Bangalore District Court
Srinivas Govinraj vs Vinayaka Bharath Gas on 6 February, 2026
KABC020382892022
IN THE COURT OF THE XXII ADDL. JUDGE, COURT OF
SMALL CAUSES AND ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY (SCCH-24).
Presided Over by Smt. Roopashri, B.Com., LL.B.,
XXII ADDL., SCJ & ACJM,
MEMBER - MACT,
BENGALURU.
Dated: On this 6th day of February 2026
CC NO.14557/2022
1. Sl.No. of the Case : C.C.No.14557/2022
2. The date of : 02-12-2022
commission of the
offence
3. Name of the : Mr. Srinivas Govindraj
Complainant S/o Govindraj,
Aged about 46 years,
R/at No.52, 1st cross,
2nd main, SBI officers Colony,
Basveshwarnagar,
Bangalore -560 079.
(By Sri.Santhosh S Gogi,
Advocate)
4. Name of the : 1. Vinayaka Bharath Gas
Accused No.158/A,
Vignana Nagar main road,
SCCH-24 2 C.C.14557/2022
BTM Dollars Scheme,
Basava Nagar,
Bengaluru -560 037.
Represented by its Partner
Smt. Pavithra G Umashankar
2. Smt.Pavithra G Umashankar
Partner, Vinayaka Bharath Gas
Wife of Sri.Panchakshrappa
Pramod,
Aged about 41 years,
No.147, Adarsh Vista,
Next to Shell Petrol Bunk,
Basava Nagar Main road,
Near TATA Share wood,
Vibhoothipura,
Bengaluru -560 037.
3. Mr. Panchakshrappa
Pramod,
Partner, Vinayaka Bharath Gas,
S/o Panchaksharappa,
Aged about 48 years,
No.147, Adarsh Vista,
Next to Shell Petrol Bunk,
Basava Nagar Main road,
Near TATA Share wood,
Vibhoothipura,
Bengaluru -560 037.
4. Mr. Ananthaneni Suni
Kumar
Partner, Vinayaka Bharath Gas
S/o Annathaneni Suresh Babu,
Aged about 32 yeas,
No.D 1301, Spectra Palmwoods
Apartments,
SCCH-24 3 C.C.14557/2022
Pattandur Agrahara main road,
Siddapura, Brookefield,
Bengaluru -560 066.
(By Sri.Surendra Y S
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 not guilty
8. Date of such order for : 06-02-2026
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.
2. It is the case of the complainant that:, The accused no.1 is a partnership company, the accused no.2 is the partner of the accused no.1 company, the accused no.3 is the outgoing partner of the accused no.1 company,and also been the signing authority of the accused no.1 company and accused no.4 is current partner who is involved in the day to day affairs of the accused no.1.
SCCH-24 4 C.C.14557/20223. The accused no.3 and the complainant used to work together in the same organization and thereby they have been good friends. It was through the accused no.3 the complainant was introduced to the accused no.1.
4. The accused no.2 and 3 had decided to start a LPG Distribution business in the name and style "Vinayaka Bharath Gas" and they were the partners of the said business. In the month of November 2016, the accused no.2 and 3 approached the complainant to invest in the accused no.1 company, wherein the complainant could also see profit in his share from the income generated from the accused no.1 and accused no.2 and 3 would repay the invested amount to the complainant.
5. Considering the representations, the complainant decided to invest in the accused no.1 company and thus contributed an amount of Rs.1,69,73,340/- which was transferred to the account of the accused no.2 and 3 stage by stage on various dates, as and when required by them. The accused no.2 and 3 promised to repay the borrowed amount to SCCH-24 5 C.C.14557/2022 the complainant by October, 2021. Out of the total amount of Rs.1,69,73,340/-, the accused no.2 and 3 have repaid Rs.1,30,71,340/- and remaining amount of Rs.39,02,000/- is due to the complainant. In order to discharge the said liability, the accused no.2 has issued a cheque bearing No.143885 on behalf of accused no.1, dated 22-08-2022 for Rs.39,02,000/- drawn on Bank of India, Vignananagar Branch, Bangalore.
6. As per the instructions, the complainant had presented the cheque for encashment through ICICI Bank, Bommanahalli Branch, Bengalore. But, same was returned with an endorsement "Kindly Contact Drawer/Drawee Bank & Present Again" on 02-09-2022. The complainant has intimated that the said cheque was dishonoured and thereby the accused no.2 and 3 have requested the complainant to re-present the said cheque on 29-09-2022. Again the complainant has presented the cheque through his banker, but same was returned as "Kindly Contact Drawer/Drawee Bank & Present Again" on 29-08-2022. Thereafter, the complainant got issued legal notice dated 21-10-2022 to the accused through RPAD. The said notice was duly served to the accused no.1 on 26-10-2022 and the legal SCCH-24 6 C.C.14557/2022 notice issued to the accused no.2 to 4 returned unserved for the reason "Refused". Accordingly, the accused has committed offence punishable under Sec.138 of N.I Act.
