Bangalore District Court
M/S. R J Rishikaran Projects Pvt Ltd vs Roopa Hari Ganesh on 19 August, 2025
KABC0C0056742021
IN THE COURT OF XXXIV ADDL. CHIEF JUDICIAL MAGISTRATE,
MAYO HALL UNIT, BENGALURU (ACJM-34)
PRESENT: Smt. PARVEEN A BANKAPUR,B.Com.LLB.
XXXIV ADDL. CHIEF JUDICIAL MAGISTRATE,
Dated : This the 19th day of August, 2025
C.C.No.51694/2021
COMPLAINANT : M/s. R J Rishikaran Projects Pvt Ltd
Office at Pent House, R J Manor
Apartments, 11/A, 80 Feet Road,
3rd Cross, Koramangala,
Bengaluru - 34.
Rep. by its Managing Director Mr.
Rathnakar Shetty
(By M/s.SNR Associates- Advocates)
V/s
ACCUSED : Mrs. Roopa Hari Ganesh
Aged about 41 years,
W/o. Mr. Hari Ganesh
R/at New No.9, Old No.72, Atallah
Towers, T Block, 9th Street, Anna
Nagar, Tower Club, Anna Nagar,
Chennai,
Tamilnadu - 600 040.
(By M/s.BSPS Associates - Advocates)
1 Date of Commencement 25.05.2020
of offence
2 Date of report of offence 16.09.2020
3 Presence of accused
3a. Before the Court 20.07.2022
3b. Released on bail 20.07.2022
4 Name of the Complainant M/s.R.J. Rishikaran Projects Pvt.
Ltd.,
5 Date of recording of 16.03.2021
evidence
6 Date of closure of evidence 08.11.2024
7 Offences alleged U/s 138 of the Negotiable Instruments
Act.
8 Opinion of Judge Accused is found guilty.
2 C.C.No.51694/2021
JUDGEMENT
The Private Complaint filed by the Complainant under
Section 200 of Cr.P.C against the accused alleging that she has
committed the offence punishable under Section 138 of
Negotiable Instruments Act.
2. The brief facts of the complaint are as follows:
The complainant submits that, the Accused knowing that
the Complainant is a reputed builder and doing business of real
estate like construction of multistoried building in and around
Bengaluru by entered into joint development agreement with
the landowners, selling the same to the prospective purchasers.
The Complainant is a registered company and doing a
business in the name of M/s.R.J. Rishikaran Projects Pvt. Ltd.
and the Accused is well aware the same and the Accused
further aware that the Complainant has constructed the
multistoried apartment name as RJ Brooke Square on the
properties bearing Sy.No.109, 102 and 82 situated at
Kundalahali village, K.R.Puram Hobli, Bengaluru East Taluk.
It is further submitted that the Accused has entered into
the Agreement of Sale and Construction Agreement common
dtd.16.5.2019 for purchasing the Duplex Unit bearing No.B 101
3 C.C.No.51694/2021in building known as R.J.Brooke Square. The Accused has
approached the Complainant for financial assistance with the
Complainant. On the trust of that, the Complainant has paid
an amount of Rs.1 crore to the Accused through RTGS bearing
reference No.242190913213074 dtd.30.8.2019 through his
company bank account and the Accused has assured that she
would return the said amount within six months to the
Complainant.
It is further submitted by the Complainant that after
repeated requests made by the Complainant, the Accused has
issued a post dated Cheque bearing No.838531 dtd.25.5.2020
for Rs.29,50,000/- drawn on State Bank of India, Anna Nagar,
Chennai towards discharge of his legal liability.
It is further submitted that, the Complainant presented
the Cheques through its banker i.e., HDFC Bank Ltd.,
Shankarnarayana Building, M.G. Road branch, Bengaluru for
encashment. The said Cheque was not honoured and same was
returned with endorsement “funds insufficient” on 31.7.2020.
Thereafter the Complainant got issued legal notice issued to the
Accused by RPAD on 26.8.2020, for demanding payment to the
value of Cheque within 15 days from the receipt of notice and
4 C.C.No.51694/2021the same was duly served on 29.08.2020 to the Accused.
Despite receipt of the notice, the Accused has not paid the
Cheque amount but, sent her untenable reply dtd.9.9.2020.
Hence, the Complainant has filed present complaint against the
Accused for the offence punishable u/Sec.138 of N.I. Act.
