Bangalore District Court
K Nandakumar vs S Nagaraj on 22 May, 2026
KABC010289772024
IN THE COURT OF THE LVI ADDL. CITY CIVIL &
SESSIONS JUDGE, BENGALURU (CCH 57)
:Present :
Sri.I.P.Naik
LXIII Addl. City Civil & Sessions Judge,
C/C LVI Addl. City Civil & Sessions Judge,
Bengaluru.
Dated this the 22nd Day of May, 2026
Crl. Appeal No. 1867/2024
APPELLANT Sri K. Nandakumar
S/o Late S. Krishna Setty
Aged about 83 years
No. 817, Sharada Colony
Basaveshwara Nagar
Bangalore-560 079.
(By Sri Hegde P.N., Advocate)
Vs.
RESPONDENT : Sri. S. Nagaraj
S/o Adinarayana Setty
No.140, EW2,
1st Stage, KHB Colony
Basaveshwara Nagar
Bangalore-560 079.
(By Sri.MM, Advocate)
2 Crl.A.1867/2024
:JUDGMENT:
1. This appeal preferred by appellant against
the impugned judgment and order passed by learned
IV ACMM Bengaluru in C.C.No.8885/1999 on
29.10.2024. Herein after parties to this appeal referred
their rank as per their rank before Trial Court. The
appellant is accused and respondent is complainant is
respondent before Trial Court.
2. The factual matrix of complainant’s case;
The complainant and accused are know to each other
since long time. The complainant has borrowed loan of
Rs,50,000/- from accused. At that time of granting
loan accused insisted give semi filed cheque and semi
filed D.P.Note for the purpose of secure. Further, the
complainant had issued ten cheque for repayment of
loan in ten equitable monthly installments of Rs
5,000/-each. Accordingly, the complainant had repaid
loan of Rs 45,000/- to accused, out of that amout Rs,
3 Crl.A.1867/2024
20,000/- through four cheque and Rs 25,000/- by
cash with taking back five cheque.
3. On 07.12.1997 both complainant and
accused were entered in to memorandum of
undertaking (in short MOU). As on date of MOU the
complainant was paid accrued interest on principal
amount. As per the terms of MOU the complainant
had issued only cheque belonging to M/s R S
Enterprise as guaranty towards payment of Rs
5,000/-. Accused had given assurance to return
said cheque and D.P.Note which are semi filled one,
immediately after receipt of Rs 5,000/-.
4. As per terms and conditions of MOU
accused was failed performed his contractual
obligation i.e., receiving amount/last installment and
return of semi filed cheque and semi filed D.P.Note.
Therefore, the complainant got issued legal notice on
4 Crl.A.1867/2024
08.10.1998 with demand of return of aforesaid
documents by receiving balance amount of Rs 5,000/-.
The accused had replied to said notice on 17.10.1998
with untenable answers. Accused was demanded
additional interest at rate of Rs10% per month i.e.,
Rs.500/- per month and also instructed the
complainant give amount of Rs 5,500/- to Mr.Ravi. It
means, accused wants receive money from
complainant indirectly i.e., through Mr.Ravi.
5. Further, the complainant was suspected
attitude and conduct of accused in respect of
performing his contractual obligation as per MOU, on
07.11.1998 the complainant got issued rejoinder to
accused with demand of return of documentary by
accepting remaining balance amount of Rs 5,000/-.
Again accused replied to said rejoinder with untenable
answers.
5 Crl.A.1867/2024
6. A semi filled cheque bearing No 82850 of
Bank Of India (in short BOI) and D.P.Note by
mentioning the amount in words and figures but
without mentioning the drawer’s name, which are
issued as additional security.
7. Finally, accused inserted his name in
aforesaid cheque. Further, he has used the said
cheque as if the complainant had issued the cheque on
16.12.1998 for discharge of Rs 50,000/-, but there
was no additional transaction took between
complainant and accused. Therefore, accused has
forged the cheque as if it is issued for discharge of debt
of Rs 50,000/-. Further same has been used as
genuine document by producing before Court of law in
criminal case order to cheat the complainant by
committed breach of trust.
6 Crl.A.1867/2024
8. Accused has been misused the cheque of
BOI and lunched false and frivolous criminal
proceeding against complainant for alleged offence
P/U/Sec 138 and 142 of N.I.Act. Therefore, accused
has committed an alleged offence P/U/Sec 406, 463,
464, 465, 467, 468 and 471 of IPC. Accordingly, the
complainant has filed private complaint before learned
Trial Court.
9. On considering allegation made the
complaint, the learned Trail Court took cognizance
without passing speaking order. Further, said private
complaint has been registered as PCR bg No
947/1999. Thereafter recorded the sworn statement of
complainant U/Sec 200 of Cr.P.C heard and
considered the allegation made in the complaint and
sworn statement, the learned Trial Court has opined
that sufficient materials on records and prime facie to
proceed against accused. Accordingly, learned Trial
7 Crl.A.1867/2024
Court has ordered for registration of criminal case
against accused in Register-III and issued process
against him.
10. In pursuant of summons, accused
appeared before Trail Court through his counsel and
got enlarged on bail. Further, learned Trail Court has
recorded evidence of complainant before charge, then
heard and framed charge, same has been read-over
and explained to accused. An accused abjured guilt
and claims to be tried. the Meanwhile, accused was
challenged order of cognizance, issuance of process
and other orders before Court of Sessions and Hon’ble
High Court of Karnataka in various petitions under
different provisions of law.
