Bangalore District Court
M/S. Ninjacart Services Pvt Ltd vs Dmk Coconut Davanagere on 1 August, 2025
KABC030087012025
IN THE COURT OF THE XXV ADDL. CHIEF JUDICIAL
MAGISTRATE, AT BANGALORE CITY
Dated this the 1st day of August 2025
Present : SRI. GOKULA. K
B.A.LL.B.
XXV Addl. Chief Judicial Magistrate,
Bangalore City.
C.C.No.5156/2025
Complainant : M/s.Ninjacart Services Private Limited
R/of at Sy No.16/1 & 17/2
Bellandur Gate, Sarjapura Main Road
Ambalipura, Bengaluru 560 102.
Rep by its Manager
Mr.Kiran Kashinathan.
(By CHD Advocate )
V/s
Accused : DMK Coconut Davangere
Shop No.13, DMK Coconut
APMC Yard, Davangere 577 002.
Rep by its Proprietor
Zakir Hussain.
(By ESI - Advocate )
Plea of accused: Pleaded not guilty
Final Order: Accused is Acquitted
Date of judgment : 01.08.2025
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C.C.No.5156/2025
JUDGMENT
The complainant has filed the complaint under Section 223 of Bharathiya Nagarika Suraksha Sanhita against the accused for the offence punishable under Section 25 of Payment and Settlement Systems Act 2007 R/w Section 138 Negotiable Instruments Act.
2. The brief case of the complainant is as under:
That the complainant is engaged in the business of wholesale trade of agricultural products and fresh produce supply and tied up with Non Banking Financial Institution as per the guidelines of The Reserve Bank of India and enables the service of credit facility to its borrowers. The accused is engaged in the business of wholesale trade of agricultural products and commission agency and applied for loan through Trillion loan Fintech Private Limited in loan application No.125028. The complainant had sanctioned credit facility of Rs.4,08,500/- to the accused. Since the accused applied loan on online platform he has also digitally signed the loan agreement and other documents. During process of loan transaction, the accused issued E - NACH Mandate bearing UMRN NO.
UTIB702408230013187 registered on 03.08.2023 drawn on Axis Bank, for a sum of Rs.2,55,481/- towards due discharge of debt. After obtaining the loan, the accused assured making payments, but failed to make payment and on repeated request 3 C.C.No.5156/2025 and demands made by the complainant, the accused instructed the complainant to present NACH. The complainant based on the instruction of the accused, presented said NACH through its banker ie IndusInd Bank, Koramangala, Bengaluru for outstanding amount of Rs.2,55,481/- and on processing said E NACH Mandtate, it is returned dishonored with remarks "Balance Insufficient" on 29-10-2024. On receipt of said intimation, the complainant got issued legal notice on 05.11.2024 through registered post and demanded to pay the amount dishonored under E-NACH Mandate. The notice is duly served on the accused on 07.11.2024. Inspite of issuance of notice, the accused failed to pay the claim amount to the complainant with in the statutory time. Therefore, the accused has committed the offence punishable under Section 25 of the Payment and Settlement Act 2007 R/w Section 138 of Negotiable Instruments Act. Therefore the complainant has filed the complaint.
3. On the basis of Private complaint filed by the complainant, this court has taken cognizance of offence and registered the case in PCR No.792/2025 and recorded sworn statement of the complainant and got marked 10 documents as Ex.P1 to Ex.P.10. This court by considering the material on record issued process under Section 227 of Bharathiya Nagarika Suraksha Sanhita by registering the criminal case. In 4 C.C.No.5156/2025 response to the process issued by this court, the accused appeared before this court and he is released on bail. The copy of the complaint is served to the accused along with the summons as contemplated under Section 230 of Bharathiya Nagarika Suraksha Sanhita.
4. The substance of the acquisition as provided under Section 274 of Bharathiya Nagarika Suraksha Sanhita is read over to the accused and his plea is recorded. The accused has pleaded not guilty and claimed to be tried.
