Bangalore District Court
T K Ajithkumar vs 3M India Limited, Rep. By Its General ... on 3 December, 2025
KABC0A0023002024
IN THE COURT OF THE LXXII ADDL. CITY CIVIL
& SESSIONS JUDGE AT MAYO HALL
BENGALURU, (CCH-73)
Present:
Sri. Sreepada N.,
B.Com., L.L.M.,
LXXII Addl. City Civil & Sessions Judge, Bengaluru.
Dated this the 3rd day of December 2025
Crl. Appeal. No.25255/2024
Appellant/ Mr. T.K. Ajith Kumar,
Accused:- Proprietor,
Lakshmi Enterprises,
No.39, 1038, Udayareshmi,
Karakkat Road,
Kochi - 682 016.
(By Sri. H.N.N.D - Adv.,)
V/s
Respondent/ 3M India Limited,
Complainant: A company incorporated under the
Companies Act, 1956,
Having its office at
Concorde Block, U B City,
24, Vittal Mallya Road,
Bengaluru - 560 0010
2 Crl.Appeal No.25255/2024
Rep by its General Manager - Legal,
Mr. Manjunath A. Dwarkanath
(By Miss. M. K - Adv.,)
JUDGMENT
This appeal is by the Accused before the trial court, who suffered the judgment of conviction for the offence punishable U/Sec.138 of NI Act passed by XXXIV Addl. CMM, Bengaluru, in CC.No.51103/2017, dtd. 1.6.2024, challenging the validity of the judgment.
2. For the sake of convenience the parties hereinafter will be referred to with their ranking assigned before the trial court.
3. The facts of the case:-
The Complainant initiated private complaint under Section 200 of Cr.P.C., against the Accused, alleging that the Complainant is a company engaged in manufacture, import supply and marketing of a wide variety of innovative products since 2016. The Complainant had executed a Consignee Sales Agent Agreement dtd.3.9.2012 with Accused. Under the 3 Crl.Appeal No.25255/2024 agreement the Complainant would transfer goods to the Accused under Form 'F' for the Accused to perform a forward sale to their customers and accordingly, collect monies towards the sale from their customers. Under the agreement, the Accused was required to receive the incoming goods from the Complainant and then forward the goods in its name as a Consignee Sales Agent of the Complainant, as per the instruction given by the Complainant from time to time. Accordingly, the Accused was required to make payments to the Complainant for the sale of each of the products under the Agreement. The Complainant had supplied various goods to the Accused under the Agreement, for which the Accused was required to make payments for sale of each of the products supplied. Towards partial discharge of the debt under the Agreement, the Accused issued a cheque dtd.15.06.2016 for Rs.25,60,680/- and when the Complainant presented said cheque through his banker on 15.6.2016, it came to be dishonoured for the reason "Refer to Drawer" on 16.6.2016. Thereafter, the Complainant got issued legal notice to the Accused through RPAD on 8.7.2016 through his counsel and the same was duly served on the 4 Crl.Appeal No.25255/2024 Accused on 28.7.2016. After receipt of legal notice, the Accused has not paid the cheque amount and thereby, the Accused has committed the offense punishable under Sec.138 of Negotiable Instruments Act. Thereafter the Complainant approached the Trial Court for appropriate legal action against the Accused.
4. Pursuant to summons, the Accused entered appearance through his Counsel before the Trial Court. The substance of the accusation was read over and explained to the Accused in the language known to him. The Accused pleaded not guilty and claimed to be tried. The Complainant got examined its General Manager as PW.1 and got marked Ex.P.1 to Ex.P.21 documents and closed its side. The Accused and one witness got examined as DW.1 & DW.2 and got marked Ex.D.1 to Ex.D.12 documents and closed their side.
5. The trial court after hearing the counsel for Complainant, convicted the Accused for the offence punishable U/Sec.138 of NI Act vide Judgment dtd. 1.6.2024.
5 Crl.Appeal No.25255/20246. Feeling aggrieved by the said judgment of conviction, the Accused is in appeal on the following grounds:
1. The impugned order is completely erroneous and passed mechanically, without due application of mind and it is contrary to the settled laws of evidence and the applicable provision of Negotiable Instruments Act.
2. The impugned order is perverse and completely one sides. The impugned order is further passed without proper and complete understanding of the facts of the case and without appreciation or consideration of the evidence available on records.
