Bangalore District Court
M Chethan vs Shivakumar.G on 2 April, 2026
SCCH-6 1 CC No.595/2024
KABC020029542024
IN THE COURT OF ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY.
(SCCH-6)
Present: Smt. Chetana S.F.
B.A., L.L.B.,
IV Addl., Small Cause Judge & ACJM,
Court of Small Causes,
Bengaluru.
CC. No.595/2024
DATED THIS THE 02nd DAY OF APRIL, 2026
COMPLAINANT/S Sri M. Chetan,
S/o. Manjunath M.,
Aged about 31 years
R/at 2503/42, 10th Main,
D Block, Near Amba Bhavani Temple,
2nd Stage, Bengaluru-560010
(By Sri. B.C. Srirama Reddy, Advocate)
-Vs-
ACCUSED Sri Shivakumar G.,
S/o. Late Gangadrappa,
R/at Katanayakanahalli Village,
Near Pujari Prasad House,
K.R Halli Post, Hiriyuru Taluk,
Chitradurga District-577511
(By Sri. Bhojaraja, Advocate)
SCCH-6 2 CC No.595/2024
-: J U D G M E N T :-
This is a complaint filed by the complainant U/Secs.138
and 142 of the N.I. Act R/w. Sec.200 of Cr.P.C. for the offences
punishable under Secs.138 of the N.I. Act as against the accused
praying to punish the accused for the said offence.
2. The case of the complainant is that, the accused and
complainant are known to each other and during the month of
last week of July 2022, the accused approached the complainant
for hand loan of Rs.12,00,000/- for the purpose of urgent
necessities. Towards discharge of his liability, accused has
issued a post dated cheque bearing No.344625 dated 20.06.2023
for a sum of Rs.12,00,000/- drawn on State Bank of India, No.3,
Poona Bengaluru Road, Hiriyur, Chitradurga District, in favor of
complainant.
3. The complainant presented the cheque through his
banker Axis Bank LTD, Rajajinagar Branch, Bengaluru on
05.08.2023 and same has been returned through his bank with
endorsement that "Funds Insufficient" on 07.08.2023. Hence,
the complainant issued legal notice dated 01.09.2023 to the
SCCH-6 3 CC No.595/2024
accused through RPAD. Inspite of service of notice, the accused
has not paid the cheque amount and hence, he has committed
an offence punishable u/s 138 of NI Act. Hence, this complaint.
4. After issuance of legal notice accused failed to repay
the said loan nor replied to the notice. The accused has not paid
the cheque amount and has committed an offence punishable
u/s 138 of NI Act. Hence, this complaint.
5. After recording the sworn statement of the
complainant by way of affidavit and also verifying the
documents, cognizance was taken against the accused for the
offence punishable under Sec.138 of N.I. Act. The accused
appeared before this Court through his counsel and 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.
6. The complainant got examined himself as PW.1 and
got marked 5 documents as Exs.P.1 to Ex.P.5 and Ex.P5(a).
Thereafter, the case was posted for recording the statement of
accused under Sec.313 of Cr.P.C. In the statement U/s. 313
SCCH-6 4 CC No.595/2024
Cr.P.C., the accused has denied all the incriminating evidence
appearing against him. On the other hand, the accused
examined himself as DW.1 and got marked 4 documents as
Ex.D1 to Ex.D4.
7. The learned counsel for accused has relied on the
following decisions:
(2009)14 SCC 399, M.D. Thomas vs. P.S. Jaleel and
another
Crl.Revision Petition No.1015/2024, between Saju
vs. Shalimar Hardwares, Kattanam
(2017)5 SCC 737, N. Parameshwaran Unni vs.
G.Kannan and another
(2024)8 SCC 573 between dAttaraya vs. Sharanappa
(2019)5 SCC 418, Basalingappa vs. Mudibasappa
(2015)1 SCC 99, K. Subramani vs. K.
Damodaranaidu
8. Heard the arguments of both side and Perused the
records.
9. The following points arise for my consideration:
1.Whether the complainant proves that the cheque bearing No.344625 dated 02.06.2023 for Rs.12,00,000/- drawn on State Bank of India, No.3 Poona B'Lore road SCCH-6 5 CC No.595/2024 Taluk office compound, Hiriyur, Chitradurga District, issued by the accused has been dishonored on the ground of 'Funds Insufficient' on 07.08.2023 and even after receiving the intimation regarding the dishonor of cheque failed to pay the cheque amount within the stipulated period and thereby the accused has committed an offence punishable under Sec.138 of N.I. Act?
