Bangalore District Court
Pushpa vs Nagarathna on 3 March, 2025
KABC0C0186762021
IN THE COURT OF XIV ADDL.CHIEF JUDICIAL
MAGISTRATE, MAYOHALL UNIT, BENGALURU
Dated this the 3rd day of March, 2025
Present: Sri.SANTHOSH S.KUNDER., B.A.,LL.M.,
XIV Addl. C.J.M., Bengaluru.
JUDGMENT UNDER SECTION 355 of Cr.P.C
C.C.No. 55795/2021
Smt.Pushapa,
Complainant W/o Venkatesh,
Aged about 48 years,
R/at No.160, J.B.Kaval,
KHB Colony, Krishnananda Nagar,
Near Police Quarters,
Raksha Hospital Road,
Nandini Layout, Bengaluru.
(By Sri.Chandrappa.K.N & Yashwanth.D.,
Advocates)
V/s
Accused Smt.Nagarathna,
W/o Late. Thammaiah,
Aged about 65 years,
R/at No.28, 1st floor,
1st Cross, 1st Main,
Nanjappa Layout,
Adugodi, Bengaluru.
(By Sri.Hemanth.K.M., Advocate)
Offence U/s 138 of Negotiable Instruments Act
Plea of the Pleaded not guilty
accused
Final Order Accused is held guilty & convicted
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This complaint is filed under Section 200 of Cr.P.C,
for the offence punishable under Section 138 of the
Negotiable Instruments Act.
2. Complaint averments in brief:
The complainant and accused are known to each
other for several years. The accused used to borrow hand
loan from the complainant. She had approached the
complainant and requested to lend ₹25,00,000/- for
meeting her financial necessities. Heeding to the request
made, the complainant has lent ₹25,00,000/- to the
accused during 1st week of October, 2018. The accused
had promised to repay the debt within three months.
Between 2019 to 2021, she has repaid ₹6,50,000/- to the
complainant. She is liable to pay outstanding of
₹18,50,000/- to the complainant. In the year 2021, the
complainant was in serious financial crisis. Accordingly,
on 13.03.2021, she had approached the accused
demanding repayment of said sum. At that time, the
accused had issued two post-dated cheques, i.e., cheques
bearing Nos.415722 for ₹10,00,000/- and 415723 for
₹8,50,000/-, drawn on Syndicate Bank, Balepet,
Bengaluru, both dated 19.04.2021. As per the
instructions of the accused, the complainant had
presented the said cheques for encasment through State
Bank of India, Longford Town Branch, Bengaluru. But,
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both cheques came to be dishonored with endorsements
'drawers signatures differs', dated 22.04.2021. Thereafter,
the complainant has approached the accused and
informed her about the dishonor of the cheques and
demanded payment of amount covered under the said
cheques. Since, the accused was trying to dodge the
matter, left with no other alternative, on 18.05.2021 the
complainant has got issued a legal notice calling upon the
accused to pay the dishonored cheques' amount. The said
notice was served on 19.05.2021. But, she has not
complied with the demand made in the notice. Therefore,
this complaint is filed.
3. This court took cognizance of the offence
punishable under Section 138 of N.I.Act. Sworn statement
of the complainant recorded. As there were prima facie
materials, criminal case was registered and accused was
summoned.
4. Pursuant to the summons, accused has
appeared before the court and got enlarged on bail. After
compliance of Sec.207 of Cr.P.C, this court recorded her
plea by reading over the substances of accusation. She
has pleaded not guilty and claimed to be tried.
5. The complainant examined herself as PW-1
and got marked documents at Ex.P-1 to 13. Accused was
examined under Sec.313 of Cr.P.C. She has denied the
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incriminating evidence. In defence, she has examined
herself as DW-1 and Bank Manger of Canara Bank,
Chikpet Branch is examined as DW-2. Documents at
Ex.D-1 to 31 are marked for accused.
6. Heard argument on both side.
7. Advocate for accused has also filed notes of
argument with documents.
8. Points for consideration:-
1. Whether the complainant has proved
that the accused has drawn two cheques
bearing Nos.415722 for ₹10,00,000/-
and 415723 for ₹8,50,000/- both
dtd.19.04.2021, on Syndicate Bank,
Balepet branch, Bengaluru in favour of
the complainant towards discharge of
legally recoverable debt/liability and the
said cheques were dishonored for the
reason 'drawers signatures differs' and in
spite of service of statutory notice dated
18.05.2021, she has failed pay the
amount covered under the cheques and
thereby committed the offence punishable
under Section 138 of N.I.Act?
2. What order?
9. The above points are answered as under:-
Point No.1 : In the affirmative.
Point No.2 : As per final order; for the following:
REASONS
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10. Point No.1:- Before going to the merits of the case, it
would be appropriate to note that as per Section 138 of
the N.I.Act, following ingredients have to be proved by the
complainant:
1.The accused has issued a cheque on
the account maintained by him with a
bank.
2. The said cheque has been issued in
discharge, in whole or in part, of any
legal debt or other liability.
3. The said cheque has been
presented to the bank within a period
of three months from the date of
cheque or within the period of its
validity.
4. The aforesaid cheque, when
presented for encashment, was
returned unpaid/dishonoured.
5. The payee of the cheque issued a
legal notice of demand to the drawer
within 30 days from the receipt of
information by him from the bank
regarding the return of the cheque.
6. The drawer of the cheque failed to
make the payment within 15 days of
the receipt of aforesaid legal notice of
demand.
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11. It is also apt to discuss that a negotiable
instrument including a cheque carries following
presumptions in terms of Section 118(a) and Section 139
of the N.I.Act.
(i) Section 118 of the N.I.Act provides;
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:"
(ii) Section 139 of the N.I.Act provides
as follows:
'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".
Thus, the combined effect of Section 118(a) and
Section 139 of N.I.Act 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.
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12. For appreciating legal position, it is worth to
refer to the judgment of the Hon'ble Supreme Court in the
case of Hiten P.Dalal V.Bratindranath Banerjee: (2001)
6 SCC 16, wherein it was held that:
"22. Because both Sections 138 and
139 require that the Court "shall
presume" the liability of the drawer of
the cheques for the amounts for which
the cheques are drawn, as noted in
State of Madras vs.A.Vaidyanatha Iyer
AIR 1958 SC 61, it is obligatory on the
Court to raise this presumption in every
case where the factual basis for the
raising of the presumption had been
established. "It introduces an exception
to the general rule as to the burden of
proof in criminal cases and shifts the
onus on to the accused" (ibid). Such a
presumption is a presumption of law,
as distinguished from a presumption of
fact which describes provisions by
which the court 'may presume" a
certain state of affairs. Presumptions
are rules of evidence and do not conflict
with the presumption of innocence,
because by the latter all that is meant
is that the prosecution is obliged to
prove the case against the accused
beyond reasonable doubt. The
obligation on the prosecution may be
discharged with the help of
presumptions of law or fact unless the
accused adduces evidence showing the
reasonable possibility of the
nonexistence of the presumed fact."
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13. Similar view has been taken by the Hon'ble
Supreme Court in K.N.Beena vs. Munyappan and Ors.,
AIR 2001 SC 289.
14. Further, Hon'ble Supreme Court in Kalamani
Tex and Anr. Balasubramanian, 2021 SCC Online SC
75, held that:
"14. Adverting to the case in hand, we
find on a plain reading of its judgment
that the trial Court completely
overlooked the provisions and failed to
appreciate the statutory presumption
drawn under Section 118 and Section
139 of NIA. The Statute mandates that
once the signature (s) of an accused on
the cheque/negotiable instrument are
established, then these 'reverse onus'
clauses become operative. In such a
situation, the obligation shifts upon the
accused to discharge the presumption
imposed upon him."
