Bangalore District Court
Th Shankara Sheety vs M/S Simplichef Hospitality Services on 4 February, 2026
KABC020629002024
IN THE COURT OF ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY.
(SCCH-6)
Present: Smt. Chetana S.F.
B.A., L.L.B.,
IV Addl., Small Cause Judge & ACJM,
Court of Small Causes,
Bengaluru.
CC. No.19232/2024
DATED THIS THE 04th DAY OF FEBRUARY 2026
COMPLAINANT/S Sri.H. Shankara Shetty,
Aged about 54 years,
Resident of No.9,
"Rajathavarsha",
6th Cross, 6th Main Road,
Malleshwaram,
Bangalore - 03.
(By Sri.K.Krishna Prasad, Advocate)
-Vs-
ACCUSED 1. M/s. Simplichef Hospitality Services,
Having office at No. 161, Main Road,
Balaji Layout, Near Heritage Apartments,
Yelahanka Bangalore - 560 064.
Represented by its Proprietor,
Mr. Arjun B.A.
S/o B.S. Ananthamurthy,
SCCH-6 2 CC No.19232/2024
2. Mr. Arjun B.A.
S/o B.S. Ananthmurthy,
Proprietor of M/s. Simplichef Hospitality
Services,
Having office at No. 161, Main Road,
Balaji Layout, Near Heritage Apartments,
Yelahanka Bangalore - 560 064.
3. Mr. Arjun B.A.
S/o B.S. Ananthamurthy,
proprietor of M/s. Simplichef Hospitality
Services,
Resident of No. 131, Sri-vari, GF,
7th Main Road, 9th Cross,
Canara Bank Layout,
Kodigehalli,
Bangalore - 97.
4. Mr. Arjun B.A.
S/o B.S. Ananthmurthy,
Sri. Balaji Boys P.G.
Block-2,Avalahalli Road,
Behind Boys Hostel Compound,
Avalahalli, Yelahanka,
Bangalore - 64.
5. Mr. Arjun B.A.
S/o B.S. Ananthmurthy,
Sai Balaji Girls P.G.
Behind Yelahanka New Post office,
New Town, Near Central Mall,
Yelahanka, Bangalore - 97.
6. Mr. Arjun B.A.
S/o B.S. Ananthmurthy,
C/o Sri Balaji Boys P.G.
Block-1, Avalahalli, Road,
Next to BMSIT College Compound,
Avalahalli Yelahanka,
SCCH-6 3 CC No.19232/2024
Bangalore -64.
7. Mr. Arjun B.A.
C/o Balaji P.G.
Appayanna Building,
Avalahalli Main Road,
Near I>OB Bank,
Yelahanka,
Bangalore - 64.
8. Mr. Arjun B.A.
S/o B.S. Ananthmurthy,
C/o Balaji Hospitality Services,
39, 40 Chokkasandra Lake Road,
(Near Dynamite Factory),
Dasarahalli,
Bangalore - 57.
9. Mr. Arjun B.A.
S/o B.S. Ananthmurthy,
C/o Silver suites,
No.26, 4th "A" Cross,
Bhuvaneshwari Nagar,
Dasarahalli Main Road,
Hebbal, Bangalore - 24.
(By Sri.J.R.Jagadish, Advocate)
-: J U D G M E N T :-
This is a complaint filed by the complainant U/Sec. 200
of Cr.P.C. for the offences punishable under Secs.138 of N.I.
Act as against the accused praying to punish the accused for
the said offence.
SCCH-6 4 CC No.19232/2024
2. The case of the complainant is that, accused is close
friend of complainant. In the month of December 2021 the
accused approached and informed the complainant that he
has setup a outsourced college hostel in BMSIT College,
Yelahanka, Bangalore, accused has invested substantial
amount to establish the business and at that juncture the
accused has offered the complainant to invest money, accused
has voluntarily invited the complainant to join as a sleeping
partner on monthly salary basis, after the lengthy
conversation between the complainant and accused.
Thereafter complainant has agreed to invest the amount in
his wife's name Smt. Vinaya S. Shetty and accused also
agreed for the same. The complainant and his wife Smt.