7. 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 no.2 to 4 on receiving the summons have appeared before this Court through their counsel and they were enlarged on bail and their plea was recorded. The accused pleaded not guilty and claimed to be tried. Hence, the case was posted for the evidence of the complainant.
8. The complainant got examined himself as PW.1 and got marked documents as Exs.P1 to 15. Then, the case was posted for recording the statement of accused under Sec.313 Cr.P.C. In the statement U/s 313 Cr.P.C., the accused have dubbed the whole case of the complainant and claims to be tried . The accused no.2 examined herself as Dw1 and got marked documents as Ex.D5 and Ex.D6. During the cross-examination of PW.1 the learned counsel for accused confronted some documents and got them marked as Ex.D.1 to Ex.D4.
SCCH-24 7 C.C.14557/2022The accused no.4 got examined himself as DW.2 and got marked documents as Ex.D7 and Ex.D8. Hence, the case was posted for arguments.
9. Heard arguments of both sides and perused the records.
10. 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?
11. 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 :-
12. POINT NO.1:- It is the definite case of the complainant that, towards the discharge of balance invested amount, accused no.2 as the partner of the accused no.1 company has issued cheque bearing 143885 for a sum of Rs.39,02,000/- dated 22-08-2022.
SCCH-24 8 C.C.14557/2022When the cheque was presented for encashment for two times, same was returned with an endorsement "Kindly Contact Drawer/Drawer Bank & Present Again". Though the said fact was brought to the notice of the accused by issuing legal notice but accused have failed to repay the cheque amount.
13. To substantiate the contention, the complainant got examined himself as PW1 and in his examination in chief he has reiterated the averments of the complaint. Ex.P1 is the cheque bearing No. 143885 dated 22-08-2022 for Rs.39,02,000/. The accused no.2 to 4 nowhere have disputed that cheque in question relates to the accused no.1 company and signature in the Ex.P1 is of the signature of accused no.2. Ex.P2 and 3 are the cheque return memos which indicates that cheque was returned for the reason "Contact Drawer/Drawer Bank & Present Again", Ex.P4 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, ExP5 to 8 are the postal receipts, ExP9 to Ex.P11 are the three postal covers, Ex.P.12 to Ex.P14 are the postal acknowledgments. Ex.P15 is the Bank statement for the year 2016 to 2021.
SCCH-24 9 C.C.14557/202214. The accused no.2 by adducing her evidence while admitting that she is the partner of the accused no.1 company and while admitting sum of Rs.1,69,73,340/- invested by the complainant in the accused no.1 company has taken the defence that the complainant himself has approached them in the year 2016 and invested sum of Rs.1,69,73,340/- and on the oral agreement they have entrusted the complainant to look after the operation of the agency. Accordingly from 2016 till 2022 the complainant was looking after the operation of the business of Vinyaka Bharath Gas. The partners of accused no.1 company have authorized the complainant to operate the business and other bank related transaction. The accused further submitted that the complainant has obtained his return on investment amount ie., Rs.1,30,71,340/- through bank transaction and remaining amount of Rs.39,02,000/- has been taken of by the complainant, off the record as complainant was also dealing with cash transaction. The complainant was handling all the business transaction from 2016 to 2022 and accused no.2 has also shared OTP for the purpose of bank transaction to continue the operation of the business. The accused no.2 has denied any signed cheque issued to the SCCH-24 10 C.C.14557/2022 complainant and contended that during the year 2016 to 2022 the cheques relating to the company have been misused by the complainant. In that regard, the accused no.2 had intimated to the bank. The complainant has misused the cheque which is in the name of accused no.1 and filed false complaint.
15. In order to probablise the defense, the accused no.2 got examined herself as Dw1 and got marked documents as Ex.D5 and Ex.D6. During the cross-examination of PW.1, learned counsel for accused confronted some documents and got them marked as Ex.D.1 to Ex.D4. The accused no.4 got examined himself as DW.2.
16. Though the accused no.2 in her evidence in chief has stated that at no point of time she had issued signed cheque to the complainant but nowhere during the cross examination of PW.1 any single suggestion has been posed denying /disputing her signature in the Ex.P1, rather in the cross examination of DW.1/accused no.2, in an unequivocal terms she had admitted her signature in the Ex.P1.
17. If the statement given by the accused no.2 to 4 u/Sec. 313 of Cr.PC is perused, wherein the accused have stated that they have not issued cheque and that SCCH-24 11 C.C.14557/2022 they have paid entire amount to the complainant and that the disputed cheque was lost and they are not liable to pay the cheque amount.
18. The learned counsel for the complainant at this juncture has referred the judgment reported in (2021) 5 SCC 283 between Kalamani Tax & Anr., Vs. P Balasubramanian wherein it was observed that " if the blank cheque is voluntarily signed presumption as to legally enforceable debt, available against the accused towards some payment and court has to presume that the cheque was issued as consideration for a legally enforceable debt. The defence plea that only a blank cheque and signed blank papers were given to the accused held immaterial".
