Bangalore District Court
Appayanna N vs Abdul Aleem on 24 January, 2026
KABC0A0025542024
IN THE COURT OF LXXIII ADDL.CITY CIVIL &
SESSIONS JUDGE, MAYOHALL UNIT, BENGALURU.
(CCH.74)
PRESENT:
Smt. Anitha N.P., B.A.L., L.L.M.,
LXXIII Addl.City Civil & Sessions Judge,
Mayohall Unit, Bengaluru.
Dated this the 24th day of January 2026
Crl. Appeal. No.25283/2024
Appellant/ Sri. Appayanna N.,
Accused:- S/o: Late Narayanappa,
Aged about 74 years,
R/at No.983, Vijinapura, Dooravani
Nagar Post, Bengaluru 560016.
(By Sri.N.R.Raghavendra - Adv.,)
V/s
Respondent/ Sri. Abdul Aleem
Complainant: S/o: Late Abdul Rasheed,
Aged about 72 years,
R/at Skyline Manor Apartment,
Flat No.003, No. 7, Bride Street,
Langford Road, Richmond Town,
Bengaluru 560025.
(By Sri. V.Srinivasan - Adv.,)
2 Crl.Appeal No.25283/2024
JUDGMENT
This is an Appeal filed by Accused under Section 415(c) of BNSS 2023 and u/sec.374(3) of Cr.P.C., being aggrieved by the Judgment dated 03.07.2024 passed in C.C. No.51277/2021 on the file of XV Addl. Small Causes Judge & XXIII ACJM, Bengaluru, convicting him for an offence punishable under Section 138 of the Negotiable Instruments Act [hereinafter referred to as 'NI Act', for brevity] and sentencing him to pay fine of Rs.4,53,000/- and in default of payment of fine, to undergo simple imprisonment for 10 months. Out of the fine amount, a sum of Rs.4,48,000/- is directed to be paid to the respondent/complainant as compensation and remaining Rs.5,000/- is ordered to be remitted towards State expenses.
2. For the sake of convenience the parties hereinafter will be referred to with their ranking assigned before the trial court. The appellant is the accused and the respondent is the complainant before the trial court.
3. The facts of the case:-
The accused was director of ITI Housing Society and he was handling the lands of the society. The 3 Crl.Appeal No.25283/2024 accused impressed the complainant that the rates in the layout is reasonable, and it is good to invest. On said assurance the accused sought Rs.10 lakhs from the complainant for investment and complainant has paid Rs.10 lakhs for investment in the land in the year January 2019. The accused was not able to locate the land to the complainant and after persuasion he agreed to return the amount to the complainant and he repaid Rs.5 lakhs and for returning the remaining amount of Rs.5 lakhs he sought time. Again after repeated demands the accused issued post dated cheques for a sum of Rs.4 lakhs dated 14.12.2019 in cheque No.316168. The complainant presented the said chque before his banker on 17.02.2020 and the said cheque returned dishonored with endorsement 'funds insufficient' vide memo dated 17.02.2020. Thereafter the complainant issued legal notice on 28.02.2020 and the said notice was received by accused on 06.03.2020. The accused given reply on 09.03.2020 denying the transaction and stating that amount is paid. However the accused not paid the amount of the cheque and thereby, the Appellant has committed the offence punishable under Sec.138 of NI Act. Thereafter the Complainant approached the Trial Court for appropriate legal action against the Accused.4 Crl.Appeal No.25283/2024
4. Pursuant to summons the Accused entered appearance through his Counsel before the Trial Court. The substance of the accusation was read over and explained to the Accused in the language known to him. The Accused pleaded not guilty and claimed to be tried. The Complainant got examined himself as PW.1 and got marked Ex.P.1 to Ex.P.8 documents and closed his side. The Accused got examined himself as DW.1 and got marked 2 documents as per Ex.D1 and 2.
5. The trial court after hearing the counsel for Complainant and accused, convicted the Accused for the offence punishable U/Sec.138 of NI Act vide Judgment dtd.03.07.2024.
