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Bangalore District Court
C.N.Chandrashekar Reddy vs Rajesh.R.Naik on 26 May, 2025
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CC No. 4482/ 2020
KABC030170402020
Presented on : 05-03-2020
Registered on : 05-03-2020
Decided on : 26-05-2025
Duration : 5 years, 2 months, 21 days
IN THE COURT OF XX ADDL.CHIEF JUDICIAL MAGISTRATE AT
BENGALURU CITY
PRESENT: SRI. SHRISHAIL BHIMASEN BAGADI,
B.Com.,L.L.B.,
XX ADDL. C.J.M., Bengaluru.
Dated this the 26th day of May 2025
C.C.No. 4482/ 2020
C N Chandrashekar Reddy
Complainant : Physically Disabled person,
S/o. Late D V Narayana Reddy,
Door No. 7/3/A, 3/1,
Chikkabelandur Village,
Carmelaram Post,
Bangalore - 560 035
{ By Sri. A R Shashi Kumar-
Advocate }
Vs.
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CC No. 4482/ 2020
Rajesh R Naik,
Accused : S/o. Rama Naik,
C/o. Govindanna
Shanthisagar,
Deluxe Hotel,
No.68/2, Coles Park Road
Fraser Town,
Bangalore - 560 005
Also at the following address
i) Hotel Sagar Deluxe
L-14, Jeevan Bima Nagar Main Road,
HAL 3rd Stage,
Bangalore - 560 075
ii) Sridevi Sagar Hotel,
No.13/45, Vivek Nagar,
Near Police station,
Bangalore - 560 047
iii) Manager,
Krishnasagar Hotel,
Kannamangala Gate,
Devanahally Taluk,
Pin Code - 562 110
iv) C/o. Preeti,
No. 24, 4th Cross,
'B' Block, Egipura,
Viveknagar Post,
Bangalore - 560 047
v) Sai Palace Hotel,
No.16, HDFC Bank Building,
Belathur - Kadugodi Main Road,
Bangalore - 560 067
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CC No. 4482/ 2020
vi) C/o. R Ramesh,
No.267, Diagonal Road,
2nd Main, New Tippasandra,
HAL 3rd stage,
Bangalore - 560 075
vii) Srinivasa Gowda,
S/o. Babu Gowda
No.41, 1st Phase, JP Nagar,
Sarakki,
Bangalore - 560 078
viii) C/o. Raghavendra Shetty
S/o. Shankar Shetty,
Gaddodu Siddapura,
Kundapura Taluk
Udupi District - 576 229
ix) C/o. Raju,
Durga Deepa Nilaya,
Siddapura,
Kundapura (Taluk)
Udupi (Dist) - 576 229
x) Dhana Manava Nilaya,
ISSUR, Siddapura,
North Canara
Pin - 581 322
{ By Sri.Lokesh A.- Advocate }
Offence complained : U/S. 138 of N.I. Act.,
Plea of accused : Pleaded not guilty
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CC No. 4482/ 2020
Final Order : Accused is Convicted
Date of Order : 26.05.2025
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CC No. 4482/ 2020
JUDGMENT
The complainant has filed this complaint against the accused
under section 200 of the Cr.P.C., alleging that he has committed an
offence punishable under section 138 of the Negotiable Instruments
Act.
2. The brief facts of the complainant’s case are as follows:
The complainant submits that the accused has been known
to him since 2014. One Mr Suchindra, owner of Sagar Deluxe
Hotel, Jeevan Bhima Nagar, Bengaluru, had introduced the
accused to the complainant. Based on the acquittance, the accused
had borrowed a loan of Rs. 6,00,000/- from the complainant for the
purpose of his hotel business, out of the total loan amount the
complainant gave a sum of Rs.3,75,000/- through cash and
Rs.2,00,000/- through a cheque on 18.12.2015 drawn on Federal
Bank, Kodathi Gate Branch, Bengaluru, and the remaining amount
of Rs.25,000/- was paid in cash on 18.09.2017. The accused
promised to repay the said loan within one year. After the lapse of
the stipulated period, the accused did not come forward to pay the
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CC No. 4482/ 2020loan amount. After repeated requests and demands, the accused
issued a cheque bearing 852303 dated 29.11.2019 for 6,00,000/-,
drawn on Canara Bank, Basavanagudi Branch, Bengaluru.
