Bangalore District Court
I V L Finance Ltd vs Ramya Devi A on 10 June, 2025
KABC020144742022
IN THE COURT OF THE IX ADDL. SMALL CAUSES
JUDGE AND, ACJM, (SCCH-7), BENGALURU.
Before: Sri. SHYAM PRAKASH
B.A.L, LLB.,
IX Addl. Small Causes Judge,
Court of Small Causes,
Member, MACT-7, Bengaluru.
Dated this 10th day of June 2025
C.C. 6903/2022
COMPLAINANT : M/s I V L Fiancnce Ltd.,
(Presently Known as M/s Dhani
Loans and Services Limited),
Registered office at M-62 & 63, First
Floor, Connaught Place: New Delhi,
Delhi - 110001,
Branch office at Plot No.87, 6,
Richmond Road, Richmond Town,
Bengaluru - 560 025.
Represented by it's Authorized
Representative, Mr. Pradeep Kumar I
S/o Late Irudayaraj,
Aged about 29 years.
(By Sri. Rajanikanth.R, Advocate)
V/s.
ACCUSED : Ramya Devi. A
Proprietor M/s Print Imaging Systems,
SCCH-7
2 CC.6903/2022
S 411, Manipal Centre, 4th Floor,
Dickenson Road, Bangalore - 560 027.
(By Sri. V.N. Agadi, Advocate)
1 Date of institution 13.04.2022
2 Offence complained of U/s 138 of N.I.Act
3 Plea of Accused Pleaded not guilty
4 Period undergone in - NIL -
custody
5 Name of Complainant M/s I V L Finance Ltd.,
Rep. by its
Authorized representative Mr.
Pradeep Kumar,
6 Date of recording of 18.12.2023
evidence
7 Date of 10.06.2025
pronouncement
of Judgment.
8 Opinion of the Judge Convicted
9 Complainant Sri. R.R., Advocate.
Represented by
10 Accused defended by Sri. V.N.A., Advocate.
*****
JUDGMENT
This complaint is filed against the accused under
Section.200 of Cr.P.C. for the offence punishable under
Section.138 of Negotiable Instruments Act.
SCCH-7
3 CC.6903/2022
2. The gist of the complaint is as follows:
The Complainant is the company is a unlisted public
company it is classified as a public limited company it is
registered and incorporated under the companies Act
1956 and Non Deposit Taking NBFC registered with the
Reserve Bank of India carrying on the business of
providing various financial services such as Personal loan,
Business loans, Secured Loans and other financial
services for its various customers. It is alleged that the
accused had approached the complainant company
seeking financial assistance for business loan facility in
the name of M/s Print Imaging Systems filed Ex.P-7/Loan
application and executed Ex.P-8/loan agreement along
with required documents and on request of the accused,
the complainant company had sanctioned a loan vide
captioned loan account No.S000305108 and the accused
has to repay the same as per the terms and conditions of
the loan agreement. The accused towards discharge his
liability, had issued Ex.P-2/cheque bearing No.001563
dated 28.02.2022 for sum of Rs.4,57,758/- drawn on
HDFC Bank, HRBR Layout, Kalyananagar Branch, that
when the Complainant has presented the said cheque for
encashment as per the assurance of the accused through
its banker, but the said cheque was dishonoured and
returned unpaid for the reason ‘Funds Insufficient’ as
SCCH-7
4 CC.6903/2022per Ex.P3/Return slip memo dated 03.03.2022. Hence,
the Complainant got issued Ex.P4/ Statutory legal notice
to the accused on 24.03.2022 by RPAD. Inspite of the
issuance of notice, the accused did not comply with the
demands of notice. Hence, the Complainant having no
other go, maintained this complaint against the accused
alleging that the accused has committed an offence
punishable under Section.138 of Negotiable Instruments
Act, and prays to deal the accused as per law.
3. On presentation of the complaint, this Court has
taken cognizance of the offence, Sworn statement of the
Complainant was recorded. On perusal of the documents
and on hearing the Complainant, process was issued
against the accused. In pursuance of the process, the
accused appeared before this Court and enlarged on bail.
