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Bangalore District Court
Sri Gante Yadukumar vs Sri C A Arjun on 16 May, 2025
KABC030017942023
IN THE COURT OF THE XIII ADDITIONAL CHIEF
JUDICIAL MAGISTRATE, BENGALURU CITY
:: PRESENT ::
SMT. PAVITHRA. R, B.A.L, L.L.B.,
XIII ACJM, Bengaluru City.
C.C.NO. 1124/2023
Dated this the 16th day of May, 2025
COMPLAINANT: Sri. Gante Yadukumar,
S/o Late G.C. Shankarappa,
Aged about 63 years,
R/a. No.242-C Old, 18/3,
New K.G.Nagar, 4th Main Road,
Bengaluru - 560 004.
[By Sri. R. Keshava Reddy, Advocate]
V/S
ACCUSED: Sri. C.A. Arjun,
S/o Subramani,
Aged about 32 years,
R/a. No.410/31A, Ground Floor,
Nimishamba Nilaya, 1st Cross,
3rd Block, HBR Layout,
BBMP Ward No.24,
Bengaluru - 560 043.
(By Sri. Manjunatha. S. Advocate)
-2- C.C.No. 1124/2023
Offence complained of : U/s. 138 of N.I. Act.,
Plea of accused : Pleaded not guilty
Final order : Accused is acquitted
Date of order : 16.05.2025
JUDGMENT
This is a private complaint filed by the complainant
under Sec.200 of Cr.P.C., against the accused for the
offence punishable under Sec.138 of Negotiable Instrument
Act, 1881 (in short referred to as N.I. Act).
The brief facts of the case are as under :
2. It is the case of the complainant that the accused
was in dire need of money to tie over the financial crisis
which engulfed the entire family reputation and for the
purpose of personal problems in the first week of October
2021, accused approached the complainant to arrange a
hand loan of Rs.2,67,500/-. Accordingly, the complainant
paid above sum to the accused by way of cash on
05.10.2021 and the same has been duly acknowledged by
-3- C.C.No. 1124/2023
the accused promising the complainant that he will repay
the said amount within 6 months from the date of borrowal.
Even after several requests the accused did not pay above
sum in time and he accused issued two cheques bearing
No.027655 dated 11.07.2022 for a sum of Rs.67,500/-
drawn on Union Bank of India, Baavanagudi Branch,
Bengaluru and cheque No.000023 dated 10.10.2022 for a
sum of Rs.2,00,000/- drawn on HDFC Bank Ltd.,
Devanahalli Branch, Devanahalli in favour of the
complainant towards discharge of aforesaid loan liabilities
i.e. legally enforceable debt assuring that above cheques will
be honored on its presentation as he maintained sufficient
funds. On his assurance the accused presented above
cheques on 07.10.2022 and 11.10.2022 through his Banker
for encashment i.e. Textile Co-operative Bank Ltd., Main
Branch, Bengaluru. Said cheques returned dishonored with
a shara “Funds Insufficient” on 10.10.2022 and another
cheque with a shara “Account Closed” on 12.10.2022.
Above information was intimated to the accused and the
-4- C.C.No. 1124/2023
accused requested to the complainant not to take further
steps and he will arrange for payments. In spite of several
demands, personal visits made by the complainant, accused
has failed and neglected to pay above sum. Hence, without
any alternative complainant issued legal notice to the
accused through his counsel on 07.11.2022 by RPAD
demanding cheque amount. The accused on 09.11.2022
though received legal notice neither repaid the amount nor
replied to the notice. That the accused though issued
cheques towards legal liability has failed to make payment
on its dishonor despite receipt of notice. Thus the accused
has committed the offence punishable u/s.138 of Negotiable
Instrument Act. Hence, this complaint.