3. Based on the complaint, the sworn statement affidavit,
and documents etc., took cognizance of an offence punishable
Under Section 138 of N.I.Act by following the guidelines of Apex
Court issued in Indian Bank Association case and ordered to be
registered a criminal case against the accused for the offence
punishable Under Section 138 of N.I. Act.
4. After issuance of summons, accused appeared before
the court and enlarged herself on bail. Plea was recorded, read
over and explained to the accused, who pleads not guilty and
claims to be tried. Hence, the case is posted for complainant’s
evidence.
5. The Managing Director of Complainant got examined
himself as PW1 and got marked documents Ex.P.1 to Ex.P.7
and closed his side. Ex.P8 document came to be marked
5 C.C.No.51694/2021
through confrontation during the course of cross-examination
of DW1.
6. Accused was examined U/S 313 of Cr.P.C.
Incriminating evidence appearing in the complainant’s evidence
was read over and explained to the accused who denies the
same. The Accused got examined herself as DW1 and no
documents were marked from her end. However, Ex.D.1 to
Ex.D.8 documents came to be marked through confrontation
during the cross-examination of PW1.
7. Heard both sides.
8. Upon hearing the arguments and on perusal of the
materials placed on record, the following points arise for my
consideration.
1) Whether complainant proves beyond all
reasonable doubts that accused in discharge
of legally recoverable debt has issued a
Cheque No.838531 dtd.25.5.2020 for
Rs.29,50,000/- drawn on State Bank of
India, Anna Nagar, Chennai in favour in
favour of the complainant which came to be
dishonoured with an endorsement “funds
insufficient” and in spite of service of
notice accused has not paid the Cheque
amount and thereby committed an offence
under Section 138 of N.I.Act?
2) What Order?
6 C.C.No.51694/2021
9. My findings on the above points is:
Point No.1: In the Affirmative
Point No.2: As per final order
for the following:
REASONS
Point No.1:-
10. Existence of legally recoverable debt is a sine qua non
for prosecuting the case under Section 138 of Negotiable
Instruments Act. For convenient purpose the essential
ingredients to constitute offence under section 138 of N.I.Act is
summarized as below:
(i) That there must be a legally enforceable debt.
(ii) That the cheque was drawn from the account of
bank for discharge in whole or in part of any debt
or other liability which presupposes the legally
enforceable debt.
(iii)That the cheque so issued had been returned due to
“insufficient funds”.
11. It is the core contention of the complainant that,
the Complainant is a registered company and doing a business
in the name of M/s. R.J. Rishikaran Projects Pvt. Ltd. and the
Accused is well aware the same and the Accused further aware
that the Complainant has constructed the multistoreyed
apartment name as RJ Brooke Square on the properties bearing
7 C.C.No.51694/2021
Sy.No.109, 102 and 82 situated at Kundalahali village,
K.R.Puram Hobli, Bengaluru East Taluk. The Accused has
entered into the Agreement of Sale and Construction Agreement
common dtd.16.5.2019 for purchasing the Duplex Unit bearing
No.B 101 in building known as R.J. Brooke Square. The
Accused has approached the Complainant for financial
assistance with the Complainant. On the trust of that, the
Complainant has paid an amount of Rs.1 crore to the Accused
through RTGS bearing reference No.242190913213074
dtd.30.8.2019 through his company bank account and the
Accused has assured that she would return the said amount
within six months to the Complainant.
12. It is further submitted by the Complainant that after
repeated requests made by the Complainant, the Accused has
issued a post dated Cheque bearing No.838531 dtd.25.5.2020
for Rs.29,50,000/- drawn on State Bank of India, Anna Nagar,
Chennai towards discharge of his legal liability which was not
honoured and same was returned with endorsement “funds
insufficient” on 31.7.2020. Thereafter the Complainant got
issued legal notice to the Accused by RPAD on 26.8.2020, for
8 C.C.No.51694/2021
demanding payment to the value of Cheque within 15 days
from the receipt of notice and the same was duly served on
29.8.2020 to the Accused. Despite receipt of the notice, the
Accused has not paid the Cheque amount but, sent his
untenable reply dtd.9.9.2020. Hence, the Complainant has filed
present complaint against the Accused for the offence
punishable u/Sec.138 of N.I. Act.
