Bangalore District Court
M M Road Lines Rep By Authorized ... vs Ms Aditya Birla Finance Ltd on 18 November, 2025
1
Crl.A.No.1057/2024
Judgment
KABC010163442024
IN THE COURT OF THE LIX ADDL.CITY CIVIL &
SESSIONS JUDGE, BANGALORE CITY (CCH-60)
Dated this the 18th day of November 2025.
PRESENT:
SRI SOMASHEKARA. A., B.A.L., LL.M.,
XV ADDL.CITY CIVIL & SESSIONS JUDGE,
BANGALORE CITY.
C/c LIX ADDL.CITY CIVIL & SESSIONS JUDGE,
BANGALORE CITY.
Crl.Appeal No.1057/2024
APPELLANT/S: M.M.Road Lines
Rep by authorised signatory
M.Nazeer Khan
No.6, Opp Glass Company
Iundustrial Subrub, 2nd Stage,
New Extension,
Yeshwanthapura
Bengaluru
(By Sri. C.M., Advocate)
Judge sign
2
Crl.A.No.1057/2024
Judgment
-Vs-
RESPONDENT/S: M/s Aditya Birla Finance Ltd
Having its office at No.(178),
Star Avenue, 6th Cross,
Victoria Layout, Victoria Road,
Bengaluru
Rep by its authorised representative
(By Sri.N.C.R., Advocate)
JUDGMENT
Appellant has filed this appeal U/s.374(3) of Cr.P.C. assailing the judgment of conviction and order of sentence passed in C.C.No.11072/2021, dated.04.05.2024 on the file of XXII Additional Chief Metropolitan Magistrate, Bengaluru.
2. Rank of the parties is referred to as per their ranks assigned before the trial court.
3. The facts of the case leading to this appeal may be summarized as under:-
Judge sign 3 Crl.A.No.1057/2024 Judgment The respondent is complainant before the trial court. The complainant has filed a complaint U/s. 200 of Code of Criminal Procedure alleging the offence committed by the accused punishable U/s.138 of Negotiable Instrument Act (herein after referred as N.I.Act).
According to the complainant the accused had requested the complainant for hand loan of Rs.12,50,000/- for business purpose on 29.11.2019 and the accused had agreed to repay the loan amount as per the repayment schedule and he had entered into an agreement. Thereafter the accused towards repayment of the loan amount had issued a cheque bearing No.650265 dated 30.08.2021 for a sum of Rs.12,50,000/- drawn on ICICI bank, Yeshwantpur Branch. As per the assurance of the accused the said cheque was presented in the complainant Bank and same was got dishonored for the reasons "Funds Insufficient". Hence the complainant issued a notice on 13.10.2021. In spite of service Judge sign 4 Crl.A.No.1057/2024 Judgment of summons, the accused did not paid the cheque amount nor replied the notice. The trial court took cognizance and after going through the materials found the prima facie case against accused for the offence punishable U/s.138 of Negotiable Instrument Act, registered criminal case and issued summons.
4. Before the trial court, accused appeared, got enlarged on bail. The substance of accusation was recorded, he claimed trial. Complainant got examined himself as PW.1 and got marked in 10 documents from Ex.P.1 to Ex.P.10 and closed his side. The accused was examined U/s.313 of Code of Criminal Procedure. The accused did not adduced his defence evidence nor produced any documents. Trial court after hearing arguments on both sides and on appreciation of oral and documentary evidence, found accused committed offence punishable U/s.138 of Negotiable Instruments Act, convicting and sentenced him to pay the fine of ₹.12,55,000/-. In default to undergo simple imprisonment for three months.
Judge sign 5 Crl.A.No.1057/2024 Judgment
5. Feeling aggrieved by the said judgment, accused person is appeared before this court urging the following grounds:
The order passed by the learned Magistrate is highly illegal, improper, perverse, unwarranted and without application of mind. The complainant has not produced any documents to show that the accused was due a sum of Rs.12,50,000/-. Though the complainant has utterly failed to prove that the cheque amount is a legally recoverable debt. The learned Magistrate has failed to appreciate the conduct of the parties and the acts and omissions of the complainant. On these grounds, the appellant/accused prayed to set-aside the Judgment of conviction and sentence passed in C.C.No.11072/2021, dated.04.05.2024 and acquit the appellant for the offence punishable U/s.138 of Negotiable Instrument Act.
6. After registration of the appeal, notice was issued to the respondent. Respondent appeared through counsel. The trial court records have been secured.
Judge sign 6 Crl.A.No.1057/2024 Judgment
7. Heard learned counsel for the appellant and perused the materials on record.
8. The following points that arise for my consideration:-
1. Whether appellant had sufficient cause for not preferring this appeal within the period of limitation?
2. Whether cheque at Ex.P.2 was issued by the accused in favour of the complainant towards discharge of debt or liability as alleged in the complaint?