3. On filing of this complaint, this court recorded
the sworn statement of the complainant and took
cognizance of the offence and issued summons to the
accused. Accused appeared before the Court through his
counsel and was enlarged on bail and substance of
-5- C.C.No. 1124/2023
accusation was read over to him and he pleaded not guilty
having defense to make. Hence, the matter was posted for
recording of statement U/Sec.313 of Cr.P.C. Since there
was incriminating evidence against the accused, the
statement as required under Sec.313 of Cr.P.C was recorded
and the matter was posted for defense evidence. PW1 was
fully cross-examined by the accused. Accused examined
himself as DW1. During the course of cross-examination of
PW1 accused got marked documents at Ex.D1 to Ex.D6.
4. Heard both the sides. Perused the averments
made in complaint, oral and documentary evidence of the
complainant and after hearing arguments, the points that
arises for determination are:-
1) Whether the complainant has proved that he
lent a sum of Rs.2,67,500/- to the accused
by way of cash. To discharge the said liability
accused issued Ex.P.1 and 2 in favour of the
complainant and the same were dishonored.
Even after issuance of notice, the accused
has failed to pay the cheques amount and
thereby he is guilty of the offence punishable
under Sec.138 of N.I. Act?
-6- C.C.No. 1124/2023
2) What order?
5. Findings to the above points are as under:-
Point No.1 : In the negative
Point No.2: As per final order for the
following:
REASONS
6. Point No.1:- According to the complaint
averments of the complainant, the accused in the first week
of October 2021 approached the complainant seeking hand
loan of Rs.2,67,500/- to meet his financial needs.
Accordingly the complainant paid a sum of Rs.2,67,500/- to
the accused by way of cash. In spite of expiry of 6 months
the accused did not repay above sum and finally in the
month of October accused issued Ex.P.1 and Ex.P.2
cheques, but the same were dishonored and the accused did
not repay the amount even after issuance of legal notice.
7. In order to prove the complainant’s case he got
examined as PW1 by filing an affidavit and got marked 9
documents at the time of his chief examination as follows…
-7- C.C.No. 1124/2023
(i) Ex.P.1 is the cheque of Union Bank of
India bearing No.027655 dated 11.07.2022 for
sum of Rs.67,500/- alleged to have been issued
by the accused. Signature of the accused is
marked through complainant as Ex.P1(a).
(ii) Ex.P.2 is the cheque of HDFC Bank
bearing No.000023 dated 10.10.2022 for sum of
Rs.2,00,000/- alleged to have been issued by the
accused. Signature of the accused is marked
through complainant as Ex.P2(a).
(iii) Ex.P3 and 4 are Bank Endorsements
dated 10.10.2022 and 12.10.2022 issued by
Textile Co-operative Bank Ltd., Main Branch
stating that ‘Funds Insufficient & Account
Closed’.
(iv) Ex.P5 is the legal notice dated
07.11.2022 issued by the complainant through
his advocate to the accused demanding the
payment of cheques amount.
(v) Ex.P.6 is the postal receipt.
(vi) Ex.P.7 is the track consignment report.
(vii) Ex.P.8 is the Statement of account of
complainant of Textile Co-operative Bank
(viii) Ex.P.9 is the statement of account of
complainant of Canara Bank
8. In the chief-examination of P.W.1, he has
reiterated entire averments of the complaint and supported
-8- C.C.No. 1124/2023
his version. The accused admits that the Ex.P1 and 2
cheques belongs to his account but denies his signatures
over the same. From the overall evaluation of oral and
documentary evidence of the complainant it is not in
dispute that the Ex.P1 and 2 cheques belongs to the
accused and complainant was the holder of these cheques
at the time of presentation before the Bank. Hence, these
points are sufficient to raise presumption available under
9. Since above cheques belongs to the accused’s
account and complainant was the holder in due course, the
complainant is benefited to raise presumption under
Sec.118 and 139 of N.I. Act. Thus until and unless the
contrary is proved it is presumed that the cheques-Ex.P1to
3 are issued for the purpose of legal liability.
10. Now the burden shifts on the accused to rebut
the presumption under Sec.118 and 139 of N.I Act from the
-9- C.C.No. 1124/2023
defence points either by giving a standard proof or by
establishing the same under the principles of
preponderance of probabilities.
