Bangalore District Court
M/S. Rishi Polymach Pvt Ltd vs Redsand Constructions on 17 April, 2026
KABC030227542025
IN THE COURT OF THE XXV ADDL. CHIEF JUDICIAL
MAGISTRATE, AT BANGALORE CITY
Dated this the 17th day of April 2026
Present : SRI. GOKULA. K
B.A.LL.B.
XXV Addl. Chief Judicial Magistrate,
Bangalore City.
C.C.No.13159/2025
Complainant : M/s Rishi Polymach Pvt.Ltd,
Rep by its Director
Jaichand Lal Daga
No.C-2, 1st floor
Kudremukha colony
Sarjapura, 2nd block
Koramangala
Bengaluru 560 060.
(By GMS Advocate )
V/s
Accused : Redsand Constructions
By its Proprietor
Mahesh Kumar P
Aged 48 years
R/at No.2219/1K16
4th cross, Basaveshwara Road
K R Mohalla
Mysuru 570004.
(By PM - Advocate )
Plea of accused: Pleaded not guilty
2
C.C.No.13159/2025
Final Order: Accused is convicted
Date of judgment : 17.04.2026
JUDGMENT
The complainant has filed the complaint under Section 223 Bharathiya Nagarik Suraksha Sanhita (BNSS) against the accused for the offence punishable under Section 138 Negotiable Instruments Act.
2. The brief case of the complainant is as under:
That the complainant is a company registered under Companies Act and carrying on the business of manufacturing and distribution of HDPE Pipes. The accused is one of the customer of the complainant. The complainant supplied DN 63 PN6 PE 100 HDPE Pipes, DN 125 PN6 PE 100 HDPE Pipes and DN140 PN6 PE 100 HDPE Pipes under invoice NO.2022-23/MYS/312 dated 29.12.2022 for a value of ₹.3,65,795/-. Towards part payment of said amount the accused issued a cheque bearing No.976167 dated 19.07.2024 for ₹.1,00,000/- drawn on Punjab National Bank, VV Market, Mysuru. The complainant presented said cheque in the 1 st week of September, 2024 through its banker ie. State Bank of India, Koramangala, Bengaluru and said cheque returned dishonored on 05.09.2024 for the reason "Funds Insufficient". Hence, the 3 C.C.No.13159/2025 complainant got issued legal notice dated 30.09.2024 calling upon the accused to pay the amount involved in the cheque. The said notice returned with postal shara "unclaimed and intimated" on 04.10.2024. Inspite of issuance of notice, the accused failed to pay the claim amount to the complainant within the statutory time. Therefore, the accused has committed the offence under Section 138 of Negotiable Instruments Act. Therefore the complainant has filed the complaint.
3. On the basis of Private complaint filed by the complainant, this court has taken cognizance of offence and registered the case in PCR No.15132/2024 and recorded sworn statement of the complainant and got marked 9 documents as Ex.P1 to Ex.P.9. This court by considering the material on record issued process under Section 227 of Bharathiya Nagarika Suraksha Sanhita by registering the criminal case. In response to the process issued by this court, the accused appeared before this court and he is released on bail. The copy of the complaint is served to the accused along with the summons as contemplated under Section 230 of Bharathiya Nagarika Suraksha Sanhita.
4. The substance of the acquisition as provided Section 274 of Bharathiya Nagarika Suraksha Sanhita is read over to the 4 C.C.No.13159/2025 accused and his plea is recorded. The accused has pleaded not guilty and claimed to be tried.
5. In view of the law laid down by Hon'ble Supreme Court of India in Indian Bank Association V/s Union of India and others reported in AIR 2014SCW3463, the affidavit filed by the complainant at the stage of taking cognizance and documents marked is treated as evidence under section 145 of Negotiable Instruments Act. As the evidence of complainant on record, the incriminating circumstances in the evidence of the complainant is read over to the accused and his statement under Section 351 of BNSS. He has denied the incriminating circumstances as false. On the application of the accused the PW 1 is recalled and he is subjected to cross examination. The accused himself examined as DW1.
6. Heard arguments of learned counsel for the complainant and arguments of learned counsel for the accused. Perused the material on record .
