Bangalore District Court
Smt. B.M. Vasantha vs Sudhindra G on 8 July, 2025
CC.No.28630/2018
KABC030779612018
Presented on : 26-10-2018
Registered on : 26-10-2018
Decided on : 08-07-2025
Duration : 6 years, 8 months, 13 days
IN THE COURT OF THE XVI ADDITIONAL CHIEF
JUDICIAL MAGISTRATE, BENGALURU CITY
Dated: This the 8th day of July 2025
Present: Smt.Tejaswini K.M., B.A.L. LL.M,
XVI Addl.C.J.M., Bengaluru City.
CC. No.28630/2018
Smt.B.M.Vasantha
W/o Dr. Chowda Gowda
Aged 53 years
R/at No.91, 3rd Main,
Airtel Office Road,
7th Block, 4th Phase, BSK III Stage,
Bengaluru - 560085.
....Complainant
(By Sri.T.C.Mallikarjuna Swamy., Advocate)
Versus
2 C.C.28630/2018
Sudhindra.G
S/o Gururaj, major
R/at No.2208, First Floor,
12th Main, 2nd Stage, Rajajinagar,
Bengaluru - 560010.
.... Accused
(By Sri.A.R.Chandrashekar., Advocate)
Offence complained : U/Sec.138 of Negotiable
Instrument Act.
Date of commencement
of evidence : 07.11.2022
Date of closing evidence : 25.03.2025
Opinion of the Judge : Accused found not guilty
JUDGMENT
This case is registered against the accused for the offence punishable U/s 138 of Negotiable Instruments Act. 3 C.C.28630/2018
2. Factual matrix of the complainant's case is as under:
It is averred that the complainant knows the accused since one year. Out of that friendship, the accused approached the complainant, during second week of January 2018, for hand loan of Rs.13 lakhs, for domestic and family, legal necessities and agreeing repay it within 6 months with nominal interest. Accordingly, the complainant arranged funds with the help of her relatives, friends and given Rs.13 lakhs by way of cash to the accused on 27.01.2018. In discharge of the said loan, the accused has issued two postdated cheques bearing No.000480 for Rss.6,16,000/- and cheque bearing No.000483 for Rs.7,87,500/- both dated 26.07.2018, drawn on ICICI Bank, Subramanyanagar Branch, Bengaluru. When the cheques were presented to the bank, they got dishonoured for the reason 'Funds Insufficient' vide memo dated 27.07.2018. Thereafter, the complainant got issued demand notice to the accused on 4 C.C.28630/2018 24.08.2018 through RPAD calling upon the accused to pay the cheques amount within 15 days from the date of receipt of notice and it was duly served upon the accused. However, the accused has not repaid the loan amount. Hence the complainant has constrained to file the present complaint.
3. 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.
4. Sworn statement of the complainant was recorded and marked 9 documents as Ex.P-1 to P-9. As there were sufficient materials to constitute the offence, this court has proceeded to pass an order for issuing process against the accused.
5. In pursuance of summons, accused has appeared through his counsel and applied for bail. He was enlarged on 5 C.C.28630/2018 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. 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 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.
7. The statement of accused as contemplated under the provisions of Section 313 of Cr.P.C has been recorded vide dated 21.12.2024 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. In order to substantiate his defense, 6 C.C.28630/2018 the accused got examined as DW.1 and got marked Ex.D1 to D19.
8. I have heard the arguments of the learned counsel for both the side and perused the oral and the documentary evidence placed on record.
9. Points that arise for my consideration are as under:
1. Whether the complainant proves that the accused person towards discharge of his liability issued 2 cheques bearing No.000480 for Rs.6,16,000/- and cheque bearing No.000483 for Rs.7,87,500/- both dated 26.07.2018, drawn on ICICI Bank, Subramanya Nagar Branch, Bengaluru in favour of complainant, on presentation of the same for encashment, they were 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 cheques amount, thereby he has 7 C.C.28630/2018 committed an offence punishable U/s 138 of Negotiable Instruments Act?
2. What Order?
10. My Answer to above points are as under:-
Point No.I :- In the Negative,
Point No.II :- As per the final order for
the following....
REASONS
11. POINT NO.I:- In nutshell case of the complainant is that she has lent loan of Rs.13 lakhs by way of cash to the accused on 27.01.2018 and in discharge of the said loan, the accused has issued cheques in question, but they got dishonoured for the reason 'Funds Insufficient'. Despite of giving notice, the accused has not repaid the loan amount. Hence the present complaint.
