Bangalore District Court
Anil Kumar.J vs G Sendhil Kumar on 4 April, 2025
1 CC.NO.9886/2023
KABC030168402023
IN THE COURT OF XII ADDL. CHIEF JUDICIAL MAGISTRATE,
BENGALURU.
Dated this the 04th day of April, 2025.
:Present:
Smt. PREETH. J., B.A.L., LLB.,
XII Addl. Chief Judicial Magistrate,
Bangalore.
CC.No.9886/2023
1. Name of the : Anil Kumar.J.,
Complainant Aged about 42 years,
S/o. Janardhan,
R/at: No.687, Srinivas Nilaya,
Old Panchayat Road,
Yeshwanthpura,
Bengaluru-560022.
(By Sri.N.S.S, Advocate)
2. Name of the Accused Sri. G. Sendhil Kumar,
Aged about 50 years,
S/o. Late Govindaswamy,
R/at: No.31, N.K.Palya,
4th Cross, Shivaji Road,
Shivajinagar,
Bengaluru-560051.
(By Sri.K.P.R., Advocate)
3. The date of commission of : 24.04.2023
the offence
4. The offence complained of or : Under Section 138 of the
proves Negotiable Instrument
Act.
2 CC.NO.9886/2023
5. Plea of the accused and his : Pleaded not guilty.
examination
6. Final Order : Accused is Acquitted.
7. Date of such order for the : 04.04.2025
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.
02. It is contended that, the complainant and the accused are known to each other for the past 10 years. The accused approached the complainant on 10-05-2022 for financial help to meet his personnel problems. Accordingly the complainant paid a sum of Rs.6,00,000/- to the accused has loan on 10-06-2022 by way of cash. Thea accused assured that he will return the same in the month of January 2023. Accordingly the complainant approached the accused and demanded for repayment in the month of January 2023 but the accused promised to repay in the month of February 2023. As such when the complainant approached the accused on 27-02-2023 he issued a cheque bearing no.516892 for Rs.6,00,000/- dated 28.02.2023, drawn on State Bank of India, Lady Curzen Road, Bengaluru-560001 towards discharge of his liability. As per the assurance of the accused, the complainant presented the said cheque for collection 3 CC.NO.9886/2023 through his banker Axis Bank, Mathikere branch, Bengaluru, but the same got dishonoured as per memo dated 06.03.2023 for the reasons "CHI REJECTED Drawee Bank for item is not clearing mode." Accordingly, complainant got issued demand notice to the accused on 27.03.2023. The said notice is duly served on the accused. But the accused has not caused any reply to the said notice, nor has repaid the amount covered under the said notice. As such cause of action arose to file this complainant. Accordingly prayed to convict the accused.
03. After recording the sworn statement of the complainant and also verifying the documents, cognizance was taken against the accused for the offence punishable under Sec. 138 of N.I. Act. The accused on receiving the summons appeared before this Court through his counsel and was enlarged on bail and his plea was recorded. The accused pleaded not guilty and claimed to be tried. Hence, the case was posted for evidence of the complainant.
4. Statement of the Accused was also recorded under Section 313 of Cr.P.C., where he has denied incriminating evidence found against him. As per the directions of Hon'ble Supreme Court of India in "Indian Bank Association V/s Union of India & Others reported in (2014) 5 SCC 590, the predecessor in office of this court has treated the sworn statement of the complainant as his evidence. The Documents were also marked as Ex.P1 to Ex.P5. 4 CC.NO.9886/2023 Upon application filed by the counsel for the Accused under Section 145(2) of N.I Act, permission was given to cross-examine PW-1 thoroughly. Though the accused choose to lead his evidence, he has not lead any evidence on his behalf. Hence, D/Evidence is taken as nil.
5. Heard the arguments by the counsel for the complainant. Defence Arguments taken as not argued.
6. The following points arise for my consideration:
Point No.1:Whether the Complainant proves that the Accused has issued the Cheque for the legally recoverable debt as alleged by them?
Point No.2: Whether the Accused has committed the offence punishable under section 138 of N.I Act?
