Bangalore District Court
Bhargav. V vs Srinivas M on 6 July, 2026
1 Crl.Apl.No.1491/2024 JUDGMENT
KABC010232992024
IN THE COURT OF LXIX ADDITIONAL CITY CIVIL
AND SESSIONS JUDGE (CCH 70)
Present:
Smt. Shirin Javeed Ansari, B.A.,LL.B (Hon`s) LL.M.,
LXIX Additional City Civil and Sessions Judge,
Bengaluru. (CCH70)
Dated this the 06th day of July, 2026
Crl.A.No.1491/2024
Appellants: Sri Bhargav.V
S/o Vishwanath
Aged about 30 years,
R/at. No.1070, New Street
Yelahanka Old Town
Bengaluru-560 064
(Sri Kumara, Advocate for appellant)
-V/s-
Respondent: Sri Srinivas.M
S/o Mrithyunjaya
Aged about 41 years
R/at. No.655, Opp. Old Middle School
OMS Road, Yelahanka
Bengaluru-560 064
(Sri Mahendra Kumar.K, Advocate for
respondent)
2 Crl.Apl.No.1491/2024 JUDGMENT
JUDGMENT
This appeal is directed against the Judgment of
conviction and order of sentence dated 05.06.2024 passed
by the learned XII Additional Chief Metropolitan
Magistrate, Bengaluru, in C.C.No.28435/2021, whereby
the appellant/accused has been convicted for the offence
punishable under Section 138 of the Negotiable
Instruments Act and has been sentenced to pay a fine of
Rs.33,55,000/-, in default to undergo simple imprisonment
for a period of one year and out of the said amount, a sum
of Rs.33,50,000/- has been directed to be paid to the
complainant as compensation under Section 357 of Cr.P.C.
2. The accused in CC No.28435/2021 before the
trial court has preferred the instant appeal against the
complainant. The appellant and respondent are hereby
assigned with their original ranks before the trial court i.e.,
the appellant as accused and respondent as complainant
in CC No.28435/2021 in the instant discussion for the
purpose of brevity and convenience to avoid the confusion
and perplexity.
3 Crl.Apl.No.1491/2024 JUDGMENT
3. The facts leading to the filing of the complaint
before the Trial Court, as could be gathered from the
records, disclose that the complainant and the accused
along with one Purushotham had allegedly established a
café under the name and style of “MIST FACTORY” and
had entered into an agreement dated 06.02.2019
concerning the establishment and running of the said
business. It was the specific case of the complainant that
he had allegedly invested a sum of Rs.36,90,000/- in the
said business and that subsequently, under an agreement
dated 25.06.2019 relating to retirement and reorganization
of the group members, the accused agreed to pay an
amount of Rs.28,00,000/- towards the complainant’s
entitlement in the business and further agreed to pay an
additional amount of Rs.5,00,000/-.
4. It was further alleged that under the said
arrangement, the accused had agreed to pay Rs.50,000/-
per month till payment of the entire amount and towards
discharge of the said liability, had issued two cheques
bearing No.695575 dated 25.12.2019 for Rs.28,00,000/-
4 Crl.Apl.No.1491/2024 JUDGMENT
and No.695576 dated 25.12.2019 for Rs.5,00,000/-, both
drawn on Axis Bank, Yelahanka Branch.
5. According to the complainant, when the said
cheques were presented for encashment through HDFC
Bank, Yelahanka Branch, they came to be dishonoured
with endorsements “As per CTS alteration other than date
is not allowed” and “Payment stopped by drawer”.
Thereafter, a legal notice dated 29.05.2020 came to be
issued calling upon the accused to pay the cheque amount.
Since the amount remained unpaid, the complaint under
Section 200 Cr.P.C. for the offence punishable under
Section 138 of the Negotiable Instruments Act came to be
instituted.
6. On presentation of the complaint, the trial court
recorded the sworn statement of the complainant and
having found sufficient grounds, took cognizance of the
offence and issued process against the accused.
