Bangalore District Court
Shubha . B Wasi vs Vijaykumar on 21 April, 2026
KABC030160972021
IN THE COURT OF THE XXV ADDL. CHIEF JUDICIAL
MAGISTRATE, AT BANGALORE CITY
Dated this the 21st day of April 2026
Present : SRI. GOKULA. K
B.A.LL.B.
XXV Addl. Chief Judicial Magistrate,
Bangalore City.
C.C.No.4993/2021
Complainant : Shubha N.Wasi
W/o.Nirbhay B Wasi
R/at.No.54/5
2nd E Cross
Hanumanthappa Layout
Sulthanpalya,
Bangalore 560 032
(By HMV -Advocate )
V/s
Accused : Vijaykumar M
S/o.Muniyappan
R/at.D.NO.3/311, Ward No.3
Thandanur (Post)
Yethapur(VIA)
Attur (TK)
Salem District 636117
Tamil Nadu.
(By SPK - Advocate )
Plea of accused: Pleaded not guilty
Final Order: Accused is Convicted
Date of judgment : 21.04.2026
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C.C.No.4993/2021
JUDGMENT
The complainant has filed the complaint under Section 200
of Criminal Procedure Code against the accused for the offence
punishable under Section 138 Negotiable Instruments Act.
2. The brief case of the complainant is as under:
That the accused is running a proprietary concern under
the name and style “POD” from the registered office “We Work”,
Koramangala, Bangalore. The accused has been acquainted
with the complainant through POD Mutual Telegram Channel
and out of said acquaintance, the accused approached the
complainant to invest in his business. The complainant agreed
to invest with the accused business entity with a fond hope and
promises made by the accused to the complainant that the
accused will pay monthly profit sharing on the amount invested
by the complainant. That reposing faith on the accused, the
complainant invested a sum of Rs.6,50,000/-. Initially the
accused made payments due towards profit sharing and slowly
started to stop the payments. That the accused was totally due
of Rs.10,48,000/-. That on several request and demand by the
complainant, initially the accused issued few cheques towards
legally enforceable debt and the complainant approached her
husband’s banker wherein she was informed the signature of
the accused differed. That on several request made by the
3
C.C.No.4993/2021complainant, finally to discharge said liability, the accused
issued two cheques drawn on HDFC Bank, Padmanabham,
Club House Road, Technopark, Kariavattom P.O., Kazhalkkoota,
Trivandrum.
i. Cheque bearing No.000040 dated.01.09.2020 for a sum of
Rs.4,00,000/-
ii. Cheque bearing No.000041 dated.08.09.2020 for a sum of
Rs.6,48,000/-.
That as per the assurance and promise made by the accused,
the complainant presented said cheques on 01.09.2020 and
08.09.2020 respectively through her banker i.e State Bank of
India, Sulthanpalya Branch Bangalore and said cheque
returned dishonored with endorsement “Funds Insufficient” on
09.10.2020. Hence, the complainant’s husband lodged a police
complaint against the accused on 19.10.2020 at Ethapur
police station, Tamilnadu. At that instance, the accused agreed
to pay all the dues and requested the complainant to present
said cheques. Reposing faith, the complainant again presented
said cheques through her banker Kotak Mahindra Bank, R.T,
Nagar Branch and said cheques returned with an endorsement
“Payment stopped by drawer” on 27.11.2020. The complainant
immediately informed the accused and the accused has given
evasive reply. Hence, the complainant issued legal notice dated
09.12.2020 through RPAD and said notice returned with shara
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C.C.No.4993/2021“Returned to sender unclaimed”. Inspite of service of notice, the
accused failed to pay the claim amount to the complainant
within the statutory time. Therefore, the accused has committed
the offence under Section 138 of Negotiable Instruments Act.
Therefore the complainant has filed the complaint.
[[
3. This case is initially filed by the complainant before 15th
Additional Chief Judicial Magistrate, Bangalore and this case is
transferred at the stage of arguments to this court vide Orders
of Hon’ble Chief Judicial Magistrate, Bangalore City.
4. On the basis of Private complaint filed by the complainant,
the court taken cognizance of offence and registered the case in
PCR No.3940/2021 and recorded sworn statement complainant
as PW 1 and got marked 7 documents as Ex.P 1 to P 7. The
court upon considering the material on record issued process
under Section 204 of Cr.P.C by registering the criminal case. In
response to the process issued by this court, the accused
appeared before this court and he is released on bail. The copy
of the complaint is served to the accused along with the
summons as contemplated under Section 207 of Criminal
Procedure Code.
5. The substance of the acquisition as provided Section 251
of Cr.PC is read over to the accused and his plea is recorded.
The accused has pleaded not guilty and claimed to be tried.