Point No.3: What Order or Sentence?
07. My findings on the above points are as under:-
Point No.1: In the Negative, Point No.2: In the Negative, Point No.3: As per the final order for the following:
-: R E A S O N S :-
08. POINT NO.1 and 2:- It is the specific case of the complainant that he lent a sum of Rs.6,00,000/- to the accused as 5 CC.NO.9886/2023 hand loan by way of cash and towards the repayment of the said loan the accused issued the disputed cheque, when the cheque was presented, same was dishonoured for the reason "CHI REJECTED Drawee bank for item is not clearing mode". Though the said fact was brought to the notice of the accused by issuing demand notice he has failed to repay the cheque amount.
09. In order to substantiate the contention, the complainant got examined himself as Pw1 and got marked 05 documents as ExP1 to Ex.P5. Though the accused admits his signatures on Ex.P1, he has disputed the issuance of the same to the complainant. It is his defence that he has issued Ex.P1 cheque along with two more cheque leaves, in blank by signing the said cheque to Venkateshwara Finance in the year 2013 when he has availing loan from the said Finance to the tune of Rs.1,50,000/-. It his defence that the complainant being the relative of the owner of the said finance had taken the cheque leaves of the accused from him and filled it up at his whims and fancies and misused Ex.P1 cheque and presented the same to the bank and thereby filed this false complaint. The next defence of the accused is that the complainant did not have the financial capacity to lend that much money to the accused.
10. The first and foremost defence of the accused is that the Cheque is not issued to the complainant but he has issued the 6 CC.NO.9886/2023 same to Venkatheswara Finance. In this regard PW1 is thoroughly cross examined by the counsels for the accused. PW1 has admitted that one Sunil who is the owner of the said Finance is his relative. At page no.4 of the cross examination of PW1 he has deposed as follows:
"ನಾನು ಆ 1,50,000 ರೂಪಾಯಿಗಳನ್ನು ಆರೋಪಿತನಿಗೆ ವೆಂಕಟೇಶ್ವರ ಪೈನಾನ್ಸ ರವರಿಂದ ಕೊಡಿಸಿರುತ್ತೇನೆ ಎಂದರೆ ಸರಿ. "
11. This goes to show that the accused availed loan from the said Finance and the complainant had helped him in getting the said loan. It has come in the evidence of PW1 that the said loan is availed in the year 2013. PW1 has also admitted that he has helped him getting the loan from the said Finance to the tune of Rs.1,50,000/-. And he has also admitted that the owner of the said Finance one Sunil is his relative. It is suggested to him that Ex.P1 and other two cheques were issued to the said Finance and the same is being misused by the complainant, for which he has deposed that Ex.P1 cheque is issued to him and he do not know about the other cheques and the accused might have issued the other cheques to the Finance.
12. At page no.4 of the cross examination of PW1 it is also suggested to him that prior to 2020 hostility was caused among him and the accused which is denied. He has given evasive answer when suggestion was put to him that the accused had 7 CC.NO.9886/2023 lodged a complaint against him before the Shivajinagar police station by deposing as "ಗೊತ್ತಿಲ್ಲ" and he has denied the suggestion that he had also given his statement before the police. One document was confronted to PW1 whereupon he has admitted his signature and his mobile phone number found in the said document. Accordingly the said document is marked as Ex.D1. He has deposed that there is no connection between this case and the said case before the police station. He has admitted that in the said statement Ex.D1 he has stated that the accused sought for hand loan from him for the purpose of construction of house. He has deposed that the accused had repaid the said loan. He has admitted that a sum of Rs.1,50,000/- shown in Ex.D1 is availed by the accused from Venkatehswara Finance and he helped him in getting the said loan. He has deposed that the accused had repaid the loan amount to the said Finance but after lodging the complaint he has repaid the said loan. He has deposed that the statement given by him as per Ex.D1 is true and correct. It is suggested to him that one of the cheques issued by the accused to the When the defence taken by the accused and the oral evidence of PW1 is read along with Ex.D1, it very clearly goes to show that the cheque leaf of the accused which is marked as Ex.P1 was issued to by him to the above Finance in the year 2013 and the 8 CC.NO.9886/2023 same is being misused by the complainant. said fiance is misused and this complaint is filed but the same is denied.
