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Bangalore District Court
Saalma Sultana vs Athif Ahmed on 23 April, 2026
KABC0C0706572024
IN THE COURT OF XIV ADDL.CHIEF JUDICIAL
MAGISTRATE, MAYOHALL UNIT, BENGALURU
Dated this the 23rd day of April, 2026
Present: SANTHOSH S.KUNDER., B.A.,LL.M.,
XIV Addl. C.J.M., Bengaluru.
JUDGMENT UNDER SECTION 392 OF BNSS
C.C.No.72955/2024
Complainant Mrs.Salma Sultana,
W/o Mr.Bhavesh Lohani,
Aged about 35 years,
No.134, 1st Floor, I Main,
5th Block, HBR Layout,
Bengaluru-560 043.
(By Sri.S.R.Sreeprasad, Advocate)
V/s
Accused Mr.Athif Ahmed,
S/o Mr.Musthaq Ahmed,
Aged about 48 years,
No.4, Bordilloni Road,
Ashiana Apartment,
393, Frazer Town,
Bengaluru-560 005.
(By Sri.Viren Michael Peres, Advocate)
Offence U/s 138 of Negotiable Instruments Act.
Plea of the Pleaded not guilty
accused
Final Order Accused is acquitted
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This complaint is filed under Section 223 of BNSS,
for the offence punishable under Section 138 of the
Negotiable Instruments Act.
2. Complaint averments in brief:
Complainant and accused are known to each other.
Under Memorandum of Understanding (MOU) between the
complainant and the accused, complainant paid a sum of
₹26,48,000/- towards business investment with the
accused. Accused used to give returns on the investment
for some time. Subsequently, he stopped paying the
returns. When demanded by the complainant, he has
issued three cheques, viz., cheque bearing Nos.097069,
097070 and 044058 all dated 22.08.2024 for
₹10,00,000/- each, drawn on J&K Bank, Mosque Road,
Frazer Town, Bengaluru assuring that the cheques would
be honoured on presentation. As per his request,
complainant has presented said cheques for collection
through her banker, viz., M/s.HDFC Bank, HBR Layout,
Bengaluru. But, the cheques came to be dishonored for
the reason 'insufficient funds' and the same was intimated
to the complainant by her banker on 21.09.2024.
Thereafter, the complainant has caused a statutory notice
dated 03.10.2024 calling upon the accused to pay the
amount covered under the dishonored cheques. The said
notice was served on the accused on 08.10.2024. But, he
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has neither issued reply nor paid the amount covered
under the cheques. Therefore, 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 230 of BNSS, this court recorded
his plea. He has pleaded not guilty and claimed to be
tried. His statement under Section 351 of BNSS recorded
on the same day. He has denied the incriminating
evidence.
5. Sworn statement affidavit of complainant
treated as evidence post-cognizance stage. Documents at
Ex.P-1 to 13 marked for complainant.
6. Defence counsel has submitted 'no defence
evidence'.
7. Heard argument on both side. In addition to
oral argument, defence counsel has filed notes of
argument with two case-laws.
8. Learned counsel for the complainant has
argued that complainant has paid ₹26,48,000/- to the
accused towards business investment. It is towards
payment of returns, the accused has issued the cheques
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in question. Learned counsel has argued that the accused
has not disputed his signature on the cheques. He has not
stepped into witness-box to substantiate his defence. He
has taken inconsistent stand/defence which are not
substantiated. Therefore, learned counsel has prayed for
convicting the accused.
9. On the other hand, learned defence counsel
has argued that the complainant has not produced the
Memorandum of Understanding (MOU) which is referred
to in Para No.2 of the complaint. It was argued that in
para No.1 of cross-examination, complainant/PW-1 has
pleaded ignorance as to whether she has produced MOU
to the court or not. While highlighting the elicitation made
in the cross-examination of PW-1 and the entries in
Ex.P8, learned defence counsel has submitted that
complainant has paid a sum of ₹23,48,000/- to the
accused and not ₹26,48,000/- as contended by her.
Learned defence counsel has submitted that there is
contradiction in the evidence of PW-1. She has
contradicted her own version by deposing that she has
paid ₹30,00,000/- to the accused. While drawing the
attention of the court to para No.12 of the cross-
examination of PW-1, accused has paid ₹33,31,000/- to
the complainant. It was argued that the complainant has
not produced her IT returns. With regard to service of
demand notice, learned defence counsel has argued that
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the notice was sent to wrong address of the accused which
is admitted by the complainant in her cross-examination
at para No.4. Though, she has claimed that she has sent
another notice, no documents produced to substantiate
the same. With these, learned defence counsel has
submitted that the complainant has failed to prove
existence of legally recoverable debt/liability on the part of
the accused. Therefore, he has prayed for acquitting the
accused.
10. I have perused the records.
11. Points for consideration:-
1. Whether the complainant has proved
that the accused has issued three
cheques, viz., cheque bearing
Nos.044058, 097069 and 097070 all
dated 22.08.2024 for ₹10,00,000/- each,
drawn on J&K Bank, Mosque Road,
Frazer Town, Bengaluru, in favour of the
complainant towards discharge of legally
recoverable debt/liability and the said
cheques were dishonored for the reason
'insufficient funds' and in spite of issuing
statutory notice dated 03.10.2024, he has
failed pay the amount covered under the
cheques and thereby committed the
offence punishable under Section 138 of
N.I.Act?
2. What order?
12. The above points are answered as under:-
Point No.1 : In the Negative.