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C.C.No.4993/2021
6. In view of the law laid down by Hon’ble Supreme Court of
India in Indian Bank Association V/s Union of India and others
reported in AIR 2014SCW3463, the affidavit filed by the
complainant at the stage of taking cognizance and documents
marked is treated as evidence under section 145 of Negotiable
Instruments Act. PW1 during further chief examination got
marked the documents as Ex.P.8 to Ex.P.14. The PW1 was
fully subjected to cross examination. After conclusion of
evidence of the complainant the incriminating circumstances in
the evidence of the complainant is read over to the accused and
the statement of the accused under Section 313 of CrPC is
recorded. The accused has denied the incriminating
circumstances as false. The accused has not chosen to lead his
evidence.
7. Heard arguments of learned counsel for the complainant
and learned counsel for the accused and perused the material
on record and reply arguments submitted by the counsel for
complainant .
8. On the basis of the material on record the following points
arise for the consideration of this court :
1. Whether the complainant proves beyond all
reasonable doubt that the accused has issued the
2 cheques ie i. Cheque bearing No.000040
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C.C.No.4993/2021dated.01.09.2020 for a sum of Rs.4,00,000/- and
ii. Cheque bearing No.000041 dated.08.09.2020 for
a sum of Rs.6,48,000/-both drawn on HDFC Bank,
Kazhakkoota, Trivandrum, in favour of the
complainant towards discharge of legal liability and
on its presentation on 26.11.2020 it is dishonoured
for the reason “Payment stopped by drawer” on
27.11.2020 and inspite of issuance of demand
notice dated 09.12.2020 the accused has not
claimed the notice on 19-12-2020 and failed to
repay the amount within statutory period and thus
the accused has committed an offence punishable
under Section 138 of Negotiable Instruments Act ?
2. What Order or Sentence?
9. The findings of this court to the above points are as follows:
Point No.1 In the Affirmative,
Point No.2 As per final order
for the following :
REASONS
10. POINT NO.1: To prove the case the complainant is
examined as PW-1. The PW1 in her evidence has reiterated the
averments made in the complaint.
11. The PW 1 in her evidence affidavit deposed that the accused
is running a proprietary concern under the name and style
“POD” from the registered office “We Work”, Koramangala,
Bangalore. She has deposed that the accused has been
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C.C.No.4993/2021
acquainted with the complainant through POD Mutual Telegram
Channel and out of said acquaintance, the accused approached
the complainant to invest in his business. She has agreed to
invest with the accused business entity with a fond hope and
promises made by the accused that the accused will pay
monthly profit sharing on the amount invested by her. She has
deposed that she has invested a sum of Rs.6,50,000/- with the
accused. To prove the investment with the accused she has
produced the details of investment as Ex.P 9. She has also
produced statement of accounts of her husband in Paytm
payments bank for transfer of Rs.50,000/- on her behalf from
her husbands account. She has also produced statement of
accounts of her account with State Bank of India as Ex.P 11 to
show transfer of Rs.6,00,000/- to the account of the accused.
She has deposed that initially the accused made payments due
towards profit sharing and slowly started to stop the payments.
She has deposed that the accused was totally due of
Rs.10,48,000/-. She has deposed that on several request and
demand by the complainant, initially the accused issued few
cheques towards legally enforceable debt and she approached
her husband’s banker wherein she was informed the signature
of the accused differed. She has deposed that on several
request to discharge said liability, the accused issued two
cheques drawn on HDFC Bank, Padmanabham, Club House
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C.C.No.4993/2021
Road, Technopark, Kariavattom P.O., Kazhalkkoota,
Trivandrum.
i. Cheque bearing No.000040 dated.01.09.2020 for a sum of
Rs.4,00,000/-
ii. Cheque bearing No.000041 dated.08.09.2020 for a sum of
Rs.6,48,000/-.
She has produced said cheques as Ex.P 1 and Ex.P 2. She has
deposed that she has presented said cheques on 01.09.2020
and 08.09.2020 through her banker ie State Bank of India,
Sulthanpalya Branch Bangalore and said cheque returned
dishonored with endorsement “Funds Insufficient” on
09.10.2020. Hence, the complainant’s husband lodged a police
complaint against the accused on 19.10.2020 at Ethapur
police station, Tamilnadu. At that instance, the accused agreed
to pay all the dues and requested the complainant to present
said cheques. Reposing faith, the complainant presented said
cheques as under drawn on HDFC Bank, Padmanabham, Club
House Road, Technopark, Kariavattom P.O., Kazhalkkoota,
Trivandrum :
1. Cheque bearing No.000040 dated.01.09.2020 for a sum of
Rs.4,00,000/-
2. Cheque bearing No.000041 dated.08.09.2020 for a sum of
Rs.6,48,000/-.
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C.C.No.4993/2021
The complainant has produced said cheques as Ex.P.1 and
Ex.P.2. The PW 1 has further deposed that when she presented
said cheques through her banker Kotak Mahendra bank, R.T.
Nagar on 26-11-2020 said cheques returned with an
endorsement “Payment stopped by drawer” on 27-11-2020. Said
bank endorsements are marked as Ex.P.3 and Ex.P.4. The PW 1
has further deposed that immediately informed the same to the
accused and the accused has given evasive reply. Hence, she
issued legal notice dated 09.12.2020 through RPAD and said
notice returned with shara “Returned to sender unclaimed” on
19-12-2020. The office copy of demand notice is marked as
Ex.P.5, postal receipt as Ex.P 6 and returned postal envelop as
Ex.P 7. It is stated that the demand notice is deemed to be
served and the accused is fully aware of the notice and
intentionally got it returned as unclaimed. The PW1 has also
deposed that inspite of service of notice, the accused failed to
make payment.