19. In (2019) 10 SCC 287 between Uttam Ram Vs. Devinder Singh Hudan & Anr., it was observed that "Once cheque is proved to be issued, it carries statutory presumption. Then onus is on the person issuing the cheque to disproved. Once agent of respondent admitted settlement of due amount and in absence of any other evidence the courts below could not dismiss complaint only on account of discrepancies in determination of amount due or oral evidence in regard thereto, when written document crystalises the amount due for which the cheque was issued-
SCCH-24 12 C.C.14557/2022Conclusion drawn by courts below to acquit the respondent, on basis of mere discrepancies in the statement in respect of the cartons, trays or the packing material or the rate charged, is not only illegal but being perverse is totally unsustainable in law Respondent is held guilty of dishonour of cheque for an offence under S.138 of the Act".
20. In (2019) 4 SCC 197 between Bir Singh Vs. Mukesh Kumar, it was observed that "Presumption that cheque, duly signed and voluntarily made over to payee, was in discharge of debt or liability, arises irrespective of whether cheque was post dated or blank cheque filled by payer or any other person, in absence of evidence of undue influence or coercion. The fact that the cheque might be post dated does not absolve the drawer of a cheque of the penal consequences of Section 138 of the Act. Further, it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a SCCH-24 13 C.C.14557/2022 debt. If the cheque is otherwise valid, the penal provisions of Section 138, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence".
21. In (2018) 8 SCC 469 between T.P Murugan (Dead) Through Legal Representatives vs. Bojan, it was held that "Under Section 139 of the NI Act, once a cheque has been signed and issued in favour of the holder, there is statutory presumption that it is issued in discharge of a legally enforceable debt or liability. This presumption is a rebuttable one, if the issuer of the cheque is able to discharge the burden that it was issued for some other purpose like security for a loan".
22. Per contra, on the point of presumption, the learned counsel for accused has referred judgment reported in Crl Appeal No. 1758/2016 between Sri Dadapeer Vs. Sri Munavar Sab, wherein it was observed that "when the signature in the cheque is admitted to be that of the accused the presumption envisaged in Section 118 of the Act can legally be SCCH-24 14 C.C.14557/2022 inferred that the cheque was made or drawn for consideration. The said proposition is well settled but the statutory presumption mandated by Sec.139 of the Act is in the nature of rebuttable presumption and it is open for the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested, the same can be either by leading evidence or by effective cross examination of the complainant".
23. The observation made in the judgment relied by the accused is similar to the observation made in the judgments relied by the learned counsel for complainant.
24. Though the accused no.2 in her evidence in chief at para no. 7 has stated that she never had issued signed cheque to the complainant since 2016 to 2022 but in her cross examination while denying the cheque in question issued by her, admitted her signature in the Ex.P1. As observed supra, she has admitted that cheque in question relates to the account of accused no.1 company. Hence, as per the observation made in the aforesaid judgment presumption shall be drawn that cheque in question was issued towards discharge of debt/ liability. Now it SCCH-24 15 C.C.14557/2022 is for the accused to rebut the presumption with preponderance of probabilities.
25. The accused have admitted the service of legal notice to the accused no.1 but stated that they were not aware that legal notice should be replied, hence, they have not given reply to the notice.
26. So far as the financial condition of the complainant to invest sum of Rs.1,69,73,340/- is concerned, the accused persons nowhere have disputed the financial stability of the complainant to invest the said sum of money. It is true that the learned counsel for accused during the cross examination of PW.1 has posed question that the complainant has not stated in his complaint or in his notice the sum of Rs.1,69,73,340/- invested by him in the accused no.1 company. But if the notice and complaint is read in whole, the complainant in specific term has stated about sum of Rs.1,39,73,640/- invested by him during the year 2016-2021. PW.1 deposed that he has transferred said sum of money through account transfer. PW.1 has produced his bank statement as per Ex.P15 which reflects the amount transferred by him from time to time to the account of SCCH-24 16 C.C.14557/2022 accused no.1. It was the question posed to the PW.1 whether he has collected any document from the accused regarding sum of Rs.1,69,73,340/- invested by him in the accused no.1 company, for which the answer of the PW.1 that by reposing confidence on the accused persons, he has invested such a huge sum of money without insisting for execution of any documents. The learned counsel for accused in further has posed question whether complainant has disclosed sum of Rs.1,69,73,340/- invested by him in the Income Tax Return. The complainant has not disclosed the investment made by him, the profit received by him and the amount due from the accused persons in the Income Tax Returns.
27. If the line of cross-examination done to the PW.1 and the evidence in chief of DW.1 is perused, it clearly reveals that, accused persons have admitted sum of Rs.1,69,73,340/- invested by the complainant in the accused no.1 company from from time to time in the year 2016-2021. Hence, even if the complainant has not disclosed the investment made by him in the ITR or the amount allegedly due by the accused in the ITR it will not disprove the case of the complainant so far as the investment of aforesaid amount by the complainant in the accused no.1 company.
