Bangalore District Court
K R Venugopal vs M/S Universal Packaging Systems on 16 April, 2026
1
C.C.No.37437/2022
KABC030877912022
Presented on : 05-12-2022
Registered on : 05-12-2022
Decided on : 16-04-2026
Duration : 3 years, 4 months, 11 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 16TH DAY OF APRIL 2026
JUDGMENT U/s.278(2) of BNSS -2023
(OLD CORRESPONDENCE NO. 255(2) OF CODE OF
CRIMINAL PROCEDURE
C.C.NO. : 37437/2022
COMPLAINANT : Sri. K.R. Venugopal,
S/o. Raj Gopal Ayyangar,
Aged about 53 years,
R/at No.3/A, 4th Block,
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C.C.No.37437/2022
42nd Cross, Rajajinagar,
Bangalore - 560 010.
(By Sri. Kumar., Adv.,)
V/s.
ACCUSED : M/s. Universal Packaging
Systems,
No.150, 3rd Cross, 4th Main,
1st Stage, KHB Coloy,
Basaveswaranagar,
Bangalore - 560 079.
Rept. By its Partner
Sri. Dharmanna Desai
(By Sri. S.J. Naveen Adv., )
Offence complained of : U/s.138 of N.I.Act
Plea of the Accused : Pleaded not guilty
Final Order : Accused is Convicted
Date of order : 16.04.2026
JUDGMENT
This is a private complaint filed by the complainant against the accused company, Rept by its partner for the offence punishable under Section 138 of Negotiable Instruments Act.
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C.C.No.37437/2022
2. The brief facts of the complainant's case is as under:
It is contended that, the accused is well acquainted with the complainant and he is doing a business under the name and style of M/s. Universal Packaging System. The complainant is accountant/Tax consultant. In that connection, the accused has approached the complainant for auditing by assuring that, he would pay 10% on the claim amount to the complainant and agreed to pay the fees shortly. The complainant being innocent and having hope that, he would get fees, he has agreed to do needful and has done assessment for the period 2010-11 to 2019-20, totally for 10 years. Therefore, the accused was liable to pay Rs.5,60,000/- towards professional fees. The accused company has also availed Rs.1,50,000/- from the complainant through IMPS on 31.10.2019 and also, 4 C.C.No.37437/2022 Rs.28,000/- by way of a cash on 02.11.2019. The accused company was liable to pay Rs.7,38,000/-. Though the accused had agreed to pay the amount in time, having failed to pay the amount, on repeated demand and request, has issued cheques bearing No.018726, 018727 both dt:11.07.2022 for Rs.2,80,000/- each, drawn on SVC Co-
Operative Bank Ltd., Basaveshwaranagar Branch, cheque bearing no.090833 & cheque bearing No.090834, dt:
13.07.2022 for Rs.75,000/- each, drawn on the very same bank assuring that, it would be honored. Believing the representation, when the complainant presented the above referred four cheques through his banker ie., Karnataka Bank, Vishveswaraiah Branch, it dishonored with shara as "Account Closed" dt:14.07.2022. Thereby, the complainant got issued the demand notice dt:11.08.2022 through RPAD, 5 C.C.No.37437/2022 which returned with the shara as Door Locked, 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 company, rept by its partner, 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.
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 company, rept by its partner has issued cheques bearing No.018726, 018727 both dt:11.07.2022 for Rs.2,80,000/- each, 6 C.C.No.37437/2022 cheque bearing no.090833 & cheque bearing No. 090834, dt: 13.07.2022 for Rs.75,000/- each, drawn on SVC Co-
Operative Bank Ltd., Basaveshwaranagar Branch, towards discharge of his liability, which were returned unpaid on presentation for the reason "Account Closed" and despite of knowledge of the notice, he has not paid the said cheque amounts 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.15 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 complainant also got further examined by marking Ex.P.16 to Ex.P.37 documents and closed his side evidence. The statement of the accused as required U/s.313 of Cr.P.C is also being 7 C.C.No.37437/2022 recorded, wherein the accused has denied the incriminating evidence appeared against him and submitted that, he has the evidence. But, however either he has chosen to complete the cross examination of PW.1 or chosen to adduce his side evidence.