12. Now it is proper to consider whether the complainant has
complied statutory requirements for constitution of the offence.
The essential ingredients of section 138 and 142 of Negotiable
Instruments Act to be complied are i) drawing of the cheque by
the accused ii) presentation of the cheque to the bank with in
the period of three months, iii) returning of the cheque unpaid
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C.C.No.4993/2021
by the drawee bank iv) giving notice in writing to the drawer of
the cheque demanding of the payment of cheque amount with
in the period of 30 days, v) failure of the drawer to make
payment within the period of 15 days after receipt of the
demand notice and v)Presentation of the complaint within a
month by the complainant after expiry of 15 days of service of
notice to the accused. Therefore it is proper to consider whether
the statutory requirements for constituting the offence under
Section 138 of Negotiable Instruments Act is complied by the
complainant.
13. The cheques are dated 01.09.2020 and 08.09.2020 said
cheques are dishonored for the reason “Payment stopped by
drawer” on 27.11.2020 . The cheques are presented through the
account of the complainant with Kotak Mahindra Bank, R.T.
Nagar Branch situated at the branch within the jurisdiction of
the court. As provided under Section 146 of Negotiable
Instruments Act, law presumes that on production of banker
slip or memo having thereon the official mark denoting that the
cheque has been dishonored, presume the fact of dishonor of
such said cheque, unless and until same is disproved. The
accused has not denied dishonnour of cheques as per Ex.P 3
and Ex.P 4.
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C.C.No.4993/2021
14. The demand notice is issued to the accused on 09.12.2020
and it is returned unclaimed on 19-12-2020 and it is deemed to
be served on the accused. The accused has also not disputed
his address mentioned in the demand notice. In his statement
under Section 313 of Cr.P.C he has stated that he was not in
the town while notice was issued, hence he has not received the
notice. Therefore it is clear that notice is issued to the correct
address of the accused and it is sufficient service of notice in in
view of provisions of Section 27 of General Clauses Act. The PW
1 has deposed that inspite of service of notice, the accused
failed to pay the claim amount to the complainant with in the
statutory time of 15 days of service of notice.
15. In this case, the accused has disputed service of the
demand notice. It is pertinent to note that the complainant has
filed this case against the accused. Similarly the Husband of the
complainant Nirbhay B. Wasi has also filed CC No. 4987/2021
before this court against the accused. The complainant has
produced the office copy of the legal notice as Exhibit P5 issued
by the complainant. She has produced the returned postal
envelope as Exhibit P7. Said Exhibit P7 envelope is opened in
the open court during evidence and the copy of the notice found
in the said envelope is marked as Exhibit P7(a). But the copy of
the notice found in Exhibit P7 envelope is issued on behalf of
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C.C.No.4993/2021
Nirbhay B Wasi, the husband of the complainant to the
accused. Therefore, the learned counsel for the accused has
vehemently argued that the complainant has not produced the
envelope issued to the accused by the complainant and there is
no proof produced for service of Exhibit P5 notice before this
court. Therefore there is no compliance on the requirements of
Section 138 proviso (b) of Negotiable Instruments Act.
16. The case in CC No. 4987/2021 is also pending on the board
of this Court and the said case also came up for final disposal
on this day itself. Hence the case papers in CC No. 4987/2021
is readily available with this court. The court can take judicial
notice that in CC 4987/2021, the wife of the complainant has
produced the returned postal envelope which is also returned
with endorsement unclaimed on 19.12.2020 as Exhibit P13. The
said envelope is opened in the open court during the evidence of
wife of the the complainant in the said case and the notice
found in Exhibit P12, Postal envelope in the said case is marked
as Exhibit P13(a). The deposition of husband of accused in CC
4987/2021 is produced in this case as Ex.P 8. Thus, upon
considering these aspects, it is clear that both the cases were
filed by the complainant and her husband through the same
advocate and notices are also issued through same advocate on
the same day. But while producing the returned postal
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C.C.No.4993/2021
envelope, the postal envelope in respect of the notice issued by
the complainant is produced in the case filed by the husband of
the complainant and the postal envelope relating to the notice
issued by the husband of the complainant is produced by the
complainant in this case. But the fact remains that both the
notices issued by the complainant in this case and the husband
of the complainant in CC No. 49873/21 were returned with
endorsement unclaimed on 19.12.2020 itself. Therefore, it is
only an error caused in producing the postal envelope in respect
of the notice of the complainant in the case filed by the husband
of the complainant and the notice of the husband of the
complainant in this case. But only on this error committed by
the advocate while producing the returned postal envelope will
not be a ground to reject the claim of the complainant. The
Court can take judicial notice that the demand notice issued as
per Exhibit P5 is also returned with postal endorsement
unclaimed as per Exhibit P. 13 produced in CC No. 4987 /2021
in the case filed by the husband of the complainant.
