CC. NI. No. 5989 of 2022
Old CC NI 99 of 2020
THE COURT OF THE XII JUDICIAL MAGISTRATE OF
FIRST CLASS, MANORANJAN COMPLEX, EXHIBITION
GROUND, NAMPALLY, HYDERABAD
PRESENT: Smt. DILPREET KAUR XII Judicial Magistrate of First Class
Friday, 15 th of May, 2026
CC.NI. No. 5989 of 2022
Old CC NI No.99 of 2020
Between:
G.V. Seshamamba d/o G. Seshaiah, aged 57 years, Occ: Retired pvt employee,
R/o Flat no. 207, HB Residency.
Yellareddyguda, Near PR Law College,
Ameerpet, Hyderabad - 500038 ….Complainant
AND
M. Renuka W/o not known Aged: 52 years,
Occ: Teacher, R/o 6-1-585/2, LIG quarters,
Near Khairtabad Railway Station,
Khairtabad, Hyderabad - 500004
Office at: 21-1-823,
Agrawal Boys High School,
Charkaman, Hyderabad - 500073 ….Accused
Offence Under Section 138 of Negotiable Instrument Act
This case is coming up before me for a final hearing in the presence of Sneha A Bhandari, Counsel for the Complainant and Sri. K
Narasimha Reddy, Counsel for the Accused and having heard and 1
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Old CC NI 99 of 2020 having stood over for consideration, this Court delivered the following:
JUDGMENT
1. The instant matter has originated out of a complaint under
Section 138 Negotiable Instruments Act (hereinafter referred to as
NI Act) filed by the complainant namely, G.V. Seshamamba against the accused M. Renuka alleging that cheque bearing no.707336
dated 15-07-2019 for an amount of Rs. 3,25,000/- drawn on
Punjab National Bank, Charminar branch, Hyderabad was issued by the accused in favor of the complainant in discharge of legal liability which arose out on account of return of money given as a hand loan by the complainant. The above-mentioned cheque has been dishonored and the accused has not paid the said amount even after receiving the prescribed legal demand notice dated 21- 10-2019 through RPAD.
2. It is the case of the complainant that accused and complainant are known to each other and complainant’s friend work in same school and thereafter the complainant and accused both came to know each other and became family friends and known to each other since 5 years. That since 2017 accused had some family liabilities and going through financial problems and wanted some financial help for construction for her own house situated at Khairtabad and for the same accused approached the 2
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Old CC NI 99 of 2020 complainant and asked for the financial help for construction purpose. In April 2017, accused approached the complainant for the same and the amount of Rs. 3,25,000/- (Rupees Three Lakh
Twenty Five thousand only) were given to accused in cash as hand loan in small installments in the span of these two years. That the accused promised to return the same amount within short period of time but however at the time of returning the amount accused started giving excuses on one or the other pretext. After requesting many times accused have issued a cheque bearing No 707336 dated 15.07.2019 drawn on Punjab National Bank, Charminar Branch for amount of Rs. 3,25,000/- (Rupees Three Lakh Twenty Five thousand only) acknowledging the aforesaid amount and to discharge the aforesaid legally enforceable debt to the complainant under the above fransaction. That as per the accused’s instructions, the complainant presented the aforesaid cheque in her
Bank i.e. IDBI Bank Limited, Ameerpet Branch, Hyderabad on 10.10.2019 for realization, But the same was dishonored due to reason that "FUNDS INSUFFICIENT from her side, the Bank informed to the complainant through cheque return memo dated:
11.10.2019. On receiving the same the complainant is utter shocked, immediately approached the accused and informed the same to her and demanded to pay the cheque amount to avoid penal action. But the accused failed to pay the cheque amount.
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That thereafter the Complainant got issued a demand legal notice
dated 21.10.2019 by Registered Post with Acknowledgement Due
and dispatched on 21.10.2019 through his advocate, calling upun the Accused to pay the amount due and payable on the said cheque within 15 days of the receipt of the said notice. That the accused received the said notice on 23.10.2019. Despite receiving the legal notice, the accused neither replied to the said notice nor paid the amount within the stipulated time. Aggrieved by this, the complainant is constrained to file the present complaint.
3. Originally the complaint was filed in the court of Hon’ble III Addl
CMM Hyderabad on 11-11-2019 and cognizance was taken and the case is numbered as CC NI No.99 of 2020. Thereafter, the case was transferred to the court of Hon’ble XII JMFC, Hyderabad by the orders of Hon’ble MSJ, Hyderabad, vide Dis no 4177 and was renumbered as CC NI No.5989/2022.
4.Upon the receipt of the summons, the Accused appeared
before the Court and a copy of the complaint was furnished to her.