2. What order?
10. My findings on the above points are as under
Point No.1: In the Negative.
Point No.2: As per final order for the following:
-: R E A S O N S :-
11. POINT NO.1:- In view of the present legal position as held by our Hon'ble High Court as well as Apex Court of India in a catena of decisions as well as relevant provisions of the Act, this court has to see whether the complainant has complied all the requirements as contained in Sec.138 of NI Act so as to bring home the guilt of the accused for the alleged offence. If so, whether the accused is able to rebut SCCH-6 6 CC No.595/2024 the legal presumption available to the complainant under Sec.139 of the Act by adducing probable defense or not. However, it is held by the full bench of our Apex Court in the case of Rangappa Vs. Mohan reported in 2010 (1) DCR 706 that;
"The Statutory presumption mandated by sec.139 of the Act, does indeed include the existence of a legally enforceable debt or lia- bility. However, the presumption U/S 139 of the Act is in the nature of a rebuttable pre- sumption and it is open for the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested".
12. Therefore, in view of the above decision, once the cheque is admitted, the statutory presumption would automatically fall in favour of the complainant the complainant that, the alleged cheque was issued for discharge of an existing legally enforceable debt or liability against the accused and the burden will shift on to the accused to rebut the same.
INGREDIENTS OF OFFENCE AND DISCUSSION:-
13. Before dwelling into the facts of the present case, it would be apposite to discuss the legal standards required to be SCCH-6 7 CC No.595/2024 met by both sides. In order to establish the offence under Section 138 of NI Act, the prosecution must fulfill all the essential ingredients of the offence. Perusal of the bare provision reveals the following necessary ingredients of the offence:-
First Ingredient: The cheques were drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;
Second Ingredient: The cheques were drawn by the drawer for discharge of any legally enforceable debt or other liability;
Third Ingredient: The cheques were returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;
Fourth Ingredient: A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in writing given to the drawer within thirty days of the receipt of information of the dishonour of cheque from the bank;
Fifth Ingredient: The drawer fails to make payment of the said amount of SCCH-6 8 CC No.595/2024 money within fifteen days from the date of receipt of notice.
APPRECIATION OF EVIDENCE-
14. The accused can only be held guilty of the offence under Section 138 NI Act if the above-mentioned ingredients are proved by the complainant co-extensively. Additionally, the conditions stipulated under Section 142 NI Act have to be fulfilled. Notably, there is no dispute at bar about the proof of only first, third, and fifth ingredient. The complainant had proved the original cheque vide Ex.P.1 which the accused person had not disputed as being drawn on the account of the accused. It was not disputed that the cheque in question was presented within its validity period.
The cheque in question was returned unpaid vide return memos vide Ex.P.2 due to the reason, "Funds Insufficient" dated 07.08.2023. The complainant had proved the service of legal demand notice dated 01.09.2023 vide Ex.P.3. Postal receipt vide Ex.P4. Returned postal cover and copy of notice vide Ex.P5 and Ex.P5(a). Thus, there is a dispute only with regard to the second ingredient to the offence. As such, the 1st,3rd,4th& 5th ingredient of the offence under section 138 of the NI Act stands proved. SCCH-6 9 CC No.595/2024
15. As far as the proof of second ingredient is concerned, the complainant has to prove that the cheque in question was drawn by the drawer for discharging a legally enforceable debtor any liability. In the present case, the issuance of the cheque in question is not denied. As per the scheme of the NI Act, once the accused admits signature on the cheque in question, certain presumption are drawn, which result in shifting of onus. Section 118(a) of the NI Act lays down the presumption that every negotiable instrument was made or drawn for consideration. Another presumption is enumerated in Section 139 of NI Act. The provision lays down the presumption that the holder of the cheque received it for the discharge, in whole or part, of any debt or other liability.
16. The combined effect of these two provisions is a presumption that the cheque is drawn for consideration and given by the accused for the discharge of debt or other liability. Both the sections use the expression "shall", which makes it imperative for the court to raise the presumptions once the foundational facts required for the same are proved. Reliance is SCCH-6 10 CC No.595/2024 placed upon the judgment of the Hon'ble Supreme Court, Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16.