7. On the basis of the material on record the following points arise for the consideration of this court :
1. Whether the complainant proves beyond all reasonable doubt that the accused has issued the cheque bearing No.976167 dated 19.07.2024 for ₹.1,00,000/- drawn on Punjab National Bank, 5 C.C.No.13159/2025 V.V. Market, Mysuru for a sum of ₹.1,00,000/-
towards discharge of legally recoverable debt and on presentation of the same it is dishonoured for the reason "funds insufficient" on 05.09.2024 and inspite of issuance of demand notice on 30.09.2024 the accused has not complied the demands in the notice and thus the accused committed an offence punishable under Section 138 of Negotiable Instruments Act ?
2. What Order of Sentence?
8. The findings of this court to the above points are as follows:
Point No.1 In the Affirmative,
Point No.2 As per final order
for the following :
REASONS
9. POINT NO.1: To prove the case the authorized representative of the complainant examined as PW-1 and in his evidence affidavit he has reiterated the averments made in the complaint. The PW1 has deposed that the complainant is a company incorporated under Companies Act and carrying on the business of manufacturing and distribution of HDPE Pipes. To prove the legal status, the complainant has produced the certified copy of the Incorporation Certificate as Ex.P.1. It is stated that the PW 1 is authorised by the Board of Directors to represent the complainant company. The PW 1 has produced the Board Resolution as Ex.P.2. This document proves 6 C.C.No.13159/2025 authority of PW 1 to represent the complainant company. The accused has not denied legal status of the complainant and authority of PW 1 to represent the complainant company. The accused has denied personal knowledge of the PW 1 about the transactions with the accused.
10. The PW 1 has deposed that the accused is one of the customer of the complainant. He has deposed that they have supplied DN 63 PN6 PE 100 HDPE Pipes, DN 125 PN6 PE 100 HDPE Pipes and DN140 PN6 PE 100 HDPE Pipes under invoice NO.2022-23/MYS/312 dated 29.12.2022 to the value of ₹.3,65,795/-. The complainant has produced the the Tax invoice for supply of materials as Ex.P 8. The complainant has also produced the ledger extract as Ex.P.9. The PW 1 has further deposed that towards part payment of said invoice amount the accused issued a cheque bearing No.976167 dated 19.07.2024 for ₹.1,00,000/- drawn on Punjab National Bank, VV Market, Mysuru. Said cheque is produced as Ex.P.3. The PW 1 further deposed that they have presented said cheque in the 1st week of September, 2024 through its banker i.e. State Bank of India, Koramangala, Bengaluru and said cheque returned dishonored on 05.09.2024 for the reason "Funds Insufficient". Said bank endorsement is marked as Ex.P.4. The PW 1 further deposed that they have got issued legal notice dated 30.09.2024 calling upon the accused to pay the amount 7 C.C.No.13159/2025 involved in the cheque. Said notice is marked as Ex.P.5. The PW 1 further deposed that said notice returned with postal shara "unclaimed and intimated" on 04.10.2024. Evidencing the same, the complainant has produced the postal receipt and the returned postal envelope as Ex.P.6 and Ex.P.7. The PW 1 has deposed that in spite of service of demand notice the accused has not paid the amount and thus he has committed the offence.
11. The essential ingredients of section 138 and 142 of Negotiable Instruments Act to be complied are i) drawing of the cheque by the accused ii) presentation of the cheque to the bank with in the period of three months, iii) returning of the cheque unpaid by the drawee bank iv) giving notice in writing to the drawer of the cheque demanding of the payment of cheque amount with in the period of 30 days, v) failure of the drawer to make payment within the period of 15 days after receipt of the demand notice and v) Presentation of the complaint within a month by the complainant after expiry of 15 days of service of notice to the accused. Therefore it is proper to consider whether the statutory requirements for constituting the offence under Section 138 of Negotiable Instruments Act is complied by the complainant.