Thereafter, the Accused was examined under Section 251 CrPC by notifying the substance of the accusation for the offence punishable under Section 138 of N.I Act and after notifying the substance of the accusation and on the question of the plea of guilt she pleaded not guilty and claimed to be tried. Hence, the trial.
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5.On the commencement of trial, the Complainant examined herself as PW1. The Complainant filed her examination-in-chief affidavit on 18.08.2022 and reiterated the contents as mentioned in the complaint; Consequently, repeating those facts wouldn’t serve any useful purpose. PW1 got Exhibited Ex. P1 to Ex. P6 as documentary evidence.
6. PW1 was cross-examined by the learned counsel of the Accused
For brevity and to avoid repetition, the relevant aspects of the cross- examination are discussed while appreciating the evidence. The case was posted for further evidence of complainant. The complainant got examined PW2 in her favor and PW2 filed her chief affidavit in lieu of her examination in chief on 06-03-2023 and on 06-05-2025, the cross examination of PW2 was conducted and the further evidence was closed on 06-05-2025. After the closure of the complainant’s evidence, the case was posted for accused’s examination under section 313 CrPC and the Accused was examined Under Section 313 CrPC enabling her to explain personally the incriminating circumstances that appeared against her in the evidence of the complainant, for which, the Accused denied the truthfulness of the evidence of the complainant. The
Accused reported that no defense evidence and the defence evidence 5
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Old CC NI 99 of 2020 was closed. After that, the arguments from both sides were concluded and the matter was posted for Judgment on 15.05.2026.
7.Heard both sides and perused the record.
The points for determination in present case are :-
(i)Whether there existed a legally enforceable debt and if so, the accused has issued Ex. P1 cheque in discharge of such debt ?
(ii) Whether accused has successfully rebutted the presumption raised u/s 139 of NI Act ?
(iii)Whether the accused is liable for punishment under
Section-138 of NI Act beyond reasonable doubt?
In order to avoid repetition, point no. 1 and 2 are discussed together.
However, before proceeding to the merits of the case, it is important to lay down the basic requirements of Section 138 of the NI Act,1881.
In Jugesh Sehgal vs. Shamsher Singh Gogi, (2009) 14 SCC 683, the Hon’ble Supreme Court has culled out the essential ingredients in order to constitute an offence u/s 138 og NI Act as highlighted below:
(i) A person must have drawn a cheque on an account mainatined by him in a bank for payment of a certain amount of money to another person from out of that account; 6
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(ii) The cheque should have been issued for discharge, in whole or in part, of any legally enforceable debt or other liability;
(iii) That cheque has been presented to the bank within a period of six months from the date on which it is drawn oe within the period of its validity whichever is earlier;
(iv) The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank;
(v) A demand of the said amount has been made by the payee or holder in due course of the cheque by a notice in writing given to the drawer within thirty days of the receipt of information by him of the dishonour of cheque from the bank;
(vi)The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of the said notice.
8.In addition to the above, the conditions stipulated under
Section 142 N.I Act have to be fulfilled. It becomes imperative to mention that Section 139 of the N.I Act provides a statutory presumption in favour of the Drawee that the Cheque was issued to him in discharge of a debt or other liability of a legally enforceable nature. Also, the said provision must be read along with Section 118 of N.I Act which states that every negotiable instrument is presumed to have been drawn and accepted for consideration. That 7
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Old CC NI 99 of 2020 said, what follows is that trial under section 138 N.I Act is structured on the premise of the reverse onus of proof theory since the offence is a document-based technical one. The journey of evidence begins not from the home of the Complainant story but from the point of the Accused. The presumptions carved out in favour of the Complainant are those of law and not those of facts.
9. Before moving forward, it is pertinent to discuss the relevant provisions of law which deal with legally enforceable debt or liability under the NI Act which are Section 118(a) and 139 of the NI Act.
Section 118(a) of the NI Act deals with the presumption of consideration and Section 138 of NI Act deals with presumption of legally enforceable debt or liability and reads as follows:
"118. Presumptions as to negotiable instruments- Until the contrary is proved, the following presumptions shall be made: (a) of consideration: that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration;
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." 8
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10.It is further pertinent to mention the relevant judgments on the point of presumption of legally enforceable debt or liability.