Reposing the confidence in the accused, the complainant presented
the said cheque for collection on 29.11.2019 through his banker,
i.e., IDBI Bank Ltd, Mission Road Branch, Bengaluru. But the said
cheque came to be dishonoured due to ‘Account Dormant’; the
factum of dishonour of the cheque was duly communicated to the
accused by issuing a legal notice dated 23.12.2019; the notice was
sent to the business address and residential address and native
place address of the accused.
The notice sent to the business address was returned as
‘not claimed’ and ‘addressee left; the notice sent to the residential
address was returned as ‘party left and addressee left’. Despite the
issuance of the notice, the accused neither paid the cheque amount
nor issued any reply notice; hence, the complainant has filed this
complaint against the accused.
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CC No. 4482/ 2020
3. On receipt of the complaint, the complainant examined
himself as PW.1 and got marked documents as per Ex.P.1 to P.27.
based on the complaint averments, sworn statement, and
documents, the court took cognizance of the offence under section
138 of the Negotiable Instruments Act and registered the case and
also issued a summons to the accused. On receipt of the summons,
the accused appeared before the court through his counsel and
was enlarged on bail. The copies of the complaint and other
relevant documents were supplied to him, and the substance of the
accusation was read over and explained to him, he did not plead
guilty, and he claimed to be tried. As per section 145(1) of the
Negotiable Instruments Act, the sworn statement affidavit of the
complainant was treated as his examination in chief, and
documents produced at the time of the recording of his sworn
statement were adopted as documentary evidence. The learned
counsel for the accused fully cross-examined the complainant, and
after the completion of the complainant’s evidence, the
incriminating evidence available in the complainant’s evidence was
read over to him. He denied the entire evidence of the complainant,
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CC No. 4482/ 2020
and the accused to prove his defense has not adduced his defense
evidence, but got marked one document through confrontation as
Ex.D.1.
4. On perusal of the material records placed before this court,
the following points that arise for my consideration.
POINTS FOR CONSIDERATION
1. Whether the accused has
successfully rebutted the presumption
available under section 139 of the
Negotiable Instruments Act that, he
had not issued the cheque to the
complainant to pay the legally
enforceable debt ?
2. Whether the complainant has
complied with the mandatory
requirements of section 138 of the
Negotiable instruments Act ?
3. What order or sentence ?
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CC No. 4482/ 2020
5. I have heard arguments of the learned counsel for the
complainant and learned counsel for the accused. The learned
counsel for the accused has filed a written synopsis.
6. Upon hearing arguments and on perusal of oral and
documentary evidence made available by the complainant and on
perusal of the documentary evidence made available by the
accused, my answers to the above said points are as under.
Point No.1 In the negative
Point No.2 In the affirmative
Point No.3 As per the final order for the
following
REASONS
Point No.1 and 2 :
7. These points are interconnected with each other, hence to
avoid repetition of facts and appreciation of evidence, both points
are taken together for common discussion.
The complainant to bring home the guilt of the accused has to
comply with the mandatory requirements of section 138 of the
Negotiable Instruments Act; firstly, he has to prove that he is the
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CC No. 4482/ 2020
holder in due course of the cheque, and the said cheque must be
presented to the bank within its validity. Once the cheque came to
be dishonoured, then the factum of the dishonour of the cheque
must be communicated to the accused by issuing a demand notice
within thirty days from the date of receipt of the bank
endorsement. After the receipt of the notice, the complainant has to
wait for fifteen days; if the accused fails to make payment of the
cheque amount within fifteen days from the date of receipt of the
legal notice, after fifteen days of the date of receipt of the legal
notice, the complainant has filed a complaint within one month. On
perusal of records noticed that the cheque was issued on
29.11.2019, till the accused disproves that, he had not issued the
cheques to the complainant, it is to be presumed that, the
complainant is a holder in due course, the complainant presented
the said cheques for collection on 29.11.2019, that means the
cheques have been presented to the bank within its validity, the
complainant received the cheque return memo on 02.12.2019 and
issued a demand notice on 23.12.2019, therefore the complainant
has complied second condition, and the legal notice issued to the
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CC No. 4482/ 2020
accused was returned unserved on 01.01.2020, and filed this
complaint on 05.02.2020, which is well within the period of
limitation. Therefore, the complainant has complied with the
mandatory requirements of section 138 of the Negotiable
Instruments Act.
