Bangalore District Court
Nirbhay . B Wasi vs Vijaykumar on 21 April, 2026
KABC030160962021
IN THE COURT OF THE XXV ADDL. CHIEF JUDICIAL
MAGISTRATE, AT BANGALORE CITY
Dated this the 21st day of April 2026
Present : SRI. GOKULA. K
B.A.LL.B.
XXV Addl. Chief Judicial Magistrate,
Bangalore City.
C.C.No.4987/2021
Complainant : Nirbhay B Wasi
S/o Bhagirath B Wasi
R/at.No.54/5
2nd E Cross
Hanumanthappa Layout
Sulthanpalya,
Bangalore 560 032.
(By CP -Advocate )
V/s
Accused : Vijaykumar M
S/o.Muniyappan
R/at.D.NO.3/311, Ward No.3
Thandanur (Post)
Yethapur(VIA)
Attur (TK)
Salem District 636117
Tamil Nadu.
(By MVSC - Advocate )
Plea of accused: Pleaded not guilty
Final Order: Accused is Convicted
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C.C.No.4987/2021
Date of judgment : 21.04.2026
JUDGMENT
The complainant has filed the complaint under Section 200
of Criminal Procedure Code against the accused for the offence
punishable under Section 138 Negotiable Instruments Act.
2. The brief case of the complainant is as under:
That the accused is running a proprietary concern under
the name and style “POD” from the registered office “WE Work”,
Koramangala, Bangalore. The accused has been acquainted
with the complainant through POD Mutual Telegram Channel
and out of said acquaintance, the accused approached the
complainant to invest in his business. The complainant agreed
to invest with the accused business entity with a fond hope and
promises made by the accused to the complainant that the
accused will pay monthly profit sharing on the amount invested
by the complainant. That reposing faith on the accused, the
complainant invested a sum of ₹.15,00,000/- with the accused.
Initially the accused made payments due towards profit sharing
and slowly started to stop the payments. That on several
request and demand by the complainant, initially the accused
issued few cheques towards legally enforceable debt and the
complainant approached his banker wherein he was informed
3
C.C.No.4987/2021the signature of the accused differed. That on several request
made by the complainant, finally to discharge said liability, the
accused issued five cheques drawn from his account on HDFC
Bank, Padmanabham, Club House Road, Technopark,
Kariavattom P.O., Kazhalkkoota, Trivandrum.
i. Cheque bearing No.000039 dated.01.09.2020 for a sum of
₹.4,70,000/-
ii. Cheque bearing No.000042 dated.09.09.2020 for a sum of
₹.5,00,000/-
iii. Cheque bearing No.000043 dated.09.09.2020 for a sum of
₹.5,00,000/-
iv. Cheque bearing No.000046 dated.17.10.2020 for a sum of
₹.7,00,000/-
v. Cheque bearing No.000047 dated.17.10.2020 for a sum of
₹.2,36,000/-
That as per the assurance and promise made by the accused,
the complainant has presented all the cheques on 01.09.2020,
09.09.20 and 17.10.2020 respectively through his banker i.e.
HDFC Bank, Richmond Road, Bangalore and said cheques
returned dishonored with endorsement “Funds Insufficient”
and one cheque was endorsed as “Alteration” and said
endorsement was received by the complainant on 08.10.2020,
17.10.2020 and 19.10.2020 respectively. Hence, the
4
C.C.No.4987/2021complainant lodged a police complaint against the accused on
19.10.2020 at Ethapur police station, Tamilnadu. At that
instance, the accused agreed to pay all the dues and requested
the complainant to present said cheques. Reposing faith, the
complainant again presented said cheques for collection
through his banker Kotak Mahendra Bank, R.T. Nagar Branch.
But said cheques returned with an endorsement “Payment
stopped by drawer” on 27-11-2020 and 30-11-2020. The
complainant immediately informed the accused and the
accused has given evasive reply. Hence, the complainant issued
legal notice dated 09.12.2020 through RPAD demanding the
cheque amount and said notice returned with shara “Returned
to sender unclaimed”. Inspite of service of notice, the accused
failed to pay the claim amount to the complainant within the
statutory time. Therefore, the accused has committed the
offence under Section 138 of Negotiable Instruments Act.
Therefore the complainant has filed the complaint.
3. This case is initially filed by the complainant before 15th
Additional Chief Judicial Magistrate, Bangalore and this case is
transferred at the stage of arguments to this court vide Orders
of Hon’ble Chief Judicial Magistrate, Bangalore City.
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C.C.No.4987/2021
4. On the basis of Private complaint filed by the complainant,
the court taken cognizance of offence and registered the case in
PCR No.3939/2021 and recorded sworn statement complainant
as PW 1 and got marked 13 documents as Ex.P 1 to P 13. The
court upon considering the material on record issued process
under Section 204 of Cr.P.C by registering the criminal case. In
response to the process issued by this court, the accused
appeared before the court and he is released on bail. The copy of
the complaint is served to the accused along with the summons
as contemplated under Section 207 of Criminal Procedure Code.
5. The substance of the acquisition as provided Section 251
of Cr.PC is read over to the accused and his plea is recorded.
The accused has pleaded not guilty and claimed to be tried.