SCCH-24 17 C.C.14557/202228. In a judgment reported in Division Bench of Bombay High Court between Prakash Madhukarrao Desai Vs. Dattatraya Sheshrao Desai (2023 SCC Online Bom 1708) it was held that "a transaction not reflected in the books of account and/or Income -tax returns of the holder of the cheque in due course can be permitted to be enforced by instituting proceedings under section 138 of the Act of 1881 in view of the presumption under Sec.139 of the Act of 1881 that such cheque was issued by the drawer for the discharge of any debt or other liability, execution of the cheque being admitted. Violation of section 269SS and /or section 271AAD of the Act of 1961 would not render the transaction unenforceable under section 138 of the Act of 1881".
29. Further the Hon'ble Supreme Court in Cr. Appeal No.175/2010 decided on 25-09-2025 has set aside the judgment of the Hon'ble High Court of Kerala decided on 25-06-2025 rendered in Sanjay Mishra case and observed that "a violation of Section 269SS of the Income Tax Act, 1961, which restricts cash transactions above Rs.20,000/- does not render such transactions illegal, void or unenforceable. The Hon'ble Supreme Court observed that "the breach of Section SCCH-24 18 C.C.14557/2022 269SS merely attracts the statutory penalty prescribed u/Sec.271D and cannot by itself invalidate a debt for the purpose of proceedings u/Sec. 138 of the NI Act 1881. Holding that the presumptions under Sections 118 and 139 of the NI Act remain unaffected, the Hon'ble Supreme Court rejected the view taken in P.C.Hari that cash transactions above Rs.20,000/- are void and do not qualify as "legal enforceable debt".
30. Hence this court by relying upon the observation made in the aforesaid Judgment is of the opinion that even though complainant has not disclosed the investment made by him in the accused no.1 company and the amount allegedly due from the accused no.1 company in the Income Tax Returns, still it is a legally recoverable debt/liability.
31. Having admitted sum of Rs.1,69,73,340/- invested by the complainant in the accused no.1 company, the accused persons taken the further defence that the complaint filed by the complainant is not maintainable and offense u/Sec. 138 of N.I Act does not attract for the reason that the investment of money does not come within the purview of debt or liability so as to attract offence u/Sec. 138 of N.I Act.
SCCH-24 19 C.C.14557/2022The Learned counsel for accused at this juncture has referred the judgment in WP No. 105585/2023 between Shri Mohan Raghavan Vs. Shri Vijayakumar Muddanna Shetty. If the entire judgment is read in whole, in the said case also the complaint had taken the contention that he had invested money in the Hotel business and towards the discharge of the amount invested, cheque in question was issued. It is true that on appreciation of the evidence the Hon'ble High Court has dismissed the complaint but it is not on the ground that investment of amount does not come within the purview of debt/ liability and it does not attract offence u/Sec. 138 of N.I Act but on the ground that in the said case the complainant has failed to produce any cogent material to establish establishing that an amount of Rs.11,00,000 was invested by him in the Hotel business. By raising doubt regarding the investment of amount, the complaint was dismissed.
32. If the averments of legal notice, the averment of complaint and the evidence in chief of PW.1 is read in whole, the complainant was bent upon stated that he had invested sum of Rs.1,69,73,340/- in the accused no.1 company. It is for the first time, during the cross examination, PW.1 has used the word loan by SCCH-24 20 C.C.14557/2022 taking the contention that accused persons have borrowed sum of Rs.1,69,73,340/- from him for the improvement of business.
33. An investment in a company may not automatically qualify as a legally enforceable debt or liability. It is generally considered a capital risk rather than a debt. Unless the investment structure creates a specific, legal binding and existence liability guaranteed buy back or a loan disguised as an investment that was due at the time cheque was issued. If an investment is structured as a loan or a guaranteed return, it may qualify.
34. Coming to the case in hand, the complainant in his complaint at para no.5 and 6 has clearly stated that accused no.2 and 3 approached him with a proposal to invest in the accused no.1 company assuring that complainant would get profit in his share from the income generated from the accused no.1 and accused no.2 and 3 would repay the same to the complainant, hence complainant decided to invest in accused no.1 company to support the accused no.2 and 3 in developing the accused no.1.