Reliance is placed by this court upon the judgments of Hon'ble
Supreme Court of India in Rangappa v Sri mohan, (2010 11 SCC
441, Kumar Exports v Sharma Carpets, (2009) 2 SCC 513, and
Bir Singh v Mukesh Kumar, (2019) 4 SCC 197, wherein it has held that the presumption u/s 139 NI Act is a presumption of law and not presumption of fact. It has further been held that it is not necessary that the cheque must have been filled by the accused himself and the accused may be liable even when the cheque has been filled by the complainant. The essential requirement is that the liability must exist on the date of the presentation of the cheque in question. It has been further held that once the signatures on the cheque are admitted then the court is bound to raise presumption u/s 118 r/w. 139 NI Act regarding existence of legally enforceable debt or liability. Further, it is a settled position that when an Accused has to rebut the presumption under Section 139
N.I Act, the standard of proof for doing so is that of "preponderance of probabilities". It has been held by the Hon'ble Supreme Court in
Rangappa v. Sri. Mohan, (2010) 11 SCC 441 that the presumption contemplated under Section 139 of the N.I Act includes the presumption of the existence of a legally enforceable debt. To rebut the statutory presumption under Section 139 N.I Act, 9
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Old CC NI 99 of 2020 the standard of proof is that of the preponderance of probabilities, by which the Accused is required to raise a probable defence. To rebut the presumption, it is open to the Accused to rely on evidence led by him/her, or the Accused can also rely on the materials submitted by the Complainant or the circumstances upon which the parties rely to raise a probable defence. It has been held by the
Hon’ble Supreme Court in Basalingappa v. Mudibasappa (2019)
5 SCC 418 that to rebut the presumption, the Accused can also rely on the materials submitted by the Complainant to raise a probable defence. The Accused by cross-examining the Complainant can rebut the presumption of issuance of cheque in discharging of any debt or other liability. The inference of preponderance of probabilities can be drawn not only from the material brought on record but also by reference to the circumstances. The Accused by cross-examining the Complainant can rebut the presumption of issuance of cheque in discharging of any debt or other liability. The
Accused can prove the non-existence of a consideration by raising a probable defense and if the Accused is proven to have discharged the onus of proof showing that the existence of consideration was doubtful or improbable, the onus would shift on the Complainant who will be obligated to prove it as a matter of fact and upon his failure to prove would disentitle him for the grant of relief under
Section 138 of the N.I Act.
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11.The Hon’ble Supreme Court in Kumar Exports Private
Limited v. Sharma Carpets (2009) 2 SCC 513, held that to disprove the presumption under Section 139 of the Act, 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 that they did not exist.
12.Thus, as laid down in the catena of decisions it is an established law that the onus lies upon the Accused to rebut the presumption and to establish that cheque in question was not given in respect of any debt or liability, with the standard of proof being the preponderance of probability. Therefore, it becomes critical to examine whether the explanation of the Accused coupled with the evidence on record is sufficient to dislodge the presumption envisaged by Sections 118 & 139 of N.I Act.
13. Being cumulative, it goes without saying that it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence u/s 138 NI Act. This criminal liability can be attached by proving each of the elements of the section under which the liability is 11
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Old CC NI 99 of 2020 sought to be enforced. I shall now go on to appreciate the evidence, documentary or oral, in the light of how compellingly it satisfies each of such ingredients if at all.
14.Learned Counsel for the complainant has submitted that there exists legally enforceable liability in favor of the complainant on the basis of presumption under section 139 NI Act and also on the basis of the averments made in the complaint and the evidence by way of affidavit. She has further submitted that the cheques in question were issued to the complainant by the accused in discharge of legally enforceable debt or liability and the dishonor of the said cheque is proved by bank return memo already placed on record. Further, legal demand notice has been duly served on the accused. She has further submitted that the complainant received no payment within 15 days of the service the legal notice. Learned
Counsel for complainant has thus submitted that all the ingredients laid down U/S 138 NI Act are fulfilled and the accused should be convicted.
15.Per Contra, it is the case of the accused that there is no legally enforceable debt or liability in favor of the complainant because the blank signed cheque was given to the complainant for security purpose only but not to present in the bank. To prove her defence, 12
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Old CC NI 99 of 2020 the accused has relied on the cross-examination of the complainant and that prayer of the accused is that he should be acquitted.
16.The presentation of the Cheque in question for encashment and dishonor of the cheque for the reason “Funds Insufficient” is not in dispute, as it is a matter of record proved by Ex. P1 Cheque and the return memo dated 11.10.2019 marked as Ex. P2. Ex. P1 i.e. Cheque is dated 15.07.2019 and is dishonored on 11.10.2019, which shows that Ex. P1 Cheque was presented within the validity period and was returned unpaid by reason of ‘Funds Insufficient’. It is also not in dispute that Ex. P1 Cheque was drawn by the Accused on the bank account maintained by her as she has not denied her signature on Ex. P1 Cheque.
17.Further, Ex. P3 Legal notice was issued within the statutory period to the Accused, calling upon him to pay the cheque amount.
The Accused has not given any reply to Ex P3 legal notice. It is found from the collective appreciation of Ex. P3 legal notice, Ex. P4 and P5 postal receipts that the legal notice was issued to the
Accused. Ex P6 postal acknowledgement card shows that the legal notice has been received by the accused. Moreover, the accused has admitted in her Section 313 CrPC examination that she received the legal notice. Further, the Accused has failed to repay 13
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Old CC NI 99 of 2020 the amount within 15 days from the receipt of Ex. P3. Therefore, the statutory requirement of Section 138 (a) (b) and (c) are duly proved.
