decisions:
1. In Criminal Appeal No.4171 of 2024 between Ashok
Singh Vs. State of Uttar Pradesh and another‘s case, wherein
Hon’ble Apex Court has held that:
“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
8
C.C.No.20779/2023complainant 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. In the case at hand, the
appellant had categorically stated in his deposition
and reiterated in the cross-examination that he had
withdrawn the amount from the bank in Faizabad
(Typed Copy of his deposition in the paperbook
wrongly mentions this as ‘Firozabad’). The Court
ought not to have summarily rejected such stand,
more so when respondent no.2 did not make any
serious attempt to dispel/negate such
stand/statement of the appellant. Thus, on the one
hand, the statement made before the Court, both in
examination-in-chief and cross- examination, by
the appellant with regard to withdrawing the money
from the bank for giving it to the accused has been
disbelieved whereas the argument on behalf of the
accused that he had not received any payment of
any loan amount has been accepted”.
2. In Criminal Appeal Nos.1233-1235 of 2022 between
P.Rasiya Vs. Abdul Nazer and another‘s case, wherein Hon’ble
Apex Court has held that:
“Feeling aggrieved and dissatisfied with the
judgment and orders passed by the Appellate Court
affirming the conviction of the accused under
Section 138 of the N.I. Act, the accused preferred
three different Revision Applications before the High
Court. By the impugned common judgment and
order, the High Court has reversed the concurrent
9
C.C.No.20779/2023findings recorded by both the courts below and has
acquitted the accused on the ground that, in the
complaint, the Complainant has not specifically
stated the nature of transactions and the source of
fund. However, the High Court has failed to note
the presumption under Section 139 of the N.I. Act.
As per Section 139 of the N.I. Act, it shall be
presumed, unless the contrary is proved, that the
holder of a cheque received the cheque of the
nature referred to in Section 138 for discharge, in
whole or in part, of any debt or other liability.
Therefore, once the initial burden is discharged by
the Complainant that the cheque was issued by the
accused and the signature and the issuance of the
cheque is not disputed by the accused, in that case,
the onus will shift upon the accused to prove the
contrary that the cheque was not for any debt or
other liability. The presumption under Section 139
of the N.I. Act is a statutory presumption and
thereafter, once it is presumed that the cheque is
issued in whole or in part of any debt or other
liability which is in favour of the
Complainant/holder of the cheque, in that case, it
is for the accused to prove the contrary. The
aforesaid has not been dealt with and considered by
the High Court. The High Court has also failed to
appreciate that the High Court was exercising the
revisional jurisdiction and there were concurrent
findings of fact recorded by the courts below”.
10(a) Per contra, it is the argument of the
learned counsel for the accused that the accused had
borrowed hand loan of Rs.12,00,000/- from the
complainant and the same was repaid by the accused
10
C.C.No.20779/2023
with interest of Rs.1,00,000/-. The accused has not
borrowed the loan of Rs.27,00,000/- from the
complainant as alleged in the complaint. By mis-using
the signed blank cheque which was taken at the time of
borrowing loan, by creating a story of lending loan of
Rs.27,00,000/- has filed this false case by filling up of
blank cheque though the accused has repaid the entire
loan which he borrowed from the complainant.
10(b) It is the further argument of the learned
counsel for the accused that the complainant has not
produced any documents to show that he had a financial
capacity to pay hand loan of Rs.27,00,000/- as alleged.
