Bangalore District Court
Nandish Maruthi vs Nagaraju.M on 12 March, 2026
KABC020089462023
IN THE COURT OF THE XII ADDL. JUDGE, COURT OF SMALL
CAUSES & ADDL. CHIEF JUDICIAL MAGISTRATE,
BENGALURU (SCCH-08)
DATED THIS THE 12th DAY OF MARCH - 2026
PRESENT: Smt. Kannika M.S.
M.A, LL.B.,
XII ADDL. SCJ & ACJM,
MEMBER - MACT, BENGALURU.
C.C. No.3146/2023
Complainant : Sri.Nandish Maruthi
S/o Late B.Maruthi,
Aged about 38 years
R/at : #1310, 2nd cross,
24th main, KHB colony
Govindarajanagar
Bengaluru-560 079
(By Sri.Rakshith Kumar- Advocate)
:Vs:
accused : Sri.Nagaraju M.
S/o Sri.N.Murthy
Aged about 40 years
No.38/1, 7th cross,
Saraswathipura
Nandini extension,
Bengaluru-560 096.
(By Sri.Vikas M- Advocate)
SCCH-8 2 C.C.No.3146/2023
Date of complaint : 04.02.2023
Date of commencement of
Evidence : 13.03.2023
Offence charged : Sec.138 of Negotiable
Instruments Act
Date of Judgment : 12.03.2026
Opinion of the Judge : Accused found guilty
JUDGEMENT
This is a private complaint filed U/Sec.200 of Cr.P.C. against the accused for the alleged offence punishable U/Sec.138 of N.I. Act.
2. The brief facts of the case of the complainant is that:
The accused and his wife had entered into an agreement for sale dated 18-10-2021 for sale of immovable property Sy.No.142 (old Sy.No.1) under block No.37 at Jarakabande Kaavalu grama bearing corporation PID NO.12-30-3, BBMP wad No.68 Municipal No.38 (Municipal New No.3), Nandini extension, 7th cross, Saraswathipuram, Bengaluru city for Rs.1,10,00,000/-.
On various dates, the complainant has paid the entire sale SCCH-8 3 C.C.No.3146/2023 consideration of Rs.1,10,00,000/- within the time stipulated to perform the complainant's part of contract. The accused had borrowed hand loan of Rs.70,15,000/- to clear the bank loan obtained by him from M/s Pragathi cooperative bank Ltd., Malleswaram as against mortgaging the aforesaid property. The complainant paid Rs.1,80,15,901/- i.e., over and above the sale consideration mentioned in the agreement for sale dated 18-10- 2021 and he had paid additional amount of Rs.70,15,901/- as a hand loan to clear the existing bank loan created mortgaging the aforesaid property and further it was assured by the accused that he shall return the amount within two months from the date of clearing the loan amount.
3. The complainant further submits that he had transferred a total amount of Rs.68,65,000/- to the accused i.e., (a) Rs.39,00,000/- to Pragathi cooperative bank, Malleswaram bearing account No.201600001248 on 4-11-2021 (loan account)
(b) Rs.29,65,800/- paid to Pragathi cooperatve bank bearing account No.201600001248 on 29-11-2021 (loan account) and (c) Rs.1,50,901/- has been paid to the accused by bank transfer to SCCH-8 4 C.C.No.3146/2023 the SBI account No.32827745903, Yashwanthpur branch, Bengaluru. Inspite of several reminders to repay the aforesaid debt, the accused person failed to comply his promise. That on 01-09-2022 for the existing debt due towards the complainant, the accused had issued a post dated cheque bearing No.047355 dt.15-11-2022 for Rs.70,15,000/- drawn on Pragati co-operative bank Ltd., in favour of the complainant.
4. The complainant further submits that, he has presented the said cheque to the bank for encashment, but the said cheque dishonoured as Account closed. The complainant issued the legal notice on 23-12-2022. After service of notice, the accused rather complying the notice, chose contrary by replying to the demand notice. The accused has not paid the amount and hence, the complainant has filed the present complaint before this Court.
