Bangalore District Court
M /S. Ninjacart Services Pvt.Ltd vs Shri Harinarayan Fruit Company on 22 April, 2026
KABC030386042025
IN THE COURT OF THE XXV ADDL. CHIEF JUDICIAL
MAGISTRATE, AT BANGALORE CITY
Dated this the 22nd day of April, 2026
Present : SRI. GOKULA. K
B.A.LL.B.
XXV Addl. Chief Judicial Magistrate,
Bangalore City.
C.C.No.22442/2025
Complainant : M/s Ninjacart Services Private Limited
R/o Helios Business Park
E Block, 2nd floor,
Opp: New Horizon College Bus stop
Service Road,
Kadabeesanahalli,
Bengaluru 560 103.
Rep by its Associate Manager
Mr.Adarsh R.
(By SGA Advocate )
V/s
Accused : Shri Harinarayan Fruit Company
C/o.Babalu Harinarayan Gupta
Flat No.06, Someshwar
Appt Shivshaktt Appt, Lamkhede Zmala
Dindori Road
Nashik, PO:Meri Colony
Gare Maharashtra 422004
Rep by Proprietor
Kumari Amisha
(By SKRG - Advocate )
Plea of accused: Pleaded not guilty
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C.C.No.22442/2025
Final Order: Accused is Convicted
Date of judgment 22.04.2026
JUDGMENT
The complainant has filed the complaint under Section 223 of Bharathiya Nagarika Suraksha Sanhitha 2023 against the accused for the offences punishable under Section 25 of The Payment and Settlement Systems Act 2007 r/w Section 138 of Negotiable Instruments Act.
2. The brief case of the complainant is as under:
That the complainant is involved in the business of wholesale trading of agricultural products and fresh produce supply. The complainant is tied up with Non Banking Financial Institution and enables service of credit facility to its borrowers. That Trillionloans Fintech Private Limited has entered a partnership agreement with the complainant and authorizes the complainant to act as agent on behalf of Trillionloans Fintech Private Limited. The accused engaged in the business of whole sale trade and agricultural products and commission agency. The accused applied for loan before the complainant through Trillionloans Fintech Private Limited in loan application No.337432 and the complainant extended credit facility to the accused for a sum of Rs.14,85,986/- out of which the accused 3 C.C.No.22442/2025 availed Rs.9,19,100/-. Since the accused had applied loan in online platform, he has also signed the loan agreement and other documents digitally. During the process of loan transaction, the accused issued signed NACH bearing UMRN No.ICIC0000000017155717 on 31.07.2024 drawn on ICICI bank for a sum of Rs.14,85,986/-. Initially, the accused assured to make regular payments and later the accused failed to make payment as per the agreement. Hence, the complainant has processed NACH mandate through its banker AU Small Finance Bank, Koramangala for a outstanding sum of Rs.10,46,106/- and on processing said E NACH Mandate, it is returned dishonored with remarks "Balance Insufficient" on 03.05.2025. On receipt of said intimation, the complainant got issued legal notice on 07.05.2025 through registered post and demanded to pay the amount dishonoured under E-NACH Mandate. The notice issued to the accused returned unserved on 16.05.2025 with reason "Refused". Inspite of issuance of notice, the accused failed to pay the claim amount to the complainant with in the statutory time. Therefore, the accused has committed the offence punishable Section 25 of the Payment and Settlement Systems Act 2007 r/w Section 138 of Negotiable Instruments Act. Therefore the complainant has filed the complaint. 4
C.C.No.22442/2025
3. On the basis of Private complaint filed by the complainant, this court taken cognizance of offence and registered the case in PCR No.9772/2025 and recorded sworn statement of the authorized officer of complainant as PW 1 and got marked 10 documents as Ex.P1 to Ex.P.10. This court by considering the material on record issued process under Section 227 of Bharathiya Nagarika Suraksha Sanhita by registering the criminal case. In 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 accused and his plea is recorded. The accused has pleaded not guilty and claimed to be tried.
