Bangalore District Court
B.S.Shreenivas vs Priyanka M.R on 6 March, 2026
KABC030645172021
IN THE COURT OF THE XIX ADDITIONAL CHIEF
JUDICIAL MAGISTRATE AT BENGALURU CITY.
Dated this the 06th day of March, 2026.
PRESENT:SMT.RASHMI H.B., B.A.(LAW)LL.B.,LLM.,
XIX ADDL.C.J.M., BENGALURU CITY.
C.C.No.23290 of 2021
Complainant :- Sri.B.S.Shreenivas,
S/o.G.A.Suryanarayana,
Aged about 52 Years,
R/at.No.779/7, 1st Cross,
Road, Mahalakshmi layout,
Bengaluru - 560086.
(Rep. By Sri.R.K., Advocate)
-V/s-
Accused :- Smt.Priyanka M.R.,
W/o.Anand R.,
Aged about 36 Years,
R/at.No.5/8, 1st Main Road,
1st Cross Road, Adarsha
Nagar, Chamrajpet,
Bengaluru - 560018.
(Rep. By Sri.M.N., Advocate)
Date of complaint :- 15-02-2021
Date of Commencement :- 09-09-2021
of evidence
Offence complained :- Section 138 of N.I.Act
2 C.C.No.23290/2021
Opinion of the Judge :- Accused is found guilty.
(SMT.RASHMI H.B.,)
XIX ADDL.C.J.M., Bengaluru City.
JUDGMENT
This is a private complaint filed under section 200 of Cr.P.C., against the accused for the offence punishable under section 138 of the Negotiable Instruments Act.
02.The brief facts of the complaint is as under:
The complainant, accused and her husband are well known to each other from past 5 years. On that cordial acquaintance, accused and her husband have availed hand loan of Rs.3,00,000/- during second week of October-2019 from the complainant in order to open their Yoga Coaching Center and promised to return the same together with interest at the rate of 1.5% per month within one year. But, the accused failed to repay the same. After several requests and demands, to discharge said liability, the accused has issued a cheque bearing No.001011 dated 18-12-2020 for 3 C.C.No.23290/2021 Rs.3,00,000/-, drawn on State Bank of Mysuru, Mahalakshmi Layout branch, Bengaluru in favour of the complainant. As per the instructions of the accused, the complainant presented said cheque for encashment through his banker Canara Bank, Bank, Mahalakshmi Layout Branch, Bengaluru. The cheque is returned unpaid with bank endorsement dated 23-12-2020 for the reason "Funds Insufficient". Thereafter, the complainant has got issued legal notice to the accused on 16- 01-2021 through registered post and the same was served on accused on 18-01-2021. The accused has sent reply notice dated 29-01-2021. But, the accused has failed to make payment of cheque amount. Hence, complainant has filed this complaint on 15-02-2021.
03. After presentation of complaint, this Court took cognizance of offence and recorded the sworn statement of complainant. Thereafter, a criminal case is registered against accused and summons is issued to the accused. The accused appeared through her counsel and she is enlarged on bail. The copies of the complaint and other 4 C.C.No.23290/2021 papers furnished to the accused. Substance of accusation was read over to her. Accused has pleaded not guilty and claimed to be tried.
04. As per directions of Hon'ble Supreme Court of India in Indian Bank Association vs Union of India reported in 2014 (5) SCC 590, the sworn statement is treated as examination in chief of complainant. In order to prove the accusation made against the accused, the complainant examined himself as PW1 got marked 06 documents as Ex P1 to Ex.P6.
05. Thereafter, statement of accused is recorded under section 313 of Cr.P.C. wherein the accused has denied the incriminating evidence found on record as false and he submitted she would lead defence evidence. On behalf of the accused, one witness - Smt.Noopur Sinnha, Bank Manager of SBI, Mahalakshmi Layout Branch, Bengaluru is examined as DW1 and got marked 01 document as Ex.D1.
5 C.C.No.23290/2021
06. Heard the arguments of learned counsels for complainant and accused. Perused entire case record carefully.
07. On the basis of contentions raised in the complaint the points that arises for determination of this Court are as follows:
1.Whether the complainant proves that, the accused issued the cheque towards discharge of legally enforceable debt?
2.Whether the complainant proves the guilt of the accused for the offence punishable under section 138 of Negotiable Instruments Act?
3.What order?