12. To substantiate her case the husband complainant stepped into witness box and got examined as PW.1. He has 8 C.C.28630/2018 got marked Ex.P1 to P9. He has produced the cheques issued by accused and the same are marked as Ex.P-1 & P-2, the signatures of the accused are marked as Ex.P-1(a) & 2(a), copies of bank memos are marked as Ex.P-3 & 4, copy of demand notice dated:24.08.2018 is marked as Ex.P-5, copy of the postal receipt is marked as Ex.P-6, copy of postal acknowledgment is marked as Ex.P-7, complaint is marked as Ex.P-8 and copy of SPA is marked as Ex.P9.
13. Defense of the accused is as follows:
He was doing real estate business, along with his mobile service center. During that time Mohan and Smt.Kusumalatha approached him and requested to search for a shop for hotel. He had knowledge about the vacant shops. Son of the complainant has posted advertisement in OLX in the year 2017 regarding vacant shop which was available for rent. He took Smt.Kusumalatha and her husband to him and shown the shop and they agreed to take it for rent. Since it was Dhanurmasa 9 C.C.28630/2018 they both were not ready to commence the hotel and they did not give the advance amount. That time husband of the complainant asketo the accused to pay the advance amount and assured after payment of advance amount by Smt.Kusumalatha and Mohan, he will return back the amount to him. Therefore, the accused paid Rs.50,000/-, Rs.1,00,000/- by way of cash and Rs.4.5 lakhs by way of cheque. He also taken 7 signed cheques from the accused for security purpose. Thereafter, Smt.Kusumalatha was running hotel in the shop of the complainant, but the complainant's husband has not given back his security cheques and the advance amount taken by him. Among 7 cheques, the husband of the complainant has presented cheque for Rs.8,82,408/- and it got dishonoured, but no action taken on said cheque. He has not taken any loan from the complainant as alleged. Hence on above grounds he prays to acquit him from this case.10 C.C.28630/2018
14. Negotiable Instruments Act provides for 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".
15. 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 discharge, in whole or in part, or any debt or other liability."
16. 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 11 C.C.28630/2018 presumption available u/s 139 NI Act can be rebutted by the accused by raising a probable defense.
17. The SPA Holder of the complainant i.e. husband of the complainant has examined as PW.1 and he has reiterated the contents of the complaint in his chief-examination. During cross-examination by the counsel for the accused, he has admitted that complainant is his wife and she is a house wife and they both are residing together. He got retired in the year 2016 from the Town Planning Department . He deposed that the complainant had building in Basaveshwaranagar wherein accused and 2 other women by name Smt.Kusumalatha and Bhavya were running hotel. PW1 deposed that his wife ie complainant met the accused in the year 2017, November when she came to see their vacant shop.
18. PW1 further deposed that accused has taken the loan for the purpose of running hotel and for his personal expenses. 12 C.C.28630/2018 He sought loan in January 2018 and complainant gave Rs.13 lakhs in the second week of January 2018 to the accused. He further deposed that they have given Rs.2 lakhs by way of cheque and remaining amount by way of cash to the accused. That time he was very much present along with his wife. His wife is a income tax payer, but she has not declared alleged loan amount in her IT returns. He deposed that the complainant arranged money for loan by taking help of her sisters, brothers and friends, he cannot tell how much amount was taken from whom and what are their names. He deposed after taking loan, the accused has given 2 cheques to the complainant. He denied the suggetion that the complainant has taken 6 cheques from the accused and they are still with her. He deposed instant cheque has been given in January second week of 2018 by mentioning the date, amount and name by the accused. He admits there is difference in the handwriting and ink used to write the details in the cheques 13 C.C.28630/2018 and to make signature. He deposed that the accused has agreed to give interest @ 2%.
19. PW1 further deposed that he does not know what the accused is doing, what is his address and he has not made efforts to get the address of the accused. He pleaded ignorance to the suggestion that the accused is doing real estate business. He deposed that through his wife's cheque belonging to the Canara Bank, she has given Rs.2 lakhs to the accused. He denied accused has not taken Rs.2 lakhs by way of cheque as alleged.
