Bangalore District Court
S A Ravi vs S Nagaraj on 1 April, 2025
KABC020120522021
IN THE COURT OF THE XII ADDL. JUDGE, COURT OF SMALL
CAUSES & ADDL. CHIEF JUDICIAL MAGISTRATE,
BENGALURU (SCCH-08)
DATED THIS THE 1st DAY OF APRIL - 2025
PRESENT: Smt. Kannika M.S.
M.A, LL.B.,
XII ADDL. SCJ & ACJM,
MEMBER - MACT, BENGALURU.
C.C. No.3487/2021
Complainant : Sri. S.A. Ravi,
S/o. Shankara Chari,
Aged about 42 years,
R/at No.16, 13th Cross,
5th Main Road, Jaraganahalli,
Kanakapura Main Road,
Bangalore-560 078.
Occ.: Gold Smith business.
(By Sri/Smt. Shivasharanappa M.,
Advocate)
:Vs:
Accused : Sri. S. Nagaraj,
S/o. Shivanna,
Aged 48 years,
R/at No.42, 4th Cross,
Manjunatha Layout,
Kodichikanahalli,
Near New Arvind English School,
Bannerghatta Road,
SCCH-8 2 C.C.No.3487/2021
Bengaluru-560 076.
Permanent address:
Sanganabasavana Doddi Village,
Kethohalli Dakhale, Kasaba Hobli,
Ramanagara Taluk & District.
(By Sri. Srinivasa, Advocate)
Date of complaint : 16.02.2021
Date of commencement of
Evidence : 05.04.2021
Offence charged : Sec.138 of Negotiable
Instruments Act
Date of Judgment : 01.04.2025
Opinion of the Judge : Accused found
guilty
JUDGEMENT
This is a private complaint filed U/Sec.200 of Cr.P.C. against the accused for the alleged offence punishable U/Sec.138 of N.I. Act.
2. The brief facts of the case of the complainant is that:
The complainant and accused are known to each other from several years through one S.P.Basavaraju S/o. Parvathaiah, the accused has sought financial help of Rs.3,00,000/- (Three Lakhs SCCH-8 3 C.C.No.3487/2021 Rupees only) from the complainant in the month of second week of January 2020 for clearing the debts borrowed from his friends.
As per the accused request and good relation maintained by the accused with the complainant, the complainant by borrowing hand loan from his friends and trusting the accused, the complainant has paid a sum of Rs.3,00,000/- (Three Lakhs Rupees only) to the accused by way of cash in the third week of January 2020 and the same is received by the accused from the complainant. While receiving the amount the accused had assured and under taken that Rs.3,00,000/- (Three Lakhs Rupees only) will be returned within six months. As per this understanding the complainant waited but the accused has not keep up the word and not returned the amount which was received from the complainant. The Complainant had requested the accused in the second week of September 2020 to return the aforesaid amount which was received from the complainant, the accused has undertaken that the Rs.3,00,000/- (Rupees Three Lakhs only) will be paid on or before 06/10/2020 As per the SCCH-8 4 C.C.No.3487/2021 understanding the accused has issued a post dated Cheque bearing No.507251 dated 06/10/2020 drawn on Allahabad Bank, B.T.M. Layout, Branch Bangalore-560076 towards repayment for a sum of Rs.3,00,000/- (Three Lakhs Rupees only) in favour of the complainant and has assured to the complainant that the Cheque given by the accused will be honored on the date of Cheque and the complainant need not worry about the same. Thereafter the complainant before presenting the Cheque informed the accused that the complainant is presenting the Cheque and that point of time the accused had assured that there is sufficient funds in the accused account. As per the assurance of the accused, the complainant has presented the Cheque for realization through his banker Canara Bank, Yelachenahalli Branch, J.P.Nagar, Bangalore but, the same is bounced on 7/10/2020 for the reason as "Kindly Contact Drawer/Drawee Bank & Please Present Again".
