Bangalore District Court
Om Sri Sai Jaya Merchants Finance ... vs Gopinath Rao. S on 28 March, 2026
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C.C.No.17414/2020
KABC030611162020
Presented on : 05-12-2020
Registered on : 05-12-2020
Decided on : 28-03-2026
Duration : 5 years, 3 months, 23 days
IN THE COURT OF THE XXVIII ADDL. CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY
Present: Smt.Nagamma.M.Ichchangi,
BA.,LL.B.,(Spl),
XXVIII A.C.J.M, Bengaluru City.
DATED; THIS THE 28th DAY OF MARCH-2026
CC.No.17414/2020
COMPLAINANT : OM Sri Sai Jaya Merchants
Finance Company ®
A registered company having its Office
At No.25/1, Shop No.8,
1st Floor, West Park Road,
Malleswaram, 11th Cross,
Bengaluru-560003,
Represented by its GPA Holder
Smt.Jayanthi H.A
(By Sri.Aanand.V.,Adv.,)
V/s.
ACCUSED : Gopinath Rao S
S/o Subbarao K.C.
Aged about 33 years,
No.453, Bande Road,
Kogilu Layout,
Bengaluru North,
Bengaluru-560064.
And also,
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C.C.No.17414/2020
No.3142, Ganigarapet,
4th Ward, Doddaballapur
Bengaluru Rural District.
(By Sri.Praveen.C.,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 : 28-03-2026
:JUDGMENT:
The complainant company has filed complaint against the accused under section 200 of Cr.P.C., for an offence punishable under section 138 of Negotiable Instruments Act.
2. The case of the complainant's company in brief is as under:
It is the case of the complainant company that, the complainant is a company registered under companies Act, engaged in the business of extending financial facility to prospective customers under their various finances schemes. The complainant company in the course of its business introduce Business Loan facilities to its customers/Members. Accordingly, the accused being a member in the complainant's company through membership No.2506 filed application for loan for improvement of his business and borrowed loan a 2 C.C.No.17414/2020 sum of Rs.5,00,000/- on 06/09/2019. The complainant has paid Rs.5,00,000/- through cheque No.772251 of Axis Bank which was enchased on 06/09/2019. After availing loan, the accused became defaulter and after several requests and remainders the complainant company has issued final notice to the accused on 30/01/2020 and thereafter the accused to pay the balance amount towards his loan, issued a postdated cheque bearing No.000164 dated 28/01/2020 drawn on Karur Visyay Bank, Bangalore in favour of complainant towards full and final discharge of payment liability towards the stated loan. When the complainant presented the said cheque to the banker Axix Bank Ltd, Malleshwaram Branch, Bangalore on 04/03/2020. But the said cheque was dishonored on 05/03/2020 with an endorsement "Payment Stopped by Drawer". Thereafter, on 18/03/2020 the complainant got issued a demand notice to the accused through its counsel calling upon him to pay the cheque amount. The said RPAD notice was duly served to accused on 20/03/2020. After issuance of the notice, the accused neither paid the cheque amount nor replied to the notice. As such, the accused has committed an offence punishable under section 138 N.I.Act. Hence, the present complaint came to be filed before this court on 16/06/2020.3
C.C.No.17414/2020
3. After registration of the complaint, the cognizance of the offence cited therein was taken. Sworn statement of the complainant was recorded. Since there were sufficient materials to proceed against the accused, an order was passed on 04/12/2020 to register the case in Register No.III and it was registered as Criminal case.
4. Thereafter, summons was issued to the accused and he has appeared before the court through counsel and secured bail. He was furnished necessary papers as contemplated under section 208 of Cr.P.C. Thereafter, the plea of the accused was recorded by the court. He has pleaded not guilty and claimed to be tried.
5. Since the earlier Authorized Representative of the complainant's company who was examined as PW.1 in support of complainant's case has left the company, the complainant company has examined its PA Holder as PW.2 by filing substitution application and got marked 14 documents at Ex.P.1 to 14 and closed its side.