15. From the aforesaid judgments, it is clear that for
the offence under Section 138 of the Act, the
presumptions under Section 118 (a) and Section 139 of
N.I.Act have to be mandatorily raised as soon as execution
of cheque by the accused is admitted or proved by the
complainant and thereafter, burden shifts on the accused
to prove otherwise. A presumption is not in itself evidence
but only makes a prima facie case for a party for whose
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benefit it exists. Presumptions, both under Sections 118
and 139 of N.I.Act are rebuttable in nature.
16. It is useful to refer to the judgment of the
Hon'ble Apex Court in M/s Kumar Exports Vs. Sharma
Carpets, (2009) 2 SCC 513, wherein it was held:-
"20. The accused in a trial under
Section 138 of the Act has two options.
He can either show that consideration
and debt did not exist or that under
the particular circumstances of the
case the non existence of
consideration and debt is so probable
that a prudent man ought to suppose
that no consideration and debt
existed. To rebut the statutory
presumptions an accused is not
expected to prove his defence beyond
reasonable doubt as is expected of the
complainant in a criminal trial. The
accused may adduce direct evidence
to prove that the note in question was
not supported by consideration and
that there was no debt or liability to be
discharged by him. However, the
Court need not insist in every case
that the accused should disprove the
nonexistence of consideration and
debt by leading direct evidence
because the existence of negative
evidence is neither possible nor
contemplated. At the same time, it is
clear that bare denial of the passing of
the consideration and existence of
debt, apparently would not serve the
purpose of the accused. Something
which is probable has to be brought on
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record for getting the burden of proof
shifted to the complainant. To disprove
the presumptions, the accused should
bring on record such facts and
circumstances, upon consideration of
which, the Court may either believe
that the consideration and debt did
not exist or their nonexistence was so
probable that a prudent man would
under the circumstances of the case,
act upon the plea that they did not
exist. Apart from adducing direct
evidence to prove that the note in
question was not supported by
consideration or that he had not
incurred any debt or liability, the
accused may also rely upon
circumstantial evidence and if the
circumstances so relied upon are
compelling, the burden may likewise
shift again on the complainant. The
accused may also rely upon
presumptions of fact, for instance,
those mentioned in Section 114 of the
Evidence Act to rebut the
presumptions arising under Sections
118 and 139 of the Act."
17. Now coming to the merits of the case, where
the complainant is contending that the accused used to
borrow hand loan from her. Out of such acquaintance,
she had again requested to lend hand loan of
₹25,00,000/-. Accordingly, during first week of October,
2018, she has lent ₹25,00,000/- to the accused, who in
turn promised to repay the same within three months.
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The complainant is further contending that out of
₹25,00,000/-, the accused had repaid ₹6,50,000/- from
2019 to 2021 and towards repayment of balance sum of
₹18,50,000/-, the accused had drawn the subjects
cheques, which, on presentation, returned unpaid for the
reason 'drawers signatures differs' and in spite of service
of statutory notice, she has failed to pay the cheques'
amount.
18. In order to prove the case, the complainant has
examined herself as PW-1. She has filed her sworn
affidavit where she has reiterated the complaint
averments. Ex.P-1 to 13 marked through her. Ex.P-1 and
2 are subject cheques; Ex.P-3 and 4 are bank
endorsements; Ex.P-5 is copy of the legal notice dated
18.05.2021; Ex.P-6 is postal receipt; Ex.P-7 is postal
acknowledgment card; Ex.P-8 is certified copy of charge
sheet and its enclosures in Cr.No.106/2019 of Adugodi
Police Station; Ex.P-9 is copy statement of accused
recorded by Gyanabharathi Police in Cr.No.96/2019;
Ex.P-10 is copy of legal notice dated 23.01.2020 issued by
the accused to one H.V Venkatalakshmamma; Ex.P-11 is
true copy of FIR in Cr.No.252/2021 of Channammanakere
Achukattu P.S; Ex.P-12 is certified copy of FIR in
Cr.No.99/2019 of Hanumanthanagar P.S and Ex.P-13 is
copy of legal notice dated 06.02.2020 issued by the
accused to one Smt.Leelavathi.
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19. On the other hand, the accused has examined
herself as DW-1. She has also got summoned the then
Bank Manager, Canara Bank, Chikpete Branch,
Bengaluru as DW-2. Of documents marked for the
accused, Ex.D1 to 6 are copies of property tax receipts
pertaining to the complainant; Ex.D7 to 9 are
photographs of house of the complainant; Ex.D10 is RC
details of vehicle bearing registration No.KA04MV4554,
registered in the name of complainant; Ex.D11 and 15 are
copies of notice dated 15.03.2021 issued by the accused
to the complainant; Ex.D12 is invitation card of house
warming ceremony of the complainant; Ex.D13 is cheque
bearing No.978784 dated 17.11.2018 drawn in favour of
Lakshmamma; Ex.D14 is bank endorsement, Ex.D16 is
postal receipt; Ex.D17 is postal acknowledgment card;
Ex.D18 and 24 are copies of complaint lodged to
Commissioner of Police, Bengaluru City; Ex.D19 is letter
dated 06.09.2022 issued to the accused by Chief
Manager, Canara Bank, Chickpet, Bengaluru; Ex.D20 and
21 are account statements of the accused, Ex.D22 is
certified copy of sale deed dated 03.10.2018 executed by
the accused herein in favour of one M.V Somashekar;
Ex.D23 is endorsement issued by the Police
Commissioner; Ex.D25 is true copy of statement of the
complainant herein; Ex.D26 and 27 are cheque books
containing record slips (all cheques are exhausted);
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Ex.D28 is note book maintained by the accused; Ex.D29
is certified copy of charge sheet and its enclosures in
Cr.No.134/2021 of Adugodi P.S; Ex.D30 is record
maintained by bank regarding reason for dishonor of
cheques and Ex.D31 is e-mail.
20. The complainant has reiterated the complaint
averments in her affidavit. She was cross-examined by the
learned counsel for the accused. It is elicited that the
complainant is working as Manager in a medical shop and
her husband is an Auto Rickshaw Driver and an
Agriculturist. In the year 2017-18, her salary was
₹40,000/- per month. Previously, she was earning
₹20,000/- per month. It is elicited that in the year 2017,
the complainant was getting rental income of ₹50,000/-
per month. It was suggested that in year 2017 and
2018-19, the complainant paid property tax of ₹1,136/-
and ₹21,183/- respectively. Tax receipts pertaining to
properties confronted to PW-1 and the same are marked
as Ex.D1 to 6. Three photographs of house building of
complainant are confronted and the same are marked as
Ex.D7 to 9. It is suggested that the PW-1 owns Fortuner
Car. She has stated that for purchasing the said car she
has borrowed loan of ₹20,00,000/-. RC details of the said
vehicle confronted and the same is marked as Ex.D10. It
is elicited that the complainant is maintaining two bank
accounts in Bank of Baroda (erstwhile Vijaya Bank) and
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State Bank of India. It is also elicited that husband of the
complainant also operates bank accounts in the said
banks. Her mother Lakshmamma is also maintaining
bank account in State Bank of India.
21. It is elicited that accused is a retired school
teacher. PW-1 has admitted that accused has issued legal
notice to her and the same is confronted and marked at
Ex.D11. However, she has denied the suggestion that after
the receipt of the notice, she had threatened the accused
to file a complaint against her. It is elicited that accused
had filed private complaint (PCR No.13542/2021) before
VI ACMM and in that case, police filed charge sheet and
CC.No.8838/2022 has been registered against the
complainant.
