Bangalore District Court
C Ravikiran vs M/S. Sha Enterprises on 16 June, 2025
1 CC.No.17968/2018
KABC030484732018
Presented on : 03-07-2018
Registered on : 03-07-2018
Decided on : 16-06-2025
Duration : 6 years, 11 months, 13 days
IN THE COURT OF THE XVI ADDITIONAL CHIEF
JUDICIAL MAGISTRATE, BENGALURU CITY
Dated: This the 16th day of June 2025
Present: Smt.Tejaswini K.M., B.A.L. LL.M,
XVI Addl.C.J.M., Bengaluru City.
CC. No.17968/2018
Sri.C.Ravikiran
Aged about 39 years
S/o C.Venkataraju
R/at No.16, II Model House Street,
Basavanagudi,
Bengaluru - 560004.
....Complainant
(By Sri M.G.Suresh Holla, Advocate)
Versus
2 C.C.17968/2018
1. M/s SHA Enterprises
At No.3/3, Building No.6,
Begur Hobli, Next to Kauvery Tank,
Kodichikkanahalli,
Bengaluru- 560068.
Rep by its partners
2. Imtiyaz H.A.S.,
Aged about 43 years
S/o H.A.Sattar
Partner, M/s Sha Enterprises
R/at No.803,
Olympus Prestige Acropolis,
Koramangala,
Bengaluru - 560029.
3. Anjum Imtiyaz
Aged about 37 years
W/o Imtiyaz H.A.S.
Partner, M/s Sha Enterprises
R/at No.803,
Olympus Prestige Acropolis,
Koramangala,
Bengaluru - 560029.
.... Accused
(By Sri.Kiran C.V., Advocate)
3 C.C.17968/2018
Offence complained : U/Sec.138 of Negotiable
Instrument Act.
Date of commencement
of evidence : 27.06.2018
Date of closing evidence : 23.11.2023
Opinion of the Judge : Accused found guilty
Offence complained : U/Sec.138 of Negotiable
Instrument Act.
Opinion of the Judge : Accused found guilty
JUDGMENT
This case is registered against the accused for the
offence punishable U/s 138 of Negotiable Instruments
Act.
2. Factual matrix of the complainant’s case is as
under:
It is stated that the first accused is the partnership
firm and second and third accused are it’s partners. The
accused persons have approached the complainant and
4 C.C.17968/2018expressing their difficulty and sought financial assistance.
Accordingly, the accused have availed loan of
Rs.9,00,000/- on 21.08.2017 from the complainant
through cheque bearing No.000106 dated 21.08.2017. The
accused agreed to repay it within 6 months from the date
of availment. The accused have also executed promissory
note in favour of the complainant. After repeated
demands by the complainant towards repayment of the
said amount, the accused have issued cheques bearing
No.413384 dated 16.01.2018, cheque bearing No.413385
dated 28.02.2018, cheque bearing No.413386 dated
28.02.2018, cheque bearing No.413387 dated 28.02.2018,
cheque bearing No.413388 dated 28.02.2018, cheque
bearing No.413389 dated 28.02.2018 and cheque bearing
No.413390 dated 28.02.2018 for Rs.1,00,000/- each, drawn
on Karnataka Bank, Overseas Branch, Bengaluru. When
those cheques were presented to the bank, they got
5 C.C.17968/2018dishonoured for the reason ‘Exceeds Arrangements’ vide
memes dated 03.04.2018. Thereafter, the complainant
got issued a legal notice on 13.04.2018 demanding the
accused to make payment of cheques amount within 15
days. The notice has been served on the accused on
18.04.2018. The accused have given an untenable reply to
the notice on 28.04.2018, but failed to pay the cheques
amount. Hence the complainant has constrained to file
the present complaint.
3. After receiving the complaint, this court has
meticulously gone through the documents and affidavit
filed along with it and then took cognizance of the offence
punishable U/sec.138 of Negotiable Instruments Act and
ordered for registration of the compliant as P.C.R.
4. Sworn statement of the complainant was
recorded and marked 24 documents as Ex.P-1 to P-24. As
there were sufficient materials to constitute the offence,
6 C.C.17968/2018
this court has proceeded to pass an order for issuing
process against the accused.
5. In pursuance of summons, accused No.2 & 3 have
appeared through their counsel and applied for bail. They
were enlarged on bail. Then the substance of accusation
was read over to the accused in the language known to
them, for which they pleaded not guilty.
