Bangalore District Court
Shubha . B Wasi vs Vijaykumar on 21 April, 2026
KABC030160972021
IN THE COURT OF THE XXV ADDL. CHIEF JUDICIAL
MAGISTRATE, AT BANGALORE CITY
Dated this the 21st day of April 2026
Present : SRI. GOKULA. K
B.A.LL.B.
XXV Addl. Chief Judicial Magistrate,
Bangalore City.
C.C.No.4993/2021
Complainant : Shubha N.Wasi
W/o.Nirbhay B Wasi
R/at.No.54/5
2nd E Cross
Hanumanthappa Layout
Sulthanpalya,
Bangalore 560 032
(By HMV -Advocate )
V/s
Accused : Vijaykumar M
S/o.Muniyappan
R/at.D.NO.3/311, Ward No.3
Thandanur (Post)
Yethapur(VIA)
Attur (TK)
Salem District 636117
Tamil Nadu.
(By SPK - Advocate )
Plea of accused: Pleaded not guilty
Final Order: Accused is Convicted
Date of judgment : 21.04.2026
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C.C.No.4993/2021
JUDGMENT
The complainant has filed the complaint under Section 200 of Criminal Procedure Code against the accused for the offence punishable under Section 138 Negotiable Instruments Act.
2. The brief case of the complainant is as under:
That the accused is running a proprietary concern under the name and style "POD" from the registered office "We Work", Koramangala, Bangalore. The accused has been acquainted with the complainant through POD Mutual Telegram Channel and out of said acquaintance, the accused approached the complainant to invest in his business. The complainant agreed to invest with the accused business entity with a fond hope and promises made by the accused to the complainant that the accused will pay monthly profit sharing on the amount invested by the complainant. That reposing faith on the accused, the complainant invested a sum of Rs.6,50,000/-. Initially the accused made payments due towards profit sharing and slowly started to stop the payments. That the accused was totally due of Rs.10,48,000/-. That on several request and demand by the complainant, initially the accused issued few cheques towards legally enforceable debt and the complainant approached her husband's banker wherein she was informed the signature of the accused differed. That on several request made by the 3 C.C.No.4993/2021 complainant, finally to discharge said liability, the accused issued two cheques drawn on HDFC Bank, Padmanabham, Club House Road, Technopark, Kariavattom P.O., Kazhalkkoota, Trivandrum.
i. Cheque bearing No.000040 dated.01.09.2020 for a sum of Rs.4,00,000/-
ii. Cheque bearing No.000041 dated.08.09.2020 for a sum of Rs.6,48,000/-.
That as per the assurance and promise made by the accused, the complainant presented said cheques on 01.09.2020 and 08.09.2020 respectively through her banker i.e State Bank of India, Sulthanpalya Branch Bangalore and said cheque returned dishonored with endorsement "Funds Insufficient" on 09.10.2020. Hence, the complainant's husband lodged a police complaint against the accused on 19.10.2020 at Ethapur police station, Tamilnadu. At that instance, the accused agreed to pay all the dues and requested the complainant to present said cheques. Reposing faith, the complainant again presented said cheques through her banker Kotak Mahindra Bank, R.T, Nagar Branch and said cheques returned with an endorsement "Payment stopped by drawer" on 27.11.2020. The complainant immediately informed the accused and the accused has given evasive reply. Hence, the complainant issued legal notice dated 09.12.2020 through RPAD and said notice returned with shara 4 C.C.No.4993/2021 "Returned to sender unclaimed". Inspite of service of notice, the accused failed to pay the claim amount to the complainant within the statutory time. Therefore, the accused has committed the offence under Section 138 of Negotiable Instruments Act.
Therefore the complainant has filed the complaint. [[
3. This case is initially filed by the complainant before 15th Additional Chief Judicial Magistrate, Bangalore and this case is transferred at the stage of arguments to this court vide Orders of Hon'ble Chief Judicial Magistrate, Bangalore City.
4. On the basis of Private complaint filed by the complainant, the court taken cognizance of offence and registered the case in PCR No.3940/2021 and recorded sworn statement complainant as PW 1 and got marked 7 documents as Ex.P 1 to P 7. The court upon considering the material on record issued process under Section 204 of Cr.P.C by registering the criminal case. In response to the process issued by this court, the accused appeared before this court and he is released on bail. The copy of the complaint is served to the accused along with the summons as contemplated under Section 207 of Criminal Procedure Code.