11. Thereafter, learned Trial Court has
conducted the Trail. During Trial the complainant
himself examined as PW.1 and twenty one documents
8 Crl.A.1867/2024
got marked at Ex.P.1 to Ex.P.21. After closer of
complainant’s evidence, accused was examined by
Trial Court U/Sec 313 of Cr.P.C and put forth the
incriminating evidence. An accused has specifically
denied incriminating evidence. He has not chosen to
lead his evidence. During cross examination of PW.1
three documents got marked at Ex.D.1 to Ex.D.3 by
way of confrontation. Thereafter, the learned Trial
Court has heard both side and convicted the accused
by passed impugned Judgment and order which is
challenged in present appeal.
12. An accused being dissatisfied and
disagreed with impugned Judgment and order of the
Trial Court on following grounds;
The learned Trial Court has not applied its mind
while appreciating the facts and evidence placed by
the complainant. Further, it has lost sight over
improvement and suppression made in the
complaint. According to complainant’s case, he has
issued semi filled cheque and D.P.Note, which were
9 Crl.A.1867/2024
issued for security purpose. Further, accused had
violated the MOU. Therefore, accused has committed
offence of cheating, criminal breach of trust, forgery
and forged document used as genuine. Mere violation
of contractual obligation, is not amounts to accused
has committed alleged offences. During cross
examination PW.1 deposed his ignorance in respect
of hand writing found on cheque and D.P.Note. In
such circumstance, the court could not have fastened
the liability of forgery, cheating and criminal breach
of trust on accused. According to settled law, liability
of forgery attribute against its maker only. It is not
case of the complainant that accused has aware
about forged document and same has been used as
genuine one. On reading of allegation made in the
complaint or entire allegation made against accused
does not disclosed ingredients of alleged offence like
a forgery, cheating, entrustment, criminal breach of
trust, using of forged document as genuine
document. In spite of that, learned Trial Court has
proceeded to convict the accused, which is liable to
be setaside. Hence, prays for allow the appeal and set
aside the impugned judgment and order of
conviction.
13. After registration of present appeal, issued
notice to complainant. In pursuant of notice, the
complainant appeared through his counsel.
10 Crl.A.1867/2024
14. TCR are summoned and same before
Court.
15. Heard, both side.
16. The learned counsel for accused urged
that, in this case the complainant himself not sure
regarding transaction where alleged transaction taken
between himself and accused or his friend
Satyaprakash and accused. Further the complainant
has not made definite and specific allegations against
accused. The learned counsel for accused strongly
relied on cross-examination of PW.1 wherein he stated
against his own sworn statement and evidence
deposed before framing charge itself creates serious
doubt in the complainant’s case.
17. The learned counsel for accused urged that
the Criminal Case filed against one Sathya Prakash by
11 Crl.A.1867/2024
the accused, which was ended in conviction. The
complainant himself preferred Appeal against the
Judgment and order passed in Appeal No. 282/2004
being counsel of his friend Sathya Prakash, but this
fact is not deposed properly. He has given evasive
answer to questions relating to Appeal preferred
against conviction order passed against one Sathya
Prakash. Further the complainant himself made
allegations against his estranged wife Smt. Sudheshna.
According to recitals of MOU, the complainant and his
estranged wife are signatory to the said MOU, but he
made allegations against accused as well as his
estranged wife stating that they are forged his
signature and mis-appropriated the semi-filled cheque
and semi filled pronote. According to allegations made
in the complaint, the entire transaction discloses that
the complainant availed loan from the accused. But
during evidence he stated that his friend Sathya
Prakash availed the loan from the accused, he has
12 Crl.A.1867/2024
issued disputed cheque i.e. semi filled cheque Ex.P.1
as guarantor of his friend’s liability. There is various
contradictions in the allegations made in the complaint
and oral testimony of P.W.1. Accused is not agent or
servant or Banker of complainant. Therefore, question
of entrustment does not arise at all.
18. By reading the entire complaint, it
discloses that the complainant not paid amount of Rs
50,000/ itself discloses that he has issued cheque for
security purpose. Whenever cheque is issued for
security purpose, it is not amount to cheating and
question of forgery does not arise at all. He has filed
false and frivolous complaint against accused in order
to harass him. Hence prays for allow the appeal and
set side impugned judgment and order passed by
learned Trial Court and acquit the accused from
alleged offences.
13 Crl.A.1867/2024
19. The learned counsel for accused relied on
following decisions in support of his contention :-
2022 SCC Online SC 585
Rekha Jain v. State of Karnataka and Anr
(2018) 7 SCC 581
Sheela Sebastian v. R. Jawarahraj and Anr.
2024 SCC Online SC 339
A.M.Mohan v. State Rep. SH and Anr.
(2023) 3 SCC 423
Deepak Gaba and ors v. State of UP & Anr.
(2009) 6 SCC 77
SVL Murthy V. State rep. by CBI.
20. As against this, the complainant being
advocate, he urged that there is no dispute regarding
execution of MOU/Ex.P.8. According to recitals of
Ex.P.8, the complainant himself issued cheque for Rs
5,000/-in favour of accused as additional security. An
accused may be encashed by the accused, in case it is
not honoured, the complainant has taken personal
liability for payment money against cheque. So, it
discloses that cheque is issued for security purpose.
