Bangalore District Court
Maruthi Plastics vs N.R. Sign World on 18 July, 2025
KABC020234682022
IN THE COURT OF XXIV ADDITIONAL SMALL
CAUSES JUDGE, & A.C.J.M. AT: BENGALESE
(SCCH-26)
DATED THIS THE 18th DAY OF JULY 2025
PRESENT : SRI. APPASAB NAIK,
B.A.L.L.B.(Spl)
XXIV ADDL. SCJ & ACJM
BENGALURU.
1 Case Number CC. No.10663 OF 2022
2 The date of 11.11.2021
commencement of
evidence
3 The date of closing 19.10.2024
evidence
4 Name of the M/s. Maruthi Plastics,
Complainant Represented by its Proprietor;
Mr. Tej Singh,
No.1, 11th Cross, Banaras
Mansion, Near Raj Hotel,
BVK Iyengar Road,
Bengaluru - 560 053.
And also at:
No.9, 3rd Floor, Subramanya
Lane, Cottonpet,
Bengaluru - 560 053.
(By Sri.Akash V.T.- Adv)
SCCH - 26 2 CC No.10663/2022
5 Name of the 1.M/s. NR Sign World,
Accused Office at No.176/44,
Ground Floor, MKK Road,
Nagappa Block,
Bengaluru - 560 021.
Represented by its authorized
signatory;
Smt. Nimishy Aggarwal
W/o Rajendra Jain,
2. Smt. Nimishy Aggarwal
Authorized signatory
M/s. NR Sign World,
Office at No.176/44,
Ground Floor, MKK Road,
Nagappa Block,
Bengaluru - 560 021.
3. Mr. Rajendra Jain,
Having his Office at No.176/44,
Ground Floor, MKK Road,
Nagappa Block,
Bengaluru - 560 021
(By Sri. R.S. Abhay- Adv.)
6 The offence U/s.138 of the Negotiable
complained of Instruments Act
7 Opinion of the judge Accused found guilty
JUDGMENT
The complainant has filed this complaint Under Section 200 of Cr.P.C against the accused alleging that the SCCH - 26 3 CC No.10663/2022 accused has committed an offence punishable Under Sec.138 of the Negotiable Instruments Act, 1881. (In short N.I.Act).
2. The brief facts of the complainant's case are as under :
It is the case of the complainant that, the complainant is proprietorship concern and involved in business of selling plastics materials and Acrylic Sheets thereafter retailing the same to various business customers. The accused No.2 representing Accused No.1, Accused No.3 is husband of accused No.2 has approached seeking to Acrylic sheets and they have placed many oral purchase orders/invoices.
Further during course of such business between the accused No.1 to 3 and complainant the former and had placed certain purchase orders seeking delivery of Acrylic Sheets. The accused No.1 had dues to the tune of Rs.23,11,195/-. The accused No.3 had entered into an agreement dated 03.01.2020 agree to pay in a sum of Rs.20,50,651/-. Further submitted that if accused No.2 and SCCH - 26 4 CC No.10663/2022
3 have failed to pay the amount of Rs.20,50,651/- as agreed by the accused No.1 to 3 had agreed to pay the 28% interest on the outstanding account including court charges, notice charges and lawyer fee. But the accused has not paid the said amount to the complainant. Thereafter, repeated demands the accused No.3 had issued 3 cheques bearing No.628312 dated, 05.07.2021 for a sum of Rs.15,00,000/-, cheque No. 068635 dated 13.08.2021 for Rs.9,50,651/- and cheque No.068640, dated 13.08.2021 for Rs.9,00,000/- drawn on Karnataka Bank Ltd., City Market Branch, Bengaluru in favour of complainant and assured to present said cheque for encashment.
3. Further it is the case of the complainant that, on presentation of the said cheque through its banker YES Bank Ltd., BVK Iyengar Road, Near Abhinay Theater, Maharaja Complex, Bengaluru, it was returned with an endorsement "Funds Insufficient and Drawers Signature differs" on 13.08.2021 and 28.09.2021. Thereafter complainant issued legal notice to the accused dated SCCH - 26 5 CC No.10663/2022 05.10.2021 through RPAD and Speed Post calling upon him to pay the cheque amount within 15 days from the date of receipt of notice. The notices sent to accused have been returned with postal cover on 08.10.2021. In spite of it, the accused has not given any reply to the notice or not paid the due amount. Hence, filed this complaint.