Point No.2 : As per final order; for the following:
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REASONS
13. Point No.1:- Complainant is contending that,
she has paid a sum of ₹26,48,000/- to accused towards
business investment. She is contending that accused gave
returns on the investment for some time; but stopped
paying the returns subsequently. When demanded by the
complainant, accused has issued the subject cheques
towards payment of returns which came to be dishonored
for the reason 'funds insufficient'. Thereafter, complainant
has issued demand notice, calling upon the accused to
pay the amount covered under the dishonored cheques.
Since, he has not complied with the demand, the
complainant has filed the present complaint.
14. In order to prove the case, the complainant has
filed her sworn affidavits and got marked documents at
Ex.P1 to 13. Ex.P-1 to 3 are the cheques; Ex.P-4 is bank
endorsement; Ex.P-5 is copy of the demand notice dated
03.10.2024; Ex.P-6 is postal receipt; Ex.P-7 is unserved
postal cover; Ex.P8 to 10 (HDFC Bank) and Ex.P11 to 13
(IndusInd Bank) are bank statements of complainant.
15. Learned defence counsel has cross-examined
PW-1. In cross-examination dated 10.06.2025, PW-1 has
pleaded ignorance to the suggestion if she has produced
the MOU which is pleaded in para No.2 of the complaint
and para No.1 of the notice. She has admitted the
suggestion that date of payment of ₹26,48,000/- is not
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pleaded in the complaint, legal notice and evidence
affidavit. She has deposed that she gave ₹26,48,000/- to
accused by way of bank transfer. She has conceded that
she has not produced agreement showing that the
accused has agreed to pay ₹30,00,000/-. She has denied
the suggestion that she had no funds to give ₹26,48,000/-
to accused.
16. Subsequent to cross-examination dated
10.06.2025, complainant has produced her bank
statements of HDFC Bank and IndusInd Bank which are
marked at Ex.P8 to 13. After marking of these documents,
learned defence counsel has further cross-examined
PW-1. It is elicited that as per entry dated 10.11.2019 in
Ex.P9, complainant has transferred ₹25,000/- to accused.
It is further elicited that entries at Ex.P8(b) to 8(d) show
transfer of money from her account to the account of
accused. She has admitted the suggestion that out of five
entries in Ex.P8(e), three entries relate to transfer of
money to accused and remaining two entries show
transfer of money to her own account. She has admitted
that on 12.07.2020, she has transferred ₹3,55,000/-; and
on 16.07.2020 she has transferred ₹50,000/- to accused.
17. During cross-examination dated 07.11.2025,
PW-1 has asserted that she has paid more than
₹4,00,000/- to accused by cash. However, she does not
remember the exact money paid by cash and date(s) of
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such payment. PW-1 has conceded that entries in Ex.P9
which are marked in 'blue' indicate transfer of money by
accused to her account. She has pleaded ignorance to the
suggestion that accused has transferred ₹19,76,000/- to
her account in IndusInd bank. She has admitted that as
per entries in Ex.P13, accused has paid ₹6,60,000/-.
Relevant entries in Ex.P13 are marked at Ex.P13(a) to
13(i). When it was questioned that as per entries in Ex.P8,
9 and 11, the accused has paid ₹13,55,000/-, PW-1 has
answered that whatever the entries appearing in Ex.P8, 9
and 11 showing payments made by the accused are
correct. Similar was the answer when it was suggested
that as per entries in Ex.P10, 12 and 13, accused has
paid ₹19,76,000/-. However, she has denied the
suggestion that the accused has repaid entire principal of
₹23,48,000/- with interest totally amounting to
₹33,31,500/-. She has also denied the suggestion that
she has misused the security cheques. She has denied the
suggestion that she has not paid ₹26,48,000/- to
accused.
18. With regard to the service of notice, at para
No.4 of the cross-examination, PW-1 has admitted the
suggestion that in legal notice at Ex.P5, apartment
number of the accused and name of the road is wrongly
mentioned. She has admitted that the notice sent to the
accused has not been returned. At this moment, PW-1 has
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volunteered that her advocate has sent another notice to
accused. But, she does not remember the date of second
notice. She has claimed that the said second notice was
served on the accused.
19. Now coming to the documentary evidence, the
complainant has relied on her bank statements which are
marked at Ex.P8 to 13. Relevant entries in Ex.P8 are
marked at Ex.P8(a) to 8(f) and Ex.P13(a) to 13(i).
