IN THE COURT OF THE JUDGE COURT OF SMALL

CAUSES AND XXVI A.C.M.M, AT BENGALURU

Present: Abdul Khadar, B.A., LL.B.,

JUDGE, Court Of Small Causes,
Bengaluru.
Dated this the 27th day of November 2019
C.C. No:143/2018
Complainant: V.K. Sathya Narayana
S/o V.N. Keshavan
Aged about 38years,
R/at Apt. No.101, Ground floor,
No. 44, Manchaiah Layout,
20th Cross, BHEL Layout,
Rajarajeshawarinagar,
Bangalore-98.
(By Sri.G.H.Nagaraj-Advocate)
-Vs-

Accused : M/s. Sri Balaji Builders &

Developers,
Rep. by its Proprietor,
T.V. Srinivasamurthy,
No. 47/2-2, 2nd Floor,
Near Nagasandra Circle,
South End Road, Basavanagudi,
Bengaluru-560004.

Also at:T.V. Srinivasamurthy

S/o T.S. Venkatesha Murthy,
R/at No.887, 19th Main,
Ideal Homes Township,
Rajarajeswarinagara,
Bengaluru-560098.

(By Sri.B.Srinatha-Advocate)
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JUDGMENT

The complainant has filed the private complaint

under Sec.200 of Cr.P.C., against the accused for
having committed an offence punishable under Sec.138
of Negotiable Instruments Act.

2. According to the complainant, that the

accused is running a business under name and style of
M/s. Sri Balaji Builders and Developers and accused is
the Proprietor of the said firm and have developed
property by constructing one residential Apartment in
each floor (i.e., 101, 201 and 301) in site No. 44,
Manchaiah Layout, 20th cross, BHEL Layout, Pattanagere
Village, Kengeri Hobli, Rajarajeshwarinagar, Bengaluru.
The accused has sold the flat bearing flat No. 101 in the
above apartment by taking full consideration amount
and the accused has executed a sale agreement
registered in favour of complainant as document No.
JAY-1-00489-2013-14 stored in CD No. JAYD169, dated
24.04.2013 in the office of the Sub-Registrar,
Jayanagar, Bengaluru after receiving entire sale
consideration. After execution of sale agreement,
complainant came to know that accused has availed
loan from Bank of Baroda, M.G. Road Branch, Bengaluru
and accused has suppressed the above transaction and
executed sale agreement in favour of complainant.
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Thereafter accused have not settled the amount to the

bank and thereafter accused requested the complainant
to clear the loan amount of Rs.3,00,000/- and agreed to
pay the amount within three months to him. As per
accused request the complainant has cleared the loan
amount of Rs.3,00,000/- to the Bank of Baroda, M.G.
Road Branch, through RTGS on behalf of accused.
After lapse of three months, accused not repaid the loan
amount, inspite of repeated requests and demands,
towards discharge of legal debt, accused had issued two
cheques bearing No. 656075 dated 17.08.2017 and No.
656076 dated 17.09.2017 for sum of Rs.1,50,000/-
each drawn on Corporation Bank, Rajarajeshwari Nagar
Branch, Bengaluru. The complainant presented the
said cheque for encashment through his banker, State
Bank of India, Shankarpuram Branch, Bengaluru and
the said cheques were dishonoured for the reason as
“Payment stopped by drawer” on 09.11.2017.
Immediately the complainant intimated regarding the
dishonor of cheque to the accused, but he failed to pay
the amount covered under the cheques. The
complainant got issued a legal notice to the accused
through RPAD on 18.11.2017 demanding him to pay the
cheques amount within 15 days from the date of receipt
of notice. The notice sent to the both addresses of the
accused, were duly served on him on 20.11.2017.
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Despite service of notice, the accused neither sent any

reply nor paid the amount under the cheques.
Accordingly, he has filed the present complaint to take
action against the accused in accordance with law.
3. Being satisfied with the complaint averments,
this Court has taken cognizance and after recording
sworn statement being satisfied with the prima-facie
case, issued summons to the accused compelling his
appearance. Accused appeared through his counsel
before this Court and got enlarged on bail. Substance of
accusation was read over to the accused. Accused
pleaded not guilty for the offence punishable u/s.138 of
NI Act. Hence, this Court called upon the complainant to
prove his case.
4. In support of the case, the complainant himself
examined as P.W.1 and got marked 13 documents as
per Ex.P1 to 13. After closure of evidence of
Complainant, the accused was examined as
contemplated u/s.313 Cr.P.C and his statement was
recorded. The accused, totally denied the case of the
complainant. He has led defense evidence by examining
himself as D.W.1 got marked 7 documents as per Ex.D1
to D7 on his behalf.
5. I have heard the arguments canvassed by both
counsels and perused the materials available on record.
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6. The points that would arise for my