* Whether Ex. P1 Cheque was issued by the Accused in
discharge of a legally enforceable debt or liability?
18.The pertinent question which requires determination is whether Ex. P1 Cheque was issued by the Accused in the discharge of a legally enforceable debt or liability. It is a matter of record that the Accused has not denied her signature on Ex. P1 Cheque. The
Hon’ble Supreme Court in Kalamani Tex & Anr. v. P.
Balasubramanian (2021) 5 SCC 283, held that the NI Act mandates that once the signatures of an Accused on the cheque/Negotiable instrument are established then these “reverse onus” clauses become operative. In such a situation the obligation shifts upon the Accused to discharge the presumption imposed on him. Due to such admission, the presumption under section 139 of the N.I Act that there exists a legally enforceable debt or other liability arise in the favor of the Complainant. It is the contention of the Complainant that the Accused had issued Cheque bearing No.
707336 dated 15.07.2019 for Rs. 3,25,000/- (Three Lakh Twenty
FIve Thousand) towards the payment of handloan amount taken by the accused. The accused though admitted the issuing of cheque but has denied that she issued cheque to the complainant towards legally enforceable debt rather she issued blank signed cheque for 14
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Old CC NI 99 of 2020 security purpose for chit business run by the complainant and that she has repaid to her the entire amount what she actually owed to the complainant. This defence of accused is revealed from her examination under Section 313 CrPc and also from the cross examination of PW1 and PW2.
19. As discussed in para 10 of this judgment, one of the recognised modes of discharging the presumption under Section 139 of the NI
Act is by raising a reasonable doubt in the version of the complainant. The accused, in order to rebut the presumption and discharge the burden with respect to the fact that the cheque was not issued towards a legally enforceable debt, has not produced any witness. Rather, she has attempted to raise a doubt in the complainant’s version in the following ways:
• by advancing oral arguments; and • through cross-examination of PW1 and PW2.
However, when the cross-examination of PW1 and PW2, as well as the arguments advanced by the accused, are appreciated in light of the requirements of Section 138 as stated in para 7, it becomes evident that the same are not of much assistance in establishing that the cheque was not issued towards a legally enforceable debt, for the following reasons:
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I) At the outset, the complainant, examined as PW1, has clearly stated that she had advanced a total sum of Rs. 3,25,000/- to the accused over a period of time. She has specifically deposed that “I gave 3,25,000 from 2017 to 2019 onwards to the accused as she needed money for house construction.” This version is supported by the averments made in the complaint as well as by the evidence of PW2. PW2, in his chief affidavit, has stated that - “The complainant gave cash to the accused many times in my presence also as hand loan in small instalments many times total amounting to Rs. 3,25,000/-(Rupees Three Lakhs Twenty Five Thousand only) from the period of 2017 to 2019.”
Thus, the evidence of PW1 and PW2 is consistent on the material aspect that the amount was paid in installments over a period of time. This consistency lends credibility to the complainant’s case regarding the existence of a legally enforceable debt.
It is also important to note that the complainant has consistently stated that the cheque in question was issued towards discharge of the said liability. In her cross-examination, she has deposed, “I got the cheque in September 2019. Witness adds, after insisting the accused.” She has further stated that “I have filled the contents of Ex.P1 cheque” and clarified in her re-examination that - “I wrote the amount which was told to me by the accused.” These statements do not weaken the case of the 16
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Old CC NI 99 of 2020 complainant. On the contrary, they indicate that the cheque was issued by the accused and handed over to the complainant with authority to fill in the details.
Further, there is no suggestion that the signature on the cheque is forged or that the cheque was stolen or misused. This is a significant circumstance. In fact, the defence has not set up any case disputing the execution of the cheque.
The defence has placed reliance on the admission of the complainant regarding the absence of documentary proof for the loan transaction. The complainant has stated, “I have not submitted any record to show that I gave the money to the accused in small amounts in installments.
Witness adds, it was written in a book and I have not filed such a book.” However, this admission has to be considered in the proper context. The complainant has not denied maintaining a record, rather she has only stated that such record was not produced before the Court.
Moreover, it is not a legal requirement that every loan transaction, especially between persons who are known to each other, must be supported by documentary evidence. The oral evidence of PW1, which is consistent and duly corroborated by PW2, is sufficient to discharge the initial burden, particularly in view of the statutory presumption.
