Bangalore District Court
Matangi Iron And Steel Company vs Viraj Projects India Pvt. Ltd on 9 March, 2026
1 C.C.No.54778/2019
KABC0B0009552021
XV ADDL. JUDGE, COURT OF SMALL CAUSES 23rd
ACJM(SCCH-19), MAYOHALL UNIT, BENGALURU
PRESENT: -
SRI. MOHAN SADASHIV POL,
B.A., L.L.B(Spl)
XV ADDL. JUDGE, Court of Small
Causes & 23rd ACJM, Bengaluru.
Dated this the 9th day of March, 2026
C.C.No.54778/2019
1) M/s. Matangi Iron & Steel Company,
R/by its Proprietor,
Mr. Dhiraj Aggarwal, Age 55 years,
No.13, 17th Main, HAL II Stage,
Indiranagar, Bangalore-560 008. ...... Complainant
(By Sri. R.R.T. Adv.,)
V/s.
1) M/s. Viraj Projects India Pvt. Ltd.,
R/by its Managing Director,
Having Registered Office at:
1st Floor, S.No.34, Near Inorbit Mall,
Wadgoan, Sheri, Pune-411 014.
2 C.C.No.54778/2019
2) Mr. Amulya Kumar Bal,
Director,
M/s. Viraj Projects India Pvt. Ltd.,
3) Mr. Vilaskumar Thanmal Palresha,
Director,
M/s. Viraj Projects India Pvt. Ltd.,
4) Mr. Dheeraj Prabhakar Malineni,
Director, M/s. Viraj Projects India Pvt. Ltd.,
A2 to 3 are at: No.588, 19th Main Road,
20th Cross Road, Sahakara Nagar,
Bengaluru, Karnataka-560092. ......... Accused
( A.1 to 4 By Sri.J.K.L. Adv.,)
LIST OF DATES
01 Date of Cheque 25-03-2019
02 Date of Dishonour 04-05-2019
03 Date of issuance of Statutory 03-06-2019
Notice
04 Date of Service of Notice 04-06-2019
(deemed)
05 Date of Complaint 17-07-2019
06 Offences Charged with U/Sec.138 of NI Act.
07 Date of Judgment 09-03-2026
08 Whether Acquitted or Convicted
Convicted
09 Sentence imposed Fine of Rs.25,64,491/-
3 C.C.No.54778/2019
JUDGMENT
This case is arising out of a private complaint filed by the complainant against accused No.1 to 4 alleging commission of offense punishable under Sec.138 of N.I Act.
2. The brief facts of the complainant case in a nutshell that, it is running the business of trading iron and steel products used in infrastructure, engineering and construction industries and stocks and supplies Mild Steel products. Accused No.1 is the company and accused No.2 to 4 are the Directors. The accused persons have approached the complainant for the supply of TMT Bars Sheets. Consequently, the accused placed various purchase orders for purchasing the variety of TMT Bars sheets on various date and the complainant supplied and delivered the materials as per the purchase orders.
3. Further, in order to discharge his legally enforceable liability/payment accused No.1 to 4 have issued a post 4 C.C.No.54778/2019 dated cheque bearing No.085011 dtd:25-03-2019 for Rs.20,58,043 drawn on Corporation Bank, Pune Main Branch, promised the same will be honoured when presented. As per the instructions of the accused, the complainant had presented the said cheque for collection, but the said cheque was dishonoured on 04-05-2019 with an endorsement "Funds Insufficient". Therefore, the complainant got issued a legal notice on 03-06-2019 and it was duly served on accused No.1 to 4 on 04-06-2019. Despite of issuance of notice, complainant did not receive the payment under the returned unpaid cheque and aggrieved thereby filed a complaint before this Court.
4. Initially the complaint was registered as P.C.No.54073/2019. Acting upon the complaint, Hon'ble LVIII Addl. Chief Metropolitan Magistrate, Mayohall Unit, Bengaluru Court took the cognizance of the offence p/u/s 138 of NI Act. Sworn statement of the complainant was recorded and got marked Ex.P.1 to 10. Being satisfied that 5 C.C.No.54778/2019 there are prima-facie materials to proceed against accused No.1 to 4, Private Complaint was converted to Criminal Case and issued summons to accused No.1 to 4. Upon service of summons, accused No.2 was appeared and enlarged on the bail. The Plea of accused No.2 was recorded as per Sec.251 of Cr.P.C. accused No.2 has not pleaded guilty and submitted that he has defense to make.
5. As per notification No.ADM-I(A)30/20 dtd:23-12-2020 of Hon'ble CMM, Bengaluru this case is transferred to this Court.
6. After receipt of the case, accused No.3 and 4 appeared before this Court and enlarged on bail. Plea was recorded as per Sec.251 of Cr.P.C. Accused No.3 and 4 have not pleaded guilty and submitted that they have defense to make.
