Bangalore District Court
Y. Varadaraya Nayak vs Shashikala V Shetty on 5 August, 2025
KABC020295492021
IN THE COURT OF ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY.
(SCCH-6)
Present: Smt. Chetana S.F.
B.A., L.L.B.,
IV Addl., Small Cause Judge & ACJM,
Court of Small Causes,
Bengaluru.
CC. No.9978/2021
DATED THIS THE 5th DAY OF AUGUST, 2025
COMPLAINANT/S Sri.Y.Varadaraya Nayak,
S/o. Raghava Nayak,
Aged about 56 years
Residing at No.337,
Near Bhasyam Circle,
12th Main, 3rd Block,
Rajajinagar,
Bengaluru-560010.
And also at 'Rukmini Nilaya',
Via Perumudhe,
Yekkuru Post,
Mangalore Taluk.
(By Sri.J.S.Dinesh- Advocate)
-Vs-
ACCUSED Smt. Shashikala V Shetty,
W/o. Late Vishwanatha Shetty,
SCCH-6 2 CC No.9978/2021
Aged about 54 years
Working at R.N.S.Vidya Niketan School,
No.324, Bunts Sangha Complex,
West of Chord Road,
Near Attiguppe Metro Station,
Vijayanagara-560040.
And residing at No.10,
2nd Main Road,
Attiguppe,
Vijayanagara,
Bengaluru-562149.
(By Sri.H.Shankar Shetty- Advocate)
-: J U D G M E N T :-
This is a complaint filed by the complainant U/Sec.200 of
Cr.P.C. R/w. Sec.138 & 142 of the N.I. Act for the offence
punishable under Sec.138 of the N.I. Act as against the
accused praying to punish the accused for the said offence.
2. The case of the complainant is that the husband of
accused viz. Late Vishwanath Shetty was the absolute owner
in possession and enjoyment of the land bearing Sy.No.30/5
measuring 0.04.50 cents, Sy.No.30/6P4 measuring 0.82 Cents
and Sy.No.30/6P4 new Sy.No.30/27 measuring 0.11.25 cents
all the lands situated at Kemral Village, Mulki Hobli,
Mangalore Taluk, and land bearing Sy.No.2/12 measuring
SCCH-6 3 CC No.9978/2021
0.30.50 Cents situated at Nadugodu Village, Mulki Hobli,
Mangalore Taluk. During the month of May 2015 the accused
and her husband approached the complainant and offered to
sell the above mentioned properties for their family and legal
necessities and the complainant has agreed to purchase. After
negotiations, the accused and her husband have agreed to sell
the above mentioned properties for a total sale consideration
amount of Rs.10,00,000/-.
3. The above mentioned properties are agricultural
proprieties. In order to register the sale deed there was a
requirement of 11-E sketch. That apart, the land bearing
Sy.No.30/6P4 was not phoded ad it requires considerable time
to get the phodi and 11-E sketch. Since the accused and her
husband were in need of urgent money to overcome the
financial difficulties, the accused has required the
complainant to pay full sale consideration amount of
Rs.10,00,000/- and to get the agreement of sale in his favour.
The complainant by looking in to the difficulties of accused
has agreed to pay the entire sale consideration amount.
SCCH-6 4 CC No.9978/2021
Accordingly the husband of accused has executed agreement
of sale in favour of the complainant on 01.06.2015 for the said
agreement of sale the accused has signed as witness. The
complainant has paid the entire consideration amount of
Rs.10,00,000/- in the following manner.
a. A sum of Rs.5,00,000/- by way of cheque bearing no.
076436 dated 05.06.2015 drawn on Shamrao Vittal Co-
Operative Bank Ltd. Benglauru.
b. A sum of Rs.3,00,000/- by way of cheque bearing no.
076442 dated 08.06.2015 drawn on Shamrao Vittal Co-
Operative Bank Ltd. Bengaluru.
c. A sum of Rs.2,00,000/- by way of cash.
4. The accused and her husband have acknowledged
the receipt of the entire sale consideration amount of Rs.
10,00,000/-.