7. After appearance of the accused, substance of
accusation was explained to him. He pleaded not guilty
and claimed to be tried. The sworn statement of the
5 Crl.Apl.No.1491/2024 JUDGMENT
complainant was treated as examination-in-chief in terms
of the decision of the Hon’ble Supreme Court in Indian
Bank Association Vs. Union of India.
8. In order to establish his case, the complainant
examined himself as PW-1 and relied upon Ex.P1 to
Ex.P14. Ex.P1 and Ex.P2 are the cheques in question,
Ex.P3 and Ex.P4 are the bank endorsements, Ex.P5 is the
copy of legal notice, Ex.P6 to Ex.P11 are postal documents,
Ex.P12 and Ex.P13 are the agreements and Ex.P14 is the
bank statement.
9. After closure of complainant’s evidence,
statement of the accused under Section 313 Cr.P.C. was
recorded. The accused denied the incriminating
circumstances appearing against him and specifically
contended that he had never borrowed any amount from
the complainant and that the complainant, who was
allegedly entrusted with the affairs of his business, had
misused signed blank cheques and blank stamp papers. In
support of his defence, the accused entered into the
witness box as DW-1 and produced Ex.D1 and Ex.D2.
6 Crl.Apl.No.1491/2024 JUDGMENT
10. Upon appreciation of the oral and documentary
evidence, the trial court answered the point for
consideration in the affirmative and convicted the accused
for the offence punishable under Section 138 of the
Negotiable Instruments Act and imposed sentence as
stated supra.
11. Being aggrieved by the impugned judgment
passed by the trial court, the appellant being accused
before the trial court has preferred the instant appeal
against the respondent who was the complainant before
the trial court on the following:
GROUNDS OF APPLEAL
a) That the trial court failed to properly
appreciate the evidence available on
record; that Ex.P12 and Ex.P13 are
fabricated documents; that the
complainant failed to establish his
financial capacity and his alleged
investment of Rs.36,90,000/-; that there
was no legally recoverable debt; that there
was no valid service of statutory notice;
that the defence regarding misuse of
7 Crl.Apl.No.1491/2024 JUDGMENTsigned blank cheques has been ignored;
and that the judgment suffers from serious
legal infirmities and is liable to be set
aside.
b) The appellant submits that, the Order of
the trial court is highly illegal and the
same suffers from legal infirmities and the
interference of this Hon’ble Court is
warranted and the Order of the Court
below is devoid of equity.
c) The appellant submits that, the Trial Court
gravely erred in convicting the appellant
for the offence punishable under section
138 of the Negotiable Instruments Act,
which is manifestly erroneous and opposed
to the facts and circumstances of the case
and liable to be set-aside, in limine.
d) The appellant submits that, the Court below
without considering the lacunas in the
case of the Complainant/Respondent and
the contradictions passed the impugned
judgment, which is bad as per the
established principles of law. The vital
documents have been ignored by the trial
court.
8 Crl.Apl.No.1491/2024 JUDGMENT
e) At the outset the Trial Court ought not to
have taken the cognizance of the alleged
offence for the simple reason that,
admittedly the complainant is not a
partner of the café known as ‘MIST
FACTORY’ and admittedly he has not
produced any documents in order to show
that he is the partner of the café known as
‘MIST FACTORY’ and during the cross
examination he himself has admitted that
he has not produced the document, when
such being the case his investment for the
cafe does not arise at all.
f) It is further submitted that, admittedly the
complainant has not SE produced a single
document to show in respect of his
investment of Rs. 36,90,000/- (Rupees
Thirty-Six Lakhs Ninety Thousand Only)
and its contrary to alleged exhibits P12
and P13-in-fact the complainant has not
invested a single Rupee, during the cross
examination even the complainant has
also admitted the foresaid facts.