7. As per the guidelines and direction of Hon'ble Supreme court in Indian Bank Association and others Vs. Union of India Bank Association and others reported in (2014) 6 C.C.No.54778/2019 5 SCC 590, this Court treated the sworn statement of the complainant as complainant evidence. Accused No.2 to 4 were examined U/Sec.313 of Cr.P.C and they denied the incriminating circumstances.
8. Ld. Counsel for the complainant files written arguments and citations. Heard the Ld. Counsel for the accused. Matter is reserved for judgment.
9. On the basis of the above said materials, evidence and pleadings the points that would arises for my determinations are;
Point No.1:- Whether the Complainant proves that the cheque drawn on the account of accused No.1 to 4 is issued for the discharge of legally enforceable liability and it is dishonoured with an endorsement as "Funds Insufficient" and inspite of service of legal notice and demand, the accused failed to pay the cheque amount within stipulated period as such they have committed an offence punishable U/Sec.138 of Negotiable Instruments Act?
7 C.C.No.54778/2019Point No.2:- What order?
10. My findings to the above points are as under:
Point No.1 : In the affirmative Point No.2 : As per the final order, for the following:
:R E A S O N S:
11. Point No.1: - The complainant in order to prove his case, examined himself as PW.1 and reiterated the entire complaint averments. In support of his oral testimony he relied upon Ex.P.1 to Ex.P.10. The Ex.P.1 is the copy of purchase order, Ex.P.2 is the Original Cheque, Ex.P.3 and 4 are Bank Endorsements, Ex.P.5 is the copy of Legal Notice, Ex.P.6 is the Postal Receipts, Ex.P.7 to 9 are the Postal Acknowledgments and Ex.P.10 Postal Cover.
12. Ld. Counsel for the complainant has filed written arguments by contending that, the complainant has supplied the goods to accused No.1 to 4 in the year 2018 and the liability is of the year 2018, accused No.1 to 4 have 8 C.C.No.54778/2019 issued post dated cheque of the year 2019, which shows that accused No.1 to 4 have delayed the payment before the date of issuance of the cheque. Accused No.1 to 4 have not paid the cheque amount within statutory period. Even after filing of this case, accused No.1 to 4 have avoided the payment on or other pretext. The accused persons never intended to make timely payment and try to hold the money as long as possible. It is further contended that, despite of service of notice, accused No.1 to 4 have not paid the cheque amount. Therefore, committed the offence U/Sec.138 of N.I. Act and prayed to convict accused No.1 to 4.
13. Learned counsel for the complainant relied upon the judgment of Hon'ble Supreme Court in (2019) 4 SCC 197 between Bir Singh vs Mukesh Kumar, wherein Hon'ble Apex Court held that, the proceedings under sec.138 of NI Act are for enforcement of criminal and civil liability, the court should exercise its discretionary power to direct payment of compensation. Further, relied upon the 9 C.C.No.54778/2019 judgment of Hon'ble Apex Court in (2012) 1 SCC 260 between R. Vijayan Vs. Baby, wherein Hon'ble Apex Court held that, unless there are special circumstances the court should exercise the power to levy fine upto twice of the cheque amount as a compensation. Further, relied upon the judgment of Hon'ble High Court of Karnataka in Cri. Rev. Pet. No.996/2016 between M.S. Banavathy and com., vs Mahaeer Electro Mech., (P) Ltd., and (2025) SCC online KAR 786 between A.V. Poojappa vs Dr. S.K. Vagdevi on the ground to imposing the fine upto twice of the cheque amount.
14. Ld. Counsel for accused No.1 to 4 has submit his arguments by contending that, accused No.1 to 4 have admitted the transaction with the complainant and issuance of the cheque. Further, submitted that accused No.1 to 4 were ever ready to pay the cheque amount, but, the complainant was not ready to compound the matter. The accused persons have deposited the cheques in the Court for 10 C.C.No.54778/2019 the purpose of compromise, but, complainant has not received the same. Therefore, accused No.1 to 4 have filed the applications U/Sec.258 of Cr.P.C and Sec.143 of N.I. Act by undertaking to deposit 10% interest from the date of cheque for settled the matter. On 20-02-2023 as per the order of this Court, accused No.1 to 4 have deposited two DD's in the name of Registrar of this Court for Rs.20,58,043/- and Rs.5,06,448/-. Further, Ld. Counsel for the accused submitted that, if accused No.1 to 4 are convicted the deposited amount may be considered as fine amount and setup may be granted to accused No.1 to 4.