20. The witness was confronted with the account statement of his wife i.e. complainant and same was admitted by him and it was marked as Ex.D1. By seeing Ex.D1 PW1 admits there is no reference about the payment of Rs.2 lakhs by way of cheque to the accused. He deposed that the complainant has given Rs.11 lakhs through Rs 500 notes. He does not know during that time there was demonetization in 14 C.C.28630/2018 the country. He denied that the accused has not borrowed Rs.13 lakhs from the complainant. By seeing Ex.D1 he deposed his wife has presented 3 cheques of the accused to the bank and among them, 2 cheques are pertaining to the present case and another cheque was returned to the accused as accused paid the cheque amount of Rs.8,82,408/-.
21. PW1 further deposed in his cross examination that though the rental agreement was made in the name of Bhavya and Smt.Kusumalatha, accused was looking after the hotel business. He received Rs.12 lakhs from Bhavya and Smt.Kusumalatha, as rent advance . Out of that Rs.4,50,000/- was through cheque and remaining amount was taken by way of cash. He does not know the said cheque of Rs.4,50,000/- belongs to whom. He denied the complainant has taken cheques from the accused for security assuring that after Bhavya and Smt.Kusumalatha pay the rent advance amount, she will return them, but failed to return the cheques to the 15 C.C.28630/2018 accused. When it is suggested that there is no nexus between Bavya and Smt.Kusumalatha and accused, the witness deposed that accused has introduced Bhavya as his wife and Smt.Kusumalatha is his sister. He admitted he has encashed cheque No.471 on 16.12.2017 issued for Rs.4,50,000/- as per Ex.D2(a). He deposed that the accused has only paid 1 month rent so far.
22. PW.1 further deposed that accused was running the hotel along with Kusumalatha and Bhavya. When it is suggested that the name of the accused is not found in the notices at Ex.D6 to D8, he deposed the accused has not allowed to show his name in the rent agreement, but it was made to enter in the name of 2 woman i.e. Bhavya and Kusumalatha, as such the notices were given to them and not to the accused. He denied that since Bhavya and Kusumalatha did not have the cheques, for security purpose, the cheques of the accused were given to him, but the complainant has presented those 16 C.C.28630/2018 cheques for 7 times to the bank. He denied that he has taken those cheques for security, among them 3 cheques were presented to the bank. He voluntarily deposed that he has taken 3 cheques and among them 2 cheques are presented in this case and another cheque was returned to the accused, as accused paid the cheque amount by way of cash. He denied that on behalf of Bhavya and Kusumalatha, accused had paid Rs.5 lakhs as advance amount and same was not returned to him. He deposed that accused owes Rs.6 lakhs to him. He admits there is difference in the handwriting of the details written in Ex.P1 & P2 cheques and the signatures. He admits in Ex.P7 postal acknowledgment one Neelamma has signed and he does not know who is Neelamma. He denied that he has filed false case against the accused.
23. Percontra, the accused stepped into witness box and got examined as DW.1 and he has deposed that he was doing real estate business along with his mobile service center. 17 C.C.28630/2018 During that time Mohan and Smt.Kusumalatha approached him and requested to search for shop for hotel. He had knowledge about the vacant shops. Son of the complainant has posted advertisement in OLX in the year 2017 regarding vacant shop which was available for rent. He took Smt.Kusumalatha and her husband to him and shown the shop and they agreed to take it for rent. Since it was Dhanurmasa, they were not ready to commence the hotel and they did not give the advance amount. That time husband of the complainant asked to the accused to pay the advance amount and assured after payment of advance amount by Smt.Kusumalatha and Mohan, he will return back the amount to him. Therefore, the accused paid Rs.50,000/-, Rs.1,00,000/- by way of cash and Rs.4.5 lakhs by way of cheque. He also taken 7 signed cheques from the accused for security purpose. Thereafter, Smt.Kusumalatha was running hotel in the shop of the complainant, but the complainant's husband has not given back his security cheques 18 C.C.28630/2018 and the advance amount taken by him. Among 7 cheques, the husband of the complainant has presented cheque for Rs.8,82,408/- and it got dishonoured. He has not taken any loan from the complainant as alleged.
24. During cross-examination by the counsel for the complainant DW1 deposed that Kusumalatha was the customer to his shop and Bhavya was her friend. He was working in a mobile shop and but not produced any document in that regard. he has no licence to do real estate business. He deposed there is no nexus between himself and Ex.D5 rent agreement. He deposed his correct address is No.1124, 1st Floor, 3rd Main, E Block, Rajajinagar, Bengaluru. He has not received summons from the Court, but he received call from the police station and got to know about this case. He admits the suggestion that while executing rent agreement at Ex.D5 for advance rent amount, his cheque was taken. He denied that himself and Bhavya and Kusumalatha were doing the said hotel 19 C.C.28630/2018 business. He admits as per the rent agreement, Rs.12,87,000/- was given as advance to the complainant. He does not know whether RS.50-60 lakhs were spent for alteration of the interiors of the hotel. He does not know the result of O.S.No.2819/2018.
