Bangalore District Court
H.B.Basavaraju vs K B Rajashekar on 9 January, 2026
1
Cri Appeal No.451/2023
KABC010094512023
IN THE COURT OF LV ADDL. CITY CIVIL AND SESSIONS
JUDGE, BENGALURU (CCH-56)
DATED: THIS THE 9th DAY OF JANUARY 2026
PRESENT
SRI. MOHAN PRABHU, M.A., LL.M.
LV ADDL. CITY CIVIL AND SESSIONS JUDGE, BENGALURU
CRIMINAL APPEAL NO.451 / 2023
Appellant/ H.B.BASAVARAJU
accused S/O BHEEME GOWDA
AGED ABOUT 45 YEARS,
LIC AGENT,
RESIDING AT OPP. TO ANJANEYA
TEMPLE, MARUTHINAGAR, ARASIKERE,
HASSAN - 573 103.
ALSO AT
H.B. BASAVARAJU
S/O BHEEME GOWDA
AGED ABOUT 46 YEARS,
RESIDING AT GROUND FLOOR,
CORNER HOUSE, 2ND CROSS, BEHIND
ANJANEYA TEMPLE,
MARUTHINAGAR, ARASIKERE,
HASSAN - 573 103.
[R/by B.R.MANJUNATHA KASTURI, Advs.]
Vs
Respondent/ K.B.RAJASHEKAR
Complainant S/O LATE K.M. BASAVARADHYA
AGED ABOUT 63 YEARS,
RESIDING AT No.60/1,
'GEETHA NILAYA', 5TH CROSS, 4TH MAIN,
CHAMARAJAPET,
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Cri Appeal No.451/2023
BENGALURU - 560 018.
[R/by Sri B.M., Adv.]
JUDGMENT
This appeal is filed U/s.374[3] of Cr.P.C., by the accused against the judgment of conviction dated:
28.02.2023 passed in C.C. No.12512/2022 by learned IV Addl. Judge, Court of Small Causes & ACMM, Bengaluru for the offence under S.138 of Negotiable Instruments Act [for short 'N.I. Act''].
The parties are referred to their rank before the trial court.
The case of the complainant is briefly stated as follows:
The complainant and the accused are known to each other since so many years, as the accused was the good friend of the complainant. The complainant was retired Government servant retired on 31.05.2019 as Assistant Executive Engineer in the Public Works Department, at Arasikere, Hassan District. The accused is an Agent in LIC, at Arasikere, Hassan District. That on 15.03.2019 the accused approached the complainant and requested the complainant for hand loan of Rs.8,50,000/-3
Cri Appeal No.451/2023 in order to purchase the site and to construct the house at Arasikere and to clear all the family problems of the accused by saying that he will repay the hand loan amount of Rs.8.5 lakhs within 1 ½ years to the complainant. As the accused was good friend of the complainant, hence, the complainant has paid hand loan to the accused on different dates. He has paid a sum of Rs.2 lakhs through cheque bearing No.931743 on 04.04.2019, Rs. 1 lakh through cheque bearing No.310865 on 31.08.2019, Rs. 1 lakh through cheque bearing No.310869 on 31.08.2019, Rs.1.5 lakhs through cheque bearing No.343023 on 14.07.2020, Rs. 1 lakh through cheque bearing No.183213 on 31.08.2019 and Rs.2 lakhs by way of cash to the accused. The accused has repaid the amount of Rs.50,000/- towards part payment. Subsequently, for repayment of the remaining amount the accused issued four cheques i.e. cheque bearing No.144189 dated 23.06.2021 for Rs.1 lakh, cheque bearing No.222115 dated 23.06.2021 for Rs.3 lakhs, cheque bearing No.222116 dated 23.06.2021 for Rs.1 lakh, cheque bearing No.222117 dated 23.06.2021 for Rs.3 lakhs, all drawn on State Bank of India, Arasikere branch. When the complainant presented these cheques 4 Cri Appeal No.451/2023 for encashment, the cheques came to be dishonoured with bank endorsement 'funds insufficient' and returned to drawer. The complainant intimated the said fact to the accused, then the accused requested the complainant to present the cheques once again. Accordingly, the complainant presented the said cheques once again for encashment, but the same came to be returned with an endorsement 'exceeds arrangement'. Thereafter the complainant issued legal notice u/S/138 f NI Act to the accused. Even though the accused received the notice, he did not send any reply notice and also not paid the cheque amount. Hence, the complainant filed complaint against the accused which came to be registered as C.C.No.9174/2021. After filing of this case, the accused has executed letter of loan settlement and undertaken to pay the disputed amount. Hence, the complainant has withdrawn the said case for payment of due amount. The accused issued four cheques for sum of Rs.2 lakhs each i.e. cheques bearing No.222120, 222122, 222123 and 222124 drawn on State Bank of India, Arasikere branch. The complainant presented these cheques for encashment, but these cheques were dishonoured by the bank on 26.08.2022 with an endorsement 'funds 5 Cri Appeal No.451/2023 insufficient' / 'exceeds arrangement'. Thereafter the complainant issued a legal notice dated 01.09.2022 to the accused u/S.138 of NI Act. Even though the accused received the legal notice, he did not reply the notice and also not paid the cheque amount. Hence, this complaint.