Copies of the complaint papers supplied to him.
Substance of the accusation was read-over and explained
to the accused. Accused did not plead guilty and claims to
be tried. Hence, the matter was posted for evidence of the
Complainant.
4. In order to prove the case of the Complainant, the
Authorized Signatory of the Complainant company has
examined as Pw.1 and got marked documents as Ex.P1 to
SCCH-7
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Ex.P11 and closed his side evidence. After completion of
the complainant’s evidence, on providing sufficient
opportunity to the accused, but she did not utilized the
opportunity and remained absent as such the cross-
examination of Pw.1 is taken as nil and the matter is
posted for section 313 of Cr.P.C. statement. Thereafter the
accused did not choose to appear before the court,
according to her convenience and the accused having
effectually taken advantage of legal position and
purposefully to prolong the matter, she remained absent.
Hence, in order to proceed with the matter and in the light
of Criminal Revision Petition No.664/2020 dated
07.02.2025 of the Hon’ble High Court of Karnataka
Bengaluru in the case of Sunil Yadav V/s Y.C. Manju, the
recording statement U/sec. 313 of Cr.P.C is dispensed
with. Having due regard to the fact that, this was a
summons case and the accused himself was to blame for
non-compliance with the said provision. To substantiate
his defence and to falsify the claim of the complainant the
accused has neither cross-examined the
complainant/P.W.1 nor examined himself or got marked
any documents on his behalf.
5. Heard arguments.
SCCH-7
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6. Upon reading the entire materials on record and on
hearing the arguments, the following Points that arise for
my consideration:
1. Whether the Complainant proves
beyond all shadow of doubt that, the
accused has committed an offence
punishable under Section.138
Negotiable Instruments Act?
2. What order?
7. My answers to the above Points are as follows:
Point No.1 : In the Affirmative
Point No.2 : As per the final order, for
the following:
REASONS
8. POINT NO.1: As the accused did not plead guilty,
the Complainant himself examined as Pw.1 and got
marked documents as Ex.P1 to Ex.P11. As per the
decision reported in ILR 2008 KAR PAGE- 4629
between Shivamurthy V/s Amruthraj and in
another decision rendered by the Hon’ble Apex court
in AIR-2008 SC-1325 between Krishna Janardharn
Bhat V/s Dattareya G. Hegde, in order to attract
Sec.138 of N.I Act, the Complainant has to satisfy 3
SCCH-7
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essential ingredients like, 1) there is legally
enforceable debt, 2) that the cheque was drawn
from the account of the Bank of the accused for
discharge of whole or part of any debt or other
liability which pre-supposes to be legally enforceable
debt, 3) Cheque so issued returned unpaid due to
Insufficient of funds.
9. Keeping in view the ingredients of Section.138 of
Negotiable Instruments Act, I proceed to discuss the
documents of this case.
(a) Ex.P1 authorization letter executed by the
complainant firm in favour of Pw.1.
(b) Ex.P2 is the cheque bearing No.001563 dated
28.02.2022 for sum of Rs.4,57,758/- drawn on
HDFC Bank, HRBR Layout Branch. As per the say of
the Complainant Ex.P2(a) is the signature of the
accused.
(c) Ex.P3 is the Bank return slip
memo/Endorsement issued by the Bank authorities,
dated 03.03.2022 for having dishonour of the cheque
for the reason ‘funds insufficient’. On perusal of the
original complaint it is clear that, it buttress the
stand taken by the Complainant herein.
(d) It must be noted as per Clause (b) proviso to
Section.138 of Negotiable Instruments Act, the
SCCH-7
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complainant was required to make a demand for
payment of the said amount w
ithin 30 days from the date of receipt of cheque as
un-paid.
(e) Ex.P4 is the office copy of legal notice dated
24.03.2022 which shows that, the Complainant
made demand in writing calling upon the accused to
make repayment of the said cheque amount by
issuing notice against him which is within 15 days.
