Bangalore District Court
Sulochana vs Padmavathi on 12 August, 2025
KABC010062822024
IN THE COURT OF LVIII ADDL. CITY CIVIL &
SESSIONS JUDGE, BENGALURU CITY (CCH-59)
DATED THIS THE 12th DAY OF AUGUST, 2025
PRESENT:
Sri. BALACHANDRA N BHAT,
B.Sc, LL.B, PGDHRL
LVIII Addl. City Civil & Sessions Judge,
Bengaluru.
CRL.A.No.398/2024
APPELLANT / Smt.Sulochana,
ACCUSED W/o. Nagaiah Madatala,
Aged about 44 years,
R/at No.174, Abbigere Main
Road, Kammagondanahalli,
Jalahalli West,
Bengaluru-560 015.
(By Sri.Karthik Kumar R, Adv.)
- VS -
RESPONDENT / Smt.Padmavathi,
COMPLAINANT: W/o. Subbarayudu,
Aged about 44 years,
R/at #19, Anjaneyaswamy
Layout, II Cross, Pipeline Road,
Bengaluru-560 090.
(By Smt.Mamatha S, Adv.)
***
2 Crl.A.No.398/2024
JUDGMENT
The present appeal is preferred by the
appellant/accused under Section 374 (3) of the Code
of Criminal Procedure against the impugned
judgment of conviction and order of sentence passed
by the Court of the learned XII ACMM, Bengaluru in
C.C.No.10372/2021 on 05.02.2024, for the offence
punishable under Sec.138 of the Negotiable
Instruments Act.
2. The parties shall be referred to by the
ranks held by them before the learned trial Court for
the sake of clarity and to avoid confusion.
3. The history of the case could be
summarised in a nut shell as follows;
3a) The complainant and accused claim to be
relatives, classmates and continued to be friends. On
the basis of acquaintances the accused had with the
complainant, he is said to have approached the
complainant during second week of June, 2020
requesting for hand loan of Rs.9,00,000/- for the
purpose of construction. The accused is said to have
promised to repay the amount within six months.
The complainant claims to have had savings from the
3 Crl.A.No.398/2024
pension amount of his mother-in-law and assured
sum from LIC amounting to a tune of Rs.3,00,000/-
that was tendered to 6.06.2020 and remaining
amount of Rs.6,00,000-00 is said to have been paid
in cash on 25.06.2020. The amount of Rs.6,00,000/-
was arranged from the savings of the salary of the
husband of the complainant. The accused is said to
have acknowledged the receipt of this amount.
3b) The complainant claims to have remained
silent till December, 2020 and thereafter, the
complainant had demanded the accused for
repayment of loan. The accused had then issued a
cheque bearing No.082411 dated 16.12.2020 drawn
on Central Bank of India, Abbigere Branch,
Bengaluru for a sum of Rs.9,00,000-00. The
complainant had then presented the cheque to the
drawee bank through his banker on 21.12.2020. The
cheque was returned dishonoured for want of
sufficient funds in the account of the accused with an
endorsement dated 21.12.2020. The accused is said
to have called upon the complainant and threatened
to commit suicide. The complainant claims to have
lodged information with the police station. The
accused had promised to repay the amount on
4 Crl.A.No.398/2024
22.01.2021. The complainant had then approached
the accused requesting her to repay the loan amount
on 23.01.2021. The complainant claims to have
presented the cheque to the drawee bank through his
banker on 30.01.2021. The cheque was again
returned dishonoured for insufficient funds with
endorsement dated 30.01.2021. The complainant had
then got issued legal notice on 3.02.2021. The notice
was served on 4.02.2021 on the accused. The
accused is alleged to have failed to respond to the
notice within the prescribed period. Therefore, the
cause of action for the case had arisen.
4. The complainant filed her affidavit by way
of sworn statement in lieu of her oral evidence
reiterating the complaint averments and got marked
9 documents at Ex.P.1 to Ex.P.9. After service of
summons, the accused appeared through her counsel
and she was enlarged on bail. The accusations were
read over and plea of the accused was recorded. The
accused had pleaded not guilty and claimed to be
tried. Statement of the accused was recorded under
Section 313 of the Code of Criminal Procedure. The
accused examined herself as DW.1 and got marked
one document at Ex.D.1.
