Bangalore District Court
T.S. Sateesh vs N.Srinivas on 20 November, 2025
KABC0C0159042023
IN THE COURT OF XIV ADDL.CHIEF JUDICIAL
MAGISTRATE, MAYOHALL UNIT, BENGALURU
Dated this the 20th day of November, 2025
Present: Sri.SANTHOSH S.KUNDER., B.A.,LL.M.,
XIV Addl. C.J.M., Bengaluru.
JUDGMENT UNDER SECTION 355 of Cr.P.C
C.C.No. 55115/2023
Complainant T.S. Sateesh,
S/o Sree Rangachar,
Aged about 53 years,
Director, Hoysala Projects Pvt Ltd.,
Flat No.2, Infantry Road,
Near Hindu Press,
Bengaluru-560001.
(By Sri.Dilip Kumar, Advocate)
V/s
Accused Mr.N.Srinivas,
S/o Narayanappa,
Aged about 49 years,
R/at No.36, 19th Cross,
Bhuvaneshwari Nagar,
Dasarahalli, Bengaluru-560024.
(By Sri.G.R Gangadhara, Advocate)
Offence U/s 138 of Negotiable Instruments Act.
Plea of the Pleaded not guilty
accused
Final Order Accused is held guilty & convicted
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This complaint is filed under Section 200 of Cr.P.C,
for the offence punishable under Section 138 of the
Negotiable Instruments Act.
2. Complaint averments in brief:
2.1. Complainant is founder, Chairman and
Managing Director of Hoysala Projects Private Limited,
which is primarily focused on residential projects.
Complainant is a premier Developer in North Bangalore.
In the year 2020, he was looking for a land near
Devanahalli, Bangalore, for his new venture.
2.2. In the year 2020, the accused represented to
the complainant that he is involved in and real estate and
development activities and also assists the renowned
developers to procure lands; and he would assist the
complainant to purchase lands at Devanahalli Taluk. In
furtherance of his real estate business, he has
represented that he is absolute owner of Sy.No.108,
measuring 3-00 acres, situated at Lingadeeragollahalli
Village, Kundana Hobli, Devanahalli Taluk and also
agreement holder of property bearing Sy.Nos.19, 20, 21,
23, 24 and 99, totally measuring 11 acres 29 guntas and
expressed willingness to sell the said properties in favour
of the complainant. He has assured the complainant and
agreed to provide all the revenue records and identified
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the owners of the said properties to secure them for
executing sale agreement/sale deeds.
2.3. As the complainant was intending to purchase
and develop the properties, he has readily agreed to invest
on the same and paid the accused the advance amount of
₹1,70,50,000/- in the following manner:-
Sl. Amount Date Mode of transfer
No. (₹)
1. 80,00,000 18.03.2020 Account transfer
2. 72,45,000 20.03.2020 -do-
3. 8,05,000 -do- -do-
4. 5,00,000 19.09.2020 Mobile Account
transfer
5. 5,00,000 22.09.2020 -do-
2.4. After receiving ₹1,70,50,000/-, accused has
failed to execute registered sale deed of land bearing
Sy.Nos.19, 20, 21, 23, 24, 99 and 108. Complainant
learnt that accused has sold property bearing Sy.No.108
on 02.01.2021 to 3rd party and he has also became
confirming party to the sale of properties in respect of
land bearing Sy.Nos.19, 21, 24 and 99 on 02.01.2021 and
got the sale deed registered in favour of some other
developer by taking huge money. When the complainant
demanded him to refund the advance money, he has
issued the following cheques:-
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Cheque Cheque amount Drawn on
Number and (₹)
Date
211273 1,60,00,000 Axis Bank, Sahakar
15.03.2023 Nagar
211277 40,00,000 -do-
15.03.2023
2.5. Accused has assured the complainant that the
cheques would be honoured on its due date. As per the
assurance and promise of the accused, complainant has
presented said cheques for encashment through his
banker, viz., in HDFC Bank, Richmond Road, Bengaluru.
But, to his utter shock and dismay, both cheques were
dishonored with an endorsements 'Payment Stopped by
Drawer' and the same was informed to the complainant by
his banker by way of return memo dated 17.03.2023.
2.6. After the receipt of dishonor memo,
complainant has got issued a legal notice dated
08.04.2023 through RPAD calling upon the accused to
pay the amount covered under the dishonored cheques.
The said notice returned with endorsement 'intimation
delivered' on 12.04.2023 and 'unclaimed'. It is averred
that the accused has got stopped the payment of the
cheques with malafide intention. Therefore, this complaint
is filed.
3. This court took cognizance of the offence
punishable under Section 138 of N.I.Act. Complainant
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was examined on oath. As prima facie case made out,
criminal case was registered and accused was summoned.
4. Pursuant to the process, accused has
appeared before the court and admitted to bail. After
compliance of Section 207 of Cr.P.C, this court recorded
his plea. He has pleaded not guilty and claimed to be
tried.
5. Sworn statement affidavit of complainant
treated as evidence post-cognizance stage. Documents at
Ex.P-1 to 8 marked for the complainant.
6. Accused was examined under Section 313 of
Cr.P.C. He has denied the incriminating evidence. By way
of defence, he has examined himself as DW-1. Documents
at Ex.D1 to 12 marked.
7. During cross-examination of DW-1,
complainant got marked Ex.C1 to C3.
8. Heard argument on both side.
9. Advocate for complainant has argued that the
complainant gave money to the accused by way of bank
transfer which is reflecting in bank statement at Ex.P8.
Accused has set up defences that signatures on the
cheques are forged; demand notice not served; repaid
money to the complainant; and cheques are stolen. It was
argued that accused has admitted his liability towards the
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complainant by deposing in his examination-in-chief that
he gave some other cheques to complainant. In so far as,
defence regarding non-service of notice is concerned,
learned counsel has pointed out Ex.D10, which is
produced by the accused himself where his address is
shown, to which notice was sent. Said address has not
been disputed by the accused. In order to falsify the postal
endorsement appearing on Ex.P7, accused has not
examined postal authorities. It was argued that
complainant is not a party to the defence documents at
Ex.D2 to 5. Further, accused himself is not a party to
Ex.D6 to 9. Regarding defence of forgery of signatures on
the cheques is concerned, accused has not discharged the
evidential burden casted on him by securing his specimen
signature from his banker. Further, he has not taken any
action against the complainant regarding alleged forgery
of signatures and theft of cheques. Thus, he has failed to
substantiate his defences. Therefore, learned counsel has
prayed for convicting the accused. Complainant has relied
on following judgments:-
(i) Rajesh Jain V/s Ajay Singh;
[2023 (4) KCCR 3314]
(ii) Indo Automobiles V/s Jai Durga Enterprises;
[2008 AIR (SCW) 7436]; and
(iii) N.Parameswaran Unni V/s G.Kannan;
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[2017 AIR (SCW) 1681]
10. On the other hand, learned defence counsel
has argued that, during cross-examination dated
26.11.2024, PW-1 has clearly admitted except Ex.D1
(MOU), there is no other business transaction with the
accused. It was argued that complainant has failed to
prove service of demand notice on the accused. Therefore,
offence is not constituted as no cause of action arisen for
filing the complaint. Therefore, he has prayed for
acquitting the accused.
11. Learned defence counsel has cited following
judgments:-
(i) Saju V/s Shalimar Hardwares and another;
(2025:KER:48183);
(ii) Noorudheen V/s State of Kerala and another;
(2025:KER:55419)
12. I have perused the materials placed on
records.
