Bangalore District Court
Mahavir Prasad Jain vs Arihanth Road Waya Pvt Ltd on 15 December, 2025
SCCH-6 1 CC No.4026/2024
KABC020130142024
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 CAUSES JUDGE
& ACJM, BENGALURU.
C.C. No.4026/2024
DATED THIS 15th DAY OF DECEMBER 2025
COMPLAINANT/S Sri Mahavir Prasad Jain
Aged about 80 years,
R/at # 411-N, 19th 'G' Main
I Block, Rajajinagara,
Bengaluru-560010.
Sri Jinesh Kumar Jain
S/o. Mahavir Prasad Jain
Aged about 49 years
R/at # 411-N, 19th 'G' Main
I Block, Rajajinagara,
Bengaluru-560010.
(Power of Attorney Holder)
(By Learned C. Deepa- Adv.)
-Vs-
ACCUSED 1. M/s Arihanth Road Ways Pvt.
Ltd.,
#13/22, KSV Nilaya, 3rd Main,
Kalasipalya New Extention
SCCH-6 2 CC No.4026/2024
Bengaluru-560002
Rep. By its Director
Sri Narendra Kumar
Chhabara Diwan
2. Sri Narendra Kumar
Chhabara Diwan
Managing Director,
M/s Arihanth Road Ways Pvt. Ltd.,
R/at # 117, II Floor, 5th West
Main Road, ITI Layout
Banashankari III Stage,
Bengaluru-560085
(By Sri.J. Kanikaraj- Adv.)
:JUDGMENT:
This is a complaint filed by the complainant U/Secs.138 of the N.I. Act R/w. Sec.200 of Cr.P.C. for the offences punishable under Secs.138 of the N.I. Act as against the accused praying to punish the accused for the said offence.
2. The case of the complainant is that, the accused No.1 being the Director of M/s Arihanth Road Ways Pvt. Ltd., represented by accused No.2. The accused are well acquainted with complainant as the accused and the complainant are doing the business. The accused have approached the complainant SCCH-6 3 CC No.4026/2024 during the month August 2021 and availed the hand loan of Rs.5,00,000/- for improvement of business, domestic purpose and other commitments and assured to repay the same within two years. After the stipulated period, the complainant approached the accused and demanded to repay the aforesaid amount, the accused No.2 on behalf of accused No.1 have issued a cheque bearing No.169045 dated 11.08.2023 for a sum of Rs.5,00,000/- drawn on Bank of India, J.C. Road Branch, Bengaluru .
3. As per the instructions of accused, the complainant has got presented the said cheque to his ICICI Bank Limited, Rajajinagar Branch, Bengaluru. The said cheque has been returned other reason: NON CTS Cheque not allowed in CTS Clearing with the Bank endorsement dated 14.08.2023 with a shara "Cheque 169045 not credited". The Complainant got issued legal notice dated 22.08.2023. The accused neither replied to the notice nor cleared the cheque amount and as such, accused has failed and neglected to discharge debt to the complainant. Accordingly, the accused has committed an SCCH-6 4 CC No.4026/2024 offence punishable under Sec.138 of N.I 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 his counsel and enlarged on bail and his plea was recorded. The accused pleaded not guilty and claimed to be tried. Hence, the case was posted for evidence of the complainant.
5. The complainant got examined himself as PW.1 and and got marked 7 documents as Exs.P.1 to Ex.P.7. During the course of cross examination of PW.1, the learned counsel for accused got marked Ex.D1 and Ex.D2. 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 appearing against him and claimed to be tried. On the other hand, accused did not lead any evidence on his behalf.
SCCH-6 5 CC No.4026/2024
6. Heard the arguments of both side and Perused the records.
7. The following points arise for my consideration:
1. Whether the complainant proves that the cheque No.169045 dated 11.08.2023 amounting to Rs.5,00,000/- drawn on ICICI Bank, Rajajinagar Branch, Bengaluru, issued by the accused has been dishonored on the ground of 'Other reason: NON CTS Cheque not allowed in CTS Clearing' on 14.08.2023 and even after receiving the intimation regarding the dishonor of cheque failed to pay the cheque amount within the stipulated period and thereby the accused has committed an offence punishable under Sec.138 of N.I. Act?