17. Learned Counsel for the accused in support of his
arguments has relied on the decision of Hon’ble Supreme Court
reported in AIR2025 SC 4446 between Kaveri Plastic v.
Mahdoom Bawa Bahrudeen Noorul .In this case it is held that
when the cheque amount is not mentioned in the proviso (b)
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C.C.No.4993/2021
notice or the amount different than the actual cheque amount is
mentioned, in the notice, such notice would stand invalid in the
eye of law. The condition of notice under Proviso (b) is required
to be complied with meticulously. Even typographical error can
be no defence. The accused has also relied on the decision of
Hon’ble Supreme Court in Criminal Appeal No. 711/2009
between M.D. Thomas v. P.S. Jalil and Another In this decision,
it is held that the notice of demand served upon the wife of the
accused and not on the accused. Therefore there is no escape
from conclusion that complainant had not complied with the
requirements of giving notice in terms of clause (b) of Proviso to
Section 138 of the Act. The Learned counsel for the accused has
also relied on the decision in CRM-M-54012-2023 between
Charanjeet Singh v. Kulwant Singh by the Hon’ble High Court of
Punjab and Haryana dated 16.01.2025. In this decision, it is
held that, the intention behind the said requirement is to give
an opportunity to settle the dues before criminal proceedings
are initiated against him. As such, it becomes all the more
important to ensure that such a notice contains all necessary
details pertaining to the cause of action, in Unmistakable terms.
This Court has gone through all the decisions relied by the
Learned counsel for the accused in detail. But under the facts
and circumstances of this case, the complainant has issued
notice by demanding the amount covered under Exhibit P 1 and
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C.C.No.4993/2021
Exhibit P2 cheques and there is no infinity in the notice issued
by the complainant. The only error found is that the postal
envelope in respect of the notice issued by the complainant is
produced in CC No.4987/2021 and the notice issued on behalf
of the husband of the complainant is produced in this case. As
discussed above as both the matters are posted before this
court on this day for pronouncement of judgment and this court
can take judicial notice that the returned envelope in respect of
this case is produced in CC No.4987/2021 and the returned
envelope in respect of said case is produced in this case and
both the postal envelopes shows that the notice is returned by
the accused unclaimed on 19.12.2020.
18. Therefore, it can be concluded that the notice issued by the
complainant is valid and there is valid service of notice. Hence
cause of action arose for prosecution under Section 138 of
Negotiable instruments Act on 04-01-2021. The complaint is
filed before this court on 30.12.2020. The complaint is pre-
matured. But the court has taken cognizance of the case on 26-
02-2021 after the cause of action arose. The accused has not
denied that the cheques are drawn from his account and also
not denied his signatures on the cheques and not denied
issuance of cheques to the complainant. Therefore, the
complainant has complied all the statutory requirements for
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constitution of offence under Section 138 of Negotiable
Instruments Act. Thus the complainant has discharged her
initial burden. Therefore, the complainant is entitled for
presumption under Section 139 of Negotiable Instrument Act.
The provisions of Section 139 of Negotiable Instrument Act
reads as under:-
139- Presumption in favour of holder – It should be
presumed, unless the contrary is proved, that the
holder of a cheque received the cheque, of the
nature referred to in section 138 for the discharge,
in whole or in part, of any debt or other liability.
19. Hon’ble Supreme court in a decision reported in (2010) 11
SCC 411 between Rangappa V/s Sri Mohan has held that –
The presumption mandated by Section 139 of the
act does indeed include the existence of a legally
enforceable debt or liability.
It is also observed that
Section 139 of the Act is an example of a reverse
onus clause that has been included in furtherance
of the legislative objective of improving the
credibility of negotiable instrument. It is also held
that in such a scenario, the test of proportionality
should guide the construction and interpretation of
reverse onus clauses and the defendant caused
cannot be expected to discharge an unduly high
slandered or proof.
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C.C.No.4993/2021
20. Learned counsel for the complainant has also relied on the
decision reported in 2018 (8) SCC 165 between Krishna Rao v.
Shankar Gauda , wherein it is held that accused may adduce
evidence to rebut presumption under Section 139, but mere
denial regarding existence of debt shall not serve any purpose.
In the event the accused is able to raise a probable defence
which creates doubt with regard to existence of debt or liability
the presumption may fail. The complaint has also relied on the
decision of Hon’ble Supreme Court reported in AIR 2023 SC
5018 between Rajesh Jain v. Ajay Singh . In this decision, at
para 43 and 44, The Hon’ble Supreme Court has held that the
nature of evidence required to shift the evidential burden need
not necessarily be direct evidence i.e. oral or documentary
evidence or admissions made by the opposite party, it may
comprise circumstantial evidence or presumption of law or
facts. The accused may adduce direct evidence to prove that the
instrument was not issued in discharge of a debt/liability and, if
he adduces acceptable evidence, the burden again shifts to the
complainant. At the same time the accused may also rely upon
circumstantial evidence and, if the circumstances so relied upon
are compelling, the burden may likewise shift to the
complainant. It is open for him to rely upon presumption of fact,
for instance, those mentioned in Section 114 and other sections
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C.C.No.4993/2021
of the Evidence Act. The burden of proof may shift by
presumptions of law or facts.