13. Points for consideration:-
1. Whether the complainant has proved
that the accused has issued cheques
bearing No.211273 and 211277, both
dtd.15.03.2023 for ₹1,60,00,000/- and
₹40,00,000/-, respectively, drawn on
Axis Bank, Sahakar Nagar branch,
towards discharge of legally recoverable
debt/liability and the said cheques were
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dishonored for the reason 'Payment
Stopped by Drawer' and in spite of
issuance of statutory demand notice
dated 08.04.2023, he has failed pay the
amount covered under the cheques and
thereby committed the offence punishable
under Section 138 of N.I.Act?
2. What order?
14. The above points are answered as under:-
Point No.1 : In the Affirmative.
Point No.2 : As per final order; for the following:
REASONS
15. Point No.1:- In order to prove the case,
complainant has offered his evidence. He has filed
affidavit in lieu of oral examination-in-chief and got
marked as many as 8 documents at Ex.P1 to 8. Ex.P-1
and 2 are cheques; Ex.P-3 and 4 are bank endorsements;
Ex.P-5 is copy of the legal notice dated 08.04.2023; Ex.P-6
is postal receipt; Ex.P-7 is returned postal cover; and
Ex.P8 is bank statement of complainant.
16. Learned defence counsel has cross-examined
PW-1 at great length. Memorandum of Understanding
dated 18.03.2020 entered between the complainant and
the accused is not in dispute. In fact, accused has got
marked the same at Ex.D1 by confronting the same to
PW-1 during his cross-examination. It is elicited in his
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cross-examination that except Ex.D1, no other
transaction taken place between the complainant and the
accused. Payment of ₹1,70,50,000/- by the complainant
to the accused is also not disputed by the accused.
Relevant portion of deposition of PW-1 appearing in cross-
examination dated 26.11.2024 is extracted as under:-
"6. XXXX ಈ ಕೇಸಿಗೆ ಸಂಬಂಧಿಸಿದ MOU ಹೊರತುಪಡಿಸಿ
ನನ್ನ ಮತ್ತು ಆರೋಪಿ ಮಧ್ಯೆ ಬೇರೆ ಹಣಕಾಸಿನ ವ್ಯವಹಾರ
ನಡೆದಿಲ್ಲ. XXXX MOU ಪ್ರಕಾರ ನಾನು ಆರೋಪಿಗೆ
ರೂ.1,70,50,000/- ಗಳನ್ನು ಕೊಟ್ಟಿದ್ದೇನೆ ಎಂದರೆ
ಸರಿ.XXXX"
17. Further, during chief-examination dated
04.04.2025 accused has admitted that he has received
₹1,70,50,000/- from the complainant. Relevant portion of
deposition of DW-1 dated 04.04.2025 is extracted as
under:-
"4. XXXX ನನಗೆ ರೂ.1,70,50,000/- ಗಳು ಮಾತ್ರ
ತಲುಪಿದೆ. ಜವೀುನಿನ ಮಾಲೀಕರುಗಳಿಂದ ಜಮೀನಿನ
ದಾಖಲೆಗಳನ್ನು ಒದಗಿಸಿಕೊಟ್ಟು, ಅವುಗಳನ್ನು ದೂರುದಾರರಿಗೆ
ಕೊಡಿಸುವ ಸಲುವಾಗಿ ಆ ಹಣವನ್ನು ದೂರುದಾರರು ನನಗೆ
ಕೊಟ್ಟಿರುತ್ತಾರೆ. ಅವರು ನನಗೆ ಆ ಹಣವನ್ನು ಸಾಲವಾಗಿ
ಕೊಟ್ಟಿಲ್ಲ ಮತ್ತು ಜಮೀನು ಖರೀದಿಯ ಬಾಬ್ತು ಮುಂಗಡವಾಗಿ
ಕೊಟ್ಟಿಲ್ಲ."
18. Apart from the above admission, during cross-
examination dated 24.04.2025 following elicitations are
made from DW-1:-
"ದಿ.18.03.2020 ರಂದು ದೂರುದಾರರು ನನ್ನ ಬ್ಯಾಂಕ್
ಖಾತೆಗೆ 80 ಲಕ್ಷ ರೂಪಾಯಿಗಳನ್ನು ವರ್ಗಾವಣೆ ಮಾಡಿದ್ದಾರೆ
ಎಂದರೆ ಸರಿ. ಅದೇ ರೀತಿ ದಿನಾಂಕ 20.03.2020 ರಂದು
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ದೂರುದಾರರು ನನ್ನ ಬ್ಯಾಂಕ್ ಖಾತೆಗೆ ರೂ.8,05,047/-
ಮತ್ತು ರೂ.72,45,000/- ಗಳನ್ನು ವರ್ಗಾವಣೆ ಮಾಡಿದ್ದಾರೆ
ಎಂದರೆ ಸರಿ. ದಿ.19.09.2020 ಮತ್ತು 22.09.2020
ರಂದು ಅವರು ನನಗೆ ತಲಾ ರೂ.5,00,000/- ಗಳನ್ನು
ವರ್ಗಾವಣೆ ಮಾಡಿದ್ದಾರೆ ಎಂದರೆ ಸರಿ. ಹೀಗೆ ಅವರು ನನಗೆ ಒಟ್ಟು
ರೂ.1,70,50,000/- ಗಳನ್ನು ಕೊಟ್ಟಿದ್ದಾರೆ ಎಂದರೆ ಸರಿ.
ಸರ್ವೇ ನಂ.108 ರಲ್ಲಿನ 3 ಎಕರೆ ಜಮೀನಿಗೆ ನಾನು ಮಾಲೀಕ
ಹಾಗೂ ಸರ್ವೇ ನಂ.19, 20, 21, 23, 24 ಮತ್ತು 99
ಒಟ್ಟು 11 ಎಕರೆ 29 ಗುಂಟೆ ಜಮೀನಿಗೆ ಸಂಬಂಧಿಸಿದಂತೆ ನಾನು
ಕ್ರಯದ ಕರಾರುಗಳನ್ನು ಹೊಂದಿದ್ದೇನೆ ಎಂದು ಹೇಳಿ
ದೂರುದಾರರಿಂದ ನಾನು ರೂ.1,70,50,000/- ಗಳನ್ನು
ಪಡೆದುಕೊಂಡಿದ್ದೇನೆ ಎಂದರೆ ಸರಿ."
19. Further, during cross-examination dated
03.07.2025, it is elicited as under:-
"16. XXXX ದೂರುದಾರರು ನನ್ನ ಬ್ಯಾಂಕ್ ಖಾತೆಗೆ ವರ್ಗಾವಣೆ
ಮಾಡಿದ್ದ ರೂ.1,70,00,000/- ಹಣವನ್ನು ಮರುಪಾವತಿ
ಮಾಡಲು ನಾನು ಅವರಿಗೆ ನಿ.ಪಿ.1 ಮತ್ತು ನಿ.ಪಿ.2 ಚೆಕ್ಕುಗಳನ್ನು
ಕೊಟ್ಟಿದ್ದೇನೆ ಎಂದರೆ, ಬೇರೆ ಚೆಕ್ಕುಗಳನ್ನು ಕೊಟ್ಟಿದ್ದೆ ಎಂದು
ಸಾಕ್ಷಿಯು ಹೇಳುತ್ತಾರೆ. XXXX"
20. Above, elicitations find support from bank
statement of complainant at Ex.P8. Thus, it is proved that
complainant has paid ₹1,70,50,000/- to the accused for
the purpose of procuring lands situated in various survey
numbers of Lingadeeragollahalli Village, Devanahalli
Taluk.
21. Complainant is contending that since the
accused has failed to procure the lands in his favour,
upon demand for refund of said money, accused has
issued the subject cheques. In this context, it is not out of
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mention to note that the accused has admitted that
cheques at Ex.P1 and 2 belong to him. However, he has
denied his signatures and writings on the cheques. He has
asserted that he has issued some other cheques to
complainant towards refund of ₹1,70,50,000/-.