5 Crl.A.No.398/2024
5. After hearing both the parties, by
considering the materials on record, the learned trial
Judge has found the accused guilty of the offence
punishable under Sec.138 of the NI Act. Accordingly,
the accused was convicted and sentenced to pay fine
of Rs.9,55,000/-. In default, she shall undergo
simple imprisonment for the term of 6 months. Out
of fine amount of Rs.9,55,000/-, a sum of
Rs.9,50,000/- is ordered to be paid to the
complainant towards compensation under Section
357 of Cr.PC and the balance amount of Rs.5,000/-
shall be remitted to State as defraying expenses.
6. Being aggrieved by the impugned judgment
and sentence, the accused has preferred this appeal
on the grounds that:
6a) The learned Magistrate has committed
grave error in law in taking the cognizance of the
offence and as such the conviction is bad in law and
erred in law in accepting and acting upon the
evidence of PW.1, which is being inadmissible. The
learned Magistrate erred in law in passing an
erroneous judgment which is one sided and the same
is absolutely inadmissible in the eye of law. The
evidence taken by the learned Magistrate is
6 Crl.A.No.398/2024manifestly erroneous and argument employed by the
learned Magistrate for convicting the appellant utterly
unsustainable in law. The complainant has filed a
false complaint against the appellant and the
appellant has not approached the respondent and
she never borrowed the same. The respondent filed a
false case with the created story with an intention to
extract money from the appellant and what is
mentioned in the complaint and sworn statement, the
facts are baseless and respondent also failed to prove
the same, except oral evidence of PW.1, there are no
documents about her lending capacity, her source of
income and even she has not examined her mother-
in-law and husband, where the respondent borrowed
from and at the time of lending money to the
appellant, respondent is a house wife. Even it shows
that, she has no lending capacity, hence, the
interference can be drawn that, the complainant had
not given any said amount to the appellant.
6b) On 07.04.2022, in the cross-examination
of respondent, she has stated that, accused is my
relative since from my childhood, I am an housewife
and I do not no any other work, along with accused, 4
other members have come to me seeking loan, they
7 Crl.A.No.398/2024
are husband of Sulochana, Veeranarayana. The loan
amount was asked to my husband and myself and
my husband have given the amount to the accused.
The respondent has not examined any witnesses, who
were present at the time of giving cash, hence, it
shows that, there is no transaction between the
appellant and respondent. Said amount issued by
her husband and not by her / respondent. Hence,
the inference cannot be drawn against the appellant
that, the appellant obtained loan from the
respondent, which is false and baseless.
6c) The appellant has taken a contention that,
in the year 2017, respondent was running chit fund
business and appellant was member in respondent
chit group and has invested huge amount, during the
bid process, the appellant has bid the amount, at
that time towards security purpose, respondent taken
the disputed cheque from the appellant. After
completion of entire chit fund payment process, the
respondent has not returned security cheque, when
the appellant requested the respondent to return the
cheque, she stated that, the cheque was misplaced
and when she got the cheque, she will return the
same, the appellant with the good faith and trust on
8 Crl.A.No.398/2024
the respondent, appellant quite silent, again when
appellant insisted for return of cheque and made
quarrel, at that time, respondent matter has been
referred to the concerned Police station, from the
police station, the appellant received a call and the
appellant appeared before the police and informed
that, the appellant had not borrowed any money from
the respondent. Thereafter, the Police colluding with
the respondent, forcefully obtained signatures of the
appellant on several documents without explaining.
The appellant is a illiterate lady who don’t know
reading and writing kannada as well as english
except signature in kannada and the same has been
misused. The respondent has not come to the Court
with clean hands. She is not liable to pay the cheque
amount to the respondent.
6d) There was no transaction between the
respondent and the appellant. The appellant never
borrowed loan of Rs.9,00,000/- from the respondent.
The impugned cheque was issued in favour of the
respondent for the purpose of chit transaction as a
security. The respondent has no financial capacity to
lend such huge amount to the appellant. The notice
was not served on her. The respondent has misused
9 Crl.A.No.398/2024
the impugned cheque. Though there is presumption
under Sections 118 and 139 of NI Act, existence of
legally enforceable debt is not a matter of
presumption under Section 139 of NI Act.
