Bangalore District Court
G Selvaraju vs Arunachala Enterprises on 10 November, 2025
KABC030798202019
IN THE COURT OF THE XV ADDL. CHIEF
JUDICIAL MAGISTRATE, AT BANGALORE
Dated this the 10th day of November, 2025
PRESENT: Smt. Namrata Rao .K.S
B.A.L, L.L.B., M.B.L.,
XV ACJM,.
BENGALURU.
C.C.No.25890/2019
Complainant : Sri. G. Selvaraju
S/o Late Govindaswamy,
Aged about 50 years,
R/at No.324, Lakshmanapuri,
Gandhinagar,
Bengaluru-560 009.
(By Sri. Shankar. D,
Advocate )
V/s
Accused : 1. Sri. Arunachala
Enterprises,
Having its office at No.2/1,
Hanumanthappa Garden,
2nd Main,
near Bandireddy Circle,
Lakshminarayanapura,
Bangalore-560 021.
2
CC.No.25890/2019
Rep by its Proprietrix:
Smt. K. Anjala
W/o Late A Kuppan
2. Smt. K. Anjala
W/o late A Kuppan
Aged about 55 years,
having office at No.2/1,
Hanumanthappa Garden,
2nd Main,
Near Bandireddy Circle,
Lakshminarayanapura,
Bengaluru-560 021.
And also R/at
Smt. K. Anjala,
Lakshminarayanapura,
Bengaluru-560 021.
(By Sri. M. Srinivasan-
Advocate )
Cognizance taken on 25.10.2019
Plea recorded on 25.07.2023
Offence alleged U/s 138 NI Act
Evidence commenced on 25.10.2019
Evidence closed on 21.07.2025
Judgment pronounced on 10th Day of November
2025
Final order Convicted
XV ACJM, Bengaluru.
3
CC.No.25890/2019
JUDGMENT
This complaint is filed alleging the offence punishable under Sec.138 of the Negotiable Instruments Act .
2. The germane facts necessary to adjudicate this case are as follows:
Accused No.1 is a Proprietorship firm and accused No.2 is its Proprietrix. The husband of the accused No.2 was a close relative of the complainant.
The accused No.2, her husband and their son approached the complainant in the first week of June 2012 and requested a hand loan of Rs.4,00,000/-
towards the improvement of their business in accused No.1 firm. Both the accused No.2 and her husband voluntarily agreed to pay an interest at the rate of 2% per month. In the month of June 2012 the 4 CC.No.25890/2019 complainant advanced a loan of Rs.4 lakhs through 4 different dates.
3. In the month of November 2013, the husband of the accused No.2 once again borrowed a loan of Rs.6 lakhs through a cheque for the purpose of the business improvement. Subsequently, in the month of December 2013, the husband of the accused No.2, his brother Venkatesh and the son of the accused No.2 requested for hand loan of Rs.15 lakhs. This loan of Rs.15 lakhs was paid to the accused and her husband, her son and brother of the husband of the accused through different cheques.
4. Subsequently, in the month of May 2014 once again an amount of Rs.15 lakhs was borrowed by the accused No.2 and the husband of the accused. Therefore, in total the accused No.2, her husband 5 CC.No.25890/2019 and her family members had borrowed an amount of Rs.40 lakhs from the complainant for the business. The accused had paid the interest regularly till 2014. Towards the repayment of this loan amount, the accused No.2, her husband and their son executed a loan agreement dated 01.06.2017 and also executed On Demand Pronote on the same date. Out of the said borrowed amount, the accused has paid an amount of Rs.14 lakhs towards the interest and promised to repay the principal amount within a short span of time. When the complainant insisted for the repayment of the loan persistently, the accused No.2 issued the cheques bearing Nos.
(1)557909 dated 30.08.2019 for a sum of Rs.40,00,000/- and (2) cheque bearing No.557908 dated 30.08.2013 for a sum of Rs.19,08,000/-6
CC.No.25890/2019 both cheques drawn on Indian Bank, Cubbon pet branch, Bengaluru.
5. Upon presentation of the cheques for encashment, the cheques were dishonoured for the reason "Funds Insufficient" on 02.09.2019. A legal notice dt.12.09.2019 was issued to the accused and it came to be served upon the accused. Despite the service, the accused did not repay the amount within the statutory period. Hence, this complaint.
