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CC No.1449/2023
II ADDL CJM, VIJAYAWADA. Dated 21.04.2026
IN THE COURT OF II ADDITIONAL CHIEF JUDICIAL MAGISTRATE –CUM –
MAHILA MAGISTRATE (JUVENILE COURT), VIJAYAWADA
PRESENT :- SMT. NETTEM RADHIKA
II Additional Chief Judicial Magistrate- cum-Mahila Magistrate (Juvenile Court), Vijayawada.
(Tuesday, this the 21st day of April, 2026)
C.C.No.1449/2023
Between :
Gadidesi Vidyasagar Babu @ Vidyasagar ... Complainant
AND
Badugu Jogeswara Rao … Accused
This Case came up before me for final hearing on 08.04.2026 in the presence of Sri D.Domnic Moses, Advocate for Complainant and of Sri V.Subbarao, Advocate for Accused; upon hearing the Arguments of both sides; upon perusing the record and having been stood over till this day for consideration, this Court delivered the following:- - :: J U D G M E N T :: -
This is a Complaint filed by the Complainant u/s.190 and 200 of Code of Criminal Procedure, 1973 (Herein after refer as Cr.P.C for brevity) for the offence u/s.138 of Negotiable Instrument Act, 1881 (Herein after refer to as NI
Act for brevity) against the Accused.
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2.THE CASE OF THE COMPLAINANT IS AS FOLLOWS :-
(i) On 20.01.2019 the Accused borrowed an amount of Rs.2,50,000/- (Rupees
Two Lakhs Fifty Thousand Only) from the Complainant for his business purpose and family expenses by way of hand loan in the presence of Vallapu
Vijay S/o Yesupadham and Merugu Sukumar Babu S/o Vijay Raju agreeing to repay the said amount together with interest @24% P.A. either to the
Complainant or his order on demand, subsequently Accused failed to pay the amount to the Complainant .
(ii) On repeated demands made by him, the Accused has issued a cheque dt.15.04.2019 and the cheque bearing No:085263 for an amount of
Rs.2,50,000/- in favour of the Complainant drawn on Syndicate Bank (A/c.No.630601542841), Machavaram, Vijayawada towards part payment of the above loan. The Accused requested the Complainant to present the said cheque on the same day itself i.e. 15.04.2019 representing that there are sufficient funds in his account. On that the Complainant presented the above said cheque through his banker i.e. ICICI Bank Ltd, Vijayawada for collection, but the said cheque was returned with an endorsement “Account Blocked” with a Memo dt.16.04.2019 issued by Accused Banker and the same was communicated to the Complainant from his Banker on the same day. The
Complainant informed the same to the Accused through phone, the Accused has taken the dishonoured Cheque, paid an amount of Rs.1,00,000/- to the
Complainant by way of cash and issued four (4) post dated cheques infavour 2 of 27
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II ADDL CJM, VIJAYAWADA. Dated 21.04.2026 of Complainant i.e.drawn on Syndicate Bank, Machavaram Branch,
Vijayawada 1) cheque bearing No.144521, dt.15.08.2019 for an amount of
Rs.31,500/-, 2) cheque bearing No.144522, dt.15.09.2019 for an amount of
Rs.32,250/-, 3) cheque bearing No.144523, dt.15.10.2019 for an amount of
Rs.33,000/-, 4) cheque bearing No.144524 dt.15.11.2019 for an amount of
Rs.29,250/-(Sic 29,500/-) for the part payment representing that there are necessary funds in his account.
(iii) The Complainant presented the cheque bearing No.144524 dt.15.11.2019 for an amount of Rs.29,250/- (Sic 29,500/-) on 21.11.2019 through his banker i.e. ICICI Bank Ltd, Benz Circle, Vijayawada for collection, but the said cheque was returned with an endorsement “Funds Insufficient” vide memo dt.22.11.2019 issued by Complainant ’s Bank.
(iv) The Complainant got issued legal notice on 26.11.2019 to the Accused y residence address and office address informing about the dishonour of cheque and demanded to pay the amount covered under above cheque within 15 days from the date of receipt of the said notice; and that the said notices were returned on 29.11.2019 with an endorsement “Unclaimed and
Intimation Served” and the complainant’s Counsel received the same on 03.12.2019. The Accused did not choose to either to repay the amount or to give reply. The Accused having knowledge that there are no funds in his account, but still issued a cheque with dishonest intention to cause wrongful loss to the Complainant. Hence the Complainant filed this Complaint praying 3 of 27
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II ADDL CJM, VIJAYAWADA. Dated 21.04.2026 the Court to punish the Accused for the offence U/s.138 and 142 of N.I. Act and to award compensation Under Section 357 of Cr.P.C.
