Bangalore District Court
Ningamma vs J S Sundarlal on 10 July, 2025
KABC030839862019
IN THE COURT OF XX ADDL.CHIEF JUDICIAL
MAGISTRATE AT BENGALURU CITY
PRESENT: BHOLA PANDIT,
B.Com.,LL.M.,
XX ADDL. C.J.M.
Bengaluru.
Dated this the 10th day of July 2025
C.C.No. 27100 / 2019
Complainant : Smt. Ningamma
W/o. Siddappa
Aged about 65 years,
R/at No.2 Asta Laxmi Layout,
Puttenahalli 33rd Main,
JP Nagar VI Phase,
Bangalore - 560 078
{ By Sri. V G Manjunath - Advocate }
Vs.
Accused : Shri. J S Sundararaj
2 C.C. 27100 / 2019
S/o. T G Jayaramaiah,
aged about 37 years,
R/at No. 90, 'Sundara Nilaya
1st Floor, 13th Cross, 8th Main,
Near IWWA Choultry,
BTM Layout, 2nd Stage,
Bangalore - 560 076
{ By Sri. Sharanagouda S Patil - Advocate }
Offence complained : U/S. 138 of N.I. Act.,
Plea of accused : Pleaded not guilty.
Final Order : Accused is
Date of Order : 10.07.2025
JUDGMENT
The present complaint is filed under section 200 of
code of criminal procedure against the accused seeking to
punish him for the offence punishable under section 138
of the Negotiable Instruments Act ( in short referred as “N.I.
Act“).
3 C.C. 27100 / 2019
02. The facts which leads to file present complaint are as
under :
It is stated that, the accused is the good friend of son
of Complainant by name Lakshman since more than 17
years both are having close relationship and also both are
classmates. The accused was running business of share
and stock market in the name and style of ‘Sri.
Kanakadara” having office at No.23, 1 st Floor, Wood Street,
Ashok Nagar, Bangalore – 560 025. In the month of
November 2016 the accused has approached the
Complainant through her son and expressed that he was
in need of funds and to invest in his business transactions
to the tune of Rs.10,00,000/- stating that, he is going
invest the said amount in the share business and thereby
there will be getting substantial provide and that he will be
capable of paying interest @ 5% per month to the
Complainant . Therefore the Complainant has paid a sum
of Rs.10,00,000/- on 24.11.2016 to the accused as loan
through NEFT @ 3 times as mentioned below.
4 C.C. 27100 / 2019
SL.NO DESCRIPTION AMOUNT (RS)
1 BY NEFT 329160209989307 DATED 24.11.2016 5,68,596/-
2 BY NEFT 329160209984925 DATED 24.11.2016 2,45,946/-
BY NEFT 329160209984420 DATED 24.11.2016 1,85,456/-
TOTAL 10,00,000/-
It is stated that, on 28.11.2016 the accused has executed
the loan agreement in favour of complainant for having
received the loan amount of Rs.10 lakhs from the
Complainant and has agreed to pay the interest amount at
5% per month. However, as per the promise and loan
agreement the accused neither has paid the loan amount
of Rs.10 lakhs nor the interest on the said loan amount
dated 28.11.2016. Despite telephonic massage for the
demand of the said loan amount the accused has failed to
pay the same. Therefore in the first week of July 2019 the
Complainant has approached the accused and requested
for the payment of loan amount along with interest, for
which the accused has issued cheque bearing No. 118166
dated 30.08.2019 for a sum of Rs.10,00,000/- drawn on
Axis Bank, Shanthi Nagar Branch, Bengaluru. When the
Complainant has presented the said cheque with his
5 C.C. 27100 / 2019banker it has returned unpaid due to ‘Account Closed’ vide
endorsement of bank dated 06.08.2019. On 05.09.2019
the Complainant got issued demand notice to the accused
to both the addresses of him, both notices have returned
un-served with remarks as “no such person in the
address”. On these assertions, it is sought to convict
the accused under section 138 of NI Act and award
compensation under section 357 of Cr.P.C.
03. On presentation of the complaint this court has
verified the contents of the complaint as well as documents
and thereby has taken cognizance for the offense under
section 138 of NI Act. Thereafter as per the dictum of
Hon’ble Apex Court reported in the case of Indian Bank
Association and others V/s Union of India and others, the
sworn statement of the complainant has been recorded as
PW1and got exhibited in all 10 documents at Ex.P1 to P10.
Having made out prima facie case it is ordered to register
the complaint in register No.III issue process against the
accused.