13. At this juncture it is relevant to go through the contents of Ex.D1 which is the statement given by the complainant on 14-03-2020 before the police in connection with the complaint lodged by the accused herein in respect of the transaction that had taken place between him and the Finance. In the said statement the complainant has stated that the accused had approached him for loan as he was constructing his house. As he did not have money he referred the accused to M/S Shri. Venkateshwara Finance and he stood as surety for the loan of the accused and accordingly the accused availed from the said Finance in the year 2013 to the tune of Rs.1,50,000/-. He has also stated that as the accused did not pay the interest nor the principal amount to the said finance, The Finance was issuing notice to him every now and then and finally they have booked a case against him in the year 2017, as such he had to repay the loan to the Finance, that was availed by the accused. He has also stated in the statement that after repaying the loan they have brought the document back from the said finance and the cheque given by the accused to the Finance is also taken back from the Finance and the same are with him. He has also stated that he has informed the accused herein about the repayment made by him to the Finance and the 9 CC.NO.9886/2023 accused apologized to him in that regard and assured that he will repay a sum the same in installments of Rs.10,000/- every month but till date the accused has not repaid the said money. He has also further stated in his statement Ex.D1 that the accused herein has lodged a false complaint against him and has stated that he will approach the court in respect of the cheque belonging to the accused in connection with the loan availed by him under the suretyship of the complainant. For better understanding the relevant portion of Ex.D1 is necessary to be reproduced, which is as hereunder:
"ನಾನು ನನಗೆ ಪರಿಚಯ ಇರುವ ಎಂ/ಎಸ್ ಶ್ರೀ ವೆಂಕಟೇಶ್ವರ ಫೆೈನಾನ್ಸ್(ಆರ್) ರವರಿಗೆ ನಾನು --- ಹಾಕಿ ಸೆಂದಿಲ್ ರವರಿಗೆ 1,50,000/- ರೂಗಳನ್ನು 2013 ರಲ್ಲಿ ಕೊಡಿಸಿರುತ್ತೇನೆ. ಆದರೆ ನಂದೀಶ್ ಕುಮಾರ್, ನಾನು ಕೊಡಿಸಿದ್ದ ಹಣಕ್ಕೆ ಅಸಲನ್ನಾಗಲಿ, ಅಥವಾ ಬಡ್ಡಿಯನ್ನಾಗಲಿ ವಾಪಸ್ ಕಟ್ಟದೇ ಸತಾಯಿಸುತ್ತಿದ್ದರಿಂದ ನನಗೆ ಫೆೃನಾನ್ಸ್ ಕಂಪನಿಯಿಂದ ಪದೇ ಪದೆ ನೋಟಿಸ್ ನೀಡುತ್ತ್ದಿದ್ದರಿಂದ ನನಗೆ ವಾರೆಂಟ್ ಬಂದಿದ್ದು 2017 ನೇ ಇಸವಿಯಲ್ಲಿ ಕೇಸ್ ಬುಕ್ ಮಾಡಿದ್ದು ಇದರಿಂದ ನಾನು ಬೇಸತ್ತು ನಾನು ಸೆಂದಿಲ್ ರವರ ಹಣವನ್ನು ಪಾವತಿಸಿ ನಾವು ಬ್ಯಾಂಕ್ಗೆ ನೀಡಿದ್ದ ದಾಖಲಾತಿಗಳನ್ನು ವಾಪಸ್ ಪಡೆದು ಬಂದಿದ್ದು ಆ ಸಮಯದಲ್ಲಿ ಅವರು ಫೈನಾನ್ಸ್ ಕಂಪನಿಗೆ ನೀಡಿದ ಚೆಕ್ಗಳು, ನನ್ನ ಬಳಿಯಲ್ಲಿ ಇರುತ್ತದೆ. ನಾನು ಸೆಂದಿಲ್ ರವರಿಗೆ ಹಣ ಪಾವತಿಸಿರುವ ಬಗ್ಗೆ ತಿಳಿಸಿದ್ದು ನನ್ನ ಬಳಿಯಲ್ಲಿ ಬಂದು ಕ್ಷಮಾಪಣೆ ಕೇಳು ನನಗೆ ತಿಂಗಳಿಗೆ 10,000/- ರೂಗಳಂತೆ 10 CC.NO.9886/2023 ಮರು ಪಾವತಿಸುತ್ತೇನೆ ಎಂದು ತಿಳಿಸಿದ್ದು ಇಲ್ಲಿಯವರೆಗೂ ಯಾವುದೇ ಹಣವನ್ನು ವಾಪಸ್ನೀಡಿರುವುದಿಲ್ಲ."
