Bangalore District Court
Manappuram Finance Ltd vs Virapakshippa Hadapad on 10 September, 2025
0
C.C.NO.20520/2024
KABC030358932024
Presented on : 28-06-2024
Registered on : 28-06-2024
Decided on : 10-09-2025
Duration : 1 years, 2 months, 12 days
IN THE COURT OF THE XXVIII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY
Present:
Smt.Nagamma.M.Ichchangi,
BA.,LL.B.,(Spl),
XXVIII A.C.J.M, Bengaluru City.
DATED; THIS THE 10th DAY OF SEPTEMBER-2025
JUDGMENT UNDER SECTION 355 OF CODE OF
CRIMINAL PROCEDURE
C.C.NO. : 20520/2024
COMPLAINANT : M/s.Manappuram Finance Ltd.,
Bengaluru Regional O/at No.21/4,
4th Floor, Jelita Tower,
Mission Road, Bengaluru-560027.
R/by its Authorized Signatory,
Mr.Satheesha.N. S/o Ninjappa.B,
Age: 36 years, Assistant Manager,
VEF office, Bangalore.
Ph.No.8105254840.
[email protected]
(By Sri.Manjunatha.S.,Adv.,)
V/s.
1
C.C.NO.20520/2024
ACCUSED : Sri.Virapakshippa Hadapad,
S/o Irappa, Age: 28 years,
R/at No.Hemawadagi,
Hundund Taluk,
Bagalkot District-587125.
Ph.No.9113668141.
(By Sri.Y.B.Kuntoji.,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 : 10.09.2025
: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 company in brief is as under:
It is the case of the complainant company that, the complainant company is a public limited company duly incorporated and engaged in the business of providing financial services under loan-cum- hypothecation agreement scheme for vehicles. The accused is one of the customer of the complainant company and accused has availed vehicle loan on 30.09.2022 for Rs.13,00,000/- including financial 2 C.C.NO.20520/2024 charges, for the purpose of the purchase of vehicle manufacturing year 2016, Model Ashok Leyland, vehicle bearing registration No.KA29-B-1688, the accused also executed a loan cum hypothecation agreement No.MFKAINLONS000005227148. Further the accused assured and agreed that the entire amount would be paid till the settlement of the principal amount together with interest and other expenditure accrued thereon and accused has not paid monthly installments regularly and he was in chronic defaulter of the payment of monthly installment. The complainant demanded the accused to repay the outstanding due loan amount. Then the accused towards the full and final settlement had issued the cheque No.000178 dated: 16.05.2024 for Rs.4,67,199/- drawn on ICICI Bank, Amingad Branch, Bagalkot-587112. As per the assurance of the accused, the complainant company had presented the said cheque for encashment through its banker Axis Bank, Cunningham Road, Bangalore. But the said cheque was dishonored on 27.05.2024 as "Funds Insufficient". Thereafter, on 29.05.2024 the complainant issued a legal notice to the accused through its counsel calling upon him to pay the cheque amount. The said notice was duly served to the accused on 07.06.2024. Inspite of service of the notice the accused neither paid cheque amount nor replied to 3 C.C.NO.20520/2024 the notice. As such, the accused has committed an offence punishable under section 138 of N.I.Act.
Hence, the present complaint came to be filed before this court on 24.06.2024.
3. After registration of the complaint, 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 24.06.2024 to register the case in Register No.III and it was registered as criminal case.
4. Thereafter, summons was issued to the accused and he has appeared before the court through counsel and secured bail. He was furnished its necessary papers as complied under section 208 of Cr.P.C. Thereafter, the plea of the accused was recorded by the court. He has pleaded not guilty and claimed to be tried.
5. The complainant's company in support of its case has examined its Authorized Signatory, Asst.Manager & POA as PW.1 and got marked 19 documents at Ex.P.1 to 19 and closed its side.
6. After closer of the evidence of the complainant, the statement under section 313 of 4 C.C.NO.20520/2024 Cr.P.C., was recorded. He has denied the incriminating evidence appearing against him. The counsel for accused has submitted no defence evidence. Hence, the defence evidence taken as nil.
