Bangalore District Court
Anasuyamma vs Lakshmipathy T on 5 March, 2026
CC.No.12710/2020
KABC030493342020
Presented on : 13-10-2020
Registered on : 13-10-2020
Decided on : 05-03-2026
Duration : 5 years, 4 months, 23 days
IN THE COURT OF THE XVI ADDITIONAL CHIEF
JUDICIAL MAGISTRATE, BENGALURU CITY
Dated: This the 5th day of March 2026
Present: Smt.Tejaswini K.M., B.A.L.LL.M,
XVI Addl.C.J.M., Bengaluru City.
CC. No.12710/2020
Smt.Anasuyamma
W/o Late Sundararama Reddy
Aged about 68 years
R/at No.61, South End Road,
Basavanagudi,
Bangalore - 560004.
....Complainant
(By Sri Dilip Kumar I.S., Advocate)
Versus
2 C.C.12710/2020
Sri.Lakshmipathy.T
S/o Late.Thammananchar
R/at No.62, Third Floor,
South End Road,
Basavanagudi,
Bangalore - 560004.
.... Accused
(By Sri.H.Manjunath, Advocate)
Offence complained : U/Sec.138 of Negotiable
Instrument Act.
Date of commencement
of evidence : 23.05.2023
Date of closing evidence : 30.08.2025
Opinion of the Judge : Accused found guilty
Offence complained : U/Sec.138 of Negotiable
Instrument Act.
Opinion of the Judge : Accused found guilty
JUDGMENT
This case is registered against the accused for the offence punishable U/s 138 of Negotiable Instruments Act.
3 C.C.12710/2020
2. Factual matrix of the complainant's case is as under:
It is stated that the complainant's daughter, Smt.Chandrakala Reddy, is the absolute owner of the property bearing House No. 62, situated on South End Road, Basavanagudi. The accused's mother, Smt.Leelavathi, W/o Thammannachar, entered into a rental agreement in respect of the house located on the 3rd floor of the said property. Accordingly, a lease agreement dated 25.03.2017 was executed between the accused's mother and the complainant's daughter, by virtue of which the accused's mother became a tenant under the complainant's daughter.
3. After that the accused along with his wife Smt.Pooja Lakshmipathy used to interact on day to day basis as neighbours. In May 2018 the accused has represented that he is intending to develop the property in Tumkur which he has inherited by way of partition and he has induced the complainant that if she invest in it, it would fetch the good market value and he would repay the same along with interest @ 2% per month and believing the words, the complainant has paid 4 C.C.12710/2020 Rs.15,00,000/- by way of cheques i.e. cheque bearing No.442162 dated 28.05.2018 and cheque bearing No.442161 dated 26.05.2018 for Rs.7,50,000/- each. Further the complainant has paid Rs.2,50,000/- by way of RTGS from the account of the complainant to the accused on 14.11.2018, further paid Rs.2,00,000/- by way of RTGS to the account of the wife of the accused by name Smt.Pooja Lakshmipathy on 14.11.2018. Further paid Rs.2,50,000/- by way of RTGS to the account of the accused on 23.11.2018 and Rs.2,00,000/- has been paid through RTGS on 23.11.2018. Like this the complainant has totally paid Rs.24,00,000/- to the accused.
4. The accused assured to repay it within a year with agreed interest of 2% per month with principal. In December 2019 the complainant demanded for repayment of said amount to the accused, that time for repayment of principal with interest for 10 months, the accused has issued cheque for Rs.28,80,000/- dated 01.02.2020 through cheque bearing No.000031, drawn on HDFC Bank, Gandhi Bazar Branch, Bangalore. When it was presented to the bank, it got dishonoured for the reason 'funds insufficient' vide memo dated 12.02.2020. 5 C.C.12710/2020 Therefore, the complainant got issued legal notice on 04.03.2020 demanding the accused to make payment amount within 15 days and same has been served on the accused on 05.03.2020. The accused has given an untenable reply, but not paid the cheque amount. Hence the complainant has constrained to file the present complaint.
5. After receiving the complaint, this court has meticulously gone through the documents and affidavit filed along with it and then took cognizance of the offence punishable U/sec.138 of Negotiable Instruments Act and ordered for registration of the compliant as P.C.R.
6. Sworn statement of the GPA Holder of the complainant was recorded and marked 12 documents as Ex.P-1 to P-12. As there were sufficient materials to constitute the offence, this court has proceeded to pass an order for issuing process against the accused.
7. In pursuance of summons, accused has appeared through his counsel and applied for bail. He was enlarged on bail. Then the substance of accusation was read over to the accused in the language known to him, for which he pleaded not guilty.
6 C.C.12710/2020
8. As per the direction of Hon'ble supreme court in "Indian Bank Association V/s Union of India and others reported in (2014)(5) SCC 590, this court treated the sworn statement of the GPA Holder of the complainant as complainant evidence and posted matter for cross- examination of PW.1. The counsel for the accused has fully cross-examined PW.1. Thereafter the complainant closed his side of evidence.
9. The statement of accused as contemplated under the provisions of Section 313 of Cr.P.C has been recorded vide order dated 27.04.2023 and the incriminating evidence as such forthcoming against the accused in the evidence of PW.1 and the documents has been read over and explained to the accused in the language known to him. He denied all incriminating evidence.
