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Bangalore District Court
Yelahanka Merchants Finance Company vs Savitha on 15 April, 2025
KABC030592162016
IN THE COURT OF THE XXV ADDL. CHIEF JUDICIAL
MAGISTRATE, AT BANGALORE
Dated this the 15th Day of April 2025
SMT SUJATA SIDAGOUDA PATIL,
B.SC.,LL.B.
XXV Addl. Chief Judicial Magistrate,
Bangalore.
C.C.No.21929/2016
Complainant M/s Yelahanka Merchants Finance
Company, Hemakumar Nagar,
Bypass, B.B.Road,
Yelahanka,
BENGALURU-560 064.
Represented by its Manager and
GPA Holder Smt.Anitha
W/o Sri.Narendra Kumar.
(By Sri M.S. - Advocate )
V/s
Accused Savitha W/o Vishwanath.V,
No.48, 1st Cross, 1st Main,
Mathrushree Nilaya,
Surabhi Layout, Yelahanka,
BENGALURU-560 064.
(By P.G.R.G- Advocate)
1. Date of Commencement of 19.07.2016
offence
2. Date of report of offence 15.09.2016
3. Name of the complainant M/s.Yelahanka Merchants Finance
Company
4. Date of recording of 23.03.2018
evidence
5. Date of closing of 19.02.2025
evidence
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C.C.No.21929/2016
6. Offence Complained of 138 N.I.Act.
7. Opinion of the Judge Accused is convicted
8. Complainant Represented Sri - MS
by
9. Accused defence by Sri - PGRG
JUDGMENT
The complainant filed this complaint under Sec.200 Cr.P.C.
against the accused for the offence punishable under Sec.138
Negotiable Instruments Act (For short N.I.Act).
2. The brief facts of the complainant case is as under:
The complainant’s case is that Complainant is a company
dealing with Finance in the name and style of M/s Yelahanka
Merchants Finance Company, the accused has approached the
complainant on 29.10.2013 and obtained a loan of Rs.65,00,000/-
(Rupees Sixty Five Lakhs only) on the request of the accused
complainant has dispersed the amount in the manner mentioned
in the complaint which reads as follows :
Sl.No. Dated Amount
1 29.10.2013 Rs.5,00,000/-
2 29.10.2013 Rs.10,00,000/-
3 12.12.2013 Rs.5,50,000/-
4 23.01.2014 Rs.5,50,000/-
5 05.02.2014 Rs.6,61,550/-
6 09.07.2014 Rs.7,50,000/- On your behalf your
Vishawanth.V.has received
the said amount through
cheque.
7 11.07.2014 Rs.5,51,830/- On your behalf your
3
C.C.No.21929/2016
Vishawanth.V.has received
the said amount through
cheque.
8 Rs.11,86,620/- recovery expenditure and
other incidental charges.
Total Rs.65,00,000
Rs.33,14,100/- Amount paid by you
towards loan.
Rs.4,03,000/- Interest
Total Rs.37,17,100/- Balance Due.
The accused did not repay the loan amount in a regular basis, he
became defaulter. On 09.07.2016 when the complainant
approached the accused, the accused issued the cheque bearing
No.000002 dt.19.07.2016 for a balance amount of Rs.37,17,100/-
(Rupees Thirty Seven Lakhs Seventeen Thousand One Hundred
only) drawn on Kotak Mahindra Bank, Yelahanka New Town,
Bengaluru assuring that the same will be honoured and when it
was presented for encashment, the cheque returned dishonored
on 21.07.2016 with a shara “Funds Insufficient”. Also she
executed written note by admitting her liability.
Further, the accused’s husband Vishwanath.V has also
sought a loan transaction with the complainant on various dates
and accordingly the Sale Deed was executed and entire loan was
cleared. After dishonour of cheque legal notice was issued to the
accused on 09.08.2016 which was served on the accused on
10.08.2016. But no reply has been sent nor repaid the loan
4
C.C.No.21929/2016
amount. Accused has issued the cheque intentionally knowingly
fully well that there is no sufficient funds in her account and
same was dishonoured on the ground “Funds Insufficient”.
Therefore, the complainant was constrained to file the complaint
against the accused. Hence, this complaint.