6. After closer of the evidence of the complainant's company, the statement of the accused under section 313 of Cr.P.C., was recorded. He has denied the incriminating evidence appearing against him. Inspite of sufficient opportunity, the accused has not lead defence evidence. Hence, the defence evidence taken as nil.
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7. I have heard the arguments on the both sides and perused the material placed on record.
8. Upon hearing the arguments on the both sides and on perusal of the material placed on record, the following points arise for my consideration:
1.Whether the complainant proves the existence of legally enforceable debt/liability.?
2.Whether the complainant further proves that the accused had issued the cheque-Ex.P.7, towards the discharge of the legally enforceable debt/liability.?
3.Whether the complainant further proves that the cheque-Ex.P.7 was dishonored for the reason "Payment Stopped by Drawer" and thereafter the accused had failed to repay the same within the statutory period, inspite of receipt of legal notice.?
4. Whether the accused have thus committed an offence punishable under section 138 of N.I.Act.?
5.What order?
9. My answers to the above points are as under:
Point No.1: In the Affirmative Point No.2: In the Affirmative Point No.3: In the Affirmative Point No.4: In the Affirmative Point No.5: As per final order, for the following:
:REASONS:
10. POINT NO.1 to 4: In order to avoid repetition of facts and evidence points No.1 to 4 are taken together for common discussion 5 C.C.No.17414/2020 the complainant is a company registered under companies Act, engaged in the business of extending financial facility to prospective customers under their various finances schemes. The complainant company in the course of its business introduce Business Loan facilities to its customers/Members. Accordingly, the accused being a member in the complainant's company through membership No.2506 filed application for loan for improvement of his business and borrowed loan a sum of Rs.5,00,000/- on 06/09/2019. The complainant has paid Rs.5,00,000/- through cheque No.772251 of Axis Bank which was enchased on 06/09/2019. After availing loan, the accused became defaulter and after several requests and remainders the complainant company has issued final notice to the accused on 30/01/2020 and thereafter the accused to pay the balance amount towards his loan, issued a postdated cheque bearing No.000164 dated 28/01/2020 drawn on Karur Visyay Bank, Bangalore in favour of complainant towards full and final discharge of payment liability towards the stated loan. When the complainant presented the said cheque to the banker Axix Bank Ltd, Malleshwaram Branch, Bangalore on 04/03/2020. But the said cheque was dishonored on 05/03/2020 with an endorsement "Payment Stopped by Drawer".
6C.C.No.17414/2020 Thereafter, on 18/03/2020 the complainant got issued a demand notice to the accused through its counsel calling upon him to pay the cheque amount. The said RPAD notice was duly served to accused on 20/03/2020. After issuance of the notice, the accused neither paid the cheque amount nor replied to the notice. As such, the accused has committed an offence punishable under section 138 N.I.Act. Hence, the present complaint came to be filed before this court.
11. In support of the case, the complainant's company has examined its PA Holder as P.W.2. PW.2 in his chief examination has reiterated the contents of the complaint and got marked 14 documents at Ex.P.1 to 14. Ex.P.1 is the Power of Attorney. Ex.P.2 is the Membership Application. Ex.P.3 is the Loan Application. Ex.P.4 is the Bank Statement. Ex.P.5 is the Receipt. Ex.P.6 is the final notice. Ex.P.7 is the cheque issued by the accused in favour of the complainant on 28/01/2020 for sum of Rs.5,00,000/-. Ex.P.7(a) is the Accused Sign. Ex.P.8 is the Bank Memo dated 05/03/2020. Ex.P.9 is the Copy of Legal Notice dated: 18/03/2020 Ex.P.9(a) and (b) are the Post Receipts Ex.P.10 is the Postal Acknowledgment. Ex.P.11 is the Postal Cover. Ex.P.12 is the Complaint. Ex.P.13 is the Certified Copy of Power of Attorney and Ex.P.14 is the Amended Complaint.