8. The complainant to prove his case, examined himself as
PW.1 and in his examination in chief affidavit, he has reiterated the
contents of the complaint, in addition to his affidavit evidence, he
has produced documents as per Ex.P.1 to P.27, among these
documents Ex.P.1 is the cheque issued by the accused in favor of
the complainant, signature of the accused marked as Ex.P.1(a) ,
Ex.P.2 is the cheque return memo wherein it is mentioned that, the
cheques issued by the accused came to be dishonored due to
account dormant. Ex.P.3 is the legal/demand notice issued by the
complainant to the accused calling upon him to pay the cheque
amount, Ex.P.4 to 14 are the postal receipts, Ex.P.15 to 24 are the
unserved postal envelopes, Ex.P.15(a) to P.24(a) are the unserved
legal notices, Ex.P.25 is the bank account statement(further
statement produced along memo on 17.05.2025), Ex.P.26 is the on
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CC No. 4482/ 2020
demand promissory note, Ex.P.27 is the consideration receipt,
wherein it is mentioned that, the accused had borrowed a sum of
Rs.6 lakh from the complainant on 18.03.2017.
09. The learned counsel for the accused has cross examined
the PW.1 and asked certain questions and its answers given by the
complainant extracted hereunder.
“He was running a gas cylinder
business from 2014 to 2020; the
accused was known to him since
2014, when he was working at
Sagar Deluxe Hotel in Bhima Nagar.
Later, the accused joined another
hotel called Sridevi Hotel in Vivek
Nagar. He had sent notices to the
business and residential addresses
of the accused. The accused was
working as a cook at the Sagar
Deluxe Hotel. The owner of the
hotel, Sachindra, introduced the
accused to him with the intention of
helping him financially. The accused
asked him for financial assistance in
the last week of December 2014,
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CC No. 4482/ 2020and he gave him Rs.3,75,000/- in
cash and Rs.2 lakh by cheque on
18.12.2015. He has no documents
to show that he has Rs.6 lakh to pay
the accused; the complainant has
submitted that he has sufficient
money from the sale of his property.
He further deposed that he had
sent legal notices to ten addresses of
the accused, none of which were
served on him, and that the accused
had taken him to the sixth address
as mentioned in the complaint. The
accused had provided his Aadhaar
card and bank passbook for his
address reference; he had not
produced those documents, nor had
he received any documents from the
accused regarding the loan. The
complainant also stated that he had
paid the last installment of Rs.
25,000 to the accused; at the time of
loan disbursement, he, his wife and
the accused were present. He had
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CC No. 4482/ 2020given Rs. 2 lakh out of the sale
consideration of Rs. 18 lakh
received by his wife; that amount
was kept at home.
The complainant further states
that as per the bank statement of
Ex.25, he had withdrawn Rs. 18
lakh on 27.08.2015; out of Rs. 18
lakh, he had given Rs. 17 lakh to
Suchindra. After withdrawing Rs. 18
lakh, the balance available in his
account was Rs. 85,384/-. He had
given a sum of Rs 2 lakh to the
accused out of the Rs 18 lakh
received by his wife from the sale of
property; the amount was kept at
home. He stated that he had given
Rs.3,75,000/- in cash, Rs.2 lakh by
cheque and the remaining
Rs.25,000/- in cash.
The accused’s counsel made a
suggestion to the complainant that
the accused had given cheques as
security for the payment of interest;
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CC No. 4482/ 2020
although the accused had paid the
cheque, the complainant refused to
return it, but the complainant
clearly rejected the suggestion made
by the accused’s counsel. Except for
these admissions, the counsel for
the accused failed to elicit from the
mouth of the complainant that the
accused had not issued the cheque
to pay the legally enforceable debt.