10. In order to substantiate his defense, the accused got himself examined orally as DW.1 and got marked Ex.D1 to D30 and he had been cross-examined by the learned counsel for the complainant.
11. I have heard the arguments of the learned counsel for both the side and perused the oral and the documentary evidence placed on record. 7 C.C.12710/2020
12. Points that arise for my consideration are as under:
1. Whether the complainant proves that the accused towards discharge of his liability issued a cheque bearing No.000031 dated 01.02.2020 for Rs.28,80,000/-, drawn on HDFC Bank, Gandhi Bazar Branch, Bangalore in favour of complainant, on presentation of the same for encashment, it was dishonored for "Funds Insufficient" in the account maintained by the accused, then in-spite of issuing demand notice to the Accused and in complying with statutory requirement under Negotiable Instrument Act, Accused did not repay the cheque amount, thereby he has committed an offence punishable U/s 138 of Negotiable Instruments Act?
2. What Order?
13. My Answer to above points are as under:-
Point No.I :- In the Affirmative,
Point No.II :- As per the final order for
the following....
8 C.C.12710/2020
REASONS
14. POINT NO.I:- The Defense of the accused that:
In 2017 he went to the house of one Mr.Raghupathi Reddy for rent, the said house was in the name of his wife by name Mrs.Chandrakala Raghupathy. He took the said house for rent of Rs.25,000/- per month and advance amount of Rs.2,50,000/-. The said advance amount of Rs.2,50,000/- was paid through cheque and accordingly rental agreement has been executed in his mother's name. After seeing the said rental agreement wherein the name of the owner is Mrs.Chandrakala , the accused got to know that Mrs.Chandrakala is residing in Australia and Mr.Raghupathi Reddy is her husband looking after the business of the said house and he singed to the rental agreement. Thereafter, they both developed friendship with each other and Mr.Raghupathi Reddy has also actively participated in the marriage of the accused held on 21.04.2017. In May 2017 he borrowed loan of Rs.5 lakhs from Mr.Raghupathi Reddy and given his cheque of HDFC Bank for security purpose. He agreed to repay the said loan with interest of 2%.9 C.C.12710/2020
15. It is further contended that Mr.Raghupathi Reddy was indulged in money lending business. He used the accused to do the said money lending business. He has produced the blank cheques taken by Mr.Raghupathi Reddy through him by the borrowers in this case. Mr.Raghupathi Reddy has has told that one Mrs.Anusuyamma who is sister of Mr.Raghupathi Reddy is intending to sell her property as such he can introduce any prospective buyers for the said property. Accordingly, the accused introduced one Mr.Sathish who intended to purchase the property from Mrs.Anusuyamma and Mr.Raghupathi Reddy, for the said sale transaction Mr.Anusuyamma has agreed to give commission amount of Rs.18 lakhs to the accused. Thereafter, by receiving Rs.81 lakhs from Mr.Sathish towards advance sale consideration, the complainant has executed registered agreement of sale in favour of Mr.Sathish.
16. Out of commission amount of Rs.18 lakhs, the complainant has paid Rs.15 to the accused through Mr.Raghupathi Reddy by opening the account in the Federal Bank in the name of the accused, through 2 cheques for Rs.7,50,000/- each and agreed to give 10 C.C.12710/2020 remaining Rs.3 lakhs at the time of executing the sale deed.
17. Thereafter, he purchased car owned by the son of the complainant by name Mr.Manjunath for Rs.4,30,000/- through the complainant and Mr.Raghupathi Reddy. Mr.Raghupathi Reddy has told him that Mr.Manjunath is residing in Australia, but he has signed to From No.29 and 30 for the said vehicle and made the accused to believe it and purchase the said car. Thereafter, he went to Shiradi along with Mr.Raghupathi Reddy that time Mr.Manjunath Reddy came near his house and stated that accused has tried to sell the land as well as car by forging the documents. The wife of the accused has informed it to the accused over phone and he has also observed that Mr.Manjunath Reddy was speaking in high tone over phone with Mr.Raghupathi Reddy in this regard.
18. When he came back to Bengaluru he got to know that said Mr.Manjunath Reddy has lodged complaint in Puttenahalli police station for forging the documents to sell the land as well as car against the Mr.Raghupathi Reddy and Mrs.Anusuyamma i.e. complainant. But both 11 C.C.12710/2020 Mr.Raghupathi Reddy and the complainant were absconded. Puttenahalli police have seized the car purchased by accused. In view of complaint lodged by Mr.Manjunath Reddy, RTO has refused to transfer the car into the name of the accused, when he enquried Mr.Raghupathi Reddy in this regard he told that a complaint is lodged against him as such to take the bail ,he needs Rs.2 lakhs and same has to be given to advocate by name Mr.Ganesh.
19. Further the accused enquired and got to know that complaint is lodged against Mr.Raghupathi Reddy and others and not against him. Mr.Raghupathi Reddy has agreed to return back Rs.2 lakhs and also money taken to sell the car to him. The accused has informed it to the police. During this situation he got to know that said Mr.Manjuanth Reddy has married the daughter of Mrs.Anusuyamma i.e. complainant of this case and in order to avoid the share of Mr.Manjunath Reddy in the property of the complainant's family, by colluding with each other, complainant and Mr.Raghupathi Reddy has done as stated above. Mr.Raghupathi Reddy has agreed to pap the remaining Rs.3 lakhs towards commission 12 C.C.12710/2020 amount, Rs.4 lakhs towards car purchasing amount given by the accused and Rs.2 lakhs received for obtaining bail to him and thereby he transferred Rs.2 lakhs to the account of his wife through Mrs.Anusuyamma's account.
