Fair 1 of 46CC No 2081 of 2016
IN THE COURT OF THE II ADDITIONAL JUNIOR CIVIL JUDGE CUM
II ADDITIONAL JUDICIAL MAGISTRATE OF FIRST CLASS, AT KARIMNAGAR
PRESENT: Sri Jamana Venkata Satya Raj Kiran II Addl. Junior Civil Judge cum II Addl. Judl. Magistrate of F.C., Karimnagar.
Thursday, the 12 th day of March, 2026
CALENDAR CASE No.2081 of 2016
Name of the complainant:Ramidi Ram Reddy, S/o. Narsimha Reddy, Age : 55 years, Occ : Agriculture, R/o. Thimmapur village and Mandal of Karimnagar District.
Name of the accused:A1 – Sree Chaitanya Degree College, Thimmapur village and Mandal in Karimnagar District represented by its Correspondent namely Muddasani Ramesh Reddy.
A2 – Muddasani Ramesh Reddy, S/o. Laxma Reddy, 44 years, Secretary & Correspondent of Takshashila Education Society, Karimnagar and Sri Chaithanya Degree and Engineering College, R/o. Thimmapur village and Mandal of Karimnagar District.
Offence punishable under:138 of Negotiable Instruments Act. sections
Prosecution conducted by:Sri V.Bala Krishna Rao, Advocate.
Defence conducted by:Sri M.Anil Kumar, Advocate.
Plea of the accused:Not guilty
Finding of the Court:Accused are found guilty for the offence punishable under Section 138 of Negotiable Instruments Act and the accused are accordingly, convicted under section 255(2) Cr.P.C.
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Sentence or Order:Accused are sentenced to pay an amount of Rs.6,50,000/- (Rupees six lakhs and fifty thousands only) and in default, accused No.2 shall undergo simple imprisonment for a period of one year. The amount of Rs.6,50,000/- (Rupees six lakhs and fifty thousands only) shall be paid to the complainant as compensation under section 357 (3) of Cr.P.C., within one month.
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This case came before me on 09.03.2026 for final hearing in the presence of Sri.V.Balakrishna Rao, Advocate for the complainant and Sri M.Anil Kumar, Advocate for the accused; after perusing the case records, upon hearing the arguments of both the counsels and having stood over for consideration till this date, this Court delivered the following:-
: : J U D G M E N T : :
1.This is a complaint filed under section 200 of Criminal Procedure Code by the complainant against the accused for the offence punishable under section 138 of Negotiable Instrument Act, 1881 which will be here in after be to as “The NI
Act”.
2.The brief facts of the private complaint are as follows:
i.Complainant is having good relations with the accused No.1 and out of said acquaintance, the accused No.1 approached the complainant in the month of August, 2012 with a request to lend money an amount of
Rs.5,00,000/- to meet his unavoidable financial needs for his college and also domestic needs. Considering the urgency, the complainant has given said amount as hand loan to the accused and after receipt of said amount, the accused issued the cheque bearing No.704746 for Rs.5,00,000/- of
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Vijaya Bank, Karimnagar branch, duly signed by the accused No.1 and further promised that in case of making any due regarding the payment, directed the complainant to present said cheque in the bank for realization of cheque amount and further promised to repay the said amount within three (3) years.
ii.It is further submitted that recently, the complainant in need of money approached the accused and demanded him to refund the above loan amount and on persuasions made by the complainant, the accused directed the complainant to present the above said cheque in discharge of the above said loan amount. Complainant has deposited the said cheque in his account in Gayatri Cooperative Urban Bank, Karimangar branch for realization but the said cheque was not honoured, bounced and returned as unpaid by the payee bank by issuing a cheque return memo mentioning as “funds insufficient” on 07.07.2015.
iii.It is further submitted that the complainant got issued legal notice dated 24.07.2015 to the accused No.1 and 2 calling to pay the cheque amount within 15 days from the date of receipt of legal notice and the said notice was acknowledged by the accused and the accused No.1 replied to the said notice by denying the averments but the said allegations are wrong.
The act of the accused is negligence on his part in avoiding legally enforceable debt and had intentionally issued cheque without maintaining sufficient funds in his account. Hence, the complaint.
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3.Upon consideration of the complaint and sworn affidavit, the cognizance as per section 190 (1) (a) of the Code of Criminal Procedure (hereinafter referred to as Cr.P.C.) for the offence punishable under section 138 of NI Act was taken against the accused by the I Additional Judicial Magistrate of First Class,
Karimnagar. Later, this case was transferred to the Court of Special Judicial
Magistrate of First Class (Excise), Karimnagar at the stage of summons, as per
the orders of Hon’ble District and Sessions Court, Karimnagar vide proceedings in Dis. No.1968/ADM/DCK, dated 20.03.2017. Later this case was transferred to this Court at the stage of trial by the Hon’ble High Court, as per the orders of Hon’ble Principal District and Sessions Court, Karimnagar vide proceedings in Dis. No.621/Tr. of cases/2019/STATS/DCK, dated 11.06.2019.
4.Upon the receipt of the summons, the accused appeared before the Court and a copy of the complaint was furnished to him. Thereafter, the accused was examined under section 251 Cr.P.C. by notifying the substance of the accusation for the offence punishable under section 138 of N.I Act. After notifying the substance of the accusation and on the question of the plea of guilt, he pleaded not guilty and claimed to be tried. Hence, the trial.
5.In order to prove his case, the complainant himself examined as PW.1 and got marked Exs.P1 to Ex.P5 apart from examining PW2/Velpula Ravinder on his behalf.
6.After closure of the prosecution evidence, the accused was examined under
Fair 5 of 46CC No 2081 of 2016 section 313 Cr.P.C., by putting incriminating evidence available against the accused, for which accused denied the same and reported that there is evidence. On behalf of accused, the accused himself examined as DW1 and got marked Exs.D1 to D6 on his behalf.
7.Heard the arguments of both sides and perused the record. Written arguments were submitted by the learned counsel for accused.
8.Now the point for determination is:- “Whether the complainant has established the guilt of the accused under section 138 of NI Act, beyond all reasonable doubt or not”?
Evidence on record on Complainant’s side:-
9.On behalf of complainant, the complainant himself examined as PW1 in lieu of chief-examination affidavit, by reiterating the contents of complaint and marked Ex.P1 to Ex.P5. Ex.P1 is the original cheque bearing No.704746 for
Rs.5,00,000/- dated 06.07.2015. Ex.P2 the cheque return memo dated 07.07.2015. Ex.P.3 is the office copy of legal notice dated 24.07.2015. Ex.P.4 are the postal receipts dated 25.07.2015. Ex.P5 are the two acknowledgment cards dated 29.07.2015. Ex.P6 is the reply notice, dated 11.08.2015.
10.During the course of cross-examination, PW1 stated that he is doing agriculture work and he studied upto 7th class. His income source is agriculture work. PW1 further stated that he has land to the extent of Ac.10-00 gts to different survey numbers in Thimmapur and Karimnagar and presently they are growing paddy crop and for each Acre Rs.50,000/- as a profit from paddy crop
Fair 6 of 46CC No 2081 of 2016 per year. PW1 further stated that he has bank account in KDCC, Karimnagar and SBI, Thimmapur Branch and he maintained Rs.20,000/- to Rs.30,000/- as a bank balance in said accounts. PW1 further stated that he does not remember bank balance for the years 2012 and 2013 and he has one more account in
Gayathri bank, Karimnagar.
