APEG2700056IN THE COURT OF THE XIII ADDITIONAL SESSIONS 72025JUDGE, EAST GODAVARI AT
RAMACHANDRAPURAM.
Present: Smt. G.Anandi, III Additional Sessions Judge, Kakinada.
(FAC) XIII Additional Sessions Judge,
Ramachandrapuram
Thursday, the 9th day of April, 2026
CRIMINAL APPEAL No. 279 of 2019
From what court the appeal is:Additional Judicial First Class preferredMagistrate’sCourt, Ramachandrapuram Number of the case in that:C.C.No.86 of 2018 Court Number of the Appeal:C.A.No.279 of 2019
Name and description of the:Madineni Prasanna Kumar, S/o AppellantsSitaramayya, Age 51 years, Hindu, R/oD.No.34,10thMain Mriyannaplya Coffee board layout, Hafram Post, Bangalore-560025. Name and description of the:Vytla Surya Prakhasa Rao, S/o 1st respondent /ComplainantPattabhi Rama Rao, Age 58 years, Hindu,R/oD.No.19-12-1, Ratnampeta, Ramachandrapuram Town and Mandal. The sentence and order under: which it was imposed in the lower Court. In the result, the accused is sentenced to pay a fine of Rs.5,000/-, in default of payment of fine amount, accused shall undergo simple imprisonment for one week. The accused is further directed to pay compensation of two cheques amounts i.e. Rs.4,95,000/- (Rupees four lakhs ninety five thousand only) and R.s4,95,000/- (Rupees four lakhs ninety five thousand only) totalling to Rs.9,90,000/- (Rupees nine lakhs ninety thousand only) to the complainant within a period of two months from this day u/s 357 Cr.P.C. In case of default on payment of compensation amount as ordered by this court, the accused is sentenced to undergo simple imprisonment for a period of one month.
C.A.No.279/2019 2
Whether confirmed/modified: Confirmed. or Reversed, if modified the modification
Date of presentation: 14.08.2019
Date of filing: 14.08.2019
Notice issued by Court to: appear14.08.2019
Bail bonds if appellant has: --- been let out on bail
Appellants ordered to appear: 28.02.2020
Date of hearing: 12.03.2026
Date of judgment:09.04.2026
This criminal appeal coming on 02.04.2026 for final hearing before me in the presence of Sri Md.M.Chisti, Advocate for the petitioner/
Appellant/Accused, and of Sri M.Srihari, Advocate for the respondent; and upon hearing both sides; and the matter having stood over for consideration till this day, this Court delivered the following:
J U D G M E N T
1.This appeal filed under Section 374 of Cr.P.C., is against the
Judgment passed in C.C.No.86/2018 on the file Addl. Judicial Magistrate of First Class, Ramachandrapuram dt.02.08.2019.
2.The respondent in the present appeal as complainant before the trial court filed a complaint under Section 190 r/w 200 of Cr.P.C., for the
C.A.No.279/2019 3 offence under section 138 of Negotiable Instruments Act against the appellant/accused herein.
3.The averments of which complaint in brief are that:
The accused borrowed a sum of Rs.7,50,000/- from the complainant on 01.05.2016 in order to discharge his sundry debts, and the accused agreed to repay the amount with interest at the rate of 24% p.a., on the even date he also executed promissory note in favour of the complainant.
But he did not repay the amount and on repeated demands made by the complainant, the accused issued two cheques dt.27.08.2017 for
Rs.4,95,000/- and cheque dt.02.09.2017 for Rs.4,95,000/- towards full and final settlement of the promissory note debt. When the complainant presented the said cheque for collection on 07.09.2017 the same were dishonoured and intimated to complainant through return memo with an endorsement "Funds insufficient."
4.Thereupon the complainant issued legal notice dt.11.09.2017 demanding the accused to repay the amount but the accused having received the notice neither gave reply nor repaid the amount. Hence, the complaint.
5.Before the trial court, basing on the sworn affidavit of complainant, cognizance was taken for the offence punishable under Sec. 138 of
Negotiable Instrument Act, against the accused and process was issued.
The accused / appellant on receipt of notice made his appearance before the court, copies were furnished to him under Sec. 207 of Cr.P.C., and
C.A.No.279/2019 4 when he was examined under Sec. 251 Cr.P.C. by explaining the substance of accusation for the offence under Sec.138 of Negotiable
Instrument Act, he having understood the same pleaded not guilty and claimed to be tried.
6. On behalf of the complainant, PW.1 was examined, Ex.P1 to P9 were marked. On completion of complainant’s evidence, the accused was examined under sec.313 Cr.P.C, who having understood the incriminating material available against him, being explained to him, denied the same and on his behalf got examined his wife as DW.1, Ex.D.1 was marked.