20. During cross-examination dated 07.11.2025,
PW-1 has admitted that entries at Ex.P8(b) to 8(d) and 8(f)
show transfer of money to accused whereas, out of five
entries in Ex.P8(e), three entries show transfer of money
to accused and remaining two entries show transfer of
money to her own account. Relevant portion of deposition
of PW-1 dated 07.11.2025 is extracted as under:-
"7. It is true that entry of Ex.P8(a) relates
to dishonor of subjects cheques at Ex.P.1 to
3. It is true that entries at Ex.P8(b) to (d)
show transfer of money from my account to
the account of accused. It is true that out
of five entries in Ex.P8(e), three entries
relate to transfer of money to accused and
remaining two entries show transfer of
money to my own account. It is true that
those three entries show that on
12.07.2020, I have transferred
Rs.3,55,000/- to accused. It is true that as
per Ex.P8(f), I have transferred Rs.50,000/-
to accused on 16.07.2020. I do not
remember, if apart from money transfers at
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Ex.P8(b) to 8(f), I have transferred money to
accused through bank. XXXX"
21. In complaint, it is averred that a sum of
₹26,48,000/- was paid by the complainant to the accused
whereas, during cross-examination dated 31.01.2026 at
para No.14, complainant/PW-1 has asserted that she has
paid ₹30,00,000/- to the accused. She has also asserted
that she has paid more than ₹4,00,000/- to accused by
cash. But, she does not remember the date(s) of payment
of money in cash. It is pertinent to note that complainant
has nowhere pleaded in the complaint that she has paid
₹30,00,000/- to accused and that she has paid more than
₹4,00,000/- in cash. Thus, there is descrepancy in the
pleading and evidence with regard to quantum of money
paid to the accused. Complainant has not produced any
document to show that she has paid ₹30,00,000/- to
accused. Further, the account statement produced by the
complainant do not indicate payment of ₹26,48,000/- to
accused. As per bank statements and as admitted by the
complainant, following payments made to the accused:-
Sl. Date Amount Exhibits
No. (₹)
1. 07.10.2019 9,60,000/- Ex.P8(b)
2. 27.12.2019 9,60,000/- Ex.P8(c)
3. 10.07.2020 23,000/- Ex.P8(d)
4. 12.07.2020 1,00,000/- Ex.P8(e)
5. 12.07.2020 1,55,000/- Ex.P8(e)
6. 12.07.2020 1,00,000/- Ex.P8(e)
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7. 16.07.2020 50,000/- Ex.P8(f)
Total 23,48,000/-
22. Thus, very contention that the complainant
has paid ₹26,48,000/- to accused does not find support
from her own documents.
23. During cross-examination at para No.8, PW-1
has admitted that entries marked in blue color in Ex.P9
and the entries marked in green color in Ex.P10 indicate
transfer of money by accused to her account. Relevant
portion of her deposition at para No.8 extracted
hereunder:-
"8. It is true that all the entries in Ex.P9
which are marked in blue indicate transfer
of money by accused to my account. I do
not know if the entries marked in pink
colour in Ex.P9 are the same entries
appearing Ex.P8. It is true that all the
entries in Ex.P10 which are marked in
green indicate transfer of money by
accused to my account."
24. I have perused the relevant entries in Ex.P8;
and the one which are marked in pink color/blue color in
Ex.P9 and the entries marked in green color in Ex.P10. As
admitted by the complainant in her cross-examination
and as appearing in Ex.P9 to 11 & 13, transfer of money
by the accused to the account of complainant is shown in
tabular form as below:-
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KABC0C0706572024
Sl. Date Amount Exhibits
No. (₹)
HDFC Bank
1. 10.11.2019 25,000 Ex.P9
2. 11.11.2019 7,500 -do-
3. 11.11.2019 7,500 -do-
4. 19.12.2020 20,000 -do-
5. 19.01.2021 20,000 -do-
6. 19.02.2021 20,000 -do-
7. 19.03.2021 30,000 -do-
8. 20.05.2021 20,000 -do-
9. 19.06.2021 20,000 -do-
10. 19.07.2021 20,000 -do-
11. 19.08.2021 20,000 -do-
12. 22.10.2021 20,000 -do-
13. 19.11.2021 69,000 -do-
14. 20.11.2021 1,000 -do-
15. 20.01.2022 20,000 -do-
16. 19.03.2022 20,000 -do-
17. 13.06.2022 15,000 -do-
18. 14.06.2022 5,000 -do-
19. 23.06.2022 20,000 -do-
20. 07.07.2022 20,000 -do-
21. 19.07.2022 20,000 -do-
22. 22.07.2022 10,000 -do-
23. 20.08.2022 33,000 -do-
24. 24.08.2022 17,000 -do-
25. 19.09.2022 20,000 -do-
26. 24.09.2022 15,000 -do-
27. 01.10.2022 15,000 -do-
28. 10.10.2022 10,000 -do-
29. 19.10.2022 15,000 -do-
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KABC0C0706572024
30. 19.10.2022 5,000 -do-
31. 27.10.2022 10,000 -do-
32. 07.11.2022 10,000 -do-
33. 10.11.2022 10,000 -do-
34. 18.11.2022 30,000 -do-
35. 19.11.2022 500 -do-
36. 29.11.2022 2,000 -do-
37. 09.12.2022 10,000 -do-