(2) After filing the complaint, the learned Magistrate has taken cognizance of the offence punishable u/S.138 of NI Act and registered a case as PCR No.3000/2022. Thereafter recorded sworn statement of the complainant. On the basis of the complaint averments the sworn statement of the complainant and the documents the learned Magistrate passed an order to register criminal case against the accused for the offences punishable u/S.138 of NI Act in Register III and issued summons. Accordingly, the case in C.C.No.12512/2022 came to be registered. The accused entered appearance by engaging his counsel and released on bail. The accusation read over to the accused for which the accused pleaded not guilty and claimed for trial. The sworn statement of the complainant is treated as evidence who examined as PW 1. The trial court records would go to show that despite sufficient 6 Cri Appeal No.451/2023 opportunity given to the accused he did not cross examine PW1 and also not led defence evidence. The learned Magistrate examined the accused u/S/313 of CrPC on the date of appearance itself. The accused has denied all the incriminating evidence. Despite sufficient opportunity the accused did not cross examine PW 1 and also not lead his defence evidence. The learned Magistrate after posting the case for arguments, pronounced the judgment on 28.02.2023 and acting u/S.255(2) of CrPC accused convicted for the offence punishable u/S.138 of NI Act and sentenced him to pay fine of Rs.4,05,000/-, in default he has to undergo simple imprisonment for a period of six months. Out of fine amount, a sum of Rs.4 lakhs shall be paid to the complainant and the remaining amount of Rs.5,000/- shall be forfeited to the State.
(3) Aggrieved by the Judgment of conviction, the accused has preferred this appeal on following grounds.
The trial court overlooked admitted facts made in the statement u/S/313 of CrPC. The accused was not examined u/S/313 of CrPC after evidence. Thus there is procedural irregularity. The accused filed an application seeking permission to cross examine the complainant, 7 Cri Appeal No.451/2023 but the same was rejected without any basis. The judgment was pronounced immediately without even affording opportunity to the accused to challenge the said order. In the impugned judgment at page-10 the defence of the accused that the complainant received Rs.6 lakhs from him and he is liable to pay only Rs.2,000/- is mentioned, but failed to prove the said aspect. Since the accused was neither permitted to cross examine PW 1 nor given an opportunity to lead evidence, there is no opportunity to rebut the presumption. The law is very clear that in the absence of the accused, the stage of any criminal proceedings cannot be jumped at the most warrant can be issued against the accused. But the trial court did not follow the procedure which resulted in miscarriage of justice. The trial court overlooked fact that it is settled principle of law that an opportunity is to be given to the accused to prove their case. But the trial court rejected the application of the accused seeking permission to cross examine PW1. Hence, injustice is caused to the accused. The complainant has failed to prove the existence of liability. It is not proved when the cheques were issued. There is no evidence to show who filled contents of the cheque when it was issued where 8 Cri Appeal No.451/2023 the accused signed the same. Since the trial court has not given opportunity to accused to lead the defence evidence, there was no opportunity to the accused to rebut the evidence. The essential requirement as contemplated u/S.138 of NI Act are not complied with. The accused was denied fair opportunity to contest the case on merits. Hence, on these grounds, the appellant prays to set aside the order and judgment in C.C.No.12512/2022 dated 28.02.2023.
