Bangalore District Court
Sindhu K Byadagi vs Savitha Gururaj on 8 January, 2026
KABC030488052023
Presented on : 30-10-2023
Registered on : 30-10-2023
Decided on : 08-01-2026
Duration : 2 years, 2 months, 9 days
IN THE COURT OF THE XXIII ACJM, BENGALURU
-: Present :-
Smt.Asha K.S., B.A.L, L.L.B.,
XXIII ACJM, BENGALURU,
C.C. No.27874/2023
Dated: the 08th day of January, 2026
Complainant :- Smt.Sindhu K.Byadagi,
D/o.K.Byadagi,
Aged about 36 years,
R/at No.102, 10th A Cross,
Prashant Nagar,
Bangalore-560040.
Mob: 9535520885.
(By Sri.K.M.Thirthappa., Advocate)
-V/s -
Accused :- Smt.Savitha Gururaj,
W/o.Guruaj,
Aged about 58 years,
Pride Enchanta,
320, 'H' Block, Mysore Road,
Opposite, BHEL Rang Anathan Colony,
Nayandan Halli, Bangaluru,
Karnataka-560026.
Mob: 9845988586.
(By Sri.H.V.Subramanya., Advocate)
2
C.C.No.27874/2023
Offences complained of U/s 138 of Negotiable Instruments Act.
Plea of the Accused Not Pleaded guilty.
Final Order Accused is Convicted
Date of Order 08.01.2026.
ASHA Digitally signed
by ASHA K S
Date: 2026.01.23
KS 12:22:19 +0530
(Smt.Asha K.S,)
XXIII ACJM, Bengaluru.
JUDGMENT
The complainant has filed the present complaint under Section 200 of Cr.P.C. against the accused for the commission of an offense punishable under section 138 of Negotiable Instruments Act.
2. The case of the complainant in brief is as under:-
"The complainant, accused are known to each other and they are friends. The complainant was tenant under the accused and as such they have good relationship. In the month of October 2020 the accused had approached the complainant for financial assistance. The complainant also agreed and paid Rs.5 lakhs in the month of November 2020 through bank. The accused has agreed to repay the said amount within one year. Thereafter the accused has fails to keep up her promise. After repeated demands by the complainant, the accused has agreed to issue cheque and the same day they have entered into an agreement also.3
C.C.No.27874/2023 Thereafter the accused had issued cheque bearing No.001612 dated 30.04.2023 for Rs.5 lakh drawn on ICICI Bank, Electronic City branch, Bengaluru. On presentation of said cheque by the complainant through her banker Karnataka Bank, Amarjyothinagar branch, Bengaluru, same has been dishonoured for the reason "Payment Stopped By Drawer"on 10.07.2023.
3. Thereafter the complainant has issued legal notice to the accused and same has been served to the accused and accused has not chosen to issue reply notice and not paid amount also.
4. After filing of complaint, cognizance was taken. In pursuance of summons, accused appeared before the Court and she had enlarged on bail. Substance of accusation has been framed and contents of its read over to the accused. Accused pleaded not guilty and she claimed to be tried.
5. In order to prove her case complainant has examined herself as PW.1 and got marked 15 documents at Ex.P.1 to 15 on behalf of the complainant. After closure of complainant evidence, accused has been examined as under section 313 of Cr.P.C and opted to lead evidence. Accused has been examined as DW-1 and got marked Ex.D.1 to D.6.
4C.C.No.27874/2023
6. Thereafter arguments heard and perused the Record.
7. The following points arise for my determination: -
1) Whether the complainant has made out all the ingredients of Sec.138 of Negotiable Instruments Act to prove the guilt of accused?
2) What Order?
8. On hearing the arguments and on perusal written arguments and the materials placed on record, my answers to: -
Point No.1:- In the Affirmative Point No.2:- As per final order for the following:-
REASONS
9. It is the case of complainant is that the accused and complainant are known to each other. The accused had borrowed amount of Rs.5 lakhs and to discharge the said liability, Accused had issued Ex.P.1. On presentation said cheque has been returned for the reasons "Payment Stopped By Drawer". After service of notice the accused has not chosen to issue reply notice. Thereafter, the complainant has filed this complaint.
