Bangalore District Court
Sri V Nagaraja vs Sri Prakasha C on 9 March, 2026
KABC0C0193602023
IN THE COURT OF XIV ADDL.CHIEF JUDICIAL
MAGISTRATE, MAYOHALL UNIT, BENGALURU
Dated this the 9th day of March, 2026
Present : SANTHOSH S.KUNDER, B.A.,LLM,
XIV Addl.C.J.M., Bengaluru
JUDGMENT UNDER SECTION 355 of Cr.P.C
C.C.No. 56444/2023
Complainant Sri.V Nagaraja,
S/o Venkatappa,
Aged about 'nil',
R/at No.48,
Sai Chaithanya Mango Medows,
Kada Agrohara,
Bidarahalli, Bengaluru East,
Bengaluru.
(By Sri.Prashanth.P.N., Advocate)
V/s
Accused Sri.Prakash.C.,
S/o Channe Gowda,
Aged about 45 years,
R/at No.310/8, 5th Cross,
Nazarabad, Bazar Street,
Mysore-570010.
(By Sri.Suresha.C., Sharath.J.M., &
Shivaraju, Advocates)
Offence U/s 138 of Negotiable Instruments Act.
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Plea of the Pleaded not guilty
accused
Final Order Accused is held guilty & convicted
This complaint is filed under Section 200 of Cr.P.C
for the offence punishable under Section 138 of the
Negotiable Instruments Act.
2. Complaint averments in brief:
2.1. Complainant and accused are acquainted with
each other. In the month of December 2019, accused has
approached the complainant for hand loan of ₹12,00,000/-
to overcome his domestic, personal and business related
issues. In order to help the accused, complainant lent
₹12,00,000/- to accused upon him executing loan
agreement on 10.12.2019 and receiving cheque bearing
No.000047 for ₹12,00,000/- drawn on ICICI Bank. Since
the accused had promised to repay the money within six
months, complainant did not charge interest on the money
lent.
2.2. However, in spite of lapse of six months,
accused kept on dodging the repayment on the ground of
Covid pandemic and requested more time. Understanding
the situation, complainant gave some time to accused to
repay the money. Even thereafter, accused did not repay
the money which constrained the complainant to send a
letter to accused that he would be depositing cheque for
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encashment and to maintain sufficient balance. The said
intimation letter dated 13.10.2022 returned unserved on
27.10.2022 with shara 'not claimed, returned to sender'.
Thereafter, complainant has deposited the said cheque in
ICICI Bank, Hennur branch on 30.11.2022. Surprisingly,
the cheque was returned on 02.12.2022 with endorsement
'funds insufficient'. Act of the accused in not keeping
sufficient balance in the account is deliberate, intentional
and with a reason to avoid the repayment of money. After
the receipt of intimation of dishonor from the bank,
complainant has sent a statutory notice dated 31.12.2022.
The said notice was not served. In the mean time, the
accused has approached the complainant and requested
not to take any legal recourse and sought time to repay the
entire due amount. However, this time also he did not keep
up his promise. Therefore, the complainant has again
presented the cheque on 16.02.2023 in the very bank. The
cheque was again returned unpaid with endorsement dated
16.02.2023 for the reason 'funds insufficient'. Thereafter,
complainant has sent another statutory notice dated
11.03.2023 calling upon the accused to pay the amount
covered under the dishonored cheque. The said notice
returned unserved on 15.03.2023 with shara 'no such
person in this address, returned to sender'. Therefore, this
complaint is filed.
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3. This court took cognizance of the offence
punishable under Section 138 of N.I.Act. Complainant was
examined on oath. As prima facie case made out, criminal
case was registered and accused was summoned.
4. Pursuant to the process, accused has appeared
before the court and admitted to bail. After compliance of
Section 207 of Cr.P.C, this court recorded his plea. He has
pleaded not guilty and claimed to be tried.
5. Sworn statement affidavit of complainant
treated as evidence post-cognizance stage. Documents at
Ex.P-1 to 15 marked for complainant.
6. Accused was examined under Section 313 of
Cr.P.C. He has denied the incriminating evidence. Accused
has not led defence evidence in spite of providing
opportunity. One defence document at Ex.D1 marked in
the cross-examination of PW-1.