(4) The trial court records received.
(5) The respondent / complainant entered appearance by engaging his counsel.
(6) This court after hearing arguments posted the case for judgment. Thereafter this court was given an opportunity to the accused / appellant to cross examined PW 1 as well as to lead defence evidence. Hence, in this appeal PW 1 was fully cross examined on the side of the accused and accused also lead his defence evidence and examined as DW 1.
(7) I have heard the arguments of the learned counsel for the appellant and the learned counsel for the respondent and perused the records.
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Cri Appeal No.451/2023 (8) I have perused the entire record.
(9) The learned counsel for the respondent relied upon the following citations.
1. (2022) 6 SUPREME COURT CASE 735 (TEDHI SINGH VS. NARAYAN DASS MAHANT).
2. AIR 2025 SUPREME COURT 1931 (ASHOK SINGH VS. STATE OF UTTA PRADESH).
3. (2007) 6 SUPREME COURT CASES 555 (C.C.ALAVI HAJI VS. PALAPETTY MUHAMMED AND ANOTHER).
4. AIR 2023 SUPREME COURT 5018 (RAJESH JAIN VS AJAY SINGH).(2012) 1 SUPREME OCURT CASESE 260 (R. VIJAYAN VS. BABY AND ANOTHER).
(10) The following points would arise for my consideration:-
Point No.1:- Whether the impugned judgment of conviction and order of sentence passed thereon is illegal, perverse and calls for interference?
Point No.2:- Whether there is sufficient grounds made out by the appellant to set side the judgment passed in C.C.No.12512/2022 as prayed for?
Point No.3:- What order?
(11) My findings to the above points are as below:-
Point No.1:- In the Negative
Point No.2:- In the Negative.
Point No.3:- As per the final order,
for the following
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Cri Appeal No.451/2023
REASONS
(12) POINT NO.1&2:- These points are taken
up together for discussion to avoid repetition in
discussion of evidence.
(13) The complainant who has been examined as PW1 in his affidavit filed for examination inchief by reiterating the complaint averment has deposed that the accused borrowed sum of Rs.8.5 lakhs on various dates.
He has deposed that he has paid sum of Rs.2 lakhs to the accused through cheque bearing No.931743 on 04.04.2019 Rs.1 lakh through cheque bearing No.310865 on 31.08.2019, Rs. 1 lakh through cheque bearing No.310869 on 31.08.2019, Rs.1.5 lakhs through cheque bearing No.343023 on 14.07.2020, Rs. 1 lakh through cheque bearing No.183213 on 31.08.2019 and Rs.2 lakhs by way of cash. It is pertinent to note here is that during the course of cross examination of DW 1 / accused, he has admitted the suggestion that on 02.04.2018 the complainant transferred amount of Rs.2 lakhs to his bank account through cheque bearing No.931743. On 04.04.2019 the complainant transferred amount of Rs.1 lakh to his bank account through cheque bearing No.310865, that on 31.08.2019 the complainant 11 Cri Appeal No.451/2023 transferred the amount of Rs.1 lakh to his bank account through cheque bearing No.310869. On 31.08.2019 the complainant transferred amount of Rs.1.50 lakhs to his bank account through cheque bearing No.343023 and on 14.07.2020 the accused transferred amount of Rs.1 lakh to his bank account through cheque bearing No.183213. All these admissions can be found in the cross examination dated 12.02.2025 made by the learned counsel for the complainant to DW1. DW1 deposed that the complainant transferred amount of Rs.8 lakhs to his bank account. Since the accused / DW 1 himself admitted the receipt of Rs.8 lakhs from the complainant through bank account, no further proof is required