The complainant has not produced his IT Returns and he
has not shown with regard to lending loan of
Rs.27,00,000/- to the accused in his IT Returns. Under
the circumstances, an adverse inference has to be drawn
against the accused that he has not lent hand loan of
Rs.27,00,000/- to the accused. Learned counsel for the
accused in support of his argument has placed reliance
upon following decisions:
1. In Criminal Appeal No.533 of 2015 between
H.V.Jagannatha Vs. Prabhakar.B.J’s case, wherein Hon’ble
High Court of Karnataka has held that:
11
C.C.No.20779/2023
“14. The respondent/accused has disputed
the capacity of the appellant/complainant to lend
huge amount of Rs.6,35,000/-. The Hon’ble Apex
Court in the case of DATTATREYA supra has
observed at Paragraph 30 as follows:
” 30. Moveover, affirming the
findings of the Trial Court, the High
Court observed that while the
signature of the respondent on the
cheque drawn by him as well as on
the agreement between the parties
herein stands admitted, in case where
the concern of financial capacity of
the creditor is raised on behalf of an
accused, the same is to be discharged
by the complainant through leading
of cogent evidence”
“15. In view of the above, the
appellant/complainant has to establish his capacity
to lend huge amount by cogent evidence. The
appellant/complainant has not placed any material
on record to establish his capacity to lend such a
huge amount of Rs.6,35,000/-“.
2. In Criminal Appeal No.3257 of 2024 between Sri
Dattatraya Vs. Sharanappa‘s case, wherein Hon’ble Apex
Court has held that:
“Therefore, it may be said that the liability of
the defence in cases under Section 138 of the NI Act
1881 is not that of proving its case beyond
reasonable doubt.
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C.C.No.20779/2023
21. In light of the aforesaid discussion, and as
underscored by this Court recently in the decision
of Rajes Jain Vs. Ajay Singh, an accused may
establish non-existence of a debt or liability either
through conclusive evidence that the concerned
cheque was not issued towards the presumed debt
or liability, or through adduction of circumstantial
evidence vide standard of preponderance of
probabilities.
Applying the aforementioned legal position to
the present factual matrix, it is apparent that there
existed a contradiction in the complaint moved by
the Appellant as against his cross-examination
relatable to the time of presentation of the cheque
by the Respondent as per the statements of the
Appellant. This is to the effect that while the
Appellant claimed the cheque to have been issued
at the time of advancing of the loan as a security,
however, as per his statement during the cross-
examination it was revealed that the same was
presented when an alleged demand for repayment
of alleged loan amount was raised before the
Respondent, after a period of six months of
advancement. Furthermore, there was no financial
capacity or acknowledgement in his Income Tax
Returns by the Appellant to the effect of having
advanced a loan to the Respondent. Even further
the Appellant has not been able to showcase as to
when the said loan was advanced in favour of the
Respondent nor has he been able to explain as to
how a cheque issued by the Respondent allegedly in
favour of Mr Mallikarjun landed in the hands of the
instant holder, that is, the Appellant.
13
C.C.No.20779/2023
28. Admittedly, the Appellant was able to establish
that the signature on the cheque in question was of
the Respondent and in regard to the decision of this
Court in Bir Singh (supra), a presumption is to
ideally arise. However, in the above referred context
of the factual matrix, the inability of the Appellant
to put forth the details of the loan advanced, and
his contradictory statements, the ratio therein
would not impact the present case to the effect of
giving rise to the statutory presumption under
Section 139 of the NI Act 1881. The Respondent has
been able to shift the weight of the scales of justice
in his favour through the preponderance of
probabilities”.
3. In (2014) 2 Supreme Court Cases 236 between John K.
Abraham Vs. Simon C. Abraham and another‘s case, wherein
Hon’ble Apex Court has held that:
“It has to be stated that in order to draw the
presumption under Section 118 read along with
139 of the Negotiable Instruments Act, the burden
was heavily upon the complainant to have shown
that he had required funds for having advanced the
money to the accused; that the issuance of the
cheque in support of the said payment advanced
was true and that the accused was bound to make
the payment as had been agreed while issuing the
cheque in favour of the complainant”.
11. Keeping in mind the well established and
settled principle of law laid down in the above decisions
14
C.C.No.20779/2023
relied by the learned counsel for the complainant and
accused, let this Court to see the case on hand.
12. To prove the guilt of the accused, PW1/the
complainant, in his examination-in-chief by way of
affidavit, has reproduced the averments made in the
complaint and produced documents marked at Ex.P1 to
Ex.P8.