22. During further cross-examination dated
13.07.2022, PW-1 has asserted that she has lent money
to the accused in October 2018. PW-1 has admitted that
she has received the notice dated 15.03.2021 issued by
the accused. It is elicited that in the said notice the
accused has asserted that in November, 2018 she has
borrowed loan of ₹10,00,000/-. In reply, PW-1 has stated
that she has issued reply to the said notice saying that
sum of ₹25,00,000/- lent in first week of October, 2018.
PW-1 has denied the suggestion that the said
₹10,00,000/- was lent in cash on 20.11.2016 on interest
@ 3%. She has also denied the suggestion that four
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cheques were taken from the accused for security. It is
elicited that in the year 2016, PW-1 has availed loan of
₹25,00,000/- in Pragathi Co-operative Bank and
₹10,00,000/- was lent to the accused out of the said loan
amount. It is also elicited that the daughter of PW-1 went
to abroad for higher education. It is elicited that in the
year 2017, complainant has performed house warming
ceremony and the invitation card is confronted and
marked at Ex.D12. One cheque, i.e., cheque bearing
No.978784 dated 17.11.2018 drawn on Syndicate Bank,
Banashankari Branch has been confronted to PW-1 and
elicited that the said cheque was issued by the accused
for repayment of the loan. The said cheque is marked as
Ex.D13. She has stated that she has returned the said
cheque to the accused as it was dishonored. Bank
endorsement confronted to PW-1 and marked at Ex.D14.
PW-1 has denied suggestion that the cheque was returned
to the accused after taking money in cash from her.
23. During further cross-examination dated
13.07.2022 it was questioned as to in what mode the
accused has returned ₹6,50,000/-, PW-1 has stated the
said money was paid through bank transfer. It is elicited
that notice dated 15.03.2021 has been received by PW-1.
In the said notice accused has stated that loan was
availed in November, 2016. In reply, to the said suggestion
PW-1 has stated that accused has stated so, but loan of
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₹25,00,000/- availed in October, 2018 and in this regard,
she has sent a reply. PW-1 has denied the suggestion that
she has availed loan of ₹1,00,000/- from the accused in
cash for expenses towards house warming ceremony. She
has also denied the suggestion that the accused has paid
₹7,72,500/- on different dates through cheques. PW-1
has stated that she has spent about ₹75,00,000/- to
₹80,00,000/- lakhs for construction of house. It was
suggested that the accused had given two cheques for
surety for purchasing vehicle. It is also suggested that
from December, 2016, the accused has repaid ₹50,000/-
per month. It was also suggested that the accused has
paid ₹50,000/- each on 16.12.2016, 12.01.2017,
14.02.2017, 15.03.2017, 14.04.2017, 12.05.2017,
12.06.2017, 13.08.2017, 14.09.2017 and 16.10.2017 and
₹1,50,000/- on 14.07.2017. PW-1 has denied all these
suggestions. PW-1 has also denied the suggestion that the
accused has paid a sum of ₹7,72,500/- through cheque
and ₹16,00,000/- in cash and in all she has repaid
₹23,72,500/-.
24. During cross-examination dated 26.07.2022, it
is elicited that the accused has remitted money to the
bank account of her husband thrice. It was suggested that
on 19.12.2019 and 30.01.2020, the accused has remitted
₹40,000/- and ₹10,000/- respectively, to the bank
account of the husband of the complainant. PW-1 has
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reiterated that money was remitted thrice. PW-1 has
denied the suggestion that on 20.03.2019 the daughter of
the accused has remitted a sum ₹50,000/- to the bank
account of husband of the complainant. PW-1 has also
denied the suggestion that in the year 2018, the accused
had sufficient funds in her hands and as such, she had
no necessity to borrow loan from the complainant. She
has also denied the suggestion that at the time of
borrowing loan, the accused had issued four signed blank
cheques without mentioning the dates. She has also
denied the suggestion that the subject cheques were
issued by the accused in year 2016, but not in the year
2021.
25. Now coming to the evidence of accused, who in
her examination-in-chief deposed that in November, 2016,
during demonetization, the complainant called her and
told that she has sufficient money in her hands and asked
her to take the money for lending on interest. Accordingly,
she give ₹10,00,000/- saying that ₹20,80,000/- should be
returned in three years with interest. She had also told
that from December, 2016, interest @ ₹50,000/- shall be
paid. Accordingly, she has paid interest every month.
DW-1 has further deposed that in the year 2016,
complainant borrowed loan from Janapragathi Co-
operative Society for construction of house. She had asked
the accused to pay ₹50,000/- every month towards said
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loan. But, accused had told that she will not pay
₹50,000/-, instead she would pay money every month to
her. Accordingly, she has paid money to the complainant
every month. DW-1 has stated that she had paid
₹16,63,000/- to the complainant in cash. She has also
paid ₹1,77,500/- to her daughter through bank transfer.
She has further asserted that she had paid ₹6,65,000/- to
the complainant and her husband Venkatesh by way of
bank transfer. DW-1 has further stated that in November
2016, at the time of lending ₹10,00,000/-, complainant
had taken four blank cheques for ₹5,00,000/- each. DW-1
has further asserted that in all, she has paid
₹25,05,000/- or ₹25,15,000/- to the complainant. She
has further asserted that during house warming
ceremony, she has paid ₹1,00,000/- to the complainant.
Further, she has stated that she has paid ₹1,00,000/- to
the complainant in cash at the time of purchasing
vehicle. Further, in the year 2018, she has paid
₹1,00,000/- to the complainant for the purpose of higher
education of her daughter. DW-1 further has deposed that
on 15.03.2021, she has issued a legal notice to the
complainant. Copy of the said notice, postal receipt and
postal acknowledgment card are produced and same are
marked at Ex.D15 to 17, respectively. She has also
produced copy of complaint dated 27.05.2021 lodged to
Police Commissioner which is marked at Ex.D18. DW-1
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has further asserted that on 26.02.2021, she has issued
stop payment instruction to her banker in respect of
cheques bearing No.415722, 415723, 415725 and 800846
(correct cheque numbers are stated in chief-examination
dated 19.09.2022). She has stated that the bank account
pertaining to those cheques were closed in
February/March 2021. However, being unaware of the
same, the complainant has presented the cheques for
encashment.
26. DW-1 was further examined-in-chief on
19.09.2022. She has produced letter dated 06.09.2022
issued by her banker and the same is marked at Ex.D19.
Further, she has produced her bank statements which are
marked at Ex.D20 and 21. Ex.D22 is the certified copy of
the sale deed dated 03.10.2018. Base on ExD22, she has
asserted that she had sufficient money in her hands and
as such, she was not in need of money during 2018. She
has further deposed that she has lodged a complaint to
police against the complainant as per Ex.D24 and the
police recorded her statement. Copies of statement of
complainant and police endorsement are marked Ex.D23
and 25. DW-1 has further deposed that on 17.11.2018,
she gave one cheque for ₹1,00,000/- to the complainant
as she was in urgent need of money for visa for her
daughter. Further, in the cheuqe which was issued for
₹18,000/-, the complainant altered the cheque amount.
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Therefore, it was dishonored. DW-1 has produced two
cheques containing 'Record Slips', which are marked
Ex.D26 and 27. Relevant entries in 'Record Slips' are
marked at Ex.D26(a) and 27(a). Further, DW-1 has also
produced certified copy of charge sheet and all its
enclosures in PCR No.13542/2021. The said document is
marked at Ex.D29.
