Bangalore District Court
Shyam Kiran vs Smt. R. Chitra on 18 November, 2025
CC.No.24521/2022
KABC030617932022
Presented on : 30-07-2022
Registered on : 30-07-2022
Decided on : 18-11-2025
Duration : 3 years, 3 months, 19 days
IN THE COURT OF THE XVI ADDITIONAL CHIEF
JUDICIAL MAGISTRATE, BENGALURU CITY
Dated: This the 18th day of November 2025
Present: Smt.Tejaswini K.M., B.A.L. LL.M,
XVI Addl.C.J.M., Bengaluru City.
CC. No.24521/2022
Sri.Shyam Kiran
S/o Ramakrishna Setty
Aged about 45 years
R/at No.1, 1st Floor, 4th Street,
Sivan Chetty Garden,
Bengaluru - 560042.
....Complainant
(By Sri.H.B.Chandrashekar., Advocate)
Versus
2 C.C.24521/2022
Smt.R.Chitra
W/o Rajendra Ramu
R/at No.125, RS Enterprises
2nd Cross, Ebrahim Sahib Street,
Shivajinagar,
Bengaluru - 560001.
.... Accused
(By Sri.Ganesh Prasad B.S., Advocate)
Offence complained : U/Sec.138 of Negotiable
Instrument Act.
Date of commencement
of evidence : 16.06.2022
Date of closing evidence : 14.03.2025
Opinion of the Judge : Accused found not guilty
JUDGMENT
This case is registered against the accused for the offence punishable U/s 138 of Negotiable Instruments Act. 3 C.C.24521/2022
2. Factual matrix of the complainant's case is as under:
It is stated that the accused has approached the complainant and requested for financial help. The complainant has given Rs.3 lakhs on 16.09.2016 to the accused in presence of witnesses and the accused had agreed to repay the same within 6 months. Later in the first week of March 2017 when the complainant demanded to clear the amount, the accused sought some more time and also executed agreement dated 21.03.2017 in favour of the complainant and promised to repay the amount within 36 months from the date of loan with interest @ 18% per annum. For the amount of Rs.3,00,000/-
interest comes to Rs.1,62,000/-. Therefore, the accused had agreed to repay Rs.4,62,000/- to the complainant. In March 2019 the complainant has requested the accused to repay the amount. However, she has postponed it. On 20.03.2019 there was a panchayat conveyed wherein the accused sought time, as she will get loan approved. She was paid Rs.25,000/- and promised to repay the remaining amount within 6 months.
3. In October 2019 again the complainant has requested the accused to make payment that time accused sought further 4 C.C.24521/2022 6 months time and paid Rs.37,000/-. Therefore, the accused was liable to pay remaining Rs.4,00,000/- to the complainant. During COVID-19 situation again the accused took time for 5 months to repay the amount. Upon calculation of interest from 10.10.2019 to 10.10.2021 it comes to Rs.1,44,000/- and the accused promised to pay the total amount of Rs.5,44,000/- to the complainant. To show her bonafides she has issued a postdated cheque bearing No.847069 dated 08.11.2021 for Rs.1,00,000/-, drawn on United Bank of India, Shivajinagar Branch, Bengaluru and assuring to maintain sufficient balance in it. In so far as the remaining amount of Rs.4,44,000/- she agreed to transfer it to the bank account of the complainant.
4. On 08.11.2021 the complainant has presented the cheque to the bank, but it was dishonoured for the reason 'refer to drawer' vide memo dated 09.11.2021. Later the complainant approached his banker to know the details and got to know that United Bank of India being merged with Punjab National Bank and due to the RBI Circular cheques pertaining to the older banks are not acceptable and accordingly, instructed the complainant to contact the accused, even it is got to know that there was no sufficient balance in the account of the accused.
5 C.C.24521/2022
5. Therefore, the complainant has issued legal notice dated 07.12.2021 through RPAD calling upon the accused to pay the cheque amount. Said notice was returned with a shara 'no such addressee'. Accordingly the complainant contacted the accused and brought to her notice about the same for which the accused represented that she will maintain sufficient amount, hence requested to present the cheque again. As per request of the accused again the complainant has presented the cheque on 18.12.2021 which again dishonoured for the reason 'refer do drawer'. Thereafter the complainant has given the legal notice to the accused on 27.12.2021 and same was served on the accused. However, the accused not repaid the loan amount. Hence the complainant has constrained to file the present complaint.