10. To attract Sec.138 of NI Act it is necessary to fulfill the ingredients of said provision. I have carefully 5 C.C.No.27874/2023 perused the section 138 of of N.I.Act, it has three ingredients which are as follows:
1. That there is a Legally enforceable debt,
2. That the cheque was drawn from the account of bank for discharge in whole or any part of any debt or other liability which pre-supposes a legally enforceable debt.
3. That the cheque so issued had been returned due to insufficiency of funds.
11. Keeping in view the ingredients of Sec.138 of Negotiable Instruments Act. Now I proceed to reproduce the Sec.139 and 118(a) of N.I.Act here itself.
12. Sec.139 of N.I.Act reads as follows "Presumes in favor of holder, it shall be presumed unless the contrary is proved, that the holder of cheque received the cheque, of the nature referred to in Sec.138, for the discharge, in whole or in part or any debt or other liability".
13. Sec.118(a) reads as follows "Presumption as to Negotiable Instrument Act until the contrary is proved, the following presumption shall be made (a) of consideration- that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted endorse, negotiate or transferred, was accepted, endorsed, negotiated or transferred for consideration".
6C.C.No.27874/2023
14. Keeping in view of the ingredients and provision of Sec.139 and 118(a) of N.I.Act, now I proceed to discuss the documents in the case. I am of the opinion that I need not repeat the entire case of the complaint once again since I have already stated the same at the beginning of this judgment.
15. To prove her case, the complainant has examined herself as PW-1 and produced 15 documents and same has been marked as Ex.P.1 to P.15. The cheque as per Ex.P.1 and signature thereon as per Ex.P.1(a). Bank memo as per Ex.P.2. Legal Notice as per Ex.P.3. Postal Receipt as per Ex.P.4. Track Consignment Report as per Ex.P.5. Two Bank Passbooks as per Ex.P.6 and P.7. Loan Agreement as per Ex.P.8. IT returns for the Year 2018-19 as per Ex.P.9. Balance sheet as per Ex.P.10. Another Balance sheet as per Ex.P.11. IT returns for the year 2019-2020 as Ex.P.12. IT Returns for the year 2020-2021 as per Ex.P.13. IT returns for the year 2021-2022 as per Ex.P.14 and IT returns document as per Ex.P.15.
16. In the cross-examination of PW-1 she has deposed that she was tenant under the husband of accused as per Ex.D.1. There was a lease agreement between herself and husband of accused for a period of 12 months and lease amount was Rs.27 lakhs. She paid Rs.3 lakhs on 15.12.2019, Rs.12 lakhs on 30.12.2019 and Rs.15 lakhs 7 C.C.No.27874/2023 through cash. As per Ex.D.1 she paid Rs.10 lakhs on 17.02.2020. As per Ex.D.1 the owner of the premises has right to deduct the repair expenses at the time of vacating premises. She had vacated the presmises in the year 2022 because the accused only informed that she is intending to sell the house.
17. She further deposed that as per Ex.P.9, her income was Rs.5,27,950/- and debt was Rs.9 lakhs. As per Ex.P.12 her income was Rs.9,14,748/- and debt was Rs.10,50,000/-. She had disclosed about the loan lent to the accused in her IT returns. The accused has repaid Rs.22 lakhs lease amount through cash and Rs.1,80,000/- through account. She had received said amount from her mother and sister and for that reason she had not disclosed about the lease amount in her IT returns. She denied the suggestion that there was a clash between the accused and herself with regard to deduction of amount of Rs.3 lakhs for repair work and for that reason she had misused the cheque received for security purpose. She also denied the suggestion that she paid portion of lease amount to the accused through account and now she is deposing false evidence that she lent amount to the accused.