(f) Ex.P5 is the postal receipt.
(g) Ex.P6 is the returned unserved Postal cover
(h) Ex.P7 is the loan application.
(i) Ex.P8 is the loan agreement
(j) Ex.P.9 is the Schedule
(k) Ex.P.10 is the Account Statement
(l) Ex.P.11 is the forclosure copy
10. As per Clause (C) proviso to Section.138 of
Negotiable Instruments Act, the accused is entitled
for 15 days time to make payment of money covered
under cheque. Further, as per Sec.142 (b) of
Negotiable Instruments Act, complaint has to be filed
within 30 days from the date of which the cause of
action aroses. Therefore, the Complainant has filed
this complaint well within time.
SCCH-7
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11. Thus, the Complainant has fulfilled all the
ingredients, which were required for the completion
of the offence punishable under Section.138 of
Negotiable Instruments Act.
12. On reading the entire materials on record it shows
that, there is no dispute with regard to the monitory
transaction in between the Complainant and
accused and so also there is no dispute so as to the
fact that Ex.P2 cheque belongs to the bank account
of the accused and Ex.P2(a) is her signature. But it
is the case of the Complainant that, the accused had
approached the complainant company seeking
financial assistance for business loan facility in the
name of M/s Print Imaging Systems filed
Ex.P-7/Loan application and executed Ex.P-8/loan
agreement along with required documents and on
request of the accused, the complainant company
had sanctioned a loan vide captioned loan account
No.S000305108 and the accused has to repay the
same as per the terms and conditions of the loan
agreement. The accused towards discharge his
liability, had issued Ex.P-2/cheque bearing
No.001563 dated 28.02.2022 for sum of
Rs.4,57,758/- drawn on HDFC Bank, HRBR Layout,
Kalyananagar Branch, that when the Complainant
SCCH-7
10 CC.6903/2022
has presented the said cheque for encashment as
per the assurance of the accused through its banker,
but the said cheque was dishonoured and returned
unpaid for the reason ‘Funds Insufficient’ as per
Ex.P3/Return slip memo dated 03.03.2022. Hence,
the Complainant got issued Ex.P4/ Statutory legal
notice to the accused on 24.03.2022 by RPAD.
Inspite of the issuance of notice, the accused did not
comply with the demands of notice. Hence, the
Complainant having no other go, maintained this
complaint against the accused alleging that the
accused has committed an offence punishable under
Section.138 of Negotiable Instruments Act.
13. In view of the decision reported in 2010 SC 1898
between Rangappa V/s Mohan, once the execution of
Negotiable Instruments Act is either proved or
admitted, then the court shall draw a presumption
under Section.139 of Negotiable Instruments Act, in
favour of the complainant to that effect that the said
Negotiable Instrument i.e., the disputed cheque has
been drawn for valid consideration and it is towards
legally recoverable debt and it is drawn for valuable
consideration. Thus, it is the burden of the accused
SCCH-7
11 CC.6903/2022
to rebut the presumption, which arose in favour of
the complainant with necessary probable defence.
14. Hon’ble High Court; in the case
Dr.B.V.Sampathkumar V/s K.G.V. Lakshmi, ILR
2006 Kar. 1730, which was followed in Latha K Nair
V/s Gold Mohar Foods & Feeds Ltd., ILR 2008 Kar.
1883 has held that:”The dismissal of the complaint
on the plea that it was issued as security and hence
no prosecution would lie is an untenable view. A
cheque whether issued for repayment of loan or as
security makes futile difference U/s138 of the Act. In
the event of dishonour, legal consequences are same
without distinction. When once issue of cheque is
proved, a presumption U/s 138 of the Act would
arise with regard to the consideration”(Paragraph 5).