5. The complainant submits that as per the recitals of
the agreement of sale, the accused and her husband have
agreed to obtain 11-E sketch and phodi before registration of
absolute sale deed. Subsequent to execution of agreement of
SCCH-6 5 CC No.9978/2021
sale, the husband of accused died leaving behind the accused
and her daughter as his legal representatives. Subsequent to
the death of husband of accused the complainant has required
the accused to execute the registered sale deed in respect of
the above said properties in terms of agreement of sale dated
01.06.2015. At that time, the accused has requested the
complainant to provide some time to get inheritance khatha
and 11-E sketch. Due to the sudden demise of husband of
accused, the complainant could not pressurize the accused to
obtain inheritance khata, 11-e sketch and to execute the sale
deed in terms of agreement of sale dated 01.06.2015. Finally
the accused got mutated her name by way of inheritance in
respect of the above said properties during the month of
December 2018. Though the accused has got inheritance
khatha, in order to execute the sale deed. The 11-3 sketch or
phodi was mandatory. As such the complainant has requested
the accused to obtain 11-E sketch or to get the phodi. After
repeated requests of the complainant, the accused has got
phoded the land bearing no. 30/6P4 during the month of
September 2019. However the accused could not get the 11-E
SCCH-6 6 CC No.9978/2021
sketch in respect of Sy.No.2/12 of Nadagodu village and
Sy.NO.30/5 of Kemral Village even to this day. The
complainant is always ready and willing to get the registered
sale deed in respect of the above mentioned properties from
the date of execution of agreement of sale till this date.
6. The complainant submitted that immediately after
the phodi of Sy.No.30/6P4 new Sy.NO.30/27 the complainant
has requested the accused to execute the sale deed in respect
of the said land. When the complainant demanded the
accused to execute the sale deed, the accused has pleaded
that the accused required the above said properties and
requested the complainant to take back amount paid by the
complainant at the time of execution of agreement of sale
dated 01.06.2015 with nominal interest of Rs.2,00,000/-
totally Rs.12,00,000/-. The complainant by looking in to the
demise of the husband of accused has agreed for the same.
For return of the said amount the accused issued a cheque
bearing no. 175552 dated 22.02.2021 for Rs.12,00,000/-
drawn on Vijaya Bank, Vijayanagar, Bengaluru and the
SCCH-6 7 CC No.9978/2021
accused has agreed to keep sufficient amount in her bank
account for clearance of the said cheque.
7. The complainant presented the said cheque on
03.03.2021 through Shamrao Vittal Co-operative Bank,
Rajajinagar branch, Benglauru, but the said cheque returned
unpaid for the reason Funds Insufficient. Again the
complainant has requested to represent the same cheque on
24.03.2021 and 18.05.2021, but the said cheque returned
unpaid for the reason Funds Insufficient. The complainant
issued a notice to the accused on 15.06.2021 which was
served on the accused on 16.06.2021. The accused has not
paid the cheque amount and has committed an offence
punishable u/s 138 of NI Act. Hence, this complaint.
8. After recording the sworn statement of the
complainant by way of affidavit and also verifying the
documents, cognizance was taken against the accused for the
offence punishable under Sec.138 of N.I. Act. The accused
appeared before this Court through his counsel and enlarged
on bail and his plea was recorded. The accused pleaded not
SCCH-6 8 CC No.9978/2021
guilty and claimed to be tried. Hence, the case was posted for
evidence of the complainant.
9. The complainant got examined himself as PW.1 and
got marked10 documents as Exs.P.1 to P.10. Thereafter, the
case was posted for recording the statement of accused under
Sec.313 of Cr.P.C. In the statement U/s. 313 Cr.P.C., the
accused has denied all the incriminating evidence appearing
against him. The accused got examined as DW.1 and got
marked 1 document at Ex.D1.
10. Heard the arguments of both side and Perused the
records.
11. The following points arise for my consideration:
1.
Whether the complainant proves that the
cheque bearing No.175552 drawn on
Vijaya bank., Bengaluru for Rs.12 lakhs
issued by the accused has been
dishonored on the ground of ‘Funds
Insufficient’ and even after receiving the
intimation regarding the dishonor of
cheque failed to pay the cheque amount
within the stipulated period and thereby
the accused has committed an offence
punishable under Sec.138 of N.I. Act?
SCCH-6 9 CC No.9978/2021
2. What order?
12. My findings on the above points are as under:-
Point No.1: In the Negative
Point No.2: As per final order for the
following:-
-: R E A S O N S :-
13. POINT NO.1:- In view of the present legal position as
held by our Hon’ble High Court as well as Apex Court of
India in a catena of decisions as well as relevant
provisions of the Act, this court has to see whether the
complainant has complied all the requirements as
contained in Sec.138 of NI Act so as to bring home the
guilt of the accused for the alleged offence. If so, whether
the accused is able to rebut the legal presumption
available to the complainant under Sec.139 of the Act by
adducing probable defense or not. However, it is held by
the full bench of our Apex Court in the case of Rangappa
Vs. Mohan reported in 2010 (1) DCR 706 that;
“The Statutory presumption man-
dated by sec.139 of the Act, does in-
SCCH-6 10 CC No.9978/2021
deed include the existence of a legally
enforceable debt or liability. However,
the presumption U/S 139 of the Act
is in the nature of a rebuttable pre-
sumption and it is open for the ac-
cused to raise a defence wherein the
existence of a legally enforceable debt
or liability can be contested”.