18. The accused has denied the case of complainant and to prove her defence, she has examined as DW-1. She has deposed that she knows the complainant. In the year 8 C.C.No.27874/2023 2013, she was working as Senior General Manager in the Raheja Group company till 2022 and getting Rs.1 lakh salary per month. In the year 2022, she was working in the Incentive company and also getting Rs.2 lakh salary with incentives per month. Thereafter she was working in the Vilas Pride Group and getting Rs.2 to 3 lakhs commission per month. The complainant was tenant in her plot and as such she knows the complainant and her mother. On 30.12.2019 they have entered into lease agreement and on that time complainant paid Rs.12 lakhs and sought time to pay remaining amount. Thereafter they paid Rs.7 lakhs in two installments through online. In the month of February 2022 complainant had vacated the plot and on that time she paid Rs.24 lakhs by deducting Rs.3 lakhs for repair work. After repaid work she has transferred remaining amount of Rs.1,80,000/- to the complainant. On that time dispute has been arise with regard to deduction of amount for repair work. She never borrowed any amount from the complainant and not issued cheque for any debt or liability. At the time of receiving lease amount she had issued cheques for security purpose. The complainant has misused the cheque and filed false case. In support of her case she has produced document and same has been marked as Ex.D.1 to D.6. Ex.D.1 is the lease deed. Ex.D.2 and D.3 are the appraisal letters issued by the Pebble Bay Developers 9 C.C.No.27874/2023 Company. Ex.D.4 is bank statement. Ex.D.5 and 6 are the income tax documents.
19. In the cross-examination of DW-1 she has deposed that she is residing in a rented house and she had alienated her house situated at Chandra Layout. Now she is working as Head of Sales and Marketing Department. She had issued reply notice to the complainant and as per said reply notice, it has been wrongly typed as she had received Rs.24 lakhs lease amount and repaid the same. As per Ex.D.1 it is shown as Rs.15 lakhs paid through cash and lease amount was Rs.27 lakhs. In the Ex.D.1 there is no recital in the with regard to issuance of cheque for security purpose. The complainant has transferred amount of Rs.1 lakh on 06.11.2020 and Rs.2 lakhs and Rs.1 lakh on 28.10.2020 and again Rs.1 lakh on 29.10.2020. The signature found in the Ex.P.8 is belongs to herself. In the CC.3884/2023, she has been convicted for the offence. Ex.P.1 cheque and signature belongs to her. She has not issued any notice to the complainant and demanded her cheque and stamp papers. She has not lodged complaint against the complainant also.
20. As per complainant accused had borrowed amount of Rs.5 lakhs and to discharge the same, the accused had issued Ex.P.1cheque. Here there is no dispute in signatures. The complainant has produced documents 10 C.C.No.27874/2023 and same has been marked as Ex.P.1 to 15. The cheque as per Ex.P.1 and signature thereon as per Ex.P.1(a). Bank memo as per Ex.P.2. Legal Notice as per Ex.P.3. Postal Receipt as per Ex.P.4. Track Consignment Report as per Ex.P.5. Two Bank Passbooks as per Ex.P.6 and P.7. Loan Agreement as per Ex.P.8. IT returns for the Year 2018-19 as per Ex.P.9. Balance sheet as per Ex.P.10. Another Balance sheet as per Ex.P.11. IT returns for the year 2019-2020 as Ex.P.12. IT Returns for the year 2020-2021 as per Ex.P.13. IT returns for the year 2021-2022 as per Ex.P.14 and IT returns document as per Ex.P.15. Admittedly cheque and signature are belongs to accused and there is no dispute in issuance of cheque also. Complaint has been filed within time. Admittedly both parties are known to each other but the accused has denied the transaction. Here the question is whether accused has rebutted the presumption or not. The accused has an option to rebut the presumption by way of eliciting truth from PW-1 in the cross-examination, by way of entering into witness box and he can utilize materials available on record. In this case the accused has entered into witness box and cross-examined the PW-1 also.
21. In this case there is no dispute in signature in the cheque and also issuance of cheque but accused has disputed the transaction. The accused has explained that how her cheque had been to the hands of the complainant ie.., she has issued cheque for the security purpose, at the 11 C.C.No.27874/2023 time of receiving lease amount from the complainant. Admittedly the complainant was tenant under the husband of accused and complainant has paid amount of Rs.27 lakhs as lease amount. After vacating premises by the complainant, the accused also returned lease amount by deducting Rs.3 lakhs for repair work and the accused has spent Rs.1,20,000/- for repair of the building and the accused has returned remaining amount of Rs.1,80,000/- to the complainant. There is no dispute in these aspects and both parties were admitted these aspects in their cross- examination.