5. Cognizance was taken and sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, the summons was issued to accused. Accused appeared through his counsel and got enlarged on bail. Substance of accusation was framed, read over and SCCH-8 5 C.C.No.3146/2023 explained to the accused in the language known to him, he denied the same and claimed to be tried. Hence, the case was posted for complainant's evidence.
6. In order to prove his case, the complainant himself got examined as PW-1 and got marked the documents at Ex.P1 to Ex.P10 and closed his evidence. PW-1 on confrontation got marked Ex.D1 to Ex.D4. The accused got examined himself as DW-1 and his wife Shwetha as DW-2. After closure of complainant's side evidence, the statement U/Sec.313 of Cr.P.C was prepared and read over to accused, he has denied the same.
7. I have heard the arguments of learned counsel for complainant. Perused the written arguments filed by the accused and entire records in this case.
8. The following points arise for my consideration:
1. Whether the complainant proves that, the accused has issued a cheque bearing No.047355 dt.15-11-2022 for Rs.70,15,000/- drawn on Pragati co-operative bank Ltd., in favour of the complainant and the complainant presented the said cheque for encashment, but the same returned with an endorsement as "Account closed" ?SCCH-8 6 C.C.No.3146/2023
2. Whether the complainant further proves that he has got issued the legal notice dated: 16-12-2022 to the accused demanding the cheque amount from the Accused within 15 days from the date of receipt of the notice, the said legal notice is duly served on the accused but the accused has failed to make the payment of the cheque amount well within the prescribed time and there by committed an offence punishable under section 138 of Negotiable Instrument Act?
3. What order?
9. The finding of this court on the above points is as under:
Point No.1 : In Affirmative,
Point No.2 : In Affirmative,
Point No.3 : As per final order,
for the following;
REASONS
POINTS NO.1 & 2:
10. Since these points are interconnected, they are taken up together for discussion to avoid repetition of facts.
11. According to the complaint, the accused and his wife had entered into an agreement for sale dated 18-10-2021 for sale of immovable property Sy.No.142 (old Sy.No.1) under block No.37 SCCH-8 7 C.C.No.3146/2023 at Jarakabande Kaavalu grama bearing corporation PID NO.12- 30-3, BBMP wad No.68 Municipal No.38 (Municipal New No.3), Nandini extension, 7th cross, Saraswathipuram, Bengaluru city for Rs.1,10,00,000/-. On various dates, the complainant has paid the entire sale consideration of rs.1,10,00,000/- within the time stipulated to perform the complainant's part of contract. The accused had borrowed hand loan of Rs.70,15,000/- to clear the bank loan obtained by him from Pragathi cooperative bank Ltd., Malleswaram as against mortgaging the aforesaid property. The complainant paid amount of Rs.70,15,901/- as a hand loan to clear the existing bank loan created mortgaging the aforesaid property and further it was assured by the accused that he shall return the amount within two months from the date of clearing the loan amount. The complainant had transferred the amount to the Pragathi co-operative bank on behalf of accused for discharge of mortgage loan borrowed by accused. Inspite of several reminders to repay the aforesaid debt, the accused person failed to comply his promise. Finally on 1-9-2022 the accused had issued a post dated cheque bearing No.047355 dt.15-11-2022 for SCCH-8 8 C.C.No.3146/2023 Rs.70,15,000/- drawn on Pragati cooperative bank Ltd.,in favour of the complainant for discharge of the loan amount. The complainant presented the said cheque to the bank for encashment, but the said cheque dishonoured as Account closed. The complainant issued the legal notice on 16-12-2022. After service of notice, the accused rather complying the notice, chose contrary by replying to the demand notice.
12. In support of his contention, he has filed affidavit in lieu of examination-in-chief wherein reiterated the averments of the complaint and examined as PW.1 and got marked Ex.P1 to P10. Ex.P1 is the cheque issued by the accused in favour of the Complainant, Ex.P1(a) is the signature of accused, Ex.P3 is the legal notice, Ex.P4 is the postal acknowledgment, Ex.P5 is the postal receipt, Ex.P6 is the reply notice dt.5-1-2023, Ex.P7 is the corrigendum notice dt.25-1-2023, Ex.P8 is the postal receipt, Ex.P9 is the account statement, Ex.P9(a) to (k) and (l) are the relevant entries regards to transfer of amount and Ex.P10 is the tract consignment.