6e) It is necessary to consider the statutory
provisions in this regard and also proposition of law.
Section 118 of NI Act lays down that, until the
contrary is proved, it shall be presumed that every
negotiable instrument was made or drawn for
consideration. Section 139 of NI Act contemplates
that, unless the contrary is proved, it shall presume
that holder of the cheque receive the cheque of the
nature referred to section 138 of the NI Act for
discharge, in whole or in part, of any debt or other
liability. The presumption mandated by Section 139
of the Negotiable Instruments Act does indeed show
the existence of legally enforceable debt or liability. It
is a rebuttable presumption. It is open to raise the
defence, wherein,t he existence of legally enforceable
debt or liability can be contested. For rebutting
presumption, accused is not required to adduce
evidence with unduly high standard of proof, but the
standard of proof for doing so is that preponderance
of probability. The appellant has raise probable
10 Crl.A.No.398/2024
defence, which creates doubt about the existence of
legally enforceable debt or liability, then the onus
shift back to the respondent. It is clear that, for
rebutting the presumption, appellant can rely on the
material submitted by the respondent or his cross-
examination and she need not necessarily adduce her
defence evidence in all the cases.
6f) The position of law, which emerges is that,
once issuance of cheque is admitted, the presumption
under Section 118(a) of NI Act would arise that it is
supported by a consideration. Such a presumption is
rebuttal. The accused can prove the non-existence of
a consideration by raising a probable defence. If the
accused is proved to have discharged the initial onus
of proof showing that, the existence of debt was
improbable or doubtful or the same was illegal, the
onus would shift to the respondent, who will be
obliged to prove it as a matter of fact and upon it
failure to prove would disentitle him to grant of relief
on the basis of the negotiable instrument. The
burden upon the accused of proving the non-
existence of the consideration can be either direct or
by bringing on record, the preponderance of
probability by reference to the circumstances upon
11 Crl.A.No.398/2024
which she relies. In the above facts, appellant
successfully proved that, the issuance of impugned
cheque was issued in favour of respondent for the
purpose of chit transaction as a security. It is
contended that, the respondent has no financial
capacity to lend such huge amount to the appellant.
6g) It is suggested to PW.1 : witness says
that, she has given the amount by way of cash. It is
true to suggest that, I have not given the amount to
the accused through bank. My mother in law has got
the LIC amount on 06.06.2020, by way of cash, my
mother in law has received the amount from LIC. It
is true to suggest that, my mother in law has received
the amount from LIC through cash and not through
cheque. To show that my mother in law has received
the amount from LIC, I have not produced the
documents before this Court. My husband does work
in the factory. My husband earns an amount of
Rs.50,000/- per month. We are having one small
turning machine. In this case, no evidence has been
adduced by the respondent to prove the transaction,
which had been categorically denied by the appellant.
The respondent has not placed any material to prove
her financial capacity. In the cross-examination of
12 Crl.A.No.398/2024
respondent, her husband is working and they have a
one small turning machine and two people working in
that factory and earns monthly Rs.50,000/ during
the period of Covid-19, but no documents i.e., IT
returns, GST filing to show that, the respondent runs
a small company and her husband earns an amount
of Rs.50,000/- nor examined her husband before the
Court. No prudent man will sit simply when his wife
led a huge amount of Rs.9,00,000/- and categorically
respondent admitted in her cross-examination that, it
is true to suggest that, cheque is presented in my
name which has been given by accused to my
husband. But the respondent’s husband has not
been examined to support the case of his wife
respondent. The respondent has not placed any
documents or oral submission, what is the difficulties
to examine her husband and her mother-in-law,
hence, the respondent failed to prove that, her
husband was working and earned Rs.50,000/- per
month. No such documents produced nor examined
her husband. No presumption can be drawn that the
respondent has capacity to lend to the tune of
Rs.9,00,000/- merely on the basis of self-serving
statement of the respondent without the proof of
income of the respondent. There is a major
13 Crl.A.No.398/2024
contradiction in the evidence of respondent. The
statement of respondent not corroborated by the
material available on record. Hence, the appellant
borrowed a loan of Rs.9,00,000/- cannot be accepted.