8
C.C.No.13159/2025
12. It is now proper to consider wither the complainant has complied all the statutory requirements for constituting offence under Section 138 of Negotiable Instruments Act. The cheque is dated 19.07.2024. Said cheque is presented for collection through State Bank of India, Koramangala branch and said cheque returned dishonored on 05.09.2024 for the reason "Funds Insufficient". The legal notice is issued 30.09.2024 and the said notice returned as "unclaimed and intimated" on 04.10.2024. The cause of action arose for prosecution of the accused on failure of the accused to comply the demands in the notice with in the statutory period on 19.10.2024. The complaint is filed before this court on 11.11.2024 within the statutory period. As provided under Section 146 of Negotiable Instruments Act, law presumes that on production of banker slip or memo having thereon the official mark denoting that the cheque has been dishonored, presume the fact of dishonor of such said cheque, unless and until same is disproved. The accused has not disputed that the cheque is drawn from his account and not disputed issuance of cheque and his signature on the cheque. The cheque is presented for collection through the account of the complainant with State Bank of India, Koramangala branch, Bangalore which is situated within the jurisdiction of this court. The accused has denied service of demand notice. But he has not denied the address in the postal 9 C.C.No.13159/2025 envelop or in the notice. The notice is returned with postal endorsement, unclaimed and intimation delivered. To disprove the correctness of such endorsement made by the postal authority, the accused has not made any efforts to summon the postal authority or to prove that the endorsement is incorrect. Therefore the notice to the accused deemed to be served and the accused intentionally unclaimed the notice inspite of delivery of intimation. Thus the complainant has complied all the statutory requirements for constitution of offence under Section 138 of Negotiable Instruments Act. Therefore, the complainant is entitled for presumption under Section 118 and 139 of Negotiable Instrument Act. The provisions of Section 118 provides for presumption as to negotiable Instruments which reads as follows -
118- Presumptions as to negotiable Instruments - Until the contrary is proved, the following presumptions shall be made -
(a) of consideration - that every negotiable Instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;
(b) as to date - that every negotiable 10 C.C.No.13159/2025 instrument bearing a date was made or drawn on such date; (c) ..................
The provisions of Section 139 of Negotiable Instrument Act reads as under:-
139- Presumption in favour of holder - It should be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
13. In the decision relied by both the parties, reported in (2010) 11 SCC 411 between Rangappa V/s Sri Mohan Hon'ble Supreme court has held that -
The presumption mandated by Section 139 of the act does indeed include the existence of a legally enforceable debt or liability.
It is also observed that Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instrument. It is also held that in such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant caused cannot be expected to discharge an unduly high slandered or proof.
11
C.C.No.13159/2025 Thus, by applying the settled legal principles laid down in the above decisions, once the complainant discharges his burden the accused shall rebut the presumption with probable evidence either eliciting the material from the evidence of complainant or producing his evidence.
14. The accused has admitted the business transactions with the complainant. He has stated that he had business transactions with the complainant from last 8 years and he had made the business to the tune of ₹ 70,00,000/- with the complainant. He has also admitted that he used to purchase materials from the complainant from their factory at Belagola Industrial Area, Mysuru. The accused has contended that he has paid all the invoice amount including Exhibit P8 invoice to the factory in charge of the complainant at Mysuru by name Narasimha moorthy and there is no due amount payable by the accused. Thus, in the cross-examination of PW1, the accused has not disputed supply of materials as per Exhibit P8 invoice by the complainant. But he has taken the contention that he has paid the invoice value of Exhibit P8 and also all other invoices raised by the complainant and there is no due amount payable by the accused to the complainant. But in the defence evidence as DW1, the accused has taken the contention that the complainant has not supplied the materials as per Exhibit P8 12 C.C.No.13159/2025 tax invoice. Therefore the complainant has not produced the e way bill in respect of Exhibit P8 tax invoice.
15. The accused has further taken the contention that at the time of commencement of the business transactions with the complainant, he has issued three blank signed cheques to the complainant for the purpose of security. The complainant has misused one among three cheques for the purpose of filing of this case.
16. In the cross-examination of PW1, he has admitted that accused has purchased the materials from their factory at Beragola industrial area, Mysuru. He has admitted that the factory in charge, Ravi was attending the transactions with the accused at Mysuru. He has also admitted that one Narasimha Moorthy is in charge of their factory at Mysuru.