22. The accused has taken contention and deposed in her evidence that she was working and getting sufficient salary, incentive and as such there was no necessity for her to borrow amount from the complainant. In support of her contention she has produced six documents i.e,, Lease Deed IT returns, bank statement and document issued by her company. Ex.D.2 and D.3 are appointment letter and document issued by the Pebble Bay Developers Pvt Ltd and those documents shows that in the year 2019 accused was getting Rs.1,91,000/- salary per month including other allowances. Ex.D.4 is the bank statement pertaining to the accused from 2013 to 2016. Ex.D.5 and Ex.D.6 are the IT returns for the year 2013-2014 and 2019-2020. In the Ex.D.5 and D.6 it is shown that the accused was getting salary and she had sufficient income. It might be true that 12 C.C.No.27874/2023 the accused was getting sufficient salary but that does not mean that there was no necessity for the accused to borrow amount from the complainant. As per complainant she paid Rs.5 lakhs to the accused in the year 2020. Admittedly Ex.P.1 cheque belongs to the accused and signature and issuance of cheque also admitted and now cheque is in the hands of the complainant. In such circumstances the burden shifts on the accused to establish that how her cheque had been to the hands of the complainant. As stated above the accused has explained that she had handed over her cheque to the complainant at the time of entering into the lease deed.
23. Here the point for consideration is whether reason given by the accused with regard to custody of cheque is acceptable one or not. As discussed above there is no dispute in lease transaction between the complainant and the accused. During the cross-examination of DW-1, she admits that there is no recital in the lease deed marked at Ex.D.1 with regard to issuance of cheque to the complainant or the mother of the complainant for security purpose at the time of entering into an agreement of lease. If really accused had issued cheque for security purpose with regard to lease transaction then definitely there should be recital in the lease deed or any other document. Here there is no such document. As discussed above the complainant has vacated the premises in the year 2022 but till today the 13 C.C.No.27874/2023 accused has not issued any notice and demanded for return of her cheque. Till today no complaint has been lodged against the complainant for alleged misuse of her cheque.
24. In this case prior to filing of complaint, notice has been sent to the accused as per Ex.P.3 and same has been served as per Ex.P.5. Inspite of service of notice also accused has not chosen to issue reply notice. It is not the case of accused is that, address shown in the notice is not pertaining to him or no notice has been served to him. During the cross-examination of PW-1 also nothing has been asked with regard to address of accused. There is no explanation from the accused for non issuance of reply notice. The accused has not produced any document to show that the address shown in the notice is not belongs to her. As per Section 27 of General Clauses Act notice sent with correct address has to be consider as deemed service. As stated above, the accused has not disputed his address shown in the notice. Hence it is considered as deemed service.
25. In the decision of Hon'ble High Court of Andhra Pradesh in Gorantla Venkateshwara Rao Vs. Kolla Veeraraghava Rao and another case, it was held that failing on the part of accused in giving reply to the legal notice issued by the complainant, is one of the strong circumstances to draw a inference that accused has 14 C.C.No.27874/2023 borrowed amount from the complainant and cheque was issued towards payment of legally enforceable debt. Here, in this case on hand also in spite of receipt of legal notice also the accused did not chose to give reply, hence it is also one of the circumstances which clear supports the case of complainant.
26. As per accused there was a exchange of words between the complainant and accused with regard to deductions of expenses of repair work of the building. In such circumstances there was no hurdle for the accused to lodge complaint against the complainant. There is no explanation from the accused for not taking any steps against the complainant for alleged misuse of her cheque. She has not even tried to take back her cheque.
27. Advocate for accused has contended that complainant only filled the cheque and same has been misused, hence it is not valid. During the cross-examination of PW-1, she denied that aspect. Here the question is whether complainant can fill the cheque or not. In the authority in Sunita Dubey (Smt.) Vs. Hukum Singh Ahirwar. In that Hon'ble Apex Court held that blank cheque can be filled up by holder thereof. Which will be valid instrument in eye of law. The complainant has right to get benefit U/s.20 of Act. As per Section 20 of N.I.Act inchoate instruments are also valid and legally enforceable. In the case of a signed 15 C.C.No.27874/2023 blank cheque, the drawer gives authority to the drawee to fill up the a great liability. Hence accused cannot contend that the cheque is not valid. The accused also not taken any steps to send the instrument for FSL to ascertain that handwriting found in the cheque is not belongs to accused. In such circumstances, the accused cannot take contention that cheque is not valid.
