Bangalore District Court
R.N.Kiran vs H.K.Mohan on 4 October, 2025
KABC020452552024
IN THE COURT OF THE XXII ADDL. JUDGE, COURT OF
SMALL CAUSES AND ADDL. CHIEF JUDICAL
MAGISTRATE, BENGALURU CITY
(SCCH-24).
Presided Over by Smt. Roopashri, B.Com., LL.B.,
XXII ADDL., SCJ & ACJM,
MEMBER - MACT,
BENGALURU.
Dated: On this 4th day of October 2025
CC No.13641/2024
1. Sl.No. of the Case : C.C.No.13641/2024
2. The date of : 06-12-2023
commission of the
offence
3. Name of the : Sri. R.N.KIRAN,
Complainant S/o Sri. R.S.Narayanaswamy,
Aged about 43 years,
residing at No.1-A,
near Nandi Park Apartment,
Mahaganapathi Nagara,
Gottigere, Bannerughatta road,
Bengaluru - 560083.
(By Sri.S.Basavaraja. -
Advocate)
4. Name of the : Sri H.K.MOHAN
Accused S/o Sri.Krishnappa .D.
SCCH-24 2 C.C.No.13641/2024
Aged about 46 years,
R/at No.S-357,
Near Claret School, 5th Cross,
Sharadamba Nagara,
Jalahalli, Bengaluru North,
Bengaluru 560013.
Also Working at:
Working as Technician,
LCA LSP Department,
Hindusthan Aeronautics
Limited, Old Airport road,
Marathalli, Bengaluru -560037.
(By Smt. A Sarvarani
Advocate)
5. The offence complained : Under Section 138 of the
of or proves Negotiable Instrument Act.
6. Plea of the accused and : Pleaded not guilty.
his examination
7. Final Order : Accused found guilty
8. Date of such order for : 04-10-2025
the following
*****
JUDGMENT
This complaint is filed under Sec. 200 of Cr. P. C. for the offence punishable under Section 138 of the Negotiable Instruments Act.
SCCH-24 3 C.C.No.13641/20242. It is the case of the complainant that:
The accused and complainant are known to each other. The accused approached the complainant and demanded money so as to invest in the share market and assured that he will return the said amount with profit. Hence, the complainant had paid sum of Rs.1,40,000/- through online and sum of Rs.3,40,000/- by way of cash on different dates in between 19-02-2023 to 20-03-2023. The accused has paid profit to the complainant only to the tune of Rs.27,000/- on different dates. When accused has failed to give profit to the complainant, the complainant demanded the accused to repay the amount with profit. For the discharge of the said amount, the accused has issued cheque bearing No.203139 dated 9-7-2023 for Rs.5,30,000/- including balance profit payable to the complainant, drawn on Canara bank, Marath Halli branch, Bengaluru - 560 037.
3. As per the instruction, when the complainant presented the cheque through his banker same was dishonored with memo "Funds Insufficient" on 13-07- 2023. Same was intimated to the accused. As per the request of the accused, once again the complainant SCCH-24 4 C.C.No.13641/2024 presented the cheque for encashment through his banker on 11-8-2023, but same was dishonoured with memo "Funds insufficient" on 14-08-2023. Thereafter, the complainant got issued legal notice to the accused on 07-09-2023 through RPAD & Courier service. The notice issued to the working place was returned with shara "unserved, return to sender." The notice issued to the residential address was served to the accused on 11- 09-2023, as per Website of India Post Track consignment. In spite of receipt of said notice, the accused failed to pay the said amount. Accordingly, the accused has committed an offence punishable under Sec.138 of N.I Act.
4. After recording the sworn statement of the complainant and also verifying the documents, cognizance was taken against the accused for the offence punishable under Sec.138 of N.I. Act. The accused on receiving the summons appeared before this Court through his counsel and he was enlarged on bail and his plea was recorded. The accused pleaded not guilty and claimed to be tried. Hence, the case was posted for the evidence of complainant.
5. The complainant got examined himself as PW.1 and got marked documents as Exs.P1 to 20. Then, the SCCH-24 5 C.C.No.13641/2024 case was posted for recording the statement of accused under Sec.313 Cr.P.C. In the statement U/sec.313 of Cr.P.C., the accused has denied all the incriminating ev- idence appearing against him and claimed to be tried. The accused was examined as DW.1 and marked one document as Ex.D1.