SCCH-8 9 C.C.No.3146/2023
13. On careful perusal of material placed on record Ex.P1 is the cheque bearing No.047355 dt.15-11-2022 for Rs.70,15,000/- drawn on Pragati co-operative bank Ltd.,. The complainant has presented the said cheque for encashment through his banker, but the said cheque came to be dishonored and returned with shara "Account closed" as per Ex.P2. Subsequently, complainant has issued a legal notice to the accused as per Ex.P3 through RPAD on 16-12-2022 and the said RPAD was served. Thereafter complainant has filed this case against the accused on 4-2-2023. Hence, complainant has complied the mandatory requirements of Sec.138 of N.I. Act.
14. Accused himself examined as Dw1 and also examined his wife as Dw2, in their oral evidence they deposed that, they have constructed a building by obtaining mortgage loan from the Pragathi Krishna Gramin Bank, due to COVID theri business suffered losses and they had to close their business and tenants also vacated the houses, resulting in financial difficulties and their inability to repay the bank loan. Therefore, they decided to sell the property and advertised it on SCCH-8 10 C.C.No.3146/2023 OLX for ₹2,30,00,000/-. After the advertisement, several people approached to purchase the property. Among them, the complainant, Mr. Nandish, also came forward and agreed to purchase the property for ₹1,80,00,000, stating that he would pay the amount in one or two installments. However, even after 7-8 months, he did not pay the amount. Meanwhile, the bank started pressuring them to repay the loan. Then complainant agreed to pay the amount directly to the bank towards the loan and accordingly he cleared the bank loan. After the loan was cleared, the bank returned the original property documents, then they handover the property documents and 4 cheques to the complainant as security and complainant has assured that he would return those after execution of the sale deed.
15. They further deposed afterwords complainant came and stated that the property documents were not proper and that he was no longer interested in purchasing the property and demanded return of the money. they agreed and later paid ₹5,00,000/- to him in their house. Even after receiving the SCCH-8 11 C.C.No.3146/2023 amount, complainant has not come forward to return the document. Then they issued a legal notice to complainant in September 2022. Despite of his request to return the cheques, he did not return them and instead presented them to the bank. The complainant has now demanding the property as well as the cheque amount.
16. Let me discuss whether the amount mentioned in the cheque is for a legally recoverable debt or for other liability. The interpretation of the expression for discharge of any debt or other liability occurring in section 138 of N.I. Act is significant and decisive in matter. The explanation appended to section 138 express the meaning of the expression debt or other liability for the purpose of section 138. This expression means a legally enforceable or other liability. Section 138 treats dishonour of cheque as an offence if the cheque has been issued in discharge of debt or any other liability. The explanation leaves no manner of doubt that to attract an offence under section 138 there should be legally enforceable debt or other liability. As per section 139 of N.I. Act there is a presumption in favour of the complainant that the SCCH-8 12 C.C.No.3146/2023 cheque was issued for discharge of debt or other liability. The said presumption is a legal presumption and it is in favour of the holder of cheque. It is open to the accused to rebut the said presumption. The accused has not rebut the presumptions which is available in favour of the complainant.
17. It is the mandate of Section 139 that there is a presumption in favour of the holder of the cheque that the holder received the cheque of the nature referred to in section 138, for the discharge in whole or in part or other liability. Needless to mention that the presumption contemplated under section 139 of N.I. Act is a rebuttable presumption. However the onus of proving that the cheque was not in discharge of any debt or other liability is on the drawer of the cheque/accused. In Hiten P. Dalal V/s Bratindranath Banerjee reported in 2001 (6) SCC 16 the Hon'ble Supreme Court held that both section 138 and 139 require that the court shall presume the liability of the drawer of the cheque for the amounts for which the cheque are drawn.
18. Section 139 introduces an exception to the general rule as to the burden of proof and shifts the onus on the accused. The SCCH-8 13 C.C.No.3146/2023 presumption under section 139 of N.I. Act is a presumption of law, as distinguished from presumption of facts.