22. One of the defences put forth by the accused is
that his cheques were stolen and signatures on the
cheques are forged. During the course of cross-
examination of PW-1 at para No.10, suggestions were
given attributing theft of cheques and forgery of
signatures. It was suggested that the cheques that were
kept in the office of the accused were stolen. Said
suggestion and answer elicited thereto as appearing in
para No.10 of deposition of PW-1 is extracted as under:-
"10. XXXX ನಾನು ಆರೋಪಿಯ ಜೊತೆ ವ್ಯವಹಾರಿಕವಾಗಿ
ಚೆನ್ನಾಗಿದ್ದಾಗ, ಅವರ ಕಛೇರಿಗೆ ಹೋಗಿ ಅವರಿಗೆ ಸೇರಿದ
ಚೆಕ್ಕುಗಳನ್ನು ಕಳ್ಳತನ ಮಾಡಿದ್ದೇನೆಂದರೆ, ಅವರ ಕಛೇರಿ ಎಲ್ಲಿದೆ
ಎಂದು ನನಗೆ ಗೊತ್ತಿಲ್ಲ ಎಂದು ಸಾಕ್ಷಿಯು ಹೇಳುತ್ತಾರೆ. XXXX"
23. On the contrary, in chief-examination of DW-1
at para No.2, he has deposed as under:-
"2. ದೂರುದಾರರ ಕಚೇರಿಯಲ್ಲಿ ನನಗೆ ಸೇರಿದ ದಾಖಲಾತಿಗಳು,
ಜಮೀನಿನ ದಾಖಲೆಗಳು ಮತ್ತು ಚೆಕ್ ಪುಸ್ತಕವನ್ನು ನಾನು
ಇಡುತ್ತಿದ್ದೆ. ಹಾಗೆ ಇಟ್ಟ ಚೆಕ್ ಪುಸ್ತಕದಲ್ಲಿ ದೂರುದಾರರು ಎರಡು
ಚೆಕ್ಕುಗಳನ್ನು ಕದ್ದಿದ್ದಾರೆ.XXXX"
24. At one breath, accused is contending that the
cheques that were kept in his office were stolen whereas,
on the other, he is asserting that the complainant has
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stolen two cheques out of the cheque book that was kept
in the office of complainant. Thus, accused is not certain
as to where the cheque book/cheques were kept and
stolen. During the course of cross-examination dated
04.04.2025, DW-1 has deposed thus:-
"5. XXXX ವ್ಯಾಪಾರ ಮಾಡುವ ಸಲುವಾಗಿ ದೂರುದಾರರು
ನನ್ನ ಕಚೇರಿಗೆ ಹಾಗೂ ನಾನು ಅವರ ಕಚೇರಿಗೆ ಹೋಗಿ
ಬರುತ್ತಿದ್ದೆವು. ದೂರುದಾರರು ಆ ಎರಡು ಚೆಕ್ಕುಗಳನ್ನು ಯಾವಾಗ
ಕದ್ದಿದ್ದಾರೆಂದು ನನಗೆ ಗೊತ್ತಿಲ್ಲ. ಆ ಚೆಕ್ಕುಗಳನ್ನು ಅವರು
ಕದ್ದಿದ್ದಾರೆಂದು ಈ ಕೇಸನ್ನು ಹಾಕಿದ ನಂತರ ನನಗೆ ಗೊತ್ತಾಯಿತು.
ಚೆಕ್ಕುಗಳನ್ನು ಕದ್ದ ವಿಷಯ ನನಗೆ ಗೊತ್ತಾದ ನಂತರ ದೂರು
ಕೊಡಲು ಕೊಡಿಗೆಹಳ್ಳಿ ಪೊಲೕಿಸ್ ಠಾಣೆಗೆ ನಾನು ಹೋಗಿದ್ದೆ.
ನ್ಯಾಯಾಲಯದಲ್ಲಿ ಕೇಸು ವಿಚಾರಣೆಯಲ್ಲಿದ್ದಾಗ ದೂರು
ಸ್ವೀಕರಿಸಲು ಆಗುವುದಿಲ್ಲ ಎಂದು ಪೊಲೀಸರು ಹೇಳಿದರು.
XXXX"
25. In cross-examination dated 03.07.2025 he has
deposed thus:-
"14. 2023 ರಲ್ಲಿ ನಾನು ಈ ಕೇಸಿನಲ್ಲಿ ಹಾಜರಾದ ನಂತರ,
ಕೇಸಿನಲ್ಲಿ ಹಾಜರುಪಡಿಸಲಾದ ದಾಖಲಾತಿಗಳನ್ನು ನನ್ನ ವಕೀಲರ
ಮೂಲಕ ಪರಿಶೀಲಿಸಿದ್ದೇನೆ. ಚೆಕ್ಕುಗಳಲ್ಲಿ ನನ್ನ ಸಹಿ forgery
ಆಗಿದೆ ಎಂದು ನನ್ನ plea ಮತ್ತು 313 Statement ಅನ್ನು
ದಾಖಲಿಸುವಾಗ ನಾನು ನ್ಯಾಯಾಲಯದಲ್ಲಿ ಹೇಳಲಿಲ್ಲ. ಸಹಿ
forgery ಆಗಿದೆಯೇ ಎಂದು ಕೇಳದ ಕಾರಣ ನಾನು ಹೇಳಲಿಲ್ಲ
ಎಂದು ಸಾಕ್ಷಿಯು ಸ್ವತಃ ಹೇಳುತ್ತಾರೆ. ದೂರುದಾರರು ನನ್ನ
ಸಹಿಗಳನ್ನು forgery ಮಾಡಿದ್ದಾರೆ ಎಂದು ನಾನು ಅವರ
ವಿರುದ್ದ ಪೊಲೀಸರಿಗೆ ದೂರು ಕೊಡಲಿಲ್ಲ. Forgery ಅವರು
ನನ್ನ ಸಹಿಗಳನ್ನು ಮಾಡಿದ್ದಾರೆ ಎಂದು ಅವರ ವಿರುದ್ದ ನಾನು
ಕ್ರಮ ಜರುಗಿಸಲಿಲ್ಲ. ದೂರುದಾರರು ಚೆಕ್ಕುಗಳನ್ನು ಬ್ಯಾಂಕಿಗೆ
ಹಾಜರು ಮಾಡುತ್ತಾರೆಂದು ತಿಳಿದು Stop payment
ಸೂಚನೆಯನ್ನು ಬ್ಯಾಂಕಿಗೆ ಕೊಟ್ಟಿದ್ದೇನೆ ಎಂದರೆ, ಆ ಚೆಕ್ಕುಗಳ
ಜೊತೆ ಇನ್ನೂ ಹಲವಾರು ಚೆಕ್ಕುಗಳು ಇದ್ದವು ಎಂದು ಸಾಕ್ಷಿಯು
ಹೇಳುತ್ತಾರೆ. ಚೆಕ್ಕುಗಳು ಕಳೆದು ಹೋಗಿವೆ ಎಂದು ನಾನು ಪ್ರತ್ಯೇಕ
ದೂರು ಕೊಡಲಿಲ್ಲ. ಎರಡು ಚೆಕ್ಕುಗಳನ್ನು ದೂರುದಾರರು
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ಕಳ್ಳತನ ಮಾಡಿದ್ದಾರೆ ಎಂದು ಅವರ ವಿರುದ್ದ ನಾನು ದೂರು
ಕೊಡಲಿಲ್ಲ. ಚೆಕ್ಕುಗಳು ಕಳ್ಳತನ ಆಗಿವೆ ಎಂಬ ಕಾರಣಕ್ಕಾಗಿ
Stop payment ಸೂಚನೆಯನ್ನು ಬ್ಯಾಂಕಿಗೆ ಕೊಟ್ಟಿದ್ದೇನೆ
ಎಂದು ಹೇಳಲು ಅದಕ್ಕೆ ಪೂರಕ ದಾಖಲೆಗಳನ್ನು ನಾನು
ನ್ಯಾಯಾಲಯಕ್ಕೆ ಹಾಜರುಪಡಿಸಲಿಲ್ಲ."