28. As discussed above, the advocate for accused has cross-examined the PW-1 but nothing has been elicited to prove the defence of the accused. Except suggesting with regard to restriction of cash transaction and other aspects, nothing has been suggested. It is further suggested that amount transferred by the complainant to the accused was lease amount and not loan amount. As per Ex.D.1 they have entered into an agreement of lease on 30.12.2019 and during the cross-examination of DW-1 she admits that the complainant has transferred amount of Rs.1 lakh on 6.11.2020. Rs.2 lakhs and Rs.1 lakh on 28.10.2020 and Rs.1 lakh on 29.10.2020. It shows that it is after execution of lease deed. In the Ex.D.1 it is shown as Rs.3 lakhs paid on 15.12.2019, Rs.12 lakhs on 30.12.2019 and Rs.10 lakhs will be pay on 17.02.2020 or before that date and Rs.2 lakhs within three months. During the cross-examination of PW-1 also same has been suggested. PW-1 also clearly stated that she paid Rs.25 lakhs through cash and Rs.2 lakhs through bank. In such circumstances there was no 16 C.C.No.27874/2023 necessity for the complainant to pay Rs.5 lakhs as lease amount through bank to the accused. Because lease deed was between the husband of accused and the complainant and complainant has clearly stated that she paid amount to the husband of accused. If really the complainant was due of lease amount as contended by the accused till 2020 then what is the necessity for the accused to issue cheque for security purpose. It is very strange that as per accused, the complainant has paid portion of lease amount in the year 2020.
29. If really accused had issued cheque for security purpose with regard to lease transaction, then she should have take back her cheque, before repayment of lease amount or she should have refused to repay the lease amount to the complainant at the time of vacating premises. The amount of Rs.27 lakhs pertaining to the complainant was with the accused. In such circumstances the accused should have demand her cheqeue, before repaying lease amount to the complainant. Because if any valuable document is with the other person, then definitely no person will return amount without taking back her valuable document. Here the accused has repaid lease amount and not demanded her cheque by issuing notice and no complaint has been lodged against the complainant for alleged misuse of her cheque. All these aspects show that 17 C.C.No.27874/2023 there was a transaction between the parties and for that reason only the accused is kept quite without taking any steps against the complainant. It also shows that only to escape from her liability she has taken different contention.
30. The complainant has clearly narrated in the complaint and also deposed in her evidence that accused was in need of money and for that reason she lent amount. During the cross-examination of DW-1 also she admits that she had alienated her house and other cheque case also registered against her. All these aspects show that the accused was in need of money and borrowed amount from the complainant and to discharge her liability only accused had issued cheque. Now only to escape from her liability, the accused has taken different contention.
31. The accused has taken another contention that the complainant has no source of income. In the evidence complainant has clearly deposed that she had income. She has produced Ex.P.6 and P.7 bank passbook to show that there was amount in her account. Ex.P.9 to P.15 are IT returns and in that also it is shown about her income and also liability. In those documents it is also shown that she had borrowed loan from friends and relatives and she had invested amount in mutual funds. It further shows that she is owning immovable property, movable property and there was a cash in her hand and amount in her account.
18C.C.No.27874/2023 Moreover the amount involved in this case is Rs.5 lakhs only. In such circumstances, there is no difficulty for the complainant to arrange said amount. Hence question of financial capacity does not arise.
32. The complainant has not only produced cheque to prove her case but she has produced an agreement I.e, Ex.P.8 is the agreement between the parties and it shows that the accused had borrowed amount of Rs.5 lakhs from the complainant through bank and issued cheque in favour of the complainant. In the Ex.P.8 there is a signature of accused and during the cross-examination of the DW-1 she also admits the signature in the Ex.P.8. Though accsued has denied the execution of Ex.P.8 but she has not explained that why she has put her signature in the Ex.P.8. The accused is not an ordinary woman. As per accused she is working in the reputed companies and handling business, in such circumstances definitely she knows the consequence of issuance of signed blank stamp paper and signed blank cheque. No ordinary person will issue cheques and stamp paper without any reason. In such circumstances, the accused being an educated lady and working in reputed company, how could she had issued blank cheque and stamp paper. It is not at all acceptable one.
