Bangalore District Court
M/S Akshodaya Chits (Bangalore) Ltd vs Kautilya Trust And Another on 6 March, 2026
0 C.C.NO.29769/2023
KABC030519292023
Presented on : 22-11-2023
Registered on : 24-11-2023
Decided on : 06-03-2026
Duration : 2 years, 3 months, 14 days
IN THE COURT OF THE XXVIII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY
Present:
Smt.Nagamma.M.Ichchangi,
B.A.,LL.B.,(Spl)
XXVIII A.C.J.M, Bengaluru City.
DATED; THIS THE 06th DAY OF MARCH-2026
C.C.NO.29769/2023
Complainant: M/s. Akshodaya Chits(Bangalore) Ltd.,
Regd.& Branch Office at No.20/2,
4th Floor, 4th Cross, Sampige Road,
Malleshwaram, Bangalore-56003.
Represented by its General Manager and
General Power attorney holder
Sri.H.N.Paramesh Digitally
signed by
NAGAMMA
NAGAMMA ICHCHANGI
ICHCHANGI Date:
2026.03.09
17:05:00
+0530
(By Sri.M.K.Lokesha.,Adv.,)
Accused: 1. Kautilya Trust,
A203, Mantri Green,
S1 Sampige Road, Malleshwaram,
Bengaluru-560003.
Represented by its Managing Trustee,
Mr. Ravindra.M.M
2. Mr. Ravindra.M.M
Aged about 52 year,
S/o Dr.M.K.Mallikarjunappa,
R/at No.38, Sobha Malachite Villas,
1 C.C.NO.29769/2023
Sobha Ultima Campus, Jakkur
Plantation Road,
Yelahanka, Bangalore-560064.
(By Sri.Dilipkumar.I.S.,Adv.,)
Offence complained of : U/s.138 of N.I.Act
Plea of the Accused : Pleaded not guilty
Final Order : Accused is convicted
Date of order : 06-03-2026
:JUDGMENT:
The complainant company has filed complaint against the accused under section 200 of Cr.P.C., for an offence punishable under section 138 of Negotiable Instruments Act.
2. The case of the complainant's in brief is as under:
It is the case of the complainant that, the complainant company is a registered company and is engaged in the business of conducting chit transaction. The accused No.1 is a subscriber of prized chit ticket No.42 in chit group No.91001 carried on by the complainant for a sum of Rs.1,00,000,00/- with monthly subscription/installments payable on the date they fall due as agreed. The accused being the prize subscriber/bidder of the prize chits has received the entire prize amount of Rs.30,00,000/- dated:
19-08-2020 from the complainant company and by executing all necessary documents as required, assured to the complainant company that the monthly 2 C.C.NO.29769/2023 subscriptions/installments will be paid regularly without any default, including arrears if any to the complainant company. Accused No.2 is the managing trustee of the accused No.1 trust. The accused No.1 and 2 have executed all necessary documents as required, had also undertaken for payment of monthly subscriptions liable to be paid by them. Despite making several requests and reminder by the complainant company to the accused for paying the monthly subscriptions, the accused being the subscriber has become defaulting subscriber for the payment of the outstanding balance amounts with respect to the said prize tickets were co-extensively liable to pay a total amount of Rs.3,48,000/- to the complainant company is legally entitled to recover jointly and severally from the accused who is a subscriber and has undertaken for the payments in accordance with law. Further demand by the complainant company the accused No.2 had issued the cheque bearing No.210535 dated: 21-09-2023 for Rs.3,48,000/- drawn on the Bank of India, contonment Branch, Bengaluru in favour of the complainant. The complainant had presented the said cheque for realization through its banker Karur Vysya Bank Ltd, Malleshwaram Branch, Bengaluru. But the said cheque was dishonored on 22-09-2023 for the reasons "Funds Insufficient". Thereafter on 03-10-2023 the complainant got issued a legal notice to the accused through its counsel by Speed Post calling upon him to pay the cheque amount. The 3 C.C.NO.29769/2023 said notice was returned as a door locked on 05-10-2023. Thereafter, the accused persons neither paid the cheque amount nor replied to the notice. As such, the accused persons have committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court on 09-11-2023.