26. From the above extracted evidence it is seen
that the accused is asserting that he has come to know
about theft of cheque after he appeared in this case.
Significantly, even after coming to know about alleged
theft and forgery of signatures, he has not lodged
complaint to police. He has also not taken legal action
against the complainant in this regard. Though, he has
asserted that he had been to Kodigehalli Police Station to
lodge complaint and that the police refused to receive the
complaint, no documents produced to substantiate the
said assertion. Assuming for the argument sake that the
police refused to take complaint, he had option to
approach the jurisdictional magistrate by way of private
complaint. But, no such effort is made. It is significant to
note that at the time of recording 313 of statement, he has
not chosen to offer any explanation on incriminating
evidence. Except bare denial absolutely no explanation is
offered to a specific question regarding drawing of subject
cheques. Nothing prevented him from explaining the
circumstances under which the cheques came to the
hands of the complainant and regarding alleged forgery of
14
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signatures. Inconsistency, in the stand taken by the
accused regarding place of theft coupled with inaction on
the part of the accused to take action regarding alleged
theft and forgery, makes the version of the defence
regarding theft of cheque and forgery of signatures
doubtful and as such, the same cannot be believed.
27. It is pertinent to point out that the cheques
were dishonored for the reason 'payment stopped by
drawer', vide endorsements at Ex.P3 and 4, and not for
the reason of 'signature differs'. Section 146 of Negotiable
Instruments Act provides that in respect of very
proceedings under Chapter-XVII (Sections 138 to 148), the
court shall presume the fact of dishonor of cheque on
production of bank's slips or memo having thereon the
official mark denoting that the cheque has been
dishonored, unless and until such fact is disproved. In the
present case, as noted above, both cheques were
dishonored for the reason 'payment stopped by drawer'.
Had really, the signatures on the cheques are
mismatched, the bank would have refused to honour the
cheque for the reason 'signature does not match'.
28. Hon'ble Supreme Court in Ajitsinh Chehuji
Rathod V/s State of Gujarat and another; (2024) 4
SCC 453 held as under:-
"13. Section 118 sub-clause (e) of the NI Act
provides a clear presumption regarding
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indorsements made on the negotiable
instrument being in order in which they
appear thereupon. Thus, the presumption of
the indorsements on the cheque being
genuine operates in favour of the holder in
due course of the cheque in question which
would be the complainant herein. In case,
the accused intends to rebut such
presumption, he would be required to lead
evidence to this effect.
14. Certified copy of a document issued by a
Bank is itself admissible under the Bankers'
Books Evidence Act, 1891 without any
formal proof thereof. Hence, in an
appropriate case, the certified copy of the
specimen signature maintained by the Bank
can be procured with a request to the Court
to compare the same with the signature
appearing on the cheque by exercising
powers under Section 73 of the Indian
Evidence Act, 1872.
15. Thus, we are of the view that if at all, the
appellant was desirous of proving that the
signatures as appearing on the cheque
issued from his account were not genuine,
then he could have procured a certified copy
of his specimen signatures from the Bank
and a request could have been made to
summon the concerned Bank official in
defence for giving evidence regarding the
genuineness or otherwise of the signature on
the cheque.
16. However, despite having opportunity, the
accused appellant did not put any question
to the bank official examined in defence for
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establishing his plea of purported mismatch
of signature on the cheque in question and
hence, we are of the firm opinion that the
appellate Court was not required to come to
the aid and assistance of the appellant for
collecting defence evidence at his behest. The
presumptions under the NI Act albeit
rebuttable operate in favour of the
complainant. Hence, it is for the accused to
rebut such presumptions by leading
appropriate defence evidence and the Court
cannot be expected to assist the accused to
collect evidence on his behalf."
29. In the case on hand, except bald assertion that
the signature on the cheques are forged, accused has not
made any efforts to secure his specimen signature card
from the bank where he maintains the account. If at all
the accused is desirous of proving that the signatures
appearing on the cheque are not genuine, then he could
have procured a certified copy of his specimen signature
from the bank and a request could have been made to
summon the bank official concerned in defence for giving
evidence regarding the genuineness or otherwise of the
signature on the cheque. But, he has not made any such
effort. On the contrary, during cross-examination at para
No.16 a specific suggestion was given to the effect that
cheques were issued towards repayment of money, DW-1
has answered that he has issued some other cheques.
However, to substantiate the said answer, nothing is
17
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placed on record. Therefore, it appears that defence of
theft of cheques and forgery is only an afterthought in
order to defeat the claim of the complainant. Thus, this
court holds that defence regarding forgery of signatures
not established.
30. Now coming to next defence of the accused
regarding non-service of notice is concerned, accused has
produced copy of his Aadhaar Card at Ex.D12 to contend
that demand notice was sent to wrong address.
Complainant has produced a copy of demand notice at
Ex.P6 which was addressed to No.36, 19th Cross,
Bhuvaneshwari Nagar, Dasarahalli, Bengaluru-560024,
whereas, address appearing on Ex.D12 is, No.62, Defence
Layout, Kattigenahallli, Yelahanka, Bengaluru-560064.
Both addresses are altogether different.
31. It is an undisputed fact that registered demand
notice sent to accused returned unserved with postal
endorsement 'door locked/unclaimed' and not for the
reason 'addressee is not residing in the given address'.
Accused is contending that notice not served on him for
the reason that he is not residing in the said address. In
this context, it is to be noted that the complainant and
another have filed PCR.No.79/2022 against the accused
herein and one P.Anjanappa before Senior Civil Judge and
JMFC, Devanahalli, a copy of which is at Ex.D10. In the
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said complaint, address of accused herein is shown as
No.36, 19th Cross, Bhuvaneshwari Nagar, Dasarahalli,
Bengaluru-560024. It is significant to note that it is the
accused who produced the said document during cross-
examination of PW-1. Relevant portion of deposition of
PW-1 at para No.13 is extracted as under:-
"13. ದೇವನಹಳ್ಳಿ ನ್ಯಾಯಾಲಯದಲ್ಲಿ ನಾನು ಮತ್ತು M/s
Arvind Homes Private Limited ಸೇರಿ ಆರೋಪಿಯ
ವಿರುದ್ಧ PCR No.79/2022 ರಂತೆ ಖಾಸಗಿ ದೂರನ್ನು
ಸಲ್ಲಿಸಿದ್ದೇನೆ ಮತ್ತು ಅದರ ದೃಡೀಕೃತ ನಕಲನ್ನು ನನಗೆ ಈಗ
ತೋರಿಸಲಾಗಿದೆ ಎಂದರೆ, ಸಾಕ್ಷಿಯು ಹೌದು ಎನ್ನುತ್ತಾರೆ. ಸಾಕ್ಷಿಗೆ
ತೋರಿಸಿದ PCR No.79/2022 ರ ಖಾಸಗಿ ದೂರಿನ
ದೃಡೀಕೃತ ನಕಲನ್ನು ನಿಡಿ.10 ಎಂದು
ಗುರುತಿಸಲಾಯಿತು.XXXX"
32. During cross-examination dated 03.07.2025, it
is extracted thus from DW-1:-
"11. ಪೊಲೀಸರು ನನಗೆ ನೋಟೀಸು ಕೊಟ್ಟಾಗ ನಿಡಿ-10
ದಾಖಲಾದ ವಿಷಯ ನನಗೆ ಗೊತ್ತಾಯಿತು. ಅದು 2022 ನೇ
ಇಸವಿ ಆಗಿತ್ತು. ವಿಳಾಸದಲ್ಲಿ ನಾನು ಯಾವತ್ತೂ ವಾಸ ಇರಲಿಲ್ಲ.