The complainant and accused are very close friends.
The accused colluding with estranged wife of
14 Crl.A.1867/2024
complainant forged his signature, mis-used the
entrusted cheque for wrongful gain. All these fact is
admitted in Criminal Cases. Further the complainant
himself demanded return of cheque by receiving
amount of Rs 5,000/-, but accused issued reply with
untenable answers. Further he also got issued
rejoinder. At that time accused replied with frivolous
answers. The Trial Court has rightly considered all
allegations made against the accused and assigned
proper reasons and rightly convicted the accused.
There is no ground for interference and intervention in
the alleged transaction. Hence prays for dismiss the
Appeal.
21. On considering allegation made in the
complaint, oral and documentary evidence and hearing
of both parties the following point would arise for my
consideration;
15 Crl.A.1867/2024
(1) Whether Trial Court has failed to consider
regarding cheque/Ex.P.1 issued under MOU/
Ex.P.8 is not amounts to entrustement.?
(2) Whether Trial Court has failed to considered
cheque issued under MOU for security purpose ii
not amounts to cheating.?
(3) Whether Trial Court has failed considered
filling name and date in semi-filled cheque is not
amount to forgery.?
(4) Whether interference and intervention is
required from this court.?
(5) What order.?
22. My answer to aforesaid points as under;
POINT No.1 : In the Affirmative.
POINT No.2 : In the Affirmative.
POINT No.3 : In the Affirmative.
POINT No.4 : In the Affirmative.
POINT No.5 : As per final orders
—————- for following
REASONS
23. In order to prove the charges leveled
against accused, the complainant himself stepped into
16 Crl.A.1867/2024
the witness box and examined as P.W.1. During
examination-in-chief the complainant stated that he
knows the accused through his estranged wife. She
was Typist in Vysya Bank. Accused used propaganda
with the aid of his estranged wife to the effect that he
was very much present in the society with high dignity
and honour. On 16.10.1999 accused issued letter to
one Sathya Prakash who is friend of complainant doing
business in the name and style of R.S.Enterprises. The
Sathya Prakash had approached the complainant for
the purpose of need of money. Accused lend amount
of Rs 50,000/- to Sathya Prakash. According to MOU
Ex.P.8, the loan of Rs 50,000/- repaid in 10 EMIs. In
this regard Sathya Prakash issued 10 cheques of
Syndicate Bank, Bangalore, accused encashed 4
cheques and received amount of Rs 25,000/- in cash
and returned 5 cheques. At the time of entering into
MOU the complainant paid interest, only Rs 5,000/- is
due as a last installment. The complainant has issued
17 Crl.A.1867/2024
cheque Ex.P.1 for security purpose in pursuance of
MOU. An accused has played fraud on complainant
and dishonestly and fraudulently mis-used the
cheque and filed frivolous complainant against him
alleging that complainant has committed offence
punishable under Sec. 138 of N.I.Act. Prior to that
complainant got issued legal notice and rejoinder to
accused demanding receiving Rs 5,000/- and returned
the cheque Ex.P.1 and D.P.note. The complainant
further stated that accused demanded demanded
interest of Rs 500/- per month on last installment.
Further he also instructed to pay the amount of Rs
5,500/- to his friend Ravi. The Criminal Case filed
against the complainant is ended in acquittal. He has
disclosed that accused forged the signature of the
complainant and mis-used the entrusted cheque.
Hence he has committed the alleged offences.
18 Crl.A.1867/2024
24. The P.W.1 subjected to cross-examination
conducted by the learned counsel for accused. During
cross-examination he stated that his present
occupation is Advocate and prior to that he was
Divisional Officer in Central Government. Further he
is doing jewellery business. Further stated that he has
no habit to put his signature on blank or semi filled
document. Further he stated that he has obtained the
certified copy of demand promissory note produced in
C.C.No.32036/2000. Further he stated that his
estranged wife Sudheshna was forged his signature on
cheque as well as D.P.note colluding with accused.
Further he deposed wrongly in his sworn statement
and examination-in-chief prior to framing of charge
that he has received Rs 50,000/- from the accused in
the year 1996. Further stated that he has issued semi
filled cheque on the demand of accused. Further
stated that the accused replied to the notice and
rejoinder issued by the complainant. Further, the
19 Crl.A.1867/2024
learned counsel for accused suggested that
complainant and his estranged wife availed Rs
50,000/- on 20.11.1997 for his domestic requirement.
This suggestion is denied. Further, the learned
counsel for accused suggested that issued Cheque and
ProNote for security purpose of Rs 50,000/-. This
suggestion is also denied. Further, the complainant
stated that there is number of cases pending between
complainant and his estranged wife. Therefore,
question of signing on documents does not arise at all.
Further stated that he has issued Cheque Ex.P.1 for
the purpose of security towards loan availed by his
friend Sathya Prakash. The accused was initiated
Criminal Case against Sathya Prakash alleging that he
has committed offence punishable under Sec. 138 of
N.I.Act. Against the conviction order, the complainant
being an Advocate for Sathya Prakash, Sathya Prakash
himself preferred Appeal No. 282/2004. Further
stated that his estranged wife forged his signature.