13. Ex.P.1 is the cheque bearing No.001861 for
Rs.8,50,000/- dated 27.03.2023 drawn on Union Bank of
India, RPC Layout Branch, Bengaluru in favour of the
complainant. Ex.P.2 is the bank memo dated 09.05.2023,
wherein it could be seen that the cheque at Ex.P1
presented by the complainant was returned unpaid as per
Bank endorsement dated 09.05.2023 for “PAYMENT
STOPPED BY DRAWER”.
14. Ex.P3 is the office copy of the demand notice
dated 23.05.2023 issued by the complainant to the
accused through Advocate calling upon the accused to
pay the cheque amount within 15 days from the date of
receipt of the notice. Ex.P4 is the postal receipt for having
sent the notice at Ex.P3 to the accused. Ex.P.5 is the
postal returned cover wherein it could be seen that notice
15
C.C.No.20779/2023
sent to the accused returned with postal shara dated
27.05.2023 as “NOT CLAIMED”.
15. Ex.P.6 is the copy of the Aadhar Card of the
accused. Ex.P.7 is the Statement of Account from
04.03.2021 to 08.09.2021 of the complainant maintained
in Bengaluru City Co-operative Bank, bearing Account
No.0003/10/101/037702. Ex.P.8 is the Encumbrance in
Form No.15 of property bearing Khatha No.457/A for the
period 01.04.2014 to 06.06.2023.
16. It is a settled principle that once the signature
on a cheque is admitted, a presumption arises under
Section 139 of the N.I. Act that the cheque was issued in
discharge of a debt or liability. This presumption extends
to the existence of a legally enforceable debt or liability.
There is no doubt regarding the initial presumption in
favor of the complainant. However, this presumption is
rebuttable. The initial onus lies on the accused to rebut it
by raising a probable defence to the satisfaction of the
Court. The standard of proof required is ‘preponderance of
probabilities’. If the accused raises a probable defence
creating doubt about the existence of a legally enforceable
debt or liability, or shows that the consideration was
improbable, doubtful, or illegal, the onus shifts to the
16
C.C.No.20779/2023
complainant to prove the debt as a matter of fact. Failure
to do so results in the complainant’s case failing.
17. To invoke the presumption under Sections 118
and 139 of the N.I. Act, the complainant must establish
that the cheque belongs to the accused and bears his
signature on it. Here, the accused has not denied that
Ex.P1 is his cheque and his signature thereon. Thus, it is
established that the cheque at Ex.P.1 belongs to the
accused and bears his signature.
18. Once the complainant discharges this burden,
the Court must presume under Section 139 of the N.I. Act
that the cheque was issued in discharge of a debt or
liability. However, this presumption is rebuttable. The
Court must now examine whether the accused has raised
a probable defence to rebut it.
19. At the outset, it is relevant to note that the
cheque was returned unpaid for the reason that
“PAYMENT STOPPED BY DRAWER”. It is not the defense
of the accused that he has maintained sufficient amount
in his account. Merely because the cheque was returned
unpaid for the reason of “PAYMENT STOPPED BY
DRAWER”, it cannot be said that the offence under
section 138 of NI Act, would not constitute, unless the
17
C.C.No.20779/2023
presumption under Section 139 of NI Act, is rebutted by
the accused by raising a probable defense.
20. The accused in his defense evidence has
deposed that he had borrowed loan of Rs.4,00,000/-,
Rs.5,00,000/- and Rs.3,00,000/- from the complainant.
At the time of availing the loan, two signed blank cheques
were given to the complainant towards security of the
loan. On 19.12.2021, he has paid Rs.10,00,000/- to the
complainant through RTGS. Prior to that he has paid
Rs.3,00,000/- to the complainant through RTGS. Though
he borrowed loan of Rs.12,00,000/- from the
complainant, he paid Rs.13,00,000/- including interest of
Rs.1,00,000/-. Though he requested for return of the
cheques after repayment of the loan, the complainant did
not return the same by stating that the cheques were mis-
placed. He came to know with regard to bouncing of
cheque, when he received the summons from the Court.
Since the complainant has demanded 10% interest, he
filed complaint against the complainant before
Vijayanagara Police Station. The police advised them to
resolve their dispute before the Court. He was not liable
to pay any amount to the complainant.