3. After filing of the complaint, cognizance taken and
recorded the sworn statement of the complainant. The
complainant has complied all the statutory requirements under
Sec.138 of N.I.Act. Thereafter, the case is registered against the
accused and summons issued. The accused appeared through
his Advocate and released on bail. Copy of the complaint
furnished to the accused. Plea recorded and read out to the
accused. The accused pleaded not guilty and claimed to be tried.
4. In support of the case, the Authorized representative of
the complainant company is examined as PW 1 and got
marked documents as Ex.P.1 to Ex.P.23. After closure of the
evidence of the complainant, 313 Cr.P.C statement of the
accused has been recorded. The accused denied the
incriminating evidence placed by the complainant. The accused
has not chosen to lead defense evidence. Arguments heard and
the matter was posted for judgment and the accused was
acquitted. Being aggrieved , the complainant challenged the
judgment before the the Hon’ble High Court of Karnataka in
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C.C.No.21929/2016
Crl.A.No.1342/2019 wherein the matter was remanded
directing the trial court to provide an opportunity to both the
parties to lead oral and documentary evidence. Accordingly PW 1
is further examined and got marked Ex.P.24 to Ex.P.28. Inspite
of grant of sufficient opportunities, not the accused nor the
counsel for accused appeared before the court. Hence, recording
of additional statement of the accused has been dispensed with.
Ex.D.1 has been confronted previously.
5. Heard arguments and perused the material on record.
6. On the basis of the contents of the complaint the
following points arise for my consideration. :
1. Whether the complainant proves beyond
reasonable doubt that the accused issued a
cheque bearing No.000002 dt.19.07.2016 for a
balance amount of Rs.37,17,100/- drawn on
Kotak Mahindra Bank, Yelahanka New Town,
Bengaluru in favour of the complainant?
2. Whether the complainant proves beyond
reasonable doubt that the accused has
committed the offence punishable under
Sec.138 of N.I.Act?
3. What Order?
7. My findings to the above points are as follows:
Point No.1&2: In the Affirmative.
Point No.3 : As per final order
for the following
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C.C.No.21929/2016
REASONS
8. Point Nos.1 &2 :
The complainant's case is that Complainant is a
company dealing with Finance in the name and style of M/s
Yelahanka Merchants Finance Company, the accused has
approached the complainant on 29.10.2013 and obtained a loan
of Rs.65,00,000/- (Rupees Sixty Five Lakhs only) on the request
of the accused complainant has dispersed the amount in the
manner mentioned in the complaint which reads as follows :
Sl.No. Dated Amount
1 29.10.2013 Rs.5,00,000/-
2 29.10.2013 Rs.10,00,000/-
3 12.12.2013 Rs.5,50,000/-
4 23.01.2014 Rs.5,50,000/-
5 05.02.2014 Rs.6,61,550/-
6 09.07.2014 Rs.7,50,000/- On your behalf your
Vishawanth.V.has received
the said amount through
cheque.
7 11.07.2014 Rs.5,51,830/- On your behalf your
Vishawanth.V.has received
the said amount through
cheque.
8 Rs.11,86,620/- recovery expenditure and
other incidental charges.
Total Rs.65,00,000
Rs.33,14,100/- Amount paid by you
towards loan.
Rs.4,03,000/- Interest
Total Rs.37,17,100/- Balance Due.
7
C.C.No.21929/2016
The accused did not repay the loan amount in a regular basis, he
became defaulter. On 09.07.2016 when the complainant
approached the accused, the accused issued the cheque bearing
No.000002 dt.19.07.2016 for a balance amount of Rs.37,17,100/-
(Rupees Thirty Seven Lakhs Seventeen Thousand One Hundred
only) drawn on Kotak Mahindra Bank, Yelahanka New Town,
Bengaluru assuring that the same will be honoured and when it
was presented for encashment, the cheque returned dishonored
on 21.07.2016 with a shara “Funds Insufficient”.
Further, the accused’s husband Vishwanath.V has also
sought a loan transaction with the complainant on various dates
and accordingly the Sale Deed was executed and entire loan was
cleared. After dishonour of cheque legal notice was issued to the
accused on 09.08.2016 which was served on the accused on
10.08.2016. But no reply has been sent nor repaid the loan
amount. Accused has issued the cheque intentionally knowingly
fully well that there is no sufficient funds in her account and
same was dishonoured on the grounds “Funds Insufficient”.
Therefore, the complainant was constrained to file the complaint
against the accused. Hence, this complaint.