6. Feeling aggrieved by the said judgment of conviction, the Accused is in appeal on the following grounds:
1. The impugned order of conviction is illegal, perverse and contrary to the facts. It is the specific defence of the accused that himself and complainant were friends and in the month of January 2019 the complainant met accused to purchase a site and the accused stated that he had no site and he informed that one Srinivas S/o Gurumurthy 5 Crl.Appeal No.25283/2024 resident of KR.Puram Bangalore is having site at HSR Layout. Thereafter the accused, complainant and said Srinivas have discussed in this regard. As per the discussion the complainant paid Rs.10 lakhs to said Srinivas through RTGS on 25.01.2019. The accused was only guarantor and he has not received any amount from the complainant. At that time in resepect of said transaction the complainant collected 2 signed cheques from the accused as security. Thereafter some dispute arose in respect of said site and for that reasons the complainant not agreed to purchase the same and he requested the accused and Srinivas to return back his amount. Accordingly the said Srinivas returned Rs.5 lakhs in the 3rd week of August 2019 through RTGS. The accused also paid Rs.5 lakhs by way of DD on 24.10.2019.
2. During the course of cross-examination the complainant admitted the said facts but stated that it is another transaction. The same was not properly appreciated by the trial court.
3. After repayment of the entire amount of Rs.10 lakhs to complainant the accused requested to return his cheques at that time the complainant stated that cheque is 6 Crl.Appeal No.25283/2024 misplaced and hence he is unable to give back and he will handover the same after it is traced. However complainant had sent legal notice by suppressing the facts.
Accordingly he has given reply to said notice.
4. In the cross-examination the Complainant admitted several facts and thereafter produced documents and the same were not appreciated by the trial court. The complainant not examined any witnesses to prove his case. The complainant not examined said Srinivas.
5. The complainant misused the cheque given as security. There is no legally enforceable debt. Under the above grounds the Appellant sought for acquittal by allowing the appeal.
7. Heard both sides arguments. Respondent also filed his written arguments.
8. The counsel for Respondent has relied upon following citations:
Crl.R.P.No.699/2014 on 01.03.2023 between M.Shashikala Vs. S.Wilfred Crl. Revision Petition No.524/2014 on 10.02.2023 between Vittal Kumar Vs. N.P.Chandran 7 Crl.Appeal No.25283/2024 Crl.Rev.Pet. No.463/2018 on 29.10.2022 between K.N.Malleshappa Vs. Basavanagowda Crl.Apl.No.200221/2021 on 30.11.2022 between Devaraj Doddappa Biradar Vs. Balappa Oma-nna Kurabar @ Padasalagi 2022 LiveLaw (SC) 979 between Jain P.Jose Vs. Santosh & Anr.
AIRONLINE 2020 KAR 2232 between
M.Narasimhalu Vs. Sri.S.Narasimharaju on
06.08.2020.
I have carefully gone through the dictum laid down in the above decisions.
9. Perused the evidence, documents on record and also impugned Judgment of conviction passed by the Trial Court.
10. On re-appreciation of the evidence, documents on record, the following points would emerge for the consideration of this court.
1. Whether the Appellant proves that the cheque in question was not issued towards any legally recoverable debt?
8 Crl.Appeal No.25283/20242. Whether the Judgment of conviction passed by the Trial Court calls for interference by the hands of this court?
3. What Order?
11. My finding on the above points are as under:
Point No.1 : In the Negative.
Point No.2 : In the Negative.
Point No.3 : As per final order for the following:
REASONS
12. POINT NOs.1 and 2:-
Since the above two points are interlinked, in order to avoid repetition of facts the above points have been taken up together for consideration.
13. Before re-appreciating the evidence on record, it is necessary to refer some of the latest rulings of the Hon'ble Apex Court reported in 2019 (3) KCCR 2473 (SC) (Basalingappa V/s Mudibasappa), the Hon'ble Apex Court while considering several earlier rulings on the offence U/Sec.138 of NI Act and also on the presumption 9 Crl.Appeal No.25283/2024 U/Sec.118 and 139 of NI Act, at Para 23 was pleased to observe as follows:
23. We having noticed the ratio laid down by this Court in above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:-
(i) Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.