08. Now, this Court answers to above points are as follows:
Point No.1: In the Affirmative;
Point No.2: In the Affirmative;
Point No.3: As per final order for the following:
:: R E A S O N S ::
09. POINTS No.1 and 2: Since these points are inter- relating with each other, they are taken up together for 6 C.C.No.23290/2021 common discussion to avoid the repetition of facts and findings.
10. This case is tried as summons case. As this matter is tried as summons case, this Court relies on the evidence recorded by learned predecessor in office. In that regard, this Court relies on decision of Hon'ble Supreme Court of India in the case of Mehsana Nagarik Sahkari Bank Ltd., V/s Shreeji Cab Co. & Others reported in 2014(13) SCC 619. Wherein the Hon'ble Supreme Court had observed that de- nova hearing is necessary only when the evidence is recording in summary manner. Therefore, this Court has proceeded with the case on the basis of part evidence recorded previously.
11. Before proceeding with the discussion, in order to prove the guilt of offence under section 138 of N.I. Act, initial burden casts on the complainant to prove the following ingredients:
a) The cheque must have been drawn
for discharge of existing debt or
liability.
7 C.C.No.23290/2021
b) Cheque must be presented within
validity period.
c) Cheque must be returned unpaid due
to insufficient funds or it exceeds the amount arranged.
d) Fact of dishonour be informed to the
drawer by notice within 30 days.
e) Drawer of cheque must fail to make
payment within 15 days of receipt of
the notice.
12. In order to prove the case, the complainant - Sri. B.S.Sreenivas, has examined himself as PW1. The PW1 has filed an affidavit in lieu of examination-in-chief reiterating entire complaint averments. In support of his oral evidence, he has produced Ex.P1 to 6 documents. The complainant got marked one original cheque as Ex.P1, signature of accused as Ex.P1(a), bank endorsement as Ex.P2, demand notice as Ex.P3, postal receipt as Ex.P4, postal acknowledgment as Ex.P5 and reply notice dated 29-01- 2021 as Ex.P6.
13. During cross-examination of PW1, he deposed he is having annual income of Rs 6,00,000/- and he had family expenses to the tune of Rs 2,50,000/- per annum. The 8 C.C.No.23290/2021 amount of Rs 3,00,000/- is lend in cash which was kept saved in house for the medical expenses of his father. In the presence of the husband of accused, he has lend Rs 3,00,000/- in cash to accused at Mahalakshmi Layout Bus Stand without entering into an agreement in writing. He explained he lend the amount in cash as accused sought amount in cash urgently. Apart from accused, he has lend amount of Rs 9,00,000/- to her husband Anand, Rs 2,00,000/- to Ranjan and Rs 3,00,000/- to Vedhavathi. Further he has filed Criminal Case in CC.No.23698/2021 against one Ramu regarding dishonour of cheque for Rs 3,00,000/-. He admitted the fact that cheque is drawn at State Bank of Mysore which was merged with State Bank of India on 01.04.2017. The defence has suggested the cheque is invalid as banks were merged. Pw1 has denied said suggestions as false. He has admitted the fact that ink of writings of cheque and signature are different. The defence has suggested in the year 2017 accused has availed loan of Rs 68,000/- from him for purchase of motorcycle by taking a blank cheque as security and inspite 9 C.C.No.23290/2021 of repayment of the amount, he did not return the cheque and misused the cheque. The PW1 has denied said suggestions as false.
14. The evidence of PW1 and Ex.P.1 to Ex.P6 clearly show the complaint is filed within time and all the ingredients of section 138 of N.I.Act. The cheque is issued for legally recoverable debt and it is dishonored for 'Funds Insufficient'. The said fact is brought to the notice of accused. Till date the accused did not comply the demand of the complainant for payment of amount mentioned in the cheque. Therefore, PW1 has discharged his burden to prove the ingredients of the offence punishable under section 138 of Negotiable Instruments Act.
15. Another aspect is to consider whether the Ex.P1 cheque and Ex.P1(a) signature belongs to the accused or not. The defense has admitted Ex.P1 cheque belong to accused and it bears her signatures. These facts clearly shows that the cheques in dispute is belongs to accused and she has signed the said documents. Therefore, 10 C.C.No.23290/2021 presumption under section 118 and 139 of N.I. Act lies in favour of the complainant.