13. In order to bring home the guilt of the accused,
Managing Director of Complainant got examined himself as
PW1 and reiterated the contents of complaint in his
examination-in-chief. He has also placed original Cheque
No.838531 dtd.25.5.2020 at Ex.P1, bank endorsement at
Ex.P2, office copy of legal notice issued by the Complainant to
the Accused on 26.8.2020 at Ex.P4, postal receipt, Ex.P5 s the
postal acknowledgement, Ex.P6 is the reply notice, Ex.P7 is the
Certified copy of Board Resolution and Ex.P8 is the Copy
Tripartite Agreement.
14. The documents produced by the complainant of
course established that complainant meets out the procedural
requirements of Section 138 of Negotiable Instrument Act, but
9 C.C.No.51694/2021
it is to be considered whether all these documents establish the
offence committed by the accused.
15. The Negotiable Instruments Act raises two
presumptions. One contained in Section 118 and the other in
Sec. 139 thereof. For the sake of convenience Sec 118(1) of the
N.I. Act is extracted here below:
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.
1. To (g) . . . . . . . . . . . .
Provided that where the instrument has been
obtained from its lawful owner, or from an person in
lawful custody thereof, by means of an offence of fraud,
or has been obtained from the maker or acceptor
thereof by means of an offence of fraud, or for unlawful
consideration, the burden of proving that the holder is
a holder in due course lies upon him”.
10 C.C.No.51694/2021
16. Further Section 139 of the Negotiable Instruments 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.”
Scope and ambit and function of the presumption
U/s 118(a) and Sec 139 of NI Act came to be considered
by the Hon’ble Apex Court of Indian in Krishna
Janardhan Bhat Vs Dattatraya G.Hegde (2008
AIAR (Criminal 151) The Supreme Court has laid
down the law in the following phraseology.
“D Negotiable Instruments Act 1881, Secs 139,
138–Presumption under-same arises in regard to
second aspect of the matter provided under Sec 138–
Existence of legally enforceable debt is not a matter of
presumption under Sec 139- It merely raises
presumption in favour of a holder of the cheque that
the same has been issued for discharge of any debt or
other liability – Merely an application of presumption
contemplated under Section 139 of N.I.Act should not
lead to injustice or mistaken conviction.”
17. Further, said decision was followed by Hon’ble High
Court of Karnataka in Kempanarasimhaiah Vs P.Rangaraju
11 C.C.No.51694/2021
& Others (2008 (5) KCCR 3371). Relevant paragraph of the
said judgment reads as under: –
“12. As to the provisions of Sections 138 of N.I.Act, the
following principles emerge from the above
observations of Hon’ble Supreme Court at para Nos
21, 23, 25, 26 and 34 of its Judgment in the above
said case of Krishna Janardhan Bhat Vs
Dattatraya G.Hegde, AIR 2008 SC 1325.
(i) Section 139 of the Act merely raises a presumption
that the cheque was issued towards discharge in whole
or in part in any debt or other liability, which
presupposed legally enforceable debt. Existence of
legally recoverable debt is not a matter of presumption
under Section 139 of the Act. It merely raises a
presumption in favour of a holder of the cheque that
the same has been issued for discharge of any debt or
other liability.” (para 21)
(ii) The question as to whether the presumption stood
rebutted or not, must be determined keeping in view
the other evidences on record. Where the chances of
false implication cannot be ruled out, the background
fact and the conduct of the parties together with their
legal requirements are required to be taken into
consideration. (para 26)
(iii) An accused, for discharging the burden of proof placed
upon him under a statute, need not examine himself.
He may discharge his burden on the basis of the
materials already brought on records (para 23)
(iv) Standard of proof on the part of an accused and that of
the prosecution in a criminal case is different. Further
more where as prosecution must prove the guilt of an
accused beyond all reasonable doubt, the standard of
proof so as to prove a defence on the part of an
12 C.C.No.51694/2021
accused is “preponderance of probabilities”(para 23 &
25)
(v) Inference of preponderance of probabilities can be
drawn not only from the materials brought on records
by the parties but also by reference to the
circumstances upon which he relies ( para 25)
(vi) Other important principles of legal jurisprudence,
namely presumption of innocence as human rights
and the doctrine of reverse burden introduced by
Section 139 should be deliberately balanced (para 34)
18. Thus from the observations extracted above, it is
clear that presumption Under Section 139 of the N.I. Act is only
to the extent that the cheque was drawn for discharge in full or
in part of any debt or other liability and the said presumption
do not relate to the existence of legally enforceable debt or
liability. Therefore, before drawing the presumption under
Section 139 of the N.I.Act, it is the duty of the Court to see
whether or not the complainant has discharged his initial
burden as to existence of legally enforceable debt. No doubt, as
per Section 118(a) of the Act, there is a rebuttable presumption
that every negotiable instrument, is accepted, endorsed,
negotiated or transferred was accepted, endorsed, negotiated or
transferred for consideration.”
