Bangalore District Court
Terraserve Foods Pvt. Ltd vs A B Enterprises on 16 May, 2026
KABC030713622022
Presented on : 05-09-2022
Registered on : 05-09-2022
Decided on : 16-05-2026
Duration : 3 years, 8 months, 11 days
IN THE COURT OF THE XXIII ACJM, BENGALURU
-: Present :-
Smt.Asha K.S., B.A.L, L.L.B.,
XXIII ACJM, BENGALURU,
C.C. No.28369/2022
Dated: the 16th day of May, 2026
Complainant :- Terraserve Foods Pvt. Ltd.,
No.9/4, Yerrappa Indl. Area,
Channenahalli, Seegehalli,
Magadi Main Road,
Bangalore-562130.
Office Representative
Mr.Shashikumar.M.
(By Sri.Anil Kumar H.S., Advocate)
-V/s -
Accused :- A B Enterprises,
No.16, 2nd Cross,
Near Kamadhenu School,
Basavanagudi,
Hebbal 1st Stage,
Mysoru-570016.
Rep by its Proprietor.
Sri.Ananda.A.
(By Sri.Harisha D.G., Advocate)
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C.C.No.28369/2022
Offences complained of U/s 138 of Negotiable Instruments Act.
Plea of the Accused Not Pleaded guilty.
Final Order Accused is
Date of Order 16.05.2026.
ASHA Digitally signed
by ASHA K S
Date: 2026.05.20
KS 14:33:36 +0530
(Smt.Asha K.S,)
XXIII ACJM, Bengaluru.
JUDGMENT
The complainant has filed the present complaint under
Section 200 of Cr.P.C. against the accused for the
commission of an offense punishable under section 138 of
Negotiable Instruments Act.
2. The complainant is carrying on the wholesale
business under the name and style of M/s.Terraserve Food
Pvt Ltd in manufacturing and trading in food and beverages
and supply the same on cash and credit basis. The accused
also carrying on the business of food and beverages in
retails in the name of A B Enterprises. The accused was
purchasing goods from the complainant’s company in cash
and credit basis. Accordingly the complainant was
maintaining books of accounts. The accused had purchased
materials worth of Rs.71,307/- and issued cheque bearing
No.000022, dated 24.11.2019 for an amount of Rs.71,307/-
drawn on Bank of Baroda, Hebbal Branch, Mysore. On
presentation of said cheque by the complainant through his
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banker Axis Bank, Nagarabhavi 2nd Stage branch,
Bengaluru same has been returned as “Funds Insufficient”
on 25.11.2019.
3. Thereafter the complainant has issued legal
notice to the accused on 24.12.2019 and same has been
returned as unclaimed. Thereafter accused has not replied
the notice nor paid the cheque amount.
4. After filing of complaint, cognizance was taken.
In pursuance of summons, accused appeared before the
Court and he had enlarged on bail. Substance of accusation
has been framed and contents of its read over to the
accused. Accused pleaded not guilty and he claimed to be
tried.
5. In order to prove his case complainant has
examined himself as PW.1 and got marked 17 documents
at Ex.P.1 to 17 on behalf of the complainant. After closure of
complainant evidence, accused was regularly absence.
Hence recording of 313 statement is dispensed.
6. Thereafter arguments heard and perused the
Record.
7. The following points arise for my determination: –
1) Whether the complainant has
made out all the ingredients of Sec.138 of
4C.C.No.28369/2022
Negotiable Instruments Act to prove the
guilt of accused?
2) What Order?
8. On hearing the arguments and on perusal written
arguments and the materials placed on record, my answers
to: –
Point No.1:- In the Affirmative
Point No.2:- As per final order
for the following:-
REASONS
9. It is the case of complainant is that the accused
and complainant are known to each other, both were doing
business of food and beverages. The accused had purchased
material from the complainant’s company and to discharge
said liability, accused had issued cheque. On presentation
said cheque has been returned for the reasons “Funds
Insufficient”. After issuance of notice also the accused has
not issued reply notice. Thereafter, the complainant has
filed this complaint.