ನಿಡಿ-10 ರಲ್ಲಿ ತೋರಿಸಿದ ನಿಡಿ-10 ರಲ್ಲಿ ತೋರಿಸಿದ ವಿಳಾಸ
ತಪ್ಪು ಇದೆ ಎಂದು ನಾನು ಪೊಲೀಸರಿಗೆ ಹೇಳಿಕೆ ಕೊಡಲಿಲ್ಲ. ನಿಡಿ-
10 ಮತ್ತು ಈ ಕೇಸಿನ ದೂರಿನಲ್ಲಿ ನೀಡಿರುವ ನನ್ನ ವಿಳಾಸ ಒಂದೇ
ಎಂದರೆ ಸರಿ. ನನಗೆ ದೂರುದಾರರು ಕಳುಹಿಸಿದ ನೋಟೀಸು Door
locked ಎಂಬ ಅಂಚೆ ಹಿಂಬರಹದೊಂದಿಗೆ ವಾಪಸ್ಸು ಬಂದಿದೆ
ಎಂದರೆ ನನಗೆ ಗೊತ್ತಿಲ್ಲ. ನನ್ನ ವಿಳಾಸ ಬದಲಾವಣೆ ಆಗಿದೆ ಎಂದು
ನಾನು ದೂರುದಾರರಿಗೆ ನೋಟೀಸನ್ನು ಕೊಡಲಿಲ್ಲ."
33. Demand notice pertaining to this case is dated
08.04.2023 whereas, private complaint at Ex.D10 was
filed on 17.02.2022. It is elicited that accused came to
know about filing of private complaint at Ex.D10 when the
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police issued notice to him in the year 2022. It is elicited
during cross-examination of accused that he has not
stated before the police that address shown in Ex.D10 is
incorrect. He has also not given notice to complainant
regarding change of his address. Assuming for argument
sake that the accused is not residing in the address,
postman would have endorsed that 'addressee not
residing in the given address'. As noted above, registered
notice was returned for the reason 'door
locked/unclaimed'.
34. Section 114 of Indian Evidence Act provides
that the court may presume the existence of any fact
which it thinks likely to have happened. Illustration (e) to
Section 114 provides that the court may presume that
every judicial and official acts have been regularly
performed. Therefore, unless and until contrary is proved,
postal shara appearing on Ex.P7 has to be presumed to be
correct. In order to disprove the correctness of postal
shara, accused has not chosen to examine the postman
concerned. He has also not disputed address appearing on
Ex.D10 before any other authority. On the other hand,
police issued notice to him to very address. These
circumstances lead to me to the conclusion that demand
notice was sent to the correct address of the accused.
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35. It is true that address appearing on Ex.D12 is
different address. In this context, it is to be noted that the
person may be having different addresses and he may
reside in different addresses at different point of time.
That does not mean that either of the address is incorrect.
Hon'ble Supreme Court in catena of cases has held that
when a notice is sent by registered post and is returned
with postal endorsement 'refused' or 'not available in the
house' or 'house locked' or 'shop closed' or 'addressee not
in station', due service has to be presumed.
36. In C.C.Alavi Haji V/s Palapetty Muhammed
and another; (2007) 14 SCC 750, Hon'ble Supreme
Court observed that:-
"13. According to Section 114 of the Act, read
with illustration (f) thereunder, when it appears to
the Court that the common course of business
renders it probable that a thing would happen,
the Court may draw presumption that the thing
would have happened, unless there are
circumstances in a particular case to show that
the common course of business was not followed.
Thus, Section 114 enables the Court to presume
the existence of any fact which it thinks likely to
have happened, regard being had to the common
course of natural events, human conduct and
public and private business in their relation to the
facts of the particular case. Consequently, the
court can presume that the common course of
business has been followed in particular cases.
When applied to communications sent by post,
Section 114 enables the Court to presume that in
the common course of natural events, the
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communication would have been delivered at the
address of the addressee. But the presumption
that is raised under Section 27 of the G.C. Act is a
far stronger presumption. Further, while Section
114 of Evidence Act refers to a general
presumption, Section 27 refers to a specific
presumption. For the sake of ready reference,
Section 27 of G.C. Act is extracted below:
27. Meaning of service by post. -
Where any Central Act or
Regulation made after the
commencement of this Act
authorizes or requires any
document to be served by post,
whether the expression serve or
either of the expressions give or
send or any other expression is
used, then, unless a different
intention appears, the service shall
be deemed to be effected by
properly addressing, pre-paying
and posting by registered post, a
letter containing the document, and,
unless the contrary is proved, to
have been effected at the time at
which the letter would be delivered
in the ordinary course of post.
14. Section 27 gives rise to a presumption that
service of notice has been effected when it is sent
to the correct address by registered post. In view
of the said presumption, when stating that a
notice has been sent by registered post to the
address of the drawer, it is unnecessary to
further aver in the complaint that in spite of the
return of the notice unserved, it is deemed to have
been served or that the addressee is deemed to
have knowledge of the notice. Unless and until
the contrary is proved by the addressee, service
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of notice is deemed to have been effected at the
time at which the letter would have been
delivered in the ordinary course of business. This
Court has already held that when a notice is sent
by registered post and is returned with a postal
endorsement refused or not available in the house
or house locked or shop closed or addressee not
in station, due service has to be presumed. [Vide
Jagdish Singh Vs. Natthu Singh ; State of M.P. Vs.
Hiralal & Ors. and V.Raja Kumari Vs.
P.Subbarama Naidu & Anr. ] It is, therefore,
manifest that in view of the presumption
available under Section 27 of the Act, it is not
necessary to aver in the complaint under Section
138 of the Act that service of notice was evaded
by the accused or that the accused had a role to
play in the return of the notice unserved."
37. In Indo Automobiles (supra), Hon'ble
Supreme Court held:-
"8. Admittedly, notice under Section 138B of
the Negotiable Instruments Act was sent to the
respondents through registered post and
under a certificate of posting on their correct
address of the respondents. The High Court
had quashed proceeding on the ground that
although notice through registered post and
also under certificate of posting were sent by
the appellant/ complainant to the respondents
but because of the endorsement of the postal
peon, the service could not be said to have
been effected. In our view, the High Court was
not justified in holding that service of notice
could not be found to be valid. In K.Bhaskaran
vs. Sankaran Vaidhyan Balan & Anr. [1999 (7)
SCC 510], it has been held that the context of
section 138B of the Negotiable Instruments Act
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invites a liberal interpretation favouring the
person who has the statutory obligation to give
notice under the Act because he must be
presumed to be the loser in the transaction
and provision itself has been made in his
interest and if a strict interpretation is asked
for that would give a handle to the trickster
cheque drawer. It is also well settled that once
notice has been sent by registered post with
acknowledgment due in a correct address, it
must be presumed that the service has been
made effective. We do not find from the
endorsement of the postal peon that the postal
peon was at all examined. In V. Raja Kumari
vs. P. Subbarama Naidu & Anr. [2004 (8) SCC
774], again this Court reiterated the same
principle and held that the statutory notice
under Sections 138 and 142 of the Negotiable
Instruments Act, 1881 sent to the correct
address of the drawer but returning with the
endorsement must be presumed to be served
to the drawer and the burden to show that the
accused drawee had managed to get an
incorrect postal endorsement letter on the
complainant and affixed thereof have to be
considered during trial on the background
facts of the case."
