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Bangalore District Court
M Ravikumar vs A.K. Ramababu on 8 May, 2025
KABC020160262023
IN THE COURT OF THE XII ADDL. JUDGE, COURT OF
SMALL CAUSES & ADDL. CHIEF JUDICIAL MAGISTRATE,
BENGALURU (SCCH-08)
DATED THIS THE 8th DAY OF MAY - 2025
PRESENT: Smt. Kannika M.S.
M.A., LL.B.
XII ADDL. SCJ & ACJM
MEMBER - MACT, BENGALURU.
C.C. No.4655/2023
Complainant : Sri. M. Ravi Kumar,
Aged about 57 years,
S/o. Late Sri Muniswamy Raju,
R/at flat No.002,
Soni Brent Woods Apartment,
22nd Main Road, Shamanna Garden,
5th Phase, J.P. Nagar,
Bangalore - 560078.
(By Sri. M. Mune Gowda, Advocate)
:Vs:
Accused : Sri. A.K. Rama Babu,
Aged about 54 years,
S/o. A. Krishnaiah Naidu,
No.101/5, 2nd Floor,
22nd Main Road,
Janardhan Layout,
Bangalore - 560070.
SCCH-8 2 C.C.No.4655/2023
(By Sri. M. Shivarame Gowda,
Advocate)
Date of complaint : 17.05.2023
Date of commencement of
Evidence : 07.06.2023
Offence charged : Sec.138 of Negotiable
Instruments Act
Date of Judgment : 08.05.2025
Opinion of the Judge : Accused found not
guilty
JUDGEMENT
This is a private complaint filed U/Sec.200 of Cr.P.C.
against the accused for the alleged offence punishable
U/Sec.138 of Negotiable Instrument Act.
2. The brief facts of the case of the complainant is
that:
The accused and complainant were known to each other
for several years and on the basis of the said acquaintance, the
accused being building contract, complainant entrusted a
SCCH-8 3 C.C.No.4655/2023building for construction at Gottigere, Bengaluru. The accused
borrowed hand loan of Rs.3,00,000/- from the complainant for
purchase of ready-mix concrete. The complainant had sold a
flat in Soni Brent woods at that time, in order to help the
accused, complainant paid Rs.3,00,000/- to the accused by
way of cash and in turn paid the said amount to Thejus who is
the supplier of ready-mix concrete and assured to repay the
same by the end of January 2023. But the accused has failed to
repay the amount to the complainant. When the complainant
demanded to repayment of the amount, the accused has issued
the a cheque bearing No.000386 dated 23.01.2023 for a sum of
Rs.3,00,000/-, drawn on Kotak Mahindra Bank, Banashankari
3rd Stage Branch, Bengaluru. As per the instruction of the
accused, complainant has presented the said cheque for
encashment through his banker Bank of Baroda, J.P. Nagar
branch, Bengaluru, but the said cheque came to be dishonored
and returned with shara “Funds Insufficient”. Thereafter he has
issued the legal notice on 08.04.2023 through RPAD to the
SCCH-8 4 C.C.No.4655/2023accused address and the same was served to the accused on
10.04.2023. The accused has not paid the amount, and hence,
the complainant has filed the present complaint before this
Court.
3. Cognizance was taken and sworn statement of the
complainant was recorded. Since there were sufficient materials
to proceed against the accused, the summons was issued to
accused. Accused appeared through his counsel and got
enlarged on bail. Substance of accusation was framed, read
over and explained to the accused in the language known to
him, he denied the same and claimed to be tried. Hence, the
case was posted for complainant’s evidence.
4. In order to prove his case, the complainant got
examined himself as PW-1 and got marked the 7 documents at
Ex.P1 to Ex.P7 and closed his evidence. After closure of
complainant’s side evidence, the statement U/Sec.313 of Cr.P.C
was prepared and read over to accused, he has denied the
same. The accused has not led his defence evidence. But,
SCCH-8 5 C.C.No.4655/2023
through confront to PW.1 got marked Ex.D1 and D2
documents. Thereafter, case was posted for arguments.
5. I have heard the arguments. Perused the entire
records in this case.