7. Heard argument on both side.
8. Points for consideration:
1.Whether the complainant has proved
that accused has issued cheque
bearing No.000047 dated 30.11.2022
for ₹12,00,000/-, drawn on Bank of
Baroda, Gandhi Square, Mysuru,
towards discharge legally recoverable
debt/liability and the said cheque was
dishonored for the reason 'funds
insufficient' and in spite of issuance of
statutory notice dated 11.03.2023, he
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has failed pay the amount covered
under the cheque and thereby
committed the offence punishable
under Section 138 of N.I.Act?
2. What order?
9. The above points are answered as under:-
Point No.1 : In the Affirmative.
Point No.2 : As per final order;
for the following:
REASONS
10. Point No.1: In order to prove the case, the
complainant has examined himself as PW-1 and produced
documents marked at Ex.P1 to 15. Ex.P-1 is cheque;
Ex.P.2 and 3 are bank endorsements; Ex.P-4 is copy of
legal notice dated 28.11.2022; Ex.P.5 is postal receipt;
Ex.P-6 is returned postal cover; Ex.P7 is copy of legal
notice dated 11.03.2023, Ex.P8 is postal receipt; Ex.P9 is
returned postal cover; Ex.P10 to 12 are bank statement of
complainant; Ex.P13 is loan agreement, Ex.P14 is copy of
intimation letter dated 'nil'; and Ex.P15 is returned postal
cover.
11. Learned defence counsel has cross-examined
PW-1. During cross-examination, it is elicited son of the
complainant and accused were doing bar and restaurant
business in Mysore. It is elicited that complainant has filed
cheque dishonor case against one Suresh. Certified copy of
6 CC.No.56444/2023
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sworn statement affidavit/deposition of complainant in
CC.No.53128/2023 was confronted and the same is
marked at Ex.D1. It is elicited that in the said proceeding,
complainant herein has deposed that from 2004 to 2020 he
was working in Petro Chemical Industry in Saudi Arabia
and returned Bengaluru in the year 2020. It was suggested
that the son of the complainant had taken signed blank
cheque and blank stamp paper from the accused and that
the accused has not at all borrowed money from the
complainant. PW-1 has denied the said suggestion. He has
also denied the suggestion that false complaint is filed by
misusing the blank cheque and blank stamp paper.
12. At the out set, it is to be noted that by giving
suggestion to PW-1 to the effect that signed blank cheque
and blank stamp paper were taken, accused has impliedly
admitted his signature on the cheque at Ex.P1 and loan
agreement at Ex.P13. Relevant portion of deposition of
PW-1 as appearing in page No.9 is extracted hereunder:-
"03. XXXX ಮೂಲ ಸನ್ನದುದಾರರಿಂದ ಅನುಮತಿ ಪಡೆದು
Bar and Restaurant ನ ವ್ಯವಹಾರವನ್ನು ನನ್ನ ಮಗ
ಮತ್ತು ಆರೋಪಿಯು ಮಾಡುತ್ತಿದ್ದ ಸಂದರ್ಭದಲ್ಲಿ ನನ್ನ ಮಗ
ಆರೋಪಿಯಿಂದ ಸಹಿ ಮಾಡಿದ ಖಾಲಿ ಚೆಕ್ಕು ಮತ್ತು ಖಾಲಿ stamp
paper ಅನ್ನು ಪಡೆದುಕೊಂಡಿದ್ದೇನೆಂದರೆ ಸರಿಯಲ್ಲ. XXXX"
13. Ex.P13 is document captioned as " ಒಪ್ಪಂದ ಪತ್ರ"
which reads as under:-
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"ಒಪ್ಪಂದ ಪತ್ರ
ಸನ್ ಎರಡು ಸಾವಿರದ ಹತ್ತೊಂಬತ್ತನೇ ಇಸವಿ ಡಿಸಡಂಬರ್
ಮಾಹೆ ದಿನಾಂಕ ಹತ್ತರಲ್ಲಿ (10-12-2019):-
ಮೈಸೂರು ಸಿಟಿ, 5 ನೇ ಕ್ರಾಸ್, ಬಜಾರ್ ಸ್ಟ್ರೀಟ್,
ನಜರ್ ಬಾದ್, ಮನೆ ನಂ.310/8 ರಲ್ಲಿ ವಾಸವಾಗಿರುವ
ಶ್ರೀ ಸಿ.ಪ್ರಕಾಶ ರವರು ಹಣ ಪಡೆಯುವವರು,
ಮತ್ತು
ಶ್ರೀನಿವಾಸ ನಿಯರ್ ರಾುಮಾನುಜಯ್ಯ ಜನರ್ ಸ್ಟೋರ್,
ಗಾಂಧಿನಗರ, ಕಾವೂರ್, ಮಂಗಳೂರು,575015. ಮನೆ
ನಂ್ಠ 3-50/4(8) ರಲ್ಲಿ ವಾಸವಾಗಿರುವ. ಶ್ರೀ
ವಿ.ನಾಗರಾಜರವರು (ಹಣ ಕೊಡುವವರು).