SCCH-24 21 C.C.14557/202235. It is further an admitted fact and even it can be culled out from the tenor of the cross examination and the tenor of evidence given by the DW.1 that, out of Rs.1,69,73,340/-, sum of Rs.1,30,71,340/- was returned to the complainant. The complainant states that said amount was returned to him by the accused no.2 and 3 on behalf of accused no.1, whereas the accused no.2 deposes that they have not returned the said amount to the complainant but complainant himself has taken the said amount from the account of accused no.1 as he was in-charge of the day today affairs of the accused no.1 company. It is not in dispute that from 2013 till October -2021 the accused no.2 and 3 were the partners of the accused no.1 company. The accused no.2 continued to be the partner of the company even after October -2021 . Hence, even if it is taken for a while for the sake of discussion that the complainant himself has taken sum of Rs.1,30,71,340/- from the accused no.1 company towards part of the amount invested by him, under such circumstances the accused no.2 and 3 being the partner of the company, it cannot be taken of such a huge sum of money from the account of accused no.1 company without the consent and knowledge of the accused no.2 and 3. When sum of Rs.1,30,71,340/-
SCCH-24 22 C.C.14557/2022was parted to the complainant which is the portion of the invested amount, under such circumstances it can be said that the amount invested by the complainant is structured as a loan or a guaranteed return. If it is purely an investment, sum of Rs.1,30,71,340/- would not have been returned to the complainant. Hence, it can be said that after payment of sum of Rs.1,30,71,340/- out of invested amount of Rs.1,69,73,340/-, towards balance amount of Rs.39,02,000/-, disputed cheque was issued. Hence, the complaint filed by the complainant under Sec.138 of NI Act is maintainable and the investment made by the complainant under the disguise of loan would come under the purview of debt/ liability.
36. The accused having admitting sum of Rs.1,69,73,340/- invested by the complainant in their company, taken the defence that from 2016 the complainant is looking after the day to day affairs of the company and he was operating the bank transactions of the company and entire control of the business affairs of the company was in the hands of the complainant and during the said period the complainant even has taken off the balance amount of Rs.39,02,000/- from the company account hence no SCCH-24 23 C.C.14557/2022 amount is due to the complainant and that by misusing the cheque in question, the complainant has filed false complaint against the accused persons.
37. In the light of the aforesaid defence taken by the accused, if the evidence let in by the respective parties is perused, it is not in dispute that earlier to 2016, accused no.3 and complainant were working together in a IT company. The complainant was introduced to the accused no.1 company by the accused no.3. The accused no.3 and his wife ie., accused no.2 were the partners of the company from the date of its establishment in the year 2013. The accused persons have mainly relied upon Ex.D1 to Ex.D6 to substantiate their defence that the complainant was in charge of the day to day affairs of the accused no.1 company. The learned defence counsel by referring the cross examination of PW.1 has submitted that the PW.1 during his cross-examination has admitted that he was part of the business transaction and he had sent E-mail as per Ex.D1 hence if PW.1 was not operating the day to day affairs of the company, he would not have taken initiative to reply the E-mails for recovery of cylinders. The learned defence counsel in further has submitted that, the SCCH-24 24 C.C.14557/2022 PW.1 during his cross examination has admitted the Distributorship of stock check report marked as Ex.D4 which is signed by the complainant and said document was acknowledged by the complainant during his cross-examination. It was further argued by the learned defence counsel that the entire business operation based on the sale of LPG cylinders to the customers and the cash collected from the sale of cylinders is deposited by the end of the day or the following day to the bank account of the company and remaining cash is utilizing for the daily operation. The complainant has admitted that he was receiving OTP from the bank and hence complainant was having access to the company transaction and he was handling even cash transactions hence complainant has misappropriated the funds by withdrawing except profits and he has not disclosed the same in the books of account.
38. It is not in dispute that, complainant was receiving OTP from the bank till the month of January - 2021. PW.1 has deposed that till the month of September -2021 he used to go to the company every now and then and when ever needed he was helping the company. As observed supra, PW.1 has admitted E- mail sent by him as per Ex.D3 equiring with the SCCH-24 25 C.C.14557/2022 customer about the amount due towards the supply of cylinder and also admitted stock cheque report as per Ex.D4.
39. The learned defence counsel during the cross-examination of PW.1 has highlighted the transaction between the complainant and one Chikkana and Manju who are the drivers of the accused no.1 company and submitted that the complainant having control over the affairs of the company transferred money to the account of aforesaid two person. But PW.1 has deposed since Chikkana and Manju are known to him, in his personal capacity he had lend money to the aforesaid two persons and the said transaction has nothing to do with the disputed transaction.
40. The learned counsel in further has referred Ex.D5 ie., letter communicated to the complainant from the Labour Department.
41. DW.1 in her cross examination has clearly deposed that complainant is not the partner of the accused no.1 company. In the cross-examination, DW.1 has stated that they have authorized the complainant to look after the day to day affairs of the SCCH-24 26 C.C.14557/2022 company including to deal with the bank transaction. But admittedly they have not given authorization letter to the complainant and no resolution was passed for entrusting the aforesaid work to the complainant. DW.1 has deposed that, as per the oral agreement they have authorized the complainant to deal with the business transaction of the accused no.1 company. But if Clause No. 27 of the Ex.D8 is perused, there is restriction to give Power of Attorney to any other person by the signatories to the LPG Distributorship for operating LPG Distributorship business without prior approval of the Corporation in writing.