16. As per provision of section 118 and 139 of N.I. Act, the court has to presume liability of the accused and to such amount mentioned in the cheque to discharge legally recoverable debt. The said aspect was denied by the accused. Once the execution of cheque is admitted section 139 of the Act, mandates a presumption that the cheque was for the discharge of any debt or other liability. Thereafter, the onus of proving probable defense of the accused is on accused and standard of proof for rebutting presumption is preponderance of probabilities. To rebut presumption it is open for the accused to rely on evidence or the accused can also rely on the materials submitted by the complainant in order to raise probable defense.
17. In that regard, the Hon'ble Supreme Court of India in its Judgment reported in 2019(5) SCC 418 in the case of Basalingappa V/s Mudibasappa discussed the manner in which accused could rebut the presumption 11 C.C.No.23290/2021 raised under section 118 and 139 of Negotiable instruments Act. The Hon'ble Supreme Court of India in the case of Basalingappa Vs. Mudibasappa reported in 2019 (5) SCC 418 laid down principles regarding how presumption under section 118 and 139 of N.I.Act can be rebutted.
18. To rebut the presumptions, accused has relied on the Ex P6 reply notice. As per the contention taken in the reply notice, accused has availed loan of Rs 68,300/- to purchase of motorcycle from M/s Sapthagiri Auto Private Ltd, Rajajinagar, Bengaluru on 13-01-2017 and at the time of availing the loan, complainant has collected the signatures of accused and her family members Ranjan, Smt Vedhavathi and neighbor Ramu and recently she has repaid the amount and hypothecation of vehicle is released. But he did not return the security On demand promissory note and this disputed cheque.
19. On going through defence taken in the reply notice and during cross-examination of PW1, accused has contended the Ex P1 cheque is given in blank form as 12 C.C.No.23290/2021 security for vehicle loan. No admission elicited from mouth of PW1 about said defence. Further accused did not entered into witness box to elaborate the facts. Further accused did not produce RC book or RTO endorsement to show her vehicle was hypothecated with M/s Sapthagiri Auto Private Ltd. Further she did not produce any document or admission of PW1 to show he is related to M/s Sapthagiri Auto Private Ltd. Further she did not produce the loan statement or repayment proofs. Therefore entire versions taken as security cheque given in blank form is misused by complainant is not made out. The said version of the accused is found not probable to believe.
20. On going through defence of accused, she being aware of the fact that security cheque is in custody of complainant inspite of repayment itself, she did not issued legal notice to complainant seeking return of cheque. Further, she did not file police complaint regarding illegal custody of cheque by the complainant after repayment of amount till dishonour of cheque. Further, she did not 13 C.C.No.23290/2021 instruct the bank to stop payment of the security cheque if no liability existed to pay under Ex P1 cheque. No prudent man would kept quiet after she being aware of fact that inspite of payment, security cheque is not returned. Therefore, entire version of accused is found self serving statement. There is no circumstance made out to accused to hand over security cheque for Rs 68,000/- to complainant. Therefore entire defence version found not probable to believe.
21. Further to rebut the presumption, accused has taken defence that Ex P1 cheque is not a valid cheque as State Bank of Mysore is merged with State Bank of India from 01-04-2017. In that regard, she has summoned Dw1- Smt Noopur Sinha, who was then branch manager of SBI of Mahalakshmi Layout. In her examination she has deposed the Ex P1 cheque which is dated 18.12.2020 is not valid cheque as State Bank of Mysuru is merged with State Bank of India. She has got marked Ex D1-letter of RBI in DPSS CO.CHD.No.3070/03.06.06/2017-18 dated 02-05-2018, 14 C.C.No.23290/2021 which is issued to Chief General Manager of State Bank of India directing validity of old MICR cheques books is extended from 31-03-2018 to 30-06-2018 and direct the customers to get new cheque book issued on or before 30- 06-2018.
22. During her cross examination, Dw1 has admitted the fact that Ex P2 bank endorsement issued stating cheque is dishonoured for the reasons "Funds Insufficient" and it does not show cheque is dishonoured for any other reason including invalid cheque. The complainant suggested Ex P1 cheque is valid cheque. The said suggestions answered as not true.
23. The bank endorsement draws presumptive value under section 146 of N.I.Act. The Ex P2 bank endorsement shows the cheque is dishonoured for reasons Funds Insufficient and not as cheque is invalid as per bank merger. The Ex D1 letter of RBI does not show after 30-06- 2018 old MICR cheques are invalid. It shows only the period of validity of cheques are extended for another three 15 C.C.No.23290/2021 months and issued directions that no further extention shall be granted after 30-06-2018. It is evident to note defence or Dw1 did not produce any notification of RBI or State Bank of India when is the last date when old cheques of State Bank of Mysuru is valid.