(ii) The presumption under Section 139 is a rebuttable presumption and the onus is on the Accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
(iii) To rebut the presumption, it is open for the Accused to rely on evidence led by him or Accused can also rely on the materials submitted by the Complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
(iv) That it is not necessary for the Accused to come in the witness box in support of his defence, Sec.139 imposed an evidentiary burden and not a persuasive burden.
(v) It is not necessary for the Accused to come in the witness box to support his defence.10 Crl.Appeal No.25283/2024
14. In another ruling reported in AIR 2010 SC 1898 (Rangappa V/s Mohan), observed as under:-
"Existence of legally recoverable debt or liability- The presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. This is of course in the nature of a rebuttable presumption and it is open to the Accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the Complainant. 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 instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139, is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the Accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an Accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 11 Crl.Appeal No.25283/2024 'preponderance of probabilities'. Therefore, if the Accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. The Accused can rely on the materials submitted by the Complainant and it is conceivable that in some cases the Accused may not need to adduce evidence of his/her own."
15. Keeping in view the broad principles laid down by the Hon'ble Apex Court, let me re-appreciate the evidence and documents on record.
16. The definite case of the Complainant/Respondent is that the accused was director of ITI Housing Society and he was handling the lands of the society. The accused impressed the complainant that the rates in the layout is reasonable, and it is good to invest. On said assurance the accused sought Rs.10 lakhs from the complainant for investment and complainant has paid Rs.10 lakhs for investment in the land in the year January 2019. The accused was not able to locate the land to the complainant and after persuasion he agreed to return the amount to the complainant and he repaid Rs.5 lakhs and for returning the remaining amount of Rs.5 lakhs he sought time.
12 Crl.Appeal No.25283/2024Again after repeated demands the accused issued post dated cheques for a sum of Rs.4 lakhs dated 14.12.2019 in cheque No.316168. The complainant presented the said chque before his banker on 17.02.2020 and the said cheque returned dishonored with endorsement 'funds insufficient' vide memo dated 17.02.2020. Thereafter the complainant issued legal notice on 28.02.2020 and the said notice was received by accused on 06.03.2020. The accused given reply on 09.03.2020 denying the transaction and stating that amount is paid. However the accused not paid the amount of the cheque.
17. The Complainant got examined as PW.1 and got marked Ex.P.1 to Ex.P.8 documents and closed his side. On the other hand, the Accused got examined himself as DW.1 and got marked 2 documents as per Ex.D1 & 2 on his behalf to prove the defense.
18. Let me go through the documentary evidence placed by the Complainant in this case. Ex.P.1 is the Cheque dtd: 14.12.2019 issued by the Accused in favour of the Complainant. Ex.P.2 is the Endorsement dtd:
17.02.2020 issued by the State Bank of India for dishonour of Cheque. Ex.P.3 is the Office copy of Legal 13 Crl.Appeal No.25283/2024 Notice dtd: 28.02.2020. Ex.P.4 is the Postal Receipt dtd 28.02.2020. Ex.P.5 is the Postal acknowledgment. Ex.P.6 is postal track consignment. Ex.P.7 is copy of reply notice dated 09.03.2020. Ex.P.8 is invoice receipt.
19. The present complaint has been filed before the Trial Court on 30.06.2020. In view of the closure of court due to Covid-19 the complaint was filed on 30.06.2020. In this regard it is necessary to note that in Suo Motu Writ Petition of Hon'ble Apex Court in Miscellaneous Application No.21/2022, Miscellaneous Application No.665/2021 in Suo Motu Writ Petition (C) No.3/2020 dated 10.01.2022 the Hon'ble Apex Court clarified that period from 15.03.2020 till 28.02.2022 shall also stand excluded in computing the periods prescribed under sections 23(4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings. Hence it is to be held that within the prescribed period the complainant has filed 14 Crl.Appeal No.25283/2024 the complaint. On perusal of all the above documents with date of filing of the complaint and dates of documents, it is clear that before filing of the complaint, the Complainant has complied with all the requirements of Section 138 of the Negotiable Instruments Act and the present complaint is filed well within the period of limitation and it is in accordance with the provisions of Negotiable Instruments Act.