6. On taking the cognizance for the offence and pursuant to the appearance of the accused, he pleaded not guilty, claimed defense.
7. The Complainant has examined himself as PW.1 and Ex.P1 to Ex.P15 are marked in substantiation of his case. During the statement under section 313 CrPC, the accused has denied all 7 CC.No.25890/2019 the incriminating evidence against him. The accused is examined as DW.1 and her son of the is examined as DW.2 and got marked Ex.D1 to Ex.D16 on their behalf.
8. I have given a careful consideration to the arguments advanced by the counsel for both sides. I have carefully perused the records.
9. In view of the materials placed on record, The following points arise for my consideration:
1. Is there a legally recoverable debt?
2. Whether the complainant proves that the accused has committed the offence punishable under section 138 of N.I.Act?
3. What Order?8
CC.No.25890/2019
10. My findings for the above points are:
Point No.1 : In the Affirmative Point No.2: In the Affirmative Point No.3: As per the final order for the following REASONS
11. POINT No.1: It is the testimony of PW.1 that the accused No.1 is a proprietorship firm and the accused No.2 is proprietrix. It is not disputed. P.W.1 further testifies that the husband of the accused No.2 is a close relative of the complainant. In fact this is also not disputed.
12. It is the testimony of PW.1 that he has advanced the loan of Rs.4 lakhs in the month of June 2012, Rs.6 lakhs in the month of November 9 CC.No.25890/2019 2013, Rs.15 lakhs in the month of December 2013 and Rs.15 lakhs in the month of May 2014. The details of the payments as alleged to be made by the complainant to the accused No.1 firm for the improvement of business are as under:-
Date Cheque Amount To the account Number of 19.06.2012 323730 Rs.2,00,000/- Accused No.1 25.06.2012 323731 Rs.1,00,000/- Accused No.1 16.06.2012 154857 Rs.60,000/- Accused No.1 16.06.2012 042935 Rs.40,000/- Accused No.1 23.11.2013 53152 Rs.6,00,000/- T.L.Shivaram 14.12.2013 260517 Rs.3,00,000/- Arun Kumar 14.12.2013 260518 Rs.5,00,000/- A Kuppan 14.12.2013 260519 Rs.5,00,000/- A. Venkatesh 20.12.2013 300926 Rs.2,00,000/- Arun Kumar 23.05.2014 260522 Rs.15,00,000/- A. Kuppan The accused does not dispute the receipt of these amounts. It is her only contention that the entire amount has been repaid.10
CC.No.25890/2019
13. It is the further testimony of PW.1 that on 01.06.2017 the accused No.2, his son Arun Kumar, the husband of the accused No.2 Sri.A.Kuppan executed a loan agreement and two promissory notes. The said certified copy of loan agreement and promissory notes are marked at Ex.P13 to 15. The accused has admitted Ex.P13 to 15 and stated that though it was signed by her, her husband and her son, the complainant had managed to obtain cheques, the signatures on these documents way back in the year 2014 on a blank stamp paper. Let me consider this aspect at the relevant stage.
14. It is the further testimony of PW.1 that in the month of May 2017, upon persistent demands the accused paid an amount of Rs.14 11 CC.No.25890/2019 lakhs towards the interest on 06.06.2018 and agreed to repay the principal amount for arrears of interest within a month or two. Ultimately, when the complainant once again approached the accused and demanded for the repayment of the amount, accused issued the cheque marked at Ex.P1 and P2. The accused does not dispute the transaction, the cheques marked at Ex.P1 and 2 and also the signatures therein. Her only defence is that she has repaid the entire amount.
15. Relying upon the dictum of Hon'ble Apex Court in Rangappa V/s Mohan reported in 2010(11) SCC 441 a presumption under Section 139 of the NI Act is raised. The Hon'ble Apex Court held that when the cheque is drawn from the account of the accused and the 12 CC.No.25890/2019 accused admits and accepts the signature on the cheque, the court is obliged to presume, as per Section 139 of the N.I. Act, in favor of the complainant. Needless to say that this is a rebuttable presumption, and the accused may show the possibility of the absence of a legally binding obligation or debt.
16. As the presumption is raised, the onus shifts on the accused to prove that the cheque was not issued to the complainant in discharge of a legally recoverable debt or probabalise his defence on the hilt of preponderance of probabilities.