2. What order?
8. 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 :-
9. POINT NO.1:- In view of the present legal position as held by our Hon'ble High Court as well as Apex Court of India in a catena of decisions as well as relevant provisions SCCH-6 6 CC No.4026/2024 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 mandated by sec.139 of the Act, does indeed in- clude the existence of a legally en- forceable debt or liability. However, the presumption U/S 139 of the Act is in the nature of a rebuttable presump- tion and it is open for the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested".
10. 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 burden SCCH-6 7 CC No.4026/2024 will shift on to the accused to rebut the same.
INGREDIENTS OF OFFENCE AND DISCUSSION:-
11. 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;
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;SCCH-6 8 CC No.4026/2024
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-
12. The accused can only be held guilty of the offence under Section 138 NI Act if the above-mentioned ingredients are proved by the complainant co-extensively. Additionally, the conditions stipulated under Section 142 NI Act have to be fulfilled. Notably, there is no dispute at bar about the proof of only first, third, and fifth ingredient. The complainant had proved the original cheque vide Ex.P.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 14.08.2023 vide Ex.P.4 due to the reason, "'Other reason: NON CTS Cheque not SCCH-6 9 CC No.4026/2024 allowed in CTS Clearing". The complainant had proved the service of legal demand notice dated 22.08.2023 vide Ex.P.5 by bringing on record the Postal receipt vide Ex.P.6. Postal acknowledgment vide Ex.P.7. Thus, there is a dispute only with regard to the second ingredient to the offence. As such, the 1st,3rd,4th& 5th ingredient of the offence under section 138 of the NI Act stands proved.
13. 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 SCCH-6 10 CC No.4026/2024 part, of any debt or other liability.
14. The combined effect of these two provisions is a presumption that the cheque is drawn for consideration and given by the accused for the discharge of debt or other liability. Both the sections use the expression "shall", which makes it imperative for the court to raise the presumptions once the foundational facts required for the same are proved. Reliance is placed upon the judgment of the Hon'ble Supreme Court, Hiten P. Dalal vs. Bratindranath Banerjee (2001) 6 SCC 16.
15. 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.
16. 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 SCCH-6 11 CC No.4026/2024 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:
17. Firstly accused has taken the specific defence that PW.1 being the GPA holder of the complainant has no personal knowledge about the present transaction. Hence the evidence of PW.1 cannot be considered. In this regard the learned counsel for the accused cross examined PW.1 at length wherein PW.1 in his cross examination Para 3 clearly stated that accused no.2 has came to the house of PW.1 on August 2021 last week and received the amount in cash from his father and at that time he do not know whether any other family members have witnessed the said transaction. Even PW.1 has not stated that he was also present at the time of the transaction. Further in cross examination para 4 PW.1 clearly admitted that he do not have the information about the transaction between his father and the accused no.2. Even when it was suggested that as he do not have any information about the transaction between his father SCCH-6 12 CC No.4026/2024 and accused he is not capable of giving the evidence, for which also PW.1 only stated he do not know. PW.1 has not clarified and stated anything as to whether he has the information about the transaction between his father and the 2 nd accused or else he has witnessed the transaction. Hence it appears that PW.1 has no personal knowledge and also information about the present transaction.
18. Further accused has taken the specific defence that the present cheque in question was given by the accused no.2 in year 2003 in respect of old transaction and the same has been misused by the complainant and filed this false case and accused is not at all liable to pay any amount to the complainant. In this regard learned counsel for the accused in the cross examination of the PW.1 it was suggested that the accused no.1 company has been closed in the year 2003 and 2004 for which PW.1 pleaded his ignorance by saying that he do not know and the same might have been closed. Further even PW.1 pleaded his ignorance with regard to the suggestion posed that after the closure of the accused no.1 company, accused SCCH-6 13 CC No.4026/2024 no.2 has no income. Further PW.1 admitted that since last 15 years his father is not doing any business. As per the admission of the PW1 his father has stopped all his business since last 15 years. But contrary to the version of the PW.1, PW.1 himself in the complaint stated that the accused has approached during month of August of 2021 and availed financial assistance to the tune of Rs.5,00,000/- for improvement of the business and domestic purpose. Thus, there is a material contradiction in the complaint and in the evidence of the PW.1.