4. After perusing the contents of the complaint and documents, this court has taken cognizance of offence punishable u/s 138 of NI act and registered PCR. Thereafter, this court has recorded the sworn statement of the authorized person of the complainant firm and got marked 14 documents as Ex.P.1 to Ex.P.14. Since, the complainant has made out prima-facie case to proceed against accused, the case has been registered in Criminal Register No.III and issued summons to the accused. The accused, in response to the summons, they have appeared before this court and obtained bail. Thereafter, the plea of the accused has been recorded. They have pleaded not guilty and claims to be tried.
SCCH - 26 6 CC No.10663/2022
5. In view of judgment passed by the Hon'ble Apex Court in the case of Indian Bank Association and others V/s. Union of India and others, the sworn statement on affidavit is treated as evidence of complainant and it is considered as PW-1 evidence and documents are marked as Ex.P.1 to Ex.P.14 and during the cross-examination of PW.1, the accused has marked the documents as Ex.D1 to Ex.D3 through confrontation. 313 Statement of accused is recorded and incriminating circumstances appeared in the evidence against the accused were read over to the accused and accused denied the all incriminating circumstance appeared in the evidence and he submits that to adduce defence evidence on their behalf, but they have not chosen to adduce defence evidence and defence evidence is taken as nil.
6. Heard the arguments on both sides. Perused the records.
Learned counsel for complainant has produced the following decisions:
1.(2019) 4 SCC 197
2.(2023)10 SCC 148 SCCH - 26 7 CC No.10663/2022
3.(2001)8 SCC 458 Learned counsel for accused has produced the following decisions:
1.(2023)1SCC578
2.(2008)4SCC54
3.ILR 2008 KAR 4629
7. Now the points that arise for my consideration are as follows:-
1. Whether the complainant prove beyond all reasonable doubt that the accused has issued cheque bearing No.628312 dated, 05.07.2021 for a sum of Rs.15,00,000/-, cheque No. 068635 dated 13.08.2021 for Rs.9,50,651/- and cheque No.068640, dated 13.08.2021 for Rs.9,00,000/- drawn on Karnataka Bank Ltd., City Market Branch, Bengaluru, in his favour in discharge of the legally enforceable debt or liability and when the said cheques were presented to the Bank for encashment they were returned unpaid with remarks that "Account Closed" and inspite of demand notice, he has not paid the amount and thereby committed the offence punishable under Sec.138 of Negotiable Instruments Act?
2. What order?
8. On the basis of the materials available on records, my finding to the above points as follows:
SCCH - 26 8 CC No.10663/2022
POINT NO.1: In the Affirmative.
POINT NO.2: As per the final order
for the following:
REASONS
9. POINT No.1: It is the case of the complainant that, Accused have placed many oral purchase orders/ invoices. Further during course of such business between the accused No.1 to 3 and complainant the former and had placed certain purchase orders seeking delivery of Acrylic Sheets. The accused No.1 had dues to the tune of Rs.23,11,195/-. The accused No.3 had entered into an agreement dated 03.01.2020 agree to pay in a sum of Rs.20,50,651/-.Further submitted that if accused No.2 and 3 have failed to pay the amount of Rs.20,50,651/- as agreed by the accused No.1 to 3 had agreed to pay the 28% interest on the outstanding account including court charges, notice charges and lawyer fee. But the accused has not paid the said amount to the complainant. Thereafter, repeated demands the accused No.3 had issued 3 cheques bearing No.628312 dated, 05.07.2021 for a sum of Rs.15,00,000/-, SCCH - 26 9 CC No.10663/2022 cheque No. 068635 dated 13.08.2021 for Rs.9,50,651/- and cheque No.068640, dated 13.08.2021 for Rs.9,00,000/- drawn on Karnataka Bank Ltd., City Market Branch, Bengaluru in favour of complainant and assured to present said cheques for encashment. Further it is the case of the complainant that, on presentation of the said cheques through its banker YES Bank Ltd., BVK Iyengar Road, Near Abhinay Theater, Maharaja Complex, Bengaluru, they werereturned with an endorsement "Funds Insufficient and Drawers Signature differs" on 13.08.2021 and 28.09.2021. Thereafter complainant issued legal notice to the accused dated 05.10.2021 through RPAD and Speed post calling upon him to pay the cheque amount within 15 days from the date of receipt of notice. The notices sent to accused have been returned with postal cover on 08.10.2021. In spite of it, the accused has not given any reply to the notice or not paid the due amount.