17. It is the specific defence of the accused that she had borrowed an amount of Rs.32 lakhs and has repaid more than the 13 CC.No.25890/2019 borrowed amount i.e., Rs.36 lakhs to the complainant. During the course of cross- examination of PW.1 the dates on which the accused states that the amount has been repaid is questioned. PW.1 acknowledges the receipt of these payments. But further explains that the payments so pointed out by the accysed corresponded to various loans taken at different times, and were unrelated to the case in question. The relevant portion of the cross examination is at Para-3:
Para-3 runs as under:
"3. ಈ ಕೆಳಗಿನಂತೆ ಅರುಣಾಚಲ ಎಂಟರ್ ಪ್ರೆೃಸಸ್ ಮೂಲಕ, 2 ನೇ ಆರೋಪಿ ಹಾಗೂ ಅವರ ಗಂಡನ ಮೂಲಕ ನನಗೆ ಹಣ ಮರುಪಾವತಿ ಆಗಿದೆ ಎಂದರೆ ದಿ.26.07.2012 ರೂ. 8 ಸಾವಿರ ದಿ.31.08.2012 ರೂ. 8 ಸಾವಿರ ದಿ.26.09.2012 ರೂ. 8 ಸಾವಿರ 14 CC.No.25890/2019 ದಿ.25.10.2012 ರೂ. 8 ಸಾವಿರ ದಿ.30.11.2012 ರೂ. 8 ಸಾವಿರ ದಿ.30.01.2013 ರೂ. 8 ಸಾವಿರ ದಿ.22.02.2013 ರೂ. 8 ಸಾವಿರ ದಿ.22.03.2013 ರೂ. 8 ಸಾವಿರ ದಿ.21.06.2013 ರೂ. 16 ಸಾವಿರ ದಿ.23.02.2013 ರೂ. 8 ಸಾವಿರ ದಿ.31.08.2013 ರೂ. 8 ಸಾವಿರ ದಿ.25.08.2013 ರೂ. 8 ಸಾವಿರ ದಿ.31.12.2013 ರೂ. 8 ಸಾವಿರ ದಿ.31.12.2013 ರೂ. 12 ಸಾವಿರ ದಿ.30.01.2014 ರೂ. 30 ಸಾವಿರ ದಿ.07.03.2014 ರೂ. 30 ಸಾವಿರ ದಿ.31.01.2014 ರೂ. 20 ಸಾವಿರ ದಿ.19.04.2014 ರೂ. 15 ಲಕ್ಷ 30 ಸಾವಿರ ನನಗೆ ಹಣ ಮರುಪಾವತಿ ಆಗಿದೆ ಎಂದರೆ ನಾನು ಆರೋಪಿಯ ಗಂಡನಿಗೆ ಎಷ್ಟೂೕ ಬಾರಿ ಹಣ ನೀಡಿದ್ದೇನೆ, ಅದನ್ನು ಅವರು ಹಿಂತಿರುಗಿಸಿದ್ದಾರೆ. ಈ ಮರುಪಾವತಿಗೂ ಈ ಪ್ರಕರಣಕ್ಕೂ ಸಂಬಂಧ ಇಲ್ಲ."
When the accused points out the 15 CC.No.25890/2019 payment to the complainant and in turn the complainant states that the said payments are not related to the transaction in question, then the onus is on the complainant to show that such payments were not related to the repayment of the amounts so mentioned in the complaint.
18. It is pertinent to note here itself that in the complaint itself the complainant reports the payment of Rs.14 lakhs on 06.06.2018 by the accused and also clarifies that it was towards the interest only. However the accused relies upon the statement of PW1 that the payments made by the accused to the complainant has elicited in para-3 of the cross examination contends that the entire amount 16 CC.No.25890/2019 has been repaid and relies upon the Honb'le Apex Court in Dasharath Bai Case.