3.On receipt of the Complaint, this Court took the case into cognizance for the offence u/s.138 of NI Act against the Accused and issued summons. After receipt of summons the Accused made his appearance through the learned counsel. Copies of the case documents furnished to the Accused as contemplated u/s.207 Cr.P.C. He was examined u/s.251 Cr.P.C. The substance of the accusation for the offence u/s.138 of NI Act was read over and explained to the Accused, for which he denied and claimed to be tried and the matter was posted for trial.
TRIAL:
4.During trial, the Complainant himself examined as PW.1 and got examined one V.Vijay, who is said to be the witness at the time of Hand loan as PW2 and got marked Ex.P1 to P5.
5.After closure of the evidence let in by the Complainant , the Accused was examined u/s.313 Cr.P.C by explaining the incriminating material found against him in the evidence of Complainant/PW.1 and PW.2, for which the plea of the Accused is denial in toto and reported for defence evidence, subsequently reported “No Defence evidence”, hence defence evidence was closed on 02.03.2026.
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6.The learned counsel for Complainant relied upon the following
Judgments:-
1)“Sanjabij Tari Vs. Kishore S.Borcar and Another Reported 2025 INSC 1158,
2) Josepgh Jose Vs. J.Baby and State of Kerala Reported 2002 CRILJ4392,
3) Priyanka Kumari Vs.Shailendra Kumar Reported on 13 th October, 2023,
4) K.Bhaskaran Vs. Sankaran Vaidhyan Balan and Another AIR 1999
Supreme Court 3762,
5) G.Venkataramanaiah Vs. Sillakollu Venkateswarlu and Another 1998(2)
ALD (Crl.) 689 (AP),
6) Upohar International Pvt. Ltd., and Another Vs. State of A.P and Another” 1997(1) ALD (Crl.) 30 (A.P.) (D.B.).
7. The learned counsel for Complainant relied upon the above judgments and submitted that the Complainant is entitled for the presumption U/s.139 of
N.I.Act; and that it is for the Accused to rebut the presumption but Accused failed to rebut the same, hence the case of the Complainant is to be believed and the Accused is liable for conviction for the offence U/s.138 of N.I.Act.
8.Heard the learned counsel for Complainant and learned counsel for
Accused. Both have filed written arguments reiterating the case of the
Complainant. The testimonies of PW1 and PW2 and Ex.P1 to P5.
9.NOW THE POINT FOR MY DETERMINATION IS, “Whether the
Complainant has proved the guilt of the Accused for the offence u/s.138
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II ADDL CJM, VIJAYAWADA. Dated 21.04.2026 of NI Act, 1881 beyond reasonable doubt?
10.POINT:
11.In order to determine the above said point the Complainant has to prove the following:-
i) Whether Ex.P1/Cheque was issued towards legally enforceable debt?
ii) Whether the Complainant presented Ex.P1/Cheque to the
Bank within the Stipulated period as required U/Sec.138(a) of NI Act?
iii) Whether the Complainant got issued Ex.P3/Legal Notice to
the Accused within the stipulated period for dishonor of Ex.P1/Cheque as required U/Sec.138(b) of NI Act, if so,
whether the same was served upon the Accused?
iv) Whether the Return Endorsement made by the Bank
Authorities on Ex.P1/Cheque Return Memo would attract the offence U/Sec.138 of NI Act?
v) Whether the Accused is liable for conviction for the offence Sec.138 of NI Act?
12.It is pertinent to extract hereunder Sec.138 & 139 of Negotiable
Instrument Act, 1881 which are as follows:-
Sec.138: 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
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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 provision of
this Act,be punished with imprisonment for a term which may
extend to one year, 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 given a notice in writing, to the drawer of
the Cheque, within fifteen days of the receipt of information by
him from the Bank regarding the return of the Cheque a 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.
EXPLANATION: For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.”
Sec.139: Presumption in favour of holder:
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It shall be presumed, unless the contrary is proved, that the holder
of the Cheque received the Cheque of the nature refer to in
Sec.138 for the discharge, in whole or in part, of any debt or
other liability.