Thereafter the complainant has re-presented the said Cheque on 20/11/2020 before the Canara Bank, Yelachenahalli Branch, J.P.Nagar, Bangalore, the said bank has issued same SCCH-8 5 C.C.No.3487/2021 endorsement "Kindly Contact Drawer/Drawee Bank & Please Present AGAIN" on 21/11/2020. Thereafter the complainant again re-presented the said Cheque on 29/12/2020 before the Canara Bank, Yelachenahalli Branch, J.P.Nagar, Bangalore the bank has issued same endorsement "KINDLY CONTACT DRAWER/DRAWEE BANK & PLEASE PRESENT AGAIN" on 30/12/2020. Immediately contacted the bank, the bank officials have informed that the accused has not at maintained minimum balance in his account hence, they have given said endorsement to the complainant bank. Thereafter the complainant tried to contact the accused but the complainant's efforts went in vain. The accused is aware of the issuing Cheque without keeping minimum balance and also not keeping sufficient funds in the accused account would clearly constitute offence Punishable under Section 138 of the Negotiable, Instruments Act. Thereafter the a legal notice dated 08/1/2021 sent through his advocate to the accused through RPAD to the address furnished by the accused intimating about the dishonor of the Cheque and also SCCH-8 6 C.C.No.3487/2021 demanding for payment of the Cheque amount of Rs.3,00,000/- within fifteen days. The said notice sent by RPAD was received in one address and in another address intentionally evaded receiving the legal notice. The accused is residing the aforesaid address. The accused after knowing the legal notice issued by the complainant he neither paid the Cheque amount nor has replied the legal notice. Hence, the complainant has filed the present complaint before this Court.
3. Cognizance was taken and sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, the summons was issued to accused. Accused appeared through his counsel and got enlarged on bail. Substance of accusation was framed, read over and explained to the accused in the language known to him, he denied the same and claimed to be tried. Hence, the case was posted for complainant's evidence.
4. In order to prove his case, the complainant got himself examined as PW-1 and got marked the 9 documents at Ex.P1 to SCCH-8 7 C.C.No.3487/2021 Ex.P9 and closed his evidence. After closure of complainant's side evidence, the statement U/Sec.313 of Cr.P.C was prepared and read over to accused, he has denied the same. The accused has adduced evidence and examined as DW.1 and got marked Ex.D1 document. Thereafter, case was posted for arguments.
5. I have heard the arguments of learned counsel for accused and perused the entire records in this case.
6. The following points arise for my consideration:
1. Whether the complainant proves beyond reasonable doubt that, the accused has issued the cheque bearing No.507251 dated 06.10.2020 for a sum of Rs.3,00,000/- drawn on Allahabad Bank, BTM Layout Branch, Bengaluru and the complainant presented the said cheque for encashment, but the said cheque returned with endorsements as "Kindly contact Drawer Drawee Bank and please present again" ?
2. Whether the complainant further proves beyond reasonable doubt that he has got issued the legal notice dated: 08.01.2021 to the Accused demanding the cheque amount from the Accused within 15 days from the date of receipt of the notice, the said legal notice is duly served on the accused, but the accused has failed to make the payment of the cheque amount well within the SCCH-8 8 C.C.No.3487/2021 prescribed time and there by committed an offence punishable under section 138 of Negotiable Instrument Act?
3. What order?
7. The finding of this court on the above points is as under:
Point No.1 : In Affirmative,
Point No.2 : In Affirmative,
Point No.3 : As per final order,
for the following;
REASONS
POINTS NO.1 & 2:
8. Since these points are interconnected, they are taken up together to avoid repetition of facts.
According the complaint, the accused is known to him from several years and he had borrowed the hand loan of Rs.3,00,000/- and towards repayment, accused issued the post dated cheque bearing No.507251 dated 06.10.2020 for a sum of Rs.3,00,000/- drawn on Allahabad Bank, BTM Layout Branch, Bengaluru, and when he has presented the said cheque for SCCH-8 9 C.C.No.3487/2021 collection and for realization, the said cheque dishonored and returned with shara "Kindly contact Drawer Drawee Bank and please present again", hence he issued the legal notice to the accused on 08.01.2021 through RPAD and the same served to the accused. The accused has not paid the amount, hence the complaint.