38. In Parameswaran Unni (supra), Hon'ble
Supreme Court held as under:-
"11. A bare reading of Section 138 of the N.I.
Act, indicates that the purport of Section 138 is
to prevent and punish the dishonest drawers
of cheques who evade and avoid their liability.
As explained in Clause (b) of the proviso, the
payee or the holder of the cheque in due
course is necessarily required to serve a
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written notice on the drawer of the cheque
within fifteen days from the date of intimation
received from the bank about dishonour.
12. It is explicitly made clear under Clause (c)
of Section 138 of N.I. Act, that this gives an
opportunity to a drawer of the cheque to make
payment within fifteen days of receipt of such
notice sent by the drawee. It is manifest that
the object of providing Clause (c) is to avoid
unnecessary hardship. Even if the drawer has
failed to make payment within fifteen days of
receipt of such notice as provided under
Clause (c), the drawer shall be deemed to have
committed an offence under the Act and
thereafter the drawee would be competent to
file complaint against the drawer by following
the procedure prescribed under Section 142 of
the Act.
13. It is clear from Section 27 of the General
Clauses Act, 1897 and Section 114 of the
Indian Evidence Act, 1972, that once notice is
sent by registered post by correctly addressing
to the drawer of the cheque, the service of
notice is deemed to have been effected. Then
requirements under proviso (b) of Section 138
stands complied, if notice is sent in the
prescribed manner. However, the drawer is at
liberty to rebut this presumption.
14. It is well settled that interpretation of a
Statute should be based on the object which
the intended legislation sought to achieve. "It
is a recognized rule of interpretation of statutes
that expressions used therein should
ordinarily be understood in a sense in which
they best harmonize with the object of the
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statute, and which effectuate the object of the
Legislature. If an expression is susceptible of a
narrow or technical meaning, as well as a
popular meaning, the Court would be justified
in assuming that the Legislature used the
expression in the sense which would carry out
its object and reject that which renders the
exercise of its power invalid" (M/s New India
Sugar Mills Ltd., V/s Commissioner of Sales
Tax, AIR 1963 SC 1207).
15. This Court in catena of cases has held that
when a notice is sent by registered post and is
returned with postal endorsement "refused" or
"not available in the house" or "house locked"
or "shop closed" or "addressee not in station",
due service has to be presumed [Jagdish Singh
v. Natthu Singh, (1992) 1 SCC 647; State of
M.P v. Hiralal, (1996) 7 SCC 523 and V. Raja
Kumari v. P.Subbarama Naidu, 2004(4) RCR
(Criminal) 933 : (2004) 8 SCC 774]. Though in
process of interpretation right of an honest
lender cannot be defeated as has happened in
this case. From the perusal of relevant sections
it is clear that generally there is no bar under
the N.I. Act to send a reminder notice to the
drawer of the cheque and usually such notice
cannot be construed as an admission of non-
service of the first notice by the appellant as
has happened in this case."
39. In view of the observation made in the
aforesaid judgments by the Hon'ble Supreme Court,
judgments relied by the accused which is rendered by
Hon'ble High Court of Kerala in Saju (supra) and
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Noorudheen (supra), need not be considered. In the case
on hand, as noted above, registered notice sent to the
accused returned unserved for the reason 'door
locked/unclaimed'. Non-examination of postman/postal
authorities to falsify the endorsement, is fatal to the
defence of the accused. I have recorded a finding that
notice was posted to correct address of the accused
through registered post. Therefore, service is deemed to
have affected.
40. There can be no dispute that in matters
relating to offence under Section 138 of the Act, the
complainant has only to establish that the cheque is
genuine, presented within time and upon it being
dishonoured, due notice was sent within 30 days of such
dishonour, to which repayment must be received within
15 days, failing which a complaint can be preferred by the
complainant within one month as contemplated under
Section 142(1)(b) of the Act.
41. In Gimpex Private Limited vs. Manoj Goel,
[(2022) 11 SCC 705], Hon'ble Supreme Court has
highlighted the ingredients forming the basis of the
offence under Section 138 of the NI Act in the following
structure:
"(i) The drawing of a cheque by person on
do account maintained by him with the
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banker for the payment of any amount of
money to another from that account;
(ii) The cheque being drawn for the
discharge in whole or in part of any debt or
other liability;
(iii) Presentation of the cheque to the bank
arranged to be paid from that account;
(iv) The return of the cheque by the drawee
bank as unpaid either because the amount
of money standing to the credit of that
account is insufficient to honour the cheque
or that it exceeds the amount;
(v) A notice by the payee or the holder in
due course making a demand for the
payment of the amount to the drawer of the
cheque within 30 days of the receipt of
information from the bank in regard to the
return of the cheque; and;
(vi) The drawer of the cheque failing to
make payment of the amount of money to
the payee or the holder in due course
within 15 days of the receipt of the notice."
42. In K. Bhaskaran v. Sankaran Vaidhyan
Balan, [(1999) 7 SCC 510], the Hon'ble Court had
summarised the constituent elements of the offence in
similar terms by holding:
"14. The offence Under Section 138 of the
Act can be completed only with the
concatenation of a number of acts. The
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following are the acts which are
components of the said offence: (1) drawing
of the cheque, (2) presentation of the
cheque to the bank, (3) returning the
cheque unpaid by the drawee bank, (4)
giving notice in writing to the drawer of the
cheque demanding payment of the cheque
amount, (5) failure of the drawer to make
payment within 15 days of the receipt of
the notice."
43. The NI Act provides for two presumptions:-
Section 118 and Section 139. Section 118 of the Act inter
alia directs that it shall be presumed, until the contrary is
proved, that every negotiable instrument was made or
drawn for consideration. Section 139 of the Act stipulates
that "unless the contrary is proved, it shall be presumed,
that the holder of the cheque received the cheque, for the
discharge of, whole or part of any debt or liability".
Because Section 139 requires that the court "shall
presume" the fact stated therein, it is obligatory on the
court to raise this presumption in every case where the
factual basis for the raising of the presumption has been
establish. Therefore, the court will necessarily presume
that the cheque is issued towards discharge of a legally
enforceable debt/liability in two circumstances. Firstly,
when the drawer of the cheque admits issuance/execution
of the cheque and secondly, in the event where the
complainant proves that the cheque was issued/executed
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in his favour by the drawer. The circumstances set out
above form the fact(s) which bring about the activation of
the presumptive Clause. [Bharat Barrel & Drum Mfg.Co.
V/s Amin Chand Pyarelal, (1999) 3 SCC 35].
44. In the present case, accused has admitted
that cheques belong to him. He has failed to prove that
signature on the cheques is forged. On the other hand,
complainant could able to establish that signatures found
on the cheque are that of the accused. Once execution of
cheque by the accused is proved by the complainant,
burden shifts on the accused to prove otherwise. Since
the execution of the cheques is proved, limited question
to be considered, is whether the accused has discharged
his 'evidential burden' to arrive at the conclusion that the
presumption of law supplied by Section 139 has been
rebutted.
45. Discussing the burden of proof and
presumptions, Hon'ble Supreme Court in Rajesh Jain
V/s Ajay Singh, [(2023) 10 SCC 148] held as under:-
"Burden of Proof and Presumptions:
Conceptual Underpinnings
28. There are two senses in which the
phrase 'burden of proof' is used in the
Indian Evidence Act, 1872 ("Evidence Act,
hereinafter"). One is the burden of proof
arising as a matter of pleading and the
other is the one which deals with the
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question as to who has first to prove a
particular fact. The former is called the
"legal burden" and it never shifts, the
latter is called the 'evidential burden' and
it shifts from one side to the other. [See
Kundanlal v. Custodian (Evacuee
Property); AIR 1961 SC 1316.]