17. In the cross-examination, PW1 has admitted that at the time of commencement of the business transactions, the accused has given 3 cheques to the complainant. But he has not admitted that one among the cheques issued at the time of commencement of the transactions is used for filing of this case. Further he has deposed that the accused has issued 3 cheques for ₹ 1,00,000/- each towards the balance payment in Exhibit P8 for a sum of ₹.3,18,000/- in the month of December 2024. 13
C.C.No.13159/2025 Learned counsel for the accused during the course of arguments has submitted that the PW1 at one stretch has admitted that they have obtained three blank cheques for the purpose of security and at the another stretch he has deposed that in the month of December 2024 the accused has issued three cheques for ₹ 1,00,000/- each. Therefore, learned counsel for the accused has submitted that the case of the complainant is doubtful. It is pertinent to note that even though the accused PW1 has admitted that they have obtained three cheques for the purpose of security, he has not admitted that among said cheques, they have used one cheque for filing of this case. He has specifically deposed that in the month of December 2024, the accused has issued three charges. Therefore, only for the reason that PW1 has admitted that they have collected three cheques at the time of commencement of the business transactions with the accused, it cannot be presumed that the present cheque was issued by the for the purpose of security at the time of commencement of the transactions. The accused is not specific about the cheque numbers issued for the purpose of security at the time of commencement of the transactions with the complainant. Therefore, this factor itself will not establish that the cheque in question is obtained by the complainant for the purpose of security. Even for the sake of arguments it is presumed that the cheque is obtained for the purpose of 14 C.C.No.13159/2025 security. This itself will not preclude the complainant from utilizing said cheque, for claiming the existing legally recoverable debt. In this aspect it is proper to place reliance to the decision of Hon'ble Supreme court reported in (2022) 18 SCC 614 between Sripati Singh(since Dead) through his son Vs State of Jharkhand and another. Wherein it is held that -
21. A Cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. "security" is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfillment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified time frame and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such 15 C.C.No.13159/2025 presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of the NI Act would flow.
Therefore in view of the principles laid down in this decision, the cheque issued for security may also mature for presentation and on dishonour of the same the consequences under Negotiable Instruments Act will follow. Therefore only for the reason that the Ex.P 3 cheque was issued by the accused for security purpose itself does not disentitle the complainant to present it for securing legal liability.
18. The accused has stated that he has repaid entire amount in respect of the transactions with the complainant. But to establish said factor, the accused has not produced any material evidence before this court. The complainant has produced the ledger statement as Exhibit P9 from 01.04.2024 to 11.03.2025, which shows the outstanding due amount for ₹3,18,808/-. This also shows that the accused has paid a sum of ₹.50,000/- on 20.07.2024. The accused, who taken the contention that he has repaid all the amount in respect of material purchased from the complainant, has not produced his ledger statement, cash receipts or bank transfer details before this court.
16
C.C.No.13159/2025
19. Thus, upon considering entire material on record, the accused except his self-serving statement that he has repaid entire amount for the material purchased by him to the complainant, has not produced any documentary evidence before this court. The accused, at the one stretch, in the cross examination of PW 1 has admitted that he has repaid entire due amount including the invoice amount under Exhibit P8. But in his evidence as DW1 he has changed his version and contended that no material is supplied by the complainant as per Exhibit P8 invoice. Thus the accused has contradicted in his evidence. The accused has also stated that he has repaid the due amount to Narasimhamoorthy by cash. But the PW1 has deposed that in their company they will not accept cash payments. If the accused has repaid the amount by cash he should have obtained cash receipt from the complainant. But the accused has not produced any material before this court to show that he has made the payment for the material purchased by him and there is no due amount payable to the complainant. Therefore, this Court is of the considered view that the defence taken by the accused does not inspire the confidence of this Court that there is no outstanding due amount payable by the accused and it does not probabalise non-existence of legally recoverable debt. Therefore, this Court concludes that the accused has failed to rebut the presumption available in favour of the complainant 17 C.C.No.13159/2025 under Section 118 and 139 of Negotiable Instruments Act. The complaint is backed with the presumption under law. It is statutory presumption. Till the accused is able to rebut the presumption about existence of legally recoverable liability, the complainant cannot be called upon to prove the existence of legally recoverable debt by producing cogent and conclusive evidence. The Court is bound to presume that the cheque Exhibit P 3 is issued by the accused towards discharge of legally recoverable debt. Therefore, this Court concludes that the complainant has proved with the aid of presumption under Section 139 of Negotiable Instruments Act that the Accused has issued Exhibit P3 cheque towards discharge of legally recoverable debt and it is dishonored on its presentation for the reason funds insufficient and in spite of issuance of demand notice the accused has not complied the same and thus he has committed the offence punishable under Section 138 of Negotiable Instruments Act. Therefore this Court answers the above point number 1 in the Affirmative.