6 C.C. 27100 / 2019
04. In response to the summons, the accused put his
appearance before the court through his counsel and filed
bail application under section 436 of Cr.P.C., the accused
has been enlarged on bail. The substance of accusation
has been recorded and read over to the accused, he
pleaded not guilty and wants to put forth his defense. As
per applications under section 145(2) of NI Act the accused
was permitted to cross examine PW1. To support the
evidence of PW1 the Complainant has examined one
witness by name Basavaraj as PW1 by way of affidavit and
the son of the Complainant by name Lakshman is also
examined as PW3 by way of affidavit. The Learned defense
counsel has cross examined PW1 to 3 at length. The
statement of accused under section 313 of Cr.P.C. has
been recorded and read over to him, he has denied the
same in toto and given explanation stating that, he did not
receive the demand notice. He wanted to lead defense
evidence on his behalf. But later he did not adduced his
side evidence.
7 C.C. 27100 / 2019
05. Heard oral arguments advanced by both the learned
counsels. The Learned defense counsel has filed written
arguments which runs in number of pages. The Learned
defense counsel has also relied following judgments.
(a) 2008 AIR SCW 738
(b) (2008) 1 SCC 258
(c) (2001) 6 SCC 16
(d) (1973) 2 SCC 808
(e) (2010) 11 SCC 441
The Learned prosecuting counsel also has relied the
following judgments.
a) (2001) 6 SCC 16
(b) (2001) 8 SCC 458
(c) AIR 2002 SC 182
06. The following points that arise for my consideration
are as under;
POINTS
1. Does the complainant proves
beyond reasonable doubts that, the
accused has issued cheque
8 C.C. 27100 / 2019
bearing No. 118166 dated
30.08.2019 for a sum of
Rs.10,00,000/- drawn on Axis Bank,
Shanthi Nagar Branch, Bengaluru
towards the discharge of his lawful
liability of the complainant and
when the said cheque was presented
for encashment, it was returned
unpaid due to shara as “Account
Closed ” as per banker’s memo and
in-spite of issuance of demand
notice , the accused has failed to
pay the cheque amount, thereby has
committed the offence punishable
under section 138 of NI Act?
2. What Order or sentence ?
07. My findings to the above points is as follows;
1. Point No.1: In the Affirmative
2. Point No.2: As per final order
for the following;
REASONS
08. POINT No.1: It is the specific case of the
complainant that, the accused being one of the classmate
and close friend of her son Lakshman has availed loan of
Rs.10 lakhs from her on 3 different times through NEFT
9 C.C. 27100 / 2019
on 24.11.2016 for the purpose of investment in his
business and on 28.112016 he has executed loan
agreement to pay the loan amount with interest @ 5% per
month. The accused has issued disputed cheque and
when the said cheque presented with his banker by the
Complainant , it has returned unpaid due to ‘Account
closed’ on 06.08.2019 and thereafter the Complainant
got issued demand notice and in respect of that the
accused neither has paid cheque amount nor has given any
reply, hence it is sought to convict the accused.
09. To bring home guilt of the accused beyond all
reasonable doubts for the offense punishable u/s 138 of NI
act, the sworn statement of Complainant has been treated
as affidavit evidence as per the verdict of the Hon’ble Apex
court in the case of Indian Bank Association and others
V/s Union of India and others, in his affidavit evidence the
Complainant has replicated the averments of the
complaint. To corroborate the oral testimony of the
Complainant, he got marked 10 documents as Ex.P1 to
10 C.C. 27100 / 2019
P10. Ex.P1 is the disputed cheque, Ex.P2 is the bankers
return memo, Ex.P3 is the demand notice, Ex.P4 and P5
are the postal receipts, Ex.P6 and P7 are the postal envelop
which are containing demand notices which are also
marked as Ex.P6(a) and P7(a), Ex.P8 is the loan
agreement, Ex.P9 is the Bank account statement, Ex.P10 is
the judgment in CC 2184/2018 of XII the ACJM Court. To
support the oral evidence of PW1 one witness by name
Basavaraj examined as PW2 and son of the Complainant
by name Lakshman examined as PW3. The Learned
defense counsel has cross examined PW1 to 3 at length.
10. Before to appreciate the oral and documentary
evidence produced on records, it is imperative on this court
to find out whether the Complainant has proved the
necessary ingredients of section 138 of NI Act before filing
the present complaint.
11. Looking upon the disputed cheque at Ex.P1, two
banker’s memos at Ex.P2, demand notice at Ex.P3, the
11 C.C. 27100 / 2019
said notice has been issued within 30 days from the date of
receiving the return memo. As per Ex.P6 and P6(a), Ex.P7
and P7(a) two notices have been sent to the accused by
mentioning 2 different addresses bu both the notices have
returned to the sender. The notice sent under Ex.P6 is
returned with postal shara as ‘no such person ‘ which
means the said notice was not served upon the accused.