5. The substance of the acquisition as provided Section 251 of Cr.PC is read over to the accused and his plea is recorded. The accused has pleaded not guilty and claimed to be tried. 5
C.C.No.4993/2021
6. In view of the law laid down by Hon'ble Supreme Court of India in Indian Bank Association V/s Union of India and others reported in AIR 2014SCW3463, the affidavit filed by the complainant at the stage of taking cognizance and documents marked is treated as evidence under section 145 of Negotiable Instruments Act. PW1 during further chief examination got marked the documents as Ex.P.8 to Ex.P.14. The PW1 was fully subjected to cross examination. After conclusion of evidence of the complainant the incriminating circumstances in the evidence of the complainant is read over to the accused and the statement of the accused under Section 313 of CrPC is recorded. The accused has denied the incriminating circumstances as false. The accused has not chosen to lead his evidence.
7. Heard arguments of learned counsel for the complainant and learned counsel for the accused and perused the material on record and reply arguments submitted by the counsel for complainant .
8. On the basis of the material on record the following points arise for the consideration of this court :
1. Whether the complainant proves beyond all reasonable doubt that the accused has issued the 2 cheques ie i. Cheque bearing No.000040 6 C.C.No.4993/2021 dated.01.09.2020 for a sum of Rs.4,00,000/- and ii. Cheque bearing No.000041 dated.08.09.2020 for a sum of Rs.6,48,000/-both drawn on HDFC Bank, Kazhakkoota, Trivandrum, in favour of the complainant towards discharge of legal liability and on its presentation on 26.11.2020 it is dishonoured for the reason "Payment stopped by drawer" on 27.11.2020 and inspite of issuance of demand notice dated 09.12.2020 the accused has not claimed the notice on 19-12-2020 and failed to repay the amount within statutory period and thus the accused has committed an offence punishable under Section 138 of Negotiable Instruments Act ?
2. What Order or Sentence?
9. The findings of this court to the above points are as follows:
Point No.1 In the Affirmative,
Point No.2 As per final order
for the following :
REASONS
10. POINT NO.1: To prove the case the complainant is
examined as PW-1. The PW1 in her evidence has reiterated the averments made in the complaint.
11. The PW 1 in her evidence affidavit deposed that the accused is running a proprietary concern under the name and style "POD" from the registered office "We Work", Koramangala, Bangalore. She has deposed that the accused has been 7 C.C.No.4993/2021 acquainted with the complainant through POD Mutual Telegram Channel and out of said acquaintance, the accused approached the complainant to invest in his business. She has agreed to invest with the accused business entity with a fond hope and promises made by the accused that the accused will pay monthly profit sharing on the amount invested by her. She has deposed that she has invested a sum of Rs.6,50,000/- with the accused. To prove the investment with the accused she has produced the details of investment as Ex.P 9. She has also produced statement of accounts of her husband in Paytm payments bank for transfer of Rs.50,000/- on her behalf from her husbands account. She has also produced statement of accounts of her account with State Bank of India as Ex.P 11 to show transfer of Rs.6,00,000/- to the account of the accused. She has deposed that initially the accused made payments due towards profit sharing and slowly started to stop the payments. She has deposed that the accused was totally due of Rs.10,48,000/-. She has deposed that on several request and demand by the complainant, initially the accused issued few cheques towards legally enforceable debt and she approached her husband's banker wherein she was informed the signature of the accused differed. She has deposed that on several request to discharge said liability, the accused issued two cheques drawn on HDFC Bank, Padmanabham, Club House 8 C.C.No.4993/2021 Road, Technopark, Kariavattom P.O., Kazhalkkoota, Trivandrum.
i. Cheque bearing No.000040 dated.01.09.2020 for a sum of Rs.4,00,000/-
ii. Cheque bearing No.000041 dated.08.09.2020 for a sum of Rs.6,48,000/-.
She has produced said cheques as Ex.P 1 and Ex.P 2. She has deposed that she has presented said cheques on 01.09.2020 and 08.09.2020 through her banker ie State Bank of India, Sulthanpalya Branch Bangalore and said cheque returned dishonored with endorsement "Funds Insufficient" on 09.10.2020. Hence, the complainant's husband lodged a police complaint against the accused on 19.10.2020 at Ethapur police station, Tamilnadu. At that instance, the accused agreed to pay all the dues and requested the complainant to present said cheques. Reposing faith, the complainant presented said cheques as under drawn on HDFC Bank, Padmanabham, Club House Road, Technopark, Kariavattom P.O., Kazhalkkoota, Trivandrum :
1. Cheque bearing No.000040 dated.01.09.2020 for a sum of Rs.4,00,000/-
2. Cheque bearing No.000041 dated.08.09.2020 for a sum of Rs.6,48,000/-.9
C.C.No.4993/2021 The complainant has produced said cheques as Ex.P.1 and Ex.P.2. The PW 1 has further deposed that when she presented said cheques through her banker Kotak Mahendra bank, R.T. Nagar on 26-11-2020 said cheques returned with an endorsement "Payment stopped by drawer" on 27-11-2020. Said bank endorsements are marked as Ex.P.3 and Ex.P.4. The PW 1 has further deposed that immediately informed the same to the accused and the accused has given evasive reply. Hence, she issued legal notice dated 09.12.2020 through RPAD and said notice returned with shara "Returned to sender unclaimed" on 19-12-2020. The office copy of demand notice is marked as Ex.P.5, postal receipt as Ex.P 6 and returned postal envelop as Ex.P 7. It is stated that the demand notice is deemed to be served and the accused is fully aware of the notice and intentionally got it returned as unclaimed. The PW1 has also deposed that inspite of service of notice, the accused failed to make payment.