38. 19.12.2022 20,000 -do-
39. 29.12.2022 20,000 -do-
40. 14.01.2023 20,000 -do-
41. 19.01.2023 20,000 -do-
42. 24.01.2023 10,000 -do-
43. 10.02.2023 10,000 -do-
44. 18.02.2023 20,000 -do-
45. 07.03.2023 20,000 -do-
46. 13.03.2023 10,000 -do-
47. 19.03.2023 20,000 -do-
48. 07.04.2023 20,000 -do-
49. 20.04.2023 20,000 -do-
50. 25.04.2023 10,000 -do-
51. 01.05.2023 10,000 -do-
52. 17.05.2023 10,000 -do-
53. 23.05.2023 20,000 -do-
54. 24.05.2023 10,000 -do-
55. 02.06.2023 20,000 -do-
56. 19.06.2023 20,000 -do-
57. 28.06.2023 20,000 -do-
58. 17.07.2023 5,000 -do-
59. 19.07.2023 20,000 -do-
60. 21.07.2023 5,000 -do-
61. 02.08.2023 20,000 -do-
14
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62. 09.08.2023 2,000 -do-
63. 16.08.2023 3,000 -do-
64. 19.08.2023 2,000 -do-
65. 19.08.2023 20,000 -do-
66. 27.08.2023 3,000 -do-
67. 28.08.2023 20,000 -do-
68. 19.10.2023 10,000 -do-
IndusInd Bank
69. 07.01.2020 15,000 Ex.P10
70. 09.01.2020 10,000 -do-
71. 10.12.2019 37,500 -do-
72. 10.12.2019 2,500 -do-
73. 10.01.2020 15,000 -do-
74. 17.01.2020 19,000 -do-
75. 25.01.2020 15,000 -do-
76. 26.01.2020 10,000 -do-
77. 28.01.2020 15,000 -do-
78. 10.02.2020 24,000 -do-
79. 10.02.2020 11,000 -do-
80. 11.02.2020 5,000 -do-
81. 29.02.2020 25,000 -do-
82. 29.02.2020 5,000 -do-
83. 11.03.2020 10,000 -do-
84. 11.03.2020 10,000 -do-
85. 11.06.2020 40,000 -do-
86. 11.06.2020 40,000 -do-
87. 23.06.2020 40,000 -do-
88. 30.06.2020 40,000 -do-
89. 08.07.2020 40,000 -do-
90. 17.07.2020 40,000 -do-
91. 03.08.2020 30,000 -do-
92. 07.08.2020 10,000 -do-
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93. 12.08.2020 40,000 -do-
94. 24.08.2020 20,000 -do-
95. 31.08.2020 40,000 -do-
96. 09.09.2020 20,000 -do-
97. 10.09.2020 30,000 -do-
98. 14.09.2020 10,000 -do-
99. 22.09.2020 20,000 -do-
100. 02.10.2020 40,000 -do-
101. 13.10.2020 35,000 -do-
102. 31.10.2020 40,000 -do-
103. 22.10.2020 20,000 -do-
104. 07.11.2020 40,000 -do-
105. 19.11.2020 20,000 -do-
106. 10.12.2020 35,000 -do-
107. 30.11.2020 35,000 -do-
108. 30.12.2020 35,000 -do-
109. 10.01.2021 35,000 -do-
110. 01.02.2021 8,000 -do-
111. 03.02.2021 30,000 -do-
112. 11.02.2021 15,000 -do-
113. 12.02.2021 20,000 -do-
114. 03.03.2021 35,000 -do-
115. 13.03.2021 30,000 -do-
116. 31.03.2021 30,000 -do-
117. 17.04.2021 25,000 -do-
118. 27.04.2021 10,000 -do-
119. 01.08.2021 35,000 -do-
120. 11.07.2021 50,000 -do-
121. 02.09.2021 50,000 -do-
122. 01.01.2022 20,000 -do-
123. 14.01.2022 5,000 -do-
124. 31.01.2022 10,000 -do-
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125. 31.01.2022 11,500 -do-
126. 15.02.2022 10,000 -do-
127. 16.02.2022 7,000 -do-
128. 17.02.2022 3,000 -do-
129. 01.03.2022 20,000 -do-
130. 01.03.2022 2,000 -do-
131. 14.03.2022 10,000 -do-
132. 05.04.2022 16,000 -do-
133. 20.04.2022 50,000 -do-
134. 20.04.2022 50,000 -do-
135. 26.04.2022 22,000 -do-
136. 26.04.2022 45,000 -do-
137. 22.04.2022 50,000 -do-
138. 07.04.2022 4,000 -do-
HDFC Bank
139. 19.04.2021 20,000 Ex.P11
140. 19.09.2021 20,000 -do-
141. 19.12.2021 20,000 -do-
142. 19.04.2022 20,000 -do-
IndusInd Bank
143. 20.04.2022 5,000 Ex.P13(a)
144. 20.04.2022 5,000 Ex.P13(a)
145. 20.04.2022 5,000 Ex.P13(b)
146. 26.04.2022 45,000 Ex.P13(c)
147. 09.05.2022 20,000 Ex.P13(d)
148. 17.05.2022 10,000 Ex.P13(e)
149. 24.05.2022 2,05,000 Ex.P13(f)
150. 31.05.2022 10,000 Ex.P13(g)
151. 11.09.2022 20,000 Ex.P13(h)
152. 31.01.2023 2,00,000 Ex.P13(i)
Total 33,75,000
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25. Thus, it is evident from the entries in Ex.P9 to
11 & 13 that as against ₹23,48,000/- received from the
complainant, accused has returned ₹33,75,000/-.
Complainant has not produced any document to show
that she has paid ₹26,48,000/- to accused as pleaded in
the complaint; and ₹30,00,000/- as deposed to in the
cross-examination. It is significant to note that the
complainant has not produced MOU which is pleaded in
para No.2 of the complaint to substantiate her claim that
accused has agreed to pay returns on her investment.
Though, complainant has asserted during her cross-
examination that accused has agreed to pay/return
₹30,00,000/- to her, no documents produced to
substantiate the said assertion. On the other hand,
complainant's own documents prove that the accused has
returned ₹33,75,000/-.
26. During cross-examination dated 31.01.2026,
PW-1 has admitted to the entries in Ex.P8 to 13 reflecting
payment of ₹33,31,000/- (₹13,55,000/- + ₹19,76,000/-).
Relevant portion of deposition of PW-1 appearing in page
No.19/20 is reproduced hereunder:-
"Question: As per entries in Ex.P8, 9 and 11
accused has paid Rs.13,55,000/- to you?
Answer: Whatever the entries appearing in
Ex.8, 9 and 11 showing payments made by
accused, are correct.
