Bangalore District Court
M/S Kalpana Souharda Co-Operative Ltd vs Rajeshwari on 7 January, 2026
KABC030227382024
IN THE COURT OF XXXVIII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU
~:PRESENT:~
SRI. VEERESH KUMAR C.K. B.A.L, LL.M, CC [Cyber Laws]
XXXVIII ADDL. CHIEF JUDICIAL MAGISTRATE
BENGALURU
C.C. No.13772/2024
Date Of Judgment: 7th day of January, 2026
M/s.Kalpana Souhardha
Co-operative Limited (Regd.)
Office at - No.56, Ground Floor
Harihara Mansion, Narayana Pilla
Street, Shivajinagar, Bengaluru-560 001
bearing registrationNo.RSR/SOU/REG/
47/2341/2015-16, Dt.14/02/2016
Rep. By its Legal Officer/Manager
Sri.Varun.R
S/o.Ramesh Babu, 31 yrs. ....Complainant
(Rep. By Sri. C.N.Raghavendra, Advocate)
----//VERSUS//----
Smt. Rajeshwari
W/o.Satish Kumar, 43 yrs.
r/a.No.25, Mathurshree
3rd Cross, D Block
Sri Krishna Garden,
RR Nagar, Bengaluru-560 091 ....Accused
(Rep.By Sri. Nagaraj K. G., Advocate )
KABC030227382024 JUDGMENT CC N O.13772/2024
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:: J U D G M E N T ::
T his case emanates from a private complaint filed by the complainant alleging that the accused has committed an offence punishable under section 138 of the Negotiable Instruments Act, 1881, by issuing cheque for the total amount of Rs.2,09,676/-, and the same was dishonored.
2. THE ESSENTIAL FACTS:
The complainant that the complaint is the Souharda Co- operative Society Ltd., established under Co-operative Societies Act. The accused approached the complainant for a sanction of a loan for personal purpose and requirement. The accused had an account with a complainant society bearing No.KSC/PLA/0000115. After going through the details of the accused, the complainant agreed to advanced a personal loan to the complainant. The complainant sanctioned the loan of Rs.1,00,000/- by way of RTGS to the accused. The accused only repaid sum of Rs.32,000/- in favour of complainant. KABC030227382024 JUDGMENT CC N O.13772/2024
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Thereafter, the accused failed to make the payment of the loan and became the defaulter. When the complainant pressed for the payment, for which the accused issued cheque for sum of Rs.2,09,676/- bearing No572668. When the said cheque was presented for encashment and the same returned with an endorsement 'Funds Insufficient'. For which the complainant got issued the demand notice. Inspite of the service of the same, the accused did not come forward to make a payment nor issued any reply to the notice. The accused intentionally issued a cheque without maintaining sufficient balance in the bank account and thereby committed an offence punishable U/Sec.138 of N.I. Act.
3. On presentation of the complaint, this Court has taken cognizance for the offence punishable U/sec. 138 of N.I. Act. The summons were issued to the accused. In pursuance to the service of summons, the accused has put her appearance through her Counsel and was enlarged on bail. KABC030227382024 JUDGMENT CC N O.13772/2024
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4. The complaint copies were furnished to the accused as per Sec. 207 of Cr. P. C. The plea was recorded under Sec. 251 of Cr.P.C. The accusation was read over to the accused to which she has pleaded not guilty and claimed to be tried.
5. To substantiate the case, the complainant has examined its Legal Officer as PW.1 and got marked documents as Ex.P.1 to 19. He is fully cross examined by the accused. After completion of complainant evidence, the statement of the accused U/Sec. 313 of Cr.P.C. was recorded. He has denied all incriminating circumstances appearing against him. He has not chosen to lead defence evidence.
6. Heard the arguments of the learned counsel for the complainant and accused. Meticulously perused the available materials on records.