6. Heard from complainant side. Defence has not chosen to canvass his side argument.
7. Perused the materials available on record.
8. My answer to the aforesaid points are as under:-
Point No.1 :- In the Affirmative 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 company, rept by its partner has committed an offence punishable U/s.138 of 8 C.C.No.37437/2022 N.I.Act. He pleads and asserts that, the accused in discharge of his liability, has issued the cheques bearing No.018726, 018727, both dt:11.07.2022 for Rs.2,80,000/- each, cheque bearing no.090833 & cheque bearing No. 090834, dt: 13.07.2022 for Rs.75,000/- each, drawn on SVC Co-Operative Bank Ltd., Basaveshwaranagar Branch, which is being dishonored with shara as "Account Closed". Thereby, he got issued the legal notice which returned unserved, which has given a cause of action to file the complaint.
10. In this scenario, if the documents placed by the complainant is scrutinized, the complainant in order to examine the compliance of statutory requirements as envisaged U/s.138 of NI Act, he got produced the Ex.P.1 to P.4 the cheques dt:11.07.2022 & 13.07.2022 respectively. The said cheques are returned with an endorsements as 9 C.C.No.37437/2022 Account closed as per Ex.P5 to P.8, the return advise dt:
14.07.2022. The Ex.P.9 is the office copy of the legal notice dt:11.08.2022, Ex.P.10 is the postal receipt and Ex.P.11 is the returned RPAD cover which indicates the shara as Door Locked dt: 13.08.2022. The present complaint is filed on 06.09.2022. A careful scrutiny of the documents relied by the complainant goes to show that, a statutory requirement of Sec.138 of N.I. Act is being complied with and this complaint is filed well in time. The complainant has discharged his initial burden by examining him as PW.1 and by producing the documents as referred above.
Thus, complainant is entitled to rely on the statutory presumptions enshrined U/s.118 R/w. Sec. 138 of N.I.Act.
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, 10 C.C.No.37437/2022 negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration.
Further 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. 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 accused can take probable defense in the scale of preponderance of probabilities to rebut the presumption available to the complainant.
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C.C.No.37437/2022
12. Here, the complainant claim that, he being the accountant/tax practitioner has audited the financial year of 2010-11 to 2019-20 for a period of 10 years of the accused company and therefore, it was liable to pay Rs.5,60,000/- the professional fee. The accused company has also borrowed Rs.1,50,000/- the hand loan through IMPS and Rs.28,000/- by way of a cash. Therefore, he claims that, towards the discharge of said liability, the accused being one of the partner has issued the disputed cheques which are being dishonoured as per Ex.P.4 to P.8 and thereby, claiming that, he is entitled to claim the benefit of Sec.118 and 139 of N.I.Act, seeks for conviction. On the other hand, though the accused would admit that, he is one of the partner and the disputed cheques along with the signatures appearing therein belongs to him, but has denied the fact of he taking the assistance of the 12 C.C.No.37437/2022 complainant for audit of the assessment years as claimed by the complainant and also, the company borrowing the loan as pleaded by the complainant. On the other hand, he would take a contention that, as he was not keeping good health, he has engaged the complainant as an attendant and while the complainant discharging his work as attendant, has stolen the disputed cheques which are alleged to be misused in filing the present complaint. Thereby, he contending that, he has rebutted the presumption seeks for acquittal.