3. The Appellant had set out the established the grounds for rebuttal of the presumption under Section 139 of the Negotiable Instruments Act that the Cheque issued was a security Cheque which was subject to the conditions stipulated in Ex.P.10 being complied with, there was no legally enforceable debt of Rs.25,60,000/- as on the date of presentation of the Cheque and the Appellant is not liable to pay any amounts to the Respondent, much less 6 Crl.Appeal No.25255/2024 the amount of Rs.25,60,680/-
mentioned in Ex.P.2. However, Learned Magistrate has not completed ignored the several crucial admission that were elicited from the Respondent during the cross-examination of Complainant.
4. The grave error and illegality committed by the Learned Magistrate in appreciating the defense and grounds raised by the Appellant.
5. The Learned Magistrate has proceeded to erroneously observe and hold in the impugned order that there allegedly existed a legally enforceable debt at the time of presentation of the Cheque.
6. The Learned Magistrate hold that the condition regarding reconciliation and final settlement of accounts between the parties was met by the Respondent prior to presentation of Ex.P.2 Cheque is the Learned Magistrate improper appreciation of Ex.D.4 email dtd:
28.10.214 that was issued by the Respondent to the Appellant.
7. The Learned Magistrate failed to consider the documents and the evidence of DW.1 & DW.2 in a proper perspective.
7 Crl.Appeal No.25255/20248. The Learned Magistrate has also failed to appreciate that the Respondent resorted to making false and misleading statements in its complaint in an attempt to mislead the Learned Magistrate into believing that Ex.P.2 was allegedly issued towards a lawful debt, with assurance from the Appellant that the same would be realized immediately upon presentation.
9. The Learned Magistrate ought to have drawn adverse inference against the Respondent by holding that the Appellant had not only paid the entire amount of Rs.2.77 Crores and Rs.25,60,860/- alleged to be due under Ex.P.10 & Ex.P.11 to the Respondent for Div.84,41 and 42, but the Appellant had in fact made excess payment to the Respondent over and above the said payments. However, the Learned Magistrate has failed to draw such necessary inferences and instead rejected the Appellant's contention regarding excess payment by ignoring the vital evidence referenced, consequently the impugned order ought to be set aside by this Court.
8 Crl.Appeal No.25255/202410. The Learned Magistrate has failed to properly appreciate the relevant facts pertaining to the complaint, the vital evidence on record, and the applicable principles of law, the Learned Magistrate has erroneously held in the impugned order that the Respondent had allegedly discharged its primary burden of proving its case beyond reasonable doubt.
11. The Complainant failed to produce and mark in evidence necessary document of authorization authorizing the Respondent to even file the complaint against the Appellant under the provisions of Section 138 of the Negotiable Instruments Act. Such being the case, the Learned Magistrate ought to have dismissed the complaint as being defective and not maintainable for want of necessary authorization, which defect goes to the very root of the complaint. Consequently, no order of conviction ought to have been passed by the Learned Magistrate against the Appellant basis such complaint.
12. The Learned Magistrate has failed to provide any reasons or justification whatsoever for sentencing the Appellant 9 Crl.Appeal No.25255/2024 to pay the arbitrary sum of Rs.37,69,442/- to the Respondent as fine by way of compensation under Section 357(1) of Cr.P.C., for this reason, the impugned order deserves to be set aside.
13. Under the above grounds the Appellant sought for acquittal by allowing the appeal.
7. Heard both sides. Perused the written arguments filed by both the counsels.
8. Perused the evidence, documents on record and also impugned Judgment of conviction passed by the Trial Court.
9. On re-appreciation of the evidence, documents on record, the following points would emerge for the consideration of this court.
1. Whether the Appellant proves that the cheque in question was not issued towards any legally recoverable debt?
2. Whether the Judgment of conviction passed by the Trial Court calls for interference by the hands of this court?
10 Crl.Appeal No.25255/20243. What Order?
10. My finding on the above points are as under:
Point No.1 : In the Negative.
Point No.2 : In the Negative.
Point No.3 : As per final order for the following :
REASONS
11. POINT NOs.1 and 2:-
Since the above two points are interlinked, in order to avoid repetition of facts the above points have been taken up together for consideration.