14. Further at page no.2 of Ex.D1, last few lines he has stated as follows:
"ಅವರು ನೀಡಿರುವ ದೂರು ಸತ್ಯಕ್ಕೆ ದೂರವಾಗಿರುತ್ತದೆ. ನಾನು ಜಾಮೀನು ನೀಡಿ ಹಣ ಕೊಡಿಸಿದ್ದ -- ರ ಬಗ್ಗೆ ನಾನು ನ್ಯಾಯಲಾಯಕ್ಕೆ ಮುಂದಿನ ಕ್ರಮ ಕೈಗೊಳ್ಳುತ್ತೇವೆ ಎಂದು ಈ ದಿನ ಠಾಣೆಗೆ ಹಾಜರಾಗಿ , ನನ್ನ ಹೇಳಿಕೆ ನೀಡಿರುತ್ತೇನೆ."
15. When the defence taken by the accused and the oral evidence of PW1 is read along with Ex.D1, it very clearly goes to show that the cheque leaf of the accused which is marked as Ex.P1 was issued by him to the above Finance in the year 2013 and the same is being misused by the complainant by filing up the same at his whims and fancies and presented it to the bank for encashment. Admittedly, the owner of the said Finance is his relative and also his friend. Ex.D1 which is admitted by the complainant very clearly goes to shows that the complainant is in possession of the cheque leaves of the accused which he had given to the said finance. Ex.D1 goes to show that as the complainant has repaid the loan of the accused to the said finance, in order to recover the said money along with excess amount has presented Ex.P1 cheque to the bank in order to make wrongful gain.
16. From the oral evidence of PW1 and also Ex.D1 it very clearly goes to show that the relationship of the accused and the 11 CC.NO.9886/2023 complainant is not cordial from the year 2020 and the accused has knocked the doors of the police station to resolve the dispute. When such being the case, where the relationship is strained, and the complainant having bitter experience from the accused of not repaying the loan to the Finance and it was he who had to repay the loan of the accused to the Finance, there is no way the complainant will again give loan to the accused to the tune of Rs.6,00,000/- that too by way of cash. At the cost of repetition it is to be stated that no prudent man will land hand loan to a defaulter. As such without any hesitation it can be said that the defence taken by the accused that his cheque is being misused by the complainant is a probable defence.
17. Yet another defence of the accused that the complainant had no financial capacity to lend a sum of Rs.6,00,000/- to the accused is concerned, is also proved by the accused by virtue of Ex.D1 which is the statement given by the complaint. The complainant has specifically stated in the said statement that the accused had first approached him for loan of Rs.1,50,000/- but as he did no have that much money he referred him to the above referred Finance. When the complainant did not have Rs.1,50,000/- in the year 2013 it is hard to believe that he had the capacity of lending Rs.6,00,000/- in the year 2022. PW1 during the course of cross examination has deposed that he had pledged 12 CC.NO.9886/2023 his wife's jewelry and took loan and gave the money to the accused. When the complainant did not have money what was the necessity for him to pledge the gold and take loan and give loan to the accused that too interest free. He has also deposed that other than his diary business he is also getting rent from the houses which are constructed by him father.