3. After registration of the complaint was filed, the cognizance of the offence cited therein was taken. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 09-11-2023 to register the case in Register No.III.
4. Thereafter, summons was issued to the accused and they have appeared before the court through counsel and secured bail. Accused No.2 was furnished necessary papers as contemplated under section 208 of Cr.P.C. Thereafter, the plea of the accused was recorded by the court. Accused No.2 pleaded not guilty and claimed to be tried.
5. In support of complainant's case the complainant company has examined its GPA holder as PW.1 and got marked 14 documents at Ex.P.1 to 14 and closed its side.
6. After closer of the evidence of the complainant, the statement under section 313 of Cr.P.C., was recorded. Accused No.2 has denied the incriminating evidence 4 C.C.NO.29769/2023 appearing against him. Inspite of sufficient opportunity, the accused No.2 not lead defence evidence. Hence, the defence evidence taken as nil.
7. I have heard the arguments on the complainant side and perused the material placed on record.
8. Inspite of sufficient opportunity, the accused and his counsel did not appear before the court and not canvased their arguments. Hence, the arguments on the defence side taken as nil. Further inspite of sufficient opportunity the learned counsel for the accused failed to file written argument.
9. Upon hearing the arguments on the complainant side and on perusal of the material placed on record, the following points arise for my consideration:
1.Whether the complainant proves the existence of legally enforceable debt/liability.?
2.Whether the complainant further proves that the accused had issued the cheque-Ex.P.1, towards the discharge of the legally enforceable debt/liability.?
3.Whether the complainant further proves that the cheque-Ex.P.1 was dishonored for the reason "Funds Insufficient" and thereafter the accused had failed to repay the same within the statutory period, inspite of receipt of legal notice.?
4. Whether the accused have thus committed an offence punishable under section 138 of N.I.Act.?
5.What order?5 C.C.NO.29769/2023
10. My answers to the above points are as under:
Point No.1: In the Affirmative Point No.2: In the Affirmative Point No.3: In the Affirmative Point No.4: In the Affirmative Point No.5: As per final order, for the following:
:REASONS:
11. POINT NO.1 to 4: These points are taken together for common discussion in order to repetition of facts and evidence.
The complainant company is a registered company and is engaged in the business of conducting chit transaction. The accused No.1 is a subscriber of prized chit ticket No.42 in chit group No.91001 carried on by the complainant for a sum of Rs.1,00,000,00/- with monthly subscription/installments payable on the date they fall due as agreed. The accused being the prize subscriber/bidder of the prize chits has received the entire prize amount of Rs.30,00,000/- dated: 19-08-2020 from the complainant company and by executing all necessary documents as required, assured to the complainant company that the monthly subscriptions/installments will be paid regularly without any default, including arrears if any to the complainant company. Accused No.2 is the managing trustee of the accused No.1 trust. The accused No.1 and 2 6 C.C.NO.29769/2023 have executed all necessary documents as required, had also undertaken for payment of monthly subscriptions liable to be paid by them. Despite making several requests and reminder by the complainant company to the accused for paying the monthly subscriptions, the accused being the subscriber has become defaulting subscriber for the payment of the outstanding balance amounts with respect to the said prize tickets were co-extensively liable to pay a total amount of Rs.3,48,000/- to the complainant company is legally entitled to recover jointly and severally from the accused who is a subscriber and has undertaken for the payments in accordance with law. Further demand by the complainant company the accused No.2 had issued the cheque bearing No.210535 dated: 21-09-2023 for Rs.3,48,000/- drawn on the Bank of India, contonment Branch, Bengaluru in favour of the complainant. The complainant had presented the said cheque for realization through its banker Karur Vysya Bank Ltd, Malleshwaram Branch, Bengaluru. But the said cheque was dishonored on 22-09-2023 for the reasons "Funds Insufficient". Thereafter on 03-10-2023 the complainant got issued a legal notice to the accused through its counsel by Speed Post calling upon him to pay the cheque amount. The said notice was returned as a door locked on 05-10-2023. Thereafter, the accused persons neither paid the cheque amount nor replied to the notice. As such, the accused persons have committed an 7 C.C.NO.29769/2023 offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court.