20 Crl.A.1867/2024
The complaint lodged by accused against complainant
with making allegation that, he has committed an
offence P/U/Sec 138 of N.I.Act is ended in acquittal.
25. Further, this Court has relied on oral
evidence of PW.1 deposed while recording his sworn
statement, evidence adduced prior to framing charge
and post charge for better appreciation of merits of this
case;
“In the year 1996 I have borrowed the sum of Rs
50,000/- from the accused, to meet the urgent expenses of my
family. Subsequently on 7.12.1997 we have entered into MOU
in respect of discharging of the said loan”
“During 1996 I have borrowed a sum of Rs 50,000/-
from the accused. At that time, the accused insisted me to
give a semi filled pronote and semi filled cheque. Only
amounts were mentioned in figures and word in pronote and
cheques”
“ನಾನು ನನ್ನ ಸತ್ಯ ಪ್ರ ತಿಜ್ಞೆ ಹೇಳಿಕೆಯಲ್ಲಿ 1996 ರಲ್ಲಿ ನಾನು
ಆರೋಪಿ ಕಡೆಯಿಂದ 50 ಸಾವಿರ ರೂ ಸಾಲ ಪಡೆದಿರುತ್ತೆ ೕನೆ ಅಂತ
ಹೇಳಿದ್ದು ಸದರಿ ಸಾಲವು ಈ ಪ್ರ ಕರಣದ ವ್ಯ ವಹಾರಕ್ಕೆ ಸಂಬಂಧಪಟ್ಟಿ ದ್ದು
ಹೌದು ಅಥವಾ ಇಲ್ಲ ಎಂಬ ಪ್ರ ಶ್ನೆ ಗೆ ಸಾಕ್ಷಿ ಯು 1996 ರಲ್ಲಿ ಸಾಲ
ಪಡೆದುಕೊಂಡಿರುತ್ತೆ ೕನೆ ಅಂತ ಸತ್ಯ ಪ್ರ ತಿಜ್ಞೆ ಯ ಹೇಳಿಕೆಯಲ್ಲಿ
ಹೇಳಿರುವುದು ತಪ್ಪು ತಿಳುವಳಿಕೆಯಿಂದ ಹೇಳಲಾಗಿದೆ ಎಂದು ಸಾಕ್ಷಿ
ನುಡಿಯುತ್ತಾ ರೆ.”
21 Crl.A.1867/2024
“1997 ನೇ ಡಿಸೆಂಬರ್ನ ಲ್ಲಿ ನಾನು ಆರೋಪಿಯಿಂದ 50 ಸಾವಿರ
ರೂ ಸಾಲ ಪಡೆದಿರುತ್ತೆ ೕನೆ ಎಂದರೆ ಸರಿಯುಲ್ಲ . ನನ್ನ ದೂರಿನಲ್ಲಿ ನನ್ನ
ಗೃಹಕೃತ್ಯ ದ ಅಡಚಣೆಗಾಗಿ ಆರೋಪಿಯಿಂದ 50 ಸಾವಿರ ಸಾಲ
ಪಡೆದಿರುತ್ತೆ ೕನೆ ಅಂತ ಬರೆಸಿದ್ದು ಸದರಿ ಬರವಣಿಗೆಯು ಬೆರಳಚ್ಚು
ತಪ್ಪಿ ನಿಂದ ಆಗಿರುತ್ತ ದೆ ಅಂತ ಸಾಕ್ಷಿ ನುಡಿಯುತ್ತಾ ರೆ. ಅದೇ ರೀತಿ ನನ್ನ
ಪ್ರ ತಿಜ್ಞೆ ಯ ಹೇಳಿಕೆಯಲ್ಲಿ ಮತ್ತು ಮುಖ್ಯ ವಿಚಾರಣೆಯ ಸಾಕ್ಷ್ಯ ದಲ್ಲಿ
ಆರೋಪಿಯಿಂದ ಗೃಹಕೃತ್ಯ ದ ಸಲುವಾಗಿ 50 ಸಾವಿರ ರೂ ಸಾಲ
ಪಡೆದಿರುತ್ತೆ ೕನೆ ಅಂತ ಕೇಳಿರುವುದು ತಪ್ಪು ತಿಳುವಳಿಕೆಯಿಂದ
ಹೇಳಿರುತ್ತೆ ೕನೆ.”
“ದಿನಾಂಕ 30.7.2011 ರವರೆಗೆ ನನಗೆ ನಿಪಿ-1 ಮತ್ತು 15 ರ
ದಾಖಲಾತಿಗಳಲ್ಲಿ ಫೋರ್ಜರಿ ಆಗಿರುವ ವಿಚಾರ ತಿಳಿದಿರುವುದಿಲ್ಲ ಎಂದರೆ
ಸಾಕ್ಷಿ ತನಗೆ ಸದರಿ ದಿನಾಂಕ ಗೊತ್ತಿ ರುವುದಿಲ್ಲ ವೆಂದು ಉತ್ತ ರಿಸಿರುತ್ತಾ ರೆ.
ಸಾಕ್ಷಿ ಮುಂದುವರೆದು ನಿಪಿ-1 ಮತ್ತು 15 ಅನ್ನು ಆರೋಪಿ
ತೆಗೆದುಕೊಳ್ಳು ವ ಸಮಯದಲ್ಲಿ ಯೇ ದುರುದ್ದೆ ೕಶದಿಂದ ಪಡೆದಿರುತ್ತಾ ರೆ.