10. To attract Sec.138 of NI Act it is necessary to
fulfill the ingredients of said provision. I have carefully
perused the section 138 of of N.I.Act, it has three
ingredients which are as follows:
1. That there is a Legally enforceable debt,
2. That the cheque was drawn from the account of
bank for discharge in whole or any part of any
5C.C.No.28369/2022
debt or other liability which pre-supposes a
legally enforceable debt.
3. That the cheque so issued had been returned
due to insufficiency of funds.
11. Keeping in view the ingredients of Sec.138 of
Negotiable Instruments Act. Now I proceed to reproduce the
Sec.139 and 118(a) of N.I.Act here itself.
12. Sec.139 of N.I.Act reads as follows “Presumes in
favor of holder, it shall be presumed unless the contrary is
proved, that the holder of cheque received the cheque, of the
nature referred to in Sec.138, for the discharge, in whole or
in part or any debt or other liability”.
13. Sec.118(a) reads as follows “Presumption as to
Negotiable Instrument Act until the contrary is proved, the
following presumption shall be made (a) of consideration-
that every negotiable instrument was made or drawn for
consideration, and that every such instrument, when it has
been accepted endorse, negotiate or transferred, was
accepted, endorsed, negotiated or transferred for
consideration”.
14. Keeping in view of the ingredients and provision
of Sec.139 and 118(a) of N.I.Act, now I proceed to discuss
the documents in the case. I am of the opinion that I need
not repeat the entire case of the complaint once again since
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C.C.No.28369/2022
I have already stated the same at the beginning of this
judgment.
15. To prove his case, the complainant has been
examined himself as PW-1 and he has reiterated the
complaint averments in his affidavit of evidence. He has
produced as many as 17 documents and same has been
marked as Ex.P.1 to P.17. The cheque as per Ex.P.1 and
signature thereon as per Ex.P.1(a) Bank memos as per
Ex.P.2. Legal Notice as per Ex.P.3. Postal Receipt as per
Ex.P.4. Postal Acknowledgment as per Ex.P.5.
C.O.O.Appointment Order as per Ex.P.6. Incorporation
Certificate as per Ex.P.7. Registration Certificate as per
Ex.P.8. Seven Tax Invoices as per Ex.P.9 to P.15. Account
Ledger Extract Ex.P.16 and Complaint as per Ex.P.17.
Inspite of granting sufficient opportunity also the accused
has not chosen to cross-examine PW-1.
16. In the Judgment reported in Crl.Revision Peittion
No.664/2020 in Sunil Yadav Vs.Y.C.Manju case Hon’ble
High Court of Karnataka held that when accused is
regularly absence then recording of 313 statement can be
dispensed. In the case on hand also the accused is regularly
absent and inspite of granting sufficient opportunities
accused has not present for recording 313 statement and
not challenged the evidence of complainant. Hence
recording of 313 statement is dispensed.
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C.C.No.28369/2022
17. In this case the accused has not chosen to enter
into witness box and not challenged the evidence of PW-1. It
is the specific case of the complainant is that the accused
had purchased materials from the complainant worth of
Rs.71,307/- and to discharge the said liability, the accused
had issued Ex.P.1 cheque. Ex.P.16 Account Ledger Extract
shows that the accused has purchased material from the
complainant. Ex.P.9 to P.15 also shows that the
complainant has supplied materials to the accused. Ex.P.1
cheque belongs to accused and same has been returned for
the reason “Funds Insufficient”. As discussed above the
complainant has deposed that in his evidence with regard to
transaction between the parties and produced 17
documents in support of his case. The accused has not
challenged the evidence the evidence of complainant. The
cheque belongs to accused and he has not disputed the
signature also. It shows that the accused is admitting the
liability and for that reason only, he has not challenged the
evidence of complainant.