7. Based on the above materials the points that would arise for consideration are as follows:
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POINTS FOR CONSIDERATION
1. Whether the complainant proves that the accused has issued a cheque bearing No.572668 dated: 20/01/2024 in favour of complainant for sum of Rs.2,09,676/- in discharge of legally enforceable debt and same are dishonored on the ground as "funds insufficient' and thereby committed an offence punishable U/Sec. 138 of N.I. Act ?
2. What order ?
8. The above points are answered as below:
Point No.1: In the NEGATIVE, Point No.2: As per final order for the following:-
::REASONS::
9. On Point No.1: The further narration of the entire averments of the complaint is desisted in order to avoid the repetition, as already narrated at the inception.
10. However, it is well settled that whenever complainant alleged that the accused has committed an offence punishable U/Sec.138 of N.I. Act, obviously, the complainant has to establish that there was a legally enforceable debt and to discharge the said legally enforceable KABC030227382024 JUDGMENT CC N O.13772/2024
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debt, the accused has issued the cheque and subsequently the said cheque has been dishonored because of reason of insufficiency of funds in the account of the drawer/accused. Keeping in view of these main and important ingredients of section 138 of N.I. Act, this Court proceeds to discuss the evidence available on record.
11. As already been stated above, the complainant has examined its Legal Officer as PW.1. He has filed affidavit in lieu of his examination in chief U/Sec.145 of N.I. Act reiterating the entire averments of the complaint and got marked Ex.P.1 to 19.
12. The Ex.P.1 is the cheque bearing No.572668 dated 20/01/2024 for amount Rs.2,09,676/- drawn on Canara Bank, Basaveshwaranagar branch, Bengaluru, Ex.P.2 is the Bank Endorsement "funds insufficient", Ex.P.3 is the copy of Legal notice, Ex.P.4 is the postal receipt, Ex.P.5 is the Returned postal cover, Ex.P.6 is the board resolution, Ex.P.7 is KABC030227382024 JUDGMENT CC N O.13772/2024
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the loan statement, Ex.P.9 is the board resolution, Ex.P.9 is the loan agreement, Ex.P.10, 11 are the sanction letter, Ex.P.13 is the acknowledgment letter, Ex.P.13, 14 are the Pronote, Ex.P.15 is the loan application, Ex.P.16 is the process note and Ex.P.17 to P.19 are the salary certificate of the accused. On perusal of Ex.P.1, makes it clear that it supports the stand taken by the complainant herein, Ex.P.2 is the Bank, endorsement, which discloses that the aforesaid cheque has been dishonored on 24/01/2024 for the reason of Refer to drawer. As per clause (a) of proviso to Sec.138 of N.I. Act the cheque is to be presented for encashment within the period of its validity from the date on which the cheque has been issued. The Ex.P.1 bears the date 20/01/2024 and it was presented on 24/01/2024, which is within the prescribed period.
13. As per clause (b) of proviso to Sec. 138 of N.I. Act, the complainant is required to issue notice, in writing, to the KABC030227382024 JUDGMENT CC N O.13772/2024
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drawer/accused making a demand for repayment of the said cheque amount within 30 days from the date of receipt of information about the dishonor of the cheque. Ex.P.3 is the copy of Legal notice, Ex.P.4 is the postal receipt, Ex.P.5 is the Returned postal cover. Thereby, it is found that the complainant has issued legal notice within 30 days from the date of knowledge of dishonor of cheque. Thus, the provisions of clause (a) & (b) of proviso to Sec.138 of N.I. Act have been complied with.
14. As per clause (c) of the proviso to Sec. 138 of N.I. Act, the drawer/accused is entitled to have 15 days time to make the payment of the cheque amount. Even after elapse of 15 days time for making payment the accused has not made payment. Further the clause (b) of Sec. 142 of N.I. Act makes it clear that the complaint has to be filed within 30 days from the date of cause of action arose. The endorsement made by this Court on the complaint reveals that the complainant KABC030227382024 JUDGMENT CC N O.13772/2024
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presented the complaint on 15/03/2024 and as such, this complaint is well within the period of limitation. Therefore, this Court is of the considered opinion that the complainant has complied all the necessary components which attracts section 138 of N.I. Act. Even the accused has not challenged any of the mandatory requirements to be complied by the complainant.
