Bangalore District Court
Harha S vs Mallikarjun H Rao on 27 March, 2026
1
C.C.No.30188/2024
KABC030515802024
Presented on : 17-09-2024
Registered on : 17-09-2024
Decided on : 27-03-2026
Duration : 1 years, 6 months, 10 days
IN THE COURT OF THE XXII ADDL.CHIEF JUDICIAL
MAGISTRATE, BENGALURU
PRESENT: SRI.JAI SHANKAR.J,
B.A.L., LL.B
XXII ADDL.C.J.M., BENGALURU.
DATED: THIS THE 27TH DAY OF MARCH 2026
JUDGMENT U/s.278(1) of BNSS -2023
(OLD CORRESPONDENCE NO. 255(1) OF CODE OF
CRIMINAL PROCEDURE
C.C.NO. : 30188/2024
COMPLAINANT : Sri. Harsha. S,
S/o. Shivanna,
Aged about 34 years,
R/at No.126, AADRI, 7th Cross,
2
C.C.No.30188/2024
2nd Main, Hoysalanagar,
Sunkadakatte,
Vishwaneedam Post,
Bangalore - 560091,
(By Sri.Prakash.S.Suryavanshi. Adv.)
V/s.
ACCUSED : Sri. Mallikarjun H. Rao,
S/o. Hanumantha Rao,
Aged about 50 years,
R/at No.24, Udyan Nagar,
New Jewarg Road,
Kalaburgi - 585102.
(By Sri. Mahesh C.M., Adv.,)
Offence complained of : U/s.138 of N.I.Act
Plea of the Accused : Pleaded not guilty
Final Order : Accused is acquitted
Date of order : 27.03.2026
JUDGMENT
This is a private complaint filed by the complainant against the accused for the offence punishable under Section 138 of Negotiable Instruments Act. 3
C.C.No.30188/2024
2. The brief facts of the complainant's case is as under:
It is contended that, the complainant and accused are relatives and under such acquittance, the accused has borrowed Rs.7 lakhs from 15.03.2017 to 30.06.2020 through cash as well as through bank transfer. The accused had undertook to repay the said amount in the month of April 2024 and due to pandemic of Covid-19, he could not return the amount. On repeated request and demand, the accused issued the cheque bearing No.789027, dt:
29.04.2024 for Rs.7 lakhs drawn on SBI, Bharathnagar, Bangalore - 91, assuring that, on its presentation, it would be honored. Believing the representation of the accused, when the complainant presented the cheque through his banker, it dishonored with shara as "Funds Insufficient" 4
C.C.No.30188/2024 dt:29.04.2024. Thereby, the complainant got issued the demand notice dt:07.05.2024 through RPAD which served on the accused. Despite which, the accused has not chosen to comply it, but got issued the untenable reply dt; 24.05.2024, which has given cause of action to file the present complaint.
3. After filing of the complaint, this court has taken cognizance of the offence punishable U/s.138 of N.I.Act. Sworn statement of the complainant was recorded. Being satisfied that, there are prima-facie materials to proceed against accused, summons was issued. After appearance of the accused, he was enlarged on bail and plea was recorded. The accused has not pleaded guilty, but submitted that, he would go for the trial.
5
C.C.No.30188/2024
4. From the basis of the pleadings, the following points that arise for my consideration are as follows:-
1. Whether the complainant proves that, the accused issued cheque bearing No.789027, dt:29.04.2024 for Rs.7 lakhs drawn on SBI, Bharatnagar, Bangalore-91, towards discharge of his liability which was returned unpaid on presentation for the reason "Funds Insufficient" and despite of knowledge of the notice, he has not paid the said cheque amount and thereby, committed an offence punishable U/s.138 of N.I.Act?
2. What order?
5. The sworn statement and the documents marked at Ex.P.1 to P.7 by the complainant is being treated as the complainant evidence as per the decision of the Hon'ble Apex Court in Indian Bank Association Vs. Union of India and Ors., reported in 2010 (5) SCC 590. The statement of the accused as required U/s.313 of Cr.P.C. was read over 6 C.C.No.30188/2024 and explained to accused, he denied the incriminating evidence appeared against him and submitted that, he has the evidence, but however, later submitted that, he has no evidence from his side. But Ex.D.1 got marked through the confrontation of PW.1.