Vinaya S. Shetty they jointly invested Rs.20,00,000/- by way
of cheque, by way of RTGS. Thereafter the complainant's wife
and the accused herein they both have entered in to an MOU
dated 01.01.2022 for the acknowledging the receipt of the
amount and as per the recitals of the MOU the accused has
agreed to pay Rs.40,000/- as salary and interest of
Rs.60,000/- per month on invested amount of Rs.20,00,000/-
SCCH-6 5 CC No.19232/2024
in together the accused agreed to pay Rs.1,00,000/- per
month. As per MOU the accused paid monthly agreed payment
up to October 2022 and from November 2022 to March 2023
the accused has not paid any amount to complainant nor to
his wife and accused utterly failed to act as per conditions of
alleged MOU on many occasions the complainant demanded
and as per the clause-11 of the MOU the complainant's wife
has given 3 months notice dated 05.04.2023 intimating the
termination of the alleged MOU and demanded the balance of
monthly payment of Rs.5,00,000/- for the period commencing
from November 2022 to March 2023. After issuing the said
termination notice the accused pleaded some time to clear the
above said legal debt. After accused had issued two cheques
bearing No.001238 dated 25.04.2024 for Rs.2,50,000/- and
No.001239 dated 25.04.2024 for Rs.2,50,000/- both the
cheques were drawn on ICICI Bank, Jakkur Layout Branch,
Bengaluru.
3. The complainant presented the cheques to the
bank for encashment, but the said cheques returned unpaid
SCCH-6 6 CC No.19232/2024
with the shara "Funds Insufficient" on 123.02.2024. The
complainant issued legal notice dt.17.08.2024 to the accused
through RPAD and speed post and the same was served to the
accused. The accused has not paid the cheque amount and
has committed an offence punishable u/s 138 of NI Act.
Hence, this complaint.
4. After recording the sworn statement of the
complainant by way of affidavit and also verifying the
documents, cognizance was taken against the accused for the
offence punishable under Sec.138 of N.I. Act. The accused
appeared before this court through their counsel and enlarged
on bail and their plea were recorded. The accused pleaded not
guilty and claimed to be tried. Hence, the case was posted for
evidence of the complainant.
5. The complainant got examined himself as PW.1 and
got marked 40 documents as Exs.P.1 to Ex.P40. Thereafter,
the case was posted for recording the statement of accused
under Sec.313 of Cr.P.C. In the statement U/s. 313 Cr.P.C.,
the accused has denied all the incriminating evidence
SCCH-6 7 CC No.19232/2024
appearing against them. Further, accused has not led defence
evidence on his behalf.
6. The learned counsel for complainant has relied on
the following citations:
1.Sripathi Singh (since deceased) through his son Gaurav singh vs State of Jharkhand and another criminal Apl No.1269-1270 of 2021
2. Dashrathbhai Trikambai paterl vs Hitesh Mahendrabhai Patel and another Criminal Apl. No.1497/2000
3. Crl. Apl.100100/2016 between Sr. Shrikant vs. Mahammadasab vide DD dated 14.02.2020
4. Rangappa vs. Mohan 2010(11) SCC.441
5. In Sampelly Satyanaraya Rao vs. Indian Renewable energy development agency Ltd., SLP(Crl.) no:-5410 of 2014 in Crl. Appeal No.867/2016
6. K.L Agarwal vs. Paramount Salutations Bengaluru "Crl.Rev.Pet No.1482/2010.
7. Sh. Badri Prasad vs. Sh. Padam Singh
8. Criminal Appeal No.(s).950-951 of 2018 (Arising out of SLP (Crl)Nos.10111-10112 of 2014)
9. AIR 2023 SC 5018 in the case of Rajesh Jain vs. Ajay Singh
10. 2019(4) SCC 197 in the case of Brisingh vs. Mukhesh Kumar.
SCCH-6 8 CC No.19232/2024
7. Heard the arguments of both side and Perused the records.
8. The following points arise for my consideration:
1. Whether the complainant proves that the cheque bearing No.001238 dated 25.04.2024 for Rs.2,50,000/- and No.001239 dated 25.04.2024 for Rs.2,50,000/- both the cheques were drawn on ICICI Bank, Jakkur Layout Branch, Bengaluru. issued by the accused has been dishonored on the ground of "Funds Insufficient" on 23.07.2024 even after receiving the intimation regarding the dishonor of cheques failed to pay the cheques amount within the stipulated period and thereby the accused has committed an offence punishable under Sec.138 of N.I. Act?