21. From the above evidence of the accused, there
is no doubt that there was a financial transaction between
18
C.C.No.20779/2023
the complainant and the accused. According to the
accused, he borrowed hand loan of Rs.12,00,000/- which
was paid through RTGS by the complainant and he has
repaid the amount borrowed from the complainant along
with interest of Rs.1,00,000/- and the same has been
transferred to the account of the complainant through
RTGS.
22. As per the case of the complainant, between
20.02.2021 to 28.09.2021, the complainant has paid
Rs.27,00,000/- to the accused subject to repaying the
same within short time with interest. It is true, the
complainant has not given details when and how much
payment was made to the accused. It is also true, the
complainant has not given details with regard to how the
payment of Rs.27,00,000/- was made. The complainant
in his notice/complaint/sworn statement has stated that
out of Rs.27,00,000/-, the accused has not paid
Rs.8,50,000/- for which cheque in question was issued.
As per the case and evidence of the complainant, out of
Rs.27,00,000/-, the accused has repaid Rs.18,50,000/- to
the complainant.
23. It is true, the complainant either in the
complaint or in the notice or in his sworn statement has
stated with regard to source of income and his financial
19
C.C.No.20779/2023
capacity. It is also true, the complainant neither in his
notice nor in the complaint nor in his sworn statement
has stated that out of the sale amount, he has lent loan of
Rs.27,00,000/- to the accused. But, the document at
Ex.P.8 shows that the complainant had sold his property
on 03.09.2021 for Rs.36,00,000/-. From this evidence, it
could be said that the complainant had a financial
capacity to lend loan of Rs.27,00,000/-.
24. That apart, it is not the defense of the accused
that the complainant has no financial capacity to lend
loan of Rs.27,00,000/-. In this regard, no question was
put to the complainant on behalf of the accused, when the
complainant was in witness box. Thus, it is held that
there is no merit in the argument of the learned counsel
for the accused that the accused has no financial capacity
to lend loan of Rs.27,00,000/-.
25. The complainant in his cross-examination has
admitted that the accused has paid Rs.13,00,000/- to
him through RTGS which includes interest of
Rs.1,00,000/- for Rs.12,00,000/-. The complainant has
further deposed in his cross-examination that the accused
has not only paid Rs.13,00,000/-, he has paid more than
Rs.13,00,000/-. The complainant in his cross-
examination has deposed that he has transferred
20
C.C.No.20779/2023
Rs.15,00,000/- to the accused through account and the
remaining amount was paid through cash. The
complainant has admitted that he paid Rs.4,00,000/- on
06.09.2021, Rs.5,00,000/- on 08.09.2021 and
Rs.3,00,000/- on 28.09.2021, to the accused. This fact
was also admitted by accused. The accused has admitted
receiving hand loan of Rs.12,00,000/- from the
complainant on the above dates. The accused has
categorically denied with regard to payment of
Rs.15,00,000/-. The accused has denied that he has
received amount by way of cash and through cheque.
26. Over all assessing the evidence of the accused
and defense taken by the accused in the cross-
examination of PW.1, it could be make out that the
accused has only admitted the loan transaction of
Rs.12,00,000/- which was paid on the above 3 dates
through RTGS, but he has denied payment of
Rs.15,00,000/- by way of cash as well as through cheque.
27. During the cross-examination of accused on
14.08.2025, the accused has expressed his ignorance
with regard to payment of Rs.96,000/- and Rs.2,00,000/-
through cheque when it was suggested to accused that he
received Rs.96,000/- and Rs.2,00,000/- through cheque.
However, the accused in his cross-examination dated
21
C.C.No.20779/2023
06.11.2025 has given an explanation that by withdrawing
Rs.2,00,000/- and Rs.96,000/-, he repaid the said
amount to the complainant. This explanation was not
given on 14.08.2025. It appears that after cross-
examination of accused on 14.08.2025, when it was
specifically suggested to him that Rs.96,000/- and
Rs.2,00,000/- was paid through cheque, in order to
overcome the documentary transaction, the accused in
his cross-examination dated 06.11.2025 has improved his
version and has given the above explanation. In the
considered opinion of this Court, the above explanation
given by the accused appears to be false.