determinations are:
1. Whether the complainant proves that
the accused issued two cheques bearing
No. 656075 dated 17.08.2017 and No.
656076 dated 17.09.2017 for sum of
Rs.1,50,000/- each drawn on Corporation
Bank, Rajarajeshwari Nagar Branch,
Bengaluru has been issued by the accused
towards discharge of his legal liability and
failed to make good to the Complainant
after its dishonor and issue of legal notice
within the stipulated period and thereby
accused has committed the offence
Punishable U/s. 138 of the NI Act?

2. What order?
7. My findings to the above points is as under:
Point No.1 : In the Affirmative
Point No.2 : As per final order below
For the following:
REASONS
Point No.1 :
8. It is pertinent to note that, whenever a private
complainant is filed seeking prosecution of the accused
for an offence punishable under Section 138 of
Negotiable Instrument Act, if the issuance of cheque and
the signature on the cheque is accepted and admitted
by the accused, an initial presumption has to be raised
by the Court in favour of the complainant, that the
cheque in question was issued towards legally
recoverable debt or liability. Of course, this presumption
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is rebuttable presumption. Such rebuttable evidence has

to be placed before the Court by the accused. It is well
known that, the accused can rebut the said legal
presumption either by cross-examination of complainant
or by leading evidence. The complainant himself
examined as PW.1 filed affidavit by way of chief
examination has reiterated the versions of complaint. I
would not like to reproduce the same to avoid repetition
of facts since the complainant has explained the details
of complaint averments in chief examination. The
complainant produced 13 documents at Ex.P1 to P.13.
9. So far as the document is concerned Ex.P.1 & 3
are the cheque bearing No. 656075 dated 17.08.2017
and cheque bearing No.656076 dated 17.09.2017 for
sum of Rs.1,50,000/- each drawn on Corporation Bank,
Rajarajeshwari Nagar Branch, Bengaluru. Ex.P1(a) and
3(a) are the signatures of the accused. Ex.P2 &4 are the
Bank endorsements issued by the State Bank of India,
Shankarpuram Branch, Bengaluru on 09.11.2017
wherein the said cheques were dishonoured with a
shara as “Payment stopped by drawer”. Ex.P5 is the
legal notice dated 18.11.2017 wherein the complainant
demanded for repayment of money of Rs.3,00,000/-
from the accused within 15 days from the date of
receipt of notice. Exs.P6&7 are the postal receipts, in
which the notice has been sent by RPAD to the
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addresses of accused, shown in cause title. Ex.P8 is the

postal acknowledgement which shows that the notice
was duly served on the accused. Ex.P9 is the settlement
letter executed by the accused in favour of complainant
wherein, accused had acknowledged the receipt of
Rs.3,00,000/- received on account of reimbursement
of full and final settlement of Bank loan in respect of
property apartment bearing No.101 Ground floor, in
respect of OA No. 848/2010 filed by bank of Baroda.
Whereas the complainant has agreed to pay the
amount of Rs.3,00,000/- towards clearance of all court
cases and also transferred the said amount directly to
bank of Baroda account No. 06650015181219 by way
RTGS dated 17.03.2017, UTR No. SBMYR201703
1700001424 from SB account No.54003858498 and
bank also confirmed and receipt of money and cleared
all pending litigation was on out of court and also
accused has collected no objection from the said bank in
the presence of witness. Ex.P10 is the bank pass book
of complainant, wherein it reveals that on 17.03.2017
Rs.3,00,000/- debited from the account of complainant
and paid the loan account of accused in bank of Baroda.
Ex.P11 is the bank acknowledgement. Ex.P12 is the
certificate given to bank of Baroda. Ex.P13 is the Sale
deed wherein the complainant purchased apartment
unit No.101 from the accused for sum of Rs.27,00,000/-
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Ex.P14 is the sale agreement dated 24.04.2013 entered