18. PW1 has deposed that he can produce documents to show that he has pledged his wife's gold ornaments and also produce documents to show his income from rent. But those documents have not seen the light of the day for the best reasons known to the complainant. When the accused has questioned the financial capacity of the complainant, the reverse burden is on the complainant to prove his financial capacity by producing cogent oral and documentary evidence to the satisfaction of the court. But the complainant has not done so. As such when the complainant has withheld the documents from producing the same to this court, adverse inference is drawn against the complainant for not having produced the relevant documents to prove his financial capacity. When the accused has specifically questioned the financial capacity of the complainant, the burden shifts on the complainant to prove his financial status.
19. Now at this juncture it would be relevant to refer the judgment reported in APS Forex Services Pvt., Ltd., Vs. Shakti 13 CC.NO.9886/2023 International Fashion Linkers and Ors., (2020) 12 SCC 724, wherein Hon'ble Apex Court has held as follows:
"We are of the view that whenever the accused has questioned the financial capacity of the complainant in support of his probable defence, despite the presumption under Section 139 of the N.I. Act about the presumption of legally enforceable debt and such presumption is rebuttable, thereafter the onus shifts again on the complainant to prove his financial capacity and at that stage the complainant is required to lead the evidence to prove his financial capacity, more particularly when it isa case of giving loan by cash and thereafter issuance of a cheque."
20. In another decision of the of the Hon'ble Apex court between Basalingappa vs. Mudibasappa, (2019) 5 SCC 418, it is held that the accused can always show that the complainant had no financial capacity to advance the alleged loan and the same shall be a probable defence which the accused can raise.
21. In yet another decision reported in (2015) 1 SCC 99 K. Subramani/K. Damodara Naidu it is held that when source of income from which alleged loan was made to the accused is not proved, then legally recoverable debt is not proved. Here in the case on hand also the complainant has miserably failed to prove 14 CC.NO.9886/2023 his source of income. Hence, it can be said that complainant has failed to prove his financial capacity.
22. The accused has also taken the defence that Ex.P1 cheque is a old cheque of the year 2010 and the same was issued to the above referred Finance in the year 2013, which is drawn on State Bank Of Mysore. During the course of cross examination of PW1 questions were posed to him with regard to merger of SBM with SBI as on 01-04-2017 and with regard to deadline for exchange of old cheque leaves. PW1 has given evasive answers by deposing as "ಗೊತ್ತಿಲ್ಲ". The counsel for the Accused has vehemently argued that Ex.P1 cheque was an invalid cheque leaf as on the date of the said cheque i.e., as on 28-02-2023, as such the offence under Section 138 of the Act will not attract to a cheque which is invalid. Section 138 of the Negotiable Instrument Act reads as follows:
"Section 138: dishonour of cheque for insufficiency etc., of funds in the account where any cheque drawn by a persons on an account maintained by him with a banker for payment of any amount of money to another persons from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an 15 CC.NO.9886/2023 agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for (a term which may be extended to two years) or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless
(a) the cheque was been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier.
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said account of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him the bank regarding the return of the cheque as unpaid: andmerged
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice".
23. On plain reading of the above provision of law, it is clear that if any invalid cheque is presented before the Bank and the same is dishonoured, then there is no liability under Section 138 of the Act. As per the case of complainant, he had lent alleged hand loan of Rs.6,00,000/ during the year 2022 and the disputed 16 CC.NO.9886/2023 cheque is issued in the month of February 2023 . The cheque in question is related to State Bank Of Mysore. The court can take judicial notice that said Bank was merged with State Bank of India on 01-04-2017. But as observed supra, the disputed cheque is stated to have been issued on 28-02-2023 i.e., after lapse of nearly 6 years from the date of merger of State Bank of Mysore with State Bank Of India. As on the date of issuance of disputed cheque, State Bank Of Mysore was not at all in existence and it was merged with State Bank Of India. At this juncture it is beneficial to rely upon the decision of the Hon'ble Allahabad High Court which is reported in 2024 AHC 10243 between Smt. Archana Singh Gautam VS State of UP and Another, wherein the Hon'ble Allahabad High Court has issued a significant ruling regarding cheque bounce cases involving merged bank accounts. The said court held that dishonored cheques from a bank that has under gone merger cannot attract liability under section 138 of the NI Act. Further at paragraph no.12 it is also held as follows:
merged "12. This Court is also of the view that the above anology will also be applicable to the cheques of all banks which had merged with other banks".