27. Counsel for the complainant cross-examined
DW-1 and elicited that cheques in question belong to her
and it bear her signatures. She has admitted that Ex.P7
(postal acknowledgment card) bears her signature. She
has admitted that the notice delivered to her address. But,
she has not issued reply. She has volunteered that since
she gave notice to the complainant earlier to the notice at
Ex.P5, she did not reply to the legal notice. She has
admitted that Ex.D1 to 6 and 10 are printouts of
computer generated documents. She has admitted that in
Ex.D26(a) and 27(a), cheques' amount has not been filled.
She has admitted that entries in Ex.D28 do not have the
signatures of complainant and her husband. DW-1 has
also admitted that except Ex.D28, there are no documents
to show that the complainant and her husband
acknowledged the receipt of money. DW-1 has volunteered
that except cheque at Ex.D13, there are no other
documents. She has also admitted that there is no
document to show that she has paid ₹20,80,000/- to the
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complainant. She has volunteered that out of
₹20,80,000/-, she has paid ₹16,63,000/- by cash. She
has denied the suggestion that she has borrowed
₹25,00,000/- from the complainant and out of that, a
sum of ₹6,50,000/- has been repaid and in order to avoid
payment of balance of ₹18,50,000/-, she has issued false
notice to the complainant. When DW-1 was questioned
that if she had any difficulty to lodge complaint against
the complainant saying that she is not returning the
cheque in spite of repayment of money, DW-1 has replied
that she had been to Adugodi P.S, but no one was present
in the police station due to Covid. It was suggested that as
on 15.03.2021 there was no Covid in Bengaluru. She has
denied the suggestion that she had never been to police
station and a complaint was lodged directly to Police
Commissioner to suppress the real facts. It is elicited that
one Manjula, wife of Shanker lodged complaint against
DW-1 to Adugodi P.S and case in CC.No.21354/2019 is
pending for consideration. Certified copy of charge sheet
has been confronted to DW-1 and same is marked as
Ex.P8. She has denied the suggestion that she had
borrowed money from many people and without repaying
the same, she has issued legal notice to them. A copy of
notice issued to one Venktalakshmamma is confronted to
DW-1 and the same is marked as Ex.P10. It is elicited that
one Usharani has lodged complaint against DW-1 and FIR
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has been registered in Channamanakere Acchukattu
Police Station. A copy of FIR confronted and same is
marked as Ex.P11. Like wise, one Shanker has also lodged
complaint against her. A copy of FIR and complaint are
together marked as Ex.P12. Notice issued to one
Leelavathi is confronted and same is marked as Ex.P13.
She has denied the suggestion that she is in the habit of
borrowing money from others and issuing notice to them.
She has denied the suggestion that she has managed to
registered a false case against the complainant by
colluding with police and the police filed charge sheet
against the complainant as per Ex.D29.
28. Accused has got summoned Bank Manager of
Canara Bank, Chikpet Branch, who is examined as DW-2.
During his examination-in-chief, he has deposed that
Syndicate Bank has been merged with Canara Bank with
effect from 01.04.2021 and that Ex.D19 has been issued
by him. He has stated that on 26.02.2021, the accused
has issued stop payment instruction to Syndicate Bank
and there afterwords, she has not done any transaction in
the said account. He has stated that the subject cheques
i.e., cheques bearing Nos.415722 and 415723 were
received in the bank for clearance and those cheques were
dishonored for the reason 'drawers signatures differs'.
DW-1 has produced information sheet containing
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dishonor of cheques and e-mail, which are marked at
Ex.D30 and D31, respectively.
29. Learned counsel for the accused cross-
examined DW-2 with permission of the court after
declaring him as a hostile witness. During his cross-
examination, it was suggested that the accused had also
requested for closure of her account on 26.02.2021. DW-2
has stated that she has given only stop payment
instruction. When it was questioned as on the date of
presentation of subject cheques for encashment, if the
bank account of the accused was operating, DW-2 has
answered affirmatively.
30. Upon going through the oral and documentary
evidence produced by both side, it is forth coming that the
defence of the accused is that she had borrowed a sum of
₹10,00,000/- from the complainant in November, 2016
and she is asserting that she has repaid the same with
interest. She is also asserting that as on the date of
alleged borrowing of money as sought to be contended by
the complainant, she had sufficient funds in her hands
and that she had no necessity to borrow money from the
complainant in the year 2018. Accused is also contending
that the subject cheques and other cheques were taken by
the complainant as security at the time of lending
₹10,00,000/- in the year 2016. The accused is also
contending that she had given two cheques to the
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complainant in order to facilitate her to avail vehicle loan.
Apart from these contention, the accused has also set up
defence that she herself had helped the complainant
financially.
31. Case of the complainant is that the accused
has borrowed hand loan of ₹25,00,000/- during first week
of October 2018 and repaid ₹6,50,000/- from 2019 to
2021. According to her, for payment of balance of
18,50,000/-, the accused has drawn the subject cheques
at Ex.P1 and 2. Indisputably, these cheques were drawn
on the bank account of the accused. Accused is not
disputing her signatures on the cheques. Accused has
admitted that the dishonored cheques belong to her and
were drawn on the bank account maintained by her in
Syndicate Bank, Balepet branch, Bengaluru.
32. Hon'ble Apex Court in Bir Singh vs Mukesh
Kumar, (2019) 4 SCC 197 held as follows:
"37. A meaningful reading of the
provisions of the Negotiable
Instruments Act including, in
particular,, Sections 20, 87 and 139,
makes it amply clear that a person
who signs a cheque and makes it over
to the payee remains liable unless he
adduces evidence to rebut the
presumption that the cheque had
been issued for payment of a debt or
in discharge of a liability. It is
immaterial that the cheque may have
been filled in by any person other than
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the drawer, if the cheque is duly
signed by the drawer. If the cheque is
otherwise valid, the penal provisions
of Section 138 would be attracted.
33. It is also not in dispute that the cheques were
presented for encashment well within its validity period
and both the cheques were dishonored on 22.04.2021 for
the reason 'drawers signature differs', vide endorsements
at Ex.P3 and 4. After the receipt of intimation of dishonor
from the bank, the complainant has issued a demand
notice in writing to the accused as per Ex.P-5 within the
period specified in proviso (b) of Section 138 of NI Act.
Accused is not disputing the service of demand notice.
During cross-examination dated 14.10.2022, she has
admitted in clear terms that address to which the notice
was sent is that of her address and the notice delivered to
the said address. But, according to her, someone has
received the notice and kept in her house. She has
admitted that she has not issued reply to the said notice.
Relevant portion of deposition of DW-1 dated 14.10.2022
is extracted as under:-
"XXXX ನಿಪಿ.7 ರಲ್ಲಿ ನಮೂದಿಸಿರುವ ವಿಳಾಸ ನನ್ನದೇ.
ಅದಕ್ಕೆ ನಿಮ್ಮ ಮನೆಯವರೇ ಯಾರೋ ಸಹಿ ಮಾಡಿದ್ದಾರೆ
ಎಂದರೆ ಸಾಕ್ಷಿ ಯಾರು ಸಹಿ ಮಾಡಿದ್ದಾರೆ ಎಂದು ಗೊತ್ತಿಲ್ಲ,
ಆದರೆ ನೋಟೀಸನ್ನು ಪಡೆದುಕೊಂಡು ಮನೆಯಲ್ಲಿ ಇಟ್ಟಿದ್ದರು
ಎನ್ನುತ್ತಾರೆ. ಸದರಿ ನೋಟೀಸ್ ಗೆ ನಾನು ಜವಾಬು ಕೊಟ್ಟಿಲ್ಲ.