12. In support of the case, the complainant has examined its GPA holder as P.W.1. PW-1 in his chief examination has re-iterated the contents of complaint and got marked 14 documents at Ex.P.1 to 14. Ex.P.1 is the cheque issued by the accused No.2 in favour of the complainant on 21-09-2023 for Rs.3,48,000/-. Ex.P.1(a) is the signature of the accused No.2. Ex.P.2 is the bank memo dated: 22-09-0023 informing the dishonor of the cheque as Funds Insufficient. Ex.P.3 is the office copy of legal notice dated:03-10-2023. Ex.P.4 is the postal receipt. Ex.P.5 and 6 are the speed post covers. Ex.P.7 is the Chit agreement. Ex.P.8 is the payment vocher. Ex.P.9 is the Promissory Note. Ex.P.10 is the Ledger Account. Ex.P.11 is the Certified copy of Certificate of Incorporation. Ex.P.12 is the certified copy of GPA. Ex.P.13 is the Certified copy of Board Resolution and Ex.P.14 is the complaint.
13. The counsel for the complainant has argued that the accused No.1 is a subscriber of chit and accused No.2 is the managing trustee of the accused No.1 trust. They participated in the chit auction conducted by the complainant. Further the subscriber was received prize amount from the complainant. Further argued that after receiving the prize amount they are irregular in paying the 8 C.C.NO.29769/2023 chit installments and thereafter the accused persons became a defaulter inspite of several remainders of the the complainant. Further argued that the accused persons have not paid the installments amount. Towards this transactions, there is a balance due to the complainant is for Rs.3,48,000/-. Thereafter the accused No.2 towards of discharge of said due amount, he had issued the cheque in question in favour of the complainant. The complainant has presented the said cheque to its banker for encahsment. But the said cheque have been dishonored for the reasons Funds Insufficient. Further argued that the accused No.2 has not denied Ex.P.1 being his cheque drawn on his account. When the signature is not disputed, the presumption under section 139 N.I.Act is to be drawn in favour of the complainant and accused persons are liable for punishment under section 138 of N.I.Act.
14. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of legally enforceable debt/liability, for which the cheque came to be issued. The complainant has to prove all the requirements of section 138 of N.I.Act. Ex.P.1 being his cheque drawn on the account of the accused No.2 is not in dispute. The said cheque having been dishonored, when it was presented by the complainant before the bank for encashment is also not seriously disputed by the accused 9 C.C.NO.29769/2023 persons. Thereafter, the notice-Ex.P.3 being refused by the accused further admitted. The accused persons have not taken up any contention that thereafter they had paid the cheque amount within stipulated time of 15 days, after service of the notice the accused persons neither paid the cheque amount nor replied to the notice. Hence, the present complaint came to be filed before the court on 09-11-2023 within the period of one month from the date cause action. As such, in the present case from perusal of documents, the essential requirements of section 138 of N.I.Act, have been complied with.
15. Under section 139 of N.I.Act, there is a presumption regarding the existence of legally enforceable debt/liability. Such presumption is rebuttable presumption and it is open to the accused to raise defence discharging the existence of a legally enforceable debt/liability. In the case on hand the accused has not disputed the existence of legally enforceable debt/liability, for which cheque-Ex.P.1 was issued. In order to prove their defense, the accused persons have not produced any oral or documentary evidence on their behalf. Further they have not chosen to cross examine PW.1. Hence, evidence of PW.1 remained unchallenged.