19C.C.No.27874/2023
33. As per Section 114 of Indian Evidence Act court may presume that bill of exchange was accepted for good consideration. Issuance of cheque is proved. Hence presumption can be drawn. Therefore, it probabalizes that the transactions alleged in the complaint is genuine.
34. The advocate for accused has produced authority reported in (2019) Basalingappa V/s. Mudibasappa); The Hon'ble Apex Court in the above judgment held that the accused can rebut the presumption and while prosecution must establish its case beyond reasonable doubt but accused to prove a defence must only meet standard of preponderance of probabilities. It is also held that the complainant has to prove his financial capacity. In that case the complainant has taken contention that he had lent Rs.18 lakhs many persons in two years and on the same time he had paid Rs.6 lakhs to the accused but not explained that how he had accumulated funds and there was a contradictions in the evidence of complainant. It is true that standard of proof is different with respect to prosecution and accused but in the case on hand the accused has not proved her defence and fails to rebut the presumption. There is no piece of material or evidence to prove that accused has issued cheques pertaining to lease transaction and not for debt. Ex.P.6, P.7 and Ex.P.9 to P.15 shows that the complainant had possessed movable property, immovable property, she had cash on hand and 20 C.C.No.27874/2023 amount in her account and also shows that she had invested amount in the mutual funds. There are sufficient material to show that the complainant had huge amount with her as on the date of transaction. In such circumstances question of financial capacity does not arise. Moreover the facts and circumstances of both the cases are entirely different. Hence ratio held in above authority is not applicable to case on hand.
35. Advocate for accused has produced authority reported in (2015) 1 SCC 99 K.Subramani Vs.Damodhar Naidu. In that Hon'ble Apex Court held that complaint must prove his source of income to avail presumption. In the case on hand also the accused has not issued any reply and not taken contention regarding financial capacity. But the complainant has deposed and produced several documents to prove her financial capacity. Hence the issue regarding financial capacity does not arise. Hence the ratio held in above authority is not supports to the contention of the accused.
36. Advocate for accused has produced authority reported in Krishna Janardhan Bhat Vs.Dattatreya G.Hegde in (2008) 4 SCC 54. Advocate for accused argued that as per said authority there should be document with regard to alleged transaction. In that case there is no agreement, promissory note with regard to said transaction. Hence 21 C.C.No.27874/2023 court cannot draw presumption U/s.139 of N.I.Act. It is true that there should be documents with regard to alleged transaction in the case on hand there is an agreement with regard to transaction and accused has admits issuance of cheque and signature. At the same time accused has to explain that how her cheque had been to the hands of the complainant. But here the accused has fails to prove her defence with regard to custody of cheque. The facts and circumstances of above authority and case on hand are entirely different. Here accused has not proved her defence, hence she cannot take shelter of above said authority.
37. The accused has produced another authority reported in 2021 (4) AKR 844 in Murtuja Khajapatel Bagali Vs.Jakeer Ibrahimsab Indikar. In that also Hon'ble High Court of Karnataka held that accused can rebut the presumption through cross-examination and complainant has to prove his financial capacity and to rebut the presumption there is no necessity to the accused to step into the witness box. It is true that the accused can prove his defence by eliciting truth from PW-1 in the cross- examination and he can rely documents available on the records. Here nothing has been elicited from PW-1 and the accused has fails to prove her defence and not rebutted the presumption. Hence the ratio held in above authority is not supports to the contention of the accused.
22C.C.No.27874/2023
38. The accused person has fails to prove her defence. The reason or explanation given by the accused with regard to how her cheque had been to the hands of the complainant is not at all acceptable one. The complainant has produced documents to prove her case. Hence there is no reasons to disbelieve the case of complainant. Hence presumption can be drawn in favour of complainant.