19. Apart from this PW.1 himself admitted that in respect of 2018 transaction accused no.2 has issued the cheque bearing no. 169044 and the same has been dishonoured and PW.1 has filed the cheque bounce case against the accused no.2 in CC No.273/2019. Even PW.1 admitted the copy of the complaint in CC No.273/2019 confronted to him and was marked as Ex.D1. When already the cheque issued by the accused was dishonored and accused was already due and complainant has lodged the complaint under Section 138 of NI Act in the year 2019 itself and during the pendency of the said case and when SCCH-6 14 CC No.4026/2024 already accused is due of money how can the complainant once against lend huge amount of RS.5,00,000/- to the accused in the year 2021. Though PW.1 stated that as accused stated that there was an emergency his father has given the amount but the said version of the PW.1 cannot believed and accepted as ordinarily no prudent man that to in the old age of 75 years can lend the huge amount to a person who is already due of amount to him that too without any documents.
20. Apart from this the cheque number in CC 273/2019 is 169044 and the cheque in the present case is 169045. according to the complainant accused no.2 has given the Ex.P2 cheque in 2023 and the cheque in CC No. 273/2019 was given in the year 2018 it is hardly acceptable that after the issuance of the one cheque a person takes 7 years time to issue the next cheque.
21. Further accused has taken the clear defence that Ex.P2 cheque and the cheque in cc No. 273/2019 belongs to the year 2002 and 2003 and the account to which the cheque belongs has been closed in the year 2008 itself. Ex.P2 cheque is non SCCH-6 15 CC No.4026/2024 CTS cheque and the non CTS cheque are invalid and hence Section 138 of NI Act does not attract.
22. In this regard, on perusal of Ex.P2 cheque admittedly it is non CTS cheque printed before 2010. But, however A Non CTS cheque can still be the basis for the sec. 138 of NI Act case for dishonor, provided it was validly presented within 3 months validity period after the RBI introduced CTS system 2011, even though non CTS cheque cannot be cleared through the CTS system. Non CTS cheque refer to the cheques that do not comply with cheque truncation system or CTS format. Non CTS cheques are considered obsolete in India as banks no longer clear them and customers are advised to replace any non CTS cheque book with a newer CTS 2010 standard. But, the Non CTS cheques were officially discontinued for clearing as of 31 st December 2018.
23. Coming to the facts of the present case, in the present case admittedly Ex.P2 cheque is also a Non-CTS cheque dated 11.08.2023 and the chequye has been presented to the bank on 14.08.2023and the bank has given the endorsement as per SCCH-6 16 CC No.4026/2024 Ex.P3 as ;
"We regret to inform you that we are unable to credit the cheque to the account due to the following reason:
Other reason:- Non-CTS Cheque not allowed in CTS clearing.
24. Thus the complainant has presented the cheque after 31.12.2018after the expiry of the official date from which Non CTS cheques are officially discontinued.
25. Further the learned counsel for accused draw the attention of the court that the cheque in question was not at all presented before drawer's bank and it has only presented before collecting bank. The endorsement issued "We regret to inform you that we are unable to credit the cheque to the account due to the following reason:NON CTS cheque not allowed in CTS clearing. itself a ground for non compliance of ingredients of section 138 NI Act. If complainant not complied the ingredients question of attracting section 138 NI Act does not arise.
26. In this regard, he relied upon judgment reported in 2008 Crl.L.J 1217( Shroff Publisher And Distributors Pvt.V/s Springer India Pvt. Ltd) wherein the Hon'ble High SCCH-6 17 CC No.4026/2024 Court of Delhi wherein the issue arose for consideration was:
(i) What is meant by The Bank' as mentioned in Clause (a) of the proviso to Section 138 of the NI Act?
