P.Shyam Prasad

1 Fair Judgment STC.NI.No. 7130 of 2022

IN THE COURT OF THE VI JUDICIAL MAGISTRATE OF FIRST

CLASS :: HYDERABAD.

PRESENT: Sri. P Shyam Prasad, VI Judicial Magistrate of First Class, Hyderabad.

Wednesday, the 7thday of January, 2026

STC. NI. No.7130 OF 2022

Between:-

M/s. Transwat Engineering Consultancy Pvt. Ltd., #8-2-686/K/1 & 2, 2nd Floor, Kimtee Square, Road No.12, Banjara Hills, Hyderabad – 500034, Rep. By its Managing Director, M.Sridhar Reddy, S/o.Late Sivarami Reddy.

...Complainant

AND

Mr. Narasimha Reddy Koduru, S/o. K. Krishna Reddy, Director of KNR Contractor Private Limited #8-2-1109/2, Flat No.102, Subadra Enclave, Srinagar Colony, Hyderabad.

… Accused

This case is coming on before me for final hearing on 30.12.2025 in presence of Nagesh Reddy and other counsel and other Counsels for complainant and B.Ravi Chandra, counsel for accused, hearing upon their arguments, and having stood over for consideration till this day, the court delivered the following :-

-: J U D G M E N T:-

1. This complaint is filed by the M/s. Transwat Engineering Consultancy

Private Limited represented by its Managing Director M. Sridhar Reddy through his counsel U/Sec. 200 Cr.P.C. against the Accused/ Mr.Narasimha

Reddy Konduru for the offence u/sec.138 of N.I.Act with the following 2 Fair Judgment STC.NI.No. 7130 of 2022 averments the Complainant is a Private Limited company Regd. Under the

Company Act 1956 is engaged in the business of Engineering Consultancy in the filed of Civil Engineering under the Name and Style of M/s.

Transwat Engineering Consultancy Private Limited, Managing Director of the company has the knowledge of the transaction took place between company and the Accused.

The Accused is a Director of M/s.KNR Contractors Private Limited is approached complainant representative for Inter Corporate Deposit loan for his working capital for his on going works considering the acquaintance between complainant and Accused. Complainant representative has agreed to lend Inter Corporate Deposit Loan to the

Accused. It is further averred in the complaint the complainant has transferred an amount of Rs.1,00,00,000/- (One Crore Rupees) to the

Accused through N.E.F.T/R.T.G.S. as mentioned below:-

Sl.No. Date Account Number & Bank Account Number & RTGS Amount of Complainant Bank of Accused Vardhaman Mahila HDFC Bank, Srinagar Coorperative Bank, Colony Branch, Banjarahills, Branch, Hyderabad Hyderabad 126.11.201800100052000004450200017378799NEFTCR-Rs.40,00,000/- YESB00CVB 002/ N33018017 1056851 201.12.201800100052000004450200017378799NEFTCR-Rs.10,00,000/- YESDOCVB0 02/ N33518017 3487874 3 Fair Judgment STC.NI.No. 7130 of 2022

Sl.No. Date Account Number & Account Number & RTGS Amount Bank of Complainant Bank of Accused Kotak Mahindra Bank, HDFC Bank, Srinagar Banjarahills, Branch, Colony Branch, Hyderabad Hyderabad 114.12.201878101100161850200017378799RTGS-Rs.10,00,000/- KKBKR5201 8121400696 105 229.12.201878101100161850200017378799NEFT Rs.20,00,000/- KKBKH1836 38776406 329.12.201878101100161850200017378799RTGSKKBKR Rs.20,00,000/- 5201812290 0878060

It is further averred in the complainant after transfer of the amount by the complainant to the Accused. The Accused promised to repay the same within six months and further he stated that he has to receive the amount from his business circle accordingly the accused has also transferred an amount of Rs.55,00,000/- on various dates as mentioned below through R.T.G.S. /N.E.F.T.

