Bangalore District Court
Mohan Ram V vs M Visvesvaraya Co Operative Bank ... on 12 January, 2026
1
Cri Appeal No.1790/2024
KABC010280182024
IN THE COURT OF LV ADDL. CITY CIVIL AND SESSIONS
JUDGE, BENGALURU (CCH-56)
DATED: THIS THE 12th DAY OF JANUARY 2026
PRESENT
SRI. MOHAN PRABHU, M.A., LL.M.
LV ADDL. CITY CIVIL AND SESSIONS JUDGE, BENGALURU
CRIMINAL APPEAL NO.1790 / 2024
Appellant/ MOHAN RAM V
accused S/O LATE V. VISHWANATHAN RAO
R/AT NO 58/192 SRI GANESHA NILAYA
5TH CROSS KIRLOSKAR E COLONY
KURUBARAHALLI,
BENGALURU
[R/by R.M. LAW CHAMBERS, Advs.]
Vs
Respondent/ M VISVESVARAYA CO OPERATIVE BANK
Complainant LIMITED, NO 1, 9TH MAIN, A BLOCK,
SUBRAMANYA NAGAR MAIN ROAD
2ND STAGE, RAJAJINAGAR,
BENGALURU - 560 010,
HEAD OFFICE NO 109,
SHANKARMUTT ROAD,
SHANKARPURAM, BENGALURU - 560 004
[R/by Sri C.S.S., Adv.]
JUDGMENT
This appeal is filed U/s.415 [3] of BNSS, by the 2 Cri Appeal No.1790/2024 accused against the judgment of conviction dated:
01.10.2024 passed in C.C. No.15280/2019 by learned XXI ACMM, Bengaluru for the offence under S.138 of Negotiable Instruments Act [for short 'N.I. Act''].
The parties are referred to their rank before the trial court.
The case of the complainant is briefly stated as follows:
The accused approached the complainant bank for mortgage loan in ML/EMI/4 on 03.06.2017 for Rs.30 lakhs for purchase of site and HL/EMI/24 on 12.01.2018 for Rs.70 lakhs for construction of house. After obtaining the loan the accused was paying partly sum now and then The accused has failed to pay the loan amount. He became chronic defaulter. The accused came to the Bank and issued cheque bearing No.0838 dated 06.03.2019 for Rs.4,40,000/- drawn on State Bank of India. CA/5-SFHS adjacent to Nandini Layout Police Station, Bengaluru towards part payment of the loan in favour of the complainant. As per the instructions of the accused, the complainant presented the cheque issued by the accused for clearance on 22.05.2019. But the said cheque came to be dishonoured and returned with an endorsement 3 Cri Appeal No.1790/2024 'funds insufficient', vide endorsement dated 23.05.2019. Immediately, the complainant brought to the notice of he accused regarding dishonour of cheque. As there was no proper reply nor the accused paid the amount, hence, the complainant issued legal notice dated 08.06.2019 through its advocate calling upon the accused to pay the amount due under the cheque. The notice was sent through RPAD and Speed post on 08.06.2019. The notice sent through RPAD and Speed Post was duly served on the accused with the postal shara door locked / intimation delivered / not claimed, returned to sender. Despite having knowledge of notice, the accused neither replied to the said notice nor paid the cheque amount within 15 days from the date of receipt of notice. Hence, the complaint.
(2) After filing the complaint, sworn statement of the complainant recorded, as he filed affidavit in lieu of sworn statement, document Ex.P1 to P8 were marked.