13. So, from the rival claims of the parties, it evidences that, there is no dispute with regard to the acquittance of the parties. The accused would also not dispute the existence of the company and he being one of the partner. He would also not dispute the disputed cheques does belongs to the company and the signatures 13 C.C.No.37437/2022 appearing therein. But, however he would dispute the fact of he engaging the complainant as auditor and carrying on the auditing work of the Assessment year 2010-11 to 2019-
20. It is an admitted fact that, the complainant would not own any certificate pertaining to his graduation or any experience certificate pertaining to the occupation of accountant /tax practitioner or has produced any document to show that, the particular fees was fixed for auditing as claimed in the complaint. Perhaps, many questions were posed to the complainant relating to the accountant /tax practitioner wherein the complainant has pleaded his ignorance. But on perusal of the documents at Ex.P.21 to P.23, Ex.P.27 to P.35 ie., Form VAT -555 and the orders passed by the Department of the Commercial Tax U/s.9(2) of CST Act, it would establish that, the complainant being referred as the accountant of the accused company which 14 C.C.No.37437/2022 is not being denied by the accused. In other words, the accused has not chosen to destroy these documents by cross examining the PW.1. No doubt, the cross examination in part available on record would indicate about the denial of the company engaging the service of the complainant or of he issuing the disputed cheques towards legal liability, but nowhere, it would go to indicate that, the accused having questioned the above referred documents by fully and effectively cross examining the PW.1.
14. When, these documents are not being denied or questioned by the accused, it has to be inferred that, the accused company has engaged the service of the complainant in auditing the assessment year 2010-11 to 2019-20. If, the accused had effectively cross examined the PW.1 completely, certainly the stand of the accused could 15 C.C.No.37437/2022 have been appreciated. When the accused has not chosen to cross examine the PW.1 on the above referred documents, it suffices that, the complainant establishing his claim and the accused company being due of Rs.5,60,000/- towards the professional fees. It would not be wrong to say that, there is no probable or convincing evidence forthcoming to appreciate the defence case or disbelieving the documents produced by the complainant.
15. The complainant would claim that, apart from the professional fee being due, the accused company has also borrowed Rs.1,50,000/- through IMPS on 31.10.2019. This amount is also denied by the accused. No doubt, the accused has denied the receipt of this amount, but the Ex.P.18 the bank statement would evidence an amount of Rs.1,50,000/- being transferred by the complainant on 31.10.2019 to the account of the accused company. So, 16 C.C.No.37437/2022 this document also suffices an amount of Rs.1,50,000/- being transferred to the account of the accused company which is also due. The accused has also not chosen to cross examine the witness on this document or has produced any document to counter the Ex.P18. So, it establishes an amount of Rs.1,50,000/- being transferred to the account of the accused company through IMPS.
16. Here the accused would take a contention that, while the complainant was serving him as attendant in his house, has stolen the disputed cheques which is misused in filing the present complaint. Though, the accused would contend that, the disputed cheques were being stolen, but again there is no proof forthcoming to accept it. Perhaps, there is no probable or convincing evidence forthcoming to accept the defence. If really, the complainant has stolen the 17 C.C.No.37437/2022 disputed cheques, nothing had prevented him to initiate a legal proceeding or lodge the complaint. When, the evidence available on record itself suffices that, the defence raised by the accused is unacceptable, it indicates that, the defence raised by the accused is only to avoid the liability of the disputed cheques. Because, no prudent man would squat over the matter without initiating any legal action. Even, he has not placed any probable evidence as to why he has signed and kept a blank cheques. So, here a serious doubt would create so far the defence case is concerned. In other words, there is no convincing evidence forthcoming to appreciate the defence case, rather the evidence available on record establishes the accused is due of Rs.7,10,000/- covered under the disputed cheques.