20. POINT NO. 2 : While answering the point no. 1 this court concluded that the complainant proved that the accused committed the offence punishable under Section 138 of Negotiable Instruments Act. The Amount covered under the cheque is ₹.1,00,000/-. The cheque is dated 19.07.2024. The 18 C.C.No.13159/2025 money involved in the case is used in commercial transactions. Therefore the fine amount that may be imposed is calculated for a sum of ₹.1,20,750/-
21. The Hon'ble High Court of Karnataka in the reportable decision in CRL.RP No. 996 of 2016 dated 09-07-2025 between M/s Banavathy and Company VS Mahaeer Electro Mech (P) Ltd at para 21 has held that -
21. In case lesser interest is awarded and only default sentence is imposed, the rigor of offence under Section 138 will be diluted and thereby the object of the Statute will be defeated. If recovery and compensatory part is not taken care of while determining the quantum of sentence and appropriate interest is not awarded, until the date of recovery of the entire amount, the complainant will be forced to file civil suit on the same subject matter. In view of Section 143(3) the trial for offence under Section 138 of N.I.Act has to be completed within six months. If the said provision is not adhered to and the trial for the offence under Section 138 of N.I.Act takes 4 to 5 years, in the mean time, the claim of the complainant for recovery of the cheque amount by filing civil suit becomes barred by limitation. Not only that the accused who is convicted for offence under Section 138 of N.I.Act challenges the same before the Sessions Court wherein the matter takes 2 to 3 years. The accused unsuccessful in the said appeal prefers revision petition before the High Court and it is seen that the disposal of revision takes more than 5 years. After all this if the complainant has to receive the fine/compensation as awarded by the trial Court, if it is cheque amount or little higher than the cheque amount, he will be at loss and put to injustice. Therefore, while passing the order of sentence after determining the 19 C.C.No.13159/2025 fine/compensation, the Court shall also pass an order to pay future interest @ 9% p.a. on the compensation amount payable to the complainant by fixing time of one/two 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.
Therefore considering directions issued by the Hon'ble High Court in this decision it is proper to direct the accused to pay future interest on the fine amount at the rate of 9 % P.A. till payment. Therefore considering all these aspects this court proceed to pass the following -
ORDER By exercising powers conferred under Section 278(2) of Bharathiya Nagarika Suraksha Sanhitha the accused is convicted for the offence punishable under Section 138 of Negotiable Instrument Act and he is sentenced to pay a fine of ₹.1,20,750/- (Rupees One Lakh Twenty Thousand Seven Hundred and Fifty only), which shall be deposited with in a month and in default, pay interest at the rate of 9% from this day till payment of fine amount, In default to pay the fine with interest, the accused shall undergo simple imprisonment of 6 months.
Further acting Section 395(1)(a) of Bharathiya Nagarika Suraksha Sanhitha out of the fine amount a sum of ₹.5,000/- 20
C.C.No.13159/2025 (Rupees Five Thousand only) shall be defrayed as prosecution expenses to the state.
Further acting Section 395(1)(a) of Bharathiya Nagarika Suraksha Sanhitha a sum of ₹.1,15,750/- (Rupees One Lakh Fifteen Thousand Seven Hundred and Fifty only), , with interest out of the fine amount on recovery shall be paid as compensation to the complainant.
Supply free copy of the judgment to the accused . (Partly dictated to the Stenographer directly on the computer, typed by her, partly dictated to the Adalath AI computer application, transcribed by it, corrected and signed then pronounced by me in the open court on this the 17th day of April 2026).
(GOKULA.K) XXV A.C.J.M., BANGALORE CITY.
ANNEXURE LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
PW.1 : Naveenson Royan LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P1 : Certified Copy of Incorporation Certificate Ex.P2 : Board Resolution Ex.P3 : Cheque Ex.P4 : Bank Endorsement Ex.P5 : Copy of Legal Notice Ex.P6 : Postal receipt Ex.P7 : Returned Postal envelope Ex.P8 : Web copies of tax invoice Ex.P9 : Ledger Extract 21 C.C.No.13159/2025 LIST OF WITNESSES EXAMINED FOR THE ACCUSED:-
DW.1 : Mahesh Kumar.
LIST OF DOCUMENTS MARKED FOR THE ACCUSED:-
Nil (GOKULA.K.) XXV A.C.J.M., BANGALORE CITY.