17. Further, it has been held by a three-judge bench of the Hon'ble Apex Court in the case of Rangappa vs. Sri Mohan (2010) 11 SCC 441 that the presumption contemplated under Section 139 of NI Act includes the presumption of existence of a legally enforceable debt. Once the presumption is raised, it is for the accused to rebut the same by establishing a probable defence.
18. The presumptions raised under Section 118(b) and Section 139 NI Act are rebuttable presumptions. A reverse onus is cast on the accused, who has to establish a probable defence on the standard of preponderance of probabilities to prove that either there was no legally enforceable debt or other liability. In this case, the arguments raised by the Ld. counsel for the accused to rebut the presumption are discussed below:
I. Notice not served:
19. Accused has taken the specific defense that notice has not been served to the accused as the complainant has SCCH-6 11 CC No.595/2024 overwritten the name of the village Kattanayakanahalli and sent the notice to the Kattanayakaanhgallu by correcting the spelling mistake and intentionally complainant sent notice to the wrong address and colluding with the post office made the post office to write the shara as "Refused". In Support of his contention accused has produced Ex.D1/copy of his Aadhar card, Ex.D2 is copy of the ration card and Ex.D3 is Gas Consumer Book and Ex.D4 is the Voter Identity Card and argued that the notice has not been sent to the correct address of the accused. The said defense has been denied by the PW1. PW1 stated that there was a spelling mistake in the name of Kattanayakanahalli in Ex.P5 and it was rectified. In this regard, on perusal of Ex.P5 there is clear shara "As Addressee Refused Returned to Sender".
20. Further Ex.P5, in Ex.P5 the spelling of Kattanayakahanhalli was corrected and once again written. If at all the notice has been sent to the wrong address certainly the postal authority has written the shara as wrong address or insufficient address. Apart from this, the court summons has been sent to the accused to the same address has been SCCH-6 12 CC No.595/2024 personally served to the accused. Accused counsel relied on the decision reported M.D Thomas V/s P.S Jaleel, wherein Apex Court has observed that notice served upon the wife of appellant and not the appellant and therefore there is no escape that the complainant has not complied the requirement of giving the notice in terms of clause (b) of proviso to Sec.138 of NI Act.
21. With due respect to the Hon'ble Apex Court, in the present case, the notice has been reported to be refused. Hence, the above said decision is not applicable to the present case as it differs in the factual matrix.
22. Further relied on the decision reported in Crl. Revision Petition 1015/2025 Shaju V/s Shalimar Hardwares Kattanamam, wherein Hon'ble High court of Kerala has relied on the earlier decision Thomas.M.D v/s P. Jalleel and others and come to the conclusion at para No.11 that " Therefore, the service of notice on the relative of the accused is not sufficient, especially when there is no evidence from the side of the complainant that the accused was aware of the service of notice on his relative. If there is no such evidence, SCCH-6 13 CC No.595/2024 it is to be presumed that the statutory notice under Sec.138(b) of the Negotiable Instruments Act, 1881 is not served on the accused. The upshot of the above discussion is that the conviction and sentence imposed on the petitioner are to be set aside".
23. I have carefully read over the above said decision with due respect to the Hon'ble Court, in the above said case, the notice has been served to the relative of the accused and not to the accused. But in the present case, it is not of the case that notice has been served to any relative of the accused. In present case, the notice has been reported to be refused. Hence, the above said decision is not applicable to the present case as it differs in the factual matrix.
24. In this regard this court relying upon the decision in the case between Alavi Haji V/s. Palapetty Mohammed and another, wherein the Hon'ble court held that Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary registered post SCCH-6 14 CC No.595/2024 and is returned with a postal endorsement 'refused' or not available in the house or house locked or shop closed or addressee not in station. Due service has to be presumed.