19. The Honble Apex Court in Dashrathbhai Trikambhai Patel Vs. Hitesh Mahendrabhai Patel & Anr reported in (2023) 1 SCC 578 has held as under:
"30. In view of the discussion above, we summarise our findings below:
(i) For the commission of an offence under Section 138, the cheque that is dishonoured must represent a legally enforceable debt on the date of maturity or presentation;
(ii) If the drawer of the cheque pays a part or whole of the sum between the period when the cheque is drawn and when it is encashed upon maturity, then the legally enforceable debt on the date of 17 CC.No.25890/2019 maturity would not be the sum represented on the cheque;
(iii) When a part or whole of the sum represented on the cheque is paid by the drawer of the cheque, it must be endorsed on the cheque as prescribed in Section 56 of the Act. The cheque endorsed with the payment made may be used to negotiate the balance, if any. If the cheque that is endorsed is dishonoured when it is sought to be encashed upon maturity, then the offence under Section 138 will stand attracted;
(iv) The first respondent has made part-payments after the debt was incurred and before the cheque was encashed upon maturity. The sum of rupees twenty lakhs represented on the cheque was not the 'legally enforceable debt' on the date of maturity. Thus, the first respondent cannot be deemed to have committed an offence under Section 138 of the Act when the cheque was dishonoured for insufficient funds; and 18 CC.No.25890/2019
(v) The notice demanding the payment of the 'said amount of money' has been interpreted by judgments of this Court to mean the cheque amount. The conditions stipulated in the provisos to Section 138 need to be fulfilled in addition to the ingredients in the substantive part of Section 138. Since in this case, the first respondent has not committed an offence under Section 138, the validity of the form of the notice need not be decided"
I have gone through the above judgment of the Hon'ble Apex Court carefully. I am of the understanding that for an offence under Section 138, the dishonoured cheque must represent a legally enforceable debt at the time of presentation or maturity. If the drawer makes partial or full payments between the time the cheque is issued and when it is encashed, the 19 CC.No.25890/2019 debt at maturity is reduced and may no longer match the cheque amount. Therefore, the payments so made must be endorsed on the cheque as per Section 56; if such endorsed cheque is dishonoured, Section 138 of the NI Act can apply.
20. Now the question is whether the payments admitted to be made by the accused from 2012 to 2014 to an amount of Rs.34,76,000/- amounts to repayment and therefore whether the onus once again gets shifted upon the complainant to show that as on the date of Ex.P1 and 2 the amounts so mentioned therein is still the legally recoverable debt. I have gone through Ex.D1 to D14. They are the bank statements of the accused No.1 firm, the accused No-2 and also the account statements 20 CC.No.25890/2019 of the husband of the accused No.2. No doubt the dates of payments and also the amount mentioned in Para-3 of the cross examination more or less tallies with the bank statement. Therefore, the onus shifts upon the complainant to show that the payments so made is not pertaining to the cheque amount marked at Ex.P1 and 2.
21. In order to substantiate this, the complainant has relied upon the Ex.P13 to P15. Ex.P13 is the certified copy of loan agreement dated 01.06.2017. Ex.P14 and 15 are the promissory note executed by the accused No.2 as the proprietrix of accused No.1. I have gone through Ex.P13 carefully. What Ex.P13 states is this. The complainant has lent an amount of Rs.40 lakhs to the accused and in turn the 21 CC.No.25890/2019 accused and her son had agreed to repay this amount at the rate of 1.5% per month. On going through Ex.P13 it appears that the accused and her son along with deceased husband of Accused No.2 had approached the complainant acknowledging the debt that they had borrowed in the year 2012 and had requested to scale down the rate of interest from 2% per month to 1.5% per month for which even the complainant had agreed. Nodoubt, Ex.P13 is not only an acknowledging the earlier debt, but also serves as a binding agreement between the complainant on one part and the accused No.2 , her son (DW.2) on another part.
