Bangalore District Court
Y.S.Ravikumar vs Devaraju.M on 16 March, 2026
1
CC.No.20604/2020
KABC030675442020
Presented on : 29-12-2020
Registered on : 29-12-2020
Decided on : 16-03-2026
Duration : 5 years, 2
months, 18 days
IN THE COURT OF XII ADDL. CHIEF JUDICIAL MAGISTRATE,
BENGALURU.
Dated this the 16th day of March, 2026.
:Present:
Smt. Dhanalakshmi.R
XII Addl. Chief Judicial Magistrate,
Bangalore.
CC.No.20604/2020
Complainant : Sri.Y.S.Ravikumar
S/o. R.Somashekar,
Aged about 42 years,
R/at: No.1002/A, New Street,
Yelahanka, Bengaluru-560064.
(By Sri.NM., Advocate)
V/s
Accused : Sri. Devaraju.M
S/o. Muniyappa
AGed about 45 years,
R/at: No.549, Maruthi Nilaya,
Rachenahalli Main Road,
Thanisandra, Nagavara Post
Bengaluru-560045.
(By Sri.KS., Advocate)
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CC.No.20604/2020
KABC030675442020
1. The date of : 10.06.2020
commission of the
offence
2. Date of the filing of : 12.08.2020
offence
3. Name of the : Y.S.Ravikumar
Complainant
4. Date of recording of : 24.12.2020
evidence
5. Date of closing of : 03.11.2025
evidence
6. Offence Complained : 138 of NI Act
of
7. Opinion of the Judge Accused is convicted
8. Date of such order for : 16.03.2026
the following
JUDGMENT
01. This case is registered U/sec.200 of Cr.P.C based on the written complaint given by the complainant against the accused for the offence punishable under Section 138 of Negotiable Instrument Act, 1881 (hereinafter called as NI Act for the purpose of brevity).
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CC.No.20604/2020 KABC030675442020
02. The case of the complainant in brief is as under : -
The complainant and accused are known to each other from many years and they are friends.
At the request of the accused, the complainant has lent an amount of Rs.8,00,000/- to the accused for the improvement of his transport business in the first week of December 2019. The accused has failed to repay the said amount within a period of
3 months as agreed by him. Upon insistence, the accused has issued a cheque bearing No.320880 for Rs.8,00,000/- dated 10.03.2020 drawn on State Bank of Mysore, HBR Layout Branch, Bengaluru. As per the instruction of the accused, when the said cheque is presented for encashment through the Banker of the Complainant i.e. Punjab National Bank at Yelahanka branch, the same came to be dishonoured with an endorsement as "Funds Insufficient" on 10.03.2020. When the said 4 CC.No.20604/2020 KABC030675442020 fact brought to the knowledge of the accused, he requested the complainant to represent the cheque on 10.06.2020. Later on presenting the said cheque for encashment, then also the same came to be dishonored with an endorsement as "Exceeds arrangement" on 10.06.2020. As such the complainant has issued demand notice dt:
29.06.2020 to the accused calling upon him to repay the cheque amount within 15 days from the date of receipt of the said notice. Inspite of receiving the said notice, the accused has not repaid amount. Hence, the present complaint.
3. On filing of the complaint, cognizance of the offence is taken and recorded the sworn statement of the complainant and marked 5 documents as per Ex.P1 to Ex.P5. The complainant has complied all the statutory requirements under Sec.138 of NI Act. Thereafter, 5 CC.No.20604/2020 KABC030675442020 the case is registered against the accused and summons issued.
4. On service of summons, the accused appeared through his counsel and he was enlarged on bail. The substance of accusation was read over and explained to the accused in the language known to him. As per the directions of Hon'ble Supreme Court of India in Indian Bank Association V/s Union of India & Others reported in (2014) 5 SCC 590, this court has treated the sworn statement of the complainant as his evidence. On application filed by the counsel for the accused under section 145 of NI Act, permission was accorded to cross examine PW1.
Accordingly the accused has cross-examined the complainant. Accordingly, PW1 was cross examined by learned counsel for the accused and one witness examined as PW2. The statement of the accused under Section 313 of Cr.P.C is 6 CC.No.20604/2020 KABC030675442020 recorded. The accused except denying the incriminating evidence against him and he choose to lead defence evidence. The accused examined herself as DW1 and got marked one document as Ex.D1 on his behalf.