12. Before re-appreciating the evidence on record, it is necessary to refer some of the latest rulings of the Hon'ble Apex Court reported in 2019 (3) KCCR 2473 (SC) (Basalingappa V/s Mudibasappa), the Hon'ble Apex Court while considering several earlier rulings on the offence U/Sec.138 of NI Act and also on the presumption U/Sec.118 and 139 of NI Act, at Para 23 was pleased to observe as follows:
11 Crl.Appeal No.25255/202423. We having noticed the ratio laid down by this Court in above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:-
(i) Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the
Accused to raise the probable defence.
The standard of proof for rebutting the presumption is that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the Accused to rely on evidence led by him or Accused can also rely on the materials submitted by the Complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
(iv) That it is not necessary for the Accused to come in the witness box in support of his defence, Sec.139 imposed an evidentiary burden and not a persuasive burden.
12 Crl.Appeal No.25255/2024(v) It is not necessary for the Accused to come in the witness box to support his defence.
13. In another ruling reported in AIR 2010 SC 1898 (Rangappa V/s Mohan), observed as under:-
"Existence of legally recoverable debt or liability- The presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. This is of course in the nature of a rebuttable presumption and it is open to the Accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the Complainant. 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 instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139, is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque 13 Crl.Appeal No.25255/2024 is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the Accused/ defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an Accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the Accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. The Accused can rely on the materials submitted by the Complainant and it is conceivable that in some cases the Accused may not need to adduce evidence of his/her own."
14. Keeping in view the broad principles laid down by the Hon'ble Apex Court, let me re-appreciate the evidence and documents on record.
14 Crl.Appeal No.25255/202415. The definite case of the Complainant/Respondent is that the Complainant is a company incorporated under Companies Act and is engaged in manufacture, import supply and marketing of a wide variety of innovative products and the Accused is the Proprietor of Lakshmi Enterprises and the Consignee Sales Agent Agreement dtd.3.9.2012 had been taken place between the Complainant and the Accused. Under the agreement, the Complainant would transfer goods to the Accused under Form 'F' to the Accused to perform a forward sale to their customers and accordingly, collect mony towards the sale from their customers and the Accused was required to receive the incoming goods from the Complainant and then forward the goods in its name as a Consignee Sales Agent of the Complainant. Accordingly, the Accused was required to make payments to the Complainant for the sale of each of the products under the Agreement. Accordingly, for partial discharge of the debt under the Agreement, the Accused had issued a cheque dtd.15.06.2016 for Rs.25,60,680/- and when the Complainant presented said cheque, it came to be dishonoured for the reason "Refer to Drawer" on 15 Crl.Appeal No.25255/2024 16.6.2016. Thereafter, the Complainant got issued legal notice to the Accused. However, the Accused got issued false and untenable reply dtd: 25.7.2016. Therefore, the Accused is required to make payment of the Cheque amount. Accordingly, the Complainant filed the present complaint.
16. The Complainant in order to prove the averments of the complaint got examined its General Manager as PW.1 and got marked the documents at Ex.P.1 to Ex.P.21. On the other hand, the Accused himself got examined as DW.1 and examined one witness as DW.2 and got marked the documents at Ex.D.1 to Ex.D.12.
17. Let me go through the documents produced by the Complainant in this case. Ex.P.1 is the Board Resolution. Ex.P.2 is the Cheque issued by the Accused dtd: 15.6.2016. Ex.P.3 is the Cheque Return Memo dtd: 16.6.2016. Ex.P.4 is the Office copy of Legal notice dtd: 8.7.2016. Ex.P.5 & Ex.P.6 are the RPAD Receipts. Ex.P.7 is the Postal Acknowledgment. Ex.P.8 is the Reply Notice given by the Accused dtd:
