Bangalore District Court
K. Srinivas Reddy vs R. Pandian on 13 January, 2026
CC.No.34039/2023
KABC030603802023
Presented on : 26-12-2023
Registered on : 26-12-2023
Decided on : 13-01-2026
Duration : 2 years, 0 months, 18 days
IN THE COURT OF THE XVI ADDITIONAL CHIEF
JUDICIAL MAGISTRATE, BENGALURU CITY
Dated: This the 13th day of January 2026
Present: Smt.Tejaswini K.M., B.A.L. LL.M,
XVI Addl.C.J.M., Bengaluru City.
CC. No.34039/2023
Sri. Srinivas Reddy
Aged about 49 years
S/o Krishna Reddy
R/at No.85, 8th Cross, 2nd Main,
Manjunathanagar,
Gowdanapalya,
Subramanyapura Post,
Bengaluru - 560061.
....Complainant
(By Sri S.C.K Advocate)
Versus
2 C.C.34039/2023
Sri.R.Pandian
Aged about 61 years
S/o Ramachari
No.13, Old No.7/2,
Near Arehalli Arch, Kodipalya,
Badamanavarthe Kaval, Arehalli,
Subramanyapura Post,
Uttarahalli Hobli,
Bangalore - 560061 and also
No.13, Kodipalya Gate,
Uttarahalli Main Road,
Subramanyapura Post,
Bengaluru - 560061.
.... Accused
(By Sri C.M.R., Advocate)
Offence complained : U/Sec.138 of Negotiable
Instrument Act.
Date of commencement
of evidence : 22.12.2023
Date of closing evidence : 27.01.2025
Opinion of the Judge : Accused found guilty
Offence complained : U/Sec.138 of Negotiable
Instrument Act.
Opinion of the Judge : Accused found guilty
3 C.C.34039/2023
JUDGMENT
This case is registered against the accused for the offence punishable U/s 138 of Negotiable Instruments Act.
2. Factual matrix of the complainant's case is as under:
It is stated that the complainant and the accused are known to each other since several years. In the first week of February 2019 the accused approached the complainant for hand loan of Rs.2 lakhs for marriage expenses of son of accused. Accordingly, the complainant has paid Rs.2 lakhs to the accused on 08.02.2019 through cheque bearing No.447248 dated 08.02.2019 and the accused assured to repay the same within two and half year and also agreed to pay the interest @ 18% per year. Even after completion of two and half years the accused failed to repay the amount.
3. On demand, the accused has issued postdated cheque bearing No.414420 dated 20.09.2023 for Rs.2,00,000/-, drawn on Canara Bank, Uttarahalli Branch, 4 C.C.34039/2023 Bengaluru towards discharge of loan. The complainant has presented the cheque before the bank, but it got dishonoured for the reason 'funds insufficient' on 21.09.2023. Therefore, complainant got issued a legal notice on 30.09.2023 through registered post to the accused demanding the accused to make payment of cheque amount within stipulated period. The notice was served on the accused on 04.10.2023. In spite of issuance of notice, accused has not paid the amount, but issued reply to the demand notice. Hence the complainant has constrained to file the present complaint.
4. 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.R.
5. Sworn statement of the complainant was recorded and marked 12 documents as Ex.P-1 to P-12. As there were sufficient materials to constitute the offence, this court has proceeded to pass an order for issuing process against the accused.
5 C.C.34039/2023
6. In pursuance of summons, accused has appeared through his counsel and applied for bail. He was enlarged on bail. Then the substance of accusation was read over to the accused in the language known to him, for which he pleaded not guilty.
7. 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 cross-examined PW.1.
8. The statement of accused as contemplated under the provisions of Section 313 of Cr.P.C has been recorded vide order dated 05.03.2025 and the incriminating evidence as such forthcoming against the accused in the evidence of PW.1 and the documents have been read over and explained to the accused in the language known to him. He denied all incriminating evidence. The accused has not led any evidence.
9. I have heard the arguments of both side. The counsel for accused filed written arguments and also filed 6 C.C.34039/2023 memo with citation. I have perused the oral and the documentary evidence placed on record and gone through those case laws.
10. Points that arise for my consideration are as under:
1. Whether the complainant proves that the accused towards discharge of his liability issued a cheque bearing No.414420 dated 20.09.2023 for Rs.2,00,000/-, drawn on Canara Bank, Uttarahalli Branch, Bengaluru in favour of complainant, on presentation of the same for encashment, it was 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 cheque amount, thereby he has committed an offence punishable U/s 138 of Negotiable Instruments Act?
