Bangalore District Court
M/S Ninjacart Services Pvt Ltd vs G S Coconuts on 18 February, 2026
KABC030520032025
IN THE COURT OF THE XXV ADDL. CHIEF JUDICIAL MAGISTRATE,
AT BANGALORE CITY
Dated this the 18th day of February, 2026
Present : SRI. GOKULA. K
B.A.LL.B.
XXV Addl. Chief Judicial Magistrate,
Bangalore City.
C.C.No.30160/2025
Complainant : M/s.Ninjacart Services Private Limited
R/o.at Helios Business Park, E Block, 2nd
floor
Opp New Horizon College Bus Stop
Service Road, Kadabeesanahalli,
Bengaluru 560 103.
Rep by its Associate Manager
Adarsh R.
(By SGA Advocate )
V/s
Accused : G S Coconuts
25-1-1/b, Sowdamai Trading
Near fire station Yadla bazar
Palakot
Andhra Pradesh 534 260.
Represented by Propritor
Sirigineedi Durga Rao
(By NP- Advocate )
Plea of accused: Pleaded not guilty
2
C.C.No.30160/2025
Final Order: Accused is convicted
Date of judgment 18.02.2026
JUDGMENT
The complainant has filed the complaint under Section 223 of Bharathiya Nagarika Suraksha Sanhitha 2023 for the offences punishable under Section 25 of The Payment and Settlement Systems Act 2007 R/w Section 138 Negotiable Instruments Act.
2. The brief case of the complainant is as under:
That the complainant is a company registered under Companies Act involved in the business of wholesale trading of agricultural products and fresh produce supply and it is also tied up with NBFC for providing financial services. The accused is engaged in the business of wholesale trade of agricultural products and commission agency. The accused applied for loan before the complainant through Trillion loans Fintech Private Limited in loan application No.73675. After considering the same, the complainant has extended credit facility to the accused for a sum of Rs.5,94,280/- out of which Rs.2,35,000/- was availed by the accused. The accused has agreed to repay the loan as per the terms and conditions of the loan agreement. The accused has applied the loan in the online platform and digitally signed the loan documents. 3
C.C.No.30160/2025 During process of loan transaction, the accused issued a signed NACH (National Automated Clearing House) bearing UMRN No.UBIN7021807230000541 ON 18.07.2023 drawn on Union Bank of India, for a sum of Rs.5,94,280/- in favour of the complainant towards due discharge of debt/liability. The accused has assured to make payment as per the terms and conditions of the loan agreement. It is pleaded that later the accused has defaulted to pay the installments of loan as agreed upon. Since no payment was made by the accused, the complainant has processed E-NACH mandate for realization through his banker AU Small Finance Bank, Koramangala, Bengaluru for outstanding sum of Rs.3,58,845/- and on processing said E NACH Mandate, it is returned dishonored with remarks "Balance Insufficient" on 27-06-2025. On receipt of said intimation, the complainant got issued legal notice on 02.07.2025 through registered post and demanded to pay the amount dishonoured under E-NACH Mandate. The notice is duly served on the accused on 17.07.2025. Inspite of service of notice, the accused failed to pay the claim amount to the complainant with in the statutory time. Therefore, the accused has committed the offence under Section 25 of the Payment and Settlement Act 2007 R/w Section 138 of Negotiable Instruments Act. Therefore the complainant has filed the complaint.4
C.C.No.30160/2025
3. On the basis of Private complaint filed by the complainant, this court has taken cognizance of offence and registered the case in PCR No.13541/2025 and recorded sworn statement of the authorised officer of the complainant as PW 1 and got marked 10 documents as Ex.P1 to Ex.P10. This court by considering the material on record issued process under Section 227 of Bharathiya Nagarika Suraksha Sanhita by registering the criminal case. In response to the process issued by this court, the accused appeared before this court and he is released on bail. The copy of the complaint is served to the accused along with the summons as contemplated under Section 230 of Bharathiya Nagarika Suraksha Sanhita.