20. Further the accused has repaid the loan of Rs.5 lakhs taken by him from Mr.Raghupathi Reddy i.e. by transferring Rs.2 lakhs and Rs.1.5 lakhs through his account and Rs.1.5 lakhs from his wife's account to the account of the Mr.Raghupathi Reddy. He never borrowed any loan from the complainant i.e. Mrs.Anusuyamma as narrated in the complaint and he has received only commission amount for brokerage for selling her land. He does not owe any money to Mrs.Anusuyamma i.e. complainant. Mr.Raghupathi Reddy has made the accused to open the account in Federal Bank and thereafter the accused never did any transaction in his old bank account maintained at HDFC Bank.
21. Thereafter, Mr.Raghupathi Reddy asked him to vacate the house, that time accused requested him to return back the blank cheques, but Mr.Raghupathi Reddy has told that while vacating the house, he will return the cheques, but not returned them. He misused the security 13 C.C.12710/2020 cheques and filed this case and another case in his name. After receiving the notice from the complainant he enquried with Mr.Raghupathi Reddy that time he told that by colluding with Mr.Manjunath Reddy, he is acting against him as such he intended to drag him to court. Like this Mr.Raghupathi Reddy has filed different cheque bounce cases against various persons to whom he has given loan. Hence, on these grounds, accused prays to acquit him from this case.
22. Negotiable Instruments Act provides for some presumption in favour of the complainant i.e., Section 118 reads as here: - "That every negotiable instrument was made or drawn for consideration and that every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration".
23. Further Sec 139 of the Negotiable Instruments Act provides for presumption in favour of a holder. It reads as here: - "It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in sec 138, for the 14 C.C.12710/2020 discharge, in whole or in part, or any debt or other liability."
24. Combined reading of above said sections raises a presumption in favour of the holder of the cheque that he has received the same for discharge in whole or in part of any debt or other liability. However, it is settled principle of law that the presumption available u/s 139 NI Act can be rebutted by the accused by raising a probable defense.
25. The complaint is filed through Mrs.Anusuyamma, she has filed sworn statement affidavit before the Court, but later she has given GPA in favour of the Mr.Rathupathy Reddy, who is none other than her brother to prosecute this case and accordingly, in the capacity the GPA Holder of the complainant Mr.Rathupathy Reddy has given evidence in the present case. He has got marked Ex.P1 to P12. He has produced the cheque issued by accused and the same is marked as Ex.P-1, the signature of the accused is marked as Ex.P- 1(a), copy of bank memo is marked as Ex.P-2, copy of demand notice dated:04.03.2020 is marked as Ex.P-3, copy of postal receipt is marked as Ex.P-4, copy of postal 15 C.C.12710/2020 acknowledgment is marked as Ex.P-5, copy of reply notice is marked as Ex.P-6, postal cover is marked as Ex.P-7, postal receipt is marked as Ex.P-8, copies of bank statements are marked as Ex.P-9 & P10, complaint is marked as Ex.P-11 and copy of GPA is marked as Ex.P-12. He has been cross-examined by the counsel for the accused at length.
26. Percontra, the accused has also stepped into witness box and orally deposed about his defense as stated supra and he has been cross-examined by the counsel for the complainant.
27. I have meticulously gone through pleadings and evidence placed on record and given my anxious consideration to the arguments canvassed by both side. Having regard to the facts of the case and evidence placed on record following are the admitted facts:
1) Mrs.Anusuyamma i.e. complainant of this case and Mr.Rathupathy Reddy i.e. GPA Holder are brother and sister.
2) Mr.Chandrshekar Reddy is the son of complainant.16 C.C.12710/2020
3) Mrs.Chandrakala is daughter of complainant and wife of Mr.Rathupathy Reddy.
4) Mr.Rathupathy Reddy and the accused are aquatinted with each.
5) The accused was a tenant in the house of Mr.Rathupathy Reddy and Mrs.Chandrakala and accordingly rent agreement has been executed by owner Mrs.Chandrakala in the name of accused's mother.
6) Mr.Rathupathy Reddy has filed separate cheque bounce case against the accused ie..
CC.No.12708/2020 wherein the accused has been convicted and appeal is pending.
28. Instant case is filed by the complainant alleging that she has lent loan of Rs.24 lakhs through account and in discharge of the said loan, with interest, the accused has issued the disputed cheque, but same got dishonoured for the reason 'funds insufficient'. Hence this case.
29. The complainant has produced the said cheque at Ex.P1, on perusal of the same, it appears that the cheque stands in the name of the accused. The accused 17 C.C.12710/2020 admits that the cheque belongs to his account, but he denies his signature on the cheque. The cheque has been dishonoured for the reason 'funds insufficient' as per Ex.P2 bank memo. Except denying the signature on the cheque, accused has not made any concrete efforts to establish that he has not signed on the cheque. Upon comparison of the signature of accused on the cheque and other documents available on record, it appears that there is no much glaring difference. Admittedly, the cheque has been dishonoured for the reason 'funds insufficient' and not for the reason 'signature differs'. Therefore, mere denial of the signature on the cheque cannot be any defense, same has to be proved in accordance with law.