15. But mere issuance of cheque is not sufficient to
come to conclusion that there was existence of debt
or liability in between the complainant and accused
unless the complainant proved the same with
necessary evidence by proving the fact of lending
loan in favour of the accused. The accused to
disprove the contention of the complainant has not
challenged the contention of complainant. It is
SCCH-7
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pertinent to note in this case that though the
accused appeared through her Counsel, she has
neither chosen to cross examine the Pw.1 nor
stepped into witness box or produced any
documents on her behalf.
16. It is settled principle that, even a blank cheque leaf
voluntarily signed and handed over by the accused
towards some payment would attract presumption
under section 139 of Negotiable Instrument Act.
Section 118 of N.I. Act, reads as under:
118. Presumptions as to negotiable
instruments. — Until the contrary is proved, the
following presumptions shall be made:-
(a) of consideration — that every negotiable
instrument was made or drawn for
consideration, and that every such instrument,
when it has been accepted, indorsed,
negotiated or transferred, was accepted,
indorsed, negotiated or transferred for
consideration:
(b) as to date –that every negotiable
instrument bearing a date was made or drawn
on such date:
(c) as to time of acceptance –that every
accepted bill of exchange was accepted within
a reasonable time after its date and before its
maturity:
SCCH-7
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(d) as to time of transfer –that every transfer
of a negotiable instrument was made before its
maturity:
(e) as to order of endorsements –that the
endorsements appearing upon a negotiable
instrument were made in the order in which
they appear thereon:
(f) as to stamps –that a lost promissory note,
bill of exchange or cheque was duly stamped:
(g) that holder is a holder in due course — that
the holder of a negotiable instrument is a
holder in due course:
Provided that, where the instrument has
been obtained from its lawful owner, or from
any person in lawful custody thereof, by
means of an offence or fraud, or has been
obtained from the maker or acceptor thereof by
means of an offence or fraud, or for unlawful
consideration, the burden of proving that the
holder is a holder in due course lies upon him.
Section 139 of N.I. Act, reads as under:
139. Presumption in favour of holder.–It
shall be presumed, unless the contrary is
proved, that the holder of a cheque received
the cheque of the nature referred to in section
138 for the discharge, in whole or in part, of
any debt or other liability.
Referring the Sections of the N.I. Act, a three
Judges Bench of Hon’ble Supreme Court in “T.
SCCH-7
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Vasanthakumar Vs. Vijaykumari” (2015) 8 SCC
378, has held:
“9. Therefore, in the present case since
the cheque as well as the signature has been
accepted by the accused-respondent, the
presumption under Section 139 would
operate. Thus the burden was on the accused
to disprove the cheque or the existence of any
legally recoverable debt or liability. To this
effect, the accused has come up with a story
that the cheque was given to the complainant
long back in 1999 as a security to a loan; the
loan was repaid but the complainant did not,
return the security cheque. According to the
accused, it was that very cheque used by the
complainant to implicate the accused.
However, it may be noted that the cheque
was dishonoured because the payment was
stopped and not for any other reason. This
implies that the accused had knowledge of
the cheque being presented to the bank, or
else how would the accused have instructed
her banker to stop the payment. Thus, the
story brought out by the accused is unworthy
of credit, apart from being unsupported by
any evidence.
17. This decision, refers to an earlier judgment of
Hon’ble Supreme Court in “Rangappa vs. Sri
Mohan” (2010) 11 SCC 441, which elucidating on
the presumption under Section 139 of the N.I. Act,
observes that this includes a presumption that
there exists a legally enforceable debt or liability.
SCCH-7
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However, the presumption under Section 139 of the
N.I. Act is rebuttable and it is open to the accused
to raise a defence wherein the existence of a legally
enforceable debt or liability can be contested.
18. A recent decision of a three Judges Bench of Hon’ble
Supreme Court in “Kalamani Tex and Another vs. P.
Balasubramanian” (2021) 5 SCC 283, examines the
scope and ambit of the presumption under Sections
118 and 139 of the N.I. Act, to hold:
15. Once the 2nd Appellant had admitted
his signatures on the cheque and the Deed, the
trial Court ought to have presumed that the
cheque was issued as consideration for a legally
enforceable debt. The trial Court fell in error
when it called upon the Complainant−
Respondent to explain the circumstances under
which the appellants were liable to pay. Such
approach of the trial Court was directly in the
teeth of the established legal position as
discussed above, and amounts to a patent error
of law.