11. During the cross examination of PW.1, the
accused has taken following defences:
(i) that the complainant had no financial capacity to
lend Rs.2,67,500/- to the accused as on date of alleged loan
a he had no source of income,
(ii) that the accused issued Ex.P1 and 2 cheques for
the purpose of security towards the Chit transaction with
the complainant and
(iii) that the signature found on Ex.P1 and 2 is not
made by the accused.
Rebuttal evidence by the accused:
12. Above mentioned are the specific defences taken
by the accused in this case. Let us analyze whether the
accused has substantiated his defence points. The accused
– 10 – C.C.No. 1124/2023
has lead defence evidence by entering into witness box as
DW.1 and got marked documents at Ex.D.1 to Ex.D.6 as
follows:
(i) Ex.D.1 is the statement of account of accused of
Union Bank of India.
(ii) Ex.D.2 is the account statement of accused of
Karur Vysya Bank.
(iii) Ex.D.3 and 4 are the copies of screenshot of
payment made through Google Pay to complainant.
(iv) Ex.D5 is the copy of FIR in Crime No.73/2022.
(v) Ex.D6 is the copy of FIR in Crime No.76/2022.
13. Firstly: It is the defence of the accused that he
has not borrowed any amount from the complainant and
the accused has questioned the financial capacity of the
complainant. It is an admitted fact that the complainant
and accused knew each other. During cross examination of
PW. 1 dated 04.01.2024 the complainant admits to the
suggestion that he did not possessed a job where he
receives monthly income or annual income. He stated that
he does a saree weaving business. That eight months prior
– 11 – C.C.No. 1124/2023
to filing of this complaint he obtained GST certificate for
sale of saree business. According to complaint the alleged
transaction took place in the first week of October 2021.
The complainant to show he had sufficient income and
capacity to lend money has produced Ex.P8 and 9. On
perusal of Ex.P8 bank statement of the complainant
maintained at Textile Co-operative Bank Limited for the
period 01.01.2021 to 3.12.2021 it is clear that the sum
maintained by the complainant in the said account is only
Rs.1,535/- as on 05.10.2021. On perusal of Ex.P9 bank
statement of the complainant maintained at Canara Bank
for the period 01.01.2021 to 31.12.2021 it is clear that the
sum maintained by the complainant in the said account is
only Rs.41,299/- as on 07.10.2021. Prior to 07.10.2021 I.e
first week of October 2021 or subsequent to that the
complainant never possessed Rs.2,67,500/- in the above
said account.
– 12 – C.C.No. 1124/2023
14. That apart, the complainant has not uttered in
his evidence as to through what source he received
Rs.2,67,500/- and lent it to the accused by way of cash. The
complainant also has stated that at the time of alleged loan
transaction no document was executed between the accused
and the complainant. Though there is inflow and outflow of
money from the account of the complainant, there is no
material on record to show that the complainant possessed
with him Rs.2,67,500/- by way of cash as on date of alleged
loan and the same was handed over to the accused. This
point is brought in the cross examination of PW.1 as one of
the defences of the accused. This defence point is a probable
one looking into the tenor of the cross examination of the
PW.1.
15. Secondly: the accused has taken a major defence
that the he issued Ex.P1 and 2 cheques for the purpose of
security towards the Chit transaction with the complainant.
In support of this defence the accused has produced Ex.D1
– 13 – C.C.No. 1124/2023
statement of accounts of Union Bank of India with respect
to his account for the period 01.10.2020 to 31.03.2022 and
Ex.D2 is the account statement of Karur Vaysya Bank of the
accused. On perusal of the said statements it appears that
the accused has transferred a sum of Rs.12,500/- every
month to the complainant’s account by way of UPI. The said
fact also has been admitted by the PW.1 during his cross
examination dated 01.01.2024.
16. PW.1 admits that the accused has transferred a
sum of Rs.12,500/- per month for 18 months from
01.10.2020 to 01.10.2022. The complainant has given
explanation stating that said amount is with regard to
financial transaction between the accused and
complainant’s son, but the same is denied by the accused.
