1 CC N.I 455/2024 in Old STC N.I 2106/2024
IN THE COURT OF X JUDICIAL MAGISTRATE OF FIRST
CLASS, HYDERABAD
Present: Smt.G.Praseeda,
X Judicial Magistrate of first Class,
Manoranjan complex, Hyderabad
Thursday, the 07 th day of May , 2026
C.C N.I No. 455 of 202 4
( Old C C N.I. 2106 of 20 24) Between:-
A Naveen Kumar, S/o. A Satyanarayana, Aged 43 years, Occ: Pvt., Employee, R/o. Flat No.203, R.K. Residence, Road No.3, Himayat Nagar, Hyderabad – 29.
... Complainant
AND
R Srikanth, S/o. Sudhakar, R/o. Flat No.304, Kala Residency, H.No. 6-9-648/1, Water Tank Road, Old Malakpet, Hyderabad – 500 036. .… Accused
This case has come before me for final hearing on in the presence of M/s. K.V. Mallikarjun Rao, learned counsel for the Complainant and of Sri. N. Sudhakar Rao, learned counsel for accused, and after hearing both sides, perusing the case record and the matter having stood over for consideration till this day this court delivered the following:-
:: JUDGMENT ::
This is a private complaint filed by the complainant against the accused for the offence punishable under Section 138 of the Negotiable
Instruments Act, 1881.
Originally, it was filed in this Hon’ble court, wherein it was registered as
STC N.I No.2106/2024, subsequently the case was converted into CC
N.I.455/2024 on the file of this court.
2 CC N.I 455/2024 in Old STC N.I 2106/2024
1.Brief facts of the complainant’s case are that the complainant and the accused are friends and known to each other, out of such acquaintance accused borrowed a sum of rupees 15,00,000/- (Rupees Fifteen Lakhs) from complainant and accused issued postdated cheque vide cheque bearing No.
000085 drawn on HDFC Bank, Saleem Nagar Branch. Dt: 05-01-2024 Rs.
8,00,000/- towards the part of due amount and complainant had presented the said cheque for realization in his Banker i.e., Punjab National Bank,
Himayathnagar branch, Hyderabad but the said cheque returned with an endorsement "Funds Insufficient" on 06-01-2024. The complainant informed the same to the accused and issued a legal notice on 24-01-2024, through registered post acknowledgment due, were the said notice received by the accused and gave a reply notice on dt. 07-02-2024. In spite of sending the notice the accused did not make the payment of the cheque amount and committed an offence punishable u/s. 138 of NI Act. Hence, the complainant has filed this complaint on dt.26-02-2024 which is within limitation.
2.After perusal of sworn affidavit statement of the complainant and considering the facts and circumstances of this particular case, Court took cognizance of the case against the accused for the offence punishable under
Section 138 of the Negotiable Instruments Act, 1881 and issued summons to the accused.
3.On receipt of the summons, the accused made his appearance before the court, whereupon, copies of documents relied upon by the complainant were furnished to the accused as contemplated under Section 207 of Cr.P.C.
3 CC N.I 455/2024 in Old STC N.I 2106/2024
4.The accused was examined under Section 251 Cr.P.C. explaining the substance of accusation alleged against him for the offence under Section 138 of the Negotiable Instruments Act, 1881 for which the accused denied the said offence, pleaded not guilty and claimed to be tried.
5.During the course of trial, to prove its case against the accused, the complainant got examined himself as PW.1 and got marked Ex.P1 to P4.
PW1 filed chief affidavit by reiterating the contents same as complaint.
6.PWI 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 and the same is closed by order
dated 27-03-2025. After the closure of the complainant's evidence, the case
was posted for accused's examination under section 313 CrPC on 27-03- 2025. Accused was examined Under Section 313 CrPC on 17-07-2025 enabling him to explain personally the incriminating circumstances that appeared against him in the evidence of the complainant, for which, the
Accused denied the truthfulness of the evidence of the complainant. The
Accused reported that he has defense evidence, however no defence evidence was lead. Hence, the defence evidence closed on dt.23-02-2026.
After that, the arguments from both sides were concluded and the matter was posted for Judgment.
7. Heard both sides and perused the record:- 4 CC N.I 455/2024 in Old STC N.I 2106/2024
Point for determination are:
1.Whether exhibit P-1 Cheque was issued by accused in discharge of a legally enforceable debt or liability?
2. Whether the accused has succeeded in rebutting the presumption
U/s.139 of NI Act?
3. Whether the accused is liable for punishment U/s.138 of NI Act?
Point No:1
1. Whether exhibit P-1 Cheque was issued by accused in discharge of a legally enforceable debt or liability?
A) Existence of legally enforceable debt: The accused has in his examination U/s.251 C.r.P.C deposed that he has issued blank signed cheque to the complainant for the purpose of security. According to Bir
Sing v/s Mukesh Kumar - 6 th February, 2019, when once the signature of the cheque is admitted then the court is bound to presume the existence of legally enforceable debt. However, even section 139 of NI Act raises a strong presumption in favour of complainant that the cheque has been issued for legally enforceable debt. Hence, basing on the above said ruling and reasoning this court inclines to presume that there is an existence of legally enforceable debt under Ex-P1 and When there is no dispute with regard to the issuance of cheque and when the accused admitted the issuance of cheque to the complainant then according to section118 (a) of
NI Act and section 139 of NI Act it is presumed that the cheque was made or drawn for consideration only and also presumed that there is existence of legally enforceable debt.
5 CC N.I 455/2024 in Old STC N.I 2106/2024
Point No: 2
2. Whether the accused has succeeded in rebutting the presumption
U/s.139 of NI Act?