3. Whether trial court is correct in holding that, accused has committed offence punishable U/s.138 of Negotiable Instrument Act?
4. Whether interference of this court is necessary in this appeal?
5. What Order?
9. On re-appreciation of oral and documentary evidence, in the light of the arguments advanced by the learned Judge sign 7 Crl.A.No.1057/2024 Judgment advocates for both sides, my findings on the aforesaid points as follows:-
POINT No.1 : In the Affirmative, POINT No.2 : In the Negative, POINT No.3 : In the Affirmative, POINT No.4 : In the Affirmative, POINT No.5 : As per the final order for the following:-
REASONS
10. POINT NO.1:- Appellant has filed application U/s.5 of Limitation Act for condonation of 22 days delay in preferring this appeal. Perused the application filed U/sec.5 of Limitation Act, contents of affidavit filed in support of said I.A. In the affidavit, It is stated that, the order of the sentence passed by the Trial Court is on 04.05.2024, but, free copy of the Judgment is not supplied to him, he had applied for certified copy of the order on 29.05.2024 same is delivered on 07.06.2024. Therefore, delay of 22 days has been caused in filing the appeal.
Judge sign 8 Crl.A.No.1057/2024 Judgment The delay in filing this appeal is for the bonafide reasons not with any other intention. If the delay is not condoned, there would be injustice to him. On the other hand, if the delay is condoned, no hardship or prejudice would cause to the respondent.
11. Reasons assigned by the appellant to condone delay of 22 days in preferring this appeal is genuine and satisfactory. Hon'ble Apex court has laid down in various decisions that, court shall take liberal approach in condoning the delay in filing the petitions. In AIR 1988 SC 897 (G.Ramegowda V/s. Special Land Acquisition Officer, Bengaluru), Hon'ble Apex court pleased to observe that;
'Sufficient cause' in Section 5 must receive a liberal construction so as to advance substantial justice and generally delay in preferring appeals are required to be condoned in the interest of justice where no gross negligence or deliberate inaction or lack of bonafides is imputable to the party seeking condonation of the delay. When substantial justice and technical consideration are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in Judge sign 9 Crl.A.No.1057/2024 Judgment injustice being done because of a non-deliberate delay. It must be grasped that, judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.' The principles cited above are applicable to the case on hand and accordingly applications deserves to be allowed. Hence, point No.1 is answered in the Affirmative.
12. POINTS NO.2 to 4 :- These points are interrelated, hence they are taken together for common discussion in order to avoid repetition of facts and evidence.
13. Case set up by the respondent/complainant, before the Trial Court, was that it had financed a sum of Rs.12,50,000/- to the Appellant/Accused for business purpose, the accused undertaken to repay the said amount in installment, but he has not repaid, therefore, towards repayment of the due amount he has issued cheque in question. On presentation of the said cheque Judge sign 10 Crl.A.No.1057/2024 Judgment got dishonored for the reasons "Funds Insufficient". After issuing the notice the present complaint is filed.
14. The accused contested the case of complainant and contested that, he has issued blank cheque at the time of availing the loan. The cheque amount was much more than the actual due, therefore, cheque was not in discharge of legal liability.
15. The Trial Court has mateculosly scrutinize the evidence adduced by the parties and undividely concluded that the accused is liable to pay the cheque amount and thus convicted him. Against the said Judgment and conviction the present appeal has been preferred.
16. The first contention raised by the learned counsel for the appellant/accused is that since the amount due and payable to the complainant was much less than the amount represented by the cheque, on the date these cheques were presented for encashment, the petitioners were not legally required to honour Judge sign 11 Crl.A.No.1057/2024 Judgment these cheques and, consequently, no offence under Section 138 of the Negotiable Instruments Act is made out against them. The complainant called upon the petitioners to pay a sum of Rs.12,50,000/- as on the date of issuance of notice i.e., 13.10.2021. Despite the fact that the amount due on that date was only Rs.6,05,941/- and the notice calling upon the petitioners to pay more than the amount due from them being illegal and invalid, no offence under Section 138 of the Negotiable Instruments Act is made out against them.
17. Section 138 of Negotiable Instruments Act reads as under:-
"138. Dishonour of cheque for insufficiency, etc., of funds in the accounts Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money Judge sign 12 Crl.A.No.1057/2024 Judgment standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for [a term which may extend to two years], or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless-
(a) The cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier.
(b) The payee or the holder induce course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer, of the cheque within thirty days of the receipt of information by him from the bank regarding the return of the cheques as unpaid, and Judge sign 13 Crl.A.No.1057/2024 Judgment
(c) The drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
18. The following are the components of the offence punishable under Section 138 of Negotiable Instrument Act:-
(1) drawing of the cheque by a person on an account maintained by him with a banker, for payment to another person from out of that account for discharge in whole/part any debt or liability, (2) presentation of the cheque by the payee or the holder in due course to the bank, (3) returning the cheque unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque, (4) giving notice in writing to the drawer of the cheque within 15 days of the receipt of information by the payee Judge sign 14 Crl.A.No.1057/2024 Judgment from the bank regarding the return of the cheque as unpaid demanding payment of the cheque amount, (5) failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered by the cheque within 15 days of the receipt of the notice.