The XXVIII ACMM, Bengaluru after perusal of the sworn statement of the complainant, the complaint averments and documents passed an order dated 05.07.2019 and directed the office to register criminal case against the 4 Cri Appeal No.1790/2024 accused for the offences punishable u/S.138 of NI Act in Register III and issued summons. Accordingly, the case in C.C.No.15280/2019 came to be registered. The accused entered appearance by engaging his counsel and released on bail. The accusation read over to the accused for which the accused pleaded not guilty and claimed for trial. The learned Magistrate by following the guidelines of Hon'ble Supreme Court in the case of Indian Bank Association and others Vs. Union of India, the judgment reported in (2014) 5 SCC 59, the sworn statement of the complainant is treated as evidence. On the same day he accused also examined u/S/313 of CrPC The accused has denied incriminating evidence. Since the learned counsel for the accused moved an application u/S/145 of NI Act, prayed to permit he accused to cross examine PW1 / complainant, the application came to be allowed and case posted for cross examination. On the appearance of the accused on 13.07.2023 the substance of accusation read over to the accused for which the accused pleaded not guilty and claimed for trial. The trial court records shows that PW1 fully cross examined on the side of the accused. The accused has not led any defence evidence. After hearing arguments of both sides, the learned 5 Cri Appeal No.1790/2024 Magistrate pronounced the judgment on 01.10.2024 and acting u/S.278(2) of BNSS (corresponding Old Section 255(2) of CrPC) accused convicted for the offence punishable u/S.138 of NI Act and sentenced him to pay fine of Rs.4,50,000/-, in default he has to undergo simple imprisonment for a period of one year. Out of fine amount, a sum of Rs.4,40,000/- shall be paid to the complainant and the remaining amount of Rs.10,000/- shall be forfeited to the State.
(3) Aggrieved by the Judgment of conviction, the accused has preferred this appeal on following grounds. The impugned judgment of the trial court is contrary to law and evidence. The judgment of the trial court is incorrect, illegal, improper and irregular. The evidence appreciated by the trial court is erroneous. During Covid- 19 pandemic the accused lost his job, thereafter there was cut-down in the source of income. Hence, the appellant was stated as chronic defaulter in payment of loan installments. Later on the appellant made request to the respondent to grant some time to pay the loan installments. There was also strict guidelines from RBI during Covid-19 pandemic not to impose any interest on 6 Cri Appeal No.1790/2024 recovery loan amount. But the respondent imposed interest and took possession of the site. The respondent during the course of cross examination before the trial court dated 24.01.2024 has admitted that the respondent has been taken possession of the appellant site. Sale auction was held, but unfortunately there was no successful bidder. The respondent officials approached the appellant when the said auction was unsuccessful. Later on bank officials threatened the appellant and forcible took the blank cheques as security purpose. The respondent has failed to notify the appellant with respect to presentation of the cheque for encashment on 22.05.2019 with its banker. During the course of cross examination of PW1, he has admitted that on 29.03.2019 and 30.03.2019 the appellant has paid total sum of Rs.3,09,730/-. It is apparent that PW1 admits that total due from both loan accounts as on cheque returned date was only Rs.2,08,735/-. PW1 has admitted that they have filed another cheque bounce case against the accused for the same loan transaction for Rs.6,78,000/- which is pending before the XXVI ACMM, Bengaluru. The trial court has failed to note that as per installments monthly installment for both the loan was 7 Cri Appeal No.1790/2024 Rs.34,400/- and Rs.43,450/-. That on 29.03.219 and 30.03.2019 the accused has paid sum of Rs.3,09,730/-. The EMI amount was due only of Rs.2,08,735/- including both loan accounts. But the complainant has filed this case for Rs.4,40,000/- and another criminal case for Rs.6,78,000/-. The trial court has failed to note that the respondent has falsely filed two cases for Rs.11,18,000/-. But as on the date 3108..2019 there was outstanding of Rs.5,27,660/- including both the loan accounts. The trial court wrongly passed judgment in favour of the respondent without looking into documentary evidence. Hence, the appellant prayed to set side the judgment dated 01.10.2024 passed in C.C.No.15280/2019.
(4) The trial court records received.
(5) The respondent / complainant entered appearance by engaging his counsel.
(6) I have heard the arguments of the learned counsel for the respondent. Despite sufficient opportunity given to the appellant, the appellant has not addressed arguments. This court also permitted the appellant to file written arguments before 12.1.2025, but the appellant did not file written arguments also.
(7) I have perused the entire record.
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Cri Appeal No.1790/2024 (8) The following points would arise for my consideration:-
Point No.1:- Whether the impugned judgment of conviction and order of sentence passed thereon is illegal, perverse and calls for interference?