20. Now let us go through the cross-examination of PW-1, during the course of cross-examination PW1 deposed that himself and accused were close friends and accused is employee in ITI. The accused is doing real estate business after his retirement. The accused sought amount for investment on 26.01.2019. He knows Srinivas who is friend of accused. He transferred Rs.10 lakhs on 25.01.2019 to the account of said Srinivas in respect of site situated at ITI layout. The accused has given DD for a sum of Rs.5 lakhs on 24.10.2019 but it is in respect of some other transaction. He entered transaction with accused in respect of site at ITI layout. He categorically denied that accused has repaid the amount of Rs.5 lakhs and Srinivas has paid Rs.5 lakhs 15 Crl.Appeal No.25283/2024 and inspite of that he has misused the signed blank cheque of accused.
21. On perusal of the evidence of Accused he deposed that he knows complainant. The complainant paid Rs.10 lakhs to Srinivas on 25.01.2019 and he was only guarantor and he has not received any amount from the complainant. At the time of said transaction the complainant collected 2 signed cheques from him as security. Due to some differences the complainant not purchased site and he requested the accused and Srinivas to return back his amount. Accordingly, the said Srinivas repaid Rs.5 lakhs in 3rd week of August 2019 by RTGS and the accused repaid Rs.5 lakhs by way of DD. When the accused asked for return of his cheque the complainant stated that they are misplaced and after they traced he will handover the same.
22. During the course of cross-examination this accused deposed that he was director of ITI Housing Society, he retired in the year 2007. He admits that as he could not show the site he returned Rs.5 lakhs to complainant through DD. He admits that signature found on Ex.P1 is his signature.
16 Crl.Appeal No.25283/202423. With this factual aspects, firstly the court has to appreciate whether there are materials to ascertain the existence of legally enforceable debt. At the outset, the Court has to appreciate whether Section 138 of The Act is made out. When the cheque is produced before the Court and when it came to be dishonored for funds insufficient or for any other reason and when the legal notice was issued within the statutory period then the presumption available under Sections 118 & 139 of The Act is made out in favour of the complainant. The provisions of Section 118 of The Act are separated from the general rule applicable to the contracts and it provides presumption in favour of the party. The said presumptions are that: unless the contrary is proved the Court has to presume that the consideration had passed between the parties as enumerated under Section 118 of NI Act. Likewise, unless the contrary is established Section 139 of the NI Act clearly establishes that the holder of the cheque had received the same towards discharge of the legally enforceable debt either towards whole or partial liability. The said presumptions have to be read conjointly in order to ascertain whether the ingredients are made out. Further, the said presumptions are rebuttable and the same has to be 17 Crl.Appeal No.25283/2024 appreciated with the factual aspects of the case. The impugned cheque at Ex.P1 was drawn during the period of its validity and was accordingly presented to the back and after its dishonor the notice was also issued and later on after completing all the statutory bound obligations. The complaint came to be filed. This clearly indicates that initial presumption is drawn in favour of the complainant. It is also relevant to note that the said presumption is rebuttable one and as such the defence of the accused has to be appreciated in order to ascertain whether the presumption which is drawn initially in favour of the complainant has been successfully rebutted.
24. The law is well settled that the accused need not enter the witness box to rebut initial presumption. At the same time, the defense which is taken up by the accused is to be appreciated so as to ascertain whether the same was probable or not. Admittedly, in the above case the complainant has said to have lent a sum of Rs.10 lakhs and the said sum was paid towards investment on site as per the assurance of accused at ITI Housing Society Layout. When the accused could not identify the site he returned Rs.5 lakhs and for 18 Crl.Appeal No.25283/2024 repayment of balance amount of Rs.5 lakhs the accused issued Ex.P1 cheque.