ನಿಪ-16 ರಲ್ಲಿ Amount in words ನಾನು ನಮೂದು ಮಾಡಿದ್ದು
ಉಳಿದ ಬರವಣಿಗೆಗಳನ್ನು ಯಾರು ಮಾಡಿರುತ್ತಾ ರೆ ಎಂದು ನನಗೆ
ಗೊತ್ತಿ ಲ್ಲ . ಆರೋಪಿ 3 ನೇ ವ್ಯ ಕ್ತಿ ಗಳಿಂದ ದುರುದ್ದೆ ೕಶದಿಂದ ಅದನ್ನು
ಭರ್ತಿ ಮಾಡಿರುತ್ತಾ ರೆ. ನಿಪಿ-1 ರಲ್ಲಿ Amount in words and figures
ನಾನು ನಮೂದು ಮಾಡಿದ್ದು ಉಳಿದ ಬರಬಣಿಗೆಗಳನ್ನು ಯಾರು
ಮಾಡಿರುತ್ತಾ ರೆ ಎಂದು ನನಗೆ ಗೊತ್ತಿ ಲ್ಲ . ಆರೋಪಿ 3 ನೇ ವ್ಯ ಕ್ತಿ ಗಳಿಂದ
ದುರುದ್ದೆ ೕಶದಿಂದ ಅದನ್ನು ಭರ್ತಿ ಮಾಡಿರುತ್ತಾ ರೆ.”
“ದಿನಾಂಕ 25.6.2016 ರಂದು ನಾನು ನ್ಯಾ ಯಾಲಯದಲ್ಲಿ ಸಾಕ್ಷಿ
ನುಡಿದಾಗ ನನ್ನ ಮಾಜಿ ಪತ್ನಿ ಸುದೇಶನಾ ರವರು ಸದರಿ ಬರವಣಿಗೆ
ಮಾಡಿರುತ್ತಾ ರೆ ಎಂದು ಉತ್ತ ರಿಸುತ್ತೆ ೕನೆ ಎಂದರೆ ಸಾಕ್ಷಿ ತಪ್ಪು
ತಿಳುವಳಿಕೆಯಿಂದ ಉತ್ತ ರಿಸುತ್ತೆ ೕನೆ ಎಂದು ತಿಳಿಸಿರುತ್ತಾ ರೆ.”
“ನನಗೆ ದೂರನ್ನು ಸಲ್ಲಿ ಸಿರುವಾಗ ನಿಪಿ-15 ರಲ್ಲಿ ಸುದೇಶನಾ
ರವರ ಸಹಿ ಫೊರ್ಜರಿ ಆಗಿರುತ್ತ ದೆ. ಸುದೇಶನಾರವರು ಆರೋಪಿಯ ಜೊತೆ
ಶಾಮೀಲಾಗಿ ನಿಪಿ-15 ಅನ್ನು ಸೃಷ್ಟಿ ಸಿರುತ್ತಾ ರೆ ಎಂದು ನನ್ನ ದೂರಿನಲ್ಲಿ
ವಿರರಿಸಿರುವುದಿಲ್ಲ ಎಂದರೆ ಸಾಕ್ಷಿ ಹೇಳಿರಬಹುದು ಎಂದು
ಉತ್ತ ರಿಸಿರುತ್ತಾ ರೆ.”
22 Crl.A.1867/2024
Point No.1 :-
26. It is specific case of the complainant is that
after availing loan from the accused, they have entered
into MOU/Ex.P.8. Accused was initiated criminal
proceedings against complainant alleging that he has
committed the alleged offences punishable under
Sec.138 of N.I.Act in CC No.32411/1999, The said
case is ended in acquittal as per the Judgment and
order dated 2.3.2013 rendered by learned 20 th Addl.
Chief Metropolitan Magistrate, Bengaluru, Bengaluru.
The said copy is marked at Ex.P.21. Further the
complainant produced deposition of accused himself
tendered subject to cross-examination in CC
No.32411/99. At that time the learned counsel for
accused (who is complainant in the present Appeal)
suggested that himself and accused i.e. complainant
and accused entered in MOU/Ex.P.8 on 07.12.97.
Based on said admission, the said copy got marked at
23 Crl.A.1867/2024
Ex,D.1. The certified copy got marked in the present
Appeal at Ex.P.8. The recitals of Ex.P.8 is as under :
“1. The loanee S. Nagaraj and Chinni
Sudeshna have borrowed a sum of Rs
50000/- (Rupees Fifty Thousand only)
from R.Nanda Kumar loaner.
2. In order to set off/ofset
loans/liquidate/discharge the said loan, I.
S.Nagaraj have given my debtors
cheques i.e. M/s R.S.Enterprises in ten
Nos. of Rs 5000/- (Rs Five Thousand
each) payable in 10 EMI’s starting dt.
19.12.1997 to 19.09.1998 directly in
favour of Sri Nanda Kumar. The same
may be encashed by him and in case
any of the cheques not being honoured,
I.S.Nagaraj personally take
responsibility of paying the money
against that cheque. Other than this,
no any other existing.”