g) It is submitted that, during the cross
examination the complainant has stated
that the complainant has invested the
9 Crl.Apl.No.1491/2024 JUDGMENT
aforesaid amount for a period of 8 months,
but the exhibits P12 and P13 indicates
that within six months the alleged
partnership has been dissolved, these facts
clearly shows that the testimony of the
PW-1 cannot be believed and he falsely
deposed before the Trial Court, this fact
totally is ignored by the Trial Court.
h) It is submitted that, the Trial Court came to
a wrong conclusion that during the course
of the cross-examination of PW-1 nothing
is elicited from the mouth of the
complainant except the suggestions
imposed regarding the transaction held
between the complainant and the accused,
the Trial Court has not taken pain to
appreciate the cross examination of the
PW-1 and also not given any reasoning, in
fact during the cross examination the
accused has elicited, regarding the non-
payment of the complainant, the
complainant was never a partner to the
café, paying capacity and the service of
notice etc., the accused has rebutted by
raising a probable defense, but the Trial
Court has totally ignored this aspect and
10 Crl.Apl.No.1491/2024 JUDGMENT
came to the conclusion that the
complainant has proved his case, which is
not correct.
I) The appellant submits that, the Trial Court
has come to a wrong conclusion that the
cheques were issued by the accused and
was drawn on his bank account as he has
not denied his signature on the cheques,
the very issuance of alleged cheques were
denied by the accused and recital on the
cheque and further the accused has clearly
taken defense that the alleged signed
blank cheques were misused by the
complainant. Hence, on the above said
grounds alone the Trial Court ought to
have dismissed the complaint by
acquitting the accused. But the Trial Court
below wholly erred in not appreciating
facts.
j) The appellant submits that, the Trial Court
below wholly erred in not noticing the
contrary of Exhibit P-12 and P-13 and the
Ex P-12 and P-13 are totally created and
concocted by the Complainant in order to
extract the money from the innocent
accused the Ex P-13 is not a conclusive
11 Crl.Apl.No.1491/2024 JUDGMENT
proof or sufficient evidence to charge any
person with liability as per section 34 of
Evidence Act.
k) The appellant submits that, the Trial Court
below wholly erred in coming to conclusion
that the legal notice dated 29.05.2020
marked as Ex P-5 served up on the
accused and in spite of service of notice,
the accused has not replied to the notice
nor paid the amount, admittedly no notice
is served upon the accused, admittedly the
notice is served on one Smt.
Ashwathamma. It is well settled principals
of law that, the service of notice on the
accused is one mandatory ingredient to
prove the offence under section 138 the
Negotiable Instruments Act. In this regard
there is clear judgment reported (2009)
14SCC 398, this piece of evidence has
been overloaded by the Trial Court and
hence the judgment of Trial Court is liable
to be set aside on all the above said
grounds.
l) The appellant submits that, the Trial Court
failed to look in the documents placed
before the court and came to the wrong
12 Crl.Apl.No.1491/2024 JUDGMENT
conclusion.
m) The appellant submits that, the judgment
of the Trial Court is based on irrelevant
and unnecessary presumpions and
assumptions and hence it is illegal and
bad in the eyes of law.
n) The appellant submits that, the Trial court
has framed wrong points for its
consideration as “whether the complainant
proves beyond all reasonable doubt that
the accused has issued the two cheques
and the same was dishonoured, thereby
committed an offence punishable U/S 138
Negotiable Instruments Act” instead. of the
point that whether the alleged cheques
were issued for discharge of legal
recoverable debt or liability thus on this
ground that the judgment of the Trial
Court is bad in the eyes of law.
o) The appellant submits that, nowhere in the
complaint it is averred that the alleged
amount is a legally recoverable debt.