Point No.2:- Whether there is sufficient grounds made out by the appellant to set side the judgment passed in C.C.No.15280/2019 as prayed for?
Point No.3:- What order?
(9) My findings to the above points are as below:-
Point No.1:- In the Negative
Point No.2:- In the Negative.
Point No.3:- As per the final order,
for the following
REASONS
(10) POINT NO.1&2:- These points are taken
up together for discussion to avoid repetition in
discussion of evidence.
(11) PW1 Branch Manager of complainant bank and authorized signatory in his examination in-chief affidavit by reiterating the complaint averments has deposed that the accused who obtained loan mortgage loan of Rs.30 lakhs in order to purchase the site and housing loan of Rs.70 lakhs for construction of house issued crossed 9 Cri Appeal No.1790/2024 cheques bearing No.081132 dated 06.03.2019 for sum of Rs.4,40,000/- drawn on SBI in favour of the complainant towards part payment of these loans. PW 1 has deposed that as per the instructions of the accused Ex.P2 cheque presented to the bank for encashment on 22.05.2019, but the said cheque came to be dishonoured as 'funds insufficient' vide endorsement dated 23.05.2019. In order to substantiate its contention taken by PW1, Ex.P2 original cheque Ex.P3 bank endorsement are marked.
Ex.P2(a) is the signature of the accused. PW1 has deposed that after dishonour of the cheque, immediately it was brought to the notice of the accused. As there was no proper reply on the side of the accused, nor he paid the cheque amount, hence, legal notice dated 08.06.2019 issued to the accused through their advocate. He states that notice was sent through RPAD and Speed post on 08.06.2019. The notice sent through RPAD and Speed post was served on the accused with postal shara door locked / intimation delivered / not claimed, returned to sender. In order to substantiate this contention taken by PW1, the documents Ex.P4 to 7 are marked./ Ex.P4 is the legal notice dated 08.06.2019. Ex.P5 are two postal receipts for having sent notice to the accused. Ex.P6 and 10 Cri Appeal No.1790/2024 P7 are returned postal coves. ExP6 returned with shara door locked/ intimation served, Ex.P6 returned with shara door locked / intimation served. Ex.P6(a) and Ex.P7(a) are the envelops containing notice. Ex.P8 is the account statement showing loan account of the accused.
(12) During the course of cross examination of PW1 by the learned counsel for the accused, no such contention is taken by the accused is that in Ex.P4 legal notice, Ex.P4 postal receipt, Ex.P6 & P7 RPAD covers, postal address of the accused is wrongly mentioned. It is also not such contention is that the notice sent by the complainant as per EX.P4 not served on the accused. Since the complainant had sent EX.P4 legal notice to the correct address of the accused, the provision u/S/27 of General Clauses Act can be made applicable to this case and the court can held that the notice sent to the accused as per Ex.P4 through RPAD as per Ex.P6 and P9 duly served on the accused. Even in Ex.P6 and P7 postal covers, the postal authority mentioned that the door locked, intimation served. Since the postal authority have served intimation to the accused, despite that the accused did not claim legal notice as per Ex.P4, indicates 11 Cri Appeal No.1790/2024 that the accused having well known about the contents of Ex.P4 purposely not received the legal notice. It is not the contention of the accused is that he has sent reply notice to the complainant.