The notice under Ex.P7 returned with postal shara as ‘not
claimed’ , which means the said notice is sent to the
correct and proper address of the accused and the same
was not taken by the accused. Under the General Clauses
Act as per section 27 there is presumption about deemed
service of such kind of notices. The accused did not
entered in the witness box to deny the service of demand
notice. However, during the cross examination of PW1 on
page No.8 though he has admitted that, because of not
showing as correct address the said notice did not served
upon the accused. That admission can be considered only
in respect of Ex.P6 and not in respect of Ex.P7. Thus, I am
of the considered opinion that, there is a correct and
12 C.C. 27100 / 2019
proper compliance of section 138(b) of NI Act. The shara of
the postal authority on Ex.P7 was made on 09.09.2019 and
the present complaint has been filed before this court on
19.10.2019 within 30 days from the date of approval of
cause of action. Thus, now I have no hesitation to say
conclusively that the present complaint has been filed only
in compliance of section 138 of NI Act. Even in the written
argument at para 17 it is contended that, the demand
notice was not served personally on the accused as such
the accused was returned with shara as ‘no such person’ .
But as per my finding above, as per Ex.PO7 the service of
demand notice shall be taken as admitted service and this
contention of the accused has not sustainable.
12. Section 118 & 139 of NI Act are two important
provisions and they provides for raising mandatory
presumptions in favour of the complainant until the
contrary is proved by the accused. Even in the catena of
decisions i.e., in the case of Rangappa Vs. Mohan reported
in 2010(11) SCC 441, in the case of Bir Singh Vs. Mukesh
13 C.C. 27100 / 2019
Kumar reported in 2019(4) SCC 197, in the case of APS
Forex Services (P) Ltd., Vs.Shakthi International Fashion
Linkers reported in 2020(12) SCC 724, in the case of
Rajeshbai Muljibhai Patel Vs. State of Gujarat, reported in
2020(3) SCC 794, in the case of Triyambak S. Hegde Vs.
Sripad reported in Live Law 2021 SC 492 and in the relied
judgments of the complainant, a precedent is laid down
that, “Once the issuance of cheque and the signature
thereon is admitted by the accused, the court is required
to raise presumption in favour of the the complainant
stating that, the accused has issued the cheque for some
consideration towards discharge of his legal debt or
liability of the complainant and that the complainant is
the due holder of the said cheque. The burden or reverse
onus shifts on the accused to rebut the statutory
presumptions under sections 118(a) & 139 of NI Act.” Now,
it is well established law that, the presumption mandated
by section 139 of NI Act, thus indeed includes the existence
of legally enforceable debt or liability and it is open for the
accused to raise a probable defense wherein the existence
14 C.C. 27100 / 2019
of legally enforceable debt or liability can be contested and
he shall prove before the court on preponderance of
probabilities, only thereupon a statutory presumption
raised in favour of the complainant stands rebutted.
13. The Learned defense counsel has relied the judgment of
Hon’ble Apex Court in the case of Krishna Janardhan
Bhat, wherein it is held that the existence of legally
recoverable debt is not the matter of presumption. But the
larger Bench of the Hon’ble Apex Court in the case of
Rangappa V/s. Mohan and in the subsequent judgment of
the Hon’ble Apex Court it is held that, once the issuance of
cheque and signature there on has been admitted by the
accused, the existence of legally recoverable debt includes
the presumption under section 139 of NI Act. Therefore
the judgment relied by the Learned defense counsel in
respect of applicability of presumption under section 118
and 139 of NI Act have been overruled in the latest
judgment of Hon’ble Apex Court in the case of Rangappa
V/s. Mohan. Therefore the judgment relied by the Learned
15 C.C. 27100 / 2019
defense counsel are not applicable to the case on hand. In
the case on hand when the demand notice was not
personally served on the accused and as per Ex.P7 it is
considered as deemed service of notice as such addresses
which cannot be expected that, the accused would have
given his reply notice and thereby would have taken his
defense in the beginning itself. However, there is no bar
for the accused to put forth his defense during the trial of
the case. The Learned defense counsel himself has relied
the verdicts of Hon’ble Apex Court in the case of
Basalingappa V/s. Mudibasappa reported in AIR 2019 SC
1983 in the case judgment itself the Hon’ble Apex Court
clearly held that, in order to rebut the Legal presumptions
under section 118 and 139 of NI Act the accused shall put
forth his specific defense as to how and why the disputed
cheque has gone in the hands of the Complainant and
prove the same by producing evidence to the extent of
preponderance of probabilities and not beyond all
reasonable doubts. Mere denial of issuance of cheque or
mere denial of transaction are not the defense which can
16 C.C. 27100 / 2019
be considered as probable defense to rebut the Legal
presumptions. Keeping in mind these dictum of law I
proceed to scrutinize oral and documentary evidences
placed on record by the Complainant . Admittedly the
accused neither has adduced his oral evidence nor has
placed on record any documentary evidence on his behalf.