9. During the course of evidence, the authorized
representative of the complainant got examined as PW 1 who
narrated entire contents of the complaint.
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C.C.No.21929/2016
10. In support of the complaint contention, the authorized
representative of the complainant produced 23 documents as
Ex.P.1 to Ex.P.23. Ex.P.1 is the G.P.A. Ex.P.2 is the receipt.
Ex.P.3 is the Cheque. Ex.P.4 is the Receipt. Ex.P.5 is the
Challan. Ex.P.6 is the bank return memo. Ex.P.7 is the office
copy of legal notice. Ex.P.8 &9 are the postal receipts. Ex.P.10
is the postal acknowledgment. Ex.P.11 is the application.
Ex.P.12 to Ex.P.19 are the receipt. Ex.P.20 is the loan
application. Ex.P.21 is the acknowledgment. Ex.P.22 is the
Partnership Deed. Ex.P.23 is the Money lending licence.
Subsequently, PW 1 has been further examined and got marked
A.C of the ledger extract and 4 account statements as Ex.P.24
to Ex.P.28
11. During cross examination PW 1 who being the GPA
holder of the complainant finance deposed that since 2004 she
is working as manager and in the present case she holds GPA
on behalf of the complainant finance. She specifically explains
that during loan sanction they used to make spot inspection to
assess the repayment capacity of the customer and if they have
sound capacity to repay, they used to sanction the 2 nd loan in
their favour prior to repayment of earlier loan. But in present
case in respect to the accused loan transaction enquiry is done
orally and no document is placed to prove sound capacity to
repay the loan.
9
C.C.No.21929/2016
12. Further she deposed that the accused herself
approached the complainant finance and issued the cheque and
while issuing the cheque it was completely filled up. Accused
agreed to repay the loan on daily basis. But she is unable to
depose whether the accused has repaid the 1st loan obtained by
her or not but she agreed to produce relevant document
regarding repayment but not produced reliable document.
Accordingly, accused has made part payment of loan on daily
basis for Rs.17,800/- The business of the accused was run by
herself and her husband. Further she deposed that sanctioned
loan of Rs.65 Lakhs is duly transferred to the accused account in
7 installments and out of them 5 installments is given in favour
of the accused and rest two installments paid to her husband.
Accordingly accused has made part payment of Rs.33,14,000/-
and with respect to the balance amount interest accrued is
Rs.4,03,000/- . The accused also is due of the amount ie the loan
sanction process fess and other incidental charges entirely the
amount due was Rs.11,86,620/-.
[
13. Further she admits that out of 7 installments 2
installments have been paid in favour of her husband without
her due consent and to that effect no consent form taken from
the accused. Hence, defense counsel suggested that sanctioned
loan of Rs.65 lakhs is not paid to the accused as pleaded in the
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C.C.No.21929/2016
complaint. But it is admitted that accused made part payment
of Rs.33,13,100/- as per the ledger extract. But further she
volunteers that around Rs.39 to 40 lakhs amount is repaid by
the accused. During further cross examination she denied
above said payment.
[[
14. Previously the complainant not produced relevant
documents to show the transfer of sanctioned loan amount in
favour of the accused. Therefore, the evidence lead by the
complainant was not sufficient to convince the court to draw
inference in favour of the complainant. Therefore, case was
disposed on 28.6.2019 by acquitting the accused. Thereafter
being aggrieved the complainant objected the judgment before
the the Hon’ble High Court of Karnataka through
Crl.A.No.1342/2019 in which the complainant moved an
application i/e 391 of Cr.p.c seeking permission to adduce
additional evidence as they have material documents and have
been left without marking as they had moved an application
before the trial court and same was dismissed. Therefore the
request of the complainant is considered by the the Hon’ble
High Court of Karnataka and remanded the matter by setting
aside the judgment dt. 28.06.2019 and issued direction to the
trial court to give an opportunity to both the parties to adduce
additional oral and documentary evidence. Further it has
11
C.C.No.21929/2016
directed the complainant to appear before the trial court on or
before 25.11.2023 without expecting court notice.