4. The substance of the acquisition as provided Section 274 of Bharathiya Nagarika Suraksha Sanhita is read over to the accused and his plea is recorded. The accused has pleaded not guilty and claimed to be tried.
5. In view of the law laid down by Hon'ble Supreme Court of India in Indian Bank Association V/s Union of India and others reported in AIR 2014 SCW 3463, the affidavit filed by the complainant at the stage of taking cognizance and documents marked is treated as evidence under section 145 of Negotiable Instruments Act. As the evidence of complainant is on record, the incriminating 5 C.C.No.30160/2025 circumstances in the evidence of complainant is read over to the accused and his statement under Section 351 of Bharathiya Nagarika Suraksha Sanhita is recorded. The accused has denied the incriminating circumstances as false. The PW 1 is recalled for cross examination on the application of the accused under Section 145(2) of Negotiable Instruments Act. When the matter was posted for cross examination, the complainant and accused appeared before this court and have filed joint memo stating that they have arrived at amicable settlement in respect of payment of due amount by the accused and requested to pass judgment and consider the joint memo for awarding fine and compensation. The accused has submitted he is not cross examining PW 1 and no defence evidence.
6. Heard arguments of learned counsel for the complainant and learned counsel for the accused and perused the material on record.
7. On the basis of the material on record the following points arise for the consideration of this court :
1. Whether the complainant proves beyond reasonable doubt that the accused issued a signed NACH (National Automated Clearing House) bearing UMRN No.UBIN7021807230000541 ON 18.07.2023 drawn on Union Bank of India, for a sum of Rs.5,94,280/- in favour of the complainant towards legal liability and on processing said NACH for outstanding due of Rs.3,58,845/-6
C.C.No.30160/2025 through the complainant's banker it returned dishonored for the reason "Balance Insufficient" on 27.06.2025 and inspite of receipt of legal notice dated 02.07.2025 on 17.07.2025, the accused has not complied the demands with in the statutory period and committed an offence punishable under Section 25 of The Payment and Settlement Systems Act r/w Sec.138 of Negotiable Instruments Act ?
2. Whether the joint memo filed by both the complainant and the accused can be considered for imposing fine and awarding compensation ?
3. What Order or sentence ?
8. The findings of this court to the above points are as follows:
Point No.1&2 In the Affirmative.
Point No.3 As per final order
for the following :
REASONS
9. POINT NO.1: To prove the case the authorized representative of the complainant is examined as PW-1 and in his evidence affidavit he has reiterated the averments made in the complaint. It is stated that the complainant company is tied up with Non Banking Financial institutions and providing financial services through NBFC's. To prove the incorporation of the company the PW 1 has produced the notarized copy of certificate of incorporation as Ex.P 1. 7
C.C.No.30160/2025 The PW 1 has produced the notarized copy of resolution of Board of Directors of the company as Ex.P 2 and also produced the authorization letter issued by Trillion Loans as per Ex.P.3. As per Ex.P 2 and Ex.P.3 the PW1 is authorized to represent the complainant company and prosecute the accused. These documents prove the legal status of the complainant as a Company and authority of PW 1 to represent the complainant company.