6. In view of the law laid down by Hon’ble Supreme Court of
India in Indian Bank Association V/s Union of India and others
reported in AIR 2014SCW3463, the affidavit filed by the
complainant at the stage of taking cognizance and documents
marked is treated as evidence under section 145 of Negotiable
Instruments Act. The PW1 in his further chief examination got
marked the documents as Ex.P.14 to Ex.P.28. The accused got
marked four documents by confronting to PW 1 as Ex.D.1 to
Ex.D4. The PW1 was fully subjected to cross examination. After
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C.C.No.4987/2021
conclusion of evidence of the complainant the incriminating
circumstances in the evidence of the complainant is read over to
the accused and the statement of the accused under Section
313 of CrPC is recorded. The accused has denied the
incriminating circumstances as false. The accused has not
chosen to lead his evidence.
7. Heard arguments of learned counsel for the complainant
and learned counsel for the accused and perused the material
on record and reply arguments submitted by the counsel for
complainant .
8. On the basis of the material on record the following points
arise for the consideration of this court :
1. Whether the complainant proves beyond all
reasonable doubt that the accused has issued the
5 cheques i.e. (i) Cheque bearing No.000039
dated.01.09.2020 for a sum of ₹.4,70,000/-, (ii)
Cheque bearing No.000042 dated.09.09.2020 for a
sum of ₹.5,00,000/-, (iii) Cheque bearing
No.000043 dated.09.09.2020 for a sum of
₹.5,00,000/-, (iv) Cheque bearing No.000046
dated.17.10.2020 for a sum of ₹.7,00,000/- (v)
Cheque bearing No.000047 dated.17.10.2020 for a
sum of ₹.2,36,000/- all drawn on HDFC Bank,
Kazhakkoota, Trivandrum, in favour of the
complainant towards discharge of legal liability and
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C.C.No.4987/2021on its presentation on 26-11-2020 it is
dishonoured for the reason “Payment stopped by
drawer” on 27.11.2020 and 30.11.2020 and
inspite of issuance of demand notice dated
09.12.2020 the accused has unclaimed the notice
on 19-12-2020 and failed to repay the amount
within statutory period and thus the accused
committed an offence punishable under Section
138 of Negotiable Instruments Act ?
2. What Order or Sentence?
9. The findings of this court to the above points are as follows:
Point No.1 In the Affirmative,
Point No.2 As per final order
for the following :
REASONS
10. POINT NO.1: To prove the case the complainant himself
examined as PW-1. The PW1 in his evidence has reiterated the
averments made in the complaint. The PW 1 in his evidence
affidavit deposed that the accused is running a proprietary
concern under the name and style “POD” from the registered
office “WE Work”, Koramangala, Bangalore. The accused
approached the complainant to invest in his business. The
complainant agreed to invest with the accused business entity
with a fond hope and promises made by the accused to the
complainant that the accused will pay monthly profit sharing on
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C.C.No.4987/2021
the amount invested by the complainant. He has deposed that
reposing faith on the accused, the complainant invested a sum
of ₹.15,00,000/- with the accused. Initially the accused made
payments due towards profit sharing and slowly started to stop
the payments. That on several request and demand by the
complainant, initially the accused issued few cheques towards
legally enforceable debt and the complainant approached his
banker wherein he was informed the signature of the accused
differed. He has deposed that on several request made by the
complainant, finally to discharge said liability, the accused
issued five cheques drawn on HDFC Bank, Padmanabham,
Club House Road, Technopark, Kariavattom P.O., Kazhalkkoota,
Trivandrum.
i. Cheque bearing No.000039 dated.01.09.2020 for a sum of
₹.4,70,000/-
ii. Cheque bearing No.000042 dated.09.09.2020 for a sum of
₹.5,00,000/-
iii. Cheque bearing No.000043 dated.09.09.2020 for a sum of
₹.5,00,000/-
iv. Cheque bearing No.000046 dated.17.10.2020 for a sum of
₹.7,00,000/-
v. Cheque bearing No.000047 dated.17.10.2020 for a sum of
₹.2,36,000/-
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C.C.No.4987/2021
The PW 1 has produced said cheques as Ex.P 1 to 5. He has
deposed that he has presented all the cheques on 01.09.2020,
09.09.20 and 17.10.2020 through his banker ie HDFC Bank,
Richmond Road, Bangalore and said cheque returned
dishonored with endorsement “Funds Insufficient” and one
cheque was endorsed as “Alteration” and said endorsement was
received by the complainant on 08.10.2020, 17.10.2020 and
19.10.2020. The PW 1 has not produced said endorsement
before the court and the complainant has not prosecuted the
accused on such dishonour of the cheques. He has deposed that
he has lodged a police complaint against the accused on
19.10.2020 at Ethapur police station, Tamilnadu. At that
instance, the accused agreed to pay all the dues and requested
the complainant to present said cheques. He has deposed that
on such representation of the accused he has presented said
cheques Ex.P 1 to P 5 through his banker Kotak Mahendra
bank R.T. Nagar Branch on 20-11-2020 and said cheques
returned with an endorsement “Payment stopped by drawer” on
27-11-2020 and 30-11-2020. Said bank endorsements are
marked as Ex.P.6 to Ex.P.10. The PW 1 has further deposed
that immediately informed the same to the accused and the
accused has given evasive reply. Hence, he issued legal notice
dated 09.12.2020 through RPAD and said notice returned with
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C.C.No.4987/2021
shara “Returned to sender unclaimed”on 19-12-2020. The office
copy of demand notice is marked as Ex.P.11, postal receipt as
Ex.P 12 and returned postal envelop as Ex.P 13. It is stated that
the demand notice is deemed to be served and the accused is
fully aware of the notice and intentionally got it returned as
unclaimed. The PW1 has also deposed that inspite of service of
notice, the accused failed to make payment.