ಆದಾಗಿ ನನಗೆ ನನ್ನ ವೈಯಕ್ತಿಕ ವ್ಯಾಪಾರಕ್ಕೆ ಹಣದ
ಅವಶ್ಯಕತೆ ಇರುವುದರಿಂದ ನಾನು ಈ ದಿನ ನಿಮ್ಮಿಂದ ಭಾರತ
ಸರ್ಕಾರದಲ್ಲಿ ಚಲಾವಣೆಯಲ್ಲಿರುವ ಡದಿನಾಂಕಃ 10-12-
2019 ರೂ. 12,00,000/- (ಹನ್ನೆರಡು ಲಕ್ಷ)
ರೂಪಾಯಿಗಳನ್ನು ದಿನಾಂಕಃ 10-12-2019 ಸಾಲವಾಗಿ
ಪಡೆದಿರುತ್ತೇನೆ.
ಈ ಹಣಕ್ಕೆ ಭದ್ರತೆಯಾಗಿ ನನ್ನ ಗಾಂಧಿಸ್ಕ್ವೕೆರ್,
ರಸ್ತೆಯಲ್ಲಿರುವ ಬ್ಯಾಂಕ್ ಆಫ್ ಬರೋಡ ಶಾಖೆಯ ನನ್ನ
ಉಳಿತಾಯ ಖಾತೆಯ ಚೆಕ್ಕನ್ನು ಕೊಟ್ಟಿರುತ್ತೇನೆ. ಚೆಕ್
ನಂ.000047 ಎಸ್.ಬಿ. ಅಕೌಂಡ್ ನಂಬರ್ ಃ
052201100003846.
ನಾನು ಹಣ ಹಿಂದಿರುಗಿಸಿದಾಗ ಚೆಕ್ಕು ಮತ್ತು ಈ ಪೇಪರ್
ಕೊಡತಕ್ಕದ್ದು.
ಸಾಕ್ಷಿಗಳು ಸಾಲ ಪಡೆದವರು ಸಹಿ.
Sd/-
1) Sd/-
2)"
14. Reading of Ex.P13 makes it very clear that
cheque was delivered by the accused to the complainant on
10.12.2019 itself. Accused having admitted his signature
on the agreement, in the absence of evidence to contrary,
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it does not lie in his mouth to contend that he has no
knowledge of the contents of the agreement. His only
defence is that he has not borrowed money from the
accused and he has not parted with the cheque. According
to him, son of the complainant had taken signed blank
cheque and signed stamp paper. To substantiate the same,
except bald assertion, no evidence produced. He has failed
to explain the circumstances which made him to deliver
the signed cheque and stamp paper to the son of the
complainant. PW-1 has categorically denied that signed
cheque and blank paper taken by his son. It is pertinent to
note that, as per recitals in Ex.P13, cheque was taken way
back in the year 2019. Assuming for argument sake that
blank cheque and blank stamp paper were given way back
in the year 2019, long silence of the accused without
demanding for return of cheque/stamp paper, is quite
unusual. Signed cheque and blank stamp paper are
valuable security which can be made use of by any person.
Under these circumstance, normal human conduct would
be to take steps to get back the signed cheque and stamp
paper. But, accused has not taken any action. He has not
issued notice to the complainant/his son demanding to
return the cheque and stamp paper. Therefore, very
defence that signed blank cheque and stamp paper were
parted with the son of the complainant can not be believed.
On the other hand, there are clear recitals in Ex.P13 to the
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effect that the accused has borrowed loan of ₹12,00,000/-
from the complainant on 10.12.2019 and issued the
subject cheque for security.