18. The accused has not given proper explanation
that that how his cheque had been to the hands of
complainant. Ex.P.1 to 17 supports the case of complainant.
As per Ex.P.3, the complainant has demanded the accused
for payment by issuing notice. The complainant has
presented Ex.P.1 cheque and same has been returned for
the reason “Funds Insufficient”. The complainant has issued
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C.C.No.28369/2022
notice and demanded for payment and filed complaint
within time. The Track consignment marked at Ex.P.5
shows that the notice has been served to the accused. The
complainant has clearly stated that the accused is residing
in same address. Thereafter also the accused has not
chosen to issue reply notice.
19 . In this case the advocate for complainant
vehemently argued that the complainant has proved his
case and discharged the initial burden. On the other hand,
accused person has not rebutted the presumption. Ex.P.1
to P.17 supports the case of complainant. Prior to filing of
this complaint, the complainant has issued notice to the
accused through RPAD inspite of service of notice also the
accused person has not issued reply notice.
20. In the decision of Hon’ble High Court of Andhra
Pradesh in Gorantla Venkateshwara Rao Vs. Kolla
Veeraraghava Rao and another case, it was held that failing
on the part of accused in giving reply to the legal notice
issued by the complainant, is one of the strong
circumstances to draw a inference that accused has
borrowed amount from the complainant and cheque was
issued towards payment of legally enforceable debt. Here, in
this case on hand also in spite of receipt of legal notice also
the accused did not chose to give reply, hence it is also one
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C.C.No.28369/2022
of the circumstances which clear supports the case of
complainant.
21. In the authority reported in Crl Appeal
No.348/2011 in Smt.Jayalakshmamma Vs.Shasikala. In
that case the Hon’ble High Court of Karnataka held that if
accused has taken contention that complainant has
misused his cheque, then there should be complaint before
the police or any authority or intimation to the bank. If
accused has not exercised these options then, his
contention cannot be considered with regard to missing of
cheque or alleged misuse of cheque. In the case on hand
also till today the accused has not taken any steps against
the complainant for alleged misuse of his cheque. The
accused has not explained that what prevented him from
taking steps against the complainant. Hence ratio held in
above authority is applicable to case on hand.
22. In the authority reported in Crl. Appeal
1755/2010 in Sanjabij Tari Vs.Kishore S. Borcar and
another, case Hon’ble Apex Court held that only on the
ground that transaction is by way of cash and not shown in
the IT returns, complaint cannot be dismissed. It is further
held that if accused not lodged any complaint against the
complainant after dishonour of cheque by alleging that the
cheque was not to be encashed. Consequently, the defence
of financial incapacity of complainant, advanced by the
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C.C.No.28369/2022
accused is on after thought. In the case on hand also after
dishonour of cheque, the complainant has issued notice and
same has been served to the accused but thereafter also the
accused has not taken defence by issuing reply notice and
not lodged any complaint against the complainant for
alleged misuse of his cheque. Merely because it has not
been shown in the IT records, accused cannot take that
advantage. As discussed above it is for the accused to rebut
the presumption but he has failed to rebut the presumption
and to prove his defence. Hence accused cannot take
defence with regard to financial in capacity of the
complainant or cash transaction. The ratio held in above
authority is supports the case of complainant.
23. As per Section 114 of Indian Evidence Act court
may presume that bill of exchange was accepted for good
consideration. Issuance of cheque is proved. Hence
presumption can be drawn. Therefore, it probabalizes that
the transactions alleged in the complaint is genuine.