between accused and his family members with the
complainant. According to the learned counsel for the
complainant, when the issuance of cheques and his
signature are admitted, then the presumption as
required under Section 139 of N.I. Act comes to the aid
of the complainant and it is the turn of the accused to
explain or rebut the said presumption by raising a
probable defence.
10. In this regard, the court has to see whether
the accused has been successful in rebutting the
presumption through cross-examination of PW-1 and his
evidence. In support of his defence, the accused cross
examined PW-1 in length, but nothing has been elicited
from his mouth to show that the consideration does not
exist as alleged by the complainant under Ex.P1. During
the course of cross examination of PW-1, he deposed
that, he is doing legal consultant cum practicing
advocate. Accused had sold one apartment in his
favour for sale consideration of Rs.27,00,000/-. He
deposed that by suppressing the stay order which was
pending in respect of aforesaid property in DRT and
executed sale deed. He admits that he is not a party to
the DRT Proceedings. He verified the documents
pertaining to the property. He denied that if any
encumbrance on said property it will reflect in the EC.
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He denied that there was no connection with the

property purchased by him and the schedule property
shown in DRT. As per Ex.P9 the accused is due of
Rs.3,00,000/-. He denied that accused is not in due of
Rs.3,00,000/- to him. He admits that accused received
the entire sale consideration amount and got registered
the sale deed in his favour. He denied that there is no
connection with Ex.P1 and Ex.P3 cheques and the sale
transaction. He denied that the contents of cheques
were not written by accused and same was written by
him and no demand notice was served on accused. He
admits that as per Ex.P13 property market value shown
as Rs.21,50,000/-. Witness voluntaries that, as per the
suggestion of vender he had shown the aforesaid
amount in the sale deed. He admits the said apartment
having 3flats. He transferred Rs.3,00,000/- to the
accused bank of Baroda account. He denied that, he has
not paid the amount to loan account of accused and the
same was balance sale consideration amount.
11. Admittedly, in the cross examination of
complainant, the accused has not elicited from his
mouth that there is no existence of legally recoverable
debt payable by the accused to the complainant. It is
the defence of the accused that, one Mr. Prasanth
availed a home loan facility from bank of Baroda and
paid only 25 to 30% of their agreement value and he
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did not pay any amount other than any loan and also in
between himself cancelled his flat purchase and
requested them to repay all bank loan amount and by
believing all his instruction, the accused signed all
cancellation documents and collected back huge amount
but not returned to Bank of Baroda or anywhere and he
misused all their faith and belief as well as cheated
them and because of all his fraudulent activity the
accused incurred huge financial loss and also managed
to repay all bank dues by negotiating with bank officials
and finally after all correspondence that bank had
made arrangements to settle them self through court
of law. Later on accused sold similar flat to complainant
Mr. V.K. Satyanarayan at an value of Rs. 35lakhs only
and requested to settle bank of Baroda bank dues only
on my flat consideration and he did not availed any
loan from the complainant and complainant paid his flat
consideration money to loan account of Mr. Prasanth
and that is clearly mentioned in bank statements.
12. On careful appreciation of the evidence of the
complainant and accused there is no disputes with
regard to the cheques and signatures belongs to the
accused and the signature marked as Ex.P1(a) and
3(a). Hence it can be held that the complainant has
proved the provision of section 118 & 139 of the N.I.
Act. Section 118 of N.I. Act, the presumption available
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regarding consideration, as to the date and also holder

or holder-in-due course of cheque. When the
Complainant presented the cheques it implies that
which were given to him by the accused. This
presumption has to be rebutted by the accused by
adducing the defense evidence. So the burden is on the
accused to rebut the presumption. The D.W.1 during the
course of cross-examination, he admitted the issuance
of cheques to the Complainant. The conduct of the
parties has to be considered in the back ground and
circumstances of the case from the admitted facts from
the mouth of accused, hence, it can be held that the
cheques were issued for legally recoverable debt. As I
above discussed the conduct of the parties has to be
considered, if really the accused has not issued
cheques, what prevented him to lodge the criminal
proceedings against the complainant till today.
13. It is settled law that a cheque whether issued
for repayment of a loan or as security makes little
difference u/s 138 of the Act in the event of dishonor
legal consequence will be same without distinction when
once issuance of cheques are proved a presumption u/s
139 of the act would arise with regard to the
considerations. On perusal of appreciation of the oral
testimony of the accused it can be held that entire
defense taken by the accused regarding issuance of
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cheques are admitted. Therefore, when there is a