regarding payment of amount by the complainant to the accused. PW 1 has deposed that for repayment of the amount borrowed by him, the accused issued cheques in his favour. When he presented the cheque to the bank for encashment, the cheques came to be dishonored for insufficient funds in the bank account of the accused and also with an endorsement referred to drawer. He had issued legal notice to the accused calling upon him to pay the cheque amount, but the accused failed to pay the cheques amount. Hence, he has filed the complaint 12 Cri Appeal No.451/2023 against the accused which came to be registered as C.C.No.9174/2021. In order to substantiate this contention taken by the complainant he has produced the certified copy of the order sheet of C.C.No.9174/2021, which is marked at Ex.P19. He has also produced the document Ex.P20 certified copy of the application filed u/S.257 of CPC for withdrawal of this case, as the accused issued letter of loan settlement dated 24.02.2022. PW1 has deposed that in view of the settlement for repayment of the amount, the accused had issued four cheques of Rs.2 lakhs each in his favour draw on SBI, Sampige Road branch, Malleswaram, Bengaluru. When he presented the cheques for encashment, the cheques returned with shara 'funds insufficient' / 'exceeds arrangement. Out of 4 cheques, the present case is pertaining to two cheques. The document Ex.P1 and P2 - 2 cheques are marked through PW 1. The complainant has also produced Ex.P3 bank endorsement for having dishonoured of cheque for the reason exceeds arrangement Ex.P3 and Ex.P4 bank endorsement for having dishonoured of cheques for funds insufficient. PW 1 has deposed that he had issued legal notice dated 01.09.2022 calling upon the accused 13 Cri Appeal No.451/2023 to pay the cheques amount within 15 days from the date of receipt of the notice. In order to substantiate his contention he has produced and got marked document Ex.P5 legal notice dated 1.09.2022. Ex.P6 to P9 are the postal receipts for having sent the notice to the accused. Ex.P10 and P11 are the postal acknowledgments for having served the notice to the accused. Ex.P12 and 13 are speed post acknowledgment for having served the notice to the accused. The complainant has produced and got marked Ex.P14 to P17 - 4 passbooks to show payment of hand loan amount to the accused. he has also produced and got marked Ex.P18 letter of loan settlement executed by the accused. Thus, PW 1 in order to substantiate the contention taken in his complaint examined himself as PW 1 and produced documents Ex.P1 to P20. Since the accused in this appeal has taken contention that no sufficient opportunity was given to him to cross examine PW 1 and to lead defence evidence, this appellate court has given an opportunity to the appellant to cross examine PW 1, as well as to lead his defence evidence.
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Cri Appeal No.451/2023 (14) During the course of cross examination of PW1, nothing worth is elicited from his mouth to discard his examination in-chief version. He has denied the suggestion that the accused is not due any amount payable to him. He has denied the suggestion that he received the cheques from the accused for security purposes. He has denied the suggestion that the accused has repaid the amount borrowed from him. Thus, on perusal of the contention taken by the accused, during the course of cross examination of PW1, it is the contention of the accused is that he has borrowed amount from the complainant, but he has already repaid the amount to the complainant.