10. The PW1 has deposed that the accused applied for loan before the complainant through Trillions Fintech Private Limited in loan application No.73675. After considering the same, the complainant has extended credit facility to the accused for a sum of Rs.5,94,280/- out of which Rs.2,35,000/- was availed by the accused. The accused has agreed to repay the loan as per the terms and conditions of the loan agreement. The accused has applied the loan in the online platform and digitally signed the loan documents. During process of loan transaction, the accused issued a signed NACH (National Automated Clearing House) bearing UMRN No.UBIN7021807230000541 ON 18.07.2023 drawn on Union Bank of India, for a sum of Rs.5,94,280/- in favour of the complainant towards due discharge of debt/liability . Said NACH is produced as Ex.P.5. The PW 1 has deposed that the complainant has processed E-NACH mandate for realization through his banker AU Small 8 C.C.No.30160/2025 Finance Bank, Koramangala, Bengaluru for outstanding sum of Rs.3,58,845/- and on processing said E NACH Mandate, it is returned dishonored with remarks "Balance Insufficient" on 27-06- 2025. Said return memo is marked as Ex.P.6. On receipt of said intimation, the complainant got issued legal notice on 02.07.2025 through registered post and demanded to pay the amount dishonoured under E-NACH Mandate. Said notice is marked as Ex.P.7. The notice issued is duly served on 17.07.2025. Evidencing the same, the complainant has produced the post receipt, postal acknowledgment as Ex.P.8 and Ex.P.9. The PW 1 has deposed that inspite of service of notice, the accused failed to pay the claim amount to the complainant with in the statutory time. Therefore, the accused has committed the offence.
11. The offence alleged is primarily under Section 25 of The Payment and Settlement Systems Act 2007, which reads as under.
Section 25. Dishonour of electronic funds transfer for insufficiency, etc., of funds in the account.
(1) Where an electronic funds transfer initiated by a person from an account maintained by him cannot be executed on the ground that the amount of money standing to the credit of that account is insufficient to honour the transfer instruction or that it exceeds the amount arranged to be paid from that account by an agreement made with a bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may extend to two 9 C.C.No.30160/2025 years, or with fine which may extend to twice the amount of the electronic funds transfer, or with both:
Provided that nothing contained in this section shall apply unless--
(a) the electronic funds transfer was initiated for payment of any amount of money to another person for the discharge, in whole or in part, of any debt or other liability;
(b) the electronic funds transfer was initiated in accordance with the relevant procedural guidelines issued by the system provider;
(c) the beneficiary makes a demand for the payment of the said amount of money by giving a notice in writing to the person initiating the electronic funds transfer within thirty days of the receipt of information by him from the bank concerned regarding the dishonour of the electronic funds transfer; and
(d) the person initiating the electronic funds transfer fails to make the payment of the said money to the beneficiary within fifteen days of the receipt of the said notice.
(2) It shall be presumed, unless the contrary is proved, that the electronic funds transfer was initiated for the discharge, in whole or in part, of any debt or other liability.
(3) It shall not be a defence in a prosecution for an offence under sub-
section (1) that the person, who initiated the electronic funds transfer through an instruction, authorisation, order or agreement, did not have reason to believe at the time of such instruction, authorisation, order or agreement that the credit of his account is insufficient to effect the electronic funds transfer.
(4) The Court shall, in respect of every proceeding under this section, on production of a communication from the bank denoting the dishonour of electronic funds transfer, presume the fact of dishonour of such electronic funds transfer, unless and until such fact is disproved.
(5) The provisions of Chapter XVII of the Negotiable Instruments Act, 1881 (26 of 1881) shall apply to the dishonour of electronic funds transfer to the extent the circumstances admit. Explanation.--For the purposes of this section, "debt or other liability"
means a legally enforceable debt or other liability, as the case may be. 10
C.C.No.30160/2025 This provision also specify that the provisions of chapter XVII of the Negotiable Instruments Act to the extent the circumstances admit is applicable. The essential ingredients of section 25 of The Payment and Settlement Systems Act 2007 to be complied are i) An electronic fund transfer initiated by the person from his account ii) Processing of the NACH Mandate by the beneficiary, iii) it returning unexecuted for the reason insufficiency of funds to honour transfer instructions.
iv) electronic fund transfer was initiated in discharge of any debt or liability v) it is initiated in accordance with the relevant procedural guidelines issued by the service provider vi) Beneficiary making demand with in 30 days of receipt of information of dishonour by giving notice in writing, vii) failure of the person initiating electronic fund transfer to make payment within the period of 15 days after receipt of the demand notice. The Payment and Settlement Systems Act 2007 does not prescribe any time limit to file the complaint.