7. The counsel for accused filed written arguments. Heard the arguments on the complainant side and perused the material placed on record.
8. Upon hearing the arguments on both sides 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.2, towards the discharge of the legally enforceable debt/liability.?
3.Whether the complainant further proves that the cheque-Ex.P.2 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?
5C.C.NO.20520/2024
9. 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:
10. POINT NO.1 to 4: In order to avoid repetition of facts and evidence points No.1 to 4 are taken together for common discussion The complainant company is a public limited company duly incorporated and engaged in the business of providing financial services under loan- cum-hypothecation agreement scheme for vehicles. The accused is one of the customer of the complainant and accused has availed vehicle loan of Rs.13,00,000/- including financial charges, for the purpose of the purchase of vehicle manufacturing year 2016, Model Ashok Leyland, vehicle bearing Registration No.KA29-B-1688, accused also executed a loan agreement. Further the accused assured and agreed that the entire amount would be paid till the settlement of the principal amount together with interest and other expenditure accrued thereon and accused has not paid monthly installments regularly and he was in chronic defaulter of the payment of 6 C.C.NO.20520/2024 monthly installment. The complainant demanded the accused to repay the outstanding due loan amount. Then the accused towards the full and final settlement had issued the cheque in question. As per the assurance of the accused, the complainant had presented the said cheque for encashment through its banker. But the said cheque was dishonored as "Funds Insufficient". Thereafter, the complainant issued a statutory notice to the accused through its counsel calling upon him to pay the cheque amount. Inspite of issuance of the notice the accused neither paid the cheque amount nor replied to the notice. As such, the accused has committed an offence punishable under section 138 of N.I.Act. Hence, the present complaint came to be filed before this court.
11. In support of the case, the complainant has examined its Authorized Signatory, Asst.Manager & POA as P.W.1 and 19 documents were marked at Ex.P.1 to 19. PW.1 in his evidence has deposed that the accused has availed vehicle loan of Rs.13,00,000/- including financial charges for the purpose of the purchase of vehicle, manufacturing year 2016, model Ashok Leyland, vehicle bearing Registration No.KA29-B-1688. While availing the loan, the accused has also executed the loan agreement agreeing to a abide by the terms and 7 C.C.NO.20520/2024 conditions of the repayment of the equated monthly installments. Further the complainant company demanded the accused to repay the outstanding due loan amount, towards the full and final settlement the accused got issued the cheque in question in favour of the complainant. Ex.P.1 is the certified copy of Minutes of meeting extract. Ex.P.2 is the cheque issued by the accused in favour of the complainant dated: 16.05.2024 for Rs.4,67,199/-. Ex.P.3 is the bank memo dated:27.05.2024 informing the dishonor of the cheque as Funds Insufficient. Ex.P.4 is the office copy of legal notice dated:29.05.2024. Ex.P.5 is the postal receipt. Ex.P.6 is the postal acknowledgment. Ex.P.7 is the complaint. Ex.P.8 is the Scanned copy of vehicle loan application. Ex.P.9 is the scanned copy of loan cum hypothecation agreement. Ex.P.10 is the print out copy of statement of account. Ex.P.11 is the print out copy of Pre Re- repossession intimation to police. Ex.P.12 are the printout copies of postal receipt and track consignment. Ex.P.13 is the printout copy of post repossession letter to police. Ex.P.14 is the print out copy of postal receipt. Ex.P.15 is the print out copy of presale notice. Ex.P.16 are the print out copies of after sale/demand notice. Ex.P.17 & 18 are the track consignments. Ex.P.19 is the certificate U/s.65(b) of I.E.Act.
8C.C.NO.20520/2024
12. The counsel for the complainant has argued that from the evidence placed on record reveals that the accused is one of the customer of the complainant company and accused has availed vehicle loan of Rs.13,00,000/- including financial charges for the purpose of purchase of vehicle bearing Registration No. KA29-B-1688. Further argued that the accused also executed loan documents in favour of the complainant and accused assured and agreed that the entire amount would be paid till the settlement of the principal amount together with interest and other expenditure. But the accused not pay the installments regularly and he was a chronic defaulter of payment of monthly installments. Further argued that the complainant demanded the accused to repay the outstanding due. The accused towards the full and final settlement 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 has been dishonored for the reasons Funds Insufficient. Further argued that the accused has not denied Ex.P.2 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 is liable for punishment under section 138 of N.I.Act.