27. It clearly discloses that the complainant
issued his debtors cheques under MOU. At this stage
this Court has relied on Judgment of Hon’ble Supreme
Court of India rendered in State of Gujarat v/s
Jaswantalal nathalal {(1968) 2 SCR 408), Velji
24 Crl.A.1867/2024
Raghvaji Patel V/s State of Maharashtra (1965 SCR
429), Jaswantrai Manilal Akhaney vs The State Of
Bombay(1956 SCR 483) and Central Bureau Of
Investigation, … vs Duncans Agro Industries
Ltd.,Calcutta {(1996) 5 SCC 591)}, wherein Their
Lordships have laid down certain guidelines regarding
ingredients of entrustment in the following terms :
(1) accused must be Banker/Agent/Public Servant.
(2) must be entrusted with property in that capacity,
(3) accused must committed breach of trust in respect
of property.
28. In view of the above guidelines laid down
by Their Lordships I have examined the oral and
documentary evidence and the allegations made in the
complaint. The complainant has categorically stated in
his complaint that himself borrowed loan of Rs
50,000/- from the accused along with his estranged
wife, but the same fact is deposed in sworn statement
25 Crl.A.1867/2024
as well as examination-in-chief which was recorded
prior to framing the charge. After framing charge the
complainant has changed his version and stated that
he has facilitated loan of Rs 50,000/- to his friend
Sathya Prakash. This is totally contrary to the entire
allegation made in complaint against accused. The
cheques are issued by the complainant in terms of
MOU/Ex.P.8. Accused is not Banker or agent or
servant of complainant. Therefore, question of
entrustment of cheque as alleged by the complainant
does not arise at all. This aspect is not considered by
the Trial Court in judicious manner. Therefore, point
No.1 is answered in the Affirmative.
Point No.2 and 3 :-
29. The complainant has taken specific
contention that accused cheated the complainant and
forged the semi filled cheque and D.P.note. In this
case the complainant not disputed regarding he or his
26 Crl.A.1867/2024
friend Sathya Prakash availed loan from the accused.
Further there is no dispute regarding repayment of
amount of Rs 45,000/- out of Rs 50,000/-. Further,
during cross-examination PW.1 stated that he is not in
the habit of signing documents which are blank or
semi filled. The complainant has taken specific
contention that his signature is forged by the accused.
By considering the entire cross-examination of P.W.1,
he tried to fixing the criminal liability on his estranged
wife Smt. Sudheshna. But the entire complaint is
taken into consideration, there is no such allegation
made against Smt. Sudheshna.
30. In cross-examination PW.1 stated that
accused filled the cheque with the help of third person.
The complainant made allegation against accused that
he has issued cheque under MOU/Ex.P.8 and he has
entrusted the said cheque to accused as additional
security. Further he made allegations that accused
27 Crl.A.1867/2024
cheated him by misappropriating entrusted cheque.
Therefore, at this stage this Court has relied on recent
verdict of Hon’ble Supreme Court of India in the
following case :-
2025 SCC Online SC 2058
ARSHAD NEYAZ KHAN Vs STATE OF JHARKHAND & ANR
17. In Inder Mohan Goswami vs. State of Uttaranchal, (2007) 12
SCC 1 (“Inder Mohan Goswami”), while dealing with Section 420
IPC, this Court observed thus:
“42. On a reading of the aforesaid section, it is manifest
that in the definition there are two separate classes of
acts which the person deceived may be induced to do.
In the first class of acts he may be induced fraudulently
or dishonestly to deliver property to any person.
The second class of acts is the doing or omitting to do
anything which the person deceived would not do or omit to
do if he were not so deceived.
In the first class of cases, the inducement must be
fraudulent or dishonest. In the second class of acts, the
inducing must be intentional but need not be
fraudulent or dishonest.
Therefore, it is the intention which is the gist of the offence.
To hold a person guilty of cheating it is necessary to
show that he had a fraudulent or dishonest intention at
the time of making the promise. From his mere failure
to subsequently keep a promise, one cannot presume
that he all along had a culpable intention to break the
promise from the beginning.”
19. It is settled law that for establishing the offence of cheating,
the complainant/respondent No.2 was required to show that the
appellant had a fraudulent or dishonest intention at the time of
making a promise or representation of not fulfilling the agreement
for sale of the said property. Such a culpable intention right at
the beginning when the promise was made cannot be
presumed but has to be made out with cogent facts. In the
28 Crl.A.1867/2024
facts of the present case, there is a clear absence of dishonest
and fraudulent intention on the part of the appellant during
the agreement for sale. We must hasten to add that there is no
allegation in the FIR or the complaint indicating either expressly
or impliedly any intentional deception or fraudulent/dishonest
intention on the part of the appellant right from the time of
making the promise or misrepresentation. Nothing has been said
on what the misrepresentations were and how the appellant
intentionally deceived the complainant/respondent No.2. Mere
allegations by the complainant/respondent No.2 that the
appellant failed to execute the agreement for sale and failed to
refund the money paid by the complainant/respondent No.2 does
not satisfy the test of dishonest inducement to deliver a property
or part with a valuable security as enshrined under Section 420
IPC.