6. The following points arise for my consideration:
1. Whether the complainant proves accused
has borrowed Rs.3,00,000/- and for
discharge of the said amount issued Cheque
bearing No. 000386 dated 23.01.2023 and
there by committed an offence punishable
under section 138 of Negotiable Instrument
Act?
2. What order?
7. The finding of this court on the above points is as
under:
Point No.1 : In Negative
Point No.2 : As per final order,
for the following;
SCCH-8 6 C.C.No.4655/2023
REASONS
POINTS NO.1 & 2:
8. Since these points are interconnected, they are taken
up together to avoid repetition of facts.
9. According the complaint, the accused is known to
the complainant and on the basis of said acquaintance
borrowed handloan of Rs.3,00,000/- from the complainant.
Thereafter when the complainant demanded to repay the
amount, the accused issued the post dated cheque bearing
No.000386 dated 23.01.2023 for a sum of Rs.3,00,000/- drawn
on Kotak Mahindra Bank, Banashankari 3rd Stage Branch,
Bengaluru, and when he has presented the said cheque for
collection and for realization, the said cheque dishonored and
returned with shara “Funds Insufficient” on 02.02.2023 and
08.03.2023, hence he issued the legal notice to the accused on
08.04.2023 through RPAD and the same was served. The
accused has not paid the amount, hence the complaint.
SCCH-8 7 C.C.No.4655/2023
10. In support of his contention complainant has filed
affidavit in lieu of examination in chief wherein reiterated the
averments of the complaint and examined as PW.1 and got
marked EX P1 to P7. Ex.P1 is the cheque bearing No.000386
dated 23.01.2023 for Rs.3,00,000/- issued by the accused in
favour of the Complainant. EX.P2 and 3 are the endorsements
dated: 02.02.2023 and 08.03.2023 issued by the Bank with
respect to the cheque bearing No.000386 for a sum of
Rs.3,00,000/-. It is shows that cheque are dishonored for the
reason Funds Insufficient with memo. Ex.P4 is the legal notice
dated 08.04.2023 issued by the complainant through his
counsel to the accused for the repayment of the said loan
amount. Ex.P5 and 6 are the postal receipt and courier receipt,
Ex.P7 is the postal acknowledgment. These documents goes to
show that the legal notice sent to the accused was served on
him on 10.04.2023. Even after service of notice, the accused
has not repaid the amount. Thereafter complainant has filed
SCCH-8 8 C.C.No.4655/2023
this case against the accused. Hence, complainant has
complied the mandatory requirements of Sec.138 of N.I. Act.
11. On the other hand, the accused has not examined
himself but confronted the Joint Development Agreement and
General Power of attorney as Ex.D1 and D2 in the cross-
examination of the Pw1. The accused has denied the case of the
complainant and his specific defence is that in the year 2016,
complainant and accused entered into the Joint Development
Agreement, at that time accused has issued cheques for the
security of the said agreement, thereafter due to some
misunderstandings between them, the complainant has
misused the said cheque filed this case. The accused has not
denied the issuance of cheque, as well as his signature but his
contention is that he has issued the said cheque in the year
2016, in support of his contention he has relied upon the
Ex.D1 and D2 which were the JDA and GPA. PW.1 has not
denied the execution of the said documents and on perusal of
the said document there is no recital regarding to issuance of
SCCH-8 9 C.C.No.4655/2023
cheque as a security of the said agreement. On perusal of the
Ex.P1 cheque, the date of issue from the bank mentioned as
13.09.2021, how it is possible to give the cheques to the
complainant in the year 2016, therefore the above said defence
of the accused does not holds any water and it is suspicious.
12. The accused another contention is that the legal
demand notice was not issued by the complainant within 30
days of the receipt of information regarding dishonor of the
cheque, i.e. 08.03.2023, from the date of the return memo, and
thus the complaint is not maintainable. On the other hand, the
complainant main contention is that it was intimated about the
dishonor of the cheque in question only when its Bank sent the
aforesaid return statements, and the legal demand notices were
issued within 30 days thereafter.
