Bangalore District Court
D.N.Dayashankar vs B.S.Prakash on 13 October, 2025
KABC020094682023
IN THE COURT OF THE XII ADDL. JUDGE, COURT OF
SMALL CAUSES & ADDL. CHIEF JUDICIAL MAGISTRATE,
BENGALURU (SCCH-08)
DATED THIS THE 13th DAY OF OCTOBER- 2025
PRESENT: Smt. Kannika M.S.,
M.A., LL.B.
XII ADDL. SCJ & ACJM,
MEMBER - MACT, BENGALURU.
C.C. No.3232/2023
Complainant : Mr. D.N. Dayashankar,
S/o. Late Narasimha Murthy,
Aged about 57 years,
Presently residing at
#3085, 2nd Cross,
Gayathrinagar,
Bengaluru - 560021.
(By Sri. P.C. Narasimhaiah,
Advocate)
:Vs:
Accused : Mr. B.S. Prakash,
Aged about 34 years,
Presently residing at
Old No.43/19, New No.247,
SCCH-8 2 C.C.No.3232/2023
2nd Floor, Revanna Layout,
18th Cross, National Highway-
Tumkur Road,
Chikkabidarakallu,
Nagasandra Post,
Bangalore - 560073.
(By Sri. T.R.N., Advocate)
Date of complaint : 17.02.2023
Date of commencement of
Evidence : 05.04.2023
Offence charged : Sec.138 of Negotiable
Instruments Act
Date of Judgment : 13.10.2025
Opinion of the Judge : Accused found guilty
JUDGEMENT
This is a private complaint filed U/Sec.200 of Cr.P.C. against the accused for the alleged offence punishable U/Sec.138 of Negotiable Instrument Act.
SCCH-8 3 C.C.No.3232/2023
2. The brief facts of the case of the complainant is that:
The accused and complainant are known to each other from several years and on the basis of acquaintance, accused and his wife approached the complainant for handloan of Rs.1,50,000/- for their domestic necessities. Accordingly complainant lent handloan of Rs.1,10,000/- to the accused in cash on 25.06.2022 and the accused promised to return the said amount within five months. Towards settlement of amount and discharge of liability, the accused issued a cheque bearing No.858176 dated 10.11.2022 for a sum of Rs.1,10,000/-, drawn on Karnataka Bank Ltd., Hesaraghatta Main Road, Bengaluru, in favor of complainant. As per the instruction of the accused, complainant has presented the said cheque for encashment through his banker Karnataka Bank Limited, Srirampuram branch, Bengaluru, but the said cheque came to be dishonored and returned with shara "Funds Insufficient & Dormant account" on 30.12.2022. Hence he has issued the SCCH-8 4 C.C.No.3232/2023 legal notice on 06.01.2023 through RPAD to the accused address and the same was not served on the accused. The accused has not paid the amount, and hence, the complainant has filed the present complaint before this Court.
3. Cognizance was taken and sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, the summons was issued to the accused. Accused appeared through his counsel and got enlarged on bail. Substance of accusation was framed, read over and explained to the accused in the language known to him, he denied the same and claimed to be tried. Hence, the case was posted for complainant's evidence.
4. In order to prove his case, the complainant got examined himself as PW-1 and got marked the 5 documents at Ex.P1 to Ex.P5 and closed his evidence. After closure of complainant's side evidence, the statement U/Sec.313 of Cr.P.C was prepared and read over to accused, he has denied the SCCH-8 5 C.C.No.3232/2023 same. The accused has examined himself as DW.1, but not produced any document on his behalf. Thereafter, case was posted for arguments.
5. I have heard the arguments of learned counsel for accused and complainant. Perused the entire records in this case.
6. The following points arise for my consideration:
1. Whether the complainant proves that, the accused has issued the cheque bearing No.858176 dated 10.11.2022 for a sum of Rs.1,10,000/-, drawn on Karnataka Bank Ltd., Hesaraghatta Main Road, Bengaluru and the complainant presented the said cheque for encashment, but the said cheque returned on 30.12.2022 with an endorsement as "Funds Insufficient & Dormant account" ?
2. Whether the complainant further proves that he has got issued the legal notice dated: 06.01.2023 to the Accused demanding the cheque amount from the Accused within 15 days from the date of receipt of the notice, the said legal notice is duly served on the accused, but the accused has failed to make the payment of the cheque amount well within the prescribed time and there by SCCH-8 6 C.C.No.3232/2023 committed an offence punishable under section 138 of Negotiable Instrument Act?
