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IN THE COURT OF THE III ADDL.JUDICIAL MAGISTRATE OF FIRST CLASS,
NELLORE.
APNE0A0011942022Present: Sri. ABDUL RAHMAN SHAIK, III Addl.Judicial Magistrate of First Class, Nellore
This the 20th day of February, 2026.
CC No.152 of 2019 (Old C.C.No.127 of 2016)
BETWEEN
Yerragunta Subba Reddy, s/o.Yerrangunta Vekata Subba Reddy, Hindu, aged 63 years, residing at D.No.23/1480,
...Complainant
Lecturer’s colony, Tunga Rajagopal Reddy Street, Nellore City. AND U.V.Satyanarayana, s/o. U.Lakshmi Narasimha Chary, Hindu, aged 40 years, working as S.G.Teacher, S.V.Elementary School, Balaji Nagar, Nellore and residing at
...Accused
D.No.6/111, Shivaji Nagar, Near Ramalayam, Pappula Street, Nellore.
This case having come before me for final hearing on 19.02.2026 in the presence of Shri. M.Venkateswarlu Learned Counsel for Complainant and of Shri.Ananta Satyanarayana, Learned Advocate for the accused, upon perusing the material papers on record and upon hearing the counsel on either side, this Court delivers the following:
:: J U D G M E N T ::
1.This is a complaint filed by the complainant U/Sec.138 & 142 of
Negotiable Instruments Act against the accused.
2. The case of the complainant in brief is as follows:
The accused borrowed a sum of Rs.1,00,000/- on 18.09.2012 from him for his family necessities and in consideration thereof, executed a promissory notes in favuor of him on the even date, and agreeing to repay the same with 2 interest at 24% per annum. Inspite of repeated demands by him, the accused did not choose to repay the amount. Later on the accused issued a cheque bearing
No.469796, dated 22.07.2015 for Rs.1,60,000/- drawn on State Bank of India,
Barracks Branch,Nellore. Accordingly, the complainant presented the said cheque for realization in Corporation Bank, Town Branch Nellore and the said cheque was dishonoured with an endorsement “FUNDS INSUFFICIENT” in the account of the accused and the complainant bank issued a cheque return memo
dated 01.09.2015. The complainant got issued the registered notice on
05.09.2015 through his counsel to the accused. The said notice was served to the accused on 08.09.2015 but, he failed to give any reply nor comply the demand. Hence the complaint.
3.After verifying the case records and material papers filed by the complainant this case is taken on file under Sec.138 & 142 of Negotiable
Instruments Act against the accused.
4.On appearance of the accused, copies of complaint and its annexures were furnished to him.
5.The accused was examined Under Section 251 of Cr.P.C with reference to the offence punishable U/Sec. 138 & 142 of Negotiable Instruments
Act. The accused pleaded not guilty and claimed to be tried.
6.On behalf of the complainant, the complainant himself examined as
PW-1 and got marked Exs.P1 to Ex.P4 and also examined PW2 on behalf of complainant and no documents were marked.
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7.On closure of complainant evidence, the accused was examined
U/Sec. 313 Cr.PC. The accused pleaded not guilty denying the incriminating evidence spoken against him. The accused reported no defense evidence on his behalf, hence the defense evidence is closed.
8.The Complainant is examined as PW1 and got marked Exs.P1 to
Ex.P4. Ex.P1 is the cheque bearing No.469796 dated 22.07.2015 for
Rs.1,60,000/- drawn on State Bank of India, Barracks Achari street,Nellore,
Ex.P2 is the cheque return memo dated 01.09.2015 for the cheque bearing
No.469796 issued by Corporation Bank, Tekkemitta Extension Branch, Magunta
Layout, Nellore, Ex.P3 is the legal notice dated 05.09.2015 along with postal receipt, Ex.P4 is the postal acknowledgment card of the accused. On behalf of complainant one V.Prasanth Reddy examined as PW.2. On the other hand the accused has not adduced any evidence and no documents were marked on his behalf.
9.Heard the counsels for both sides.
10.Now the point for determination is:
1. Whether there is legally enforceable debt between complainant and accused for issuance of Ex.P1 cheque bearing No. 469796
dated 22.07.2015 by the accused?