6. Heard arguments of both sides and perused the records.
7. The following points arise for my consideration:
1. Whether the complainant proves that accused has committed an offence punishable under Sec.138 of N.I. Act?
2. What order?
8. My findings on the above points are as under:
Point No.1: In the Affirmative Point No.2: As per final order, for the following:
-: R E A S O N S :-
9. POINT No.1:- It is the definite case of the complainant that, towards the discharge of debt the accused has issued disputed cheque in favour of the complainant and when the cheque was presented for SCCH-24 6 C.C.No.13641/2024 encashment, same was dishonoued for the reason "funds insufficient." Though the said fact was brought to the notice of the accused by issuing legal notice, but accused has failed to repay the cheque amount.
10. To substantiate the contention, the complainant got examined himself as PW1. In the examination in chief, the complainant has reiterated the averments made in the complaint. Ex.P1 is the Cheque, Ex.P1(a) is the signature of the accused, Ex.P2 to 5 are the cheque return memos which indicates that cheque is returned for the reason "Funds Insufficient" on 12-07- 2025 and 14-08-2023 respectively, Ex.P6 is the unserved courier postal cover, Ex.P7 is the demand notice issued by the complainant to the accused through his Advocate calling upon the accused to make payment of the cheque amount, Ex.P8 & 9 are the Postal receipts, Ex.P10 is the unserved RPAD postal cover, Ex.P11 is the returned legal notice, Ex.P12 is the letter written to the Post Master, Begur Post office dated 09-12-2023, Ex.P13 to 15 are the Postal communication letters and intimation regarding service of notice, Ex.P16 is the Postal cover, Ex.P17 & 18 are the Bank statements, Ex.P19 is the Courier Track consignment and Ex.P20 is the Certificate U/sec.65B of Indian Evidence Act.
SCCH-24 7 C.C.No.13641/202411. The accused while out rightly denied the contention of the complainant to the effect of sum of Rs.4,80,000/- given to him towards investment in shares, has taken the specific defence that he had borrowed hand loan of Rs.1,40,000/- on different dates from the complainant by giving blank signed cheque and during the course of time he had repaid entire amount of Rs.1,40,000/- (ie.,) through phone pay and bank transfer to the tune of Rs.46,500/- and balance amount of Rs.93,500/- was paid through cash and after repayment of entire amount, though the accused insisted the complainant to return the cheque, but complainant evaded to return the cheque and by misusing the said cheque filed false complaint. The accused in further has denied the service of legal notice to him.
12. If the materials placed on record is perused, the accused no where has disputed the Ex.P1 relates to his account so also his signature in the Ex.P1 but contends that it was given as security for the hand loan transaction of Rs.1,40,000/-. Hence presumption under Sec.118 and 139 of NI Act can be drawn regarding issuance of cheque towards discharge of debt. It is true that such presumption is rebuttal. The accused can prove the non existence of consideration by raising SCCH-24 8 C.C.No.13641/2024 probable defence . If the accused discharged the initial burden of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift on the complainant to prove it as a matter of fact and upon his failed to prove would disentitle him to get the relief.
13. Now with the materials available on record the court has to appreciate whether accused has prohablised the defence taken by him.
14. So far as the objection raised by the accused as to non service of legal notice is concerned, though the learned counsel for accused during the cross of PW.1 has disputed the service of legal notice to the accused and also posed suggested that the address of the accused given in the legal notice is an incomplete address, but nowhere in the evidence in chief of accused he has disputed the service of legal notice to him. Further if the statement of accused recorded u/Sec. 313 Cr.PC is perused, wherein he was admitted the service of legal notice and stated that even though legal notice is served to him, he has not given reply to the said notice. Even though the learned counsel for accused has posed suggestion to the PW.1 that he has given incomplete address of the accused, but if the evidence in chief of SCCH-24 9 C.C.No.13641/2024 accused is perused, wherein accused has given his address and the said address and the address of the accused stated in the legal notice and complaint is one and the same. If really the complainant has given incomplete address of the accused, then it is for the accused to state what is his complete address and he has to produce address proof to let the court know the complete address of the accused. But accused has not stated what is his complete address. Further if the Bail bond executed by the accused is perused, wherein he has stated his address which is in consonance with the address mentioned in the legal notice and complaint. If Ex.P7 to Ex.P16 are perused, the legal notice was issued to the accused through RPAD and there is endorsement about service of notice. When legal notice is issued to the accused to his correct address and to the last known address through RPAD, presumption shall have to be drawn under Sec. 27 of General Clauses Act. Hence it can be said that legal notice is duly served to the accused. In spite of service of notice, the accused did not opt to give reply and not taken the defence which he has taken by giving reply notice.