21. The complainant has also relied on the decision of Hon’ble
High Court of Sikkim reported in 2018 0 Supreme (SIKK) 35
between Poorna Kumar Gurung v. Ankith Sarda. He has also
relied on the decision of Hon’ble High Court of Karnataka
reported in 2025 (1) AKR 264 between R.K. Surendra Babu v. C.
Ashoka. In this decision, it is held that mere fact that accused
had issued stop payment instruction is not sufficient to reverse
the presumption under Section 139, unless accused proves
existence of sufficient balance in the Account at the time of
cheque presented.
22. Therefore, upon considering the principles of law laid down
in the above-referred decisions, it is proper to consider the
defence raised by the accused, whether it is sufficient to rebut
the presumption under Section 139 of Negotiable Instruments
Act.
23. The defence of the accused is that the complainant has
voluntarily invested a sum of ₹ 6,50,000/- in the share market.
The complainant has also received the profits of ₹ 2,00,000/-
from her investment. The accused is only the advisor to the
complainant to invest in the stock market. He has not received
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any remuneration for the services rendered by him to the
complainant. There is no written agreement between the
complainant and accused for sharing of profits and to bear the
loss in the investment. The complainant who invested in the
stock market should be entitled for profits if her investment
turned into profit and the complainant should bear the loss if
the investment turned into loss. The accused is not the
registered member of SEBI. Therefore, he cannot be termed as a
stock broker. The accused cannot act as a stock broker and if it
is the case of the complainant that the complainant has made
investment through the accused, such transaction is illegal
transaction and it cannot be enforced under law. The
complainant has not disclosed about the investment in the
income tax returns. Therefore, the amount invested by the
complainant is unaccounted amount. There is no mutual
agreement between the complainant and accused to pay the
principal amount and profit for total sum of ₹ 10,48,000/-
claimed by the complainant. It is also case of the accused is
that the husband of the complainant has lodged the complaint
at Ethapur police station and they have threatened that they
will arrest him through higher police officials. Therefore he got
afraid of his arrest. Therefore he has sent Exhibit P1 and
Exhibit P2 cheques to the complainant. But he is not liable to
pay said amount to the complainant. It is further case of the
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accused that he has not used a single rupee of the complainant
for his personal use. Due to COVID-19 pandemic he has
suffered huge loss in the investment in the stock market. He
has not agreed to make good the loss suffered in the stock
market investment of the complainant. Therefore there is no
legally recoverable debt.
24. In this case, the accused has not disputed the fact that he
was developed PoD Mutual Telegram Channel and invited the
prospective investors to invest in the stock market. He has also
not disputed that the complainant has invested a sum of ₹
6,50,000/- with him and he has invested said amount of the
complainant in the stock market. The PW1 has stated that her
husband has transferred a sum of ₹ 50,000/- from his account
with Paytm payments Bank as per Ex.P.10 and she has
transferred a sum of Rs.6,00,000/- in November 2019 and Jan
2020 as detailed in Ex.P9 and as reflected in her bank
statement Ex.P.11 to the account of the accused. The accused
has not denied such transfer of amount of ₹ 6,50,000/- by the
complainant to his bank account. The PW1 has deposed in her
cross-examination that the accused has paid a sum of ₹
2,00,000/- as profit for the period from August 2019 to
February 2020. This statement of The PW1 is also not denied by
the accused.
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25. It is the case of the complainant that after February 2020
the accused stopped to make the profit sharing. It is stated that
the accused has agreed to make repayment of the principal
amount of ₹ 6,50,000/- and profit sharing for the period from
Feb 2020 till July 2020 for a sum of ₹ 3,98,000/-. Totally for a
sum of ₹ 10,48,000/- in respect of which the accused has
issued Exhibit P1 and Exhibit P2 cheques. The accused has
sent Exhibit P1 and Exhibit P2 cheques through courier. The
accused has not denied issuance of cheques and his signature
in Exhibit P1 and Exhibit P2 cheques. He has also not denied
issuance of cheques. He has also not denied that contents of the
cheques is written by him. He has also not denied that he has
issued said cheques through courier.
26. In the entire cross-examination of PW1, the accused has not
made any suggestion that the accused has not agreed to make
profit sharing. The accused who issued stop payment
instructions has not explained why he has issued stop payment
instructions and he has also not produced any evidence before
this court to show that in spite of issuance of stop payment
instructions he had sufficient funds in his account to honour
the Exhibit P1 and Exhibit P2 cheques on its presentation.