24. Regarding the burden of the accused to rebut the
presumptions in N.I Act the Hon’ble Apex Court in
Rohitbhai Jivanlal Patel Vs State Of Gujarat in Crl.A.No.508
OF 2019 held:
“16.On the aspects relating to preponderance of
probabilities, the accused has to bring on record such
facts and such circumstances which may lead the
Court to conclude either that the consideration did
not exist or that its non-existence was so probable
11C.C.No.28369/2022
that a prudent man would, under the circumstances
of the case, act upon the plea that the consideration
did not exist. This Court has, time and again,
emphasized that though there may not be sufficient
negative evidence which could be brought on record
by the accused to discharge his burden, yet mere
denial would not fulfill the requirements of rebuttal as
envisaged under Section 118 and 139 of the NI Act…”
25. In the case on hand the accused has not
disputed the issuance of cheque and signature and he has
not disputed transaction and till today not taken any steps
against the complainant. He has not chosen to send
intimation to the bank for stop payment and not issued any
notice to the complainant for return of his cheque. The
accused has not taken any defence and not cross-examined
PW-1. If really there was no transaction between the parties,
then definitely accused would have challenged the evidence
of PW-1. It also shows that the accused is admitting liability
and only to escape from his liability he is seeking time. As
discussed above the accused has fails to rebut the
presumption.
26. Under the criminal jurisprudence, the
prosecution is required to establish the guilt of the accused
beyond all reasonable doubt. However, the proceeding
U/sec.138 of Negotiable Instruments Act is quasi-criminal
in nature. In these proceedings proof beyond reasonable
doubt is subject to presumptions envisaged under sec.118,
139 and 146 of Negotiable Instruments Act. An essential
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C.C.No.28369/2022
ingredient of Sec.138 of Negotiable Instruments Act is that
cheque in question must have been issued towards a legally
or liability. Sec.118 and 139 of Negotiable Instruments Act
envisage certain presumptions. Under Sec.118 a
presumption shall be raised regarding consideration, date,
acceptance, transfer, endorsements and regarding the
holder in due course of Negotiable Instruments. Even under
Sec.139 a rebuttal presumption shall be raised that the
cheque in question was issued regarding discharge of a
legally enforceable debt. These presumptions are mandatory
presumptions that are required to be raised in case of
Negotiable Instruments. These presumptions are not
conclusive presumptions, but are rebuttable. As discussed
above the accused has fails to prove his defence and also
rebut the presumption.
27. The decision reported in AIR 2010 SC 1898
(Rangappa V/s. Mohan), the Honorable Apex Court held
that once execution of Negotiable instrument is either
proved or admitted, then the court shall draw a
presumption to the effect that the said negotiable
instrument has been drawn for valid consideration and the
legally recoverable debt was in existence.
28. Advocate for complainant argued that transaction
was in the year 2019 and till today the complainant has not
received any benefit from the accused. Due to delay in
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C.C.No.28369/2022
proceedings also, the complainant has suffered a lot. In the
authority reported in Crl. Revision Petition No.996/2016 of
M/s.Banavathi and Company Vs.Mahaeer Electro Mech Pvt
Ltd and another. In that Hon’ble High Court of Karnataka
held that as per Section 80 of N.I.Act When no rate of
interest is specified in the instrument, interest on the
amount due thereon shall, notwithstanding any agreement
relating to interest between any parties to the instrument,
be calculated at the rate of eighteen per centum per annum,
from the date at which the same ought to have been paid by
the party charged, until tender or realization of the amount
due thereon, or until such date after the institution of a suit
to recover such amount as the Court directs. All discussed
above transaction was in the year 2019 and now it is in the
year 2026 and the complainant has suffered a lot of
financial issue due to delay. If complainant would have
invested and deposited in any bank or business, he would
have get benefit. Hence the accused is liable to pay interest
@ rate of 18% per annum from the date of filing of complaint
to till realization.
29. Therefore, when there is evidence of complainant
regarding the issuance of cheque and it was dishonour on
presentation and when there is no evidence on the side of
the accused to rebut the presumption available under
section 118 and 139 of Negotiable Instrument Act, I am of
the view that complainant has successfully established that
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C.C.No.28369/2022
cheque have been issued by the accused towards the
discharge of legal liability and was dishonoured on its
presentation for “‘Funds Insufficient”.