evidence of complaint regarding issuance of cheques
and it’s dishonor on presentation, when there is no
defence evidence to rebut the presumption available
u/s.118 & 139 of the Act.
14. The statutory presumption under Sec.139 of
N.I. Act explains initial presumption infavour of the
producer of an instrument. It says court shall presume
that one instrument is handed over infavour of another
person only for the purpose of recover of existed debt.
Therefore, the statutory presumption explained under
Sec.139 of N.I. Act always provides presumption
infavour of the complainant. But, it does not mean that
the statutory presumption cannot be rebutted. The said
presumption can be rebutted at the strength of strong
oral and documentary evidence. Let us see the attempt
of the accused to-rebut the evidence of complainant.
15. To defeat the case of the complainant,
accused himself examined as DW-1, wherein he
deposed that, he knows the complainant since 5 years.
The complainant purchased apartment No.44, Ground
floor RR Nagar in the year 2011-12 for a total sale
consideration of Rs.35,00,000/-, out of which, he
received Rs.29,00,000/- as advance from him and there
was a loan stood in the aforesaid building in bank of
Baroda and the same was cleared by the complainant.
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At that time the complainant had taken cheques from

him and gave receipt as per Ex.D1. Stop payment
application marked at Ex.D2. The bank statement of
M.R. Prashant and O.V.Srinivasa Murthy marked at
Ex.D3 and D4. OTS of Bank of Baroda marked at Ex.D5
and the C/C of order in O.A.No.848/10 of DRT marked
at Ex.D6. The complainant is due of Rs.3,00,000/- to
him. There was no direct transaction between him and
the complainant through one Prakash transaction was
held. Hence, prayed to dismiss the complaint by
acquitting him.
16. This witness cross examined by the counsel
for the complainant, wherein he categorically admits
that, he studied Diploma in Electronic. Doing
construction business. He knows the complainant. He
admits that Ex.P1 and Ex.P.3 belongs to his account,
Ex.P1(a) and P3(a) is his signatures. He denied that
contents were written by him and his hand writing. He
admits that he sold flat situated at RR Nagar to the
complainant and by receiving sale consideration fully he
had registered the sale deed. Witness voluntaries that,
there is a due of Rs.5,30,000/- from the complainant.
The same was not mentioned in sale deed as the said
sale deed is marked as Ex.P13, wherein there is a
recital of receival of entire sale consideration from the
complainant. He admits before sale of flat there is a
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loan on the property in the bank of Baroda and also

said flat was attached by the DRT. As the complainant
asked him to clear the attachment, he stated him that
after sale of the property he cleared the loan of DRT
and executed the sale deed. He admits that on
24.04.2013 he executed sale agreement in favour of
complainant as per Ex.P14. He admits that as per
Ex.P14 he received entire sale consideration amount
from the complainant. He admits in three flats, he was
in due of Rs.24,00,000/- to the bank of Baroda and
Rs.7,00,000/- loan on the property of complainant. As
the complainant paid Rs.3,00,000/- to the loan account
of the accused out of Rs.7,00,000/-. He denied that the
said amount was given by the complainant as hand loan
Ex.P1 and P3 cheques were gone to the hands of
complainant through Prakash. He denied that the
cheques were issued for repayment of Rs.3,00,000/-.
He denied that the cheques shown in Ex.D1 and the
alleged cheques in question are different one. The
cheques shown in Ex.D2 and Ex.P1 and 3 are different
one. He has not issued notice to the complainant for
demanding return of cheques. He admits that himself
executed Ex.P9 settlement letter infavour of the
complainant and there is a recital in Ex.P9 that the
cheques were issued for the repayment of amount due
to the complainant. He admits that, he is residing at
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address shown in the Ex.P9. The address shown in