15. As per the Judgment of Hon'ble Supreme in case of APS FOREX SERVICES PRIVATE LTD., vs. SHAKTI INTERNATIONAL FASHION LINKERS AND ORS., reported in [2020] ACR 457 wherein it is held that, once accused has admitted issuance of cheque which bears his signature, there is presumption that there exists legally enforceable debt or liability under Sec.139 of N.I. Act. In the present case the issuance of the cheque and the signature on the cheque is not disputed by the accused. The said decision is aptly applicable for raising presumption in favour of complainant.
KABC030227382024 JUDGMENT CC N O.13772/2024
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16. Therefore, when once it is proved that the cheque belonged to the accused coupled with proof that the cheque bears the signature of the accused. The presumption must be that the cheque was issued for a legally enforceable debt or liability. As this Court holds that the complainant has proved the execution of Ex.P.1. More so, the accused has not challenged his signature on the cheque. As a result, the presumption U/sec.139 of N.I. Act is drawn in favour of complainant. Now it is adverted to the rebuttal of presumption by the accused as per below.
ANALYSIS AND EVALUATION OF REBUTTAL OF PRESUMPTION BY THE ACCUSED.
17. In order to rebut the presumption the accused has set up the following defence, • there is no proper authority for presentation of the complaint nor it is supported by proper authorization, • the cheque amount of Rs.2,09,676/- is time barred based upon the account statement as per Ex.P.7, KABC030227382024 JUDGMENT CC N O.13772/2024
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• the cheque is not issued before one month of acknowledgment, however it was issued at the time of sanction of loan as per Ex.P.10 and P.11.
• There is no legally recoverable debt, ON MAINTAINABILITY.
18. Adverting to the defences together, it is the argument of the learned counsel for the accused that the complaint came to be filed by legal officer/manager by name Varun.R, as per the cause title of the complaint and he was said to be authorized by the virtue of Ex.P.6, which is board resolution dated 14/10/2023. The said resolution states that Mr.Varun.R, Director of Kalapana Soudarda Co-operative Society is authorized by board to conduct proceedings of the present case. There is no clarity the said Varun is legal officer or the director. The appointment or any kind of employment order is produced to clear the doubt in this regard. The board resolution at Ex.P.6 says that the director pf the society is KABC030227382024 JUDGMENT CC N O.13772/2024
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authorized to conduct the present case however the case is filed before the Court by Legal Officer/Manger. It goes to show that the said Mr. Varun, the legal Officer/ Manager has no authority to present the present complaint.
19. Again the representative of the complainant came to be changed and Ms. Asha was substituted in place of earlier representative and she is said to be the CEO of complainant society as per the board resolution dated 14/11/2023. However, PW.1 states in the cross examination that she is the legal officer and she does not know how the resolution as stated her as CEO of the complainant society. There is no proper designation of the representatives. There is no similarity in the resolution and cause title of the complainant. PW.1 herself does not know that she is stated as CEO of the complainant. That means she has no idea about her designation arrayed and the contents of the Affidavit filed by her before the Court. In view the said anomaly it was KABC030227382024 JUDGMENT CC N O.13772/2024
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necessary on the part of the complainant to file the appointment letter before the Court. Nonetheless no such document is produced before the Court.
20. It is also argued by the learned counsel for the accused that the board resolution is not the true copy of the minutes of the board resolution. It is not even the extract of the board resolution. It is issued as a authority. In the cross examination PW.1 stated that she would produce the minutes of the board resolution. However, no such minutes or books of minutes is produced before the court. There is no clarity in regard to proper representative of the complainant before the court.