15. During pendency of said appeal, the accused
remained absent. Accordingly, the complainant appeared
before the court on 25.11.2023 as per the direction of the
Hon’ble High Court of Karnataka. Very same day in absence of
accused and defense counsel, court has issued notice to the
accused. But the notice returned with information that the
accused has left the given address. Thereafter, NBW issued
against the accused as per request of the complainant through
concerned police station for number of times. But concerned
police failed to execute the NBW as the accused is in the habit of
changing the residential premises often. Therefore the
complainant adduced her additional evidence and produced
relevant documents like the ledger extract and 4 account
statements of the complainant finance which have been duly
marked as Ex.P.24 to Ex.P.28. Despite they took paper
publication to find out whereabout of the accused, but, in vain.
But nobody appeared and gave information of the accused.
Hence, court has dispensed recording additional statement of the
accused as per the principles discussed by the Honble Apex
Court in reported judgment 2025 SCC Online Bombay, 145
(Navneet Singh Gogia and Anr V/s State of Maharashtra) and
12
C.C.No.21929/2016
heard arguments from the complainant side and posted for
judgment.
16. It is observed that as per the judgment Dt.28.6.2019
specific contention of the complainant is that rest of the
sanctioned loan of Rs.7,50,000/- and Rs.5,51,830/- was paid to the
husband of the accused . But to prove the transfer of said both
amount in favour of the husband of the accused, no relevant
documents produced by the complainant. Hence, the pleading of
the complainant is not proved with sufficient material and
documentary evidence. In order to fill up the above said lacuna,
the complainant has produced 4 account statements as per
Ex.P.25 to Ex.P.28.
17. As per Ex.P.25 Rs.5 lakhs is released from the
complainant finance on 29.10.2013 in favour of the accused
through cheque No.0796989. Thereafter as per Ex.P.26, on
12.12.2013 – Rs.7,50,000/-, on 23.01.2014 – Rs.5,50,000/-, on
5.2.2014 – Rs.6,61,550/- have been transferred to the accused
from account of the complainant maintained in Kotak Mahindra
Bank, B.B.road Branch, Yelahanka. From the same account, on
9.7.2014 – Rs.7,50,000/- , on 11.07.2014 – Rs.5,51,830/- amount
has been transferred in favour of the husband of the accused.
Further as per Ex.P.27 on 12.12.2013 – Rs.5,50,000/- has been
transferred to the accused through cheque No.0786214. Further,
13
C.C.No.21929/2016
as per Ex.P.28, Rs.10 Lakhs has been paid in cash to the
accused.
18. As per the observation made by the Honble High
Court of Karnataka in Crl.A.No.1342/2019, the complainant has
failed to prove transfer of rest of 2 installments which have been
alleged to have been paid in favour of the husband of the
accused. To that effect, the complainant produced Ex.P.26
through which the complainant finance has made payment in 5
installments out of them 3 installments are paid in favour of the
accused and 2 installments ie on 9.7.2014 and 11.7.2014 the
complainant finance has released amount to the extent of
Rs.7,50,000/- and Rs.5,51,830/- respectively. Therefore entirely
as per the admitted fact the complainant has released amount
of more than Rs.53 lakhs in favour of the accused. It is
observed that the complainant finance has deducted other
charges and rest of Rs.53 Lakhs has been transferred to the
account of accused and her husband’s account. Therefore what
ever documents produced by the complainant ie the payments
receipts Ex.P.12 to Ex.P.19 have been duly complied with by
showing valid payment of sanctioned loan amount in favour of
the accused.
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C.C.No.21929/2016
19. Further it is observed that after receipt of loan
amount, accused has executed payment receipt. Further it is
observed that at the time of issuance of cheque she has given
acknowledgment as per Ex.P.4 through which it is clearly
mentioned that the disputed cheque is issued by the accused
towards discharge of loan liability to the extent of the amount
mentioned in the disputed cheque. Apart it the complainant has
produced the application for membership, loan application as
per Ex.P.11 and Ex.P.20 through which it has been duly proved
that the present accused tried to avail loan and became member
of the complainant finance and applied for loan of Rs.65 Lakhs.
As per by laws of the complainant finance, the loan has been
sanctioned by considering the application.
20. Further it is observed that the complainant finance
has put endorsement on the loan application and sanctioned
entire loan of Rs.65 lakhs in 6 installments. Thereafter, accused
became defaulter and when they insisted for payment, at that
time she issued the cheque along with the acknowledgment.