28. Having gone through the account statement of
the complainant at Ex.P.7 as well as oral evidence of the
complainant and accused, there is no doubt that
Rs.96,000/- and Rs.2,00,000/- was paid to the accused
through cheque on 04.03.2021 and 04.09.2021
respectively. Further, as admitted by the accused, the
accused has received Rs.4,00,000/-, Rs.5,00,000/- and
Rs.3,00,000/- from the complainant on 06.09.2021,
08.09.2021 and 28.09.2021 respectively and the said
payment was paid through RTGS. Thus, from the above
evidence, it is clear that the complainant has paid
Rs.14,96,000/- through account transaction. However,
22
C.C.No.20779/2023
the accused has denied payment of Rs.2,96,000/-
through cheque.
29. As per the evidence of the complainant, out of
repayment of Rs.18,50,000/-, the accused has made
payment of Rs.13,00,000/- through RTGS and
Rs.5,50,000/- by way of cash. The accused in his cross-
examination dated 14.08.2025 has expressed his
ignorance with regard to repayment of Rs.5,50,000/- by
way of cash, when it was suggested to the accused that he
paid Rs.5,50,000/- to the complainant by way of cash. If
really, the accused has not paid Rs.5,50,000/- to the
complainant by way of cash, he could have been directly
denied the suggestion made to him. From the way of
evidence given by the accused, it can be inferred that
there were cash transaction between the complainant and
accused.
30. As observed above, the accused has admitted
receiving of Rs.12,00,000/- from the complainant which
was paid through RTGS, but he has denied payment of
Rs.2,96,000/- which was paid through cheque. As per
the documentary evidence, the accused has received
Rs.14,96,000/- from the complainant through RTGS and
cheque, but he admitted only of Rs.12,00,000/- which
was paid through RTGS. From this documentary
23
C.C.No.20779/2023
evidence, it could be said that the version of the accused
could not be believed that he has taken hand loan of
Rs.12,00,000/- only. From the very conduct of the
accused, it could be said that the accused has given false
evidence before the Court that he had taken hand loan of
Rs.12,00,000/- though as per the documentary evidence
at Ex.P.7 and admitted fact show that the accused has
received Rs.14,96,000/- through RTGS and cheque.
31. Merely because no document has been placed
by the complainant with regard to payment of
Rs.12,04,000/- by way of cash and it was not declared in
IT Returns, based upon oral evidence of the accused, it
cannot be said that the accused has successfully rebutted
the presumption available under section 139 and 118 of
NI Act. For the above reasons, it is held that the accused
has failed to prove his defense that he had taken hand
loan of Rs.12,00,000/- from the complainant, but not
Rs.27,00,000/-. Thus, it is held that accused has not
raised probable defense which rebuts the presumption
available under section 139 and 118 of NI Act.
32. In the humble opinion of this Court, the
decisions relied by the learned counsel for the accused
referred supra would not anyway help to the defense of
the accused since the facts and circumstances of the
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C.C.No.20779/2023
present case brought on record and facts and
circumstances of the case involved in the referred
decisions are not similar. With this and in view of the
aforesaid discussions, in the considered opinion of this
Court, it is held that the complainant has proved that the
accused has issued cheque bearing No.001861 for
Rs.8,50,000/- dated 27.03.2023 drawn on Union Bank of
India, RPC Layout Branch in favour of the complainant
towards discharge of lawful dues to the complainant.
Thus, it is held that the complainant has proved the Point
No.1 beyond all reasonable doubt. Hence, Point No.1 is
answered in the AFFIRMATIVE.
POINT No.2 AND 3:
33. These two points are taken up together for
common discussion to avoid repetition of facts.