9C.C.NO.20520/2024
13. The counsel for accused filed written arguments stating that the accused is resident of Hunagund Taluk, Bagalakot District and he has executed agreement at Bagalkot and his loan is also sanctioned at Bagalkot. To harass the accused the complainant has filed complaint before this court I,e beyond jurisdiction of accused residence, on this point complaint filed by the complainant is not maintainable and complainant has not produced board resolution and any other documents to show that on 16.05.2024 the accused was due of Rs.4,67,199/-. The complainant company has seized the vehicle and sold the said vehicle in auction sale for Rs.11,00,000/- but before this court complainant is saying that they have sold the said vehicle for Rs.6,60,000/- only. As per the decision of Hon'ble High Court of Karnatka once the vehicle is seized and auctioned if any amount is due thereafter then Civil Suit has to be filed for recovery of the amount. The complainant has filed present complaint by misusing the cheque issued by the accused for security purpose at the time availing vehicle loan, Hence prays for dismissal of complainant's complaint and acquittal of accused.
14. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is 10 C.C.NO.20520/2024 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.2 being his cheque drawn on the account of the accused 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. Thereafter, the notice-Ex.P.4 being received by the accused further admitted. The accused has not taken up any contention that thereafter he had paid the cheque amount within stipulated time of 15 days, after service of the notice the accused neither replied to the notice nor paid the cheque amount to the complainant. Hence, the present complaint came to be filed before the court on 24.06.2024 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. As per the 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 11 C.C.NO.20520/2024 enforceable debt/liability. In the case on hand the accused has not disputed the existence of legally enforceable debt/liability, for which the cheque- Ex.P.2 was issued. In the case on hand the complainant and the accused having some transaction has not been seriously disputed by the accused. Further the accused has not seriously disputed that he had issued the cheque in favour of the complainant. It is not disputed that the accused is one of the customer of the complainant company. Further it is also not disputed that the accused has received loan amount from the complainant. Whereas, the accused has contended that he had given signed blank cheque at the time of availing vehicle loan. He contends that the blank cheque which was given by him to the complainant for security purpose is misused by the complainant.
16. Once issuance of the cheque and signature are admitted, the statutory presumptions would arise under sections 118 and 139 of the N.I.Act that the cheque was issued by the drawer for legally payable debt or 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 12 C.C.NO.20520/2024 that ought to be raised in every case. Further it is also held that mere plausible explanation by the drawer is not sufficient and proof of that explanation is necessary. The principle of law laid-down in the above decision is applicable to the facts of this case. In the instant case, since the complainant is in possession of the cheque-Ex.P.2 the court has to draw the initial presumption that he is the payee of that cheque. Once the initial burden is discharged by the complainant, the onus shifts on the accused to rebut the complainant's case. In order to prove his defence, the accused neither adduced oral evidence nor produced any documentary evidence.