05. Heard the learned counsel for both sides. Perused the records.
6. The following points arise for consideration:
POINTS
1) Whether the complainant proves that the accused has issued the cheque for the legally recoverable debt as alleged by him?
2) Whether the accused has committed the offence punishable under section 138 Act?
3) What Order or Sentence?7
CC.No.20604/2020 KABC030675442020
7. The above points are answered as under:
Point No.1: In the Affirmative, Point No.2: In the Affirmative, Point No.3: As per the final order for the following:
R E A S O N S
8. POINT No. 1 and 2: This Court is of the opinion that it need not repeat the entire averments made in the complaint here also, as this Court has already narrated the same at the inception of this judgment.
09. In order to bring home a liability under Section 138 of NI Act, 1881, following elements must spring out from the averments in the complaint and the evidence adduced by the complainant, viz.
1. A person must have drawn a cheque on an account maintained by him in a bank for payment of a certain sum of money to another person from out of that account for 8 CC.No.20604/2020 KABC030675442020 the discharge of any legally enforceable debt or liability;
2. The cheque has been presented to the bank within a period of three months from the date mentioned on the cheque or within the period of its validity, whichever is earlier;
3. The cheque is returned by the bank unpaid either because the amount of money standing to the credit of the 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 the bank;
4. The payee or the holder in due course of the cheque 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 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
5. The drawer of such cheque fails to make the payment to the payee or the holder in due course of the cheque within 15 days of the receipt of the notice.
10. It is well settled that whenever complainant alleges that the accused has committed the offence punishable under Section 9 CC.No.20604/2020 KABC030675442020 138 of NI Act, obviously, the complainant has to establish that there was a legally enforceable debt and to discharge the said legally enforceable debt the accused has issued the cheque and subsequently the said cheque has been dishonoured because of insufficiency of funds in the account of the drawer/accused. Keeping in view of these main and important ingredients of Section 138 of NI Act, this Court proceeds to discuss the evidence available on record.
11. As been stated above, the complainant has examined himself as PW-1. The PW-1 has filed affidavit in lieu of his examination in chief under Section 145 of N I Act reiterating the entire averments of the complaint.
12. The Ex.P-1 is the cheque dtd:
10.03.2020. On perusal of Ex.P-1 makes it clear that it supports the stand taken by the 10 CC.No.20604/2020 KABC030675442020 complainant herein. The Ex.P2 is the Bank endorsements discloses that the aforesaid cheque has been dishonoured on 10.06.2020 for the reason of "Exceeds Arrangements" in the account of the drawer. As per clause (a) of proviso to Section 138 of NI Act the cheque is to be presented for encashment within three months or within the period of its validity from the date on which the cheque has issued. The Ex.P1 bares the date 10.03.2020 and it was presented on 10.06.2020, which is within the prescribed period.
13. Further, as per clause (b) of proviso to Section 138 of N I Act, the complainant is required to issue legal notice, in writing, to the drawer/accused making a demand for repayment of the said cheque amount within 30 days from the date of receipt of information about the dishonor of the cheques. The Ex.P2 is the Bank endorsement dated 10.06.2020. The Ex.P-3 is the office copy of 11 CC.No.20604/2020 KABC030675442020 the legal notice dated 29.06.2020 and the Ex.P.4 is the postal receipt dt: 29.06.2020. Therefore, the complainant has issued legal notice within 30 days from the date of knowledge of dishonor of cheque. Thus, the provisions of clause (a) & (b) of proviso to Section 138 of N I Act have been complied with. The Ex.P-5 is the Postal Envelop and it shows that the legal notice got issued by the complainant is returned on 01.07.2020. As per clause (c) of the proviso to Section 138 of N I Act, the drawer/accused is entitled to have 15 days time to make the payment of the cheque amount. Therefore, the complainant was required to wait till 15.07.2020. According to the complainant, no payment was made by the drawer/accused within that period. Thus the cause of action for filing the complaint arose on 16.07.2020. Further the clause
(b) of Section 142 of N I Act makes it clear that the complaint has to be filed within 30 days from the 12 CC.No.20604/2020 KABC030675442020 date of cause of action arose. Thus this complaint was required to be filed on or before 16.08.2020. The endorsement made by this Court on the complaint reveals that the complainant presented this complaint on 13.08.2020 and as such, this complaint is well within the time limit. Therefore, this Court is of the considered opinion that that the complainant has complied all the necessary components of Section 138 of NI Act.