6. As per the direction of Hon’ble supreme court in
“Indian Bank Association V/s Union of India and others
reported in (2014)(5) SCC 590, this court treated the
sworn statement of the complainant as complainant
evidence and posted matter for cross-examination of
PW.1. The counsel for the accused has fully cross-
examined PW.1.
7. The statement of accused as contemplated under
the provisions of Section 313 of Cr.P.C has been recorded
7 C.C.17968/2018
vide order dated 19.04.2022 & 09.06.2022 respectively and
the incriminating evidence as such forthcoming against
the accused in the evidence of PW.1 and the documents
has been read over and explained to the accused in the
language known to them. They denied all incriminating
evidence. The accused No.2 has been examined as DW.1
and got marked Ex.D1. DW.1 not tendered for cross-
examination.
8. Both counsel have not addressed the arguments
on merits. I have perused the oral and the documentary
evidence placed on record.
9. Points that arise for my consideration are as
under:
1. Whether the complainant proves that the
accused towards discharge of their liabilityissued 7 cheques bearing Nos.413384 dated
16.01.2018, cheque bearing No.413385 dated
28.02.2018, cheque bearing No.413386 dated
8 C.C.17968/201828.02.2018, cheque bearing No.413387 dated
28.02.2018, cheque bearing No.413388 dated
28.02.2018, cheque bearing No.413389 dated
28.02.2018 and cheque bearing No.413390
dated 28.02.2018 for Rs.1,00,000/- each,
drawn on Karnataka Bank Ltd., Overseas
Branch, Bengaluru in favour of complainant,
on presentation of the same for
encashment, they were dishonored for
“Exceeds Arrangements” in the account
maintained by the accused, then in-spite of
issuing demand notice to the Accused and
in complying with statutory requirement
under Negotiable Instrument Act, Accused
did not repay the cheques amount, thereby
they have committed an offence punishable
U/s 138 of Negotiable Instruments Act?
2. What Order?
10. My Answer to above points are as under:-
Point No.I :- In the Affirmative,
Point No.II:- As per the final order for
the following….
9 C.C.17968/2018
REASONS
11. POINT No.I :- In nutshell, case of the
complainant is that he has lent loan of Rs.9 lakhs to the
accused No.1 to 3 and in discharge of the said loan, the
accused have issued cheques in question, but they got
dishonoured for the reason ‘Exceeds Arrangements’.
Despite of giving notice, the accused has not repaid the
amount. Hence the present complaint.
12. To substantiate his case the complainant
stepped into witness box and got examined as PW.1. He
has got marked Ex.P1 to P24. He has produced 7 cheques
issued by accused and the same are marked as Ex.P-1 to
P7, the signatures of the accused are marked as Ex.P-1(a)
to 7(a), copies of bank memos are marked as Ex.P-8 to
P14, copy of demand notice dated: 13.04.2018 is marked
as Ex.P-15, copies of postal receipts are marked as Ex.P-16
10 C.C.17968/2018
to P18, copies of postal acknowledgments are marked as
Ex.P-19 to P21, Copy of on demand promissory note and
consideration receipt is marked as Ex.P.22, copy of reply
notice is marked as Ex.P-23 and postal cover is marked as
Ex.P-24.
13. Defense of the accused is as follows:
The accused persons have repaid entire loan
amount to the complainant. The cheques in questions
were given for security purpose, at the time of availing
the loan and they are misused by the complainant and
false case is filed.
14. Negotiable Instruments Act provides for some
presumption in favour of the complainant i.e., Section 118
reads as here: – “That every negotiable instrument was
made or drawn for consideration and that every such
instrument when it has been accepted, endorsed,
11 C.C.17968/2018
negotiated or transferred was accepted, endorsed,
negotiated or transferred for consideration”.
15. Further Sec 139 of the Negotiable Instruments
Act provides for presumption in favour of a holder. It
reads as here: – “It shall be presumed, unless the contrary
is proved, that the holder of a cheque received the
cheque, of the nature referred to in sec 138, for the
discharge, in whole or in part, or any debt or other
liability.”
16. Combined reading of above said sections raises
a presumption in favour of the holder of the cheque that
he has received the same for discharge in whole or in part
of any debt or other liability. However, it is settled
principle of law that the presumption available u/s 139 NI
Act can be rebutted by the accused by raising a probable
defense.