Sl.No. Date Account Number & Bank of RTGS Amount Complainant Vardhaman Mahila Coorperative Bank, Banjarahills, Branch, Hyderabad 115.04.2019001000520000044RTGS-UTR Rs.15,00,000/- No.000708 224.04.2019001000520000044Intra Bank TransferRs.40,00,000/- 4 Fair Judgment STC.NI.No. 7130 of 2022

It is further averred in the complaint the complainant received only

Rs.55,00,000/- from the Accused the balance amount of Rs.45,00,000/- yet to be receive from the Accused. When the complainant demanded for the balance amount accused promised the same would be paid in short period and keep on extending time to time. When the complainant demanded for payment of balance amount the Accused executed a promissory note in favour of Complainant in the month of 16.03.2020 for Rs.25,00,000/- also issued cheque No.00042 for Rs.25,00,000/- drawn on HDFC Bank,

Srinagar Colony Branch, Hyderabad for discharge of partial legally enforceable debt and requested complainant to present the cheque on his instructions. When the complainant further demanded for the total amount and promised that he will transfer the amount with in 15 days. It is further averred in the complaint that due to Pandemic Covid – 2019 indefinite lock down was imposed and further extension of Pandemic situation prevailed in the country. The Accused requested and took advantage on the same and extended time for repayment of amount from time to time. When the Complainant going on demanding the Accused for payment of Amount. The Accused instructed the Complainant to deposit the cheque of Rs.25,00,000/- in his bank amount and it would be honored on its presentation. When the Complainant questioned for balance

Rs.20,00,000/- and promised that the same would be arranged along with interest in short period.

Believing the words of the Accused the Complainant has presented cheque for Rs.25,00,000/- in the account bank Axis Bank, Banjara Hills

Branch, for clearance the cheque was returned by the bank with memo

dated 31.10.2022 for the reasons “Account Closed”. Thereafter the

5 Fair Judgment STC.NI.No. 7130 of 2022 complainant has got issued a legal notice dt.04.11.2022 by RPAD with acknowledgment through his counsel to the Accused demanding to make payment of the bounced cheque within 15 days from the date of receipt of the notice. The Notice served on the Accused on 07.11.2022 insufficient of making payment as demanded by Complainant. The Accused issued reply notice with a false averments denying the liability and evade the payment of amount to the complainant.

The Complainant finally approached this Court and filed this case to

Convict the Accused of 138 of N.I.Act. and also pray for to award

Compensation of 357(3) Cr.P.C. in the interest of Justice.

2. After filing the Sworn Affidavit of the Complainant the learned predecessor took the cognizance u/Sec.138 of N.I.Act against the

Accused and renumbered as STC.NI.7130/2022.

3.On appearance of the accused before this court, copies of all documents furnished to the Accused U/sec.207 Cr.P.C.

4.Accused is examined u/sec.251 Cr.P.C., He denied the contents of complaint.

5.During Trial the complainant filed himself examined as PW1 and got marked Ex.P1 to Ex.P15 and closed his evidence.

6.Accused examined u/Sec.313 Cr.P.C. He denied the evidence of PW1.

No defence witnesses examined but Ex.D1 is marked during cross of PW1.

7. Heard both sides. Both sides submitted their written arguments.

8. Now the point for determination is whether the complainant has proved the necessary ingredients u/Sec.138 of N.I.Act against the Accused beyond all reasonable doubt.

6 Fair Judgment STC.NI.No. 7130 of 2022

POINT

As per the settled proposition of law, the initial burden is cast upon the complainant to prove above the transaction.

The complainant is harping upon the statutory presumption u/Sec.139 of N.I.Act, contended that, when once the cheque is issued by the Accused, the presumption shall be that, it is towards discharge of legally enforceable debt. There is no dispute about the statutory presumption contained in Sec.139 of N.I. Act, but it is rebuttable presumption.

In order to Constitute the offence u/sec.138 of N.I.Act it is to be proved that the Accused must have drawn the cheque on the Account maintained by him in Bank for the discharge in whole, or in part of the debt, or liability and that the cheque has been presented for collection within period of its validity and that the same is dishonoured for the reason “Insufficient Funds” or it exceeds the amount arranged to be paid from the Account by an Agreement made with the Bank and that the

Accused failed to comply the legal notice issued calling upon him to pay the cheque amount within fifteen days.

As per the ratio laid down by the Hon’ble Apex Court in

i) M/s. Kusum Ingots & Alloys Limited Vs. M/s. Pennar Peterson Securities

Limited and others reported in 2000(2) SC 218

Where the cheques were drawn by the Accused for payment of certain amount of Money due to the complainant from the Account in the 7 Fair Judgment STC.NI.No. 7130 of 2022

Bank and said cheques were dishonoured by the Bank and the amount remained unpaid even after lapse of 15 days, from the date of notice issued by the Complainant after the cheques were dishonured, so the ingredients u/Sec.138 of N.I.Act are found established prima facie in taking cognizance of the said offence.