13. I now to proceed to consider the same as under by Point wise:-
14. POINT No.(ii):
Whether the Complainant presented Ex.P1/Cheque to the Bank
within the Stipulated period as required U/Sec.138(a) of NI Act?
14.1.It is the evidence of PW.1 that the Accused issued Ex.P1/Cheque on 15.11.2019 for Rs.29,250/- and he presented the same in his Banker i.e.
ICICI Bank Limited, Benz circle Branch, Vijayawada for collection on 21.11.2019. A perusal of Ex.P2/Cheque Return Memo, it is clear that
Ex.P1/Cheque was dishonored on the ground “ Funds Insufficient ”, but not on the ground that Ex.P1/Cheque was presented beyond the period of limitation.
14.2. From the entire cross examination of PW1, it is not the case of the
Accused that PW1 did not present Ex.P1/Cheque in his Banker. Further, there is no suggestion to PW1 in his entire cross examination that he did not present Ex.P1/Cheque within the time stipulated. Hence, this Court is of the considered opinion that PW.1 has presented Ex.P1/Cheque with his Banker within the time stipulated as required u/s.138(a) of NI Act, 1881. Accordingly, this Point is answered in favour of Complainant and against the Accused.
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15. POINT (iii)
Whether the Complainant got issued Ex.P3/Legal Notice to the Accused within the stipulated period for dishonor of Ex.P1/Cheque as required U/Sec.138(b) of NI Act, if so, whether the same was served upon the Accused?
15.1. PW.1 deposed that he received information about dishonor of Cheque from his Banker on 22.11.2019 and got issued Ex.P3 legal notice on 26.11.2019 i.e. within (5) days from the date of dishonor of the Cheque from the Bank.
15.2. According to section 138(b) of NI Act, 1881, the legal notice is to be issued to the Accused within (5) days from the date of information about dishonor of Cheque from the Bank. In this case on hand, a perusal of Ex.P3/ legal notice and that PW.1 got issued Ex.P3/legal notice to the Accused within (5) days from the receipt of information from the Banker about the dishonor of
Ex.P1/Cheque.
According to Section 27 of General Clauses Act, 1897, “if any notice
is sent to the person by way of Registered Post with
Acknowledgment due with correct address and it is returned on any
ground, it is a deemed service of the notice unless the contrary is
proved”.
15.3. It is the evidence of PW.1 that the Accused got returned Ex.P3/Legal notice dated 26.11.2019, the same was “unclaimed and intimation was 9 of 27
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II ADDL CJM, VIJAYAWADA. Dated 21.04.2026 served” by the Postal Authorities to the Accused on 29.11.2019, but he kept quiet without complying the demand made by PW1. A perusal of
Ex.P5/Unserved covers disclose that the same was returned to sender as “Unclaimed and Intimation served”, which means refused; and that it is a deemed service, as such it is a valid service u/s.27 of General Clauses Act, 1897. In the cross examination of PW1, the Accused except suggesting that
PW1 obtained the above postal endorsement by managing the postal authorities, did not get any favourable answers to substantiate the same and place any cogent and convincing material to support the same.
15.4. In view of the above discussion this Court is of the considered opinion that the Complainant got issued Ex.P3/Legal notice to the Accused about the dishonour of Ex.P1/Cheque within the stipulated period of limitation as provided Under Section 138 of N.I Act, 1881 and the same was deemed to have been served on the Accused under Ex.P5. Accordingly this Point is answered in favour of Complainant and against the Accused.
16. POINT No.(iv):
Whether the Return Endorsement made by the Bank Authorities on Ex.P1/Cheque Return Memo would attract Sec.138 of NI Act?
16.1.It is the evidence of PW.1 that Ex.P1/Cheque was dis-honoured with an endorsement ‘funds insufficient’; and that he got issued Ex.P3/Legal notice, but Accused got returned the same under Ex.P5/Returned registered 10 of 27
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II ADDL CJM, VIJAYAWADA. Dated 21.04.2026 cover and he did not make any payment. It is not the case of Accused that as on the date of presentation of Ex.P1/Cheque by PW.1, he had sufficient funds in his Account. Further, the Accused did not make any suggestion that he has sufficient funds in his bank Account. From the evidence of PW1 coupled with
Ex.P2/Cheque return memo, it is clear that the Bank Authorities returned
Ex.P1/Cheque for the reason “Funds Insufficient” in the Account of Accused.