12 C.C.17968/2018
17. The complainant has reiterated the contents of
complaint in his chief-examination. During cross-
examination by the counsel for the accused, PW.1 has
deposed that he knows the accused persons and he has
given Rs.9,00,000/- to the accused persons. Before to this
loan transaction, he has not given any loan to the accused
persons. He is not doing money lending business. He
admits the accused has paid Rs.1 lakh on 17.10.2017, Rs.1
lakh on 17.11.2017 and Rs.3 lakhs on 18.12.2017. He has
not verified whether the accused No.3 is the partner of
accused No.1 firm or not.
18. Further PW1 pleaded ignorance to the
suggestion that accused No.3 has got retired from the
said firm in February 2017. He knows the contents of the
reply notice. He denied that accused have given cheques
in question for security before 2016. He denied that
accused No.3 had retired from the firm, as such she had
13 C.C.17968/2018
no authority to put signature to the cheques and cheques
were given prior to 2016. He denied that accused persons
have repaid entire amount. He denied that the cheques
were given for some other transaction and they are
misused. He denied that the blank cheques were given to
him and he has filled them. He deposed as the accused
have given 7 cheques, he has taken accordingly. He
admits that accused has paid 3 installments through
cheques bearing No.413381 to 413383. He denied that
accused No 2 has given the cheques in question for
payment of EMI’s every month. He admits that after
deducting Rs.3 lakhs paid by the accused, what remains is
Rs.6 lakhs. PW.1 has deposed that along with Rs.6 lakhs,
there is due of interest Rs.1 lakh. He deposed that he
claimed interest @ 2% per month. He deposed has no
licence to claim interest.
14 C.C.17968/2018
19. PW1 further deposed that the accused have
agreed to repay the loan in 9 installments. PW1 Denied
that after payment of 3 installments every month, in the
month of January 2018 he sought interest to the accused,
when the accused not consented for the same, he has
misused the pronote and cheques of the accused persons.
He pleaded ignorance to the suggestion that there is a
difference in the ink used to write details and put
signature in Ex.P22. He denied that he is claiming excess
amount of Rs.1 lakh from the accused and filed false case
against the accused No.3 also.
20. On the other hand, accused No.2 stepped into
witness box and got examined as DW.1. He deposed that
in the month of August 2017 he has borrowed Rs.9 lakhs
from the complainant, out of that he has paid Rs.3 lakhs
in October, November and December 2017 through
cheques. The complainant sought the remaining Rs.6
15 C.C.17968/2018
lakhs by way of cash, as such he paid Rs.2 lakhs every
month in between January to March 2018 and repaid
entire Rs.6 lakhs. While taking loan, he has given 7
cheques of Rs.1,00,000/- each to the complainant for
security. After repayment of the loan, he sought back
those security cheques, but the complainant has not
returned them, but presented to the bank. He has not put
the dates in the cheques. He owes interest of Rs.1 lakh to
the complainant and not more than that.
21. Despite of giving sufficient time the DW.1 has
not tendered for cross-examination, therefore vide order
dated 03.09.20124 the stage was closed as ‘DW.1 not
tendered for cross-examination’ to the complainant
side. Accused No.3 has not lead any separate evidence.
22. I have carefully gone through the complaint and
evidence placed on record. At the out set the accused
have admitted that the cheques at Ex.P1 to P7 belongs to
16 C.C.17968/2018
the accused No.1 firm and accused No.2 has not disputed
his signatures to all the cheques. Though the accused
No.3 has taken a contention that she has resigned to the
firm in the year 2017 itself, she has not established it
before the Court. Therefore, initial presumption has to be
drawn in favour of the complainant that the cheques are
issued for discharge of legally enforceable debt.
23. The Honorable Supreme Court of India in
“Triyambak S Hegde v Sripad” (2022) 1 SCC 742 while
relying upon the the constitution bench judgment of
Basalingappa v Mudibasappa (2019) 5 SCC 418, under
para 14 of its judgment reiterated that
“once the cheque was issued and that the
signatures are upon the cheque are accepted by
the accused, the presumptions undee Sec 118
and 139 of the NI Act arise against the accused.
That is, unless the contrary is proved, it shall be
presumed that the cheques in question were
drawn by the accused for a consideration and
that the complainant had received the cheque in
17 C.C.17968/2018
question in discharge of debt/liability from the
accused.”
24. Therefore, as per Sec.118 and 139 of NI Act initial
presumption has to drawn infavour of the complainant
that cheques at Ex.P1 to 7 were issued in discharge of
legally enforceable debt. The burden lies on the accused
to rebut the said initial presumption on the scale of
preponderance of probabilities.
25. The complainant has deposed that he has lent
loan of Rs.9 lakhs to the accused. DW.1 in his chief-
examination itself has clearly admitted that he has taken
loan of Rs.9 lakhs from the complainant in August 2017.