24. The learned counsel for accused has relied on the judgement of Hon'ble Andhra Pradesh High Court in the case of Thummuru Sita Ramireddy vs Kondamadugula Siva Parvathi in Crl Petition No 7756/2024 dated 06.03.2025. In the said cases, Hon'ble Court has Vijaya Bank ceased to exist as a banker as on the date when the cheque is presented and the old cheque of Vijaya bank lost identity as cheque after amalgamation of Vijaya bank with Bank of Baroda with effect from 30.03.2019 and customers were directed to return the cheques and cheque book. The said judgement is not applicable to the case in hand as the Vijaya Bank which was separate identity bank is merged with different bank i.e Bank of Baroda and this case is related to merger of SBM with SBI. Therefore different 16 C.C.No.23290/2021 circulars were issued by RBI regarding entity of the bank and its instruments. But after Merger of State Bank of Mysore with State bank of India, data integrated and validity of cheques, customers account numbers and MICR and IFSC codes were changed to SBI and it remained valid till further final notification.
25. In this case, accused did not enter into witness box to show she has went to the State Bank of India after merger of the banks to request to get exchange her old cheque book with new cheque book. Therefore the validity of cheque is not effected as per merger rules. The advisory was given by RBI to extend the validity of cheques for 3 months periods from 01-04-2017 onwards to State bank of India. But Ex D1 is not the last letter correspondence between the RBI and Chief Manager of SBI in that regard. If the cheque is invalid, the bank could have issued endorsement showing cheque is invalid. The evidence of Dw1 does not show the Ex D1 bank endorsement is not correct. She did not even dispute the said bank 17 C.C.No.23290/2021 endorsement reason and explained why such endorsement is given by her bank. Therefore without production of final notification of invalidating the old MICR cheques of State Bank of Mysuru either issued by RBI or SBI, no rebuttable evidence brought on record to hold Ex P2 bank endorsement is not correct. Therefore defence of accused found not probable to believe.
26. As per section 139 of the N.I.Act, it shall be presumed unless contrary is proved, that the holder of cheque has received the cheque of the nature referred to in section 138 of N.I. Act for discharge in whole or in part of any debt or other liability. The Full bench judgement of Hon'ble Supreme Court of India in the case of Rangappa vs Sri Mohan reported in 2010(11) SCC 441 has held that presumption mandated by section 139 of N.I.Act does indeed include the existence of legally enforceable debt or liability. Therefore, once the initial burden is discharged by the complainant that the cheque is issued by accused and the signature, the burden casted on the accused to prove 18 C.C.No.23290/2021 the contrary that cheque is not issued for any debt or other liability. The said proposition of law is laid down by Hon'ble Supreme Court of India in the case of the P Rasiya vs Abdul Nazer and another. In the Judgement of Hon'ble Supreme Court of India reported in 2021 (5) SCC 283 in the case of M/S Kalamani Tex vs P. Balasubramanian. In the para 13 of said Judgement the Hon'ble Supreme Court observed as follows:
"13. Adverting to the case in hand, we find on a plain reading of its judgement that the trail court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under section 118 and section 139 of N.I.A. The statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these "reverse onus" clause become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. The point of law has been crystalised by the court in Rohitbhai Jivanlal Patel vs State of Gujarath..."19 C.C.No.23290/2021
27. Considering aforesaid legal proposition, burden casted on accused to disprove the case of complainant and his defence must be found more probable. No admissions elicited from the mouth of PW1 about misuse of the cheque. Therefore, defence of accused is found not probable and his evidence is not credible to believe.
28. Once the initial burden is discharged by the complainant that the cheque is issued by accused and the signatures, the burden casted on the accused to prove the contrary that cheque is not issued for any debt or other liability. However, in this case accused has failed to make probable defence to rebut the presumptions. The defence of accused is found self serving statement and it is not sufficient to rebut the presumptions. Hence, on the basis of the evidence of PW1 and Ex P1 to 6 documents, the complainant has proved the case and complainant is entitled for recovery of the amount as compensation.
