Bangalore District Court
Manapuram Finance Limited vs Sandeep Somashetti on 6 February, 2026
KABC030722162024
IN THE COURT OF THE LIII ADDL. CHIEF JUDICIAL
MAGISTRATE AT BENGALURU CITY.
Dated this the 6th day of February 2026
PRESENT:SRI.S.CHINNASWAMY, B.A.LL.B.,
LIII ADDL.C.J.M., BENGALURU.
Case No. :- C.C.No.43532 of 2024
Complainant :- M/s.Manappuram Finance Ltd.
Bengaluru Regional Office at No.21/1,
4th Floor, Jelitta Tower, Mission Road,
Bengaluru-560027. Represented by
its Authorized Signatory-
Mr.Chikkegowda.S S/o Sannamari,
Aged about 38 years, Legal and
Recovery Manager, Bengaluru.
(By Sri.M.S., Advocate.)
-Vs-
Accused :- Sandeep Somashetti
S/o Somashetti,
Aged about 34 years,
R/at Mavathur Village Hebbalu
Hobali, K.R.Nagara Taluk Mavathuru,
K.R.Nagar School, K.R.Nagar,
Mysore-571602.
(By Sri.V.P., Advocate.)
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C.C.No.43532/2024
Offence complained of :- U/Sec.25 of Payment and Settlement
Systems Act
Plea of accused :- Pleaded not guilty
Opinion of the Judge :- Accused found guilty
Date of order :- 6th February, 2026
JUDGMENT
The complainant has filed this complaint under Section 223 of BNSS against the accused for the offence punishable U/sec.25 of Payment and Settlement Systems Act.
2. It is the case of the complainant that the complainant company is a Non-Banking Financial company engaged in the business of providing financial services under Loan- Cum- Hypothecation agreement scheme for vehicles, having its Regional office at Bengaluru and it is represented by authorized signatory representative by name Chikkegowda.S. The accused availed a Two Wheeler loan on 3 C.C.No.43532/2024 27.09.2023 for a sum of Rs.92,200/- including financial charges, for the purpose of purchase of said vehicle bearing Registration No.KA45ED9168 from complainant company and also accused executed loan- cum- Hypothecation Agreement, and it was sanctioned to accused vide bearing Loan Account No.7192851 for an amount of Rs.92,200/-, the accused assured and agreed to pay above said loan with interest and other expenditure by way of equated monthly installments to the complainant company. After availing the loan accused failed to repay the same and it is due of Rs.93,941/- from its ESAF Bank bearing account No.53230004739369 to be transferred from the account. In this regard, the complainant has executed Auto Debited instructions on 10.10.2024 through its bankers Axis Bank Cunningham Road Branch, Bengaluru, towards repayment of loan amount of Rs.93,941/- belongs to accused, but the same was returned dishonured with an endorsement for the reasons "Funds/Balance Insufficient" dated 10.10.2024. The copy of customer NACH (National Automated Clearing House) Debit Authorization and Debit memo is produced. 4
C.C.No.43532/2024
3. The accused has expressly assured the complainant that he would maintain sufficient balance in his account, towards payment of loan would be duly credited to account of the complainant, in accordance with the repayment schedule of the said loan transaction. On the dishonour of the said NACH debit transaction complainant has issued Demand notice on 29.10.2024 for calling upon the accused for repayment of loan amount within 15 days of receipt of said notice. The said demand notice has been served as per endorsement dated 09.11.2024. After knowing the fact of issuance of demand notice to accused, has not repaid the same within 15 days of it return of notice as called far. The accused has intentionally failed to discharge legally enforceable debt and thereby accused has committed the offence punishable Section 25 of Payment and Settlement Systems Act.
4. That the dishonour of Electronic funds transfer in respect of legally enforceable debt, amounts to offence U/sec.25 of The Payment and Settlement Systems Act, 5 C.C.No.43532/2024 2007. Hence, even after receipt of demand notice, accused has not paid the loan amount. Hence this complaint pray for convict the accused and award penalty and compensation.
5. After presentation of the complaint this court has taken cognizance for the offence punishable U/sec.25 of The Payment and Settlement Systems Act, and issued summons to accused, after service summons, accused has appeared and released on bail. After the sum substance of accusation was read over to accused in his language known to him, for which he did not pleaded guilty and claims to be tried, under takes to cross examine the complainant, but not filed his defence.
6. After sufficient opportunities was given the accused has not come forward to cross examine the complainant/PW1, accused continuously absent. Hence incriminating evidence appearing against accused as per section 351 of BNSS (313 of Cr.P.C) is dispensed. 6
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7. Heard arguments on complainant's side. On the other hand accused has not advanced arguments, hence posted for judgment.