15. A cheque issued as security pursuant to a
financial transaction cannot be considered as a worthless
piece of paper under every circumstance. If in a
transaction, a loan is advanced and the borrower agrees to
repay the amount in a specified timeframe and issues a
cheque as security to secure such repayment; if the loan
amount is not repaid in any other form before the due date
or if there is no other understanding or agreement between
the parties to defer the payment of amount, the cheque
which is issued as security would mature for presentation
and the drawee of the cheque would be entitled to present
the same. On such presentation, if the same is
dishonoured, the consequences contemplated under
Section 138 and the other provisions of N.I. Act would flow.
In this regard, it is useful to refer to the judgment of
Hon'ble Supreme Court in Sripati Singh (since deceased)
through his son Gaurav Singh V/s State of Jharkhand
and another; 2021 SCC OnLine SC 1002, where it was
held as under:-
17. A cheque issued as security
pursuant to a financial transaction
cannot be considered as a worthless
piece of paper under every
circumstance. 'Security' in its true
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sense is the state of being safe and
the security given for a loan is
something given as a pledge of
payment. It is given, deposited or
pledged to make certain the
fulfilment of an obligation to which
the parties to the transaction are
bound. If in a transaction, a loan is
advanced and the borrower agrees
to repay the amount in a specified
timeframe and issues a cheque as
security to secure such repayment; if
the loan amount is not repaid in any
other form before the due date or if
there is no other understanding or
agreement between the parties to
defer the payment of amount, the
cheque which is issued as security
would mature for presentation and
the drawee of the cheque would be
entitled to present the same. On
such presentation, if the same is
dishonoured, the consequences
contemplated under Section 138 and
the other provisions of N.I. Act would
flow.
18. When a cheque is issued and is
treated as 'security' towards
repayment of an amount with a time
period being stipulated for
repayment, all that it ensures is that
such cheque which is issued as
'security' cannot be presented prior
to the loan or the instalment
maturing for repayment towards
which such cheque is issued as
security. Further, the borrower
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would have the option of repaying
the loan amount or such financial
liability in any other form and in that
manner if the amount of loan due
and payable has been discharged
within the agreed period, the cheque
issued as security cannot thereafter
be presented. Therefore, the prior
discharge of the loan or there being
an altered situation due to which
there would be understanding
between the parties is a sine qua
non to not present the cheque which
was issued as security. These are
only the defences that would be
available to the drawer of the cheque
in a proceedings initiated under
Section 138 of the N.I. Act. Therefore,
there cannot be a hard and fast rule
that a cheque which is issued as
security can never be presented by
the drawee of the cheque. If such is
the understanding a cheque would
also be reduced to an 'on demand
promissory note' and in all
circumstances, it would only be a
civil litigation to recover the amount,
which is not the intention of the
statute. When a cheque is issued
even though as 'security' the
consequence flowing therefrom is
also known to the drawer of the
cheque and in the circumstance
stated above if the cheque is
presented and dishonoured, the
holder of the cheque/drawee would
have the option of initiating the civil
proceedings for recovery or the
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criminal proceedings for punishment
in the fact situation, but in any
event, it is not for the drawer of the
cheque to dictate terms with regard
to the nature of litigation."
16. Complainant has produced his bank statement
at Ex.P10 to 12. Entry dated 13.12.2019 in Ex.P11 shows
that complainant has transferred ₹2,50,000/- to accused
by RTGS. Further, entry dated 23.12.2019 in Ex.P12
shows that a sum of ₹8,00,000/- was transferred to
accused by RTGS. Of course, cheque at Ex.P1 represents
₹12,00,000/-. Pertinently, accused has not disputed
Ex.P11 and 12. These documents prove lending of
₹10,50,000/- by the complainant to the accused.
Therefore, the contention that complainant was working
abroad between 2004 and 2020 is inconsequential and
does not disprove the money transactions which the
accused had with the complainant. Assuming that the
complainant was in abroad between 2004 and 2020, that
does not mean that he never came India during the said
period. Therefore, evidence of complainant in
C.C.No.53128/2023 that he was working in Saudi Arabia
and returned India in 2020 does not render the
complainant's case unworthy of merits.