5. In view of the law laid down by Hon'ble Supreme Court of India in Indian Bank Association V/s Union of India and others reported in AIR 2014 SCW 3463, the affidavit filed by the complainant at the stage of taking cognizance and documents marked is treated as evidence under section 145 of Negotiable Instruments Act. The accused has filed an application to recall PW 1 for cross examination and the application was allowed and PW 1 was recalled for cross examination. But the accused neither opted to cross examine PW 1 nor adduced defence evidence. When the case is posted for cross examination of PW1, the complainant and accused appeared before the court with a joint memo for settlement wherein they have agreed to settle the dispute on payment of Rs.1,00,000/- by the accused to the complainant towards claim amount under the cheque. In view of 5 C.C.No.5156/2025 such settlement the accused has submitted he is not having cross examination of PW 1 nor his defence evidence.
6. Heard arguments and perused the material on record.
7. On the basis of the material on record the following points arise for the consideration of this court :
1. Whether the complainant proves that the accused issued signed NACH bearing UMRN NO.UTIB702408230013187 registered on 03.08.2023 drawn on Axis Bank, for discharge of legal liability and it is dishoured for a sum of Rs.2,55,481/-
when it is processed for collection for the reason balance insufficient on 29-10- 2024 and inspite of service of demand notice dated 05-11-2024 on 07-11-2024 the accused has failed to make payment with in the statutory time and thus committed an offence punishable under Section 25 of the Payment and Settlement Systems Act r/w Sec.138 of N.I. Act ?
2. Whether the joint memo filed by both the complainant and the accused can be considered for deciding the case ?
3. What Order?
8. The findings of this court to the above points are as follows:
Point No.1&2 In the Affirmative.
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C.C.No.5156/2025
Point No.3 As per final order
for the following :
REASONS
9. POINT NO.1: To prove the case the authorized representative of the complainant examined as PW-1 and in his evidence affidavit he has reiterated the averments made in the complaint.
To prove the incorporation of the company the PW 1 has produced the web copy of the Certificate of Incorporation as Ex.P 1. As per Ex.P 1 the complainant is a Public Limited company registered under Companies Act. The PW 1 has produced the Authorization letter as Ex.P.2. As per Ex.P 2 the PW1 is authorized to represent the complainant company and prosecute the accused. These documents prove the legal status of the complainant as a Company and authority of PW 1 to represent the complainant company.
10. The offence alleged is primarily under Section 25 of The Payment and Settlement Systems Act 2007, which reads as under.
Section 25. Dishonour of electronic funds transfer for insufficiency, etc., of funds in the account.
(1) Where an electronic funds transfer initiated by a person from an account maintained by him cannot be executed on the ground that the amount of money standing to the credit of that account is insufficient to honour the transfer instruction or that it exceeds the amount arranged to be paid from that account by an agreement made with a bank, such person shall be deemed to 7 C.C.No.5156/2025 have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the electronic funds transfer, or with both:
Provided that nothing contained in this section shall apply unless--
(a) the electronic funds transfer was initiated for payment of any amount of money to another person for the discharge, in whole or in part, of any debt or other liability;
(b) the electronic funds transfer was initiated in accordance with the relevant procedural guidelines issued by the system provider;
(c) the beneficiary makes a demand for the payment of the said amount of money by giving a notice in writing to the person initiating the electronic funds transfer within thirty days of the receipt of information by him from the bank concerned regarding the dishonour of the electronic funds transfer; and
(d) the person initiating the electronic funds transfer fails to make the payment of the said money to the beneficiary within fifteen days of the receipt of the said notice. (2) It shall be presumed, unless the contrary is proved, that the electronic funds transfer was initiated for the discharge, in whole or in part, of any debt or other liability. (3) It shall not be a defence in a prosecution for an offence under sub-section (1) that the person, who initiated the electronic funds transfer through an instruction, authorisation, order or agreement, did not have reason to believe at the time of such instruction, authorisation, order or agreement that the credit of his account is insufficient to effect the electronic funds transfer. (4) The Court shall, in respect of every proceeding under this section, on production of a communication from the bank denoting the dishonour of electronic funds transfer, presume the fact of dishonour of such electronic funds transfer, unless and until such fact is disproved.