42. In view of the clear restrictions as enumerated in Clause 27 of Ex.D8, there is no reason to believe that complainant was authorized by the accused no.2 and 3 to manage the affairs of the company. Further when no approval from the Corporation in writing was given as required under Clause no.27 of the Ex.D8, the complainant has no authority under law to deal with the day to day affairs of the company. The mere fact that some E-mail correspondence was made by the complainant and OTP was shared to the mobile of the complainant and notice was addressed to the complainant from the concerned SCCH-24 27 C.C.14557/2022 labour Department and the Ex.P4 was signed by the complainant it cannot be said that complainant had control over the business affairs of the company and he was dealing with the bank transaction of the company on his own without bringing to the notice of the partners of the company. It is improbable to accept that authority was given orally to handle the dealership of the company including financial matter. The complainant had no authority to operate the account of the company. Sending OTP is different from operating the account. As deposed by PW.1 OTP was received by him only to facilitate the company to transact without any obstruction. The mere fact that inventory was acknowledged it cannot be said that complainant was in charge of the company.
43. When accused no.2 and 3 are the partners of the company from 2003 till Ex.D8 was executed and when accused no.2 continued to be the partner of the company and when complainant is not the partner of the company at any point of time and no authorization in writing was given to the complainant, under such circumstances there is no reason to believe that the complainant out of his own had taken sum of Rs.1,30,71,340/ from the account of the company towards part satisfaction of his invested amount and SCCH-24 28 C.C.14557/2022 there is no reason to believe that even the balance amount of Rs.39,02,000/- was taken of by of the complainant of his own from the company Account by way of cash without showing it in the Books of Account. It is nowhere the case of accused no.2 and 3 that they were the nominal partners and they were not participating in the management of the company. DW.1 has deposed that from 2016 the complainant and one Jagadesh were depositing amount to the account of company and they were withdrawing amount from the account of company through online and RTGS. But to substantiate the said contention the accused persons have not produced any document. They could have produced the bank statement of the company and could have proved before the court that even balance sum of Rs. 39,02,000/- was taken by the complainant from the companies account. Further when as per the own evidence of the accused no.2, the cash collected from the customers towards sale of LPG cylinders used to be deposited by the end of the day and on the following day to the account of the company, the question of misusing the funds of the company by the complainant does not arise. So far as the allegation made by the accused persons regarding the complainant withdrawing excess profit as cash and not SCCH-24 29 C.C.14557/2022 disclosed the same in the books of account during the year 2016 -2021 is concerned, if that being the case while auditing the company account this fact would have come out and accused no.2 and 3 being the active partners of the company would have taken necessary legal action against the complainant. But in all these periods the accused have not taken any action against the complainant. The accused persons have produced stock check report as per Ex.D4 dated 30-11-2021 signed by the complainant. As per the said document there is shortage of 1472 commercial empty cylinders while handing over the stock to the accused no.4. According to the accused the shortage of 1472 of commercial empty cylinders was during the period 2016 -2021 and such shortage of commercial empty cylinders was happened when complainant was looking after the operation. When accused no.2 and 3 were the active partners of the company during the year 2016 to 2021 it is for them to answer how there is shortage of 1472 commercial empty cylinders during the said period. When there is no iota of document to prove that complainant was authorized to operate the bank account of the company so also the day to day affairs of the company there is no reason to believe that the complainant has misappropriated the funds of the SCCH-24 30 C.C.14557/2022 company and there by adjusted sum of Rs.39,02,000/- towards the balance invested amount. When it was suggested to the DW.1 that out of invested amount of Rs.1,69,73,340/-, sum of Rs.1,30,71,340/- was repaid to the complainant by the accused, the DW.1 deposed that they have not repaid it and that complainant himself has taken away the said sum and that on inspection of the account they came to know that the complainant had withdrawn the amount more than required for the management of the company. But in order to substantiate the same, the accused persons have not produced any document more particularly the bank statement of the company to prove that sum of Rs.39,02,000/- was withdrawn by the complainant from the company account. DW.1 pleaded ignorance whether audit was done regarding sum of Rs.39,02,000/- withdrawn by the complainant. DW.1 deposed that they have cash challen to prove that company had sum of Rs.39,02,000/- in its account and he has no objection to produce the said document. But admittedly accused have not produced the said document. If really, complainant had taken sum of Rs.39,02,000/- from the account of the company, it would have reflected in the audit report. The DW.1 feigned ignorance whether misappropriation of SCCH-24 31 C.C.14557/2022 Rs.39,02,000/- was reflected in the audit report of the year 2006 to 2021. Without there being any document there is no reason to believe that complainant having no authority over the accused no.1 company had withdrawn sum of Rs.39,02,000/- or utilized the cash amount to the tune of Rs.39,02,000/-.