13 C.C.No.51694/2021
19. Factual matrix of the case is required to be tested on
the anvil of principles emerging from the above-referred
decisions.
20. The defence taken by the Accused is that, the
Complainant by misusing the cheques in question against her
and his husband. Moreover, the Complainant company is not
holder in due course of the said cheques and the Complainant
which is dealing with construction activities cannot issue any
type of loans and moreover, as there was only a limited
interactions between the Complainant company and alleged
loan. Therefore, allegations made by the Complainant are false
and frivolous.
21. To substantiate his claim the Managing Director of
the Complainant company examined himself as PW1. In the
evidence he deposed that, the Accused is known that he is a
reputed builder and doing business of real estate like
construction of multi-store building and entered into joint
development agreement with land owners. It is further deposed
that, the Complainant is a registered company doing business
in the name of M/s.R.J. Rishikaran Projects Pvt. Ltd. and
14 C.C.No.51694/2021
Accused aware that, the Complainant have constructed the
multistoreyed apartment by name M/s. R.J. Brooke Square in
Sy.No.109, 102 and 82. It is further deposed that, the Accused
well known to Complainant for past one year and also known
that, in respect of sale transaction made in between her and
Complainant company under sale agreement and construction
agreements. It is further deposed that, Accused was
approached the Complainant for financial assistance and on
the trust the Complainant has paid Rs.1 crore to her through
RTGS on 30.8.2019. It is further deposed that, the Accused
also well known the same and she also assured that she and
her husband would return the said amount within six months
to the Complainant. It is further deposed that, after repeated
requests to the Accused and her husband at that time, the
Accused has issued Ex.P1 cheque for Rs.29,50,000/- to the
Complainant towards repayment of debt. It is further deposed
that, on the trust of Accused, the Complainant presented the
said cheque for encashment which was dishonoured with
endorse “funds insufficient” as per Ex.P2. It is further
deposed that, thereafter, the Complainant got issued legal
notice to the Accused as per Ex.P3 which was duly served upon
15 C.C.No.51694/2021
the Accused as per Ex.P5. It is further deposed that, inspite of
payment of cheque amount, the Accused has issued untenable
reply to him as per Ex.P6.
22. Considering the oral and documentary evidence of
the Complainant placed before the court, prima facie presumed
that, Ex.P1 was issued by the Accused towards discharge of
legally enforceable debt. To rebut the presumption, the learned
Counsel for Accused cross examined the PW1 in full length. In
cross examination PW1 stated that, the Complainant company
is a private limited company and there are 4 directors and he
has filed Board Resolution of the company as per Ex.P7 to
authorize him to represent the company. It is further stated
that, their company’s object is land developing and
constructions of buildings. It is admitted by the PW1 that the
Accused resided at Chennai. He further stated that Managing
Director have every right to recover the debt on behalf of
company. He further stated that, as per resolution and
company Memorandum of Article of Association, 2013 he got
authority to recover the debt. He further stated that he
informed other directors about lending Rs.1 crore loan to the
16 C.C.No.51694/2021
Accused. He further stated that, he deposed in
C.C.No.50216/2021 and 50208/2021 as per document Ex.D1
and 2. He further admits that Rs. 3 lakhs amount received
from Accused as per Ex.D3 receipt. He further admits that the
cheque number in other case and this case are one series
number. He further stated that in the month of February 2020
she and her husband came to Complainant office and issued
cheque as per Ex.P1. He further stated that, the Complainant
company filed 3 cases against Accused and her husband for
total amount of Rs.1,18,00,000/-. He further stated that, he
has good relationship with Accused as she intending to
purchase flat from him. He further stated that, he know the
financial capacity of the Accused. He further stated that
Accused have an aluminum factory in Chennai City. He further
stated that he know the residential and factory addresses of the
Accused. He further admits that, as per Ex.D8 sale deed
executed in favour of daughter of PW1 and the sale
consideration is different from sale agreement of the Accused.