(13) During the course of cross examination of PW 1 he has deposed that they have sanctioned 2 loan in favour of the accused totally amount of Rs.70 lakhs. He has admitted the suggestion that they proceeded against the accused under SARFAESI Act and taken possession of the mortgaged property. He has deposed that even though all the property was taken under SARFAESI Act, but there was no successful bidder. PW 1 has admitted the suggestion that two cheque bounce cases were filed against the accused. He has deposed that they have sanctioned two types of loans to the accused, one is mortgage loan and another is site purchase and construction loan. PW1 has deposed that the accused repaid only part of the loan amount. The accused repaid only amount of Rs.1,30,000/- towards principal amount. The accused paid 8 installments of Rs.43,450/-. During the year 2019 the accused due a sum of Rs.28,69,501/- towards purchase of site i.e. mortgage loan. He was due 12 Cri Appeal No.1790/2024 a sum of Rs.36 lakhs borrowed for construction purpose. PW1 has deposed that the accused has issued cheque for Rs.4,40,000/- towards part payment of loan amount. During the course of cross examination of PW 1, he has admitted the suggestion that Ex.D1 and D2 noticed were issued by them to the accused. Since PW 1 has admitted two notices confronted to him, hence, these notices are marked as Ex.D1 and D2. He has admitted suggestion that after issuing notice the accused deposited amount o Rs.1,23,240/- on 29.03.2019 and deposited Rs.32,000/- on 30.03.2019. He has admitted suggestion that after these two payments balance payable was R.2,08,735/-. He further deposed that as on the date of issuance of cheque, due amount of Rs.4,40,000/-. He has deposed that the accused was liable to pay EMI of Rs.43,450/- towards one loan account and EMI of Rs.34,400/- towards another loan. He has denied the suggestion that the accused was not due a sum of Rs.4,40,000/- as on 22.05.2019. In this appeal the appellant would contend that during the course of cross examination of PW 1, he has admitted the suggestion that after the accused made payments of Rs.1,23,240/- on 29.03.2019 and Rs.32,000/- on 30.03.2019 the balance payable was Rs.2,08,735/-. 13
Cri Appeal No.1790/2024 The appellant / accused in this appeal urged that even though PW1 has admitted the documents Ex.D1 and D2, two notices the trial court has not properly appreciated the evidence of PW 1. I have gone through the document Ex.D1 and D2. Ex.D1 is the notice dated 22.03.2018, wherein the reference is mentioned as 'your loan product and account No.HL/EMI/24 balance outstanding Rs.36,0,000/-. No doubt, in the body of this notice, it is mentioned that you have failed to pay over dues of Rs.2,44,377/- towards yours above loan account. Likewise, if we read Ex.D2 notice dated 22.03.2019, a reference is mentioned as your loan product and account No.ML/EMI/4 balance outstanding Rs.28,69,50/-. No doubt, in the body of this notice, it is stated that you have failed to pay over dues of Rs.2,71,088/- towards your above loan account. While reading any document, we have to read the document as a whole, not in isolation. If we read the document Ex.D1 notice there is clear mention that there was balance outstanding of Rs.36 lakhs towards loan No.HL/EMI/24 i.e. towards outstanding loan. If we read Ex.D2 it is very clear that the accused was due balance outstanding of Rs.28,69,501/- towards ML/EMI/4 i.e. towards mortgage loan. Under 14 Cri Appeal No.1790/2024 Ex.D1 and D2 what was called to pay his over dues amount towards loan account. The learned counsel for the respondent submitted that as on the date loan amount payable by the appellant is amount of Rs.1 crore. He submitted that towards part payment of loan amount, Ex.P2 cheque for Rs.4,40,000/- was issued by the accused. He submitted that another cheque bounce case field against the accused ended in conviction. Even though the accused preferred an appeal in Crl. Appeal No.1412/2024 the same also came to be dismissed. He submitted that even though this court while suspending sentence directed the accused to deposit 20% of fine amount, but the accused failed to deposit 20% of the fine amount. There is some force in the arguments of the learned counsel for the appellant. This court while suspending sentence on 07.11.2024 imposed condition that the appellant shall deposit 20% of Rs.4,50,000/- before the rial court within 60 days from the date of order. But there is no document on the side of the appellant to show that he has complied the order passed by this court by depositing 20% of fine amount. No doubt, non deposit of fine amount itself cannot be a ground to dismiss this appeal in its entirety. However, the very act 15 Cri Appeal No.1790/2024 of the appellant of non-depositing 20% of amount would indicates scant disrespect of the court order.