25. DW1 further deposed that he has not given notice to Chowdegowda or the complainant seeking back his Rs.4,50,000/-, because Smt.Kusumalatha told that she will return it. He has given notice to the Smt.Kusumalatha, but the said copy of notice is not produced here. He does not know who is Neelamma. He denied the suggestion of the counsel for the accused that Neelamma resides with him in his house. He does not know that notice is received by Neelamma on behalf of him. He denied that the cheque was given for security to the loan taken in January 2018 from the complainant. He denied he has taken the loan and it was given to smt.Kusumalatha and Bhavya to alter the interiors of the hotel. He denied that for 20 C.C.28630/2018 repayment of the loan, he has given Ex.P1 and P2 cheques to the complainant. He deposed he has not given notice either to the complainant or to her husband seeking back his 7 cheques. He has also not given police complaint in this regard. When it is suggested he had given 4 cheques to the complainant and not 6 cheques, he denied it. He denied after payment of Rs.8,82,000/- complainant has returned cheque No.000479 to him. He denied that for the remaining Rs.13 lakhs, he had given disputed cheques to the complainant. He denied himself and Smt.Kusumalatha and Bhavya owed Rs.33 lakhs of rent due to the complainant. He does not know Smt.Kusumalatha has challenged the order of the Court to pay the said rental due amount to the complainant before Hon'ble High Court of Karnataka. He denies he owes to pay the cheques amount to the complainant.
26. I have carefully gone through the complaint, evidence placed on record. I have given my anxious consideration to the 21 C.C.28630/2018 arguments canvassed by both sides. The counsel for the complainant has argued that no police complaint is given by the accused against the complainant or her husband stating that his security cheques are misused by the complainant. The accused owes cheque amount to the complainant and in order to avoid the same, the accused has taken the bald contentions which are not admissible and hence prays to convict the accused.
27. On the other hand, the counsel for the accused argued that the complainant or her husband does not know the address of the accused. The legal notice is not served on the accused, it was received by someone by name Neelamma. There is no proof for loan transaction of Rs.13 lakhs and out of it, Rs.2 lakhs was paid by way of cheque to the accused, as alleged. During demonetization time, there was ban of notes of Rs.500/-, but PW.1 has deposed that loan amount was given through 500 rupees notes. Therefore, the loan transaction is 22 C.C.28630/2018 suspicious. He further argued that in O.S.No.2816/2018, in the evidence, PW.1 has deposed that Smt.Kusumalatha and Bhavya owes Rs.7,87,500/- even in the present cheque at Ex.P2 same amount is reflected. There is no nexus between the accused and the hotel business made by the Smt.Kusumalatha and Bhavya, in the premises of the complainant. The address shown in the legal notice is the address of Bhavya and Smt.Kusumalatha shown in the legal notice given to them. No demand notice is given to the correct address of the accused. During cross-examination complainant has deposed, accused owes Rs.6 lakhs, percontra the case is filed for Rs.13 lakhs. Therefore, he vehemently argued that the security cheques of the accused given on behalf of Bhavya and Smt.Kusumalatha while entering into rent agreement with the complainant are misused and false case is filed.
28. Having regard to the evidence of both parties it appears that there is no dispute that complainant is the owner 23 C.C.28630/2018 of rental premises which were given to Bhavya and Smt.Kusumalatha to run hotel as per rental agreement at Ex.D5. It appears that the accused has introduced Bhavya and Smt.Kusumalatha to the complainant before taking the premises of the complainant for rent. At the outset accused has not disputed his signature at Ex.P1 and P2 cheques. Therefore, initial presumptions U/Sec.118 and 139 of NI Act has to be drawn in favour of the complainant holding that cheques are issued in discharge of legally enforceable debt.
29. The Honorable Supreme Court of India in "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 accused for a 24 C.C.28630/2018 consideration and that the complainant had received the cheque in question in discharge of debt/liability from the accused."
30. Therefore, as per Sec.118 and 139 of NI Act initial presumption has to drawn infavour of the complainant that cheques are 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. In order to rebut the said presumption the accused has taken various defenses and cross-examined the complainant as well as led evidence.