Thereupon, the trial court on hearing both parties, passed it’s judgment on 02.08.2019 by holding the appellant/ accused guilty for the offence under Sec. 138 of Negotiable Instrument Act.
7.It is aggrieved by the said judgment that appellant/ Accused approached this court through the present appeal, on the following grounds of appeal:
(a) The trial court ought to have considered that the complainant stated as if he was filing income tax returns, but fialed to produce any evidence.
(b) The trial court ought to have taken adverse inference as per law, in respect of non-production of income tax returns and any other evidence as to capacity.
C.A.No.279/2019 5
(c) The trial court ought to have considered that the impugned cheques were not given to the complainant, but were given to a 3rd party.
(d) The trial court ought to have considered that the complainant failed to prove by cogent evidence that he has any acquaintance with the accused.
(e) The trial court ought to have considered that there is no relationship between accused and the complainant asper the defence and that there is difference between averments of the complainant and evidence adduced.
(f) The observation of the trial court that P.W.1 orally stated about the capacity and that it is sufficient is erroneous in the light of established law submitted by the accused.
8.Coming before this court, no additional evidence was adduced.
Written arguments were filed by both sides.
9.For sake of convenience, the parties as arrayed before the trial court will be referred to as such, in this appeal as well.
10.Now, the point, for consideration :
1.Whether the complainant could establish the guilt of
accused for the offence under 138 of N.I.Act?
2.Whether there are any grounds to interefere with the findings and judgment of the learned Addl.Judicial First Class Magistrate, Ramachandrapuram in CC 18/2019?
11.POINT:
C.A.No.279/2019 6
The complainant’s case is that the accused in order to discharge his sundry debts, borrowed a sum of Rs.7,50,000/- from him on 01.05.2016, by executing promissory note agreeing to repay the sum with interest, which he postponed paying and on the persistent demands made by complainant he happened to issue two cheques dt.27.08.2017 for
Rs.4,95,000/- and cheque dt.02.09.2017 for Rs.4,95,000/- towards full and final settlement of the promissory note debt, but the same being presented by him was dishonored for the reason “funds in sufficient”, pursuant to which the complainant happened to issue legal notice dt.19.08.2019, which notice was served on accused, pursuant to which he neither repaid the amount nor gave reply. Hence, his actions attract the offence under Sec. 138 of Negotiable Instrument Act. The complainant to substantiate his contentions had examined himself as PW.1 and produced all the relevant documents referred by him in the complaint and reflected in his chief affidavit, as Ex.P1 to P9. Now before getting into the appreciation of evidence to see as to what material, the complainant has adduced to bring home the guilt of the accused for the offence under
Sec.138 of Negotiable Instrument Act, it requires to understand as to what amounts to an offence under Sec.138 of Negotiable Instrument Act, and what is the material that the complainant in the cases like the one on hand needs to produce to establish the accusation against the accused under the referred provision, for which a perusal of Sec. 138 of Negotiable
Instrument Act is necessary the extract of which is reproduced as under:
C.A.No.279/2019 7
Sec.138 of Negotiable Instrument Act:
Dishonour of cheque for insufficiency, etc., of funds in the account.—
Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless—
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;
and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
12.The complainant going by the very admission given by D.W.1 in her cross examination that, the cheques Exs.P.1 and P.2 bears the signatures of her husband/accused, itself entitled the complainant to draw presumption under Section 118(a) and Section 113 (9) of Negotiable
C.A.No.279/2019 8
Instruments Act that, the cheques were issued towards discharge of legally enforceable debt and the accused having admitted his signatures on Exs.P.1 and P.2 cannot simply get away by stating that, the cheques were not issued to the complainant and that he has to rebut the presumption by producing cogent evidence. Which argument of the complainant is absolutely on proper lines. But at the same time to rebut the presumption, it does not necessitate the accused to enter the witness box and give evidence, as such, the argument of the complainant that, the accused not entering into witness box, but examining his wife as
D.W.1 on his behalf, itself says that because he admitted his signatures on Exs.P.1 and P.2, he did not have the audacity to face the cross examination, though sounds a strong point for argument, on behalf of the complainant, in law is not acceptable; So the accused himself not entering into the witness box does not in any way accrue to the benefit of the complainant, nor it diminishes the evidentiary value of D.W.1 who is no other than his wife, under Section 120 of Evidence Act, is a competent witness on behalf of the accused.