5. In view of the law laid down by Hon'ble Supreme Court of India in Indian Bank Association V/s Union of India and others reported in AIR 2014 SCW 3463, the affidavit filed by the complainant at the stage of taking cognizance and documents marked is treated as evidence under section 145 of Negotiable Instruments Act. As the evidence of complainant is on record 5 C.C.No.22442/2025 the incriminating circumstances in the evidence of complainant is read over to the accused and his statement under Section 351 of BNSS is recorded. On the application of accused the PW 1 is recalled for cross examination. Inspite of grant of opportunity, the accused has not cross examined PW 1. Hence, cross examination of PW 1 taken as Nil. Inpsite of grant of sufficient opportunities, the accused has not lead defence evidence. Therefore the defence evidence is taken as nil.
6. Heard arguments of learned counsel for the complainant and Arguments of learned counsel for the accused is taken as heard and perused the material on record.
7. On the basis of the material on record following points arise for the consideration of this court :
1. Whether the complainant proves beyond reasonable doubt that the accused has issued NACH Mandate bearing No.ICIC0000000017155717 on 31.07.2024 drawn on ICICI bank for a sum of Rs.14,85,986/- in favour of the complainant and on processing for collection of balance amount of Rs.10,46,106/- it is dishonoured for the reason "Balance Insufficient" on 03.05.2025 and inspite of issuance of demand notice dated 07.05.2025 the accused failed to repay the amount with in the statutory period and thus committed an offence punishable under Section 25 of The Payment and Settlement Systems Act r/w Section 6 C.C.No.22442/2025 138 of Negotiable Instruments Act ?
2. What Order or 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 is examined as PW-1 and in his evidence affidavit he has reiterated the averments made in the complaint. The complainant is a company incorporated under Companies Act which is tied up with NBFC, the Trillion Loans Fine Tech limited, facilitating loan facility as a assignee. To prove the incorporation of the company the PW 1 has produced the true copy of certificate of incorporation as Ex.P 1. The PW 1 has produced the true Copy of Resolution of Board of Directors of the company as Ex.P 2. The PW 1 has also produced the authorization letter issued by Trillion loans as Ex.P.3. As per Ex.P 1 to Ex.P3, the PW1 is authorized to represent the complainant company and prosecute the cases filed by the complainant. These documents prove the legal status of the complainant as a Company and authority of PW 1 to represent the complainant company.
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C.C.No.22442/2025
10. The PW 1 has deposed that is accused engaged in the business of whole sale trade and agricultural products and commission agency. The accused applied for loan before the complainant through Trillionloans Fintech Private Limited in loan application No.337432 and the complainant extended credit facility to the accused for a sum of Rs.14,85,986/- out of which the accused availed Rs.9,19,100/-. It is stated that the complainant is service provider and assignee of Trillion Loans. He has deposed that the accused has agreed to repay the loan as per the terms and conditions of the loan agreement. The accused approached for loan on online platform, he has digitally signed the loan documents. He has produced said loan documents as Ex.P 4. In the sanction letter there is clear authorization by Trillion Loans fine-tech pvt Ltd to the complainant to recover the loan and also process the NACH mandate or any other mandate on behalf of Trillion Loans.Pw 1 has further deposed that during the process of loan transaction, the accused issued signed NACH bearing UMRN No.ICIC0000000017155717 on 31.07.2024 drawn on ICICI bank for a sum of Rs.14,85,986/-. The complainant has produced the E copy of the NACH Mandate as Ex.P 5. He has deposed that initially the accused made regular payments and later the accused failed to make payment as per the agreement, hence, complainant has processed E-NACH mandate through 8 C.C.No.22442/2025 their banker AU Small Finance Bank, Koramangala for a outstanding sum of Rs.10,46,106/-and on processing said E NACH Mandate, it is returned dishonored with remarks "Balance Insufficient" on 03-05-2025. The PW 1 has produced the debit transaction return memo as Ex.P 6. The PW1 has deposed that they have got issued legal notice dated 07.05.2025 calling upon the accused to pay the due amount as per Ex.P7. The PW 1 has deposed that said notice duly returned unserved on 16.05.2025 with reason "Refused". Hence, it is clear that the accused intentionally not claimed the notice and refused it. Therefore notice is deemed to be served since the accused has knowledge of the notice. Evidencing the service of notice, PW 1 has produced the postal receipts and the returned postal envelope as Ex.P.8 and Ex.P.9. He has deposed that inspite of service of demand notice the accused has not paid the amount and thus committed the offence.