Hence, on this ground the complaint of the
complainant is liable to be dismissed. The
averment of legally recoverable debt is the
13 Crl.Apl.No.1491/2024 JUDGMENT
main ingredient for the offence punishable
under section 138 of Negotiable
Instruments Act which is total absent in
the complaint. This fact has been total
ignored by the Trial Court.
p) The appellant submits that, the reasoning
and the findings of the Trial Court on the
mandatory ingredients are absent in the
judgment passed by the Trial Court and
came to a wrong conclusion in convicting
the accused.
q) The appellant submits that, the accused
during the cross examination of
complainant has completely rebutted the
evidence and presumption which has been
over looked by the Trial Court. When such
being the case the burden shifts on the
complainant to prove his case with proper
satisfactory and acceptable explanation
and proof, which has not been done by the
Complainant.
r) The appellant submits that, it is well
established principles of law that the mere
dishonour of cheque will not amount to an
offence punishable under section 138 of
14 Crl.Apl.No.1491/2024 JUDGMENT
the Negotiable Instruments Act. Unless
and until the complainant proves that
there is a legally recoverable debt.
s) The appellant submits that, thus, on all the
above said grounds the judgment of the
Trial Court is liable to be set aside, the
accused is eligible to be acquitted in virtue
of the facts and circumstances of case.
t) The appellant submits that, the Trial Court
did not consider the fact that admittedly
except the signature nothing is written by
the accused on the cheques and it clearly
demonstrates that there is a misuse of
cheques.
u) It is submitted that the Order of the Trial
Court is cryptic. The reading of the
impugned order clearly reveals that the
trial court has not applied her judicious
mind and she has not given proper reason
for concluding the judgment.
u) It is submitted that, the impugned order
passed by the Trial Court is violating
principles of natural justice and the Trial
Court has not given any opportunity to the
accused to argue the matter and without
15 Crl.Apl.No.1491/2024 JUDGMENT
giving single opportunity the Trial Court
very hurriedly passed the impugned order,
the reason best know to the Trial Court.
And hence, on this ground alone the order
of the Trial Court is liable to be set aside.
On these and other allied grounds, the
appellant/accused pray before this court to call for entire
records from the trial court, set aside the impugned
judgment conviction and sentence passed by Trial Court in
CC No.28435/2021 dated 05.06.2024 and acquit the
appellant/accused, by allowing this appeal in the interest
of justice and equity.
12. Heard arguments of learned counsel for
appellant and learned counsel for respondent. On the basis
of the materials available on record following points arise
for my consideration:
1) Whether the impugned judgment of
conviction and sentence suffers
from violation of principles of
natural justice and fair trial
warranting interference by this
Court?
2) What order?
16 Crl.Apl.No.1491/2024 JUDGMENT
13. My findings to the above points are as under:
Point No.1 : In the Affirmative;
Point No.2 : As per final order,
for the following:
REASONS
14. Point No.1:- Before adverting to the merits of
the rival contentions, it is necessary to bear in mind that
though an appeal against conviction under Section 138 of
the Negotiable Instruments Act is in the nature of a
continuation of the original proceedings, the Appellate
Court is under a legal obligation to independently re-
appreciate the entire evidence available on record and
ascertain as to whether the findings recorded by the
learned Trial Magistrate are supported by legal evidence
and whether such findings are based upon sound
principles of law. The appellate jurisdiction cannot be
exercised in a mechanical manner by merely approving the
conclusions arrived at by the Trial Court. On the contrary,
when the findings are based upon assumptions, surmises
or incomplete appreciation of evidence, interference by the
Appellate Court becomes not only permissible but also
17 Crl.Apl.No.1491/2024 JUDGMENT
obligatory.
15. It is an elementary principle of criminal
jurisprudence that a prosecution under Section 138 of the
Negotiable Instruments Act, though quasi-criminal in
nature, nevertheless culminates in a conviction carrying
penal consequences. Therefore, the complainant is
required to establish foundational facts before availing the
benefit of statutory presumptions under Sections 118 and
139 of the Negotiable Instruments Act. Though the
presumptions available under the statute are mandatory,
they are not absolute and the accused is required only to
establish a probable defence on the touchstone of
preponderance of probabilities and not beyond reasonable
doubt.