7C.C.No.17414/2020
12. The counsel for the complainant has argued that, that the complainant company in the course of its business introduced business loan facilities to its customers/members. The accused being the member of the complainant company filed loan application for improvement of his business and borrowed loan of Rs.5,00,000/- on 06/09/2019. The complainant had accordingly paid to the accused as loan by way of cheque. After availing loan the accused became defaulter and after several requests and remainders and final notice the accused issued cheque in question in favour of the complainant. He further argued that the accused has not denied Ex.P.7 being his cheque drawn on the account of the accused. When the signatures is not disputed, the presumption under section 139 N.I.Act is to be drawn in favour of the complainant. The accused has failed to elicit anything in the cross examination of P.W.2 to disbelieve the case of the complainant. The defence have failed to rebut the presumption under section 139 N.I.Act.
13. The counsel for accused has argued that the accused was working in the complainant company from 2016 year to 2019 year. During the said period the complainant has collected the signed blank cheques from the accused and retained the same with them filed the present false complaint against the 8 C.C.No.17414/2020 accused by misusing one of the said cheques. Hence, prays for acquittal of the accused.
14. In order to attract the offence punishable under section 138 of N.I.Act, the complainant is firstly required to prove the existence of legally enforceable debt/liability, for which the cheque came to be issued. The complainant has to prove all the requirements of section 138 of N.I.Act. The counsel for accused has suggested PW.2 that they have collected signed blank cheques from accused when he was working in the complainant company and retained the same with them. The said suggestion goes to show that Ex.P.7 belongs to accused account and it bears the signature of the accused. It is the contention of the accused counsel that in Ex.P.2 I.e membership application the father name of accused was mentioned as K.C.Subbarao but in the complaint the father name of accused is mentioned as Ramachandraiah and further contended that the complainant has not produced the ID proofs of accused which were collected at the time of lending loan to the accused and further contended that the complainant has wrongly mentioned the cheque number in the complaint. On perusal of case papers and complaint it reveals that at the time of filing of the complaint the complainant has mentioned the father name of accused as Ramachandraiah 9 C.C.No.17414/2020 instead of K.C.Subbarao and cheque number as 042011 instead of 000164. But on perusal of order sheet dated 16/04/2024 and 24/02/2026 it reveals that the applications filed by complainant for amendment of complaint in respect of father of name of accused and cheque number were allowed by this court and complainant has filed amended complaint as per Ex.P.12 and amended complaint on 28/02/2026. Once the complaint is amended, an amended complaint supersedes the original acting as the new operative pleading that withdraws and replaces the initial complaint in the record. The original complaint loses its status and is considered abandoned, although it remains in the record. According to the 'Doctrine of Relation Back' the amendments are generally deemed to have been part of the original filing, provided they relate to the same transactions. Hence, the arguments of the accused counsel that the complaint is not maintainable as the complainant has not mentioned the name of father of accused and the cheque number correctly in the complaint holds no water.
15. As per the section 139 of N.I.Act, there is a presumption regarding the existence of legally enforceable debt/liability. Such presumption is rebuttable presumption and it is open to the accused 10 C.C.No.17414/2020 to raise defence discharging the existence of a legally enforceable debt/liability. In the case on hand the accused has disputed the existence of legally enforceable debt/liability, for which the cheque-Ex.P.7 is issued. Whereas, the accused has contended that he had not taken any loan from the complainant company the complainant has taken blank signed cheques from accused when he was working in the complainant company and retained the same with them. On perusal of Ex.P.2 i.e., application for membership it reveals that the accused had filed application to the complainant company for membership. On perusal of Ex.P.3 I.e loan application it reveals that on 29/08/2019 the accused had sought loan of Rs.5,00,000/- from the complainant company and on perusal of Ex.P.5 I.e Receipt it reveals that accused had received Rs.5,00,000/- from the complainant as loan on 06/09/2019. Though the counsel for accused cross examined PW2 at length but not denied the signatures of accused appearing on Ex.P.2,3 and 5, which clearly goes to show that the accused had applied for membership and loan in the complainant company as per Ex.P.2 and 3 and received loan amount from the complainant company as per Ex.P.5.