3. What order?
7. The finding of this court on the above points is as under:
Point No.1 : In Affirmative,
Point No.2 : In Affirmative,
Point No.3 : As per final order,
for the following;
REASONS
POINTS NO.1 & 2:
8. Since these points are interconnected, they are taken up together for discussion to avoid repetition of facts.
9. According the complaint, the accused is known to the complainant and on the basis of said acquaintance borrowed handloan of Rs.1,10,000/- from the complainant. Thereafter when the complainant demanded to repay the amount, the accused issued a cheque bearing No.858176 dated 10.11.2022 for a sum of Rs.1,10,000/-, drawn on Karnataka SCCH-8 7 C.C.No.3232/2023 Bank Ltd., Hesaraghatta Main Road, Bengaluru and when he has presented the said cheque for collection and for realization, the said cheque dishonored and returned with shara "Funds Insufficient & Dormant account" on 30.12.2022, hence he issued the legal notice to the accused on 06.01.2023 through RPAD and the same was returned unserved. The accused has not paid the amount, hence the complaint.
10. In support of his contention, complainant has filed affidavit in lieu of examination-in-chief wherein reiterated the averments of the complaint and examined as PW.1 and got marked Ex.P1 to P5. Ex.P1 is the cheque bearing No.858176 dated 10.11.2022 issued by the accused in favour of the Complainant. Ex.P1(a) is the signature of the accused on the cheque. Ex.P2 is the endorsement dated: 30.12.2022 issued by the Bank with respect to the dishonour of the cheque bearing No. 858176 for a sum of Rs.1,10,000/-. It is shows that cheque are dishonored for the reason Funds Insufficient & Dormant SCCH-8 8 C.C.No.3232/2023 account. Ex.P3 is the legal notice dated 06.01.2023 issued by the complainant through his counsel to the accused for the repayment of the said loan amount. Ex.P4 is the postal receipt, Ex.P5 is the returned postal cover. Ex.P1 to P5 shows that the legal notice sent to the accused was not served to the accused. The accused has not repaid the amount. Thereafter complainant has filed this case against the accused. Hence, complainant has complied the mandatory requirements of Sec.138 of N.I. Act.
11. The accused has examined himself as DW.1 and in the examination in chief accused has deposed that, he is not having any financial transaction with the complainant, and he has also not given any cheque to the complainant and at any time he has not met the complainant. He had taken a vehicle from the showroom on loan basis and at that time he had kept 8 to 10 signed cheques with him, out of which 5 cheques are taken by the showroom, and remaining cheque were handed SCCH-8 9 C.C.No.3232/2023 over to his wife. He does not know how the Ex.P1 cheque has gone into the hand of the complainant.
12. Let me discuss whether the amount mentioned in the cheque is for a legally recoverable debt or for other liability. The interpretation of the expression for discharge of any debt or other liability occurring in section 138 of N.I. Act is significant and decisive in matter. The explanation appended to section 138 express the meaning of the expression debt or other liability for the purpose of section 138. This expression means a legally enforceable or other liability. Section 138 treats dishonour of cheque as an offence if the cheque has been issued in discharge of debt or any other liability. The explanation leaves no manner of doubt that to attract an offence under section 138 there should be legally enforceable debt or other liability. As per section 139 of N.I. Act there is a presumption in favour of the complainant that the cheque was issued for discharge of debt or other liability. The said SCCH-8 10 C.C.No.3232/2023 presumption is a legal presumption and it is in favour of the holder of cheque. It is open to the accused to rebut the said presumption. The accused has not rebut the presumptions which is available in favour of the complainant.
13. It is the mandate of Section 139 that there is a presumption in favour of the holder of the cheque that the holder received the cheque of the nature referred to in section 138, for the discharge in whole or in part or other liability. Needless to mention that the presumption contemplated under section 139 of N.I. Act is a rebuttable presumption. However the onus of proving that the cheque was not in discharge of any debt or other liability is on the drawer of the cheque/accused. In Hiten P. Dalal V/s Bratindranath Banerjee reported in 2001 (6) SCC 16 the Hon'ble Supreme Court held that both section 138 and 139 require that the court shall presume the liability of the drawer of the cheque for the amounts for which the cheque are drawn.
SCCH-8 11 C.C.No.3232/2023
Section 139 introduces an exception to the general rule as to the burden of proof and shifts the onus on the accused. The presumption under section 139 of N.I. Act is a presumption of law, as distinguished from presumption of facts.