25.7.2016. Ex.P.9 is the Consignee Sales Agent Agreement dtd: 1.4.2012 entered into between the 16 Crl.Appeal No.25255/2024 Complainant and the Accused. Ex.P.10 & Ex.P.11 are the MT Account Book Balance. Ex.P.12 is the certified copy of E-Mail communication. Ex.P.13 is the certified copy of Memorandum of Understanding. Ex.P.14 & Ex.P.15 are the E-Mail communications. Ex.P.16 is the Account Statement. Ex.P.17 is the certified copy of of Arbitral Award dtd: 30.9.2019 passed in A.C.No.114/2018. Ex.P.18 is the certified copy of Judgment dtd: 16.7.2022 passed in Com.A.P.No.39/2020. Ex.P.19 is the Bank Account Statement. Ex.P.20 & Ex.P.21 are the certified copy of the orders of Arbitrator passed in A.C.No.114/2018. The complaint has been presented by the Complainant before the Trial Court on 26.8.2016. On perusal of all the above documents with date of filing of the complaint and dates of documents, it is clear that before filing of the complaint the Complainant has complied with all the requirements of Section 138 of the Negotiable Instruments Act and the present complaint is filed well within the period of limitation and it is in accordance with the provisions of Negotiable Instruments Act.17 Crl.Appeal No.25255/2024
18. The Accused has taken up specific defense that the Complainant had commenced business relationship with the Accused in the year 1989. Further they entered fresh Agreement known as Consignment Sales Agent Agreement (CSA) on 3.9.2012. All the sales of the Complainant's products were to be under the sales invoice of the Complainant. However, the sales tax registration of Lakshmi Enterprises was to be used for such sales given that the Complainant did not have its registered place of business in Kerala. As per the said Agreement customers for homecare products and healthcare products would pay sale consideration in two parts. The first part was to be paid to the Complainant and the second part was to be paid to Lakshmi Enterprises in between the parts, at the request of the Complainant, but was not captured under the CSA. The first part was either directly remitted to the Complainant or remitted to the Complainant through Cheques issued in the name of the Complainant, but handed over to the Lakshmi Enterprises for deposition in the name of the Complainant. Further taken up the contention that at the insistence of the Complainant undated Cheque 18 Crl.Appeal No.25255/2024 bearing No.352140 for a sum of Rs.25,60,680/- being subject matter of the instant proceedings was handed over to the Complainant on the basis of Ex.P.10, the encashment of which was subject to the conditions morefully detailed in Ex.P.10 & Ex.P.11. The total amount that was siad to be payable to the Complainant towards sales transactions undertaken under division 84 was Rs.48,95,203/-. Of the said sum of Rs.48,95,203/- the amount of Rs.16,52,656/- was to be collected by the Complainant from the customers directly, as is evident from Note-2 of Ex.P.10. The balance amount was to be paid by Lakshmi Enterprises subject to the condition in Ex.P.10 & Ex.P.11. The said balance amount included amount of Rs.5,54,044/- adjusted by the Complainant towards VAT for the month of June 2014 for division 26, 27 & 84, as well as the sum of Rs.1,78,706/- adjusted towards "CARES" as seen in Note-2 of Ex.P.10. Further it is the defense of the Accused is that as per Ex.P.10, the amount actually payable by Lakshmi Enterprises to the Complainant, out of the total sum of Rs.48,95,2023/- was to be arrived at after deducting the amounts of Rs.16,52,656/-, Rs.5,54,044/- and Rs.1,78,706/-, 19 Crl.Appeal No.25255/2024 which amounts to Rs.25,09,797/-. However, the obligation to pay the said sum also arose subject to conditions being fulfilled, as enumerated in Ex.P.10 & Ex.P.11. However, due to arithmetic error on the part of the Complainant, the said amount was erroneously calculated as being Rs.25,60,680/-, and the undated Cheque was thus also collected by the Complainant from Lakshmi Enterprises for the said erroneous and incorrect amount. Thus, the amount of Rs.25,60,680/- being the Cheque amount, does not constitute the alleged liability of Lakshmi Enterprises, even as per the statements of the Complainant as per Ex.P.10. Even further taken up the defense that during the course of the arbitral proceedings, the Complainant produced its Bank Account Statement for the period between July 2012 and August 2014 and according to it during the period between January 2013 and August 2014 Lakshmi Enterprises had in act made payments to tune of Rs.11,77,32,901/-. As on the date of presentation by the Complainant on 15.6.2016, the accounts of Lakshmi Enterprises with the Complainant had not been reconciled or finally settled between the parties. However, such 20 Crl.Appeal No.25255/2024 reconciliation and finalization of the accounts has not taken place even as of this date. In fact, the Accused is not liable to pay any amounts to the Complainant, in light of excess payment having already been made by him, the Cheque has not been issued by the Accused to the Complainant for any legally payable debt.