19. The question which comes up for consideration is as to what the expression „amount of money means in a case where the admitted liability of the drawer of the cheque gets reduced, on account of part payment made by him, after issuing but before presentation of cheque in question. No doubt, the expression „amount of money would mean the amount of the cheque alone in case the amount payable by the drawer, on the date of presentation of the cheque, is more than the amount of the cheque. But, can it be said the expression „amount of money would always mean the amount of the cheque, even if the actual liability of the drawer of the cheque has got reduced on account of some payment made by him towards discharge of the debt or Judge sign 15 Crl.A.No.1057/2024 Judgment liability in consideration of which cheque in question was issued. If it is held that the expression „amount of money would necessarily mean the amount of cheque in every case, the drawer of the cheque would be required to make arrangement for more than the admitted amount payable by him to the payee of the cheque. In case he is not able to make arrangement for the whole of the amount of the cheque, he would be guilty of the offence punishable under Section 138 of Negotiable Instruments Act. Obviously this could not have been the intention of the legislature to make a person liable to punishment even if he has made arrangements necessary for payment of the amount which is actually payable by him. If the drawer of the cheque is made to pay more than the amount actually payable by him, the inevitable result would be that he will have to chase the payee of the cheque to recover the excess amount paid by him. Therefore, I find it difficult to take the view that even if the admitted liability of the drawer of the cheque has got reduced, on account of certain payments made after issue of cheque, the payee would Judge sign 16 Crl.A.No.1057/2024 Judgment nevertheless be entitled to present the cheque for the whole of the amount, to the banker of the drawer, for encashment and in case such a cheque is dishonoured for wants of funds, he will be guilty of offence punishable under Section 138 of Negotiable Instrument Act.
20. In this background, now let us appreciate the oral evidence of the parties adduced before the Trial Court more particularly the cross-examination of PW-1. Wherein he has categorically admitted that, as on 30.08.2021 the accused is liable to pay only Rs.4,84,885/-. The relevant portion of the cross- examination is extracted herein below;-