14. Complainant at paragraph No.2 of the complaint has stated that he and accused being the friends are known to each other from many years. Even the accused has not disputed the said fact and he stated that from past 15 years he and the complainant are doing the real estate business together, but the said fact is disputed by the complainant. But the fact remains that the complainant and accused known to each other from past 15 years remains undisputed. The 13 CC.No.20604/2020 KABC030675442020 accused has not denied that the cheque at Ex.P1 does not belongs to his account. The accused has also not disputed his signature in the cheque at Ex.P1. Hence the execution of the cheque as per Ex.P1 is not in dispute. Hence the presumption under Section 118 of the NI Act that the cheque in question was drawn for consideration and the presumption under Section 139 of the NI Act that the holder of the cheque received the said cheque in discharge of a legally enforceable debt or liability arises against the accused.
15. The accused in order to rebut the said presumption has cross examined the complainant in detail and also examined himself as DW1 and produced Ex.D1 document. It is the specific defence of the accused that the legal notice issued by the complainant as per Ex.P3 is not served on him. On perusal of the records, it is seen that the 14 CC.No.20604/2020 KABC030675442020 Ex.P3 notice is issued on 29.06.2020. As per the postal acknowledgment at Ex.P5 the said notice is received by one Shwetha. It is pertinent to note that the accused has nowhere disputed that the address mentioned in the legal notice, acknowledgment and complaint does not belongs to him. Further the accused during his cross examination has categorically admitted that the summons issued by the police with respect to the address mentioned in the complaint is duly served on him. Further he has admitted that Shwetha is none other than his wife and he admitted that in his absence his wife Shwetha will received the post. Further, the accused has not disputed the signature of his wife in the postal acknowledgment at Ex.P5. When it is specifically questioned to the accused that at least after receiving the summons from the court whether he has enquired regarding the receipt of the legal notice with his wife, the 15 CC.No.20604/2020 KABC030675442020 accused has answered that since the cheque is of 10 years old, he has not enquired with his wife. Further when it is specifically questioned the accused that whether his wife will inform him regarding any notice or any letter is received by her, the accused stated that she may inform and regarding the receipt of the legal notice is not brought to his knowledge. Hence it could be seen that the receipt of legal notice by the wife of the accused is not in dispute and as admitted by the accused, the address mentioned in the legal notice, postal acknowledgment and complaint belongs to the accused. As per Section 27 of the General Clauses Act 1897, once a party properly posts letter by registered post to a proper address, it establishes a legal presumption that service of a documents by register post is effective, unless evidence proves otherwise. At this stage this court relies upon the Judgment reported in (2014) 8 16 CC.No.20604/2020 KABC030675442020 SCR 880 between M/s. Ajith Sheets Ltd. v. K. Gopalakrishnaya, wherein it is held that, "as per Section 114 of the Evidence Act, which enables the Court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee, Section 27 of the General Clauses Act gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered poster. It is not necessary to aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or the addressee is deemed to have knowledge of the notice. Unless and until contra 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 course of business."
16. The above said judgment is aptly applicable to this case as the address of the accused mentioned in the complaint, Legal Notice 17 CC.No.20604/2020 KABC030675442020 at Ex.P3 and Postal acknowledgment at Ex.P5 are of the same address as admitted by the accused. Hence the burden shifts to the accused to prove the non-receipt of the notice. But the accused except bare denial that his wife has not informed him regarding the notice, has not lead any evidence to show that the legal notice at Ex.P3 is not duly served. Such being the case, the contention of the accused that the legal notice at Ex.P3 is not served on him to the address mentioned in Ex.P5 cannot be accepted.