11. The offence alleged is primarily under Section 25 of The Payment and Settlement Systems Act 2007, which reads as under.
Section 25. Dishonour of electronic funds transfer for insufficiency, etc., of funds in the account.
(1) Where an electronic funds transfer initiated by a person from an account maintained by him cannot be executed on the ground that the amount of money standing to the credit of that account is insufficient to honour the transfer instruction or that it exceeds the amount arranged to be paid from that account by an 9 C.C.No.22442/2025 agreement made with a bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the electronic funds transfer, or with both:
Provided that nothing contained in this section shall apply unless--
(a) the electronic funds transfer was initiated for payment of any amount of money to another person for the discharge, in whole or in part, of any debt or other liability;
(b) the electronic funds transfer was initiated in accordance with the relevant procedural guidelines issued by the system provider;
(c) the beneficiary makes a demand for the payment of the said amount of money by giving a notice in writing to the person initiating the electronic funds transfer within thirty days of the receipt of information by him from the bank concerned regarding the dishonour of the electronic funds transfer; and
(d) the person initiating the electronic funds transfer fails to make the payment of the said money to the beneficiary within fifteen days of the receipt of the said notice. (2) It shall be presumed, unless the contrary is proved, that the electronic funds transfer was initiated for the discharge, in whole or in part, of any debt or other liability.
(3) It shall not be a defence in a prosecution for an offence under sub-section (1) that the person, who initiated the electronic funds transfer through an instruction, authorisation, order or agreement, did not have reason to believe at the time of such instruction, authorisation, order or agreement that the credit of his account is insufficient to effect the electronic funds transfer. (4) The Court shall, in respect of every proceeding under this section, on production of a communication from the bank denoting the dishonour of electronic funds transfer, presume the fact of dishonour of such electronic funds transfer, unless and until such fact is disproved.
(5) The provisions of Chapter XVII of the Negotiable Instruments Act, 1881 (26 of 1881) shall apply to the dishonour of electronic funds transfer to the extent the circumstances admit.10
C.C.No.22442/2025 Explanation.--For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability, as the case may be.
12. This provision also specify that the provisions of chapter XVII of the Negotiable Instruments Act to the extent the circumstances admit is applicable. The essential ingredients of section 25 of The Payment and Settlement Systems Act 2007 to be complied are i) An electronic fund transfer initiated by the person from his account ii) Processing of the NACH Mandate by the beneficiary, iii) it returning unexecuted for the reason insufficiency of funds to honour transfer instructions. iv) electronic fund transfer was initiated in discharge of any debt or liability v) it is initiated in accordance with the relevant procedural guidelines issued by the service provider vi) Beneficiary making demand with in 30 days of receipt of information of dishonour by giving notice in writing, vii) failure of the person initiating electronic fund transfer to make payment within the period of 15 days after receipt of the demand notice. The Payment and Settlement Systems Act 2007 does not prescribe any time limit to file the complaint. Therefore it is necessary to apply provisions of Section 142 of The Negotiable Instruments Act. Therefore the complainant shall present the complaint within a month after expiry of 15 days of service of notice to the accused. Therefore it is proper to consider whether the statutory requirements for constituting 11 C.C.No.22442/2025 offence under Section 25 of he Payment and Settlement Systems Act 2007 r/w Section 138 of Negotiable Instruments Act is complied by the complainant.