16.2. According to Sec.146 of Negotiable Instruments Act, 1881, production of Bank Slip or Memo having thereon, the Official Mark denoting that the Cheque has been dis-honoured, the Bank slip or Memo is Prima-
Facie evidence and the Court shall presume that Cheque has been dis-
honoured. However, the said presumption is rebuttal presumption.
16.3.The Complainant by examining himself as PW.1 and by exhibiting Ex.P2/Cheque return memo has proved that Cheque was dis-
honoured due to the reason‘ funds insufficient’ in the Bank Account of
Accused. Section 138 of NI Act clearly stipulates that any Cheque has been returned by the Bank unpaid, because of the amount standing in the credit of that Account is “Insufficient” to honour the Cheque, it would attract Section 138 of N.I.Act. It is the evidence of PW.1 that he has issued Ex.P3/Legal notice to the Accused after receipt of Ex.P2/Cheque return memo. From the entire cross examination of PW.1, even there is no suggestion from the end of the Accused with regard to endorsement on Ex.P2/Cheque return memo.
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II ADDL CJM, VIJAYAWADA. Dated 21.04.2026 16.4. In view of the above discussion, this Court is of the considered view that the endorsement “ funds insufficient ” made by Bank authorities on
Ex.P2/cheque return memo would attract Section.138 of NI Act. Accordingly this Point is answered in favour of Complainant and against Accused.
17. POINT No.(i)
Whether Ex.P1/Cheque was issued towards legally enforceable
debt?
17.1. PW.1 deposed that Accused borrowed Rs.2,50,000/-(Two lakh fifty
Thousand only) from him on 20.01.2019 for his family and business expenses by way of hand loan in the presence of PW2 and one M.Sukumar Babu, agreeing to repay the same with interest at the rate of 24% p.a. payable on demand either to PW.1 or his order on demand. It is the further evidence of
PW.1 that after several demands, the Accused issued an account payee cheque bearing No.085263 for an amount of Rs.2,50,000/- on 15.04.2019 drawn on Syndicate Bank, Machavarm, Vijayawada with the Accused account
No.630601542841 towards part payment of the above said borrowed amount from him and requested to present the said cheque on the same day itself representing that there are necessary funds in his account to honour the above said cheque; and that PW1 presented the above cheque for collection through his Banker i.e. ICICI Bank Limited, Benz Circle Branch, Vijayawada and the same was returned dishonoured on 16.04.2019 with the reason “Account Blocked”.
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II ADDL CJM, VIJAYAWADA. Dated 21.04.2026 17.2. It is the further evidence of PW1 that immediately after receipt of information as to dishonour of cheque, he has communicated to the Accused through telephone, the Accused approached PW1 and taken back the above said dishonour cheque and paid an amount of Rs.1,00,000/- cash and issued four post dated cheques for the part payment i.e. cheque No.144521, dt.15.08.2019 for an amount of Rs.31,500/-(Pertaining to CC No.6462/22);
Cheque No.144522 dt.15.09.2019 for an amount of Rs.32,250/-(Pertaining to
CC No.6402/22); Cheque No.144523, dt.15.10.2019 for an amount of
Rs.33,000/-(Pertaining to CC No.6404/22) and Cheque No.144524, dt.15.11.2019 for an amount of Rs.29,250/-(Sic 29,500) (Pertaining to CC
No.1449/23 - Present case), all are drawn from Syndicate Bank, Machavaram,
Vijayawada by representing that there are necessary funds in his account to
honour the four cheques.
17.3. It is the further evidence of PW1 that he has presented the
Ex.P1/Cheque bearing No.144524 dt.15.11.2019 for an amount of Rs.29, 250/- on 21.11.2019 through his banker i.e. ICICI Bank, Benz circle Branch,
Vijayawada and the same was dishonoured on 22.11.2019 for the reason of “Funds Insufficient” with a memo endorsement dt.22.11.2019 by the Accused banker i.e. Syndicate Bank, Machavaram Branch, Vijayawada and the said information was communicated to the Accused by way of Ex.P3/Legal notice which was issued to residence address as well as office address, but the same are returned as Unclaimed and intimation served under Ex.P5/ 13 of 27
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Unserved postal covers.