2. What order?
9. My findings on the above points are as under
Point No.1: In the Affirmative Point No.2: As per final order for the following:
-: R E A S O N S :-
10. POINT NO.1:- In view of the present legal position as held by our Hon'ble High Court as well as Apex Court of India in a catena of decisions as well as relevant SCCH-6 9 CC No.19232/2024 provisions of the Act, this court has to see whether the complainant has complied all the requirements as contained in Sec.138 of NI Act so as to bring home the guilt of the accused for the alleged offence. If so, whether the accused is able to rebut the legal presumption available to the complainant under Sec.139 of the Act by adducing probable defense or not. However, it is held by the full bench of our Apex Court in the case of Rangappa Vs. Mohan reported in 2010 (1) DCR 706 that;
"The Statutory presumption man- dated by sec.139 of the Act, does in- deed include the existence of a legally enforceable debt or liability. However, the presumption U/S 139 of the Act is in the nature of a rebuttable pre- sumption and it is open for the ac- cused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested".
11. Therefore, in view of the above decision, once the cheque is admitted, the statutory presumption would automatically fall in favour of the complainant that, the alleged cheque was issued for discharge of an existing legally enforceable debt or liability against the accused and the SCCH-6 10 CC No.19232/2024 burden will shift on to the accused to rebut the same.
INGREDIENTS OF OFFENCE AND DISCUSSION:-
12. Before dwelling into the facts of the present case, it would be apposite to discuss the legal standards required to be met by both sides. In order to establish the offence under Section 138 of NI Act, the prosecution must fulfill all the essential ingredients of the offence. Perusal of the bare provision reveals the following necessary ingredients of the offence:-
First Ingredient: The cheques were drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;
Second Ingredient: The cheques were drawn by the drawer for discharge of any legally enforceable debt or other liability;SCCH-6 11 CC No.19232/2024
Third Ingredient: The cheques were returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;
Fourth Ingredient: A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in writing given to the drawer within thirty days of the receipt of information of the dishonour of cheque from the bank;
Fifth Ingredient: The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of notice.
-APPRECIATION OF EVIDENCE-
13. The accused can only be held guilty of the offence under Section 138 NI Act if the above-mentioned ingredients are proved by the complainant co-extensively. Additionally, the SCCH-6 12 CC No.19232/2024 conditions stipulated under Section 142 NI Act have to be fulfilled. Notably, there is no dispute at bar about the proof of only first, third, and fifth ingredient. The complainant had proved the original cheque vide Ex.P.1 & 2 which the accused person had not disputed as being drawn on the account of the accused. It was not disputed that the cheque in question was presented within its validity period. The cheque in question was returned unpaid vide return memo dated 23.07.2024 vide Ex.P.3 & 4 due to the reason, "Funds Insufficient". The complainant had proved the service of legal demand notice dated 17.08.2024 vide Ex.P.5 by bringing on record the postal receipt vide Ex.P.6 to 14, Postal covers vide Ex.P15 to 22, copy of notice vide Ex.P15(a) to 22(a), Postal acknowledgment vide Ex.P23, MOU dated 01.01.2022 vide Ex.P.24, Termination notice vide Ex.P25, Postal receipts vide Ex.P26 to Ex.P30, Track consignment vide Ex.P31 to 34, Postal acknowledgment vide Ex.P35 to 37, Bank account statements vide Ex.P38 to Ex.P40. Thus, there is a dispute only with regard to the second ingredient to the offence. As such, the 1 st,3rd,4th& 5th ingredient of the offence under section 138 of the NI Act SCCH-6 13 CC No.19232/2024 stands proved.