6. Heard from both side. The complainant counsel relied upon the decisions reported in AIR 2023 SC 5018 - Rajesh Jain Vs. Ajay Singh ., which is dealt on the point of legally enforceable debt, judgment in Crl. Appeal No. 200057/2016, the Bidar Co-operative Bank Ltd., Vs. Girish, Crl.Rev. Pet.No. 256/2022- Sudharkar Reddy C.B Vs. Smt. Pushpa, Judgment in Crl Rev. Pet No. 100079/2016- Krishna Automation and Software and others Vs. Balachandra S. Mule., which is 7 C.C.No.30188/2024 dealt on the point of time barred debt and Circular dt:
19.01.2022 of Hon'ble High Court.
7. Perused the materials available on record.
8. My answer to the aforesaid points are as under:-
Point No.1 :- In the Negative Point No.2 :- As per the final order, for the following:-
REASONS
9. Point No.1:- The complainant has filed this complaint alleging that, the accused has committed an offence punishable U/s.138 of N.I.Act. He pleads and asserts that, the accused in discharge of his liability, has issued cheque bearing No.789027, dt: 29.04.2024 for Rs.7 lakhs drawn on SBI, Bharathnagar, Bangalore - 91, which is being dishonored with shara as "Funds Insufficient". Thereby, he got issued the demand notice which served on 8 C.C.No.30188/2024 the accused. Despite which, he has not chosen to comply it, but got issued untenable reply denying the loan transaction, which has given a cause of action to file the complaint. In order to establish his claim, as said above, the sworn statement and the documents marked at Ex.P.1 to P.7 are being treated as complainant evidence. Therefore, the complainant claiming that, he has discharged his initial burden by not only adducing his oral evidence, but also producing the documentary evidence at Ex.P.1 to P.7, he claims that, he is entitled to claim benefit of Sec.118 & 139 of N.I.Act.
10. On the other hand, though the accused would admit that, the complainant is his brother-in-law and so also, the disputed cheque and the signature appearing therein belongs to him, but he would deny the loan transaction of Rs.7 lakh as pleaded in the complaint and 9 C.C.No.30188/2024 also, the issuance of the cheque towards the discharge of legal liability. He would not dispute the service of demand notice. He questions the financial capacity of the complainant to advance Rs.7 lakhs and takes the defence that, as there was a family dispute between him and his wife ie., the elder sister of the complainant, she has left her matrimonial house and she is residing in her parents house. She has also filed a Divorce petition in M.C.No.5278/2024 and since, there was a family dispute, there was no occasion for him to issue the disputed cheque to the complainant. He also takes the contention that, the disputed cheque was being stolen by his wife and in collusion with the complainant has filed the false case by misusing the cheque and thereby, contending that, he has rebutted the presumption seeks for acquittal. 10
C.C.No.30188/2024
11. Having, heard and after perusal of the materials available on record, at this stage it would be appropriate to extract U/s.118 & 139 of N.I.Act which would help this court to appreciate the rival claims of the parties in the proper manner.
Sec. 118 of the Act reads as thus, that every Negotiable Instrument was made or drawn for consideration and that, every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration.
Sec.139 of Negotiable Instrument Act provides for presumption infavour of PA holder. It reads like this, it shall be presumed, unless the contrary is proved, that, the holder of a cheque received the cheque, of the nature referred to in Sec. 138, for the discharge, in whole or in part, or any debt or any other liability.
11
C.C.No.30188/2024
12. A combined reading of the referred sections raises a presumption infavour of the holder of the cheque that, he has received the same for discharge in whole or in part of any debt or other liability. No doubt, the said presumptions of law are rebuttable in nature, the opponent can take probable defense in the scale of preponderance of probabilities to rebut the presumption available to the holder of the cheque. It is need less to say that, the evidence of the PW.1 can be rebutted even by effectively cross- examining him, rather entering the witness box. In this case, the accused has not chosen to enter the witness box, rather claims that, he has rebutted the presumption by cross examining the PW.1 effectively.
13. So, by gathering the rival claims of the parties with the oral and documentary evidence available on record, 12 C.C.No.30188/2024 it evidence that, the complainant is the brother-in-law of the accused. It also evidences that, as there was a family dispute between the accused and his wife, she has filed a divorce petition in M.C.No.5278/2024 which is pending for consideration. This fact could also be found from the Ex.D.1 the petition which is being marked through the confrontation of the DW.1. Even, the accused would not dispute the disputed cheque at Ex.P.1 does belongs to him and so also, would not dispute the signature appearing therein. Even, he would not dispute the disputed cheque being dishonored for want of sufficient funds as per Ex.P.2. Even, the accused would not dispute the service of demand notice at Ex.P.5. Here, the entire rival claims of the parties is with regard to the loan transaction and the issuance of the disputed cheque.