2. What Order?
11. My Answer to above points are as under:- 7 C.C.34039/2023
Point No.I :- In the Affirmative,
Point No.II :- As per the final order for
the following....
REASONS
12. POINT NO.I:- Defense of the accused is that:
He has borrowed Rs.2 lakhs from the complainant and he has repaid it in first week of August 2019, apart from that he has also paid interest of Rs.6,000/- per month upto 6months. Despite of his request to return the security cheque, the complainant has postponed it stating that cheque has been misplaced and after 4 years, the said cheque has been misused and false case is filed. The complaint is filed with respect to time barred debt. Hence, prays to acquit him from this case.
13. Advocate for accused has relied on the citations reported in 2024 (1) Kar.L.j.35 in between S.S.Ramesh V/s K.Lokesh, I have gone through this case law.
14. Negotiable Instruments Act provides for some presumption in favour of the complainant i.e., Section 118 reads as here: - "That every negotiable instrument was 8 C.C.34039/2023 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 presumption available u/s 139 NI Act can be rebutted by the accused by raising a probable defense.
17. The complainant has reiterated the contents of the complaint in his chief-examination. He has produced the cheque issued by accused and the same is marked as Ex.P-1, the signature of the accused is marked as Ex.P- 9 C.C.34039/2023 1(a), copy of bank memo is marked as Ex.P-2, copy of demand notice dated:30.09.2023 is marked as Ex.P-3, copies of postal receipts are marked as Ex.P-4 & P-5, copies of postal acknowledgments are marked as Ex.P-6 & P-7, copy of reply notice is marked as Ex.P-8, postal cover is marked as Ex.P-9, copy of postal receipt is marked as Ex.P-10, copy of postal acknowledgment is marked as Ex.P-11 and complaint is marked as Ex.P-12.
18. The advocate for accused has cross-examined PW.1. Percontra, the accused has not chosen to give defense evidence. It has been held by Hon'ble Supreme Court of India in the judgment titled Rangappa vs. Sri Mohan, (2010) 11 SCC 441 that a reverse onus clause usually imposes an evidentiary burden and not a persuasive burden and when an accused has to rebut the presumption under sec 139, the standard of proof for doing so is that of "preponderance of probabilities". Therefore, if the accused is able to raise a probable defense which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. It was further held that the accused can rely on the materials submitted by the complainant in order to raise 10 C.C.34039/2023 such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.
19. At the outset the accused has admitted the acquittance with the complainant and also loan transaction with the complainant. He has taken a contention that the disputed cheque has been given for security purpose. He has not disputed his signature on ExP1 cheque. Even cheque has been dishonoured for the reason 'funds insufficient' as per Ex.P2 memo and not for the reason 'drawer signature mismatch'. Therefore, the complainant has proved that the cheque belongs to the account of the accused and it bears his signature.
20. 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 11 C.C.34039/2023 presumed that the cheques in question were drawn by the accused for a consideration and that the complainant had received the cheque in question in discharge of debt/liability from the accused."
21. Therefore, as per Sec.118 and 139 of NI Act initial presumption has to drawn infavour of the complainant that cheque was 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.
22. The complainant has pleaded in the complaint that he has lent loan of Rs.2 lakhs to the accused through cheque bearing No.447248 on 08.02.2019 and in discharge of the said loan the accused has issued the disputed cheque after taking lot of time. Even during cross-examination PW.1 has deposed that he had given loan of Rs.2 lakhs to the accused on 08.02.2019. He deposed that he has not shown the said loan transaction in his ITR. He denied the suggestion that accused had taken Rs.2 lakhs from him for interest of Rs.3% and paid Rs.6,000/- per months towards interest. He denied that disputed cheque was taken for the purpose of security. He 12 C.C.34039/2023 denied that in first week of August 2019 accused has repaid entire amount. He admits that accused has given legal notice. He admits the suggestion thatbeteen 8/2/2019 to 23/9/2023 there is gap of 4 years 7 months. He deposed that accused has given cheque on 19.09.2023. He denied after repayment of entire amount, cheque has been presented to the bank after lapse of 4 years and the complaint is filed pertaining to the time barred debt. He deposed that he has no document to show that he requested the accused several times to repay the amount. But he requested orally. He deposed that he is not aware that there is difference in the handwriting of filling the details in the cheque and signature of the accused. He deposed that while giving cheque the accused has agreed to give 18% interest. He denied that as the accused repaid entire loan to him, accused is not liable to pay the cheque amount.