He denied that as per Ex.P7 all directors and company
Secretary were not passed the resolution, who authorized him
to represent the case.
17 C.C.No.51694/2021
23. To rebut the presumption the Accused examined
herself as DW1. She deposed that, she know the Complainant
from May 2019 as she and her husband were searching for
purchase of property in Bengaluru and at that point of time,
they approached the Complainant. It is further deposed that,
the Complainant company in the field of construction of multi-
storeyed building the name of R.J. Brooke Square. It is further
deposed that, after negotiation she and her husband entered
into an agreement of sale and construction agreement, with
Complainant company on 16.5.2019 and she was paid amount
of Rs.3,80,00,288/- out of which Rs.2,40,00,000/- was
transferred to the Complainant company by their banker
Karnataka Bank Ltd., who have sanctioned loan to her. It is
further deposed that, at this period during the course of
transaction the blank cheques were handed over to the
Complainant company for tax purpose towards the sale
transaction. It is further deposed that, due to unforeseen
circumstances they were unable to pay further payments due
to Covid pandemic and they requested the Complainant to
return the amount. It is further deposed that, the Complainant
promised to return the amount once the flat is sold and in view
18 C.C.No.51694/2021
of the understanding they did not ask for return of the cheques
which were handed over to the Complainant at the time of
agreement. It is further deposed that, the amount has been
transferred by the Complainant company to her account was
part of an interim understanding and it is part of sale
transaction and not loan amount as claimed by the
Complainant. It is further deposed that, except agreement of
sale, they have no transaction whatsoever with the
Complainant. It is further deposed that, Complainant company
is bound by the terms of the agreement and in case of if there
is any default in further payments, the Complainant have to
forfeit 15% of the amount paid and has to return the balance
transaction amount to her and there is no loan transaction as
claimed by the Complainant. It is further deposed that, the
Complainant by misusing the cheques in question has filed this
false and frivolous case against her and her husband. It is
further deposed that, the Complainant company is not the
holder in due course of the cheques. It is further deposed that,
the Complainant is trying to shirk away from the
responsibilities of the repayment as per the terms of agreement.
It is further deposed that, the Complainant dealing with the
19 C.C.No.51694/2021
construction activities cannot issue any type of loans and
moreover as there was only a limited interactions between him
and Complainant company and hence, question of issuing loan
of Rs.1 crore not arise and it is false statement. It is further
deposed that, alleged cheque which was presented in May
2020 that this period was a Covid pandemic in the entire global
and the question of handing over the cheques from Chennai to
Bengaluru was itself impossible at that point of time.
24. In the cross-examination DW1 stated that she is a
B.Com graduate. She further stated that, she know the
complaint averments and claim of the Complainant. She further
stated that, she know the Complainant company and she know
the Managing Director of Complainant company since from
2019 through her husband Sri. Hari Ganesh. She further
stated that, the agreement of sale was executed for flat B-101 in
between Complainant and herself as per Ex.D3. She further
admits that, for purchase of said flat, she availed loan of Rs.5.5
crores from Karnataka Bank. She further admits that, out of
loan amount, she received Rs.2.4 crores from bank and
transferred to Complainant. She further stated that, Rs.1.4
20 C.C.No.51694/2021
crores was paid by her to the Complainant and remaining
balance was Rs.3.8 crores. She further stated that, till today
Ex.D3 is in existence. She further admits that, during the
course of availing loan from the bank, she executed Tripartite
Agreement with bank and Complainant. She unable to say that,
Ex.D3 was cancelled or not. She further unable to say that,
with respect of Ex.D3, as per point No.12, 15% amount
deducing and she received notice or not. She further unable to
say that, she issued letter to the bank for recovery of loan
amount by selling the flat. She further stated that, she has not
issued any notice to the Complainant for cancellation of
agreement of sale and returning of advance amount. She
further stated that, she was not paid loan installment to the
Karnataka Bank. She further stated that till today loan was not
cleared. She further stated that her husband was depositing
the loan installments. She denied that, bank was issued notice
for defaulter and also received notice from the bank for
attachment of the flat. She further admits that, at the time of
Ex.D3 sale agreement she know the separate value of the
separate value and total value as per the list mentioned in the
Ex.D5. It is further admits that, Ex.D5 includes GST and SST.