25. It is the submission of the learned counsel for the Appellant that he has stated that he has no site in his hand and informed that one Srinivas K.R.Puram is having site at HSR layout and the complainant, accused and said Srinivas had joint discussion and thereafter the complainant paid Rs.10 lakhs by way of RTGS to said Srinivas on 25.01.2019 and he was only guarantor for the said amount. He has not received any amount from the complainant. At the time of said transaction the complainant collected 2 signed blank cheques from him as security. Subsequently as there was dispute in respect of said site the complainant not agreed to purchase the site and he requested for refund of Rs.10 lakhs. Accordingly the said Srinivas repaid Rs.5 lakhs in the 3rd week of August 2019 by way of RTGS. The accused also paid Rs.5 lakhs through DD dated 24.10.2019 to complainant. Hence there is no due from him to the complainant.
26. At this juncture, initial presumption is proved by the complainant and as such, the onus of rebutting 19 Crl.Appeal No.25283/2024 the same will be shifted on to the accused person. The defense of accused is that the accused as well as said Srinivas have repaid the amount Rs.10 lakhs paid by the complainant. In this regard on perusal of the documentary evidence relied on by the accused he has mainly relied upon reply notice marked at Ex.D1 & postal receipt marked at Ex.D2. On perusal of the reply notice marked at Ex.D1 he has contended that the complainant paid Rs.10 lakhs to Srinivas through RTGS on 25.01.2019 in respect of site at HSR layout and the accused stood as only guarantor and he has not received any amount. At the time of transaction the complainant collected 2 signed blank cheques from the accused as security. As the complainant could not purchase the site he asked for return of the amount from said Srinivas and also from the accused and at that time Srinivas repaid Rs.5 lakhs through RTGS and the accused repaid Rs.5 lakhs by way of DD. Hence the defence which has been taken by the accused is regarding payment of Rs.10 lakhs by the complainant to Srinivas and its repayment by Srinivas and this accused equally at Rs.5 lakhs. However in this regard no material are forthcoming.
20 Crl.Appeal No.25283/202427. In the above case to establish that the accused not received any amount from the complainant on the contrary it is one Srinivas who has received amount of Rs.10 lakhs from the complainant no evidence is forthcoming. It is necessary to note that when the accused taken specific defence that the complainant paid Rs.10 lakhs to Srinivas and he has not received any amount from the complainant and he only stood as guarantor, the burden is on the accused to prove the said fact. However the accused not taken least risk to examine said Srinivas before the court. THE accused could have produced the statement of account of said Srinivas. However he has not taken any steps in this regard. In this regard on perusal of cross-examination of accused he deposed as follows:
"It is true to suggest that as I could not show site, so I returned Rs.5 lakhs to complainant through DD.
28. Even for the sake of arguments if it is accepted that the cheques are misused by the complainant, necessarily it has to be supported by some materials. There is no explanation by the accused that why he had not initiated any police complaint after issuance of notice 21 Crl.Appeal No.25283/2024 by the complainant or after receiving of summons by the court.
29. The specific contention of the accused that it is one Srinivas who has received amount from the complainant and not the accused is not proved with any cogent and convincing evidence by the accused. Accordingly the defence of the accused that the complainant collected 2 signed cheques from him towards security is not proved. However once again at the cast of repetition.
30. The court is well aware of the cardinal principle of law, that the burden will be upon the prosecution to prove the case beyond reasonable doubt. However, a duty is also casted upon the Accused to successfully rebut the presumption which is raised by the complainant. Admittedly, the complainant has discharged the initial burden as already discussed supra and as such the onus will be shifted upon the accused to rebut the same.