39. Regarding the burden of the accused to rebut the presumptions in N.I Act the Hon'ble Apex Court in Rohitbhai Jivanlal Patel Vs State Of Gujarat in Crl.A.No.508 OF 2019 held:
"16.On the aspects relating to preponderance of probabilities, the accused has to bring on record such facts and such circumstances which may lead the Court to conclude either that the consideration did not exist or that its non-existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. This Court has, time and again, emphasized that though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfill the requirements of rebuttal as envisaged under Section 118 and 139 of the NI Act..."
40. As discussed above the accused has fails to rebut the presumption. Under the criminal jurisprudence, the prosecution is required to establish the guilt of the accused beyond all reasonable doubt. However, the proceeding U/sec.138 of Negotiable Instruments Act is quasi-criminal in nature. In these proceedings proof beyond reasonable 23 C.C.No.27874/2023 doubt is subject to presumptions envisaged under sec.118, 139 and 146 of Negotiable Instruments Act. An essential ingredient of Sec.138 of Negotiable Instruments Act is that cheque in question must have been issued towards a legally or liability. Sec.118 and 139 of Negotiable Instruments Act envisage certain presumptions. Under Sec.118 a presumption shall be raised regarding consideration, date, acceptance, transfer, endorsements and regarding the holder in due course of Negotiable Instruments. Even under Sec.139 a rebuttal presumption shall be raised that the cheque in question was issued regarding discharge of a legally enforceable debt. These presumptions are mandatory presumptions that are required to be raised in case of Negotiable Instruments. These presumptions are not conclusive presumptions, but are rebuttable.
41. In the authority reported in Crl Appeal No.348/2011 in Smt.Jayalakshmamma Vs.Shasikala. In that case the Hon'ble High Court of Karnataka held that if accused has taken contention that complainant has misused his cheque, then there should be complaint before the police or any authority or intimation to the bank. If accused has not exercised these options then, his contention cannot be considered with regard to missing of cheque or alleged misuse of cheque. In the case on hand also the accused has taken contention that she had issued 24 C.C.No.27874/2023 cheque for security purpose but no notice has been issued to the complainant and no complaint is lodged. Hence ratio held in above authority is applicable to case on hand.
42. The Hon'ble Apex Court in Rangappa v. Sri Mohan, (2010) 11 SCC 441 Hon'ble Apex Court held as under:-
"26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat [(2008) 4 SCC 54 : (2008) 2 SCC (Cri) 166] may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant.
28. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of "preponderance of probabilities". Therefore, if the accused is able to raise a probable defence, which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."25
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43. Such being the case it is for the accused to rebut the presumption under Sec.139 of Negotiable Instruments Act and to show that the cheque in question was not issued towards any legally enforceable debt or liability and accused has to prove the same not by mere possible explanation, but by cogent evidence. In this case the accused has fails to prove that she has not issued cheque towards legally enforceable debt. There is no dispute with regard to signatures. Till today accused has not filed any complaint against the complainant for alleged misuse of her cheque. She has not tried to take back her cheque. Silence of accused shows that she is admitting transaction and for that reason only, she has not tried to take back her cheque.
44. Advocate for complainant argued that transaction was in the year 2020 and till today the complainant has not received any benefit from the accused. Due to delay in proceedings also, the complainant has suffered a lot. In support of his arguments advocate for complainant has produced authority reported in Crl. Revision Petition No.996/2016 of M/s.Banavathi and Company Vs.Mahaeer Electro Mech Pvt Ltd and another. In that Hon'ble High Court of Karnataka held that as per Section 80 of N.I.Act When no rate of interest is specified in the instrument, interest on the amount due thereon shall, notwithstanding any agreement relating to interest between any parties to the instrument, be calculated at the rate of eighteen per 26 C.C.No.27874/2023 centum per annum, from the date at which the same ought to have been paid by the party charged, until tender or realization of the amount due thereon, or until such date after the institution of a suit to recover such amount as the Court directs. All discussed above transaction was in the year 2020 and now it is in the year 2026 and the complainant has suffered a lot of financial issue due to delay. If complainant would have invested and deposited in any bank or business, she would have get benefit. Hence the accused is liable to pay interest @ rate of 18% per annum from the date of filing of complaint to till realization.