6. After receiving the complaint, this court has meticulously gone through the documents and affidavit filed along with it and then took cognizance of the offence punishable U/sec.138 of Negotiable Instruments Act and ordered for registration of the compliant as P.C.
7. Sworn statement of the complainant was recorded and marked 13 documents as Ex.P-1 to P-13. As there were sufficient materials to constitute the offence, this court has 6 C.C.24521/2022 proceeded to pass an order for issuing process against the accused.
8. In pursuance of summons, accused has appeared through her counsel and applied for bail. She was enlarged on bail. Then the substance of accusation was read over to the accused in the language known to her, for which she pleaded not guilty.
9. As per the direction of Hon'ble supreme court in "Indian Bank Association V/s Union of India and others reported in (2014)(5) SCC 590, this court treated the sworn statement of the complainant as complainant evidence and posted matter for cross-examination of PW.1. The counsel for the accused has fully cross-examined PW.1. Thereafter the complainant closed his side of evidence. During cross- examination of PW.1, Ex.X1 was marked through confrontation.
10. The statement of accused as contemplated under the provisions of Section 313 of Cr.P.C has been recorded vide dated 06.01.2023 and the incriminating evidence as such forthcoming against the accused in the evidence of PW.1 and the documents has been read over and explained to the 7 C.C.24521/2022 accused in the language known to her and she has denied the same.
11. In order to substantiate her defense, the accused got herself examined as DW.1 and got the document marked as Ex.D1. The counsel for the complainant has cross-examined DW1.
12. I have heard the arguments of the learned counsel for both side. The learned counsel for the complainant has filed written arguments along with memo with citations. I have perused the oral and the documentary evidence placed on record and gone through written arguments and those case laws.
13. Points that arise for my consideration are as under:
1. Whether the complainant proves that the accused person towards discharge of her liability issued a cheque bearing No.847069 dated 08.11.2021 for Rs.1,00,000/-, drawn on United Bank of India, Shivajinagar Barnch, Bengaluru in favour of complainant, on presentation of the same for encashment, it was dishonored for "Refer to Drawer" in the account maintained by the accused, then in-spite of issuing demand 8 C.C.24521/2022 notice to the Accused and in complying with statutory requirement under Negotiable Instrument Act, Accused did not repay the cheque amount, thereby she has committed an offence punishable U/s 138 of Negotiable Instruments Act?
2. What Order?
14. My Answer to above points are as under:-
Point No.I :- In the Negative,
Point No.II :- As per the final order for
the following....
REASONS
15. POINT NO.I:- To substantiate his case the
complainant stepped into witness box and got examined as PW.1. He has got marked Ex.P1 to P13. He has produced the cheque issued by accused and the same is marked as Ex.P-1, the signature of the accused is marked as Ex.P-1(a), copies of bank memos are marked as Ex.P-2 & 3, copies of demand notices dated: 07.12.2021 and 27.12.2021 are marked as Ex.P-4 & P-5, copies of the postal receipts are marked as Ex.P4(a) & P- 6, copy of postal acknowledgment is marked as Ex.P-7, copy of 9 C.C.24521/2022 returned notice is marked as Ex.P-8, postal cover is marked as Ex.P-9, copy of postal receipt is marked as Ex.P-10, copy of postal acknowledgment is marked as Ex.P-11. Copy of loan agreement dated 21.01.2017 is marked as Ex.P-12 and complaint is marked as Ex.P-13.
16. Advocate for complainant has relied on the citations reported in AIR 2010 SC 1898 in between Rangappa V/s Mohan, 2015 (4) KCCR 3938 in between Gurupadaswamy V/s M.Partha, 2015 (8) SCC 378 in between Toxann Sharma V/s Arum Sharma, (2012) 10 SCC 383 in between Murugesan V/s State through Inspector of Police, AIR 1968 SC 1413 in between Gopal Krishnaji Ketkar V/s Mohamed Haji Latif, (1999) 7 SCC 510 in between K.Bhaskaran V/s Sankaran Vaidhyan Balan, (2007) 6 SCC 555 in between C.C.Alavi Haji V/s Palapetty Muhammed and another and O.S.4286/2023, I have gone through these case laws.
17. Defense of the accused is that:
She has taken loan of Rs.1,00,000/- each from the complainant in 2013 and 2014, both those loans are repaid by her. Even the complainant acknowledged it in Ex.D1 book. She never executed any loan agreement in favour of the complainant. While taking the loan of Rs.1,00,000/-, she has 10 C.C.24521/2022 given the disputed cheque for security. The said cheque has been misused and false case is filed against her. The demand notice is not served on her. Hence prays to acquit her from this case.