17.4. It is the contention of learned counsel for Complainant that the
Accused issued Ex.P1/cheque towards part payment of the debt under hand loan of Rs.2,50,000/- borrowed by the Accused on 20.1.2019 from PW1 which is legally enforceable debt. It is the further contention of learned counsel for
Complainant that the Accused has been admitting his signature on
Ex.P1/Cheque and thus it can be presumed that Ex.P1/Cheque was issued towards legally enforceable debt covered under the hand loan of
Rs.2,50,000/- dt.20.01.2019.
17.5. The learned counsel for Accused vehemently contended that PW1 used to conduct private chits, in which the Accused is one of the subscribers, he became prized subscriber of one of the chits, at the time of giving the prized chit amount PW1 obtained five blank signed cheques towards security for payment of remaining installments; and that he paid remaining installments, but he did not return the five cheques though the Accused requested him, but not returned the same under the guise that those cheques are not traced; and that by misusing five cheques PW1 fabricated
Ex.P1/Cheque and cheques in other criminal cases i.e. C.C. Nos.6462/2022, 6402/2022 and 6404/2023 and filed all four cases against him in order to harass him.
17.6. In this case on hand there is no dispute about the signature of 14 of 27
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Accused on Ex.P1/Cheque. Further it is not in dispute that Ex.P1/Cheque belongs to Accused. In the cross examination PW1 categorically deposed that he never run the private chits. PW2 also categorically deposed that to his knowledge PW1 never run private chits and he never join one of the subscribers of the alleged chits. PW2 also categorically deposed that he along with one M.Sukumar Babu witnessed the transaction on 20.01.2019.
Though, the Accused cross examined PW1 and PW2 at length it is not the case of the Accused that the signature on Ex.P1/Cheque is not that of him.
Further from the cross examination of PW1 and PW2, it is evident that the
Accused has been admitting the signature on Ex.P1/Cheque.
17.7.When once the signature on the Negotiable Instrument is admitted, there arises a presumption U/Sec.118(a) and Section.139 of
Negotiable Instrument Act that the said instrument had been made (or) drawn for consideration. Under Section.139 of NI Act, the Court has to presume,
Unless the contrary is proved, that the holder of the Cheque received the same for discharge of, in whole or part of any debt or other liability. Thus, in compliance of Sec.138 of NI Act, the Court has to presume that Cheque had been issued towards discharge of debt or liability. However, this presumption is a rebuttable presumption. Though the burden to rebut the presumption on the Accused is not as high as that of presumption of burden of proof of prosecution, the burden of proving that a Cheque had not been issued for a debt or liability, is on the Accused by adducing positive evidence to 15 of 27
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Probabilise the asserted fact.
17.8.The Hon’ble Supreme Court in the case of Rangappa Vs. Sri
Mohan 1 Wherein the Hon’ble Apex Court dealt with the scope of presumption under 138 of NI Act and the relevant para is extracted here under:-
Para 14: “ In light of these extracts, we are in
agreement with the respondent-claimant that the
presumption mandated by Section 139 of the Act
does indeed include the existence of a legally
enforceable debt or liability. To that extent, the
impugned observations in Krishna Janardhan
Bhat(supra) may not be correct………. As noted in
the citations, this is of course in the nature of a
rebuttable presumption and it is open to the Accused
to raise a defence wherein the existence of a legally
enforceable debt or liability can be contested.
However, there can be no doubt that there is an initial
presumption which favours the Complainant .
Section 139 of the Act is an example of a reverse
onus clause that has been included in furtherance of
the legislative objective of improving the credibility
of negotiable instruments. ……... In such a scenario,
the test of proportionality should guide the
construction and interpretation of reverse onus
clauses and the Accused/defendant cannot be
expected to discharge an unduly high standard or
proof. In the absence of compelling justifications,
reverse onus clauses usually impose an evidentiary
1(2010) 11 SCC 14 16 of 27
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burden and not a persuasive burden. Keeping this in
view, it is a settled position that when an Accused
has to rebut the presumption under section 139, the
standard of proof for doing so is that of
preponderance of probabilities. Therefore, if the
Accused is able to raise a probable defence which
creates doubts about the existence of a legally
enforceable debt or liability, the prosecution can fail.