31. The accused has taken various defenses to rebut the said initial presumption drawn in favour of the complainant. Firstly, the accused is denying the very loan transaction with the complainant. The husband of the complainant by name Chowdegowda has stepped into witness box as PW.1 on behalf of the complainant as her GPA holder and given evidence in 25 C.C.28630/2018 this case. It appears that the premises which was given for rent stands in the name of the complainant, but every transaction is made by her husband Chowdegowda i.e. PW.1 in the present case. There is no dispute regarding personal knowledge of transaction between the accused and the complainant's husband and Bhavya and Smt.Kusumalatha. Therefore, PW.1 is competent to give evidence the present case. The complainant's case is that she has given Rs.13 lakhs by way of cash to the accused on 27.01.2018. Percontra, the accused denied the said loan transaction with the complainant.
32. It is significant to note here that as per her own pleadings and the evidence of PW.1, the complainant and her husband met the accused in the year 2017 for the first time. The accused approached the complainant and introduced Bhavya and Smt.Kusumalatha and her husband Mohan who were in search of rental premises to run a hotel. Thus,the period of acquaintance between the complainant and the 26 C.C.28630/2018 accused was merely around 6 to 8 months prior to the alleged loan transaction. Except oral evidence of PW.1, there is no proof to believe that Rs.13 lakhs was given to the accused.
33. Yet another point to be noted here is that though PW.1 has deposed that out of Rs.13 lakhs, Rs.2 lakhs was paid by way of cheque to the accused, when the account statement of the complainant at Ex.D1 was confronted and asked, there is no reference about payment of Rs.2 lakhs by way of cheque to the accused, PW.1 has unequivocally admitted said suggestion. No other account statement of the complainant is produced to prove that she has paid Rs.2 lakhs by way of cheque to the accused. Thus, it also creates suspicion about the case of the complainant that she has lent loan of Rs.13 lakhs to the accused by way of cash.
34. The complainant has also failed to prove that she was possessing Rs.13 lakhs with her on 27.01.2018 with cogent evidence. If the complainant had known the accused for a 27 C.C.28630/2018 considerable period, the possibility of advancing a cash loan might have been plausible. However, in the present case, where the complainant had only known the accused for about 6 to 8 months, it is difficult to comprehend how such a substantial amount could have been given in cash without any documentary proof. This raises the first serious doubt regarding the complainant's case.
35. During cross-examination, PW.1 stated that he was unaware of the accused's occupation and address and had never made any effort to ascertain the accused's whereabouts. He also pleaded ignorance to the suggestion of accused counsel that the accused was engaged in small-scale real estate business. This indicates that either the complainant or PW.1 did not know the address or current location of accused. Consequently, the likelihood of the complainant having advanced a substantial loan of Rs. 13 lakhs to the accused 28 C.C.28630/2018 without obtaining any documentary proof appears highly doubtful.
36. It is pertinent to note here that the complainant has entered into rent agreement with Smt Bhavya and Smt.Kusumalatha as per Ex.D5 on 05.12.2017. But the name of the accused is not found in this rent agreement. Even he has not signed as a witness to the rent agreement. But throughout evidence, PW.1 has deposed that accused was running a hotel along with Bhavya and Smt.Kusumalatha, but he had not allowed to enter his name in the rent agreement. The complainant has filed O.S.No.2816/2018 against Smt Bhavya and Smt.Kusumalatha for the relief of possession of the suit premises. During that time PW.1 has given evidence in the said case, but there is no whisper anything about the accused in connection with the hotel business.
37. The complainant has given demand notice on 16.04.2018 and 18.06.2018 to Bhavya and Smt.Kusumalatah as 29 C.C.28630/2018 per Ex.D6 and D8 seeking recovery of outstanding rent. Notably, even in these notices, there is no mention of the accused or any assertion of his liability to pay the rent dues along with Smt. Kusumalatha and Bhavya.
38. Subsequently, the complainant terminated the rental agreement, as per Ex.D9, with Bhavya and Smt. Kusumalatha, and not with the accused. These documents clearly indicate that it was Bhavya and Smt. Kusumalatha who were operating/running the hotel on the complainant's premises, not the accused.