15. So far as the contention taken by the complainant as to sum of Rs.4,80,000/- given by him on different dates for investment in share business and the SCCH-24 10 C.C.No.13641/2024 assurance given by the accused of the repayment of invested amount with profit from time to time and failure on the part of the accused in making payment of profit so also invested amount and the defence taken by the accused that there was hand loan transaction of Rs.1,40,000/- with the complainant and the repayment of entire loan amount through Phone pay, Bank transfer and cash etc., is concerned, if the evidence of PW.1 and DW.1 is read in whole, wherein the accused has disputed the financial status of the complainant so as to invest sum of Rs.4,80,000/- with the accused on share business. While disputing the financial status of the complainant it is vehemently argued by the learned defence counsel that even if there is presumption u/Sec. 118 and 139 of NI Act, but when accused disputed the financial capacity of the complainant, burden is upon the complainant to prove his financial status. If he fails to prove the financial status then the case of the complainant will go. The learned counsel for accused at this juncture has relied upon the judgment reported in 2009 Cr.L.J 882 between M/s Kamar General Store/KishoriLalviji. In the said case complainant did not have any money with him. In fact he owed money to others. It was held that the accused has probablised his defence from the own evidence of complainant. Hence, SCCH-24 11 C.C.No.13641/2024 holding that cheques were not issued for discharge of any debt, acquitted the accused.
16. In 2011 (3) AIR Kar 434 between B.Girish /Ramaiah. In the said case also the accused has specifically denied monetary transaction. The complainant alleged that he lent money to the accused after borrowing from other sources and he has not produced any document to show the alleged borrowing. More over since transaction was above Rs.20,000/- there was no account payee cheque issued by complainant under Sec.269 (SS) of Income Tax Act in absence of oral and documentary evidence from complainant. Hence, held that presumption u/Sec. 139 and 118 stood rebutted.
17. In 2015 AIR SCW 64 - K Subramani Vs. K Damodara Naidu. In the said case the complainant failed to prove that he had source of income to lend Rs.14 lakh to the accused. He failed to prove that there is legally recoverable debt payable by the accused. Hence, acquitted the accused.
18. While disputing the payment in cash to the tune of Rs.3,40,000/- made by the complainant to the accused, it is vehemently argued by the learned counsel SCCH-24 12 C.C.No.13641/2024 for accused that though the complainant has stated that on 19-02-2023 he had given an amount of Rs.40,000/- in cash but as per the bank statement produced by the complainant, as on 19-02-2023 the balance amount in his credit was Rs.19,000/- and that though the complainant has stated that on 21-02-2023 he had given Rs.1,00,000/-, on 28-02-2023 he had given Rs.1,00,000/-, on 19-03-2023 he had given Rs.50,000/- and on 20-03-2023 he had given Rs.50,000/- to the accused by way of cash but on the above respective dates the amount credited in the account of the complainant was Rs.8,948/-, Rs.9001/-, Rs.2,613/-, Rs.12,612/-. Hence the complainant had no financial capacity to invest sum of Rs.4,80,000/- in any business with the accused.