14. Therefore, in view of the above decision, once the
cheque is admitted, the statutory presumption would
automatically fall in favour of the complainant that, the
alleged cheque was issued for discharge of an existing legally
enforceable debt or liability against the accused and the
burden will shift on to the accused to rebut the same.
INGREDIENTS OF OFFENCE AND DISCUSSION:-
15. Before dwelling into the facts of the present case, it
would be apposite to discuss the legal standards required to
be met by both sides. In order to establish the offence under
Section 138 of NI Act, the prosecution must fulfill all the
essential ingredients of the offence. Perusal of the bare
provision reveals the following necessary ingredients of the
offence:-
SCCH-6 11 CC No.9978/2021
First Ingredient: The cheques were
drawn by a person on an account
maintained by him for payment of
money and the same is presented for
payment within a period of 3 months
from the date on which it is drawn or
within the period of its validity;
Second Ingredient: The cheques were
drawn by the drawer for discharge of
any legally enforceable debt or other
liability;
Third Ingredient: The cheques were
returned unpaid by the bank due to
either insufficiency of funds in the
account to honour the cheque or that
it exceeds the amount arranged to be
paid from that account on an
agreement made with that bank;
Fourth Ingredient: A demand of the
said amount has been made by the
payee or holder in due course of the
cheque by a notice in writing given to
the drawer within thirty days of the
SCCH-6 12 CC No.9978/2021receipt of information of the
dishonour of cheque from the bank;
Fifth Ingredient: The drawer fails to
make payment of the said amount of
money within fifteen days from the
date of receipt of notice.
-APPRECIATION OF EVIDENCE-
16. The accused can only be held guilty of the offence
under Section 138 NI Act if the above-mentioned ingredients
are proved by the complainant co-extensively. Additionally, the
conditions stipulated under Section 142 NI Act have to be
fulfilled. Notably, there is no dispute at bar about the proof of
only first, third, and fifth ingredient. The complainant had
proved the original cheque vide Ex.P.1 which the accused
person had not disputed as being drawn on the account of the
accused. It was not disputed that the cheque in question was
presented within its validity period. The cheque in question
was returned unpaid vide return memo vide Ex.P.2 to 4 due
to the reason,Funds Insufficient”. The complainant had proved
the service of legal demand notice dated 15.06.2021 vide
SCCH-6 13 CC No.9978/2021
Ex.P.5 by bringing on record the postal receipt vide Ex.P.6 and
7 and Ex.P8-postal acknowledgment and Ex-P9-returned
postal cover and notice copy. Ex.P10- House agreement.
Thus, there is a dispute only with regard to the second
ingredient to the offence. As such, the 1st,3rd,4th& 5th ingredient
of the offence under section 138 of the NI Act stands proved.
17. As far as the proof of second ingredient is concerned,
the complainant has to prove that the cheque in question was
drawn by the drawer for discharging a legally enforceable
debtor any liability. In the present case, the issuance of the
cheque in question is not denied. As per the scheme of the NI
Act, once the accused admits signature on the cheque in
question, certain presumption are drawn, which result in
shifting of onus. Section 118(a) of the NI Act lays down the
presumption that every negotiable instrument was made or
drawn for consideration. Another presumption is enumerated
in Section 139 of NI Act. The provision lays down the
presumption that the holder of the cheque received it for the
discharge, in whole or part, of any debt or other liability.
SCCH-6 14 CC No.9978/2021
18. The combined effect of these two provisions is a
presumption that the cheque is drawn for consideration and
given by the accused for the discharge of debt or other liability.
Both the sections use the expression “shall”, which makes it
imperative for the court to raise the presumptions once the
foundational facts required for the same are proved. Reliance
is placed upon the judgment of the Hon’ble Supreme Court,
Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16.
19. Further, it has been held by a three-judge bench of
the Hon’ble Apex Court in the case of Rangappa vs. Sri Mohan
(2010) 11 SCC 441 that the presumption contemplated under
Section 139 of NI Act includes the presumption of existence of
a legally enforceable debt. Once the presumption is raised, it is
for the accused to rebut the same by establishing a probable
defence.