30. If the signature of the accused on the cheque did not match the specimen signature available with the accused's bank, the memo would have indicated 'signature differs'. However, since the cheque was processed and the memo issued only stated that it could not be honored due to insufficient funds in the accused's account, it must be presumed by the Court that the cheque was indeed signed by the accused. 18 C.C.12710/2020
31. Neither in the chief examination of the accused nor in the reply to the notice has the accused contended that he did not sign the disputed cheque. The accused should have examined his banker, summoned his specimen signature, or taken steps to send the cheque to the FSL to substantiate his defense that he did not sign it. No such efforts have been made by the accused. Mere denial of the signature is insufficient. Therefore, it is established that the cheque pertains to the account of the accused and bears his signature.
32. Therefore, initial presumption U/Sec.118 and 139 of NI Act has to be drawn in favour of the complainant as the Honorable Supreme Court of India in Rangappa V Sri Mohan, (2010) 11 SCC 441 and Triyambak S Hegde v Sripad" (2022) 1 SCC 742 while relying upon the the constitution bench judgment of Basalingappa v Mudibasappa (2019) 5 SCC 418, under para 14 of its judgment reiterated that "once the cheque was issued and that the signatures are upon the cheque are accepted by the accused, the presumptions undee Sec 118 and 139 of the NI Act arise against the accused. That is, unless the contrary is proved, it shall be presumed that the cheques in question were drawn by the 19 C.C.12710/2020 accused for a consideration and that the complainant had received the cheque in question in discharge of debt/liability from the accused."
33. Therefore, as per Sec.118 and 139 of NI Act initial presumption has to drawn infavour of the complainant that cheque is issued in discharge of legally enforceable debt. The burden lies on the accused to rebut the said initial presumption on the scale of preponderance of probabilities.
34. Though the complainant has filed the case and filed her sworn statement, subsequently being the GPA Holder Mr.Rathupathy Reddy has given evidence on behalf of the complainant and he has been duly cross- examined by the counsel for the accused. Since the very defense of the accused is that there was a transaction between himself and Mr.Rathupathy Reddy from 2017, personal knowledge of Mr.Rathupathy Reddy about the transaction in question is not under serious dispute.
35. In view of initial presumption given U/Sec.118 of NI Act, it shall be presumed that the cheque is drawn for consideration and U/Sec.139 of NI Act that the disputed cheque has been issued by the accused in discharge of 20 C.C.12710/2020 legally enforceable debt. The burden lies on the accsued to rebut the said presumption on the scale of preponderance of probabilities.
36. The complainant has pleaded that entire Rs.24 lakhs has been transferred to the account of the accused as well as his wife between 28.05.2018 to 23.11.2018. In support of her case, the complainant has produced her account statement marked at Ex.P9 which reflects that on 29.05.2018 the 2 cheques bearing No.000442161 and 00044262 has been debited and accused has received Rs.15 lakhs. Further Ex.P10 the account statement of the complainant shows that on 14.11.2018 the complainant has transferred Rs.2,50,000/- to the account of the accused and Rs.2,00,000/-to the account of the wife of the accused, on 23.11.2018 Rs.2,50,000/- and Rs.2,00,000/- to the account of the accused. Thereby the complainant has clearly proved that in total of Rs.24 lakhs has been transferred to the accused and his wife's account.
37. During cross-examination of the accused dated 12.03.2025 at para No.4 the accused has unequivocally admitted about receiving of Rs.24 lakhs from the complainant, but he deposed that Rs.15 lakhs was given 21 C.C.12710/2020 towards brokerage commission. In the para No.5 of the cross-examination the accused admits that he has not repaid Rs.24 lakhs to the complainant and voluntarily he deposed that he does not owe to return back the said amount as same belongs to him.
38. Percontra, the accused has specifically taken a contention that the complainant has agreed to give commission of Rs.18 lakhs for selling her land. Accordingly, MOU has been executed between herself and the complainant and out of Rs.18 lakhs, Rs.15 lakhs was paid through 2 cheques of Rs.7,50,000/- each as reflected in Ex.P9 bank statement. Further the accused contends that he has paid Rs.4,30,000/- for purchasing the car (of Manjunath Reddy) to Mr.Rathupathy Reddy and due to the complaint lodged by the owner of the said car Mr.Manjunath Reddy, Mr.Rathupathy Reddy has agreed to returned back the said amount to the accused and returned it through account of the complainant. Further he has paid Rs.2 lakhs to Mr.Rathupathy Reddy for obtaining bail and said Rs.2 lakhs has been transferred through the account of the complainant to the accused. The advance amount he paid to Mr.Rathupathy Reddy 22 C.C.12710/2020 while taking his house for rent was Rs.2.5 lakhs and same has been returned to the account of the accused. Therefore, the entire amount of Rs. 24 lakhs, which was transferred by the complainant to the accounts of the accused and his wife, is not refundable to the complainant.
39. The counsel for the accused has vehemently argued that the complainant has suppressed the sale transaction with Mr.Sathish done through accused and payment of commission amount of Rs.15 lakhs in the complaint and instead of pleading said Rs.15 lakhs was paid towards commission, it is shown as loan transaction in the complaint. Therefore, the complainant has suppressed true facts and due to the lack of such true proper pleadings, the complaint is not maintainable.