9. In support of his contention complainant has filed affidavit in lieu of examination-in-chief wherein reiterated the averments of the complaint and examined as PW.1 and got marked EX P1 to P9. Ex.P1 is the cheque bearing No.507251 dated 06.10.2020 for Rs.3,00,000/- issued by the accused in favour of the Complainant. EX.P2 to 4 are the endorsements dated:07.10.2020, 21.1.2020 and 30.12.2020 issued by the Bank. It is shows that cheque was dishonored for the reason Kindly contact Drawer Drawee Bank and please present again with memo. Ex.P5 is the legal notice dated 08.01.2021 issued by the complainant through his counsel to the accused for the repayment of the said loan amount. Ex.P6 and 7 are the postal SCCH-8 10 C.C.No.3487/2021 receipts, Ex.P8 is the postal acknowledgment, Ex.P9 is the postal cover.
10. On careful perusal of material placed on record Ex.P1 is the cheque bearing No.507251 dated 06.10.2020 goes to show that, accused has issued cheque for Rs.3,00,000/- in favour of the Complainant. The Complainant has presented the same for encashment but the said cheque was dishonored and returned for the reason as Kindly contact drawer drawee bank and please present again as per Ex.P2 on 21.11.2020. Subsequently, complainant has issued a legal notice to the accused as per Ex.P3 through RPAD on 08.01.2021. The said RPAD was served to the accused as per Ex.P8 on 23.01.2021. Thereafter complainant has filed this case against the accused on 15.02.2021. Hence, complainant has complied the mandatory requirements of Sec.138 of N.I. Act.
11. Accused in his chief examination has deposed that, complainant is not known to him. He has not taken any loan from SCCH-8 11 C.C.No.3487/2021 the complainant nor given cheque to him. He had taken Rs.3,00,000/- loan from one Basavaraju in the year 2017-18 at that time he gave two cheques as security. He has returned the amount to the said Basavaraju. He asked for return of cheques but Basavaraju postponed the same. Thereafter due to Corona he kept quiet. False case is filed against him through the complainant. In order to prove his defence, he got examined himself as DW.1 and got marked 1 documents as Ex.D1.
12. Let me discuss whether the amount mentioned in the cheque is for a legally recoverable debt or for other liability. The interpretation of the expression for discharge of any debt or other liability occurring in section 138 of N.I. Act is significant and decisive in matter. The explanation appended to section 138 express the meaning of the expression debt or other liability for the purpose of section 138. This expression means a legally enforceable or other liability. Section 138 treats dishonour of cheque as an offence if the cheque has been issued in discharge of debt or any other liability. The explanation leaves no manner of SCCH-8 12 C.C.No.3487/2021 doubt that to attract an offence under section 138 there should be legally enforceable debt or other liability. As per section 139 of N.I. Act there is a presumption in favour of the complainant that the cheque was issued for discharge of debt or other liability. The said presumption is a legal presumption and it is in favour of the holder of cheque. It is open to the accused to rebut the said presumption. The accused has not rebut the presumptions which is available in favour of the complainant.
13. It is the mandate of Section 139 that there is a presumption in favour of the holder of the cheque that the holder received the cheque of the nature referred to in section 138, for the discharge in whole or in part or other liability. Needless to mention that the presumption contemplated under section 139 of N.I. Act is a rebuttable presumption. However the onus of proving that the cheque was not in discharge of any debt or other liability is on the drawer of the cheque/accused. In Hiten P Dalal V/s Bratindranath Banerjee reported in 2001 (6) SCC 16 the Hon'ble Supreme Court held that both section 138 and 139 require that SCCH-8 13 C.C.No.3487/2021 the court shall presume the liability of the drawer of the cheque for the amounts for which the cheque are drawn.
Section 139 introduces an exception to the general rule as to the burden of proof and shifts the onus on the accused. The presumption under section 139 of N.I.Act is a presumption of law, as distinguished from presumption of facts.