10. As already stated supra the proprietor of the complainant firm has examined himself as PW.1 and got SCCH - 26 10 CC No.10663/2022 marked 14 documents as Ex.P.1 to P14. PW.1 has filed affidavit in lieu of examination-in-chief reiterating the entire averments of his complaint. Ex.P1 is the agreement for payment deed dated 03.01.2020. Ex.P2 to Ex.P4 are the cheques, Ex.P2(a) to Ex.P4(a) are the signature of accused. Ex.P5 to Ex.P7 are the Bank endorsements. Ex.P8 is the office copy of legal notice dated 05.10.2021. Ex.P9 to Ex.P11 are the postal receipts. Ex.P12 to Ex.P14 are the Unopened RPAD covers. These documents disclose that the complainant presented the cheques for encashment, but the same were returned to him with endorsement "Funds Insufficient and Drawer Signatures Differs". These documents support the averments made in the complaint. As per these documents, it appears that the complainant has issued legal notice to the accused demanding them to pay the cheque amounts within 15 days from the date of receipt of notice. Therefore, the present complaint has been filed within time limit
11. The documents produced by PW.1 clearly shows SCCH - 26 11 CC No.10663/2022 that he has complied with the mandatory provisions of Section 138 of NI Act. Therefore, it gives raise to presumption in favour of complainant u/s 118 and 139 of NI Act. However, the presumptions available in favour of complainant are rebuttable in nature.
12. A careful scrutiny of the documents relied by the complainant goes to show that, the statutory requirements of Section 138 of N.I. Act is complied with and this complaint is filed within time. Thus, the complainant is entitled to rely on the statutory presumptions enshrined under section 118 read with section 139 of N.I. Act.
13. The 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".
Further Section 139 of the Negotiable Instruments Act provides for presumption in favour of a holder. It reads as here: -
SCCH - 26 12 CC No.10663/2022 "It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in section 138, for the discharge, in whole or in part, or any debt or other liability."
14. A 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.
15. In this case the accused had disputed that accused is not liable to pay the amount covered under the cheques, only liable to pay the due amount of Rs.3,73,489/-.
16. In this case the proprietor of complainant firm examined PW-1 and he has produced the relevant documents to draw presumption in favour of the complainant as per the ingredient of Sec.138 of N.I.Act. Now, it is proper to consider the oral evidence of the PW-1.
17. During cross examination of PW-1, it is specific defense of the counsel that the accused has paid entire amount. Another defence of the counsel for accused that SCCH - 26 13 CC No.10663/2022 accused has only pay the amount of Rs.3,75,000/-. Another defence taken that the complainant has created the Ex.P-1 and also complainant has not disclosed the payment made by the accused after filing of this compliant.
18. The accused has not adduced the defence on their behalf, but the documents got marked as Ex.D1 to D3 through confrontation to PW-1. The Ex.D1 and D2 are the bank account statements and Ex.D3 is the acknowledgment receipt.
19. The learned counsel for the complainant argued that reiterating complaint averments during his arguments and explained the exhibited documents on complainant side Ex.P.1 to 14. Further, argued that accused was due balance amount of Rs.23,11,195/- and mutual discussion of both parties, entered into agreement dated 03-01-2020 agreed to pay the amount of Rs.20,50,651/- and also further agreed that if not paid the said amount, 28% interest on the outstanding balance amount. In the cross examination of PW1, the learned counsel for accused has SCCH - 26 14 CC No.10663/2022 suggested to PW1 in respect of Ex.P-1 and Ex.P1 is admitted by the accused. The accused has admitted the transactions. The accused has not disputed the cheques and their signatures. The learned counsel for complainant argued that once the issuance of cheques and documents were admitted by the accused, it drawn presumption U/s 139 of NI Act. The accused has issued the cheques for repayment of due amounts and complainant has proved the case on oral and documentary evidence. Hence he prayed for convict the accused.
