Bangalore District Court
N Shiva Kumar vs Appayanna on 13 March, 2026
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Cri Appeal No.954/2024
KABC010141302024
IN THE COURT OF LV ADDL. CITY CIVIL AND SESSIONS
JUDGE, BENGALURU (CCH-56)
DATED: THIS THE 13TH DAY OF MARCH 2026
PRESENT
SRI. MOHAN PRABHU, M.A., LL.M.
LV ADDL. CITY CIVIL AND SESSIONS JUDGE, BENGALURU.
CRIMINAL APPEAL NO.954/ 2024
Appellant/ N.SHIVAKUMAR
accused S/O LATE NANGE GOWDA
AGED ABOUT 52 YEARS,
C/O SHANTHA SHIVAKUMAR N.
'VIDYANATHESWARA PRASANNA'
No.1/B, 3RD CROSS, JYOTHI NAGAR,
CHANDRA LAYOUT, WARD No.128,
BENGALURU - 560 072.
[R/by .SHIVARAJU H.B., Adv.]
Vs
Respondent/ APPAYANNA S/O LATE MUNISHAMAPPA
Complainant AGED ABOUT 67 YEARS,
RESIDING AT No.12,
CHANNEKSHAVA NILAYA,
NAYANDAHALLI POST,
PANTHARAPALYA,
BENGALURU - 560039.
[R/by Sri V.K., Adv.]
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Cri Appeal No.954/2024
JUDGMENT
This appeal is filed U/s.374(3) of Cr.P.C. by the accused against the judgment of conviction dated:
18.05.2024 passed in C.C.No.8331/2022 by learned XXII ACJM, Bengaluru, for the offence under S.138 of Negotiable Instruments Act [for short 'N.I. Act'] (2) The parties are referred to their rank before the trial court.
(3) The case of the complainant is briefly stated as follows:
The complainant and the accused are known to each other through his brother-in-law Byarappa and they are known to from past 8 years. Under such acquittance the accused approached the complainant in the first week of February 2015 pleading his difficulty and his intention to purchase house at Chandra Layout and requested the complainant to give hand loan of Rs. 20 lakhs. The complainant had funds in the bank account agreed to lend the said hand loan amount of Rs.20 lakhs. Accordingly, the complainant has paid the said hand loan 3 Cri Appeal No.954/2024 amount of Rs.20 lakhs to the accused by way of cash on 14.03.2015. The accused has acknowledged the receipt of said amount, the accused assured the complainant that he would repay the said amount within one year, but the accused has failed to pay the amount, despite of repeated request made by the complainant. Finally, the accused got issued cheque for Rs.10 lakhs bearing No.005782 dated 24.12.2018 drawn on SBM, Kumbalgod Branch, Bengaluru towards part payment and assured that he will repay the balance amount of Rs.10 lakhs shortly. The accused contacted the complainant and requested him to present the said cheque in the first week of March 2019. Accordingly, as per the instruction of the accused, the complainant presented the said cheque for clearance on 06.03.2019, through his bank Bank of Maharashtra, R.R.Nagar branch, Bengaluru, but the said cheque came to be dishonoured on 07.03.2019 with an endorsement 'funds insufficient'. Immediately, the complainant contacted the accused for payment of cheque amount and balance amount, at that time, the accused requested the complainant to give two months 4 Cri Appeal No.954/2024 time complainant approached the accused for repayment of the said amount. Hence, the accused got issued cheque for Rs.20 lakhs bearing No.621892 dated 18.06.2019 drawn on Canara Bank, Chandra Layout, Bengaluru. When the complainant presented the said cheque for clearance on 18.06.2019 through his banker Mahila Co-operative Bank, R.R.Nagar, Bengaluru, the cheque came to be dishonoured as per the bank memo dated 20.06.2019 for the reasons funds insufficient. The complainant once again approached the accused, then the accused gave evasive answer. Hence, the complainant got issued legal notice to accused calling upon him to pay the said amount of Rs.20 lakhs. The notice has been duly served upon the accused, but he has not paid the cheque amount. Hence, the complainant was making arrangement to file PCR against the accused based on the said cheques, at that time, the accused has come forward and requested the complainant not to precipitate the matter and agreed to pay additional amount of Rs.5 lakhs within 10 months. Accordingly, the accused has got issued post dated cheque for Rs.25 5 Cri Appeal No.954/2024 lakhs dated 06.05.2021 bearing No.005787 drawn on State Bank of Mysore, Kumbalgodu branch, in the name of complainant and assured the complainant that he will make necessary arrangement for encashment of the said cheque. The accused requested the complainant to present the said cheque in the third week of June 2021.