(5) The provisions of Chapter XVII of the Negotiable Instruments Act, 1881 (26 of 1881) shall apply to the dishonour of electronic funds transfer to the extent the circumstances admit.8
C.C.No.5156/2025 Explanation.--For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability, as the case may be.
This provision also specify that the provisions of chapter XVII of the Negotiable Instruments Act to the extent the circumstances admit is applicable. The essential ingredients of section 25 of The Payment and Settlement Systems Act 2007 to be complied are i) An electronic fund transfer initiated by the person from his account ii) Processing of the NACH Mandate by the beneficiary, iii) it returning unexecuted for the reason insufficiency of funds to honour transfer instructions. iv) electronic fund transfer was initiated in discharge of any debt or liability v) it is initiated in accordance with the relevant procedural guidelines issued by the service provider vi) Beneficiary making demand with in 30 days of receipt of information of dishonour by giving notice in writing, vii) failure of the person initiating electronic fund transfer to make payment within the period of 15 days after receipt of the demand notice. The Payment and Settlement Systems Act 2007 does not prescribe any time limit to file the complaint. Therefore it is necessary to apply provisions of Section 142 of The Negotiable Instruments Act. Therefore the complainant shall present the complaint within a month after expiry of 15 days of service of notice to the accused.
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C.C.No.5156/2025
11. Therefore it is proper to consider whether the statutory requirements for constituting the offence under Section 25 of he Payment and Settlement Systems Act 2007 r/w Section 138 of Negotiable Instruments Act is complied by the complainant. The PW 1 has deposed that the accused availed personal loan facility of Rs.4,08,500/- from the complainant and towards repayment of liability, the accused issued E NACH Mandate UMRN NO. UTIB702408230013187 registered on 03.08.2023 drawn on Axis Bank. He has deposed that as per the instructions of the accused they have processed the mandate for collection for a sum of Rs.2,55,481/- and it is dishonoured for the reason balance insufficient in the account of the accused on 29-10-2024. The web copy of NACH is marked as Ex.P 6. The PW 1 has produced said debit transaction return memo as Ex. P7. As provided under Section 25(4) of The Payment and Settlement Systems Act and also under Section 146 of Negotiable Instruments Act law presumes that on production of banker slip or memo having thereon the official mark denoting that the cheque/ electronic fund transfer has been dishonored, presume the fact of dishonor of such said cheque, unless and until same is disproved. The accused has not disputed the dishonour of NACH mandate. The PW1 has deposed that they have got issued legal notice dated 05-11-2024 calling upon the accused to pay the due amount as per Ex.P8. The PW 1 has 10 C.C.No.5156/2025 deposed that said notice issued through RPAD is duly served on the accused on 07-11-2024. Evidencing the same the complainant has produced the postal receipt and acknowledgment card as Ex.P 9 and Ex.P 10. The complaint is filed before this court on 16-12-2024. Thus the complainant has complied all the statutory requirements for constitution of offence under Section 25 of The Payment and Settlement Systems Act 2007 r/w Section 138 of Negotiable Instruments Act. Therefore, the complainant is entitled for presumption under Section 25 (2) of The Payment and Settlement Systems Act 2007. Under Section 139 of Negotiable Instrument Act also there is similar presumption. The provisions of Section 139 of Negotiable Instrument Act reads as under:-
139- Presumption in favour of holder - It should be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
12. Hon'ble Supreme court in a decision reported in (2010) 11 SCC 411 between Rangappa V/s Sri Mohan has held that -
The presumption mandated by Section 139 of the act does indeed include the existence of a legally enforceable debt or liability. It is also observed that Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable 11 C.C.No.5156/2025 instrument. It is also held that in such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant caused cannot be expected to discharge an unduly high slandered or proof.