17. The accused has taken a specific defence that he and the complainant were doing real estate business together from past 15 years. The same is denied by the complainant. The accused has stated that there is no hand loan transaction between the complainant and accused. About 10 years back he has given his cheque to his 18 CC.No.20604/2020 KABC030675442020 customer and he does not remember as to who is the customer. But it is pertinent to note that the accused during the cross-examination of the complainant dated 08.11.2024 has taken a contradictory stand stating that the complainant has given loan to the accused and towards the same the complainant has obtained various documents from the accused and except the cheque he has not produced any other documents. Further the accused has taken another contention that towards the real estate business regarding the property at Devanahalli Village, it was agreed between them that a Joint Venture agreement will be executed for the development of the property. Regarding the said Joint Venture agreement, five blank cheques have been issued by the accused to the complainant. Further the accused has taken a contention during the cross examination of the complainant that towards the said Joint Venture 19 CC.No.20604/2020 KABC030675442020 agreement, the complainant has received advance amount and when the said amount is demanded by the accused, the complainant has not returned the same and sought 6 months time to return the amount due to the covid. Hence by misusing the cheques of the accused, the complainant has filed false case against him.
18. As stated above the accused has taken a contradictory stand regarding the issuance of cheque that at one stretch the accused during his chief examination has taken a contention that in order to give a cheque to his customer he has given signed blank cheque to the complainant but on the other hand the accused has taken a contention that towards the Joint Venture agreement he has issued 05 cheques to the complainant. As rightly contended by the learned counsel for the complainant, the accused has not 20 CC.No.20604/2020 KABC030675442020 produced the said joint venture agreement. Further, the accused has produced Ex.D1 document, which is the record slip containing the details of the cheques and to whom it is issued, and the amount and on which date the cheques are issued. On perusal of the said document, it is seen that the Ex.P1 cheque is bearing No.320880 and also another cheque bearing No.320881 is said to be issued to one Y.N.K.Ravi. The accused has stated that since the complainant is residing at Yelahanka, the initial Y is mentioned. But he denied the suggestion that the said YNK Ravi is different from the complainant.
19. It is also pertinent to note that in the said document in other pages, the date of issuance of the cheque and the amount is clearly mentioned and also mentioning the name of the persons. But with regarding to the Ex.P1 cheque, the name is 21 CC.No.20604/2020 KABC030675442020 shown as YNK Ravi and the amount is not mentioned and also the date of issuance of the cheque is also not mentioned. Hence the record slip which is produced by the accused at Ex.D1 cannot be said to be a legally acceptable document and this document cannot come to the aid of the accused to show that he has issued the blank cheque to the complainant. It is also pertinent to note that as per the said Ex.D1 document only two cheques are said to be issued to the complainant i.e. YNK Ravi. But as per the case of the accused, he has issued only one cheque to his customer towards the real estate business as stated during the chief examination of the accused.
20. Per contra the accused during the cross- examination of the complainant has suggested that he has issued five cheques to the complainant towards the Joint Venture agreement. Hence, the 22 CC.No.20604/2020 KABC030675442020 accused has taken three contradictory stand regarding the issuance of the cheque to the complainant.
21. The learned counsel for the accused has taken a contention that the cheque at Ex.P1 belongs to the State Bank of Mysore. The said Bank is merged with the State Bank of India. Hence the Ex.P1 cheque is not a valid cheque. But it is pertinent to note that the learned counsel for the accused has not produced any documents before the court as to when the said State Bank of Mysore merged with the State Bank of India and from which date the cheques belonging to the State Bank of Mysore has become invalid. It is pertinent to note that as per the Gazette notification, the State Bank of Mysore merged with the State Bank of India on 01.04.2017 and the cheques pertaining to the State Bank of Mysore 23 CC.No.20604/2020 KABC030675442020 become invalid from 31.12.2017. But it is pertinent to note that the accused has issued cheque of the State Bank of Mysore on 10.03.2020. As stated above, the accused has not at all denied the issuance of the cheque to the complainant. But as discussed above, he has taken a three contradictory stand regarding the issuance of the cheque. Further the cheque at Ex.P1 is dishonored as per Ex.P2 Bank return memo for the reason 'Exceeds arrangement' and not for the reason 'cheque invalid'. At this stage this Court relies upon the judgment of the Hon'ble High court of Judicature at Bombay in Crl.A.No.940/2024 dt: 10.02.2026 between Chetan Sunderji Bhanushali and two others Vs. Hema Ramesh Chheda and three others wherein it is held as under;
" 20. On its plain reading, the fulfillment of the condition of valid presentation of the cheque for encashment hinges upon the two 24 CC.No.20604/2020 KABC030675442020 factors. One, presentation of the cheque within the period of its validity and, two, if the cheque does not contain any validity period, then within a period of six months from the date on which it is drawn. The Parliament has addressed a situation where the validity period of the cheque is less than the period of six months. Thus, by using the expression 'whichever is earlier', the Parliament has mandated that, the presentation shall be within the period of validity of cheque, if it is less than six months from the date on which the cheque is drawn. Often, the cheques contain an endorsement to the effect, "valid for specified period of months". In that event, the cheque must be presented for encashment within the said period from the date it is drawn.