39. The accused contends that when he introduced Smt. Bhavya and Smt. Kusumalatha to the complainant, Smt. Kusumalatha and her husband, Mohan, inspected the premises and expressed their interest. However, at that time, citing the inauspicious period of Dhanurmasa, they were hesitant to commence the hotel business or pay the advance consideration. That time the complainant asked the accused to 30 C.C.28630/2018 pay advance consideration on behalf of Bhavya and Smt.Kusumalatha and that amount will be repaid to him soonafter Bhavya and Smt.Kusumalatha paid the rent advance amount. Therefore, accused has given Rs.4,50,000/- by way of cheque and 50,000/- by was of cash to the complainant as the advance amount and during that time, the complainant has taken his 7 signed cheques for security purpose. However PW.1 has denied it. To corroborate the defense, the accused has produced his account statement marked at Ex.D2 wherein there is a reference about encahsment of cheque bearing No.471 dated 16.12.2017 which was issued for Rs.4,50,000/- by Chowdegowda. This Chowdegowda is none other than the PW.1 of this case i.e. husband of the complainant. During cross- examination, PW.1 has admitted that he has received this Rs.4,50,000/- by way of cheque of the accused. But there is no mention of this payment in the entire complaint. This cheque was encashed on 16.12.2017 as per Ex.P2(a) and rental 31 C.C.28630/2018 agreement at Ex.D5 was entered on 05.12.2017. In the evidence given by PW.1 in O.S.No.2816/2018 at Ex.D4, in para No.6, PW.1 had clearly admitted in his chief-examination itself that he has received Rs.4,50,000/- through cheque bearing No.471 and Rs.50,000/- by way of cash. Thus, it clearly corroborates the defense that accused has paid advance consideration through cheque and cash to the complainant on behalf of Bhavya and Smt.Kusumalatha. Therefore, possibility of taking the signed 7 cheques of the accused by the complainant while entering into this rent agreement cannot be brushed aside.
40. During cross-examination when it is suggested to PW.1 that out of the 6 cheques of the accused, 3 cheques were presented to the bank, PW.1 has answered that he has taken 3 cheques of the accused and out of 3 cheques, 2 cheques are produced in the present case and another cheuqe was returned to the accused as he paid the third cheque amount of Rs.8,82,408/-. This gives rise to yet another doubt regarding the 32 C.C.28630/2018 reason behind the complainant receiving an amount of Rs. 8,82,408/-. The complaint contains no averment indicating that, apart from the alleged loan of Rs. 13 lakhs, any additional loan amount was advanced by the complainant to the accused. When such being the case, as per his own version, if PW.1 has received Rs.8,82,408/- by way of cash, from the accused, then this case ought to have been filed for the remaining amount of Rs.4,17,592/-, but definitely not for Rs.13 lakhs. But the complainant has conveniently suppressed the fact of receiving Rs.8,82,408/- in the complaint, for the reasons best known to her. There is no endorsement of the complainant regarding partial payment made by the accused to the complainant in disputed cheque or return of third cheque of the accused after receiving the said amount of Rs.8,82,408/-. Thus, it creates suspicion about the case of the complainant.
41. Interestingly during cross-examination dated 13.09.2004 para No.5 PW.1 has deposed that accused owes 33 C.C.28630/2018 Rs.6 lakhs to the complainant. If that is the case, why 2 cheques were presented for Rs.13 lakhs is not forthcoming. Admittedly, there is difference in the ink used to fill up the details in Ex.P1 & P2 cheques and to affix the signature and same is admitted by PW.1 in his cross-examination. Therefore, possibility of filling the cheque by the complainant as her whims and fancy cannot be brushed aside.
42. PW.1 has unequivocally admitted that on behalf of Bhavya and Smt.Kusumalatha, he has received Rs.4,50,000/- from the accused, while entering into rent agreement. In further cross-examination dated 13.09.2024, he deposed that as per Ex.P6 to 8 notice, he has received Rs.6 lakhs from the accused. Further cross-examination at para No.5, he deposed that accused owes Rs.6 lakhs to him. Therefore, when PW.1 knows accused owes only Rs.6 lakhs, what made him to file this case for Rs.13 lakhs by presenting 2 cheques of the accused is not forthcoming. There is no endorsement of both cheques 34 C.C.28630/2018 regarding the partial payment of Rs.6 lakhs or Rs.8,82,408/- by way of cash made by the accused.