12. Now it is proper to consider whether the complainant has complied statutory requirements for constitution of the offence. The essential ingredients of section 138 and 142 of Negotiable Instruments Act to be complied are i) drawing of the cheque by the accused ii) presentation of the cheque to the bank with in the period of three months, iii) returning of the cheque unpaid 10 C.C.No.4993/2021 by the drawee bank iv) giving notice in writing to the drawer of the cheque demanding of the payment of cheque amount with in the period of 30 days, v) failure of the drawer to make payment within the period of 15 days after receipt of the demand notice and v)Presentation of the complaint within a month by the complainant after expiry of 15 days of service of notice to the accused. Therefore it is proper to consider whether the statutory requirements for constituting the offence under Section 138 of Negotiable Instruments Act is complied by the complainant.
13. The cheques are dated 01.09.2020 and 08.09.2020 said cheques are dishonored for the reason "Payment stopped by drawer" on 27.11.2020 . The cheques are presented through the account of the complainant with Kotak Mahindra Bank, R.T. Nagar Branch situated at the branch within the jurisdiction of the court. As provided under Section 146 of Negotiable Instruments Act, law presumes that on production of banker slip or memo having thereon the official mark denoting that the cheque has been dishonored, presume the fact of dishonor of such said cheque, unless and until same is disproved. The accused has not denied dishonnour of cheques as per Ex.P 3 and Ex.P 4.
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C.C.No.4993/2021
14. The demand notice is issued to the accused on 09.12.2020 and it is returned unclaimed on 19-12-2020 and it is deemed to be served on the accused. The accused has also not disputed his address mentioned in the demand notice. In his statement under Section 313 of Cr.P.C he has stated that he was not in the town while notice was issued, hence he has not received the notice. Therefore it is clear that notice is issued to the correct address of the accused and it is sufficient service of notice in in view of provisions of Section 27 of General Clauses Act. The PW 1 has deposed that inspite of service of notice, the accused failed to pay the claim amount to the complainant with in the statutory time of 15 days of service of notice.
15. In this case, the accused has disputed service of the demand notice. It is pertinent to note that the complainant has filed this case against the accused. Similarly the Husband of the complainant Nirbhay B. Wasi has also filed CC No. 4987/2021 before this court against the accused. The complainant has produced the office copy of the legal notice as Exhibit P5 issued by the complainant. She has produced the returned postal envelope as Exhibit P7. Said Exhibit P7 envelope is opened in the open court during evidence and the copy of the notice found in the said envelope is marked as Exhibit P7(a). But the copy of the notice found in Exhibit P7 envelope is issued on behalf of 12 C.C.No.4993/2021 Nirbhay B Wasi, the husband of the complainant to the accused. Therefore, the learned counsel for the accused has vehemently argued that the complainant has not produced the envelope issued to the accused by the complainant and there is no proof produced for service of Exhibit P5 notice before this court. Therefore there is no compliance on the requirements of Section 138 proviso (b) of Negotiable Instruments Act.
16. The case in CC No. 4987/2021 is also pending on the board of this Court and the said case also came up for final disposal on this day itself. Hence the case papers in CC No. 4987/2021 is readily available with this court. The court can take judicial notice that in CC 4987/2021, the wife of the complainant has produced the returned postal envelope which is also returned with endorsement unclaimed on 19.12.2020 as Exhibit P13. The said envelope is opened in the open court during the evidence of wife of the the complainant in the said case and the notice found in Exhibit P12, Postal envelope in the said case is marked as Exhibit P13(a). The deposition of husband of accused in CC 4987/2021 is produced in this case as Ex.P 8. Thus, upon considering these aspects, it is clear that both the cases were filed by the complainant and her husband through the same advocate and notices are also issued through same advocate on the same day. But while producing the returned postal 13 C.C.No.4993/2021 envelope, the postal envelope in respect of the notice issued by the complainant is produced in the case filed by the husband of the complainant and the postal envelope relating to the notice issued by the husband of the complainant is produced by the complainant in this case. But the fact remains that both the notices issued by the complainant in this case and the husband of the complainant in CC No. 49873/21 were returned with endorsement unclaimed on 19.12.2020 itself. Therefore, it is only an error caused in producing the postal envelope in respect of the notice of the complainant in the case filed by the husband of the complainant and the notice of the husband of the complainant in this case. But only on this error committed by the advocate while producing the returned postal envelope will not be a ground to reject the claim of the complainant. The Court can take judicial notice that the demand notice issued as per Exhibit P5 is also returned with postal endorsement unclaimed as per Exhibit P. 13 produced in CC No. 4987 /2021 in the case filed by the husband of the complainant.