30. The complainant has proved that accused had
issued cheque towards discharge of his legally recoverable
liability. There is no proper explanation from the accused
that why he had not tried to take back his cheque. There is
no effort from the accused to take steps against the
complainant for alleged misuse of his cheque. All these
aspects show that there was a transaction between the
parties and to discharge his liability only, accused had
issued Ex.P.1. Ex.P.1 to P.17 shows that there was a
transaction between the parties. Accused has fails to prove
that there is no legally recoverable debt or liability. there is
no reasons to disbelieve the case of complainant. Hence, in
view of the above discussion, this court is of the opinion
that the complainant has proved his case. On careful
perusal of materials on record I am of the opinion that there
is a legally recoverable debt or liability. All these aspects
show that accused had issued cheque to the complainant
towards discharge of his liability. The complainant has
proved the initial burden and accused has not produced any
cogent evidence to disprove the contention of the
complainant and not rebutted the presumption. The oral
evidence of PW.1 coupled with documentary evidence
corroborates with each other. Considering the facts and
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C.C.No.28369/2022
circumstances of the case the version of complainant
appears to be true. The ingredients required to fulfill
Sec.138 of NI Act also proved. Hence, I hold that there are
materials available on record to conclude that accused has
committed an offence U/Sec.138 of NI Act, hence I
answered Point no.1 in the Affirmative.
31. Point No.2:- In view of the aforesaid reasons, I
proceed to pass the following :-
-: ORDER :-
By invoking the power conferred
under section 278(2) of B.N.S.S.,The
accused is found guilty for the offence
punishable under section 138 of
Negotiable Instruments Act.
Accused is sentenced to pay a fine
of Rs.71,307/- (Rupees Seventy One
Thousand Three Hundred Seven only)
along with interest @ rate of 18% per
annum from the date of filing of
complaint to till realization till payment of
amount. In default to pay the fine,
accused shall undergo simple
imprisonment for a period of six months.
Further, acting under Sec.357(1)(b)
of Cr.P.C., on recovery of sum of
Rs.71,307/- (Rupees Seventy One
Thousand Three Hundred Seven only)
along with interest @ rate of 18% per
annum only, Rs.70,307/- along with
16C.C.No.28369/2022
interest shall be paid to the complainant
as compensation and Rs.1,000/- shall be
remitted to the state exchequer.
Supply free copy of this order to the
accused forthwith.
(Dictated to stenographer directly on my computer, after clerical
additions by him, script revised, corrected and pronounced by me in the
Open Court on this the 16th day of May-2026)ASHA Digitally signed
by ASHA K S
Date: 2026.05.20
KS 14:33:58 +0530
(Smt.Asha K.S,)
XXIII ACJM,Bengaluru.
ANNEXURE
1) List of Witnesses examined for complainant:-
PW.1 : Sri.Raghavendra T.
2) List of documents marked on behalf of complainant: –
Ex.P.1 : cheque.
Ex.P.1(a) : Signature of accused,
Ex.P.2 : Bank Memo,
Ex.P.3 : Legal Notice,
Ex.P.4 : Receipt.
Ex.P.5 : Postal Acknowledgment.
Ex.P.6 : COO Appointment Order.
Ex.P.7 : Incorporation Certificate.
Ex.P.8 : Complainant's company
Registration Certificate.
Ex.P.9 to P.15 : Seven Tax Invoices.
Ex.P.16 : Account Ledger.
Ex.P.17 : Complaint. Authorization Letter
And Resolution.
3) List of witness examined on behalf of the Accused :-
: Nil :
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C.C.No.28369/2022
4) List of documents marked on behalf of the Accused:-
: Nil : ASHA Digitally signed by ASHA K S Date: KS 2026.05.20 14:34:09 +0530 (Smt.Asha K.S,) XXIII ACJM, Bengaluru. 18 C.C.No.28369/2022 19 C.C.No.28369/2022