Ex.P8 belongs to him. He do not receive Ex.P5 notice.
He admits that he is residing in the address shown in
Ex.P5. He admits that he received court summons in
address shown in Ex.P8. He admits that there is no
connection with bank statement and Ex.D3. As per
Ex.D5 the bank send OTS on 3.02.2011. He admits
that he has not issued notice to the complainant for
repayment of the balance sale consideration amount.
He has not taken any legal action against the
complainant before the police station after service of
notice or service of summons from the court.
17. No doubt the accused has clearly admitted his
signature on Ex.P1 and P3, but he disputed that, he has
not issued cheque to the complainant to discharge his
liability and the same was issued by him as security.
The evidence of DW-1 clearly shows that no legal action
has been taken by the accused against complainant to
show that cheques in question were given by him as
security to clear of his loan stood in the bank of Baroda
out of sale consideration amount and the same has
been misused to file this case. There, itself the
accused has failed to raise the probable defence. The
document at Ex.P9 shows that the complainant had lent
the money to the accused and the accused issued the
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cheques to the complainant to discharge the amount

owed by him.
18. In this regard I relied on decisions reported in
AIR 2019 SC 1876 in the case of Rohitbhai
Jivanlaa Patel V/s State of Gujarat and another
wherein it is in held that once presumption of existence
of legally enforceable debt drawn in favour of
complainant, onus is shifted on accused-Unless onus is
discharges by accused that preponderance of
probabilities are tilting in his favour. Doubt on case of
complainant cannot be raised for want of evidence
regarding source of funds for advancing loan to
accused.
2. AIR 2018 SC 3601 in the case of T.P.
Murugan (Dead) by LRs V/s. Bojan. Wherein it is
held that once a cheque has been signed and issued in
favour of the holder, there is statutory presumption that
is issued in discharge of a legally enforceable debt or
liability. This presumption is a rebuttal one, if the issuer
of the cheque is able to discharge the burden that is
was issued for some other purpose like security etc.
3. AIR 2015 SC 2240 in the case of
T.Vasantha Kumar v. Vijayakumari wherein it is
held that Dishonour of cheque-Appeal against
acquittal-cheque As well a signature on it not disputed
by accused respondent-presumption under S.139 would
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be attracted-Story brought out by accused that cheque

was given to complainant long back in 1999 as a
security to a loan; the loan was repaid but complainant
did not return security cheque – is unworthy of credit,
apart from being unsupported by any evidence-Mere
printed date on cheque by itself cannot be conclusive of
fact that cheque was issued in 1999-Order of High in
acquitting accused is erroneous and set aside.
19. However the claim of the accused is that, he
has not issued the cheques in dispute to the
complainant for the loan of Rs.3,00,000/- borrowed by
him in the month of September 2017. The say of
accused is presumed to be true and then there was no
impediment to the accused to issue stop payment
instructions at the earlier point of time to his banker. On
perusal of Ex.D2 it reveals that, the accused send
requisitation to his banker to stop payment for cheque
Nos 656069 and 656070. He categorically admits that
the Ex.P1 and P3 cheque No.656075 and 656076 and
the same were different one. Further what impediment
was there to the accused to take legal action against the
complainant. Therefore the contradiction in the version
of the accused with regard to the issuance of cheques
in dispute by him to the complainant also gives raise to
series doubts with regard to his defence. Accused has
not made out any probable defence so as to shift the
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burden on the complainant. Accused has failed to

establish his defence that, cheques were misused by the
complainant which was given by him as security. It is
well settled law that, rule of presumption of innocence
of accused cannot be applied with same rigour to
offence U/s 138, particularly where presumption is
drawn that holder received the cheque for discharge,
the debt or liability. Of course there is a variation in the
complaint and the evidence of PW.1 with regard to
advancement of loan and the purpose for which Ex.P1
and P3 cheques were issued by the accused. But mere
variation in the sworn statement of PW.1 does not
dissolve the liability of the accused to rebut the
presumption. Thus, accused has failed to rebut the
presumption arise in favour of the complainant under
Sections 118(a) and 139 of N.I. Act.
20. On perusal of the entire evidence on record, it
reveals that, cheques were presented to the bank for
encashment which came to be dishonored as “Payment
stopped by drawer” and notice was issued to the
accused was duly served on accused. The accused has
admitted cheques belongs to his account and his
signatures on Ex.P1 and P3, it is sufficient to hold that
the complainant has proved the existence of debt under
Ex.P1 and P3 by the accused. Thus it clearly goes to
show that since the accused had issued the cheque in
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question to the complainant for consideration. The