As per instruction of the accused, the complainant presented the cheque for encashment on 19.06.2021 through his banker Bank of Maharashtra, R.R.Nagar branch, Bengaluru. But the said cheque also returned unpaid with shara 'funds insufficient'. as per the bank endorsement dated 21.06.2021. Having no other alternative, the complainant got issued legal notice through his advocate to the accused on 03.07.2021 to both addresses by RPAD and speed post to the residential address residing at the time of transaction. The notice sent by RPAD and speed post have been duly served upon the accused on 05.07.20201. But the accused neither replied to the notice nor paid the cheque amount. Hence, the complaint.
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Cri Appeal No.954/2024 (4) After filing the complaint, the learned Magistrate taken cognizance of the offence punishable u/S.138 of NI Act. The sworn statement of the complainant was recorded. The learned Magistrate after perusal of the sworn statement of the complainant, complaint averments and documents passed an order dated 11.03.2022 directing the office to register case against the accused in Register - III for the offenses punishable u/S.138 of NI Act and issued summons to the accused. Accordingly, the case in C.C.No.8331/2022 came to be registered against the accused. The accused entered appearance by engaging his counsel and released on bail. The accusation read over and explained to the accused on 06.01.2024 for which the accused pleaded not guilty and claimed for trial. The learned Magistrate examined accused u/S.313 of CrPC. The accused denied incriminating evidence. The sworn statement of the complainant considered as his evidence in view of the judgment of Hon'ble Supreme Court in INDIAN BANK ASSOCAITIONS case. Since the learned counsel for the accused moved application u/S.145(2) of 7 Cri Appeal No.954/2024 NI Act praying to permit the accused to cross examine PW1 application came to be allowed and case posted for cross examination of PW1. PW1 was fully cross examined by the learned counsel for the accused. As defence evidence, the accused examined himself as DW1. In this case on the side of the complainant, complainant examined as PW1 and documents Ex.P1 to P12 are marked. On the side of the accused, the accused examined himself as DW1. The learned Magistrate after hearing both sides, pronounced the judgment on 18.05.2024 and acting u/S.255 (1) of CrPC the accused convicted for the offences punishable u/S/138 of NI Act and sentenced to pay fine of Rs.25,05,000/-, in default, shall undergo simple imprisonment for one year. The amount of Rs.25 lakhs ordered to be paid to the complainant as compensation and the remaining amount of Rs.5,000/- shall be paid to the State as expenses.
(5) Aggrieved by the judgment of conviction, the accused has preferred this appeal, on the following among other grounds.
The impugned Order passed by the learned 8 Cri Appeal No.954/2024 Magistrate is illegal to the facts and circumstance of the case, improper and incorrect and it leads to miscarriage of justice and the same is liable to be set-aside. The real fact is the complainant has lent a sum of Rs.2,00,000/- to the accused and insisted the accused to issue a blank cheque. As the accused is very much in need of money he issued a blank cheque. The accused has repaid the entire amount and asked for his cheque to return. The complainant on one or the other reasons keeps on postponing of returning of the cheque. Meanwhile the complainant filed this false case against the accused by misusing the cheque. In case of signed blank cheque, if the drawee dishonestly fills up any excess amount, drawer has no obligation to facilitate the encashment of cheque- Shreyas Agro Services (P) Ltd Vs S. B Chandrakumar- (2008) 61 AIC 804. This fact and law is not considered by the trial court.. The trial court fail to note that two other cheques involved in the concocted story of complainant is not placed before this Court to elicit the real facts. Nothing is elicit in the cross examination of the accused to substantiate that the 9 Cri Appeal No.954/2024 accused has availed a huge amount of a sum of Rs. 20,00,000/- as hand loan in way of cash. The complainant had no source of income to lend such a huge amount to the accused and paying such a huge amount in cash is unbelievable. When the accused has not availed a sum of Rs. 20 lakhs as hand loan the question of issuance of cheque to discharge a legal enforceable debt does not arise. . The trial Court without any documentary evidence has barely considered the allegation regarding additional amount of Rs.5,0,000/- to stop the filling of previous PCR. In this respect previous bounced cheque was not produced and nothing is elicit from the appellant in the cross examination regarding this aspect. The appellant further submits that, he came from a very respectable family having deep roots in the society and they are permanent residents in the above Address and he has got movable and Immovable properties in the above-said Address and he is a law-abiding citizen. The court below has wrongly come to the conclusion that the appellant is liable for legally enforceable debt of a sum of Rs.25,00,000//-. Hence, on these grounds, the appellant 10 Cri Appeal No.954/2024 prays to set aside the judgment and order of dated 18.05.2024 passed by the XXII ACJM, Bengaluru in C.C.No.8331/2022 and prayed to acquit the accused.
(6) The trial court records received.
(7) The respondent entered appearance by engaging his counsel.