25. Moreover, in this regard, it has been held by the Hon'ble Apex Court in the case of M/S Indo Automobiles Vs. M/S. Jaidurga Enterprises reported in 2008 (2) DCR 499 and also as provided under Sec.27 of the Mysore general clauses Act, 1897. When a notice is sent to the correct address of the addressee, even if the same is returned unserved due absence or non-claiming or refusal of the addressee, the same amounts to deemed service. Moreover, the very purpose of giving statutory notice to provide an opportunity to the accused/drawer to make payment of the cheque amount and escape from the criminal prosecution. The non-service of the notice would be ground only in the case of the accused admitting the liability under the cheque and pleading only exemption from the criminal prosecution for non payment of the cheque amount. Thus this defence of the accused is of no consequence in the present case as he is totally denying the liability under the said cheque. SCCH-6 15 CC No.595/2024
26. As such the statutory demand notice is held to have been duly served on the accused. Hence defence taken by the accused that notice not served her does not holds good.
II. Financial Capacity
27. Further learned counsel for the accused argued the complainant had no financial captaincy to lend the loan of Rs.12,00,000/- and complainant has not produced any document to prove his financial capacity.
28. The learned counsel for accused cross examined PW.1 at length with regard to his education, qualification, his occupation and the income, wherein PW.1 clearly stated that he was taking Govt. tender and doing Contract work in Hiriyur at that time accused was well known to him. Further PW1 stated that at that time accused was running Dobi shop near Taluk office of Hiriyur. The learned counsel for accused has not at all denied the occupation of the PW.1. The learned counsel for accused cross examined PW.1 with regard to PW.1 has not produced any document to show that he was doing contract work, tender and also contract through his friend Basavaraju. SCCH-6 16 CC No.595/2024 Admittedly, though complainant has not produced any document to show that he was doing contract work and he has licence and he was taking tender from the Government. But, accused has not at all denied all these facts deposed by the PW.1 atleast by putting single denial suggestion. Hence, accused himself has not denied those facts, the non production of the document with regard to Contract work and the license by the PW.1 is not material or fatal to the case of the complainant.
29. Further, PW.1 at cross-examination dated 10.07.2025 deposed that, he has withdrawn an amount from his bank before 15 days prior to the lending as loan to the accused in 2-3 installments. Further PW.1 deposed that he can produce his pass book. Further PW.1 deposed that he has pledged gold ornaments in the jewelry shop near his house and also in Manappuram and Muttut Finance and taken Rs.5,00,000/- and Rs.3,00,000/- and given to the accused. It is material to note here that learned counsel for accused has not all denied these facts deposed by the PW.1 in his cross-examination dated 10.07.2025 at para No.2 atleast by putting a single denial suggestion. Only learned counsel for accused bent upon posing SCCH-6 17 CC No.595/2024 the suggestion that whether PW.1 can produce the documents or receipts to show that he has borrowed the amount by pledging his gold ornaments in the Manappuram and Muttut Finance and he can produce passbook to show that he has withdrawn an amount from the Bank. The learned counsel for accused has not at all denied the fact deposed by the PW.1 that he has withdrawn the amount from the bank and also he has taken the gold loan by pleading his gold ornaments in the shop near by his house and Manappuram and Muttut Finance and given the said amount to the accused at least by putting a single denial suggestion. The non denial of the above said fact deposed by the parties in the cross-examination clearly amounts to the admissions of that facts by the other side. Even it is material to note here that nowhere learned counsel for accused has denied specifically by putting the specific suggestion that complainant has not financial capacity to lend the loan of Rs.12,00,000/- to the accused. The non denial of the said fact clearly amounts to the admissions of the fact that complainant has sufficient financial capacity to lend the loan of Rs.12,00,000/- to the accused.
SCCH-6 18 CC No.595/2024
III. No documents have been produced by the complainant to show the passing of the consideration:-
30. The learned counsel for accused has taken specific defence that complainant has not at all lent the loan of Rs.12,00,000/- to the accused at any point of time. The complainant is totally stranger to the accused and accused has seen the complainant for the first time before the court only. In this regard, on perusal of cross-examination of PW.1, PW.1 stated that he was doing the Contract work at Hiriyur at that time, accused was running Dobi shop near Taluk Office, Hiriyur and at that time, accused was introduced to him through his friend. But, complainant pleaded his ignorance about what was the qualification of the accused and about the family details of the accused. Even PW.1 has not stated the fact and circumstances, based on which, complainant has gained trust over the accused to show that complainant has lent the loan of Rs.12,00,000/- to the accused without taking any single document from the accused that too accused being running a Dobi shop.SCCH-6 19 CC No.595/2024
31. Apart from this, PW.1 himself stated that, he has borrowed the loan by pledging the gold in the Manappuram and Muttut Finance and in the shop nearby his house and lent the said amount to the accused. Ordinarily no prudent man would lent the loan to a third person who is not relative or close friend or any person so closely associated with him by borrowing the loan by pledging the gold that too without any interest and without any documents. Admittedly, it is not the case of the complainant that he has lent the loan for any higher interest to the accused. PW.1 being a contractor who is a business man how could he lend the loan of huge amount of Rs.12,00,000/- to the accused who is the third party who is not relative or close friend of the PW.1 that too without any interest and without taking any documents. Ordinarily no prudent man that too Pw-1 being business man would not lend loan of Rs.12,00,000/- to the third person without any interest and without taking any document and security. This fact itself creates a doubt about the passing of the consideration.