22. The accused No.2 and her son examined as DW.2 does not disptue the signatures on Ex.P13 to P15. At para-5 of the cross examination 22 CC.No.25890/2019 it is the suggestion of the accused that way back in the year 2014 the complainant had obtained blank signed cheques from the husband of the accused No.2, A. Kuppan, her son and also from the accused No.2. It is also suggested that in the year 2014 itself the complainant had obtained the signatures on a blank stamp paper and also promissory notes. The relevant portion of the cross-examination is at Para-5 and it runs as under:
"5. 2015 ರಲ್ಲಿ ಕುಪ್ಪನ್ ಹಾಸಿಗೆ ಹಿಡಿದಿದ್ದರು ಎಂದರೆ ನನಗೆ ಗೊತ್ತಿಲ್ಲ. ದಿ.01.06.2017 ರಲ್ಲಿ ಕುಪ್ಪನ್ ರವರು ಆರೋಗ್ಯವಾಗಿದ್ದರು. ಕುಪ್ಪನ್ ರವರಿಗೆ ಅರೋಗ್ಯ ಸರಿ ಇಲ್ಲದ್ದನ್ನು ಗಮನಿಗೆ ದಿ.23.05.2014 ರಂದು ಕುಪ್ಪನ್ ಕಡೆಯಿಂದ, 1, 2ನೇ ಆರೋಪಿ ಹಾಗೂ ಅರುಣ್ ಕಡೆಯಿಂದ ತಲಾ 5 ಖಾಲಿ ಸಹಿ ಮಾಡಿದ ಚಕ್ಕುಗಳನ್ನು ಪಡೆದುಕೊಂಡಿದ್ದೇನೆ ಎಂದರೆ ಸುಳ್ಳು. ಅದೇಸ ಮಯದಲ್ಲಿ ಖಾಲಿ 23 CC.No.25890/2019 ಛಾಪಾ ಕಾಗದದ ಮೇಲೆ ಹಾಗೂ ಒಂದು ಪ್ರನೋಟ್ ಮೇಲೆ ಕುಪ್ಪನ್, 2ನೇ ಆರೋಪಿ ಹಾಗೂ ಅರುಣ್ ಕಡೆಯಿಂದ ಸಹಿ ಮಾಡಿಸಿ ಪಡೆದುಕೊಂಡಿದ್ದೆ ಎಂದರೆ ಸುಳ್ಳು, ಸದರಿ ಛಾಪಾ ಕಾಗದ ಹಾಗೂ ಪ್ರನೋಟ್ ಮೇಲೆ ಕುಪ್ಪನ್, 2ನೇ ಅರೋಪಿ ಹಾಗೂ ಅರುಣ್ ರವರೇ ಬರೆದುಕೊಟ್ಟಿದ್ದಾರೆ."
Interestingly the accused No.2 maintains silence on Ex.P13 to P15 during her examination
-in-chief. When Ex.P13 to P15 were confronted to her she does not whisper as to whether the signature were obtained on a blank papers. If at all her stand was that the signatures were obtained on a blank stamp paper, she could have very well mentioned about it either in her examination-in-chief or cross-examination. No plausible explanation is forthcoming from the records as to her silence. The relevant portion of the cross examination is at Para-6: 24
CC.No.25890/2019 "6. ದಿ.01.06.2017 ಕ್ಕೆ ಒಟ್ಟು ರೂ.59 ಲಕ್ಷಗಳನ್ನು ದೂರುದಾರರೊಟ್ಟಿಗೇ ಬಾಕಿ ಮಾಡಿಕೊಂಡಿದ್ದೆ ಎಂದರೆ ನನ್ನ ಯಜಮಾನರಿಗೆ ಗೊತ್ತು. ಹೀಗೆ ಪಡೆದ ಹಣವನ್ನು 2-3 ಕಂತುಗಳಲ್ಲಿ ಹಿಂತಿರುಗಿಸುತ್ತೇವೆ ಎಂದು 2019 ರವರೆಗೂ ಕಾಲಹರಣ ಮಾಡಿದ್ದೇವೆ ಎಂದರೆ ಸುಳ್ಳು. ಈಗ ದಿ.01.06.2017 ರ ಸಾಲದ ಕರಾರುಪತ್ರ ಹಾಗೂ ಪ್ರೊನೋಟ್ ನ ಧೃಡೀಕೃತ ನಕಲುಗಳನ್ನು ನೋಡಿ ಗುರುತಿಸುತ್ತಿದ್ದೇನೆ. ಸಾಲದ ಕರಾರುಪತ್ರದಲ್ಲಿ ನನ್ನ, ನನ್ನ ಗಂಡನ ಹಾಗೂ ನನ್ನ ಮಗನ ಸಹಿಗಳು ಇವೆ. ಪ್ರೊನೋಟ್ ಗಳಲ್ಲಿ ನನ್ನ ಸಹಿ ಇದೆ, ಇವುಗಳನ್ನು ನಿಪಿ.13 ರಿಂದ 15 ರವರೆಗೆ ಗುರುತಿಸಲಾಯಿತು. ನನಗೆ ತಿಳಿದಿರುವಂತೆ ರೂ.20 ಲಕ್ಷಗಳನ್ನು ಸಾಲವಾಗಿ ಪಡೆದದ್ದು ನಿಜ, ಅದಕ್ಕೆ ಬಡ್ಡಿ ಸೇರಿಸಿ ರೂ.37 ಲಕ್ಷಗಳು ಎಂದು ಮಾತುಕತೆ ಆಗಿರುತ್ತದೆ."