23. It is pertinent to note that, under Section 118(a) of the Negotiable Instruments Act, 1881, there is a statutory presumption in favour of the complainant that the cheque was issued for consideration. Further in the cross-examination of PW.1 as well as reply notice at Ex.P8 13 C.C.34039/2023 accused himself has admitted that he has borrowed Rs.2 lakhs from the complainant. Therefore, the complainant has proved loan transaction with the accused.
24. The only defense of the accused is that he has repaid Rs.2 lakhs in August first week of 2019 to the complainant. The complainant has denied the said suggestion in his cross-examination. Therefore, the burden lies on the accused to establish his defense with cogent evidence. Except making suggestion to PW.1 regarding repayment of Rs.2 lakhs with interest for 6 months, no iota of evidence brought on record by the accused to prove his defense. In what mode he has repaid the loan amount to the complainant is not forthcoming. No proof is produced to show that he has repaid Rs.2 lakhs with interest. Therefore, mere making suggestion to PW.1 regarding repayment amounts to an mere assertion and it lacks proof.
25. AIR 2023 SC 5018 in between Rajesh Jain V/s Ajay Singh, Apex court held that "62. The fundamental error in the approach lies in the fact that the High Court has questioned the want of evidence on part of the complainant in order to support 14 C.C.34039/2023 his allegation of having extended loan to the accused, when it ought to have instead concerned itself with the case set up by the accused and whether he had discharged his evidential burden by proving that there existed no debt/liability at the time of issuance of cheque."
26. If he had repaid the amount in August 2019 itself he ought to have made efforts to get back his cheque from the complainant, if he had given cheque for security purpose while availing the loan. Admittedly cheque has been issued on 20.09.2023 and presumption of has to be drawn regarding date of issuance of cheque as per Sec 118 of NI Act. Therefore between 2019 to 2023 the accused had more than 3 years of time to take steps to recover his security cheque allegedly issued to the complainant. Why such endeavor is not made by the accused is not forthcoming. No proper explanation is given in this regard.
27. The cheque has been dishonoured for the reason 'funds insufficient'. Had the complainant failed to return the cheque. despite of his request, the accused could have given stop payment instructions to his banker to avoid his cheque being misused. Even such efforts is 15 C.C.34039/2023 also not made by the accused for the reason best known to him. In the absence of credible evidence about repayment of entire loan with interest this Court declines to accept the defense of the accused.
28. In Sri C.N.Dinesha V Smt.C.G.Mallika reported in 2017 CrR.530(Kant) it is observed that "The culpability of offence under Section 138 of the Act will not freeze for the reason of violation of Section 269SS of the I.T. Act and nothing prevents the operation of the statutory presumption under Sections 118 and 139.
Therefore, even if the loan transaction is not declared in his IT returns, same wouldn't exonerate liability of the accused to establish his defence.
29. Apex court has held in Bir Singh vs Mukesh KumarAIR 2019 SUPREME COURT 2446, "40. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. "
16 C.C.34039/2023
30. Moreover, as per Sec.20 of NI Act the drawer need not fill the entire body of the cheque provided drawee proves the existence of legally enforceable debt and issuance of the cheque in discharge of the said debt.
31. In Sri Sudhakar Reddy C.B vs Smt Pushpa decided on 12 October, 2023 CRIMINAL REVISION PETITION NO.256/2022, Hon'ble High Court of Karnatka observed that, "39. Thus, when the questions formulated by the learned Single Judge of High Court of Bombay was referred to the Division Bench, it took pains in considering the matter from various facets and answered both the questions in the Affirmative. Thereby, holding that issuance of cheque is a promise in writing within the meaning of sub section (3) of Section 25 of the Contract Act and it is an exception to the general rule that the agreement without consideration is void. Thus, issuance of a cheque satisfies the ingredients of sub section (3) of Section 25 , i.e., promise made in writing and signed by the person to be charged therewith to pay wholly or in part a dent of which the creditor might have enforced payment, but for the law for the limitation of suits and as such, the cheque becomes a cheque drawn towards discharge of a legally enforceable debt as contemplated by the explanation to Section 138 of the NI Act. Therefore, the position of law is laid down by the Division Bench of High Court of Bombay and there is no reason for not accepting the same. 40. In view of the settled position of law, even if the contention of the learned counsel for the petitioner that the cheques were issued towards a time barred debt is to be accepted, by applying the 17 C.C.34039/2023 above principle of law to the present case, issuance of cheques in question amount to written promise to pay the said debt, as provided under Section 25(3) of the Contract Act and it creates legally enforceable debt. Hence, it squarely attracts Section 138 of NI Act.