32. Apart from this, though complainant himself has stated that he has withdrawn an amount from his bank for three SCCH-6 20 CC No.595/2024 times and given the same to the accused and he can produce his pass book. But, the complainant has not produced his pass book to show that he has withdrawn an amount of Rs.3,00,000/- two times or withdrawn any amount from his bank and lend the same to the accused. Even the complainant has not produced any document to show that he has borrowed any gold loan from the finance. All these facts creates a doubt about fact that complainant has lent the loan of Rs.12,00,000/- to the accused.
Thus, complainant has failed to prove the passing of the consideration to the accused.
IV defence of the accused:- Cheque issued to one Venkatesh and the same was misused by the complainant.
33. Even PW.1 admitted that accused is an illiterate person and he did not know how to writingdd the English. Further admitted that as per the say of the accused he has written the amount in the cheque in English, which also creates a doubt about the case of the complainant. Admittedly, Rs.12,00,000/- is a huge amount and ordinarily no prudent man would lend so much of huge amount to a person without taking any document as a security. Under such circumstances, the SCCH-6 21 CC No.595/2024 defence taken by the accused that, he has given four signed blank cheques to one Venkateshaiah under whom he was working for the purpose of paying the amount to the Ashraya house were misused through the complainant appears to be more probable than the case of the complainant. Even accused clearly stated that he has asked for return of his cheque the said person, but he stated that those cheques were lost and he has not given any complaint as the said person has threatened him.
Conclusion:
34. In view of all the above discussion, it can be concluded that the complainant has failed to establish through cogent and convincing evidence, the fact of issuance of the cheques for discharge of legally enforceable debt or any liability, which is dishonored for want of sufficient funds. On the other hand, the accused has successfully rebutted the presumption available to the complainant through probable evidences, that would preponderate upon the evidence led by the complainant. Therefore, the accused is held to have not committed an offence punishable under sec. 138 of N.I. Act. Accordingly, Point No.1 is answered in the NEGATIVE.
SCCH-6 22 CC No.595/2024
35. POINT NO.2:- In view of my answer to point No.1, I proceed to pass the following:-
-: O R D E R :-
Acting U/Sec.278(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023, accused hereby acquitted for the offence punishable U/Sec.138 of Negotiable Instruments Act.
The bail and surety bond of the accused and surety shall stand canceled.
(Dictated to the Stenographer, transcribed and computerized by her. After her typing, corrected, signed and then pronounced by me in open Court this the 2nd day of April, 2026).
(CHETANA S.F.) IV Addl., Small Cause Judge & ACJM, Court of Small Causes, Bengaluru.
ANNEXURE List of witnesses examined for the Complainant:
PW.1 :- Sri. M. Chethan List of witnesses examined for the accused:-
DW.1 :- Sri. Shivakumar G., SCCH-6 23 CC No.595/2024 List of documents marked for the Complainant:-
Ex.P.1 : Cheque
Ex.P.1(a) : Signature of accused
Ex.P.2 : Bank Endorsement
Ex.P.3 : Office copy of Legal Notice
dt.01.09.2023
Ex.P.4 : Postal Receipt
Ex.P.5 and 5(a) : Returned postal cover and copy of
notice
List of documents marked for the accused:-
Ex.D.1 to 4 : Notarized copies of Aadhar card, Ration card, Gas card and Voter ID of accused (CHETANA S.F.) IV Addl., Small Cause Judge & ACJM, Court of Small Causes, BENGALURU.