16. Upon careful scrutiny of the impugned
judgment, this Court finds that the trial court has virtually
proceeded on the assumption that mere admission of
signatures on Ex.P1 and Ex.P2 cheques by itself
conclusively establishes the existence of a legally
enforceable debt. Such an approach, in the considered
18 Crl.Apl.No.1491/2024 JUDGMENT
opinion of this Court, runs contrary to the settled
principles laid down by the Hon’ble Supreme Court in
Basalingappa Vs. Mudibasappa, (2019) 5 SCC 418,
wherein it has been categorically held that once the
accused raises a probable defence, the burden shifts back
upon the complainant to establish his case independently.
17. The entire case of the complainant revolves
around the assertion that he had invested an amount of
Rs.36,90,000/- in a café known as “MIST FACTORY” and
subsequently became entitled to receive Rs.28,00,000/-
and an additional amount of Rs.5,00,000/- under Ex.P12
and Ex.P13. Significantly, except the self-serving testimony
of PW-1 and the disputed agreements Ex.P12 and Ex.P13,
absolutely no independent documentary evidence has been
placed before the Court to establish the alleged investment
of Rs.36,90,000/-.
18. Astonishingly, no books of account, bank
statements showing withdrawal of such huge amount,
income tax returns, GST records, partnership deeds,
licence documents, profit and loss accounts, capital
19 Crl.Apl.No.1491/2024 JUDGMENT
contribution records or any other contemporaneous
documents have been produced to establish that the
complainant had indeed invested Rs.36,90,000/- in the
said business. The absence of such primary evidence
assumes considerable significance, especially when the
transaction alleged involves a huge amount.
19. The trial court, however, without examining
whether the complainant possessed the financial
wherewithal to invest such a huge amount, has
mechanically observed that the arguments relating to
financial capacity do not hold water. Such reasoning, in
the considered opinion of this Court, is legally
unsustainable.
20. In cases involving substantial amounts, proof
regarding source of funds assumes importance. The
Hon’ble Supreme Court in Basalingappa Vs. Mudibasappa
and APS Forex Services Pvt. Ltd. Vs. Shakti
International Fashion Linkers, (2020) 12 SCC 724, has
repeatedly emphasized that where the financial capacity is
seriously disputed by the accused, the complainant is
20 Crl.Apl.No.1491/2024 JUDGMENT
required to satisfactorily establish the source of funds. In
the case on hand, such burden has not been discharged.
21. The trial court has further proceeded on the
assumption that Ex.P12 agreement itself establishes the
liability. A careful reading of Ex.P12 reveals that the same
is a private document. The execution thereof has been
specifically denied by the accused. Once the execution of
the document itself was disputed, it became incumbent
upon the complainant to prove the same in accordance
with law.
22. Curiously, no attesting witnesses to Ex.P12
have been examined. No independent witnesses have been
examined to establish the circumstances under which
Ex.P12 came into existence. The trial court has accepted
Ex.P12 in a mechanical manner without subjecting the
document to judicial scrutiny. Such an approach, in the
opinion of this Court, has resulted in miscarriage of
justice.
23. The Trial Court has heavily relied upon Section
20 of the Negotiable Instruments Act. However, Section 20
21 Crl.Apl.No.1491/2024 JUDGMENT
merely recognizes the authority of the holder to fill up an
inchoate instrument. It does not dispense with the
requirement of proving the existence of legally enforceable
debt or liability. The Trial Court appears to have equated
admission of signatures with admission of liability, which
is contrary to settled law.
24. Equally surprising is the finding recorded by the
trial court that since the accused had not initiated legal
proceedings against the complainant, adverse inference
has to be drawn against him. Such reasoning, with utmost
respect, is wholly alien to criminal jurisprudence. Non-
initiation of legal proceedings by the accused cannot
constitute proof of the complainant’s case. The burden
never shifts merely because the accused failed to institute
separate proceedings.
25. The Trial Court has further observed that
failure of the accused to issue a reply notice itself
establishes the borrowing transaction. Such a finding
again cannot be approved. Mere non-issuance of reply
notice cannot by itself become a substitute for proof of
22 Crl.Apl.No.1491/2024 JUDGMENT
legally enforceable liability.