11.PW1 further stated that he is not an income tax assessee. PW1 further stated that he has acquaintance with accused as he is also one of the adjacent owner to his agriculture land and he has acquaintance with accused from 2003 on wards and accused is not his relative. PW1 admitted that he did not mention loan transaction details in his 200 Cr.P.C and chief affidavit. PW1 further admitted that he did not mention other two cases filed by him against accused in the chief affidavit and section 200 of Cr.P.C. PW1 further stated that his source of income is agriculture. PW1 further admitted that he stated in his chief that he advanced an amount of Rs.5,00,000/- in the month of August, 2012 and there is no date of hand loan mentioned in his chief affidavit or section 200 Cr.P.C complaint. PW1 denied the suggestions that he never advanced an amount of Rs.5,00,000/- to accused at any point of time.
12.PW1 further stated that he knew accused since 2003 onwards and accused runs educational institutions. PW1 further admitted that he filed total three cases including present case against accused for total amount of Rs.16,00,000/- and all cases are still pending. PW1 further denied that he does not have any financial capacity to lend any amount to accused. PW1 further admitted that
Fair 7 of 46CC No 2081 of 2016 accused is a Secretary to Sree Chaitanya Degree college, Karimnagar. PW1 further admitted that he made Sree chaitanya institutions as a party to present case but he did not file any document showing that accused running Sree
Chaintanya Degree college, Karimnagar. Accused running as a Secretary, Sree
Chaitanya Degree College, Sree Chaitanya College of Engineering, Sree
Chaitanya Institution of Technology and Sciences and Sree Chaitanya college of Pharmacy.
13.PW1 further stated that he knew that all these institutions running under
Takshashila Educational society. All the buildings are owned by Sree chaitanya educational colleges. PW1 further stated that he does not know whether accused is paying nearly Rs.87,00,000/- as salaries to his employees per month. PW1 further denied that accused does not need to borrow any amount from PW1 as he financially settled. PW1 further denied that there is a difference in writing of signature and other column in Ex.P1. PW1 further denied that accused issued reply of legal notice on 11.08.2015. PW1 further admitted that he sold land in the year 2003 to accused. PW1 further denied that accused issued three blank cheques with his signature during land transaction. PW1 further denied the suggestions that he filed false case against accused by misusing above said cheques by filling all the columns.
14.PW1 further denied that he did not file reply notice of the accused intentionally. PW1 further admitted that accused filed criminal case against
PW1 in LMD PS vide crime No.14/2015. PW1 further denied that there are no
Fair 8 of 46CC No 2081 of 2016 transactions took place between himself and accused after 2003 and that accused is not due any amount to PW1. PW1 further denied that accused is not due any amount with reference to any legally enforceable debt. PW1 further denied that he filed a false case against accused by misusing cheque which were issued in the land transaction as a security purpose.
15.During the course of further cross examination on 17-11-2025, PW1 admitted that the accused has purchased some land from him in the year 2003. PW1 further denied that at the time of sale transaction, the accused has issued three (3) blank signed cheques to PW1 as collateral purpose and that he is deposing falsely, accused has issued only blank signed cheques.
16.PW1 further denied that even though the accused has paid total sale consideration, PW1 failed to return the said cheques to him. PW1 further denied that he informed the accused that the said cheqeus were misplaced and will return them when the same were traced out. On 07-01-2026, during further cross examination, PW1 further denied that intentionally he has not furnished
Ex.P6 before the Court earlier and he has produced the same at the stage of arguments only to delay the case proceedings. PW1 further denied that a consolidated notice was given on behalf of the accused in respect of three cheque cases filed by him against the accused. PW1 further denied that intentionally he has suppressed that consolidated reply notice. PW1 further denied that mentioning of six (6) cheques on the second page of Ex.P6 is merely a typographical mistake and infact it would have been three cheques.
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17.During further cross examination on 10.02.2026, PW1 further admitted that he has mentioned in his complaint and chief examination that the accused approached him to lend an amount of Rs.5,00,000/- to meet his unavoidable financial needs for his college and also domestic needs. PW1 further admitted that there is no mention in his complaint and chief examination about the date of loan transaction in between himself and the accused and the date of issuance of cheque by accused in his favour. PW1 adds that the cheque was issued by the accused in the year 2014. PW1 further admitted that Ex.P1 was issued in the name of “for Sree Chaitanya Degree College, Secretary and
Correspondent”. PW1 further admitted that Ex.P1 was issued on behalf of
Sree Chaitanya Degree College. PW1 adds that it was issued personally and on behalf of College also.
18.PW1 further denied that the account No.50328 is not the personal account of the accused but it is pertaining to Sree Chaitanya Degree college. PW1 further denied the suggestions that he has not issued any demand notice to Sree
Chaitanya Degree college individually and that Ex.P1 was issued by Sree
Chaitanya Degree college and since demand notice was not issued to the said college individually, the present complaint is not maintainable as per provisions of NI Act. PW1 further denied that the accused is not the drawer of
Ex.P1 in personal capacity since the account belongs to Sree Chaitanya Degree college. PW1 further stated that he was having account only in Gayatri Co- operative Urban bank, Karimnagar at the time of alleged transaction and at that
Fair 10 of 46CC No 2081 of 2016 time, he was possessing around Rs.10,00,000/- of amount as bank balance in his bank account.
19.PW1 further denied that he is not having financial capacity to lent an amount of Rs.5,00,000/- to the accused as hand loan and he is not possessing any such amount in his bank account, as such, he has not filed his bank account statement before the Court. PW1 further admitted that he has also filed another cheque bounce case against the accused in CC No.742 of 2016 (For hand loan of Rs.6,00,000/-) on the file of III Additional Junior Civil Judge, Karimnagar apart from CC No.1943 of 2014. PW1 further denied that he has misused the cheques which were issued by the accused at the time of execution of
Ex.D1/land transaction in the year 2003. PW1 further admitted that he has not obtained any promissory note or loan documents from the accused to show that he advanced loan amount of Rs.5,00,000/- to him. PW1 adds that accused informed him that the cheque would be sufficient.
20.One Velpula Ravinder, who is alleged witness to issuance of cheques by accused was examined as PW2. PW2 filed affidavit in lieu of his chief examination stating that complainant and accused are belongs to his village i.e., Thimmapur; that there are land transactions in between the complainant and accused and that in that purpose when the complainant asked money, the accused had issued three (3) cheques for Rs.6,00,000/-, Rs.5,00,000/- and
Rs.5,00,000/- totally for Rs.16,00,000/- in his presence. PW2 further deposed that later, the complainant had informed him that the said cheques were
Fair 11 of 46CC No 2081 of 2016 returned as unpaid due to insufficient funds, therefore, the complainant had filed cases against the accused.
21.During the course of cross examination, PW2 stated that he knew PW1 since 40 years and they are not relatives. PW2 further stated that PW1 is an agriculturist and PW1 possessed land to the extent of Ac.12-00 gts but he does not the survey number for the same. PW2 further stated that the accused is a running Chaitanya Institutions. PW2 further stated that he knew land disputes between accused and PW1 but he does not know the exact date and year for land transactions and he does not know the survey number for the present 138 of NI Act case. PW2 further stated that he does not know the sale consideration price between PW1 and accused and he does not know that how much advance paid by accused to PW1 and balance amount need to pay by accused to PW1.