19. In Laxmi Dyechem V/s State of Gujarat and others reported in 2012 (13) SCC 375 , the Hon'ble Supreme court reiterated that in view of section 139 it has to be presumed that a cheque was issued in discharge of a debt or other liability but the presumption could be rebutted by adducing evidence. The burden of proof was however on the person who wanted to rebut the presumption.
20. In K.N. Beena V/s Muniyappan and Anothers reported in 2001(8) SCC 458, the Hon'ble Supreme court held that in view of the provisions of section 139 of the N.I.Act read with section 118 thereof the court had to presume that the cheque had been issued for discharging a debt or liability. The said presumption was rebuttable and could be rebutted by the accused by proving the contrary. The accused had to prove by cogent evidence that there was no debt or liability.
21. In this case accused has not disputed regards to the and his wife had entered into an agreement for sale dated 18-10- SCCH-8 14 C.C.No.3146/2023 2021 for sale of immovable property Sy.No.142 (old Sy.No.1) under block No.37 at Jarakabande Kaavalu grama and also transferred of amount of Rs.70,15,901/- to his loan account of Pragathi Co-operative Bank on November 2021 to discharge the Mortgage loan obtained by him in respect of the sale agreement property. The accused defence is that the complainant has agreed to discharge bank loan amount, the said amount is the part of sale consideration amount and they had fixed the property value for Rs.1,10,00,000/- to save the stamp duty. The accused has cross-examined the Pw1 at length to the said aspect but Pw1 has denied the suggestions regards that payment towards Pragathi Co-operative Bank was also the part of sale consideration amount. Except the oral testimony of the accused and his wife nothing to be produced before this court to prove the said aspect, without corroborative evidence mere denial is not sufficient to prove the defence of accused.
22. In this case there is no dispute about the acquaintance between the accused and also execution of agreement of sale deed dated 18.10.2021 and also payment made by the SCCH-8 15 C.C.No.3146/2023 complainant towards mortgage loan to the Pragathi Co- operative Bank and also civil proceedings in between accused and complainant regards to the specific performance of contract in OS No.7170/2022 and also said suit was decreed.
23. The accused in his evidence taken defence is that after payment of Bank loan complainant has taken the original sale deeds of the agreement property and also two cheques each of him and his wife as security and also promising to return the cheques after execution of sale deed, the disputed cheque was one of those cheques. To this aspect accused has relied on Ex.D2, which is the termination notice issued on 21.10.2022 by the accused for termination of the agreement of sale. On perusal of the said notice in paragraph 7 stated that, at the time of registration of agreement of sale complainant has received four singed blank cheques belonging to the accused and his wife and demanded for the return those cheques. As per evidence of the accused cheques were taken by complainant after 2 to 3 days from the discharge of Bank loan by the SCCH-8 16 C.C.No.3146/2023 complainant, as per complaint averments and also admission of the Dw1 complainant has paid the Bank loan in the month of November 2022, agreement of sale executed on 18.10.2021, the oral evidence and documentary evidence of the accused are contradict about when the accused has given the cheques to the complainant.
24. As per complainant averments accused has issued the posted dated cheque on 01.09.2022 towards discharge of the loan which was paid by him to Pragathi Co-operative Bank on behalf of the accused. Accused has also admits that he has obtained the mortgage loan from the Pragathi Co-operative Bank and it was paid by the complainant. The accused in Ex.D2 not at all whispered about the mortgage loan of Rs.70,71,901/- was paid by the complainant to the Pragathi Co-operative Bank and the said amount was also part of sale consideration, they fixed the vallation of property for Rs.1,10,00,000/- to save stamp duty, when accused has silent about the said mortgage money paid by the complainant SCCH-8 17 C.C.No.3146/2023 towards Bank, it clearly indicates that the said mortgage loan amount paid by the complainant is not a part of sale consideration it was a loan amount as per the version of the complainant. The accused has not answered what was precluded him to narrate the facts regards to payment of mortgage loan by the complainant which was paid on November 2021 in the Ex.D2, even he has well aware of the said facts. The suppression of the said fact in the Ex.D2 it also falsifies the defence taken by the accused.