27. The complainant has produced the WhatsApp conversation
between the complainant and accused as per Exhibit 12. The
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accused has not denied the conversation found in the WhatsApp
screenshot produced by the complainant. The said conversation
shows that the accused has promised to pay returns above 13%
to 15% on the investment in the month of August 2019. The PW
1 has produced the deposition of her husband in CC 4987/2021
as Ex.P 8. In the said case the husband of the complainant has
also produced various WhatsApp conversations between the
complainant and accused as Exhibit P26. The accused has not
denied the correctness of the conversations found in Exhibit
P26 WhatsApp communication produced in the said case. No
suggestion has been made to PW1 in the said case that the
complainant has created Exhibit P26 WhatsApp conversation
and it is not the real conversation between the husband of
complainant and accused. In the said conversation there is
reference with regard to request of the complainant to issue
cheques and also sharing of the calculation sheet of the dues to
the complainant and her husband and and that the accused
has sent the cheques through courier. It is the contention of the
complainant that she has presented Exhibit P1 and Exhibit P2
cheques, but the said cheques are dishonored for the reason
insufficient funds. Thereafter her husband has lodged the
complaint with Ethappur Police Station. And in the Ethapur
Police Station, the compromise has held to settle the dues of the
complainant and her husband for a sum of ₹ 26,00,000/-. But
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the the accused has not adhered to such compromise.
Therefore, the complainant has constrained to present the
cheques to the outstanding due amount as mentioned in the
cheques. The accused in the statement under Section 313 of
CrPC has stated that the complainant has threatened through
police that he would be arrested by Etapur police. Therefore he
has sent the cheques through courier. But in the cross
examination of PW1, no such suggestion is made to PW1 that
the complainant or her husband hae threatened the accused
through Ethapur police and hence accused has sent the
cheques through courier. Therefore in the absence of such
suggestion to PW1 and producing the material before the court
to show that the complainant has threatened through Ethapur
police to arrest him, this contention is not having any
evidentiary value.
28. Another defence of the accused is that he has not agreed to
make good the loss suffered by the complainant in the
investment. It is pertinent to note that the complainant has not
directly made investment in the stock market. The complainant
has transferred the amount to the account of the accused and
the accused may have invested it in the stock market in his own
name. Admittedly, the accused is not the registered stock
broker. In the cross-examination of PW1, it is elicited that the
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complainant is not having any information in which Share the
amount of the complainant is invested by the accused. The
accused has also not produced any documents to show that he
has communicated the complainant in which share her amount
is invested. Therefore, the investment by the complainant with
the accused is only for profit sharing and not for sharing of loss.
The Exhibit P12 WhatsApp conversation also shows the promise
made by the accused to get returns 13% to 15% on the
investment and also the statement of the accused that risk is
his. The Exhibit P26 Whatsapp conversation produced in CC
4987/2021 referred in Ex.P8 deposition of husband of
complainant shows that the complainant has shared the
calculation sheet in respect of his investment and investment of
his wife to the accused. The accused himself filled the contents
of the cheque and sent it through courier to the complainant.
This fact also shows that the accused has agreed to share the
investment and profit as mentioned in the cheque. If he has not
agreed to pay the amount mentioned in the cheques, he would
not have issued the cheques by mentioning the said amount. It
is not the case of the accused that he has issued blank signed
cheque to the complainant and the complainant herself filled
the contents of the cheque. Therefore the admission of the
accused that he himself written the contents of the cheque and
issued to the Complainant itself clearly establishes that he has
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agreed to pay the cheque amount of ₹ 10,48,000/- to the
complainant and issued the cheqeus.
29. The accused has stated that the accused is not the
registered stock broker registered under SEBI. Therefore, the
investment made by the complainant through the accused is an
unlawful transaction and it cannot be recovered as a legally
recoverable debt. In support of his arguments, the accused has
relied on the decision of Hon’ble High Court of Allahabad
reported in 2024 SCC Online ALL 5512. Between Jeethendra
Kumar Keshwani v. State of UP and another. In this decision, it
is held that the SEBI Act is a special Act which shall prevail
over the general Act, such as IPC or CrPC. It is settled position
of law that once a Special Act holds the field, the provisions of
general law would not apply and only the prosecution can be
lodged in accordance with the provisions of such Special Law
and the provisions under Section 26 of SEBI Act specifically. In
this case admittedly the accused is not the stock broker
registered under SEBI Act. It is also not the case of the accused
that he has made the investment in the name of the
complainant in the stock market. It is specific case of the
complainant that she has made investment with the accused
and accused in his name made the investment in the stock
market. Therefore the accused is the individual investor and he
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will not termed as stock broker. Therefore, the contention of the
accused is that, in view of Special Act, the prosecution under
Section 138 of Negotiable Instruments Act is not maintainable
and cannot be accepted.
30. The learned counsel for the accused has also relied on the
decision reported in AIR 2022 SC 5213 between Securities and
Exchange Board of India versus National Stock Exchange
Members Association and another. This decision is also about
registration of stock broker under SEBI Act. As the accused is
not the stock broker registered under SEBI Act and he has
made the investment in his own name, he will not come under
the provisions of SEBI Act. Therefore, said decision is not
helpful to the accused to support his arguments.