22.PW2 denied the suggestions that accused issued three cheques at the time of sale transactions. PW2 further stated that he does not know the cheque bearing numbers. PW2 further denied that accused did not issue cheque for
Rs.5,00,000/-, Rs.6,00,000/- and Rs.5,00,000/- with reference to land transactions. PW2 further denied that accused never issued three cheques with reference to land transactions to PW1. PW2 further denied that he does not have any knowledge about the present case and that he is deposing false evidence against accused on the influence of PW1.
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Evidence on record on the side of Accused:-
23.On behalf of accused, the accused himself examined as DW1 and deposed in his chief-examination that presently he is working as a Correspondent for Sree
Chaitanya Educational Institute, Karimnagar since 1997 and under him around 1200 employees were working and monthly basis, he used to pay salaries of an amount of Rs.86,00,000/- to his employees. DW1 further deposed that he does not have any necessities to borrow any amount to anybody at any point of time as he is financially well settled. DW1 further deposed that he has income tax returns to show his financial capacity. DW1 further deposed that he has acquaintance with complainant since 2003 and the complainant possessed land to the extent of Ac.04-27 gts in Sy.Nos.414/A, 415/A, 416/D, 416/E, 393/A and 408/A and 408/F situated at Thimmapur, Karimnagar and DW1 purchased above said land in the year 2003 vide document No.4915/2003 for consideration of Rs.2,10,400/-.
24.DW1 further deposed that he issued three blank signed cheques to the complainant as a security purpose at the time of advancement of amount, at the time of agreement of sale and subsequently he paid total consideration to accused but complainant did not return three blank signed cheques even after receipt of total consideration by him and further the complainant stated that he misplaced cheques. DW1 further deposed that in the year 2010, due to some issues, he re-executed sale deed in favour of complainant vide bearing
No.5376/2010 dated 09-11-2010/Ex.D2 for an amount of Rs.7,01,500/- for the
Fair 13 of 46CC No 2081 of 2016 same extent of land which was purchased by him vide Ex.D1. DW1 further deposed that he requested for return of his cheques even at the time of execution of Ex.D2 but the complainant did not return the same.
25.DW1 further deposed that complainant by misusing cheques issued by DW1 in the year 2003 filed three cases against him under section 138 of NI Act including present case. DW1 further deposed that the complainant filed false cases against him without returning his blank signed cheques even after receiving the sale consideration in the present case complainant mentioned in section 200 Cr.P.C that he issued present cheque for an amount of
Rs.5,00,000/- towards land sale consideration.
26.DW1 further deposed that he issued reply notice to complainant for his legal notice and after receipt of legal notice by him, DW1 issued a reply notice to the complainant. DW1 further deposed that he issued three (3) cheques in favour of the complainant only for collateral purpose at the time of sale transaction.
DW1 further deposed that only after payment of total sale consideration, a sale deed was executed by the complainant in his favour under Ex.D1 but due to some issues again he re-sold the said property to the complainant under Ex.D2.
Later, DW1 asked the complainant to return back his blank signed cheques, for which the complainant replied that he could not trace out the said cheques and he will return the same if he could find the same.
27.DW1 further stated that subsequently by filling the empty columns in the
Fair 14 of 46CC No 2081 of 2016 cheques, the complainant has filed false case against DW1. DW1 further deposed that he has mentioned all the above details in his reply legal notice.
Ex.D1 is the certified copy of registered sale deed bearing No.4915/2003 dated 09.06.2003. Ex.D2 is the certified copy of registered sale deed in favour of complainant vide bearing No.5376/2010 dated 09.11.2010 for an amount of
Rs.7,01,500/-. Ex.D3 is the certified true copy of IT returns of the accused society, Takshasila Educational Society for the assessment year 2014-15.
Ex.D4 is the certified true copy of IT returns of the accused society, Takshasila
Educational Society for the assessment year 2015-16. Ex.D5 is the certified true copy of IT returns of the accused society, Takshasila Educational Society for the assessment year 2016-17. Ex.D6 is the Certified true copy of IT returns of the accused society, Takshasila Educational Society for the assessment year 2024-25.
28.During the course of cross-examination, DW1 stated that he is an Engineer
Graduate (in Computer Science) and he is a Post Graduate. DW1 further stated that their Education Society got registered in the year 1997 in the name and style of Takshasila Education Society. The society is registered in Karimnagar and at the time of registration, the members of the society are Ramesh Reddy,
Laxma Reddy, Srinivas Reddy, Gopal Reddy and Jaipal Reddy. DW1 further stated that he is Secretary to the society and they started the first college at
Thimmapur in the year 2001. DW1 further stated that the said land at
Thimmapur was purchased by them in the year 2000.
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29.DW1 admitted that their college was established in land situated in Sy.No.313 at Thimmapur, Karimnagar and they purchased land only to an extent of Ac.03- 09 gts in Sy.No.314 of Thimmapur, Karimnagar from one Ramidi Laxmareddy who is the paternal uncle of complainant. DW1 further admitted that another
Ac.03-17 gts land in Sy.No.314 was also purchased by them from one Ramidi
Narsimha Reddy who is father of complainant. DW1 adds that they were cheated by the father of complainant since it was re-registered in their name by the father of complainant by suppressing the initial registration in favour of
Bandari Papaiah.
30.DW1 further stated that after verifying the pattadar passbook of the father of the complainant, they purchased the said land from the father of complainant.
DW1 further admitted that they issued three blank signed cheques in favour of the complainant in the year 2003. DW1 adds that the alleged sale transactions are totally different from the present cheque bounce case.
31.During the course of further cross-examination, DW1 admitted that they purchased some lands from the family of complainant in the year 2003 in three (3) transactions under sale deed bearing No.4914/2003, No.4915/2003 and
No.4917/2003 dated 09-06-2003 respectively. DW1 further admitted that the family of complainant purchased some of the lands from them in the year 2005 in two (2) transactions and subsequently again in the year 2010 in one transaction. DW1 adds that those transactions are no way concerned with the present case and the alleged cheque. DW1 further adds that those transactions
Fair 16 of 46CC No 2081 of 2016 are accomplished and they does not exists.
32.DW1 further denied the suggestions that in the year 2010, some disputes arose in between them and the family of complainant since they have not alienated the total property to the family of complainant. DW1 further denied that in the year 2010, the complainant and their family have raised protest in front of his college in view of the above said dispute and the said news was published in news papers. DW1 further denied that a panchayath was also held in respect of the above disputes between them and the family of the complainant. DW1 further denied that the said panchayath was held by Dunga Rajaiah (Thimmapur Sarpanch), Venkat Reddy, Kondal Reddy and Raji Reddy and
DW1 along with his staff attended the said panchayath in the year 2014.
33.DW1 further denied that he never admitted in that panchayath that he has to alienate or revert back some more properties to the family of complainant legally. DW1 further denied the suggestions that news was published in daily news papers, i.e., Andhra Jyothi and Eenadu stating that they caused loss to the family of the complainant. DW1 further denied that the complainant has instituted a criminal case against him. DW1 adds that he lodged a criminal case against the complainant since he failed to return back his blank signed cheques to DW1 after completion of land transactions. DW1 further stated that he does not know whether an FIR was registered basing upon his report or not.