11. Now it is proper to consider whether the complainant has
complied statutory requirements for constitution of the offence.
The essential ingredients of section 138 and 142 of Negotiable
Instruments Act to be complied are i) drawing of the cheque by
the accused ii) presentation of the cheque to the bank with in
the period of three months, iii) returning of the cheque unpaid
by the drawee bank iv) giving notice in writing to the drawer of
the cheque demanding of the payment of cheque amount with
in the period of 30 days, v) failure of the drawer to make
payment within the period of 15 days after receipt of the
demand notice and v) Presentation of the complaint within a
month by the complainant after expiry of 15 days of service of
notice to the accused. Therefore it is proper to consider whether
the statutory requirements for constituting the offence under
Section 138 of Negotiable Instruments Act is complied by the
complainant.
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C.C.No.4987/2021
12. The cheques are dated 01.09.2020, 09,09,2020 and
17.10.2020 and said cheques were presented on 26-11-2020
and they were dishonored for the reason “Payment stopped by
drawer” on 27.11.2020 and 30.11.2020 respectively. The
cheques are presented through the account of the complainant
situated at the branch within the jurisdiction of this court. As
provided under Section 146 of Negotiable Instruments Act, law
presumes that on production of banker slip or memo having
thereon the official mark denoting that the cheque has been
dishonored, presume the fact of dishonor of such said cheque,
unless and until same is disproved. The accused has not denied
dishonnour of cheques as per Ex.P 6 to Ex.P 10.
13. The demand notice is issued to the accused on 09.12.2020
and it is returned unclaimed on 19-12-2020 and it is deemed to
be served on the accused. The accused has also not disputed
his address mentioned in the demand notice. In his statement
under Section 313 of Cr.P.C he has stated that he was not in
the town while notice was issued, hence he has not received the
notice. Therefore it is clear that notice is issued to the correct
address of the accused and it is sufficient service of notice in
view of provisions of Section 27 of General Clauses Act. The PW
1 has deposed that inspite of service of notice, the accused
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C.C.No.4987/2021
failed to pay the claim amount to the complainant with in the
statutory time of 15 days of service of notice.
14. In this case, the accused has disputed service of the
demand notice. It is pertinent to note that the complainant has
filed this case against the accused. Similarly the wife of the
complainant Shubha N Wasi has also filed CC No. 4993/2021
before this court against the accused and the complaint is
marked as Exhibit D1 in this case by the accused. The
complainant has produced the office copy of the legal notice as
Exhibit P11 issued by the complainant. He has produced the
returned postal envelope as Exhibit P13. Said Exhibit P13
envelope is opened in the open court during evidence and the
copy of the notice found in the said envelope is marked as
Exhibit P13(a). But the copy of the notice found in Exhibit P13
envelope is issued on behalf of Shubha N Wasi, the wife of the
complainant to the accused. Therefore, the learned counsel for
the accused has vehemently argued that the complainant has
not produced the envelope issued to the accused by the
complainant and there is no proof is produced for service of
Exhibit P11 notice before this court. Therefore there is no
compliance on the requirements of Section 138 proviso (b) of
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C.C.No.4987/2021
15. The case in CC No. 4993/2021 is also pending on the board
of this Court and the said case is also came up for final disposal
on this day itself. Hence the case papers in CC No. 4993/2021
is readily available with this court. The court can take judicial
notice that in CC 4993/2021, the wife of the complainant has
produced the returned postal envelope which is also returned
with endorsement unclaimed on 19.12.2020 as Exhibit P7. The
said envelope is opened in the open court during the evidence of
wife of the the complainant in the said case and the notice
found in Exhibit P7, Postal envelope in the said case is marked
in the said case as Exhibit P7(a). The accused himself produced
certified copy of Exhibit P7(a) notice before this court as Exhibit
D3. Thus, upon considering these aspects, it is clear that both
the cases were filed by the complainant and his wife through
the same advocate and notices are also issued through same
advocate on the same day. But while producing the returned
postal envelope, the postal envelope in respect of the notice
issued by the complainant is produced in the case filed by the
wife of the complainant and the postal envelope relating to the
notice issued by the wife of the complainant is produced by the
complainant in this case. But the fact remains that both the
notices issued by the complainant in this case and the wife of
the complainant in CC No.4993/21 were returned with
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C.C.No.4987/2021
endorsement unclaimed on 19.12.2020 itself. Therefore, it is
only an error caused in producing the postal envelope in respect
of the notice of the complainant in the case filed by the wife of
the complainant and the notice of the wife of the complainant in
this case. But only on this error committed by the advocate
while producing the returned postal envelope will not be a
ground to reject the claim of the complainant. The Court can
take judicial notice that the demand notice issued as per
Exhibit P11 is also returned with postal endorsement unclaimed
as per Exhibit P. 7 produced in CC No.4993 /2021 in the case
filed by the wife of the complainant.
16. Learned Counsel for the accused in support of his
arguments has relied on the decision of Hon’ble Supreme Court
reported in AIR2025 SC 4446 between Kaveri Plastic v.