21. There are no documents to show that the Chairman and Secretary had the authority to sign on behalf of the directors of the society, in Ex.P.8. There is no mention about the directors in the resolution. It is usually the secretary acts on behalf of the board and communicates the minutes of the KABC030227382024 JUDGMENT CC N O.13772/2024
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board resolution. In the present case there no such exercise. In view of the same it was necessary to produce the society by- laws for the purpose of clarity whether the signatories of Ex.P.8 had an authority to communicate the resolution. Thereby there is no clarity with the complainant in regard to representation of the complainant before the Court. This goes to the root of the matter for the sake of maintainability of the complaint before the Court. In view of the same the complaint is not maintainable.
ON TIME BARRED DEBT / LIABILITY.
22. The accused has specifically raised a defence on the ground of time barred debt and liability. It was demonstrated by the learned counsel for the accused and pointed towards the loan account statement at Ex.P.7. Accordingly to the Complainant it is the print out of the account statement maintained by the complainant in their office and it is a print out taken from the computer. However, it is not annexed with KABC030227382024 JUDGMENT CC N O.13772/2024
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any secondary evidence certificate under section 65B of Indian Evidence Act nor the said statement bears the seal and signature of the complainant. There is no proper authority for issuance of Ex.P.7 nor issued under the proper authority. On close perusal of Ex.P.7, it is found that the loan of Rs.1,00,000/- was sanction as on 21/8/2017 and there is regular cash deposits shown until 30/03/2019. The last cash payment is on 3/1/2019 and thereafter the interest is credited. Since from 3/1/2019 till 28/10/2023 i.e., for the period of 4 years there has not been any payment by the accused towards the loan. Then on 28/10/2023 it is shown that cash payment of Rs.5,000/- is alleged to have been made by the accused. The learned counsel for the accused argued that the said cash payment has no basis and the same is made only in order to evade the period of limitation and to bring the present case within the period of limitation. There is no account book nor the cash receipts and vouchers to show KABC030227382024 JUDGMENT CC N O.13772/2024
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that Rs.5,000/- was deposited by the accused as on 28/10/2023. Thereby the date for reckoning of the cause of action arises on 3/1/2019 and the cheque is presented on 21/2/2021. There is a gap of around 4 years from the date of last payment till the encashment of the cheque, which is clearly barred under law of Limitation.
23. As per section 21 of Limitation Act, the period for recovery of loan or liability starts from the date on which there was a last transaction, for the purpose of computing the period of limitation. Sec.18 of Limitation Act contemplates fresh period of limitation only if there is any acknowledgment of debt, executed by the borrower within the prescribed period of limitation i.e, within 3 years from the date of due. Further Sec.19 of Limitation Act also contemplates the fresh period of limitation from the date of payment of money towards the liability in question. In view of the same the claim of the complainant is time barred and the same is not legally KABC030227382024 JUDGMENT CC N O.13772/2024
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recoverable debt. The Hon'ble High Court of Karnataka in its authoritative pronouncement while dealing with an aspect of time barred debt, in case of D.Viajy vs. G.Jayaprakash in Criminal Revision Petition No.400/2016 dated 22.03.2025, held that, In view of the principles laid down in the judgment of the Apex Court, judgment of the different High Courts, including this Court, this Court comes to a conclusion that Court can invoke section 138 of N.I. Act in respect of the liability, even if it is a time barred debt subsequently through a document recognizing the liability and also promised to pay the same.
In the present case there is no such document by the accused acknowledging the debt and to pay the time barred debt. As a result the debt and liability claimed by the complainant is not legally recoverable debt.
24. It is also pertinent to note that during the course of cross examination of PW.1, she has stated that cheque came KABC030227382024 JUDGMENT CC N O.13772/2024
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to be issued before one month of presentation of cheque. However, as per Ex.P.10 and P.11 the sanction letter, Ex.P.1, cheque number and its details are mentioned in the sanction letter itself. Thereby it clearly goes to show that cheque was not issued before one month for encashment, however, it was procured from the accused while sanctioning the loan itself and the security cheque has been misused by the complainant.