"ಚೆಕ್ಕನ್ನು ನಗದೀಕರಿಸಲು ಸಲ್ಲಿಸುವಾಗ ಆಪಾದಿತರಿಂದ 12,50,000/- ಸಾಲದ ಮೊತ್ತ ತೀರುವಳಿ ಮಾಡಲು ಬಾಕಿ ಇತ್ತು. ಚೆಕ್ಕಿನ ದಿನಾಂಕ 30.08.2021 ಎಂದರೆ ಸರಿ. ಸದರಿ ದಿನಾಂಕದಂದು ಆಪಾದಿತರು 12 ½ ಲಕ್ಷ ಸಾಲ ತೀರುವಳಿ ಮಾಡಲು ಬಾಕಿ ಇತ್ತು. ನಿಪಿ.9 statement of account ಅನ್ನು ನಾವು ಹಾಜರುಪಡಿಸಿದ್ದೇವೆ. ನಿಪಿ.9 ರ ಪ್ರಕಾರ 4,84,885/- ಆಪಾದಿತರು ತೀರುವಳಿ ಮಾಡಲು ಬಾಕಿ ಇದೆ ಎಂದು ಕಂಡುಬರುತ್ತದೆ ಎಂದರೆ ಸರಿ. ಚೆಕ್ಕನ್ನು ನಗದೀಕರಿಸಲು Judge sign 17 Crl.A.No.1057/2024 Judgment ಸಲ್ಲಿಸುವಾಗ 12 ½ ಲಕ್ಷ ಸಾಲ ತೀರುವಳಿ ಮಾಡಲು ಬಾಕಿ ಇರಲಿಲ್ಲ ಕೇವಲ 4,84,885/- ಬಾಕಿ ಇತ್ತು ಎಂದರೆ ಸರಿಯಲ್ಲ. ನಿಪಿ.9 ರಲ್ಲಿ 12,50,000/- ಸಾಲದ ಮೊತ್ತ ಬಾಕಿ ಇದೆ ಎಂದು ಕಂಡುಬರುವುದಿಲ್ಲ. ಆ ಕಾರಣದಿಂದ ಚೆಕ್ಕನ್ನು ಬ್ಯಾಂಕಿಗೆ ಸಾಲ್ಲಿಸಿದ ದಿನಾಂದಂದು 12,50,000/- ಸಾಲದ ಮೊತ್ತ ಬಾಕಿ ಇರಲಿಲ್ಲ ಎಂದರೆ ಸರಿಯಲ್ಲ. ಸಾಲವನ್ನು ನೀಡುವಾಗ ಗ್ರಾಹಕರಿಂದ ಚೆಕ್ಕುಗಳನ್ನು ಭದ್ರತೆಗಾಗಿ ನಾವು ಪಡೆದುಕೊಂಡಿದ್ದು ನಮ್ಮ ಮನಸೋ ಇಚ್ಚೆ ಚೆಕ್ಕಿನಲ್ಲಿ ಮೊತ್ತವನ್ನು ನಮೂದಿಸಿದ್ದೇವೆ ಎಂದರೆ ಸರಿಯಲ್ಲ. ನಿಪಿ.9 ರ ಪ್ರಕಾರ ಪ್ರತಿ ತಿಂಗಳು ಸಾಲದ ಕಂತಿನ ಹಣ 46,455/-. ಚೆಕ್ಕನ್ನು ನಗದೀಕರಿಸಲು ಸಲ್ಲಿಸಿದ ನಂತರ ಕೂಡ ಆಪಾದಿತರು ದಿ.31.08.2021 ಮತ್ತು 06.09.2021 ರಂದು 13.09.2021 ಮತ್ತು ಚೇರೆ ಬೇರೆ ತಿಂಗಳಲ್ಲಿ ಕಂತಿನ ಮೊತ್ತ ಕಟ್ಟಿದ್ದಾರೆ ಎಂದರೆ ಸಾಕ್ಷಿಯು ನಿಪಿ.9 ರಲ್ಲಿ ಆ ರೀತಿ ಕಂಡುಬರುತ್ತದೆ ಎಂದು ನುಡಿಯುತ್ತಾರೆ. ಬೆಕ್ಕನ್ನು ಆಪಾದಿತರು ಯಾವ ದಿನಾಂಕದಂದು ನೀಡಿದ್ದಾರೆ ಎಂದು ನನಗೆ ಮಾಹಿತಿ ಇಲ್ಲ. ಸಾಲ ನೀಡುವಾಗ ಆಪಾದಿತರಿಂದ ಪಡೆದುಕೊಂಡ ಚೆಕ್ಕನ್ನು ದುರುಪಯೋಗ ಪಡಿಸಿಕೊಂಡಿದ್ದೇವೆ ಎಂದರೆ ಸರಿಯಲ್ಲ".
From the above evidence of PW-1 it is clear that as on date of issuance of notice the accused is liable to pay only Rs.4,84,885/- but not the cheque amount of Rs.12,50,000/-. Apart Judge sign 18 Crl.A.No.1057/2024 Judgment from this it is relevant to extract the Bank Statement maintain by the complainant/respondent i.e., Ex.P.9. The relavent entries are reads as under;
Transactio Value Date Transacti Particulars Credit Net Dues
n Date on Type (Rs.) (Rs.)
08.01.2020 08.01.2020 Receipt Pmnt Rcvd through 46455.00 -
NEFT Vide Fund
Transfer No.805463,
Receipt No.805463 for
Installment
07.02.2020 07.02.2020 Receipt Pmnt Rcvd through 46455.00 -
NEFT Vide Fund
Transfer No.911042,
Receipt No.911042 for
Installment
06.03.2020 06.03.2020 Receipt Pmnt Rcvd vide PDC 46455.00 -
No.397028, Receipt
No. 397028,
dtd.06.03.2020 for
Installment
13.03.2020 13.03.2020 Receipt Pmnt Rcvd Vide PDC 46455.00 -
No.530527, Receipt
No.530527,
dated.13.03.2020 for
Installment
18.03.2020 18.03.2020 Receipt Pmnt Rcvd through 46455.00 -
NEFT Vide Fund
Transfer No.559320,
Receipt No.559320 for
Installment
Judge sign
19
Crl.A.No.1057/2024
Judgment
05.06.2020 05.06.2020 Receipt Pmnt Rcvd Vide PDC 46455.00 -
No.748549, Receipt
No.748549,
dated.05.06.2020 for
Installment
15.06.2020 15.06.2020 Receipt Pmnt Rcvd Vide PDC 46455.00 -
No.278777, Receipt
No.278777,
dated.15.06.2020 for
Installment
24.06.2020 24.06.2020 Receipt Pmnt Rcvd through 46455.00 -
NEFT Vide Fund
Transfer No.794074,
Receipt No.794074 for
Installment
26.06.2020 26.06.2020 Receipt Pmnt Rcvd Vide PDC 46455.00 46455.00
No.389088, Receipt Cr.
No.389088,
dated.26.06.2020 for
Any Due
05.08.2020 05.08.2020 Installme Interest Capitalized 79218.00 79218.00
nt Billing Cr.
07.09.2020 07.09.2020 Receipt Pmnt Rcvd Vide PDC 46455.00
No.783147, Receipt
No.783147,
dated.07.09.2020 for
Installment
14.09.2020 14.09.2020 Receipt Pmnt Rcvd Vide PDC 46455.00 1000.00 Dr.