8. After considering material available on record the following points that arise for my consideration are as under;
1. Whether the complainant proves beyond all reasonable doubt that the accused towards discharge of his liability issued standing instructions form for repayment of loan in his favour and when he presented the said S.I form for realization, it was dishonored for the reason "Balance Insufficient" in the account maintained by the accused?
2. Whether the complainant proves beyond all reasonable doubt that he issued demand notice to the accused, the accused did not repay the loan amount within statutory period and thereby he has committed an offence punishable U/sec.25(1) of The Payment and Settlement Systems Act,?
3. What order ?
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9. That in order to prove the above points complainant holder of the authorization letter himself examined as PW1 got marked Ex.P1 to Ex.P10 documents. The sworn statement of complainant is treated as chief examination as per decision of Hon'ble Apex court in the case of Indian Bank Association Vs Union of India and Others reported in 2014(5) SCC 590 this court treated the sworn statement of complainant as chief examination, accused has filed application U/sec.145(2) of N.I.Act and reserved his right to cross examine the complainant, but has not filed his defence.
10. This court answered to the above points as here under:
Point No.1 & 2 :- In the Affirmative.
Point No.3 :- As per final order, for the
following;
:: R E A S O N S ::
11. Point No.1 and 2:- These points are inter-linked with each other, are taken for common discussion and avoid repetition of facts of evidence.
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12. That in order to prove this case complainant company authorized person himself filed his chief examination affidavit in the form of sworn statement affidavit and got marked Ex.P1 to Ex.P10 documents.
13. It is specific case of the complaint that,-The accused availed a Two Wheeler loan on 27.09.2023 for a sum of Rs.92,200/- including financial charges, for the purpose of purchase of said vehicle bearing Registration No.KA45ED9168 from complainant company and also accused executed loan- cum- Hypothecation Agreement, and it was sanctioned to accused vide bearing Loan Account No.7192851 for an amount of Rs.92,200/-, the accused assured and agreed to pay above said loan with interest and other expenditure by way of equated monthly installments to the complainant company. After availing the loan accused failed to repay the same and it is due of Rs.93,941/- from its ESAF Bank bearing account No.53230004739369 to be transferred from the account. In this regard, the complainant has executed Auto Debited instructions on 9 C.C.No.43532/2024 10.10.2024 through its bankers Axis Bank Cunningham Road Branch, Bengaluru, towards repayment of loan amount of Rs.93,941/- belongs to accused, but the same was returned dishonured with an endorsement for the reasons "Funds/Balance Insufficient" dated 10.10.2024. The copy of customer NACH (National Automated Clearing House) Debit Authorization and Debit memo is produced.
14. The accused has expressly assured the complainant that he would maintain sufficient balance in his account, towards payment of loan would be duly credited to account of the complainant, in accordance with the repayment schedule of the said loan transaction. On the dishonour of the said NACH debit transaction complainant has issued Demand notice on 29.10.2024 for calling upon the accused for repayment of loan amount within 15 days of receipt of said notice. The said demand notice has been served as per endorsement dated 09.11.2024. After knowing the fact of issuance of demand notice to accused, has not repaid the same within 15 days of it return of notice as called far. The 10 C.C.No.43532/2024 accused has intentionally failed to discharge legally enforceable debt and thereby accused has committed the offence punishable Section 25 of Payment and Settlement Systems Act.
15. That the dishonour of Electronic funds transfer in respect of legally enforceable debt, amounts to offence U/sec.25 of The Payment and Settlement Systems Act. Hence, even after receipt of demand notice, accused has not paid the loan amount
16. In order to substantiate its contention complainant authorized person himself examined as PW1 got marked Ex.P1 to Ex.P10 documents. Ex.P2 is the Summary of NACH debit mandate generated on 02.11.2024 on looking into the Ex.P2 it discloses that the accused has approached the complainant company for financial assistance under two wheeler vehicle loan benefits applied for the same. In turn complainant company has granted loan of Rs.92,200/- 11
C.C.No.43532/2024 under bearing loan account No.7192851 and also has agreed to abide by the terms and conditions.
17. Further accused has failed to pay the same, he has instructed to debit through the NACH (National Automated Clearing House) from bank viz., Esaf Small Finance Bank, bearing account No.53230004739369 to be transferred from the account. In support of the same complainant has produced Ex.P3 is the Transaction Return Memo, on looking into the same it discloses that the said NACH debit instruction is dishonoured on 10.10.2024 for the reasons "Balance/Funds Insufficient" and letter dated 22.10.2024.