21. The question that wrenches to the fore is, whether the expression, "within the period of its validity" is elastic enough to cover a situation where the cheque is rendered invalid, even though the period of validity, expressly mentioned on the cheque, has yet not expired? Since the Parliament has, in the first part of the clause (a) of the proviso, fixed the period within which the cheque shall be presented for encashment to the drawee bank, the expression 'within the period of its validity' used in the later part of the proviso, need not be only in reference to the duration of time specified on the cheque. The period of validity may also be determined with reference to an incident 25 CC.No.20604/2020 KABC030675442020 which renders the cheque invalid, even though the period of validity, expressly specified on the cheque, is yet to expire. The word 'period' may not govern the word 'validity'. In the later part of the clause (a) of the proviso, it is the validity of the cheque on which there is more emphasis, than the 'period'. To put it in other words, the expression 'period of validity' does not seem to be restricted to the specified 'term' of validity, and the question of invalidity of the cheque may arise on account of the circumstances, which may curtail the express specified 'term' of validity.
22. In the case of Archana Singh Gautam (supra), on which reliance was placed by Mr. Svar, the cheque was drawn on an account maintained with Allahabad Bank, payable on 02 nd June, 2023, though the Allahabad Bank had already merged with the Indian Bank on 01st April, 2020, and the cheques drawn on Allahabad Bank were valid upto 30 th September, 2021, only. In that context, a learned Single judge of the Allahabad High Court held that, if any invalid cheque was presented to the drawee bank and the same was dishonoured, no liability under Section 138 of the N. I. Act would be attracted. Since the cheque drawn on Allahabad Bank was valid, up to 30 th September, 2021 only, dishonourment of such cheque after 30 th September, 2021 would not attract the penal liability under Section 138 of the N.I. Act, as the cheque was not valid on the date of 26 CC.No.20604/2020 KABC030675442020 presentation as mandated by the clause (a) of the proviso to Section 138 of the N. I. Act.
23. In the case of Gantha Kavitha Devi (supra), the cheque in question was drawn on State Bank of Hyderabad, payable on 20th September, 2021. The said cheque was returned unpaid with an endorsement, "invalid cheque (SBH)", as the earstwhile State Bank of Hyderabad stood merged with State Bank of India and the cheques drawn on earstwhile State Bank of Hyderabad were valid only till 31st March, 2018. In the light of the aforesaid facts, a learned Single Judge of the Andhra Pradesh High Court after adverting to clause (a) of the proviso to Section 138 of the N. I. Act, 1881, enunciated that, it is clear that if any invalid cheque is presented to the drawee bank and the same is dishonoured, it can be said that, there is no liability under Section 138 of the N. I. Act. The subject cheque was not a valid cheque on the date of its presentation, as required by clause (a) of the proviso and, hence, dishonourment of the same would not attract the liability under Section 138 of the N. I. Act.
24. Mr. Svar, would urge, the decision in the case of Gantha Kavitha Devi (supra), fully governs to the facts of the case at hand, as the State Bank of Hyderabad was also an Associate Bank which came to be merged with the State Bank of India like State Bank of Patiala. And the cheques therein were 27 CC.No.20604/2020 KABC030675442020 presented for encashment after its validity period as stipulated by the RBI, like the case in hand.