As per the case of Complainant, the Accused, who is a Director of

M/s.KNR Contractors Private Limited approached the Complainant seeking Inter Corporate Deposit (ICD) for working Capital requirements, for which the Complainant advanced a total amount of Rs.1,00,00,000/- (One Crore Rupees) to the Accused between 26.11.2018 and 29.12.2018 through RTGS/NEFT the accused agreed to repay the same amount within six months. Accordingly he repaid only Rs.55,00,000/- (Fifty Five Lakhs

Rupees) in April, 2019, for repayment of Balance amount of Rs.45,00,000/- (Forty Lakhs Rupees) upon several demands the Accused executed a promissory note Ex.P1 dt.16.03.2020, for Rs.25,00,000/- and issued cheque Ex.P2 Bearing No.000042 dt. 10.10.2022 for Rs.25,00,000/- (Twenty Five Lakhs Rupees) drawn on HDFC Bank, Srinagar Colony

Branch, Hyderabad, When Complainant presented the Ex.P2 cheque in his

Account Bank the same is dishonoured as “Account Closed”. After issue of

Statutory legal notice, the Accused issued reply notice denying the liability, thereby the Accused is liable for punishment u/Sec.138 of N.I.Act.

The counsel for the Accused contended that, the Complainant lacks authority to file the present complaint on behalf of M/s. Transwat

Engineering Consultancy Private Limited.

8 Fair Judgment STC.NI.No. 7130 of 2022

The Complainant has not been filed by a properly authorized person.

On perusal of the contents Ex.P14, clearly shows that, the Board of

Directors of the Complainant company duly authorized the Managing

Director to take decisions on behalf of the company, including lending and borrowing of funds and also to prosecute the legal matters pertaining to the Complainant Company Ex.P14 shows that the Complainant is the

Director of Complainant Company and Ex.P15 shows the Complainant is the Director of the Complainant Company.

The Counsel for the Complainant contended that, when a complaint is filed by the Managing Director, no specific authorization is required to file complaint, as such Ex.P14 and Ex.P15 are sufficient to prove that PW1 is authorized to file complaint. So, I accept the contention of learned counsel for the complainant on this aspect. The contention of learned counsel for Accused cannot be accepted.

The next contention of the learned counsel for the Accused is that,

PW1 admitted that only his signature is on Ex.P14 did not provide evidence of a valid board meeting authorizing him to initial legal proceeding.

On perusal of the cross of PW1 it is suggested that, Ex.P14 and

Ex.P15 are created and fabricated for the purpose of this case. He denied the suggestion. No doubt PW1 admitted that only his signature available on Ex.P14.

9 Fair Judgment STC.NI.No. 7130 of 2022

On perusal of the contents of Ex.P14 in para (c) it is mentioned that the Complainant/Mr. M.Sridhar Reddy, Director be further authorized to execute necessary documents, if required including taking up legal course of action for recovery of the amounts.

The Counsel for the Accused relied on the ruling reported in Jawahar

Mills Ltd., rep. By its authorized Agent S.Kalidas Vs. M/s. General

Diffutions Rep. By its Power Agent Sadashivam and another in Crl. A 44/1999, Dt.05.01.2007, Madras High Court.

I have carefully gone through the above rulings, not applicable to this case.

So, the contention of learned counsel for the Accused cannot be accepted on this aspect.

The Counsel for the Accused further contended that, the

Complainant company does not have the legal capacity to act as a lending institution and Ex.P15 does not contain any clause authorising the

Managing Director or any person to lend money to other person or companies. Counsel further contended that the loan itself is ultra vires of the companies Memorandum it can not be considered a legally enforceable debt u/sec.138 of N.I.Act.

The documents filed by the complainant i.e. Ex.P14 and Ex.P15 clearly shows and establish the Board of Directors of the Complainant 10 Fair Judgment STC.NI.No. 7130 of 2022

Company duly authorized the Managing Director to take decisions on behalf of the company, including lending Money and borrowing funds and also to prosecute the Legal matters pertaining to the Complainant

Company. So, the Contention Counsel of the Accused cannot be accepted on this aspect.