……...” 17.9.The Hon’ble Supreme Court in the case of Bir Singh Vs. Mukesh
Kumar 2discussed the Rangappa cases(supra) and held at para 37 as follows:- “ A meaningful reading of the provisions of the
Negotiable Instruments Act including, in particular,
sections 20,87 and 139 makes it amply clear that a person
who signs a Cheque and makes it over to the payee
remains liable unless he adduces evidence to rebut the
presumption that the Cheque had been issued for
payment of a debt or in dicharge of a liability. ……….. If
the Cheque is otherwise valid, the penal provisions of
Section 138 would be attracked”.
17.10.The Hon’ble Supreme Courtof India inthe case of M/s.
Kalamani Tex & Another Vs. P.Bala Subramanian 3 discussed the
Rangappa and Bir Singh Cases (Supra) and held at para No.14 that :-
Para.14:- “………..The statute mandates that once the
signature(s) of an Accused on the Cheque/Negotiable
22019 (4) SCC 197 3(Crl.Appeal No.123/2021, dated 10.02.2021) 17 of 27
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Instruments are established, then these ‘reverse onus ’
clause become operative. In such a situation, the
obligation shifts upon the Accused to discharge the
presumption imposed upon him……………".
In view of the above statutory presumptions, above judicial precedents and in view of the rival contentions of both sides, I now proceed to examine,
“Whether the Accused could rebut the presumption U/sec.139 of NI
Act” ?
17.11.The Hon’ble Supreme Court of India and Hon’ble High Court of
A.P. in catena of decisions held that in order to rebut the statutory presumptions raised U/Sec.118 & U/Sec.139 of Negotiable Instruments Act, 1881 the Accused must raise probable defence which must meet the standard of “Preponderance of Probability” and not mere possibility and a bare denial of passing of consideration, could not aid the case of Accused.
17.12.In order to rebut above statutory presumption, the Accused has
Banked upon the cross examination of PW.1 and PW2. The Accused has not adduced his evidence. In the cross examination PW.1 denied the suggestion that he has run private chits, the Accused is one of the members along with
PW2, the Accused participated in the said chit and became prized subscriber of one of the chits and also paid the remaining installments; and that at the time of giving the prized amount, PW1 obtained five blank cheques from the
Accused for security for repayment of remaining installments and he paid 18 of 27
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II ADDL CJM, VIJAYAWADA. Dated 21.04.2026 remaining chit installments to PW1, but did not return the five cheques though the Accused requested him to return the same under the guise that those cheques are not traced; and that by misusing the five cheques, he has fabricated Ex.P1/Cheque and cheques in other criminal cases i.e. C.C.
Nos.6462/2022, 6402/2022 and 6404/2022 filed against the Accused in order to harass him.
17.13.From the entire cross examination of PW1 and PW2 the Accused could not get any favourable answers about the alleged chit business of the
Complainant /PW1. If at all the contention of the Accused is true, the Accused would have taken steps like issuance of legal notice or lodging of complaint against the Complainant and get back the signed blank cheques said to have been obtained by PW1 from the Accused in the course of alleged chit transaction; but the Accused did not take any such steps for the reasons best known to him.
17.14. When it is the specific contention of the Accused that PW1 has been running private chits and the Accused is one of the subscribers of chit, during running of said chit he became prized subscriber of one of the chits, at the time of giving prized amount the Complainant obtained five signed blank cheques towards security for payment of remaining installments; and that he paid remaining chit installments but PW1 did not return the five cheques though the Accused requested him to return the same under the guise that those cheques are not traced and that by misusing the same he has 19 of 27
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II ADDL CJM, VIJAYAWADA. Dated 21.04.2026 fabricated Ex.P1/Cheque and other cheques in C.C. Nos.6462/2022, 6402/2022 and 6404/2022, it is for the Accused to place convincing and cogent material before the Court like who are other subscribers of the chits the quantum of each chit, the quantum of each installment and the duration of chit and so also mode of the payment of each installment and the quantum of amount he got towards prized amount. But the cross examination of PW1 and
PW2 are bereft of all those details. Further the Accused has not placed any material before the Court on all those aspects. Further there is no plausible explanation from the side of the Accused why he kept silent without taking any steps against PW1 as per law to get back the alleged signed blank cheques.