15. On perusal of Ex.P.1 the purchase order, Ex.P.2 the cheque, it appears that, it has been issued by the accused No.1 to 4. On perusal of Ex.P.3 and 4 the bank endorsements, it appears that the cheque got bounced and dishonored for the reason of "Funds insufficient" and Bank intimation was issued on 04-05-2019. On perusal of Ex.P.5 the notice, Ex.P.6 the postal receipts, it appears that, the complainant has 11 C.C.No.54778/2019 issued a notice dtd:03-06-2019 to accused No.1 to 4 on 03- 06-2019 informing about the dishonor and demanded the cheque amount. On perusal of Ex.P.7 to 9 postal acknowledgments, it appears that, it has been served on the accused No.1 to 4 on 04-06-2019.
16. On the basis of facts of the case and evidence led by the complainant, it appears that, the cheque has been presented within time as required, further within 30 days the notice was issued after receipt of Bank intimation with respect to the dishonour of the cheque. The notice was deemed to be served on accused on 04-06-2019 and after lapse of 15 days statutory period the complaint has been filed. Therefore, this Court is of the considered opinion that, the complainant has fulfilled the mandatory requirements under Sec.138 of N.I Act. Therefore this court is of the considered opinion that the cheque has been issued by the accused to discharge the legal liability.
12 C.C.No.54778/2019
17. Accused No.1 to 4 have admitted the transaction and issuance of the cheque. Further, it is contended that, On 20/02/2023 they have deposited the cheque amount with interest at the rate of 10% as per the observation made by this Court dated 10/12/2021.
18. Once the foundational facts that the cheque in question bears the signature of the accused and the same has been drawn on account maintained by the accused are established, a factual base is established to invoke the presumption of cheque having been issued in discharge of a legally recoverable debt and drawn for good consideration by virtue of Sec.118(a) r/w Sec.139 of NI Act.
19. Since, Sec.138 of NI Act is a technical offence, all ingredients as mentioned in above including the necessary compliance in terms of Sec.138 of N.I.Act must be established for the accrual of cause of action in favour of the Complainant. In view of the above detailed discussion, this 13 C.C.No.54778/2019 court hold that the Complainant has establish the essential ingredients of Sec.138 of NI Act. The complainant has succeeded in establishing legally enforceable liability and hence attracted the provision of Sec.139 of N.I.Act. Hence, complainant succeeds in proving his case. Accordingly, accused No.1 to 4 are entitled for conviction.
20. The learned counsel for the complainant contended that, the accused persons have not paid the cheque amount within stipulated period. Therefore, prays to impose the fine at twice of the cheque amount. Per contra, Ld. Counsel for the accused has prayed to set up accused No.1 to 4 for the amount already paid by them. Now the only question before this Court is whether the complainant is entitled to twice the cheque amount.
21. On perusal of the Order sheet, it appears that, on 23-11- 2021 the accused No.1 to 4 have filed application U/Sec.258 of Cr.P.C. On perusal of the said application it appears that, 14 C.C.No.54778/2019 accused No.1 to 4 were seeking permission to deposit the cheque amount. But said application has been opposed by the complainant. Further, on 27-11-2021 the accused persons have filed memo with cheque for Rs.20,58,043/- for settlement and payment of cheque amount. On 10/12/2021 this Court has rejected the said application U/Sec.258 of Cr.P.C. by observing and offering to pay cheque amount with interest at 10%. On 25/03/2022 the complainant refused to settle the matter.
22. Further on 16-04-2022 accused No.1 to 4 have filed 2 nd application U/Sec.258 of Cr.P.C. along with cheque for the cheque amount with interest. But the said application was also opposed by the complainant and matter was not settled. Further, on 22-07-2022 Ld. Counsel for accused No.1 to 4 files application U/Sec.143 of N.I. Act to settle the matter. On 11-10-2022 two DD's are filed for Rs.20,58,043/- and Rs.5,06,448/- in the name of complainant company. But, the Ld. Counsel for the complainant has objected to receive the 15 C.C.No.54778/2019 said DD's and not received the same. Therefore, on 20/02/2023 accused No.1 to 4 have deposited the cheque amount of Rs.20,58,043/- with interest of Rs.5,06,448/- through two D.D.'s in the name of the Registrar of this court.
23. Further, on 19-08-2023 this Court has allowed the application U/Sec.143 of N.I. Act and directed the accused to pay the cheque amount with interest at 10% p.a. from the date of cheque till payment of entire amount. In compliance of the said order on 19-03-2024 the accused persons have submitted two cheques for settlement. On 22-01-2025 the complainant was submitted that, he is not willing to withdraw the amount and settle the matter.