In Laxmi Dyechem V/s State of Gujarat and others reported in 2012 (13) SCC 375 , the Hon'ble Supreme court reiterated that in view of section 139 it has to be presumed that a cheque was issued in discharge of a debt or other liability but the presumption could be rebutted by adducing evidence. The burden of proof was however on the person who wanted to rebut the presumption.
In K.N. Beena V/s Muniyappan and Anothers reported in 2001(8) SCC 458, the Hon'ble Supreme court held that in view of the provisions of section 139 of the N.I.Act read with section 118 thereof the court had to presume that the cheque had been issued for discharging a debt or liability. The said presumption was rebuttable and could be rebutted by the SCCH-8 12 C.C.No.3232/2023 accused by proving the contrary. The accused had to prove by cogent evidence that there was no debt or liability.
14. The accused has taken contention regarding the financial capacity of the complainant. In the cross examination PW.1 stated that he was a tailor and also mimicry artist and he earns 20 to 25 thousand from his tailoring and he is residing in his own house and his monthly savings is Rs.15,000/-. To prove this aspect complainant has not produced any document, but accused counsel has suggested the Pw1 that he has filed cheque dishonor cases against other persons and those were settled. This makes it clear that complainant was financially capable to lend the loan. When such being the case, it can be easily presumed that the complainant is having financial stability to lend a sum of Rs.1,10,000/-.
15. Further defence of the accused is that, notice is not been served upon him, complainant has given the notice to wrong address with an ulterior motive. But accused in his cross- examination admits that "ಪಿರ್ಯಾದಿನ ಶೀರ್ಷಿಕೆಯಲ್ಲಿ ನೀಡಿರುವ ವಿಳಾಸದಲ್ಲಿ 1 ರಿಂದ SCCH-8 13 C.C.No.3232/2023 1¾ ವರ್ಷಗಳ ಹಿಂದೆ ವಾಸವಾಗಿದ್ದೆನು.". These admission of the accused clears that notice was given to the correct and proper address of the accused. As per Section 27 of General Clauses Act, there is a presumption that if the communications or letters are sent to the address wherein the person ordinarily resides or carry on his business, it is presumed to be valid service. As per Ex.P5 which is the RPAD returned postal cover, returned as postal shara "Not Claimed" which clears that the accused has intentionally avoided the notice, and the accused has got the knowledge about the notice, but he has not issued any reply. When he kept quite regarding the notice of the complainant and not issued the reply notice after getting to know about the notice, the complainant has no needs to prove his financial capacity. At this stage this Court has relied on decision rendered by the Hon'ble Supreme Court in Tedhi Sing V/s Narayan Das Mahant(Tedi Singh) 2022 SCC Online SC302, in this case Court held that, "Where the accused has failed to send reply to the legal notice, challenging the financial capacity of the SCCH-8 14 C.C.No.3232/2023 complainant, at the first instance, complainant need not prove his financial capacity".
The above said decision is aptly applicable to this case on hand, when the accused has kept quite without issuing the reply at the very earlier stage available to him to put forth him defence, she has no right to question the financial capacity of complainant.
16. The accused main contention is that he has not borrowed any amount from the complainant he is not knowing the complainant, the disputed cheque has been misused by his wife and his brother-in-law, they have issued the cheque as security for the loan received by them from the complainant. The complainant has admitted that he is knowing the wife and the brother-in-law of the accused and loan transaction in between them and denied the suggestion of accused regarding Ex.P1 cheque was given by the wife and brother-in-law of the accused at the time of obtaining the loan as security of the said loan. But accused in his defence evidence deposed that he does SCCH-8 15 C.C.No.3232/2023 not know how his cheque gone to the hands of complainant. Evidence of the accused is contrary to the defence taken at the time of cross-examination of Pw1. Further accused has not produced any other oral and documentary evidence in support of his defence.
17. Accused further defence is that he had taken a vehicle from the Bajaj showroom on loan basis and at that time he had kept 8 to 10 signed cheques with him, out of which 5 cheques are taken by the showroom, and remaining cheque were handed over to his wife. His wife and his brother-in-law have misused the cheques and given the cheque to complainant for their loan security. Assuming for a moment, hypothetically only for the sake of appreciation of evidence, if the disputed cheque given as security by his wife and brother-in-law, what precluded to the accused to take action against his wife and his brother-in-law and also against the complainant is not explained by the accused.