16. Further it is the contention of the accused that the complainant had collected blank signed 11 C.C.No.17414/2020 cheques from accused and retained the same with them. If at all the accused had issued blank signed cheques to the complainant company then he would have given reply to the legal notice issued by the complainant company. Further if at all the accused had issued blank signed cheques to the complainant company and they retained the blank signed cheques with them then what prevented the accused from initiating proceedings against the complainant for misusing his cheques. No prudent man will keep quite after knowing that his cheques are misused. Further nowhere the accused has stated or explained why and for what purpose he handed over the blank signed cheques to the complainant and further the accused has not produced any oral or documentary evidence to prove that his cheques are misused by the complainant.
17. Once issuance of the cheque and signature are admitted, the statutory presumptions would arise under sections 118 and 139 of the N.I.Act that the cheque was issued by the drawer for legally payable debt or liability and for valid consideration. The Hon'ble Supreme Court has held in Rangappa V/s Mohan, reported in 2010 AIR SCW 296, the presumption that the cheque was drawn in discharge of legally recoverable debt is a presumption of law that 12 C.C.No.17414/2020 ought to be raised in every case, though, it is a rebuttable presumption. Ofcourse, the presumption under section 139 and 118 of the N.I.Act are rebuttal presumption. Further it is also held that mere plausible explanation by the drawer is not sufficient and proof of that explanation is necessary. The principle of law laid-down in the above decision is applicable to the facts of this case. In the instant case, since the complainant is in possession of the cheque- Ex.P.7 the court has to draw the initial presumption that he is the payee of that cheque. Once the initial burden is discharged by the complainant, the onus shifts on the accused to rebut the complainant's case. In order to prove his defence, the accused neither adduced oral evidence nor produced any cogent evidence to probables his defence.
18. In the case of K.S.Ranganatha V/s Vittal Shetty, reported in 2021 SCC Online SC 1191, the Hon'ble Supreme Court held that, once the cheque is admitted to be that of the accused, the presumption envisaged in section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the court to presume that the holder of the cheque received it for the discharge of any debt or liability. It is further held that 13 C.C.No.17414/2020 the position of law makes it crystal clear that when a cheque is drawn out and is relied upon by drawee, it will raise a presumption that it is drawn towards a consideration which is a legally recoverable amount; such presumption of course, is rebuttable by proving to the contrary. The onus is on the accused to raise a probable defence and the standard of proof for rebutting the presumption is on preponderance of probabilities.
19. In the case of Kalemani Tex and another V/s P.Balasubramanian, reported in (2021) 5 SCC 283, the Hon'ble Supreme Court has observed that 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.
20. In addition to this in the case of T.P.Murugan (Dead) through legal representatives V/s Bojan, reported 2018 (8) SCC 469, the Hon'ble Apex Court held that once the cheque has been signed and issued in favour of the holder of the cheque, there is statutory presumption that the cheque is issued in respect of legally enforceable debt or liability: rebuttal of such presumption must be by adducing credible evidence.
14C.C.No.17414/2020 Mere raising a doubt without cogent evidence with respect to the circumstances, presumption under section 139 of N.I.Act cannot be discharged. The principle of law laid-down in the above decisions are applicable to the facts of this case. Except some bald contentions, the accused has not been able to make out a probable case on his behalf.