29. On considering the facts and circumstances of the case, the complainant has able to establish that Ex.P.1 20 C.C.No.23290/2021 cheque is issued to discharge liability of repayment of Rs.3,00,000/- to complainant by the accused. Ex.P1 is dishonoured for the reason "Funds Insufficient" in the account of accused and complainant is entitled for the cheques amount as compensation. The Hon'ble High Court of Karnataka in its reported judgement in 2025 SCC Online KAR 786 in the case of A V Poojappa vs Dr S K Vagdevi rep by her Special Power of Attorney Holder Sri H V Shivashankar in Para No.24 discussed the following aspect while imposing punishment, which reads as follows:
"24. While imposing the punishment, the Courts are required to examine the following aspects:
1. The quantum of the loan
2. The defence taken by the accused, more particularly whether he has taken a false defence and failed to prove the same.
3. Whether the accused has dragged on the matter unnecessarily and thereby delayed the disposal of the case at the stage of trial, appeal, revision,
4. Whether the transaction relates to business between the parties or the parties are 21 C.C.No.23290/2021 business class who would have utilized the amount for their business and flourish, or
5. In other cases, the returns the loan amount would have brought, if it was kept in a fixed deposit in a nationalized bank etc,"
30. On considering said legal aspect, cheque is dated 18-12-2020. Already 5 years 2 months have lapsed from inception of the complaint. If said cheque amount kept in FD in nationalized bank, interest at the rate of 6% per annum would have been accrued. Therefore, it would be appropriate to award additional compensation of Rs.90,000/- as cost of the proceedings infavour of complainant. As per the judgement of Hon'ble High Court of Karnataka in Crl. Rev. Pet. No.996/2016 dated 09-07- 2025 in the case of M/s Banavathy & Company vs Mahaeer Electro Mech(P) Ltd has held as follows:-
"While passing the order of sentence after determining the fine/Compensation, the court shall also pass an order to pay future interest at the rate of 9% per annum on the compensation amount payable to the complainant by fixing time of one or two 22 C.C.No.23290/2021 months to deposit compensation amount so that even if the matter is challenged before the Sessions Court in appeal and High Court in revision the interest of the complainant will be protected".
31. Considering the said legal proposition, it would be appropriate to award 9% per annum interest on the compensation amount payable to complainant if accused failed to comply the order of sentence within one month. The accused is not a repeated offender. Hence, there is no need to award imprisonment term. However, accused is liable to pay the fine amount of Rs.10,000/- to the state towards litigation expenses. Under these circumstances, this Court answers Points No.1 and 2 in the Affirmative.
32. POINT No.3: For the foregoing reasons stated in the Points No.1 and 2, this Court proceeds to pass the following:
ORDER The accused is found guilty for the offence punishable under section 138 of Negotiable Instruments Act.23 C.C.No.23290/2021
Acting under section 255(2) of Cr.P.C, the accused is convicted for the offence punishable under section 138 of the Negotiable Instruments Act. The accused is sentenced to pay a fine of Rs 4,00,000/- within one month and in case of default she shall undergo simple imprisonment for 6 months.
Out of the fine amount Rs 3,90,000/-
shall be paid to the complainant as compensation as per section 357(1)(b) of Cr.P.C. with future interest at the rate of 9% per annum if accused failed to deposit compensation amount within stipulated time of one month. The remaining amount of Rs.10,000/- shall be defray to the State.
In view of section 437(A) of Cr.P.C. bail bonds stand extended for 6 months from this date.
Supply free copy of Judgment to the accused.
(Dictated to the stenographer directly on computer, typed by her, revised and corrected by me th and signed, pronounced in the Open Court this06 day of March, 2026. ) (SMT.RASHMI H.B.,) XIX ADDL.C.J.M., Bengaluru City.24 C.C.No.23290/2021
::ANNEXURE::
List of Witnesses examined for Complainant:-
PW1 :- B.S.Sreenivas.
List of Documents marked for Complainant:-
Ex.P1 :- One Original Cheque, Ex.P1(a) :- Signature of Accused, Ex.P2 :- Bank Endorsement, Ex.P3 :- Office copy of the Legal Notice, Ex.P4 :- Postal Receipt, Ex.P5 :- Postal Acknowledgment, Ex.P6 :- Reply Notice dated 29-01-2021.
List of Witnesses examined for Accused:-
DW1 :- Smt.Noopur Sinnha List of Documents marked for Accused:-
Ex.D1 :- Copy of Circular of Reserve Bank of India dated 02-05-2018.
(SMT.RASHMI H.B.,) XIX ADDL.C.J.M., Bengaluru City.25 C.C.No.23290/2021