documents on record shows that the complainant had
lent the money to the accused towards clear the loan of
accused on purchased plot of the complainant and the
accused issued the cheques to the complainant to
discharge his liability.
21. Now, the question that arises that whether
the issuance of cheques in question by the accused to
discharge the liability of him to the complainant comes
under the purview of Sec.138 of N.I. Act or not. It is
settled law that in order to draw the presumption under
Sec.118 read along with 139 of N.I. Act, the burden was
heavily upon the complainant to have shown that he
had lent loan of Rs.3,00,000/- to the accused, that the
issuance of the cheques in support of the said
repayment was true and that the accused was bound to
make the payment as had been agreed while issuing the
cheque infavour of the complainant.
22. It is well settled law that under sec. 138 of
N.I. Act., once the cheque is issued by the drawer, a
presumption under Sec. 139 of the N.I. Act in favour of
holder would attracted. Sec. 139 creates a statutory
presumption that, a cheques received in the nature
referred to under section 138 of N.I. Act is for the
discharge in whole or in part of any debt or other
liability. The initial burden lays upon the complainant to
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prove the circumstances under which the cheques were

issued in his favour and that the same was issued in
discharge of a legally enforceable debt. It is further
accused to adduce evidence of such fact and
circumstances to rebut the presumption that such debt
does not exist or that the cheque is not supported by
consideration. Considering scope of the presumption to
be raised under sec. 139 of Act and the nature of
evidence to be adduced by the accused to rebut the
presumption in Kumar Export V/s Sharma Carpets
(2009)2 SCC 513 the Hon’ble Supreme court in paras
(14-15) and paras (18-20) held as under
“14 Sec. 139 of Act provides that, it shall be
presumed unless the contrary is proved that the holder
of cheque received the cheque of the nature referred to
in Sec. 138 for the discharge, in whole or in part of any
debt or other liability”.
“15 Presumption are devices by use of which the
courts are enabled and entitled to produced or issue
notwithstanding that there is no evidence or insufficient
evidence. Under the Evidence Act all presumption must
come under one or the other class of the three class
mentioned in the act, namely (1) May presume
(rebuttable), (2) shall presume (rebuttable), 3)
conclusive presumptions (irrebutable). The term
presumption used to designate an inference,
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affirmative or disaffirmative of the existence of a fact,

convientely called the presumed fact drawn by a
judicial tribunal by a process of probable reasoning
from some matter of fact, either judicially noticed or
admitted or established by legal evidence to
satisfaction of the tribunal presumption literally means
taking as true without examination of proof.”
“18. Applying the definition of the word “proved”
in Section 3 of the Evidence Act to the provisions of
Sections 118 and 139 of the Act, it becomes evident
that in a trial under Section 138 of the Act a
presumption will have to be made that every negotiable
instrument was made or drawn for consideration and
that it was executed for discharge of debt or liability
once the execution of negotiable instrument is either
proved or admitted. As soon as the complainant
discharges the burden to prove that the instrument, say
a note, was executed by the accused, the rules of
presumptions under Sections 118 and 139 of the Act
help him 14shift the burden on the accused. The
presumptions will live, exist and survive and shall end
only when the contrary is proved by the accused, that
is, the cheque was not issued for consideration and in
discharge of any debt or liability. A presumption is not
in itself evidence, but only makes a prima facie case for
a party for whose benefit it exists.”
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“19. The use of the phrase “until the contrary is

proved” in Section 118 of the Act and use of the words
“unless the contrary is proved” in Section 139 of the Act
read with definitions of “may presume” and “shall
presume” as given in Section 4 of the Evidence Act,
makes it at once clear that presumptions to be raised
under both the provisions are rebuttable. When a
presumption is rebuttable, it only points out that the
party on whom lies the duty of going forward with
evidence, on the fact presumed and when that party has
produced evidence fairly and reasonably tending to
show that the real fact is not as presumed, the purpose
of the presumption is over.”
“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
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insist in every case that the accused should disprove the

non- existence 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 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 non-
existence was so probable that a prudent man would
under the circumstances of the case, act upon the plea
15 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 to 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.” [underlining added].”
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23. On bare perusal of above decision it appears