Ex.P4 transaction reveals that amount was directly paid to
the complainant’s Google pay number “+91 8088088228”
stating “First month Chit Fund for 3 lak”. There is no
evidence by the son of the complainant to show that there
– 14 – C.C.No. 1124/2023
was financial transaction between him and the accused and
towards the said transaction accused has transferred above
sum to his father’s account. Further, he makes an
allegation that the complainant has cheated many persons
by not giving back chit amount complaints in this regard
have been registered against the complainant. In support of
the same the accused has produced Ex.D5 the copy of FIR
in Crime No.73/2022 registered against the accused on a
first information given by one T.S Shilpashree and Ex.D6
the copy of FIR in Crime No.76/2022 registered against the
accused on a first information given by one
Vasanthalakshmi with the Kempegowda Nagar Police
Station. Though above documents are not relevant to this
case, in Ex.D5 it is alleged that the complainant was
conducting chit business. The complainant denies he was
doing chit business, but does not explains and proves as to
why he received amount by the accused in monthly
installments. Looking into the mechanism of transfer of
funds every month with similar quantity i.e Rs. 12,500/- it
– 15 – C.C.No. 1124/2023
can be presumed that the there was a chit transaction
between the complainant and accused as alleged by the
accused. From the discussion made above a doubt arises as
to whether the complainant has misused the cheques which
were given towards chit transaction for the purpose of
security. Hence this is one of the probable defences which is
substantiated by the accused.
17. Thirdly: the accused has disputed signatures on
Ex.P1 and 2 as the same does not belongs to him. On
perusal of Ex.P1 and 2 it is apparent that the signatures
found on Ex.P1 is different from that of the Ex.P2. Though
the accused does not dispute the issuance of cheques to the
complainant, he does not admits Ex.P1(a) and Ex.P2(a) as
his signatures. But Ex.P1 and 2 are not returned with shara
“signature differs”. Further the accused has not taken any
steps to prove that these are not his signatures. Hence the
accused has failed to substantiate the above defence point.
It is relevant to note that the accused has denied that he
– 16 – C.C.No. 1124/2023
has not received the statutory notice. But he has not called
upon the postal authority to contradict the postal
endorsement issued by the said authority which says
delivery is confirmed. Hence mere allegation will not suffice.
18. In the above mentioned background if the first
two defences of the accused is looked into, then a doubt
arises as to whether Ex.P1 and 2 cheques were issued to the
complainant by the accused, is it towards legal liability as
averred in the complaint or is it towards the purpose stated
by the accused in his defence. This suspicion gives way to
believe the contention of the accused who has taken above
defences and been successful in substantiating the same.
Upon consideration of the defence points the accused was
able to raise probable defences in this case as discussed
supra. Hence now, the existence of legally recoverable debt
is in question. Thus, it arises doubt about the existence of
legally recoverable debt. At this stage it is relevant to refer to
decision which is also emphasized by the counsel for the
– 17 – C.C.No. 1124/2023
accused: Basalingappa Vs. Mudibasappa reported in
(2019) 5 SCC 418 regarding “standard of proof to be given
by the accused”. The said decision is aptly applicable to the
case on hand for the reason that the accused by cross
examining the PW.1 effectively elicited facts mentioned
supra which has established his defence points and created
doubt on the case of the complainant. So, that’s a degree of
proof which is akin to preponderance of probability which
shall be produced by the accused in a case under section
138 of N.I Act.