31. The accused has also relied on the decision of Hon’ble Delhi
High Court reported in 2007 Cr. LJ 2262 between Veryander
Singh v. Lakshmi Narain and Another. In this decision, it is held
that Money paid by way of illegal gratification for the purpose of
arranging the job for the complainant pursuant to the
agreement between the petitioner and the complainant, the
agreement is void and consideration thereof is unlawful. The
agreement which are void ab initio and their illegality is known
to the parties at the time of execution could not fall under the
purview of Section 65 of Indian Contract Act. In this case, the
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C.C.No.4993/2021
complainant has made the investment with the accused and
accused in his name made the investment in stock market and
promised the complainant to share the profit and bear the loss.
Therefore, the Investment made by the complainant cannot be
held to be forbidden by law and it will contrary to the SEBI Act
or any other law for the time being in force. The accused has not
enlightened this Court how the said transaction alleged by the
complainant will become a void contract. Therefore this decision
isalso not helpful to the accused to support his arguments.
32. The accused has also relied on the decision of Hon’ble
Kerala High Court reported in 2005 Criminal Law Journal 4095
between J. Daniel v. State of Kerala and another. In this case, it
is held that Liability covered by cheque had arisen out of
agreement for compounding of non-compoundable offence,
which was not legally enforceable debt. In this case, no such
circumstances are made out, hence this decision is not helpful
to the accused to support his arguments. The accused has also
relied on the decision of Hon’ble Supreme Court reported in
2022 16 SCC 762 between Sunil Tady and others v. State of
Gujarat and another . In this case, the Hon’ble Supreme Court
has dealt about money payable at a future time upon happening
or not happening of contingent event and the consequences of
dishonour of the cheque issued for security under such
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C.C.No.4993/2021
circumstances. In this case, it is not the defence of the accused
that he has issued Exhibit P1 and Exhibit P2 cheques for the
purpose of security. When the accused has not taken the
defence that the cheques were issued for the purpose of security
and the complainant herself filled the contents of the cheque,
the principles laid down in this decision will not help the
accused to substantiate his defence.
33. The accused has also placed his reliance on the judgment
of the Hon’ble Supreme Court reported in 2023 1 SCC 578
between Dasharahbhai Trikanbhai patel Vs Hitesh
Mahendrabhai patel and another. In this decision, Hon’ble
Supreme Court has dealt about effect of part payment on the
debt prior to presentation of the cheque for encashment and
Endorsement under Section 56 of Negotiable Instruments Act.
In this case on hand it is not the case of the accused that he
had made part payment after issuance of the cheque.
Therefore, the question of applicability of Section 56 of
Negotiable Instruments Act would not arise in the present case.
Therefore, the principles laid down in this decision will not help
the accused to support his arguments.
34. The accused has also taken the defence that the
complainant has not disclosed the source of income for
investing a sum of ₹ 6,500,000/-. The husband of complainant
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C.C.No.4993/2021
is a chartered accountant by profession. In the cross-
examination, as per Ex.P 8 it is elicited that he is working in a
private company YOKOGAWA and he is having salary of ₹
2,50,000/- to ₹ 3,00,000/-.in the year 2019. The complainant is
also BDS graduate and she was practicing till 2019. In this case
the accused has not disputed investment of ₹ 6,50,000/- with
the accused. Therefore when the accused has not disputed the
investment of ₹ 6,50,000/- question of considering the aspect of
source of income would not arise.
35. Therefore, for the above discussion, upon considering entire
evidence on record, it can be concluded that the accused has
not denied issuance of cheques. The accused has not denied the
investment made by the complainant. He has not denied the
WhatsApp conversation between the complainant and the
accused produced as Exhibit P12. He has not specifically denied
his liability. The accused instead of taking his own defence he
has tried to find out the defects in the case of the complainant.
But he has failed to show any circumstances, creating doubt
about the case presented by the complainant with probable
evidence. The accused has not chosen to let his evidence
probablise his case. The accused who contended that he has
suffered loss in the investment, has not disclosed in which
shares he has invested the amount of the complainant and he
30
C.C.No.4993/2021
has not brought on record any material to show that he has
suffered loss in the investment of the amount of the
complainant. Therefore the defence of the accused that the
investment of the complainant is turned into loss , also not
probalised with evidence. Therefore, there is no specific defence
taken by the accused and the accused has failed in his attempt
to establish his defence by eliciting the falsification of the case
of the complainant. Therefore, this Court is in the considered
view that the accused agreeing to pay the amount covered under
Exhibit P1 and Exhibit P2 cheques, has issued these cheques to
the complainant and got it dishonored without maintaining
sufficient amount in the account and issuing stop payment
instructions without any sufficient cause and inspite of service
of notice he has failed to make good the amount to the
complainant. The accused has failed to established his defence
with probable evidence for rebuttal of the presumption under
Section 139 of Negotiable Instruments Act. Therefore, this Court
concludes that the accused has failed to rebut the presumption
under Section 139 of Negotiable Instruments Act. Therefore, this
Court concludes that the complainant has established existence
of legally recoverable debt and issuance of Exhibit P1 and
Exhibit P2 cheques towards discharge of said debt and as such
commission of the offence under Section 138 of Negotiable
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Instruments Act. Therefore this Court answers the above point
number 1 in the affirmative.