14. As far as the proof of second ingredient is concerned, the complainant has to prove that the cheque in question was drawn by the drawer for discharging a legally enforceable debtor any liability. In the present case, the issuance of the cheque in question is not denied. As per the scheme of the NI Act, once the accused admits signature on the cheque in question, certain presumption are drawn, which result in shifting of onus. Section 118(a) of the NI Act lays down the presumption that every negotiable instrument was made or drawn for consideration. Another presumption is enumerated in Section 139 of NI Act. The provision lays down the presumption that the holder of the cheque received it for the discharge, in whole or part, of any debt or other liability.
15. The combined effect of these two provisions is a presumption that the cheque is drawn for consideration and given by the accused for the discharge of debt or other liability. Both the sections use the expression "shall", which makes it imperative for the court to raise the presumptions once the SCCH-6 14 CC No.19232/2024 foundational facts required for the same are proved. Reliance is placed upon the judgment of the Hon'ble Supreme Court, Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16.
16. Further, it has been held by a three-judge bench of the Hon'ble Apex Court in the case of Rangappa vs. Sri Mohan (2010) 11 SCC 441 that the presumption contemplated under Section 139 of NI Act includes the presumption of existence of a legally enforceable debt. Once the presumption is raised, it is for the accused to rebut the same by establishing a probable defence.
17. The presumptions raised under Section 118(b) and Section 139 NI Act are rebuttable presumptions. A reverse onus is cast on the accused, who has to establish a probable defence on the standard of preponderance of probabilities to prove that either there was no legally enforceable debt or other liability. In this case, the arguments raised by the Ld. counsel for the accused to rebut the presumption are discussed below:
18. In the line of the argument, if the materials and SCCH-6 15 CC No.19232/2024 evidence on record are perused, it is not disputed by the accused that the complainant and Smt. Vinaya S. Shetty wife of the complainant have invested an amount of Rs.20,00,000/- with the accused No.1 company. The accused has not disputed the issuance of cheque and signature in the cheque. The only the contention raised by the accused is that the MOU Ex.P24 is entered into between one Vinaya S. Shetty wife of the complainant and the accused company and as such, Smt. Vinaya S. Shetty herself has only the right to claim the amount of investment and the complainant has no right to claim the amount as per MOU as complainant is not a party to the MOU.
19. In this regard, on perusal of records, admittedly, the MOU was entered into between Smt. Vinaya S. Shetty wife of the complainant and accused No.1 company and as per MOU complainant has transferred the amount of Rs. 20,00,000/- to the accused company through cheques as mentioned in the MOU(1). But, on careful perusal of MOU, at page No.2 of the MOU, it is clearly stated that both the expressions, FIRST SCCH-6 16 CC No.19232/2024 PART, and SECOND PART, shall mean and include all their respective heirs, executors, administrators, legal representatives, nominees, successors and assignees etc., Thus from Ex.P24 MOU, it is clear that the second part Smt. Vinaya S. Shetty wife of complainant shall mean and include her husband Shankara Shetty H also as he is (1) heir of the second part Vinaya S. Shetty. It is pertinent to note here that accused has not disputed the fact that complainant is the husband of the Vinaya Shetty.
20. Further as per MOU, an amount of Rs.9,00,000/- has been paid to the accused company on 23.12.2021 (UTR No.BCBMH21356306655) through RTGS from Bharat Co- operative Bank (Mumbai) Ltd., Malleswaram Branch account of the complainant. This fact is also not disputed by the accused. Even the complainant in support of his contention has produced his bank statement of Bharath Co-operative Bank (Mumbai) Ltd., as per Ex.P40. On perusal of which, it clearly shows that on 23.12.2021, complainant has transferred an amount of Rs.9,00,000/- through RTGS to the accused SCCH-6 17 CC No.19232/2024 company, the complainant has every right to claim the said amount as reflected in Ex.P24.