(14) On perusal of the cross examination of PW1 the accused has not disputed his signature on Ex.P2 cheque. The accused also not taken any such contention that Ex.P2 cheque is not of his bank account. During the course of cross examination of PW 1, nothing worth is elicited from his mouth to suggest how Ex.P2 cheque of the accused gone to the hands of the complainant. Since the accused has failed to prove of these facts the court must held that the complainant who is holder of the Ex.P2 cheque holding the same as the accused towards discharge of liability or part of his liability issued E.P2 cheque in favour of the complainant. During the course of cross examination of PW1, the accused has not denied of borrowing the mortgage loan of Rs.30 lakhs and towards purchase of site and construction loan of Rs.70 lakhs. The accused has not produced any bank statement to show what was the actual amount epaid by the accused to the complainant. PW1 has deposed that the complainant proceeded against the accused under SARFAESI Act and taken possession of the property that 16 Cri Appeal No.1790/2024 dues shows the accused was chronic defaulter of payment of loan amount. PW1 has deposed that they could not auction the property as there was no successful bidder. PW 1 has clearly deposed that the accused issued Ex.P2 cheque for Rs.4,40,000/- towards payment of part of loan amount. During the course of cross examination of PW 1 nothing is elicited from his mouth to suggest that Ex.P2 issued other than payment of part of loan amount.
(15) Since he accused has not disputed regarding borrowing of loan amount from the complainant and not disputed regarding Ex.P2 is of the bank account of the accused and Ex.P1(a) is he signature of the accused. Hence, presumption u/Ss.138 & 118 of NI Act available to the complainant. It is important to refer some of the judgment of Hon'ble Supreme Court and Hon'ble High Courts.
(16) In the judgment of Hon'ble Supreme Court in the case of K.S. Ranganath Vs Vitthala Shetty reported in 2022 [1] Crimes 454-[SC] wherein head note reads as below:-
"Negotiable Instruments Act, 1881 - Section 138 read with Sections 118 and 139- Dishonour of cheque-Conviction and sentence
- 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 17 Cri Appeal No.1790/2024 is a legally recoverable amount - Onus is on accused to raise a probable defence and standard of proof for rebutting presumption is on preponderance of probabilities-Defence sought to be put forth and witnesses examined in instant proceedings are only by way of improvement in respect of same cause of action-Defence sought to be put forth relating to cheque and other documents having been obtained by force, cannot be accepted as a probable defence when respondent successfully discharged initial burden cast on him-Appeal dismissed.(Paras 11, 17 and 19)"
(17) The Hon'ble Supreme Court in Judgment in a case of Rangappa V/s Mohan in para no. 14 observed as follows:-
"In the light of these extracts, we are in agreement with the respondent/ claimant that 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 Krishnajanardhana Bhat case 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 circumstance therein. As noted in the citations, this is ofcourse 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."
(18) In the decision of Hon'ble Supreme Court reported in 2019(1) DCR 401 between Bir Singh V/s Mukesh Kumar it is held that a meaningful reading of the 18 Cri Appeal No.1790/2024 provisions of the Negotiable Instrument 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 he 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. In my humble view, the principles of these decisions are aptly applicable to the present case because PW1 in his examination in chief clearly deposed regarding accused issuing Ex.P2 cheque towards payment of part of loan amount. Further, in the judgment of Hon'ble Supreme Court in a case of Sumeti Vij V/s M.s Paramount Tech Fab Industries, wherein it is held that to rebut the presumption, facts must be proved by the accused on a preponderance of probability. In the decision of the Hon'ble High Court of Karnataka in M Ramesh Kumar Case wherein in para No.5 observed that section 138 of N.I. Act, on proof of issuance of the cheque, the onus shifts to the accused to rebut the presumption that the 19 Cri Appeal No.1790/2024 cheque was issued not for discharge of any debt or liability in terms of section 138 of N.I. Act. In the decision of Hon'ble High Court of Karnataka in the case of Sitaram Gouda A V/s Isbu Kunhammade it is held that, accused not disputing issuance of cheque- but taking inconsistent stand later- accused not initiating any proceedings as regards misuse, or forgery of cheque and making of wrongful claim- except denial, accused not proving his case beyond reasonable doubt as obligation was on him to do so when he took a special plea.
(19) On perusal of trial court records, the trial court has rightly drawn presumption under S.139 of N.I. Act, by following three ingredients as laid down by the Hon'ble Supreme Court in Rangappa Vs Mohan reported in 2010 SC 1898. Section 139 of N.I. Act empowers the court to presume that holder of cheque received it for discharge of any liability enforceable debt or liability. Burden is on the accused to rebut the said presumption.