(8) I have heard the arguments on both sides and perused the entire records.
(9) The learned counsel for the appellant relied upon the following decisions
1. Judgment of Hon'ble High Court of Delhi reported in 2012 (2) DCR 368 (PAWAN SINGHAL VS. GAURI SHANKAR DEORA AND ANOTHER).
2. AIR 2010 SUPREME COURT 1898 (RANGAPPA VS.MOHAN).
3. 2009 CRI.L.J.4460 (M/S MATHESON BONSANQUET VS. K.V. MANJUNATHA).
4. (2010) 11 SUPREME COURT CASES 441 (RANGAPPA VS. SRI.MOHAN).
5. 2008(1) DCR 374 (KRISHNA JANARDHAN BHAT VS. DATTATRAYA G. HEGDE).
6. 2012 ACD 1079 (MAD) (R.RAMARAJ V. R.KUPPUSWAMY).
7. JUDGMENT OF HON'BLE SUPREME COURT IN CRL.L.P. No.228/2011 (PAWAN SINGHAL VS. GAURI SHANBKAR DEORA AND ANOTHER).
(10) The following points would arise for my consideration:-
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Cri Appeal No.954/2024 Point No.1:- Whether the impugned judgment of conviction and order of sentence passed thereon is illegal, perverse and calls for interference?
Point No.2:- Whether there is sufficient grounds made out by the appellant to set aside the judgment dated 18.05.2024 passed in C.C.No.8331/2022 as prayed for?
Point No.3:- What order?
(11) My findings to the above points are as below:-
Point No.1:- In the negative
Point No.2:- In the negative
Point No.3:- As per the final order,
for the following
REASONS
(12) POINT NO.1 & 2:- These points are taken up together for discussion in order to avoid repetition of discussion in evidence and for the sake of convenience.
(13) First and foremost point to be noted in this case is that the accused has not disputed his signature on Ex.P1 cheque. It is not in dispute that the Ex.P1 is the bank account of the accused. The accused has taken 12 Cri Appeal No.954/2024 defence that he had availed hand loan of Rs.2 lakhs from the complainant. At the time of borrowing hand loan, the complainant has received his blank signed cheques as security. Even though he has repaid the hand loan amount of Rs.2 lakhs to the complainant, the complainant did not return his security cheques by stating that the same was misplaced and assured that he will return back the cheque immediately after it is traced out. But the complainant by misusing the cheque filed this false case.
(14) The accused who has examined as DW 1 in his affidavit filed for the examination in-chief has deposed that he had availed sum of Rs.2 lakhs from the complainant. At the time of availing the said loan, the complainant insisted him to give signed blank cheques as security. By fearing that he will not get the hand loan from the complainant without giving signed blank cheques, hence, he forced to issue blank cheques as he was very much in need of money. DW 1 has deposed that he never requested the complainant for such a huge amount of Rs.20 lakhs as loan. He states that the 13 Cri Appeal No.954/2024 complainant has no capacity to lend him sum of Rs.20 lakhs. He states that as per RBI Rules, a person shall not take or accept loan / deposit from other persons other than through banking channel i.e. account payee cheque, bank drafts. DW1 has deposed that he was not issued any such cheque for sum of Rs.20 lakhs to the complainant, cheque which is produced by the complainant was blank cheque given by him at the time of he borrowed sum of Rs.2 lakhs from the complainant.