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II) The financial capacity of the complainant has also been questioned. However, the complainant has explained her financial position in detail, stating that “I worked at MG. Scooters as a sales officer. I earned around 12000. Witness adds, that was 14 years back and presently i get pension as my father was a Government teacher and since i am a divorcee, i get his pension as a divorced daughter.” “I voluntarily retired in 2008 from MG. Scooters. My father's pension is 19,850/-. I am getting pension since 2015. Witness adds, that the pension started in 2016, but it came with arrears of 2015”
She has also stated that she earns agricultural income from her father’s agricultural land. Though she has admitted that “I am not an income tax assessee,” this by itself is not sufficient to disbelieve her financial capacity, particularly when the accused has not placed any contrary material on record. The explanation given by the complainant appears reasonable and has not been shaken in cross- examination.
Moreover, it is well settled in the recent pronouncement of the
Hon’ble Apex Court in Tedhi Singh vs Narayan Dass Mahant
[2022 Live Law (SC) 275]that a complainant is not expected to initially prove financial capacity unless the accused specifically 18
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Old CC NI 99 of 2020 raises such a defence. At the same time, the accused is entitled to show that the complainant did not have the financial capacity, either by leading independent evidence, examining witnesses, or through effective cross-examination.
It is the duty of the Court to consider the entire evidence on record and decide whether the accused has established a probable defence on the basis of preponderance of probabilities. In the present case, the accused has not rebutted the statutory presumption by any cogent evidence and has only put suggestions regarding the complainant’s financial capacity. Mere suggestions or questions, without any supporting material, do not help the case of the accused.
If the Court were to doubt the financial capacity of the complainant merely on the basis of such questions, then in no case under
Section 138 of the Negotiable Instruments Act would a conviction be possible. It is also relevant to note that this objection has been raised for the first time during cross-examination. The accused could have raised this plea in reply to the statutory notice, but has not done so. This omission is significant, as it shows that there was no immediate denial of liability at the earliest point of time, which supports the case of the complainant.
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Therefore, as the accused has failed to bring any material on record even on the standard of preponderance of probabilities, this defence cannot be accepted.
III) Coming to the third limb of the defence, namely, the attempt to create doubt based on alleged inconsistencies regarding the date of the cheque, its presentation, and the earlier dishonor in July 2019, this Court finds that the entire argument, on close examination of the evidence, is more apparent than real and does not create any doubt on the core case of the complainant.
The complainant has, in a natural and candid manner, stated during cross-examination that “I don't remember correctly but it must be 2 times”when asked about how many times the cheque was presented.
She was also confronted with the earlier cheque return memo dated
July 2019, to which she fairly answered, “Yes,” thereby admitting that the cheque had been presented earlier. She has further stated that“I did not issue notice for the first dishonor of cheque,” and also admitted that“I have not written in my Complaint, legal notice Ex. P3 and chief affidavit that cheque was returned once before in July 2019.”These answers show that the complainant has not tried to falsely improve her case, but has given truthful answers even when they could appear to support the defence.
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However, the defence has failed to draw the correct legal inference from these admissions. It is well settled that a cheque can be presented more than once within its validity period, and each dishonor gives rise to a fresh cause of action, provided the legal requirements are complied with based on the dishonor relied upon.
Therefore, merely because the complainant did not issue a notice after the first dishonor in July 2019, her right to proceed on the basis of the subsequent dishonor dated 11.10.2019 is not lost. It is also to be noted that though the accused confronted the complainant with the cheque return memo and got it marked as Ex.
D1, the said document is only a xerox copy. Even though it is marked, it cannot be relied upon, as xerox copies are not admissible in evidence unless properly proved. Mere marking of a document does not amount to its proof, and in the present case, the accused has failed to establish anything against the complainant on this basis.
On the other hand, the conduct of the complainant appears to be in line with normal human behavior. She has stated that after the dishonor, she“immediately approached the accused and informed the same to her and demanded to pay the cheque amount.”This shows that instead of immediately initiating legal action after the first dishonor, she gave an opportunity to the accused to make payment. This is natural in 21
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Old CC NI 99 of 2020 transactions between persons who are known to each other for a long time. It is only when the accused failed to pay that the complainant proceeded with legal action after the subsequent dishonor.
The defence has also tried to point out an inconsistency regarding the date of the cheque. When asked about the date mentioned in the complaint, the complainant stated, “it is 15-07-201. Witness adds, that is why she said approximate date before.” This has to be read along with her earlier statement that“it can be one month here and there (approx).” These answers indicate that the complainant was deposing from memory about events that took place several years earlier and was giving approximate answers where she was not sure of exact dates. Such minor inconsistencies are natural and, in fact, show that the witness is not giving a tutored version.
Importantly, these inconsistencies do not affect the main case of the complainant. The essential facts remain intact, namely, that the cheque bearing No. 707336 was issued by the accused, it was presented by the complainant as per the instructions of the accused, and it was dishonored for “funds insufficient” on 11.10.2019 as shown by Ex. P2. The complainant has also clearly stated in her complaint that “as per the accused’s instructions, 22
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Old CC NI 99 of 2020 the complainant presented the aforesaid cheque in her Bank i.e.