Furthermore, as of the date of the
last payment, the accused had
executed the promissory note, and
the accused had promised to repay
the loan within one year.
10. The learned counsel for the accused has filed written
arguments and contended that the complainant has not produced
any document to show that he has sufficient funds in his hands. In
this regard, the learned counsel for the complainant, during the
argument, has produced a memo along with a bank statement, in
which it is clearly mentioned that there were sufficient funds in the
complainant’s bank account on the date of the loan transaction.
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CC No. 4482/ 2020
Further, the payment made by the complainant by cheque is clearly
reflected in the bank statement; therefore, the argument of the
accused that the complainant does not have the financial capacity
to lend money is not tenable. The learned counsel for the accused
argued that the complainant has filed several cheque bounce cases
against various persons; in all the cheque bounce cases, the
outstanding amount due to the complainant is Rs.94,39,000/-.
11. The learned counsel for the complainant in his reply
arguments stated that the complainant had filed cheque bounce
cases to recover the amount of the sale agreement entered into by
the accused for the sale of their properties; therefore, no money
transfer transaction took place between the complainant and the
other accused as mentioned in the written arguments. The accused
has not furnished any document to show that the complainant was
engaged in a money transfer transaction. In this case, also, the
complainant had paid an amount of Rs.2,00,000/- by cheque; in
such circumstances, it is not desirable to say that the complainant
was engaging in a money laundering transaction. If that is so,
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CC No. 4482/ 2020nothing prevented the accused from taking appropriate legal action
against the complainant. Further, the accused persons named in
the written arguments have not taken any action against the
complainant for engaging in money laundering. Further, the
cheque bounce case registered against Suchindra was disposed of
by convicting him. If the complainant was engaging in money
laundering, the accused named Suchindra would have been
acquitted of the offence punishable under Section 138 of the NI Act.
Therefore, the contention taken by the learned counsel for the
accused that the complainant was engaging in money laundering is
not tenable.
12. The legal notice given by the complainant to the accused
was returned with an endorsement that the accused did not claim,
and the cheque given by the accused was dishonoured as ‘account
dormant’. In such cases, the accused has the opportunity to prove
his innocence by depositing the cheque amount before the court,
stating that he did not have to pay anything to the complainant
and the address mentioned in the legal notice was wrong. In this
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CC No. 4482/ 2020regard I have relied upon the judgment of the Hon’ble Supreme
Court of India reported in reported in (2007) 14 SCC 750 between
C.C.Alavi Haji Vs Palapetty Muhammed and Another, in this case
the Hon’ble Supreme Court of India has held that,
The Proviso to section Section
138(c) of the NI Act, is meant to
protect honest drawers whose
cheques may have been
dishonoured for the fault of others,
or who may have genuinely wanted
to fulfill their promise but on
account of inadvertence or
negligence failed to make necessary
arrangements for the payment of
the cheque. The proviso is not
meant to protect unscrupulous
drawers who never intended to
honour the cheques issued by
them, it being a part of their modus
operandi to cheat unsuspecting
persons.
It is also to be borne in mind
that, the requirement of giving of
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CC No. 4482/ 2020notice is a clear departure from the
rule of Criminal Law, where there is
no stipulation of giving of a notice
before filing a complaint. Any
drawer who claims that he did not
receive the notice sent by post, can
within 15 days of receipt of
summons from the court in respect
of complaint under section 138 of
the Act, make payment of the
cheque amount and submit to the
court that, he had made payment
within 15 days of receipt of
summons (by receiving a copy of the
compliant with the summons) and,
therefore, the complaint is liable to
be rejected. A person who does not
pay within 15 days of receipt of the
summons from the Court along with
the copy of the complaint under
section 138 of the Act, cannot
obviously contend that there was no
proper service of notice as required
under section 138 of, by ignoring
statutory presumption to the
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CC No. 4482/ 2020contrary under section 27 of the
General Clauses Act and Section
114 of the Evidence Act. In our view,
any other interpretation of the
proviso would defeat the very object
of the legislation. As observed in
Bhaskaran’s case, if the giving
notice in the context of Clause (b) of
the proviso was the same as the
receipt of notice a trickster cheque
drawer would get the premium to
avoid receiving the notice by
adopting different strategies and
escape from legal consequences of
section 138 of Act.”