20. The learned counsel for accused argued that, the complaint has filed by the complainant is not maintainable. The complainant has created the Ex.P-1. The complainant has not produced the ledger and account statements. The accused have made repayments to the complainant, but not disclosed the compliant U/Sec.56 of NI Act. The complainant has not clarified the interest mentioned in Ex.P1. Hence he prayed for acquit the accused.
21. I have perused entire material placed on record.
SCCH - 26 15 CC No.10663/2022 Ex.P1 is the agreement, which discloses that as on 03-01- 2020 due sum of Rs.20,50,651/-.
22. Before to appreciate the oral and documentary evidences placed on record by the respective parties and also to appreciate the arguments advanced. As per sections 118(a) & 139 of NI Act are two important provisions and they provides for raising mandatory presumptions in favour of the complainant until the contrary is proved by the accused. Even in the catena of decisions i.e., in the case of Rangappa Vs. Mohan reported in 2010(11) SCC 441, in the case of Bir Singh Vs. Mukesh Kumar reported in 2019(4) SCC 197, in the case of APS Forex Services (P) Ltd., Vs.Shakthi International Fashion Linkers reported in 2020(12) SCC 724, in the case of Rajeshbai Muljibhai Patel Vs. State of Gujarat, reported in 2020(3) SCC 794, in the case of Triyambak S. Hegde Vs. Sripad reported in Live Law 2021 SC 492 and it is laid down that, "Once the issuance of cheque and the signature thereon is admitted by the accused, the court is required to raise presumption in SCCH - 26 16 CC No.10663/2022 favour of the complainant stating that, the accused has issued the cheque for some consideration towards discharge of his legal debt or liability of the complainant and that the complainant is the due holder of the said cheque. The burden shifts on the accused to rebut the statutory presumptions under sections 118(a) & 139 of NI Act." Now, it is well established law that, the presumption mandated by Section 139 of NI Act, thus indeed includes the existence of legally enforceable debt or liability and it is open for the accused to raise a probable defense wherein the existence of legally enforceable debt or liability can be contested and he shall prove before the court on preponderance of probabilities, only thereupon a statutory presumption raised in favour of the complainant stands rebutted.
23. After careful scrutinizing the oral evidences of PW.1 and also the averments of complaint, there is no dispute the business transaction between the complainant and accused. It is the defense of the accused that, the due amount only sum of Rs.3,75,000/- and another defence SCCH - 26 17 CC No.10663/2022 that accused has paid the entire amount to the complainant. The relevant portion of the cross examination of the PW.1, is reproduced for the benefit of discussion as under;
"2 ನೇ ಆರೋಪಿ ಬ್ಯಾಂಕ ದಾಖಲೆಯನ್ನು ತೋರಿಸಿ ಸದರಿ ದಾಖಲೆಯ ಪ್ರಕಾರ ನನಗೆ ಆರೋಪಿತರು ಎಲ್ಲ ಹಣವನ್ನು ಮರುಪಾವತಿ ಮಾಡಿರುತ್ತಾ ರೆ Further suggested to PW-1 that ನಿಡಿ-2 ರ ದಾಖಲೆಯ ಪ್ರಕಾರ ಬಾಕಿ ನೊತ್ತ ರೂ.3,73,489/- ಇರುತ್ತದೆ."
24. In this case, the complainant has taken contention that as per agreement Ex.P1 between the complainant and accused in respect of due balance amount. The accused has failed to repay the amount of Rs.20,50,651/-, the accused has agreed to pay 28% interest on the outstanding amount. Considering the cross examination of PW1, accused have executed the Ex.P1 infavour of complainant for payment of due balance amount.