26. The accused has consistently taken the defence
that signed blank cheques and blank stamp papers were
misused by the complainant. The law is well settled that
even such a defence, if rendered probable through
circumstances elicited in cross-examination, would be
sufficient to rebut the presumption under Section 139 of
the Act.
27. The cross-examination of PW-1 reveals several
inconsistencies regarding the duration of investment and
the nature of relationship between the parties. The
complainant himself admitted that he had not produced
documents to substantiate his status as a partner. Though
these admissions assume importance, the Trial Court has
brushed aside the same by observing that nothing
worthwhile was elicited in the cross-examination.
28. Such a sweeping observation made by the trial
court is contrary to the material available on record. The
duty of the Court is not to record conclusions in a cryptic
manner but to analyze the answers elicited during cross-
23 Crl.Apl.No.1491/2024 JUDGMENT
examination. Unfortunately, the impugned judgment does
not disclose any such exercise.
29. Another important circumstance which escaped
the attention of the Trial Court relates to the service of
statutory notice. Ex.P10 acknowledgment admittedly bears
the signature of one Ashwathamma. There is no evidence
to establish that the said Ashwathamma received the
notice on behalf of the accused or that she was authorized
by him. The Trial Court proceeded on the assumption that
Ashwathamma being the mother of the accused amounts
to deemed service. Such conclusion is unsupported by any
legal evidence.
30. Though service upon a family member may,
under certain circumstances, amount to valid service, the
complainant was nevertheless required to establish the
said fact through cogent evidence. In the absence thereof,
the Trial Court ought to have exercised greater caution
before recording a finding regarding deemed service.
31. Yet another disturbing feature noticeable from
the impugned judgment is that the trial court has framed
24 Crl.Apl.No.1491/2024 JUDGMENT
the point for consideration only with reference to issuance
and dishonour of cheques and omitted the most crucial
ingredient namely existence of legally enforceable debt or
liability. The omission to frame an appropriate point has
vitiated the entire process of appreciation of evidence and
has materially affected the conclusions arrived at by the
Trial Court.
32. A careful reading of the impugned judgment
further discloses that several findings have been recorded
on the basis of presumptions and assumptions rather than
on the basis of evidence. The approach adopted by the trial
court, with respect, appears to be one of searching for
circumstances supporting conviction rather than
evaluating whether the complainant had succeeded in
proving his case.
33. It is trite that suspicion, however strong, cannot
take the place of proof. The complainant cannot succeed
merely because the defence appears weak. The
complainant has to stand upon the strength of his own
evidence and not upon the weakness of the defence.
25 Crl.Apl.No.1491/2024 JUDGMENT
34. Upon cumulative appreciation of the entire
material available on record, this Court is of the considered
opinion that the accused has succeeded in raising a
probable defence sufficient to rebut the statutory
presumptions under Sections 118 and 139 of the
Negotiable Instruments Act. Consequently, the burden
shifted back upon the complainant to establish the
existence of legally enforceable debt by adducing
satisfactory evidence. The complainant having failed to
discharge such burden, the benefit of doubt necessarily
enures to the accused.
35. Before parting with the appreciation of evidence,
this Court deems it appropriate to advert to another
significant aspect which appears to have escaped the
notice of the learned Trial Magistrate. The foundation of
the complainant’s case rests upon Ex.P12 and Ex.P13.
According to the complainant, Ex.P13 evidences his initial
investment in the business venture and Ex.P12 evidences
the subsequent retirement and reorganization arrangement
under which the accused allegedly undertook to pay
26 Crl.Apl.No.1491/2024 JUDGMENT
Rs.28,00,000/- towards the complainant’s share and an
additional amount of Rs.5,00,000/-. When the very genesis
of the liability emanates from these documents, the burden
heavily rested upon the complainant to establish their
execution and genuineness in accordance with law.