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Question: As per entries in Ex.P10, 12 and
13 accused has paid Rs.19,76,000/- to you?
Answer: Whatever the entries appearing in
Ex.P10, 12 and 13 showing payments made
by accused, are correct."
27. Further, in para No.10, she has admitted to
the entries in Ex.P13 reflecting payment of ₹6,60,000/- by
the accused. Said piece of evidence is extracted
hereunder:-
"10. I did not get the portion of the Ex.P13
marked on the previous date showing
payments made to me by accused. If it is
showing in Ex.P13 that accused has made
payment of Rs.6,60,000/- to me, it would be
correct. Relevant entries in Ex.P13 are
marked at Ex.13(a) to 13(i)."
28. Complainant has unequivocally admitted in
her cross-examination that the accused has repaid more
money than what she has paid to him. Therefore, her
assertion that the accused is in due of ₹30,00,000/- is
falsified by her own testimony and the documents.
29. It is true that in terms of Section 118(a) of NI
Act, it shall be presumed that every negotiable instrument
was made or drawn for consideration. However, it is a
rebuttable presumption. It is trite that the accused for
discharging the burden of proof placed upon him under a
statute need not examine himself. He may discharge his
burden on the basis of the materials already brought on
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record and he is entitled to rely on the evidence led by the
complainant in order to raise a probable defence.
Inference of preponderance of probabilities can be drawn
not only from the materials brought on record by the
parties but also by reference to the circumstances upon
which they rely. The following was laid down in by Hon'ble
Supreme Court in Krishna Janadhan Bhat V/s
Dattatraya G.Hegde; (2008) 4 SCC 54:-
"32. An accused for discharging the burden
of proof placed upon him under a statute
need not examine himself. He may
discharge his burden on the basis of the
materials already brought on records. An
accused has a constitutional right to
maintain silence. Standard of proof on the
part of an accused and that of the
prosecution in a criminal case is different."
30. In the above judgment, Hon'ble Supreme Court
again reiterated that whereas prosecution must prove the
guilt of an accused beyond all reasonable doubt, the
standard of proof so as to prove a defence on the part of
an accused is "preponderance of probabilities". In para
No.34, the following was laid down:-
"34. Furthermore, whereas prosecution must prove
the guilt of an accused beyond all reasonable
doubt, the standard of proof so as to prove a
defence on the part of an accused is
"preponderance of probabilities". Inference of
preponderance of probabilities can be drawn not
only from the materials brought on record by the
20
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parties but also by reference to the circumstances
upon which he relies."
31. In Kumar Exports v. Sharma Carpets, (2009)
2 SCC 513, Hon'ble Supreme Court examined as to when
the complainant discharges the burden to prove that
instrument was executed and when the burden shall be
shifted. In paras 18 to 20, the following has been laid
down:
"18. Applying the definition of the word "proved"
in Section 3 of the Evidence Act to the provisions of
Sections 118 and 139 of the Act, it becomes
evident that in a trial under Section 138 of the Act
a presumption will have to be made that every
negotiable instrument was made or drawn for
consideration and that it was executed for
discharge of debt or liability once the execution of
negotiable instrument is either proved or admitted.
As soon as the complainant discharges the burden
to prove that the instrument, say a note, was
executed by the accused, the rules of
presumptions under Sections 118 and 139 of the
Act help him shift the burden on the accused. The
presumptions will live, exist and survive and shall
end only when the contrary is proved by the
accused, that is, the cheque was not issued for
consideration and in discharge of any debt or
liability. A presumption is not in itself evidence,
but only makes a prima facie case for a party for
whose benefit it exists.
19. The use of the phrase "until the contrary is
proved" in Section 118 of the Act and use of the
words "unless the contrary is proved" in Section
139 of the Act read with definitions of "may
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presume" and "shall presume" as given in Section
4 of the Evidence Act, makes it at once clear that
presumptions to be raised under both the
provisions are rebuttable. When a presumption is
rebuttable, it only points out that the party on
whom lies the duty of going forward with
evidence, on the fact presumed and when that
party has produced evidence fairly and
reasonably tending to show that the real fact is
not as presumed, the purpose of the presumption
is over.
20. ... The accused may adduce direct evidence to
prove that the note in question was not supported
by consideration and that there was no debt or
liability to be discharged by him. However, the
court need not insist in every case that the
accused should disprove the non-existence of
consideration and debt by leading direct evidence
because the existence of negative evidence is
neither possible nor contemplated. At the same
time, it is clear that bare denial of the passing of
the consideration and existence of debt,
apparently would not serve the purpose of the
accused. Something which is probable has to be
brought on record for getting the burden of proof
shifted to the complainant. To disprove the
presumptions, the accused should bring on record
such facts and circumstances, upon consideration
of which, the court may either believe that the
consideration and debt did not exist or their non-
existence was so probable that a prudent man
would under the circumstances of the case, act
upon the plea that they did not exist."