25. It is pertinent to note that, in the case of Archana Singh Gautam (supra), as well as Gantha Kavitha Devi (supra), the cheques were returned by the drawee bank by making an endorsement which reflected upon the validity of the cheque. In the case of Archana Singh Gautam (supra), the cheque was returned with the remarks, "wrongly delivered not drawn on us"
by the Indian Bank, into which the Allahabad Bank had merged.
Whereas, in the case of Ganta Kavitha Devi (supra), the cheque was returned with the remarks, "invalid cheque (SBH)".
Yet, the process for an offence punishable under Section 138 of the N. I. Act, 1881 was issued in those cases.
26. The object of Section 138 of the N.I. Act, 1881 is to inculcate faith in the efficacy of banking operations and ensure credibility in transacting business through cheques. The Supreme Court has thus delineated the approach in the case of Dalmiya Cement (Bharat) Ltd. Vs. Galaxy Traders & Agencies Ltd. & Ors9., that efforts to defeat the objectives of law by resorting to innovative measures and methods are to be 28 CC.No.20604/2020 KABC030675442020 discouraged, lest it may affect the commercial and mercantile activities in a smooth and healthy manner, ultimately affecting the economy of the country.
27. In the case of NEPC Micon Ltd. & Ors. Vs. Magma Leasing Limited10, following the three-Judge Bench judgment in the case of Modi Cements Ltd. V. Kuchil Kumar Nandi, wherein it was enunciated that, return of the cheque on account of stop payment instruction will not preclude an action under Section 138 of the N. I. Act, 1881, the Supreme Court held that, when the cheque is returned by a bank with an endorsement "account closed", it would amount to returning the cheque unpaid because "the amount of money standing to the credit of that account is insufficient to honour the cheque" as envisaged in Section 138 of the N. I. Act, 1881.
28. The position in law is that, it is the dishonour of the cheque that assumes importance and the reason for dishonour, especially "stop payment", "refer to drawer", "account closed", "exceeds agreement" and the like, are not of decisive significance. This factor also deserves to be kept in view.
29. In a case of the present nature, however, the reason for the return of the cheque assumes significance. If the cheque is not returned with a specific endorsement that, the cheque is invalid, 10 (1999) 4 SCC 253 29 CC.No.20604/2020 KABC030675442020 11 (1998) 3 SCC 249 but on account of insufficiency of funds, then as rightly submitted by Mr. Karia, the presumption contained in Section 146 of the N. I. Act, 1881, comes into play and the onus would shift on the drawer to rebut the presumption that, the dishonour of the cheque was not on account of insufficiency of funds. The presumption contained in Section 146 of the N. I. Act, is also a presumption of law and the Court is enjoined to presume the said fact, as it is a mandatory and not a permissive presumption.
30. It is true, the Acquisition order issued by the Central Government and the order/circular issued by the RBI, cannot be brushed aside lightly. However, when the cheque is returned with the remarks, "Insufficient Funds", the presumption contained in Section 146 of the N. I. Act, 1881, would be required to be rebutted by demonstrating that, the drawee bank could not have honoured the cheque in question as its period of validity had expired.
31. There is another facet which the Court cannot lose sight of. The drawer of the cheque may deliver a signed blank cheque to the payee, or the drawer of cheque may himself draw a post dated cheque. In the intervening period, on account ofacquisition or merger of the drawee bank, the validity period of the cheque may expire. If the payee after a lapse of time fills in the date on the 30 CC.No.20604/2020 KABC030675442020 cheque and presents the cheque for encashment, should the drawer be permitted to wriggle out of the situation by taking a stand that, in the intervening period the cheque has been rendered invalid on account of acquisition or merger of 'the bank'?
32. The legal position has crystallized to the effect that, even if a blank signed cheque leaf is delivered to the payee, towards debt or liability, and the payee fills in the particulars, the cheque is not rendered invalid and the presumption contained in Section 139 of the N. I. Act, 1881 is attracted. In the case of Bir Singh Vs. Mukesh Kumar12, after adverting to the settled line of precedent, the Supreme Court enunciated the law as under:-
"33. A meaningful reading of the provisions of the Negotiable Instruments 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 the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debit 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.