(15) Now coming to the oral evidence of appellant /accused who has been examined as DW 1 is concerned, in his examination in-chief he has deposed that the complainant was working as Assistant Executive Engineer, at Arasikere approved 6 parapet wall and the work was allotted to the accused who was working as Gram Panchayat member. At that time, the accused borrowed amount of Rs.8 lakhs from the complainant by way of cheque. Thereafter, he completed his tender 15 Cri Appeal No.451/2023 work. But no amount was given to him towards tender work. In the meanwhile the complainant retired from service. Thereafter he has repaid the amount of Rs. 5 - 6 lakhs to the complainant by way of cash. When he borrowed amount of Rs.8 lakhs from the complainant he had issued 12 blank cheques for Rs.1 lakhs each in favour of the complainant. Thereafter the complainant had filed two criminal cases against him. When the case was pending, he along with his wife went to hotel situated at Mandovi Showroom and called the complainant to that hotel over phone and he has given Rs.2 lakhs to the complainant. At that time, the complainant received 4 blank cheques from his wife. When he requested the complainant to withdraw the criminal case in order to obtain passport at that time the complainant asked him to execute agreement. Hence, by saying so, the complainant obtained his and his wife signature on agreement document. Thereafter even though he has requested the complainant to return the cheques, but the complainant did not return the cheques to him. DW1 has deposed that he is due only a sum of Rs.36,000/- payable to the complainant. During the course of cross examination of DW 1 he has admitted 16 Cri Appeal No.451/2023 the receipt of amount from the complainant by way of cheque. He has admitted issuance of four cheques dated 23.06.2021 in favour of the complainant. He has also admitted the suggestion that the complainant had filed one cheque bounce case against him in C.C.No.9174/2021. He has admitted his and his wife signature on Ex.P18. He has admitted his signatures on Ex.P1 & P2 cheques. When question asked to him that he has received amount of Rs.8 lakhs from the complainant he is liable to pay the same, then he admitted such suggestion and deposed that he will repay the said amount of Rs.8 lakhs to the complainant. Thus, during the course of cross examination of DW 1/ accused, he has admitted the suggestion that he received sum of Rs.8 lakhs from the complainant and he is due to pay the said amount of Rs.8 lakhs to the complainant. Since DW1 himself in his cross examination admitted regarding borrowing amount of Rs.8 lakhs from the complainant and due sum of Rs.8 lakhs to the complainant, no other proof is required to show that Ex.P1 and P2 issued in order to discharge legally enforceable debt.
(16) The learned counsel for the respondent / complainant has relied on the judgment of Hon'ble 17 Cri Appeal No.451/2023 Supreme Court reported in (2022) 6 SUPREME COURT CASE 735 (TEDHI SINGH VS. NARAYAN DASS MAHANT), wherein in para 10 it is held as follows.
"The Trial Court and the First Appellate Court have noted that in the case under Section 138 of the N. I. Act the complainant need not show in the first instance that he had the capacity. The proceedings under Section 138 of the N. I. Act is not a civil suit. At the time, when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. To that extent the Courts in our view were right in holding on those lines. However, the accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable which he can do by producing independent materials, namely, by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further, more importantly, achieve this result through the cross examination of the witnesses of the complainant. Ultimately, it becomes the duty of the Courts to consider carefully and appreciate the totality of the evidence and then come to a conclusion whether in the given case, the accused has shown that the case of the complainant is in peril for the reason that the accused has established a probable defence."
(17) AIR 2025 SUPREME COURT 1931 (ASHOK SINGH VS. STATE OF UTTA PRADESH), wherein the Hon'ble Supreme Court also referred the judgment of TEDHI SINGH VS. NARAYAN DASS MAHANT. In para 22 of 18 Cri Appeal No.451/2023 the judgment also held that the complainant is not required at threshold to prove his financial capacity unless the accused specifically dispute it.
(18) He relied on the judgment of Hon'ble supreme Court reported in (2007) 6 SUPREME COURT CASES 555 (C.C.ALAVI HAJI VS. PALAPETTY MUHAMMED AND ANOTHER), wherein in para 8 it is held as follows.
"Since in Bhaskarans case (supra), the notice issued in terms of Clause (b) had been returned unclaimed and not as refused, the Court posed the question: Will there be any significant difference between the two so far as the presumption of service is concerned? It was observed that though Section 138 of the Act does not require that the notice should be given only by post, yet in a case where the sender has dispatched the notice by post with correct address written on it, the principle incorporated in Section 27 of the General Clauses Act, 1897 (for short G.C. Act) could profitably be imported in such a case. It was held that in this situation service of notice is deemed to have been effected on the sendee unless he proves that it was not really served and that he was not responsible for such non-service."