34.DW1 further denied that he never lodged any report at police station stating
Fair 17 of 46CC No 2081 of 2016 that PW1 failed to return his blank signed cheques. DW1 further denied that he assured the family of complainant to return back their land but failed to do so.
DW1 further denied the suggestions that only in view of the above said land transactions, he issued three post dated cheques (including the cheque involved in the present case) in favour of the complainant on 05.06.2014 for
Rs.5,00,000/-, on 19.02.2015 for Rs.6,00,000/-, on 06.07.2015 for
Rs.5,00,000/-, in the presence of the panchayath elders at the house of complainant. DW1 further denied that the land issues were totally settled in between the panchayath elders and in view of that, he issued the above said three cheques as clearance of total payment. DW1 adds that the said three cheques have been issued by him in the year 2003 to the complainant only for collateral purpose at the time of purchasing the land.
35.DW1 further denied the suggestions that he has not issued the cheques in the year 2003 but the same were issued in the year 2014 in the presence of panchayath elders. DW1 further denied that if really he has given the cheques for collateral purpose, there is no question of alienating or selling the said property to the family of complainant in the year 2005 and 2010. DW1 further stated that he has not filed his IT returns pertaining to the years from 2003 to 2014, before the Court. DW1 further admitted that he preferred an appeal in
Appeal No.D-8965/2014, dated 04.06.2016 and an order was passed by the concerned RDO of Karimnagar against the wife of complainant in regard to some land transactions and the said Appeal was dismissed by the RDO.
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36.DW1 further admitted that the wife of complainant has instituted a civil suit against him in OS.No.75/2015 (OS.No.917/2025) pending on the file of
Hon’ble Additional Senior Civil Judge’s Court, Karimnagar. DW1 adds that the
said transaction is totally different from the present cheque bounce case. DW1 further denied the suggestions that since they have initially in the stage of establishing their institutions in the year 2003 to 2014, he was not having financial capacity to give salaries of an amount of Rs.86,00,000/- to the staff of his institution. DW1 further denied that he was in need of money during the said period of 2000 to 2014. DW1 further denied that no monitory transactions took place in between himself and the family of complainant from 2000 to 2014. DW1 adds that the land transactions completed in the year 2010 and thereafter no land transaction or monitory transaction took place in between him and the complainant.
37.DW1 further denied that he only issued the said three cheques in favour of the complainant in lieu legally enforceable debt. DW1 further denied that the complainant has complied all the requirements under section 138 of NI Act, but he failed to honor the cheques. DW1 adds that he issued reply notice to the complainant demanding the complainant to return back the cheques which were given for collateral purpose. DW1 further adds that the complainant intentionally failed to file the reply notice before the Court along with complaint. DW1 further denied that a cheating case was registered against him in crime No.14/2015 of Thimmapur police station.
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38.DW1 further stated that he does not remember whether they mentioned in the reply notice about the Civil suit, Appeal before RDO and other land transactions or not? DW1 further denied that the said three post dated cheques have been dishonoured with reasons that insufficient funds and signature differs respectively. DW1 adds that he issued blank signed cheques and the complainant has filled the details and presented before the bank. DW1 further denied the suggestions that the details of his cheques will be filled by the staff of his institution. DW1 adds that he himself personally writes and fills the details of his cheque before issuing the same. DW1 further denied the suggestions that only to avoid the repayment to the complainant, he is deposing falsely by creating stories. DW1 further denied that he caused loss to the complainant by dishonoring the cheques issued to them. DW1 further denied that he has not specifically shown in his IT returns pertaining to the year 2014- 2015 about the debts that are to paid.
Basic requirements of Section 138 of the NI Act,1881
39.Now let us discuss the basic requirements of Section 138 of the NI Act,1881.
To establish the offence under Section 138 of N.I Act, the Complainant must fulfill all the essential ingredients of the offence, as highlighted below:
i.The cheque was drawn by a person on an account maintained by him/her for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity;
Fair 20 of 46CC No 2081 of 2016 ii. The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability; iii. 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; iv. 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 of the dishonour of cheque from the bank; v. The drawer fails to make payment of the said amount of money within fifteen days from the date of receipt of the notice.
Statutory Presumptions under NI Act, 1881:
40.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.
41.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
Fair 21 of 46CC No 2081 of 2016 statutory presumption under Section 139 N.I Act, 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 or by cross-examining the Complainant, the accused 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.
42.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.
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43.Thus, 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.
44.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 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.
A PPRECIATION OF E VIDENCE & F INDINGS :
45.The complainant has submitted that the accused is well known to him as they are having good relations and out of such acquaintance the accused No.1 has approached the complainant with a request to lend an amount of Rs.5,00,000/- to meet his unavoidable financial needs for his college and also domestic needs, considering the same, the complainant has advanced an amount of
Rs.5,00,000/- to the accused as hand loan and after receipt of said amount, the accused has issued a cheque bearing No.704746, dated 06.07.2015 for
Fair 23 of 46CC No 2081 of 2016
Rs.5,00,000/- in favour of PW1/complainant, and upon presentation the cheque was dishonoured on 07.07.2015 with a reason that funds insufficient, as such the complainant has issued a legal notice on 24.07.2015 to the accused demanding to pay such cheque amount within a period of 15 days. The said notice was acknowledged by the accused on 29.07.2015, for which the accused has issued a reply notice by denying the averments of the notice under Ex.P6 on 11.08.2015. In spite of issuance of notice, the accused has not choose to repay the amount covered under the cheque.
46.The complainant has examined PW1 and PW2 and marked Ex.P1 to P6 and the accused has examined himself as DW1 and marked Exs.D1 to Ex.D6.
47.Perusal of whole record discloses that the complainant alleges that the accused has issued Ex.P1/cheque to him in lieu of payment of legally enforcible debt of
Rs.5,00,000/- to the complainant which was covered under Ex.P1. On the other hand, the accused as DW1 admitted the issuance of cheque to PW1 but further stated that it was issued as security purpose in the year 2003 but not in the year 2014 and not in lieu of payment of any legally enforceable debt. Thus, there is no dispute regarding issuance of cheque under Ex.P1 by DW1 to PW1. The dispute is regarding whether Ex.P1 was issued by DW1 in lieu of any enforceable debt or for security purpose.
48.Perusal of Ex.P1, depicts that a cheque bearing no. 704746, dated 06.07.2015 was issued by accused/DW1 herein in favour of Complainant/PW1 herein for
Fair 24 of 46CC No 2081 of 2016 an amount of Rs.5,00,000/- (Rupees five lakhs only) and perusal of Ex.P2 discloses that the said Ex.P1 was presented at concerned Bank and the same was returned with a memo dated 07.07.2015 endorsing the reason as “funds insufficient”. Further, perusal of Ex.P3 to Ex.P6 depicts that a legal/demand notice was issued by the complainant through his counsel on 24.07.2015, to the accused by demanding the accused to pay the amount under Ex.P1, and the same was served upon accused, for which the accused has given a reply notice under Ex.P6 by denying the contents of Ex.P3/notice averments.