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CC.No.20604/2020 KABC030675442020
34. If a signed blank cheque is voluntarily presented to a 12 (2019) 4 SCC 197 payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence. ...........
36. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."
33. The aforesaid pronouncement was approved by a three- Judge Bench of the Supreme Court in the case of Kalamani Tex and Another Vs. P. Balasubramanian13.
34. Consistent with the object of the penal provisions incorporated in Section 138 of the N. I. Act, 1881, a dishonest drawee cannot be permitted to take benefit of such a situation and defeat the rights of a payee who alters his position on the basis of the sanctity of the cheque as a negotiable instrument, especially when such cheque is returned unencashed with the remarks "insufficiency of funds".
32
CC.No.20604/2020 KABC030675442020 Hence as per the above said judgment only if the cheque is dishonoured for the reason as 'invalid cheque' then accused cannot be held liable. But in the present case the cheque is dishonoured not for the reason 'invalid cheque' but for the reason 'Exceeds Arrangements'. Further the cheque at Ex.P1 is presented within in the periods of its validity.
22. The learned counsel for the accused has relied upon the judgment of the Hon'ble High court of Kerala reported in 2001 Crl. LJ 24 between Sasseriyil Joseph vs. Devassia wherein it is held that, when there is no valid acknowledgment of debt before expiry of 03 years from date of loan, debt is not legally enforceable at the time of issuance of the cheque and accused cannot be convicted for dishonour of cheque. This court has gone through the entire judgment. The said 33 CC.No.20604/2020 KABC030675442020 judgment is not applicable toe the present case as the transaction between the parties is of the year 2019 and cheque is issued in the year 2020. Further as discussed above the accused has taken 03 contradictory stands regarding issuance of the cheque to the complainant.
23. The learned counsel for the complainant has relied upon the following citations.
1. (2021) 5 SCC 283 betwen Kalamani Tex v. P. Balasubramanian.
2. (2018) 8 SCC 165 between Kishan Rao vs. Shankar Gouda.
3. (2019) 18 SCC 106 between Rohitbhai vs Jeevanlal Patel v. State of Gujarat and Another.
4. (2018) 8 SCC 469 between T.P. Murugan dead through legal representative vs. Bojan.
This Court has carefully gone through the above said judgments. As per the ratio laid down in the above said judgments, the accused has failed to rebut the presumption in this case.
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CC.No.20604/2020 KABC030675442020
24. The accused has taken a 03 different contradictory stands regarding issuance of cheque. The accused has to rebut the presumption under Section 139 of the NI Act, the standard of proof for doing so is that of "Preponderance of probability". Therefore if the accused is able to raise a probable defence which creates doubts about the existence of the legally enforceable debt or liability, the prosecution can fail. But it is to be seen that in this case the accused has failed to rebut the presumption. Hence, for the above said reasons it is held that the accused has committed an offence punishable under Section 138 of the Act. As such, Point No.1 and 2 are answered in the AFFIRMATIVE. 138 of NI Act.
25. Point No.3: Negotiable Instruments Act was enacted to bring credibility to the cheque. The very purpose of the enactment is to promote the use of the Negotiable Instrument, while to 35 CC.No.20604/2020 KABC030675442020 discourage the issuance of the cheque without having sufficient funds in the account. Such being the case, the intention of the legislature is that complainant be suitably compensated while the accused be punished for his act.
26. When compensation is awarded enforcement of the same come into question. There is no provision in the Code of Criminal Procedure for imposing default sentence for enforcing the payment of compensation. In this regard, the Hon'ble Supreme Court in the decision reported in 2002 (2) SCC 420 between Suganthi Suresh Kumar Vs. Jagadeeshan was pleased to hold that "the court may enforce the order by imposing sentence in default". The same is reaffirmed in latest decision in 2010 AIR SCW 3398 between K.A.Abbas H.S.A. Vs Sabu Joseph. Therefore, it is deemed fit to provide default sentence in order to 36 CC.No.20604/2020 KABC030675442020 enforce the payment of compensation. Ex.P.1 cheque is of the year 2020. Therefore, the complainant is deprived of the money that was rightfully due to him for about 06 years. Accordingly, it is deemed fit that a compensation of Rs.10,90,000/- (Rupees Ten Lakhs Ninety Thousand only) be granted. It is to be seen that as per the reportable judgment of the Hon'ble High Court of Karnataka in Crl.R.P.No.996/2016 dt:
09.07.2025 between M/s.Banavathy and company Vs. Maheer Electro Mech (P) Ltd., and to others the Hon'ble High Court at paragraph No.21 has held as under:
"while passing the order of the sentence after determining the fine/Compensation the court shall also pass an order to pay future interest at the rate of 9% p.a on the compensation amount payable to the complainant by fixing time of one or two months to deposit compensation amount so that even if the matter is challenged before the Session Court 37 CC.No.20604/2020 KABC030675442020 in appeal and High Court in Revision the interest of the complainant will be protected".