Therefore it is necessary to apply provisions of Section 142 of The Negotiable Instruments Act. Therefore the complainant shall present the complaint within a month after expiry of 15 days of service of notice to the accused.
12. Therefore it is proper to consider whether the statutory requirements for constituting the offence under Section 25 of the Payment and Settlement Systems Act 2007 r/w Section 138 of Negotiable Instruments Act is complied by the complainant. The 11 C.C.No.30160/2025 NACH Mandate dishonored on 27.06.2025 for the reason "Balance Insufficient". The legal notice issued on 02.07.2025. It is duly served on 17.07.2025 . As provided under Section 25(4) of The Payment and Settlement Systems Act and also under Section 146 of Negotiable Instruments Act law presumes that on production of banker slip or memo having thereon the official mark denoting that the cheque/ electronic fund transfer has been dishonored, presume the fact of dishonor of such said cheque, unless and until same is disproved. The accused has not disputed the dishonour of NACH mandate. Inspite of service of notice, the accused failed to pay the claim amount to the complainant with in the statutory time. The cause of action for prosecution is arose on expiry of 15 days after service of notice on 01-08-2025. The complaint is filed before this court on 13.08.2025. The NACH is processed for collection through AU Small Finance Bank, Koramangala, which is situated within the jurisdiction of this court. Thus the complainant has complied all the statutory requirements for constitution of offence under Section 25 of The Payment and Settlement Systems Act 2007 r/w Section 138 of Negotiable Instruments Act. Therefore, the complainant is entitled for presumption under Section 25 (2) of The Payment and Settlement Systems Act 2007. Under Section 139 of Negotiable Instrument Act also there is similar presumption. The provisions of Section 139 of Negotiable Instrument Act reads as under:-
12
C.C.No.30160/2025 139- Presumption in favour of holder - It should be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
13. Hon'ble Supreme court in a decision reported in (2010) 11 SCC 411 between Rangappa V/s Sri Mohan has held that -
The presumption mandated by Section 139 of the act does indeed include the existence of a legally enforceable debt or liability.
It is also observed that Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instrument. It is also held that in such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant caused cannot be expected to discharge an unduly high slandered or proof.
Therefore the principles laid down in this decision can also be made applicable to the proceedings for the offence under Section 25 of The Payment and Settlement Systems Act 2007. In view of the principles laid down in these decisions the onus is on the accused to rebut the presumption. The accused has not issued any reply at the initial stage at the time of service of the legal notice. After plea of the accused is recorded, he has not contested the case to rebut the 13 C.C.No.30160/2025 presumption and he has came up with mutual understanding with the complainant to settle the dispute and payment of due amount in terms of memo of settlement. Therefore there is no defence from the accused to rebut the presumption under Section 25 (2) of The Payment and Settlement Systems Act 2007 r/w Section 139 of Negotiable Instruments Act. Therefore this court concludes that the complainant has successfully proved that the accused has committed the offence punishable under Section 25 , 26 & 27 of The Payment and Settlement Systems Act 2007 r/w. Section 138 of Negotiable Instruments Act. Therefore this court answers the above point No.1 in the Affirmative.