He states that he has repaid sum of Rs.2 lakhs hand loan to the complainant, but the complainant did not return back his cheques. He states that the complainant has filed complaint by misusing his signed blank cheques. During the course of cross examination of DW1 he has admitted the suggestion that Ex.P1 cheque belongs to him and of his bank account. He has admitted the signature contained in Ex.P1 cheque. He has deposed that at the time of borrowing Rs.2 lakhs from the complainant and for having issued cheque for security purpose, there is no written document were made. He has not taken any action against the complainant to say 14 Cri Appeal No.954/2024 that the complainant misused his security cheque received at the time of lending amount of Rs.2 lakhs. He has denied the suggestion that on 14.03.2015 he borrowed sum of Rs.20 lakhs from the complainant by way of cash. He has denied the suggestion that on 24.12.2018 for repayment of part amount of Rs.10 lakhs he has issued cheque in favour of the complainant and the same was came to be dishonoured. He has denied suggestion that thereafter when the complainant insisted him to repay the borrowed amount of Rs.20 lakhs at that time on 18.06.2019, he has issued cheque in favour of the complainant. But the same also came to be dishonoured. He has denied the suggestion that on 17.07.2019 the complainant got issued notice to him. He has denied the suggestion that thereafter on 06.05.2021 he by agreeing to pay additional amount of Rs.5 lakhs towards delayed payment issued Ex.P1 cheque in favour of the complainant. Thus it is the specific case of the complainant is that the accused who borrowed sum of Rs.20 lakhs from him for repayment of the same by adding Rs.5 lakhs issued Ex.P1 cheque for Rs.25 lakhs. 15
Cri Appeal No.954/2024 PW1 in his examination in-chief affidavit by reiterating the complaint averments has deposed that in the first week of February 2015 the accused approached him and requested him financial assistance as he intending to purchase house at Chandra Layout. Hence considering the request of the accused he agreed to pay hand loan of Rs. 20 lakhs. Accordingly, he has paid sum of Rs.20 lakhs to the accused by way of cash on 14.03.2015. The accused has assured him that he would repay the said amount within one year, but the accused did not repaid the said amount. After repeated request and demands made by him the accused finally issued cheque for Rs.10 lakhs on 24.12.2018 drawn on SBM, Kumbalgodu branch, towards part payment, but the said cheque came to be dishonoured. When he approached the accused, then the accused requested him to present the cheque in the first week of March 2019. Accordingly, he presented the cheque to the bank on 06.03.2019 through his banker, but the cheque came to be dishonored for insufficient funds, as per bank endorsement dated 07.03.2019. Again when he approached the accused, then the accused 16 Cri Appeal No.954/2024 requested him to give two months time to pay the entire amount of hand loan. After lapse of 2 months when he approached the accused, the accused issued cheque bearing No.621892 dated 18.06.2019 drawn on Canara Bank, Chandra Layout branch, Bengaluru for Rs.20 lakhs. When he presented the said cheque for collection through his banker the cheque came to be dishonoured for funds insufficient as per memo dated 20.06.2019. When once again approached the accused then the accused gave evasive answer. Hence, he was issued a legal notice to the accused calling upon him to pay the cheque amount of Rs.20 lakhs. The notice by RPAD and speed post duly served upon the accused. When he was making preparation to file private complaint against the accused, at that time the accused came forward and requested him to not to file complaint. The accused agreed to pay additional amount of Rs.5 lakhs within 10 months. Accordingly, the accused issued cheque dated 06.05.2021 bearing No. 005787 drawn on SBM, Kumbalgodu branch, for Rs.25 lakhs. When he presented the said cheque Ex.P1 to the bank for encashment, the 17 Cri Appeal No.954/2024 cheque came to be dishonoured as per Ex.P2 bank memo for insufficiency funds. PW 1 has further deposed that thereafter he got issued legal notice to the accused as per Ex.P3 on 03.07.2021. the notice sent to the accused by RPAD and speed post duly served upon the accused. Despite of the same, the accused has not paid the cheque amount. The document Ex.P1 to P12 are marked through PW1. Ex.P1 is the cheque, Ex.P1(a) is the signature of the accused, Ex.P2 bank memo for having dishonoured the cheque for insufficient funds. Ex.P3 is the copy of legal notice dated 03.07.20201 issued to the accused. Ex.P4 and P5 are the postal receipts for having sent the notice to the accused. Ex.P6 is the postal acknowledgment for having served the notice to the accused through RPAD. Ex.P7 is the postal acknowledgments of speed posts for having served the notice to the accused. Ex.P8 & 9 are the bank statements of the complainant, Ex.P10 reply notice and the Ex.P11 & 12 are the postal receipts.
(15) The learned counsel for the appellant /accused 18 Cri Appeal No.954/2024 vehemently argued that the accused while availing loan of Rs.2 lakhs gave three cheques to the complainant for security purposes. Even though the accused has repaid the amount of Rs.2 lakhs to the complainant the complainant has failed to return the blank signed cheque of the accused who received for security purposes. He argued that during the course of cross examination of PW1, it is established that the complainant has no financial capacity to pay such huge amount of Rs.20 lakhs to the accused. He argued that there is a clear bar under law to give cash amount of Rs.20,000/- or more. He argued that it is unbelievable that the complainant paid a sum of Rs.20 lakhs by way of cash to the accused on a single day. He submitted that the complainant has failed to establish his source of income. He argued that the complainant has failed to discharge initial burden cast upon him to show that the accused borrowed sum of Rs.20 lakhs from the accused. He argued that the presumption u/S.139 and 118 of NI Act can be drawn when the complainant successful in proving the initial burden. But in the present case, the complainant has 19 Cri Appeal No.954/2024 failed to prove the initial burden cast on him. The learned counsel for the appellant has relied upon the Judgment of Hon'ble High Court of Delhi reported in 2012 (2) DCR 368 (PAWAN SINGHAL VS. GAURI SHANKAR DEORA AND ANOTHER), AIR 2010 SUPREME COURT 1898 (RANGAPPA VS.MOHAN), 2009 CRI.L.J.4460 (M/S MATHESON BONSANQUET VS. K.V. MANJUNATHA), (2010) 11 SUPREME COURT CASES 441 (RANGAPPA VS.