36. POINT NO. 2 : While answering the point no. 1 this court
concluded that the complainant proved that the accused
committed the offence punishable under Section 138 of
Negotiable Instruments Act. The Amount covered under the
cheques is Rs.10,48,000/-. The cheques are dated 01.09.2020
and 08.09.2020. The money involved in the case is used in
commercial transactions. Therefore considering these aspects
the fine amount is calculated for a sum of Rs.15,84,620/-.
37. The Hon’ble High Court of Karnataka in the reportable
decision in CRL.RP No. 996 of 2016 dated 09-07-2025 between
M/s Banavathy and Company VS Mahaveer Electro Mech (P)
Ltd at para 21 has held that –
21. In case lesser interest is awarded and only
default sentence is imposed, the rigor of offence
under Section 138 will be diluted and thereby the
object of the Statute will be defeated. If recovery and
compensatory part is not taken care of while
determining the quantum of sentence and
appropriate interest is not awarded, until the date of
recovery of the entire amount, the complainant will
be forced to file civil suit on the same subject matter.
In view of Section 143(3) the trial for offence under
Section 138 of N.I.Act has to be completed within six
months. If the said provision is not adhered to and
the trial for the offence under Section 138 of N.I.Act
takes 4 to 5 years, in the mean time, the claim of the
complainant for recovery of the cheque amount by
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C.C.No.4993/2021
filing civil suit becomes barred by limitation. Not
only that the accused who is convicted for offence
under Section 138 of N.I.Act challenges the same
before the Sessions Court wherein the matter takes
2 to 3 years. The accused unsuccessful in the said
appeal prefers revision petition before the High
Court and it is seen that the disposal of revision
takes more than 5 years. After all this if the
complainant has to receive the fine/compensation as
awarded by the trial Court, if it is cheque amount or
little higher than the cheque amount, he will be at
loss and put to injustice. Therefore, while passing
the order of sentence after determining the
fine/compensation, the Court shall also pass an
order to pay future interest @ 9% p.a. on the
compensation amount payable to the complainant
by fixing time of one/two months to deposit
compensation amount so that even if the matter is
challenged before the Sessions Court in appeal and
High Court in revision the interest of the
complainant will be protected.
In view of the directions issued in the above refereed judgment,
it is also proper to direct the accused to pay future interest on
the fine amount at the rate of 9 % P.A. till payment. Therefore
considering all these aspects this court proceed to pass the
following –
ORDER
By exercising powers conferred U/sec.255(2) of Cr.P.C.,
the accused is convicted for the offence punishable under
Section 138 of Negotiable Instrument Act and he is sentenced
to pay a fine of Rs.15,84,620/- (Rupees Fifteen Lakhs Eighty
Four Thousand Six Hundred and Twenty Only) payable with in
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C.C.No.4993/2021
a month and in default pay interest at the rate of 9% from this
day till payment of fine amount, and In default to pay the fine
with interest, the accused shall undergo simple imprisonment
of one year.
Further acting U/s 357(1)(a) of Cr.P.C. out of the fine
amount a sum of Rs.10,000/-(Rupees Ten Thousand only) shall
be defrayed as prosecution expenses to the state.
Further acting U/s 357(1)(b) of Cr.P.C. a sum of
Rs.15,74,620/- (Rupees Fifteen Lakhs Seventy Four Thousand
Six Hundred and Twenty Only)and interest out of the fine
amount on recovery shall be paid as compensation to the
complainant.
Supply free copy of the judgment to the accused.
[
(Partly dictated to the Stenographer directly on the computer, typed by her,
partly dictated to the Adalath AI computer application, transcribed by it,
corrected and signed then pronounced by me in the open court on this the
21st day of April 2026).
(GOKULA.K)
XXV A.C.J.M., BANGALORE CITY.
ANNEXURE
LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
PW.1 : Shubha N. Wasi
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C.C.No.4993/2021
LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P1&2 : Cheques
Ex.P3&4 : Bank Endorsements
Ex.P5 : Office copy of legal notice.
Ex.P6 : Postal receipt
Ex.P7 : Returned Postal envelope
Ex.P8 : Certified Copy of the Deposition
in C.C.No.4987/2021
Ex.P9 : Details of investment
Ex.P10 : 4 Statement of accounts of the husband of
the complainant
Ex.P11 : Bank Statement of SBI
Ex.P12 : Screen shots of Whats app and telegram
chats
Ex.P13 : Pendrive, soft copy of whats app and
telegram chat
Ex.P14 : Certificate U/s.63 of BSA.
LIST OF WITNESSES EXAMINED FOR THE ACCUSED:-
Nil
LIST OF DOCUMENTS MARKED FOR THE ACCUSED:-
Nil
(GOKULA.K.)
XXV A.C.J.M., BANGALORE CITY.