13
C.C.No.30188/2024
14. As said above, the accused would not only dispute the loan transaction by taking a contention that, the disputed cheque is being stolen by his wife and being misused in collusion with the complainant, but would also question the financial capacity of the complainant in advancing the loan amount of Rs.7 lakhs. The complainant would contend that, he had advanced Rs.7 lakhs from 15.03.2017 to 30.06.2020. He claims that, he has paid the said amount through cash as well as through bank transfer. In this regard, he has also got produced the bank statement at Ex.P.6 which he claims to have transferred from time to time. In precise, in his cross examination, he would claim that, he has advanced Rs.4,50,000/- through bank transfer and Rs.2,50,000/- by way of a cash. Here, the complainant would not dispute the fact of the accused being the founder of M.H.R. Foundation of India and Dathrisha E-Tech 14 C.C.No.30188/2024 Solution Company. Perhaps, the accused would take a contention that, the complainant was working under him, which is also not denied by the complainant. As said above, the complainant has not produced any piece of evidence to establish that, he has advanced Rs.2,50,000/- in cash. However, he would place his complete reliance on the bank statement marked at Ex.P.6 under which, he alleges to have transferred Rs.4,50,000/-. If the Ex.P.6 is perused, the complainant has marked relevant entries in a marker which would indicate that, some amount appears to have been transferred. But, however the complainant has to establish that, the said amount was being transferred to the account of the accused. So, at this juncture, it would be appropriate to extract the entries which would make more relevant to appreciate the fact of the loan transaction. 15
C.C.No.30188/2024
15. It indicate an amount of Rs.11.11 is transferred to Datrisha E-Tech solution, on 07.02.2017, Rs.35,000/- on 10.02.2017 to the very same firm, Rs.1 lakh through IMPS/P2A/707410522470/XXXXXXX 093 UTIV, on 15.03.2017, Rs.1 lakh through the very same reference on 15.03.2017, Rs. 1,000/- through transfer INB Net on 14.08.2017, Rs.14,000/- through INPS/P2A/ 725916925320/XXXXXXX 041 & ANDB on 16.09.2017, Rs. 30,000/- through transfer INB repay on 12.10.2017, Rs.1/- through transfer INB test on 04.04.2018, Rs.700/- through transfer INB Test on 12.06.2018, Rs.1,900/- through transfer INB Test on 12.06.2018, Rs.1,900/- through transfer INB Test on 02.07.2018, Rs.1,400/- through transfer INB Test on 16.08.2018, Rs.400/- through transfer INB Teston 19.08.2018, Rs.1,000/- through transfer INB Teston 19.08.2018, Rs.500/- through transfer INB Test on 16 C.C.No.30188/2024 27.08.2018, Rs.50,000/- through transfer INB Test on 26.09.2018, Rs.500/- through transfer INB Test on 23.10.2018, Rs.2,000/- through transfer INB Krishibandu amount on 31.12.2018, Rs.98,000/- through transfer INB Test on 18.02.2019, Rs.1, Rs.1,000/-, Rs.500/-, Rs.3,000/- on 04.06.2019 & Rs.7,300/- on 08.06.2019, Rs.3,900/- on 17.06.2019 & Rs.652.78 on 12.06.2020 through transfer UPI/ DR/ 915519532160 Mallikar/S SBIN/ MHR Foundation. This entries would indicate that, some amounts are being transferred to the account of the company ie., MHR Foundation and Datrisha E-Tech solution Company. Though, the accused would contend that, while the complainant was working under his company, he used to receive the materials through the complainant which is being partly denied by the 17 C.C.No.30188/2024 complainant, but however, nowhere the accused would deny the amount being debited as referred above.
16. If, the above amount is calculated, it would come at Rs.4,19,165/-. Though, the complainant would contend that, he has transferred almost Rs.4,50,000/- to the account of the accused which is being denied by the accused, but the accused having not denied the debit of the above referred amounts, it suffices that, the case placed by the complainant with regard to the loan transaction appears to be acceptable. Perhaps, having the accused taken a contention that, the complainant was working under him, an inference could be drawn that, the accused being the employer of the complainant, he ought to have debited the amount to the account of the complainant as salary and there would be no occasion for having remitted 18 C.C.No.30188/2024 the above amount as a part of the company transaction amount. So, here it suffices that, there was some loan transaction between the complainant and the accused. No doubt, the complainant has not produced any documentary proof with regard to the loan transaction of Rs.2,50,000/-, but the very conduct of the accused would also suffice that, there was a loan transaction of Rs.7 lakh as pleaded by the complainant.