43. In Dashrathbhai Trikambhai Patel vs Hitesh Mahendrabhai Patel , in Criminal Appeal No. 1497 of 2022, apex court held that "'29. Under Sec 56 read with Sec 15 of the Act, an endorsement may be made by recording the part- payment of the debt in the cheque or in a note appended to the cheque. When such an endorsement is made, the instrument could still be used to negotiate the balance amount. If the endorsed cheque when presented for encashment of the balance amount is dishonoured, then the drawee can take recourse to the provisions of Sec 138. Thus, when a part- payment of the debt is made after the cheque was drawn but before the cheque is encashed, such payment must be endorsed on the cheque under Sec 56 of the Act. The cheque cannot be presented for encashment without recording the part payment. If the unendorsed cheque is dishonoured on presentation, the offence under Sec 138 would not be attracted since the cheque does not represent a legally enforceable debt at the time of encashment".
35 C.C.28630/2018
44. The principle laid down in above case law aptly applicable to present case. As Per Section 56 NI Act, Part- Payment made after Cheque is drawn must be endorsed on Cheque. Indeed the complainant has totally suppressed about these payments of Rs.5 lakhs ( as advance rent amount ) and Rs.8,82,408/- ( as per evidence of PW1, cash payment ) by the accused in the complaint. Since there is no pleading that another loan amount was given to accused , this court has to assume that theses payments were made towards repayment of loan, as per complainants own version. However accused is disputing loan transaction of 13 lakhs as well payment of Rs.8,82,408/- also. It also creates doubt about the case of the complainant.
45. Admittedly, the complainant has given legal notices as per Ex.D6 to D8 to Bhavya and Smt.Kusumalatha seeking rental outstanding amount. But there is no reference about the name of the accused in the said notices. Even in the notice at 36 C.C.28630/2018 Ex.D11 which was given subsequently, to Bhavya and Smt.Kusumalatha, there is no reference about the accused and hi liability. If at all, as per the complainant, accused was running the hotel, in the name of Bhavya and Smt.Kusumalatha, nothing prevented the complainant to seek rent arrears from the accused through those notices. However, there is no whisper about the name of the accused in those notices, therefore is is crystal clear that the except showing the premises of the complainant to Bhavya and Smt.Kusumalatha, the accused never participated in the hotel business. It also corroborates the defense that for security purpose, the accused on behalf of Bhavya and Smt.Kusumalatha, paid Rs.5 lakhs towards advance amount and also given his cheques for security.
46. Now the burden shifts back on the complainant to prove her case beyond reasonable doubts. However, except oral testimony of PW.1 no proof is produced to establish the 37 C.C.28630/2018 loan transaction of Rs.13 lakhs and source of income of complainant.
47. Ex.D12 i.e. advertisement given in the OLX regarding the rent of shops of the complainant and Ex.D16 Certificate given U/Sec.65-B also corroborates the defense of the accused, by seeing said advertisement he took Bhavya and Smt.Kusumalatha to the complainant to see the premises.
48. Yet another important contention of the accused is that demand notice is not served on him. The demand notice is given on 24.08.2018 as per Ex.P5, and postal acknowledgment ie Ex.P7 is produced by the complainant stating that the notice is served on accused. On perusal of Ex.P7 it appears one 'Neelamma' has signed and taken the notice. During cross- examination of the accused' the counsel for the complainant has asked Neelamma is residing with accused and same is denied by him and he specifically deposed he does not know who is Neelamma. In the legal notice, the address of the 38 C.C.28630/2018 accused is shown as resident No.2208, First Floor, 12 th Main, 2nd Stage, Rajajinagar, Bangalore, this address is also reflected as the address of Smt Bhavya in Ex.D8 rent recovery notice given by the complainant. Therefore, the burden lies on the complainant to prove in the said address, the accused is residing. Admittedly there is no signature of he accused at Ex.P7 postal acknowledgment. When such being the case unless and until the complainant proves that the notice is given to the correct address of the accused, it cannot be construed that the notice is served to accused. During cross-examination of PW.1 has deposed he does not know address, occupation of the accused. Hence it is evident that the complainant does not know the address of the accused, but to the address shown in the rent recovery notice at Ex.D9 given to Bhavya, the complainant has given the demand notice at Ex.P4 stataing that it is address of the accused. It is not esyablshed that both the accused ans Smt Bavya are residing togther in same 39 C.C.28630/2018 address. It is not forthcoming who is Neelamma , ie one who received legal notice as per Ex.P7. Hence accused has clearly demonstrated that the demand notice is given to the wrong address and same is not served on him. To further establish that the accused is residing in the address shown at legal notice, no proof is produced. Therefore, for the aforesaid reasons, this Court holds that the legal notice is not given to the correct address of the accused.