16. In this case the accused No.2 has not taken any specific defence regarding issuance of cheque in favour of the complainant. The accused in their defence have not 10 C.C.NO.29769/2023 disputed the cheque in question have been issued by accused No.2. He also not disputed his signature appearing on the said cheque. Further the complainant and the accused having some transaction has not been seriously disputed by the accused. Further the accused persons have not seriously disputed that accused No.1 is a subscriber of chit and they participated in the chit auction conducted by the complainant. Further the accused No.1 not denied it was received prize money from the complainant. Towards this transaction, there is a balance due to the complainant is for a sum of Rs.3,48,000/-. It is not disputed that the complainant is a private limited chits company and the accused No.1 is a subscriber. Once issuance of the cheque and signature are admitted, the statutory presumptions would arise under sections 139 and 118 of the N.I.Act that the cheque was issued by the drawer for legally payable debt/liability and for valid consideration. The Hon'ble Supreme Court has held in Rangappa V/s Mohan, reported in 2010 AIR SCW 296, the presumption that the cheque was drawn in discharge of legally recoverable debt is a presumption of law that ought to be raised in every case. In the instant case, the accused No.2 has nowhere denied transaction. The accused No.2 himself has admitted that he is the holder of alleged cheque. It is sufficient hold that the accused No.2 has issued the cheque- Ex.P.1 and even after the accused No.2 has not repaid the cheque amount the getting of receipt of notice. The 11 C.C.NO.29769/2023 complainant have complied all the terms of ingredients of the provisions of 138 of N.I.Act. Accordingly, PW.1 has established the case of the complainant, the accused No.2 had issued the cheque-Ex.P.1 in order to repay the legally recoverable amount. Therefore, the accused has failed to rebut the presumption under section 139 of N.I.Act. Hence, the accused persons are liable for dishonor of the cheque. With these reasons, I answer point No.1 to 4 in the Affirmative.
17. POINT NO.5: The accused persons are held to have committed an offence punishable under section 138 of N.I.Act. The complainant have proved its case. The accused No.2 has failed to prove his rebuttal for the reasons mentioned above and in view of the mandatory requirements of section 138 of N.I.Act, being complied with. The accused persons are found to have committed an offence punishable under section 138 of N.I.Act. Since, the said offence is an economic crime, the accused persons are not entitled for the beneficial provisions of probation of offenders Act. In view of the above discussions and the findings on point No.1 to 4, I proceed to pass the following:
ORDER Acting under section 255(2) of Cr.P.C. the accused persons are convicted for the offence punishable under section 138 of N.I.Act.12 C.C.NO.29769/2023
The bail bond executed by the accused No.2 hereby stands canceled.
The accused No.2 is sentenced to pay fine of Rs.3,53,000/- (Rupees Three Lakhs Fifty Three Thousand Only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.3,48,000/- (Rupees Three Lakhs Forty Eight Thousand only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.5,000/-
(Rupees Five Thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of six months.
Office is hereby directed to furnish free copy of this judgment to the accused forthwith.
(Dictated to the Typist directly on computer typed by him, corrected by me and then judgment pronounced in the open court on 06th day of March 2026) Digitally signed by NAGAMMA NAGAMMA ICHCHANGI ICHCHANGI Date: 2026.03.09 17:05:18 +0530 (Smt.Nagamma.M.Ichchangi) XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
13 C.C.NO.29769/2023ANNEXURE List of witnessess examined on behalf of the complainant:
PW.1 : Sri.Paramesha.H.N. List of documents marked on behalf of the complainant:
Ex.P.1 : Cheque issued by the accused No.2. in favour of the complainant on 21-09-2023. Ex.P.1(a) : Signature of the accused No.2. Ex.P.2 : Bank Memo dated: 22-09-2023 informing the dishonor of the cheque as Funds Insufficient. Ex.P.3 : Copy of Legal Notice dated: 03-10-2023.
Ex.P.4 : Postal receipt. Ex.P.5 & 6 : Speed post covers. Ex.P.7 : Chit Agreement. Ex.P.8 : Payment Voucher. Ex.P.9 : Promissory Note. Ex.P.10 : Ledger Account. Ex.P.11 : Certified copy of Certificate of Incorporation. Ex.P.12 : Certified copy of GPA. Ex.P.13 : Certified copy of Board Resolution. Ex.P.14 : Complaint.
List of witnesses examined on behalf of the accused:
-Nil-
List of documents marked on behalf of the accused:
-Nil- Digitally signed by
NAGAMMA
NAGAMMA ICHCHANGI
ICHCHANGI Date: 2026.03.09
17:05:28 +0530
XXVIII Addl. Chief Judicial
Magistrate, Bengaluru City.