It is relevant to note here that, only proving of
existence of legally recoverable debt is not suffice to
convict the accused for the offense punishable under
section 138 of N.I.Act. In addition to this, the complainant
has also to satisfy the following ingredients:-
1. That the complainant has presented
the said cheuqe for encahsment within
its validity period;
25
C.C.No.20779/2023
2. That the said Cheque has been
returned unpaid for want of sufficient
funds in the account of the accused;
3. That the complainant has issued
statutory notice demanding the amount
covered under the Cheque to the
accused within the stipulated period of
30 days form the date of receipt of
notice of dishonour of Cheques in
question;
4. That the accused has failed to
comply with, the demand notice issued,
within the statutory period of 15 days
from the date of receipt of such
statutory notice; and
5. That the complaint has been
presented within the period of one
month after expiry of 15 days from the
date of receipt of statutory notice issued
to the accused as provided under
section 142 of N.I.Act.
34. It is seen that the complainant has got the
demand notice on 23.05.2023 at Ex.P.3 issued within
stipulated period of 30 days from the date of receipt of
intimations of dishonor of Cheque.
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C.C.No.20779/2023
35. It is one of the arguments of the learned
counsel for the accused that accused has not been served
with the notice.
36. Per contra, it is the argument of the learned
counsel for the complainant that notice issued to the
accused to his proper and correct address returned with
postal shara “UNCLAIMED”. The accused in his cross-
examination has also admitted that he resides in the
address for which notice was sent. The accused has not
produced any document to show that he was not residing
in the address for which notice was sent. When the notice
which was sent to proper and correct address of the
accused, returned with shara “UNCLAIMED/NOT
CLAIMED” then the Court has to draw a presumption
that, the accused has been duly served with the notice,
unless it is proved by the accused that the address for
which notice was sent is not the proper and correct
address of the accused. But, the accused has not
rebutted the presumption. Hence, the accused has been
duly be served with the notice.
37. The Hon’ble Apex Court in the decision
reported in 2007 (6) SCC 555 between C.C.Alavi Haji Vs.
Palapetty Muhammed and another has held that”Insofar
as the question of disclosure of necessary particulars with
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C.C.No.20779/2023
regard to the issue of notice in terms of proviso (b) of
Section 138 of the Act, in order to enable the Court to
draw presumption or inference either under Section 27 of
the G.C. Act or Section 114 of the Evidence Act, is
concerned, there is no material difference between the two
provisions. In our opinion, therefore, when the notice is
sent by registered post by correctly addressing the drawer
of the cheque, the mandatory requirement of issue of
notice in terms of Clause (b) of proviso to Section 138 of
the Act stands complied with. It is needless to emphasise
that the complaint must contain basic facts regarding the
mode and manner of the issuance of notice to the drawer
of the cheque. It is well settled that at the time of taking
cognizance of the complaint under Section 138 of the Act,
the Court is required to be prima facie satisfied that a
case under the said Section is made out and the
aforenoted mandatory statutory procedural requirements
have been complied with. It is then for the drawer to rebut
the presumption about the service of notice and show that
he had no knowledge that the notice was brought to his
address or that the address mentioned on the cover was
incorrect or that the letter was never tendered or that the
report of the postman was incorrect. In our opinion, this
interpretation of the provision would effectuate the object
and purpose for which proviso to Section 138 was
enacted, namely, to avoid unnecessary hardship to an
28
C.C.No.20779/2023
honest drawer of a cheque and to provide him an
opportunity to make amends”.
38. It is no doubt, as per Ex.P.3, the notice sent to
the accused returned with postal shara dated 27.05.2023
as “NOT CLAIMED”. It is true, when the notice issued to
the accused to his correct address returned with shara
“Refused or Unclaimed” then it has to be presumed that
the accused has been duly served with notice. It is
burden upon the accused to prove that the address for
which notice sent was not his proper and correct address.
39. The accused in his cross-examination has
admitted that he resides in the address for which notice
was sent. From this, it could be said that the complainant
has issued the notice to the proper and correct address of
the accused.
40. When the notice which was sent to correct and
proper address of the accused returned with postal shara
“NOT CLAIMED/UNCLAIMED”, then it has to be
presumed that accused has been duly served with the
demand notice. The accused has not rebutted this
presumption, on the other hand, the accused himself has
deposed that he resides in the address for which notice
was sent. Hence, it is held that there is no merit in the
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C.C.No.20779/2023
argument of the learned counsel for the accused that
accused has not been served with the demand notice.