45. The complainant has proved that accused had issued cheque towards discharge of her legally recoverable debt or liability. There is no proper explanation from the accused that why she has not tried to take back her cheque. There is no effort from the accused to take steps against the complainant for alleged misuse of her cheque. If there was no transaction between the parties, then no ordinary prudent man will simply sit by issuing cheque. After receiving of notice also the accused had an option to take steps against the complainant but the accused has not exercised any of option available to her. All these aspects show that there was a transaction between the parties and to discharge her liability only, accused had issued Ex.P.1. The accused has fails to prove that there is no legally recoverable debt or liability. Hence, in view of the above 27 C.C.No.27874/2023 discussion, this court is of the opinion that the complainant has proved her case. On careful perusal of materials on record I am of the opinion that there is a legally recoverable debt or liability. All these aspects show that accused had issued cheques to the complainant towards discharge of her liability. The complainant has proved the initial burden and accused has not proved her defence and not rebutted the presumption. The evidence of PW.1 coupled with documentary evidence corroborates with each other. During the cross-examination of PW-1 also nothing has been elicited. Considering the facts and circumstances of the case the version of complainant appears to be true. The ingredients required to fulfill Sec.138 of NI Act also proved. Hence, I hold that there are materials available on record to conclude that accused has committed an offence U/Sec.138 of NI Act, hence I answered Point no.1 in the Affirmative.
46. Point No.2:- In view of the aforesaid reasons, I proceed to pass the following :-
-: ORDER :-
By invoking the power conferred under section 278(2) of B.N.S.S.,The accused is found guilty for the offence punishable under section 138 of Negotiable Instruments Act.
Accused is sentenced to pay a fine of Rs.5,00,000/- (Rupees Five Lakhs 28 C.C.No.27874/2023 only).along with interest @ rate of 18% per annum from the date of filing of complaint to till realization till payment of amount. In default to pay the fine, accused shall undergo simple imprisonment for a period of six months.
Further, acting under Sec.357(1)(b) of Cr.P.C., on recovery of sum of Rs.5,00,000/- ((Rupees Five Lakhs only along with interest @ rate of 18% per annum only, Rs.4,95,000/-along with interest shall be paid to the complainant as compensation and Rs.5,000/- shall be remitted to the state exchequer.
Supply free copy of this order to the accused forthwith.
(Dictated to stenographer directly on my computer, after clerical additions by him, script revised, corrected and pronounced by me in the Open Court on this the 08 th day of January-2026) ASHA Digitally signed by ASHA K S Date: 2026.01.23 KS 12:22:46 +0530 (Smt.Asha K.S,) XXIII ACJM,Bengaluru.
ANNEXURE
1) List of Witnesses examined for complainant:-
PW.1 : Smt.Sindhu K.Byadagi.
2) List of documents marked on behalf of complainant: -
Ex.P.1 : Cheque.
Ex.P.1(a) : Signature of accused,
Ex.P.2 : Bank Memo,
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Ex.P.3 : Legal Notice,
Ex.P.4 : Postal receipt.
Ex.P.5 : Track Consignment Report.
Ex.P.6 & P.7 : Two Bank Passbooks.
Ex.P.8 : Loan Agreement.
Ex.P.9 : IT returns for the year 2018-19.
Ex.P.10 : Balance Sheet.
Ex.P.11 : Another Balance Sheet.
Ex.P.12 : IT returns for the year 2020-21.
Ex.P.13 : IT returns for the year 2021-22.
Ex.P.14 : IT returns for the year 2022-23.
Ex.P.15 : IT returns document.
3) List of witness examined on behalf of the Accused :-
DW-1 : Savitha Gururaj.
4) List of documents marked on behalf of the Accused:-
Ex.D.1 : Lease Deed
Ex.D.2 & D.3 : Appointment Letters
Ex.D.4 : Bank Statement.
Ex.D.5 & D.6 : I.T. Returns.
ASHA Digitally signed
by ASHA K S
Date: 2026.01.23
KS 12:22:59 +0530
(Smt.Asha K.S,)
XXIII ACJM, Bengaluru.
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