ONUS ON THE COMPLAINANT
19. Since the accused has established his defences
on the principles of preponderance of probability, now the
onus shifts on the complainant to prove his case beyond
reasonable doubt. In order to prove the complainant’s case
beyond reasonable doubt the complainant has relied on
Ex.P1 to 9. Firstly, to establish that the complainant lent a
sum of Rs.2,65,000/- on the alleged date i.e. 05.10.2021 by
– 18 – C.C.No. 1124/2023
way of cash, has not produced any document to believe his
side of the story. Secondly, to establish that he possessed
above cash on the alleged date of transaction and advanced
said cash to the accused, has not produced cogent oral and
documentary evidence. Thirdly, to prove his source of
income and financial capacity at the time of allgede loan
transaction the complainant has not produced single piece
of document. Fourthly, the complainant has failed to
satisfactorily explain for what reason he had received
Rs.12,500/- for 18 months between October 2020 to
October 2022. If at all not for chit transaction, then for what
business is this amount received is not clarified by the
complainant. Fifthly, the UPI- google pay transaction stating
made found in Ex.D4 is not specifically denied by the
complainant which showcases the defence of the accused
stating that the said transaction was made for “First
month Chit Fund for 3 lak”. Advocate for complainant has
relied on a decision rendered by Hon’ble High Court of
– 19 – C.C.No. 1124/2023
Karnataka, in Rajanna Vs. Lokesh. B dated 22.08.2023
reported in 2023 (4) AKR 824, wherein it is held as follows:
“12. The simple defence of accused is that
the blank cheque and On-demand
Promissory Note are given as collateral
security in respect of a Chit Fund
transaction with the complainant.
However, the accused has not placed any
material to show that the complainant was
running any Chit Fund business and Dws.
2 and 3 were the members of the Chit
Fund business. Though DWs 2 and 3 had
deposed regarding Chit Fund Business, but
there is no document to show that they
were part of the Chit Fund transaction.
Hence, the defence raised by the accused
is not probable.
13. On the contrary, facts that the
signature on the cheque and the cheque
belongs to the accused, are undisputed.
Further, again it is corroborated by Ex.P.3,
which is the On-demand Promissory Note
and the Consideration Receipt. Hence, the
initial presumption is in favour of the
complainant under Section 139 of the N.I.
Act, and the accused has failed to rebut
the said presumption.”
The said decision is not aptly to the case on hand for
the reason that the facts and circumstances of these cases
are different from one another and also for the reason that
– 20 – C.C.No. 1124/2023
the accused has successfully rebutted the above
presumption by producing Ex.D4 and as well by effectively
cross examining the PW.1 to the effect admitting the
contents of Ex.D4.
20. The contradictions and discrepancies aroused in
the evidence of the PW.1 is not explained by the
complainant which is a major draw back to the
complainant’s case. No documentary or relative witnesses
have been brought in to prove above points. Any prudent
man who has a genuine case would definitely not let go this
opportunity, but the complainant for the reasons best
known to him has not clarified above point, not produced
documentary evidence to show financial transaction
between him and the accused and to establish his financial
capacity as on date of alleged loan. This being the position
of the complainant, he has failed to establish the fact that
the Ex.P1 and 2 cheques were issued by the accused in his
favour towards discharge of legal liability. The complainant
– 21 – C.C.No. 1124/2023
has not utilized this opportunity. Hence the Court cannot
presume that such a transaction has taken place. This
being the situation there arises a doubt regarding the loan
transaction, issuance of the cheques by the accused for the
purpose referred in the complaint and legality of the
evidence of the complainant. Thus to sum up, the
complainant has not produced cogent oral and documentary
evidence to show that their exists legally recoverable debt of
Rs.7,00,000/- due by the accused. Thus an inference can
be drawn to the effect that the alleged cheques were not
issued by the accused in favour of the complainant for the
purpose mentioned in the complaint.
21. Counsel for the accused has relied on the
following decisions:
1) 2005 (3) KCCR 1576
Devipraad Rai Vs. A.M.Ganesh Rai
Dalmia Cement (Bharat) Ltd. Vs. Galaxy Traders and
Agencies Ltd.
– 22 – C.C.No. 1124/2023
Rajneesh Agarwal Vs. Amit J. Bhalla
4) 1999 (8) SCC 221 = 1999 SCC (Cr) 1411
Central Bank of India Vs. Saxons Farms
5) AIR 2006 SC 3366
M.S. Narayana Menon Vs. State of Kerala
6) ILR 2008 KAR 4629
Shiva Murthy Vs. Amrutharaj
7) 2007 Crl.L.J. 1285 (B)
V.K. Gemini vs. Chandran and another
8) 1995 Cri.L.J. 560
Taher N. Khamabati Vs. M/s. Vinayak Enterprises
K. Subramani Vs. K. Domadara Naidu
10) 2015 (2) Bankmann 111 (Karnataka High Court)
B.Shivara V. M.V.Venkatesh
Smt. Threja Vs. Smt. Jayalaxmi
– 23 – C.C.No. 1124/2023
Amzad Pasha V. H.N.Lakshmana
13) 2008 Cri.L.J. 2955 (B)
Rajendraprasad Gangabishen Porwal V.