Mahdoom Bawa Bahrudeen Noorul In this case it is held that
when the cheque amount is not mentioned in the proviso (b)
notice or the amount different than the actual cheque amount is
mentioned, in the notice, such notice would stand invalid in the
eye of law. The condition of notice under Proviso (b) is required
to be complied with meticulously. Even typographical error can
be no defence. The accused has also relied on the decision of
Hon’ble Supreme Court in Criminal Appeal No. 711/2009
between M.D. Thomas v. P.S. Jalil and Another In this decision,
15
C.C.No.4987/2021
it is held that the notice of demand served upon the wife of the
accused and not on the accused. Therefore there is no escape
from conclusion that complainant had not complied with the
requirements of giving notice in terms of clause (b) of Proviso to
Section 138 of the Act. The Learner counsel for the accused has
also relied on the decision in CRM-M-54012-2023 between
Charanjeet Singh v. Kulwant Singh by the Hon’ble High Court of
Punjab and Haryana dated 16.01.2025, This decision, it is held
that, the intention behind the said requirement is to give an
opportunity to settle the dues before criminal proceedings are
initiated against him. As such, it becomes all the more
important to ensure that such a notice contains all necessary
details pertaining to the cause of action, in Unmistakable terms.
This Court has gone through all the decisions relied by the
Learned counsel for the accused in detail. But under the facts
and circumstances of this case, the complainant has issued
notice by demanding the amount covered under Exhibit P 1 to
Exhibit P5 cheques and there is no infinity in the notice issued
by the complainant. The only error found is that the postal
envelope in respect of the notice issued by the complainant is
produced in CC No.4993/2021 and the notice issued on behalf
of the wife of the complainant is produced in this case. As
discussed above as both the matters are posted before this
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C.C.No.4987/2021
court on this day for pronouncement of judgment and this court
can take judicial notice that the returned envelope in respect of
this case is produced in CC No.4993/2021 and the returned
envelope in respect of said case is produced in this case and
both the postal envelopes shows that the notice is returned by
the accused unclaimed on 19.12.2020.
17. Therefore, it can be concluded that the notice issued by the
complainant is valid and there is valid service of notice. Hence
cause of action arose for prosecution under Section 138 of
Negotiable instruments Act on 04-01-2021. The complaint is
filed before this court on 30.12.2020. The complaint is pre-
matured. But the court has taken cognizance of the case on 26-
02-2021 after the cause of action arose. The accused has not
denied that the cheques are drawn from his account and also
not denied his signatures on the cheques and not denied
issuance of cheques to the complainant. Therefore, the
complainant has complied all the statutory requirements for
constitution of offence under Section 138 of Negotiable
Instruments Act. Thus the complainant has discharged his
initial burden. Therefore, the complainant is entitled for
presumption under Section 139 of Negotiable Instrument Act.
The provisions of Section 139 of Negotiable Instrument Act
reads as under:-
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C.C.No.4987/2021
139- Presumption in favour of holder – It should 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 the discharge,
in whole or in part, of any debt or other liability.
18. The complainant has replied on the decision of Hon’ble
Supreme court in a decision reported in (2010) 11 SCC 411
between Rangappa V/s Sri Mohan has held that –
The presumption mandated by Section 139 of the
act does indeed include the existence of a legally
enforceable debt or liability.
It is also observed that
Section 139 of the Act is an example of a reverse
onus clause that has been included in furtherance
of the legislative objective of improving the
credibility of negotiable instrument. It is also held
that in such a scenario, the test of proportionality
should guide the construction and interpretation of
reverse onus clauses and the defendant caused
cannot be expected to discharge an unduly high
slandered or proof.
19. Learned counsel for the complainant has also relied on the
decision reported in 2018 (8) SCC 165 between Krishna Rao v.
Shankar Gauda , wherein it is held that accused may adduce
evidence to rebut presumption under Section 139, but mere
denial regarding existence of debt shall not serve any purpose.
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C.C.No.4987/2021
In the event the accused is able to raise a probable defence
which creates doubt with regard to existence of debt or liability
the presumption may fail. The complaint has also relied on the
decision of Hon’ble Supreme Court reported in AIR 2023 SC
5018 between Rajesh Jain v. Ajay Singh . In this decision, at
para 43 and 44, the Hon’ble The Supreme Court has held that
the nature of evidence required to shift the evidential burden
need not necessarily be direct evidence i.e. oral or documentary
evidence or admissions made by the opposite party, it may
comprise circumstantial evidence or presumption of law or
facts. The accused may adduce direct evidence to prove that the
instrument was not issued in discharge of a debt/liability and, if
he adduces acceptable evidence, the burden again shifts to the
complainant. At the same time the accused may also rely upon
circumstantial evidence and, If the circumstances so relied
upon are compelling, the burden may likewise shift to the
complainant. It is open for him to rely upon presumption of fact,
for instance, those mentioned in Section 114 and other sections
of the Evidence Act. The burden of proof may shift by
presumptions of law or facts.
20. The complainant has also relied on the decision of Hon’ble
High Court of Sikkim reported in 2018 0 Supreme (SIKK) 35
between Poorna Kumar Gurung v. Ankith Sarda . He has also
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C.C.No.4987/2021
relied on the decision of Hon’ble High Court of Karnataka
reported in 2025 (1) AKR 264 between R.K. Surendra Babu v. C.
Ashoka . In this decision, it is held that mere fact that accused
had issued stop payment instruction is not sufficient to reverse
the presumption under Section 139, unless accused proves
existence of sufficient balance in the Account at the time of
cheque presented.
21. Therefore, upon considering the principles of law laid down
in the above-referred decisions, it is proper to consider the
defence raised by the accused, whether it is sufficient to rebut
the presumption under Section 139 of Negotiable Instruments
Act.