21 C.C.No.51694/2021
She further admits that, as Ex.D5 GST and SST value is
Rs.58,19,104/-. She further stated she issued blank cheques to
the Complainant. She further admits that the cheque value in
C.C.No.50216/2021 and this case cheque amount was
different. She further admits that in Sy.No.109, 102 and 85
construction was completed. She further admits that, in the
year 2021 entire construction work and project work was
completed. She unable to say that BBMP was issued building
possession certificate in favour of Complainant. She further
admits that Complainant told her to register the flat in her
favour. She further stated that from Debt Recovery Tribunal,
Chennai, she received notice. She further denied that she
appeared before Debt Recovery Tribunal, Chennai. She clearly
admits that, she liable to pay remaining sale consideration
amount to the Complainant. She further stated that now she
is not intending to purchase the flat. She further stated that in
case of cancellation of sale agreement, it shall be informed to
the bank. She further admits Tripartite Agreement as per
Ex.P8. She denied that she seek financial assistance from the
Complainant. She clearly admits that, on 30.8.2019 she
received Rs.1 crore from the Complainant through RTGS. She
22 C.C.No.51694/2021
further admits that, Ex.P1 cheque was belongs to her account
and also admits her signature on the cheque. She further
admits that after dishonour of cheque, she got phone message
from the bank. She further admits that Ex.P1 cheque was
dishonoured which issued by her. She further stated that she
was not enquired to the Complainant about misusing of her
cheque. She further stated that, she was not taken any legal
action and police complaint with respect of misusing of cheque
by the Complainant. She denied that, the present cheque and
cheque in C.C.No.50216/2021 were issued by her for
repayment of the debt amount.
25. Considering the oral and documentary evidence, it is
clear that the Ex.P1 cheque was issued by the Accused and
also admits her signature on the cheque. During the course of
arguments, the learned counsel for Accused vehemently argued
that, Ex.P1 cheque amount is illegal one. They stated that, the
cheque was issued by the Accused was misused by the
Complainant and filed false complaint against the Accused.
Further submits that, the Complainant is dealing with
construction activities and cannot issue any type of loans.
Therefore, the Complainant has not paid loan to the Accused
23 C.C.No.51694/2021
and Accused has not issued Ex.P1 cheque towards discharge of
any debt. Therefore, the alleged contract between Complainant
and Accused are illegal. In this regard, the learned counsel for
Accused relied on decision of Hon’ble High Court of
Karnataka in Cri.Petn.No.1387/20211 in the case of R.
Parimala Bai V/s.Bhaskara Narasimhaiah where in paragraph
No.21, the Hon’ble High Court of Karnataka held that;
“As could be seen from the rulings cited by the
learned counsel for petitioner and the provision of
Sec.23 of Indian Contract Act, it is crystal clear that, if
on the basis of a void contract particularly if the
consideration is illegal and consideration is for
immoral or illegal purposes or which is against the
public policy, then the whole transaction becomes
void, the consideration paid in such contract becomes
an illegal consideration and when it is said it is legal
or unlawful consideration, it cannot be at any stretch
of imagination called as a legally recoverable debt.”
Further, the learned counsel for Accused submitted that,
being a construction company the Complainant cannot doing
financial business and directors are not provided loan to the
others. In this regard they drawn the attention of this court to
Sec.185 of Companies Act which read thus;
24 C.C.No.51694/2021
185- Loans to directors, etc.,
1- No company shall, directly or indirectly,
advance any loan, including any loan represented by a
book debt to, or give any guaranty or provide any
security in connection with any loan taken by –
(a)- Any director of a company or of a company
which is its holding company or any partner or relative
of any such director or
(b) Any firm in which any such director or
relative is a partner.
2 – A company may advance any loan including
any loan represented by a book debt, or give any
guaranty or provide any security in connection with
any loan taken by any person in whom any of the
director of the company is interested, subject to the
condition that …….
Further the learned counsel for Accused relied Sec.186 of
Companies Act about loan and investment by company.
26. On the other hand, the learned counsel for
Complainant Accused relied on Sec.378 ZK of Companies Act
where it reads thus;
378 ZK – Loan etc., to members – The board
may subject to the provisions made in Articles,
25 C.C.No.51694/2021
provide financial assistance to the members of the
producer company by way of,
(a) Credit facility, to any member, in connection
with the business of the producer company, for a
period not exceeding six months.
(b) Loans and advances, against security
specified in Articles to any member, repayable within
a period exceeds 3 months but, not exceeds 7 years
from the date of disbursement of such loan or
advances.