17. Because, in the course of the cross examination of PW.1, the accused has categorically denied the loan transaction of Rs.7 lakh by questioning the financial capacity. But, while recording the statement U/s.313 of Cr.P.C, he has given a statement that, he had only borrowed Rs.2 lakhs as a loan and he has repaid Rs.1,30,000/-. There is no proof forthcoming to accept the accused borrowing only Rs.2 lakh or of he repaying 19 C.C.No.30188/2024 Rs.1,30,000/-. Perhaps, he would take a contention that, he is due of only Rs.70,000/- and the complainant alleges to have collected the cheque through force. It is an admitted fact that, there is no documentary evidence forthcoming to accept the loan transaction or of Rs.2,50,000/-, but this defence would really go to the root of the case to disbelieve the contention of the defence. Because, as said above, though in his statement, he would contend that, the disputed cheque was being collected through force and has misused by the complainant by mentioning it as Rs.7 lakh, but in the course of the cross examination of PW.1, he would take a contention that, the disputed cheque was being stolen by his wife who is none other than the elder sister of the complainant. The defence is totally contradictory to his claim which suffices that, the case put- forth by the defence is unacceptable. Moreso, in case, if the 20 C.C.No.30188/2024 disputed cheque is being stolen or it was being collected with force, nothing had prevented the accused to initiate some legal action or to stop the payment which admittedly not forthcoming. This suffices that, the defence raised by the accused is a false claim. Even, the I.T. return at Ex.P.7 would suffice the complainant's financial capacity. No doubt, the complainant has not disclosed the loan transaction in the I.T. returns, but the oral evidence of the PW.1 with the documentary evidence at Ex.P.6 with the statement of the accused U/s.313 of Cr.P.C. would suffice the complainant establishing his financial capacity and the loan transaction as pleaded in the complaint.
18. As said above, the complainant claim that, he has advanced Rs.7 lakhs from 15.03.2017 to 30.06.2020, which is being established for the reasons discussed above. 21
C.C.No.30188/2024 Here, though the accused was not successful in establishing the defence of the complainant collecting the disputed cheque with force or his wife having stolen the disputed cheque, but he was successful in rebutting the presumption in establishing the claim made by the complainant as a time barred debt and it is not legally recoverable debt. Because, the very claim of the complainant is that, he had advanced Rs.7 lakhs from 15.03.2017 to 30.06.2020. Here, the last payment ie., 30.06.2020 makes more relevant to appreciate the claim of the defence. The PW.1 would contend that, the disputed cheque was being issued on 24.11.2023, much less before the institution of Ex.D.1 proceeding. But, however in para No.5 of the complaint, it would indicate that, the disputed cheque is alleged to have been issued in the month of April 2024. Either, if the date ie., 24.11.2023 or the month of 22 C.C.No.30188/2024 April 2024 is calculated, it indicates that, the disputed cheque appears to have been issued after the lapse of three years and in the meantime, there was no document reduced in writing so as to accept it as a time debt. The complainant has relied upon the judgment of Hon'ble High Court of Karnataka in Crl. Rev. Pet. No. 256/2022, Sudhakar Reddy C.B. Vs. Pushpa., wherein a point of time barred debt is raised and it is being negativated by the Hon'ble High Court by observing that, even the issuance of the cheque in repayment of time barred debt amounts to a written promise within the meaning of Sec.25(3) of Indian Contract Act. It is not in dispute that, even in the case in hand the disputed cheque alleges to have been issued after the lapse of time period ie., after three years. The Hon'ble High Court of Karnataka in the above referred petition has also placed reliance on the decision of the Hon'ble High Court of 23 C.C.No.30188/2024 Bombay, Division Bench in Dinesh B Chokshi Vs. Rahul Vasudeo bhatt another., reported in 2013(2) MHLJ 130. The complainant has also placed his reliance on the judgment in Crl. Rev. Pet. 100079/2016, DD. 07.03.2024 - Krishna Automation and Software and others Vs., Balachandra S. Mule., passed by Hon'ble High Court of Karnataka, which is also dealt on Sec.25(3) of Contract Act. The Hon'ble High Court has also placed its reliance on the very judgment of the Hon'ble High Court of Bombay, Div. Bench, reported in 2013(2) MHLJ 130, but however in the decision reported in 2021(1) KLR 615, Bidar Uran Co- operative Bank Ltd., Vs. Sri.Girish wherein the Hon'ble High Court has held that, Sec.138 of N.I.Act is attracted only if there is legally recoverable debt as it cannot be said that, a time barred debt is legally recoverable debt. The Hon'ble High Court has also placed reliance of the 24 C.C.No.30188/2024 judgment in Special Leave to appeal (Crl) No.1785/2021 dt:
10.09.2021 passed by the Hon'ble Apex Court, wherein the Hon'ble Apex Court has held that, if the cheque is issued after the time bound period, it would not come under the purview of implied promise and no offence can be brought out U/s.138 of N.I.Act. In the said decision even the scope of Sec.25(3) of the Contract Act is being dealt and the Hon'ble Apex Court has clearly held that, to take the shelter of Sec.25(3) of Contract Act, there should be a written document and merely issuing the cheque would not come within the purview of Sec.25(3) of N.I.Act. No doubt, the judgment relied by the complainant would go to indicate that, even issuance of the cheque would come under the purview of Sec.25(3) of Contract Act, but when the Hon'ble Apex Court has clearly held that, there must be a distinct promise to pay either only or in part of the debt 25 C.C.No.30188/2024 and the promise must be in writing either signed by the person or the agent and unless a specific contract is in the form of novation being created with regard to the payment of time barred debt, Sec. 25(3) of the Contract Act, cannot be invoked.