32. A Three-Judge Bench of Hon'ble Apex Court in
Rangappa Vs. Sri Mohan, (2010) 11 SCC 441 had
occasion to elaborately consider the provisions of Sections
22
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138 and 139. In the above case, trial court had acquitted
the accused in a case relating to dishonour of cheque
under Section 138. The High Court had reversed the
judgment of the trial court convicting the accused. In the
said case, the accused had admitted signatures on the
cheque. Hon'ble Apex Court held that where the fact of
signature on the cheque is acknowledged, a presumption
has to be raised that the cheque pertained to a legally
enforceable debt or liability, however, this presumption is
of a rebuttal nature and the onus is then on the accused
to raise a probable defence. In para 13, following has been
laid down:
"13. The High Court in its order noted that in the
course of the trial proceedings, the accused had
admitted that the signature on the impugned
cheque (No. 0886322 dated 8-2- 2001) was indeed
his own. Once this fact has been acknowledged,
Section 139 of the Act mandates a presumption
that the cheque pertained to a legally enforceable
debt or liability. This presumption is of a rebuttal
nature and the onus is then on the accused to
raise a probable defence. With regard to the
present facts, the High Court found that the
defence raised by the accused was not probable."
33. After referring to various other judgments, Hon'ble
Supreme Court in Rangappa (supra) case held that the
presumption mandated by Section 139 of the Act does
indeed include the existence of a legally enforceable debt
or liability, which, of course, is in the nature of a
23
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rebuttable presumption. In para 26, following was laid
down:
"26. In light of these extracts, we are in agreement
with the respondent claimant that the presumption
mandated by Section 139 of the Act does indeed
include the existence of a legally enforceable debt
or liability. To that extent, the impugned
observations in Krishna Janardhan Bhat, (2008) 4
SCC 54 may not be correct. However, this does not
in any way cast doubt on the correctness of the
decision in that case since it was based on the
specific facts and circumstances therein. As noted
in the citations, this is of course in the nature of a
rebuttable presumption and it is open to the
accused to raise a defence wherein the existence
of a legally enforceable debt or liability can be
contested. However, there can be no doubt that
there is an initial presumption which favours the
complainant."
34. Elaborating further, Hon'ble Court in Rangappa
case held that Section 139 of the Act is an example of a
reverse onus and the test of proportionality should guide
the construction and interpretation of reverse onus
clauses on the accused and the accused cannot be
expected to discharge an unduly high standard of proof.
In paras 27 and 28, following was laid down:
"27. 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 instruments. While
Section 138 of the Act specifies a strong criminal
remedy in relation to the dishonour of cheques, the
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rebuttable presumption under Section 139 is a
device to prevent undue delay in the course of
litigation. However, it must be remembered that
the offence made punishable by Section 138 can
be better described as a regulatory offence since
the bouncing of a cheque is largely in the nature of
a civil wrong whose impact is usually confined to
the private parties involved in commercial
transactions. In such a scenario, the test of
proportionality should guide the construction and
interpretation of reverse onus clauses and the
defendant-accused cannot be expected to
discharge an unduly high standard of proof.
28. In the absence of compelling justifications,
reverse onus clauses usually impose an
evidentiary burden and not a persuasive burden.
Keeping this in view, it is a settled position that
when an accused has to rebut the presumption
under Section 139, the standard of proof for doing
so is that of "preponderance of probabilities".
Therefore, if the accused is able to raise a
probable defence which creates doubts about the
existence of a legally enforceable debt or liability,
the prosecution can fail. As clarified in the
citations, the accused can rely on the materials
submitted by the complainant in order to raise
such a defence and it is conceivable that in some
cases the accused may not need to adduce
evidence of his/her own."
35. In Rajesh Jain V/s Ajay Singh; (2023) 10
SCC 148, Hon'ble Supreme Court held as under:-
"39. The standard of proof to discharge this
evidential burden is not as heavy as that
usually seen in situations where the
prosecution is required to prove the guilt of an
accused. The accused is not expected to prove
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the non-existence of the presumed fact beyond
reasonable doubt. The accused must meet the
standard of 'preponderance of probabilities',
similar to a defendant in a civil proceeding.
[Rangappa vs. Mohan (AIR 2010 SC 1898)]
40. In order to rebut the presumption and
prove to the contrary, it is open to the accused
to raise a probable defence wherein the
existence of a legally enforceable debt or
liability can be contested. The words 'until the
contrary is proved' occurring in Section 139 do
not mean that accused must necessarily prove
the negative that the instrument is not issued
in discharge of any debt/liability but the
accused has the option to ask the Court to
consider the non-existence of debt/liability so
probable that a prudent man ought, under the
circumstances of the case, to act upon the
supposition that debt/liability did not exist.
[Basalingappa Vs. Mudibasappa (AIR 2019 SC
1983) See also Kumar Exports Vs. Sharma
Carpets (2009) 2 SCC 513]
41. In other words, the accused is left with two
options. The first option-of proving that the
debt/liability does not exist-is to lead defence
evidence and conclusively establish with
certainty that the cheque was not issued in
discharge of a debt/liability. The second option
is to prove the non-existence of debt/liability
by a preponderance of probabilities by
referring to the particular circumstances of the
case. The preponderance of probability in
favour of the accused's case may be even fifty
one to forty nine and arising out of the entire
circumstances of the case, which includes: the
complainant's version in the original complaint,
the case in the legal/demand notice,
26
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complainant's case at the trial, as also the plea
of the accused in the reply notice, his 313
statement or at the trial as to the
circumstances under which the promissory
note/cheque was executed. All of them can
raise a preponderance of probabilities
justifying a finding that there was 'no
debt/liability'. [Kumar Exports and Sharma
Carpets, (2009) 2 SCC 513]
42. 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 fact.