(19) He relied on the judgment of the Hon'ble Supreme Court reported in AIR 2023 SUPREME COURT 5018 (RAJESH JAIN VS AJAY SINGH), wherein it is held that the signature of the accused on cheque was unchallenged, allowing presumption has to legally enforceable debt to take effect. In this judgment in para 47 it is held that the accused has neither replied to the 19 Cri Appeal No.451/2023 demand notice nor has led any rebuttal evidence in support of his case. The case set up by him needs to be drawn from the suggestion put during the cross examination and from his reply given in the statement recorded under Section 313 of CrPC.
(20) He relied upon the judgment of Hon'ble Supreme Court reported in 2012) 1 SUPREME OCURT CASES 260 (R. VIJAYAN VS. BABY AND ANOTHER), wherein it is held that as the provisions of Chapter XVII of the Act strongly lean towards grant of reimbursement of loss by way of compensation, the court should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy fine up to twice the cheque amount and direct payment of such amount as compensation.
(21) I have gone through all these cited decisions In my humbly view the principles laid down by the Hon'ble supreme Court in these cited decisions are aptly applicable o the present case. During the course of cross examination of DW1 / accused he has admitted the receipt of loan amount from the complainant through cheque. He has not disputed his signature on Ex.P1 and 20 Cri Appeal No.451/2023 P2 cheques. He has admitted the receipt of legal notice, as per Ex.P5. It is not the contention of the accused is t hat after receiving legal notice from the complainant he has issued any reply notice to the complainant by taking contention which had taken by him in his examination in- chief. On perusal of the cross examination of DW1, it would go to show that he has admitted document E.P18 letter of loan settlement. It is important to note that at the time of examination of the accused before the trial court u/S.313 of CrPC he has stated that he borrowed hand loan from the complainant, but he has repaid the same, but he is due only a sum of Rs.36,000/-. Even during the course of cross examination of DW1 he has admitted that he had borrowed a sum of Rs.8 lakhs from the complainant and he is ready to repay the amount of Rs.8 lakhs. Thus there is nothing to prove by the complainant and to show that Ex.P1 and P2 issued for discharge of debt or liability by the accused borrowed a hand loan of Rs.8.5 lakhs from him and Ex.P1 and P2 is that of his bank account of the accused and Ex.P1 dn P2 containing signature of accused. It is for the accused to rebut he presumption available to the complainant u/S.139 & 118 of NI Act. But except self serving 21 Cri Appeal No.451/2023 statement of DW1 there is no documents on the side of the accused to show that he has paid the borrowed amount to the complainant. Since the accused has admitted borrowing loan amount from the complainant and also admitted that Ex.P1 and P2 of his bank account and Ex.P1 and P2 containing his signature the presumption can be drawn u/S139 & 118 of NI ct. It is important to refer some of the judgment of Hon'ble Supreme Court and Hon'ble High Courts.
(22) In the judgment of Hon'ble Supreme Court in the case of K.S. Ranganath Vs Vitthala Shetty reported in 2022 [1] Crimes 454-[SC] wherein head note reads as below:-
"Negotiable Instruments Act, 1881 - Section 138 read with Sections 118 and 139- Dishonour of cheque-Conviction and sentence
- When a cheque is drawn out and is relied upon by drawee, it will raise a presumption that it is drawn towards a consideration which is a legally recoverable amount - Onus is on accused to raise a probable defence and standard of proof for rebutting presumption is on preponderance of probabilities-Defence sought to be put forth and witnesses examined in instant proceedings are only by way of improvement in respect of same cause of action-Defence sought to be put forth relating to cheque and other documents having been obtained by force, cannot be accepted as a probable defence when respondent successfully discharged initial 22 Cri Appeal No.451/2023 burden cast on him-Appeal dismissed.(Paras 11, 17 and 19)"
(23) The Hon'ble Supreme Court in Judgment in a case of Rangappa V/s Mohan in para no. 14 observed as follows:-
"In the light of these extracts, we are in agreement with the respondent/ claimant that presumption mandated by section 139 of the act does indeed include the existence of a legally enforceable debt or liability. To that extent the impugned observations in Krishnajanardhana Bhat case may not be correct. However this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstance therein. As noted in the citations, this is ofcourse 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."