Santoshkumar Parasmal Saklecha
Amaravathi Chits Investments V. T.M. Vaidyanathan
15) 2006 (3) SCC (cri) 30
M.S.Narayana Menon Vs. State of Kerala and another
16) AIR 1961 SC 1316
Kundan Lal Rallaram Vs. Custodian, Evacuee
Property, Bombay
17) AIR 1953 SC 225
Hiralal and others Vs. Badkulal and others
18) AIR 1964 SC 136
A. Raghavamma and another Vs. A.Chenchamma
and another
Smt. Threja Vs. Smt. Jayalaxmi
– 24 – C.C.No. 1124/2023
I have gone through all these decisions, the facts and
circumstances of these cases with that of the present one is
different. The legal propositions of theses cases are applied
while appreciating evidence and discussing facts and law
wherever is necessary in the present judgment.
22. In order to constitute an offence under section
138 of N.I Act, there should be an existence of legally
recoverable debt or legal liability, but in this case any of the
ingredients is not in existence as the complainant has failed
to prove the same beyond reasonable doubt who has utterly
failed to prove his financial capacity and existence of legally
recoverable debt. The complainant has failed to prove the
case as required under section 138 of N.I Act for the reasons
discussed supra. All these circumstantial evidence gives
way to doubt the case of the complainant within the ambit
of section 138 of N.I Act. The complainant has failed to
prove his case beyond reasonable doubt and the guilt of the
accused by answering the rebuttal evidence of the accused.
– 25 – C.C.No. 1124/2023
Thus for all these reasons this court finds that the accused
has successfully rebutted the presumption available at the
hands of the complainant and the complainant has
completely failed to prove his case beyond reasonable doubt.
Therefore, in the light of above discussion, the Court answer
point No.1 in the Negative.
23. Point No.2:- Thus in view of the reasons stated
and discussed above the court proceeds to pass the
following:-
ORDER
Acting under Sec.255(1) of Cr.P.C
accused is hereby acquitted of the offence
punishable U/Sec.138 of N.I. Act.
The bail bond of the accused stands
canceled.
(Dictated to the Stenographer directly on computer, revised,
corrected, signed and then pronounced in the open court on this the 16 th
day of May, 2025)(PAVITHRA R.)
XIII ACJM, BENGALURU CITY
– 26 – C.C.No. 1124/2023
ANNEXURE
LIST OF WITNESSES EXAMINED FOR COMPLAINANT:
PW.1 Gante Yadukumar
LIST OF WITNESSES EXAMINED FOR ACCUSED:
DW.1 C.A. Arjun
LIST OF DOCUMENTS MARKED FOR COMPLAINANT:
Ex.P1 & 2 : Original Cheques
Ex.P.1(a) & 2(a) : Signature of the accused
Ex.P.3 & 4 : Bank endorsements
Ex.P.5 : Copy of Legal Notice
Ex.P.6 : Postal receipt
Ex.P.7 : Track consignment report
Ex.P.8 & 9 : Bank account statements of
complainant
LIST OF DOCUMENTS MARKED FOR ACCUSED:
Ex.D.1 : Statement of account of accused of Union
Bank of IndiaEx.D.2 : Account statement of accused of Karur
Vysya BankEx.D.3 & 4 : Copies of screenshot of payment made
through Google Pay to complainant
– 27 – C.C.No. 1124/2023
Ex.D5 : Copy of FIR in Crime No.73/2022
Ex.D6 : Copy of FIR in Crime No.76/2022
XIII ACJM, BENGALURU CITY.
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