Therefore, the loan transaction between the complainant
and accused persons is proved beyond reasonable doubt.
26. Further during cross-examination the
complainant has admitted that he has received
Rs.1,00,000/- each on 17.10.2017, 17.11.2017 and
18 C.C.17968/2018
18.12.2017. The complainant has presented 7 cheuqes of
Rs.1,00,000/- each. It is material to note here that while
cross-examination of PW.1 the counsel for the accused
has taken double stand, at one stretch he has suggested
to PW.1 that the accused has agreed to repay Rs.9 lakhs in
9 installments, but in meanwhile as the complainant
sought the interest , but the accused denied for the same,
those security cheques are misused. Percontra during in
chief-examination, the accused No.2 has deposed that he
has repaid entire loan amount of Rs.9 lakhs i.e. Rs.3 lakhs
by way of cheques and Rs.6 lakhs by way of cash before
March 2018 itself. Therefore whether the stand taken
during cross examination about part payment is correct
or stand taken during chief examination of DW1
regarding payment of entire amount is correct itself is not
forthcoming. Admittedly, though accused No.2 has given
19 C.C.17968/2018
chief-examination in this regard he has not tendered for
cross-examination.
27. As per section 102 of Evidence Act the burden of
proof in a proceeding lies on that person who would fail if
no evidence at all were given on either side. As per
Section 103 of Evidence Act “Burden of proof as to
particular fact”-‘The burden of proof as to any particular
fact lies on that person who wishes the Court to believe in
its existence, unless it is provided by any law that the
proof of that fact shall lie on any particular person’.
28. AIR 2023 SC 5018 in between Rajesh Jain V/s
Ajay Singh, Apex court held that
“62. The fundamental error in the approach
lies in the fact that the High Court has questioned
the want of evidence on part of the complainant
in order to support his allegation of having
extended loan to the accused, when it ought to
have instead concerned itself with the case set up
by the accused and whether he had discharged
20 C.C.17968/2018
his evidential burden by proving that there
existed no debt/liability at the time of issuance of
cheque..”
29. Principle laid down in above case law aptly
applicable to present case. There is no proof to believe
that accused No 2 has repaid the remaining Rs.6 lakhs by
way of cash between January to March 2018 as alleged.
Therefore, this court declines to believe that entire loan
was repaid by the accused.
30. During cross-examination of PW.1 the counsel
for the complainant suggested to PW.1 that cheques were
given for ‘some other transaction before 2016’ and same
is denied by PW.1. Percontra, in his chief-examination
accused No.2 has deposed that the cheques were given
for security purpose while availing the loan of Rs.9 lakhs.
Even the accused has specifically deposed that he has
given 7 cheques for Rs.1,00,000/- each. Therefore, it
21 C.C.17968/2018
appears there is no clarity to the accused and their
counsel regarding, when the cheques in question were
given to the complainant. No iota of evidence brought on
record by the accused to prove that cheques were given
either before 2016 for some other transaction or at the
time of availing the loan in the year 2017.
31. If at all, the accused has repaid the entire
amount then nothing prevented the accused to take steps
against the complainant to recover the cheques
immediately. No such endeavour is made by the accused
for the reasons best known to him. The accused has
utterly failed to prove the repayment of entire loan
amount and the cheques were given for security purpose.
32. During cross-examination PW.1 has clearly
deposed that the accused has issued the cheques for the
balance of Rs.6 lakhs along with interest of Rs.1 lakh.
There is an initial presumption regarding the date of
22 C.C.17968/2018
issuance of the cheques U/Sec.118 of NI Act. Unless the
contrary is established this Court has to consider that
Ex.P1 cheque is issued on 16.01.2018 and Ex.P2 to P7
cheques were issued on 28.02.2018. The accused have
failed to establish that they were not given on the said
dates. Therefore, such contention of the accused cannot
be accepted for want of evidence.
33. The accused has not disputed the issuance of
notice by the complainant. The notice at Ex.P15 has been
served to the accused persons as per Ex.P19 to P21 postal
acknowledgments. Even the accused have given reply as
per Ex.P23, but the accused have not at all mentioned that
they have repaid the entire amount as stated in the
evidence. But the said defense is taken while giving chief-
examination by the accused No.2 and same creates
suspicion about the case.
23 C.C.17968/2018
34. The complainant has produced Ex.P22 i.e.
pronote in support of his case executed by the accused
No.2. It is suggested to PW1 that the complainant
himself has filled the details in cheque and same is denied
by PW.1. It is pertinent to note here that Section 20 of N.I.