21. Apart from this, as per Ex.P24 MOU(11) A notice of three months is required to be given to both party in the event of either both party deciding to end this agreement. Under such circumstances, after notice period of three months, either party of the First part wants to end or terminate this Agreement or the party of the second part expresses his intention to terminate this Agreement, the first party shall refund the investment amount of Rs.20,00,000/- to the party of the second part at the time of termination of this agreement without fail. The accused i.e., First Party shall refund the investment amount of Rs.20,00,000/- to the party of the second part at the time of termination of this agreement without fail. Further the complainant in support of his contention has produced Ex.P25 Termination notice issued to the accused wherein Smt. Vinaya S. Shetty has clearly terminated the said MOU and requested SCCH-6 18 CC No.19232/2024 to make the arrangement to pay the amount of Rs.28,00,000/- to her on or before 10.07.2023 and treat the notice as Termination notice of the MOU dated 01.01.2022, entered into between her and the accused company. The complainant also produced the Track consignment as per Ex.P31 to Ex.P34 and Postal acknowledgment as per Ex.P.35 to Ex.P37 which clearly shows that the Termination notice has been duly served to the accused and inspite of service of termination notice, accused has not given any reply neither made any payment to the Vinaya S. Shetty.
22. Further the accused has taken the contention that the amount as per MOU invested by the said Vinaya S. Shetty has been repaid to the Vinaya S. Shetty entirely. But, accused has not produced any single document to show that he has repaid the entire amouint to the Vinaya S. Shetty. Hence, the defence taken by the accused that he has repaid entire amount to the Vinaya S. Shetty cannot be accepted and believed.
23. Apart from this, accused has taken the specific SCCH-6 19 CC No.19232/2024 defence that the complainant and his wife used to visit the working place of the accused and at that time, complainant and his wife has taken the signed blank cheque kept it in his office and both of them presented the cheque on the same day and filed this false case. The accused has taken the above said defence by way of only suggestion. Mere suggestions is not sufficient to disprove testimony of case of complainant. Accused has not led any defence evidence and subjected himself to the cross examination. Even accused has not stated clearly as to when and where and why he has kept his signed blank cheque at his working place and why he has not noticed the same and not taken any legal action and steps against complainant for misusing the same.
24. Apart from this, if for the sake of the arguments, if the defence of the accused is believed, then the genuine doubt would arise in the minds of the court as to why accused has kept his signed blank cheque so carelessly and negligently so that any person visiting his working place can easily have assess those cheques. Ordinarily no prudent man that too SCCH-6 20 CC No.19232/2024 accused being a business man would keep the signed blank cheque so recklessnessly and negligently and so easily assessable to any person visiting the working place. Thus the defence taken by the accused is highly doubtful and not believable.
25. Apart from this, if at all the defence of the accused is believed to be a gospel truth, then question arises in the minds of the court as to why even after service of the notice, accused has not taken the said defence at the earliest possible opportunity by giving reply to the notice issued by the PW-1. No explanation were forthcoming in this regard. In the absence of any such recourse being adopted by the accused, it is highly impossible to believe his defence. The Hon'ble Apext Court in the case of Rangappa Vs. Mohan Reported in 2010 (1) DCR 706, wherein it was held as follows:
24. "-Very fact that the accused had failed to reply to the statutory notice under Sec.138 of N.I.Act leads to inference that there was merit in the complainant's version".SCCH-6 21 CC No.19232/2024
26. In the present case also the accused inspite of the service of the notice has not replied to the notice and taken the defence at the later stage only for the sake of the defence. That, being the true facts it can be held that, the accused has failed to establish his defence.
27. Moreover, ordinarily no prudent man would keep quite after giving the signed blank cheque and signed blank papers to a third person that too after receiving the notice. In this regard it is pertinent to note the principle held in Sri. Prakash @ Jnana Prakash v/s Miss T.S. Susheela reported in ILR 2012 KAR 4815 our Hon'ble High Court has held that - If the documents had been illegally obtained by the complainant, it is inexplicable that the petitioner did not choose to give a complaint to the police or to take other mea- sures insofar as that conduct of the complainant is concerned and hence has disbelieved the evidence set forth -
28. Applying the ratio laid down by the Hon'ble Court to the present case on hand, the accused in this case also has not taken up any legal measures against complainant re- garding possession of cheque. From this an inference can be SCCH-6 22 CC No.19232/2024 drawn that no prudent man will keep himself silent without taking any steps to safeguard his interest when his document lies with the possession of other party.