[[[
22. The defence of the accused is that the cp has voluntarily
invested a sum of ₹ 15,00,000/- in the share market. The
complainant has also received the profits of ₹ 9,00,000/- from
his investment. The accused is only the advisor to the
complainant to invest in the stock market. He has not received
any remuneration for the services rendered by him to the
complainant. There is no written agreement between the
complainant and accused for sharing of profits and to bear the
loss in the investment. The complainant who invested in the
stock market should be entitled for profits if his investment
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C.C.No.4987/2021
turned into profit and the complainant should bear the loss if
the investment turned into loss. The accused is not the
registered member of SEBI. Therefore, he cannot be termed as a
stock broker. The accused cannot act as a stock broker and if it
is the case of the complainant that the complainant has made
investment through the accused, such transaction is illegal
transaction and it cannot be enforced under law. The
complainant has not disclosed about the investment in the
income tax returns. Therefore, the amount invested by the
complainant is unaccounted amount. The complainant has not
disclosed the source of income for investing a sum of ₹
15,00,000/-. There is no mutual agreement between the
complainant and accused to pay the principal amount and
profit for total sum of ₹ 24,06,000/- claimed by the
complainant. It is also case of the accused is that the
complainant has lodged the complaint at Ethapur police station
and they have threatened that they will arrest him through
higher police officials. Therefore he got afraid of his arrest.
Therefore he has sent Exhibit P1 to Exhibit P5 cheques to the
complainant through courier. But he is not liable to pay said
amount to the complainant. It is further case of the accused is
that he has not used a single rupee of the complainant for his
personal use. Due to COVID-19 pandemic he has suffered huge
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loss in the investment in the stock market. He has not agreed to
make good the loss suffered in the stock market investment of
the complainant. Therefore there is no legally recoverable debt.
23. In this case, the accused has not disputed the fact that he
was developed PoD Mutual Telegram Channel and invited the
prospective investors to invest in the stock market. He has also
not disputed that the complainant has invested a sum of ₹
15,00,000/- with him and he has invested said amount of the
complainant in the stock market. The PW1 has stated that he
has transferred a sum of ₹ 5,00,000/- in August 2019 and ₹
10,00,000/- in December 2019 from his bank account to the
account of the accused. He has also produced the statement of
account showing such transactions as Exhibit P14. The accused
has not denied such transfer of amount of ₹ 15,00,000 by the
complainant to his bank account. The PW1 has deposed in his
cross-examination that the accused has paid a sum of ₹
9,00,000/- as profit for the period from August 2019 to
February 2020. This statement of The PW1 is also not denied by
the accused.
24. It is the case of the complainant that after February 2020
the accused stopped to make the profit sharing. It is stated that
the accused has agreed to make repayment of the principal
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amount of ₹ 15,00,000/- and profit sharing for the period from
Feb 2020 till July 2020 for a sum of ₹ 9,30,000/-. Totally for a
sum of ₹ 24,30,000/-. The PW1 has also stated that on
25.08.2020, the accused has made payment of ₹ 24,000/-.
Therefore, due amount payable by the accused is ₹ 24,06,000/-
in respect of which the accused has issued Exhibit P1 to Exhibit
P5 cheques. It is the case of the complainant that the accused
has issued initially 5 cheques as per Exhibit P17 to Exhibit P21
towards payment of ₹ 24,06,000/-. But when he enquired with
HDFC Bank they have informed that the signature in Exhibit
P17 to Exhibit P21 cheques differs therefore he informed the
accused about the said fact that signature in Exhibit P17 to
Exhibit P21 cheques differs from the specimen signature and
requested the accused to issue fresh cheques in the place of
Exhibit P17 to Exhibit P21 cheques. Then the accused has sent
Exhibit P1 to Exhibit P5 cheques through courier. The
complainant has also produced the courier cover as Exhibit P22
and Exhibit P23 and also the RPAD cover as Exhibit P24 for
sending the cheques by the accused to the complainant. The
accused has not denied the fact of issuance of Exhibit P17 to
Exhibit P21 cheques to the complainant or issuance of Exhibit
P1 to Exhibit P5 cheques to the complainant in the place of
Exhibit P17 to Exhibit P21 cheques. The accused has not
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denied his signature in Exhibit P1 to Exhibit P5 cheques. He
has also not denied issuance of cheques. He has also not denied
that contents of the cheques is written by him. He has also not
denied that he has issued said cheques through courier.
25. In the entire cross-examination of PW1, the accused has not
made any suggestion that the accused has not agreed to make
profit sharing. The accused who Issued stop payment
instructions has not explained why he has issued stop payment
instructions and he has also not produced any evidence before
this court to show that in spite of issuance of stop payment
instructions he had sufficient funds in his account to honour
the Exhibit P1 to Exhibit P5 cheques on its presentation.
26. The complainant has produced the WhatsApp conversation
between the complainant and accused as per Exhibit 15. The
accused has not denied the conversation found in the WhatsApp
screenshot produced by the complainant. The said conversation
shows that the accused has promised to pay returns above 13%
to 15% on the investment in the month of 19.11.2019. The
complainant has also produced various WhatsApp
conversations between the complainant and accused as Exhibit
P26. The accused has not denied the correctness of the
conversations found in Exhibit P26 WhatsApp communication.
24
C.C.No.4987/2021
No suggestion has been made to PW1 that the complainant has
created Exhibit P26 WhatsApp conversation and it is not the
real conversation between the complainant and accused.