that, mere raising a doubt without cogent evidence with
respect to the circumstances will not discharge
presumption under section 139. Issuer of the cheque
can rebut that presumption by adducing credible
evidence that the cheque was issued for some other
purpose like security for loan. In the present case by
examining himself as PW.1, the complainant has
discharged the initial burden cast upon him, that the
cheque was issued by the accused towards discharge
of loan borrowed by him during the month of April
2013 With the examination of PW.1, the statutory
presumption under Sec. 139 of the Act arises that the
cheque was issued by the accused for the discharge of
any debt or other liability in whole or in part. It is for
the accused to adduce evidence to prove that the
cheque was not supported by consideration and that
there was no debt or liability to be discharged by him.
The defence relied upon by the accused do not create
doubt about the advancement of loan and the existence
of a legally enforceable debt for which the cheques
were issued. The oral and documentary evidence
adduced by the complainant are sufficient to prove that,
it was a legally enforceable debt and that, the cheque
was issued to discharge the legally enforceable debt.
The evidence adduced by the accused is not sufficient
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to rebut the presumption under section 139 of the Act.

Thus, the story brought by the accused is unworthy of
credit. Apart from being unsupported by any evidence.
24. The oral and documentary evidence available
on record are clear and categorically established all the
ingredients of Section 138 of N.I. Act and also proved
the fact that the accused had issued the cheques in
question in favour of the complainant towards the
discharge of loan of accused stood in Bank of Baroda
and the said cheques were dishonoured and then the
accused failed to pay the amount of cheque within 15
days from the date of service of demand notice. Hence,
the dishonor of the cheques in question is clearly
attracts the penal provision of Section 138 of the N.I.
Act and the complainant has proved the guilt leveled
against the accused for the offence P/u/s Section 138
of the N.I. Act. The accused has utterly failed to rebut
the presumption under Sec.138 of N.I. Act infavour of
the complainant. Hence, the complainant is entitled for
benefit of statutory presumption as contemplated under
Sec.139 of the Act. I did not find any informalities or
contradictions elicited to render his evidence incredible.
Therefore, the testimony of PW-1 inspires confidence to
believe and to act upon the evidence of PW.1 and the
documentary evidence at Ex.P1 to P14 are consistence,
corroborative and supporting to each other and in
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accordance with the case of the complainant and which

leads me to conclude that the complainant has proved
beyond reasonable doubt against the accused for the
alleged offence punishable under Sec.138 of N.I. Act.
Accordingly, I answer Point No.1 in the Affirmative.
Point No.2:
25. In view of my above discussions and findings
on Point No.1, I proceed to pass the following:

ORDER

Acting under Section 255[2] of Cr.P.C, the
accused is hereby convicted for the offence
Punishable U/s. 138 of the N.I. Act.

The accused shall pay fine of Rs.4,00,000/-.
In default of payment of fine amount, the
accused shall under go Simple Imprisonment
for six months.

Out of the amount so realized, the accused
shall pay a sum of Rs.3,90,000/- to the
Complainant as compensation, as provided
U/s.357 Cr.P.C. The remaining amount of
Rs.10,000/- shall go to the State.

The bail bond and surety bond of the
accused is hereby stand cancelled.

Office is directed to furnish free copy of this
judgment to the accused.
(Dictated to the Stenographer directly over computer, typed by
her, corrected and then pronounced by me in the Open Court on
this the 27th day of November 2019)

(Abdul Khadar)
Judge , Court of Small Causes,
& XXVI ACMM, Bengaluru.
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ANNEXURE
List of Witnesses examined on behalf of complainant:
PW -1 V.K. Sathyanarayana

List of Documents marked on behalf of complainant:

Ex.P1&3 Cheques
Ex.P1(a)&3(a) Signature of accused
Ex.P2&4 Bank Endorsements
Ex.P5 Legal Notice
Ex.P6&7 Postal receipts
Ex.P8 Postal acknowledgement
Ex.P9 Settlement agreement
Ex.P10 Bank pass book
Ex.P11 Bank acknowledgement
Ex.P12 Certificate issued to the Bank of Baroda
Ex.P13 Sale deed
Ex.P14 Sale agreement
List of Witnesses examined on behalf of accused:
DW -1 T.V. Srinivasa Murthy
List of documents marked on behalf of accused:
Ex.D1 Receipt
Ex.D2 Stop payment application
Ex.D3 Bank statement of S.R. Prasanth
Venkatesh
Ex.D4 Bank statement of O.V. Srinivasmurthy
Ex.D5 On time settlement
Ex.D6 C/c of DRT order in OA No.848/2010
Ex.D7 Sale agreement

(Abdul Khadar)
Judge, Court of Small Causes,
& XXVI ACMM, Bengaluru.