17. There can be no dispute that in matters relating
to offence under Section 138 of the Act, the complainant is
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required to establish that the cheque is genuine, presented
within time and upon it being dishonoured, due notice was
sent within 30 days of such dishonour, to which
repayment must be received within 15 days, failing which a
complaint can be preferred by the complainant within one
month as contemplated under Section 142(1)(b) of the Act.
18. In K. Bhaskaran v. Sankaran Vaidhyan
Balan, [(1999) 7 SCC 510], the Hon'ble Court had
summarised the constituent elements of the offence in
similar terms by holding:
"14. The offence Under Section 138 of the
Act can be completed only with the
concatenation of a number of acts. The
following are the acts which are components
of the said offence: (1) drawing of the
cheque, (2) presentation of the cheque to the
bank, (3) returning the cheque unpaid by
the drawee bank, (4) giving notice in writing
to the drawer of the cheque demanding
payment of the cheque amount, (5) failure of
the drawer to make payment within 15
days of the receipt of the notice."
19. The NI Act provides for two presumptions:-
Section 118 and Section 139. Section 118 of the Act inter
alia directs that it shall be presumed, until the contrary is
proved, that every negotiable instrument was made or
drawn for consideration. Section 139 of the Act stipulates
that "unless the contrary is proved, it shall be presumed,
that the holder of the cheque received the cheque, for the
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discharge of, whole or part of any debt or liability". Because
Section 139 requires that the court "shall presume" the
fact stated therein, it is obligatory on the court to raise this
presumption in every case where the factual basis for the
raising of the presumption has been establish. Therefore,
the court will necessarily presume that the cheque is
issued towards discharge of a legally enforceable
debt/liability in two circumstances. Firstly, when the
drawer of the cheque admits issuance/execution of the
cheque and secondly, in the event where the complainant
proves that the cheque was issued/executed in his favour
by the drawer. The circumstances set out above form the
fact(s) which bring about the activation of the presumptive
Clause. [Bharat Barrel & Drum Mfg.Co. V/s Amin
Chand Pyarelal, (1999) 3 SCC 35].
20. In the present case, since the execution of the
cheque is, admittedly, not under dispute, the limited
question to be considered, is whether the accused has
discharged his 'evidential burden' to arrive at the
conclusion that the presumption of law supplied by
Section 139 has been rebutted.
21. Discussing the burden of proof and
presumptions, Hon'ble Supreme Court in Rajesh Jain V/s
Ajay Singh, [(2023) 10 SCC 148] held as under:-
"28. There are two senses in which the
phrase 'burden of proof' is used in the
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Indian Evidence Act, 1872 ("Evidence Act,
hereinafter"). One is the burden of proof
arising as a matter of pleading and the
other is the one which deals with the
question as to who has first to prove a
particular fact. The former is called the
"legal burden" and it never shifts, the latter
is called the 'evidential burden' and it shifts
from one side to the other. [See Kundanlal v.
Custodian (Evacuee Property); AIR 1961 SC
1316.]
29. The legal burden is the burden of proof
which remains constant throughout a trial.
It is the burden of establishing the facts
and contentions which will support a
party's case. If, at the conclusion of the
trial a party has failed to establish these to
the appropriate standards, he would lose
to stand. The incidence of the burden is
usually clear from the pleadings and
usually, it is incumbent on the plaintiff or
complainant to prove what he pleaded or
contends. On the other hand, the evidential
burden may shift from one party to another
as the trial progresses according to the
balance of evidence given at any particular
stage; the burden rests upon the party who
would fail if no evidence at all, or no
further evidence, as the case may be is
adduced by either side (See Halsbury's
Laws of England, 4th Edition para 13).
While the former, the legal burden arising
on the pleadings is mentioned in Section
101 of the Evidence Act, the latter, the
evidential burden, is referred to in Section
102 thereof. [G.Vasu V. Syed Yaseen
Sifuddin Quadri; AIR 1987 AP 139.
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affirmed in Bharat Barrel & Drum Mfg.Co.
Vs. Amin Chand Payrelal; (1999) 3 SCC 35]
30. Presumption, on the other hand,
literally means "taking as true without
examination or proof". In Kumar Exports v.
Sharma Exports; (2009) 2 SCC 513, this
Court referred to presumption as "devices
by use of which courts are enabled and
entitled to pronounce on an issue
notwithstanding that there is no evidence
or insufficient evidence."
31. Broadly speaking, presumptions are of
two kinds, presumptions of fact and of law.