17.15. The evidence of PW2 is to the extent of that he along with
M.Sukumar were present at the time of hand loan transaction for
Rs.2,50,000/- on 20.01.2019 between PW1 and the Accused. The Accused though cross examined PW2 could not elicit any favourable answers as to raise doubt about the presence of PW2 at the time of said transaction and to doubt his veracity. The entire cross examination of PW1 and PW2 is unshaken in respect of the hand loan transaction dt.20.01.2019. Further in the entire cross examination of PW2 it is not the case of the Accused that
PW2 did not witness the hand loan transaction on 20.01.2019 and he has not elicited anything from him to doubt his presence at the time of transaction under the hand loan and to impeach his creditworthiness. Under these 20 of 27
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II ADDL CJM, VIJAYAWADA. Dated 21.04.2026 circumstances, this Court is of the considered opinion that the Accused by cross examining PW1 and PW2 failed to place any cogent and convincing material to substantiate the case of the Accused and to meet the standard of “Preponderance of Probability”.
17.16.In view of the above discussion this Court is of the considered opinion that the contention of the Accused that Ex.P1/Cheque was given to
Complainant towards security purpose during the course of alleged chit transaction and it was misused and fabricated by the Complainant is not believable and trustworthy.
17.17.In view of all the above attending circumstances, this Court is of the considered opinion that the Accused failed to rebut the presumption under
Section 139 of NI Act by placing cogent and convincing material to probabalize her defence.
17.18.In view of the above discussion, this Court is of the considered view that the Accused has issued Ex.P1/Cheque in favour of Complainant towards part payment of debt due under hand loan between PW1 and
Accused and it is legally enforceable debt. This Point is answered in favour of Complainant and against the Accused.
18. POINT No.(v)
Whether the Accused is liable for conviction for the offence
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U/sec.138 of NI Act?
18.1. In view of the foregoing discussion and findings on Point Nos.(i) to
(iv), this Court is of the considered opinion that the Complainant has proved his case and the Accused failed to rebut the presumption drawn in favour of
Complainant U/s.139 of N.I. Act, 1881, by Probabalizing the defence taken by him; and that the Complainant proved the guilt of the Accused for the offence U/Sec.138 of N.I.Act. Accordingly, the Accused is liable for Conviction.
19.IN THE RESULT, the Accused is “found guilty” for the offence
U/sec.138 of Negotiable Instrument Act,1881 and accordingly he is convicted
U/sec.255 (2) Cr.P.C.
20.Heard the Accused on quantum of sentence to be imposed against him. The Accused pleaded that he is married and has two sons, who are aged about 23 Years and 17 Years respectively, the elder son has been pursuing final year B.Tech and the younger one has been studying second year
Intermediate, his wife has been running a small clothes shop at a Church; and that his presence is very much essential to look after his family. It is further submitted that he is doing Shamiyana business and earning meager amount.
He further submitted that he puts behind bars, his dependents will become orphans and prayed the Court to take lenient view. Considering the profession and family situation of the Accused prayed the Court to show mercy on him.
21.The learned counsel for Accused submitted that considering the small 22 of 27
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II ADDL CJM, VIJAYAWADA. Dated 21.04.2026 business of the Accused, his wife and the age and studies of their both sons prayed the Court to show mercy on him and impose fine instead of sentence.
22. The offence proved against the Accused is U/sec.138 of NI Act, which is punishable with Imprisonment for a term which may extend to TWO(2)
YEARS or with fine which may extend to twice the amount of Cheque, or
with both. Hence, this Court is not inclined to take any lenient view in favour of the Accused.
23. The learned counsel for the Complainant has argued that this Court is having power to award compensation which is equivalent to twice the amount of Cheque U/sec.357(3) of Cr.P.C. On the other hand the learned counsel for the Accused vehemently argued that this Court has no power to award compensation and power to impose fine upto Rs.10,000/ only, in view of
Sec.29 of Cr.P.C.
24. The Hon'ble Supreme Court in the case of Somnath Sarkar Vs.
Utpal Basu Mallick and another 4, wherein their lordships held that:
"Section 138 of N.I.Act does not contemplate grant of
compensation and it envisages imposition of fine not exceeding
twice the amount of dishonoured Cheque and it is from and out
of this fine amount, the Complainant be compensated under
Sec.357(3) of Cr.P.C." .
25.Further, it is a settled legal position that a Special Enactment prevails 42014 (1) ALT (Crl) 145 SC 23 of 27
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II ADDL CJM, VIJAYAWADA. Dated 21.04.2026 over the General Law and the Negotiable Instruments Act, 1881 is a Special
Enactment.