IDBI Bank Limited, Ameerpet Branch, Hyderabad on 10.10.2019 for realization,” which shows that the cheque was presented with the authority of the accused.
It is also relevant that the defence has not given any explanation regarding the earlier dishonor in July 2019. If there was no legally enforceable debt, the accused should have explained why the cheque issued by her was presented and dishonored even at that time. The silence of the defence on this aspect, along with the fact that no reply was given to the statutory notice (as admitted by the complainant, “I did not get reply”), strengthens the case of the complainant that the cheque was issued towards an existing liability.
Further, the argument of the defence that the complainant did not mention the earlier dishonor in the complaint is of no consequence.
A complaint is not required to contain every past detail. What is important is whether the requirements of Section 138 of the
Negotiable Instruments Act are satisfied in respect of the dishonor in question. In this case, the complainant has clearly proved that the cheque was dishonored on 11.10.2019, that a legal notice was issued on 21.10.2019 within the prescribed time, and that the 23
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Old CC NI 99 of 2020 accused failed to make payment within 15 days of receiving the notice. These basic facts have not been disputed.
Therefore, when the entire evidence is considered as a whole, the alleged inconsistencies regarding prior presentation and dates are only minor in nature and do not affect the foundation of the complainant’s case. On the contrary, the honest admissions made by the complainant add to her credibility, and the settled legal position answers the defence raised on these grounds.
Accordingly, this line of defence fails to rebut the statutory presumption and, in fact, supports the case of the complainant when examined in light of the evidence on record and the settled principles of law.
IV) The defence has further tried to argue that since the complainant admitted in her cross-examination that there was an agreement regarding payment of interest, but the same was not mentioned in the complaint, legal notice, or chief affidavit, the entire transaction becomes doubtful. However, on careful reading of the evidence, this contention is not acceptable.
The complainant has clearly stated, “Rs. 2 per month was the interest,” and has further clarified that “Ex. P1 was issued for the total payment of loan 24
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Old CC NI 99 of 2020 amount. Witness adds, it did not include interest.” She has also candidly answered the following question:
“Q. Have you mentioned in your complaint, chief affidavit or notice that rate of interest was Rs. 2 per month?
Ans: It is not written. Witness adds, it was told at the time of giving the money and will take it later.”
These statements do not weaken the complainant’s case. On the contrary, they show that the cheque amount relates only to the
principal amount and does not include any interest component.
This aspect is important because it shows that the complainant has not exaggerated her claim and has restricted it only to the principal amount of Rs. 3,25,000/-. Such conduct appears fair and supports her case. The fact that interest was not mentioned indicates that the complainant chose not to include additional claims and confined her case only to the legally enforceable debt covered by the cheque.
It is also a settled position of law that even if there are oral agreements regarding payment of interest, the validity and enforceability of the principal amount covered under the cheque is not affected. The cheque Ex. P1 itself is a written acknowledgment 25
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Old CC NI 99 of 2020 of liability for Rs. 3,25,000/-, and the statutory presumption under
Sections 118 and 139 of the Negotiable Instruments Act, 1881 applies to that amount. Therefore, the non-mentioning of interest does not create any inconsistency and does not support the defence in any manner.
V) The defence has also tried to create doubt by pointing out that the complainant herself filled up the cheque and that no witness was present at the time when the cheque was issued. However, when the evidence on this point is properly considered, it supports the case of the complainant rather than the accused.
The complainant has clearly stated, “I have filled the contents of Ex. P1 cheque,” and has further explained in her re-examination that “I wrote the amount which was told to me by the accused.” She has also stated that “when the cheque was issued to me, nobody was present.” In the same manner,
PW2 has stated, “I was not present when the accused was handing over Ex.P1 to the complainant.”
These statements are natural and do not create any doubt in the complainant’s case. On the contrary, they show two important things: first, that the cheque was given voluntarily by the accused, and second, that the complainant was permitted to fill in the details 26
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Old CC NI 99 of 2020 of the cheque. It is important to note that no suggestion has been made to the complainant that the cheque was stolen, lost, or taken by force. This absence of such a defence is a significant circumstance.
The law on this point is well settled by the Hon’ble Supreme Court in Bir Singh v. Mukesh Kumar, even if a blank signed cheque is voluntarily handed over, there is a presumption that it was issued towards discharge of a liability, and the holder of the cheque is entitled to fill in the contents. Therefore, the fact that the complainant filled up the cheque does not affect its validity and, in fact, supports the presumption in her favour.