ನಾನು ಮೊದಲೇ ನೋಟೀಸ್ ಕೊಟ್ಟಿದ್ದ ಕಾರಣ ಸದರಿ
ನೋಟೀಸ್ಗೆ ಉತ್ತರ ನೀಡಿಲ್ಲ ಎನ್ನುತ್ತಾರೆ.XXXXX"
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34. As noted earlier, the accused has admitted her
signature on the cheques in issue and hence, a mandatory
presumption under Section 139 N.I.Act has to be raised in
favour of the complainant. In view of the same, the burden
is upon the accused to rebut the presumption that such
liability does not exist, by adducing evidence. Thus, it is
for the accused to raise a probable defence to rebut said
presumption. Therefore, now I shall examine whether the
accused has been successful in probabilizing her defence.
35. Accused is contending that she has borrowed
loan of ₹10,00,000/- from the complainant in the year
2016 and repaid the same. She is also contending that at
the time of borrowing loan of ₹10,00,000/- from the
complainant, she had taken four cheques for security. To
substantiate the defence, the accused has placed heavy
reliance on note-book entries at Ex.D28, where she has
recorded in handwriting that she has in all paid a sum of
₹25,05,500/- to complainant and her husband.
Complainant has denied the payment of money as
recorded in Ex.D28 during her cross-examination dated
13.07.2022. Relevant portion of deposition of PW-1 dated
13.07.2022 is extracted hereunder:-
"XXXXX 2016 ಡಿಸೆಂಬರ್ ನಿಂದ ಪ್ರತಿ ತಿಂಗಳು
ಆರೋಪಿ ನಿಮಗೆ ಬಡ್ಡಿ ಮತ್ತು ಅಸಲು ಸೇರಿಸಿ 50,000-00
ರೂ ಗಳನ್ನು ಕೊಡುತ್ತಾ ಬಂದಿರುತ್ತಾರೆ ಎಂದರೆ ಸಾಕ್ಷಿ ಸುಳ್ಳು
ಎನ್ನುತ್ತಾರೆ. ದಿ.16.12.2016 ರಲ್ಲಿ 50,000-00,
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ದಿ.12.01.2017 ರಲ್ಲಿ 50,000-00, ದಿ.14.02.2017
ರಲ್ಲಿ 50,000-00, ದಿ.15.03.2017 ರಲ್ಲಿ 50,000-00,
ದಿ.14.04.2017 ರಲ್ಲಿ 50,000-00, ದಿ.12.05.2017
ರಲ್ಲಿ 50,000-00, ದಿ.12.06.2017 ರಲ್ಲಿ 50,000-00,
ದಿ.14.07.2017 ರಲ್ಲಿ ಗೃಹಪ್ರವೇಶಕ್ಕಾಗಿ 1,50,000-00,
ದಿ.13.08.2017 ರಲ್ಲಿ 50,000-00, ದಿ.14.09.2017
ರಲ್ಲಿ 50,000-00, ದಿ.16.10.2017 ರಲ್ಲಿ 50,000-00,
ಇನ್ನೂ ಇತರೆ ದಿನಂಕಗಳಲ್ಲಿ ಹಣವನ್ನು ಕೊಟ್ಟಿದ್ದು, ಆ ಸಂಬಂಧ
ಈಗ ತೋರಿಸುತ್ತಿರುವ ಪುಸ್ತಕದಲ್ಲಿ ಆರೋಪಿ ಬರೆದಿಟ್ಟಿದ್ದಾರೆ
ಎಂದರೆ ಸಾಕ್ಷಿಯು ಸರಿಯಲ್ಲ ಎನ್ನುತ್ತಾರೆ. ಚಕ್ ಮುಖಾಂತರ
7,72,500-00 ಮತ್ತು ನಗದಾಗಿ 16,00,000/- ಒಟ್ಟು
23,72,500-00 ಹಣ ನಿಮಗೆ ಆರೋಪಿ ಕೊಟ್ಟಿದ್ದಾರೆ
ಎಂದರೆ ಸಾಕ್ಷಿಯು ಸರಿಯಲ್ಲ ಎನ್ನುತ್ತಾರೆ."
36. As per the entries made in Ex.D28, a sum of
₹16,63,000/- was repaid by way of cash and a sum of
₹8,42,500/- was paid through cheques. In this context, it
is pertinent to note that except the entries in Ex.D28, no
other documents are produced to substantiate the
contention that the accused has repaid a sum of
₹16,63,000/- to the complainant/her husband as being
asserted by her. Admittedly, neither the complainant nor
her husband signed the entries in Ex.D28 acknowledging
the receipt of money on the respective dates noted therein.
This has been admitted by the accused during her cross-
examination. Relevant portion of deposition of DW-1 dated
31.10.2022 is extracted hereunder:-
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KABC0C0186762021
"XXXX ನಿಡಿ.28 ರ ಪುಸ್ತಕದಲ್ಲಿ ದೂರುದಾರರಿಗೆ
ಮತ್ತು ದೂರುದಾರರ ಗಂಡನಿಗೆ ಹಣ ಕೊಡಲಾಗಿದೆ ಎಂದು
ಬರೆದಿದ್ದು ಅವರ ಸಹಿ ಪಡೆದುಕೊಂಡಿದ್ದೀರಾ ಎಂದರೆ
ಸಾಕ್ಷಿಯು ಇಲ್ಲ ಎನ್ನುತ್ತಾರೆ. ನೀವು ಹಾಗೆ ಹಣ ಕೊಟ್ಟಿರುವ
ಮತ್ತು ಅವರು ಪಡೆದುಕೊಂಡಿರುವ ಬಗ್ಗೆ ಬೇರೆ
ಯಾವುದಾದರೂ ದಾಖಲೆ ಇದೆಯಾ ಎಂದರೆ ಸಾಕ್ಷಿ ಇಲ್ಲ
ಎನ್ನುತ್ತಾರೆ. ನಿಡಿ.13 ರ ಚಕ್ ಒಂದನ್ನು ಬಿಟ್ಟು ಬೇರೆ
ಯಾವುದೇ ದಾಖಲೆ ಇಲ್ಲ ಎನ್ನುತ್ತಾರೆ. "
37. Ex.D13 is cheque dated 17.11.2018 drawn in
favour of one Lakshmamma, the mother of the
complainant for ₹82,500/- and it appears from Ex.D14
that the said cheque was dishonored. During cross-
examination of PW-1, it was suggested that Ex.D13 was
dishonored for the reason that it was materially altered by
her and that the accused paid the amount towards the
said cheque and thereafter, it was returned to her. Of
course, there is an entry in Ex.D28 to the effect that
cheque amount of ₹82,500/- was paid to said
Lakshmamma. Again, this is also a self-serving entry
without corroborative evidence. Thus, this court holds
that the entries in Ex.D28 regarding payment of
₹16,63,000/- in cash by the accused to complainant/her
husband, have not been proved.