25. The accused in their written arguments taken defence is that prior presentation of the disputed cheque to the bank accused has issued the notice on 12.09.2022 and 21.10.2022, even issuance of notices complainant has presented the cheque and the complainant has not producing the said notices and suppress the issuance of said notice before this court. On the other hand complainant counsel argued that they have narrated about the issue of notice dated 21.10.2022 and accused has not issued any notice on 12.09.2022, cheque SCCH-8 18 C.C.No.3146/2023 issued before issue of the Ex.D3 hence, the said things are not fatal to the case of the complainant. On perusal of the complaint averments as per complainant, posted dated cheque issued by accused on 01.09.2022 by mentioned the date 15.11.2022 and complainant has mentioned about the notice dated 21.10.2022 and also narrated the gist of the notice averments in the complaint. These clears that complainant has not suppressed about the Ex.D2 and the issue of the said notice is not fatal to the case of the complainant.
26. The accused in their written arguments taken further defence that alleged disputed cheque issued as a security, complainant in his cross-examination of OS No.7170/2022 deposed that he has received the cheques as security of mortgage amount. If the security cheque was dishonoured, would not attract the provisions of the Sec.138 NI Act. In support of this accused has relied on Ex.D3 which was deposition of the Pw1 in OS No,7170/2022. On perusal of the said deposition of Pw1, he has deposed that "the blank issued SCCH-8 19 C.C.No.3146/2023 by the defendant No.1 is for the purpose of security of discharge of mortgage loan". Now the question is that whether the cheque issued for security of loan, if dishonored it can be attracted the provision of this Act? To decide this question this court has relied on decision of the Hon'ble Supreme Court in Sampelly Satyanarayana Rao vs. Indian Renewable Energy Development Agency Ltd. In this case Hon'ble court held that
- "a cheque issued as security, pursuant to a financial transaction, cannot be considered as a worthless piece of paper. A security is given, deposited or pledged to ensure the fulfillment of an obligation undertaken. If a cheque is issued to secure repayment of a loan advanced and if the loan is not repaid on or before the due date, the drawee would be entitled to present the cheque for payment, and if such a cheque is dishonoured, the consequences contemplated under Section SCCH-8 20 C.C.No.3146/2023 138 of the Act would follow. When a cheque is issued and is treated as 'security' towards repayment of an amount, with a time period being stipulated for repayment, all that it ensures is that such cheque cannot be presented prior to the date of repayment. A prior discharge of the loan is a sine qua non for the drawee to not present such a cheque for payment."
27. Another decision of The Supreme Court, in the case of Sripati Singh vs. The State of Jharkhand & Anr.
The Court held that a cheque issued by way of security, if dishonoured, would attract the provisions of the Act, if the same is issued in consequence of a legally enforceable debt, which has become recoverable at the time of its presentation.
28. As per the above said decisions it make clears that cheque issued as security, if dishonored it also attracted under SCCH-8 21 C.C.No.3146/2023 Sec.138 of NI Act. According to the version of complainant, he has paid the mortgage loan which was borrowed by the accused from the Pragathi Co-operative Bank, the accused also admits the repayment of mortgage loan by the complainant to the Bank. As per version of complainant for the said loan repayment accused has given post dated cheque on 01.09.2022, but accused denied the said fact and taken defence is that mortgage loan also part of the sale consideration amount as per the agreement of sale property and at the time of execution of agreement of sale complainant has taken take two cheques each from accused and his wife. But accused has has not examined the witnesses of the said agreement of sale if they were orally agreed to discharge the mortgage loan and it was also the part of sale agreement, therefore, accused has failed to prove that mortgage loan amount was also the part of sale consideration amount.
29. The accused in his defence evidence deposed that 2 to 3 days after the payment of mortgage loan he has given the SCCH-8 22 C.C.No.3146/2023 cheques to the complainant and also as per Ex.D2 accused himself admits the execution of agreement of sale and its sale consideration amount of Rs.1,10,00,000/- and receiving of part sale consideration amount and also Ex.P9 clears that complainant has paid the entire sale consideration amount towards agreement of sale. As per these documents complainant has clearly established that sale consideration amount is only Rs.1,10,00,000/- and he has paid the said amount and also additionally he has discharge the mortgage loan of Rs.70,15,901/- to the Pragathi Co-operative Bank on behalf of the accused on November 2021. The said additional amount is not the part of sale consideration amount, it was a legally recoverable loan from the accused. When the accused admits that after payment of the said loan to the Bank he has given cheque as security, it is the duty of the accused to repay the said amount, within the date mentioned in the cheque, if he has fails to pay the amount, there is no bar to present the said SCCH-8 23 C.C.No.3146/2023 security cheque by the holder of the cheque. Therefore, the above said arguments of accused does not holds water.