44. If the evidence of DW.2 is perused, he has entered into a partnership deed under Ex.D8 on 11-10- 2021. PW.1 has admitted that there is no connection what so ever between him and the accused no.4 as accused no.4 has entered the accused no.1 company subsequent to the investment made by him. The counsel for accused bent upon posed question to the PW.1 that accused no.4 was introduced to the accused no.1 company by the complainant. Even the accused no.4 who got examined as DW.2 in his evidence at one breath has deposed that he was introduced to the company by the complainant. But in his further evidence has deposed that the complainant was stranger to him till he intended to come to the accused no.1 company as the partner. Hence, when complainant was not known to the accused no.4 at the time when he entered the accused no.1 company as partner, the question of complainant introducing the SCCH-24 32 C.C.14557/2022 accused no.4 to the accused no.1 company does not arise. DW.2 deposed that prior to his entered the accused no.1 company as the partner, he had verified the company account and at that time some doubt was raised and there was mismatch of the stocks and he enquired the complainant and one Jagadesh regarding the same even after knowing that they are not the partners of the company. When accused no.4 was aware that complainant is not the partner of the company and that accused no.2 and 3 are the partners, the accused no.4 ought to have questioned the accused no.2 and 3 regarding mismatch of stock of the company if any. The DW.1 in his evidence in chief has stated that there was shortage of 1700 cylinders of the value of Rs.45,00,000/-. During the cross- examination has deposed that there was shortage of 2500 cylinders and as per Ex.D4 there was shortage of 1472 cylinders. Nowhere it is stated the total value of the shortage cylinders so as to say that the complainant by misusing 1472 cylinders has misappropriated the funds of the company towards his balance invested amount. Even though DW.2 has stated that at the time of physical inventory given as per Ex.D4 there was shortage of cylinders of the quantity afore stated but after his taking charge of the SCCH-24 33 C.C.14557/2022 management of the company he has not taken any action either against the accused no.2 and 3 or against the complainant. Hence, it creats doubt regarding shortage of cylinders or missing of cylinders. AS observed supra, the accused no.2 to 4 in their statement recorded u/Sec. 313 of Cr.PC have stated that they have paid entire amount to the complainant, but except proving the payment of Rs.1,30,71,340/-, they have not proved payment of Rs.39,02,000/- to the complainant. Hence, it can be said that sum of Rs.39,02,000/- is due to the complainant.
45. Regarding issuance of disputed cheque towards the discharge of aforesaid amount is concerned, at the risk of repetition, Ex.P1 relates to the company account. It bears the signature of the accused no.2 who is one of the partner of the accused no.1 company. The accused no.2 denied the cheque in question issued by her and accused have relied upon Ex.D6 to prove that accused no.2 has not issued cheque in question.
46. If Ex.D6 is perused, it is the letter addressed to the Bank Manger, Bank of India, Vignananagar, Bangalore for stop payment and cancellation of all the SCCH-24 34 C.C.14557/2022 cheques against company account No. 843520110000231 to which Ex.P1 relates and to change the phone number for OTP. In the Ex.D6 it is stated that they have observed that few cheques relating to the company account might have been lost or misused hence to stop payment of all the cheques. Now the mere fact that the mobile number was changed for sharing OTP as per Ex.D6 it cannot be said that the complainant has misused the funds of the company because complainant had no authority to operate the bank account of the company except to share the OTP. In the Ex.D6 it is not specifically stated the cheque number of the disputed cheque for its stop payment but in general, on assumption and presumption they have stated that the company cheques might have been lost or misused. It is nowhere the case of the accused that at any point of time the accused no.2 had kept signed blank cheque and it was lost and same was misused by the complainant. It is nowhere stated when the cheque was misplaced or lost. No steps have been taken to trace the cheque by lodging the complaint. Hence, it can be said that accused no.2 herself has given the disputed cheque to the complainant for Rs.39,02,000/- towards the balance invested amount.
SCCH-24 35 C.C.14557/202247. Now the question that would arise whether accused no.2 was competent to issue Ex.P1 on behalf of the company and whether she was authorized to issue the cheque towards the discharge of the debt of the accused no.1 company. In order to appreciate the said material point it is better to have glance on the Ex.D8. Ex.D8 is executed on 11-10-2021. As per the said document, the accused no.3 was retired from the partnership firm and accused no.4 was inducted to the partnership firm as the incoming partner. As per Clause 19 of the Ex.D8, from the date of execution of Ex.D8, the accused no.4 become the authorized signatory of the company and authority was given to him to deal with the bank transaction of the company. If cheque in question is perused, it is dated 22-08- 2022. Though the PW.1 in his cross examination has deposed that disputed cheque was given to him by the accused no.3 one year prior to the date mentioned in the cheque and thereby stated that accused no.3 has issued post dated cheque, but if the averments of the complaint is read wherein, in clear terms the complainant has stated that in order to discharge the liability the accused no.2 has issued cheque on behalf of accused no.1 dated 22-08-2022 and it is nowhere stated that post dated cheque was issued to him.