No.219478, Receipt
no.219478,
dtd.14.09.2020 for
Installment
Judge sign
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Crl.A.No.1057/2024
Judgment
24.09.2020 24.09.2020 Receipt Pmnt Rcvd Vide PDC 46455.00 2000.00 Dr.
No.379648, Receipt
No.379648,
dtd.24.09.2020 for
Installment
06.10.2020 06.10.2020 Receipt Pmnt Rcvd Vide PDC 46455.00 49830.00
No.385191, Receipt Dr.
No.385191,
dtd.06.10.2020 for
Installment
14.10.2020 14.10.2020 Receipt Pmnt Rcvd Vide PDC 46455.00 50830.00
No.754042, Receipt Dr.
No.754042,,
dated.14.10.2020 for
Installment
26.10.2020 26.10.2020 Receipt Pmnt Rcvd Vide PDC 46455.00 51830.00
No.005533, Receipt Dr.
No.005533,
dtd.26.10.2020 for
Installment
05.11.2020 05.11.2020 Receipt Pmnt Rcvd through 5106.00 142475.00
NEFT Vide Fund Dr.
Transfer No.051120,
Receipt No.051120 for
Installment
07.11.2020 07.11.2020 Receipt Pmnt Rcvd Vide PDC 46455.00 96020.00
No.300463, Receipt Dr.
No.300463,
dated.07.11.2020 for
Installment
16.11.2020 16.11.2020 Receipt Pmnt Rcvd Vide PDC 46455.00 97020.00
No.613679, Receipt Dr.
No.613679,
dated.16.11.2020 for
Installment
Judge sign
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Crl.A.No.1057/2024
Judgment
16.11.2020 16.11.2020 Receipt Pmnt Rcvd through 46455.00 50565.00
NEFT vide Fund Dr.
Transfer No.431400,
Receipt No.431400 for
Installment
26.11.2020 26.11.2020 Receipt Pmnt Rcvd Vide PDC 46455.00 53022.00
No.577554, Receipt Dr.
No.577554,
dated.26.11.2020 for
Installment
07.12.2020 07.12.2020 Receipt Pmnt Rcvd Vide PDC 46455.00 101123.00
No.128234, Receipt Dr.
No.128234,
dated.07.12.2020 for
Installment
14.12.2020 14.12.2020 Receipt Pmnt Rcvd Vide PDC 46455.00 102123.00
No.767017, Receipt Dr.
No.767017,
dated.14.12.2020 for
Installment
24.12.2020 24.12.2020 Receipt Pmnt Rcvd Vide PDC 46455.00 103123.00
No.354743, Receipt Dr.
No.354743,
dated.24.12.2020 for
Installment
13.01.2021 13.01.2021 Receipt Pmnt Rcvd Vide PDC 46,455.00 154.684.00 No.246329 Receipt DR No.246329 dtd 13.01.2021 for installment 18.01.2021 18.01.2021 Receipt Pmnt Rcvd Vide PDC 46,455.00 155.684.00 No.246439 Receipt DR No.246429 dtd 18.01.2021 for installment Judge sign 22 Crl.A.No.1057/2024 Judgment 25.01.2021 25.01.2021 Receipt Pmnt Rcvd Vide PDC 46,455.00 155.684.00 No.741585 Receipt DR No.741585 dtd 25.01.2021 for installment 06.02.2021 06.02.2021 Receipt Pmnt Rcvd Vide PDC 46,455.00 207.665.00 No.0105267 Receipt DR No.0105267 dtd 06.02.2021 for installment 12.02.2021 12.02.2021 Receipt Pmnt Rcvd Vide PDC 46,455.00 208.665.00 No.626320 Receipt DR No.626320 dtd 12.02.2021 for installment 18.02.2021 18.02.2021 Receipt Pmnt Rcvd Vide PDC 46,455.00 209.665.00 No.956571 Receipt DR No.956571 dtd 18.02.2021 for installment 06.03.2021 06.03.2021 Receipt Pmnt Rcvd Vide PDC 46,455.00 262.394.00 No.280227 Receipt DR No.280227 dtd 06.03.2021 for installment 15.03.2021 15.03.2021 Receipt Pmnt Rcvd Vide PDC 46,455.00 263.394.00 No.447990 Receipt DR No.447990 dtd 15.03.2021 for installment 22.03.2021 22.03.2021 Receipt Pmnt Rcvd Vide PDC 46,455.00 264,394.00 No.364742 Receipt DR No.364742 dtd 22.03.2021 for installment Judge sign 23 Crl.A.No.1057/2024 Judgment 26.03.2021 26.03.2021 Receipt Pmnt Rcvd Vide PDC 46,455.00 264,394.00 No.781206 Receipt DR No.781206 dtd 26.03.2021 for installment 28.03.2021 28.03.2021 Receipt Pmnt Rcvd Vide PDC 46,455.00 224.147.00 No.246329 Receipt DR No.246329 dtd 13.01.2021 for installment 06.04.2021 06.04.2021 Receipt Pmnt Rcvd Vide PDC 46,455.00 272,395.00 No.653217 Receipt DR No.653217 dtd 06.04.2021 for installment 13.04.2021 13.04.2021 Receipt Pmnt Rcvd Vide PDC 46,455.00 273,395.00 No.458553 Receipt DR No.458553 dtd 13.04.2021 for installment 23.04.2021 23.04.2021 Receipt Pmnt Rcvd Vide PDC 46,455.00 274,395.00 No.693897 Receipt DR No.693897 