30. The accused in their arguments taken another defence that complainant in his evidence admits that he has to be produce the IT returns document, but he has not produced the same before the court to show whether he has mentioned in his IT documents balance of the loan amount by the accused. When the accused has admits complainant has paid the mortgage loan which was borrowed by him from the Pragathi Co-operative Bank through account transfer by his account there is no necessity to produce the IT returns and non production of the IT documents not fatal the case of complainant and also it is not the defence of accused he has repaid the mortgage loan which was paid by the Complainant to the Bank. Therefore, production of IT returns document is not necessary.
31. The accused counsel has cross examined the PW1 at length. He has denied all the suggestions of the accused SCCH-8 24 C.C.No.3146/2023 counsel and accused has failed to elicit from the mouth of PW.1 that, accused has not liable to pay the cheque amount it was the part of sale consideration amount and at any point of time accused has not issued the cheque as per Ex.P1.
32. The, main defence of the accused that disputed cheque along with other 3 other cheques were taken by the complainant for security of agreement of sale, he has misused the cheque after he has issued the notice as per Ex.D2. In support of his contention he has not produced any document. Except his oral testimony nothing is produced with regard to the amount paid by complainant to the Bank on behalf of accused is also the part of sale consideration amount and cheque given as security at the time of sale agreement, the accused himself deposed the evidence contrary to the defence taken in the Ex.D3 that cheques taken at the time of execution of agreement of sale. The defence narrated in the Ex.D2 and evidence adduced by the Dw1 and 2 are not corroborative and those were conflict to each other about the when they given cheques. Further accused has not stated what was precluded them to mentioned the cheque SCCH-8 25 C.C.No.3146/2023 numbers in the agreement if they given as security at the time of agreement of sale, but the accused has not answered the said things. The above said contention urged by the accused does not hold any water in the eye of law, only to escape from the clutches of law he has taken the said defence. Though PW.1 is cross examined at length but the whole of cross examination revolves round the alleged defence, but the same was denied. The accused has failed to disprove the case of the complainant in the cross- examination.
33. To put in encapsulated form, a normal prudent man would file a compliant before the law enforcing agency if his cheque was misused, but the accused has not filed any complaint. Hence if is forthcoming that, the contention urged by the accused that he has not issued Ex.P1 cheque is baseless. Further, the accused has not given any instructions to his bank to stop the payment in case of presence of the Ex.P1 cheque. The question arises as to what prevented the accused to give instructions to the bank when the cheque is not returned by the complainant as alleged by the accused. Under the presumption available under SCCH-8 26 C.C.No.3146/2023 section 118 and 139 of the N.I. Act, if the accused is taking up the defence of non-passing of the consideration mentioned in any Negotiable Instrument it is his/accused burden to rebut the presumption. Further Section 16 and 20 of N.I. Act has a provision to holder of a cheque to fill up the blanks in the cheque issued by the drawer. In the present case, the accused has admitted his signature.
34. The trial of cases under N.I. Act is supported with the presumption available under section 118 and 139 of N.I. Act. For the proper adjudication of the matter the accused has to rebut the above said presumption provided under the N.I. Act in favour of complainant through other evidence. It is the contention of the accused that he has not issued Ex.P1 cheque to complainant. The said fact is not proved by the accused. Though the futile attempt has been made by the accused, but having regard to the his cross- examination his evidence will not inspire the confidence of this court. The said factum has been exhaustively discussed above. Hence, without any hesitation it can be held that the presumption SCCH-8 27 C.C.No.3146/2023 available under section 138 of N.I. Act in favour of the complainant stands unrebutted.