SCCH-24 36 C.C.14557/202248. Ex.D8 was executed on 11-10-2021. As observed supra, from 11-10-2021 the accused no.4 become the authorized signatory of the company. Even if it is taken for a while for the sake of discussion that accused no.2 had issued post dated cheque one year prior to the date mentioned in the cheque, then also when as per the evidence cheque was issued on 22-08- 2021, but as per the averments of the complainant, as on the said date accused no.3 was the Authorized Signatory of the company but not the accused no.2 and accused no.2 being not an Authorised signatory was not competent to issue cheque on behalf of the company.
49. It was vehemently argued by the learned counsel for complainant that when cheque was issued copy of the partnership deed will not be annexed, hence there was no occasion for the complainant to know who is the authorized signatory of the company . Since accused no.2 has issued cheque on behalf of the company, the accused no.1 and its partners are liable to pay the cheque amount.
50. If Ex.D8 is perused, complainant is the signatory to the Ex.D8. The PW.1 has stated that SCCH-24 37 C.C.14557/2022 without going through the contents of the Ex.D8, as witness he has signed the Ex.D8, hence there was no occasion for him to know that accused no.2 had no authority to issue cheque on behalf of the company.
51 Learned counsel for complainant in further has argued that when complainant is not a party to the partnership deed and he is not a consenting witness, there was no need to go through the contents of the Ex.D8 and without going through the contents of the Ex.D8, the complainant signed the document , But this court is not agreeing with the aforesaid line of argument for the reason that complainant had invested huge sum of money in the company and as admitted by the complainant in his cross-examination, he used to go to the company from the year 2006 till 2021 and he use to assist the company in its management as and when needed and that he is not signing any document without going through the contents of the document.
52. Even if complainant has proved the fact of sum of Rs.1,69,73,340/- invested by him, sum Rs.1,30,71,340/- taken back by him and sum of Rs.39,02,000/- due to him and has proved the cheque in question issued by accused no.2, but for the reason SCCH-24 38 C.C.14557/2022 that accused no.2 had no authority to issue the cheque on behalf of the company because she was not the authorized signatory of the accused no.1, under such circumstances complainant is not entitled for relief claimed in the complaint.
53. The learned counsel for accused has referred judgment reported in 2000 SCC (cri) 414 between Suman Sethi Vs. Ajay K Churiwal & Ors., wherein it was observed that " Notice of demand issued under Section 138 of the Negotiable Instruments Act would not be invalid merely on ground that in addition to cheque amount additional amount towards damages, cost, interest etc., is also demanded, provided the additional amount demanded is severable ". But the observation made in the aforesaid judgment has no application to the case in hand for the reason that complainant has not demanded in his notice for the additional amount apart from cheque amount towards damages, cost, interest etc.,
54. In view of the discussion made herein above issue no.1 is answered in the Negative.
55. POINT No.2 :- In the light of the reasons on the point No.1 and 2, I proceed to pass the following;
SCCH-24 39 C.C.14557/2022ORDER Acting under Sec. 255 (1) of Cr.PC, the accused are not found guilty of the o/p/u/s 138 read with section 142 of NI Act.
The bail and surety bond of the accused no.2 to 4 and surety shall stand cancelled.
Dictated to the stenographer on line, revised, corrected and then pronounced in the open court this the 6 th day of February 2026.) (ROOPASHRI) XXII Addl. SCJ & ACJM Bengaluru.
ANNEXTURE:
LIST OF WITNESSES EXAMINED ON BEHALF THE COMPLAINANT P.W.1 : Srinivas Govindraj LIST OF DOCUMENTS MARKED ON BEHALF OF COMPLAINANT:
Ex.P.1 : Original Cheque given by accused SCCH-24 40 C.C.14557/2022 Ex.P.1(a) : Signature of the accused.
Ex.P.2 & 3 : Bank endorsements
Ex.P.4 : Copy of legal notice
Ex.P.5 to 8 : Four Postal Receipts
Ex.P.9 to 11 : Three postal acknowledgment
Ex.P.12 to 14 : Three postal acknowledgment
Ex.P15 : Bank statement for the year 2016
to 2021
LIST OF WITNESSES EXAMINED BY THE ACCUSED DW.1 : - Smt. Pavithra G Umashankar DW.2 - Ananthaneni Suni Kumar LIST OF DOCUMENTS MARKED ON BEHALF OF ACCUSED:
Ex.D1 : Copy of message sent from mail ID
Ex.D2 : Copy of E mail dated 09.06.2020
Ex.D3 : Copy of E mail
Ex.D4 : Bharath Gas Distributorship stock
cheque report
Ex.D5 : Original notice issued by Labour
Department dated 29-03-2021
Ex.D6 : Original copy of attested copy issued by
Bank of India.
Ex.D7 : Certified copy of E-mail dated 02.08.2021
Ex.D8 : Certified copy of deed of reconstruction of
partnership dated 11.10.2021
XXII Addl. SCJ & ACJM
Bengaluru.
Digitally
signed by
ROOPASHRI
ROOPASHRI Date:
2026.02.07
13:09:21
+0530