17. On the disputed cheques being dishonoured, the complainant has got issued demand notice as per Ex.P.9, 18 C.C.No.37437/2022 but however it is being returned with the shara as Door Locked as per Ex.P.11. The accused would not dispute the address referred therein. The address referred in Ex.P.9 & P.11 is a very address referred in the cause title. When the accused was able to appear through the counsel to the court process issued to the very same address, this court is of the considered view that, the complainant has complied the provision of Sec. 27 of General Clauses Act. In the decision reported in (2021) 5 SCC 283 - Kalamani Tex and Another., Vs. P.Balasubramanian, (2010) 11 SCC 441- Rangappa Vs. Sri.Mohan., Wherein it is held that, when once the signature of an accused on the cheque is established, than the reverse onus clauses become operative, also aptly applies to the case in hand. When the complainant has established the accused being the partner having issued the cheques at Ex.P.1 to P.4 towards 19 C.C.No.37437/2022 the discharge of legal liability and their existed a legally enforceable debt, the onus to disprove it, shifts on the accused which is not been proved by placing positive evidence. In this background, having the accused not disputed the complainant case by placing positive evidence, this court is of the considered view that, the cheques issued by the accused at Ex.P.1 to P.4 is for the legally enforceable debt and this fact is being established by the complainant by placing cogent and positive evidence which is not rebutted by the other side.
18. As said above, the accused has not disputed the cheques does pertains to him. It could be said that, the accused has not disputed the cheques in question and signature found therein. When the drawer has admitted the issuance of cheque therein, the presumption envisaged 20 C.C.No.37437/2022 U/s.118 R/w.139 of N.I.Act would operate infavour of the complainant. The said provisions lies on a special rule of evidence applicable to negotiable instruments. The presumption is one of law and thereunder the court shall presume that, the instrument was endorsed for consideration. So also, in the absence of contrary evidence on behalf of the accused, the presumption U/s.118 of N.I.Act goes in favour of the complainant. No doubt, as said statutory presumptions are rebuttable in nature, but when the complainant has relied upon the statutory presumptions enshrined U/s.118 R/w.Sec.139 of N.I.Act, it is for the accused to rebut the presumption with cogent and convincing evidence. To put it in other way, the burden lies upon the accused to prove the cheques in question at Ex.P.1 to P.4 were not issued for the discharge of debt or liability.
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C.C.No.37437/2022
19. It is worth to note that, Sec.106 of Indian Evidence Act postulates that, the burden is on the accused to establish the fact which is especially within its knowledge. This provision is exception to the general rule that, the burden of proof is always on the prosecution to establish its case beyond all reasonable doubt. In that view of matter, the burden is on the accused to prove that, the cheques in question was not issued for discharge of any liability. But, despite the accused has taken the defence that, the Ex.P.1 to P.4 were not issued towards the legal liability, but the said fact and the version is not been established. No doubt, the accused would contend that, the contents found in Ex.P.1 to P.4 were being reduced by the complainant, but when the complainant was able to establish his case, the complainant is being protected U/s. 20 of N.I.Act.
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C.C.No.37437/2022
20. From the discussion made supra, it could be said that, the complainant has established his case by placing positive evidence. On the other hand, the accused failed to to establish his defence by placing probable defence and also, failed to elicit the said fact from the mouth of the PW.1. To put it in other way, the accused though taken a probable defence, but it is not been established by placing the positive evidence. The presumption of law lies in favour of the complainant as envisaged U/s.118 R/w. Sec. 139 of N.I.Act. In this back ground, the case of the complainant requires to be accepted. The evidence placed on record establishes that, the complainant has proved that, for discharge of the legal liability, the accused as a partner has issued Ex.P1 to P.4 and it is being dishonored as per Ex.P5 to P.8. Therefore, Point No.1 is answered in the "Affirmative'. 23
C.C.No.37437/2022
21. Point No.2:- For the reasons discussed in the point No.1, the complainant has proved the guilt of the accused punishable U/s.138 of N.I.Act. The Hon'ble Apex Court also dealt in the decision reported in (2018) 1 SCC 560, M/s. Meters and Instrument Pvt. Ltd., Vs. Kanchana Mehta., wherein, It is held that "the object of provision being primarily compensatory, punitive element being mainly with the object of enforcing the compensatory element, compounding at the initial stage has to be encouraged, but is not debarred at the later stage subject to appropriate compensation has may be found acceptable to the parties or the court". By considering the decision, it could be said that, the time when the transaction has taken place and the primary object of the provision being kept in mind, I am of the considered view that rather imposing punitive sentence, if sentence of fine is imposed with a 24 C.C.No.37437/2022 direction to compensate the complainant for its monetary loss by awarding compensation U/s.357 of Cr.P.C., it would meet the ends of justice. By considering these aspects, I am of the considered view that, it would be just and proper to impose fine of Rs.7,15,000/-. Out of the compensation of Rs.7,15,000/- an amount of Rs.7,10,000/-, shall be awarded to the complainant U/s.357 of Cr.P.C. Accordingly, I proceed to pass the following :
ORDER Acting U/s.278(2) of BNSS -2023 (Old Correspondence No. 255(2) of Code of Criminal Procedure), the accused company, rept by its partner is convicted for the offence punishable under section 138 of the Negotiable Instruments Act.