49.There is no dispute regarding the delivery of legal notice to the accused, since the accused alleged that he had issued a reply notice to the complainant.
50.The accused has not disputed his signature on Ex.P1 since himself as DW1 clearly deposed in his chief examination that he has issued a blank signed postdated cheque to PW1 as security purpose in the year 2003.
51.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 07.07.2015 marked as Ex. P2. Ex. P1/Cheque is dated 06.07.2015 and it is dishonored on 07.07.2015, which shows that Ex. P1 Cheque was presented within its validity period. Ex. P1 was dishonored because of insufficient funds. Further, Ex.
P3/legal notice dated 24.07.2015 was issued to the accused within the statutory period of 30 days from the date of dishonor. As seen from Ex.P4/postal receipt
Fair 25 of 46CC No 2081 of 2016 and Ex.P5/acknowledgment card, a demand notice was served upon the accused, calling upon him to pay the cheque amount. Later, accused has issued reply notice to the complainant under Ex.P6.
52.In view of above discussion, it is settled that Ex.P1/Cheque was drawn by the accused on the bank account maintained by him, as the signature on Ex.P1 was admitted by DW1.
53.Therefore, the statutory requirement of Section 138 (a) (b) and (c) are duly proved.
54.Now, it has to be seen that :
Whether Ex.P1/Cheque was issued by the accused in discharge of a legally enforceable debt or liability?
55.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. In view of aforesaid discussion, it is settled that the signature on
Ex.P1 is of accused.
56.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.
Accordingly, the presumption under section 139 of the N.I Act that there exists
Fair 26 of 46CC No 2081 of 2016 a legally enforceable debt or other liability arising in the favor of the
Complainant.
57.The learned defence counsel has questioned PW1 in regard to financial capability, where PW1 stated that he used to do agricultural works. PW1 also stated that he is not an income tax assesee. The learned defense counsel has argued that the complainant has not filed any income tax returns to prove the alleged monitory transaction held in between the accused and the complainant and the accused has not issued Ex.P1/cheque in lieu of payment of legally enforceable debt.
58.In the case of Rohitbhai Jivanlal Patel vs. State of Gujarat 2019 SCC
OnLine SC 389, the Hon’ble Supreme Court has given its findings as to the “presumption and filing of documentary evidence by the complainant stating that the considerations such as filing of receipt, promissory note, income tax returns, account books are not required to be proved by a complainant in a case U/sec. 138 of Negotiable Instruments Act, in view of statutory presumption U/sec. 139.” The Hon’ble Supreme Court further held that filing of income tax receipts are not required to be proved by the complainant in view of the presumption.” On these grounds case U/sec.138 of Negotiable
Instruments Act cannot be dismissed.
59.Furthermore, in the Hon’ble High Court of Madhya Pradesh case, Smt. Ragini
Gupta v. Piyush Dutt Sharma (CRR 5263/2018), it was held that "This Court
Fair 27 of 46CC No 2081 of 2016 is of the considered opinion that mere non-filing of Income Tax Return would not automatically dislodge the source of income of the complainant. Non- payment of Income Tax is a matter between the revenue and the assessee. If the assessee has not disclosed his income in the Income Tax Return, then the
Income Tax Department is well within its rights to reopen the assessment of income of the assessee and to take action as per the provisions of the Income
Tax Act."
60.Hence in view of the judgments of Hon’ble Supreme Court, the fact that PW1 has not filed any income tax returns or PW1 not being income tax assessee, does not strike out the case of complainant. So, it is not fatal to the case of complainant.
61.As per the version of PW1, Ex.P1 was issued by the accused/DW1 in lieu of payment of legally enforceable debt. PW2 has also supported the version of
PW1 by stating that himself, complainant and the accused belongs to
Thimmapur village and there are some land transactions in between the complainant and the accused in regard to that purpose the complainant has asked money to the accused, for which the accused has issued three cheques in the presence of PW2 for an amount of Rs.6,00,000/-, Rs.5,00,000/- and
Rs.5,00,000/- respectively, totally amounting to Rs.16,00,000/-. PW2 stated that he does not know the cheque numbers, sale consideration and survey numbers of the land, however, the numbers of the cheque and details of the land are on record in view of Ex.P1, Ex.P2, Ex.D1 and Ex.D2.
Fair 28 of 46CC No 2081 of 2016
62.The remaining part of the cross examination of PW2 is pertaining to only suggestions given by the learned counsel for accused to PW2 regarding non issuance of cheques by DW1 with reference to land transactions and deposing of false evidence by PW2 and the said suggestions were denied by PW2.
Nothing is elicited by the learned defense counsel throughout the cross examination of PW1 and PW2 to disprove their version and to disprove the case of complainant. Thus, the evidence of PW2 is corroborated with the evidence of PW1 with regarding to issuance of Ex.P1 by the accused in favour of the complainant/PW1 in lieu of the legally enforceable debt.
63.The only documents relied upon by the defense are Ex.D1 to D6, out of which
Ex.D1 and Ex.D2 are the sale deeds and Ex.D3 to D6 are the IT returns pertaining to the years 2014-15, 2015-16, 2016-17 and 2024-25. Perusal of
Ex.D1 discloses that the complainant has sold out the land to an extent of Ac.0- 33 Gts in Sy.No.414/A, Ac.0-11 Gts in Sy.No.415/A, Ac.0-31 Gts in
Sy.No.416/D, Ac.1-21 Gts in Sy.No.416/E, Ac.0-21 Gts in Sy.No.393/A, Ac.0- 20 Gts in Sy.No.408/A, Ac.0-10 Gts in Sy.No.408/F, total land to an extent of
Ac.4-27 Gts to accused society for a sale consideration of Rs.2,10,400/- through a registered sale deed bearing Doct.No.4915/2003 dt.9.6.2003. Ex.D2 discloses that the accused resold the same land to the complainant through a registered sale deed bearing Doct.No.5376/2010 dt.09.11.2010 for sale consideration of Rs.7,01,500/-.
Fair 29 of 46CC No 2081 of 2016
64.However, the complainant has not disputed those sale deeds but the complainant further alleged that in view of the land transactions and monetary transactions in between the complainant family and the accused which was initiated in the year 2003 and proceeded till 2014 and in view of their settlement regarding clearing of the payment by the accused, the accused has issued three cheques (which involves Ex.P1) amounting to Rs.16,00,000/- as payment of total amount. Furthermore, the accused has submitted the IT returns pertaining to the years 2014-2017 respectively and 2024-2025 as Ex.D3 to D6 but the accused has not furnished the IT returns from the year 2003 till 2014 during the period which the complainant alleges that there are land and monetary transactions in between the family of the complainant and the accused.
65.DW1 admitted that there are many land transactions held in between the family of complainant and the accused which were initiated from the year 2003. DW1 also admitted that he issued three blank signed cheques to the family of complainant but DW1 has taken plea of defense that he has issued those cheques in the year 2003 as they are postdated cheques and that too for the purpose of security but not in lieu of payment of any legally enforceable debt, but there is no mention in Ex.D1 about the details or transaction pertaining to
Ex.P1.