19. In the light of the argument canvased by the learned counsel for accused, if the evidence of PW.1 is perused, as per the evidence of PW.1 he has been working in Northern Trust and his annual income is Rs.8,50,000/-. It means the monthly income of the complainant is nearly Rs.70,833/-. The accused no where has disputed the avocation and income of the PW1 as stated in his evidence. As per the case of accused he is working in HAL company and drawing monthly salary of Rs.1,50,000/- and his wife is SCCH-24 13 C.C.No.13641/2024 Government Employee working in Judicial Department and drawing monthly salary of Rs.50,000/-. It is the case of the accused that he had borrowed sum of Rs.1,40,000/- on different dates from the complainant and he had repaid the same by way of cash, Phone pay and Account transfer. To that effect he has produced his bank statement as per Ex.D1. If Ex.D1 is perused wherein there is entry regarding transfer of Rs.3,500/-, Rs.10,000/-, Rs.6,000/-, Rs.23,000/-, Rs.5,000/-, Rs.10,000/- in all Rs.46,500/-, on 25-02-2023, 05-03- 2023, 12-03-2023, 26-03-2023. 17-05-2013 and 30-06- 2023 respectively. According to the accused balance amount of Rs.93,500/ was repaid by him by way of cash. The complainant has admitted sum of Rs.46,500/- paid by accused on different dates mentioned above. But according to him it was towards Joining bonus profit in respect of invested amount. It is relevant to state here that if the version taken by the accused is considered, then when accused having salary of Rs.1,50,000/- per month, gone to the extent of borrowing money from the complainant to the tune of Rs.1,40,000/- and when accused has not disputed the avocation and income of the complainant, under such circumstances it can be said that complainant is financially sound enough to invest sum of Rs.4,80,000/- with the accused. Further investment of Rs.4,80,000/- was not at a stretch. It is SCCH-24 14 C.C.No.13641/2024 relevant to state here that except during the cross examination of PW.1 posing suggestion that PW.1 is not financially fit to invest Rs.4,80,000/- neither in the evidence in chief of Dw.1 nor during his cross examination has disputed the financial status of the complainant. The accused has not raised the said defence at the thresh hold by giving reply to the notice. It is true that as on the dates mentioned in the complaint about investment of money with the accused by way of cash, there was meger amount in the account of the complainant. But it is no where the case of the complainant that by withdrawing sum of Rs.40,000/- on 19-02-2023, Rs.1,00,000/- on 21-02-2023, Rs.1,00,000/- on 28-02-2023, Rs.50,000/- on 19-03- 2023 and Rs.50,000/- on 20-03-2023 he had given said amount to the accused by way of cash to invest it in the shares so as to say that complainant had no sufficient money in his account so as to invest in shares. If really accused having sufficient income with him borrowed sum of Rs.1,40,000/- from the complainant, he would have borrowed said sum at one stretch without borrowing it on different dates with different sum running in to Rs.20,000/-, Rs.30,000/-, Rs.40,000/-, Rs.50,000/- etc. Hence the very sum transferred to the account of accused on different dates itself reveals that it is only for investing money in shares, the complainant SCCH-24 15 C.C.No.13641/2024 had transferred the same to the account of accused and remaining amount stated in the complaint was given on different dates through cash. So far as sum of Rs.3,500/-, Rs.10,000/-, Rs.6,000/-, Rs.23,000/-, Rs.5,000/- and Rs.10,000/- in all of Rs.46,500/- transferred by the accused to the complainant on different dates is concerned, there is no merit in the defence taken by the accused that same was towards repayment of the loan of Rs.1,40,000/- borrowed by him from the complainant. If really accused had borrowed sum of Rs.20,000/- on 21-02-2023, without repaying the said amount the complainant would not have lend sum of Rs.30,000/- on 28-02-2023 and without repaying Rs.30,000/- the complainant would not have lend Rs.40,000/- on 19-03-2023 and without repaying sum of Rs.40,000/- the complainant would not have lend further sum of Rs.50,000/- on 20-03-2023. Hence, the very transfer of amount by complainant on different dates to the accused and transfer of money by the accused to the complainant to the extent stated in the complaint would itself reveals that the complainant had given sum of Rs.4,80,000/- towards investment in shares and sum of Rs. 46,500/- was paid by the accused towards initial profit. If really accused had borrowed sum of Rs.1,40,000/- from the complainant and if really accused had repaid the said sum and if SCCH-24 16 C.C.No.13641/2024 really cheque in question was issued towards security for the alleged loan transaction, then on repayment of alleged loan amount, the accused could have taken back the cheque from the complainant and could have takes legal action against the complainant and accused could have taken all these defences by giving reply to the legal notice. But no such action has been taken by the accused. Accused is not an uneducated person, he is employed in HAL Company and he knows the pros and cons of issuance of blank signed cheque. Hence, the defence taken by the accused is not acceptable one. So far as the contention taken by the accused that though the complainant stated to have given sum of Rs.4,80,000/- to the accused to invest in shares, but cheque is presented for Rs.5,30,000/- and there is no explanation for issuance of cheque for higher amount is concerned, the complainant in his complaint, evidence and in the legal notice has clearly stated that towards invested amount of Rs.4,80,000/- and profit, cheque in question was issued for Rs.5,30,000/- and thereby given proper explanation for issuance of cheque for higher amount than the invested amount of Rs.4,80,000/-. So far as issuance of money on different dates by the complainant by way of cash is concerned, merely because the sum of Rs.3,40,000/- out of Rs.4,80,000/- was paid through cash it cannot be said that SCCH-24 17 C.C.No.13641/2024 complainant has not given the said sum. In Civil Appeal No. 11309/2025 (Arising out of SLP (Civil) No. 10362 of 2024 between George Kutty Vs.,M N Saji it was observed that "it is not uncommon that in money transactions, there is a component of cash also involved and Just because a person is not able to prove the transfer through official modes (ie) through any Negotiable Instrument or Bank transaction, would not lead to the conclusion that such amount was paid through cash. Moreover the initial presumption is legally enforceable debt comes from the Negotiable Instrument Act also and then the onus shifts on the accused to prove that no such amount was given. Only because documentary proof was not available, view cannot be taken that such amount was not paid through cash and absence of document for payment through cash would not negate and disprove the stand that the cash transaction also took place between the parties".