35. Further more, the accused has not taken any action against the complainant after assurance made by the complainant to return the cheque. He also admitted that he has not filed any complaint against the complainant to misuse of cheques which he given for security. If really there was transaction as alleged by the accused, then he would have certainly taken action against the complainant. In this regard it is relevant to rely on the decision reported in AIR 2023 SC 5018 in the case of Rajesh Jain V/s Ajay Singh, wherein it was held as here under :
Once the presumption under Section 139 was given effect to, the Courts ought to have proceeded on the premise that the cheque was, indeed, issued in discharge of a debt/liability. The entire focus would then necessarily have to shift on the case set up by the accused, since the activation of the presumption has the effect of shifting the evidential burden on the accused. The nature of inquiry would then be to see whether the accused has discharged his onus of rebutting the presumption. If he fails to do so, the Court can straightaway proceed to convict him, subject to satisfaction of the other ingredients of Section 138. If the Court finds that the evidential burden placed on the accused has been discharged, the complainant would be expected to prove the said fact independently, without taking aid of the SCCH-8 28 C.C.No.3146/2023 presumption. The Court would then take an overall view based on the evidence on record and decide accordingly.
36. The principles laid down therein aptly applicable to the case on hand. In the instant case on hand also the accused has taken a similar defence that the complainant has misused the cheque taken for security to agreement to sale dated 18.10.2021 but the accused failed to initiate any legal action in this regard. The accused however failed to provide any substantial evidence or to file police complaint regarding alleged misuse of cheque. In contrast the case of the complainant remained consistent and the signature of the accused on cheque was unchallenged, allowing presumption has to legally enforceable debt to take effect. To trigger the presumption mere admission of the drawer's signature without admitting the execution of the entire contents in the cheque is sufficient. The said principles has been laid down by the Hon'ble Apex Court in a decision reported in AIR 2019 SC 2446 (Bir Singh V/S Mukesh Kumar) wherein the Hon'ble court held that:
SCCH-8 29 C.C.No.3146/2023
"Negotiable Instrument Act(26 of 1881), S.138, S.139- Presumption as to legally enforceable debt- Rebuttal- signed blank cheque- If voluntarily presented to payee, towards payment, payee may fill up amount and other particulars and it in itself would not invalidate cheque- Onus would still be on accused to prove that cheque was not issued for discharge of debt or liability by adducing evidence."
37. Further on the same point of law it is relevant to rely on a decision of the Apex Court in the case of APS FOREX SERVICES PVT. LTD. v. SHAKTI INTERNATIONAL FASHION LINKERS AND OTHERS reported in AIR 2020 SC 945 held regarding presumption is concerned that when the accused admits issuance of cheque, his signature on cheque and that cheque in question was issued for discharging the liability, there is always a presumption in favour of the complainant that there exists legally recoverable debt or liability.
38. Further on the same point of law it is relevant to rely on a decision of the Apex court 2021(1) DCR 625 between M/s. Kalamani Tex and another Vs P. Balasubramanian, wherein it is held that:
"Since signature on cheque was admitted and presumption raised upon accused was not sufficiently rebutted by accused, so passing acquittal is unjustified".SCCH-8 30 C.C.No.3146/2023
When such is the case the principles laid down therein aptly applicable to the case on hand.
39. In the instant case, the accused has not raised any probable defence. Hence, in such an event the accused has not rebutted the presumption as contemplated under Sec.139 of N.I.Act. The accused though disputed amount mentioned is not legally recoverable debt it was the part of sale consideration amount, but the complainant had demonstrated the cheque amount is a loan not a part of sale consideration amount. The accused also not disputed the signature in Ex.P.1. Therefore, it is clear as a cloud less sky that presumption envisaged under Sec.118 and 139 of N.I.Act has not been rebutted by the accused. The discussions made supra discloses that the accused failed to demonstrate that, he has given the Ex.P1 cheque as a security to the agreement of sale transaction between the accused and the complainant.