23. So far as DW2, the son of the accused is concerned, in his examination-in-chief has testified that their signatures were obtained on a blank stamp paper and promissory notes at a time 25 CC.No.25890/2019 when his father's health was not in good condition. The relevant portion of the cross examination is at Para-2, line-1 and it runs as under:
"2. ನನ್ನ ತಂದೆಗೆ ಅರೋಗ್ಯ ಸಗರಿ ಇಲ್ಲದ ಸಮಯದಲ್ಲಿ ದೂರುದಾರರು ತಾವು ನೀಡಿದ ಹಣದ ಭದ್ರತೆಗಾಗಿ ದಾಖಲೆಗಳು ಬೇಕು ಎಂದು ಖಾಲಿ ಛಾಪಾ ಕಾಗದದ ಮೇಲೆ ನನ್ನ, ನನ್ನ ತಾಯಿ ಹಾಗೂ ತಂದೆಯ ಸಹಿಗಳನ್ನು ಪಡೆದಿರುತ್ತಾರೆ. ಇದಲ್ಲದೇ ನನ್ನ, ನನ್ನ ತಂದೆಯ ಹಾಗೂ ಅರುಣಾಚಲ ಎಂಟರ್ ಪ್ರೆೃಸಸ್ ನ ತಲಾ 5 ಖಾಲಿ ಸಹಿ ಮಾಡಿದ ಚೆಕ್ಕುಗಳನ್ನು ದೂರುದಾರರು ಪಡೆದಿರುತ್ತಾರೆ. ದೂರುದಾರರಿಗೆ ನಾವು ಸಂಪೂರ್ಣ ಹಣವನ್ನು ಮರುಪಾವತಿಸಿರುತ್ತೇವೆ. ದೂರುದಾರರಿಗೆ ನೀಡಬೇಕಾದ ಯಾವುದೇ ಹಣದ ಭಾದ್ಯತೆ ಇರುವುದಿಲ್ಲ. ನನ್ನ ತಾಯಿಯ ವಿರುದ್ಧ ಸುಳ್ಳು ಪ್ರಕರಣ ಸಲ್ಲಿಸಿರುತ್ತಾರೆ."
In the cross-examination, DW.2 at para-4 says that he has affixed his signature at Ex.P13 in the year 2014. I have gone through Ex.P13 at this 26 CC.No.25890/2019 stage very carefully. Ex.P13 is written on stamp paper obtained on 30.05.2017. The agreement was executed on 01.06.2017. If that is so, the stand of the accused that they had signed on Ex.P13 way back in the year 2014 seems to be highly improbable.
24. Furthermore, even if it is assumed that they had indeed signed the documents on a blank stamp paper and blank promissory notes, it raises the question as to why they did not take any appropriate legal action against the complainant for allegedly misusing these documents. Even after getting to know about the dishonour of the cheques, the accused have kept quiet. I find no evidence placed on record to show that the signatures of the accused No.2, her husband and son were taken on a blank stamp paper. 27
CC.No.25890/2019 Therefore Ex.P13 to P15 stands probabilized and the complainant has also shown before this court that the accused was due for a sum of Rs.40 lakhs as on 01.06.2017.
25. The cheques are dated 30.08.2019. It is the case of the accused that she has made payments as per Ex.D1 to D14.
The last date of payment as per Ex.D1 to D14 is dated 19.04.2014. If at all as on 19.04.2014, she has repaid the entire amount to the complainant, what on earth made them to execute Ex.P13 to Ex.P15 is not explained. Ex.P13 to P15 are dated 01.06.2017. So, if the accused had repaid the amount in the year 2014 itself, then I am unable to understand why they executed Ex.P13 to 15. There is no plausible explanation forthcoming from the evidence as to why the loan agreement 28 CC.No.25890/2019 at Ex.P13 was executed in the year 2017 along with the promissory notes.