17. Learned Counsel for the accused in support of his arguments has relied on the decision of Hon'ble Supreme Court reported in AIR2025 SC 4446 between Kaveri Plastic v. Mahdoom Bawa Bahrudeen Noorul .In this case it is held that when the cheque amount is not mentioned in the proviso (b) 14 C.C.No.4993/2021 notice or the amount different than the actual cheque amount is mentioned, in the notice, such notice would stand invalid in the eye of law. The condition of notice under Proviso (b) is required to be complied with meticulously. Even typographical error can be no defence. The accused has also relied on the decision of Hon'ble Supreme Court in Criminal Appeal No. 711/2009 between M.D. Thomas v. P.S. Jalil and Another In this decision, it is held that the notice of demand served upon the wife of the accused and not on the accused. Therefore there is no escape from conclusion that complainant had not complied with the requirements of giving notice in terms of clause (b) of Proviso to Section 138 of the Act. The Learned counsel for the accused has also relied on the decision in CRM-M-54012-2023 between Charanjeet Singh v. Kulwant Singh by the Hon'ble High Court of Punjab and Haryana dated 16.01.2025. In this decision, it is held that, the intention behind the said requirement is to give an opportunity to settle the dues before criminal proceedings are initiated against him. As such, it becomes all the more important to ensure that such a notice contains all necessary details pertaining to the cause of action, in Unmistakable terms. This Court has gone through all the decisions relied by the Learned counsel for the accused in detail. But under the facts and circumstances of this case, the complainant has issued notice by demanding the amount covered under Exhibit P 1 and 15 C.C.No.4993/2021 Exhibit P2 cheques and there is no infinity in the notice issued by the complainant. The only error found is that the postal envelope in respect of the notice issued by the complainant is produced in CC No.4987/2021 and the notice issued on behalf of the husband of the complainant is produced in this case. As discussed above as both the matters are posted before this court on this day for pronouncement of judgment and this court can take judicial notice that the returned envelope in respect of this case is produced in CC No.4987/2021 and the returned envelope in respect of said case is produced in this case and both the postal envelopes shows that the notice is returned by the accused unclaimed on 19.12.2020.
18. Therefore, it can be concluded that the notice issued by the complainant is valid and there is valid service of notice. Hence cause of action arose for prosecution under Section 138 of Negotiable instruments Act on 04-01-2021. The complaint is filed before this court on 30.12.2020. The complaint is pre- matured. But the court has taken cognizance of the case on 26- 02-2021 after the cause of action arose. The accused has not denied that the cheques are drawn from his account and also not denied his signatures on the cheques and not denied issuance of cheques to the complainant. Therefore, the complainant has complied all the statutory requirements for 16 C.C.No.4993/2021 constitution of offence under Section 138 of Negotiable Instruments Act. Thus the complainant has discharged her initial burden. Therefore, the complainant is entitled for presumption under Section 139 of Negotiable Instrument Act. The provisions of Section 139 of Negotiable Instrument Act reads as under:-
139- Presumption in favour of holder - It should be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
19. Hon'ble Supreme court in a decision reported in (2010) 11 SCC 411 between Rangappa V/s Sri Mohan has held that -
The presumption mandated by Section 139 of the act does indeed include the existence of a legally enforceable debt or liability.
It is also observed that Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instrument. It is also held that in such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant caused cannot be expected to discharge an unduly high slandered or proof.
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20. Learned counsel for the complainant has also relied on the decision reported in 2018 (8) SCC 165 between Krishna Rao v. Shankar Gauda , wherein it is held that accused may adduce evidence to rebut presumption under Section 139, but mere denial regarding existence of debt shall not serve any purpose. In the event the accused is able to raise a probable defence which creates doubt with regard to existence of debt or liability the presumption may fail. The complaint has also relied on the decision of Hon'ble Supreme Court reported in AIR 2023 SC 5018 between Rajesh Jain v. Ajay Singh . In this decision, at para 43 and 44, The Hon'ble Supreme Court has held that the nature of evidence required to shift the evidential burden need not necessarily be direct evidence i.e. oral or documentary evidence or admissions made by the opposite party, it may comprise circumstantial evidence or presumption of law or facts. The accused may adduce direct evidence to prove that the instrument was not issued in discharge of a debt/liability and, if he adduces acceptable evidence, the burden again shifts to the complainant. At the same time the accused may also rely upon circumstantial evidence and, if the circumstances so relied upon are compelling, the burden may likewise shift to the complainant. It is open for him to rely upon presumption of fact, for instance, those mentioned in Section 114 and other sections 18 C.C.No.4993/2021 of the Evidence Act. The burden of proof may shift by presumptions of law or facts.