18. After dishonor of the same the complainant company has issued legal notice through his counsel by RPAD on dated 29.10.2026 same is served as per Ex.P6, on looking into the Ex.P4 legal notice it discloses that after dishounor of the NACH complainant company has demanded the accused through his counsel by issuing legal notice by RPAD same is returned as served on the accused. In the 12 C.C.No.43532/2024 said notice it was called upon by the complainant company to pay the loan amount of Rs.93,941/- within 15 days of receipt of legal notice. In support of the same complaint Ex.P7 and Ex.P5 & 6 are the postal receipts and postal acknowledgment they clearly disclose that even after service of demand notice accused has not paid the due amount, thereby accused has committed the offence punishable U/sec.25 of Payment and Settlement Systems Act.
19. Further it is important to note the section 118 and 139 of N.I.Act, it is primary burden lies on the complainant as per U/sec.118 of N.I.Act, then burden shifted on the accused to prove that the said NACH has not been issued for the legally recoverable debt and no consideration was passed. In this regard no Iota of evidence is adduced by the accused, as discussed in the above paras the transaction taken between complainant and accused is admitted and further it discloses that the said Standing Instructions was given for consideration and there is no dispute with regard 13 C.C.No.43532/2024 to as to date and time of transfer and as to order of instrument (NACH/Standing Instructions).
20. Further as per section 139 of N.I.Act that it shall be presumed, unless the contrary is proved, that the holder of a NACH of the nature referred to in Section 138 for discharge, in whole or in part, of any debt or other liability. Hence, it is settled principle of law that the said presumption can be rebutted by the accused by raising probable defence.
21. As per Sec.139 of N.I.Act there is always presumption in favour of the complainant that the accused issued the NACH for legally recoverable debt, anyhow this presumption is rebuttable one. In order to rebut the said presumption, even though accused has appeared and released on bail and under takes to cross examine the complainant, but has not filed his defence, either even after sufficient time is granted, accused has not come forward to cross examine the complainant. Hence, the statement of 351 BNSS (313 of Cr.P.C) is dispensed.
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22. So on considering the entire material available on record the evidence adduced by the complainant remained unchallenged and uncontroverted. Accordingly the accused has obtain loan under the NACH facility from the complainant company and failed to repay the due amount of Rs.93,941/-. In this regard the complainant executed the Auto debit instructions on 10.10.2024 towards repayment of above said loan amount belongs to accused but the same is dishonoured as "Balance/Funds Insufficient". After complainant has issued legal notice calling upon the accused to repay the loan amount within 15 days of said notice, accused has failed to repay the same, thereby accused has committed offence punishable U/Secs.25 of Payment and Settlement Systems Act. Hence, Point Nos.1 and 2 are answer in the Affirmative.
23. Point No.3:- Once the accused is found guilty for the offence punishable U/sec.138 of N.I.Act, he may be punished with imprisonment for a period of two years or with fine which may be extended to twice of the amount of 15 C.C.No.43532/2024 the cheque or with both. Accordingly, this court proceed to pass the following;
ORDER Acting under Section 278 of BNSS the accused is Convicted for the offence punishable under Section 25 of Payment and Settlement Systems Act and sentenced to pay fine of Rs.98,941/- (Ninety Eight Thousand Nine Hundred and Forty One Only).
In default of payment of fine amount, the accused shall under go simple imprisonment for six months. Out of the total fine amount, an amount of Rs.93,941/-(Ninety Three Thousand Nine Hundred and Forty One Only) shall be paid to the complainant company as compensation under Section 395 of BNSS and remaining fine of Rs.5,000/- shall be remitted to the state.
The bail bond of the accused stands canceled, the cash surety of Rs.2,000/- that was deposited by accused on 02.07.205 is ordered to be forfeited to the state.
The accused is entitled for free copy of this judgment U/sec.404 of BNSS. But today accused is not present before the court. Hence, free copy of judgment is not supplied to 16 C.C.No.43532/2024 accused. If accused voluntarily appears before the court, free copy will be served on accused. (Directly dictated to the Stenographer on computer, typed by him, corrected by me and then pronounced in the Open Court on 6th February 2026) (S.CHINNASWAMY) LIII ACJM,Bangaluru.
::ANNEXURE::
Witnesses examined on behalf of the Complainant:
PW1 :- Chikkegowda.S. Documents marked on behalf of the Complainant:
Ex.P1 :- Certified xerox copy of Minutes of Meeting. Ex.P2 :- Summary of NACH Debit Mandate. Ex.P3 :- Bank Endorsement/Return Memo.
Ex.P4 :- Legal Notice. Ex.P5 :- Postal receipt. Ex.P6 :- Postal Acknowledgment. Ex.P7 :- Complaint. Ex.P8 :- Certified copy of Loan application. Ex.P9 :- Certified copy of Loan Agreement. Ex.P10 :- Loan Account Statement.
Witnesses examined on behalf of the Accused:- Nil- Documents marked on behalf of the Accused:- Nil-
(S.CHINNASWAMY) LIII ACJM,Bangaluru.