The Counsel for the Accused further contended that, the

Complainant failed to demonstrate compliance with Sec.186(2) of the

Companies Act 2013, which restricts the lending of funds to individuals.

As the Complainant is a Corporate entity governed by statue, any loan advanced in violation of these regulatory limits is void abinitio, thereby rebutting the presumption of a legally enforceable debt. u/sec.139 of

N.I.Act.

On perusal of the cross of PW1, there is no cross with regard to

Sec.186(2) of Companies Act 2013. The Accused can not take advantage one after the other, it shows only to escape from liability, once he received

One Crore Rupees from the Complainant by way of on line transaction and repaid Rs.55,00,000/- through on line transaction and repaid

Rs.55,00,000/- through on line, by discharging part liability and Ex.P2 cheque along with Ex.P1, Promissory note for consideration, he can not take advantage by putting several questions to the complainant under

Companies Act. Since this transaction is under RTGS/NEFT between both parties but the Companies Act is not applicable to this case and there is no necessity to show company as one of the Accused.

11 Fair Judgment STC.NI.No. 7130 of 2022

Ex.P14 dt.11.04.2018, clearly shows the Complainant Company passed Special resolution and the above transaction took place in the month of November, December 2018, and there is no necessity of passing

Special resolution and the contention of counsel for Accused cannot be accepted on this aspect.

The Counsel for the Accused further contended that, PW1 failed to produce any document to show that the Accused was the Managing

Director of KNR Contractors Private Limited as on the date of alleged lending of the money. The other arguments regarding Companies Act are not relevant at this stage without any proof.

Admittedly Ex.P2 cheque given by the Accused to PW1 for

Rs.25,00,000/- along with Ex.P1 pronote, as per the contents of Chief

Affidavit, Accused borrowed an amount of Rs.1,00,00,000/- (One Crore

Rupees) which was paid by the PW1 through on line under Ex.P8 to

Ex.P11 bank statements, out of which Accused paid Rs.55,00,000/- to PW1 as part payment under Ex.P10 for remaining amount of Rs.45,00,000/-, he issued Ex.P1 promissory note, and Ex.P2 cheque only for Rs.25,00,000/-.

Accused not denying his signature on Ex.P1, Ex.P2 but his specific defence is that, as per his cross of PW1, it is suggested that One Ganesh

Reddy who worked in KNR Contractors Private Limited stolen the cheque and in collusion with the said Ganesh Reddy PW1 misused and filed this case. He denied the suggestion.

12 Fair Judgment STC.NI.No. 7130 of 2022

If really Ganesh Reddy stolen the cheque, the Accused should have given the complaint to the Police, nor addressed a letter to the Bank for

Stop Payment.

The Counsel for the Accused further contended that, the promissory note Ex.P1 and the Ex.P2 were not issued for a fresh liability but were perhaps obtained under different circumstances or are fabricated.

As per the evidence of PW1 the Accused borrowed an amount of

Rs.1,00,00,000/- (One Crore Rupees) by way of on line transaction under

RTGS/NEFT under different dates, out of which the Accused repaid an amount of Rs.55,00,000/- through RTGS as admitted by PW1, When PW1 demanded for balance amount, the Accused executed Ex.P1 promissory note and issued cheque for Rs.25,00,000/-.

When PW1 deposited Ex.P2 cheque in his Bank Account, the Accused deliberately closed the Account, only to escape from liability. Ex.P2 cheuqe issued only to clear the remaining part of the loan amount, even then, the Accused is due an amount of Rs.20,00,000/- Ex.P8 to Ex.P10

Bank statements clearly shows, the transaction between PW1 and Accused

Ex.P2 cheque supported by Ex.P1 promissory note to prove the consideration.

As per the ratio laid down in K.Bhaskaran Vs. Shankaran Vaidhyan

Balan and another reported in AIR 1999 SC 3762(1), and in D.Achyutha

Reddy Vs. State of A.P. reported in 2014(1) ALD (Crl) 233 (A.P.) when the 13 Fair Judgment STC.NI.No. 7130 of 2022 signature on cheque was not denied by the Accused, the presumption that the cheque was made or drawn for consideration on the date which the cheque bears arises. The holder of the cheque presumed to have received it for discharge of liability.

As per ratio laid down in Rangappa Vs. Sri Mohan reported in 2010 (5) SCJ 700 held that, the presumption mandated by sec.139 of N.I.Act does indeed include the existence of a legally enforceable debt or liability.