Further it is observed that during cross examination or after
receipt of legal notice, the accused never denied the signature
either on the loan application or the acknowledgment or on the
disputed cheque. Therefore the documents which have been
executed by the accused in favour of the complainant finance
remained in tact , not objected.
15
C.C.No.21929/2016
21. Further, it is observed that in one angle, the defense
counsel suggested that she paid entire loan amount and in
another angle it has been suggested that she has made payment
of Rs.40 lakhs as Rs.40 lakhs was released in her favour, hence
entire loan transaction is duly complied by the accused. But to
prove this suggestion, no material documents have been
produced by the accused. The complainant has proved release of
sanctioned loan amount in favour of the accused. As per the
loan application contents, she has to repay the loan amount on
daily basis of Rs.17,800/-. But the accused has not placed
relevant documents to show the entire payment to rebut the
presumption existing in favour of the complainant finance .
22. Further it is observed that at the time of loan sanction
process, the complainant finance has deducted recovery
expenditure to the extent of Rs.11,86,620/- and other incidental
charges from the sanctioned loan amount. But when the accused
became defaulter and loan amount is huge amount which was
sanctioned more than 12 years back. Therefore the amount
invested by the complainant finance in favour of the accused is
to be recovered without loss. Hence after gap of long period
above said deduction is said to be payable since after filing of
present case there is no such part payment made by the accused.
Further it is observed that as per the amendment of N.I .Act, the
16
C.C.No.21929/2016
present case is filed prior to amendment. Therefore the
complainant finance was not entitled for interim compensation.
Therefore by considering entire litigation period, the
complainant finance is entitled to have reasonable compensation
towards recovery of loan amount extended in favour of the
accused along with incidental charges and recovery charges.
23. After allowing of application filed by the complainant
before the the Hon’ble High Court of Karnataka , the
complainant appeared before this court and gave additional
evidence by marking the material documents to show transfer
of 2 installments in favour of the husband of the accused. She
has filled up the lacuna of non transferring of entire loan amount
in favour of the accused. As per direction of the the Hon’ble
High Court of Karnataka , after receipt of LCR this court has
put better effort to secure the accused. The LCR has been
received on 25.11.2023 and as per direction of the the Hon’ble
High Court of Karnataka, both parties ought to have appeared
before the trial court without expecting the court notice on
25.11.2023. But only the complainant has appeared and
proceeded with the case. The accused remained absent and no
representation.
24. During trail, accused never denied issuance of
cheque and his signature on it. Hence, drawing of legal
17
C.C.No.21929/2016
presumption in favour of the complainant as per Sec.118 and 139
of N I Act is justifiable, unless the contrary is proved. In the
present case, accused never denied alleged part payment as
pleaded under the complaint and also he never denied entire
loan transaction. Hence, it is nothing but the accused
impliedly admitted disbursement of loan amount and also part
payment made by her. But, as per the defense, during
argument it is highlighted that there is no relevant documents
placed by the complainant to show release of entire loan of Rs.65
lakhs in favour of the accused. In absence of relevant document
to show legal disbursement of sanctioned loan amount, the
complainant’s case has not been considered previously. Further
it is observed that as per Ex.D.1 it is defended that towards
balance payment of loan amount the husband of the accused
executed sale deed as per Ex.D.1 in favour of the partner of the
complainant finance by name Jayamma.
25. Apart of above said defense further it is observed that
the sanctioned loan is released in 7 installments, out of them 5
installment amount have been released in favour of present
accused and rest of 2 installments have been released in favour
of the husband of the accused and to that effect the complainant
has not produced relevant documents. After remanding the
matter before the court the complainant – PW1 appeared and
18
C.C.No.21929/2016
lead further evidence and produced reliable material documents
Ex.P.25 to Ex.P.28. Out of which as per the contents of Ex.P.26,
on 9.7.2014 and on 11.7.2014, the complainant finance has
released Rs.7,50,000/- and Rs.5,51,830/- respectively in favour of
the husband of the present accused by name U.Vishwanatha .
Therefore, as per the earlier deposition of PW 1, it is clarified
that in 7 installments complainant finance has released amount
of Rs. 53 lakhs approximately in favour of the accused and her
husband.