dtd 23.04.2021 for installment 06.05.2021 06.05.2021 Receipt Pmnt Rcvd Vide PDC 46,455.00 328,947.00 No.610916 Receipt DR No.610916 dtd 06.05.2021 for installment 13.05.2021 13.05.2021 Receipt Pmnt Rcvd Vide PDC 46,455.00 329,947.00 No.180432 Receipt DR No.180432 dtd 13.05.2021 for installment Judge sign 24 Crl.A.No.1057/2024 Judgment 09.06.2021 05.06.2021 Receipt Pmnt Rcvd through 46,455.00 422,004.00 NACH vide fund DR transfer No.S51085091 Receipt No.S51085091 for installment 11.06.2021 11.06.2021 Receipt Pmnt Rcvd through 46,455.00 422,754.00 NACH vide fund DR transfer No.S71357412 Receipt No.S71357412 for installment 18.06.2021 18.06.2021 Receipt Pmnt Rcvd through 46,455.00 423,504.00 NACH vide fund DR transfer No.S2223923 Receipt No.S2223923 for installment 26.06.2021 24.06.2021 Receipt Pmnt Rcvd through 46,455.00 423,504.00 NACH vide fund DR transfer No.S25211968 Receipt No.S25211968 for installment 30.06.2021 30.06.2021 Receipt Pmnt Rcvd through 46,455.00 351,496.00 NACH vide fund transfer No.OD300621 Receipt No.OD300621 for installment 05.07.2021 05.07.2021 Receipt Pmnt Rcvd through 46,455.00 397,951.00 NACH vide fund DR transfer No.S69125150 Receipt No.S69125150 for installment 12.07.2021 12.07.2021 Receipt Pmnt Rcvd through 46,455.00 398,701.00 NACH vide fund DR transfer No.S95778457 Receipt No.S95778457 for installment Judge sign 25 Crl.A.No.1057/2024 Judgment 19.07.2021 17.07.2021 Receipt Pmnt Rcvd through 46,455.00 399.451.00 NACH vide fund DR transfer No.S15255841 Receipt No.S15255841 for installment 26.07.2021 23.07.2021 Receipt Pmnt Rcvd through 46,455.00 399,451.00 NACH vide fund DR transfer No.S35647248 Receipt No.S35647248 for installment 31.07.2021 30.07.2021 Receipt Pmnt Rcvd through 46,455.00 399,451.00 NACH vide fund DR transfer No.S61626223 Receipt No.S61626223 for installment 06.08.2021 05.08.2021 Receipt Pmnt Rcvd through 46,455.00 456,930.00 NACH vide fund DR transfer No.S87607899 Receipt No.S87607899 for installment 10.08.2021 09.08.2021 Receipt Pmnt Rcvd through 46,455.00 457,680.00 NACH vide fund DR transfer No.S4817125 Receipt No.S4817125 for installment 12.08.2021 11.08.2021 Receipt Pmnt Rcvd through 46,455.00 457,680.00 NACH vide fund DR transfer No.S14275180 Receipt No.S14275180 for installment 18.08.2021 18.08.2021 Receipt Pmnt Rcvd through 46,455.00 458,430.00 NACH vide fund DR transfer No.S44512835 Receipt No.S44512835 for installment Judge sign 26 Crl.A.No.1057/2024 Judgment 26.08.2021 25.08.2021 Receipt Pmnt Rcvd through 46,455.00 458,430.00 NACH vide fund DR transfer No.S72731735 Receipt No.S72731735 for installment 30.08.2021 26.08.2021 Receipt Pmnt Rcvd through 20,000.00 484,885.00 NACH vide fund DR transfer No.123821646607 Receipt No.123821646607 for installment
21. I am conscious of the implication that the drawer of a cheque may make payment of a part of the amount of the cheque only with a view to circumvent and get out of his liability under Section 138 of Negotiable Instrument Act. But, this can easily be avoided, by payee of the cheque, either by taking the cheque of the reduced amount from the drawer or by making an endorsement on the cheque acknowledging the part payment received by him and then presenting the cheque for encashment of only the balance amount due and payable to him. In fact, Section 56 of Negotiable Instrument Act specifically provides for an endorsement on a Negotiable Instrument, in case of part-
Judge sign 27 Crl.A.No.1057/2024 Judgment payment and the instrument can thereafter be negotiated for the balance amount. It would, therefore, be open to the payee of the cheque to present the cheque for payment of only that much amount which is due to him after giving credit for the part-payment made after issuance of cheque.