2. Whether the complainant is able to prove the guilt of the accused beyond all reasonable doubt for the offence punishable U/Sec.138 & 142 of NI Act?
POINT:
11.The complainant/PW1 filed his chief examination affidavit reiterating the 4 averments made in the complaint and it is supported by Exs.P1 to Ex.P4. During his cross examination, he testified that he lent Rs.2,00,000/- to the accused and the accused executed two promissory notes in his favour later the accused discharged one promissory note. He has not filed the said discharged promissory note before the court. He also not filed the promissory note dated 18.09.2012
before this court relating to the present case. He do not know who filled Ex.P1
cheque. He denied that there is a material alteration in the Ex.P1 cheque and that numeric ‘1’ is inserted before Rs.60,000/- in Ex.P1 cheque. He issued Ex.P3 notice to the residential and work address of accused. He denied that the school was closed as on the date of Ex.P3 legal notice. He further denied that the signature in Ex.P4 postal acknowledgment card does not belongs to the accused. He is not an income tax assesse. He do not know that the transactions above Rs.20,000/- to be made by a cheque or not.
12.P.W.2 is the one of the attestor of alleged promissory note dated 18.09.2012. During his cross examination he stated that he do not know whether the promissory note dated 18.09.2012 signed by him was filed before the court or not. He denied that on 18.09.2012, the accused never borrowed any amount from the complainant.
13. The complainant filed this complaint U/Sec.138 of Negotiable
Instruments Act. So, the initial burden is on the complainant to prove that there is a legally enforceable debt, Ex.P1 cheque was issued towards the satisfaction of 5 the said debt and that the said cheque was dishonored due to “funds insufficient”.
14.Section 138 of Negotiable Instruments Act deals with the offence stated to be committed on account of dishonor of cheque for insufficiency of funds etc., in the account.
15. The essential ingredients of section 138 of the Act are as under:-
i) The cheque must have been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier.
ii) The cheque must have been returned unpaid for insufficiency of funds or exceeds arrangements, etc., iii) The payee or the holder in due course of the cheque must have been served a notice of demand in writing within 30 days of the receipt of information of return of the cheque as unpaid.
iv) The drawer must have failed to make the payment within 15 days of the receipt of the notice, and
v) Complaint has to be made within one month of the date on which the cause of action arises under clause (c) of proviso to section 138 of the
Act.
16. The learned counsel for the accused filed written arguments submitting that the original promissory note was not filed by the complainant. Further, the accused was not served with Ex.P3 legal notice as the said legal notice was addressed to the School address. The said school was abandoned along back.
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Further, the complainant gave contradictory statements stating that the Ex.P1 cheque was dishonoured for the reason of funds insufficient at para No.3 and account is closed at para No.4. Further, the Number ‘1’ before Rs.60,000/-. There is a material alteration in Ex.P1 that Number ‘1’ is inserted before Rs.60,000/-.
The complainant failed to produce original promissory note towards discharge of which Ex.P1 was issued. As such, there is no legally enforceable debt and the complainant failed to prove his case. The accused was born on 01.07.1958 and retired from service in the month of July, 2018 but in the description of the accused age was shown as 40 years. Thus, itself shows, that the complainant has no prior acquaintance with the accused and prays to acquit the accused.
17.The burden initially lies on the complainant, who has got the bounden duty to prove that the Ex.P1 cheque issued by the accused. Once the execution of the Ex.P1 cheque is proved, the rule of presumption laid in Section 118 of the Negotiable Instructions Act helps him to shift the burden to the other side. The burden of proof, therefore, rests on the complainant. As soon as the execution of the Ex.P1 cheque is proved by the complainant, once again Section 118 of the Negotiable Instruments Act imposes a duty on the Court to raise a presumption in his favour that the said Ex.P1 cheque was is towards discharge of legally enforceable debt. This presumption shifts the burden of proof to the accused. If the onus is shifted on the accused, it is for him to adduce direct evidence to prove that the Ex.P1 cheque is not issued towards discharge of the legally enforceable debt. It is open to the accused also to rely on the 7 circumstantial evidence. On perusal of the oral and documentary evidence available on record, it is clear that the execution of Ex.P1 cheque and delivery of the same to the complainant is not denied by the accused. As can be seen from the cross-examination of P.W.1, it can be understood that the accused is not disputing the issuance of the Ex.P1 cheque.