66.PW1 admitted that he did not mention loan transaction details in his 200 Cr.P.C and chief affidavit but further admitted that he mentioned in his chief
Fair 30 of 46CC No 2081 of 2016 examination that he advanced an amount of Rs.5,00,000/- in the month of
August, 2012 and specifically the date of hand loan was not mentioned in his chief affidavit or section 200 Cr.P.C complaint. It was suggested to PW1 by learned defence counsel that PW1 never advanced an amount of Rs.5,00,000/- to accused at any point of time and the same was denied by PW1.
67.According to PW1, he knew accused since 2003 on-wards and accused runs educational institutions. There is no dispute regarding the acquaintance between PW1 and the accused since accused admitted the land transactions in between him and the family of complainant initiating from the year 2003. PW1 admitted during his cross examination that he filed total three cases including present case against accused for total amount of Rs.16,00,000/- and all cases are still pending.
68.The learned defence counsel suggested PW1 that he does not have any financial capacity to lend any amount to accused and the same is denied by
PW1. In order to show the financial capacity of the accused, Ex.D4 to D6 have been filed before the Court which are IT returns pertaining to the years 2014- 2017 respectively and 2024-2025. In this regard, the learned counsel for complainant has argued that, the accused has admitted in his cross examination that their first college was established at Thimmapur in the year 2001 under
Takshashila Education Society and land transactions have been initiated in between the family of complainant and the accused in the year 2003 and when the accused approached the complainant for borrowing an amount of
Fair 31 of 46CC No 2081 of 2016
Rs.5,00,000/-, the said Educational institutions are at initial stage of establishment from the years 2003 to 2014, as such the accused borrowed an amount of Rs.5,00,000/- from the complainant to meet his unavoidable necessities and for business purpose.
69.In the present case, it appears that Ex.P1 was issued by accused No.2 as representative of Sree chaitanya institutions, as such the institution was made as accused No.1 and the representative of the institution was made as accused
No.2, in the present case.
70.The learned counsel for accused has argued that the accused was running the educational institutions and paying lakhs of amounts as salaries to their staff members per month and the accused is well settled as such they does not have any need of borrowing any amount from PW1. In the present case, accused has admitted his signature on Ex.P1, but the plea of defence taken by the accused is that it was issued by him in the year 2003 pertaining to a land transaction in between the family of complainant and the accused. As admitted by DW1, there is no dispute regarding the signature of accused/DW1 on Ex.P1.
The dispute is with regarding to advancement of amount by PW1 to the accused. The other defence of the accused is that he issued three cheques to
PW1 as security purpose, but not in lieu of any legally enforceable debt and inspite of payment of total sale consideration to the complainant, the complainant failed to return the cheques to the accused. In this regard, DW1 submitted during his further cross examination that he lodged a criminal case
Fair 32 of 46CC No 2081 of 2016 against the complainant for not returning back the blank signed cheques of the accused even after completion of land transactions. However, DW1 categorically stated that he do not know whether any FIR was registered basing upon his report or not. Except taking such plea of defence, DW1 has not chose to take any steps to submit such copy of police complaint/report before the
Court, in order to substantiate his contention.
71.The learned counsel for complainant has put suggestions to DW1 during his cross examination with regarding to the issuance of cheques by DW1 with respect to land and monetary transactions between the complainant and the accused, the same were denied by DW1. Perusal of the admissions of DW1 during his cross examination clearly discloses that there are Civil and Criminal disputes pending in between the complainant family and the accused before the concerned Courts and revenue authorities. The learned counsel for complainant has also put a suggestion to DW1 with regarding to registration of
FIR vide Cr.No.14/2015 of PS Thimmapur and the said suggestion was denied by DW1. The learned counsel for complainant has argued that the accused has cheated the complainant as such a case was registered against the accused in
Cr.No.14/2015 of PS Thimmapur and inspite of admitting before the panchayath held by Dunga Rajaiah (Thimmapur Sarpanch), Venkat Reddy,
Kondal Reddy and Raji Reddy, the accused failed to alienate or revert back some more properties to the family of complainant legally and the news with regarding to the accused was also published in Andhra Jyothi and Eenadu news
Fair 33 of 46CC No 2081 of 2016 papers stating that the accused have caused loss to the family of the complainant and a criminal case has been instituted against the accused.
72.The learned counsel for accused argued that the accused issued three blank signed cheques to the complainant during land transactions as security purpose but the complainant has filed false case against accused by misusing above said cheques by filling all the columns. The initial land transaction was held in the year 2003 according to the complainant as well as the accused. Through
Ex.D1, the accused have purchased the concerned land from the complainant for some sale consideration and the same was resold to the complainant by the accused in the year 2010 under Ex.D2. Perusal of Ex.D1 and D2 depicts that there is no mention about the details of the cheque under Ex.P1 in Ex.D1 or
Ex.D2. If Ex.P1 was really issued in regard to land transaction as security purpose, the details of Ex.P1 would have been mentioned in Ex.D1 or Ex.D2.
Furthermore, no documentary proof has been furnished before the Court by the accused to substantiate that the alleged cheque under Ex.P1 was issued by accused only for security purpose.
73.Learned counsel for accused has relied upon a case in Sesseriyil Joseph Ms.
Devassia andargued that accused No.1/Sree Chaitanya Degree college has alleged to have issued Ex.P1 through accused No.2 but demand notice was not addressed to A1/Sree Chaitanya Degree college individually as such, present complaint is not maintainable as per provisions of NI Act. Perusal of Ex.P3, discloses that the demand notice has been addressed to A1 and A2 individually.
Fair 34 of 46CC No 2081 of 2016
74.PW1 admitted in his cross examination that he has not obtained any promissory note or loan documents from the accused to show that he advanced loan amount of Rs.5,00,000/- to him. In regard to that, PW1 submitted that accused informed him that the cheque would be sufficient.
75.The learned counsel for accused has relied upon the cases such as 1). V.
Ezhilvanan Vs R. Pugazhendhi, 2). A. Krishna Kumar Vs P. Regina and
another, 3). Basalingappa Vs Mudibasapa and 4). Krishna Janardhan
Bhat Vs Dattatreya G. Hegde. By relying upon the said laws, the learned defence counsel has argued that the presumptions under section 118 and 139 of
NI Act are rebuttable presumptions and in order to rebut the same, the accused can raise a probable defence on the basis of material or evidence produced by the complainant or by way of adducing direct evidence by the accused. It was further argued by the learned defence counsel that it is the bounden duty of the complainant to prove the factum of legally enforceable debt basing upon which the cheque was issued to discharge such debt. The arguments of learned defence counsel and the said law precedents denotes the legal principles in regard to the presumptions under section 118 and 139 of NI Act and rebuttal of such presumptions by the accused by raising probable defence by cross examining the complainant or his witnesses or by adducing any evidence.
76.DW1 stated in his cross examination that they were cheated by the father of complainant since the alleged land was re-registered in their name by the father of complainant by suppressing the initial registration in favour of Bandari
Fair 35 of 46CC No 2081 of 2016
Papaiah, but no documentary proof has been filed by the accused to substantiate that the alleged land was re-registered in favour of accused by suppressing the initial registration. Furthermore, the accused never contended that he approached the concerned police for taking steps or lodging complaint against the complainant or his father for such alleged double registration. Thus, mere taking such plea of defence does not substantiate the same.