26. In addition it is stated that at the time of releasing
said amount, they have deducted incidental charges along with
other recovery charges from the sanctioned loan amount. But,
very process of deduction has been opposed by the court by
saying that the process itself is uncalled for and it is not
explained by PW 1 why such steps have been taken by the
complainant finance. Now, after long gap it is observed that
after availing loan from the complainant finance, by making part
payment by the accused, she never turned up to pay the
balance amount, nor raised objection for non deduction of
incidental and recovery charges. In absence of any such steps,
whatever process carried by the complainant is deemed to be
admitted by the accused as she being a needy person approached
the complainant finance without raising any objection and she
received Rs.53 lakhs loan amount. As per defense, if any
19
C.C.No.21929/2016
illegality committed by the complainant finance then, they would
not reveal the earlier part payment made by the accused
honestly. In absence of any such illegal steps by the
complainant, whatever loan transaction held between the
accused and the complainant finance is to be considered and the
amount mentioned under the disputed cheque is said to be
outstanding amount.
27. Further it is observed that in the previous judgment,
it is stated that PW 1 has admitted that Ex.D1 was executed for
discharge of loan. But as per evidence of PW 1 she never admits
that due to execution of Ex.D.1 , there was no need to make
payment of balance amount as the husband of the accused
executed registered sale deed with respect to immovable
property in favour of one of the partner of the complainant
finance by name Jayamma. But on careful scrutiny of the very
sale deed it discloses that the sale transaction held under
Ex.D.1 is not at all related to the complainant finance as well as
the accused, as it had nexus with recovery of previous loan
availed by the husband of the accused and not with the present
loan transaction.
28. One more material fact disclosed is that the sale
transaction is held between above said Jayamma and one Uday
Kumar who is not at all related to the accused family. The
property involved in that sale process not at all belongs to the
20
C.C.No.21929/2016
accused family. Therefore under such existing circumstance the
accused cannot take shelter under Ex.D1 to skip from alleged
liability. Therefore , ExD1 does not come in the way of defense
to rebut the legal presumption which exists in favour of the
complainant finance. Hence, the lacunas which have been left
out during previous trial have been filled up by the complainant
finance by producing material documents Ex.P25 to Ex.P.28
through which the complainant finance has duly proved transfer
of loan amount in favour of the accused and her husband. In
absence of contra evidence it is legally deemed that the entire
loan amount is sanctioned to the accused as per operations
shown in Ex.P.25 to Ex.P.28 . It is observed that at the relevant
time of loan transaction the complainant finance has proved that
it has licence to have loan transaction with the customer seeking
agreed rate of interest on the loan amount. Since the present
loan transaction is nothing but business loan and as per Sec.79
of N.I.Act, the complainant finance is entitled to seek the agreed
rate of interest on the sanctioned loan.
29. As per the specific defense the disputed cheque is
issued by the accused towards security purpose and no legal
steps have been taken by the accused to get returned said
cheque from the complainant finance. Therefore in absence of
any such reliable evidence, it is legally presumed that the
accused became defaulter and failed to repay the due amount.
21
C.C.No.21929/2016
Therefore in order to recover the balance amount, the
complainant finance might have filled up the disputed cheque in
order to make it a negotiable instrument towards discharging
the legal liability. As per the principles discussed in reported
judgment held in between Birsingh V/s Mukesh Kumar,
Hon’ble Apex Court has held that as per Sec.20, 87 and 139 of
N.I.Act, the person voluntarily signs and issues the cheque to
the payee remains liable unless he rebuts the presumption
u/s.139 of N.I.Act by placing his evidence. It is immaterial that
the cheque may have been filled by the drawer or any person it
is a valid cheque. The onus still lies on the accused which had
not been discharged. Same principle is highlighted by the Honble
Apex Court in Slp.(Crl) No.3377/2019 dt.09.02.2024.
30. Further, it is perused that as per the defense , the
cheque has been issued towards security. Then court has to
observe that as on date of issuance of cheque, is there any debt
to be payable by the accused. As per the documentary evidence
placed by the complainant , the loan amount was disbursed in
the year 2013-2014 , blank signed cheque was issued in the year
2016. Hence as on the date of issuance of cheque outstanding
debt was pending against the accused. In this regard I would
like to highlight the principles discussed by the Honble Apex
Court reported in below mentioned judgment:
22
C.C.No.21929/2016
Sripathi Sing (since deceased) through his LR v/s State of
Jharkhand and Anr. CRIMINAL APPEAL NOS. 12691270
OF 2021 in which Honble Apex Court has held that :
If as on the date of issuance of cheque
liability or debt exist or the amount has
become Legally recoverable the section is
attracted and not otherwise. In other sense if
cheque was issued for repayment of loan
installments which had fallen due through
such deposit of cheques towards repayment
was also described as security in the loan
agreement where the loan has actually been
advanced and repayment is due on date of
[
issuance of cheque.