21. In the instant case the accused has nowhere denied the receipt of loan amount from the complainant company and he himself has admitted that he is the holder of alleged cheques. It is sufficient to hold that the accused has issued the cheques and even after the accused has not repaid the cheques amount the getting of receipt of notice. The complainant have complied all the terms of ingredients of the provisions of 138 of N.I.Act. The accused is liable for dishonor of cheque. In case of dishonor of cheques, once the execution of cheques are admitted by the accused, then it is for him to first rebut presumption arising out of section 139 of N.I.Act. Accordingly, PW.2 has established the case of the complainant, the accused has issued the cheque- Ex.P.7 in order to repay the legally recoverable amount. Therefore, the accused has failed to probables the defence taken by him. Therefore, the accused has failed to rebut the presumption under section 139 of 15 C.C.No.17414/2020 N.I.Act. Hence, the accused liable for dishonor of the cheque. With these reasons, I answer point No.1 to 4 in the Affirmative.
22. POINT NO.5: The accused is held to have committed an offence punishable under section 138 of N.I.Act. The complainant has proved its case. The accused has failed to prove his rebuttal for the reasons mentioned above and in view of the mandatory requirements of section 138 of N.I.Act, being complied with. The accused is found to have committed an offence punishable under section 138 of N.I.Act. Since, the said offence is an economic crime, the accused is not entitled for the beneficial provisions of probation of offenders Act. In view of the above discussions and the findings on point No.1 to 4, I proceed to pass the following:
ORDERS Acting under section 255(2) of Cr.P.C. the accused is convicted for an offence punishable under section 138 of N.I.Act.
The bail bonds of the accused hereby stands canceled.
The accused is sentenced to pay fine of Rs.5,10,000/- (Rupees Five Lakhs Ten Thousand Only) to the complainant.16
C.C.No.17414/2020 It is further ordered that out of the said fine amount an amount of Rs.5,00,000/- (Rupees Five Lakhs Only) shall be paid to the complainant as compensation as per Section 357(1)
(b) of Cr.P.C., and remaining amount of Rs.10,000/- (Rupees Ten thousand only) shall be remitted to the State.
In default of the payment of fine amount, the accused shall undergo simple imprisonment of 06 months.
Office is hereby directed to furnish free copy of this judgment to the accused forthwith.
(Dictated to the typist directly on computer typed by him, corrected by me and then judgment pronounced in the open court on 28 th day of March 2026) Digitally signed by NAGAMMA NAGAMMA ICHCHANGI ICHCHANGI Date: 2026.03.28 18:00:24 +0530 (Smt.Nagamma.M.Ichchangi) XXVIII Addl. Chief Judicial Magistrate, Bengaluru City.
ANNEXURE List of witness examined on behalf of the complainant:
PW.1 : Sri.Narashegowda S/o Malleshiah. PW.2 : Sri.Jayanthi.H.A W/o Shreedhar. List of documents marked on behalf of the complainant:
Ex.P.1 : Power of Attorney.
Ex.P.2 : Membership Application.
Ex.P.3 : Loan Application.
Ex.P.4 : Bank Statement.
Ex.P.5 : Receipt.
Ex.P.6 : Final Notice.
Ex.P.7 : Cheque
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C.C.No.17414/2020
Ex.P.7(a) : Signature of Accused.
Ex.P.8 : Bank Memo.
Ex.P.9 : Copy of Legal Notice.
Ex.P.9(a) & (b) : Postal Receipts.
Ex.P.10 : Postal Acknowledgment.
Ex.P.11 : Postal Cover.
Ex.P.12 : Complaint.
Ex.P.13 : Certified Copy of Power of Attorney.
Ex.P.14 : Amended Complaint.
List of witnesses examined on behalf of the accused:
-Nil-
List of documents marked on behalf of the accused:
-Nil- Digitally signed
by NAGAMMA
NAGAMMA ICHCHANGI
ICHCHANGI Date: 2026.03.28
18:00:09 +0530
XXVIII Addl. Chief Judicial
Magistrate, Bengaluru City.