(20) Further, The Hon'ble Apex Court in (2012) 13 SCC 3123 (Laxmi Dyechem v. State of Gujarat) has held 20 Cri Appeal No.1790/2024 thus:
"It has to be presumed that the cheque was issued in discharge of debt or other liability but the presumption could be rebutted by adducing evidence. The burden of proof was however on the person who wanted to rebut the presumption. However, this presumption coupled with the object of Chapter XIV of The Act leads to the conclusion that by countermanding payment of post dated cheque party should not be allowed to get away from the penal provision of Section 138 of The Act. "
(21) It is not the contention of the accused is that the complainant has not followed proper procedure as contemplated u/s.138 & 142 of NI Act. ExP2 cheque is dated 06.03.2019. Ex.P3 is the bank endorsement for dishonour of cheque which would go to show that the cheque presented for encashment on 22.05.2019 and I returned with an endorsement dated 23.05.2019 for funds insufficient. Thereafter, the complainant issued legal notice to the accused as per Ex.P4 on 08.04.2016 which is well within one month from the date of Ex.P3 Bank endorsement. The complainant had given 15 days time to the accused to pay the cheque amount. Thereafter the complainant presented the complaint before the Magistrate within one month on 05.07.2019. Hence, the complainant has followed the proper procedure as contemplated u/S.138 & 142 of NI Act. The 21 Cri Appeal No.1790/2024 appellant in the appeal memo would contend that during Covid 19 pandemic period strict guidelines were issued by the RBI not to impose any interest on recovery of loan amount. But the respondent imposed interest and took possession of the site. In this appeal the appellant has not produced any such guidelines issued by RBI restraining to impose any interest on recovery of loan amount. No doubt, PW1 admitted the fact that another cheque bounce case, based on each cheques issued by the accused. It is the specific contention of the complainant is that only for payment of part loan amount the accused had issued Ex.P2 cheque. In order to substantiate contention taken by the complainant and to show balance loan amount payable by the accused, the complainant has produced the bank statement, which is marked at Ex.P8. On the other hand, the appellant has not produced his bank statement showing payment made by him towards loan amount. The accused has not led his defence evidence. Even though it is not necessary to lead defence evidence and the accused can prove his defence by cross examining PW1, but on perusal of the cross examination portion of PW 1, no point is elicited from his mouth to suggest that Ex.P2 22 Cri Appeal No.1790/2024 cheque not issued for legally enforceable debt. Under such circumstances, the court shall presume that the complainant who is the holder of the cheque Ex.P2 received the same from the accused in discharge of legally enforceable debt or liability.
(22) The learned trial judge on proper appreciation of the evidence on record has rightly come to the conclusion that the accused has committed offence punishable U/s.138 of N.I. Act.
(23) The trial court rightly convicted the accused for the offence u/S.138 of NI Act. There is no infirmity in the impugned judgment of conviction and sentence passed thereon and warrants no interference at the hands of this appellate court.
(24) Considering on re-appreciation of entire evidence and after perusal of entire records, this court is of the opinion that there is no infirmity in the order passed by the trial court in C.C. No.15280/2019. Hence, I answer point No.1 &2 in the negative.
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Cri Appeal No.1790/2024 (25) POINT NO.3:- In view of my findings on point No.1 & 2, I proceed to pass the following.
ORDER The appeal filed by the appellant / accused U/s.415 [3] of BNSS is hereby dismissed.
The judgment of conviction and
sentence passed by the learned XXI
ACJM, Bengaluru, in C.C. No.15280/2019 dated 01.10.2024 is hereby confirmed.
The office is directed to send back TCR forthwith to learned XXI ACJM, Bengaluru, along with a copy of this judgment.
[Dictated to the SG-I, transcribed and typed by him, corrected and then pronounced in the open court on this the 12th day of JANUARY 2026] (MOHAN PRABHU), LV Addl. City Civil & Sessions Judge, Bengaluru. (CCH-56)