21. The complainant has also relied on the decision of Hon'ble High Court of Sikkim reported in 2018 0 Supreme (SIKK) 35 between Poorna Kumar Gurung v. Ankith Sarda. He has also relied on the decision of Hon'ble High Court of Karnataka reported in 2025 (1) AKR 264 between R.K. Surendra Babu v. C. Ashoka. In this decision, it is held that mere fact that accused had issued stop payment instruction is not sufficient to reverse the presumption under Section 139, unless accused proves existence of sufficient balance in the Account at the time of cheque presented.
22. Therefore, upon considering the principles of law laid down in the above-referred decisions, it is proper to consider the defence raised by the accused, whether it is sufficient to rebut the presumption under Section 139 of Negotiable Instruments Act.
23. The defence of the accused is that the complainant has voluntarily invested a sum of ₹ 6,50,000/- in the share market. The complainant has also received the profits of ₹ 2,00,000/- from her investment. The accused is only the advisor to the complainant to invest in the stock market. He has not received 19 C.C.No.4993/2021 any remuneration for the services rendered by him to the complainant. There is no written agreement between the complainant and accused for sharing of profits and to bear the loss in the investment. The complainant who invested in the stock market should be entitled for profits if her investment turned into profit and the complainant should bear the loss if the investment turned into loss. The accused is not the registered member of SEBI. Therefore, he cannot be termed as a stock broker. The accused cannot act as a stock broker and if it is the case of the complainant that the complainant has made investment through the accused, such transaction is illegal transaction and it cannot be enforced under law. The complainant has not disclosed about the investment in the income tax returns. Therefore, the amount invested by the complainant is unaccounted amount. There is no mutual agreement between the complainant and accused to pay the principal amount and profit for total sum of ₹ 10,48,000/- claimed by the complainant. It is also case of the accused is that the husband of the complainant has lodged the complaint at Ethapur police station and they have threatened that they will arrest him through higher police officials. Therefore he got afraid of his arrest. Therefore he has sent Exhibit P1 and Exhibit P2 cheques to the complainant. But he is not liable to pay said amount to the complainant. It is further case of the 20 C.C.No.4993/2021 accused that he has not used a single rupee of the complainant for his personal use. Due to COVID-19 pandemic he has suffered huge loss in the investment in the stock market. He has not agreed to make good the loss suffered in the stock market investment of the complainant. Therefore there is no legally recoverable debt.
24. In this case, the accused has not disputed the fact that he was developed PoD Mutual Telegram Channel and invited the prospective investors to invest in the stock market. He has also not disputed that the complainant has invested a sum of ₹ 6,50,000/- with him and he has invested said amount of the complainant in the stock market. The PW1 has stated that her husband has transferred a sum of ₹ 50,000/- from his account with Paytm payments Bank as per Ex.P.10 and she has transferred a sum of Rs.6,00,000/- in November 2019 and Jan 2020 as detailed in Ex.P9 and as reflected in her bank statement Ex.P.11 to the account of the accused. The accused has not denied such transfer of amount of ₹ 6,50,000/- by the complainant to his bank account. The PW1 has deposed in her cross-examination that the accused has paid a sum of ₹ 2,00,000/- as profit for the period from August 2019 to February 2020. This statement of The PW1 is also not denied by the accused.
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25. It is the case of the complainant that after February 2020 the accused stopped to make the profit sharing. It is stated that the accused has agreed to make repayment of the principal amount of ₹ 6,50,000/- and profit sharing for the period from Feb 2020 till July 2020 for a sum of ₹ 3,98,000/-. Totally for a sum of ₹ 10,48,000/- in respect of which the accused has issued Exhibit P1 and Exhibit P2 cheques. The accused has sent Exhibit P1 and Exhibit P2 cheques through courier. The accused has not denied issuance of cheques and his signature in Exhibit P1 and Exhibit P2 cheques. He has also not denied issuance of cheques. He has also not denied that contents of the cheques is written by him. He has also not denied that he has issued said cheques through courier.
26. In the entire cross-examination of PW1, the accused has not made any suggestion that the accused has not agreed to make profit sharing. The accused who issued stop payment instructions has not explained why he has issued stop payment instructions and he has also not produced any evidence before this court to show that in spite of issuance of stop payment instructions he had sufficient funds in his account to honour the Exhibit P1 and Exhibit P2 cheques on its presentation.