36. Admittedly, Ex.P12 and Ex.P13 are not
registered documents. They are private documents. Their
execution has been specifically denied by the accused. In
spite of such denial, no attesting witness to the documents
has been examined. No handwriting expert has been
examined. No person connected with the execution of the
documents has been examined. In the absence of
independent corroboration, the trial court was not justified
in treating the contents of Ex.P12 and Ex.P13 as gospel
truth and proceeding to base the conviction thereupon.
37. It is well settled that contents of a document do
not prove themselves. Mere marking of a document does
not amount to proof of its contents. The trial court appears
to have overlooked this settled proposition and has
accepted Ex.P12 and Ex.P13 without insisting upon strict
27 Crl.Apl.No.1491/2024 JUDGMENT
proof. Such an approach has occasioned serious prejudice
to the accused.
38. Significantly, according to the complainant, he
had invested a huge sum of Rs.36,90,000/- in the café
business. In ordinary human conduct and commercial
prudence, such a substantial investment would invariably
be supported by some contemporaneous documentary
evidence. There would ordinarily be bank transfers,
receipts, income tax records, books of account, entries in
business accounts, licences, GST registrations or at least
some documentary indication evidencing participation in
the business. Curiously, no such evidence has been
forthcoming.
39. During the course of cross-examination,
admissions have been elicited from PW-1 regarding non-
production of any document evidencing his status as
partner. The trial court, instead of considering the effect of
such admissions, has chosen to summarily observe that
nothing worthwhile has been elicited in the cross-
examination. Such a conclusion, with utmost respect,
28 Crl.Apl.No.1491/2024 JUDGMENT
reflects non-consideration of material evidence.
40. Equally important is the defence put forth by
the accused that signed blank cheques and signed blank
stamp papers had been entrusted and the same have been
misused. It is true that mere taking of such defence by
itself may not absolve the accused. However, once
surrounding circumstances probabilize such a defence, the
Court is required to examine the matter with greater
circumspection.
41. The Hon’ble Supreme Court in Basalingappa
Vs. Mudibasappa reported in (2019) 5 SCC 418 has
authoritatively held that the accused is not required to
prove his defence beyond all reasonable doubt and that the
burden upon the accused is only that of preponderance of
probabilities. It has further been held that the accused
may rely upon the evidence adduced by the complainant
himself and circumstances elicited during cross-
examination in order to rebut the statutory presumption.
42. Likewise, in John K. Abraham Vs. Simon C.
Abraham reported in (2014) 2 SCC 236, the Hon’ble
29 Crl.Apl.No.1491/2024 JUDGMENT
Supreme Court has held that where the complainant fails
to establish his source of funds and capacity to advance
huge amounts, the Court would be justified in drawing an
adverse inference against the complainant.
43. In K. Subramani Vs. K. Damodara Naidu
reported in (2015) 1 SCC 99, the Hon’ble Supreme Court
has reiterated that when the accused raises a probable
defence regarding the very existence of debt, the burden
shifts upon the complainant to establish his financial
capacity and the transaction beyond reasonable doubt.
44. In APS Forex Services Pvt. Ltd. Vs. Shakti
International Fashion Linkers reported in (2020) 12 SCC
724, the Hon’ble Apex Court has held that where the
financial capacity is specifically questioned, the
complainant is obliged to explain the source of funds.
Failure to do so would materially affect the complainant’s
case.
45. Applying the principles laid down in the
aforesaid decisions to the facts of the present case, this
Court finds that the accused has succeeded in creating
30 Crl.Apl.No.1491/2024 JUDGMENT
serious doubt regarding the very existence of the alleged
liability. Once such doubt arose, the burden reverted upon
the complainant to establish the transaction
independently. Unfortunately, except the interested
testimony of PW-1 and the disputed documents Ex.P12
and Ex.P13, no satisfactory material has been placed on
record.