25. The Learned Counsel for the accused has argued that the complaint is not maintainable U/Sec.56 of NI Act for the reasons that during the pendency of the case, the SCCH - 26 18 CC No.10663/2022 accused has repaid the some amount to the complainant, but has not disclose the said amounts in this compliant and also claim the entire cheque amounts and relied the citation (2023) 1 SCC 578 Dasharathbai Trikambhai patel Vs Hitesh Amahendrabhai Patel and another It is held that -
A. Debt, Financial and monetary laws-
Negotiable Instruments Act, 1881-S.138 and S.56 r/w S.15 loan transactions - Issuance of cheque as Security- Effect of part payment of debt prior to presentation of cheque for encashment-S-138 whether would still be attracted when the drawer of the cheque makes a part payment towards the debt or liability after the cheque is drawn but before the cheque is enchashed, for the dishonour of the cheque which represent the full sum - principles clarified C-Debt, Financial and monetary Laws-
Negotiable Instruments Act.1881-S56 r/w S.15- Endorsement by recording part payment of debt in the cheque - Permissibility and its effect- Held, under S-56 r/w S.15 an endorsement may SCCH - 26 19 CC No.10663/2022 be made by recording the part payment of the debt in the cheque or in a not appended to the cheque - Further Held, when such an endorsement is made, the instrument could still be used to negotiate the balance amount and if, the endorsed cheque when presented for encashment of the balance amount is dishonored, then the drawee can take recourse to the provisions of S.138.
Perusal the oral and documentary evidence, the learned counsel for accused has suggested to PW-1 in cross examination, Pw-1 is admitted that -
" ದಿನಾಂಕ 27-08-2022 ರಂದು ಆರೋಪಿತರು ಹತ್ತು ಸಾವಿರ ಹಣವನ್ನು ಜಮಾ ಮಾಡಿರುತ್ತಾ ರೆ ಅಂದರೆ ಸರಿ. ದಿನಾಂಕ 30- 09-2022 ರಂದು ಆರೋಪಿತರು ಪುನಃ ಹತ್ತು ಸಾವಿರ ಹಣವನ್ನು ಜಮಾ ಮಾಡಿರುತ್ತಾ ರೆ ಅಂದರೆ ಸರಿ.ದಿನಾಂಕ 11-11-2022 ರಂದು ಆರೋಪಿತರು ಪುನಃ ಹತ್ತು ಸಾವಿರ ಹಣವನ್ನು ಜಮಾ ಮಾಡಿರುತ್ತಾ ರೆ ಅಂದರೆ ಸರಿ. ಅದೇ ರೀತಿ ಆರೋಪಿತರು ಸಣ್ಣ ಪುಟ್ಟ ಹಣವನ್ನು ನನಗೆ ಜಮಾ ಮಾಡುತ್ತಾ ಇದೇ ವಷ೯ ದಿ:08-04-2024 ರಂದು ರೂ.3,50,000/- ಹಣವನ್ನು ಜಮಾ ಮಾಡಿರುತ್ತಾ ರೆ ಅಂದರೆ ಸರಿ."
and also produced the Ex.D1 to 3, As per Ex.P-2 to 4 the cheques issued by the accused dated 05-07-2021 and 13-08-2021. The complainant has present the compliant SCCH - 26 20 CC No.10663/2022 before the court on 10-11-2021. As per Ex.D1 to D-3 and admitted by the PW1 in his cross examination, the repayment made by the accused after filing of this compliant. Therefore citation relied by the accused is not applicable to this case on hand.
26. Once the presumption U/S 139 and 118 of the Negotiable Instruments Act is raised, it is for the accused to rebut the said presumption by adducing cogent evidence in support of his defence. It is relevant to mention here that the accused has not issued any reply notice. Further Ex.P.12 to 14 which are the return notice covers, it shows that the notice covers are returned as 'Addressee Left'. But as per Ex-P.7 the return notice cover, the demand notice has been not served to the accused. The accused has not disputed the service of notice. It is relevant to note that the address shown in Ex-P12 to 14 are the same address as shown in the cause title of the complaint. Therefore, in view of Section 27 of General Clauses Act, if a letter is sent through registered post acknowledgment due, it is deemed SCCH - 26 21 CC No.10663/2022 to be served on a proper address, unless the contrary is proved.