13.As seen from the line of cross examination of P.W.1 done by the accused, it appears that, his wife had given his signed blank cheques in connection with chit business at Bangalore, to one Narasimha Rao, who was one of the subscribers in the chit run by D.W.1, and the said
Narasimharao had got filed the case through the complainant herein, if it were to be true, then the evidence of D.W.1 must align with the defence
C.A.No.279/2019 9 introduced at the time of cross examination of P.W.1, but when the evidence of D.W.1 is looked into the chief examination affidavit of D.W.1, speaks another story, as according to the chief affidavit averments, as
D.W.1 who was running chit business sustained loss, she was constrained to give signed blank cheques of her husband to the persons concerning the chit, whom she named in chief examination affidavit as Smt.
Vijayalakshmi, Phydi Sushmitha and Smt. Mamatha, and that in view of the disturbance the husband and wife in fact filed O.S.4190/2016, before the court at Bangalore, and in the said case the 4th defendant
Mr.R.V.Mahesh who is a close associate of Narasimharao, as they do contract business together, had supplied the black signed cheques to
Narasimharao who in turn pressed into service the present case through complainant. So, coming to the evidence of D.W.1, not only the story put forth by accused to state as to how his signed cheques came into the hands of the complainant is at variance, but through the chief examination affidavit of D.W.1 she happened to introduce an entirely new person by name R.V.Mahesh, and definitely as regards the said character the complainant was not cross examined as no question involving RV
Mahesh was put P.W.1, because he was cross examined suggesting that one Narasimharao to whom D.W.1 happened to give blank signed cheques of her husband are misused in filing the complaint through P.W.1 herein.
C.A.No.279/2019 10
14.Be it as may, having contended divergently as discussed above, the accused did not even try to reflect upon as to what is the relationship between Narasimharao and the complainant, the animosity of RV Mahesh or Narasimharao for them to implicate accused into the false case.
Hence, in these circumstances, in the absence of cogent defence, with head or tail, it makes the court to raise a doubt as why complainant would orchesterate accused’s false implication. Thus probabalizing the argument of counsel for complanant that, the defence of the accused is introduced for sake of defence which is why there is no coherence in the story set up by the accused.
15.Even otherwise when accused admits his signature on Exs.P.1 and
P.2, then going by section 20 of Negotiable Instruments Act, which states that, when a person signs and delivers the stamp paper, i.e. wholly blank or incomplete, he/she gives the holder the prima facie authority to complete it. So, when once the accused admitted his signatures on the cheques, even if he claims blank at the time of signing, by virtue of section 20 of Negotiable Instruments Act, he is esttoped from denying the authority of the complainant to fill in the remaining particulars. As it has sufficiently come on record that, Exs.P.1 and P.2 cheques were presented within its time frame, and were dishonoured drawing presumption in favour of the complainant that the cheques were issued for lawful consideration, it is the entire burden of accused to rebut, in which with
C.A.No.279/2019 11 the aforesaid discussion it can be held that the accused could not succeed.
16.Yet another aspect raised by the accused is that, P.W.1 has no capacity to advance loan of Rs.7,50,000/- to him, but this court opines that, if at all the defence of accused that the complainant is a stranger to him and he has no necessity to borrow money from a stranger, then it is again for the accused to explain as to how he is able to speak about the financial capacity of a person who he does not know? In fact the said contention of the accused is not acceptable because despite P.W.1 categorically stating that, the accused is the relative of mother-in-law of his own son, never did the accused deny the said aspect, meaning which the contention of the complainant that, the accused is his relative, which is why he gave the amount even without obtaining security sounds probable to accept.
17.Further more, if at all, the contention of the accused that, the complainant is stranger to him contained even a grain of truth, then at least after receiving Ex.P.7 legal notice from the complainant alleged to be a stranger, how can the accused just keep quite without even giving a suitable reply, which is not an expected reaction from a prudent man, because placed in the situation, where a prudent man receives notice demanding a massive sum of Rs.7,50,000/- to be due from some random person, how can anyone keep quite without giving any reply? In fact the immediate re-action of a prudent man would not only be to issue reply,
C.A.No.279/2019 12 but also approach police alleging forgery, because the legal notice refers about the accused issuing two cheques that too specifying cheque numbers, the branch name of the bank, on which it was drawn., not denied by accused to be his account. So accused having not reacted in the way a prudent man is expected to react, for he specifically not denying the notice averments by way of reply, makes this court to opine that, the argument of the complainant’s counsel sounds probable in saying that, because the complainant is the relative of accused on receipt of notice from complainant, who is not a stranger to him, the accused who has no intention to repay the amount did not choose to reply.