31. No doubt, the law is also well settled that for the purpose of rebuttal evidence, the accused is not 22 Crl.Appeal No.25283/2024 required to enter the witness box. However, the defense should be such that it substantiates his contention. In the above case, one and only defense which is taken up by the Appellant/Accused is that the complainant paid Rs.10 lakhs to Srinivas on 25.01.2019. However as they could not get site they agreed to return amount to the complainant and accordingly Sirnivas repaid Rs.5 lakhs and Accused repaid Rs.5 lakhs to the complainant. The only contention of the accused is he was only guarantor in respect of the amount borrowed from the Srinivas from complainant. However in this regard so as to establish that the accused was only guarantor to the loan borrowed by Srinivas no document is placed on record. With respect to the presumption and also the defense of misuse of cheque taken up by the Appellant the court has relied upon the judgment of the Hon'ble Apex Court reported in (2018)8 SCC 165 (Kishan Rao V/s Shankaregowda) wherein it has been held thus:
Section 139 of the Act, 1881 provides for drawing the presumption in favour of holder. Section 139 is to the following effect:
"139.Presumption in favour of holder.-It shall 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."23 Crl.Appeal No.25283/2024
18. This Court in Kumar Exports vs. Sharma Carpets, 2009 (2) SCC 513, had considered the provisions of Negotiable Instruments Act as Referring to 139, this Section well Evidence Court laid following in paragraphs 14, 15, 18 and 19:
Section 139 of the Act provides that it shall 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.
15. Presumptions are devices by use of which the courts are enabled and entitled to pronounce on an issue notwithstanding that there is no evidence or insufficient evidence. Under the Evidence Act all presumptions must come under one or the other class of the three classes mentioned in the Act, namely, (1) "may presume"
(rebuttable), (2) "shall presume" (rebuttable), and (3) "conclusive presumptions" (irrebuttable). The term "presumption" is used to designate an inference, affirmative or disaffirmative of the existence of a fact, conveniently called the "presumed fact" drawn by a judicial tribunal, by a process of probable reasoning from some matter of fact, either judicially noticed or admitted or established by legal evidence to the satisfaction of the tribunal. Presumption literally means "taking as true without examination or proof".
18. Applying the definition of the word "proved" in Section 3 of the Evidence Act to the provisions of Sections 118 and 139 of the Act, it becomes evident that in a trial under Section 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under 24 Crl.Appeal No.25283/2024 Sections 118 and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists.
19. The use of the phrase "until the contrary is proved" in Section 118 of the Act and use of the words "unless the contrary is proved" in Section 139 of the Act read with definitions of "may presume" and "shall presume" as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over."
19. This Court held that the accused may adduce evidence to rebut the presumption, but mere denial regarding existence of debt shall not serve purpose. Following was held in paragraph 20:
"20....The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non- existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of 25 Crl.Appeal No.25283/2024 proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non- existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist..."
20. In the present case, the trial court as well as the Appellate Court having found that cheque contained the signatures of the accused and it was given to the appellant to present in the Bank of the presumption under Section 139 was rightly raised which was not rebutted by the accused. The accused had not led any evidence to rebut the aforesaid presumption. The accused even did the not come in the presumption. The accused even did not come in the witness box to support his case. In the reply to the notice which was given by the appellant the accused took the defence that the cheque was stolen by the appellant. The said defence was rejected by the trial court after considering the evidence on regard with regard to which no contrary view has also been expressed by the High Court.
21. Another judgment which needs to be looked into is Rangappa vs. Sri Mohan, 2010 (11) SCC 441. A three Judge Bench of this Court had occasion to examine the presumption under Section 139 of the Act, 1881. This Court in the aforesaid case has held that in the event the accused is able to raise a probable defence which creates doubt with regard to the existence of a debt or liability, the presumption may fail. Following was laid down in paragraphs 26 and 27:
"26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat, (2008) 4 SCC 54, may not be correct.26 Crl.Appeal No.25283/2024
However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant.
27. 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 instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the17 nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant-accused cannot be expected to discharge an unduly high standard or proof."
22. No evidence was led by the accused. The defence taken in the reply to the notice that cheque was stolen having been rejected by the two courts below, we do not see any basis for the High court coming to the conclusion that the accused has been successful in creating doubt in the mind of the Court with regard to the existence of the debt or liability. How the presumption under Section 139 can be rebutted on the evidence of PW.1, himself has not been explained by the High court.