18.Further, “When a cheque is dishonored, it is not the dishonour alone that triggers criminal liability, but the failure to comply with the statutory demand notice that does. Under Section 138(b) of the N.I. Act the payee or holder in due course must send a written notice to the drawer within thirty days from the date they receive intimation from the bank regarding the dishonour. The notice must clearly demand payment of the cheque amount within fifteen days of its receipt by the drawer.” The offence under section 138 of Negotiable Instruments Act arises “when a cheque is drawn on an account and returned unpaid for reasons such as insufficient funds or exceeding the arrangement with the bank and when the payee (or holder in due course) gives a written notice to the drawer within 30 days of receiving knowledge of the return.” The Ex.P3 legal notice clearly discloses that the accused issued a cheque for Rs.1,60,000/- and the same was returned unpaid for the reason of Funds Insufficient. Further, the complainant issued Ex.P3 legal notice demanding to pay the cheque amount Rs.1,60,000/- to the accused. To disprove the case of the complainant, the accused should prove that the accused has not issued any cheque to the complainant and if so, under what circumstances he has issued the cheque to the complainant. Mere making 8 suggestion that the accused never borrowed any amount from complainant is not sufficient to rebut the presumption U/sec.139 of Negotiable Instruments Act.
Even if the contention of the learned counsel for the accused is presumed to be true, he has not explained as to how the Ex.P1 cheque went into the possession of the complainant. The contentions of the accused are inconsistent. Merely making inconsistent pleas is not sufficient to rebut the presumption U/sec.139 of
Negotiable Instruments Act.
19.The Hon’ble Supreme court in 2019 (1) ALD (Crl) 296 and submitted that their lord ships in the said judgment observed that under Section 138 of the Negotiable Instrument Act, once the cheque has been signed and issued in favour of the holder, there is a statutory presumption that it is issued in discharge of a legally enforceable debt or liability” and further observed that the presumption is rebuttal one, if the issuer of the cheque is able to discharge the burden that it was issued for some other purpose like security for a loan.
20. Sec.139. Presumption in favour of holder.—It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
21.The Hon’ble Supreme Court in Rangappa v. Sri Mohan reported in (2010) 11 SCC 441 held that “failure of the drawer of the cheque to put up a probable defence for rebutting the presumption that arises under Section 139 would justify conviction even when the drawer may have alleged that the cheque 9 in question had been lost and was being misused by the complainant”.
22.Therefore, the complainant established the legally enforceable debt with plausible evidence. As observed above, the accused himself admitted issuance of Ex.P1 cheque and the existence of legally enforceable debt. As can be seen from the cross-examination of the accused that the accused never borrowed any amounts from the complainant and he never issued Ex.P1 cheque and that the complainant filed this complaint by using the said Ex.P1 cheque.
The above suggestion given to the complainant in the cross-examination would suggest that it is the defense of the accused that the accused never issued cheque. If the accused has not issued Ex.P1 cheque, he may disprove the same by adducing sufficient oral and documentary evidence. But he did not choose to do so.
23.It is pertinent to note here that under Section 118 of Negotiable
Instruments Act, unless the contrary is proved, it is to be presumed that the
Negotiable Instrument (including a cheque) had been made or drawn for consideration. Under Section 139 of Negotiable Instruments Act, the Court has to presume, unless the contrary was proved, that the holder of the cheque, received the cheque for discharge, in whole or in part of a debt or liability. The said presumption is rebuttable. Here, in the present case, the accused failed to rebut the said presumption. The evidence on record proves that there exists a legal enforceable debt under Ex.P1. It is the burden of the accused to prove that the cheque had not been issued for a debt or liability.
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The Hon’ble Supreme Court reported in AIR 2001 SC 3897 in the case of
Hitten P.Dalal Vs Bratindranath Benerjee held that “Thus, in complaints under
Section 138, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable. However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused”.