Therefore the cheque alleged to be issued as a security pursuant
to financial transaction, cannot be considered as worthless piece
of paper under every circumstances. “Security” in its true sense
is a state of being safe and the security given for loan is
something given as a pledge of payment. It is given , deposited
or pledged to make certain fulfillment of obligation to which the
parties to the transaction are bound. If in a transaction loan is
advanced and the borrower agrees to repay the amount in a
specified time frame and issues a cheque as security.
31. For the sake of argument that blank signed cheque is
given to the complainant, it is well settled principle of law that
“even a blank cheque leaf signed and handed over by the
accused which is towards some payment, would attract
presumption u/s.139 of N.I.Act in absence of cogent evidence to
show that cheque was not issued in discharge of debt”. Thus no
discrepancy had emerged out of the cross examination which
23
C.C.No.21929/2016
may demolish complainant version even on the touch stone of
preponderance of probabilities. Thus, accused has not disputed
the transaction. As per the documentary evidence placed by
the parties it clearly shows that the alleged loan has been
disbursed entirely in favour of the accused prior to the date of
disputed cheque which is supported by the document Ex.P.4
acknowledgment issued by the accused by saying that she has
given acknowledgment as per Ex.P.4 by issuing the disputed
cheque towards payment of balance loan amount. Hence,
amount mentioned under the cheque is legally recoverable debt.
32. In this regard I would like to take shelter under
reported judgment held between Ashok Singh Vs State of UP
Disposed on 2.4.2025 in which the Honble Apex Court has
upheld the conviction judgment passed by trial court. In said
reported case, the accused availed loan of Rs.22 Lakhs from the
complainant and issued cheque towards recovery of loan amount
including the interest for Rs.30 lakhs. Cheque has been
dishonored . After due compliance of necessary ingredients of
Sec.138 of N I Act, the complaint has been filed in
C.C.No.6650/2012 in which accused has been convicted. Same
has been challenged before the Additional Sessions Judge,
Lucknow in Crl.A No.148/2019 in which the trial court judgment
has been upheld through the judgment Dt.23.10.2020 and same
24
C.C.No.21929/2016
is challenged by the accused before the Honble High Court in
which the Honble High Court has set aside the conviction order
and the sentence imposed on the accused by both trial and
lower Appellate Court and held that the complainant has failed
to prove his case that the cheque was issued towards discharge
of lawful debt specially, when the complainant has failed to
disclose details of his bank account and date when he withdrew
the amount in question and paid to the revisionist as well as the
date when he obtained the cheque. Therefore there are glaring
inconsistencies indicating doubt in the complainant’s version.
Hence, conviction and sentence cannot be sustained.
Accordingly, accused has been acquitted.
33. The matter traveled before the Honble Apex Court
where it has been held that the proceeding under Sec.138 N I Act
is not civil suit. At the time, when the complainant gives his
evidence, unless the case is set up in the reply notice to the
statutory notice sent, that the complainant did not have
wherewithal, it cannot be expected of the complainant to initially
lead evidence to show that he had the financial capacity. Apart
it, in N I Act cases is summarily triable case, where accused has
to establish a probable defense. But in absence of issuance of
reply and leading of defense evidence, the evidence lead by the
complainant cannot be ignored for non producing the documents
25
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to prove the transfer of loan amount to the accused. Therefore
Honble Apex Court has allowed the aforesaid appeal by setting
aside the acquittal judgment passed by Honble High Court by
imposing conviction and sentence for one year simple
imprisonment with fine of Rs.35 Lakhs. At the request of Senior
defense counsel same has been modified and restricted the fine
amount of Rs.32 lakhs which is to be paid within 4 months
period, otherwise, the sentence is to be modified to the fine
amount of Rs.35 Lakhs which is to be entirely paid to the
complainant.