27 Crl.Appeal No.25283/202432. The sum and substance is that there is a presumption in favour of holder of cheque in due course. The accused failed to prove contrary. Lastly the Court has also appreciated the statement of Accused recorded under Sec.313 of Cr.P.C. regarding the evidence under Sec.313 of Cr.P.C., is not a bald formality. In fact, it is an opportunity rendered to the Accused to explain the incriminating materials against him. However, the Accused has only denied and failed to rebut the presumption available in favor of complainant. Whether this Accused has taken any legal action as against the complainant in respect of collecting his cheques as security is not forthcoming. Under the circumstances, the burden of proof is successfully established by the complainant and as such, with respect to the existence of legally enforceable debt and its presumption, the Court has relied upon the judgment of Hon'ble Apex Court reported in (2019) 10 SCC 287 (Uttam Ram V. Devinder Singh Hudan and another) wherein it has been held as;
18. We find that the approach of the learned Trial Court and that of the High Court is perverse; irrational as well as suffers from material illegality and irregularity, which cannot be sustained in complaint filed under Section 138 of the Act.
28 Crl.Appeal No.25283/202419. A negotiable instrument including a cheque carries presumption of consideration in terms of Section 118(a) and under Section 139 of the Act. Sections 118(a) and 139 read as under:
"118. Presumptions as to negotiable instruments.- Until the contrary is proved, the following presumptions shall be made:--
(a) of consideration--that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;....
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139. Presumption in favour of holder.--It shall 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."
20. The Trial Court and the High Court proceeded as if, the appellant is to prove a debt before civil court wherein, the plaintiff is required to prove his claim on the basis of evidence to be laid in support of his claim for the recovery of the amount due. A dishonour of cheque carries a statutory presumption of consideration. The holder of cheque in due course is required to prove that the cheque was issued by the accused and that when the same presented, it was not honoured. Since there is a statutory presumption of consideration, the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability.
21. There is the mandate of presumption of consideration in terms of the provisions of the 29 Crl.Appeal No.25283/2024 Act. The onus shifts to the accused on proof of issuance of cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of Section 138 of the Act which reads as under:
"138. Dishonour of cheque for insufficiency, etc., of funds in the account. -- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall...."
22. In Kumar Exports, it was held that mere denial of existence of debt will not serve any purpose but accused may adduce evidence to rebut the presumption. This Court held as under:
"20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non- existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-30 Crl.Appeal No.25283/2024
existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non- existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act." (emphasis supplied)
23. In a judgment reported as Kishan Rao v. Shankargouda6, this Court referring to Kumar Exports and Rangappa returned the following findings:
"22. Another judgment which needs to be looked into is Rangappa v. Sri Mohan [Rangappa v. Sri Mohan, (2010) 11 SCC 441 : (2010) 4 SCC (Civ) 477 : (2011) 1 SCC (Cri) 184] . A three-Judge Bench of this Court had occasion to examine the presumption under Section 139 of the 1881 Act. This Court in the aforesaid case has held that in the event the accused is able to raise a probable 31 Crl.Appeal No.25283/2024 defence which creates doubt with regard to the existence of a debt or liability, the presumption may fail. Following was laid down in paras 26 and 27: (SCC pp. 453-54) "26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat [Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54 : (2008) 2 SCC (Cri) 166], may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant.
27. 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 instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the 32 Crl.Appeal No.25283/2024 defendant-accused cannot be expected to discharge an unduly high standard of proof."
24. In a judgment reported as Bir Singh v. Mukesh Kumar7, this Court held that presumption under Section 139 of the Act is a presumption of law. The Court held as under:
"20. Section 139 introduces an exception to the general rule as to the burden of proof and shifts the onus on the accused. The presumption under Section 139 of the Negotiable Instruments Act is a presumption of law, as distinguished from presumption of facts. Presumptions are rules of evidence and do not conflict with the presumption of innocence, which requires the prosecution to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law and presumptions of fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact as held in Hiten P. Dalal [Hiten P. Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16 :
2001 SCC (Cri) 960] .
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33. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted.33 Crl.Appeal No.25283/2024
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36. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."