22. The Honble Supreme Court in Rahul Builders vs. Arihant Fertilizers & Chemicals And Another, (2008) 2 SCC 321 , Negotiable Instruments Act envisages application of the penal provisions which needs to be construed strictly. Therefore, even if two views in the matter are possible, the Court should lean in favour of the view which is beneficial to the accused. This is more so, when such a view will also advance the legislative intent, behind enactment of this criminal liability.
23. The learned counsel for the respondent argued that the consideration for a Negotiable Instrument need not necessarily be consideration mentioned in the instrument and it is permissible to Judge sign 28 Crl.A.No.1057/2024 Judgment prove existence of another consideration. The argument cannot be accepted and same is in controversy of the principles of law laid by the various Hon'ble High Courts and Apex Court on the said point of law and this is not the case of the respondent that the appellant was liable to pay some other debt to him on account of which its liability towards him was equal to or more than the amount of the cheques, on the date these cheque was presented for encashment. It is an admitted case that on the date cheques in question is presented by the respondent for encashment the amount due to him was much less than the amount represented by these cheques.
24. The complainant/respondent did not even refer to the substantial payment which he had received by way of RTGS/Deposits. To ask the drawer of the cheque to make payment of Rs.12,50,000/- despite having earlier received a sum of Rs.4,84,885/- against that very cheque is nothing but a dishonest conduct. Had the appellant complied with the demands Judge sign 29 Crl.A.No.1057/2024 Judgment made in this notice, it would have been compelled to later on chase the complainant for recovery of the excess amount paid by it and had the complainant not paid the excess amount received by him, the appellant would also have been compelled to initiate legal proceedings against him. Therefore, a notice of demand which requires the drawer of the cheque to make payment of the whole of the cheque amount, despite receiving a substantial amount against that very cheque, much before issue of notice, cannot be said to be a legal and valid notice envisaged in Section 138(b) of Negotiable Instrument Act.
25. The expression amount of money used in Section 138(b) of the Negotiable Instrument Act, to my mind, in a case of this nature, would mean the amount actually payable by the drawer of the cheque to the payee of the cheque. Of course, if the payee of the cheque makes some demands on account of interest, compensation, incidental expenses, etc, that would not invalidate the notice so long as the principal amount demanded by Judge sign 30 Crl.A.No.1057/2024 Judgment the payee of the cheque is correct and is clearly identified in the notice. When the principal amount claimed in the notice of demand is more than the principal amount actually payable to the payee of the cheque, and the notice also does not indicate the basis for demanding the excess amount, such a notice cannot be said to be a legal and valid notice envisaged in Section 138(b) of the Negotiable Instruments Act. In such a case, it is not open to the complainant to take the plea that the drawer of the cheque could have escaped liability by paying the actual amount due from him to the payee of the cheque. To make the notice legal and valid, it must necessarily specify the principal amount payable to the payee of the cheque and the principal amount demanded from the drawer of the cheque should not be more than the actual amount payable by him though addition of some other demands in the notice by itself would not render such a notice illegal or invalid.
Judge sign 31 Crl.A.No.1057/2024 Judgment
26. In Central Bank of India & Another vs. Saxons Farms & Others 1999(8) SCC 221, the Hon'ble Supreme Court observed that the object of the notice under Section 138(b) of Negotiable Instrument Act is to give a chance to the drawer of the cheque to rectify his omission and also to protect the honest drawer. If the drawer of the cheque is asked to pay more than the principal amount due from him and that amount is demanded as the principal sum payable by him, it is not possible for an honest drawer of the cheque to meet such a requirement.
27. In Suman Sethi vs. Ajay K. Churiwala, 2000 (2) SCC 380, the Hon'ble Supreme Court held that where the notice also contains a claim by way of cost, interest etc. and gives breakup of the claim of the cheque amount, interest, damages etc., which are separately specified, the claim for interest, cost etc. would be superfluous and these additional claims being severable would not invalidate the notice. It was further held that if an ominous Judge sign 32 Crl.A.No.1057/2024 Judgment demand is made in a notice as to what was due against a dishonoured cheque, the notice might fail to meet the legal requirement and may be regarded as bad. The same consequence, in my view, would follow where the principal sum demanded in the notice is more than the actual amount payable to the payee of the cheque as principal sum. In the present case, while demanding Rs.49,47,600/- vide notice dated 19.12.2008, the complainant did not even indicate that the actual amount due to him was only Rs.32,97,600/- and he called upon the complainant to pay the whole of the amount of the cheque without even trying to justify the demand made by him.