24. In the case on hand the dishonour memo is produced and marked as Ex.P2. As per the said endorsement the Cheque is 17 CC.NO.9886/2023 dishonored for the reason " CHI REJECTED Drawee bank for item is not clearing mode". It cannot be disputed that State Bank Of Mysore is merged with State Bank Of India on 01-04-2017 and the validity of the cheque leaves of State Bank Of Mysore was only till 30-12-2017. As such the cheque i.e., Ex.P1 is not valid as on the date of the said cheque. From the above decision and also on perusal of section 138 of the NI Act, it is clear that if any invalid cheque is presented before the bank and the same is dishonored, then no liability under section 138 of the NI Act would be attracted. Further the cheque in question which was issued from the account maintained in the erst while State Bank Of Mysore after its merger with State Bank Of India are not valid cheques on the date of presentation as required by proviso (a) of section 138 of the NI Act, therefore dishonoring the same will not attract liability under section 138 of the NI Act. Further more Ex.P1 cheque in the case on hand is dishonoured for the reason "CHI REJECT Drawee bank for item is in not-clearing mode ...."
25. "CHI (Clearing House Interface) REJECT" with the message "Drawee bank for item is in not-clearing mode" means the cheque clearing process failed because the drawee bank is temporarily unavailable for clearing, likely due to system issues or maintenance. This goes to shwo that the Ex.P1 cheque was returned as per Ex.P2 memo as the State Bank of Mysore was 18 CC.NO.9886/2023 merged with Sgtate Bank of India and the reasosn shwon under Ex.P2 memo will not cover under Seciotn 138 of the N I Act. In the light of the discussions made herein above, I am of the considered opinion that the complainant has miserably failed to prove that the disputed cheque is issued to him by the accused towards the discharge of his liability and I am of the considered opinion that the accused has rebutted the presumption available to the complainant, by placing cogent evidence before this court and thereby the accused has not committed the offence under section 138 of the Act. Accordingly, I answer point No.1 and 2 in the Negative.
26. POINT No.3 :- In the light of the reasons on the point No.1 and 2, I proceed to pass the following;
ORDER Acting under Sec. 255 (1) of Cr.PC, the accused is Acquitted of the offence punishable under Section 138 and Section 142 of NI Act.
The bail bond of the accused shall stand cancelled.
(Dictated to the stenographer directly on computer, corrected and then pronounced by me in open court, on this the 4th day of April, 2025.) (Smt.Preeth. J) XII Addl. CJM, Bengaluru.
19 CC.NO.9886/2023:ANNEXTURE:
LIST OF WITNESSES EXAMINED ON BEALF THE COMPLAINANT P.W.1 : Anil Kumar.J LIST OF DOCUMENTS MARKED ON BEHALF OF COMPLAINANT:
Ex.P.1 : Original Cheque on 28.02.2023
Ex.P.1(a) : Signature of the accused.
Ex.P.2 : Bank endorsement
Ex.P.3 : Copy of legal notice
Ex.P.4 : Postal Receipt
Ex.P.5 : Postal Acknowledgment
LIST OF WITNESSES EXAMINED BY THE ACCUSED
NIL
LIST OF DOCUMENTS MARKED ON BEHALF OF ACCUSED:
Ex.D1 : Statement(confronted) Digitally signed by PREETH J PREETH Date: J 2025.04.11 15:54:06 +0530 (Smt.Preeth. J) XII Addl. CJM, Bengaluru. 20 CC.NO.9886/2023 08.04.2025 For judgment (Judgment pronounced in the open court vide separate Order) ORDER
Acting under Sec. 255 (1) of Cr.PC, the accused is Acquitted of the offence punishable under Section 138 and Section 142 of NI Act.
The bail bond of the accused shall stand cancelled.
XII ACJM, Bengaluru