77.In view of aforesaid discussion, DW1 admitted that there are many land transactions held in between the family of complainant and the accused which were initiated from the year 2003. DW1 also admitted that he issued three blank signed cheques to the family of complainant but DW1 has taken plea of defense that he has issued those cheuqes in the year 2003 as they are postdated cheques and that too for the purpose of security but not in lieu of payment of any legally enforceable debt. Except taking such plea of defense, the accused has not lead cogent and convincing evidence to substantiate that the cheque under Ex.P1 was issued for collateral purpose as security but not in lieu of payment of legally enforceable debt. Apart from DW1, no other witness has been examined by learned defense. Thus, the presumptions which were available under section 118 and 138 of NI Act are not rebutted by the learned defense.
78.The learned defence counsel has further cited the cases such as 1). John K.
Abraham Vs Simon C. Abraham, 2). Brij Mohan Vs Virendra Bhandari, 3). Bhawana Kathuria Vs M/s Shivani Traders and Anr, 4). Vijay Vs
Fair 36 of 46CC No 2081 of 2016
Laxman & Ors, 5). M. Gopalappa Vs Basavappa, 6). Yashwanth Kumar
Vs Shanth Kumar and 7). Suresh Vs Sanjay. But perusal of the said citations discloses that they are not applicable to the present case on hand, since the facts and circumstances of the present case are different from the facts and circumstances of the said citations upon which the learned defense has relied upon.
79.The learned defence counsel has further relied upon Krishna Janardhan Bhat
Vs Dattatreya G. Hegde and 2). R. Chenna Kesava Rao Vs P. Laxmi
Narsaiah, and argued that it appears highly improbable for the complainant to advance an amount of Rs.5,00,000/- as hand loan to the accused on mere asking and that too without obtaining any documentary proof. Further, the learned counsel also cited the cases such as 1). Sri Dattatraya Vs
Sharanappa and 2). N. Vijay Kumar Vs Vishwanath Rao N and argued that admission of non obtaining any receipt for the loan amount from the accused is considered as fatal to the case of complainant. It was further argued by the defence counsel that three cheques have been issued by the accused to the complainant as security purpose in regard to the land transactions in the year 2003. Whereas, there is nowhere mentioned about Ex.P1 in Ex.D1/sale deed marked through DW1. No other documentary proof was produced before the
Court by the accused in order to substantiate that Ex.P1 was issued for security purpose. Thus, the facts and circumstances in the present case are different from the law precedents relied upon by the learned counsel for accused.
Fair 37 of 46CC No 2081 of 2016
80.The learned defence counsel has further relied upon V.K. Gemini Vs
Chandran and argued that admission of cheque under Ex.P1 alone cannot prove the offence under section 138 of NI Act. In the present case, it was seen that the evidence of PW1 was found cogent and convincing with regarding to the land and monetary transactions in between the complainant and issuance of cheque by the accused to the complainant in lieu of a legally enforceable debt and the evidence of PW1 was corroborated with the evidence of PW2. In these circumstances, the said citation is not applicable to the present case.
81.The accused has not disputed his signature on Ex.P1 but disputed the hand writings on Ex.P1 and even the learned defence counsel has given suggestions to the witnesses examined on behalf of complainant that the details on Ex.P1 are not filled by the accused. Except taking such plea, the accused has not subjected Ex.P1 to expert opinion for its determination. Thus, the accused has not chosen to send the said exhibits to FSL for comparison of the hand writings on Ex.P1 with his admitted hand writings. According to section 118 (e) of the
Negotiable Instrument Act, there is a presumption that the endorsements appearing upon a Negotiable Instrument were made in the order in which they appear upon. Furthermore, there are presumptions under section 118 of
Negotiable Instruments Act as to consideration, date, time of acceptance and etc., unless the contrary is proved. According to section 118 of NI Act, it is mentioned specifically as SHALL presumption, however, it can be rebutted by the accused by leading cogent evidence contrary to the same.
Fair 38 of 46CC No 2081 of 2016
82.Section 139 is a reverse onus clause and requires the accused to prove the non- existence of the presumed fact, i.e., that cheque was not issued in discharge of a debt/liability. When the accused has to rebut the presumption under section 139, the standard of proof for doing so is that of "preponderance of probabilities". To prove the same, the accused has to bring on record such facts and such circumstances which may lead the Court to conclude either that the consideration did not exist or that its non- existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist.
83.The robustness of statutory presumptions under Sections 118 and 139, ensuring that they are not easily rebutted without substantive evidence. The necessity for the accused to present a probable defense rather than merely denying allegations.
84.On perusal of the whole record, it appears that except the bare denial, nothing has been found to come on record to dislodge the positive proof. It is well settled that bare denial of the passing of the consideration and existence of debt, would not serve the purpose of the accused. Some substantive material which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the
Fair 39 of 46CC No 2081 of 2016 circumstances of the case, act upon the plea that they did not exist. The suggestions which were put to PW1 by the learned defense or the plea of defence taken by the accused, appears to be too uncertain to believe or accept.
85.Additionally, the allegations of filling the details on Ex.P1 by someone else, lacks expert opinion, making it a mere assertion without legal weight.
Accordingly, the accused’s defense remains unsubstantiated, and the statutory presumption in favor of the complainant stands unrebutted.
86.In view of above discussion, this Court has no reason to believe that the hand writings of the accused are forged and no reason to believe that Ex.P1 was given for collateral purpose. Therefore, it is settled that Ex.P1/Cheque was drawn by the accused on the bank account maintained by him and Ex.P1 was executed by him.
87.In view of aforesaid discussion, PW1 has discharged his burden that a cheque was issued by the accused in favour of PW1 in view of a legally enforceable debt. Subsequently, the burden has been shifted to accused. As discussed above, there are many defences taken by the accused and all of such defenses/points were answered in negative for the accused.
88.“Whenever blank cheque or filled up and presented, a presumption can be drawn under Sec.139 of the NI Act, it is rebuttable presumption. The question is whether the accused is able to rebut the presumption”. Initially, the burden totally is upon the PW1 so as for him to prove the case against beyond all
Fair 40 of 46CC No 2081 of 2016 reasonable doubts. From the evidence of PW1 and PW2 coupled with the documentary evidence of Exs.P1 to P6, the complainant discharged his initial burden that the accused issued Ex.P1 to him in lieu of a legally enforceable debt. Whereas, the accused could not elicit anything from the cross examination of PW1 and PW2, to disprove the case of complainant.
89.The initial presumptions which are benefiting PW1 in the form of Secs.118 and 139 of NI Act, are not rebutted by the accused throughout the cross examination of PW1 and PW2. Therefore, it is found that nothing elicited from the cross examination of PW1 and PW2 and in testimonies of DW1, so as to disbelieve the version of PW1. Hence, this Court is of the considered view that the accused has failed to rebut the presumptions in this case.