20. The presumptions raised under Section 118(b) and
Section 139 NI Act are rebuttable presumptions. A reverse
onus is cast on the accused, who has to establish a probable
defence on the standard of preponderance of probabilities to
SCCH-6 15 CC No.9978/2021
prove that either there was no legally enforceable debt or other
liability. In this case, the arguments raised by the Ld. counsel
for the accused to rebut the presumption are discussed
below:
21. Learned counsel for the accused has taken the specific
defence that the notice has not been served to her. On the
other hand the complainant has produced Ex.P8 postal
acknowledgment which clearly shows that notice has not been
served to the accused at her working place in the address
RNS, Vidyaniketan School, No.324, Bunts Complex, near
Attiguppe Metro station, Vijayanagar, Bengaluru-560040.
Even the accused in a cross examination Para-8 clearly
admitted that she is working as a teacher in RNS
Vidyanikethan School and clearly admitted that the address
mentioned in Ex.P8 is her school address and in letters and
the post sent to her school address will reach her. Even the
accused has not disputed the address to which the notice has
been sent. Even the accused has not disputed Ex.P8 postal
acknowledgment. Though the accused denied the signature in
SCCH-6 16 CC No.9978/2021
Ex.P8 is not her signature but accused has not denied the
address in Ex.P8 and also not examined postal officials to
prove that notice has not been duly served to her as per Ex.P8
postal acknowledgment.
22. Moreover, in this regard, it has been held by the
Hon’ble Apex Court in the case of M/S Indo Automobiles Vs.
M/S. Jaidurga Enterprises reported in 2008 (2) DCR 499
and also as provided under Sec.27 of the Mysore general
clauses Act, 1897. When a notice is sent to the correct address
of the addressee, even if the same is returned unserved due
absence or non-claiming or refusal of the addressee, the
same amounts to deemed service. Moreover, the very
purpose of giving statutory notice to provide an opportunity to
the accused/drawer to make payment of the cheque amount
and escape from the criminal prosecution. The non-service of
the notice would be ground only in the case of the accused
admitting the liability under the cheque and pleading only
exemption from the criminal prosecution for non payment of
the cheque amount. Thus this defence of the accused is of no
SCCH-6 17 CC No.9978/2021
consequence in the present case as he is totally denying the
liability under the said cheque.
SECOND DEFENCE
23. Further the accused has denied the entire case of
the complainant and contended that she has never issued the
cheque in question to the complainant for the repayment of
the Rs.10 lakhs alleged to be received by her husband. Even
the accused has denied that she do not know the transaction
between the complainant and her husband and she was not
signatory to the agreement Ex.P10. Even she do not know
whether her husband has received amount from the
complainant in respect of Ex.P10. The accused has stated that
after the death of her husband while verifying the document
she found that an amount of Rs. 4 lakhs has been transferred
to the account of her husband on 08.06.2015 and 09.06.2015
and she do not know in respect of which matter and
transaction the complainant transferred the said amount to
her husband. Further the accused stated that her husband
and the complainant were doing real estate business and she
SCCH-6 18 CC No.9978/2021
do not know about any of the transaction between her
husband and the complainant.
THIRD DEFENCE -TIME BARRED DEBT
24. The accused has taken the specific
defence that during life time of her husband her
husband has taken her signed blank cheque and
signed stamp papers and has handed over to the
complainant and the same has been misused by
the complainant after the death of her husband.
It was argued by learned counsel for the accused
that if at all asper the complainant accused and
her husband has executed the agreement in year
2015 then why complainant has waited till 2021
for registration of the document. Even after the
death of her husband in the year 2018 till 2021
why the complainant has not given any legal
notice or taken any action for the recovery of the
amount or for the registration of the said
agreement, at least the complainant would have
SCCH-6 19 CC No.9978/2021
filed Civil Suit for the specific purpose of the said
agreement but not such action has been taken by
the complainant for the reason best known to
him. At least PW-1 would have insisted accused
to execute new agreement within limitation
period, but no such agreement is forthcoming.
PW-1 being business man how could he keep
silent for more than 6 years without asking for
return of his amount or for cancellation of
agreement even after death of husband of
accused. The very conduct of PW-1 creates doubt
about the case of complainant.
25. Further the accused has taken specific
defence that if at all as per the complainant,
the complainant has given Rs. 10 lakhs to her
husband in the year 2015 but the complainant
is claiming the said amount in the year 2021
that is all most after 6 years and it clearly
amounts to the time barred debt and a cheque
SCCH-6 20 CC No.9978/2021
given in discharge of a time barred debt will
not constitutes a promise in writing so as to
attract a criminal liability u/s 138 of NI Act.