With regard to the absence of witnesses, it is to be noted that such transactions, especially between persons who are “family friends and known to each other since 5 years,” as mentioned in the complaint, are usually done privately. The absence of a witness does not reduce the value of the cheque as evidence. It is well settled that issuance of a cheque is generally a transaction between two persons and does not require the presence of witnesses. Once the cheque bearing the admitted signature of the accused is produced, the presumption under Section 139 of the Negotiable Instruments Act arises. Therefore, the statement of the complainant that “nobody was 27
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Old CC NI 99 of 2020 present” is in line with normal human conduct and does not lead to any adverse inference.
VI) The evidence of PW2 is important as it gives independent support to the complainant’s version regarding the loan transaction. PW2 has clearly stated in her chief affidavit that - “The complainant gave cash to the accused many times in my presence also as hand loan in small installments many times total amounting to Rs. 3,25,000/-(Rupees Three
Lakhs Twenty Five Thousand only) from the period of 2017 to 2019.” She has also stated that the accused admitted her liability and issued the cheque.
During cross-examination, PW2 has stated that “I am not aware that, on which date accused issued the cheque” and “I was not present when the accused was handing over Ex.P1”. However, these statements do not weaken her evidence on the main issue. As per her own version, she was a common friend who introduced both parties and was present during the loan transactions. She has also stated that “complainant used to maintain the whole account”, which explains why she may not know the exact dates or other details.
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The defence has pointed out a difference regarding the year of introduction. PW2 has stated that “I Introduced the accused to the complainant in around year 2015. It is true that, in my chief affidavit it is written year 2017, however, I introduce her even before that period.” This difference is minor and does not affect the main case. Whether the parties were introduced in 2015 or 2017 is not important. What is important is that PW2 has consistently supported the complainant regarding the payment of money and the existence of liability.
At this stage, it is pertinent to deal with the argument of accused.
He contends that PW2’s evidence is not helpful is also without merit. PW2 has clearly supported the case of the complainant regarding advancement of the loan in installments. Minor admissions such as not being present at the time of issuance of cheque or not knowing exact dates do not affect the core of her testimony. Her evidence continues to corroborate the complainant on material particulars.
It is also important to note that nothing has come out in cross- examination to show that PW2 had any reason to falsely depose against the accused. Her evidence remains consistent on all material aspects and gives strong support to the evidence of PW1.
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VII) Lastly, the most important aspect of this case is that the accused has completely failed to discharge the burden placed upon her after the statutory presumption has arisen. As held in Kumar
Exports v. Sharma Carpets, the accused must bring on record such material which makes the non-existence of consideration so probable that a prudent person would believe it. In the present case, no such material has been produced by the accused.
The defence of the accused is limited only to suggestions made during cross-examination, such as “it is not true to suggest that accused did not take any loan and I have filed false case.” However, such suggestions, without any supporting evidence, do not amount to proof. The accused has neither stepped into the witness box nor produced any documents to support her defence.
It is also important that the accused did not give any reply to the statutory legal notice. The complainant has stated, “I did not get reply.”
This silence is significant, because a person who has no liability would normally reply and deny the claim. The failure to do so allows the Court to draw an adverse inference against the accused.
Further, even during cross-examination, no clear defence has been put forward to explain how the cheque came into the hands of the complainant. There is no case that the cheque was given as 30
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Old CC NI 99 of 2020 security, no case that the amount was repaid, and no alternative explanation of events. It is only once, during examination under
Section 313 Cr.P.C., that the accused stated that the cheque was issued as security for a chit transaction. However, this fact was never suggested during cross-examination, not even in the form of a suggestion. This makes the version appear as an afterthought, and no evidence has been produced to support it.
The absence of any clear and consistent defence itself strengthens the case of the complainant.
VIII) The reliance placed by the accused on Basalingappa v.
Mudibasappa is misplaced in the facts of the present case. While it is correct that the accused can rebut the presumption on the basis of preponderance of probabilities, such rebuttal must be based on some material evidence. In the present case, the accused has not led any evidence, either oral or documentary, and has only relied upon suggestions and certain admissions in cross-examination, which by themselves are insufficient to rebut the statutory presumption.
The argument that the complainant failed to prove the case beyond reasonable doubt is also misconceived at this stage. Once the presumption operates, the initial burden shifts to the accused to 31
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Old CC NI 99 of 2020 raise a probable defence. Only if such defence is established does the burden shift back to the complainant. In the present case, the accused has failed to raise any probable defence. There is no explanation as to why the cheque was issued, no case of repayment, and no consistent defence regarding misuse of cheque.
Therefore, the claim of the accused that the presumption stands rebutted is not supported by any evidence. The complainant has successfully established the foundational facts required under
Section 138 of the Negotiable Instruments Act, and the accused has failed to dislodge the statutory presumption even on the standard of preponderance of probabilities. Hence, the contentions raised by the accused are liable to be rejected.