20. Herein also since there is no document to prove the cash payment of Rs.3,40,000/- by the complainant to the accused to invest it in shares, court cannot disbelieve the version of complainant, when cheque is question was issued for Rs.5,30,000/- towards invested amount and profit.
SCCH-24 18 C.C.No.13641/202421. Considering the oral and documentary evidence placed on record, it can be said that the accused has failed to probablise his defence beyond preponderance of probability.
22. In the light of the discussion herein above, I am of the considered opinion that accused deemed to have committed an offence under section 138 of the Act . Accordingly, I answer point No.1 in the Affirmative.
23. POINT No.2 :- The Negotiable Instruments Act is a Special Enactment, and the provisions of the Act prevail over the general provisions contained in Code of Criminal Procedure. Therefore, keeping the relevant provisions of the Act in mind the sentence is to be passed. In the light of the reasons on the point No.1, I proceed to pass the following;
ORDER Acting under Sec. 255(2) of Cr.PC, the accused is found guilty of the offence punishable under section 138 read with section 142 of NI Act.
SCCH-24 19 C.C.No.13641/2024Consequently, accused is sentenced to pay fine of Rs.5,40,000/- (Rupees Five Lakh Forty Thousand only), out of which Rs.5,35,000/- shall be paid as compensation to the complainant under Sec.357 of CRPC and Rs.5,000/- shall be payable to the State.
In the event of default in payment within a period of one month, the accused shall be convicted to simple imprisonment for a period of 3 months.
It is made clear that in view of Sec.421 (1) of Cr.PC, even if the accused under goes the default sentence imposed above, he is not absolved of liability to pay the fine amount.
The bail bond of accused and that of surety stands canceled.
Office to furnish the copy of this judgment free of cost to the accused.
(Dictated to the stenographer on line, revised, corrected and then pronounced in the open court this the 4th day of October 2025 (ROOPASHRI) XXII Addl. SCJ & ACJM Bengaluru.
SCCH-24 20 C.C.No.13641/2024:ANNEXTURE:
LIST OF WITNESSES EXAMINED ON BEHALF OF THE COMPLAINANT P.W.1 : Sri.R.N. Kiran LIST OF DOCUMENTS MARKED ON BEHALF OF COMPLAINANT:
Ex.P1 : Original Cheque,
Ex.P1(a) : Signature of the accused,
Ex.P2 to 5 : Cheque return memos
Ex.P6 : Unserved courier cover,
Ex.P7 : Copy of Notice
Ex.P8 & 9 : Postal receipts,
Ex.P10 : Unserved RPAD postal cover,
Ex.P11 : Returned legal notice
Ex.P12 : Letter addressed to Post Master,
Begur Post office,
Ex.P13 to : Postal communication letters,
P15
Ex.P16 : Postal cover,
Ex.P17 : Copy of Bank statements
& P18
Ex.P19 : Courier Track consignment
Ex.P20 : Certificate U/sec.65B of Indian Evidence Act.
LIST OF WITNESSES EXAMINED BY THE ACCUSED DW.1 H K Mohan LIST OF DOCUMENTS MARKED ON BEHALF OF ACCUSED:
Ex.D1 Bank Statement
XXII Addl. SCJ & ACJM
Bengaluru.
Digitally
signed by
ROOPASHRI
ROOPASHRI Date:
2025.10.04
16:00:42
+0530