13. The NACH mandate is dishonoured on 03-05-2025, the legal notice is issued on 07-05-2025. It is deemed to be duly served on 16.05.2025. Therefore cause of action arise for prosecution of the accused on expiry of 15 days of service of notice on 01-06-2025. The complaint is filed before this court on 03-06.2025. Thus the complainant has complied all the statutory requirements under Section 25 of Payment and Settlement Systems Act. As provided under Section 25(4) of The Payment and Settlement Systems Act and also under Section 146 of Negotiable Instruments Act law presumes that on production of banker slip or memo having thereon the official mark denoting that the cheque/ electronic fund transfer has been dishonored, presume the fact of dishonor of such said cheque, unless and until same is disproved. The accused has not cross examined PW 1 nor adduced evidence to rebut the presumption. The accused has not denied service of demand notice nor issued reply to the demand notice. Therefore, the complainant is entitled for presumption under Section 25 (2) of The Payment and Settlement Systems Act 2007. Under Section 139 of Negotiable Instrument Act also there is similar 12 C.C.No.22442/2025 presumption. The provisions of Section 139 of Negotiable Instrument Act reads as under:-
139- Presumption in favour of holder - It should be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
14. Hon'ble Supreme court in a decision reported in (2010) 11 SCC 411 between Rangappa V/s Sri Mohan has held that -
The presumption mandated by Section 139 of the act does indeed include the existence of a legally enforceable debt or liability. It is also observed that Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable 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.
15. Therefore the principles laid down in this decision can also be made applicable to the proceedings for the offence under Section 25 of The Payment and Settlement Systems Act 2007. In view of the principles laid down in these decisions onus is on the accused to rebut the presumption. The accused has not issued any reply at the initial stage at the time of service of the 13 C.C.No.22442/2025 legal notice. The accused has also not cross examined PW 1 inspite of grant for sufficient opportunity and not lead his evidence. Therefore there is no defence by the accused to rebut the presumption. The accused has not utilized the opportunity to defend the case.
16. The complainant by producing the loan documents Ex.P 4 established availment of loan by the accused by executing loan documents in digital form. These documents bears digital signature of the accused. The accused has also not chosen to cross examine PW 1 or to lead defence evidence to rebut the case put forward by the complainant and to contradict the evidence placed on record. Therefore this court concludes that accused has failed to rebut the presumption under Section 25 (2) of The Payment and Settlement Systems Act 2007 r/w Section 139 of Negotiable Instruments Act. Therefore this court concludes that the complainant has successfully proved that the accused has committed the offence punishable under Section 25 of The Payment and Settlement Systems Act 2007 r/w. Section 138 of Negotiable Instruments Act. Therefore this court answers the above point No.1 in the Affirmative.
17. 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 25 of The 14 C.C.No.22442/2025 Payment and Settlement Systems Act r/w Section 138 of Negotiable Instruments Act. The Amount covered under the NACH is Rs.10,46,106/-. The NACH mandate is processed for collection on 03-05-2025. The money involved in the case is used in commercial transactions. Therefore considering all these aspects the amount of fine calculated for a sum of Rs.11,45,000/-.
18. 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 Mahaveer 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 15 C.C.No.22442/2025 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 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 issued in the above referred judgment, it is also 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 25 of The Payment and Settlement Systems Act 2007 R/w Section 138 of Negotiable Instrument Act and he is sentenced to pay a fine of Rs.11,45,000/-. (Rupees Eleven Lakhs Forty five Thousand 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.
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C.C.No.22442/2025 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 Rs.5,000/- (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 Rs.11,40,000/-. (Rupees Eleven Lakhs Forty Thousand 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. (Dictated to the Stenographer directly on the computer, typed by her, corrected and signed then pronounced by me in the open court on this the 22nd day of April 2026).
(GOKULA.K) XXV A.C.J.M., BANGALORE CITY.
ANNEXURE LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
PW1 : Adarsh.R LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT:
Ex.P1 : True copy of Incorporation
Certificate
Ex.P2 : True Copy of the Board Resolution
Ex.P3 : Authorization Letter
Ex.P4 : Copies of key fact, statement, sanction
letter, loan agreement, mandate
Ex.P5 : NACH Mandate
Ex.P6 : Dishonour Memo
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C.C.No.22442/2025
Ex.P7 : Office copy of Legal Notice
Ex.P8 : Postal Receipt
Ex.P9 : Postal Track Consignment
Ex.P10 : Certificate U/s.63 of BSA.
LIST OF WITNESSES EXAMINED FOR THE ACCUSED:-
Nil LIST OF DOCUMENTS MARKED FOR THE ACCUSED:-
Nil (GOKULA.K.) XXV A.C.J.M., BANGALORE CITY.