(24) In the decision of Hon'ble Supreme Court reported in 2019(1) DCR 401 between Bir Singh V/s Mukesh Kumar it is held that a meaningful reading of the provisions of the Negotiable Instrument Act including, in particular, sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to he payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is 23 Cri Appeal No.451/2023 immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of section 138 would be attracted. In my humble view, the principles of these decisions are aptly applicable to the present case because PW1 in his examination in chief clearly deposed regarding accused issuing Ex.P1 and 2 cheques towards payment of purchase amount borrowed by the accused. Further, in the judgment of Hon'ble Supreme Court in a case of Sumeti Vij V/s M.s Paramount Tech Fab Industries, wherein it is held that to rebut the presumption, facts must be proved by the accused on a preponderance of probability. In the decision of the Hon'ble High Court of Karnataka in M Ramesh Kumar Case wherein in para No.5 observed that section 138 of N.I. Act, on proof of issuance of the cheque, the onus shifts to the accused to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of section 138 of N.I. Act. In the decision of Hon'ble High Court of Karnataka in the case of Sitaram Gouda A V/s Isbu Kunhammade it is held that, accused not disputing issuance of cheque- but taking inconsistent stand later- 24
Cri Appeal No.451/2023 accused not initiating any proceedings as regards misuse, or forgery of cheque and making of wrongful claim- except denial, accused not proving his case beyond reasonable doubt as obligation was on him to do so when he took a special plea.
(25) On perusal of trial court records, the trial court has rightly drawn presumption under S.139 of N.I. Act, by following three ingredients as laid down by the Hon'ble Supreme Court in Rangappa Vs Mohan reported in 2010 SC 1898. Section 139 of N.I. Act empowers the court to presume that holder of cheque received it for discharge of any liability enforceable debt or liability. Burden is on the accused to rebut the said presumption.
(26) Section 118 of The Act reads thus:
118. Presumptions as to negotiable instruments. -- Until the contrary is proved, the following presumptions shall be made:--
(a) Consideration --that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration (27) Further, Section 138 of The Act reads thus:25
Cri Appeal No.451/2023
138. Dishonour of cheque for insufficiency, etc., of funds in the account. --Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that 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 be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation.-- For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.
(28) Further, Section 139 of The Act reads thus: 26
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139. Presumption in favour of holder.--It shall 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.
(29) Section 118 of The Act pertains to presumption of negotiable instrument which mandates that 'unless the contrary is proved.' Similarly, Section 139 of The Act also mandates that 'unless the contrary is proved.' Therefore, it has to be presumed that the holder of the cheque received the cheque of the nature referred to in Section 138 of the Act for the discharge in whole or in part of any debt or liability. Needless to say that the presumption contemplated under Section 139 of the Act is rebuttal presumption. However, the onus of proving that the cheque was not issued towards discharge of any debt or liability is on the accused. But in this case, the accused has failed to rebut the presumption available to complainant u/S.139 of NI Act. It is relevant to cite the decision of Hon'ble Supreme Court in the case of Sunil Todi and others V/s State of Gujurat and another and in judgment of Hon'ble High Court of Karnataka which are reported in 2021(2) KCCR SN 119 (DB), Judgment reported in 2006 (5) KLJ 323 and reported in 2006(3) KLR 27 Cri Appeal No.451/2023