There can be no doubt that there is on initial presumption which favours the complainant.

The standard of proof to rebut the presumption is that of preponderance of probabilities for which the Accused can rely on the materials submitted by the complainant.

In the case on hand, the issuance of the cheque by the Accused by drawing from his Account and signature on the cheque also admitted.

Thus from the settled ratio, it is mandatory on the court to draw the presumption u/sec.118 and 139 N.I.Act in favour of the complainant and the Accused has not rebutted the presumption.

Since the entire transaction between PW1 and Accused are on line transactions under Ex.P8 to Ex.P10, there is no necessity to file any

Income Tax returns as alleged by the defence counsel. The Bank statements clearly proves that the complainant is having financial capacity 14 Fair Judgment STC.NI.No. 7130 of 2022 to lend such huge amount to the Accused when he has not borrowed the

One Crore Rupees from PW1, what is the necessity to repay Rs.55,00,000/- to PW1 through RTGS and issuance of cheque for Rs.25,00,000/-.

Mere marking Ex.D1 through PW1 is no way helpful to the Accused, the borrowed amount by the Accused in the month of November and

December, 2018. Much prior to the execution of Ex.D1. So, Ex.D1 is no way helpful to the accused. It is only to escape from liability. The Accused brought Ex.D1.

Regarding reply notice, the Accused simply denied the averments made in the legal notice, without any probable defence, No reliance can placed on Ex.P7 reply notice.

The entire cross examination done by the Accused counsel is only by way of suggestions and denied by the witness, the documents filed by the complainant amply proves the transactions between PW1 and Accused.

The Accused has not placed any probable defence either oral or by way of documents to rebutt the presumption expect suggestions and denied by the witness.

The Counsel for the Accused relied on the following rulings:-

i) Jawahar Mills Limited Vs. General Diffutions ii) AC Naryanan Vs. State of Maharastra and Another Crl.A. 73/2007 iii) Basalingappa Vs. Mudibasappa Crl.A.636/2019, dt.09.04.2019 iv) M/s. UKG Steel Private Limited Vs. Erotic Buildcon Private Limited, dt.31.05.2021.

15 Fair Judgment STC.NI.No. 7130 of 2022

I have carefully gone through the above rulings, the facts and circumstances of above rulings are not applicable to the present case.

The counsel for the Complainant relied on the following rulings:-

i) Manu/SC/0376/2010 Rangappa Vs. Sri Mohan. ii) Manu/SC 1096/2023 Rajesh Jain Vs. Ajay Singh. iii) Manu/SC/0154/2019 Bir Singh Vs. Mukesh Kumar, iv) Rohitbhai Jivanlal Patel Vs. State of Gujarath and another

I have carefully gone through the above cited rulings, which are applicable to the case on hand.

In view of my aforesaid discussion, I hold that the complainant successfully proved the necessary ingredients u/Sec.138 of N.I.Act against the Accused beyond reasonable doubt.

In the result, the Accused is found guilty for the offence u/Sec.138 of

Negotiable Instrument Act, accordingly he is Convicted u/Sec.255(2)

Cr.P.C.

Directly typed to my dictation by the steno of this court, corrected, on this the 7 th day of January, 2026.

Sd/-

VI JUDICIAL MAGISTRATE OF FIRST CLASS,

HYDERABAD.

The Accused is questioned with regard to the Quantum of sentence to be imposed against him, he says he was 70 years old and undergone heart operation.

16 Fair Judgment STC.NI.No. 7130 of 2022

Considering submission made by the Accused this is not a fit case to release the Accused under P.O.Act.

Hence the Accused is sentenced to undergo Simple Imprisonment for a period of One year and to pay Compensation of Rs.30,00,000/- (Thirty

Lakhs Rupees) to the Complainant/PW1 u/Sec.357 (3) Cr.P.C. within one month from the date of Judgment. In default payment of Compensation the

Accused shall suffer Simple Imprisonment for a period of four (04) months.

Directly typed to my dictation by the steno of this court, corrected, on this the 7 th day of January, 2026.

Sd/-

VI JUDICIAL MAGISTRATE OF FIRST CLASS,

HYDERABAD.

17 Fair Judgment STC.NI.No. 7130 of 2022

APPENDIX OF EVIDENCE

WITNESSES EXAMINED ON BEHALF

FOR complainant :

PW1 – M. