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IN THE COURT OF THE SPL. JUDICIAL MAGISTRATE OF FIRST CLASS
(MOBILE)-CUM-II ADDL. JUNIOR CIVIL JUDGE (JUNIOR DIVISION),
VIZIANAGARAM
Present: KUM. PONNURU BUJJI, Spl. Judicial Magistrate of First Class (Mobile)-cum- II Addl. Junior Civil Judge (Junior Division), Vizianagaram
Tuesday, this the 14th day of October, 2025
Calendar Case No.415/2016
Between:
A.P. State Financial Corporation, ( Incorporated under State Financial Corporation Act 1951), Vizianagaram Branch, represented by its Deputy Manager, Sri Nimmaganti Siva Kesava rao s/o late appa rao, aged 56 years, Deputy Manager, A.P. State Financial corporation, Viziangaram Branch, Simhadri Nagar, Vizianagaram.
…Complainant
And
1.Ganesh Chemicals, S. No. 48/22, Kopvvada Agraharam village, Poosapatirega Mandal, Viziangaram District.
2.Chekuri Venkatapathi Raju, S/o late Appala Raju, aged about 48 years, residing at Kovvada village, Poosapatirega Mandal, ( Partner of the 1st accused)
3.Chekuri Srivaji Raju, s/o Appala Raju, aged 45 years, residing at Kovvada village of Poosapatirega Mandal. (partner of the 1st accused)
4.Chekuri Sudharani, wife of Venkatapathi Raju, aged 44 years, (residing at Kovvada village, Poosapatirega Mandal, ( Partner of the 1st accused)
5.Chekuri Madhuri, W/o Sivaji Raju, aged 32 years, residing at Kovvada village, Poosapatirega Mandal, ( Partner of the 1st accused) …. Accused.
( Originally the complainant filed this complaint before the Hon’ble 1st Additional Junior Civil Judge’s Court, Vizianagaram and the same was numbered as CC 1279/2013. Later, this court received and re-numbered as 415/2016) 2
This case coming on 26.09.2025 for final hearing before me in the presence of Sri P. Seshadri, learned counsel for the Complainant and Sri Sri N. Ramesh, P. Ravi, learned Advocates for accused, and having stood over for consideration till this day, this court delivered the following:
J U D G M E N T
1. NATURE OF OFFENCE:- This is a private complaint filed U/Sec.190 and 200 of Code of Criminal Procedure (in short Cr.P.C) by the complainant against accused for the offence U/Sec. 138 r/w 142 of Negotiable
Instruments Act, 1882 (In short N.I.Act) which is summons procedure.
2.THE COMPLAINT AVERMENTS IN BRIEF AS FOLLOWS;
a) The complainant company is a Corporation incorporated under the
State Financial corporation Act, 1951 and implementing it’s objects by providing loan facilities to the needy enterprises to develop the especially to develop the small and medium scale industries in the state of Andhra Pradesh, there are several branches all over the state of Andhra Pradesh and one such branch at Vizianagaran having it’s head office at Hyderabad. The complainant’s
Corporation has duly authorized all its assistant Managers, Manager, Deputy
General Managers and General Managers to filing of cases and defending it in all cases as per the office order No. 99, dated 01.08.1997 by delegating powers and as the present complainant being its deputy Manager is do authorized.
b) The complainant further submits that the 1st accused is a registered firm and the accused 2 to 5 are its partners. The accused firm is doing business in Chemicals, the 2nd accused is the elder brother of the 3rd accused, the 4th accused is the wife of the 2nd accused and the 5th accused is the wife of 3rd accused, thus they are inter-related. All the accused 2 to 5 are responsible for the conduct and day to day business of the 1st accused firm. The complainant further submits that after establishment of the 1st accused firm the accused 2 to 5 have also floated a private limited company under the name and style of
CHEKURI CHEMICALS PRIVATE Ltd., wherein all of them are directors and carrying on business in chemicals. They ave also started another proprietor concern in the name and style of Swarna Chemicals Private Ltd., wherein all 3 of them are directors and carrying on business in chemicals. They have also started another proprietor concern in the name and style of SWARNA
ASSOCIATES AT KOVVADA VILLAGE for which the 5th accused herein in the propriotrix, the complainant submits that all these three concerned have availed loan facilities from the complainant branch for their above said chemicals business purposes, by executing necessary documents in favour of the complainant.
The complainant further submits that after establishment of the 1st accused firm it availed loan facility from the complainant of Rs.1,69,33,0000 by executing necessary documents in favour of the complainant, at the request of the accused, the complainant opened a loan account in the name of the 1st accused bearing Loan account code No. 71819403 which is being the complainant in its company only in the ordinary and regular course of business.
The complainant submits that all the accused agreed to pay the loan amount with interest periodically as per the terms of the agreement. The complainant submits that all the payments made by the accused are duly reflecting in the said account, and copy of which is herewith filed, and the same my pleased be treated as part of this complainant.
The complainant further submits that in clearance of the part of the above loan arrears the 2nd accused issued a cheue bearing No. 414131 for an amount of Rs.10,00,000/- dated 30.03.2013, drawn on state bank of India,
Sethammadhara, Visakhapatnam and also the accused 2nd and 3 issued a joint cheque dated 30.03.2013 bearing No. 488144 for an amount of Rs. 10,00,000/- drawn on State Bank of India, Cantonment branch, Viziangaram in favour of the complainant. The complainant presented the said cheque for collection through its Banker Syndicate bank, Vizianagaram and the same were dishonored as per the return memo of state bank of India, Vizianagara, stating that “FUNDS
INSUFFICIENT” in respect of the above first two cheques and account closed in respect of the third cheque, all the three return memos dated 13.06.2013 and thus the said cheques are bounced. Thereby the complainant issued a registered notice dated 21.06.2013 to the accused with a request to pay the 4 said cheque amount, all the accused received the same on 26.06.2013 but they did not paid any amount till now. Thus the accused 2 to 5 being partners and in charge of all the day to day affairs of the 1st accused firm have exposed themselves for the offence under section 138 N.I. Act.
The complainant further submits that at the time of issuing of the above said bounced cheques, three other cheques are also issued for the payment of the loan amount due by the above said other two concerns under common a latter dated 30.03.2013 . Even after bouncing of the above said cheques and only after receiving of the above said statutory notice, the accused gave a letter
dated 18.07.2013 with a request to bear with them till 31.07.201. But so far the
accused did not pay any amount. The complainant further submits that the above said cheques are presented and as they are bounced on 13.06.2013 issuing statutory notices on 21.06.2013 to all the accused is with in time. The said notices are served on the accused on 26.06.2013 and the time of 15 days time for payment of the cheques amounts expires on 11.07.2013 and as much this complaint is to be filed on or before 10.08.2013, but 09.08.2013 being
RANZAL, public holiday the 10th and 11th of august, 2013 are being second
Saturday and Sunday they are also public holiday and as such this complaint is filed on 12.08.2013. as such the complaint in without time. The complaint further submits that the entire loan transaction of the accused taken place at complainant’s branch, office of Viziangaram, the issuance of the above said cheques and their bouncing also taken place at Vizianagaram. Hence, all the accused committed the offence under section 138 and 141 of NI Act. within the jurisdiction of this court.
3. COGNIZANCE :- After recording the complainant statement, my learned predecessor took cognizance for the offences punishable u/sec.138 r/w.142 of
NI Act, 1881 against accused and issued summons to accused by assigning case number as in CC.No.1279/2013 on the file of 1st Additional Judicial
Magistrate I Class Court, Vizianagaram and the same was transferred to this
court as per the directions of the Hon’ble Principal District Court, Vizianagaram and the same was re-numbered by this court as C.C. 415/2016.
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4. COMPLIANCE OF PROCEDURAL REQUIREMENTS :- The accused after receipt of summons appeared before this court. Hence copies of record furnished to accused.