14. POINT NO. 2 : The complainant and the accused appeared before the court reporting amicable arrangement made by them to payment of due amount by the accused to the complainant and filed joint memo. As per the joint memo, they have reported that the matter has been settled and entered into settlement for payment of Rs.1,50,000/-. The accused has paid the 1 st installment of Rs.75,000/- by way of D.D.No.001388 dated 09.02.2026 drawn on HDFC Bank and agreed to pay the 2 nd installment of Rs.75,000/- on or before 24.03.2026. It appears that the accused and complainant have voluntarily agreed for said settlement. 14
C.C.No.30160/2025
15. Now it is proper to consider whether this arrangement made by the accused and the complainant can be considered while awarding fine and granting compensation. In this regard it is proper to rely on the decision of the Hon'ble Supreme court reported in (2004)2SCC 235 between Goa Plastic (P) Ltd Vs Chico Ursula D'souza, in this case it is held that -"
26. The object and the ingredients under the provisions, in particular, sections 138 and 139 of the Act cannot be ignored. Proper and smooth functioning of all business transactions, particularly of cheques as instruments, primarily depends upon the integrity and honesty of the parties. In our country, in large number of commercial transactions, it was noted that the cheqeus were issued even merely as a device not only stall but even defraud the creditors, The sanity and credibility of issuance of cheques in commercial transactions was eroded to a large extent. Undoubtedly, dishonour of the cheque by the bank causes incalculable loss, injury and inconvenience to the payee and the entire credibility of the business transactions within and outside the country suffers a serious set back. Parliament, in order to restore the credibility of cheques as a trustworthy substitute for cash payment enacted the aforesaid provisions. The remedy available in a civil court 15 C.C.No.30160/2025 is a long drawn matter and an unscrupulous drawer normally takes various pleas to defeat the genuine claim of the payee.".
In the above referred decision Hon'ble Supreme court has held that the dishonour of cheque is basically a civil wrong and main purpose of prosecuting the accused is for recovery of amount involved in the NACH and to give sanctity and credibility to the cheque transactions. Therefore, considering the intention of the parliament as elaborated in the above referred decision, to facilitate the mutual arrangement made by the parties, this court thinks it proper to consider the joint memo filed by the parties for awarding sentence and granting compensation. Therefore this court answers the Point No. 2 in the Affirmative.
16. Point No.3 : In view of the findings on Point Nos.1 and 2, this court proceeds to pass the following :
ORDER By exercising powers conferred under Section 278(2) of Bharathiya Nagarika Suraksha Sanhita the accused is convicted for the offence punishable under Section 25 of The Payment and Settlement Systems Act 2007 r/w Section 138 of Negotiable Instruments Act and he is sentenced to pay a fine of Rs.1,50,000/- (Rupees One Lakh Fifty Thousand Only) .16
C.C.No.30160/2025 The accused has paid 1st installment of Rs.75,000/- by way of D.D.No.001388 dated 09.02.2026 drawn on HDFC Bank as acknowledged by the complainant.
The accused shall pay the 2nd installment of Rs.75,000/- on or before 24.03.2026.
In default to pay the said amount, the accused shall pay the entire outstanding amount with interest and in default the accused shall undergo simple imprisonment of 6 months.
Further by exercising powers conferred under Section 395(1)
(b) of Bharathiya Nagarika Suraksha Sanhita entire fine amount shall be paid as compensation to the complainant.
The bail bond and surety bond of the accused stands cancelled.
Supply free copy of the judgment to the accused. [[ (Dictated to the Stenographer directly on the computer, typed by her, corrected and signed then pronounced by me in the open court on this the 18th day of February 2026).
(GOKULA.K) XXV A.C.J.M., BANGALORE CITY.
ANNEXURE LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
PW1 : Adarsh.R.
17
C.C.No.30160/2025
LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P1 : Notarized copy of Incorporation Certificate Ex.P2 : Notarized Copy of the Board Resolution Ex.P3 : Notarized copy of Authority letter Ex.P4 : Web copies of Key Facts Statement, Sanction Letter and loan agreement Ex.P5 : NACH Mandate Ex.P56 : Return Memo Ex.P7 : Office copy of Legal Notice Ex.P8 : Postal Receipt Ex.P9 : Postal acknowledgment Ex.P10 : Certificate U/s.63 of BSA.
LIST OF WITNESSES EXAMINED FOR THE ACCUSED:-
Nil Digitally signed by GOKULA K LIST OF DOCUMENTS MARKED FOR THE ACCUSED:- GOKULA Date:
Nil
K 2026.02.20
11:06:00
+0530
(GOKULA.K.)
XXV A.C.J.M., BANGALORE CITY.