The accused as a partner is sentenced to pay fine of Rs.7,15,000/- (Rupees Seven Lakhs and Fifteen Thousand only).25
C.C.No.37437/2022 In default thereof, the accused shall undergo simple imprisonment for the term of one year.
Acting U/s. 396 of BNSS - 2023 (Old Correspondence No.357(1)(b) of Cr.P.C), it is ordered that, Rs.7,10,000/- (Rupees Seven Lakhs and Ten Thousand only) there from shall be paid to the complainant as compensation. The remaining fine amount of Rs.5,000/- (Rupees Five Thousand only) is defrayed to the state for the expenses incurred in the prosecution.
The office is to furnish the free copy of this Judgment to the accused forthwith. (Directly dictated to stenographer on computer, typed by her, revised by me and then pronounced by me in the open court on this the 16th day of April 2026).Digitally signed
JAI by JAI
SHANKAR J
SHANKAR Date:
J 2026.04.16
14:01:46 +0530
(JAI SHANKAR.J)
XXII Addl. Chief Judicial Magistrate, Bengaluru.
ANNEXURE List of witnesses examined on behalf of complainant:-
PW.1 : Sri. K.R.Venugopal
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C.C.No.37437/2022
List of exhibits marked on behalf of complainant:-
Ex.P.1 to P.4 : Original cheques Ex.P1(a) to 4(a) : Signatures of the accused Ex.P5 to 8 : Bank Memos Ex.P9 : Legal notice Ex.P10 : Postal receipt Ex.P11 : Postal cover Ex.P12 to P.15 : Bank Challans Ex.P16 & 17 : Rental agreements Ex.P18 ; Bank Statement Ex.P 19 & 20 : Endorsements Ex.P21 : Form VAT -555 Ex.P22 : Re-assessment Order U/s 9(2) of the CST Act dt: 04.03.2017 Ex.P23 : Re-assessment order U/s. 39(1) R/w Sec. 36 and 72(2) of te KVAT Act Ex.P24 & 25 : Letters dt: 27.04.2022 & 28.04.2022 Ex.P26 : Proceedings of the Assistant Commissioner of Commercial Taxes Ex.P27 : RE-assessment order U/s. 39(1) R/w Sec. 69,72 & 36 of the KVAT Act 27 C.C.No.37437/2022 Ex.P.28 : Form VAT 180 Ex.P29 & 30 : Orders U/s. 9(2) of the CST Act Ex.P.31 : Re-Assessment order by the Commercial Tax Officer Ex.P.32 : Order U/s. 9(2) of the CST Act 1956 Ex.P.33 : Proceedings of the Deputy Commissioner Taxes, Ex.P.34 : Form VAT 180 Ex.P.35 : Certified copy of order Ex.P.36 : Form VAT 180 Ex.P.37 : Original SSLC marks card List of witnesses examined on behalf of the accused:-
- Nil-
List of exhibits marked on behalf of the accused:-
-Nil-Digitally signed
JAI by JAI SHANKAR
SHANKAR J
Date: 2026.04.16
J 14:01:54 +0530
(JAI SHANKAR.J)
XXII Addl. Chief Judicial Magistrate, Bengaluru.
28 C.C.No.37437/2022