They were examined u/sec.251 Cr.P.C. by explaining the allegations mentioned in the complaint and read over the same in Telugu for which they denied the same and claimed to be tried.
5. Trail:- On behalf of the complainant company, the complainant himself examined as P.W.1. He also relied exhibits Exs.P.1 to P13 i.e., Ex.P.1-
Attested copy of Office order No. 99 dated 01.08.1997, Ex.P.2- True copy of latter dt.11.01.2010, addressed to the accused along with the terms and conditions of the Loan sanction signed by the accused, Ex.P.3- Cheque bearing
No. 454155, for Rs.10,00,000/- dated 30.03.2013, issued by the accused, infavour of complainant, Ex.P4 – Cheque bearing No. 415131 for
Rs.10,00,000/- dated 30.03.2023 issued by the accused in favour of complainant. Ex.P5 – Cheque bearing No. 488114 for Rs.10,00,000/- dated 30.03.2023 issued by the accused in favour of complainant. Ex.P.6 to 8-
Cheque return memo of respective cheques dated 13.06.2013, Ex.P.9- Office copy of Statuary notice dated 21.06.2013, Ex.P.10- Postal acknowledgment
dated 26.06.2013, Ex.P11 – True copy of letter addressed to the complainant,
dated 30.03.2013, Ex.P12 – True copy of letter addressed to the complainant
dated 18.07.2013 and Ex.P.13- Statement of the loan account of the accused
dated 07.08.2013 ( 24 pages).
On behalf of the accused had examined the Deputy bank Manager ,
State bank of India, Vizianagaram as CW1 and exhibited Ex.C1 and C.2.
i.e.,ExC1 – authorization issued by their branch manager of SBI, RTC complex branch, Vizianagaram, Ex.C.2 is the statement of account of Chekuri
Chemicals Private Limited.
6. Sec.313 (1)(b) of Cr.P.C examination :- Upon closing of the evidence the accused were examined u/sec.313 Cr.P.C. calling upon them, to explain for the incriminating evidence leveled against them from the evidence of 6 complainant and the same is read over and explained to them in Telugu for which they denied the same and reported defence evidence.
7. Heard the learned counsels on both sides. The learned counsel for the complainant had filed written arguments. The both counsel filed citation in their respective contentions. Perused the material on record.
8. Written Arguments submitted by the learned counsel for the complainant:
The learned counsel for the complainant would submit that the complainant is AP State Finance Corporation, which is established by
Government of AP to provide loan facilities to the needy. It is submitted that the 1st accused is a registered firm and accused 2 to 5 are its partners. The accused firm is doing business activities in chemicals accused 2 and 3 are brothers, 4 and 5 are their wives respectively. Thus, they are closely interrelated. All of them are responsible for the day-to-day business conduct of the 1st accused. After its establishment they also flouted a private limited company under the name and style of M/s Chekuri Chemicals private limited, wherein all of them are its directors and responsible for its day-to-day business affairs. They also started another proprietary concern in the name and style of
M/s. Swarna Associates for which the 5th accused herein is the proprietrix. All these three concerns have availed loan facilities from the complainant for their above business purposes by executing necessary documents for obtaining such loans.
Its further submits that the 1st accused firm availed loan facility from the complainant for tune of Rs.1,69,33,000/-by executing necessary documents in favour of the complainant. At the request of the accused, a loan account is opened in its name in the accounts of the complainant, bearing loan account number 71819403, which is maintained by the complainant in its computer in the ordinary and regular course of its business. All the payments made by the accused are duly reflecting in the said loan account of the accused.
The complainant further submits that in part discharge of the above loan amount of the 1st accused, the 2nd accused issued a cheque for Rs.10 lakhs 7 bearing number 454155 dated, 30.03.2013, the 3rd accused issued a cheque for Rs. 10 lakhs bearing number 415131 dated. 30.03.2013 drawn on State
Bank of India, Seethammadhara, Visakhapatnam. The accused 2nd and 3rd jointly issued a cheque for Rs.10 lakhs bearing number 488114 dated, 30.03.2013 drawn on State Bank of India, Cantonment Vizianagaram. These three cheques are presented for collection through the complainant's bank i.e.,
Syndicate Bank, Vizianagaram and the three cheques are dishonored as per the three-return memos dated. 13-06-2013. Thereby, the complainant issued a registered notice dated 21-06-2013 to all the accused to pay the cheque amounts to it. The accused received the same on 26-06-2013 and have not paid the cheque amounts. Thus, they committed the offence punishable under section 138 and 141 of NI Act. Further, though the cheques are signed by the accused 2nd to 3rd and the other accused 4th and 5th accused are also liable for the said offence as they are also responsible for all the day to day affairs of the 1sy accused firm Including in issuance of the chaques. It is further relevant to submit that at the time of issuing of the above said three cheques, three other cheques are also issued in regard to the part payment of the loan amount due by the above said two other concerns of the accused, under a letter dated.
30-03-2013. It is further important to state that all the accused 2 to 4 jointly issued a letter dated 18-07-2013 to the complainant l.e., after bouncing of the cheques, admitting about issuance of the above cheques, their bouncing, and their liability under such cheques.
In order to establish its case, it examined the Assistant Manager who is competent to give evidence as per Ex. P1. Further, to prove about sanction of the loan, execution of loan documents and maintaining of loan account of the 1st accused, the complainant exhibited, Ex- P-2 and P-13 respectively. Further, to establish about issuance of the cheques pleaded in the complaint, their bouncing, statutory notice to the accused etc., facts, the Exhibits. P-3 to P-5, P- 6 to P-8 and P-9 are marked. To prove receipt of the Exhibit. P-9 statutory notice by the accused Exhibit P-10 (5 in number) postal acknowledgments are marked. The above oral evidence of PW -1 on the same clearly established the 8 offence committed by the accused 1 to 5 under 138 of NI Act. It is also relevant to submit that there is no cross examination by any of the accused on the above documentary and oral evidence.
Further, as can be seen from the cross examination of PW-1, the contention of the accused is that as if Ex.P-5 is issued on SBI, RTC Complex,
Vizianagaram and whereas it is mentioned that Ex.P-5 was drawn on SBI,
Cantonment, Vizianagaram. When Ex.P-5 is looked into, it is clear that Ex.P-5 is drawn on SBI cantonment branch, Vizianagaram, but not RTC Complex,
Vizianagaram. Similarly, it is also clearly mentioned in Ex.P-9 statutory notice that Ex.P-3 to P-5 are drawn on the respective branches as pleaded by the complainant, but not as cross examined by the accused. Further, there is no
Rule or Law that all those details are to be mentioned in Ex.P-9 statutory notice. So, the said notice is perfectly valid under Law. So, with the above oral and documentary evidence, the complainant, proved all the accused committed the offence under section 138 and 141 of NI Act, coupled to the same the presumption under section 139 of N.I Act also is in favour of the complainant only. Thus, the complainant has established all the ingredients necessary to punish under section 138 and 141 of NI Act in this case against all the accused by proving that they have committed the said offence with oral and documentary evidence. Hence, the complainant humbly prays that the
Honourable Court may be pleased to punish all the accused for the said
offences committed by them and also grant compensation of double of the cheques amounts to the complainant as per Law and render justice.
9. Arguments submitted by the learned counsel for accused:
The learned defence counsel argued that the subject cheques i.e., Ex.P3 to P5 allegedly have been issued by the accused to the complainant but, the
Ex.P3 was issued by the Ch. Venkatapathi Raju and Ex.P4 was issued by the
Ch. Sivaji Rao besides, the Ch. Venkatapathi Raju and Ch. Sivaji Rao who are the executive directors of Chekuri Chemicals were jointly issued Ex.P5. As such the same common caution of the dishonour of all the three cheques would not arise. Moreover, Ex.P5 was alleged to have been issued by the Chekuri 9 chemicals Private limited, but the present complainant filed against the
Ganesh Chemicals. As such executive P5 is not belongs to the Ganesh
Chemicals. In order to rebutte the case of the complainant the accused examined CW1 who is deputy Bank Manager, SBI, he categorically stated that the statement of accused bearing 30 58 611 4858 which stands in the name of
Chekuri chemicals private limited. Moreover, the Checkuri chemicals private limited, Ganesh chemicals and Swarna Associates are having maintain three different loan accounts. Therefore, the complainant not at all maintainable under the eye of law. Further argued that the complainant filed the complaint after expiry of limitation as this complaint is not maintainable. Ex/P11 contain the signature of the Venkatapathi Raju only and it was issued by him on the capacity of the chairman of Chekuri chemicals private Limited. Moreover,
Ex.P.11 does not contain on which loan account the cheques were issued there is no specification in this regard. How the complainant present 4 cheques in a different loans i.e., Chekuri chemicals and Ganesh Chemicals. As such Ex.P11 cannot be taken into consideration. Further argued that the Ex.P9 legal noticed was not issued as per the procedure under section 138 (b) of N.I.
Act as such the complainant failed to comply the essential ingredients under section 138 of NI Act.. As it was mentioned that Ex.P3 to P5 were issued by the accused drawn on SBI Seethammadara, visakhapatnam, and it was not contain the reason and when it was dishonour of the cheque. Moreover, it was mentioned that the advice to replace the dishonoured cheque immediately with a demand draft / Bankers Cheque) which not comes under the 138 of NI
Act/. As such the complainant Corporation failed to prove the service of mandatory notice and failed to fulfill the ingredients of Sec.138 of NI Act. As such the complainant is not maintainable under law. Further argued that PW1 admitted that the individual accounts maintain by the Chekuri chemicals and
Ganesh Chemicals. Ex.P.11 is not valid it was addressed by the chekuri chemicals. In fact the accused obtained a loan from APSFC by that time the complainant obtained a cheques for security purposes. Later they misused the same and filed the present case against them for wrongful gain. As such the 10
Ex.P3 to P5 were not issued by the accused towards legally enforceable debt .
Therefore, accused rebutted the presumption u/sec.139 of NI Act, hence, prayed the court to acquit the accused. They relied upon the judgments of All
India Reporter 2009 ( Supreme Court), Page No.2022, in support of their contention. Hence, the complainant failed to prove the case beyond all reasonable doubt. Hence, prayed the Hon’ble court to acquit the accused.
10.Now the point for determination is:
Whether the complainant established the essential ingredients of
u/sec.138 r/w.142 of NI Act, 1881 beyond reasonable doubt to the
satisfaction of this Court?
11. In order to establish the offence u/sec.138 of NI Act, the complainant needs to prove:
1. that accused issued cheque to the complainant towards legally enforceable debt?
2. that accused rebutted the presumption u/sec.118-A and 139 of NI Act.
3. that complainant proved the case beyond all reasonable doubt?
Now it has to see whether the complainant adduced satisfactory evidence and proved the above points as required.
As point Nos.1 to 3 are interlinked, hence, three points were discussed simultaneously in order to avoid the repetition of the evidence.
12. Evidence of PW.1:-
i)To substantiate the case of the complainant, he filed his chief affidavit in lieu of chief examination by reiterating the averments of the complaint. So the evidence of P.w.1 is nothing but the replica of the contents of the complaint.
ii)During the course of cross examination by the learned counsel for the accused that he deposed that he has been working as Manager in APSFC from last 35 years in various cadres. APSFC have branches in each district and called the branches respective district names. Accused had obtained loan
Ganesh chemicals, Chekuri chemicals and swarna associates. At present he has no idea about the loan account numbers of the accused which were from
Ganesh chemicals, Chekuri chemicals and swarna associates. Except the name APSFC but there is no specification on which branch on Ex.P3 to P5 11 were issued by the accused. He admitted that on Ex.P3 2nd accused alone signed. , Ex.P4 3rd accused alone signed and on Ex.P5 A2 and A3 are alone signed. He further submit that document in respect of 1st accused firm and designation and each accused. A1 to A5 issued Ex.P3 to P5 along with Ex.P11.
He admitted that Ex.P11 was issued by accused on the name of Chekuri chemicals Pvt. Ltd and one Venkatapathiraju alone sign on Ex.P11 on the capacity of Chairman of Chekuri chemicals Pvt. Ltd. He further admitted that
Ex.P 3 to P5 are issued pertaining to the loan Chekuri chemicals and Ganesh chemicals. He again says that previously accused issued 4 cheques out of one cheque account was closed and remaining 3 cheques Ex.P3 to P5 were dishonored. He further submits that he has mentioned in his legal notice, complainant as well as in his chief examination affidavit that Ex.P3 to P5 were issued by the accused pertaining to loan Chekuri chemicals and Ganesh chemicals. He further submits that he filed present complainant against
Ganesh chemicals Ltd. represented by the accused. He admitted that Ex.P5 cheque was issued by the Chekuri chemicals pvt. Ltd. He admitted that he has filed cheque bounce case against Chekuri chemicals pvt, Ltd in CC 166/2017 which is pending in this court. He again says that Chekuri chemicals Pvt. Ltd,
Ganesh chemicals and Swarna Associates are one group of company and all the Directors are the same family members. He further admitted that the above said 3 companies have maintaining 3 different loan accounts and Ex.P6 to 8 cheque return memo address to the Syndicate bank Vizianagaram. He further deposed that Except Ex.P6 to 8 bank authorities did not issued separate memos to us. Ex.P5 was issued by SBI, RTC complex branch, Vizianagaram.
He further admitted that he has mentioned in his complainant Ex.P5 was drawn from SBI, Cantonment branch, Vizianagaram. He further admitted that he has mentioned in Ex.P9 that Ex.P3 to P5 were issued by accused drawn on
SBI, Seethammadara branch, Visakhapatnam. He further deposed that he has not mentioned specifically that the date of presentation of cheque, return date and reason for return of the cheques in Ex.P9. He has no idea he informed to the accused about the dishonor of cheques in between period of return memo 12 to issuance of Ex.P9. He know the contents of Ex.P9. He further admitted that he has mentioned in Ex.P9 that they advise replace the dishonored cheque immediately with a demand draft/bankers cheque failing which they shall be filed a criminal case against you. He further admitted that Ex.P12 was addressed by Chekuri chemicals. Chairman Chekuri chemicals, Managing
Directors and Director of Ex.P12 signed on Ex.P12. He again says that accused clearly mentioned that they are having individual accounts and they asking permission for giving amount thereby they are signed on Ex.P12. A2
Venkatapathiraju is chairman of Ganesh chemicals. A3 is the Managing
Director and A4 and A5 are Directors. Ex.P5,A2 has signed on the capacity as
Executive Director of Chekuri chemicals. He further admitted that Ch.
Venkatapathiraju Chairman of Chekuri chemicals. He further admitted that as on date accused have paid Rs.1,80,00,000/- for loan due amount but not paid present cheque bounce case.
iii)He denied for the suggestions put by the learned counsel for the accused that he filed the present complaint after expired limitation as such this complainant is not maintainable as per Law. He further denied that Ex.P9 is not valid so also present complainant is not maintainable as Ex.P5 was issued by the Chekuri chemicals but not Ganesh chemical. He further denied that Ex.P6 to P8 were issued by SBI to Syndicate bank, Vizianagaram and they are not custodian of those memos. He further denied that accused did not received
Ex.P10. It is not true to suggest that Ex.P11 is not valid under Law.
13. EVIDENCE OF CW1:
I)On be half of the accused had examined the Deputy Bank manager, SBI, he deposed that their branch received court summons from this court to cause production of statement of account from 01.06.2013 to 30.06.2013 with regard to the account number 30586114858 and he authorized him to produce and depose evidence on his behalf. He produced the statement of account bearing
No. 305586114858 which is stands in the name of Chekuri Chemicals private
Limited but the said account was closed on 30.03.2013. then he produced the same before this court.
13 ii)During his cross examination he admitted that on the date of closing account, the chekuri chemicals private limited got issued Ex.P5 cheque.
Complainant presented cheque before the Syndicate bank on the same day on 13.06.2013 and it was returned with endorsement account closed under Ex.P8.
Before adverting to discussion it is just and necessary to note the
presumption u/ Sec.139 of NI Act which reads as follows:
It is presumed that “unless the contra was proved that the holder of
the cheque received the cheque for discharge in whole or in part of any
debt or liability it was further held in compliance of Sec.138 of NI Act, this
court has to presume that cheque has been issued for debt or liability, the
burden of proof that cheque was not issued for debt or liability is on the
accused”.
In order to create the doubt in the complainant’s claim the accused had taken the following defences.
14.The learned counsel for the accused has been taken defence that the accused did not receive legal notice from the complainant corporation as such
Ex.P9 is not proper service to the accused u/sec.138(b) of NI Act. Once the complainant failed to prove the service of mandatory notice to the accused, the ingredients of Sec.138 of NI Act would deemed to be not fulfilled and the complaint is liable to be dismissed.
i)As seen from the Ex.P9 legal notice, it is pertinent to note that the complainant had sent the legal notice to the accused by mentioning address that M/s. Ganesh Chemicals D.No. 50-78.7/1, near Gurudwara Junction,
Seethammapeta Visakhapatnam and the same address mentioned in the name of Chekuri Venkaptapathi Raju and Smt. Chekuri Sudha Rani, chekuri
Sivaji and Chekuri Madhuri and it was received under Ex.P10. Though the
Ex.P10 contain the name of KVNR, but the learned complainant counsel contend that the one of the office staff may be received the said legal notice.
Until contrary is proved the accused having knowledge about the legal notice which issued by the complainant. Moreover, if really the said legal notice was 14 not taken by the KVNR who is employee of accused office what prevented to them to exam the said KVNR to prove their contention .
Now it is just and necessary to note the relevant provision of Sec.27 of
General Clauses Act hereunder.
Sec.27 of General clauses Act: Meaning of service by post.—Where
any Central Act or Regulation made after the commencement of this Act
authorizes or requires any document to be served by post, whether the
expression “serve” or either of the expressions “give” or “send” or any
other expression is used, then, unless a different intention appears, the
service shall be deemed to be effected by properly addressing, pre-
paying and posting by registered post, a letter containing the document,
and, unless the contrary is proved, to have been effected at the time at
which the letter would be delivered in the ordinary course of post.
ii) Nonetheless the principle incorporated in Sec.27 can profitably be important in case where the sender has dispatched the notice by post with the
correct address written on it. Then it can be deemed to have been served
on the sendee. Here,the accused had received the court summon sent to the same address noted on the notice, which clearly means the accused intentionally avoiding to issue reply notice and payment to the complainant to the notice sent by the complainant corporation in order to avoid criminal liability.
iii)In this regard, the learned complainant counsel had relied judgment reported in The Criminal law Journal, 2006 – Gorantla Venkatedswara Rao
Vs. Kolla Veeraragha Rao and another, where in held that – section 138 –
Dishonour of cheque – legally enforceable debt - Failure of accused by complainant – In one of strong circumstances to draw an inference that accused borrowed amount from complainant and cheque was issued towards part payment of legally enforceable debt.
iv) On considering the above General clause Act and citation, the notice sent to the address of the accused is deemed to be served to accused and that notice is to be validated. Therefore, the complainant had established the 15 essential ingredients of Sec.138(b) of NI Act. The judgment relied by the learned counsel for the complainant is applicable to the present case on hand.
Hence , the contention of the learned counsel for the accused is untenable.
15.It is the further argued by the learned counsel for the accused that the
Ex.P9 does not contain when the cheque was returned and the reason for return of the cheques. In the absence of date of return and reason for return of cheques the Ex.P9 is not valid under section 138 (b) of NI Act. As such the complaint did not issued Ex.P9 as per the statutory legal notice under 138 of NI
Act, Moreover, the Ex.P9 contain Seethammadar Branch, Visakhapatnam, but there is no explanation from the complainant in this regard. As such this complaint is not maintainable and it is liable to be dismissed
i) At this point, a perusal of evidence of PW1, after issuance of cheques the complainant presented the cheques before the bank and the same was returned under Ex.P6 to P8 dated 13.06.2013, i.e., Ex.P6 and P7 returned with endorsement “ Funds Insufficient”, Ex.P8 was returned with an endorsement that “ Account Closed”. Later the complainant got issued a statutory notice
dated 21.06.2013.
ii)As seen from the Ex.P9 clearly mentioned that dishonour of the three cheques i.e., Cheque bearing No. 454155 and 415131 belongs to State bank of India, Seethammadara Branch, Vksakhapatnam and remaining cheque bearing No. 488114 belongs of Indian Viziangaram Cantonment branch.
Moreover, it was clearly mentioned that the above cheques returned by their bank. Though Ex.P9 contained the advice to replace the dishonour of the cheques immediately with a demand draft/Bankers cheque failing which they shall be constrained to initiate against them under NI Act. As such the Ex.P9 contain that the above dishonour of cheques belongs to the State Bank of India,
Seethammadara Branch, Visakhapatnam have been issued by the accused.
At this juncture, it is necessary to show the Ex.P9 as under:
16 iii) As per law the notice must be in writing and demanded payment of the
specific amount of the dishonoured cheques. In the absence reason and
date of returned do not automatically in valid the notice, the crucial
requirement for the payment of the said amount. The reason for the 17 dishonour or any other extraneous detailed is not a pre request for the notice validity.
In this regard this court relied judgment reported in ILR 2000 KAR 5000
in the case of Tiruchandoor Muruhan Spinning Mills (P) Ltd and Others Vs
M/s Madanlal Ramkumar Cotton and General Merchants has held that the
complainant has issued a single notice calling upon the accused by way
of demand to pay the cheque amount within 15 days from the date of
service of notice and the accused failed to pay the cheque amount within
the time stipulated under Section 138(b) of the Act and therefore the
complainant filed a complaint within one month from the date of service
of notice which is well within time.
iv)In the present case, the accused did not pay the amount and not even made an attempt to discharge the burden to rebut the aforesaid presumption u/sec.139 of NI Act, instead of payment to the complainant, A2 to A5 got
issued Ex.P12/ letter addressed to the complainant dated 18.07.2013. it is
clearly mentioned that they are admitted about the dishonour of cheques
and requested the complainant corporation to give a permission up to
end of 31.07.2013. if really the accused have no knowledge about the
dishonour of cheque and issuance of legal notice by the complainant how
they got issued Ex.P12 to the complainant corporation. Mere making allegations does not come under purview of rebutting the case of the complainant. In the absence of any proof of document, the bare allegation of the accused is unsustainable.
16.It is also defence has been taken by the accused counsel that the complaint filed after expiry of limitation. As the alleged disputed cheque was returned on 13.06.2013 and the complainant alleged to send the legal notice on 21.06.2013, but the complainant corporation had filed the present complaint
before this court on 12.08.2013.
i)As seen from the record shows that the disputed cheque was returned
on 13.06.2013 and the complainant alleged to send the legal notice on
21.06.2013, but the complainant corporation had filed the present
18
complaint before this court on 12.08.2013. but, here the complainant
clearly mentioned in the complaint that on 19.08.2013 being Ramzan a
public holiday and 10 th and 11 of August, 2013 are being second Saturday
and Sunday there are also public holiday and as such this complaint has
filed on 12.08.2013 within the stipulated period. Moreover, after dishonour of the cheque and issuance of legal notice, the accused got issued Ex.P7 on 18.07.2013 with a request time to the complainant corporation to repay the amount and bear with them till 31.07.2013. But so far the accused did not re- pay the amount. Later the complainant might have filed the present complaint
before this court on 12.08.2013 within the limitation. In such a case the
complaint is not bared by limitation as alleged by the accused counsel.
Therefore, the complainant filed the present complaint within the stipulation period as such the contention of the accused is not tenable.
17. The accused counsel argued that subject cheques ie Ex.P3 to P5 were issued by the accused to the complainant for security purpose. Moreover,
Ex.P3 was issued Ch. Venkatapathi Raju, Ex.P.4 was issued by Ch. Sivaji Rao and Ch. Venkatapathi Raju and Ch. Sivaji Rao who are executive director of
Chekuri Chemicals were jointly issued Ex.P5. As such the common caution of the dishonour of all the three cheques would not arise. Moreover, the account on Ex.P5 stand in the name of Chekuri chemicals Private limited, but not the
Ganesh Chemicals. Hence, this complaint is not maintainable.
ii)On the other hand the complainant counsel argued that the A2 to A5 got issued Ex.P11 along with subject cheques. As such the complainant corporation filed the single complaint in respect of all the dishonour of cheques against the accused as such the complaint is maintainable under law.
iii)At this point as seen from the record shows that the complainant is AP
State Finance Corporation, which is established by Government of AP to provide loan facilities to the needy with an object to develop small and medium scale industries in the state of AP. It is further shows that the 1 st accused is a
registered firm and accused 2 to 5 are its partners. The accused firm is
doing business activities in chemicals accused 2 and 3 are brothers, 4
19 and 5 are their wives respectively. After its establishment they also flouted a private limited company under the name and style of M/s Chekuri Chemicals
private limited, wherein all of them are its directors and responsible for its
day-to-day business affairs. They also started another proprietary
concern in the name and style of M/s. Swarna Associates for which the
5th accused herein is the proprietrix. All these three concerns have availed loan facilities from the complainant for their above business purposes by executing necessary documents for obtaining such loans of Rs.1,69,33,0000, at the request of the accused, the complainant opened a loan account in the name of the 1st accused bearing Loan account code No. 71819403 which is being the complainant in its company only in the ordinary and regular course of business. Furtherm in clearance of the part of the above loan arrears the 2nd accused issued a cheue bearing No. 414131 for an amount of Rs. 10,00,000/-
dated 30.03.2013, drawn on state bank of India, Sethammadhara,
Visakhapatnam and also the accused 2nd and 3 issued a joint cheque dated 30.03.2013 bearing No. 488144 for an amount of Rs. 10,00,000/- drawn on
State Bank of India, Cantonment branch, Vizianagaram in favour of the complainant. The complainant presented the said cheque for collection through its Banker Syndicate bank, Vizianagaram and the same were dishonoured as per the return memo of state bank of India, Vizianagaram, stating that “FUNDS
INSUFFICIENT” in respect of the above first two cheques and account closed in respect of the third cheque, all the three return memos dated 13.06.2013 and thus the said cheues are bounced. Thereby the complainant issued a registered notice dated 21.06.2013 to the accused with a request to pay the said cheque amount, all the accused received the same on 26.06.2013 but they did not paid any amount. As such the cause of action arose all the cheques on the same day as such the complainant presented the single complaint with regard to the all the dishonor of cheques.
At this juncture, it is relevant observed judgment of S. Adinarayana
Reddy Vs. Vijaya Lakshmi and others reported in 2024 live law, karnataka
High Court where in held that a single complaint is maintainable for multiple 20 dishonored cheques if they are all based on the same cause of action, The court held that a single complaint for multiple cheques is permissible, as long as a consolidated notice was issued to the accused for all the dishonored cheques.
Further, the Hon'ble Supreme Court in the Damodar S Prabhu Vs Syed
Babalal CRIMINAL APPEAL NO. 963 OF 2010 [Arising out of SLP (Crl.)
No. 6369 of 2007], AIR 2010 SC 1907, 169 where in held that " There is no
bar for lodging a complaint for initiation of action under Section 138 of
the Negotiable Instruments Act as the accused committed the offence
punishable under Section 138 of the Negotiable Instruments Act. Infact it
is not to his disadvantage but it is an advantage that a single complaint is
lodged against the accused by the complainant. The cause of action
giving raise to a complaint is upon the service of notice contemplated
under Section 138(b) of the Negotiable Instruments Act and not upon the
dishonour of the cheques and therefore the contention canvassed by the
learned Counsel for the respondent that the provisions of Section 219
Cr.P.C. are not applicable to the proceeding under Section 138 of the
Negotiable Instruments Act has to be accepted."
In the High court of Punjab and Haryana at Chandigarh, in case of
"Sh.Charashni Kumar Talwani Vs. M/s. Malhotra Poultries, Naraingarh
Road, Barwala, by relying upon the judgment of the Hon'ble Supreme
Court in the case of Siva Kumar Vs Natarajan (2009) 13 SCC 623 has held
as under; "Thus, from this, it flows that it was only after a lapse of 15 days
of the receipt of the notice under Section 138 (c) of the Act by the accused
and on non-payment, the offence under Section 138 of the Act is deemed
to have been committed. Since, in the present case, there is a single
consolidated notice for all the ten cheques so dishonoured, so after the
period of 15 days of the receipt of this consolidated notice upon non
payment of the amount of these cheques, the offence under Section 138
of the Act is deemed to have taken place. Thus, it invariably gives rise to a
21
single offence only as it is a single criminal act of omission and conduct
of the accused."
18. Further it has held that a consolidated single notice has been issued for dishonour of multiple cheques which amounts to commission of single offence under the 138 of NI Act. Therefore, single complaint is maintainable for all the dishonoured cheques. As such the contention of the accused counsel is unsustainable.
19.The learned counsel further argued that PW1 does not have any knowledge about the availing loan by the accused as such he does not know anything about the case facts.
i)As seen from evidence of Pw1 who is working in APSFC from last 30 years from various cadres and the complainant corporation got issued authorization to the PW1 to represented the case on behalf of the complainant corporation which is shows under Ex.P1. Moreover, the PW1 categorically stated that the accused availed the loan from the complainant corporation they are maintaining the above said chemical company and on their request only the complainant corporation opened the account.
ii)Hence,the complainant corporation is juristic person a legal entity. A company though is a legal entity does not have soul, mind, body and limbs to walk to court for preference of a complaint that dictates of common sense, prudence and expedience impels the courts in such a situation to allow a company to be represented by some person concerned with the affairs of the company. Similarly in case of a firm also, though strictly not a legal entity which managed by manager, partner, managing partner, director, managing director,
principal officers like other executives in charge of affairs and managing
partner, director, managing director, principal officers like other executives in charge of affairs and administration represent the same. In the present case, the complainant company is the payee and the complainant company had given authorization to PW1 to represent this case as per Ex.P.1. Moreover it is not the case of the accused that Pw1 is not employee of the said complainant 22 corporation. Moreover, Pw1 categorically stated about loan transaction of the accused with complainant corporation. As such his evidence can be believable.
20. It is further submitted by the accused counsel that Ex.P11 contain the only signature of the Ch. Venkatapathi Raju, in his capacity as Chairman, and in the name of Chekuri Chemicals Private Limited, but the remaining accused ie A3 to A5 never signed on it. Furthermore, Ex.P11 does not specify the particular loan account(s) against which the subject cheques were to be presented. In the absence of any such specific mention, it is unclear, how the complainant presented the cheque in a different loan accounts or unspecified loan accounts.
i) As seen from the letter dated 30.03.2013 marked as Ex.P11, issued
by the accused to the complainant corporation, it is pertinent to note that
Chekuri Chemicals Private Limited, represented by its Chairman, Chekuri
Venkatapati Raju (A2), addressed a request to the complainant for the
payment of arrears in respect of three loan accounts availed by their
group units. These loan accounts are: 1) Loan A/c No. 718224 – Chekuri
Chemicals, 2) Loan A/c No. 718194 – Ganesh Chemicals and 3) Loan A/c
No. 718237 – Swarna Associates. In the said letter, the accused admitted that loans were availed from the complainant corporation and that the accounts had fallen into arrears over the past six months, resulting in all three accounts being classified as Non-Performing Assets (NPAs). They further acknowledged that certain cheques previously issued had been dishonoured, and accordingly, they requested the complainant corporation to withdraw the action initiated under the
Negotiable Instruments Act. They also sought time to regularize all three accounts by the end of March 2013. Out of the four cheques earlier issued, two were dishonoured, and they specifically requested the complainant not to present the remaining two cheques. In lieu of those, they issued six new cheques amounting to Rs. 60 lakhs, assuring the complainant that these would be honoured without fail. They sought a final opportunity and expressly agreed that, in the event of dishonour of these cheques, they would not object to the complainant taking legal action against them. Although Ex.P11 bears the 23 signature of A2 (Chairman of Chekuri Chemicals) alone, the recitals of the letter clearly use the pronouns "we" and "our", indicating that the letter was issued on behalf of all directors, i.e., A2 to A5. Therefore, it cannot be presumed that A2 alone issued the letter independently. Moreover, the all the cheques numbers were also mentioned on it, out of six cheques, three cheques are the present subject cheques and remaining one cheque belongs to another CC No.
166/2017.
ii)When the Chairman of any company issues a letter to a corporation or any third party, such a communication is binding on the directors and partners of that company. In the present case, although Ex.P11 was issued by A2, the remaining accused (A3 to A5) did not raise any objections to its contents. Even
they have not send any letter to the complainant corporation they are not
binding on the letter which was issued by the A2. It seems that they are
agreed the contents present on the recital on Ex.P11. Until unless
contrary is proved the Ex.P11 was issued by the all the accused in
respect of the above said three loans. Further a perusal of Ex.P12 got issued to the complainant by the all the accused dated 18.07.2013. it is clearly mentioned that they are admitted dishonour of cheques and requested the complainant corporation to give a permission up to end of 31.07.2013 and A2 to
A5 are also singed on the Ex.P12. If really the Ex,.P11 was not issued by A3 to
A5 as to why they agreed about the issuance of subject cheques and requested time to the complainant corporation. Further surprisingly, the all the accused i.e., A2 to A5 are also signed on Ex.P12.
iii)Moreover, when there is no specific stipulation in Ex.P11 regarding
the presentation of the cheques, the complainant corporation is at liberty
to present the cheques at its discretion. Accordingly, the complainant
adjusted the cheques against the three different loans. Therefore, the subject cheques, i.e., Exs.P3 to P5, were presented in connection with the loan availed by Ganesh Chemicals, while Ex.P3 might have also been presented in respect of the loan taken by Chekuri Chemicals in C.C. No. 166/2017. Merely the complainant corporation presented the cheques in respect of the present 24 loan of Ganesh Chemicals only on such a ground the entire case of the complainant cannot be thrown away on bushes side. As they issued Ex.P11 and P12 by admitting that they issued subject cheques in respect of the above said three loans. Even after the presentation of the cheques, the accused neither issued any letter to the complainant corporation nor informed the bank to establish that the said cheques were not issued towards the present loan or any other loan, including the one related to C.C. No. 166/2017. The accused also failed to issue any reply notice in this regard. They did not initiate any legal action against the complainant corporation, and the reasons for such inaction are best known to them. Furthermore, the accused specifically requested the complainant corporation not to present the remaining two cheques. This fact is clearly mentioned both in the complaint and in the chief affidavit of PW1.
iv)The counsel for the accused further contended that Ex.P5 stands in the name of Chekuri Chemicals and not Ganesh Chemicals. However, the complainant filed the present case against the first accused, i.e., Ganesh
Chemicals, and A2 to A5, who are the directors of Ganesh Chemicals.To rebut the complainant’s case, the accused examined CW1, who categorically stated that Ex.P5 stands in the name of Chekuri Chemicals. In support of this claim,
Ex.C2 was produced. Since the loan account in question does not pertain to
Ganesh Chemicals, the complaint is not maintainable under law.
v)At this juncture, as seen from the record shows that the accused filed petition under section 91 of Cr.PC and the same was allowed in vide Crl. M.P.
No. 2558/2025 accordingly, the Deputy bank Manager of SBI attend before this court and deposed as C.W.1. As seen from the evidence of C.W.1 categorically stated that the statement of account bearing No. 30586114858 stands in the name of Chekuri Chemicals private limited and produced the statement of accused which was marked as Ex.C2. Further, he clearly stated that the said account was closed on 30.03.2013. However, during the cross examination he admitted that the complainant presented the disputed cheque i.e., Ex.P5 before the Sydicate Bank on 13.06.2013 it was returned with endorsement “Account closed.” under Ex.P8.
25 vi)Though Ex.P5 stands in the name of Chekuri Chemicals Private Limited, it is an undisputed fact that Accused Nos. 1 to 5 (A1 to A5) have been actively maintaining and managing the affairs of Ganesh Chemicals, Chekuri
Chemicals, and Swarna Associates. Specifically, A2 is the Chairman of Chekuri
Chemicals, while A2 to A5 are Directors and/or Partners of the aforementioned firms or companies. Moreover, Ex.P11 clearly indicates the loan availed by the above-mentioned companies and associates. It further reveals that Chekuri
Chemicals, along with its two group units, obtained a loan from the complainant corporation. Moreover, , Ex.P5 was issued and signed by A2 and A3 in their capacity as Executive Directors of Chekuri Chemicals.
vii) At this context, the accused counsel relied the judgment of Jugesh
Sehgal Vs. Shamsher singh Gogi in Crl. Appeal 1180/2009 Special leave
petition ( Crl.) No. 369/2006. equivalent All India Reporter 2009 ( Supreme
Court), Page No.2022, account from where the cheque was issued “
Pertained to Some one Else” – Section 138 of Negotiable instruments Act
would be an abuse of the process of the court.
On observing the aforesaid judgment where in the accused is not having group of units and he did not maintain any other loan accounts but in the present case initially the accused i.e., A2 to A5 are established 1 st accused
firm i.e., Ganesh Chemicals and they flouted private limited company in
the name of Chekuri chemicals private limited. Wherein they are its
directors and carrying on business in chemicals. The 5 th accused started
propertrix concerned in the name and style of Swarna Associates and
they all three concerns availed a loan facilities from the complainant
branch for their business purposes by executing necessary documents.
Therefore, they all are the group of units. Though Ex.P5 stands in the name of Chekuri Chemicals and not Ganesh Chemicals, i.e., the 1st accused firm, it is evident that all these firms are part of a group of units managed by the A2 to A5. Therefore, merely because Ex.P5 stands in the name of a different firm, the complainant's case cannot be discarded on that ground alone.
26
Therefore, the above judgment relied by the accused counsel is not identical to the case on hand.
In so for as the reaming cheques ie P3 to P5 concerned, those were issued by the A2 and A3 in the capacity of the chairman and director of the 1st accused firm. As per Section 141 in The Negotiable Instruments Act, 1881,
If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. In Ashutosh Ashok
Parasrampuriya v. Gharrkul Industries Pvt. Ltd., 2021 SCC OnLine SC 915,
decided on 08.10.2021.The law has consistently held that only those who
are responsible for the day-to-day conduct of business can be held
accountable.
ix) Here there is no dispute about the availing loan by the accused from the complainant company but there is no specific plea of the accused whether they have discharged all the installment to the complainant corporation in respect of the three loans. Moreover there is no probable evidence placed by the accused that they gave a disputed cheques for security purpose. Even it is assumed for a movement they gave said cheques for security purpose. It is also comes under purview of section 138 of NI Act.
21. It is also contended by the learned accused counsel that A4 and A5 did not sign on Ex.P3 to P5. As such there are no way concerned with regard to the alleged cheques which were issued by the A4 and A5, Hence, A4 and A5 are entitled to get benefit of doubt.
i)Here, the complainant counsel argued that Ex. A3 to A5 all are having joint account cheques as such they are liable for punishable under section 138 of NI Act.
As seen from Ex.P3, shows that it is a joint account held by A2 and A4, and similarly, Ex.P4 relates to a joint account of A3 and A5. Furthermore,
Ex.P5 has been signed only by A2 and A3, in their respective capacities as 27
Chairman and Executive Director. It is crucial to note that A4 and A5 have not signed any of the documents marked as Ex.P3 to Ex.P5, a fact that has been clearly admitted by PW1 during cross-examination. In the context of joint accounts, it is a well-established principle that the issuance of a cheque by one account holder cannot automatically be attributed to all joint account holders.
Under Section 138 of the Negotiable Instruments Act, criminal liability arises only against the signatory of the dishonored cheque. The Hon’ble Supreme
Court has consistently held that criminal liability is personal in nature and cannot be imposed on a non-signatory, even if they are a joint account holder.
Therefore, in the absence of signatures by A4 and A5 on the disputed cheques/documents (Ex.P3 to Ex.P5), they cannot be held liable under
Section 138 of the NI Act, and no penal consequences can impose against them.
ii)At this juncture, it is relevant to observe the judgment Apperna A. Shah vs Sheth developers Pvt. Ltd., 2013 8 SCC 71 in which the Supreme Court interpreted Sections 138 and 141 of the NI Act and after considering a catena of the decided cases, reiterated that it is only the drawer of the cheque who can be made liable for penal action under Section 138. The Supreme Court in the above case held that under Section 138, in case of issuance of cheques from joint accounts, a joint account holder cannot be prosecuted unless the cheque has been signed by each and every person who is a joint account holder.
Harshad Manubhai Malaviya v. State of Gujarat, 2017 SCC OnLine Guj 372,
decided on 04/04/2017.
iii)The above dictum evidencing that liability under Section 138 of the
Negotiable Instruments Act is restricted to the signatory of the cheque, thereby establishing that being a joint account holder does not automatically entail legal responsibility. In the present case, although Exs. P3 to P5 pertain to joint accounts, it is an undisputed fact that A4 and A5 did not sign the cheques in question. Therefore, they cannot be held liable for the dishonour of the said cheques, which were issued by A2 and A3. Furthermore, Ex. P5 merely bears the name "Chekuri Chemicals" and does not implicate A4 and A5 directly. In 28 light of this, A4 and A5 are entitled to the benefit of the doubt. Accordingly, the legal ratio laid down in the cited case is squarely applicable to the present matter.
iv) Further a perusal of total evidence, here A2 and 3 admitted their signatures in cheques. The burden was on the accused to rebut the above said presumption. Though the accused had examined CW1 and relied Ex.C2 but A1 to A3 are failed to rebut the presumptions by placing cogent and reliable evidence in support of their contention. Even though the learned counsel for the accused cross examined PW1 at length they could not elicited any favourable evidence to the accused, putting self-serving statements cannot discharge the burden of the accused.
As per the judgment of “T. Vasanth Kumar vs., Vijaya Kumari reported in 2015 Lawsuit (SC)402 dt. 28.04.2015” wherein his lordships held that
“When cheques signature was accepted by accused the
presumption U/sec.118-A and 139 of NI Act would come to rescue of
complainant, then the burden was on the accused to disprove the
cheques on existence of any legally enforceable debt or liability”.
v) In the light of above decisions and discussions this court is of consider view that the accused failed to put-forth probable defence to rebut the presumption raised U/Sec.139 of Negotiable Instrument Act. On the other hand, the complainant successfully established all essential ingredients of
Sec.138 and 142 of NI Act. When the complainant established the presumptions U/Sec.118 and 139 of NI Act would come to rescue of him to say that transaction was held and consideration was passed to the accused and towards discharge of outstanding debt, the A2 and A3 had issued Ex.P3 to P5 cheques. Then, burden shifted to them to rebut presumptions in spite of adducing evidence adduced by accused. But here theA1 to A3 failed to rebut the presumptions U/Sec.139 of NI Act by placing any reliable evidence to prove his contention. Therefore, the evidence of complainant is inspiring the confidence of the court holding that towards discharge of the outstanding debt 29 only the A1 to A3 had issued Ex.P3 to P5 cheques to the complainant
Corporation.
vi) Therefore on evaluation of the entire evidence and settled legal position, the complainant succeeded in establishing the case beyond all reasonable doubt by establishing all essential ingredients of Sec.138 r/w.142 of NI Act, 1881 to the satisfaction of this case. Accordingly this point is answered in favor of the complainant and A4 and A5, against A1 to A3 hence, they are liable for punishment.
22. Result: In the result the accused 1 to 3 are found guilty for the offence punishable u/sec.138 r/w.142 of NI Act and they are convicted for the same u/sec.255(2) Cr.P.C. The A4 and A5 are found not guilty for the offence punishable u/sec. 138 r/w 142 of NI Act and they are acquitted u/sec. 255(1) Cr.
P.C.
Directly typed to my dictation by my personal assistant, corrected by me and pronounced in open court, on this the 14th day of October, 2025.
Spl. Judicial Magistrate of I Class (Mobile), Vizianagaram
23.As A1 is a firm, A2 and A3 are being Managing Director of A1, they are questioned about quantum of sentence for the offence punishable u/sec.138 r/w.142 of NI Act for which they pleaded as follows
ACCUSED NO.2:
That he is 69 year old and he have wife and children and they are depending upon him. He is the sole bread winner of his family, if he sent to jail, his family would suffer a lot. Hence, prayed to show mercy upon him.
ACCUSED NO.3:
That He has wife and children and they are depending upon him. He is the sole bread winner of his family, if he sent to jail, his family would suffer a lot. Hence, prayed to show mercy upon him.
30
25.In the facts and circumstances of the case, I feel that it is not a fit case to invoke provisions of Probation of Offenders Act or Section 360 Cr.P.C.
26.Considering the facts and circumstances of the case and also the above submission of the A2 and A3 as they issued cheque in favour of the complainant towards the debt due, I am not inclined to take any lenient view.
But this court feels that following sentence would meet the ends of justice as imposing fine is not sufficient A2 and A3. As A1 is a firm then imposing fine against A1 is sufficient.
27.In the result A1 is ordered to pay fine of Rs.10,000/- (Rupees ten thousand only) in default of payment of fine amount on behalf of A1, A2 and A3 are being the Managing Directors of A1 shall undergo simple imprisonment for a period of ONE MONTH.
28.Further, A2 and A3 are sentenced to undergo Simple imprisonment for a period of ONE YEAR each and ordered to pay compensation of Rs.20,00,000/- (Rupees twenty lakhs only) jointly, in default payment of compensation amount, the A2 and A3 shall undergo simple imprisonment for a period of SIX
MONTHS each. The entire compensation amount of Rs.20,00,000/- (Rupees twenty lakhs only) is awardedto the complainant towards compensation as per Sec.357(1) of Cr.P.C. and the complainant corporation is set at liberty to receive the said compensation amount after expiry of appeal time.
29. The remand period of A3 i.e., from 04.10.2023 to 07.10.2023 shall be given set off under section 428 Cr.P.C.
Copy of the judgment has been supplied to the A2 and A3 u/sec.363(6) of Cr.P.C. at free of cost.
30.Convict/ A2 and A3 are appraised of their right to prefer appeal against the judgment of this court. When questioned with regard to means to engage the counsel at appellate stage, they submitted they have means.
Pronounced in open court on this the 14th day of October, 2025.
Spl. Judicial Magistrate of I Class (Mobile), Vizianagaram.
31
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For complainant:
P.W.1: R. Satyanarayana (complainant)
For Defence: CW1: K. Hari krishna (On behalf of the accused they examined the Deputy bank Manager , State bank of India, Vizianagaram)
Documents Marked.
For Prosecution: Ex.P.1- Attested copy of Office order No. 99 dated 01.08.1997, Ex.P.2- True copy of latter dt.11.01.2010, addressed to the accused along with the terms and conditions of the Loan sanction signed by the accused, Ex.P.3- Cheque bearing No. 454155, for Rs.10,00,000/- dated 30.03.2013, issued by the accused, in favour of complainant, Ex.P.4- Cheque bearing No. 415131 for Rs.10,00,000/- dated 30.03.2023 issued by the accused in favour of complainant. Ex.P.6-Cheque bearing No. 488114 for Rs.10,00,000/- dated 30.03.2023 issued by the accused in favour of complainant. Ex.P.6 to 8- Cheque return memo of respective cheques dated 13.06.2013, Ex.P.9- Office copy of Statuary notice dated 21.06.2013, Ex.P.10- Postal acknowledgment dated 26.06.2013, Ex.P11–True copy of letter addressed to the complainant, dated 30.03.2013, Ex.P12–True copy of letter addressed to the complainant dated 18.07.2013 Ex.P.13- Statement of the loan account of the accused dated 07.08.2013 ( 24 pages). For Defence: ExC.1 – Authorization issued by their branch manager of SBI, RTC complex branch, Vizianagaram, Ex.C.2 - Statement of account of Chekuri Chemicals Private Limited. M.Os. Marked : --None—
Spl. Judicial Magistrate of I Class (Mobile), Vizianagaram.
32
CALENDAR AND JUDGMENT
N THE COURT OF THE SPL. JUDICIAL MAGISTRATE OF FIRST CLASS
(MOBILE)-CUM-II ADDL. JUNIOR CIVIL JUDGE (JUNIOR DIVISION),
VIZIANAGARAM
C.C. No.415/2016
Date of offence:30.03.2013
Date of filing: 12.08.2013
Date of apprehension of accused:02.01.2017
Date of release on bail:- -
Date of commencement of trial:01.08.2022
Date of close of trial:28.08.2025
Date of sentence or order:14.10.2025
Explanation of delay:In serving summons to accused and for examination of prosecution witnesses by prosecution agency delay was happened.
Between:
A.P. State Financial Corporation, ( Incorporated under State Financial Corporation Act 1951), Vizianagaram Branch, represented by its Deputy Manager, Sri Nimmaganti Siva Kesava rao s/o late Appa rao, aged 56 years, Deputy Manager, A.P. State Financial corporation, Vizianagaram Branch, Simhadri Nagar, Vizianagaram. …Complainant
And
1.Ganesh Chemicals, S. No. 48/22, Kopvvada Agraharam village, Poosapatirega Mandal, Viziangaram Distrcit.
2.Chekuri Venkatapathi Raju, S/o late Appala Raju, aged about 48 years, residing at Kovvada Agraharam village, Poosapatirega Mandal, within the limits of Poosapatirega police station, Vizianagaram District. (partner of the 1st accused)
3.Chekuri Srivaji Raju, s/o Appala Raju, aged 45 years, residing at Kovvada village of Poosapatirega Mandal. (partner of the 1st accused)
4.Chekuri Sudharani, wife of Venkatapathi Raju, aged 44 years, ( partner of the 1st accused), residing at Kovvada village of poosapatirega mandal.
5.Chekuri Madhuri, W/o Sivaji Raju, aged 32 years, ( partner of the 1st accused) residing at Kovvada village of Poosapatirega mandal. …. Accused.
33
Offence : U/Sec.138 of NI Act
Plea of accused: Not Guilty
Finding : A1 to A3 are found guilty for the offence U/sec. 138 of NI Act. : A4 and A5 are not found guilty for the offence U/sec. 138 of NI Act. Sentence :
In the result the accused 1 to 3 are found guilty for the offence punishable u/sec.138 r/w.142 of NI Act and they are convicted for the same u/sec.255(2) Cr.P.C. The A4 and A5 are found not guilty for the offence punishable u/sec. 138 r/w 142 of NI Act and they are acquitted u/sec. 255(1) Cr. P.C. Accordingly, A1 being a firm is ordered to pay fine of Rs.10,000/- (Rupees ten thousand only) in default of payment of fine amount on behalf of A1, A2 and A3 are being the Managing Directors of A1 firm, shall undergo simple imprisonment for a period of ONE MONTH. Further A2 and A3 are sentenced to undergo Simple imprisonment for a period of ONE YEAR each and ordered to pay compensation of Rs.20,00,000/- (Rupees twenty lakhs only) jointly, in default payment of compensation amount, the A2 and A3 shall undergo simple imprisonment for a period of SIX MONTHS each. The entire compensation amount of Rs.20,00,000/- (Rupees twenty lakhs only) is awardedto the complainant towards compensation as per Sec.357(1) of Cr.P.C. and the complainant corporation is set at liberty to receive the said compensation amount after expiry of appeal time. The remand period of A3 i.e., from 04.10.2023 to 07.10.2023 shall be given set off under section 428 Cr.P.C. Copy of the judgment has been supplied to the A2 and A3 u/sec.363(6) of Cr.P.C. at free of cost. Convict/ A2 and A3 are appraised of their right to prefer appeal against the judgment of this court. When questioned with regard to means to engage the counsel at appellate stage, they submitted they have means.
Spl. Judi. Magistrate of I class (Mobile), Vizianagaram Copy submitted to :
The Hon'ble 1st Additional District and Sessions Court, Vizianagaram. A fine amount of Rs. 10,000/- paid and Compensation amount of Rs.20,00,000/- not paid. As per orders in Crl.M.P.No.6768/2025 period of suspension is extended till 12.11.2025 .
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IN THE COURT OF THE JUDICIAL MAGISTRATE OF FIRST CLASS,
SPECIAL MOBILE COURT, VIZIANAGARAM.
C.C.NO.415/2016 DATE:14.10.2025
A2. Chekuri Venkatapathi Raju, S/o late Appala Raju, aged about 48 years, residing at Kovvada village, Poosapatirega Mandal, ( Partner of the 1st accused)
Question:- Offence u/sec 138 of NI Act is proved against you and you are convicted u/s 248(2) Cr.P.C., for the said offence. What do you say about the quantum of sentence ?
Ans:- I am 69 year old and I have wife and children and they are depending upon me. I have sole bread winner of my family, if I sent to jail, my family would suffer a lot. Hence, prayed to show mercy upon me.
Spl. Judl. Magistrate of I Class (Mobile)-cum- II Addl.Jr.Civil Judge,Vizianagaram.
Signature of the accused 35
IN THE COURT OF THE JUDICIAL MAGISTRATE OF FIRST CLASS,
SPECIAL MOBILE COURT, VIZIANAGARAM.
C.C.NO.415/2016 DATE:14.10.2025
A3.Chekuri Srivaji Raju, s/o Appala Raju, aged 45 years, residing at Kovvada village, Poosapatirega Mandal, ( Partner of the 1st accused)
Question:- Offence u/sec 138 of NI Act is proved against you and you are convicted u/s 248(2) Cr.P.C., for the said offence. What do you say about the quantum of sentence ?
Ans:- I have wife and children and they are depending upon me. I have sole bread winner of my family, if I sent to jail, my family would suffer a lot. Hence, prayed to show mercy upon me.
Spl. Judl. Magistrate of I Class (Mobile)-cum- II Addl.Jr.Civil Judge,Vizianagaram.
Signature of the accused 36