40. On the other hand, the counsel for the complainant has denied that any commission amount was paid to the accused by the complainant. He contends that even if Rs. 15 lakhs were paid as commission for the sale transaction, the accused is not entitled to retain it because the sale deed has not been executed and the sale transaction itself remains incomplete. Therefore, the 23 C.C.12710/2020 amount must be returned to the complainant and cannot be treated as commission. He further argues that there is a family dispute concerning the complainant's property involving the complainant, her brother Mr. Raghupathi Reddy, and her son Mr. Manjunath Reddy, and there is no connection between the transaction involving the accused and any transaction with Mr. Raghupathi Reddy. Since the complainant transferred Rs. 24 lakhs from her account to the accused's account, the accused is liable to return the amount.
41. It is material to note that the accused has raised various defenses, one of the primary defenses is that, with respect to the issuance of the cheque, he had borrowed a loan of Rs. 5 lakhs from Mr. Raghupathi Reddy and, as security for the loan, had issued two blank cheques in favor of Mr. Raghupathi Reddy. Despite of repayment of Rs.5 lakhs through account, Mr.Rathupathy Reddy has not returned the security cheques to him, but he has misused those cheques and filed cheque bounce case in his name and another case in his sister's i.e. complainant's name.
24 C.C.12710/2020
42. The scope of the case is to ascertain whether the cheque has been issued by the accused in discharge of legally enforceable debt or not and Court cannot travel beyond scope of the case. Therefore, we have to concentrate how the complainant got into the custody of the cheque of the accused in the present case. To prove the loan transaction with the Mr.Rathupathy Reddy except his oral testimony, no documentary evidence is produced by the accused. In the cross-examination of PW.1 dated 18.03.2023 at page No.2 - 3 he has specifically denied the suggestion of the counsel for the accused that accused has repaid Rs.5 lakhs to his account. He denied the suggestion that he has misused the security cheque given by the accused in connected with the transaction mentioned in the cheque bounce case filed by him against the accused vide CC.No.12708/2020. He denied the suggestion that there is no any financial transaction between the accused and the complainant. He denied the suggestion that to harass the accused he has filed this case through his sister i.e. complainant. Thus, throughout the cross-examination, PW.1 did not make any admission that would substantiate the alleged loan transaction of 25 C.C.12710/2020 Rs.5 lakhs between the accused and Mr.Rathupathy Reddy i.e. PW.1.
43. Further the accused contends that he has repaid said Rs.5 lakhs to Mr.Rathupathy Reddy by transferring Rs.1.5 lakhs and Rs.2 lakhs from his account and Rs.1.5 lakhs from his wife's account to the account of Mr.Rathupathy Reddy and to substantiate this fact he has produced his account statement which reflects the transfer of the said amount to the account of Mr.Rathupathy Reddy. If such amount has been repaid, the accused ought to have taken immediate steps to recover back his security cheques allegedly given to Mr.Rathupathy Reddy.
44. In his chief-examination the accused has deposed that when he enquried Mr.Rathupathy Reddy about his security cheques, he assured to return the cheques while he vacating the rented house. Thus incumbent upon the accused to be alert to get back his cheques.
45. The accused has taken yet another contention that that Mr.Rathupathy Reddy is the money lender and he used to give money through accused, to various 26 C.C.12710/2020 persons by name Mr.Raju, Mr.Vinay, Mrs.Parimala, Mr.Subodh and others that time Mr.Rathupathy Reddy was taking blank signed cheques form those borrowers for security purpose and they are produced at Ex.D1 to 11. But the accused has not established that these cheques were taken by Mr. Rathupathy Reddy in connection with loans given to different persons. None of the alleged borrowers have been examined before the Court to substantiate this defense. Additionally, none of the cheques marked as Ex.D1 to D11 bear the name of Mr. Rathupathy Reddy. Therefore, in the absence of cogent evidence regarding the purported moneylending business of Mr. Rathupathy Reddy or the circumstances under which these cheques were issued, the Court cannot assume that Mr. Rathupathy Reddy was a moneylender and he routinely obtained blank signed cheques from borrowers.
46. It is material to note here that by producing those blank signed cheques accused himself demonstrated before the Court that he is aware that Mr.Rathupathy Reddy may misuse his security cheques, if he is not taken immediate steps to recover his security 27 C.C.12710/2020 cheques. Under such circumstances, for the reason that he had close association with Mr.Rathupathy Reddy and knowing his modus operandi, the accused would have been more vigilant and take immediate steps to recover back his security cheques. Despite of having such knowledge that he has not made such endeavour and same creates suspicious about the whole defense that he has issued 2 signed blank cheques to Mr.Rathupathy Reddy and one among them is presented through complainant in the present case.
47. The cheque has been dishonoured for the reason 'funds insufficient'. If Mr.Rathupathy Reddy has not ready to return security cheques the accused could have given stop payment instructions to his banker, no such endeavor is made by him. Before filing this complaint itself there are other criminal cases lodged against Mr.Rathupathy Reddy and complainant of this case and the prospective buyer of the land of complainant by name Mr.Sathish, on the ground that documents are fabricated to sell the property, impersonation ,cheating, when such serious allegations are made against the complainant and Mr.Rathupathy 28 C.C.12710/2020 Reddy, at-least that time accused would have been more cautious and take immediate steps to prevent his alleged security cheques from potential misuse. Despite this, the accused remained silent, and such conduct appears highly negligent and unusual. Therefore, his defense of issuance of 2 cheques for security purpose to Mr.Rathupathy Reddy does not transpires the confidence of the Court.