Therefore this conversation can be relied upon. The first three
pages of said conversation in Exhibit P26 is related to Exhibit
P17 to Exhibit P21 cheques which was sent through registered
post on 28.08.2020 and the complainant informing the accused
about the mismatch in the signature and making the request for
issuance of fresh fresh cheques. Next pages of conversation is
with regard to request of the complainant to issue fresh cheques
and also sharing of the calculation sheet of the dues to the
complainant and his wife and confirmation of the signature of
the accused. This WhatsApp conversation also shows that
before sending the Exhibit P1 to Exhibit P5 cheques the accused
has sent the image of the cheques, which shows that the cheque
is fully filled. The conversation also shows that dispatch of said
cheques through courier to the complainant and intimation of
the complainant about dishonour of said cheques. This
WhatsApp conversation also shows that the complainant has
sent the calculation sheet about the calculation of the principal
amount and the profit to the accused and by agreeing to the
said calculation sheet the accused has sent the cheques
through courier. The WhatsApp conversation clearly shows that
25
C.C.No.4987/2021
the Exhibit P1 to P5 cheques were issued on 02.09.2020 and
05.09.2020 through Courier. It is the contention of the
complainant that he has presented Exhibit P1 to Exhibit P5
cheques, but the said cheques are dishonored for the reason
insufficient funds and altered. Thereafter he lodged the
complaint with Ethappur Police Station. And in the Ethapur
Police Station, the compromise has held to settle the dues of the
complainant and his wife for a sum of ₹ 26,00,000/-. But the
the accused has not adhered to such compromise. Therefore,
the complainant has constrained to present the cheques to the
outstanding due amount as mentioned in the cheques. The
accused in the statement under Section 313 of CrPC has stated
that the complainant has threatened through police that he
would be arrested by Etapur police. Therefore he has sent the
cheques through courier. But in the cross examination of PW1,
no such suggestion is made to PW1 that he has threatened the
accused through Ethapur police and hence accused has sent
the cheques through courier. Therefore in the absence of such
suggestion to PW1 and producing the material before the court
to show that the complainant has threatened through Ethapur
police to arrest him, this contention is not having any
evidentiary value.
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C.C.No.4987/2021
27. Another defence of the accused is that he has not agreed to
make good the loss suffered by the complainant in the
investment. It is pertinent to note that the complainant has not
directly made investment in the stock market. The complainant
has transferred the amount to the account of the accused and
the accused may have invested it in the stock market in his own
name. Admittedly, the accused is not the registered stock
broker. In the cross-examination of PW1, it is elicited that the
complainant is not having any information in which Share the
amount of the complainant is invested by the accused. The
accused has also not produced any documents to show that he
has communicated the complainant in which share his amount
is invested. Therefore, the investment by the complainant with
the accused is only for profit sharing and not for sharing of loss.
The Exhibit P15 WhatsApp conversation also shows the promise
made by the accused to get returns 13% to 15% on the
investment and also the statement of the accused that risk is
his. The Exhibit P26 Whatsapp conversation shows that the
complainant has shared the calculation sheet in respect of his
investment and investment of his wife to the accused. The
accused himself filled the contents of the cheque and sent it
through courier to the complainant. This fact also shows that
the accused has agreed to share the investment and profit as
27
C.C.No.4987/2021
mentioned in the cheque. If he has not agreed to pay the
amount mentioned in the cheques, he would not have issued
the cheques by mentioning the said amount. It is not the case of
the accused that he has issued blank signed cheques to the
complainant and the complainant himself filled the contents of
the cheque. Therefore the admission of the accused that he
himself written the contents of the cheques and issued to the
Complainant itself clearly establishes that he has agreed to pay
the cheque amount of ₹ 24,06,000/- to the complainant and
issued the cheques.
28. The accused has stated that the accused is not the
registered stock broker registered under SEBI. Therefore, the
investment made by the complainant through the accused is an
unlawful transaction and it cannot be recovered as a legally
recoverable debt. In support of his arguments, the accused has
relied on the decision of Hon’ble High Court of Allahabad
reported in 2024 SCC Online ALL 5512. Between Jeethendra
Kumar Keshwani v. State of UP and another. In this decision, it
is held that the SEBI Act is a special Act which shall prevail
over the general Act, such as IPC or CrPC. It is settled position
of law that once a Special Act holds the field, the provisions of
general law would not apply and only the prosecution can be
lodged in accordance with the provisions of such Special Law
28
C.C.No.4987/2021
and the provisions under Section 26 of SEBI Act specifically. In
this case admittedly the accused is not the stock broker
registered under SEBI Act. It is also not the case of the accused
that he has made the investment in the name of the
complainant in the stock market. It is specific case of the
complainant that he has made investment with the accused and
accused in his name made the investment in the stock market.
Therefore the accused is the individual investor and he will not
be termed as stock broker. Therefore, the contention of the
accused is that, in view of Special Act, the prosecution under
Section 138 of Negotiable Instruments Act is not maintainable
and cannot be accepted.
29. The learned counsel for the accused has also relied on the
decision reported in AIR 2022 SC 5213 between Securities and
Exchange Board of India versus National Stock Exchange
Members Association and another . This decision is also about
registration of stock broker under SEBI Act. As the accused is
not the stock broker registered under SEBI Act and he has
made the investment in his own name, he will not come under
the provisions of SEBI Act. Therefore, said decision is not
helpful to the accused to support his arguments.