38. In order to substantiate that the subject
cheques and other cheuqes were issued to the
complainant in the year 2016, the accused has produced
record slips in cheque books which are marked at Ex.D26
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and 27; and relevant entries are marked at Ex.D26(a) and
27(a). Entries relating to the subject cheques (Ex.P1 and
2) and other two cheques, viz., cheques bearing
No.415725 and 800846 are finding place in Ex.D26(a). As
per the said entries, the cheques in question and other
two cheques were issued on 20.11.2016. There is also a
reference to the effect that blank cheques were issued
towards security. As per the assertion of the accused, she
has repaid sum of ₹25,05,500/- from 2016-2021. The
accused has produced copies of legal notice dated
15.03.2021, marked at Ex.D11 and 15, which indicate
that the accused herein issued the said legal notice to the
complainant asserting that the complainant had taken
four cheques viz., cheques bearing Nos.415722, 415723
(subject cheques), 415725 and 000846 for ₹5,00,000/-
each. Relevant paragraph of Ex.D11/15 is extracted
hereunder:-
"2. XXXX Our client further instructs that you
also instructed our client to give the said
money to our client's known people, collect
money with interest from them and to pay
you back. You have also said that you can
earn more income for the said amount. Based
on the above said assurance given by you, on
20.11.2016, you have paid our client
Rs.10,00,000/- (Rupees Ten Lakh only) by
Cash of old currency notes and immediately
asked our client to pay interest regularly, so
that our client to have responsibility to pay
principle with interest at the rate of 3% per
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month and you have collected 4 (four)
Cheques from our client on 20.11.2016. The
details of Cheques is as follows:-
i) Cheque No.415722 only mentioning the
amount of Rs.5,00,000/- only, drawn on
Syndicate Bank, Balepet Branch, Bengaluru
ii) Cheque No.415723 only mentioning the
amount of Rs.5,00,000/- only, drawn on
Syndicate Bank, Balepet Branch, Bengaluru
iii) Cheque No.415725 only mentioning the
amount of Rs.5,00,000/- only, drawn on
Syndicate Bank, Balepet Branch, Bengaluru
iv) Cheque No.000846 only mentioning the
amount of Rs.5,00,000/- only, drawn on
Syndicate Bank, Balepet Branch, Bengaluru
Our client further instructs that you
have directed our client only to write the
amount on the said four cheques, saying that
2 cheques for principle amount and 2
cheques for security amount on the principle
amount of 10,00,000/- (Rupees Ten Lakh
only) paid to our client on 20.11.2016.
Our client further instructs that you
have directed our client to pay cash only as
principle with interest payable to you since
November, 2016. XXXXX"
39. As per the contents of the said notice, the
aforesaid cheques (including cheques pertaining to the
case on hand), were issued by the accused to the
complainant for ₹5,00,000/- each, by specifically writing
the cheque amount as ₹5,00,000/-. If really, the accused
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had issued those cheques by writing the cheque amount
thereon, then all the cheques should reflect the amount of
₹5,00,000/-. But, in the cheques on hand, i.e., Ex.P1 and
2, amount is mentioned as ₹10,00,000/- and
₹8,50,000/-, respectively. Therefore, very assertion of the
accused that she had issued four cheques to the
complainant in the year 2016 towards security for the
loan of ₹10,00,000/- that was allegedly borrowed in the
year 2016, cannot be believed. It is apparent from Ex.P1
and 2 that it was drawn on 19.04.2021 for ₹10,00,000/-
and ₹8,50,000/- respectively. If really, the said cheques
were given in the year 2016, by mentioning the cheques
amount as ₹5,00,000/-, certainly the cheques should
reflect the amount as ₹5,00,000/- each. During cross-
examination dated 31.10.2022, DW-1 has admitted that
there are no documents to show that four cheques were
given to the complainant in the year 2016. Relevant
portion of deposition of DW-1 reads as under:-
"XXXXX ಪುಪ್ಪಾರವರಿಗೆ 2016 ರಲ್ಲಿ 4 ಚೆಕ್ಕನ್ನು ಕೊಟ್ಟಿರುವ
ಬಗ್ಗೆ ಏನಾದರೂ ದಾಖಲೆ ಇದೆಯಾ ಎಂದರೆ ಸಾಕ್ಷಿ ಇಲ್ಲ
ಎನ್ನುತ್ತಾರೆ.XXXX "
40. Therefore, in the absence of supporting
evidence, merely on the basis of entries made in the
record slip by the accused herself, court cannot appreciate
the contention of the accused.
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41. Yet another defence taken by the accused that
she had given instruction to her banker, i.e., Syndicate
Bank, Balepet branch, to close her bank account along
with 'stop payment' instruction. This contention has
been taken by the accused for the first time during cross-
examination of DW-2. Relevant portion of deposition of
DW-2 reads as under:-
"ದಿ.26.02.2021 ರಂದು ಆರೋಪಿ ಸ್ಟಾಪ್ ಪೇಮೆಂಟ್
ಇನ್ಸ್ಟ್ರಕ್ಷನ್ಸ ಜೊತೆಗೆ ಖಾತೆಯನ್ನು ಮುಚ್ಚಲೂ ಕೂಡಾ ಮನವಿ
ಮಾಡಿದ್ದರು ಎಂದರೆ ಸಾಕ್ಷಿ ಸರಿಯಲ್ಲ, ಅವರು ಸ್ಟಾಪ್ ಪೇಮೆಂಟ್
ಮಾಡಲು ಮಾತ್ರ ಕೋರಿಕೆ ಸಲ್ಲಿಸಿದ್ದಾರೆ ಎನ್ನುತ್ತಾರೆ.XXXXX"
"XXXX ಮೇಲೆ ಹೇಳಿದ ಎರಡು ಚಕ್ಕುಗಳನ್ನು ನಗದೀಕರಣಕ್ಕೆ
ಸಲ್ಲಿಸಿದ ದಿನಾಂಕದಂದು ಸದರಿ ಆರೋಪಿ ಖಾತೆ ಚಾಲ್ತಿಯಲ್ಲಿತ್ತಾ
ಎಂದರೆ ಸಾಕ್ಷಿ ಹೌದು ಎನ್ನುತ್ತಾರೆ. ನೀವು 26.02.2021 ರಂದೇ
ಖಾತೆ ಮುಚ್ಚಲು ಕೋರಿದ್ದರೂ ಕೂಡಾ ಮತ್ತು ಆ ಸಂಬಂಧ ಬ್ಯಾಂಕ್
ಚಾರ್ಜಸ್ ಕಟಾವು ಮಾಡಿಕೊಂಡಿದ್ದರೂ ಕೂಡಾ ದಿ.08.06.2021
ರಂದು ಆರೋಪಿ ಖಾತೆಯನ್ನು ಮುಚ್ಚಿದ್ದೀರಿ ಎಂದರೆ ಸಾಕ್ಷಿ ಸರಿಯಲ್ಲ
ಎನ್ನುತ್ತಾರೆ. ಅಕೌಂಟ್ಕ್ಲೋಸರ್
ಗೆ ಯಾವಾಗ ಆರೋಪಿ ಮನವಿ
ಸಲ್ಲಿಸಿದ್ದಾರೆ ಎಂದರೆ ಸಾಕ್ಷಿ 26.02.2021 ರ ನಂತರ
ಸಲ್ಲಿಸಿರಬಹುದು ಎನ್ನುತ್ತಾರೆ.XXXXX"
42. Accused has produced Ex.D19, i.e., letter
dated 06.09.2022 issued by Canara Bank (erstwhile
Syndicate Bank) Chikpete-II branch, Bengaluru, where it
is appearing that the accused has issued 'stop payment'
instruction to her bank on 26.02.2021 and it was for that
reason eight cheques (including the subject cheques) were
not passed. There is also a mention in Ex.D19 that the
account was closed on 08.06.2021. Thus, it can be seen
from Ex.D19 that the bank account of the accused was
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closed on 08.06.2021, whereas, the cheques in question
were presented for clearance in April, 2021 and those
cheques were dishonored on 22.04.2021 for the reason
'drawers signatures differs'.
43. It is admitted by DW-1 during her cross-
examination dated 31.10.2022 that as on the date of
giving 'stop payment' instruction on 26.02.2022, there
was about ₹6,000/- to ₹8,000/- was in her bank account.