90.In view of the above discussion and the evidence of PW1 and PW2 coupled with documentary evidence under Exs.P1 to Ex.P6, clearly establishes that the accused liable to pay an amount of Rs.5,00,000/- and subsequently issued
Ex.P.1 for the said amount, for discharge of the same and Ex.P1 was returned unpaid with an endorsement that “Funds Insufficient” and the accused failed to pay the cheque amount in spite of issuance of legal notice under Ex.P3 demanding him to pay the cheque amount. Thus, the evidence of PW.1 and
PW2 coupled with documentary evidence under Exs.P1 to Ex.P6 is consistent, cogent and convincing to show that the accused issued a cheque under Ex.P1 having knowledge that his account is not having sufficient funds and he failed to pay cheque amount in spite of issuance of legal notice within 15 days. The
Fair 41 of 46CC No 2081 of 2016 accused has failed to present any cogent documentary evidence to demonstrate that the cheque under Ex.P1 was misused by the complainant. Therefore, the accused’s defense remains unsubstantiated, and the statutory presumption in favor of the complainant stands unrebutted.
91.From the facts at hand, it is abundantly clear that the accused could not raise a probable doubt regarding the existence of a legally enforceable debt by rebutting the presumption available to the complainant under Sec.139 of the NI
Act. No plausible evidence was presented by the accused to rebut the presumption available to the complainant. The complainant successfully proved his case, demonstrating that the cheque Ex.P1 was issued in discharge of a legally enforceable liability.
92.Hence, it is held that the complainant proved beyond all reasonable doubt that the accused committed the offence punishable under section 138 of Negotiable
Instruments Act. Accordingly, this point is answered in favour of the complainant and against the accused.
93.In the result, accused are found guilty for the offence punishable under
Section 138 of Negotiable Instruments Act and the accused are accordingly, convicted under section 255(2) Cr.P.C.
Typed to my dictation by Stenographer Gr.III, corrected and pronounced by me in the Open Court on this the 12 th day of March, 2026.
II Addl. Junior Civil Judge-cum- II Addl. Judl. Magistrate of F.C., Karimnagar.
Fair 42 of 46CC No 2081 of 2016
94.Though as per section 255 of Criminal Procedure Code, hearing of the accused on the quantum of sentence is not within the ambit of the said section. Though the section does not manifest on hearing of the accused on quantum of sentence, still this Court is of an opinion that the accused must be given an opportunity for hearing him on the quantum of sentence while imposing punishment in the interest of Justice and to meet the ends of justice.
95.After hearing the accused and having regard to the facts and circumstances of the case and the nature of offence committed by the accused, this Court is of the considered view that the accused is not entitled for the benefit under the provisions of Probation of Offenders Act.
96.The convict is heard on the quantum of sentence. Accused stated that he is running educational institutions and he is having old aged mother, he has to look after his family and educational institutions and there is no other person to look after all these things and requested the Court to be lenient in sentencing.
Having given my careful consideration to the evidence available on record and considering the circumstances and submission of the accused, this Court is of the opinion that lenient view has to be taken against the accused in regard to the punishment/ imprisonment.
97.The Hon’ble Apex Court in its expression between Somnath Sarkar Vs Utpal
Basu Mallick and another reported in 2013 (12) SCALE 484 2014 (1)
Fair 43 of 46CC No 2081 of 2016 (Crl.) 145 held that a criminal Court is competent under section 138 of NI Act to levy fine up to twice the cheque amount an direct payment of such amount as compensation by way for restitution in regard to the loss on account of dishonour of cheque under section 357 of Cr.P.C.
98.The Hon’ble High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh following the dictum of Somnath Sarkar’s case awarded compensation out of the fine amount imposed in Omprakash
Agarwal Vs. Khaja Krishna Prasad and another reported in 2015 (1) ALT
Crl. 68, in Apollo Tyres Limited Vs. H.M.Tyres and another reported in
2014 Law suit Hyderabad 184, S. Ravinder Vs Bhasker Teja and others reported in 2016(1) ALT Crl. 125 and in B. Raghunandan Reddy Vs.
Rajashekar Reddy and another Reported in 2015 (1) Ald Crl. 861.
99.The cheque amount in this case is Rs.5,00,000/- (Rupees five lakhs only) and twice the amount of cheque would come to Rs.10,00,000/- and the Court can impose fine on the Accused upto Rs.10,00,000/- (Rupees ten lakhs only).
100. Considering the facts and circumstances and also the judicial precedents the accused is found guilty for the offence punishable under section 138 of N.I.
Act.
101. In the result, the accused are found guilty for the offence punishable under section 138 of the Negotiable Instrument Act and consequently accused are convicted under section 255(2) of the Code of Criminal Procedure and the
Fair 44 of 46CC No 2081 of 2016 accused are sentenced to pay an amount of Rs.6,50,000/- (Rupees six lakhs and fifty thousands only) and in default, accused No.2 shall undergo simple imprisonment for a period of one year. The amount of Rs.6,50,000/- (Rupees six lakhs and fifty thousands only) shall be paid to the complainant as compensation under section 357 (3) of Cr.P.C., within one month.
102. A free copy of Judgment shall be given to the accused as per Sec. 363 Cr.P.C r/w Rule 72 of Criminal Rules of Practice and Circular Orders, 1990.
103. The accused is entitled for set off of the period of detention undergone by him if any during inquiry and trial under section 428 of the Code of Criminal
Procedure.
104. The Accused is appraised of his right to appeal and free legal aid before the
Appellate Court.
Typed to my dictation by Stenographer Gr.III, corrected and pronounced by me in the Open Court on this the 12 th day of March, 2026.
II Addl. Junior Civil Judge-cum- II Addl. Judl. Magistrate of F.C., Karimnagar.
Fair 45 of 46CC No 2081 of 2016
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
FOR THE PROSECUTION:
Prosecution WitnessName of the WitnessDescription (PW) number
PW1Ramidi Ram ReddyComplainant.
PW2Velpula RavinderWitness to issuance of cheques.
FOR THE DEFENCE :
Defense WitnessName of the WitnessDescription (DW) number
DW1Muddasani Ramesh ReddyAccused
EXHIBITS MARKED
FOR THE PROSECUTION:
ExhibitDescription of the ExhibitProved by/ No.Attested by
Ex.P1Original cheque bearing No.704746, dated 06.07.2015 forPW1. Rs.5,00,000/-
Ex.P2Cheque return memo dated 07.07.2015PW1.
Ex.P3Office copy of legal notice, dated 24.07.2015PW1.
Ex.P4Postal receipts dated 25.07.2015PW1.
Ex.P5Acknowledgment cards, dated 29.07.2015PW1.
Ex.P6Reply notice, dated 11.08.2015PW1.
Fair 46 of 46CC No 2081 of 2016
FOR THE DEFENCE :
ExhibitDescription of the ExhibitProved by/ No.Attested by
Ex.D1Certified copy of registered sale deed bearingDW1. No.4915/2003, dated 09.06.2003
Ex.D2Sale deed vide bearing No.5376/2010, dated 09.11.2010DW1.
Ex.D3Certified true copy of IT returns of the accused society,DW1. Takshasila Educational Society for the assessment year 2014-15
Ex.D4Certified true copy of IT returns of the accused society,DW1. Takshasila Educational Society for the assessment year 2015-16
Ex.D5Certified true copy of IT returns of the accused society,DW1. Takshasila Educational Society for the assessment year 2016-17
Ex.D6Certified true copy of IT returns of the accused society,DW1. Takshasila Educational Society for the assessment year 2024-25
MATERIAL OBJECTS
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II Addl. Junior Civil Judge-cum- II Addl. Judl. Magistrate of F.C., Karimnagar.