16. No doubt, and as correctly argued by
senior counsel for the appellants, the
presumptions raised under Section 118 and
Section 139 are rebuttable in nature. As held in
MS Narayana Menon v. State of Kerela, which
was relied upon in Basalingappa (supra), a
probable defence needs to be raised, which must
meet the standard of “preponderance of
probability”, and not mere possibility. These
principles were also affirmed in the case of
Kumar Exports (supra), wherein it was further
SCCH-7
16 CC.6903/2022held that a bare denial of passing of
consideration would not aid the case of accused.
17. The appellants have banked upon the
evidence of DW−1 to dispute the existence of
any recoverable debt. However, his deposition
merely highlights that the respondent had an
over− extended credit facility with the bank and
his failure to update his account led to debt
recovery proceedings. Such evidence does not
disprove the appellants’ liability and has a little
bearing on the merits of the respondent’s
complaint. Similarly, the appellants’ mere bald
denial regarding genuineness of the Deed of
Undertaking dated 07.11.2000, despite
admitting the signatures of Appellant No. 2
thereupon, does not cast any doubt on the
genuineness of the said document.
18. Even if we take the arguments raised
by the appellants at face value that only a blank
cheque and signed blank stamp papers were
given to the respondent, yet the statutory
presumption cannot be obliterated. It is useful to
cite Bir Singh v. Mukesh Kumar, where this court
held 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.”
19. Considering the fact that there has
been an admitted business relationship between
SCCH-7
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the parties, we are of the opinion that the
defence raised by the appellants does not
inspire confidence or meet the standard of
‘preponderance of probability’. In the absence of
any other relevant material, it appears to us that
the High Court did not err in discarding the
appellants’ defence and upholding the onus
imposed upon them in terms of Section 118 and
Section 139 of the NIA.”
19. In the light of the above case in “Kalamani Tex and
Another vs. P. Balasubramanian” (2021) 5 SCC 283,
the Hon’ble Supreme Court has made decision that,
in view of the Section 118 & 139 of N.I. Act, the
Statute mandates that once the signature of an
accused on the cheque/negotiable instrument is
established, then these ‘reverse onus’ clauses
become operative. The Hon’ble Apex court referred
to the decision of Rohitbhai Jivanlal Patel v. the
State of Gujarat and held that once the Appellant
had admitted his signatures on the cheque and the
Deed, the trial Court ought to have presumed that
the cheque was issued as consideration for a legally
enforceable debt. The Hon’ble Apex court cited the
case of Bir Singh v. Mukesh Kumar (2019) 4 SCC
197, wherein the Hon’ble Supreme Court held that,
even a blank cheque leaf, voluntarily signed and
handed over by the accused, which is towards some
SCCH-7
18 CC.6903/2022
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. It is pertinent to note that, the accused failed to
rebut the presumption by leading any evidence on
his behalf. While referring to the case of Kumar
Exports Vs Sharma Carpets, the lordship held that
the accused may adduce evidence to rebut the
presumption, but mere denial regarding existence of
debt shall not serve any purpose. In this matter the
Ex.P2/cheque contained the signature of the
accused and it was given to the complainant to
present in the Bank, the presumption under section
139 was rightly raised which was not rebutted by
the accused. The accused had not led any evidence
to rebut the aforesaid presumption. In the event if
the accused is able to raise a probable defence
which creates cloud with regard to the existence of a
debt or liability, the presumption may fail. In this
matter the accused could not rebut the presumption
which arose in favour of the complainant under
Section.139 of Negotiable Instruments Act. All the
facts remain undisputed and unchallenged, though
SCCH-7
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the accused present for many hearing and have not
chosen to contest the matter by way of entering into
any defense. Though several opportunity provided to
accused, he has not chosen to cross-examine the
Pw.1. As such, the entire evidence of Pw.1 as well as
the contents of the documents produced by him
remain undisputed and unchallenged. Hence, in the
absence of anything to the contrary, I do not find
any reason to disbelieve or discard his evidence.