34. Under the light of above said discussion it is crystal
clear that burden shifts on the accused to rebut the legal
presumption which exists in favour of the complainant by
proving that the cheque in dispute was not issued towards
discharge of amount claimed through cheque. Hence
complainant has placed sufficient oral and documentary evidence
to prove that the accused issued the cheque in discharge of legal
liability. Therefore, the presumption under Sec.139 of N.I.Act
remain intact. The complainant has proved the complaint
averments by placing oral and documentary evidence. On the
other hand, the accused failed to prove the defence by rebutting
the above said presumption.
35. The complainant has proved that the cheque in
question was issued by the accused towards discharge of legal
26
C.C.No.21929/2016
liability. The Honble Apex Court in several decisions starting
from Rangappa V/s Mohan held that presentation u/s.118
and 139 of N.I.Act comes into operation in favour of the
complainant that the cheques in question are issued towards
payment of any legal debt, placing initial burden on the accused
to rebut the same and establish the circumstances in which the
cheques in question reached the hands of the complainant. Only
after rebutting the above said presumption, burden, would shift
on the complainant to prove his case.
36. In the light of the above discussion and the material
placed on record, the court is of the opinion that the complainant
has proved existence of legal liability and also proved that the
accused issued the cheque in question towards discharge of legal
liability. The complainant placed better evidence and proved
transfer of sanctioned loan amount to the accused and her
husband . Hence, the complainant has proved the ingredients of
Sec.138 of N.I.Act. Therefore considering the entire facts and
circumstances of the case and the available evidence on record,
the court comes to the conclusion that the accused committed the
offence punishable under Sec.138 of N.I.Act. The complainant is
entitled for compensation under Sec.357 Cr.P.C. Therefore, the
complainant has proved point No.1 beyond all reasonable doubt.
Hence, Point No.1 & 2 are answered in the Affirmative.
27
C.C.No.21929/2016
37.Point No.3 : , In the light of the above finding on point
No.1 , I proceed to pass the following:
ORDER
Acting u/s. 255(2) of Cr.p.c., the accused is
convicted for the offence punishable under
Sec.138 of N.I.Act.
The accused is sentenced to pay fine amount
of Rs.37,27,100/- (Rupees Thirty Seven Lakhs
Twenty Seven Thousand One Hundred Only)
In default of payment of fine, shall undergo SI
for one year.
Acting under Sec.357(1)(b) of Cr.P.C., out of
the fine amount, the complainant is entitled
for Rs.37,22,100/- (Rupees Thirty Seven
Lakhs Twenty Two Thousand One Hundred
Only) towards compensation.
Acting under Sec.357(1) (a) of Cr.P.C., the
remaining fine amount of Rs.5,000/- (Rupees
Five Thousand only) is to be remitted to the
state.
Copy of the judgment shall be furnished to
the accused free of cost.
(Dictated to the Stenographer , transcribed and typed by her, corrected and
signed and then pronounced by me in the open court on this the 15th day of
April 2025).
(SUJATA SIDAGOUDA PATIL)
XXV A.C.J.M., BANGALORE.
28
C.C.No.21929/2016
ANNEXURE
LIST OF WITNESSES EXAMINED FOR THE COMPLAINANT:
P.W.1 : Anitha.
LIST OF DOCUMENTS MARKED FOR THE COMPLAINANT :
Ex.P.1 A.C. of G.P.A Ex.P.2 Receipt Ex.P.3 Cheque Ex.P.3(a) Signature of the accused Ex.P.4 Receipt Ex.P.5 Challan Ex.P.6 Bank return memo Ex.P.7 Office copy of Legal Notice Ex.P.8 & 9 Postal receipts Ex.P.10 Postal acknowledgment Ex.P.11 Application Ex.P.12 to 19 Receipts Ex.P.20 Loan application Ex.P.21 Acknowledgment Ex.P.22 A.C of Partnership deed Ex.P.23 A.C. of Money lending license Ex.P.24 A.C. of Account Ledger Extract Ex.P.25-28 Account Statements
3) LIST OF WITNESSES EXAMINED FOR THE ACCUSED :
Nil.
4) LIST OF DOCUMENTS MARKED FOR THE ACCUSED :
Ex.D.1 Sale deed Digitally
signed by
SUJATA
SUJATA SIDAGOUDA
SIDAGOUDA PATIL
PATIL Date:
2025.04.19
10:30:31
+0530
(SUJATA SIDAGOUDA PATIL)
XXV A.C.J.M., BANGALORE.
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