29. The legal burden is the burden of
proof which remains constant throughout
a trial. It is the burden of establishing the
facts and contentions which will support a
party's case. If, at the conclusion of the
trial a party has failed to establish these
to the appropriate standards, he would
lose to stand. The incidence of the burden
is usually clear from the pleadings and
usually, it is incumbent on the plaintiff or
complainant to prove what he pleaded or
contends. On the other hand, the
evidential burden may shift from one
party to another as the trial progresses
according to the balance of evidence given
at any particular stage; the burden rests
upon the party who would fail if no
evidence at all, or no further evidence, as
the case may be is adduced by either side
(See Halsbury's Laws of England, 4th
Edition para 13). While the former, the
legal burden arising on the pleadings is
mentioned in Section 101 of the Evidence
Act, the latter, the evidential burden, is
referred to in Section 102 thereof. [G.Vasu
V. Syed Yaseen Sifuddin Quadri; AIR
1987 AP 139. affirmed in Bharat Barrel &
Drum Mfg.Co. Vs. Amin Chand Payrelal;
(1999) 3 SCC 35]
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30. Presumption, on the other hand,
literally means "taking as true without
examination or proof". In Kumar Exports
v. Sharma Exports; (2009) 2 SCC 513, this
Court referred to presumption as "devices
by use of which courts are enabled and
entitled to pronounce on an issue
notwithstanding that there is no evidence
or insufficient evidence."
31. Broadly speaking, presumptions are
of two kinds, presumptions of fact and of
law. Presumptions of fact are inferences
logically drawn from one fact as to the
existence of other facts. Presumptions of
fact are rebuttable by evidence to the
contrary. Presumptions of law may be
either irrebuttable (conclusive
presumptions), so that no evidence to the
contrary may be given or rebuttable. A
rebuttable presumption of law is a legal
rule to be applied by the Court in the
absence of conflicting (Halsbury, 4th
Edition paras 111, 112). Among the class
of rebuttable presumptions, a further
distinction can be made between
discretionary presumptions ("may
presume") and compulsive or compulsory
presumptions ("shall presume")."
46. In P.Rasiya V/s Abdul Nazer and another;
(AIR Online 2022 SC 1373), the Hon'ble Apex Court
reiterated the position of law that once the complainant
discharges his initial burden of proving issuance of
cheque by the accused with his signature, the
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presumption under Section 139 of NI Act would arise and
burden shifts on the accused to rebut the same. Of
course, the degree of proof required to be proved by the
accused is not as high as the burden on the complainant
to prove the guilt of the accused, but he is required to
probabilize his defence. Hon'ble Supreme Court also
made it clear that once the initial burden of proving the
issuance of cheque by the accused with his signature is
proved by the complainant, the burden shifts on the
accused to prove the contrary and to rebut the
presumption.
47. In Rohitbhai Jivanlal Patel V/s State of
Gujarath [(2019) 18 SCC 106], the Hon'ble Apex Court
reiterated the legal position that once the complainant is
successful in discharging his initial burden to prove
issuance of cheque by the accused with his signature, the
presumption under Section 139 of NI Act would arise and
the burden shifts on the accused to rebut the legal
presumption. The Hon'ble Apex Court reiterated the
degree of proof to rebut the presumption on the part of
the accused and held in paragraph 18 as under:
"In the case at hand, even after
purportedly drawing the presumption
under Section 139 of the NI Act, the trial
court proceeded to question the want of
evidence on the part of the complainant
as regards the source of funds for
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advancing loan to the accused and want
of examination of relevant witnesses who
allegedly extended him money for
advancing it to the accused. This
approach of the trial court had been at
variance with the principles of
presumption in law. After such
presumption, the onus shifted to the
accused and unless the accused had
discharged the onus by bringing on
record such facts and circumstances as to
show the preponderance of probabilities
tilting in his favour, any doubt on the
complainant's case could not have been
raised for want of evidence regarding the
source of funds for advancing loan to the
appellant-accused....."
48. The Hon'ble Apex Court has placed reliance on
its earlier decision in Kumar Exports V/s Sharma
Carpets (AIR 2009 SC 1518) and extracted paragraphs
No.20 and 21, which read as under:
"20. The accused in a trial under
Section 138 of the Act has two
options. He can either show that
consideration and debt did not exist
or that under the particular
circumstances of the case the non-
existence of consideration and debt
is so probable that a prudent man
ought to suppose that no
consideration and debt existed. To
rebut the statutory presumptions an
accused is not expected to prove his
defence beyond reasonable doubt as
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is expected of the complainant in a
criminal trial. The accused may
adduce direct evidence to prove that
the note in question was not
supported by consideration and that
there was no debt or liability to be
discharged by him. However, the
court need not insist in every case
that the accused should disprove the
non-existence of consideration and
debt by leading direct evidence
because the existence of negative
evidence is neither possible nor
contemplated. At the same time, it is
clear that bare denial of the passing
of the consideration and existence of
debt, apparently would not serve the
purpose of the accused. Something
which is probable has to be brought
on record for getting the burden of
proof shifted to the complainant. To
disprove the presumptions, the
accused should bring on record such
facts and circumstances, upon
consideration of which, the court
may either believe that the
consideration and debt did not exist
or their non- existence was so
probable that a prudent man would
under the circumstances of the case,
act upon the plea that they did not
exist. Apart from adducing direct
evidence to prove that the note in
question was not supported by
consideration or that he had not
incurred any debt or liability, the
accused may also rely upon
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circumstantial evidence and if the
circumstances so relied upon are
compelling, the burden may likewise
shift again on to the complainant.
The accused may also rely upon
presumptions of fact, for instance,
those mentioned in Section 114 of
the Evidence Act to rebut the
presumptions arising under Sections
118 and 139 of the Act.
21. The accused has also an option
to prove the non-existence of
consideration and debt or liability
either by letting in evidence or in
some clear and exceptional cases,
from the case set out by the
complainant, that is, the averments
in the complaint, the case set out in
the statutory notice and evidence
adduced by the complainant during
the trial. Once such rebuttal evidence
is adduced and accepted by the
court, having regard to all the
circumstances of the case and the
preponderance of probabilities, the
evidential burden shifts back to the
complainant and, thereafter, the
presumptions under Sections 118
and 139 of the Act will not again
come to the complainant's rescue."
49. The Hon'ble Apex Court has also placed reliance
on its earlier decision in Rangappa Vs. Sri. Mohan
[(2010) 11 SCC 441] and extracted paragraphs No.26 and
28 which reads as under:
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"26. In light of these extracts, we are
in agreement with the respondent
claimant that the 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 Krishna Janardhan
Bhat 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 circumstances
therein. As noted in the citations,
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.
28. 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,
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the prosecution can fail. As clarified
in the citations, the accused can rely
on the materials submitted by the
complainant in order to raise such a
defence and it is conceivable that in
some cases the accused may not
need to adduce evidence of his/her
own."
50. Regarding degree of proof, to rebut the
presumption, the Hon'ble Apex Court held in paragraph
16 as under:-
"16. All of these circumstances led the High
Court to conclude that the accused had not
raised a probable defence to rebut the
statutory presumption. It was held that:
"6. Once the cheque relates to the
account of the accused and he
accepts and admits the signatures
on the said cheque, then initial
presumption as contemplated under
Section 139 of the Negotiable
Instruments Act has to be raised by
the court in favour of the
complainant. The presumption
referred to in Section 139 of the NI
Act is a mandatory presumption and
not a general presumption, but the
accused is entitled to rebut the said
presumption.
What is required to be established
by the accused in order to rebut the
presumption is different from each
case under the given circumstances.