46. Another aspect which renders the impugned
judgment vulnerable is that the trial court appears to have
drawn adverse inference against the accused merely
because he had not initiated legal proceedings against the
complainant for alleged misuse of the cheques and
documents. Such reasoning is legally impermissible.
Failure on the part of the accused to institute civil or
criminal proceedings cannot be treated as a circumstance
proving the complainant’s case.
47. Criminal jurisprudence recognizes the right of
silence and the right of the accused to defend himself in
the proceedings initiated against him. The prosecution
cannot derive strength from the omissions of the accused.
31 Crl.Apl.No.1491/2024 JUDGMENT
The complainant must succeed on the strength of his own
evidence and not upon perceived weaknesses in the
defence.
48. This Court also notices that the trial court has
heavily relied upon Section 20 of the Negotiable
Instruments Act without appreciating the limited scope of
the said provision. Section 20 merely authorizes
completion of an inchoate instrument. It does not create a
presumption regarding existence of debt. Nor does it
dispense with proof regarding consideration. Therefore, the
invocation of Section 20 in the peculiar facts of the present
case was wholly misplaced.
49. Furthermore, the impugned judgment discloses
that the trial court has repeatedly used expressions such
as “this itself shows”, “otherwise he would have put some
defence”, “this itself proves availment of loan”, and similar
observations. Such reasoning, in the opinion of this Court,
is founded more upon conjectures than legal evidence.
Criminal conviction cannot rest upon assumptions and
surmises.
32 Crl.Apl.No.1491/2024 JUDGMENT
50. The standard of proof required from the
complainant, though aided by statutory presumptions,
cannot be diluted to the extent of converting presumptions
into conclusive proof. A presumption is only a rule of
evidence. Once rebutted by probable circumstances, the
complainant must independently establish the ingredients
of Section 138 of the Negotiable Instruments Act. In the
present case, the complainant has failed to discharge that
burden.
51. Therefore, upon a holistic and independent re-
appreciation of the entire oral and documentary evidence
available on record, this Court is of the considered view
that the findings recorded by the trial court are
unsustainable in law. The impugned judgment suffers from
misappreciation of evidence, non-consideration of material
admissions, erroneous application of statutory
presumptions and failure to appreciate the settled
principles governing prosecution under Section 138 of the
Negotiable Instruments Act.
52. Consequently, the appellant has made out
33 Crl.Apl.No.1491/2024 JUDGMENT
sufficient grounds warranting interference by this Court.
The conviction and sentence imposed by the Trial Court
cannot be allowed to stand and are liable to be set aside.
Consequently, the findings recorded by the trial court are
found to be contrary to law and evidence and hence are
liable to be interfered with. Accordingly, Point No.1 is
answered in the Affirmative.
53. Point No.2: In view of the reasons mentioned
above and the findings arrived at on Point No.1, I proceed
to pass the following:
ORDER
The Criminal Appeal filed by the appellant
under Section 374(3) of the Code of Criminal
Procedure is hereby allowed.
The Judgment of conviction and order of
sentence dated 05.06.2024 passed by the XII
Additional Chief Metropolitan Magistrate,
Bengaluru, in C.C.No.28435/2021, convicting
the appellant/accused for the offence
punishable under Section 138 of the Negotiable
Instruments Act, is hereby set aside.
Consequently, the appellant/accused is
34 Crl.Apl.No.1491/2024 JUDGMENTacquitted of the offence punishable under
Section 138 of the Negotiable Instruments Act.
The bail bond and surety bond executed by
the appellant shall stand cancelled.
The amount, if any, deposited by the
appellant before the Trial Court or before this
Court shall be refunded to him, after expiry of
the appeal period, subject to due identification
and subject to there being no order of stay
passed by any superior Court.
Transmit the Trial Court records along
with a copy of this judgment forthwith.
(Dictated to Stenographer Grade-I directly on computer, typed by
him, revised and corrected by me and then pronounced in open court on
this the 06th day of July, 2026)(Shirin Javeed Ansari)
LXIX Addl.C.C. & Sessions Judge,
Bengaluru.