SRI.MOHAN), 2008(1) DCR 374 (KRISHNA JANARDHAN BHAT VS. DATTATRAYA G. HEGDE), 2012 ACD 1079 (MAD) (R.RAMARAJ V. R.KUPPUSWAMY) and JUDGMENT OF HON'BLE SUPREME COURT IN CRL.L.P. No.228/2011 (PAWAN SINGHAL VS. GAURI SHANBKAR DEORA AND ANOTHER).
(16) On the other hand, the learned counsel for the respondent / complainant argued that the complainant has produced Ex.P8 & 9 bank statement to show financial capacity of the complainant. As on 11.03.2015 there is an entry in his bank statement to show that he has withdrawn the amount of Rs.15 lakhs. As on 14.03.2025, there is entry in his bank account to show that the 20 Cri Appeal No.954/2024 complainant has self withdrawn Rs.31 lakhs by the complainant. It is the case of the complainant is that he has paid cash amount of Rs.20 lakhs to the accused on 14.03.2015 There is clear entry in Ex.P8 & P9 bank account statement of the complainant to show that as on 14.03.2015 the complainant had withdrawn Rs.31 lakhs from his bank account for self. He argued that even though the notice as per Ex.P3 duly served on the accused, he neither replied to the notice nor paid the cheque amount. He argued that there is also entry in Ex.P8 bank account statement regarding bouncing of previous cheque for Rs.10 lakhs issued by the accused. He submitted that the complainant after issuing legal notice to the accused, calling upon the accused to pay the cheque amount of Rs.20 lakhs for the cheque dated 18.06.2019 and as the accused failed to pay the cheque amount, the complainant about to file complaint against the accused, then the accused approached the complainant and by assuring that he will pay the additional amount of Rs.5 lakhs issued this cheque Ex.P1 for Rs.25 lakhs. He argued that the decisions cited by 21 Cri Appeal No.954/2024 the learned counsel for the appellant is not applicable to the present case . He submitted that the judgment cited by the learned counsel for the appellant in RANGAPPA VS. SRI.MOHAN can be made applicable in favour of the complainant and not in favour of the accused.
(17) Since the accused himself admitted his signature on Ex.P1 cheque, and cheque is that of his bank account. The burden shifts on the accused to prove his defence that he had borrowed only sum of Rs.2 lakhs from the complainant and towards security purpose he had issued Ex.P1 cheque in favour of the complainant. But on perusal of the oral evidence of DW 1/ accused, his oral evidence is of omnibus. He has not stated in his examination in-chief, on which date he has availed the loan of Rs.2 lakhs from the complainant. He has not stated anything about on which date, which place and in whose presence he had borrowed sum of Rs.2 lakhs from the complainant. Even though he has taken contention that he had returned back the entire amount of Rs.2 lakhs to the complainant, he has not stated anything 22 Cri Appeal No.954/2024 about on which date he had repaid the amount to the complainant. He has also not stated whether he agreed to pay interest for the borrowed amount or whether while returning the borrowed amount, he had paid any interest amount to the complainant. Except self-serving statement of the accused / CW1 there is absolutely no evidence on the side of the accused to substantiated his contention that he had borrowed only sum of Rs.2 lakhs from the complainant and he had repaid the entire borrowed amount to the complainant. Since the accused has admitted that he had handed over Ex.P1 cheque to the complainant, the court can draw presumption u/S.139 of NI Act that the complainant who is holder of Ex.p1 cheque is holding the same for valid consideration. No doubt, initial burden is on the complainant to prove that he has lent amount of Rs.20 lakhs to the accused on 14.03.2015. In order to substantiate the contention taken by the complainant he has produced documents Ex.P8 and P9 statement of accounts. It is the specific case of the complainant is that as the accused approached him for hand loan of Rs.20 lakhs in the first 23 Cri Appeal No.954/2024 week of February 2015 and he had funds in his account agreed to lend the hand loan of Rs.20 lakhs to the accused. Accordingly, he had paid sum of Rs.20 lakhs by way of cash to the accused on 14.03.2015. Thus according to the complainant he had already balance in order to pay the hand loan of Rs.20 lakhs to the accused by way of cash. On perusal of Ex.P8 bank statement of the complainant it clearly shows that as on 11.03.2015 the complainant had Rs.50 lakhs in his bank account. There is also entry in Ex.P8 and P9 bank account to show that the complainant withdrawn amount of Rs.31 lakhs for self as on 14.03.2015. The contention taken by the complainant in his complainant as well as in his deposition is supported by the documents Ex.P8 and P9 bank statements. The learned counsel for the appellant / accused much argued that there is restrictions of cash transaction above Rs.20,000/-. It is true that there was restrictions for cash transaction for more than Rs.20,000/- prior to 2016 under Income Tax Act. But after amendment to the Income Tax