27. Hence, as per the above judgment the complainant is entitled for future interest at the rate of 9% p.a., on the compensation amount from the date of judgment till its repayment. Further the accused is directed to deposit the compensation amount before this court within three months from the date of this order. Accordingly, in the light of above discussions, this court proceed to pass the following:-
ORDER Acting under section 255(2) of Cr.P.C., the accused is convicted for the offence punishable under Section 138 of the NI Act and he is sentenced to pay fine of Rs.10,90,000/- (Rupees Ten Lakhs Ninety Thousand only) and in default to undergo Simple Imprisonment for a period of six months.38
CC.No.20604/2020 KABC030675442020 If the fine amount is recovered a sum of Rs.10,88,000/- (Rupees Ten Lakhs Eighty Eight Thousand only) is ordered to be paid to the complainant by way of compensation as per the provisions under Section 357 of Cr.PC. and the remaining amount of Rs.2,000/- is to be appropriated to the State.
The complainant is entitled for future interest at the rate of 9% p.a., on the compensation amount from the date of judgment till its complete repayment.
The accused is directed to deposit the compensation amount before this court within three months from the date of this order.
The Bail Bond and cash surety of the accused shall stand canceled.
Supply a free copy of this Judgment to the accused.
(Dictated directly using mobile Adalath AI app, copied and computerized by the stenographer, corrected by me and then pronounced in the open Court on this 16th day March, 2026).
(Dhanalakshmi. R) XII Addl. CJM, Bengaluru.39
CC.No.20604/2020 KABC030675442020 ANNEXURES Witnesses examined for the Complainant:
PW.1 : Y.S.Ravi Kumar Documents exhibited for the Complainant:
Ex.P.1 : Original cheque Ex.P.2 : Bank endorsement Ex.P.3 : Copy of Legal Notice, Ex.P.4 : Postal Receipt Ex.P.5 : Postal Acknowledgment
Witnesses examined for the defence Accused:
DW.1 : Devaraj.M Documents exhibited for the defence Accused:-
Ex.D.1 : Record slips of 03 cheques Digitally signed by DHANALAKSHMI DHANALAKSHMI R R Date: 2026.03.23 11:09:54 +0530 (Dhanalakshmi. R) XII Addl. CJM., Bengaluru.40
CC.No.20604/2020 KABC030675442020 16.03.2026 For Judgment (Judgment pronounced in the open court vide separate Order) ORDER Acting under section 255(2) of Cr.P.C., the accused is convicted for the offence punishable under Section 138 of the NI Act and he is sentenced to pay fine of Rs.10,90,000/-
(Rupees Ten Lakhs Ninety Thousand only) and in default to undergo Simple Imprisonment for a period of six months.
If the fine amount is recovered a sum of Rs.10,88,000/- (Rupees Ten Lakhs Eighty Eight Thousand only) is ordered to be paid to the complainant by way of compensation as per the provisions under Section 357 of Cr.PC. and the remaining amount of Rs.2,000/- is to be appropriated to the State.
The complainant is entitled for future interest at the rate of 9% p.a., on the compensation amount from 41 CC.No.20604/2020 KABC030675442020 the date of judgment till its complete repayment.
The accused is directed to
deposit the compensation amount
before this court within three
months from the date of this order. The Bail Bond and cash surety of the accused shall stand canceled.
Supply a free copy of this Judgment to the accused.
XII Addl. CJM, Bengaluru 42 CC.No.20604/2020 KABC030675442020