18. Negotiable Instruments Act provides for presumption in favour of the complainant i.e., Section 118 reads as here: -
"That every negotiable instrument was made or drawn for consideration and that every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration".
19. Further Sec 139 of the Negotiable Instruments Act provides for presumption in favour of a holder. It reads as here: - "It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in sec 138, for the discharge, in whole or in part, or any debt or other liability."
20. Combined reading of above said sections raises a presumption in favour of the holder of the cheque that he has received the same for discharge in whole or in part of any debt or other liability. However, it is settled principle of law that the presumption available u/s 139 NI Act can be rebutted by the accused by raising a probable defense.
11 C.C.24521/2022
21. The complainant has reiterated the contents of the complaint in his chief-examination. The counsel for the accused has cross-examined the complainant at length. Percontra, even the accused has stepped into witness box and orally got examined as DW.1 and she has been cross-examined by the counsel for the complainant.
22. The complainant has filed written arguments along with citations. During arguments the counsel for the accused has submitted that in the complaint and sworn statement the complainant has clearly pleaded that he is aware that the cheque belongs to United Bank of India which is merged with Punjab National Bank and the cheque of said United Bank of India is no more valid. Therefore, as the RBI circular the offence punishable U/Sec.138 of NI Act does not attracts to the old merged bank's cheque. He argued that the legal notice is not served on the accused and even she has not executed loan agreement. The security cheque of the accused has been misused. Hence prays to acquit her.
23. The complainant has pleaded that he has lent loan of Rs.3 lakhs on 16.09.2016. Even during cross-examination he has stated that he has given Rs.3 lakhs that time, his brother was present. He has not shown the loan of Rs.3 lakhs by way of 12 C.C.24521/2022 cash transaction in his income tax returns. He knows the accused from 2015. It is significant to note here that the alleged loan transaction is made through cash transaction. At the outset the accused has not disputed her signature on Ex.P1 cheque. On perusal of the cheque it appears that the cheque stands in the name of accused and it belongs to United Bank of India. As per Ex.P2 and P3 bank memos the cheque has been dishonoued for the reason 'Refer to Drawer'. Before drawing the initial presumption U/Sec.118 and 139 of NI Act the Court has to ascertain whether the cheque is issued in discharge of legally enforceable debt, whether such cheque is valid in the eyes of law.
24. During her cross-examination the accused has deposed that before COVID-19 period itself her account in United Bank of India has been closed. She consistently deposed that while taking the loan from the complainant she has given the disputed cheque for security. She deposed that she does not have any document to show that she had taken loan from the complainant in 2013-2014 and same was repaid in 2017- 2018. She has produced a small book which is marked at Ex.D1, to substantiate that she has repaid the amount to the complainant in installments. Though xerox copy of the said 13 C.C.24521/2022 book has been confronted to the complainant during his cross- examination, he has not admitted it. Therefore, for identification purpose it was marked as Ex.X1 in the cross- examination of PW.1. On perusal of Ex.D1 it appears from 2016- 2020 she has paid installments on different dates. However, the complainant has not admitted Ex.D1. If as per her statement in chief examination she has repaid loan in 2017 -2018 itself , why would she still made payment till 2020 as per her on document at ExD1 is not forthcoming. To substantiate that accused had a loan transaction with the complainant in the year 2013-2014 she has not produced any document before the Court. Even no iota of evidence is produced to prove that she has repaid the entire loan to the complainant and made efforts to recover back her cheque which was alleged to be given for security to the complainant.
25. The complainant has stated that he has received Rs.25,000/- and Rs.37,000/- towards interest on 20.03.2019 and 10.10.2019 from the accused and after calculating the interest from 10.10.2019 to 10.10.2021, there exists liability of Rs.5,44,000/- before filing this complaint. PW1 has not produced any proof to believe that he has received said interests.