20. On perusal of the allegations contained in the complaint, in
light of the ingredients of Section 406 IPC, read in the context of
Section 405 IPC, do not find that any offence of criminal breach of
trust has been made out. It is trite law that every act of breach
of trust may not result in a penal offence unless there is
evidence of a manipulating act of fraudulent misappropriation
of property entrusted to him. In the case of criminal breach
of trust, if a person comes into possession of the property and
receives it legally, but illegally retains it or converts it to its
own use against the terms of contract, then the question
whether such retention is with dishonest intention or not and
whether such retention involves criminal breach of trust or
only a civil liability would depend upon the facts and
circumstances of the case. In the present case, the
complainant/respondent No.2 has failed to establish the
ingredients essential to constitute an offence under Section 406
IPC. The complainant/respondent No.2 has failed to place any
material on record to show us as to how he had entrusted
property to the appellant. Furthermore, the complaint also omits
to aver as to how the property, so entrusted to the appellant, was
dishonestly misappropriated or converted for his own use, thereby
committing a breach of trust.
21. Furthermore, it is pertinent to mention that if it is the case of the
complainant/respondent No.2 that the offence of criminal breach of
trust as defined under Section 405 IPC, punishable under Section
406 IPC, is committed by the accused, then in the same breath it
cannot be said that the accused has also committed the offence of
29 Crl.A.1867/2024
cheating as defined in Section 415, punishable under Section 420
IPC. This Court in Delhi Race Club (1940) Limited vs. State of Uttar
Pradesh, (2024) 10 SCC 690 observed that there is a distinction
between criminal breach of trust and cheating. For cheating,
criminal intention is necessary at the time of making false
or misleading representation i.e. since inception. In criminal
breach of trust, mere proof of entrustment is sufficient.
Thus, in case of criminal breach of trust, the offender is
lawfully entrusted with the property, and he dishonestly
misappropriates the same. Whereas, in case of cheating, the
offender fraudulently or dishonestly induces a person by
deceiving him to deliver a property. In such a situation, both
offences cannot co-exist simultaneously. Consequently, the
complaint cannot contain both the offences that are
independent and distinct. The said offences cannot co-exist
simultaneously in the same set of facts as they are
antithetical to each other.
(Underline by me, for emphases)
Further Hon’ble Delhi High Court held following
case that cheque is issued under the loan agreement is
not at all entrustment.
CRL. M.C. 4979/2017 Dtd 06th January, 2026
China Trust Commercial Bank & Anr vs The State Govt Of Nct Of
Delhi & Anr
64. The offense of criminal breach of trust under Section 406 IPC
requires two foundational elements: first, an “entrustment” of
property, and second, a dishonest misappropriation of that
property.
65. The term entrustment has been explained by the Apex Court in
State of Gujarat vs. Jaswantlal Nathalal, (1968) 2 SCR 408, to the
following effect:
30 Crl.A.1867/2024
“The term “entrusted” found in Section 405 IPC governs not
only the words “with the property” immediately following it
but also the words “or with any dominion over the property”
occurring thereafter – see Velji Raghvaji Patel v. State of
Maharashtra [(1965) 2 SCR 429]. Before there can be any
entrustment there must be a trust meaning thereby an
obligation annexed to the ownership of property and a
confidence reposed in and accepted by the owner or declared
and accepted by him for the benefit of another or of another
and the owner. But that does not mean that such an
entrustment need conform to all the technicalities of the law
of trust – see Jaswantrai Manilal Akhaney v. State of
Bombay [1956 SCR 483]. The expression “entrustment”
carries with it the implication that the person handing over
any property or on whose behalf that property is handed
over to another, continues to be its owner. Further the
person handing over the property must have confidence in
the person taking the property so as to create a fiduciary
relationship between them. A mere transaction of sale
cannot amount to an “entrustment”.
66. Similarly, the Apex Court in Central Bureau of Investigation,
SPE, SIU(X), New Delhi vs. Duncans Agro Industries Ltd.,
Calcutta, (1996) 5 SCC 591 held that the expression “entrusted
with property” used in Section 405 of the IPC, connotes that the
property in respect of which criminal breach of trust can be
committed, must necessarily be the property of some person other
than the accused or that the beneficial interest in or ownership
thereof must be in the other person and the offender must hold
such property in trust for such other person or for his benefit.
67. As observed in the case of N. Raghavender vs. State of Andhra
Pradesh, CBI, Crl. Appeal No. 5/2010 decided on 13.12.2021, the
entrustment of public property and dishonest misappropriation or
use thereof in the manner provided under Section 405 IPC, are a
sine qua non for making an offence punishable under Section 409
IPC.
68. In N. Raghavender, (supra), the requirement of Section 409
was explained. It was observed:
“44. No sooner are the two fundamental ingredients of
“criminal breach of trust‟ within the meaning of Section 405
IPC proved, and if such criminal breach is caused by a
public servant or a banker, merchant or agent, the said
31 Crl.A.1867/2024offence of criminal breach of trust is punishable under
Section 409 IPC, for which it is essential to prove that:
(i) The accused must be a public servant or a banker,
merchant or agent;
(ii) He/She must have been entrusted, in such capacity,
with property; and
(iii) He/She must have committed breach of trust in
respect of such property.
45. Accordingly, unless it is proved that the accused, a
public servant or a banker etc. was „entrusted‟ with the
property which he is duty bound to account for and that
such a person has committed criminal breach of trust,
Section 409 IPC may not be attracted. …”
69. These principles have been reiterated by the Apex Court in
Delhi Race Club, (supra) and in the recent case of Apex Court in
the case of Paramjeet Singh, (supra).