17. It is the contention of accused that he has availed loan at Bagalkot and executed agreement at Bagalakot and his vehicle is sold in auction sale for Rs.11,00,000/- and after auction sale there is no due amount to the complainant company to be paid by the accused and the cheque in question was given as security to the complainant at the time of availing vehicle loan from the complainant. If at all the accused has issued cheque in question for security purpose then he could have replied to the legal notice issued by the complainant for payment of cheque amount. Further if at all the complainant company has misused the cheque issued by accused for 13 C.C.NO.20520/2024 security purpose then he could have taken legal action against the complainant company. No prudent man will keep quite after knowing that a case has been filed against him or his cheque was misused. Except contending that his cheque was misused nothing was produced by the accused to prove his allegations. The contention of the accused that the loan transaction was taken place at Bagalkot and this court has no jurisdiction to try the case is not at all acceptable one as according to Sec.142(2) (a) of N.I.Act if the cheque is delivered for collection through an account, the branch of the bank where the payee or holder in due course, as the case may be, maintains the account, is situated that means where cheque is delivered for collection at any branch of the bank of the payee or holder in due course, then, the cheque shall be deemed to have been delivered to the branch of the bank in which the payee or holder in due course, as the case may be, maintains the account. Further as per the principle of the Hon'ble Supreme Court of India in a decision reported in 2025 INSC 328 in between M/s. Shri Sendhur Agro and Oil Industries V/s. Kotak Mahindra Bank Limited wherein it is held that a complaint under section 138 can be filed where the payee bank's branch is located and the cheque was presented even if the loan transaction occurred 14 C.C.NO.20520/2024 elsewhere. Further the contention of accused that after auction sale the complainant has to file Civil Suit for recovery of due amount is also not acceptable one when the accused has issued cheque for payment of due amount then the complainant can file complaint U/s.138 of N.l.Act or he can file Civil Suit for recovery of due amount. The facts of the decision relied by the counsel for the accused and facts of the present case are different. Hence the principles laid down in decisions reported in 2025 (1) DCR 544, Allahabad High Court and decision of Hon'ble High Court of Karnataka in Crl.A.No.100184/2015 are not applicable to the present case on hand.
18. In the case of Sripati Singh (Since deceased) through his son Gaurav Singh V/s State of Jarkhand and another, reported in 2021 SCC Online SC 1002, the Hon'ble Supreme court categorically held that; once the cheque is issued as security for the loan and if the loan is not paid back then if the cheque is dishonored it attracts offence punishable 138 of N.I.Act. The principle laid-down in the above said decision is applicable to the facts of this case. Therefore, the contention of the accused cannot be acceptable that the cheque was given only for security purpose at the time availing vehicle loan from the complainant without there being any 15 C.C.NO.20520/2024 defence evidence or production of documents on accused side.
19. In the case of K.S.Ranganatha V/s Vittal Shetty, reported in 2021 SCC Online SC 1191, the Hon'ble Supreme Court held that, once the cheque is admitted to be that of the accused, the presumption envisaged in section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability. It is further held that the position of law makes it crystal clear that when a cheque is drawn out and is relied upon by drawee, it will raise a presumption that it is drawn towards a consideration which is a legally recoverable amount; such presumption of course, is rebuttable by proving to the contrary. The onus is on the accused to raise a probable defence and the standard of proof for rebutting the presumption is on preponderance of probabilities.
20. In the case of Kalemani Tex and another V/s P.Balasubramanian, reported in (2021) 5 SCC 283, the Hon'ble Supreme Court has observed that even a blank cheque leaf, voluntarily signed and handed 16 C.C.NO.20520/2024 over by the accused, which is towards some payment, would attract presumption under section 139 of the Negotiable instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.
21. In addition to this in the case of T.P.Murugan (Dead) through legal representatives V/s Bojan, reported 2018 (8) SCC 469, the Hon'ble Apex Court held that once the cheque has been signed and issued in favour of the holder of the cheque, there is statutory presumption that the cheque is issued in respect of legally enforceable debt or liability: rebuttal of such presumption must be by adducing credible evidence. Mere raising a doubt without cogent evidence with respect to the circumstances, presumption under section 139 of N.I.Act cannot be discharged. The principle of law laid-down in the above decisions are applicable to the facts of this case. Except some bald contentions, the accused has not been able to make out a probable case on his behalf.
22. In the instant case the accused has nowhere denied the transaction and he himself has admitted that he is the holder of alleged cheque. It is sufficient to hold that the accused has issued the cheque and 17 C.C.NO.20520/2024 even after receipt of notice the accused has not paid the cheque amount. However, in any manner as the complainant has complied all the terms of ingredients of the provisions of 138 of N.I.Act. The accused is liable for dishonor of cheque. In case of dishonor of cheque, once the execution of cheque is admitted by the accused, then it for him to first rebut presumption arising out of section 139 of N.I.Act. Accordingly, PW.1 has established the case of the complainant, the accused has issued the cheque- Ex.P.2 in order to repay the legally recoverable amount. Therefore, the accused has failed to probables the defence taken by them. Therefore, the accused have failed to rebut the presumption under section 139 of N.I.Act. Hence, the accused liable for dishonor of the cheque. With these reasons, I answer point No.1 to 4 in the Affirmative.