19. Even the Learned Counsel for the for Appellant during the course of arguments and as well in his written submission has reiterated the defense taken by the Accused before the Trial Court. Further argued that Ex.P.9 CSA Agreement was executed in the year 2012 and it was terminated in August 2014. The presentation of the Cheque was condition upon the Complainant to settle the of CSA Lakshmi Enterprises accounts. Even after execution of Ex.P.10, the Accused has paid a sum of Rs.5,00,000/- to the Complainant. However, the Complainant was duty bound to give credit for the said amount to the Accused, but failed to do so. The Complainant could have produced their ledger statement, but has not produced the same. Apart from Rs.5,00,000/- the Accused also transferred 21 Crl.Appeal No.25255/2024 additional funds to the Complainant between February 2014 and July 2014 in excess of Rs.4,00,00,000/-. However, the said amount has not been shown in Reconciliation Statement. There exists the calculation error in Ex.P.10 Reconciliation Statement. PW.1 merely denies the statement of nothing more. No evidence to the contrary has been led by the Complainant to substantiate the correctness of the Cheque amount. Further contended that the Trial Court has failed to properly consider the above contentions and defenses raised by the Accused, apart from that completely ignored the factual inconsistencies and suppression in the complaint and chief affidavit of PW.1, which go contrary to the Complainant's own documents. The Trial Court has not duly appreciated that no statutory presumption even accrued to the Complainant in the instant case and accordingly proceeded to erroneously convicted the Accused on the basis of the irrelevant and incorrect considerations. Further contended that as per the schedule mentioned in the written arguments only Rs.50,883/- is the difference amount. However, the Complainant has wrongly mentioned the amount of 22 Crl.Appeal No.25255/2024 Rs.25,60,680/- in the Ex.P.2 Cheque and the Accused is not at all liable to pay the same. Therefore, he prayed to set aside the judgment of the Trial Court by acquitting the Accused.
20. On the other hand, the Learned Counsel for the Complainant/Respondent supported the judgment of the Trial Court . Further contended that even as per Note in Ex.P.10 the Complainant not to present the Cheque for liability under the homecare division, then the Complainant was well within its right to present the Cheque for encashment for undisputed amounts due in excess of Rs.2.77 Crores for the healthcare division. The liability under Ex.P.11 and the calculation thereof remain undisputed. The Complainant held on the Cheque for two years in the hopes that the Accused will settle all dues. However, since the Accused failed to make any payment and the Complainant ran the risk of its dues becoming time barred, then the Complainant presented the Cheque for encashment. The binding arbitral award inter-se the parties for the same debt, the signed reconciliation statements, the admission of the Accused and the absence of credible evidence 23 Crl.Appeal No.25255/2024 to rebut the existence of liability, the claim of the Accused that he is not liable to pay even the amount mentioned in Ex.P.2 is wholly without merit. The debt represented in the Cheque was part of a larger admitted liability and the defense of non-liability is an afterthought. Accordingly, he prayed to dismiss the appeal.
21. In this appeal it is the contention taken by the Appellant herein is that the condition regarding reconciliation and final settlement of accounts between the parteis was met by the Respondent prior to presentation of Ex.P.2 Cheque is improper and even the Trial Court has not properly considered the evidence of DW.1 & DW.2. Further it is the contention of the Appellant herein is that the Trial Court ought to have drawn adverse inference against the Respondent by holding that the Appellant had not only paid the entire due amount of Rs.2.77 Crores, but also the amount of Cheque for Rs.25,60,860/- alleged to be due under Ex.P.10 & Ex.P.11. But the Trial Court has failed to draw necessary inferences and instead rejected the 24 Crl.Appeal No.25255/2024 Appellant's contention regarding excess payment by ignoring the vital evidence.
22. Admittedly, this Court on careful perusal of the materials placed by both parties and evidence led by the parties come to conclusion that there is no error committed by the Trial Court in holding that the Appellant has failed to prove the payment of Rs.2.77 Crores including the Cheque amount to the Complainant. On the other hand, the Trial Court has properly come to conclusion that the Respondent has properly discharged its prima-facie burden of proving its case beyond doubt. Further the Accused has clearly admitted in his evidence that Ex.D.10 itself discloses Rs.48.98 Crores transaction and he has not produced any documents to show that 06 division payments were directly made to the Complainant Company. Admittedly, there is no records forthcoming from the side of the Accused to show that after issuance of Cheque he has made payment to the Complainant in respect of Rs.3.02 Crores which was much higher than value of the Cheque. Therefore, prima-facie it appears that the Cheque in 25 Crl.Appeal No.25255/2024 question has been issued by the Accused for partial discharge of the debt to the Complainant.