43. 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
also rely upon presumptions 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
fact. In Kundanlal's case- (supra) when the
creditor had failed to produce his account
books, this Court raised a presumption of fact
under Section 114, that the evidence, if
produced would have shown the non-existence
of consideration. Though, in that case, this
Court was dealing with the presumptive clause
in Section 118 NI Act, since the nature of the
presumptive clauses in Section 118 and 139 is
27
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KABC0C0706572024
the same, the analogy can be extended and
applied in the context of Section 139 as well.
44. Therefore, in fine, it can be said that once
the accused adduces evidence to the
satisfaction of the Court that on a
preponderance of probabilities there exists no
debt/liability in the manner pleaded in the
complaint or the demand notice or the
affidavit-evidence, the burden shifts to the
complainant and the presumption 'disappears'
and does not haunt the accused any longer.
The onus having now shifted to the
complainant, he will be obliged to prove the
existence of a debt/liability as a matter of fact
and his failure to prove would result in
dismissal of his complaint case. Thereafter, the
presumption under Section 139 does not again
come to the complainant's rescue. Once both
parties have adduced evidence, the Court has
to consider the same and the burden of proof
loses all its importance. [Basalingappa vs.
Mudibasappa, AIR 2019 SC 1983; See also,
Rangappa vs. Sri Mohan (2010) 11 SCC 441]"
36. Learned counsel for the complainant has relied
on the judgment of Hon'ble Supreme Court in Kalamani
Tex V/s P.Balasubramanian; 2021 SCC Online SC 75,
to argued that the accused having not disputed his
signature on the cheques, assuming that blank cheques
were given, it would attract presumption under Section
139 of the NI Act.
37. It is true that even a blank cheque leaf on
which signature is admitted, would attract the
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presumption under Section 138 of NI Act. However,
accused is always entitled to rebut the presumption
contemplated under Section 138 of the Act. It is a settled
position that when an accused has to rebut the
presumption under Section 139, the standard of proof for
doing so is that of "preponderance of probabilities". If the
accused is able to raise a probable defence which creates
doubt about the existence of a legally enforceable debt or
liability, the prosecution can fail. Hon'ble Supreme Court
has clarified that the accused can rely on the materials
submitted by the complainant in order to raise such a
defence and the accused need not adduce evidence of his/
her own.
38. In the present case, as noted above, accused is
able to establish that, as against ₹23,48,000/- received
from the complainant, he has paid back ₹33,75,000/-.
Complainant has failed to establish that accused owes
₹30,00,000/-, the sum which the subject cheques
represent. It is also noted that, complainant has not
produced MOU which is pleaded in para No.2 of the
complaint and deposed to in para No.1 of her evidence
affidavit dated 14.11.2024. Thus, from the materials
which are brought on record by the complainant, accused
has successfully rebutted the presumption to disprove the
complainant's case that the cheques are supported by the
consideration. Accused could able to establish that the
29
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complainant's claim is false as he has already repaid
₹33,75,000/- as against ₹23,48,000/- which he has
received from her. Therefore, this court finds that the
evidential burden placed on the accused has been
discharged without him stepping into witness-box. Since,
the evidential burden placed on the accused has been
discharged, the complainant is expected to prove the
alleged fact that the cheques are supported by
consideration and the accused owes money covered under
the said cheques, independently without taking aid of the
statutory presumption. In this regard, this court draws
support from the observation made by the Hon'ble Apex
Court in Rajesh Jain (supra). In the instant case,
accused having discharged the evidential burden placed
on him by substantiating that he does not owe money of
sum which the cheques represent, he cannot be held
guilty.
39. In so far as, service of demand notice is
concerned, it is an undisputed fact that the demand
notice at Ex.P5 sent to the accused was returned
unserved with postal shara 'insufficient
address/intimation served', vide returned postal cover at
Ex.P7. As could be seen from Ex.P5, the notice was
addressed to 'No.4, Bordilloni Road, Ashiana Apartment,
#393, Frazer Town, Bengaluru-560005'. On the other
hand, it is elicited in the cross-examination of PW-1 at
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para No.4 that the postal address of the accused is,
'No.303, Ashiana Apartment, M.M Road, Frazer Town,
Bengaluru'. It was suggested that the accused does not
reside in that address. PW-1 has denied this suggestion.
However, she has admitted that, in legal notice, apartment
number and name of the road is wrongly mentioned. She
has also admitted that the notice sent to the accused has
been returned. However, she has volunteered that her
advocate sent another notice which was served. But, she
is unable to say the date of alleged second notice.
Relevant portion of deposition of PW-1 at para No.4 page
No.6 is extracted hereunder:-
"4. I do not know in what mode notice at
Ex.P5 sent to accused. I do not know if the
said notice returned for want of sufficient
address. I do not know if I have produced
postal acknowledgment card. I know the
postal address of the accused. His address
is, No.303, Ashiana Apartment, M.M Road,
Frazer Town, Bengaluru. It is false to
suggest that, accused does not reside in that
address. In the legal notice sent to accused,
apartment number is wrongly mentioned. It
is true that even the name of the road is also
wrongly mentioned in the legal notice. It is
false to suggest that, I have sent notice by
mentioning false address. It is true that
notice sent to accused has been returned.
Witness volunteers that her advocate sent
another notice to the accused. I do not know
the date of second notice. Second notice was
served on accused. XXXX"
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(underlined for emphasis)
40. During the course of argument, learned
counsel for the complainant while pointing out the
address appearing on the Aadhaar Card of the accused
which is available on record, submitted that the accused
resides in the very address to which notice was sent.