Therefore, for having not proved, even in
preponderance of probability, the statutory
presumptions U/s 118 and U/s 139 comes into play
i.e. the cheque was issued for a consideration and
that there was a legally enforceable debt or liability.
The same has not been rebutted with regard to the
materials submitted by the complainant or has
adduced any evidence to support his contention.
Accordingly, point No.1 is answered in
affirmative.
21. POINT No:2: Sec.138 of Negotiable Instrument Act,
was enacted to bring credibility to the cheque. The
very purpose of the enactment is to promote the use
of Negotiable Instruments and to discourage the
issuance of cheque without having sufficient funds
SCCH-7
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in the account of the accused. Such being the case,
the intention of the legislature is that complainant
be suitably compensated while accused be punished
for this act.
22. A special statute i.e. N.I. Act prevails over the
provisions of a general statute, i.e. Cr.P.C. The
amendment of Sec.143 of N.I.Act has overcome the
limitations contained in the Code of Criminal
Procedure regarding the trial and sentence. Keeping
Sec.143 (1) and proviso in mind the sentence is to
be passed. Ex.P2/cheque was issued on 28-02-
2022. Hence, the complainant was deprived of the
money that was rightfully due to it for about three
years three months. Considering the nature of the
case and also the amount involved, I deem it proper
to impose penalty and to award compensation of
Rs.6,07,000/- (Rupees Six Lakhs and Seven
Thousand only). Accordingly, the complainant is
entitled for the compensation as per Sec.80 and 117
of the Negotiable Instrument Act and I pass the
following:
ORDER
Acting under Section. 255(2)
Cr.P.C., the accused is convicted for
the offence punishable under
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21 CC.6903/2022Section.138 of Negotiable
Instruments Act.
The accused shall pay a fine of
Rs.6,07,000/- (Rupees Six Lakhs
and Seven Thousand only).
In default of payment of said
fine amount, the accused shall
undergo simple imprisonment for 1
(one) year.
Out of the said fine amount,
accused shall pay Rs.6,06,000/-
(Rupees Six Lakhs and Six Thousand
only) to the complainant as
compensation, as provided under
Section.357 of Cr.P.C. and
Rs.1,000/- (Rupees One thousand
only) shall be remitted to the state as
fine.
Supply free copy of this
judgment to the accused forthwith.
(Dictated to the Stenographer through computer and after corrections
made by me and then pronounced by me in the Open Court on this
the 10th day of June 2025).
[Shyam Prakash]
IX ADDL. JUDGE & ACJM,
Court of Small Causes,
Bengaluru.
SCCH-7
22 CC.6903/2022
Appendix:
1. List of witnesses examined for Complainant side:
P.w.1 : Sri. Praeep Kumar
P.W.2 : Sri. Santhosh Kansoor
2. List of documents marked for Complainant side:
Ex.P1 : Authorization letter
Ex.P2 : Cheque
Ex.P2(a) : Signature of the accused.
Ex.P3 : Bank return slip memo
/Endorsement
Ex.P4 : Legal notice dated 24.03.2022
Ex.P5 : Postal receipt
Ex.P6 : Returned unserved Postal cover
Ex.P7 : Loan application.
Ex.P8 : Loan agreement
Ex.P.9 : Schedule
Ex.P.10 : Account Statement
Ex.P.11 : Forclosure copy
3. List of witnesses examined marked on behalf of
defense:
-Nil –
SCCH-7
23 CC.6903/2022
4. List of documents marked on behalf of defense:
-Nil-
[Shyam Prakash]
IX ADDL. JUDGE & ACJM,
Court of Small Causes,
Bengaluru.
Digitally signed
by
SHYAMPRAKASH SHYAMPRAKASH
Date: 2025.06.17
16:37:39 +0530