In Laxmi Dyechem V/s State of Gujarat and others reported in 2012 (13) SCC 375 , the Hon'ble Supreme court reiterated that in view of section 139 it has to be presumed that a cheque was issued in discharge of a debt or other liability but the presumption could be rebutted by adducing evidence. The burden of proof was however on the person who wanted to rebut the presumption.
In K.N. Beena V/s Muniyappan and Anothers reported in 2001(8) SCC 458, the Hon'ble Supreme court held that in view of the provisions of section 139 of the N.I.Act read with section 118 thereof the court had to presume that the cheque had been issued for discharging a debt or liability. The said presumption was SCCH-8 14 C.C.No.3487/2021 rebuttable and could be rebutted by the accused by proving the contrary. The accused had to prove by cogent evidence that there was no debt or liability.
14. The accused has taken contention regarding to the financial capacity of the complainant, in the cross examination Pw1 stated he was a goldsmith and he owned a shop at Avenue Road, Bengaluru, in his shop 4 to 5 members were working and he was getting sufficient income from the said Jewelry shop. When such being the case, it can be easily presumed that the complainant is having financial stability to lend a sum of Rs.3 lakhs.
15. The accused has denied the receipt of notice, but in his cross-examination he admits the address mentioned in the notice is correct and was residing in the said address, but denied the signature found on the Ex.P8 which is the postal acknowledgment. When he admits the address is correct, as per As per Section 27 of General Clauses Act, there is a presumption that if the communications or letters are sent to the address SCCH-8 15 C.C.No.3487/2021 wherein the person ordinarily resides or carry on his business, it is presumed to be valid service. It clears that notice duly served on accused, but he has not issued any reply. When he kept quite regarding to the notice of the complainant and not issued the reply notice after service of notice, the complainant has no needs to prove his financial capacity. At this stage this Court has relied on decision rendered by the Hon'ble Supreme Court in Tedhi Sing V/s Narayan Das Mahant(Tedi Singh) 2022 SCC Online SC302, in this case Court held that, "Where the accused has failed to send reply to the legal notice, challenging the financial capacity of the complainant, at the first instance, complainant need not prove his financial capacity".
The said decision is aptly applicable to the case on hand.
16. Accused main defence is that he has borrowed Rs.3,00,000/- from on Basavaraju in the year 2017-18, at that time he has given the cheque as a security, he had given the blank cheque and the same has been mis-utilised by the complainant colluding with Basavarju, so as to usurp the money SCCH-8 16 C.C.No.3487/2021 from the accused. It is also deposed that the accused had repaid the said amount. When the accused has taken up a specific plea that he has repaid the said amount, then the onus of proof under Section 102 Indian Evidence Act shifts on the accused to demonstrate the same. But expect oral testimony the accused has not produced any document. When such being the case, there is no strength in the arguments canvassed by the learned counsel for the accused. This court is not persuaded to accept the contention of the accused. Assuming for a moment, hypothetically only for the sake of appreciation of evidence, if the accused would have repaid the entire loan amount, that too in the year 2019, what prevented the accused to call upon the complainant to return the cheque. The accused would have at-least sent a legal notice calling upon the complainant to give back the cheque. The evidence of DW.1 discloses that the accused has not taken any legal action whatsoever known to law calling upon the said Basavaraju to give back the cheque which he has taken as security. No ordinary prudent man will sleep over his rights for 2 SCCH-8 17 C.C.No.3487/2021 years when his cheque is not returned. Without there being any documentary or independent oral evidence, mere contention taken up in the cross-examination of PW.1 does not avail any benefit to the accused. Hence, this contention urged by the accused is also not tenable in the eye of law.
17. Furthermore, the accused counsel has relied on a decision of the Hon'ble Madras High Court in the case of Smt.Shobha vs. Gajanan (2013 1 Crimes(HC) 497), Hon'ble Supreme Court in the case of Sri. Dattatraya vs. Sharanappa(AIR 2024 SC4103) and Rajco Steel Enterprises vs. Kavita Saraff and another((2024) 9 SCC 390)
18. Reverting to the factual matrix, in the instant case on hand, the accused has taken varied inconsistent pleas, and all those varied inconsistent pleas have been analysed by this court which is mutually destructive of each other. When such is the case, these principles will not lend any helping hand to the accused.