26. DW.2 in his cross examination at Para-4 states that the payments to the complainant were made from the year 2014 to 2019. Ex.D1 to D14 reflects the payments to be made till 2014 only. Subsequently Ex.P13 has been executed. If at all, the accused had paid the amounts till 2019, no details of the payments, mode of payments have been provided to this court in order to substantiate their defence. Apart from the self serving testimony of DW.2, I do not find an iota of evidence placed before this court to show that they have repaid the amount from 2014 to 2019.
27. The testimony of DW.1 appears rather peculiar, as she consistently claims ignorance 29 CC.No.25890/2019 regarding all aspects of the case. Although she is the proprietress of accused No.1, she states that her husband handled all matters, and therefore, she is unaware of any transactions between the complainant and the accused No.1 firm. In response to every question related to Ex.P1 and P2, as well as payments made to the accused No.1 firm, she merely asserts that her husband was aware of everything, and she has no knowledge of the details. Notably, she does not deny the transactions themselves.
28. It is important to note that it is unlikely for her, as the proprietrix, to be completely unaware of the transactions concerning the firm. Furthermore, merely claiming ignorance does not absolve her of the liability regarding the cheques issued as per Ex.P1 and P2. Her lack of 30 CC.No.25890/2019 knowledge about the transactions does not, in law or fact, exempt her from responsibility for the liabilities represented by those cheques.
29. It is also the vehement argument of the counsel for the accused that the legal notice is not served and documents on record reflect the non- service of the notice and therefore the complaint is to be dismissed. The counsel for the accused relies upon Alavi Haji v/s Palapetty Muhammed & Others reported in (2007) 6 SCC 555. The Ex.P7, 8 is the track consignment pertaining to the legal notice. It reflects that the Legal notice have been served upon the accused. Thus I do not find any merits in the contention of the accused that the legal notice was not served.
30. Before concluding, I find it pertinent to 31 CC.No.25890/2019 mentionabout the proceedings as reflected in Ex.P9. It is the order-sheet, judgment and decree pertaining to OS No.8395 of 2019 before Hon'ble XXIV Addl City Civil and Sessions Judge, Bengaluru. It is a suit filed for the recovery of the money by the complainant against the accused No.1, 2 and others based upon Ex.P14 and 15 promissory notes. The accused No.1 and 2 herein are made jointly and severally liable for the suit claimed along with the rate of interest of 6% p.a. The case before the XXIV ACC & SJ, Bengaluru association importance for a simple reason that the amount that would be realised from the decree therein should have to be deducted from the compensation amount awarded herein.
31. Therefore when the accused has not disputed the cheques and the signatures therein 32 CC.No.25890/2019 and consequently when the presumption under section 139 of the Negotiable instruments Act is raised. The the accused has failed to probabilise her defence, I am inclined to arrive at the conclusion that the Ex.P1 & 2 cheques were issued for the purpose of the discharging the legally recoverable debt as mentioned in the complaint. Having regard to all the evidence tabled before me, I am of the opinion that the evidential burden in rebutting the presumption raised u/sec.139 of the N.I Act is not discharged. Hence, I answer the point No.1 in the AFFIRMATIVE.
32. Point No.2: The Cheques marked at Ex.P1 and 2 are dated 30.08.2019 and Ex.P3 and 4 were dishonoured for Funds 33 CC.No.25890/2019 Insufficient. A legal notice was issued within the statutory period on 12.09.2019. The complaint is presented on 25.10.2019. The complaint is in time and the complainant has complied with all the requirements of the section 138 of the Negotiable Instruments Act.
33. On the basis of the entire materials on record, I am of the opinion that the accused has committed an offence under section 138 of the Negotiable Instruments Act. Accordingly I answer the POINT NO.2 In The AFFIRMATIVE.
34. Point No.3: For the foregoing reasons and in view of the above findings, I pass the following:
34
CC.No.25890/2019 ORDER The accused No.1 and 2 are found guilty.
In Exercise of the Powers vested under section 255(2) of Cr.P.C., the accused No.1 and 2 are convicted for the offence punishable under section 138 of N.I.Act.