(ii) Does such bank mean the bank of the drawer of the cheque or covers within its ambit any bank including the collecting bank of the payee of the cheque?
(iii) To which bank the cheque is to be presented for the purpose of attracting the penal provisions of Section 138 of the NI Act?
27. Thereafter, the Hon'ble court after discussion was pleased to held at para No.19 and 20 as under:
19. A combined reading of Sections 3, 72 and 138 of the Act leaves no doubt that the law mandates the cheque to be presented at the bank on which it is drawn if the drawer is to be held criminally liable.
20. It however does not mean that cheque is always to be presented to the drawer's bank on which the cheque is issued. The payee of the cheque has an option to present the cheque in any bank including the collecting bank where he has his account. But to attract the criminal liability of the drawer of the cheque such collecting bank is obliged to present the cheque in the drawer's bank on which the cheque is drawn within the period of 6 months from the date on which it is shown to have been issued.
The non-presentation of the cheque to the drawer's bank within the period specified in Section 138 would absolve the person issuing the cheque of his criminal liability under Section 138 of the NI Act.
SCCH-6 18 CC No.4026/2024
28. The above cited judgment is aptly applicable to present case on hand as in this case also the collecting bank has not submitted the cheque before drawer's bank.
29. In view of the above said discussion and the decision held by the Hon'ble court. In the present case Ex.P2 cheque is non CTS cheque and as per Ex.P4 the bank endorsement. Ex.P2 cheque has been dishonored for the reason "We regret to inform you that we are unable to credit the cheque to the account due to the foloowing reason: non CTS cheque not allowed in CTS clearing. Thus it is clear that the cheque Ex.P2 is not at all presented to the account of the accused no.2. Thereby complainant has not complied the ingredients of Section 138 of NI Act and hence the question of attracting section 138 of NI Act does not arise at all.
Notice not served:
30. Further accused has taken the contention that notice has not been served to the accused and though PW.1 knew that the address of the accused is changed inspite of that he has sent the notice to the same address. Further in Ex.D1 SCCH-6 19 CC No.4026/2024 complaint the notice has been returned with a shara as "addressee not found in the address" and PW.1 has admitted about the same. PW.1 having knowledge about the accused not residing in the said address in spite of that, intentionally sent the notice to the same address. But in the present case the accused has not denied the Ex.P7 the postal acknowledgment which has been duly served, at least by putting a single denial suggestion and the address mentioned in the Ex.P7 hence it appears that accused only for the sake of the defence has taken the contention that notice has not been served to him. Hence notice is deemed to be served.
Conclusion:
31. 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 SCCH-6 20 CC No.4026/2024 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 punishable under Sec. 138 of N.I. Act. Accordingly, Point No.1 is answered in the Affirmative.
32. 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.SCCH-6 21 CC No.4026/2024
The remaining amount of Rs.5,000/- shall be confiscated to the state. In default of payment of fine, the accused shall 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 undergoes the default sentence imposed above, he 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 15th day of December, 2025).
(CHETANA S.F.) IV Addl., Small Cause Judge & ACJM, Court of Small Causes, Bengaluru. SCCH-6 22 CC No.4026/2024 ANNEXURE List of witnesses examined for the Complainant:
PW.1 :- Sri Jinesh Kumar Jain List of witnesses examined for the accused:- Nil List of documents marked for the Complainant:-
Ex.P.1 : Special Power of Attorney
Ex.P.2 : Cheque
Ex.P.2(a) : Signature of accused
Ex.P.3 : Pay slip
Ex.P.4 : Bank Endorsement dated
14.08.2023
Ex.P.5 : Office copy of Legal Notice dated
22.08.2023
Ex.P.6 : Postal receipt
Ex.P.7 : Postal acknowledgment
List of documents marked for the accused:-
Ex.D.1 : Copy of complaint in CC No.273/2019
Ex.D.2 : Affidavit
(CHETANA S.F.)
IV Addl., Small Cause Judge &
ACJM, Court of Small Causes,
BENGALURU.