Now it is well settled law that in order to raise the probable
defense and to prove the same on preponderance of
probabilities the accused need not to enter in the witness
box and also need not to produce any documentary
evidences on his behalf. He can very much rely upon the
evidence produced by the Complainant . In order to prove
the case of the Complainant, she has filed her affidavit
evidence in the form of examination in chief as PW1
wherein she has replicated the averments of the complaint
and she has produced before the court one material
document which is marked at Ex.P8. The recitals of Ex.P8
title as loan agreement and it discloses that this loan
agreement was entered between the Complainant and the
accused as lender and borrower on 28.11.2016. The
17 C.C. 27100 / 2019
recitals of this document further reveals that, on 4
occasions the Complainant has transferred the amount
from her account in part on respective dates and to prove
the said fact she has also produced her bank account
statement wherein the dates of entries dated 24.11.2016
clearly reveals that, on the same day she has transferred
the money through NEFT to the account of accused. This
document further reveals that in order to develop his
trading business the accused has taken above said amount
with a promise to repay the said amount with 5% interest.
That apart, this document do not consists any such words
stating that, the Complainant has paid amount to the
accused as investment in the trading business. This
document is attested by 2 witnesses. The recitals of this
document coupled with bank account statement at Ex.P9
very much corroborates the oral testimony of PW1
advancing of said hand loan amount to the accused by the
Complainant and as per section 91 of Evidence Act
production of this document at Ex.P8 itself is enough to
prove the transaction of borrowing of loan amount. It is
18 C.C. 27100 / 2019
well settled law that in a cheque bounce case when the
Legal presumptions have been provided under section 118
and 139 of NI Act, they are rebuttable presumptions, said
presumptions can be rebutted by the accused only by
taking probable defense and proving the same on
preponderance of probabilities. Mere denial of transaction
or questioning the very case of the Complainant or denying
acquittance are not the grounds to be considered as
defenses of the accused. Probable defense is one which
she show before the court that as to how and why the
disputed cheque has come to the hand of Complainant .
Then only the said defense shall be proved either by
eliciting evidence from the mouth of Complainant itself or
by producing independent evidences. Here in the case on
hand in the entire cross examination PW1 no where the
defense of the accused has been put forth, and when the
defense of the accused has not stated and also not proved,
under such circumstances the onus do not shifts on the
Complainant to prove her case beyond all reasonable
doubts. Even otherwise the Complainant had adduced the
19 C.C. 27100 / 2019
evidence of 2 witnesses by name Basavaraj S K as PW2 and
Lakshman S as PW3 who is the sone of the Complainant
Ningamma. PW2 Basavaraj who is also the attesting
witness to the loan agreement at Ex.P8, who stated in his
affidavit evidence that he knows the Complainant , PW3
and the accused. He stated that the accused is running
the business of share market and he was working under
him as clerk at the time of executing the loan agreement.
He further stated that, he was present on 28.11.2016 while
the accused was executing loan agreement in favour of
complainant and he has seen accused putting his
signature. PW3 Lakshman said in his affidavit evidence
that, himself and accused are classmates and he knows
him for the last 20 years and in the month of November
2016 the accused has borrowed Rs.5 lakhs from him as
hand loan. He further deposed that, the accused also
borrowed Rs.10 lakhs from his mother through NEFT on
24.11.2016 for investing his share business transaction.