26. In this regard this court relied on the
decision reported in the Kerala High Court in
a decision reported in 2001 Crl.L.J 24 in
case of Sasseriyal Joseph Vs Devassia, held
that section 138 of the Act is attracted only
if there is legally recoverable debt and it
cannot be said that time barred debt is
legally recoverable debt. The said Judgment
rendered by Kerala High Court in Sasseriyil
Joseph‘s case was challenged before the
Hon’ble Supreme Court in Special Leave to
Appeal (Crl.) No.1785/2001 by Hon’ble
Supreme Court by Judgment dated:10-09-
2001 affirmed the said view of Kerala High
Court and it is held as under:
SCCH-6 21 CC No.9978/2021
“We have heard learned counsel for the
petitioner. We have perused the judgment
of the High Court of Kerala in Criminal
Appeal No. 161 of 1994 confirming the
judgment/order of acquittal passed by the
Addl. Sessions Judge, Thalassery in
Criminal Appeal No. 212 of 1992 holding
inter alia that the cheque in question
having been issued by the accused for due
which was barred by limitation the penal
provision under Section 138 of the
Negotiable Instruments Act is not
attracted in the case.
27. In view of the principles stated in the above referred
decision and discussion it is evident that the penal provision
of Section 138 of the N.I.Act is applicable only to the cheques
which are issued for the discharge in whole or in part, of any
debt or other liability, which according to Explanation must be
a legally enforceable debt or other liability. A cheque given in
discharge of a time barred debt will not constitute an
unconditional undertaking or promise in writing either
expressly or impliedly so as to attract the criminal offence
SCCH-6 22 CC No.9978/2021
under section 138 of N.I Act. A cheque given in discharge of a
time barred debt will not constitute a promise in writing not
even an implied promise so as to attract a criminal liability
under Section 138 of N.I Act.
28. In the present case according to complainant he has
given the amount of Rs.10 lakhs in the year 2015 as per
Ex.P10 agreement and according to the complainant himself
in respect of the said alleged amount the accused has issued
the cheque in question in the year 2021 and cheque given in
discharge of time barred debt will not constitute a promise in
writing so as to attract a criminal liability u/s 138 of NI Act.
29. Apart from this though the complainant contended that
he has transferred amount of Rs.8 lakhs through the cheque
but not produced any documents to prove the same hence it
creates doubt about passing of the consideration of the Rs.8
lakhs.
Conclusion:
30. In view of the above facts and circumstances the
defence taken by the accused that she has given signed blank
SCCH-6 23 CC No.9978/2021
cheque to her husband in a good faith in turn the husband
might have given the said cheque to the complainant in
respect of their transaction might have been misused and filed
this case appears to be more probable than the case of the
complainant.
Conclusion:
31. In view of all the above discussion, it can be concluded
that the complainant has failed to establish through cogent
and convincing evidence, the fact of issuance of the cheques
for discharge of legally enforceable debt or any liability, which
is dishonored for want of sufficient funds. On the other hand,
the accused has successfully rebutted the presumption
available to the complainant through probable evidences, that
would preponderate upon the evidence led by the complainant.
Therefore, the accused is held to have not committed an
offence punishable under sec. 138 of N.I. Act. Accordingly,
Point No.1 is answered in the NEGATIVE.
32. POINT NO.2:- In view of my answer to point No.1, I
proceed to pass the following:-
SCCH-6 24 CC No.9978/2021
-: O R D E R :-
Acting under Section 278(1) of the
Bharatiya Nagarik Suraksha Sanhita,
2023, accused is acquitted for the offence
punishable under Section 138 of NI Act.
The bail and surety bond of the accused
and surety shall stand canceled.
(Dictated to the Stenographer, transcribed and computerized by her. After her
typing, corrected, signed and then pronounced by me in open Court this the 5 th
day of August, 2025).
(CHETANA S.F.)
IV Addl., Small Cause Judge & ACJM,
Court of Small Causes, Bengaluru.
ANNEXURE
List of witnesses examined for the Complainant:
PW.1 :- Y. Varadaraya Nayak
List of witnesses examined for the accused:-
DW.1 :- Shashikala.V
List of documents marked for the Complainant:-
Ex.P.1 : Cheque
Ex.P.1(a) : Signature of accused
Ex.P.2 to 4 : Bank Endorsements
Ex.P.5 : Legal Notice
SCCH-6 25 CC No.9978/2021
Ex.P.6 & 7 : Postal Receipts
Ex.P.8 : Postal acknowledgment
Ex.P.9 : Returned postal cover and notice
copy
Ex.P.10 : Agreement of Sale
List of documents marked for the accused:-
Ex.D1 Statement of Account
(CHETANA S.F.)
IV Addl., Small Cause Judge &
ACJM, Court of Small Causes,
BENGALURU.
SCCH-6 26 CC No.9978/2021