23. Let me go through the judgment of the Trial Court with the above arguments and evidence of both parties. Admittedly, the Accused has taken up specific defense that Ex.P.2 Cheque was issued under Ex.P.10 and as per Note-1 of Ex.P.10 the Cheque has to be presented only after final settlement of CSA Lakshmi Enterprises. When the final settlement has not been taken place, the Complainant had no right to present the Cheque. The final settlement means after final reconciliation of division, 84, 41, 42, but would also mean settlement of all payments due from the Complainant to the Accused under the CSA arrangement. Further also taken up contention that Ex.P.2 was to be treated as a security Cheque that was not to be presented until such time that the condition of final settlement of the Accused account was duly complied with. Even Ex.P.11 itself records that there being a difference between the tax liability, reconciliation of the Complainant and the Accused for the division 26, 27 26 Crl.Appeal No.25255/2024 & 84. Hence, there was no final reconciliation between the parties.
24. As aforesaid, it is the main contention of the Complainant that the Complainant and the Accused have entered into Consignee Sales Agreement in the year 2012 wherein the Accused acted as a sales agent for the Complainant in Kerala. Ex.P.9 the Agreement was terminated on 31.7.2014 and from the date of agreement to termination, the Complainant sent across its goods from Karnataka to Kerala and the Accused sold their products to the customers and collected amounts from these customers and made payments directly to the bank account of the Complainant. Even though the Complainant has supplied products worth Rs.48.93 Crores, the Accused has failed to make payment for about Rs.3,02,73,782/- to the Complainant in relation to the homecare and the heathcare divisions as per Ex.P.13 Arbitral Award dtd: 30.9.2019. Admittedly, as pointed out by the Trial Court in its judgment the Accused has not at all denied the arbitral award passed against him and according to the said award he is liable to pay Rs.3,02,72,782/-
27 Crl.Appeal No.25255/2024to the Complainant. Further as pointed out in the judgment of the Trial Court, the Accused has not at all denied the issuance of Ex.P.2 and signature found on it.
25. It is pertinent to note that as per the records produced by the Complainant i.e., Ex.P.8 it reveals that Accused has challenged the arbitral award before the Commercial Court in Com.A.P.39/2020 and the same was dismissed by the said Court. Further as pointed by the Trial Court in its judgment when the Accused had admitted his signature and issuance of Cheque in favour of the Complainant, then the burden is upon the Accused to prove that no debt or liability existed at the time of issuance of Cheque. In the absence of the same, the Accused is liable to pay the amount of the Cheque and he is liable for punishment under Section 138 of the Negotiable Instruments Act. It is not at all disputed that, the Accused is liable to pay the balance amount to the Complainant for the business transaction between him and Complainant. On the other hand, the Accused has failed to prove that he is 28 Crl.Appeal No.25255/2024 not liable to pay any balance amount to the Complainant.
26. It is interesting to note here that there was a meeting held between the Complainant and the Accused wherein the DW.2 who is the brother of the Accused was very much present and in the said meeting only Ex.P.10 & Ex.P.11 are prepared. No doubt, as per Ex.P.10 and Ex.P.11 there is an amount to be paid by the Accused to the Complainant. Even DW.2 is also signatory to the Ex.P.10 & Ex.P.11. Therefore, as pointed out by the Trial Court in its judgment, at the time of issuance of Cheque there is a legally enforceable debt from the Accused to the Complainant. Even DW.1 also clearly stated that the Ex.P.2 is the subject matter of the proceedings of this case. Even in the written arguments and as well as in the evidence of DW.1 also it goes to that Ex.P.2 Cheque has been issued as a security Cheque. That apart, DW.2 also stated that it was agreed between the parties that the statement recorded in Ex.P.10 & Ex.P.11 would be subject to finalization in accordance with the condition stipulated in the notes therein. However, in the cross-
29 Crl.Appeal No.25255/2024examination he stated that there is no any written agreement or condition stipulated in notes in Ex.P.10 & Ex.P.11. Further DW.2 also in his cross- examination stated that there is a dispute in all amount mentioned in Ex.P.11. So, by considering the above evidence and considering the contents of Ex.P.10 & Ex.P.11 and so also the arbitral award it is clear that the conclusion arrived by the Trial Court that the Ex.P.2 Cheque has been issued for satisfaction of part of legally enforceable debt is proper and correct.