13. Before discussion of the evidence of the both parties,
it is relevant to go through the Section 138 and 139 of the
Negotiable Instrument Act are set out herein below for
convenience:
SCCH-8 10 C.C.No.4655/2023
138- Dishonour of cheque for insufficiency, etc., of
funds in the account. –Where any cheque drawn by a
person on an account maintained by him with a banker for
payment of any amount of money to another person from
out of that account for the discharge, in whole or in part, of
any debt or other liability, is returned by the bank unpaid,
either because of the amount of money standing to the
credit of that account is insufficient to honour the cheque
or that it exceeds the amount arranged to be paid from that
account by an agreement made with that bank, such person
shall be deemed to have committed an offence and shall,
without prejudice to any other provisions of this Act, be
punished with imprisonment for a term which may be
extended to two years, or with fine which may extend to
twice the amount of the cheque, or with both: Provided
that nothing contained in this section shall apply unless–
(a) the cheque has been presented to the bank
within a period of six months from the date on
which it is drawn or within the period of its validity,
whichever is earlier;
(b) the payee or the holder in due course of the
cheque, as the case may be, makes a demand for the
payment of the said amount of money by giving a
notice in writing, to the drawer of the cheque,
within thirty days of the receipt of information by
him from the bank regarding the return of the
cheque as unpaid; and
(c) the drawer of such cheque fails to make the
payment of the said amount of money to the payee
or, as the case may be, to the holder in due course
of the cheque, within fifteen days of the receipt of
the said notice.
Explanation.– For the purposes of this section, “debt or
other liability” means a legally enforceable debt or other
liability.
SCCH-8 11 C.C.No.4655/2023
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.
14. The object of section 138 of the Negotiable
Instruments Act is to infuse credibility to negotiable
instruments including cheque and to encourage and promote
the use of negotiable instruments including cheque in financial
transactions. The penal provision of Section 138 of the
Negotiable instruments Act is intended to be a deterrent to
callous issuance of negotiable instruments such as cheque
without serious intention to honour the promise implicit in the
issuance of the same.
15. On careful perusal of materials placed on record,
Ex.P1 is the cheque. Date of cheque is 23.01.2023 and the
complainant presented the cheque within time from the date on
which it is drawn. The bank issued endorsements on
02.02.2023, later he has again presented the cheque and the
bank issued the memo on 08.03.2023. The complainant issued
SCCH-8 12 C.C.No.4655/2023
a notice through his advocate as per Ex.P4 on 08.04.2023. he
has issued notice after 31 days of receipt of the last
endorsement from the bank. As per Section 138(b), the payee or
the holder in due course of the cheque, as the case may be,
makes a demand for the payment of the said amount of money
by giving a notice in writing, to the drawer of the cheque, within
thirty days of the receipt of information by him from the bank
regarding the return of the cheque as unpaid. But in this case,
the complainant has issued notice after 31 days of the receipt
of the information, as per General Classes Act, 1 day has been
excluded. Hence date of endorsement has to be excluded, the
complainant has issued the notice after 31 days of the receipt
of information from the bank.
16. The complainant counsel argued that, as per General
Classes Act month shall mean a month reckoned according to
the British Calender, as per this provision 31 st day of a month
it includes a month. Therefore, the notice issued by the
complainant within time. But, on perusal of the Section 138(b)
SCCH-8 13 C.C.No.4655/2023
clearly indicates within 30 days from the date of receipt of
information payee must be issued the notice in writing not
narrated a month. There is no provision to extend the 30 day
period for issuing the notice. If the notice is not issued within
30 days period there is no cause of action to file a complaint.
The 30 days limit is important because it ensures that both
parties are aware of their rights and responsibilities, prevents
undue delay in seeking legal remedies, creates sense of urgency
and promotes efficiency in the legal system. Therefore at this
stage, this court has relied upon the decision of the Hon’ble
Supreme Court reported in 2014 9 SCC 129 between Roopsingh
Rathod vs. State of Maharashtra)
17. On a careful analysis of Section 138, held that an
offence is created when a cheque is returned by the bank
unpaid for any reasons mentioned therein, although the proviso
to Section 138 stipulates three conditions for the applicability
of the section. It is only upon satisfaction of the three
SCCH-8 14 C.C.No.4655/2023
conditions that prosecution can be launched for an offence
under Section 138. This Court observed:
“On a careful analysis of the above section, it
is seen that its main part creates an offence when
a cheque is returned by the bank unpaid for any of
the reasons mentioned therein. The significant
fact, however, is that the proviso lays down three
conditions precedent to the applicability of the
above section and, for that matter, creation of such
offence and the conditions are: (i) the cheque
should have been presented to the bank within six
months of its issue or within the period of its
validity, whichever is earlier; (ii) the payee should
have made a demand for payment by registered
notice after the cheque is returned unpaid; and (iii)
that the drawer should have failed to pay the
amount within 15 days of the receipt of the notice.