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But the fact remains that a mere
plausible explanation is not expected
from the accused and it must be
more than a plausible explanation
by way of rebuttal evidence. In other
words, the defence raised by way of
rebuttal evidence must be probable
and capable of being accepted by
the court. The defence raised by the
accused was that a blank cheque
was lost by him, which was made
use of by the complainant. Unless
this barrier is crossed by the
accused, the other defence raised by
him whether the cheque was issued
towards the hand loan or towards
the amount spent by the
complainant need not be
considered...."
Hence, the High Court concluded that the
alleged discrepancies on part of the
complainant which had been noted by the
trial court were not material since the
accused had failed to raise a probable
defence to rebut the presumption placed on
him by Section 139 of the Act. Accordingly,
the High Court recorded a finding of
conviction."
51. Thus, it is settled proposition of law that the
complainant is required to discharge his initial burden of
issuance of cheque by the accused with his signature to
raise the legal presumption under Section 139 of NI Act.
When the legal presumption arises, the burden shifts on
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the accused to rebut the same by probabilizing his
defence.
52. In view of the settled principles, complainant
having proved payment of ₹1,70,50,000/- to accused and
issuance of cheques, burden is on the accused to
substantiate the defence that the subject cheques are not
issued for consideration which the cheques represent.
But, he has failed to discharge the burden of establishing
his defence. Accused has relied on sale deeds at Ex.D2 to
9. In so far as Ex.D2 to 5 is concerned, complainant is not
a party. Accused is not a party to Ex.D6 to 9. Nothing is
elicited in the cross-examination of PW-1, in so far as of
said sale transactions are concerned. Therefore, the said
documents do not help the accused to substantiate his
defence. Under MOU at Ex.D1, accused was obligated to
procure lands to the complainant from respective owners.
Accused has contended that he had invested about ₹12
crore on the said lands. He has failed to substantiate that
complainant is also one of the vendors and conveyed
those lands to Aravind Homes. Therefore, this court
opines that defence documents at Ex.D2 to 9 do not in
anyway help the accused in the present proceeding.
53. Prima facie, cheques at Ex.P-1 and 2 are
drawn from the bank account of the accused.
Indisputably, cheques were presented for encashment well
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within its validity and dishonoured on 17.03.2023 for the
reason 'payment stopped by drawer'. Thereafter,
complainant has issued statutory notice dated
08.04.2023, calling upon the accused to pay the amount
covered under the dishonored cheques. This court has
already recorded a finding that service is deemed to have
effected. Indisputably, the accused has not complied with
the demand made in the legal notice. Therefore, by
statutory fiction, offence is deemed to have committed.
Accused has failed to probabilize his defence to dislodge
the statutory presumption. Therefore, this court holds
that the complainant has proved that the accused has
committed the offence punishable under Section 138 of
N.I.Act. Accordingly, I answer Point No.1 in the
Affirmative.
54. Point No.2:-Punishment prescribed for the
offence under Section 138 of Negotiable Instruments Act
is imprisonment for a period which may extend to two
years or with fine which may extend to twice the amount
of the cheque or with both. Object of Chapter-XVII of the
Negotiable Instruments Act, which prescribes punishment
for the dishonour of the cheque is both punitive as well as
compensatory and restitutive. In R.Vijayan V/s Baby and
another (AIR 2012 SC 528), Hon'ble Supreme Court has
observed that Chapter-XVII of the N.I. Act is an unique
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exercise which blurs the dividing line between civil and
criminal jurisdictions and it provides a single forum and
single proceeding for enforcement of criminal liability and
also for the enforcement of the civil liability i.e., for
realization of the cheque amount and thereby obviating
the need for the creditor to move to different forums for
the relief. Hon'ble Apex Court has reiterated that the
apparent intention is to ensure that not only the offender
is punished, but also ensure that the complainant
invariably receives the amount of cheque along with
compensation. Hon'ble Supreme Court has further
observed that a stage has reached when most of the
complainants in particular the financial institutions view
the proceedings under Section 138 of N.I. Act as a
proceeding for recovery of the cheque amount and
therefore, the punishment of the drawer of the cheque for
the offence of dishonour become secondary. The said
judgment is relied by Hon'ble High Court of Karnataka in
M/s. Banavathy & Company V.s Mahaeer Electro Mech
(P) Ltd., and others, (NC: 2025:KHC:25140).
55. Keeping in mind the principles laid down in
the aforesaid judgments, sentence has to be passed. In
the presence case, complainant has paid a sum of
₹1,70,50,000/- to accused way back in the year 2020.
Accused has failed to procure the lands to the
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complainant as agreed under MOU at Ex.D1. Subject
cheques were issued by the accused towards refund of
said amount on 15.03.2023. Complainant is deprived of
the amount covered under the cheques which is rightfully
due to him since March 2023. Keeping these in mind, I
impose fine of ₹2,75,00,000/- (Rupees Two Crore Seventy
Five Lakhs Only) and out of the said amount, it is just and
proper to award a sum of ₹2,74,90,000/- (Rupees Two
Crore Seventy Four Lakhs and Ninety Thousand Only) as
compensation to the complainant as provided under
Section 357(1)(b) of Cr.P.C and the remaining sum of
₹10,000/- (Rupees Ten Thousand Only) shall be defrayed
to State. In view of the findings recorded above, I proceed
to pass the following:
ORDER
Acting under Section 255(2) of Cr.P.C., accused is held guilty and convicted for the offence punishable under Section 138 of Negotiable Instruments Act.
Accused is sentenced to pay a fine of ₹2,75,00,000/- (Rupees Two Crore Seventy Five Lakhs Only). In default to pay fine, accused shall undergo simple imprisonment for a period of two years.
Out of the realized fine amount, a sum of ₹2,74,90,000/- (Rupees Two Crore Seventy Four Lakhs and Ninety Thousand Only) is ordered to be paid to the complainant as 43 C.C.No.55115/2023 KABC0C0159042023 compensation and the remaining sum of ₹10,000/- shall be defrayed to State.
Bail bonds executed by accused shall stand cancelled.
Office to supply a free copy of this judgment to accused.
(Dictated to the Stenographer, transcript computerized by her, revised corrected and then pronounced by me in the open Court on this the 20th day of November, 2025) Digitally signed by SANTHOSH SANTHOSH KUNDER S S KUNDER Date: 2025.11.20 17:33:34 +0530 ( SANTHOSH S.KUNDER ) XIV Addl. C.J.M., Bengaluru.
ANNEXURES List of witnesses examined for the Complainant:
PW.1 T.S Sateesh List of documents marked for the Complainant:
Ex.P.1 & 2 Cheques Ex.P.1(a) & Signatures of accused 2(a) Ex.P.3 & 4 Bank endorsements Ex.P.5 Copy of legal notice dated 08.04.2023 Ex.P.6 Postal receipt Ex.P.7 Returned postal covers 44 C.C.No.55115/2023 KABC0C0159042023 Ex.P.8 Bank statement of complainant List of witness examined for the defence:
DW.1 N.Srinivasa List of documents marked for the defence:
Ex.D1 Copy of MOU dated 18.03.2020 Ex.D2 to 4 Copies of registered sale deeds dated
02.01.2021 Ex.D5 Copy of registered sale deed dated 24.02.2021 Ex.D6, 7 & Copies of registered sale deeds dated 9 18.08.2021 Ex.D8 Copy of registered sale deed dated 08.12.2021 Ex.D10 Certified copy of private complaint in PCR No.79/2022 Ex.D11 Bank statement of accused Ex.D12 Notarized copy of Aadhaar Card of accused (marked after comparing with its original) List of court exhibits:
Ex.C1 to 3 Signatures of accused marked in plea and 313 statement Digitally signed by SANTHOSH S SANTHOSH KUNDER S KUNDER Date: 2025.11.20 17:33:25 +0530 XIV Addl.C.J.M., Bengaluru.