Admittedly, the respondent did not take any
document from the appellant at the time of alleged
loan transaction. No prudent man would lend
substantial amount of Rs.9,00,000/- without
charging interest and that too the said amount in
cash and not by means of any account payee cheque.
Considering the evidence on record, it does appear
improbable that, a loan of Rs.9,00,000/- was given in
cash to the appellant without any interest or
execution of written document. No proof of solvency
has been placed on record by the respondent.
6h) The appellant has denied the financial
capacity of the respondent. On the contrary, the
respondent has produced the complaint before the
Police at Ex.P.7 and statement of appellant Ex.P.8.
As per this document, the respondent mentioned in
her statement that, she received some amount from
LIC. The approximate amount is not mentioned and
some of the amount arranged by hand loan (from
where she arranged not mentioned), a total sum of
14 Crl.A.No.398/2024
Rs.9,00,000/- given to the appellant, it is worth to
mention that, there is contrary statement in her own
complaint and Ex.P.7 before Gangammanagudi
Police, in that, she arranged disputed amount
received from her LIC and some of the amount by way
of hand loan and another version of the respondent in
her cross-examination before this Court that, the
disputed amount she received her mother in law’s LIC
amount of Rs.3,00,000/- and Rs.6,00,000/- from her
husband, which is contrary statement given by the
respondent. There is no difficulties to mention in her
Ex.P.7 and same in the complaint before this Court
that amount received from her husband to lend
money to appellant, but nowhere, it is mentioned and
a probable doubt will arise against Ex.P.7, hence, it is
not a conclusive proof of appreciated material to
consider appellant has to pay the amount of
Rs.9,00,000/- to the respondent. There was another
evidence on record to indicate that, the respondent
admitted in her cross-examination she received
Rs.3,00,000/- from her mother-in-law LIC amount on
06.06.2020, which is the same date of amount
received by her mother in law from LIC, evenly by way
of cash and also it is a same date of respondent given
an amount to appellant and remaining 6 lakhs given
15 Crl.A.No.398/2024
to the appellant out of 9 lakhs which is received from
her husband and she is a house wife, which put a
heavy burden to prove the financial capacity when it
was question on behalf of the appellant. Hence, the
contention of the respondent that, the appellant is
liable to pay the cheque amount cannot be accepted.
The respondent has failed to prove her case beyond
all the reasonable doubts and she has failed to fulfill
all ingredients of offence under Sec.138 of the NI act
against the accused.
6i) The respondent shall make clear to court,
each of the circumstances, which is relied upon by
her, to establish drawing of the cheque by appellant.
The mere fact that, the cheque produced in Court
came from possession of respondent alone will not
sufficient to prove execution, even though it may be
one of the circumstances. The Court, at best, can say
that, the cheque was in possession of respondent.
But under what circumstances, it came to his
possession is to be stated by respondent. In the
absence of such statement, Court cannot proceed on
any assumption that it was handed over to
complainant by the accused. The Court shall
consider whether each of the circumstances, is
16 Crl.A.No.398/2024
proved by respondent as per law and whether each of
the circumstances lead to an irresistible conclusion
that the cheque was drawn by the accused as alleged
by the complainant. In case in which only
circumstantial evidence is produced before the Court
to prove drawing of cheque, court shall follow the
mode adopted for appreciation of circumstantial
evidence, to enter finding whether cheque is drawn by
accused, as alleged by respondent. If any
circumstance or circumstances proved in the case
can be explained on any hypothesis which is
inconsistence with the assertion of drawing of cheque
by accused, accused cannot be said to have drawn
the cheque.
6j) The learned Magistrate grossly erred in law
in not observing the fact that, the dishonour of the
cheque not issued towards legally recoverable debt.
Section 139 of the NI Act enables the Court to
presume, unless contrary is proved that the holder of
the cheque received the cheque of the nature referred
to in section 138 of discharge in whose or in part of
any debt or other liability. The learned Magistrate
grossly erred in law in not observing the fact that,
PW.1 failed to establish the source of funds, which
17 Crl.A.No.398/2024
she is alleged to have utilized for disbursal of loan of
Rs.9,00,000/- (in this case) to the appellant. The
non-disclosure of the facts pertaining to the earlier
and the steps if any taken for recovery again a
material consideration which indicated that, there
was doubt in regard to the transactions.