29
C.C.No.4987/2021
30. The accused has also relied on the decision of Hon’ble Delhi
High Court reported in 2007 Cr. LJ 2262 between Veryander
Singh v. Lakshmi Narain and Another. In this decision, it is held
that Money paid by way of illegal gratification for the purpose of
arranging the job for the complainant pursuant to the
agreement between the petitioner and the complainant, the
agreement is void and consideration thereof is unlawful. The
agreement which are void ab initio and their illegality is known
to the parties at the time of execution could not fall under the
purview of Section 65 of Indian Contract Act. In this case, the
complainant has made the investment with the accused and
accused in his name made the investment in stock market and
promised the complainant to share the profit and bear the loss.
Therefore, the Investment made by the complainant cannot be
held to be forbidden by law and it will contrary to the SEBI Act
or any other law for the time being in force. The accused has not
enlightened this Court how the said transaction alleged by the
complainant will become a void contract. Therefore this decision
also not helpful to the accused to support his arguments.
31. The accused has also relied on the decision of Hon’ble
Kerala High Court reported in 2005 Criminal Law Journal 4095
between J. Daniel v. State of Kerala and another. In this case, it
is held that Liability covered by cheque had arisen out of
30
C.C.No.4987/2021
agreement for compounding of non-compoundable offence,
which was not legally enforceable debt. In this case, no such
circumstances are made out, hence this decision is not helpful
to the accused to support his arguments. The accused has also
relied on the decision of Hon’ble Supreme Court reported in
2022 16 SCC 762 between Sunil Tady and others v. State of
Gujarat and another . In this case, The Hon’ble Supreme Court
has dealt about money payable at a future time upon happening
or not happening of contingent event and the consequences of
dishonour of the cheque issued for security under such
circumstances. In this case, it is not the defence of the accused
that he has issued Exhibit P1 to Exhibit P5 cheques for the
purpose of security. The Exhibit P26 WhatsApp conversation
clearly shows that he has issued the cheques by filling the
contents of the cheques and sent through courier. When the
accused has not taken the defence that the cheques were issued
for the purpose of security and the complainant himself filled
the contents of the cheque, the principles laid down in this
decision will not help the accused to substantiate his defence.
32. The accused has also placed his reliance on the judgment
of the Hon’ble Supreme Court reported in 2023 1 SCC 578
between Dasharahbhai Trikanbhai patel Vs Hitesh
Mahendrabhai patel and another. In this decision, Hon’ble
31
C.C.No.4987/2021
Supreme Court has dealt about effect of part payment on the
debt prior to presentation of the cheque for encashment and
Endorsement under Section 56 of Negotiable Instruments Act.
In this case on hand it is not the case of the accused that he
had made part payment after issuance of the cheque. The part
payment made by the accused for ₹ 24,000/- is prior to
issuance of the cheque and it is accounted in the calculation
sheet sent by the complainant to the accused. Therefore, the
question of applicability of Section 56 of Negotiable Instruments
Act would not arise in the present case. Therefore, the principles
laid down in this decision will not help the accused to support
his arguments.
33. The accused has also taken the defence that the
complainant has not disclosed the source of income for
investing a sum of ₹ 15,00,000/-. The complainant is a
chartered accountant by profession. In the cross-examination, it
is elicited that he is working in a private company YOKOGAWA
and he is having salary of ₹ 2,50,000/- to ₹ 3,00,000/- in the
year 2019. In this case the accused has not disputed
investment of ₹ 15,00,000/- with the accused. Therefore when
the accused has not disputed the investment of ₹ 15,00,000/-
question of considering the aspect of source of income would
not arise. It is the defence of accused that in the income tax
32
C.C.No.4987/2021
returns of the complainant he has not disclosed about
investment of ₹ 15,00,000/- with the accused. But the
complainant has stated that he has disclosed the income
received from the profits of the investment in his income tax
returns. But he has not shown the investment made in the
stock market with the accused. But this itself is not a ground to
doubt the existence of liability and the investment made by the
complainant.
34. Therefore, for the above discussion, upon considering entire
evidence on record, it can be concluded that the accused has
not denied issuance of cheques. The accused has not denied the
investment made by the complainant. He has not denied the
WhatsApp conversation between the complainant and the
accused produced as Exhibit P15 and Exhibit P26. He has not
specifically denied his liability. The accused instead of taking
his own defence he has tried to find out the defects in the case
of the complainant. But he has failed to show any
circumstances, creating doubt about the case presented by the
complainant with probable evidence. The accused has not
chosen to let his evidence probablise his case. The accused who
contended that he has suffered loss in the investment, has not
disclosed in which shares he has invested the amount of the
complainant and he has not brought on record any material to
33
C.C.No.4987/2021
show that he has suffered loss in the investment of the amount
of the complainant. Therefore the defence of the accused that
the investment of the complainant is turned into loss is also not
probalised with evidence. Therefore, there is no specific defence
taken by the accused and the accused has failed in his attempt
to establish his defence by eliciting the falsification of the case
of the complainant. Therefore, this Court is in the considered
view that the accused agreeing to pay the amount covered under
Exhibit P1 to Exhibit P5 cheques, has issued these cheques to
the complainant and got it dishonored without maintaining
sufficient amount in the account and issuing stop payment
instructions without any sufficient cause and inspite of service
of notice he has failed to make good the amount to the
complainant. The accused has failed to established his defence
with probable evidence for rebuttal of the presumption under
Section 139 of Negotiable Instruments Act. Therefore, this Court
concludes that the accused has failed to rebut the presumption
under Section 139 of Negotiable Instruments Act. Therefore, this
Court concludes that the complainant has established existence
of legally recoverable debt and issuance of Exhibit P1 to Exhibit
P5 cheques towards discharge of said debt and as such
commission of the offence under Section 138 of Negotiable
34
C.C.No.4987/2021
Instruments Act. Therefore this Court answers the above point
number 1 in the affirmative.