Act confers right to the holder of the cheque/pronote to
fill details in it. Therefore though there is difference of
ink, or handwriting in pronote, it cannot be ground to
exonerate the liability of the accused, unless they proves
contrary.
35. Having regard to the entire evidence placed on
record, this Court is of the view that complainant has
proved his case beyond reasonable doubt. Percontra, the
accused has failed to establish the defense and has not
tendered for cross-examination and also not addressed
the arguments and same is fatal to the defense.
24 C.C.17968/2018
Accordingly court proceed to answer POINT NO.I IN THE
NEGATIVE, POINT NO.II IN THE AFFIRMATIVE.
36. POINT NO.III:- In view of the reasons assigned
in above point, it is ample clear that accused has
committed the offence punishable u/s 138 of the Act
regarding EXP2 and 3 cheques. A bare reading of sec.138
of the NI Act indicates that the purport of sec.138 is to
prevent and punish the dishonest drawers of cheques
who evade their liability. The Hon’ble Apex Court in its
recent decision in M/s. Meters & instrument Pvt Ltd. Vs.
Kanchana Mehta reported in (2018)1 SCC-560 held at
para 18(ii)
that”(ii) The object of the provision being primarily
compensatory, punitive element being mainly with the
object of enforcing the compensatory element,
compounding at the initial stage has to be encouraged
but is not debarred at later stage subject to appropriate
25 C.C.17968/2018
compensation as may be found.” In view of the reasons
assigned in above point, it is ample clear that accused has
committed the offence punishable u/s 138 of the Act.
37. Therefore, having regard to the amount
advanced, time from which it is lying with the accused,
and keeping in mind the primary object of the provision,
this court is of the opinion that, rather than imposing
punitive sentence, if sentence of fine is imposed with a
direction to compensate the complainant for its monitory
loss, by awarding compensation U/Sec.357 of Cr.P.C,
would meet the ends of justice. Accordingly, this court
proceeds to pass following …..
ORDER
The accused No.1 to 3 are found guilty for
the offence punishable U/s.138 of Negotiable
Instruments Act.
26 C.C.17968/2018
Hence, acting U/sec.255(2) of Cr.P.C, the
accused No.1 to 3 are convicted and sentenced
to pay a fine of Rs.12,50,000/- (Rupees Twelve
Lakhs Fifty Thousand Only), in default of fine
amount, they shall undergo simple
imprisonment for Six Months for the offence
punishable under section 138 of N.I.Act.
Out of the fine amount collected from the
accused, an amount of Rs.12,45,000/- (Rupees
Twelve Lakhs
Forty Five Thousand only) shall be paid to the
complainant as compensation U/s.357 of Cr.P.C.
and the remaining fine of Rs.5,000/- shall be
adjusted towards the cost of state expenses.
The bail bonds of the accused shall be in
force till the appeal period is over as
contemplated under the provisions of
Sec.437(A) of Cr.P.C.
27 C.C.17968/2018
Office to supply the copy of the
Judgment to the accused forthwith at free of
cost.
(Dictated to the Stenographer, typed by her, corrected by me and
then judgment pronounced in the open court on this the 16th day of June
2025).
Digitally
signed by
Tejaswini K M
Tejaswini Date:
KM 2025.06.17
11:39:26
+0530
(Smt.Tejaswini K.M),
XVI ACJM, Bengaluru
ANNEXURE
I. List of witnesses on behalf of complainant:
P.W.1: Sri.C.Ravikiran
II. List of documents on behalf of complainant:
Ex.P-1 to 7 : Original Cheques.
Ex.P-1(a) to 7(a) : Signatures of the accused
Ex.P-8 to 14 : Bank memos.
Ex.P-15 : Copy of Legal notice.
Ex.P-16 to 18 : Postal receipts.
Ex.P-19 to P21: Postal Acknowledgment.
28 C.C.17968/2018Ex.P-22 : On Demand Promissory Note
and Consideration Receipt.
Ex.P-23 : Reply Notice.
Ex.P-24 : Postal Cover.
III. List of witnesses for the accused:
D.W.1: Sri.Imtiyaz H.A.S.
IV. List of documents for accused:
Nil
Digitally
signed by
Tejaswini K
Tejaswini M
KM Date:
2025.06.17
11:39:34
+0530
(Smt.Tejaswini K.M ),
XVI ACJM, Bengaluru
29 C.C.17968/2018