19. When, the Hon'ble Apex Court has declined to accept the issuance of the cheque itself as a promise in the above referred Spl Leave appeal, with due respect it would be said that, this court has to apply the principles enumerated in the said decision. When, the Hon'ble Apex Court has clearly held that, issuance of the cheque would not confine to the promise U/s 25(3) of Contract Act, with due respect, the decision relied by the complainant in no way comes to the rescue of the complainant and it is not applicable to the case in hand. If the complainant had got 26 C.C.No.30188/2024 reduced any written agreement/contract within a particular point of time and if, he had placed his reliance in support of the disputed cheque, certainly he could have taken the shelter of Sec.25(3) of Contract Act, which admittedly not forthcoming. When, the complainant is so particular of the disputed cheques being issued after the lapse of a time period, by applying the judgment of the Bidar Co-operative Society, this court do not find any force to appreciate the claim of the complainant to be a time debt. No doubt, the complainant has relied the circular dt;19.01.2022 issued by the Hon'ble High Court., wherein period of limitation is being extended till 28.02.2022, but the said circular pertains to the filing of proceedings and not on the law of limitation. The decision relied by the complainant reported in AIR 2023 SC 5018 Rajesh Jain Vs. Ajay Singh., which is dealt on the point of presumption and legally enforceable 27 C.C.No.30188/2024 debt, but having the complainant failed to establish the claim made is a time debt, with due respect, it could be said that, even the said decision is not applicable to the case in hand. In this back ground, it could be said that, though the complainant was able to establish the financial capacity and the loan transaction as pleaded in the complaint, but he utterly failed to establish that, the claim made is a time debt. Therefore, taking into consideration for the reasons discussed above, the complainant having failed to bring the guilt of the accused for the offence punishable U/s.138 of N.I.Act, point no.1 is answered in the Negative.
20. Point No.2:- For the reasons discussed in the point No.1, this court proceeds to pass the following :
ORDER Acting U/s.278(1) of BNSS -2023 (Old Correspondence No. 255(1) of Code of 28 C.C.No.30188/2024 Criminal Procedure), the accused is acquitted for the offence punishable under section 138 of the Negotiable Instruments Act.
The bail bond and cash surety furnished by the accused stands canceled.
Return the deposited cash surety to the accused on proper verification.
(Directly dictated to stenographer on computer, typed by her, revised by me and then pronounced by me in the open court on this the 27th day of March 2026).
JAI Digitally signed by
JAI SHANKAR J
SHANKAR Date: 2026.03.27
J 17:48:10 +0530
(JAI SHANKAR.J)
XXII Addl. Chief Judicial Magistrate,
Bengaluru.
ANNEXURE
List of witnesses examined on behalf of complainant:-
PW.1 : Sri. Harsha.S List of exhibits marked on behalf of complainant:-
Ex.P.1 Original cheque
Ex.P1(a) : Signatures of the accused
Ex.P2 : Bank Memo
29
C.C.No.30188/2024
Ex.P3 : Legal notice
Ex.P4 : Postal receipt
Ex.P5 : Postal acknowledgment
Ex.P6 : Bank statements
Ex.P7 : I.T Returns
List of witnesses examined on behalf of the accused:-
- Nil-
List of exhibits marked on behalf of the accused:-
Ex.D.1 : Complaint copy
Digitally signed
JAI by JAI SHANKAR
SHANKAR J
Date: 2026.03.27
J 17:48:15 +0530
(JAI SHANKAR.J)
XXII Addl. Chief Judicial Magistrate,
Bengaluru.
30
C.C.No.30188/2024