27. The complainant has produced the WhatsApp conversation between the complainant and accused as per Exhibit 12. The 22 C.C.No.4993/2021 accused has not denied the conversation found in the WhatsApp screenshot produced by the complainant. The said conversation shows that the accused has promised to pay returns above 13% to 15% on the investment in the month of August 2019. The PW 1 has produced the deposition of her husband in CC 4987/2021 as Ex.P 8. In the said case the husband of the complainant has also produced various WhatsApp conversations between the complainant and accused as Exhibit P26. The accused has not denied the correctness of the conversations found in Exhibit P26 WhatsApp communication produced in the said case. No suggestion has been made to PW1 in the said case that the complainant has created Exhibit P26 WhatsApp conversation and it is not the real conversation between the husband of complainant and accused. In the said conversation there is reference with regard to request of the complainant to issue cheques and also sharing of the calculation sheet of the dues to the complainant and her husband and and that the accused has sent the cheques through courier. It is the contention of the complainant that she has presented Exhibit P1 and Exhibit P2 cheques, but the said cheques are dishonored for the reason insufficient funds. Thereafter her husband has lodged the complaint with Ethappur Police Station. And in the Ethapur Police Station, the compromise has held to settle the dues of the complainant and her husband for a sum of ₹ 26,00,000/-. But 23 C.C.No.4993/2021 the the accused has not adhered to such compromise. Therefore, the complainant has constrained to present the cheques to the outstanding due amount as mentioned in the cheques. The accused in the statement under Section 313 of CrPC has stated that the complainant has threatened through police that he would be arrested by Etapur police. Therefore he has sent the cheques through courier. But in the cross examination of PW1, no such suggestion is made to PW1 that the complainant or her husband hae threatened the accused through Ethapur police and hence accused has sent the cheques through courier. Therefore in the absence of such suggestion to PW1 and producing the material before the court to show that the complainant has threatened through Ethapur police to arrest him, this contention is not having any evidentiary value.
28. Another defence of the accused is that he has not agreed to make good the loss suffered by the complainant in the investment. It is pertinent to note that the complainant has not directly made investment in the stock market. The complainant has transferred the amount to the account of the accused and the accused may have invested it in the stock market in his own name. Admittedly, the accused is not the registered stock broker. In the cross-examination of PW1, it is elicited that the 24 C.C.No.4993/2021 complainant is not having any information in which Share the amount of the complainant is invested by the accused. The accused has also not produced any documents to show that he has communicated the complainant in which share her amount is invested. Therefore, the investment by the complainant with the accused is only for profit sharing and not for sharing of loss. The Exhibit P12 WhatsApp conversation also shows the promise made by the accused to get returns 13% to 15% on the investment and also the statement of the accused that risk is his. The Exhibit P26 Whatsapp conversation produced in CC 4987/2021 referred in Ex.P8 deposition of husband of complainant shows that the complainant has shared the calculation sheet in respect of his investment and investment of his wife to the accused. The accused himself filled the contents of the cheque and sent it through courier to the complainant. This fact also shows that the accused has agreed to share the investment and profit as mentioned in the cheque. If he has not agreed to pay the amount mentioned in the cheques, he would not have issued the cheques by mentioning the said amount. It is not the case of the accused that he has issued blank signed cheque to the complainant and the complainant herself filled the contents of the cheque. Therefore the admission of the accused that he himself written the contents of the cheque and issued to the Complainant itself clearly establishes that he has 25 C.C.No.4993/2021 agreed to pay the cheque amount of ₹ 10,48,000/- to the complainant and issued the cheqeus.
29. The accused has stated that the accused is not the registered stock broker registered under SEBI. Therefore, the investment made by the complainant through the accused is an unlawful transaction and it cannot be recovered as a legally recoverable debt. In support of his arguments, the accused has relied on the decision of Hon'ble High Court of Allahabad reported in 2024 SCC Online ALL 5512. Between Jeethendra Kumar Keshwani v. State of UP and another. In this decision, it is held that the SEBI Act is a special Act which shall prevail over the general Act, such as IPC or CrPC. It is settled position of law that once a Special Act holds the field, the provisions of general law would not apply and only the prosecution can be lodged in accordance with the provisions of such Special Law and the provisions under Section 26 of SEBI Act specifically. In this case admittedly the accused is not the stock broker registered under SEBI Act. It is also not the case of the accused that he has made the investment in the name of the complainant in the stock market. It is specific case of the complainant that she has made investment with the accused and accused in his name made the investment in the stock market. Therefore the accused is the individual investor and he 26 C.C.No.4993/2021 will not termed as stock broker. Therefore, the contention of the accused is that, in view of Special Act, the prosecution under Section 138 of Negotiable Instruments Act is not maintainable and cannot be accepted.
30. The learned counsel for the accused has also relied on the decision reported in AIR 2022 SC 5213 between Securities and Exchange Board of India versus National Stock Exchange Members Association and another. This decision is also about registration of stock broker under SEBI Act. As the accused is not the stock broker registered under SEBI Act and he has made the investment in his own name, he will not come under the provisions of SEBI Act. Therefore, said decision is not helpful to the accused to support his arguments.