Act, restrictions were raised to Rs.2 lakhs and penalty provision is inserted 24 Cri Appeal No.954/2024 prohibiting to receive amount of Rs.2 lakhs and more. If anybody receives the amount, more than Rs.2 lakhs in cash he will be penalized for equivalent amount. In the present case, the accused himself had taken contention that he received sum of Rs.2 lakhs from the complainant. It is not his contention is that he has received the amount from the complainant by way of bank transactions. One- thing is very clear that there was no such restrictions in the year 2015 for cash transaction of Rs.2 lakhs and there was no such penalty provision. In the present case there is clear evidence on the side of the complainant i.e. Ex.P8 and P9 account extracts to show that he had withdrawn the amount of Rs.31 lakhs for self as on 14.03.2015. The arguments of the learned counsel for the appellant is that the complainant has no financial capacity to pay such huge amount of Rs.20 lakhs in cash to the accused is not acceptable. On perusal of Ex.P8 and P9 bank account statements of the complainant would go to show that as on 11.03.2015 the complainant had Rs.50 lakhs in his bank account. Even during the course of evidence also PW1 has deposed regarding his 25 Cri Appeal No.954/2024 financial capacity. He states that his earning is Rs.75,000/- to Rs.80,000/- p.m., after deduction of expenses. He has deposed that his annual income was Rs.4 to 5 lakhs. He has also deposed that he raised loan of Rs.50 lakhs from Mahila Co-operative Bank Ltd. for the purpose of construction. The very same loan amount of Rs.50 lakhs transaction is reflected on his bank account. Hence, there is sufficient evidence to show that the complainant had financial capacity to pay the loan amount of Rs.20 lakhs to the accused. I have gone through the decision cited by the learned counsel for the appellant reported in 2012 (2) DCR 368 (PAWAN SINGHAL VS. GAURI SHANKAR DEORA AND ANOTHER), the decision reported in 2009 CRI.L.J.4460 (M/S MATHESON BONSANQUET VS. K.V. MANJUNATHA), the decision reported in AIR SCW 2158, the decision reported in 2008(1) DCR 374 (KRISHNA JANARDHAN BHAT VS. DATTATRAYA G. HEGDE), the decision reported in 2012 ACD 1079 (MAD) (R.RAMARAJ V. R.KUPPUSWAMY). In my humble view these cited decisions can be distinguished on facts. The decision reported in 2008(1) DCR 374 26 Cri Appeal No.954/2024 (KRISHNA JANARDHAN BHAT VS. DATTATRAYA G. HEGDE) partially overruled by the Hon'ble Supreme Corut in the decision reported in AIR 2010 SC 1898, which is cited by the learned counsel for the appellant. In my humble view, the decision cited by the learned counsel for the appellant reported in AIR 2010 SC 1898 (RANGAPPA VS. SRI.MOHAN) is very helpful to the complainant than the accused.
(18) There is documents on the side of the complainant to show that the legal notice issued to the accused as per Ex.P3 is duly served upon the accused. Ex.P6 and P7 postal acknowledgments for having served notice to the accused through RPAD and speed post. If at all the accused had issued Ex.P1 cheque for security purpose only and he had repaid the amount borrowed from the complainant he should have sent reply notice to the complainant. No prudent-man will keep quiet if their blank cheque is with the opposite party, even after the loan amount was repaid. The trial court records would go to show that the accused started to take his defence only at the time of cross examination of PW 1. No doubt, 27 Cri Appeal No.954/2024 the accused can rebut presumption available to the complainant u/S.139 and 118 of NI Act, even in the cross examination of complainant. But on perusal of the cross examination portion of PW 1 nothing worth is elicited from his mouth to discard examination in chief of the complainant and the documents Ex.P1 to P12. The complainant has taken contention that prior to bank endorsement dated 26.11.2021 for having dishonoured the cheque for insufficient funds he had presented the very same Ex.P1 cheque twice to the bank. At that time, also Ex.P1 cheque came to be dishonoured. He had also got issued legal notice, calling upon the accused to pay the cheque amount of RS.20 lakhs. Despite of service of notice, as accused failed to pay the cheque amount of Rs.20 lakhs he was making arrangement to file private complaint against the accused, at that time accused came forward and requested the complainant not to precipitate the matter and agreed to pay the additional amount of Rs.5 lakhs within 10 months Accordingly, the accused issued Ex.P1 post dated cheque. In order to substantiate its contention and to show the previous 28 Cri Appeal No.954/2024 notice issued by the complainant he has produced and got marked Ex.P10 legal notice dated 17.07.2019. Ex.P11 and P12 are postal receipts for having sent legal notice. The complainant in order to substantiate the contention taken in the complaint examined himself as PW1 and produced and got marked documents. Ex.P1 toP12 the accused has failed to rebut the presumption available to the complainant u/S.139 and 118 of NI Act.