Relevant portion of deposition of DW-1 dated 31.10.2022
extracted as under:-
"XXXXX ದಿನಾಂಕಃ 26.02.2021 ಕ್ಕೆ ನೀವು ಸ್ಟಾಪ್
ಪೇಮೆಂಟ್ ಮಾಡಿದ್ದು ಆ ದಿನಾಂಕದಂದು ನಿಮ್ಮ
ಖಾತೆಯಲ್ಲಿ ಹಣ ಇತ್ತಾ ಎಂದರೆ ಸಾಕ್ಷಿ ಸುಮಾರು 6
ರಿಂದ 8 ಸಾವಿರ ಇತ್ತು ಎನ್ನುತ್ತಾರೆ. XXXX"
44. As could be seen from Ex.D30, the cheques
were dishonored for the reason 'drawers signatures
differs'. Thus, upon going through the documents placed
on record, particularly Ex.D19, bank account of the
accused was closed on 08.06.2021 which is after the
dishonor of the cheques. It is evident from Ex.D30 and
Ex.P3/P4 that the cheques in question were dishonored
for the reason 'drawers signatures differs' and not for the
reason 'account closed/payment stopped'. Therefore,
testimony of DW-2 that the cheques were dishonored for
the reason 'payment stopped' is not substantiated by
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document. On the contrary, document produced by
himself at Ex.D30, shows that the cheques were
dishonored for the reason 'drawers signatures differs'.
Evidence on record does not substantiate the contention
of the accused that she had requested for closure of her
bank account way back on 26.02.2021 as sought to be
contended by her. Notwithstanding the reason for
dishonor of cheques, indisputably the cheques were not
honored and returned unpaid. It is brought on record that
as on the date of dishonor of cheques, the accused hardly
had sufficient balance to honor the cheques. Therefore,
penal liability would attract under Section 138 of NI Act.
45. The accused has produced Ex.D29 containing
order sheet, charge sheet and its enclosures in
Cr.No.134/2021 of Adugodi Police Station, which indicate
that the accused herein filed PCR No.13542/2021 on the
file of VI ACMM, Bengaluru and after the investigation, the
complainant and her husband have been charge sheeted
for the offences punishable under Section 389, 420 and
506 R/w Section 34 of IPC and CC.No.8838/2022 has
been registered against them which is pending for trial.
During the course of argument, learned counsel for the
accused has submitted that during investigation the
police have collected sufficient evidence against the
complainant and her husband and filed charge sheet
against them alleging that they have retained security
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cheques in spite of receiving a sum of ₹24,12,500/- from
the accused. In this context, it is to be noted that the said
private complaint was filed by the accused herein on
16.07.2021 which is after the filing of complaint on hand.
Further, the charges made on the complainant and her
husband in the said criminal case is yet to be proved by
the prosecution. Therefore, this court holds that Ex.D29
does not come to aid of the accused to disprove the case of
the complainant. At the cost of repetition, it is reiterated
that apart from her self-serving statement in the legal
notice at Ex.D11/15, and self-serving entries in Ex.D28,
no evidence is placed on record to substantiate that she
has paid a sum of ₹25,05,500/- to the complainant and
she has no subsisting debt payable to the complainant.
46. Learned counsel for the accused cited following
judgments:-
Sl. Judgments
No.
1. Sri.Dattatraya V/s Sharanappa;
(2024) 8 SCC 573
2. Smt.Nirmala.S Ramadurga
V/s Gurupadyya.G.Hiremath;
AIR Online 2024 KAR 608
3. Charles Harry V/s Praveen Jain;
2024 (1) KCCR 545
4. Jadesha Reddy V/s G.Chandranna;
AIR Online 2023 KAR 202
5. Jithendra Kumar N.M V/s Smt.Rajani
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Gururaj; AIR Online 2024 KAR 659
6. Basalingappa V/s Mudibasappa;
(2019) 5 SCC 418
7. Rajarama Sriramulu Naidu V/s
Maruthachalam;
AIR 2023 SC 471
8. M.S Narayana Menon V/s State of Kerala
& Other; (2006) 6 SCC 39
9. Smt.Lakshmi Subramanya V/s
Sri.B.V Nagesh
(2013) 3 KCCR 1940
I have gone through the judgments cited by the
advocate for the accused.
47. In Basalingappa vs Mudibasappa, (2019) 5
SCC 418, Hon'ble Supreme court has summarised the
principles governing the offence under Section 138 of
N.I.Act which is extracted as under:-
"25. We having noticed the ratio laid
down by this Court in above cases on
Sections 118(a) and 139, we now
summarise the principles enumerated
by this Court in following manner:
(i) Once the execution of cheque is
admitted Section 139 of the Act
mandates a presumption that the
cheque was for the discharge of any
debt or other liability.
(ii) The presumption under Section 139
is a rebuttable presumption and the
onus is on the accused to raise the
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probable defence. The standard of
proof for rebutting the presumption is
that of preponderance of probablities.
(iii) To rebut the presumption, it is open
for the accused to rely on evidence led
by him or accused can also rely on the
materials submitted by the
complainant in order to raise a
probable defence. Inference of
preponderance of probabilities can be
drawn not only from the materials
brought on record by the parties but
also by reference to the circumstances
upon which they rely.
(iv) That it is not necessary for the
accused to come in the witness box in
support of his defence, Section 139
imposed an evidentiary burden and not
a persuasive burden.
(v) It is not necessary for the accused to
come in the witness box to support his
defence."
48. In Sri.Dattatraya V/s Sharanappa; (2024) 8
SCC 573, Hon'ble Supreme Court held as follows:-
"13. This Court in ICDS Ltd. v. Beena
Shabeer and Another[(2002) 6 SCC 426],
has held that proceedings under Section 138
of the NI Act 1881 can be initiated even if the
cheque was originally issued as security and
was subsequently dishonoured owing to
insufficient funds. The failure to honour the
concerned cheque is per se deemed as a
38
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commission of an offence under Section 138
of the NI Act 1881.
14. The NI Act 1881 enlists three
essential conditions that ought to be fulfilled
before the said provision of law can be
invoked. Firstly, the cheque ought to have
been presented within the period of its
validity. Secondly, a demand of payment
ought to have been made by the presenter of
the cheque to the issuer, and lastly, the
drawer ought to have had failed to pay the
amount within a period of 15 days of the
receipt of the demand. These principles and
pre-requisites stand well established through
Judgment of this Court in Sadanandan
Bhadran v. Madhavan Sunil
Kumar[(1998) 6 SCC 514]. There is an
explicit limitation of 30 days, beginning from
period when the cause of action arose,
prescribed by the statute vide Section 142(b)
of the NI Act 1881 to initiate proceedings
under Section 138 of the NI Act 1881.
15. Furthermore, this Court expounded
that the issuance of cheque towards a
liability, the presentation of the cheque within
the prescribed period, its return on account of
dishonour, notice to the accused, and failure
to pay within 15 days thereof, stand as sine
qua non for an offence under Section 138 of
the NI Act 1881 as per the decision in K.
Bhaskaran v. Sankaran Vaidhyan Balan
and Another[(1999) 7 SCC 510]. The same
was subsequently reiterated in numerous
judgments of this Court as well as that of the
High Courts."
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49. It is a settled position of law that in a
prosecution for the offence under Section 138 of NI Act, to
rebut the statutory presumptions under Section 118 and
139 of NI Act, an accused is not an expected to prove his
defence beyond reasonable doubt as is expected of the
complainant. He may adduce direct evidence to prove that
there was no debt or liability to be discharged by him. He
is expected of to bring something probable on record for
getting the burden of proof shifted to the complainant. In
the present case, though statutory demand notice served
on the accused, she has not chosen to issue reply to the
said notice. Hon'ble High Court of Karnataka in S.K
Honnappa V/s S.A Murthy (Crl.R.P.No.768/2018; D.D
12.08.2024), in para No.12 and 13, observed as under:-
"12. The expression, "for the discharge, in
whole or part, of any debt or other liability"
is very important. That means the
complainant, i.e., the holder of a cheque
must disclose in the first instance in his
demand notice the transaction that gives
rise to debt or other liability to be discharged
and then the same must be stated in the
complaint also. Once such a disclosure is
made and primary foundation is led in
evidence, presumption can be drawn. To put
it in other words, presumption can be drawn
only in respect of disclosed or stated
transaction, not undisclosed transaction.