41. I have perused the copy of Aadhaar Card of
accused which is available on record where the address of
the accused is shown as 'C/o Mushtaq Ahmed, No.4,
Bordillone Road, Aashiana Aprts., Flat No.303, Bangalore
North, PO: Fraser Town, DIS: Bengaluru, Karnataka-
560005'.
42. According to the complainant herself, in the
notice, apartment number is wrongly mentioned. Though,
it is elicited in the cross-examination that name of the
road is also incorrect, it is evident from the address
appearing on the Aadhaar Card that accused resides in
'Aashiana Apartments, No.4, Bordillone Road'.
Nevertheless, it is to be noted that the flat number is
wrongly mentioned as '393' in legal notice instead of 'Flat
No.303'. Therefore, notwithstanding that the notice was
sent to the same apartment/building where the accused
resides, in view of wrong mentioning of flat number, notice
was not delivered to him.
32
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43. Proviso to Section 138 of NI Act specifies the
conditions which are required to be satisfied before a
person can be convicted for an offence enumerated in the
substantive part of the section. Clause (b) of the proviso to
Section 138 casts on the payee or the holder in due
course of the cheque, as the case may be, a duty to make
a demand for payment of the amount covered under the
dishonored cheque by giving a notice in writing, to the
drawer of the cheque, within thirty days of the receipt of
information by him from the bank regarding the return of
the cheque as unpaid. Therefore, it is obligatory on the
part of the drawer of the cheque/holder in due course to
give a notice in writing to the drawer of the cheque
demanding the dishonored cheque amount.
44. In M.D.Thomas V/s P.S.Jaleel and Anr.,
(Criminal Appeal No.711/2009, DD 13.04.2009),
Hon'ble Supreme Court held as under:-
"XXXX Proviso to Section 138 specifies the
conditions which are required to be satisfied
before a person can be convicted for an
offence enumerated in the substantive part of
the section. Clause (b) of the proviso to Section
138 cast on the payee or the holder in due
course of the cheque, as the case may be, a
duty to make a demand for payment of the
said amount of money by giving a notice in
writing, to the drawer of the cheque, within
thirty days of the receipt of information by
him from the bank regarding the return of the
cheque as unpaid. In the present case, the
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notice of demand was served upon the wife of
the appellant and not the appellant.
Therefore, there is no escape from the
conclusion that complainant-respondent had
not complied with the requirement of giving
notice in terms of Clause (b) of proviso to
Section 138 of the Act. Unfortunately, the
High Court overlooked this important lacuna
in the complainant's case. Therefore, the
conviction of the appellant cannot be
sustained."
45. In R.L Varma & Sons (HUF) V/s P.C Sharma;
(AIR OnLine 2019 Del 940), Hon'ble High Court of Delhi
held:-
"34. Since the pre-condition of filing a
complaint under section 138 of the Negotiable
Instruments Act of sending a statutory notice
has not been satisfied in the present case, no
cause of action arose in favour of the
complainant to file the subject complaint.
Since no cause of action arose, the petitioner
could not have instituted the complaint nor
could the trial court as well as the appellate
court by the impugned order have convicted
the petitioner."
46. In the present case, legal notice was sent to
incorrect address of the accused. Therefore, proviso (b) to
Section 138 of NI Act has not been complied with by the
complainant. Since the pre-condition enumerated in
proviso (b) to Section 138 of NI Act has not been satisfied
in the present case, no cause of action arose in favour of
the complainant to file the complaint and as such, the
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accused cannot be convicted. For these reasons, I hold
that the complainant has failed to prove that the accused
has committed the offence punishable under Section 138
of N.I.Act. Accordingly, I answer Point No.1 in the
Negative.
47. Point No.2:-In view of the findings recorded on
Point No.1, I proceed to pass the following:
ORDER
Accused is not found guilty.
Acting under Section 278(1) of BNSS,
accused is acquitted of the offence punishable
under Section 138 of Negotiable Instruments
Act and he is set at liberty.
Bail bond executed by the accused shall
stands cancelled.
SPONSORED
Acting under Section 481(1) of BNSS,
accused is directed to execute fresh bail bond
for ₹20,00,000/- and to offer one surety for
likesum, binding to appear before the higher
court as and when such court issues notice in
respect of any appeal that would be preferred
by the complainant.
(Dictated to the Stenographer, transcript computerized by her, revised
corrected and then pronounced by me in the open Court on this the 23 rd day of
April, 2026) Digitally signed
SANTHOSH by SANTHOSH S
KUNDER
S KUNDER Date: 2026.04.23
17:17:05 +0530
( SANTHOSH S.KUNDER )
XIV Addl. C.J.M., Bengaluru.
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ANNEXURE
List of witnesses examined for the complainant:
PW.1 Salma Sultana
List of documents marked for the complainant:
Ex.P.1 to 3 Cheques
Ex.P.1(a) to Signatures of the accused
3(a)
Ex.P.4 Bank endorsement
Ex.P.5 Copy of legal notice
Ex.P.6 Postal receipt
Ex.P.7 Unserved postal cover
Ex.P.8, 9 & HDFC bank statement of complainant
11
Ex.P.10, 12 IndusInd bank statement of
& 13 complainant
Ex.P.8(a) to Marked entries in Ex.P8
8(f)
Ex.P.13(a) Marked entries in Ex.P13
to 13(i)List of witness examined for the defence: ‘Nil’
List of documents marked for the defence: ‘Nil’
Digitally signed
SANTHOSH by SANTHOSH S
KUNDER
S KUNDER Date: 2026.04.23
17:16:59 +0530XIV Addl.C.J.M., Bengaluru.