31. The accused has also relied on the decision of Hon'ble Delhi High Court reported in 2007 Cr. LJ 2262 between Veryander Singh v. Lakshmi Narain and Another. In this decision, it is held that Money paid by way of illegal gratification for the purpose of arranging the job for the complainant pursuant to the agreement between the petitioner and the complainant, the agreement is void and consideration thereof is unlawful. The agreement which are void ab initio and their illegality is known to the parties at the time of execution could not fall under the purview of Section 65 of Indian Contract Act. In this case, the 27 C.C.No.4993/2021 complainant has made the investment with the accused and accused in his name made the investment in stock market and promised the complainant to share the profit and bear the loss. Therefore, the Investment made by the complainant cannot be held to be forbidden by law and it will contrary to the SEBI Act or any other law for the time being in force. The accused has not enlightened this Court how the said transaction alleged by the complainant will become a void contract. Therefore this decision isalso not helpful to the accused to support his arguments.
32. The accused has also relied on the decision of Hon'ble Kerala High Court reported in 2005 Criminal Law Journal 4095 between J. Daniel v. State of Kerala and another. In this case, it is held that Liability covered by cheque had arisen out of agreement for compounding of non-compoundable offence, which was not legally enforceable debt. In this case, no such circumstances are made out, hence this decision is not helpful to the accused to support his arguments. The accused has also relied on the decision of Hon'ble Supreme Court reported in 2022 16 SCC 762 between Sunil Tady and others v. State of Gujarat and another . In this case, the Hon'ble Supreme Court has dealt about money payable at a future time upon happening or not happening of contingent event and the consequences of dishonour of the cheque issued for security under such 28 C.C.No.4993/2021 circumstances. In this case, it is not the defence of the accused that he has issued Exhibit P1 and Exhibit P2 cheques for the purpose of security. When the accused has not taken the defence that the cheques were issued for the purpose of security and the complainant herself filled the contents of the cheque, the principles laid down in this decision will not help the accused to substantiate his defence.
33. The accused has also placed his reliance on the judgment of the Hon'ble Supreme Court reported in 2023 1 SCC 578 between Dasharahbhai Trikanbhai patel Vs Hitesh Mahendrabhai patel and another. In this decision, Hon'ble Supreme Court has dealt about effect of part payment on the debt prior to presentation of the cheque for encashment and Endorsement under Section 56 of Negotiable Instruments Act. In this case on hand it is not the case of the accused that he had made part payment after issuance of the cheque. Therefore, the question of applicability of Section 56 of Negotiable Instruments Act would not arise in the present case. Therefore, the principles laid down in this decision will not help the accused to support his arguments.
34. The accused has also taken the defence that the complainant has not disclosed the source of income for investing a sum of ₹ 6,500,000/-. The husband of complainant 29 C.C.No.4993/2021 is a chartered accountant by profession. In the cross- examination, as per Ex.P 8 it is elicited that he is working in a private company YOKOGAWA and he is having salary of ₹ 2,50,000/- to ₹ 3,00,000/-.in the year 2019. The complainant is also BDS graduate and she was practicing till 2019. In this case the accused has not disputed investment of ₹ 6,50,000/- with the accused. Therefore when the accused has not disputed the investment of ₹ 6,50,000/- question of considering the aspect of source of income would not arise.
35. Therefore, for the above discussion, upon considering entire evidence on record, it can be concluded that the accused has not denied issuance of cheques. The accused has not denied the investment made by the complainant. He has not denied the WhatsApp conversation between the complainant and the accused produced as Exhibit P12. He has not specifically denied his liability. The accused instead of taking his own defence he has tried to find out the defects in the case of the complainant. But he has failed to show any circumstances, creating doubt about the case presented by the complainant with probable evidence. The accused has not chosen to let his evidence probablise his case. The accused who contended that he has suffered loss in the investment, has not disclosed in which shares he has invested the amount of the complainant and he 30 C.C.No.4993/2021 has not brought on record any material to show that he has suffered loss in the investment of the amount of the complainant. Therefore the defence of the accused that the investment of the complainant is turned into loss , also not probalised with evidence. Therefore, there is no specific defence taken by the accused and the accused has failed in his attempt to establish his defence by eliciting the falsification of the case of the complainant. Therefore, this Court is in the considered view that the accused agreeing to pay the amount covered under Exhibit P1 and Exhibit P2 cheques, has issued these cheques to the complainant and got it dishonored without maintaining sufficient amount in the account and issuing stop payment instructions without any sufficient cause and inspite of service of notice he has failed to make good the amount to the complainant. The accused has failed to established his defence with probable evidence for rebuttal of the presumption under Section 139 of Negotiable Instruments Act. Therefore, this Court concludes that the accused has failed to rebut the presumption under Section 139 of Negotiable Instruments Act. Therefore, this Court concludes that the complainant has established existence of legally recoverable debt and issuance of Exhibit P1 and Exhibit P2 cheques towards discharge of said debt and as such commission of the offence under Section 138 of Negotiable 31 C.C.No.4993/2021 Instruments Act. Therefore this Court answers the above point number 1 in the affirmative.