27. Interestingly, the Accused had taken up defense that he has made excess payment as per account statement Ex.D.8 & Ex.D.10 for the reconciliation statement for healthcare and homecare division. However, Ex.D.8 & Ex.D.10 are not been conclusively proved by the Accused, as they are not supported with the certificate prescribed in the Bankers Book Evidence Act. Even the Accused has not taken any pain to examine the concerned Bank Manager or Employees to support the same. Therefore, the Trial Court has properly noted that they are not relevant for the dispute, as they do not 30 Crl.Appeal No.25255/2024 discloses all the transaction between the parties in the relevant period. Therefore, it can be easily say that the defense of the Accused regarding excess payment is an improvement after the arbitral proceedings and an afterthought.
28. It is further pertinent to note here that neither DW.1 nor DW.2 have contested the conclusion in Ex.P.10 in relation to homecare division the due is at least Rs.25.6 Lakhs. On the other hand, DW.1 admitted in the cross-examination that Ex.D.10 not discloses Rs.48.98 Crores transaction and he has not produced any documents to show that 06 divisions payment were directly made to the Complainant Company. Further clearly admitted in his examination-in-chief itself that in the table not shown that such payment is from which division. Further admitted that in Para No.18 of his examination-in- chief affidavit in the table not shown that which payment is from which division. Therefore, the contention of the Accused that the Ex.P.2 Cheque should not be presented till further reconciliation cannot be accepted, as there was any agreement in connection with the notes made in Ex.P.10.
31 Crl.Appeal No.25255/202429. It is the submission of Learned Counsel for the Respondent is that in any event Ex.P.10 was executed in August 2014 and thereafter vide E-Mail dtd: 28.10.2014, the Complainant has confirmed that the reconciliation is completed and all documents have been given to the Accused. Further in the cross- examination DW.1 stated that Ex.D.4 was issued after further reconciliation, the Accused claimed that he has issued reply to this E-Mail, but failed to furnish such E-Mail. Therefore, adverse inference may be drawn against the Accused. Subsequent E- Mail in Ex.D.5 & Ex.D.7 are unilateral and self- serving E-Mails that do not come to the aid of the Accused to show that he has discharged his liability towards the Complainant.
30. It is true that Ex.D.5 & Ex.D.7 are unilateral and self-serving E-Mail, moreover even in the said E- Mails, the Accused has not denied and disputed about the liability for payment of Rs.3.02 Crores debt towards the Complainant. Hence, this Court is of the opinion that the documentary evidence placed by the Complainant evidencing completion of reconciliation. Even the Accused has not disputed about meeting of 32 Crl.Appeal No.25255/2024 Complainant and Accused on 16.2.2015 and 3.9.2015 and after the meeting the E-Mails dtd:
18.2.2015 and 8.9.2015, were addressed by the Complainant confirming that outstanding due was Rs.3.02 Crores as per Ex.P.14 & Ex.P.15. Hence, it is very much clear that the Accused was liable to pay huge amount to the Complainant with regard to the transaction taken place between them.
31. It is the main argument of the Learned Counsel for the Appellant herein is that according to notes in Ex.P.10, the Complainant ought to have not presented the Cheque till further reconciliation as stated in notes in Ex.P.10. Anyhow, the Complainant was well within his rights to present the Cheque for encashment for undisputed amount for healthcare division has rightly presented the Cheque. Even as pointed out by the Learned Counsel for the Complainant, the liability under Ex.P.11 and the conclusion thereof not been challenged by the Accused. According to Learned Counsel for the Complainant, the Complainant hold on the said Cheque for two years in the hopes that the Accused will settle the dues, but failed to make payment and 33 Crl.Appeal No.25255/2024 then the Complainant ran the risk of its dues becoming time barred, then the Complainant presented the Cheque for encashment. So, when the Accused had not settled the dues and when admittedly there is heavy due amount payable by the Accused to the Complainant, the Complainant has no other-go and has rightly presented the Cheque for encashment. Even as argued by the Learned Counsel for the Complainant there is a binding arbitral award inter-se the parties for the same debt, they signed reconciliation statements and the same has been admitted by the Accused in the evidence, therefore, in the absence of credible evidence to rebut the existence of liability, the claim of the Accused that he is not liable to pay even the amount mentioned in Ex.P.2 is of no merits.
Therefore, the debt which included in Ex.P.2 Cheque can be easily say that it is a part of larger extent of liability and his liability to pay the same to the Complainant.