29. Thus from the oral appreciation of the evidence and materials on record, complainant has clearly proved that complainant has paid Rs.9,00,000/- by way of transfer through RTGS from his account to the accused as per Ex.P40 as stated in the MOU and further as per MOU Ex.P24, the second Party in MOU i.e., Vinaya S. Shetty shall mean and include all their respective heirs, executors, administrators, legal representatives, nominees, successors and assignees etc., and hence complainant the husband of the said Vinaya S. Shetty being one of the legal heirs and nominee is entitled to claim the amount given by him as per MOU. Apart from this, the complainant is the husband of the Vinaya S. Shetty and is one of the witness to the Ex.P24. Under such facts and circumstances, it can be inferred that for the repayment of the investment amount as per MOU Ex.P24, accused has issued the cheque of Rs.5,00,000/- for the part payment to the SCCH-6 23 CC No.19232/2024 complainant which has been dishonored. On the other hand, accused has failed to prove that he has repaid the entire investment amount of Rs.20,00,000/- to the Vinaya S. Shetty and in view of the above said reason and discussion, accused has failed to raise probable defence and rebut the presumption available in favour of the complainant through cogent and reliable evidence.
Conclusion:
30. In view of all the above discussions, it can be concluded that the complainant has established through cogent and convincing evidence the fact of issuance of the cheque for discharge of legality enforceable debt, which is dishonored for want of sufficient funds, issuance of legal notice within stipulated time, failure on the part of accused to repay the amount within stipulated period. On the other hand, the accused has failed to rebut the presumption available to the complainant through probable evidences that would preponderate upon the evidence lead by the complainant. Therefore, the accused is held to have committed an offence SCCH-6 24 CC No.19232/2024 punishable under Sec. 138 of N.I. Act. Accordingly, Point No.1 is answered in the Affirmative.
31. POINT NO.2:- In view of my answer to point No.1, I proceed to pass the following:-
-: O R D E R :-
Acting U/Sec.278(2) of the Bharatiya Nagarik Suraksha Sanhita, 2023, accused is hereby convicted for the offence punishable U/Sec.138 of Negotiable Instruments Act.
Accused is sentenced to pay a fine of Rs.5,05,000/- for the offence punishable under section 138 of N.I.Act. The amount of Rs.5,00,000/- shall be paid to the complainant by way of compensation in accordance with Sec.395(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023 within three months from today.
The remaining amount of Rs.5,000/- shall be confiscated to the state. In default of payment of fine, the accused persons shall SCCH-6 25 CC No.19232/2024 undergo simple imprisonment for a period of six months.
It is made clear that in view of Sec.461 of BNSS, even if the accused shall undergo the default sentence imposed above, accused is not absolved of liability to pay the fine amount.
The bail and surety bond of the accused and surety shall stand canceled.
Office to furnish the copy of this judgment for free of cost to the accused.
(Dictated to the Stenographer, transcribed and computerized by her. After her typing, corrected, signed and then pronounced by me in open Court this the 04th day of February, 2026).
(CHETANA S.F.) IV Addl., Small Cause Judge & ACJM, Court of Small Causes, Bengaluru.
ANNEXURE List of witnesses examined for the Complainant:
PW.1 :- Sri H.Shankara Shetty SCCH-6 26 CC No.19232/2024 List of witnesses examined for the accused:-
None List of documents marked for the Complainant:-
Ex.P.1 &2 : Cheques Ex.P.1(a)& 2(a) : Signatures of accused Ex.P.3 & 4 : Bank Endorsements Ex.P.5 : Office copy of Legal Notice Dt:17.08.2024 Ex.P.6 to 14 : Postal receipts Ex.P.15 to 22 : Returned postal covers Ex.P.15(a) to : Copy of notice 22(a) Ex.P.23 : Postal acknowledgment Ex.P.24 : MOU dated 01.01.2022 Ex.P.25 : Termination notice dated 05.04.2023 Ex.P.26 to 30 : Postal receipts Ex.P.31 to 34 : Track consignments Ex.P.35 to 37 : Postal acknowledgments Ex.P.38 to 40 : Canara bank and Bharat Co-operative Bank statements List of documents marked for the accused:-
Nil (CHETANA S.F.) IV Addl., Small Cause Judge & ACJM, Court of Small Causes, BENGALURU.