14 C.C.24521/2022
26. Interestingly the cheque is presented for Rs.1 lakh. The complainant has pleaded in the complaint that the accused has been given the cheque for partial payment. It is significant to note here that when the accused has frequently sought time to repay the amount and not even paid substantial part of the principal, how the complainant could accept the cheque for Rs.1 lakh from the accused is not forthcoming. No doubt, after filing this complaint the complainant has also filed a civil case against the accused. As per the complainant Rs.3 lakhs is principal amount and remaining amount is an interest. To substantiate his claim he has produced Ex.P12 i.e. loan agreement alleged to be executed by the accused on 21.03.2019. However, the accused has disputed her signature on Ex.P12 and execution of this document. Even during cross- examination she denied that she has executed Ex.P12 i.e. loan agreement in favour of the complainant. Except ExP12 no other proof is produced to prove loan transaction.
27. Coming to maintainability of compliant, it is materiel to note here that the cheque belongs to the account of accused maintained at United Bank of India. It is widely circulated that United Bank of India has merged with Punjab National Bank and cheques of United Bank of India were valid only till 15 C.C.24521/2022 30.06.2021 and cheques already issued (post-dated) shall remain valid only up to 30th June, 2021.
28. But in the instant case cheque has been presented on 08.11.2021 stating that cheque has been issued on 08.06.2021. If at all as per per the complainant the cheque was issued on 08.11.2021 then by that time United Bank of India was already merged. Therefore, the complainant should have been vigilant enough before accepting the old cheque. In the complaint para No.8 the complainant has specifically stated that the accused has issued postdated cheque on 08.06.2021. Even that time also United Bank of India was already merged. Therefore, possibility of giving this cheque subsequent to merging of the bank by the accused on 08.11.2021 creates suspicion about the case.
29. As per Ex.P2 memo the cheque has been presented on 08.11.2021 and it got dishonoured for the reason 'refer to drawer' on 09.11.2021. Inthe complaint as well as in his chief- examination the complainant has specifically pleaded that soon after the cheque got dishonoured for the first time, he intimated it to the accused, but the accused took some more time and thereafter, he has also given the legal notice on 07.12.2021. Further it is stated that immediately the accused 16 C.C.24521/2022 has requested the complainant to present the cheque again to the bank. It is significant to note here that in para No.9 of the complaint it clearly stated by the complainant that when the cheque was dishonoured for the reason 'refer to drawer' for the first time he enquired with the bank that time time itself he got to know that the United Bank of India has been merged with Punjab National Bank and issuance of RBI circular about cheques pertains to older banks are not acceptable. Accordingly, instructed the complainant to contact the accused who is drawer of the cheque. Therefore, even at this juncture the complainant had second opportunity to get the new cheque in place of this earlier old cheque. But despite of having such knowledge the complainant has presented said cheque for the second time on 08.12.2021 sating that accused has requested to re-present same cheque and again it has been dishonoured for the reason 'refer to drawer' as per Ex.P3 memo dated 21.12.2021. Therefore, possibility of accused asking to present the cheque for second time is very less and knowing that the cheque is invalid the complainant has again presented the cheque and same creates suspicion about his case.
30. Further it is noticed that as per him the outstanding balance was Rs.5,44,000/-. Soon after the cheque got 17 C.C.24521/2022 dishonoured for the first time, the complainant had opportunity to seek new cheque for the entire remaining balance. However, he has not made such efforts, but the cheque is presented for Rs.1 lakh against the outstanding balance of Rs.5,44,000/-. Such conduct of the complainant creates suspicion about the case. Ignorance of law cannot be excused. When cheque itself is invalid the complaint is not maintainable.
31. In Ganta Kavitha Devi v. State of AP, 2024 SCC OnLine AP 5115, decided on 25-10-2024]... The Hon'ble High Court of Andra pradesh has noted that "on perusal of Section 138(a) of NI Act, if any invalid cheque is presented before the Bank and the same is dishonored, it can be said that there is no liability under Section 138 of NI Act. In the instant case, the subject cheque was issued on 20-09-2021 and the same was drawn on State Bank of Hyderabad. By that date, State Bank of Hyderabad was merged with State Bank of India and the cheques of the said bank were valid till 31-03-2018 only. As per proviso (a) of Section 138, if the cheque itself is invalid, the Bank is bound to dishonor the same. As such, on presentation of the said cheque before 6 ICICI Bank, the same was returned on 22-09-2021 with an endorsement "Invalid cheque (SBH)". Therefore, it can be presumed that the 18 C.C.24521/2022 cheque in question was invalid on the date of presentation before the ICICI Bank. The Court concluded that the subject cheque, which was issued from the account maintained in erstwhile State Bank of Hyderabad after its merger with State Bank of India, was not a valid cheque on the date of its presentation before the ICICI Bank as required by proviso (a) of Section 138. Hence, dishonoring the same will not attract liability under Section 138 of NI Act. Therefore, it is a fit case to exercise the jurisdiction under Section 482 CrPC for quashing the proceedings against the petitioner...."