Mere acceptance of signature on the cheque
by its drawer does not lead to presumption
if the transaction engendering the liability is
40
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not stated. Since presumption to be drawn
under section 139 leads to fastening
criminal liability on the drawer of the
cheque, the complainant cannot rest
expecting the court to draw presumption in
his favour without disclosing the
transaction.
13. As a corollary to this, in order to hold the
defence version probable, the drawer of the
cheque must come out with his defence in
his reply notice, and any defence introduced
for the first time either at the time when
complainant or his witnesses are cross
examined or when he leads evidence does
not carry as much weight as it carries if
there was disclosure at the earliest point of
time i.e., before the criminal action is
initiated."
50. It is true that before the service of demand
notice, the accused did sent a notice to the complainant
as per Ex.D11/15 by contending that she has given four
cheques to the complainant towards security for the loan
₹10,00,000/- that was allegedly borrowed by her in
November, 2016 and she had called upon the complainant
to return the cheques to her. In this context, it is observed
above that the accused has failed to prove borrowing of
loan ₹10,00,000/- by her from the complainant and also
failed to prove that those four cheques were given for
security of the said loan in the year 2016. It is evident
from the notices at Ex.P10 and 13 that the accused issued
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notices to one Smt.H.V Venkatalakshmamma and
Smt.Leelavathi which are similar to that of the notices at
Ex.D11/15, where also, the accused has contended that
she has given the cheques to them for security and
demanded for return of those cheques. Learned counsel
for the complainant had argued that the accused is in the
habit of borrowing loan(s) from others by giving security
cheques and without repaying the loan(s), when the lender
is about to deposit the cheques for encashment, she use
to issue such notices as is issued in this case, in order
escape from the penal liability. He has argued that it is
the modus operandi of the accused. During the course of
cross-examination dated 09.12.2022, accused has stated
that she has documents to show that she was repaid
₹16,00,000/- to the complainant. But, no such
documents produced before the court to substantiate the
said assertion. Thus, it appears that the accused has sent
notices at Ex.D11/15 dated 15.03.2021 only to desist the
complainant from presenting the cheques and to escape
from the penal liability arising out of the dishonor of
cheques. If really, there is no liability under cheques,
nothing prevented the accused to issue reply to the
demand notice denying the liability under the dishonored
cheques. But, no such efforts made by the accused.
Materials placed on record prove that the accused has
drawn the subject cheques in favour of the complainant
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for discharge of legal enforceable debt/liability. The
accused has failed to make out a probable defence to
disbelieve the case of the complainant. Therefore, this
court holds that the complainant has successfully proved
that the accused has committed the offence punishable
under Section 138 of N.I.Act. Accordingly, I answer Point
No.1 in the Affirmative.
51. Point No.2:-Punishment prescribed for the
offence under Section 138 of Negotiable Instruments Act
is imprisonment for a period which may extend to two
years or with fine which may extend to twice the amount
of the cheque or with both. Considering the facts and
circumstances of this case, year of the transaction and the
rate of interest stipulated under Section 80 of NI Act, this
court is of the considered view that it is just and desirable
to impose fine of ₹29,00,000/- and out of the said
amount, it is just and proper to award a sum of
₹28,90,000/- as compensation to the complainant as
provided under Section 357(1) (b) of Cr.P.C and the
remaining sum of ₹10,000/- shall go to the State. In view
of the discussions made, I proceed to pass the following:
ORDER
Acting under Section 255(2) of Cr.P.C.,
accused is convicted for the offence
punishable under Section 138 of Negotiable
Instruments Act.
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She is sentenced to pay a fine of
₹29,00,000/-. In default to pay fine, she shall
undergo simple imprisonment for a period of
ten months.
Out of the realized fine amount, a sum of
₹28,90,000/- is ordered to be paid to the
complainant as compensation and the
remaining sum of ₹10,000/- shall be remitted
to State.
Bail bond and surety bond stand
cancelled.
Accused is entitled for a copy of this
judgment free of cost which shall be supplied
to him forthwith.
(Dictated to the Stenographer, transcript computerized by her,
revised corrected and then pronounced by me in the open Court
on this the 3rd day of March, 2025)
( SANTHOSH S.KUNDER )
XIV Addl. C.J.M., Bengaluru.
ANNEXURES
List of witnesses examined for the Complainant:
PW.1 Pushpa
List of documents marked for the Complainant:
Ex.P.1 & 2 Cheques
Ex.P.1(a) Signatures of accused
& 2(a)
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KABC0C0186762021Ex.P.3 & 4 Bank endorsements
Ex.P.5 Copy of legal notice dated 18.05.2021
Ex.P.6 Postal receipt
Ex.P.7 Postal acknowledgment card
Ex.P.8 Certified opy of charge sheet in
Cr.No.106/2019 of Adugodi Police
Ex.P.9 Copy of statement of accused
recorded by Gyanabharathi P.S in
Cr.No.96/2019
Ex.P10 Copy of legal notice dated 23.01.2020
issued by the accused one H.V
Venkatalakshmamma
Ex.P11 True copy of FIR in Cr.No.252/2021
of Channammanakere Achukattu P.S
Ex.P12 Certified copy of FIR in
Cr.No.99/2019 of Hanumanthnagar
P.S
Ex.P13 Copy of notice dated 06.02.2020
issued by the accused to one
Smt.LeelavathiList of witness examined for the defence:
DW.1 Nagarathna DW.2 K.Karthik Tulasi Mohan
List of documents marked for the defence:
Ex.D.1 to 6 Copies of property tax receipts
pertaining to the complainant
Ex.D.7 to 9 Photographs of house of the
complainant
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KABC0C0186762021Ex.D.10 Copy of RC details of vehicle
registration No.KA04MV4554,
registered in the name of complainant
Ex.D.11 & 15 Copy of notice dated 15.03.2021
issued by the accused to the
complainant
Ex.D.12 Invitation card of house warming
ceremony of complainant
Ex.D.13 Cheque bearing No.978784 dated
17.11.2018
Ex.D.14 Bank endorsement
Ex.D16 Postal receipt
Ex.D17 Postal acknowledgment card
Ex.D18 & 24 Copy of complaint lodged to
Commissioner of Police, Bengaluru
City.
Ex.D19 Letter dated 06.09.2022 issued to the
accused by Chief Manager, Canara
Bank, Chickpet, Bengaluru
Ex.D19(a) Signature of DW-2
Ex.D20 & 21 Copy of statements of accused
Ex.D22 Certified copy of sale deed dated
03.10.2018 executed by the accused
in favour of one M.V Somashekar
Ex.D23 Endorsement issued by the Police
Commissioner
Ex.D25 True copy of statement of the
complainant
Ex.D26 & 27 Cheque books containing record slips
Ex.D26(a) Marked portions of Ex.D26 and 27
& 27(a)
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Ex.D28 Note book maintained by the accused
Ex.D29 Certified copy of charge sheet and its
enclosures in Cr.No.134/2021 of
Adugodi P.S
Ex.D30 Record maintained by bank regarding
reason for dishonor of cheques
Ex.D31 E-mail
XIV Addl.C.J.M., Bengaluru.
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