Presumptions of fact are inferences
logically drawn from one fact as to the
existence of other facts. Presumptions of
fact are rebuttable by evidence to the
contrary. Presumptions of law may be
either irrebuttable (conclusive
presumptions), so that no evidence to the
contrary may be given or rebuttable. A
rebuttable presumption of law is a legal
rule to be applied by the Court in the
absence of conflicting (Halsbury, 4th
Edition paras 111, 112). Among the class
of rebuttable presumptions, a further
distinction can be made between
discretionary presumptions ("may
presume") and compulsive or compulsory
presumptions ("shall presume")."
22. In P.Rasiya V/s Abdul Nazer and another;
(AIR Online 2022 SC 1373), the Hon'ble Apex Court
reiterated the position of law that once the complainant
discharges his initial burden of proving issuance of cheque
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by the accused with his signature, the presumption under
Section 139 of NI Act would arise and burden shifts on the
accused to rebut the same. Of course, the degree of proof
required to be proved by the accused is not as high as the
burden on the complainant to prove the guilt of the
accused, but he is required to probabilize his defence.
Hon'ble Supreme Court also made it clear that once the
initial burden of proving the issuance of cheque by the
accused with his signature is proved by the complainant,
the burden shifts on the accused to prove the contrary and
to rebut the presumption.
23. Recently, Hon'ble Apex Court in Sanjabij Tari
V/s Kishore S.Borcar & Another; (2025) SCC OnLine SC
2069, held as under:-
"15. In the present case, the cheque in question
has admittedly been signed by the Respondent
No.1-Accused. This Court is of the view that
once the execution of the cheque is admitted,
the presumption under Section 118 of the NI
Act that the cheque in question was drawn for
consideration and the presumption under
Section 139 of the NI Act that the holder of the
cheque received the said cheque in discharge of
a legally enforceable debt or liability arises
against the accused. It is pertinent to mention
that observations to the contrary by a two
Judges Bench in Krishna Janardhan Bhat vs.
Dattatraya G. Hegde, (2008) 4 SCC 54 have
been set aside by a three Judges Bench in
Rangappa (supra).
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16. This Court is further of the view that by
creating this presumption, the law reinforces
the reliability of cheques as a mode of payment
in commercial transactions.
17. Needless to mention that the presumption
contemplated under Section 139 of the NI Act,
is a rebuttable presumption. However, the
initial onus of proving that the cheque is not in
discharge of any debt or other liability is on the
accused/drawer of the cheque [See: Bir Singh
vs. Mukesh Kumar, (2019) 4 SCC 197].
XXXXX
21. This Court also takes judicial notice of the
fact that some District Courts and some High
Courts are not giving effect to the presumptions
incorporated in Sections 118 and 139 of NI Act
and are treating the proceedings under the NI
Act as another civil recovery proceedings and
are directing the complainant to prove the
antecedent debt or liability. This Court is of the
view that such an approach is not only
prolonging the trial but is also contrary to the
mandate of Parliament, namely, that the
drawer and the bank must honour the cheque,
otherwise, trust in cheques would be
irreparably damaged."
24. Thus, it is settled proposition of law that the
complainant is required to discharge his initial burden of
issuance of cheque by the accused with his signature to
raise the legal presumption under Section 139 of NI Act.
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When the legal presumption arises, the burden shifts on
the accused to rebut the same by probabilizing his defence.
25. In view of the settled principles, complainant
having proved lending of money to accused and signature
on the cheque, evidential burden is on the accused to
substantiate the defence that the cheque was not issued to
the complainant. But, he has failed to discharge the
burden of establishing his defence.
26. Prima facie, cheque at Ex.P-1 drawn from the
bank account of the accused. Indisputably, cheque was
presented twice for encashment well within its validity and
dishonoured for the reason 'insufficient funds' which is
appearing from bank endorsements at Ex.P2 and 3 dated
02.12.2022 and 16.02.2023. Thereafter, complainant has
issued notice dated 11.03.2023, copy of which is at Ex.P7
calling upon the accused to pay the amount covered under
the dishonored cheque. The said notice returned unserved.