SCCH-8 18 C.C.No.3487/2021
19. Further more, the accused has not taken any action against the complainant after assurance made by the complainant to return the cheque. He also admitted that he has not issued any notice to the complainant to return the cheque. If there was a really transaction as alleged by the accused then he would have certainly taken action against the complainant. In this regard it is relevant to rely on the decision reported in AIR 2023 SC 5018 in the case of Rajesh Jain V/s Ajay Singh, wherein it was held as here under :
Once the presumption under Section 139 was given effect to, the Courts ought to have proceeded on the premise that the cheque was, indeed, issued in discharge of a debt/liability. The entire focus would then necessarily have to shift on the case set up by the accused, since the activation of the presumption has the effect of shifting the evidential burden on the accused. The nature of inquiry would then be to see whether the accused has discharged his onus of rebutting the presumption. If he fails to do so, the Court can straightaway proceed to convict him, subject to satisfaction of the other ingredients of Section
138. If the Court finds that the evidential burden placed on the accused has been discharged, the complainant would be expected to prove the said fact independently, without taking aid of the presumption. The Court would then take an overall view based on the evidence on record and decide accordingly.SCCH-8 19 C.C.No.3487/2021
The principles laid down therein aptly applicable to the case on hand. In the instant case on hand also the accused has taken a similar defence that the complainant has misused the cheque given in the transaction of the year 207-18 but the accused failed to initiate any legal action in this regard. The accused however failed to provide any substantial evidence or to file police complaint regarding alleged misusage of cheque. In contrast the case of the complainant remained consistent and the signature of the accused on cheque was unchallenged, allowing presumption has to legally enforceable debt to take effect. To trigger the presumption mere admission of the drawer's signature without admitting the execution of the entire contents in the cheque is sufficient. The said principles has been laid down by the Hon'ble Apex Court in a decision reported in (2019) 4 SCC 197 in the case of Birsingh Vs. Mukhesh Kumar. When such is the case the principles therein aptly applicable to the case on hand.
20. Further on the same point of law it is relevant to rely on a decision of the Apex Court in the case of APS FOREX SERVICES PVT. LTD. v. SHAKTI INTERNATIONAL FASHION SCCH-8 20 C.C.No.3487/2021 LINKERS AND OTHERS reported in AIR 2020 SC 945 held regarding presumption is concerned that when the accused admits issuance of cheque, his signature on cheque and that cheque in question was issued for discharging the liability, there is always a presumption in favour of the complainant that there exists legally recoverable debt or liability.
In the instant case, the accused has not raised any probable defence. Hence, in such an event the accused has not rebutted the presumption as contemplated under Sec.139 of N.I.Act. The accused though disputed financial capacity of the complainant, but the complainant had demonstrated his financial capacity. The accused also not disputed the signature in Ex.P.1. Therefore, it is clear as a cloud less sky that presumption envisaged under Sec.118 and 139 of N.I.Act has not been rebutted by the accused.
21. Further the signature on the cheque was admitted by the accused. The discussions made supra discloses that the accused failed to demonstrate that, he has given the Ex.P1 cheque as a security to the transaction between the accused and the complainant. In this regard it is relevant to rely on a SCCH-8 21 C.C.No.3487/2021 decision reported in Hon'ble Apex court reported in 2015(4) KCCR 2881 (SC), held in between "Vasanthakumar V/s Vijayakumari, wherein it is held that:
"Accused not disputing issuance of cheque and his signature on it. Plea that it was issued long back as security and that loan amount was repaid".
And also relied on Decision of Hon'ble Supreme Court of India reported in AIR 2019 SC 2446 (Bir Singh V/S Mukesh Kumar) wherein the Hon'ble court held that:
"Negotiable Instrument Act(26 of 1881), S.138, S.139- Presumption as to legally enforceable debt- Rebuttal- signed blank cheque- If voluntarily presented to payee, towards payment, payee may fill up amount and other pariculars and it in itself would not invalidate cheque- Onus would still be on accused to prove that cheque was not issued for discharge of debt or liability by adducing evidence."