A) In support of his defence the accused has stated in his 251 CrPC
Examination that he has issued the cheque for security purpose only. Mere stating that cheque is issued for security purpose is not sufficient and it does not relieve the accused from discharging his onus of proof. For proving the same the accused must come up with the cogent evidence to show that he had issued the cheque as a security. For relying on the issuance cheque as the security the accused must prove that there no subsisting liability at the time of the presenting the cheque However, in the present case the accused has admitted in reply notice i.e., Ex.P4 that he has repaid the amount to the complainant, but the accused failed to provide any documentary evidence to show that he has repaid the alleged amount to the complainant. Hence, as there is no documentary evidence shown by the accused for the said repayment, the court inclines to presume that the liability of the accused is subsisting at the time of presentation of the cheque. For the above said reasoning this court inclines to rely on Supreme
Court Judgment i.e.,Sampelly Satyanarayana Rao Vs. Indian
Renewable Development Agency Limited 2016. Where in supreme court has held that the post-dated cheque issued as security still attracts criminal liability if a legally enforceable debt exists on the date the cheque is presented. Recently Supreme Court has quoted in Sripathi Singh v/s
State of Jharkhand that “a cheque issued as security is not a worthless piece of paper mere using the defence of cheque issued for the purpose of security does not provide absolute immunity to the drawer".
6 CC N.I 455/2024 in Old STC N.I 2106/2024
B) Further the accused has relied mainly on the aspect of Financial
Capacity and Non production of ITRs by the complainant in regard to this, the accused has in his arguments stated that the complainant did not place any evidence to show that he had financial capacity to lend amount and further argued that the court can draw an adverse inference against the complainant for not producing any evidence regarding his financial capacity to lend the amount to the accused, In support this the accused has relied on
Naga Setty Nagaiah v/s State of Andhra Pradesh and also relied citation reported in 2011 Crl.L.J.52 Karnataka High Court in Amjad Pasha v/s H.N. Lakhsmana. However, according to the recent Supreme court judgment in sanjabij Tari v/s Kishore S.Borcar and Another Dated:25
September, 2025, held that non production of financial documents like
ITRs or Bank Statements is “not a Fatal Flaw” in a sec.138 NI Act case and also clarified that the technicalities of tax law should be used to escape criminal consequences of a bounced cheque and also the supreme court in
Rajesh Jain v/s Ajay Singh held that the court will prioritize the validity of cheque over the lack of tax documents.
C) In the present case the complainant has succeeded in showing the existence of legally enforceable debt, in such a case it is the duty of the accused to prove that complainant is not having financial capacity to lend the amount and also mere raising an argument regarding non production of
ITRs is not enough the accused must come up with cogent evidence in support of his defence. Once the accused admits the signature on the cheque the presumption u/s.118 & 139 NI Act are triggered. The accused cannot this rebut this presumption simply by pointing out that the loan is given in cash or that the complainant failed to produce financial documents.
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 7 CC N.I 455/2024 in Old STC N.I 2106/2024
Supreme Court in Rangappa v. Sri.Mohan , (2010) 11 SCC 441 that the presumption contemplated under Section139 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, the standard of proof is that of the preponderance of probabilities.
Therefore, in view of the above said explanation and reasoning, this court is off the opinion that the complainant proved the alleged ingredients of offence against the accused beyond all reasonable doubt and the accused has failed to rebut the presumption U/s 139 of NI Ac. Hence, the points no.1 and 2 are answered accordingly in favour of complainant.
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.
Transcribed, Corrected and Pronounced by me in the open court, on this, 07th day of May 2026.
X JUDICIAL MAGISTRATE IF FIRST CLASS,
HYDERABAD
8 CC N.I 455/2024 in Old STC N.I 2106/2024
Quantum of Sentence:
* Accused called present. When the accused has been questioned with regard to the quantum of sentence to be imposed against him and he submitted that he was in losses and he is staying here after selling his house property and prayed this court to take a lenient view.
* Keeping in view of the nature of the case and the offence involved, and above mentioned factors and his age, this Court is not inclined to invoke the benefit under Probation of Offenders Act, but however the Court is inclined to take a lenient view while awarding the sentence. Accused is explained of his right to prefer appeal against the Judgment of this Court.
* Having considered the nature of offence, it seems proper to award a sentence of fine instead of awarding sentence of Imprisonment.
* 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.
* 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. 8,55,000/-. In default Accused shall undergo simple imprisonment for a period of 6 months. Out of the Rs.8,55,000/, Rs 5,000/- shall be defrayed to the state and remaining Rs. 8,50,000/- shall be paid to the complainant. Accused shall pay the entire fine amount within 3 months from the date of this judgment.
The bail bonds of the Accused, if any, shall stand cancelled after expiry of 6 months.
9 CC N.I 455/2024 in Old STC N.I 2106/2024
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 this 7th May, 2026.
X JUDICIAL MAGISTRATE OF FIRST CLASS
HYDERABAD.
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
FOR COMPLAINANT ACCUSED
PW.1 : A Naveen Kumar - None -
EXHIBITS MARKED FOR COMPLAINANT
Ex.P-1: Cheque bearing No. 000085, dated 05-01-2024 for Rs. 8,00,000/-
Ex.P-2: Cheque return memo, dated 06-01-2024
Ex.P-3: Office copy of Legal Notice, dated 24-01-2024
Ex.P-4: Reply notice, dated 07-02-2024.
EXHIBITS MARKED FOR ACCUSED
- Nil -
X JUDICIAL MAGISTRATE OF FIRST CLASS
HYDERABAD.