27. It is pertaining to note that as per Ex.D3 Agreement
of Sale of undivided share which executed between
Complainant and Accused for purchase of flat B-101 on ground
floor and construction agreement between Complainant and
Accused and both agreements are admitted by the Accused. It
is contention of the Complainant that, Accused and her
husband approached to the Complainant for financial
assistance and on the trust, the Complainant company paid
Rs.1 crore to the Accused which borne on account statement of
the Complainant through RTGS. The cheque amount is
Rs.29,50,000/-. The other cases filed by the Complainant
against the Accused and her husband the cheque amount in
that cases is Rs.60,00,000/- and Rs.29,50,000/-. Therefore,
26 C.C.No.51694/2021
the total amount is Rs.1,19,00,000/-. The learned counsel
for Accused submits that it is more than loan amount.
Therefore, the cheque amount is illegal. On the other hand, the
learned counsel for Complainant submits that, as per
construction agreement and Ex.D5 para No.4, the GST and
CGST amount is Rs.58,19,140/-. In the cross-examination the
Accused admits that, CGST and GST amount is
Rs.58,19,140/-. He further admits that the cheque amount is
include GST.
The learned counsel for Accused relied on decision of
Hon’ble Supreme Court in the case of N. Vijay Kumar V/s.
Vishwanatha Rao N. in Cri. Apl.No.5305/2024 where the
Hon’ble Apex Court by observing the CaseLaw in Vijay V/s.
Lakshman held that;
The High Court has rightly accepted the version
given by the respondent – Accused herein. We say so
far reasons more than one. In the first place the story
of the Complainant that he advanced a loan to the
respondent – Accused is unsupported by any material
leave a loan and documentary evidence that any such
loan transaction had ever taken place. So much so, the
complaint does not even indicate the date on which the
loan was demanded and advanced. It is blissfully silent
27 C.C.No.51694/2021
about these aspect thereby making the entire story
suspect. We are not unmindful of the fact that, there is
a presumption that the issue of a cheque is for
consideration. Sec.118 and 139 of N.I.Act make that
abundantly clear. That presumption is, however,
rebuttable in nature. What is most important is that,
the standard of proof required for rebutting any such
presumption is not as high as that required of the
prosecution. So long as the Accused can make his
version reasonably probable, the burden of rebutting
the presumption would stand discharged. Whether or
not it is so in a given case depends upon the facts and
circumstances of the case. It is trite that the courts can
take into consideration the circumstances appearing in
the evidence to determine whether the presumption
should be held to be sufficiently rebutted. The legal
position regarding the standard of proof required for
rebutting the presumption is fairly well settled by a
long line of decisions of the court.”
28. As per the contention of the Accused Ex.P1 blank was
handed over to the Complainant for a tax purpose towards the
sale transaction. She denied that, the Complainant has paid
loan of Rs.1 crore to her. On the other hand, the Accused
admitted that she and her husband were approached the
Complainant with intending to purchase the flat from the
28 C.C.No.51694/2021
Complainant through R.K. Brooke Square. It is also not denied
by the Accused for execution of Ex.D3 and construction
agreement. Further it is admitted that Ex.D3 and construction
agreement are still in existence. It is not proved by the Accused
that Ex.D3 and construction agreement are cancelled and
Complainant is to be refund the earnest amount paid by them.
On the other hand, from bank account statement the
Complainant has paid Rs.1 crore to the account of the Accused
through RTGS. The statement of the Accused is that amount is
refund of the advance amount paid by them. Without
cancellation of agreement of sale and construction agreement, it
is not possible to refund the advance amount. Moreover, as
admitted by both parties, the loan of Rs.2,40,00,000/- was paid
by the Karnataka Bank in favour of Complainant. Therefore,
Rs.1 crore amount paid by the Complainant on 30,8.2019 was
loan amount and towards repayment of loan amount, 3
cheques issued by the Accused and her husband. Therefore,
Ex.P1 cheque issued by the Accused is legally recoverable debt.
Further the Accused has not denied Ex.D3 and Construction
Agreement and also Tripartite Agreement and also not denied
both were executed by her and her husband was present at the
29 C.C.No.51694/2021
time of execution and also admits that both documents are in
the custody of bank. Therefore, Ex.P1 cheque was issued by the
Accused towards repayment of part of the loan amount.