Another decision reported in 2021(1) DCR 625 between M/s. Kalamani Tex and another Vs P. Balasubramanian, wherein it is held that:
"Since signature on cheque was admitted and presumption raised upon accused was not SCCH-8 22 C.C.No.3487/2021 sufficiently rebutted by accused, so passing acquittal is unjustified".
The aforesaid decisions are aptly applicable to the facts and circumstances of the present case.
22. The accused has not made any efforts to examine Basavaraju or other who was witnessed to the transaction between him and Basavaraju, to prove that the Ex.P1 cheque which has been given to the Basavaraju as security of loan. The accused also failed to obtain favourable answer from the mouth of PW.1 to rebut the presumptions. Though there are some small discrepancies in the evidence of PW.1, that itself will not falsifies the case of the complainant. Merely non-production of documents to show his financial capacity does not mean that the accused rebutted the presumption. How the cheque gone to the hands of complainant if he has not given an amount to the accused is not culled out from the mouth of PW.1. Even for the sake of arguments if we believe that cheques were misplaced and it was taken by the complainant, then why the accused kept silently SCCH-8 23 C.C.No.3487/2021 without taken any legal action to recover the cheques are all remained unanswered.
23. The complainant produced the cheque marked as Ex.P1 which was issued in his favour and he is the holder in due course and the said cheque was dishonored for the reason Kindly contact drawer drawee bank and please present again and even after issuance of notice, the accused has not paid the cheque amount. Thereby he has committed an offence punishable under section 138 of N.I. Act. Accordingly, I answered the Point No.1 and 2 in the Affirmative.
POINT No.3:-
24. Hence, considering the facts and circumstance involved in the case, I am of the opinion that, the complainant is entitled for the compensation as per section 80 of the Negotiable Instrument Act. Accordingly, in the light of above detailed discussion, I proceed to pass the following:
SCCH-8 24 C.C.No.3487/2021
ORDER Acting U/Sec.255(2) of Cr.P.C. the accused is hereby convicted for the offence punishable U/Sec.138 of N.I. Act and he is sentenced to pay fine of Rs.3,10,000/-(Rupees Three lakhs ten thousand only).
In default of payment of the fine, the accused shall undergo simple imprisonment for a period of one year.
Out of the fine amount collected from the accused, Rs.3,00,000/- shall be paid to the complainant as compensation u/s.357(1) of Cr.P.C, remaining Rs.10,000/- shall be forfeited to State towards expenses of the case.
It is made clear that in view of Sec.421(1) of Cr.P.C even if the accused undergoes the default sentence imposed above, he is not absolved of liability to the fine amount.
Bail bond and surety bond of the accused stands cancelled.
Office is directed to supply a free copy of the judgment to the accused.
(Dictated to the Stenographer directly on computer, typed by her, corrected and then pronounced by me, in the open Court on this the 1st day of April 2025) Digitally signed by KANNIKA KANNIKA M S MS Date: 2025.04.09 10:49:31 +0530 (Kannika M.S.) XII Addl. Small Causes Judge & ACJM, Bengaluru.SCCH-8 25 C.C.No.3487/2021
ANNEXURE List of witnesses examined for complainant :-
P.W.1 : S.A.Ravi List of documents marked for complainant:-
Exhibits Particulars of the Document
Ex.P1 Cheque
Ex.P1(a) Signature of accused on Ex.P1
Ex.P2 to 4 Bank endorsements
Ex.P5 Legal notice
Ex.P6 and 7 Postal receipts
Ex.P8 Postal acknowledgment
Ex.P9 Postal cover
List of witnesses examined for accused:
DW.1 : Nagaraju S.
List of documents marked for accused:-
Ex.D1 : Complaint in CC No.3906/2021
KANNIKA Digitally signed by
KANNIKA M S
MS Date: 2025.04.09
10:49:39 +0530
(Kannika M.S.)
XII Addl. Small Causes Judge
& ACJM, Bengaluru.