18.Having not satisfied with the above contentions, the accused pointed out against the claim of the complainant by stating that, if at all, such a loan was given to the accused, then when P.W.1 admitted he is an income tax assessee, he ought to have disclosed the same in his income tax returns, but P.W.1 himself in his cross examination admitted that he did not disclose the debt due by accused in his income tax returns, thus it being an unaccounted money is not enforceable.
19.At this juncture, the argument on behalf of the complainant that, he not disclosing the loan advanced to the accused in his income tax returns is an issue between him and income tax department which the accused cannot take shelter, and if at all, the non-discloser of the loan of the accused in his income tax returns amount to violation, then he will have to face the penalty, interest whatsoever imposed by the department, but
C.A.No.279/2019 13 it does not accrue to the benefit of the accused, is absolutely proper. As this court also opines that, when there is no provision in the income tax
Act, which makes an amount not shown in the income tax returns, as irrecoverable under Section 138 of NI Act and if at all, the act of complainant not disclosing the loan advanced to accused attracts penalty, it does not altogether render the underlying transaction void or unenforceable may be the consequence of not reflecting transaction in the income tax returns are penal in nature, as rightly put-forth by the complainant attracting interest, penalty etc., from the income tax department, being fiscal consequences do not extinguish the criminal liability of the accused under Section 138 of NI Act. If at all, the argument of the accused is permitted to be allowed, then under the guise of complainant's default in disclosing the transaction in Income Tax
Returns, the unscrupulous borrowers will altogether avoid the repayment, citing the said technical ground defeating the very purpose of Negotiable
Instruments Act.
20.Hence, this court for the reasons assigned above opines that, when the accused has admitted his signatures on Exs.P.1 and P.2, under the
Negotiable Instruments Act, the presumption is that those cheques were issued for legally enforceable debt, hence as the accused failed to lead evidence to rebut this presumption, his argument regarding the source of funds of the complainant is collateral issue which does not disapprove the admitted fact that he signed the cheques. Similarly the non discloser of
C.A.No.279/2019 14 the loan given to accused in Income Tax Returns of complainant does not disapprove the existence of legally enforceable debt, as it is an issue for income tax department to address but not for this court. Hence, with the above observation this court has no hesitation to conclude that the accused failed to rebut the presumption raised in support of the complainant concerning Exs.P.1 and P.2, thereby the conclusion is that the accused having borrowed Rs.7,50,000/- from the complainant, to discharge the same issued Exs.P.1 and P.2 cheques, which on presentation were dishonoured, and despite the complainant issuing legal notice within time limit and the same being served on the accused, he neither gave reply nor repaid the amount, thus for his actions he is liable for committing the offence punishable under Section 138 of Negotiable
Instruments Act. Accordingly, the point is answered.
21.POINT No.2:
In view of this court’s finding under point No.1 that the complainant established the offence under Section 138 of Negotiable Instruments Act, against the accused, the findings of the trial court being on proper lines supported by cogent reasons needs no interference. Accordingly, the point is answered.
22.In the result, the appeal is dismissed and the calendar and
Judgment dt.02.08.2019 in C.C.86/2018 passed by the Additional Judicial
First Class Magistrate, Ramachandrapuram, is hereby confirmed.
Consequently the conviction and sentence recorded thereunder against
C.A.No.279/2019 15 the accused/ appellant is also confirmed. Accordingly the appeal is disposed off under Sec. 386 of Cr.P.C. Since the appellant is called absent, he is directed to surrender before the learned Trial Court on or
before 29.04.2026 failing which the learned Magistrate is empowered to
compel the presence of the Appellant/ accused by issuing Non-Bailable
Warrant and notices to the Sureties of the Accused/Appellant. The
Learned Magistrate is further directed to comply with the Order and report compliance to this Court. The Office is directed to send the free copy of the Judgment to be furnished to the accused/ appellant to the
Trial Court along with Trial Court Record forthwith. The bail bonds of the appellant/accused and his sureties shall stand cancelled after six months from today, as per section 437-A of Cr.P.C.
Dictated to the Stenographer Gr.II, transcribed by him, corrected and pronounced
by me in open Court, this the 9 th day of April, 2026.
Sd/- Smt.G.Anandi
XIII ADDL. SESSIONS JUDGE,
RAMACHANDRAPURAM.
APPENDIX OF EVIDENCE
No oral or documentary evidence is adduced on either side.
Sd/- Smt.G.Anandi
XIII A.S.J.
Copy to the Additional Judicial First Class Magistrate, Ramachandrapuram.
// TRUE COPY //
Chief Administrative Officer III Addl. District & Sessions Judge’s court, Kakinada