6k) The learned Magistrate grossly erred in law
in not observing the fact that, PW.1 has miserable
failed to prove his assertions with sufficient evidence
and also failed to prove the enforceable debt against
the appellant. Further, in the above case, the
presumption is sufficiently rebutted. Hence, the
judgment and order of conviction has to be set aside.
The learned Magistrate grossly erred in law in not
observing the fact that, the cheque was not issued for
discharge of liability and the appellant cannot be
indulged for offence punishable under Section 138 of
the NI Act. The learned Magistrate grossly erred in
law in not observing the fact that, PW.1 has not
shown the source of income to show that such huge
amount is lend to the appellant. The finding of the
learned Magistrate was unreasonable and perverse.
There are several weaknesses in the evidence of PW.1
which have been overlooked by the learned
18 Crl.A.No.398/2024
Magistrate. The evidence was sufficient to create
suspicion and the appraisal of evidence on record by
the learned Magistrate thus suffers from illegality
manifest error. The sentence passed by the learned
Magistrate is too harsh and severe. The impugned
judgment is illegal, incorrect and improper and has
resulted in miscarriage of justice. On these grounds,
the appellant prays to set aside the judgment of
conviction and order of sentence.
7. The notice of this appeal was duly served
on the respondent and he has appeared before this
Court through her counsel. The trial Court Records
called and placed along with this appeal.
8. Perused the written arguments submitted
by both the parties and entire materials on record.
9. Now, the points that arise for my
consideration are :
1. Whether the appellant / accused has
made out grounds to set aside the
Judgment of conviction and order of
sentence passed in C.C.No.10372/2021
dated 05.02.2024, on the file of the
learned XII ACMM, Bengaluru ?
2. What order?
19 Crl.A.No.398/2024
10. My answer to the above points are as
under:
POINT No.1 : In the Affirmative,
POINT No.2 : As per the final order,
for the following:
REASONS
11. Point No.1: Apart from the oral testimony,
the complainant got marked the documents at Ex.P.1
to Ex.P.9. Ex.P.1 is the cheque bearing No.082411
dated 16.12.2020 for amount of Rs.9,00,000-00. The
cheque was drawn on the account of 3126277129.
Ex.P.2 is the endorsement issued on 21.12.2020.
Ex.P.3 is the endorsement for having presented the
cheque and dishonoured. Ex.P.4 is the office copy of
legal notice dated 3.02.2021. Ex.P.5 is the postal
receipt. Ex.P.6 is the postal acknowledgment. Ex.P.7
is the true copy of first information statement and
endorsement bearing NCR No.11/ 2021. Ex.P.8 is the
true copy of statement of the accused.
12. Ex.P.7 is the statement of the complainant
was made by her on 17.01.2021. The statement was
made to the Police Officer, which is not admissible in
20 Crl.A.No.398/2024
view of Section 161 of the Code of Criminal
Procedure. Ex.P.8 also was made by the accused on
22.01.2021 also before the Police Officer and is not
admissible. The statement is in the form of
undertaking made in the Police Station and hence,
cannot be looked into at all. It is unfortunate that,
the police station is being used to settle disputes of
civil nature in ignorance of the established principle
of law. Even if for the sake of arguments, these
documents are considered as relevant and admissible
documents for a moment, the complainant has not
specifically stated the particulars of the LIC and the
persons from whom, she had raised and the quantum
of amount, identity of the persons, quantum of
amount borrowed from each person.
13. The complainant had not also placed
before the learned trial Court any piece of documents
to substantiate the contents of Ex.P.7. The Police
officer knew that, a cheque of the accused was
dishonoured and the procedure contemplated did not
include lodging information with the police. Even
then, ASI Sri.Lakshmaiah proceeds to secure the
accused and becomes successful in obtaining an
undertaking from the lady on 22.01.2021 as per
21 Crl.A.No.398/2024
Ex.P.8. The police official had exceeded his
jurisdiction when the accused was secured and an
undertaking was obtained as per Ex.P.8.