The Hon’ble Supreme Court in K.N.Beena Vs Muniyappan reported in
AIR 2001 SC 2895 it is held that “The accused must rebut the presumption
U.Sec.118, 139 of Negotiable Instruments Act. Mere denial is insufficient.”
24.Further it is the contention of the accused is that he do not receive
Ex.P3 legal notice. I do not see any force in the contention of the learned counsel
for the accused. The Hon'ble Supreme Court in C.C.Alavi Haji Vs. Paalapetti
Muhammed and another (Indian Kanoon Doc.No.272690) their lordships observed that “it is also to be born in mind that the requirement of giving of notice is a clear departure from the rule of Criminal Law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the Court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (By receiving a copy of complaint with the summons) and, therefore, the complaint is liable to the rejected. A person who does not pay within 15 days of receipt of the summons from the
Court along with the copy of the complaint under Section 138 of the Act, cannot 11 obviosuly contend that there was no proper service of notice as requied under
Section 138 of the Act, by ignoring statutory presumption to the contrary under
Section 27 of the G.C. Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation.
As observed in Bhaskaran's case (Supra), if the giving of notice in the context of
Clause (b) of the proviso was the same as the receipt of notice, a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of section 138 of the
Act.”
25.The other contention of the accused is that the Ex.P1 cheque is materially altered and numeric ‘1’ is inserted before Rs.60,000/-. On perusal of Ex.P1 cheque it clearly shows that the accused was issued for Rs.1,60,000/- and the same was written in words as One Lakh Sixteen Thousand rupees only. On
Perusal of Ex.P1 cheque no insertion are appearing in Ex.P1 cheque.
The Hon’ble Supreme Court in Bir Singh Vs Mukesh Kumar reported in (2019) 4 SCC 197 it is held that “if a signed black cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused t prove that the cheque was not in discharge ofa debt or liability by adducing evidence. A meaning full 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 12 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 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.”
26.Therefore, in view of the above decision, it can be held that the accused failed to rebut the presumption under Sections 118 and 139 of Negotiable instruments Act. Therefore, this Court has no hesitation to presume that Ex.P1 cheque was issued by the accused in discharge of legally enforceable debt.
27.The accused failed to rebut the presumption under Sections 118 and 139 of Negotiable instruments Act. Therefore, this Court has no hesitation to presume that Ex.P1 cheque was issued by the accused in discharge of legally enforceable debt. Therefore, the complainant has discharged his burden by producing oral and documentary evidence as required under Section 138 of
Negotiable Instruments Act. Here, in the present case, the accused failed to discharge his burden of rebutting presumptions in favour of complainant under
Section 118 and 139 of Negotiable Instruments Act. To discharge the burden, the accused need not be entered into witness box. He can rebut the presumption by way of thorough and accurate cross-examination of the witnesses.
28.As already observed the accused admitted the issuance of cheque.
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When once the accused admits the issuance of cheque, the presumptions available under Section 118 and 139 of the Negotiable Instruments Act come into operation. Under Section 118 of the Act, every cheque is presumed to be drawn for consideration and under Section 139 of the Act, every cheque is presumed to be issued towards discharge of legally enforceable debt. The accused failed to rebut the said presumptions.
29.From the above discussion, I opined that the complainant proved his case against the accused for the offence U/sec.138 of Negotiable Instruments
Act beyond all reasonable doubt. Hence, the point is answered accordingly.
30. In the result, the accused is found guilty of the offence U/sec.138 of
Negotiable Instruments Act and accused is convicted U/sec.255(2) Cr.P.C. for the said offence.
(Typed by the Stenographer to my dictation, corrected and pronounced by me in the open court, this the 20th day of February, 2026).
Sd/-Sri.Abdul Rahman Shaik
III Addl.Judicial Magistrate of First Class, Nellore
31.On appearance of the accused, the accused is explained about the punishment provided U/sec. 138 of Negotiable Instruments Act and also questioned about the quantum of sentence to be imposed on him.
32.Accused submitted that he is a Priest in a Temple and he is a
Retired Employee and he is the sole bread winner of the family and prays to take lenient view.