SCCH-8 16 C.C.No.3232/2023
18. According to the accused the cheque issued by his wife as security for loan amount at the time of borrowing of loan, then his wife has repaid the same. The complainant has not returned the cheque, then misused the cheque. If the complainant misused the signed blank cheque, why he kept quiet without taking the legal action against the complainant and what prevented him to taken action against him, it creates the suspicion on the contention of the accused. Any prudent man cannot sit like accused, if the cheque was misused by other person and it was within his knowledge.
19. When the accused has taken up a specific plea that the disputed cheque of this case issued by the wife of the accused in the year 2016 as security for loan and she has repaid the loan. Inspite of repayment of loan amount and demand for return of cheque, complainant has not returned the cheque and misused the same. The onus to prove under Section 102 Indian Evidence Act shifts on the accused to SCCH-8 17 C.C.No.3232/2023 demonstrate the same. But except oral testimony the accused has not produced any document. When such being the case, there is no strength in the arguments canvassed by the learned counsel for the accused. This court is not persuaded to accept the contention of the accused. Assuming for a moment, hypothetically only for the sake of appreciation of evidence, if the disputed cheque issued in the year 2016 by the wife of the accused and she repaid the loan, what prevented the accused to call the complainant to return the cheque and also to take the legal action even after repayment of hand loan by her wife. The accused would have atleast sent a legal notice after repayment of loan by his wife to return the cheque. The evidence of DW.1 discloses that the accused has not taken any legal action whatsoever known to law calling the complainant to give back the cheque which he has taken as security for loan amount. No ordinary prudent man will sleep over his rights for a years when his cheque is not returned. Without there being SCCH-8 18 C.C.No.3232/2023 any documentary or independent oral evidence, mere contention taken up in the cross-examination of PW.1 does not avail any benefit to the accused. Hence, this contention urged by the accused is also not tenable in the eye of law.
20. Further more, the accused has not taken any action against the complainant after filing of this case. If there was really a transaction as alleged by the accused then he would have certainly taken action. In this regard it is relevant to rely on the decision reported in AIR 2023 SC 5018 in the case of Rajesh Jain V/s Ajay Singh, wherein it was held as here under :
Once the presumption under Section 139 was given effect to, the Courts ought to have proceeded on the premise that the cheque was, indeed, issued in discharge of a debt/liability. The entire focus would then necessarily have to shift on the case set up by the accused, since the activation of the presumption has the effect of shifting the evidential burden on the accused. The nature of inquiry would then be to see whether the accused has discharged his onus of rebutting SCCH-8 19 C.C.No.3232/2023 the presumption. If he fails to do so, the Court can straightaway proceed to convict him, subject to satisfaction of the other ingredients of Section
138. If the Court finds that the evidential burden placed on the accused has been discharged, the complainant would be expected to prove the said fact independently, without taking aid of the presumption. The Court would then take an overall view based on the evidence on record and decide accordingly.
The principles laid down therein aptly applicable to the case on hand. In the instant case on hand also the accused has taken a similar defence that the complainant has misused the cheque given in the transaction with him, but the accused failed to initiate any legal action in this regard. The accused however failed to provide any substantial evidence or to file police complaint regarding alleged misusage of cheque. In contrast, the case of the complainant remained consistent and the signature of the accused on cheque was unchallenged, allowing presumption has to legally enforceable debt to take effect. To trigger the presumption mere admission of the SCCH-8 20 C.C.No.3232/2023 drawer's signature without admitting the execution of the entire contents in the cheque is sufficient. The said principles has been laid down by the Hon'ble Apex Court in a decision reported in (2019) 4 SCC 197 in the case of Birsingh Vs. Mukhesh Kumar. When such is the case the principles therein aptly applicable to the case on hand.
21. Further on the same point of law it is relevant to rely on a decision of the Apex Court in the case of APS Forex Services Pvt. Ltd., v. Shakti International Fashion Linkers and Others reported in AIR 2020 SC 945 held regarding presumption is concerned that when the accused admits issuance of cheque, his signature on cheque and that cheque in question was issued for discharging the liability, there is always a presumption in favour of the complainant that there exists legally recoverable debt or liability.
SCCH-8 21 C.C.No.3232/2023
22. In the instant case, the accused has not raised any probable defence. Hence, in such an event the accused has not rebutted the presumption as contemplated under Sec.139 of N.I.Act. The accused though disputed financial capacity of the complainant, but the complainant had demonstrated his financial capacity. The accused also not disputed the signature in Ex.P.1. Therefore, it is clear as a cloud less sky that presumption envisaged under Sec.118 and 139 of N.I.Act has not been rebutted by the accused.