48. There is an initial presumption under sec 118 of NI Act ie Until the contrary is proved, the cheque was issued for consideration and that the holder is a holder in due course. In the absence of evidence, the mere oral assertion by the accused that the cheque was issued to Mr. Rathupathy Reddy and not given to the complainant, is not suffice. For lack of evidence, this Court declines to accept such defense.
49. Yer another contention of the accused is that he has received Rs.15 lakhs from the complainant for commission of selling the land of the complainant to Mr.Sathish and it is not the loan transaction. To prove this fact the accused has produced xerox copy of MOU allegedly entered into between complainant and accused 29 C.C.12710/2020 as per Ex.D17. Admittedly this MOU is xerox copy of MOU dated 30.05.2018. Order sheet shows that by filing necessary application to produce the said photo copy of the MOU as secondary evidence, as per the order dated 02.01.2024, same is produced and marked as Ex.D7. Therefore, the burden completely rests on the accused to prove this MOU as per law. The complainant has denied the execution of Ex.D17 MOU. The accused has not made any further efforts to prove the contents of Ex.D17 in accordance with law. However it is noticed by the Court in para No.3-4 of Ex.D17 it is mentioned that brokerage amount is fixed at Rs.18 lakhs and out of that Rs.15 lakhs was paid through 2 cheques dated 26.05.2018 and 28.05.2018 about which there is reference in the present complaint. If for the sake of arguments this MOU is admitted ie Rs.15 lakhs was paid towards brokerage amount in the para No.8 of Ex.D17 it is stated that accused shall return Rs.15 lakhs paid towards part payment of brokerage to the complainant if sale transaction is not completed or stopped.
50. The accused has stated that Mr.Manjunath Reddy has filed a criminal case against the Mr.Rathupathy 30 C.C.12710/2020 Reddy and complainant of this case for creating GPA in the name of Mr.Manjunath Reddy and executing an agreement of sale in faovur of Mr.Sathish. Based on the said complaint ,the charge sheet has been filed as Ex.D23 wherein the accused No.1 shown as Mrs.Anusuyamma, A- 2 is shown as Mr.Rathupathy Reddy, A-3 is shown as Mrs.Chandrakala Reddy, A-4 is shown as Mr.Sathish. In the said case, the copy of the agreement of sale dated 07.08.2018, allegedly executed by complainant in favour of Mr.Sathish has been produced. On perusal of the same it appears in the page No.3, the complainant has stated that she has received GPA from his son Mr.Manjunath Reddy. In the said case itself, one Mr.B.R.Srinivas has given a statement before the Court wherein he has stated that he introduced Mr.Sathish to the complainant and Mr.Rathupathy Reddy and the sale transaction was negotiated for total consideration of Rs.3.75 lakhs. Out of it, by executing sale agreement, Mrs.Anusuyamma and Mr.Rathupathy Reddy has received Rs.80 lakhs and towards commission to Mr.Lakshmipathy i.e. accused of this case ,Rs.15 lakhs has been paid by way of cheque and Rs.3 lakhs has been paid by way of cash. Here it needs 31 C.C.12710/2020 to noticed that one Mr.B.R.Srinivas claims to be introduced buyer Mr Satish and not accused.
51. Further yet another point to be noted here is that in Ex.D17 ie MOU, there is no reference about cash payment of Rs.3 lakhs paid to the accused. However, whether the documents are forged or not is out of the scope of this case and same will be considered by the competent Court based on the charge sheet filed as per Ex.D23. But having referred the entire documents annexed with the charge sheet, this Court has noticed that apart, from receiving Rs.15 lakhs by way of cheque, the accused has received Rs.3 lakhs by way of cash, through buyer and not from the complainant. While such a statement has no evidentiary value on its own, since the accused has relied on the charge sheet, this Court has been compelled to examine it. However, a doubt arises as to who actually paid the brokerage commission ie whether it was the complainant or the said buyer, Satish.
52. Generally before completion of sale transaction, the substantial part of the commission amount, will not be paid to the agents/brokers, but in the present case Rs.15 lakhs is shown to be transferred towards 32 C.C.12710/2020 commission as per Ex.D17, even before completion of sale transaction , based on mere agreement of sale which wouldn't transfer valid title in the eyes of law. As such, it creates a dark cloud on the contents of Ex.D17 and its authenticity. Therefore, The Court cannot directly jump into the conclusion that Ex.D17 which is produced as secondary evidence has been proved in accordance with law.
53. Under such circumstances, Rs.15 lakhs paid by the complainant as per Ex.P9 cannot be construed as commission paid to the accused, since said sale transaction is not completed. Even if it is assumed for the sake of argument, Rs.15 lakhs was received by way of commission, as per the contents of Ex.D17, the accused is bound to return back the said commission amount to the complainant as the sale transaction is not completed.
54. Another ground of attack of the accused that the complainant and Mr.Rathupathy Reddy have not returned the advance sale consideration paid by Mr.Sathish to him , is not the concern of the accused and based on that ground, accused cannot withhold the commission amount allegedly received by the 33 C.C.12710/2020 complainant as the sale itself is not completed. Subject to the outcome of the criminal proceedings, the complainant, Mr. Rathupathy Reddy, Mr. Sathish, and Mr. Manjunath Reddy will manage their respective rights over the property and the payment of advance consideration. This, however, cannot be ground to absolve the accused of liability in respect of the disputed cheque.