32. In Archana Singh Gautam v. State of U.P., Application u/s 482 No. - 9536 of 2024, Decided on 05-06- 2024]... The Hon'ble High Court of Allahabad has noted that "Allahabad Bank merged with Indian Bank on 01-04- 2020, and a public notice had been issued indicating that cheques of Allahabad Bank would only be valid until 30-09-2021, and that any cheque from Allahabad Bank presented after this date would be considered invalid. In its analysis, the Court differentiated between reasons for dishonour due to insufficiency of funds and the presentation of an invalid cheque, observing that Section 138 explicitly requires the cheque to be valid at the time of presentation, and since the cheque in question was issued from an account in Allahabad Bank post its merger and past the validity date, it was deemed invalid..." "
19 C.C.24521/2022
33. Above case laws clearly stated that since the cheque in question was issued from an account in a Bank post it's merger and past the validity date, it was deemed invalid. In so far as the defense is concerned though the accused has disputed the loan transaction and existence of legally enforceable debt in the cross-examination of PW.1 and in her evidence, but during the recording of statement U/Sec.313 of Cr.P.C. she deposed that she owes Rs.2 lakhs and she will try to repay the amount to the complainant. Percontra, in her evidence she denied the liability towards the cheque.
34. Though, the accused has disputed service of notice, she has admitted that the address shown in the notice is belongs to her printing press. As per Ex.P7 the notice is returned with an endorsement as 'served'. No iota of evidence is brought before the Court to prove that the said printing press has been closed. Under such circumstances, the defense of the accused that the legal notice is not served cannot be accepted.
35. Though she has contended that she has repaid the entire loan to the complainant in 2017-2018, in para No.3 of her 20 C.C.24521/2022 cross-examination she deposed that she has borrowed another Rs.10,000/- from the complainant and for that purpose she has given the cheque, is an inconsistent evidence against to her defence taken earlier. She could not tell when she has repaid the loan to the complainant. Therefore, the evidence of the accused is not free from in consistencies. Though the accused has not established her defense with cogent evidence as the cheque is invalid the complaint is not maintainable. Consequently presumption given under NI cannot be drawn in favor of the complainant. Accordingly court proceed to answer POINT NO.I IN THE NEGATIVE.
36. POINT NO.II:- In view of above said reasons the allegations levelled against the accused is not proved beyond reasonable doubts. Accordingly, this court proceeds to pass following ORDER In excise of power conferred U/Sec.255(1) of Cr.P.C, accused is not found guilt of the offense punishable U/Sec.138 of Negotiable Instruments Act and accused is acquitted.
21 C.C.24521/2022
Bail bond executed by accused stands cancelled. (Dictated to the Stenographer, typed by her, corrected by me and then judgment pronounced in the open court on this the 18th day of November 2025).
(Smt.Tejaswini K.M ), XVI ACJM, Bengaluru ANNEXURE I. List of witnesses on behalf of complainant:
P.W.1: Sri.Shyam Kriran II. List of documents on behalf of complainant:
Ex.P-1 : Original Cheque. Ex.P-1(a) : Signature of the accused Ex.P-2 & 3 : Bank memos.
Ex.P-4 & 5 : Legal notices. Ex.P-4(a) & 6 : Postal Receipts. Ex.P-7 : Postal Acknowledgment. Ex.P-8 : Returned Notice. Ex.P-9 : Postal Cover.
Ex.P-10 : Postal Receipt. Ex.P-11 : Postal Acknowledgment. Ex.P-12 : Copy of Loan Agreement. 22 C.C.24521/2022 Ex.P-13 : Complaint.
Ex.X-1 : Xerox copy of small Book. III. List of witnesses for the accused:
D.W.1: Smt.R.Chitra
IV. List of documents for accused:
Ex.D-1 : Small Book.
(Smt.Tejaswini K.M ),
XVI ACJM, Bengaluru
23 C.C.24521/2022
18.11.2025
(Judgment pronounced in the open Court
vide separate)
ORDER
In excise of power conferred U/Sec.255(1) of Cr.P.C, accused is not found guilt of the offense punishable U/Sec.138 of Negotiable Instruments Act and accused is acquitted.
Bail bond executed by accused stands cancelled.
XVI ACJM, Bengaluru