333. When the cheque issued in blank, the holder of the cheque has authorized to fill the amount due.
(30) Further, The Hon'ble Apex Court in (2012) 13 SCC 3123 (Laxmi Dyechem v. State of Gujarat) has held thus:
"It has to be presumed that the cheque was issued in discharge of debt or other liability but the presumption could be rebutted by adducing evidence. The burden of proof was however on the person who wanted to rebut the presumption. However, this presumption coupled with the object of Chapter XIV of The Act leads to the conclusion that by countermanding payment of post dated cheque party should not be allowed to get away from the penal provision of Section 138 of The Act. "
(31) It is not the contention of the accused is that he has not received any legal notice from the complainant. On the other hand, the accused / DW1 in his cross examination admitted the receipt of the legal notice issued by the complainant. The complainant has presented Ex.P1 and P2 cheques to the Bank for encashment within a period of its validity and soon after Ex.P1 and P2 came to be dishonoured by the bank within 30 days the complainant has issued legal notice to the accused, the complainant had given 15 days time to the accused to pay the cheques amount. Since the accused 28 Cri Appeal No.451/2023 has failed to pay the cheques amount within 15 days, thereafter within 30 days the complainant has filed this complaint. Thus provision u/S/138 & 142 of NI Act are duly complied with by the complainant.
(32) Even though the accused has taken contention that he has repaid the borrowed amount, there is absolutely no documents or evidence on the side of the accused to show that he has repaid the amount to the complainant. The self serving statement of DW1 which is not supported by any documentary evidence is not sufficient to hold that the accused has repaid the amount to the complainant. The accused / DW1 has not stated in his evidence on which date and how much amount he paid to the complainant towards repayment of loan amount. Since there is absolutely no evidence on the side of the accused to show that he has repaid the borrowed loan amount to the complainant and his very admission in his cross examination is that he is still due a sum of Rs.8 lakhs is sufficient to hold that Ex.P1 and P2 cheques, indeed issued by the accused for discharge of his liability.
(33) The learned trial judge on proper appreciation of the evidence on record has rightly come to the 29 Cri Appeal No.451/2023 conclusion that the accused has committed offence punishable U/s.138 of N.I. Act.
(34) This court has given fullest opportunity to the accused to cross examine PW1 and also lead defence evidence. Accordingly, the accused cross examined PW 1 and also led his defence evidence as DW1. But he has failed to rebut the presumption available to the complainant u/S.139 and 118 of NI Act. There is sufficient materials to show that the accused issued Ex.P1 and P2 for repayment of loan amount to the complainant i.e. towards discharge of his debt or liability.
(35) The trial court rightly convicted the accused for the offence u/S.138 of NI Act. There is no infirmity in the impugned judgment of conviction and sentence passed thereon and warrants no interference at the hands of this appellate court.
(36) Considering on re-appreciation of entire evidence and after perusal of entire records, this court is of the opinion that there is no infirmity in the order passed by the trial court in C.C. No.12512/2022. Hence, I 30 Cri Appeal No.451/2023 answer point No.1 &2 in the negative.
(37) POINT NO.3:- In view of my findings on point No.1 & 2, I proceed to pass the following.
ORDER The appeal filed by the appellant / accused U/s.374 [3] of Cr.P.C. is hereby dismissed.
The judgment of conviction and sentence passed by the learned IV Addl. Judge, Court of Small Causes & ACMM, Bengaluru, in C.C. No.12512/2022 dated 28.02.2023 is hereby confirmed.
The office is directed to send back TCR forthwith to learned IV Addl. Judge, Court of Small Causes & ACMM, Bengaluru, along with a copy of this judgment.
[Dictated to the SG-I, transcribed and typed by him, corrected and then pronounced in the open court on this the 9th day of JANUARY 2026] (MOHAN PRABHU), LV Addl. City Civil & Sessions Judge, Bengaluru. (CCH-56) 31 Cri Appeal No.451/2023 ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF DEFENCE:
DW1 H.B.Basavaraju LIST OF WITNESSES EXAMINED ON BEHALF OF COMPLAINANT:(Fully cross examined before this court) PW1 K.B.Rajashekar LIST OF DOCUMENTS MADE ON BEHALF OF THE COMPLAINANT:
NIL LIST OF DOCUMENTS MADE ON BEHALF OF THE ACCUSED:
NIL LV ADDL. CITY CIVIL & SESSIONS JUDGE, (CCH-56), BANGALORE.