55. Further the accused has taken another different contention that Mr.Rathupathy Reddy induced him to purchase the swift car owned by Mr.Manjunath Reddy, under the pretext that Mr.Manjunath Reddy is residing in Australia and he has signed on Form No.29 and 30, thereby Mr.Rathupathy Reddy has received Rs.4,30,000/- from the accused. How the accused has paid the said Rs.4,30,000/-, in what mode, when, in whose presence is not explained by the accused and no proof is produced in that regard.
56. However, Mr.Manjunath Reddy has filed separate complaint against Mr.Raghupathi Reddy as per Ex.D25, based on it although FIR has been registered, police have filed 'B' report in the said case as per Ex.D27. Even if it assumed that accused Rs.4,30,000/- was paid to 34 C.C.12710/2020 the Mr.Raghupathi Reddy, then the accused is at liberty to recover the said amount and same cannot be connected to the present case of the complainant, as it is separate transaction.
57. Interestingly, the accused has made futile attempts to contend that Rs. 4,30,000/- was repaid by Mr. Rathupathy Reddy through the account of the complainant, forming part of the Rs. 24 lakhs referred to in this complaint. This claim appears to be a clear afterthought and cannot be considered by the Court, as the entire sum of Rs. 24 lakhs was transferred directly from the complainant's account to the account of the accused and his wife. Had the amount has been transferred from Mr. Rathupathy Reddy's account, situation would have been different. The accused is attempting to improperly link the transfer of amount from the complainant's account with the transactions of Mr. Rathupathy Reddy. The loan transaction with Mr.Raghupathi Reddy cannot be mixed with the transaction shown in the complaint as stated by the accused in his evidence.
35 C.C.12710/2020
58. Further in the cross-examination of the accused, the counsel for the complainant has suggested that since accused has not paid rent properly Mrs.Chandrakal has forcibly vacated the accused from the said house and same is denied by accused. Though he has stated that he has given legal notice through counsel to Mrs.Chandrakala, fo illegal eviction, but said copy is not produced before the Court. Some allegations are made about rental due towards Mrs.Chandrakala, but same is not relevant to the present case as this case is not filed to recover the rent amount. Accused admitted that he has not given any complaint against the complainant alleging that his signature on the cheque has been forged and presented.
59. Neither he has given stop payment instructions to his banker nor he has taken action against Mr.Raghupathi Reddy for selling car of Mr.Manjunath Reddy by misleading him or misusing his security cheques given for the loan of Rs.5 lakhs.
60. It is brought to the notice of the Court by the counsel for the accused that in the cross-examination of the accused, the counsel for the complainant himself 36 C.C.12710/2020 made a suggestion in the para No.5 that Rs.15 lakhs was paid towards brokerage charges and the remaining Rs.9 lakhs was received for investment to make the layout. In para No.12 of the cross-examination of accused, it is suggested by the counsel for the complainant that since the amount given in the real estate transaction i.e. sale transaction was not completed, including for repayment of the said amount, with remaining amount, the accused has issued the disputed cheque and same is denied by accused. Therefore, he argued that the complainant has suppressed the real fact of payemnt of brokerage and filed this case as the loan transaction.
61. It is important to note that MOU marked as Ex.D17 has not been proved in accordance with the law, as it has been produced as secondary evidence. Furthermore, the sale transaction itself remains incomplete. Although the complaint does not explicitly state that the amount of Rs. 15 lakhs, purported to be the brokerage fee, was transferred from the complainant's account to the accused's account, this amount is still recoverable by the complainant, because the sale transaction has not been finalized.
37 C.C.12710/2020
62. In similar circumstances, the Rangappa v. Mohan, AIR 2010 SUPREME COURT 1898, "As per the record of the case, there was a slight discrepancy in the complainant's version, in so far as it was not clear whether the accused had asked for a hand loan to meet the construction-related expenses or whether the complainant had incurred the said expenditure over a period of time. Either way, the complaint discloses the prima facie existence of a legally enforceable debt or liability since the complainant has maintained that his money was used for the construction-expenses. Since the accused did admit that the signature on the cheque was his, the statutory presumption comes into play and the same has not been rebutted even with regard to the materials submitted by the complainant. "
63. Thus this court is of the firm view that having regard to facts and circumstances of the case and defence taken by the accused, the inconsistencies in the complainant's case regarding the reason for the payment of money do not undermine the core of the case. This case law is directly applicable to the present matter. The accused has admitted receiving Rs. 24 lakhs from the complainant, Therefore, the accused is liable to repay the total amount. 38 C.C.12710/2020
64. Having regard to the entire evidence placed on record this Court is of the view that the accused has failed to rebut the presumption given U/Sec.118 and 139 of NI Act. Percontra, the complainant has proved the case by adducing required oral and documentary evidence. With these observations court proceed to answer POINT NO.I IN THE AFFIRMATIVE.
65. POINT NO.II:- In view of the reasons assigned in above point, it is ample clear that accused has committed the offence punishable u/s 138 of the Act. A bare reading of sec.138 of the NI Act indicates that the purport of sec.138 is to prevent and punish the dishonest drawers of cheques who evade their liability.