He further deposed about the accused executing the loan
agreement. In support of his oral testimony he has
20 C.C. 27100 / 2019
produced the judgment certified copy of CC No.2184/ 2018
which is marked at Ex.P10, the recitals of Ex.P10 discloses
that, this Lakshman himself has filed cheque bounce case
against the present accused for Rs.5 lakhs which came to
be disposed off and convicted the accused by the learned
12th ACJM court vide judgment dated 30.10.2021. The
Learned defense counsel has cross examined both PW2
and 3. During cross examination of PW2 it is elicited that,
the fact of his knowing the Complainant since 17 years is
false. It is further elicited from his mouth that, he has not
producing any document to show that, prior to 2017 where
he was working and he was getting how much salary. It is
elicited from his mouth that, the Complainant in her chief
evidence has stated that, to repay the loan amount of the
accused the Complainant has transferred 3 time of Rs.10
lakhs to the account of accused. It is not the case of the
accused that the Complainant has repaid to him Rs.10
lakhs on behalf of her son. These evidences culled out
from the mouth of PW2 do not help the accused to disprove
the case of the Complainant. During cross examination of
21 C.C. 27100 / 2019
PW3 it is elicited that, they have not produced any
document to show that, the accused was running online
trading business in the name of Kanakadhara. Again the
similar question was posed to PW3 stating that, the some
which he owes to the accused was repaid by her mother
to the accused by transferring the same. It is not the case
of the accused that, the son of Complainant i.e. PW3
himself was liable to pay Rs.10,00,000/- to the accused
himself. So this evidence do not help the accused. One
more fact is elicit from the mouth of PW3 stating that, now
transaction is taken place between himself, his mother
and PW2. It may be true but in what way this evidence
would help the accused is only known by himself and
putting such suggestion and getting the answer in the form
of YES is of no use unless there is a specific defense by the
accused. From the cross examination of PW2 and 3 no
such material evidence has been culled out to disprove
their testimony. During cross examination of PW1 when
she was questioned stating that, are you going to lead
evidence of Basavaraj K and her son Lakshman, only there
22 C.C. 27100 / 2019
upon the evidence of PW2 and 3 has been adduced. Thus,
the accused neither has put forth his defense nor has
prove the same on preponderance of probabilities to rebut
the Legal presumptions. On the other hand, by the oral
evidence of PW1 to 3 coupled with document at Ex.P8 I am
of the opinion that, the Complainant has proved her case
beyond all reasonable doubts and in order to repay the said
hand loan amount covered under Ex.P8 the accused has
issued the cheque at Ex.P1 and when the said cheque has
been presented for encashment it was returned unpaid due
to Account closed and only there upon the Complainant
got issued legal notice and thereby has filed the present
complaint accordingly she has establish the offense
committed by the accused under section 138 of NI Act.
Hence, I answered point No.1 in the Affirmative.
POINT NO.2:
14. In view of the reasons stated and discussed above,
the complainant has proved the guilt of the accused
punishable under section 138 of N.I. Act It is worth to
23 C.C. 27100 / 2019note that, the offence is of the nature of civil wrong.
Hence, it is proper to award sentence of fine, instead of
awarding sentence of imprisonment. Accordingly, this
court proceed to pass the following;
ORDER
Acting under section 255 (2) of
Criminal Procedure Code, accused is
hereby convicted for the offence
punishable under section 138 of
Negotiable Instrument Act and
sentenced to pay fine of
Rs.12,55,000/-(Rupees Twelve Lakhs
Fifty Five Thousand only). In default,
he shall undergo simple imprisonment
for 1 (one ) year.
Acting under section 357(1) of
code of criminal procedure, it is
ordered that an amount of
Rs.12,50,000/-(Rupees Twelve Lakhs
24 C.C. 27100 / 2019
Fifty Thousand only), there from
shall be paid to the complainant as a
compensation, remaining fine amount
of Rs.5,000/- (Rupees Five Thousand
only) is defrayed to the state for the
expenses incurred in the prosecution.
The bail bond of accused stands
canceled subject to appeal period.
Supply free copy of judgment to the
accused.
{Dictated to the stenographer, transcribed and computerized by her, revised corrected
and then pronounced in the open court on this 10th day of July 2025}.
(BHOLA PANDIT)
XX ACJM,
ANNEXURE
List of witnesses examined on behalf of complainant:
P.W.1 Ningamma
P.W.2 Basavaraj S K
P.W.3 Lakshman S
25 C.C. 27100 / 2019
List of documents produced on behalf of complainant:
Ex.P.1 Cheque
Ex.P. 1(a) Signature of the accused
Ex.P. 2 Bank endorsement
Ex.P. 3 Copy of the legal notice
Ex.P. 4 & 5 Postal receipts
Ex.P. 6 & 7 and Returned postal covers and
6(a) and 7(a) notices inside the postal
cover
Ex.P.8 Loan Agreement
Ex.P.8(a) Signature of the accused
Ex.P.9 Bank Statement
Ex.P10 CC copy judgment in CC No.
2184 / 2018 dated
30.10.2021
26 C.C. 27100 / 2019
List of witnesses examined on behalf of accused:
Nil
List of documents produced on behalf of accused:
Nil
XX A.C.M.M.,
Bengaluru.
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