40. Furthermore, the transaction and issuance of cheque is proved before this court. Section 139 and 118 of N.I. Act has favourable presumptions in favour of the complainant. When the SCCH-8 31 C.C.No.3146/2023 presumptions are not rebutted and defense is not proved by the evidence placed by the complainant, the burden shifts upon the accused to rebut the presumption. The accused has not placed any probable defence evidence to disprove the case of the complainant. Hence, the defence of the accused is not acceptable in the absence of proper evidence. Thereby, it can be concluded that the Ex.P1 cheque was issued in the nature provided under section 138 of N.I. Act. As there is admission regarding the signature on Ex.P1 cheque and issuance of Ex.P1 cheque. The accused has not made out any sufficient grounds to disprove the complainant's case. On the other hand, the complainant successfully proved his case beyond all reasonable doubts. In view of above discussion, this court answers Points No.1 and 2 is in the Affirmative.
POINT No.3:-
41. In view of the reasons stated and discussed above, the complainant has proved the guilt of the accused for the offence punishable under section 138 of N.I Act. It is worth to note SCCH-8 32 C.C.No.3146/2023 that, the offence is of the nature of civil wrong. Hence, it is proper to award sentence of fine, instead of awarding sentence of imprisonment. Hon'ble Supreme Court of India in a decision reported in (2005) 17 SCC 368, in a case of H.Pukhraj Vs. D.Parasmal, observed that having regard to the length of trial and date of issuance of the cheque, it is necessary to award reasonable interest on the cheque amount along with cost of litigation.
42. Further the cheque is dated:16.12.2022 and we are in the month of March 2026. As of now 3 years 3 months having elapsed from the date of issuance of cheque. If the complainant had kept this amount of Rs.70,15,000/- in a nationalized bank, he would have fetched nominal interest at least Rs.10,35,000/- on the above said amount of Rs.70,15,000/- . Therefore, it is appropriate to compensate the complainant by awarding compensation. By considering the facts and circumstances of the case. I proceed to pass the following order :-
SCCH-8 33 C.C.No.3146/2023
ORDER Acting U/Sec.255(2) of Cr.P.C. the accused is hereby convicted for the offence punishable U/Sec.138 of N.I. Act and he is sentenced to pay fine of Rs.80,60,000/-(Rupees eighty lakhs sixty thousand only).
In default of payment of the fine, the accused shall undergo simple imprisonment for a period of one year.
Out of the fine amount collected from the accused, Rs.80,50,000/- shall be paid to the complainant as compensation u/s. 357(1) of Cr.P.C, remaining Rs.10,000/- shall be forfeited to State towards expenses of the case. It is made clear that in view of Sec.421(1) of Cr.P.C even if the accused undergoes the default sentence imposed above, he is not absolved of liability to the fine amount.
Bail bond and surety bond of the accused stands cancelled.
Office is directed to supply a free copy of the judgment to the accused.
(Dictated to the Stenographer directly on computer, typed by her, corrected and then pronounced by me, in the open Court on this the 12th day of March, 2026) KANNIKA Digitally signed by KANNIKA M S MS Date: 2026.04.02 11:54:17 +0530 (Kannika M.S.) XII Addl. Small Causes Judge & ACJM, Bengaluru.SCCH-8 34 C.C.No.3146/2023
ANNEXURE List of witnesses examined for complainant :-
P.W.1 : Nandish Maruthi List of documents marked for complainant:-
Exhibits Particulars of the Document Ex.P1 Cheque Ex.P1 (a) Signature of the accused Ex.P2 Bank endorsement Ex.P3 Legal notice Ex.P4 Postal acknowledgment Ex.P5 Postal receipt Ex.P6 Reply notice dt.5-1-2023 Ex.P7 Corrigendum notice dt.25-1-2023 Ex.P8 Postal receipt Ex.P9 Account statement Ex.P9(a) to (k) Form under Sec.65(B) certificate under and (l) Indian Evidence Act. Ex.P10 Track consignment List of witnesses examined for accused: DW-1 Nagaraju M. SCCH-8 35 C.C.No.3146/2023 DW-2 Shwetha List of documents marked for accused:- Ex.D1 Amended Plaint Ex.D2 Reply to legal notice dt.11-10-2022 Ex.D3 Certified copy evidence in OS.No.7170/2022 Ex.D4 Written statement filed by defendants in OS No.7170/2022 Digitally signed by KANNIKA M S KANNIKA M S Date: 2026.04.02 11:54:21 +0530 (Kannika M.S.) XII Addl. Small Causes Judge & ACJM, Bengaluru.