23. Further the signature on the cheque was admitted by the accused. The discussions made supra discloses that the accused failed to demonstrate that, he has given the Ex.P1 cheque as a security to the transaction between the wife of the accused and the complainant. In this regard it is relevant to rely on a decision reported in Hon'ble Apex court reported in 2015(4) KCCR 2881 (SC), held in between "Vasanthakumar V/s Vijayakumari, wherein it is held that:
SCCH-8 22 C.C.No.3232/2023
"Accused not disputing issuance of cheque and his signature on it. Plea that it was issued long back as security and that loan amount was repaid".
And also relied on Decision of Hon'ble Supreme Court of India reported in AIR 2019 SC 2446 (Bir Singh V/S Mukesh Kumar) wherein the Hon'ble court held that:
"Negotiable Instrument Act(26 of 1881), S.138, S.139- Presumption as to legally enforceable debt- Rebuttal- signed blank cheque- If voluntarily presented to payee, towards payment, payee may fill up amount and other pariculars and it in itself would not invalidate cheque- Onus would still be on accused to prove that cheque was not issued for discharge of debt or liability by adducing evidence."
Another decision reported in 2021(1) DCR 625 between M/s. Kalamani Tex and another Vs P. Balasubramanian, wherein it is held that:
"Since signature on cheque was admitted and presumption raised upon accused was not sufficiently rebutted by accused, so passing acquittal is unjustified".
The aforesaid decisions are aptly applicable to the facts and circumstances of the present case.
SCCH-8 23 C.C.No.3232/2023
24. The accused also failed to obtain favourable answer from the mouth of PW.1 to rebut the presumptions. Though there are some small discrepancies in the evidence of PW.1, that itself will not falsify the case of the complainant.
25. The complainant produced the cheque marked as Ex.P1 which was issued in his favour and he is the holder in due course and the said cheque was dishonored for the reason Funds Insufficient & Dormant account and even after issuance of notice, the accused has not paid the cheque amount. Thereby he has committed an offence punishable under section 138 of N.I. Act. Accordingly, I answered the Point No.1 and 2 in the Affirmative.
POINT No.3:-
26. Hence, considering the facts and circumstance involved in the case, I am of the opinion that, the complainant is entitled for the compensation as per section 80 of the Negotiable SCCH-8 24 C.C.No.3232/2023 Instrument Act. Accordingly, in the light of above detailed discussion, I proceed to pass the following:
ORDER Acting U/Sec.255(2) of Cr.P.C. the accused is hereby convicted for the offence punishable U/Sec.138 of N.I. Act and he is sentenced to pay fine of Rs.1,20,000/-(Rupees One lakh twenty thousand only).
In default of payment of the fine, the accused shall undergo simple imprisonment for a period of one year.
Out of the fine amount collected from the accused, Rs.1,10,000/- shall be paid to the complainant as compensation u/s.357(1) of Cr.P.C, remaining Rs.10,000/- shall be forfeited to State towards expenses of the case.
It is made clear that in view of Sec.421(1) of Cr.P.C even if the accused undergoes the default sentence imposed above, he is not absolved of liability to the fine amount.SCCH-8 25 C.C.No.3232/2023
Bail bond and surety bond of the accused stands cancelled.
Office is directed to supply a free copy of the judgment to the accused.
(Dictated to the Stenographer directly on computer, typed by her, corrected and then pronounced by me, in the open Court on this the 13th day of October, 2025) Digitally signed by KANNIKA KANNIKA M S MS Date: 2025.10.25 12:19:18 +0530 (Kannika M.S.) XII Addl. Small Causes Judge & ACJM, Bengaluru.
ANNEXURE List of witnesses examined for complainant :-
P.W.1 : Sri D.N. Dayashankar List of documents marked for complainant:-
Exhibits Particulars of the Document Ex,P1 Cheque Ex.P1(a) Signature of Accused Ex.P2 Bank endorsement Ex.P3 Legal notice Ex.P4 Postal receipt Ex.P5 Postal cover SCCH-8 26 C.C.No.3232/2023 List of witnesses examined for accused: DW.1 : Sri. B.S. Prakash List of documents marked for accused:- Nil. Digitally signed by KANNIKA KANNIKA M S MS Date: 2025.10.25 12:19:23 +0530 (Kannika M.S.) XII Addl. Small Causes Judge & ACJM, Bengaluru.