66. The Hon'ble Apex Court in its recent decision in M/s. Meters & instrument Pvt Ltd. Vs. Kanchana Mehta reported in (2018)1 SCC-560 held at para 18(ii) that"(ii) The object of the provision being primarily compensatory, punitive element being mainly with the object of enforcing the compensatory element, compounding at the initial stage has to be encouraged but is not debarred at later stage subject to appropriate compensation as may be found." In view of 39 C.C.12710/2020 the reasons assigned in above point, it is ample clear that accused has committed the offence punishable u/s 138 of the Act.
67. M/S Kalamani Tex vs P. Balasubramanian reported in AIRONLINE 2021 SC 82, Apex court reaffirmed aforementioned principle and held that "20. As regard to the claim of compensation raised on behalf of the respondent, we are conscious of the settled principles that the object of Chapter XVII of the NIA is not only punitive but also compensatory and restitutive. The provisions of NIA envision a single window for criminal liability for dishonour of cheque as well as civil liability for realisation of the cheque amount. It is also well settled that there needs to be a consistent approach towards awarding compensation and unless there exist special circumstances, the Courts should uniformly levy fine up to twice the cheque amount along with simple interest at the rate of 9% per annum."
68. The complainant himself has calculated interest for Rs.24,00,000/- and presented the cheque for Rs.28,80,000/- Therefore, keeping in mind about above principles, having regard to the amount advanced, time from which it is lying with the accused and keeping in mind the primary object of the provision, this court is of the opinion that, rather than imposing punitive sentence, fine of RS Rs.39,10,000/- is imposed with a direction to 40 C.C.12710/2020 compensate the complainant for her monitory loss, by awarding compensation U/Sec.357 of Cr.P.C, it would meet the ends of justice. Accordingly, this court proceeds to pass following .....
ORDER The accused is found guilty for the offence punishable U/s.138 of Negotiable Instruments Act.
Hence, acting U/sec.255(2) of Cr.P.C, the accused is convicted and sentenced to pay a fine of Rs.39,10,000/- (Rupees Thirty Nine Lakhs Ten Thousand Only), in default of payment fine amount, he shall undergo simple imprisonment for 2 years for the offence punishable under section 138 of N.I.Act.
Out of the fine amount collected from the accused, an amount of Rs.39,00,000/- (Rupees Thirty Nine Lakhs only) shall be paid to the complainant as compensation U/s.357 of Cr.P.C. and the remaining fine of Rs.10,000/- shall be adjusted towards the cost of state expenses. 41 C.C.12710/2020
The bail bonds of the accused shall be in force till the appeal period is over as contemplated under the provisions of Sec.437(A) of Cr.P.C.
Office to supply the copy of the Judgment to the accused forthwith at free of cost. (Dictated to the Stenographer, typed by her, corrected by me and then judgment pronounced in the open court on this the 5 th day of March 2026).
Digitally signedby TEJASWINI
TEJASWINI KM
KM Date:
2026.03.10
10:57:19 +0530
(Smt.Tejaswini K.M),
XVI ACJM, Bengaluru
ANNEXURE
I. List of witnesses on behalf of complainant:
P.W.1: Sri.Raghupathi Reddy II. List of documents on behalf of complainant:
Ex.P-1 : Original Cheque. Ex.P-1(a) : Signature of the accused. Ex.P-2 : Bank memo.
Ex.P-3 : Legal notice.42 C.C.12710/2020
Ex.P-4 : Postal Receipt.
Ex.P-5 : Postal Acknowledgment. Ex.P-6 : Reply Notice.
Ex.P-7 : Postal Cover.
Ex.P-8 : Postal Receipt.
Ex.P-9 & 10 : Bank Statements. Ex.P-11 : Complaint.
Ex.P-12 : Copy of GPA.
III. List of witnesses for the accused:
D.W.1: Sri.Lakshmipathy.T IV. List of documents for accused:
Ex.D-1 to 11 : Copies of cheques. Ex.D-12 : Notarized copies of Registration Certificate.
Ex.D-13 & 14 : Notarized copies of Form No.29. Ex.D-15 : Notarized copies of Form No.30. Ex.D-16 : Downloaded copies of HDFC Bank Statement.
Ex.D-17 : Copy of MOU.
Ex.D-18 to 20 : Copies of GPA in CC.No.6701/2019. Ex.D-21 : Copy of Sale Deed. 43 C.C.12710/2020 Ex.D-22 : Copy of Roznama in CC.No.6701/2019. Ex.D-23 : Charge Sheet in Cr.No.211/2018. Ex.D-24 : Copy of Rent Agreement. Ex.D-25 : Copy of complaint in PCR.No.8903/2018. Ex.D-26 : Copy of FIR in PCR No.8903/2018 Ex.D-27 : Copy of Charge Sheet in Cr.No.184/2018 Ex.D-28 : Copy of Order Sheet in PCR No.8903/2018. Ex.D-29 : Federal Bank Statement. Ex.D-30 : Application U/Sec.65B of Indian Evidence Act.
Digitally
signed by
TEJASWINI K
TEJASWINI M
KM Date:
2026.03.10
10:57:27
+0530
(Smt.Tejaswini K.M ),
XVI ACJM, Bengaluru
44 C.C.12710/2020