20. In view of aforesaid discussion, the present case set up by the accused is thoroughly riddled with contradictions and omissions. It is apparent on the face of the record that there is not the slightest credibility perceivable in the defense set up by the accused. Nothing significant has been drawn from the cross-examination of the complainant to raise any suspicion in the case set up by the complainant, the case of the complainant has been consistent throughout. The complainant’s case satisfied every ingredient necessary for sustaining a conviction under Section 138. The case 32
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Old CC NI 99 of 2020 of the defense was limited only to the issue as to whether the cheque had been issued in discharge of a debt/liability. When the entire evidence is appreciated cumulatively, it becomes evident that the accused has failed to create even a probable doubt regarding the existence of legally enforceable debt. The presumption under
Sections 118 and 139 of the Negotiable Instruments Act, 1881, therefore, remains intact and unrebutted.
In sum, the depositions of PW1 and PW2, read in their entirety, not only withstand the test of cross-examination but also present a coherent and credible narrative. The defences raised are either legally untenable or factually unsupported, and instead of dislodging the complainant’s case, they inadvertently reinforce it.
21.In the backdrop of the discussion above, this Court is of the considered view that the Accused has failed to rebut the presumption under Section 139 of NI Act.
On the other hand, the Complainant could establish her case by proving the issuance of cheque Ex. P1 in discharge of a legally enforceable debt by the Accused, which is supported by Ex. P2 to
P6 and the oral testimony of PW1 and PW2.
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22.In the result, the Accused is found guilty of the offence punishable under Section 138 of the Negotiable Instruments Act and consequently she is convicted under Section 255(2) Cr.P.C.
Transcribed, corrected and pronounced by me in open court on this, 15th day of May of 2026.
Sd/-
XII Judicial Magistrate of First Class, Hyderabad 34
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Quantum of sentence:
23. Accused called present. When the accused is questioned with regard to the sentence to be imposed against her, she submitted that I am having health issues and pray the court to take a lenient view.
24. Keeping in view of the nature of the case and the offence involved, this Court is inclined to invoke the benefit under
Probation of Offenders Act. Accused is explained of his right to prefer appeal against the Judgment of this Court.
25. Having considered the nature of offence, it seems proper to award a sentence of fine instead of awarding sentence of
Imprisonment.
26. In R. Mohan v. A.K.Vijaya Kumar [(2012) 8 SCC 721] the
Hon’ble Apex court held that the court may also consider imposing
default sentence in case the accused fails to pay the compensation amount.
27. It has been held in Suganti Suresh Kumar v. Jagadeeshan [AIR 2002 SC 681] by the Hon’ble Supreme Court that the court 35
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Old CC NI 99 of 2020 may consider granting of payment in installments or give time to pay such amount.
28. In the result, accused is found guilty for the offence punishable under Section 138 of the Negotiable Instrument Act, 1881, as such, accused is convicted under section 255(2) of the Code of Criminal
Procedure and sentenced to pay a fine of Rs. 5,05,000/-. In default
Accused shall undergo simple imprisonment for a period of 3 months. Out of the Rs.5,05,000/- , Rs 5,000/- shall be defrayed to the state u/s 357(1)(b) Cr Pc and remaining Rs. 5,00,000/- shall be paid to the complainant u/s357(1)(b) Cr Pc. Accused shall pay the entire fine amount in five installments within 5 months from the date of this judgment.
29. The bail bonds of the Accused, if any, shall stand cancelled after expiry of 6 months.
30. The section office is directed to furnish a copy of this judgment to the Accused free of cost.
Transcribed, corrected and pronounced by me in open court, on this15th day of May 2026
Sd/-
XII Judicial Magistrate of First Class, Hyderabad 36
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APPENDIX OF EVIDENCE
WITNESSES EXAMINED
FOR COMPLAINANT ACCUSED
PW1 : GV Sheshamamba DW1: None
PW2: K Padmavathi
EXHIBITS MARKED FOR COMPLAINANT
FOR COMPLAINANT:
1. Ex P1 is the Original cheque no. 707336 for Rs.3.25,000/-
dated 15-07-2019 drawn on Punjab National Bank.
2. Ex P2 is the Cheque return memo, dated 11-10-2019.
3. Ex P3 is the Office copy of legal notice, dated 21-10-2019.
4. Ex P4 is the Postal receipt, dated 22-10-2019.
5. Ex P5 is the Postal receipt, dated 22-10-2019.
6. Ex P6 is the Postal acknowledgment card, dated 23-10-2019
EXHIBITS MARKED FOR ACCUSED IN THE COURSE OF
CROSS EXAMINATION OF PW1 AFTER DUE
CONFRONTATION WITH PW1:
Ex D1: Copy of cheque return memo dated 16-07-2019
Sd/-
XII Judicial Magistrate of First Class,
Hyderabad 37