23. POINT NO.5: The accused is held to have committed an offence punishable under section 138 of N.I.Act. The complainant has proved its case. The accused 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 is found to have committed an offence punishable under section 138 of N.I.Act. Since, the said offence is an economic 18 C.C.NO.20520/2024 crime, the accused is 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:
ORDERS Acting under section 255(2) of Cr.P.C. the accused is convicted for an offence punishable under section 138 of N.I.Act.
The bail and surety bond of the accused hereby stands canceled.
The accused is sentenced to pay fine of Rs.4,77,199/- (Rupees Four Lakhs Seventy Seven Thousand One Hundred and Ninety Nine Only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.4,67,199/- (Rupees Four Lakhs Sixty Seven Thousand One Hundred Ninety Nine Eighty Only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.10,000/- (Rupees Ten Thousand Only) shall be remitted to the State.
In default of the payment of fine 19 C.C.NO.20520/2024 amount, the accused shall undergo simple imprisonment of 03 months.
(Dictated to the stenographer directly on computer typed by her, corrected by me and then judgment pronounced in the open court on 10 th day of September 2025) Digitally signed by NAGAMMA ICHCHANGI NAGAMMA Date: ICHCHANGI 2025.09.16 11:08:36 +0530 (Smt.Nagamma.M.Ichchangi) XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Mr.Satheesha.N List of documents marked on behalf of the complainant:
Ex.P.1 : Certified copy of Minutes of meeting.
Ex.P.2 : Cheque.
Ex.P.3 : Bank endorsement.
Ex.P.4 : Office copy of legal notice.
Ex.P.5 : Postal receipt.
Ex.P.6 : Postal acknowledgment.
Ex.P.7 : Complaint.
Ex.P.8 : Scanned copy of vehicle loan application.
Ex.P.9 : Scanned copy of Loan cum Hypothecation
agreement.
Ex.P.10 : Printout copy of Statement of account.
Ex.P.11 : Printout copy of Pre repossession
intimation to Police.
Ex.P.12 : Print copy of postal receipt and track
consignment.
Ex.P.13 : Print out copy of post re-possession letter
to police.
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C.C.NO.20520/2024
Ex.P.14 : Print out copy of postal receipt.
Ex.P.15 : Print out copy of Presale notice.
Ex.P.16 : Print out copy of after sale/demand notice.
Ex.P.17 & 18 : Track consignments.
Ex.P.19 : Certificate U/s.65(b) of I.E.Act.
List of witnesses examined on behalf of the accused:
-Nil-
List of documents marked on behalf of the accused:
-Nil-Digitally signed by NAGAMMA ICHCHANGI
NAGAMMA ICHCHANGI Date:
2025.09.16 11:08:50 +0530 XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
21
C.C.NO.20520/2024
10.09.2025
Accused absent. Counsel for
accused absent. No EP filed.
According to Section 353(6) of CrPC judgment can be pronounced in the absence of accused if the accused is sentenced with fine only. Since this court is going to impose fine only.
Hence presence of accused is not necessary to pronounce the judgment.
Hence vide separate judgment pronounced in the open court.
(Judgment pronounced in the Open Court Vide Separate Sheet) :ORDER:
Acting under section 255(2) of Cr.P.C. the accused is convicted for an offence punishable under section 138 of N.I.Act.
The bail and surety bond of the accused hereby stands canceled.
The accused is sentenced to pay fine of Rs.4,77,199/- (Rupees Four Lakhs Seventy Seven Thousand One Hundred and Ninety Nine Only) to the complainant.
It is further ordered that out of the said fine amount an amount of Rs.4,67,199/- (Rupees Four Lakhs Sixty Seven Thousand One Hundred Ninety Nine 22 C.C.NO.20520/2024 Eighty Only) shall be paid to the complainant as compensation as per Section 357(1)(b) of Cr.P.C., and remaining amount of Rs.10,000/- (Rupees Ten Thousand Only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of 03 months.
XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.