70. From the facts as narrated and also not disputed, it emerges
that there was no entrustment of property by the Complainant to
the Petitioners; rather the very fact that it was a security cheque
under the Loan Agreement, which was intended to secure any debt
and liability which may arise under the Loan Agreement in future
and for the realization of the same, the cheque would be presented.
71. The cheque was voluntarily issued as part of a commercial
transaction and formed an integral component of the contractual
security mechanism, intended to be encashed in case of default of
Loan liability. The issuance of a security cheque pursuant to a
commercial loan transaction, does not create a fiduciary
relationship, but merely evidences a contractual arrangement
between creditor and debtor. There is neither any entrustment nor
any misappropriation of the cheques; the presentation of which
was strictly in terms of the Loan Agreement.
72. At best, the grievance raised is that there was no legally
enforceable liability for which the cheque could have been
presented. It may be a defence of the Complainant in the
Complaint under Section 138 NI Act filed by the petitioner, but it
does not constitute criminal breach of trust.
73. Even if the Complainant’s allegation that the cheque was
issued as a “security cheque” is accepted at face value, the same
does not give rise to an offence under Section 409 IPC.
32 Crl.A.1867/2024
31. In instance case, the complainant himself
taken contention that he has issued cheque of R.S.
Enterpise for security purpose. In such circumstances
cheating and criminal breach of trust cannot co-exist
simultaneously on the basis of same allegation in
complaint. There is a basic distinction between
cheating and criminal breach of trust, a accused
having intention to cheat the complainant at the
inception of the transaction. Further in criminal
breach of trust, initially entrustement of property in
lawful manner, later on such property is
misappropriated by the accused. In the present case
the complainant issued cheque in dispute for security
purpose or additional security to accused on behalf of
his friend Sathya Prakash. There is no specific
allegation or there is no document to show that the
complainant or Sathya Prakash paid balance amount
of Rs 5,000/- as undertaken by complainant under
MOU/Ex.P.8. Mere filling of the name and date in
33 Crl.A.1867/2024
blank place of instruments itself is not at all amount to
cheating or forgery. The complainant has taken two
stand in this case – firstly, he has availed loan of
Rs,50,000/- from the accused and issued cheque for
repayment. Secondly, in the cross-examination he
has taken that he has facilitated his friend
Sathyaprakash to obtain the loan of Rs 50,000/- from
the accused, disputed semi filled cheque issued as
additional security for balance amount of Rs 5,000/-.
32. By considering these aspects, I am of the
opinion that cheque issued under loan agreement i.e.
MOU/Ex.P.8 and filling the inchoate instrument itself
not amounting to forgery or cheating or criminal
breach of trust. The complainant relying on the xerox
copies of disputed documents, to prove that his
signature by accused or his estranged wife forged. This
aspect is not at all proved by producing cogent
evidence. All these aspect are not considered by the
34 Crl.A.1867/2024
Trial Court in judicious manner. Accordingly, points
No.2 and 3 are answered in the Affirmative.
Point No.4 :-
33. For the aforesaid reasons, the learned Trial
Court has assigned reasons without considering the
dual stand taken by the complainant. Further the trial
Court itself stated that cheque issued for security
purpose. By considering all these facts, I am of the
opinion that interference and intervention from this
Court in impugned judgment and order is necessary.
Accordingly, point No.4 is answered in the Affirmative.
Point No.5:
34. For the foregoing reasons on points No.1
to 4, I proceed to pass following.
ORDER
The appeal preferred by the
appellant/accused under Section 374
(3)(a) of the Cr.P.C. is hereby allowed.
35 Crl.A.1867/2024
Consequently, the Judgment and
order passed by the IV Addl. Chief
Judicial Magistrate, Bengaluru in
C.C.No. 8885/1999 dated
29.10.2024 is hereby set aside.
Further, accused is acquitted from
the alleged offence punishable under
Sec. 406, 463, 464, 465, 467, 468
and 471 of IPC.
The bail bond executed by accused
and his surety are stands cancelled
and surety is hereby discharged.
Send back the Trial Court records to
the Trial Court forthwith along with a
copy of this Judgment.
(Dictated to the Stenographer, transcribed by him, then corrected and
pronounced by me in the open Court on this the 22nd day of May, 2026)
(Sri.I.P.Naik)
C/C LVI Addl. City Civil & Sessions
Judge, Bengaluru.
36 Crl.A.1867/2024
Judgment is pronounced in open
court vide separate order.
The appeal preferred by the
appellant/accused under Section 374
(3)(a) of the Cr.P.C. is hereby allowed.
Consequently, the Judgment and
order passed by the IV Addl. Chief
Judicial Magistrate, Bengaluru in
C.C.No. 8885/1999 dated
29.10.2024 is hereby set aside.
Further, accused is acquitted from
the alleged offence punishable under
Sec. 406, 463, 464, 465, 467, 468
and 471 of IPC.
The bail bond executed by accused
and his surety are stands cancelled
and surety is hereby discharged.
Send back the Trial Court records
to the Trial Court forthwith along
with a copy of this Judgment.
(Sri.I.P.Naik)
C/C LVI Addl. City Civil & Sessions
Judge, Bengaluru.