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33.Considering nature of offence proved against the accused and as the accused deliberately issued Ex.P1 cheque without having sufficient funds in his account, if the accused is released under Probation of Offenders Act, it is nothing but traverse of justice and the very object of the legislative mandate of making bouncing of cheque as punishable will be at stake. Therefore, I am of the view that it is not fit case to invoke beneficial provisions of Probation of Offenders
Act in favour of the accused.
34.Further our Hon'ble Apex Court in a decision reported in S.Suresh
Kumar Vs. Jagadeeshan 2002(1) ALD(Crl.) 417 held that “it should be the look out of the trail court Magistrate that the sentence for the offence under section 138 of Negotiable Instruments Act, 1881 should be of such a nature as to give proper effect to the object of the legislation. No drawer of the cheque can be allowed to take dishonor of the cheque issued by him light heartedly. The very object of the enactment of the provisions like Sec.138 of Negotiable Instruments
Act, 1881 would stand defeated if the sentence is flee bite in nature. It is a different matter, if the accused is paid the amount at least during the pendency of the case”.
35.The Hon’ble Supreme Court in in a decision reported in 2012 1 SCC 260 in between R. Vijayan Vs. Baby and Anr observed thus "As the provisions of
Chapter XVII of the Act strongly lean towards grant of reimbursement of the loss by way of compensation, the courts should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy 15 fine up to twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount as compensation. Direction to pay compensation by way of restitution in regard to the loss on account of dishonor of the cheque should be practical and realistic, which would mean not only the payment of the cheque amount but interest thereon at a reasonable rate. Uniformity and consistency in deciding similar cases by different courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice."
36.In view of the above observations of the Hon’ble Supreme Court and in the circumstances of this case, I am of the opinion that this is not a fit case to take a lenient view. Considering all these circumstances, I feel the following sentence will meet the ends of justice.
37. In the result, the accused is found guilty for the offence punishable under section 138 of Negotiable Instrument Act, 1881 and he is convicted under
Section 255(2) Cr.P.C., for the said offence and sentenced to undergo rigorous imprisonment for a period of one year and he is sentenced to pay a fine of
Rs.3,20,000/- (Rupees Three lakhs twenty thousand only) and out of the fine amount an amount of Rs.3,10,000/- (Rupees three lakhs ten thousand only) to be paid towards compensation to the complainant, in view of the loss suffered by him due to the act of the accused U/Sec.357(3) of Cr.P.C. for the offence punishable U/Sec.138 of Negotiable Instruments Act. The remaining fine of 16
Rs.10,000/- (Rupees ten thousand only) to be confiscated to the state. In
default of payment of fine, the accused shall undergo simple imprisonment
for a period of six months. The complainant, is at liberty to recover the compensation Under section 431 of Cr.P.C. as laid down by the Hon’ble Supreme
Court in Kumaran Vs State of Kerala and Anr reported in AIR 2017 SC 2433.
The accused is informed about his right of Appeal before Hon'ble Sessions Court and also informed about his right to get free legal Aid through Hon'ble Chairman,
District Legal Service Authority, Nellore, if he has no means. Office is directed to serve the copy of this judgment to the accused forthwith at free of cost. Office is further directed to prepare the conviction warrant accordingly.
(Typed by me, corrected and pronounced by me in the open court, this the 20th day of February, 2026).
Sd/-Sri.Abdul Rahman Shaik
III Addl.Judicial Magistrate of First Class, Nellore
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Complainant: For Defense :
PW1: Y.Subba ReddyNIL
PW2 : V.Prasanth Reddy
DOCUMENTS MARKED.
For Complainant:
Ex.P1: is the cheque bearing No.469796 dated 22.07.2015 for Rs.1,60,000/- drawn on State Bank of India, Barracks Achari street,Nellore,
Ex.P2 is the cheque return memo dated 01.09.2015 for the cheque bearing
No.469796 issued by Corporation Bank, Tekkemitta Extension Branch, Magunta
Layout, Nellore, 17
Ex.P3 is the legal notice dated 05.09.2015 along with postal receipt.
Ex.P4 is the postal acknowledgment card of the accused.
For Defense: Nil.
Sd/-Sri.Abdul Rahman Shaik
III Addl.Judicial Magistrate of First Class, Nellore
//True Copy//
III Addl.Judicial Magistrate of First Class,
Nellore