25. In other judgment reported as Rohitbhai Jivanlal Patel v. State of Gujarat and Another8 this Court held as under:
"18. So far the question of existence of basic ingredients for drawing of presumption under Sections 118 and 139 the NI Act is concerned, apparent it is that the accused- appellant could not deny his signature on the cheques in question that had been drawn in favour of the complainant on a bank account maintained by the accused for a sum of Rs. 3 lakhs each. The said cheques were presented to the Bank concerned within the period of their validity and were returned unpaid for the reason of either the balance being insufficient or the account being closed. All the basic ingredients of Section 138 as also of Sections 118 and 139 are apparent on the face of the record. The Trial Court had also consciously taken note of these facts and had drawn the requisite presumption. Therefore, it is required to be presumed that the cheques in question were drawn for consideration and the holder of the cheques i.e., the complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the accused-appellant to establish a probable defence so as to rebut such a presumption."
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20. On the aspects relating to preponderance of probabilities, the accused has to bring on record 34 Crl.Appeal No.25283/2024 such facts and such circumstances which may lead the Court to conclude either that the consideration did not exist or that its nonexistence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. This Court has, time and again, emphasized that though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfil the requirements of rebuttal as 8 AIR 2019 SC 1876 envisaged under Section 118 and 139 of the NI Act.....
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32. The result of discussion in the foregoing paragraphs is that the major considerations on which the Trial Court chose to proceed clearly show its fundamental error of approach where, even after drawing the presumption, it had proceeded as if the complainant was to prove his case beyond reasonable doubt. Such being the fundamental flaw on the part of the Trial Court, the High Court cannot be said to have acted illegally or having exceeded its jurisdiction in reversing the judgment of acquittal. As noticed hereinabove, in the present matter, the High Court has conscientiously and carefully taken into consideration the views of the Trial Court and after examining the evidence on record as a whole, found that the findings of the Trial Court are vitiated by perversity. Hence, interference by the High Court was inevitable; rather had to be made for just and proper decision of the matter."
33. To sum up it is noticed that the Accused has admitted the impugned cheque at Ex.P1 and also its issuance is categorically admitted by him, whereas it is 35 Crl.Appeal No.25283/2024 stated that the cheque was issued to the complainant as security at the time of standing as guarantor to the amount given to the person by name Srinivas. There is absolutely no explanation that why he had kept quiet if the same is given to the complainant as security. In the entire defence of the accused there is no explanation in this regard. The same shows that the accused has not taken defence which is certain and which is probable and as such the Accused has failed to rebut the presumption. By looking into the same, the impugned judgment and order of conviction passed by the Trial Court is apt and correct and the same does not call for interference of this court. The trial court has rightly appreciated the oral and documentary evidence in proper perspective. Accordingly, I answered Point Nos.1 & 2 in the Negative.
34. Point No.3: In view of the findings on the above points the appeal filed by the Appellant deserves to be dismissed. Accordingly, I proceed to pass the following:-
ORDER The appeal filed by the Appellant U/Sec.415 (C) of BNSS 2023, and u/sec.374 36 Crl.Appeal No.25283/2024 (3) of Cr.P.C. is hereby dismissed with costs.
The Judgment of conviction passed by the Learned V Addl. Small Causes Judge & XXIV ACJM Bengaluru, in CC.No.51277/2021, dtd. 03.07.2024, is hereby confirmed.
Send back the records with a copy of this Judgment to the Trial Court.
(Dictated to the Stenographer, typed by her, corrected, signed and then pronounced by me, in the open court on this the 24 th day of January 2026.) Digitally signed by ANITHA ANITHA NANJANAGUDU NANJANAGUDU PARASHIVAMURTHY PARASHIVAMURTHY Date: 2026.02.06 16:15:46 +0530 [Smt. Anitha N.P] LXXIII Addl.City Civil & Sessions Judge, Bengaluru. (CCH-74).