28. In Rahul Builders (supra), the Hon'ble Apex Court has observed that;
outstanding amount due to the appellant from respondent No.1 was Rs.8,72,409/. Respondent No.1 issued a cheque of Rs.1 lakh in favour of the appellant, which, on presentation was dishonoured. A notice was Judge sign 33 Crl.A.No.1057/2024 Judgment thereafter sent by the appellant to respondent No.1 informing him about dishonour of the cheque and asking him to remit the amount of Rs.8,72,409/-. It was noted that the amount which respondent No.1 was called upon to pay was the outstanding amount of the bills, i.e. Rs.8,72,409/- and the noticee was to respond that demand by offering the entire sum of Rs.8,72,409/-. It was further noted that there was no demand to pay the sum of Rs.1 lakh which was the amount of the cheque and what was demanded was the entire sum of Rs.8,72,409/- and not a part of it. In these circumstances, it was held that there was no demand for payment of the cheque amount. The decision of the High Court holding that the notice was invalid, was upheld by the Honble Supreme Court.
29. For the reasons given in the preceding paragraphs, I hold that the complaint filed by the complainant for higher amount than the actual due amount payable by the accused, such complaint is liable to be dismissed. The complainant presented the cheque for encashment of the whole amount of Judge sign 34 Crl.A.No.1057/2024 Judgment Rs.12,50,000/- though the amount due to him on the date of the presentation of the cheque was Rs.4,84,885/- and he also demanded the whole of the amount of Rs.12,50,000/- as principal sum without even indicating the principal amount due to him under the cheque was Rs.12,50,000/- and without even referring to the part- payment made by the accused which he had received by the complainant. For convenient purpose the instalment amounts paid by the accused, which has been reflected in the Statement of accounts marked at Ex.P.9 is detailed as above makes it clear that the accused is not liable to pay the cheque amount.
30. As rightly contended that, complainant has not placed any materials to establish that the accused is liable to pay the cheque amount. Therefore, the feeble defence raised by the accused is sufficient to rebut the statutory presumptions available to the complainant. To put it other way, the blank cheque in Judge sign 35 Crl.A.No.1057/2024 Judgment question is issued by the accused at the time of availing loan and same has been mis-used by the complainant by filing the excess amount than the due amount.
31. The trial court has failed to appreciate all these aspects in proper perspective. The learned Magistrate erred in appreciating the defense taken by the accused person regarding maintainability of the complaint for want of existence of legally enforceable debt and maintainability of the complaint. By ignoring all these aspects, the learned magistrate has wrongly convicted the accused person, which is not sustainable in the eyes of the law. Accordingly, Point No.2 is answered in the Negative and Point No.3 in the Affirmative and Point No.4 is in the Affirmative.
32. POINT NO.5:- In view of findings on the above points No.2 to 4, this criminal appeal deserves to be allowed by setting aside the impugned judgment of conviction and order of sentence. Consequently, the accused is acquitted of the offence punishable Judge sign 36 Crl.A.No.1057/2024 Judgment U/s.138 of N.I.Act. Accordingly, this court proceed to pass the following:
ORDER This Criminal Appeal U/s.374(3) of Code of Criminal Procedure filed by the appellant is allowed.
Consequently, the judgment of
conviction and order of sentence
dated.04.05.2024, passed in
C.C.No.11072/2021 on the file of XCXII Addl. SCJ and ACMM, Member - MACT, Bengaluru is set aside.
Appellant/accused is acquitted for the offence punishable U/s.138 of N.I.Act.
Her bail bonds and surety bonds stand cancelled.
The trial court is directed to release the 20% of fine amount deposited by accused as security in compliance with order dated.26.06.2024 in favour of the accused in accordance with law.
Judge sign 37 Crl.A.No.1057/2024 Judgment Office is directed to transmit T.C.R. along with copy of this Judgment to the trial court, forthwith, for informant.
(Dictated to the Typist on Computer, then corrected, signed and pronounced by me in open court on this 18 th day of November-2025.) (Somashekara A.) XV Addl. C.C. & Sessions Judge, BANGALORE CITY.
C/c LIX Addl. C.C. & Sessions Judge, BANGALORE CITY.
Judge sign 38 Crl.A.No.1057/2024 Judgment (Judgment pronounced in open court (vide detailed separate judgment) ORDER This Criminal Appeal U/s.374(3) of Code of Criminal Procedure filed by the appellant is allowed.
Consequently, the judgment of conviction and order of sentence dated.04.05.2024, passed in C.C.No.11072/2021 on the file of XCXII Addl. SCJ and ACMM, Member - MACT, Bengaluru is set aside.
Judge sign 39 Crl.A.No.1057/2024 Judgment Appellant/accused is acquitted for the offence punishable U/s.138 of N.I.Act.
Her bail bonds and surety bonds stand cancelled.
The trial court is directed to release the 20% of fine amount deposited by accused as security in compliance with order dated.26.06.2024 in favour of the accused in accordance with law.
Office is directed to transmit T.C.R. along with copy of this Judgment to the trial court, forthwith, for informant.
C/c LIX Addl. C.C. & Sessions Judge, Bengaluru City.
Judge sign 40 Crl.A.No.1057/2024 Judgment Judge sign