13. Therefore the principles laid down in this decision can also be made applicable to the proceedings for the offence under Section 25 of The Payment and Settlement Systems Act 2007. In view of the principles laid down in these decisions the onus is on the accused to rebut the presumption. The accused has not issued any reply at the initial stage at the time of service of the legal notice. After plea of the accused is recorded, he has not contested the case to rebut the presumption. The complainant and accused appeared before the court and filed joint memo reporting settlement. Therefore there is no defence from the accused to rebut the presumption under Section 25 (3) of The Payment and Settlement Systems Act 2007 r/w Section 139 of Negotiable Instruments Act. As discussed above all the statutory requirements are complied. The accused has failed to rebut the presumption under Section 25 (3) of The Payment and Settlement Systems Act 2007 r/w Section 139 of Negotiable Instruments Act. Therefore this court concludes that the complainant has successfully proved that the accused has committed the offence punishable under Section 25 of The Payment and Settlement Systems Act 2007 r/w. Section 138 of 12 C.C.No.5156/2025 Negotiable Instruments Act. Therefore this court answers the above point No.1 in the Affirmative.
14. POINT NO. 2 : The complainant and the accused appeared before the court reporting amicable arrangement made by them for payment of due amount by the accused to the complainant and filed joint memo. Under the joint memo, they have reported that the matter has been settled and they have entered into settlement for payment of Rs.1,00,000/- towards full and final settlement in respect of due amount claimed in the case. The complainant has reported receipt of full amount of Rs.1,00,000/- from the accused by cash as per the joint memo filed by them. It appears that the accused and complainant have voluntarily agreed for said settlement.
15. Now it is proper to consider whether the accused may be acquitted in view of the payment made by the accused to the satisfaction of the complainant in respect of the claim of the complainant for compensation based on the cheque in question. In the decision reported in 2005 (10) SCC 632 (K.J.B.L.Rama Reddy V/s.Annapurna Seeds & Anr) it is held that the proceedings may be compounded and accused may be acquitted on payment of the due amount by the accused to the complainant to his satisfaction. Therefore even though the complainant has established the commission of the offence by the accused under Section 138 of Negotiable Instruments Act, 13 C.C.No.5156/2025 in view of settlement and payment of due amount, the accused is entitled for acquittal. Therefore this court answers the Point No. 2 in the Affirmative.
16. Point No.3 : IN view of the findings on above point Nos.1 and 2, the court proceeds to pass the following :
ORDER By exercising powers conferred under Section 278(1) of Bharathiya Nagarika Suraksha Sanhita the accused is acquitted the offence punishable under Section 25 of The Payment and Settlement Systems Act R/w Section 138 of Negotiable Instrument Act.
The bail bond of the accused and that of the surety if any shall be in force for a period of 6 months.
The accused is set at liberty.
[[ (Dictated to the Stenographer directly on the computer, typed by her, corrected and signed then pronounced by me in the open court on this the 1st day of August 2025).
(GOKULA.K) XXV A.C.J.M., BANGALORE CITY.
ANNEXURE LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
PW1 : Kiran Kashinathan LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P1 : Certified copy of Incorporation Certificate Ex.P2 : Board Resolution 14 C.C.No.5156/2025 Ex.P3 : Web copies of loan application Ex.P4 : Sanction letter Ex.P5 : Loan agreement Ex.P6 : NACH Ex.P7 : Return Memo Ex.P8 : Office copy of legal notice Ex.P9 : Postal receipt Ex.P10 : Postal acknowledgment.
LIST OF WITNESSES EXAMINED FOR THE ACCUSED:-
Nil
LIST OF DOCUMENTS MARKED FOR THE ACCUSED:- Digitally
signed by
Nil GOKULA K
GOKULA
Date:
K 2025.08.05
11:44:50
+0530
(GOKULA.K.)
XXV A.C.J.M., BANGALORE CITY.