29. As discussed above, it has to be presumed that the
cheque in question was issued by the accused to discharge
the legally recoverable debt or liability. The accused can place
rebuttal evidence so as to show that the cheque was not issued
for consideration. As appreciated supra, accused has failed to
put acceptable and satisfactory evidence to probabilise the
defence. Therefore, there is no question of saying that the
cheque was not issued for liability. Therefore, complainant has
discharged his initial onus laid on him. When he has
discharged his initial onus, it raises presumption U/s 118(a)
and 139 of Negotiable Instruments Act. Accused has failed to
rebut the presumption either in cross-examining PW-1 or in her
evidence.
30. So, far as sentence and compensation is concern, an
offence punishable under Section 138 of N.I. Act, is a civil
wrong and compensatory in nature, punitive is secondary,
considering, the above settled principle of law with facts and
30 C.C.No.51694/2021
circumstances of the case, which clearly reveals that, towards
discharge of loan amount, the cheque in question of issued by
the accused to the complainant. Therefore, considering the
nature of transaction, duration of pendency, litigation
expenses, I am opinion that, if sentence of fine of
Rs.38,35,000/- (Rupees Thirty-eight Lakhs and Thirty-five
Thousand only) is imposed that would meet the ends of
justice, accordingly, the accused is hereby sentenced to pay a
fine of Rs.38,35,000/- (Rupees Thirty-eight Lakhs and
Thirty-five Thousand only) out of that, the complainant is
entitled for a sum of Rs.38,30,000/- (Rupees Thirty-eight
Lakhs and Thirty Thousand only) as a compensation as per
Sec.357(1) of Cr.P.C., remaining amount of Rs.5,000/-, is to be
appropriated to the state, in case of default the accused shall
undergo simple imprisonment for a period of 6 months.
Accordingly, the Point No.1 is answered in Affirmative.
31. POINT No.2: In view of discussion held in Point No.1,
I proceed to pass the following:
ORDER
Acting U/S 255(2) of Cr.P.C., the accused is
convicted for the offence punishable Under Section
138 of Negotiable Instrument Act.
31 C.C.No.51694/2021
Accused is sentenced to pay fine of
Rs.38,35,000/- (Rupees Thirty-eight Lakhs and
Thirty-five Thousand only) in default to undergo
simple imprisonment for 6 months. Further, it is
made clear that out of fine amount,
Rs.38,30,000/- (Rupees Thirty-eight Lakhs and
Thirty Thousand only) is to be paid to the
complainant as compensation and Rs.5,000/- is
ordered to be remitted to the State.
Bail bond stands cancelled.
Supply the free copy of this judgement to the
Accused forthwith.
Supply the free copy of this judgement to the
Accused forthwith.
(Dictated to the stenographer, transcribed by her, corrected by me
and then pronounced in the open court on this 19th August, 2025)
Digitally signed by
PARVEEN A PARVEEN A
BANKAPUR
BANKAPUR (PARVEEN A BANKAPUR)
Date: 2025.08.20
15:06:07 +0530
XXXIV ACJM, BENGALURU.
ANNEXURE
1. Witnesses examined on behalf of Complainant:
P.W.1 Mr. Rathnakar Shetty
2. Documents marked on behalf of complainant:
Ex.P.1 Cheque
Ex.P.2 Bank endorsement
Ex.P.3 Office copy of legal notice
Ex.P.4 Postal receipt
Ex.P.5 Postal acknowledgement
Ex.P.6 Reply
Ex.P.7 Certified copy of Board Resolution
Ex.P.8 Copy of Tripartite Agreement
32 C.C.No.51694/2021
3. Witnesses examined on behalf of Accused:
D.W.1 Mrs. Roopa Hari Ganesh
4. Documents marked on behalf of Accused:
Ex.D.1 Certified copy of deposition in PCR
No.53102/2020
Ex.D.2 Certified copy of deposition in PCR
No.53103/2020
Ex.D.3 Certified copy of receiptEx.D.4 Certified copy of notice
Ex.D.5 Certified copy of list of value
Ex.D.6 Certified copy of Agreement of Sale of Undivided
Share
Ex.D.7 & 8 Sale deeds
Digitally signed by
PARVEEN A PARVEEN A BANKAPUR (PARVEEN A BANKAPUR)
BANKAPUR Date: 2025.08.20
15:06:12 +0530 XXXIV ACJM, BENGALURU.