[
35. POINT NO. 2 : While answering the point no. 1 this court
concluded that the complainant proved that the accused
committed the offence punishable under Section 138 of
Negotiable Instruments Act. The Amount covered under the
cheques is ₹.24,06,000/-. The cheques are dated 01.09.2020,
09.09.2020and 17.10.2020. The money involved in the case is
used in commercial transactions. Therefore considering these
aspects the fine amount is calculated for a sum of ₹.
36,25,015/-.
36. The Hon’ble High Court of Karnataka in the reportable
decision in CRL.RP No. 996 of 2016 dated 09-07-2025 between
M/s Banavathy and Company VS Mahaveer Electro Mech (P)
Ltd at para 21 has held that –
21. In case lesser interest is awarded and only
default sentence is imposed, the rigor of offence
under Section 138 will be diluted and thereby the
object of the Statute will be defeated. If recovery and
compensatory part is not taken care of while
determining the quantum of sentence and
appropriate interest is not awarded, until the date of
recovery of the entire amount, the complainant will
be forced to file civil suit on the same subject matter.
In view of Section 143(3) the trial for offence under
Section 138 of N.I.Act has to be completed within six
months. If the said provision is not adhered to and
35
C.C.No.4987/2021
the trial for the offence under Section 138 of N.I.Act
takes 4 to 5 years, in the mean time, the claim of the
complainant for recovery of the cheque amount by
filing civil suit becomes barred by limitation. Not
only that the accused who is convicted for offence
under Section 138 of N.I.Act challenges the same
before the Sessions Court wherein the matter takes
2 to 3 years. The accused unsuccessful in the said
appeal prefers revision petition before the High
Court and it is seen that the disposal of revision
takes more than 5 years. After all this if the
complainant has to receive the fine/compensation as
awarded by the trial Court, if it is cheque amount or
little higher than the cheque amount, he will be at
loss and put to injustice. Therefore, while passing
the order of sentence after determining the
fine/compensation, the Court shall also pass an
order to pay future interest @ 9% p.a. on the
compensation amount payable to the complainant
by fixing time of one/two months to deposit
compensation amount so that even if the matter is
challenged before the Sessions Court in appeal and
High Court in revision the interest of the
complainant will be protected.
In view of the directions issued in the above refereed judgment,
it is also proper to direct the accused to pay future interest on
the fine amount at the rate of 9 % P.A. till payment. Therefore
considering all these aspects this court proceed to pass the
following –
ORDER
By exercising powers conferred U/sec.255(2) of Cr.P.C.,
the accused is convicted for the offence punishable under
Section 138 of Negotiable Instrument Act and he is sentenced
36
C.C.No.4987/2021
to pay a fine of ₹. 36,25,015/- (Rupees Thirty Six Lakhs Twenty
Five Thousand and Fifteen Only) payable with in a month and
in default pay interest at the rate of 9% from this day till
payment of fine amount, and In default to pay the fine with
interest, the accused shall undergo simple imprisonment of one
year.
Further acting U/s 357(1)(a) of Cr.P.C. out of the fine
amount a sum of ₹.10,000/-(Rupees Ten Thousand only) shall
be defrayed as prosecution expenses to the state.
Further acting U/s 357(1)(b) of Cr.P.C. a sum of ₹.
36,15,015/- (Rupees Thirty Six Lakhs Fifteen Thousand and
fifteen Only) and interest out of the fine amount on recovery
shall be paid as compensation to the complainant.
Supply free copy of the judgment to the accused.
[
(Partly dictated to the Stenographer directly on the computer, typed by her,
partly dictated to the Adalath AI computer application, transcribed by it,
corrected and signed then pronounced by me in the open court on this the
21st day of April 2026).
(GOKULA.K)
XXV A.C.J.M., BANGALORE CITY.
ANNEXURE
LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
PW.1 : Nirbhay B Wasi
37
C.C.No.4987/2021
LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P1-5 : Cheques
Ex.P6-10 : Bank Endorsements
Ex.P11 : Office copy of legal notice.
Ex.P12 : Postal receipt
Ex.P13 : Returned Postal envelope
Ex.P14 : Pendrive and Bank Statement
Ex.P15 : web copy of whats app communication
Ex.P16 : web copy of ITR documents for 2020-21,
2021-22
Ex.P17-21 : Cheques
Ex.P22&23 : Courier Envelopes
Ex.P24 : postal Envelope
Ex.P25 : E mail dt:27.08.2020
Ex.P26 : copies of whats app communication
Ex.P27 : Pen drive
Ex.P28 : Certificate U/s.63 of BSA.
LIST OF WITNESSES EXAMINED FOR THE ACCUSED:-
Nil
LIST OF DOCUMENTS MARKED FOR THE ACCUSED:-
Ex.D1 : Certified copy of the complaint in
C.C.No.4993/21
Ex.D2 : Certified Copy Affidavit in
C.C.No.4993/21
Ex.D3 : Certified Copy of the legal notice
Ex.D4 : Certified Copy of the legal notice.
(GOKULA.K.)
XXV A.C.J.M., BANGALORE CITY.