(19) It is important to refer some of the judgments. (20) In the judgment of Hon'ble Supreme Court in the case of K.S. Ranganath Vs Vitthala Shetty reported in 2022 [1] Crimes 454-[SC] wherein head note reads as below:-
"Negotiable Instruments Act, 1881 - Section 138 read with Sections 118 and 139- Dishonour of cheque-Conviction and sentence
- 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 - Onus is on accused to raise a probable defence and standard of proof for rebutting presumption is on preponderance of probabilities-Defence sought to be put forth and witnesses examined in instant proceedings are only by way of improvement in respect of same cause of action-Defence sought to be put forth relating to cheque and other documents having been obtained by force, cannot be 29 Cri Appeal No.954/2024 accepted as a probable defence when respondent successfully discharged initial burden cast on him-Appeal dismissed.(Paras 11, 17 and 19)"
(21) The Hon'ble Supreme Court in Judgment in a case of Rangappa V/s Mohan in para no. 14 observed as follows:-
"In the light of these extracts, we are in agreement with the respondent/ claimant that presumption mandated by section 139 of the act does indeed include the existence of a legally enforceable debt or liability. To that extent the impugned observations in Krishnajanardhana Bhat case may not be correct. However this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstance therein. As noted in the citations, this is ofcourse in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However there can be no doubt that there is an initial presumption which favours the complainant."
(22) In the decision of Hon'ble Supreme Court reported in 2019(1) DCR 401 between Bir Singh V/s Mukesh Kumar it is held that a meaningful reading of the provisions of the Negotiable Instrument Act including, in particular, sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to he 30 Cri Appeal No.954/2024 payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of section 138 would be attracted. In my humble view, the principles of these decision is aptly applicable to the present case because PW1 in his examination in chief clearly deposed regarding accused issuing Ex.P1 cheque towards discharge of legally enforceable debt. Further, in the judgment of Hon'ble Supreme Court in a case of Sumeti Vij V/s M/s Paramount Tech Fab Industries, wherein it is held that to rebut the presumption, facts must be proved by the accused on a preponderance of probability. In the decision of the Hon'ble High Court of Karnataka in M Ramesh Kumar Case wherein in para No.5 observed that section 138 of N.I. Act, on proof of issuance of the cheque, the onus shifts to the accused to rebut the presumption that the cheque was issued not for discharge of any debt or 31 Cri Appeal No.954/2024 liability in terms of section 138 of N.I. Act. In the decision of Hon'ble High Court of Karnataka in the case of Sitaram Gouda A V/s Isbu Kunhammade it is held that, accused not disputing issuance of cheque- but taking inconsistent stand later- accused not initiating any proceedings as regards misuse, or forgery of cheque and making of wrongful claim- except denial, accused not proving his case beyond reasonable doubt as obligation was on him to do so when he took a special plea.
(23) On perusal of trial court records, the trial court has rightly drawn presumption under S.139 of N.I. Act, by following three ingredients as laid down by the Hon'ble Supreme Court in Rangappa Vs Mohan reported in 2010 SC 1898. Section 139 of N.I. Act empowers the court to presume that holder of cheque received it for discharge of any liability enforceable debt or liability. Burden is on the accused to rebut the said presumption.
(24) Further, Section 138 of The Act reads thus:
138. Dishonour of cheque for insufficiency, etc., of funds in the account. --Where any cheque drawn by a person 32 Cri Appeal No.954/2024 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 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 be extended 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 in due 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 cheque as unpaid; and
(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. Explanation.-- For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.
(25) Further, Section 139 of The Act reads thus: 33
Cri Appeal No.954/2024
139. Presumption in favour of holder.--It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
(26) Section 118 of The Act reads thus:
118. Presumptions as to negotiable instruments. -- Until the contrary is proved, the following presumptions shall be made:--
(a) Consideration --that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration (27) Section 118 of The Act pertains to presumption of negotiable instrument which mandates that 'unless the contrary is proved.' Similarly, Section 139 of The Act also mandates that 'unless the contrary is proved.' Therefore, it has to be presumed that the holder of the cheque received the cheque of the nature referred to in Section 138 of the Act for the discharge in whole or in part of any debt or liability. Needless to say that the presumption contemplated under Section 139 of the Act 34 Cri Appeal No.954/2024 is rebuttal presumption. However, the onus of proving that the cheque was not issued towards discharge of any debt or liability is on the accused. But in this case, the accused has failed to rebut the presumptions available to complainant u/S.139 of NI Act. It is relevant to cite the decision of Hon'ble Supreme Court in the case of Sunil Todi and others V/s State of Gujurat and another and in judgment of Hon'ble High Court of Karnataka which are reported in 2021(2) KCCR SN 119 (DB), Judgment reported in 2006 (5) KLJ 323 and reported in 2006(3) KLR