24. PW1 in his cross examination has admitted that, the accused company has cleared the all dues, except the amount of this transaction. Further, he admits that, he has refused the proposal of repayment of cheque amount with additional amount of Rs.5,00,000/-.
16 C.C.No.54778/2019
25. On perusal of the ordersheet and cross examination of PW1, it is clear that, accused No.1 to 4 were ever ready to settle that matter and cleared all other dues. The accused have furnished the cheque amount with interest, but, it is the complainant who refuses the settlement. On perusal of ordersheet dated 20/02/2023 accused No.1 to 4 have deposited the cheque amount of Rs.20,58,043/- with interest of Rs.5,06,448/- through two D.D.'s in the name of the Registrar of this court. The said amount has been deposited in the name of the Registrar of this court.
26. Since, accused No1 to 4 have already deposited the cheque amount with interest in total Rs.25,64,491/- on 20/02/2023 itself, this court is of the considered opinion that, this is not a fit case to impose a fine at twice the cheque amount. Learned counsel for the complainant relied upon the judgment of Hon'ble Supreme Court in (2019) 4 SCC 197 between Bir Singh vs Mukesh Kumar, in (2012) 1 SCC 260 between R. Vijayan Vs. Baby. Further, relied 17 C.C.No.54778/2019 upon the judgment of Hon'ble High Court of Karnataka in Cri. Rev. Pet. No.996/2016 between M.S. Banavathy and com., vs Mahaeer Electro Mech., (P) Ltd., and (2025) SCC online KAR 786 between A.V. Poojappa vs Dr. S.K. Vagdevi on the ground to imposing the fine upto twice of the cheque amount. The Hon'ble Apex court and High has held that, unless there are special circumstances the court should exercise the power to levy fine upto twice of the cheque amount as a compensation. But, in the present case, accused No.1 to 4 were ready to settle the matter since beginning, they have also deposited the cheque amount with interest. Therefore, it appears that, the accused are not in the intention to delay the payment. Therefore, the facts and circumstances of the judgments relied by the complainant do not come to the aid of the complainant. Looking into the facts and circumstances of the case and conduct of accused No.1 to 4 to settle the matter, this Court is of the opinion that, the set up has to be awarded to accused No.1 to 4 for 18 C.C.No.54778/2019 the amount already deposited by them and this is not a fit case to impose a fine upto twice of the cheque amount. Accordingly, accused No.1 to 4 are entitled for conviction. Hence, this Court proceed to answer Point No.1 in the affirmative.
27. Point No.2:- For the above discussion, this Court is of the opinion that the complainant is entitled to be compensated with the entire cheque amount and interest already deposited. Therefore, complainant is entitle for cheque amount with interest in total Rs.25,64,491/- already deposited by accused No.1 to 4 with accrued interest. Thus, this court proceed to pass following....
-: ORDER :-
Acting U/Sec.255(2) of CrPC 1973, I hereby convict the accused No.1 to 4 for the offence P/U/Sec.138 of NI Act, 1881.
Accused No.1 to 4 are sentenced to pay fine of Rs.25,64,491/-. The fine amount has been 19 C.C.No.54778/2019 set up to the amount already deposited by accused No.1 to 4 on 20-02-2023.
The fine/deposited amount of Rs.25,64,491/- with accrued interest shall be paid to the complainant as compensation.
Bail bond of accused No.2 to 4 stands cancelled.
Issue free copy of Judgment to accused No.1 to 4 forthwith.
(Dictated to the Stenographer directly on computer, and then corrected and pronounced by me in the open Court on this the 9th day of March, 2026).
Digitally signed by MOHAN MOHAN SADASHIV SADASHIV POL (Mohan Sadashiv Pol) POL Date:
2026.03.10 XV ADDL. JUDGE, Court of Small 11:41:12 +0530 Causes & XXIII ACJM, Bengaluru.
:ANNEXURE:
1.List of witnesses examined on behalf of complainant:
P.W.1 : Sri. Dhiraj Aggarwal.
2. List of exhibits marked on behalf of complainant:
Ex.P.1 : Purchase Order.
Ex.P.2 : Cheque.
20 C.C.No.54778/2019
Ex.P.3 & 4: Bank Endorsements.
Ex.P.5 : Legal Notice.
Ex.P.6 : Postal Receipt.
Ex.P.7 to 9 : Postal Acknowledgments.
Ex.P.10 : Postal Cover.
3. List of witnesses examined on behalf of the accused:
NIL
4. List of exhibits marked on behalf of the accused:
NIL Digitally signed
MOHAN by MOHAN
SADASHIV SADASHIV POL
Date: 2026.03.10
POL 11:41:20 +0530
(Mohan Sadashiv Pol)
XV ADDL. JUDGE, Court of Small
Causes & XXIII ACJM, Bengaluru.