36. POINT NO. 2 : While answering the point no. 1 this court concluded that the complainant proved that the accused committed the offence punishable under Section 138 of Negotiable Instruments Act. The Amount covered under the cheques is Rs.10,48,000/-. The cheques are dated 01.09.2020 and 08.09.2020. The money involved in the case is used in commercial transactions. Therefore considering these aspects the fine amount is calculated for a sum of Rs.15,84,620/-.
37. The Hon'ble High Court of Karnataka in the reportable decision in CRL.RP No. 996 of 2016 dated 09-07-2025 between M/s Banavathy and Company VS Mahaveer Electro Mech (P) Ltd at para 21 has held that -
21. In case lesser interest is awarded and only default sentence is imposed, the rigor of offence under Section 138 will be diluted and thereby the object of the Statute will be defeated. If recovery and compensatory part is not taken care of while determining the quantum of sentence and appropriate interest is not awarded, until the date of recovery of the entire amount, the complainant will be forced to file civil suit on the same subject matter. In view of Section 143(3) the trial for offence under Section 138 of N.I.Act has to be completed within six months. If the said provision is not adhered to and the trial for the offence under Section 138 of N.I.Act takes 4 to 5 years, in the mean time, the claim of the complainant for recovery of the cheque amount by 32 C.C.No.4993/2021 filing civil suit becomes barred by limitation. Not only that the accused who is convicted for offence under Section 138 of N.I.Act challenges the same before the Sessions Court wherein the matter takes 2 to 3 years. The accused unsuccessful in the said appeal prefers revision petition before the High Court and it is seen that the disposal of revision takes more than 5 years. After all this if the complainant has to receive the fine/compensation as awarded by the trial Court, if it is cheque amount or little higher than the cheque amount, he will be at loss and put to injustice. Therefore, while passing the order of sentence after determining the fine/compensation, the Court shall also pass an order to pay future interest @ 9% p.a. on the compensation amount payable to the complainant by fixing time of one/two months to deposit compensation amount so that even if the matter is challenged before the Sessions Court in appeal and High Court in revision the interest of the complainant will be protected.
In view of the directions issued in the above refereed judgment, it is also proper to direct the accused to pay future interest on the fine amount at the rate of 9 % P.A. till payment. Therefore considering all these aspects this court proceed to pass the following -
ORDER By exercising powers conferred U/sec.255(2) of Cr.P.C., the accused is convicted for the offence punishable under Section 138 of Negotiable Instrument Act and he is sentenced to pay a fine of Rs.15,84,620/- (Rupees Fifteen Lakhs Eighty Four Thousand Six Hundred and Twenty Only) payable with in 33 C.C.No.4993/2021 a month and in default pay interest at the rate of 9% from this day till payment of fine amount, and In default to pay the fine with interest, the accused shall undergo simple imprisonment of one year.
Further acting U/s 357(1)(a) of Cr.P.C. out of the fine amount a sum of Rs.10,000/-(Rupees Ten Thousand only) shall be defrayed as prosecution expenses to the state.
Further acting U/s 357(1)(b) of Cr.P.C. a sum of Rs.15,74,620/- (Rupees Fifteen Lakhs Seventy Four Thousand Six Hundred and Twenty Only)and interest out of the fine amount on recovery shall be paid as compensation to the complainant.
Supply free copy of the judgment to the accused. [ (Partly dictated to the Stenographer directly on the computer, typed by her, partly dictated to the Adalath AI computer application, transcribed by it, corrected and signed then pronounced by me in the open court on this the 21st day of April 2026).
(GOKULA.K) XXV A.C.J.M., BANGALORE CITY.
ANNEXURE LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
PW.1 : Shubha N. Wasi
34
C.C.No.4993/2021
LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P1&2 : Cheques Ex.P3&4 : Bank Endorsements Ex.P5 : Office copy of legal notice.
Ex.P6 : Postal receipt
Ex.P7 : Returned Postal envelope
Ex.P8 : Certified Copy of the Deposition
in C.C.No.4987/2021
Ex.P9 : Details of investment
Ex.P10 : 4 Statement of accounts of the husband of
the complainant
Ex.P11 : Bank Statement of SBI
Ex.P12 : Screen shots of Whats app and telegram
chats
Ex.P13 : Pendrive, soft copy of whats app and
telegram chat
Ex.P14 : Certificate U/s.63 of BSA.
LIST OF WITNESSES EXAMINED FOR THE ACCUSED:-
Nil LIST OF DOCUMENTS MARKED FOR THE ACCUSED:-
Nil (GOKULA.K.) XXV A.C.J.M., BANGALORE CITY.