41. It is evident from the file that the complainant
has presented the present complaint on 27.06.2023 i.e.,
within the period of one month after expiry of 15 days
from the date of receipt of the legal notice by the accused.
42. From the above documentary evidence, it is
held that, in this case, all the ingredients of section 138 of
N.I Act have been complied with.
43. In view of the aforesaid discussions, in the
considered opinion of this Court, the complainant has
proved the Point No.2 and 3 beyond all reasonable doubt.
Therefore, the Point No.2 and 3 are answered in the
AFFIRMATIVE.
POINT No.4:
44. On going through the entire oral and
documentary evidence on record, the conduct of the
accused goes to show that he has issued the cheque in
question at Ex.P.1 without maintaining sufficient amount
in his account. This shows the intention of the accused is
30
C.C.No.20779/2023
to defraud the complainant and to escape from his
liability to pay the cheque amount.
45. In the instant case, accused issued cheque in
question to the complainant towards repayment loan
which was due by him to the complainant but, he has
failed to keep up his promise which amounts to unjust
enrichment for which complainant is to be compensated.
Hence, having been considering the aforesaid aspects and
also in view of foregoing answers on Point No.1 to 3, the
accused is liable to be punished under section 138 of
N.I.Act.
46. Considering the length of the case, amount
under the cheque, reasonable rate of interest from the
date of issuance of the cheque till date, the cost of
expenses of the litigation and time spent by the
complainant, this Court is of the view that it is proper to
impose fine of Rs.11,25,000/- out of which
Rs.11,00,000/- shall be payable to the complainant as
compensation and remaining Rs.25,000/- towards State.
Accordingly, this court proceeds to pass the following:-
ORDER
The complaint filed by the complainant
U/Sec.200 of Cr.P.C for the offence
31
C.C.No.20779/2023punishable under Section 138 of Negotiable
Instrument Act, 1881., is hereby allowed.
Acting under Section 255(2) of Cr.P.C.,
the accused is hereby convicted of the
offence punishable u/S.138 of Negotiable
Instruments Act, 1881.
Accused is sentenced to pay fine of
Rs.11,25,000/- (Rupees Eleven Lakhs and
Twenty Five Thousand Only), in default to
undergo simple imprisonment for six
months.
Further, it is ordered that out of fine
amount of Rs.11,25,000/-, Rs.11,00,000/-
(Rupees Eleven Lakhs Only) shall be payable
to the complainant as compensation and the
remaining amount of Rs.25,000/- (Rupees
Twenty Five Thousand Only) shall be
payable towards State.
Since accused is absent copy of the
Judgment has not been supplied though
copy of Judgment is prepared and ready.
The same is kept in file.
The bail of the accused dated
13.10.2023 stands canceled.
(Dictated to Stenographer directly on computer,
computerized by him, corrected and then pronounced by
me in the open court on this the 16th day of April, 2026)(LAVANYA.H.N)
LII ADDL. C.J.M., BENGALURU.
32 C.C.No.20779/2023 ANNEXURE WITNESSES EXAMINED ON BEHALF OF THE COMPLAINANT/S: PW-1 : SRI.PRAKASH.V.R. DOCUMENTS EXHIBITED ON BEHALF OT THE COMPLAINANT/S: Ex.P-1 Cheque; Ex.P-2 Bank Memo; Ex.P-3 Legal Notice dated 23.05.2023; Ex.P-4 Postal Receipt; Ex.P-5 RPAD Returned Cover; Ex.P-6 Aadhar Card; Ex.P-7 Bank Account Statement; Ex.P-8 Encumbrance Certificate. WITNESSES EXAMINED ON BEHALF OF THE ACCUSED/S: DW-1 : SRI.MANJUNATH. DOCUMENTS EXHIBITED ON BEHALF OF THE ACCUSED/S: NIL (LAVANYA.H.N) LII ADDL. C.J.M., BENGALURU. Digitally signed LAVANYA by LAVANYA H N HN Date: 2026.04.16 17:02:39 +0530