It is only when all the above three conditions are
satisfied that a prosecution can be launched for
the offence under Section 138.
Hence, the said judgment of the Apex Court aptly
applicable to the case in hand. Therefore, arguments canvassed
by the complainant cannot be considered.
SCCH-8 15 C.C.No.4655/2023
18. This court has relied upon the decision of the Honble
Delhi High court in Deepak Nagar vs State And Anr on 22
February, 2024 and also In Kamlesh Kumar v. State of Bihar
and Anr.1, Supreme Court held as under:-
“15. It is, thus, apparent that he received the
information about the dishonor of the cheque on
10.11.2008 itself. However, he did not send the legal
notice within 30 days therefrom. We, thus, find that the
complaint filed by him was not maintainable as it was
filed without satisfying all the three conditions laid down
in Section 138 of the NI Act as explained in para 12 of
the judgment in the case of MSR Leathers”.
The legal position, as culled out from the judicial dicta
referred to herein above, is that while computing the limitation
period of 30 days prescribed under Section 138(b) N.I. Act for
issuance of a valid legal notice, the day on which intimation is
received by the complainant from the bank that the cheque in
question has been returned unpaid has to be excluded.
Applying the above mentioned legal position to the present
matter, it can be seen that admittedly while the information
was received on 08.03.2023, the legal notice came to be issued
on 08.04.2023. Even if the first day i.e. 08.03.2023 is excluded
SCCH-8 16 C.C.No.4655/2023
in computing the statutory period, the legal notice came to be
issued on the 31st day i.e. beyond the statutory period provided
under Section 138(b) of the NI Act.
19. The next question is, whether the amount mentioned
in the cheque is for a legally recoverable debt or for other
liability. The interpretation of the expression for discharge of
any debt or other liability occurring in section 138 of N.I. Act is
significant and decisive in matter. The explanation appended to
section 138 express the meaning of the expression debt or other
liability for the purpose of section 138. This expression means a
legally enforceable or other liability. Section 138 treats
dishonour of cheque as an offence if the cheque has been
issued in discharge of debt or any other liability. When the
complainant failed to comply the mandatory provision of the
138 N.I. Act, the question of considering the legally recoverable
debt does not arise for consideration. Hence, I answered
Points No.1 in Negative.
SCCH-8 17 C.C.No.4655/2023
POINT No.2:-
20. In view of my answer to Point No.1 as above, I proceed to
pass the following :
ORDER
Accused is acquitted for the offence
punishable U/Sec. 138 of N.I. Act by acting
U/Sec. 255(1) of Cr.P.C.
Bail bond of the accused and surety bond
stands canceled.
(Dictated to the Stenographer directly on computer, typed by her,
corrected and then pronounced by me, in the open Court on this the 8th
day of May 2025)
KANNIKA M Digitally signed by KANNIKA M
SS Date: 2025.05.14 10:48:37
+0530(Kannika M.S.)
XII Addl. Small Causes Judge
& ACJM, Bengaluru.
ANNEXURE
List of witnesses examined for complainant :-
P.W.1 : Ravi Kumar M.
SCCH-8 18 C.C.No.4655/2023List of documents marked for complainant:-
Exhibits Particulars of the Document Ex.P1 Cheque Ex.P1(a) Signature of Accused Ex.P2 & 3 Bank Endorsements Ex.P4 Legal notice Ex.P5 & 6 Postal receipts Ex.P7 Postal acknowledgment
List of witnesses examined for accused:
None
List of documents marked for accused:-
Ex.D1 : Joint Development Agreement
Ex.D2 : General Power of Attorney
KANNIKA Digitally signed by
KANNIKA M S
MS Date: 2025.05.14
10:48:44 +0530
(Kannika M.S.)
XII Addl. Small Causes Judge
& ACJM, Bengaluru.
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