Accused has not disputed the correctness of address to
which the notice was sent. Therefore, it is deemed that
notice sent to the correct address. Therefore, by statutory
fiction, offence is deemed to have committed. Accused has
failed to probabilize his defence to dislodge the statutory
presumption. Therefore, this court holds that the
complainant has proved that the accused has committed
the offence punishable under Section 138 of N.I.Act.
Accordingly, I answer Point No.1 in the Affirmative.
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27. Point No.2:-Punishment prescribed for the
offence under Section 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. Object of Chapter-XVII of the
Negotiable Instruments Act, which prescribes punishment
for the dishonour of the cheque is both punitive as well as
compensatory and restitutive. In R.Vijayan V/s Baby and
another (AIR 2012 SC 528), Hon'ble Supreme Court has
observed that Chapter-XVII of the N.I. Act is an unique
exercise which blurs the dividing line between civil and
criminal jurisdictions and it provides a single forum and
single proceeding for enforcement of criminal liability and
also for the enforcement of the civil liability i.e., for
realization of the cheque amount and thereby obviating the
need for the creditor to move to different forums for the
relief. Hon'ble Apex Court has reiterated that the apparent
intention is to ensure that not only the offender is
punished, but also ensure that the complainant invariably
receives the amount of cheque along with compensation.
Hon'ble Supreme Court has further observed that a stage
has reached when most of the complainants in particular
the financial institutions view the proceedings under
Section 138 of N.I. Act as a proceeding for recovery of the
cheque amount and therefore, the punishment of the
drawer of the cheque for the offence of dishonour become
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secondary. The said judgment is relied by Hon'ble High
Court of Karnataka in M/s. Banavathy & Company V.s
Mahaeer Electro Mech (P) Ltd., and others, (NC:
2025:KHC:25140).
28. Keeping in mind the principles laid down in the
aforesaid judgments, sentence has to be passed. In the
present case, money was lent way back in the year 2019.
Cheque is dated 30.11.2022. Having regard to the facts
and circumstances of the case, and keeping in mind the
provision contained in Section 80 of NI Act, it is a fit case
to impose fine of ₹19,00,000/- and out of the said amount,
it is just and proper to award a sum of ₹18,90,000/- as
compensation to the complainant as provided under
Section 357(1)(b) of Cr.P.C and the remaining sum of
₹10,000/- shall be defrayed to State. In view of the findings
recorded above, I proceed to pass the following:
ORDER
Acting under Section 255(2) of Cr.P.C., accused is held guilty and convicted for the offence punishable under Section 138 of Negotiable Instruments Act.
Accused is sentenced to pay a fine of ₹19,00,000/-. In default to pay fine, he shall undergo simple imprisonment for a period of nine months.
Out of the realized fine amount, a sum of ₹18,90,000/- is ordered to be paid to the complainant as compensation and the 22 CC.No.56444/2023 KABC0C0193602023 remaining sum of ₹10,000/- shall be defrayed to State.
Bail bonds executed by accused shall stands cancelled.
Office to supply a free copy of this judgment to accused.
(Dictated to the Stenographer, transcript computerized by her, revised corrected and then pronounced by me in the open Court on this the 9 th day of March, 2026) Digitally signed SANTHOSH by SANTHOSH S KUNDER S KUNDER Date: 2026.03.10 12:24:34 +0530 ( SANTHOSH S.KUNDER ) XIV Addl. C.J.M., Bengaluru.
ANNEXURES List of witness examined for the Complainant:
PW.1 V.Nagaraja List of documents marked for the Complainant:
Ex.P.1 Cheque
Ex.P.1(a) Signature of the accused
Ex.P.2 & Bank endorsements
3
Ex.P.4 Copy of legal notice dated 28.11.2022
Ex.P.5 Postal receipt
Ex.P.6 Returned postal cover
Ex.P.7 Copy of legal notice dated 11.03.2023
Ex.P.8 Postal receipt
Ex.P.9 Returned postal cover
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Ex.P.10 Bank statement of complainant to 12 Ex.P.13 Loan agreement Ex.P.14 Copy of intimation letter dated 'nil' Ex.P.15 Returned postal cover List of witness examined for the defence Nil List of documents marked for the defense:
Ex.D1 Sworn statement affidavit/deposition of complainant in C.C.No.53128/2023 Digitally signed SANTHOSH by SANTHOSH S KUNDER S KUNDER Date: 2026.03.10 12:24:29 +0530 XIV Addl.C.J.M., Bengaluru.