25. On the contrary the learned counsel for the complainant by relying upon the Judgment in Crl.R.P.256/2022 dated 12.10.2023 between Sri. Sudhakar Reddy C. B. vs. Smt. Pushpa, argued that issuance of a cheque is a promise in writing within the meaning of Sub Sec. (3) of the Sec.25 of the Contract Act and it is an exception to the general rule that agreement without consideration is a void. The issuance of a cheque satisfy the ingredients of such Sub Sec.(3) of the Sec.25 i.e., promise made in writing and KABC030227382024 JUDGMENT CC N O.13772/2024
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signed by the person to be charged therewith to pay wholly or in part a dent of which the creditor might have enforced the payment, but for the law for the limitation of suits and as such, the cheque becomes a cheque drawn towards discharge of a legally enforceable debt as contemplated by the explanation to Sec.138 of N.I. Act and even the cheque issued for time barred debt creates legally enforceable debt and attracts Sec.130 of N.I. Act. The arguments of the learned counsel for the complainant does not appeal to the court because the complainant does not clearly state in the complaint nor in the notice that the accused had issued the cheque in question for the time barred debt. However it is found from the records that the accused had issued the cheque way back in the year 2017 while she was availing the loan from the complainant and there is a mention a cheque in the agreement itself as per Ex.P. 10. Thereby it goes to show that the complainant has utilized the cheque which was KABC030227382024 JUDGMENT CC N O.13772/2024
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already in their possession to regularize their time barred debt. In view of the same, the judgment relied by the learned counsel for the complainant is not applicable to the present set of facts and circumstances.
26. On conjoint reading of the entire materials on record it is found the complainant has proved the liability of the accused however the debt/liability claimed by the accused is time barred. As a result the accused has succeeded in rebutting the presumption that the amount claimed by the complainant is not legally recoverable debt, on the standard of preponderance of probability, as held in the decision of the Hon'ble Supreme Court reported in 2006 (3) Crimes 117 (S.C.) between M.S.Narayana Memon @ Mani V/s. State of Kerala and Anr. Hence, the above point is answered accordingly.
27. ON POINT NO. 2 : In view of the above discussions and findings, the accused is found not guilty for the offence punishable under Section 138 of N.I. Act., having regard to the KABC030227382024 JUDGMENT CC N O.13772/2024
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fact that the complainant has failed to prove the accusation against the accused. In view of the same the accused is entitled to be acquitted for the above said accusation by dismissal of the complainant. Thereby, proceed to pass the following:
:: ORDER ::
• In exercise of Sec. 255 (1) of Cr.P.C., the accused is hereby acquitted of the Offence punishable U/Sec.138 of N.I. Act.
• The bail bond and surety bond of the accused shall continue for next 6 months as per Sec.437-A of Cr.P.C.
(Directly dictated to the Stenographer on computer, corrected by me and then pronounced in the Open Court, on this the 7th day of January, 2026) CK Digitally signed by C K VEERESH Sd/-
VEERESH KUMAR Date: 2026.01.07 (VEERESH KUMAR C.K.) KUMAR 17:32:25 +0530 XXXVIII ADDL.C.J.M., BENGALURU.
ANNEXURE
1. List of Witnesses examined for Complainant:
PW.1 : Smt.Asha.B.H.
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2. List of Witnesses examined for Defence:
-Nil-
3. List of Documents marked for Complainant:
Ex.P.1 : Cheque Ex.P.2 : Bank endorsement. Ex.P.3 : Copy of legal notice. Ex.P.4 : Postal receipt. Ex.P.5 : Returned postal cover Ex.P.6 : Board Resolution Ex.P.7 : Loan Agreement. Ex.P.8 : Board Resolution Ex.P.9 : Loan Agreement. Ex.P.10,11 : Sanction letter Ex.P.12 : Acknowledgment letter. Ex.P.13,14 : Pro Note. Ex.P.15 : Loan application. Ex.P.16 : Process Note Ex.P.17 to P.19 : Salary certificate of the accused.
4. List of Documents marked for Defence:
[[
-Nil-
Sd/-
(VEERESH KUMAR C.K.) XXXVIII ADDL.C.J.M., BENGALURU.