13. Further, the accused has executed a promissory note on
demand as per Ex.P26 and a consideration receipt as per Ex.P27,
and these documents reveal that the accused has received a sum of
Rs.6,00,000/- from the complainant without any interest, i.e., the
complainant has lent the money without charging any interest; in
such cases, the provisions of the Money Laundering Act do not
apply to the facts and circumstances of the case. The accused has
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CC No. 4482/ 2020
not put forward his defence evidence; he has not made any attempt
to rebut the case of the complainant. In such circumstances, the
court has to raise a presumption that the accused has issued a
cheque in favour of the complainant to pay a legally enforceable
debt. The accused has not given evidence to prove that he did not
borrow the amount of Rs. 2,00,000/- by cheque and the remaining
amount by cash. The accused has not proved that the signature
appearing on the Ex.P1 cheque, Ex.P26 and P27/on-demand
promissory note and the consideration receipts do not belong to
him. In such circumstances, the court is bound to make adverse
inferences against the accused. The complainant has complied with
the mandatory requirements of Section 138 of the NI Act; on the
contrary, the accused has failed to prove the presumption available
against him under Section 139 of the NI Act; therefore, this is a fit
case to convict the accused. Apart from that, the accused has not
made any effort to pay the amount since 18.09.2017; therefore, the
accused is liable to pay additional compensation of Rs. 1,00,000/-
to the complainant., accordingly I answer point no.1 in the negative
and point no.2 in the affirmative.
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CC No. 4482/ 2020
Point No.3:
14. For the above said reasons and discussions, I proceed to
pass the following:
ORDERS
Acting under section 255(2) of
the Cr.P.C the accused is hereby
convicted for the offense
punishable under section 138 of
the Negotiable Instruments Act.
The accused shall pay a fine of
Rs. 7,05,000/– (which includes
cheque amount of Rs.6,00,000/-,
additional compensation of
Rs.1,00,000/- and fine amount
of Rs.5,000/- payable to the
government) in default she shall
undergo simple imprisonment for
Six month for the offense
punishable under Section 138 of
the Negotiable Instrument Act.
As per Section 357 of Cr.P.C.
out of the fine amount
Rs.7,00,000/-(which includes
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CC No. 4482/ 2020cheque amount of Rs.6,00,000/-
and additional compenstaion of
Rs.1,00,000/-) is to be paid to the
complainant as compensation and
the balance amount is to be
remitted to the state government.
Bail bond and surety bond of
the accused shall stand canceled.
Further, in exercise of power
conferred under section 424(1)(a)
of Cr.P.C the accused is permitted
to pay/deposit the fine amount of
Rs.7,05,000/- within 30 days
from this order and execution of
sentence passed against him in
view of the above permission
stands suspended for a period of
30 days from today.
Supply free copy of the
judgment to the accused.
(Directly typed by me on my laptop, corrected by me and pronounced the
judgment in the open court on this 26th day of May 2025)(SHRISHAIL BHIMASHEN BAGADI)
XX A.C.J.M., Bengaluru.
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CC No. 4482/ 2020
ANNEXURE
List of witnesses examined on behalf of complainant:
PW1
C N Chandrashekar ReddyList of documents produced on behalf of complainant:
Ex.P.1 Cheque
Ex.P.1(a) Signatures of accused
Ex.P.2 Bank endorsement
Ex.P.3 Copy of the legal notice
Ex.P.4 to 14 Postal receipts
Ex.P.15 to 24 Returned Postal covers
Ex.P.15(a) to 24(a) Notice inside the returned
postal covers
Ex.P.25 to 27 One copy of bank statement
and one on demand
promissory note and
consideration receipts
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CC No. 4482/ 2020
List of witnesses examined on behalf of accused:
NIL
List of documents produced on behalf of accused:
Ex.D.1 Copy of compliant in CC No.
2345 of 2019
XX A.C.M.M.,
Bengaluru.
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