32. Therefore, as per above case law issuance of cheque becomes a cheque drawn towards discharge of a legally enforceable debt as contemplated by the explanation to Sec 138 of the NI Act. Thus compliant is maintable.. the complainant has proved his case beyond reasonable doubt. Accordingly court proceed to answer POINT NO.I IN THE AFFIRMATIVE.
33. POINT NO.II:- In view of the reasons assigned in above point, it is ample clear that accused have committed the offence punishable u/s 138 of the Act. A bare reading of sec.138 of the NI Act indicates that the purport of sec.138 is to prevent and punish the dishonest drawers of cheques who evade their liability. The Hon'ble Apex Court in its recent decision in M/s. Meters & instrument Pvt Ltd. Vs. Kanchana Mehta reported in (2018)1 SCC-560 held at para 18(ii) that"(ii) The object of the provision being primarily compensatory, punitive element being mainly with the object of enforcing the compensatory element, 18 C.C.34039/2023 compounding at the initial stage has to be encouraged but is not debarred at later stage subject to appropriate compensation as may be found." In view of the reasons assigned in above point, it is ample clear that accused has committed the offence punishable u/s 138 of the Act.
34. Therefore, having regard to the amount advanced, time from which it is lying with the accused, and keeping in mind the primary object of the provision, this court is of the opinion that, rather than imposing punitive sentence, if sentence of fine is imposed with a direction to compensate the complainant for its monitory loss, by awarding compensation U/Sec.357 of Cr.P.C, would meet the ends of justice. Accordingly, this court proceeds to pass following .....
ORDER The accused is found guilty for the offence punishable U/s.138 of Negotiable Instruments Act.
Hence, acting U/sec.255(2) of Cr.P.C, the accused is convicted and sentenced to pay a fine of Rs.4,00,000/- (Rupees Four Lakhs Only), in default of fine amount, he shall undergo 19 C.C.34039/2023 simple imprisonment for 1 year for the offence punishable under section 138 of N.I.Act.
Out of the fine amount collected from the accused, an amount of Rs.3,90,000/- (Rupees Three Lakhs Ninety Thousand only) shall be paid to the complainant as compensation U/s.357 of Cr.P.C. and the remaining fine of Rs.10,000/- shall be adjusted towards the cost of state expenses.
The bail bonds of the accused shall be in force till the appeal period is over as contemplated under the provisions of Sec.437(A) of Cr.P.C.
Office to supply the copy of the Judgment to the accused forthwith at free of cost.
(Dictated to the Stenographer, typed by her, corrected by me and then judgment pronounced in the open court on this the 13th day of January 2026).
(Smt.Tejaswini K.M), XVI ACJM, Bengaluru 20 C.C.34039/2023 ANNEXURE I. List of witnesses on behalf of complainant:
P.W.1: Sri.K.Srinivas Reddy II. List of documents on behalf of complainant:
Ex.P-1 : Original Cheque.
Ex.P-1(a) : Signature of the accused. Ex.P-2 : Bank memo.
Ex.P-3 : Copy of Legal notice. Ex.P-4 & 5 : Postal receipts. Ex.P-6 & 7 : Postal Acknowledgments. Ex.P-8 : Reply Notice.
Ex.P-9 : Postal Cover.
Ex.P-10 : Postal Receipt.
Ex.P-11 : Postal Acknowledgment. Ex.P-12 : Complaint.
III. List of witnesses for the accused:
Nil
IV. List of documents for accused:
Nil
(Smt.Tejaswini K.M ),
XVI ACJM, Bengaluru
21 C.C.34039/2023
13.01.2026
(Judgment pronounced in the open Court vide separate Order) ORDER The accused is found guilty for the offence punishable U/s.138 of Negotiable Instruments Act.
Hence, acting U/sec.255(2) of Cr.P.C, the accused is convicted and sentenced to pay a fine of Rs.4,00,000/- (Rupees Four Lakhs Only), in default of fine amount, he shall undergo simple imprisonment for 1 year for the offence punishable under section 138 of N.I.Act. Out of the fine amount collected from the accused, an amount of Rs.3,90,000/- (Rupees Three Lakhs Ninety Thousand only) shall be paid to the complainant as compensation U/s.357 of Cr.P.C. and the remaining fine of Rs.10,000/- shall be adjusted towards the cost of state expenses.22 C.C.34039/2023
The bail bonds of the accused shall be in force till the appeal period is over as contemplated under the provisions of Sec.437(A) of Cr.P.C.
Office to supply the copy of the Judgment to the accused forthwith at free of cost.
XVI ACJM, Bengaluru 23 C.C.34039/2023