333. When the cheque issued in blank, the holder of the cheque has authorized to fill the amount due.
(28) Further, The Hon'ble Apex Court in (2012) 13 SCC 3123 (Laxmi Dyechem v. State of Gujarat) has held thus:
"It has to be presumed that the cheque was issued in discharge of 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. However, this presumption coupled with the object of Chapter XIV of The Act leads to the conclusion that by countermanding payment of post dated cheque party should not be allowed to get away from the penal provision of Section 138 of The Act. " 35
Cri Appeal No.954/2024 (29) In this case, it is not the contention of the appellant is that respondent / complainant has not followed proper procedure as contemplated u/S.138 & 142 of NI Act. The complainant has presented Ex.P1 cheque to the bank within its validity, soon after he received Ex.P2 the bank endorsement, within 30 days he has issued legal notice to the accused as per Ex.P3. After service of notice to the accused, the complainant had given 15 days time to the accused to pay cheque amount. Thereafter within 30 days the complainant has filed this complaint. Thus, the complainant has followed proper procedure as contemplated u/S.138 & 142 of NI Act. The defence taken by the accused is that the complainant has no financial capacity to pay the cash of Rs.20 lakhs is also not proved by the accused by preponderance of probabilities. On the other hand, on perusal of the examination in chief of PW 1, coupled with Ex.P8 and P9 it would go to show that he who has sufficient amount in his bank account withdrawn the amount by cash has having financial capacity to lend amount to the accused. The complainant who is holder 36 Cri Appeal No.954/2024 of Ex.P1 and there is presumption u/S.139 and 118 of NI Act. The accused has failed to rebut the presumption available to the complainant u/S.139 & 118 of NI Act. Nothing is elicited from the mouth of PW 1 in his cross examination to discard his examination in-chief version. During the course of cross examination of PW1 he has deposed regarding his financial capacity. No point is elicited from his mouth which is favorable to the accused in order to rebut presumption available to the complainant u/S.139 & 118 fo NI Act by preponderance of probabilities. The oral evidence of PW 1 which is supported by documents Ex.P1 to P12 are sufficient to hold that the accused issued Ex.P1 cheque indeed for discharge of his liability.
(30) On perusal of the oral evidence of PW1 nothing is elicited from the mouth of PW1 to discard his examination in-chief and documents Ex.P1 to P12. Even though the accused has taken defence that he had borrowed only sum of Rs.2 lakhs from the complainant and for security purpose he had issued blank signed cheque, he has failed to prove the same by giving cogent 37 Cri Appeal No.954/2024 evidence. I have gone through the decision cited by the learned counsel for the appellant. The decision of Hon'ble Supreme Court in RANGAPPA VS. SRI.MOHAN is very helpful to the complainant than the accused. The remaining decision cited by the learned counsel for the appellant are not helpful to prove defence of the accused. The trial court has properly appreciated the evidence on records and correctly come to the conclusion that the appellant has committed offence punishable u/S.138 of NI Act.
(31) The trial court on proper appreciation of the evidence on record has rightly come to the conclusion that the accused has committed offence punishable u/S.138 of NI Act. The accused has failed to rebut presumption available to the complainant u/S.139 & 118 of NI Act. There is no infirmity in the impugned judgment of conviction and sentence passed thereon and warrants no interference at the hands of this court.
(32) Considering on re-appreciation of entire evidence and after perusal of entire records, this court is 38 Cri Appeal No.954/2024 of the opinion that there is no infirmity in the order passed by the trial court in C.C. No.8331/2022. Hence, I answer point No.1 & 2 in the negative.
(33) POINT NO.3:- In view of my findings on point No.1 and 2, I proceed to pass the following.
ORDER The appeal filed by the appellant/ accused U/s.374 [3] of Cr.P.C. is hereby dismissed.
The judgment of conviction and sentence passed by the learned XXII ACJM, Bengaluru, in C.C.No.8331/2022 dated 18.05.2024 is hereby confirmed.
The office is directed to send back TCR forthwith to learned XXII ACJM, Bengaluru, along with a copy of this judgment.
[Dictated to the SG-I, transcribed and typed by him, corrected and then pronounced in the open court on this the 13th day of MARCH 2026] (MOHAN PRABHU), LV Addl. City Civil & Sessions Judge, Bengaluru. (CCH-56)