14. PW.1 during the cross-examination is
found to have stated that, her husband has a small
factory and had an income of Rs.50,000-00. However,
there are no documents to demonstrate that, the
husband of the complainant had income as asserted
by this witness. PW.1 also discloses that, apart from
the accused, she had lent loan to four other
individuals, but there are no documents at all. PW.1
is found to assert that, it was her husband, who had
given the accused loan amount. The LIC amount was
received by the mother-in-law of PW.1. The
complainant is found to have narrated in the
complaint that, she had raised Rs.3,00,000-00 from
the savings of pension amount and LIC amount from
her mother-in-law. If this was the case, the question
is what prevented the complainant from disclosing
this before the Police officer while making statement
as per Ex.P.7.
15. PW.1 also has an account with Indian
Overseas Bank and the pass book is in her custody,
22 Crl.A.No.398/2024
which is not placed before the Court. The witness
also is unable to recall as to the denominations of the
currency notes said to have been given to the
accused. PW.1 is also found to assert that, she had
lent the amount to the accused on 20.06.2020,
whereas, in the complaint, the complainant is found
to have asserted that, on 6.06.2020 she had lent
Rs.3,00,000-00 and Rs.6,00,000-00 was lent on
25.06.2020. These contradictions are sufficient to
hold that, the presumption that was available to the
complainant under Section 118 and 139 of the
Negotiable Instruments Act stood rebutted. The
learned trial Court was in error in holding that,
combined reading of the provisions of Sections 118
and 139 of the Negotiable Instruments Act would
raise presumption in favour of the holder of the
cheque that she had received the cheque for
discharge of debt in whole or in part or other liability.
16. The learned trial Court also is found to
have held that, this presumption is rebuttable by
raising probable defence. The learned trial court is
found to have relied heavily on the lapses on the part
of the accused who had ventured to step into the
witness box. The weaknesses on the part of the
23 Crl.A.No.398/2024
accused could not be a trump card to the case of the
complainant to raise and strengthen the
presumption. The learned trial Court had failed to
realise that even inconsistencies and contradictions
in the version of the complainant would also be
sufficient to rebut the presumption raised in favour of
the complainant. The learned trial Court was in
complete error in not appreciating this aspect of the
established principle of law.
17. There was no requirement for the accused
to step into the witness box to put forth her defence.
The burden on the complainant is heavy as she is
expected to prove the fact beyond a reasonable doubt.
On the contrary, it would be sufficient for the accused
to disprove the fact by way of cross-examination of
the witness of the complainant. If the accused has
dared to enter into the witness box, admissions made
in stray sentences cannot be taken to fortify the case
of the prosecution or complainant. Accordingly, the
point No.1 an omnibus point raised by the learned
trial Court ought to have been answered in the
negative.
24 Crl.A.No.398/2024
18. The complainant may have proved the
other ingredients, but having failed to discharge the
onus on rebuttal of the presumption, the accused
would be entitled to benefit of doubt. The accused is
entitled for repayment of the amount of 20% in
deposit with interest in view of Section 148 (3) of the
Negotiable Instruments Act. Accordingly, I answer
point No.1 is in the Affirmative.
19. Point No.2: In view of the above
discussions, I proceed to pass the following:
ORDER
The appeal preferred by the appellant /
accused under Section 374(3) of Cr.P.C., is
allowed.
The impugned judgment of conviction
and order of sentence dated 05.02.2024
passed in C.C.No.10372/2021 on the file of
XII ACMM, Bengaluru City, is set aside.
The accused is entitled for repayment of
the amount of 20% in deposit with interest in
view of Section 148 (3) of the Negotiable
Instruments Act from the complainant.
The appellant is hereby acquitted and
the bail bond executed by the appellant shall
stands cancelled.
25 Crl.A.No.398/2024
However, the appellant and surety
shall execute fresh bonds for their
appearance before any Court in case this
judgment is sought to be challenged.
Send back records to the learned trial
Court along with copy of this judgment.
(Typed to my dictation by the Stenographer-III directly on computer, corrected by me
and then pronounced in open Court on this the 12th day of August, 2025)(Balachandra N Bhat)
LVIII Addl. City Civil & Sessions Judge,
Bengaluru.