26. The Hon’ble Supreme Court in the case of R. Vijayan Vs. Baby 5, wherein their lordships held that:
“In regard to any prosecution for the offences punishable
U/sec.138 of NI Act, a I class Magistrate may impose a fine
exceeding Rs.5,000/- ( Now it is Rs.10,000/), the ceiling being
twice the amount of the Cheque” The Hon’ble Supreme Court
also observed that the object of 8.2014 (1) ALT (Crl) 145 SC
9.2012(1) ALD (Crl) 803 SC 26 OF 31 chapter XVII of the
Negotiable Instruments Act is both punitive as also
compensatory and restitutive. It provides a single forum and
single proceeding for enforcement of criminal liability by reason
of dishonour of Cheque and for enforcement of the Civil liability
for realization of the Cheque amount thereby obviating the need
for the creditor to move two different fora for relief. Some
Magistrate went by the traditional view, that the criminal
proceedings were for imposing punishment and did not exercise
discretion to direct payment of compensation, causing
considerable difficulty to the Complainant , as invariably the
limitation for filing Civil cases would expire by the time of
criminal case was decided. The Hon’ble Supreme Court also
observed that unless there are special circumstances, in all
cases of conviction, the Court should uniformly exercise the
power of levy fine upto twice the Cheque amount (keeping in
view the Cheque amount and the simple interest thereon at 9 %
per annum as the reasonable quantum of loss), and direct
payment of such amount as compensation; The uniformity and
consistency in deciding similar cases by different Courts, not
only increase the credibility of the Cheque as a Negotiable
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Instrument, but also the credibility of the Courts of the justice”.
27. The above judgment was also discussed by the Hon’ble Apex Court in
Bir Singh Vs. Mukesh Kumar case (supra) at paras No’s 20, 28 and 29, and also referred in M/s. Kalamani Tex Case (Supra).
28. In view of the above Judicial precedents, it is clear that this Court can impose fine upto twice the amount of dis- honoured Cheque and in that fine only, this Court has to award compensation to the Complainant under
Sec.357(3) Cr.P.C. This case is pending from the last Four (04) years. By considering the submissions made by the Accused, the mitigating circumstances and all the above facts into consideration, this Court is of the considered view that sentencing the Accused to imprisonment for a period of
ONE(1) YEAR and to pay a fine of Rs.45,000/-( Rupees Fifty Five Thousand only) would meet the ends of justice. Accordingly, the Accused is sentenced to undergo Rigorous Imprisonment for a period of ONE(1) YEAR and to pay fine of Rs.45,000/-( Rupees Fifty Five Thousand only) in default, the Accused shall undergo Simple Imprisonment for THREE(03) MONTHS. Out of the fine amount, an amount of Rs. 43,000/- (Rupees Forty Three Thousand only) shall be paid to the Complainant towards compensation under Sec.357(3)
Cr.P.C., after appeal time is elapsed. The remaining amount of Rs.2,000/- (Rupees Two Thousand only) shall be paid to the State to defray expenses incurred in the prosecution, after expiry of appeal time.
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29. The period of detention already undergone by the Accused (NIL) shall be set off under Section 428 of Cr.P.C. The Accused was informed about his right to prefer appeal against the conviction and sentence of this Court.
30. The copy of Judgment is furnished to the Accused, at free of cost, as contemplated under Sub-Section (1) of Section.363 Cr.P.C.
Partly dictated and partly typed to my dictation to the Stenographer, transcribed and typed by him, corrected and pronounced by me in the open Court, this the 21st day of April, 2026.
sd/- N.Radhika
II ADDL. CHIEF JUDICIAL MAGISTRATE –CUM –
MAHILA MAGISTRATE (JUVENILE COURT), VIJAYAWADA
Appendix of Evidence
Witness examined
For Complainant :For Accused :
PW1: G.Vidya Sagar Babu @ Vidya Sagar NIL
PW2: V.Vijay
Documents marked
For Complainant For Accused
S.No.Description Date
Ex.P1Cheque 15.11.2019
Ex.P2Cheque returned memo22.11.2019 26 of 27
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Ex.P3Office copy of legal26.11.2019- NIL - notice
Ex.P4Postal receipts Two(2) in27.11.2019 number
Ex.P5 Unserved cover Two (2)03.12.2019 in number
Material Objects
-Nil-
sd/- N.Radhika
II ADDL. CHIEF JUDICIAL MAGISTRATE –CUM –
MAHILA MAGISTRATE (JUVENILE COURT), VIJAYAWADA
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