27. Totally upon going through the materials on record, there is nothing on record which rebut the presumptions available in favour of the complainant and also to disbelieve the case of the complainant. As such, considering the entire materials on record, in my opinion, the accused has failed to rebut the presumptions available in favour of the complainant by adducing cogent oral and documentary evidence and the complainant has proved his case beyond all reasonable doubts that the accused has committed offence punishable U/Sec.138 of Negotiable Instruments Act. The learned counsel for accused has cited the decisions, I have gone through the said decisions, hence this court is of the opinion that the said decisions are not applicable to the present case on hand. Hence, I am of the opinion that the accused has committed the offence punishable U/Sec.138 of Negotiable Instruments Act.
28. It is relevant to mention here that the accused SCCH - 26 22 CC No.10663/2022 having issued cheques at Ex.P2 to 4 in favour of the complainant has failed to pay the cheque amount and hence, the complainant is to be suitably compensated for the delay caused by the accused in its repayment. Further the punishment prescribed for the offence U/s.138 of Negotiable Instruments Act is imprisonment for a period which may extend to two years or with fine which may extend to twice the amount of the cheque or with both. Considering the facts and circumstances of this case, nature, year of the transaction, nature of the instrument involved, cost of litigation and the rate of interest proposed by Hon'ble Supreme Court in 2012 (1) SCC 260 (R.Vijayan Vs Baby), considering the cross examination of PW-1 and Ex.D1 to 3 produced by the accused, the PW-1 is admitted in his cross examination that accused paid the amount of Rs.3,80,000/-. I am of the opinion that, it is just and desirable to impose fine of Rs.29,80,651/- and out of the said amount, it seems to be proper to award a sum of Rs.29,70,651/- as compensation to the complainant as SCCH - 26 23 CC No.10663/2022 provided U/s.357(1) of Cr.P.C and the remaining sum of Rs.10,000/- shall go to the State towards expenses. With these observations,my findings on Point No.1 is in the Affirmative.
29. Point No.2: For the aforesaid reason I proceed to pass the following:-
-: O R D E R :-
The accused have been convicted U/Sec.255(2) of Cr.P.C. for the offences punishable U/sec.138 of Negotiable Instrument Act.
The accused No.1 is partnership firm. The accused No.2 and 3 are hereby convicted and sentenced to pay fine of Rs.29,80,651/-. In case of default of payment of fine amount the accused shall undergo simple imprisonment for a period of one year.
Acting U/s 357(3) of Cr.P.C. out of the total fine amount payable by the accused, a sum of Rs.29,70,651/- shall be paid to the complainant as compensation.The remaining fine amount of Rs.10,000/- shall go to state.
SCCH - 26 24 CC No.10663/2022 It is further made clear that if the accused opt to undergo imprisonment, it does not absolve them from liability of paying compensation to the complainant. Office is hereby directed to supply free certified copy of this judgment to the accused forthwith.
The bail bond of the accused shall stands cancelled.
(Dictated to the stenographer, directly over computer, typed by her, corrected by me and then pronounced in the open Court on this 18th day of July, 2025.) (Appasab Naik) XXIV ADDL. SMALL CAUSES JUDGE & A.C.J.M. BENGALURU.
ANNEXURE I. WITNESSES EXAMINED ON BEHALF OF THE COMPLAINANT:
PW.1 : Sri. Tej Singh II. DOCUMENTS MARKED ON BEHALF OF THE COMPLAINANT:
Ex.P.1 : Original copy of agreement for
payment dated 03.01.2020
SCCH - 26 25 CC No.10663/2022
Ex.P.2 to 4 : 3 Cheques, Signatures as Ex.P2(a) to
Ex.P4(a)
Ex.P5 to 7 : 3 Bank endorsement
Ex.P.8 : Office copy of legal notice dated
05.10.2021
Ex.P. 9 to 11 : 3 postal receipts
Ex.P.12to 14 : 3 Unopened RPAD Covers III. WITNESSES EXAMINED ON BEHALF OF THE ACCUSED:
--NIL---
IV. DOCUMENTS MARKED ON BEHALF OF THE ACCUSED:
Ex.D1 : Statement of accounts
Ex.D2 : Statement of accounts
Ex.D3 : Document
(Confrontation through PW-1)
APPASAB Digitally
APPASAB
signed by
RAMAPPA Date: 2025.07.29
RAMAPPA NAIK
NAIK 12:43:24 +0530
(Appasab Naik)
XXIV ADDL. SMALL CAUSES JUDGE
& A.C.J.M. BENGALURU.