49. On appreciation of entire evidence and for aforementioned reasons, this court is of the clear and firm view that the accused has rebutted the evidence of the complainant on the scale of preponderance of probabilities. Percontra, the complainant has failed to prove that she has lent loan of Rs.13 lakhs to the accused, she possessed such amount with her during relevant point of time.
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50. In APS Forex Service Private Limited v. Shakti International Fashion Linkers AIR 2020 SC 945, the Hon'ble Supreme Court has clarified and explained the issue as follows:
"We are of the view that whenever the accused has questioned the financial capacity of the complainant in support of his probable defence, despite the presumption under sec 139 of the N.I. Act about the presumption of legally enforceable debt and such presumption is rebuttable, thereafter the onus shifts again on the complainant to prove his financial capacity and at that stage the complainant is required to lead the evidence to prove his financial capacity, more particularly when it is a case of giving loan by cash and thereafter issuance of a cheque. "
51. In Basalingappa vs Mudibasappa reported in AIR 2019 SUPREME COURT 1983, it is held that "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 41 C.C.28630/2018 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".
52. No proof is produced to establish her source of income. There is discrepancies in the evidence of PW.1 regarding the outstanding amount from the accused ie as per oral evidence of PW!, 6 lakhs and the amount shown in the complaint ie 13 lakhs. It appears that the cheques were presented for an amount exceeding the actual dues. Resultantantly , defence of the accused that misuse of the accused cheques which were given for security at the time of entering into rent agreement with Bhavya and Smt.Kusumalatha is more probable.
53. Moreover, the complainant has failed to prove that the demand notice is given to the proper address of the accused and same is served to him. For the aforementioned 42 C.C.28630/2018 reasons, this Court finds that the complainant has failed to prove the case beyond reasonable doubt. Inconsistencies exist between the evidence of PW.1 and the pleadings. It is well settled law that in determining whether the presumption has been rebutted, the test of proportionality must guide the determination. The standard of proof for rebuttal of the presumption under Section 139 of the Act is guided by a preponderance of probabilities. The defense version appears more plausible than that of the complainant. Accordingly, the benefit of doubt must be extended to the accused. Thus court proceed to answer POINT NO.I IN THE NEGATIVE.
54. POINT NO.II:- In view of above said reasons the allegations levelled against the accused is not proved beyond reasonable doubts. Accordingly, this court proceeds to pass following 43 C.C.28630/2018 ORDER In excise of power conferred U/Sec.255(1) of Cr.P.C, accused is not found guilt of the offense punishable U/Sec.138 of Negotiable Instruments Act and accused is acquitted.
Bail bond executed by accused stands cancelled. (Dictated to the Stenographer, typed by her, corrected by me and then judgment pronounced in the open court on this the 8th day of July 2025).
Digitally signed by Tejaswini Tejaswini Date:
KM KM 2025.07.11 17:12:47 +0530 (Smt.Tejaswini K.M ), XVI ACJM, Bengaluru ANNEXURE I. List of witnesses on behalf of complainant:
P.W.1: Sri.Chowdegowda II. List of documents on behalf of complainant:
Ex.P-1 & 2: Original Cheques. Ex.P-1(a) & 2(a) : Signatures of the accused Ex.P-3 & 4 : Bank memos.
Ex.P-5 : Legal notice.44 C.C.28630/2018
Ex.P-6 : Postal receipt.
Ex.P-7 : Postal Acknowledgment. Ex.P-8 : Complaint.
Ex.P-9 : Copy of GPA.
III. List of witnesses for the accused:
D.W.1: Sri.Sudeendhra
IV. List of documents for accused:
Ex.D-1 & 2 : Bank Statements.
Ex.D-3: C/c of Order Sheet in O.S.No.2816/2019. Ex.D-4: Affidavit of plaintiff in O.S.No.2816/2018. Ex.D-5: Copy of Rent Agreement. Ex.D-6 to 9: Notices.
Ex.D-10: Memorandum of Plaint in O.S.No.4847/2018. Ex.D-11: Notice.
Digitally
signed by
Tejaswini K M
Tejaswini Date:
KM 2025.07.11
17:12:55
+0530
(Smt.Tejaswini K.M ),
XVI ACJM, Bengaluru
45 C.C.28630/2018