The accused No.1 and 2 are sentenced to pay a fine amount of Rs.59,18,000/- (Fifty Nine Lakhs Eighteen Thousand Only) In default of payment of fine, the accused No.2 shall undergo SI for three months.
In Exercise of the powers vested under Sec.357(1)(b) of Cr.P.C., out of the fine 35 CC.No.25890/2019 amount, the complainant is entitled for Rs.59,13,000/-
(Fifty Nine Lakhs Thirteen Thousand Only) towards compensation.
In Exercise of the powers vested under Sec.357(1) (a) of Cr.P.C., the remaining fine amount of Rs.5,000/- (Rupees Five Thousand only) is to be remitted to the state.
The personal bond executed by the accused No.2 shall stand cancelled and the cash security deposited by the accused No.2 shall be refunded to the accused No.2 after the appeal period is over.
The amount if any received fromd the proceedings in O.S No.8395/2019 shall be 36 CC.No.25890/2019 deducted towards the copensation amount awared to the complainant in the present case.
A copy of the above judgment shall be supplied to the accused for free of cost. (Dictated to the Stenographer, transcribed and typed by her, corrected and signed and then pronounced by me in the open court on this the 10th day of November, 2025 ).
(SMT. NAMRATA RAO K.S) XV ACJM, Bengaluru.
ANNEXURE LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
PW.1 : G.Selvaraju LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P1 & 2 : 2 Cheques Ex.P1(a)2(a): Signatures 37 CC.No.25890/2019 Ex.P3 & 4 : 2 Bank endorsements Ex.P5 : Office copy of Legal Notice Ex.P6 : Postal receipt Ex.P7&8 : C/c of article tracking reports Ex.P9 : C/c of Order sheet, decree in OS No.8395/2019 Ex.P10 : Computarized copy of ITR returns for the year 2019-2020 Ex.P11 : 65 B certificate Ex.P12 : Balance sheet for the year 2018-19 Ex.P13 : C/c of Loan agreement Ex.P14&15: C/c of Promissory note & consideration receipt LIST OF WITNESSES EXAMINED FOR THE ACCUSED:-
DW.1 : Smt. Anjala
DW.2 : Sri. Arun Kumar
38
CC.No.25890/2019
LIST OF DOCUMENTS MARKED FOR THE ACCUSED:
Ex.D1 & 2 : C/c of statement
of account issued
by Indian Bank
Ex.D3 to 13 : C/c of statements
of accounts pertaining
to Sri. Arunachala
Enterprises from
01.07.2012 to
30.06.2018 issued by
Indian Bank,
Cubbonpet branch,
Bengaluru.
Ex.D14 : C/c of statement of
account of accused No.2
Ex.D15 : C/c of order sheet Misc
1357/2024.
Ex.D16 : Aadhaar card
(SMT. NAMRATA RAO K.S)
XV ACJM, Bengaluru.
39
CC.No.25890/2019
10.11.2025
(Judgment pronounced in the open court) ORDER The accused No.1 and 2 are found guilty.
In Exercise of the Powers vested under section 255(2) of Cr.P.C., the accused No.1 and 2 are convicted for the offence punishable under section 138 of N.I.Act.
The accused No.1 and 2 are sentenced to pay a fine amount of Rs.59,18,000/- (Fifty Nine Lakhs Eighteen Thousand Only) In default of payment of fine, the accused No.2 shall undergo SI for three months.
In Exercise of the powers vested under Sec.357(1)(b) of Cr.P.C., out of the fine amount, the complainant is entitled for Rs.59,13,000/- (Fifty Nine Lakhs Thirteen Thousand Only) towards compensation.
In Exercise of the powers vested under Sec.357(1) (a) of Cr.P.C., the remaining fine amount of 40 CC.No.25890/2019 Rs.5,000/- (Rupees Five Thousand only) is to be remitted to the state. The personal bond executed by the accused No.2 shall stand cancelled and the cash security deposited by the accused No.2 shall be refunded to the accused No.2 after the appeal period is over.
The amount if any realized or recovered in the proceedings in O.S No.8395/2019 filed before XXIV ACC & S.J, Bengaluru shall be deducted towards the compensation amount awarded to the complainant in the present case.
A copy of the above judgment shall be supplied to the accused for free of cost.
(Vide separate judgment) XV ACJM, Bengaluru.