32. As pointed out by the Trial Court in its judgment, the main contention of the Accused herein is that the Ex.P.2 Cheque had been issued with a 34 Crl.Appeal No.25255/2024 condition that after finalization of Ex.P.10 & Ex.P.11 only it is to be presented. On the other hand, the said Cheque was issued as a security for the transaction. Since the Accused has not finalized the accounts the Complainant without his knowledge cannot present the Cheque. However, the Trial Court after referring the two decisions of the Hon'ble Apex Court has properly come to conclusion that merely issuing of Cheque towards security purpose would not absolve the Accused of the liability as the same would render the Cheque as nothing more than an on demand promissory Note and therefore, issuance of Cheque can be said that it is issued for legally payable debt. Hence, the Trial Court has rightly come to conclusion that Ex.D.4, Ex.D.5 & Ex.D.11 issued by the Accused are unilateral and self-serving E-Mails which cannot come to the aid of the Accused to show that he has discharged his liability. Then the Trial Court has properly held that the entire materials on record prove that the Ex.P.2 Cheque was issued by the Accused towards part of legally enforceable debt.
33. In view of the above discussions and also materials placed by both parties, this Court is of the 35 Crl.Appeal No.25255/2024 considered opinion that the Accused has failed to prove that the Cheque has not been issued for consideration, there is no question of saying that there was no liability by the Accused towards the Complainant and Ex.P.2 Cheque is not issued for discharge of liability etc., cannot be accepted. Merely producing so many documents are not at all sufficient to hold that the Accused has properly rebutted the case of the Complainant. On the other hand, the Accused has failed to put acceptable and satisfactory evidence to probablize the defense.
34. Hence, in view of the discussions made above, this Court is of the considered opinion that the decisions which relied upon by the Learned Counsel for the Appellant are not at all helpful to the Appellant to show that he is entitled for acquittal. On the other hand, the decisions relied upon by the Complainant are squarely attracted to the contention of the Complainant. Therefore, as discussed above, the contention of the Accused that he is not liable to pay the amount as mentioned in Ex.P.2 is without having any merits. On the other hand, the Trial Court after properly appreciating the oral and documentary 36 Crl.Appeal No.25255/2024 evidence placed by both parties rightly convicted the Accused. Therefore, there is no reason to interfere with the judgment passed by the Trial Court.
35. In so far as quantum of fine imposed by the trial court is concerned, the Trial Court has imposed total fine of Rs.37,74,442/- as against the Cheque amount of Rs.25,60,680/-, keeping in view the year of transaction, duration of litigation, cost of litigation and interest on the outstanding amount etc. Since the transaction between the parties was of the year 2012 and the above case was disposed of by the Trial Court on 1.6.2024 and keeping in view of the duration of litigation and cost of litigation etc., the Trial Court has rightly awarded fine of Rs.37,74,442/-. Hence, there is no reason to interfere with the quantum of fine imposed by the trial court.
36. Thus, looking from any angle, the Accused failed to establish any probable defence even on the materials produced by the Complainant. Having regard to the facts and circumstances of the case, the Accused failed to substantiate his defence by producing cogent evidence before this court. The 37 Crl.Appeal No.25255/2024 Trial Court by appreciating the evidence and documents in a proper perspective and while referring to the rulings of Hon'ble Apex Court has rightly convicted the Accused for the offence punishable U/Sec.138 of NI Act. In the absence of any perversity or capriciousness while convicting the Accused, there is no reason to interfere with the Judgment of the trial court. Therefore no grounds made out by the Accused to interfere with the Judgment of conviction passed by the trial court. Hence, Point Nos.1 and 2 are answered in the Negative.
37. Point No.3:
In view of the findings on the above points the appeal filed by the Appellant deserves to be dismissed. Accordingly, I proceed to pass the following:-
ORDER The appeal filed by the Appellant U/Sec.374 (3) of Cr.P.C., is hereby dismissed with costs.
The Judgment of conviction passed by the Learned XXXIV Addl. CMM, Bengaluru, in CC.No.51103/2017, dtd. 1.6.2024, is hereby confirmed.38 Crl.Appeal No.25255/2024
Send back the records with a copy of this Judgment to the Trial Court.
(Dictated to the Stenographer, typed by her, corrected, signed and then pronounced by me, in the open court on this the 3rd day of December 2025.) Digitally signed by NARAYANAPPA NARAYANAPPA SRIPAD SRIPAD Date: 2025.12.04 17:41:12 +0530 [Sri. Sreepada N] LXXII Addl.City Civil & Sessions Judge, Bengaluru. (CCH-73).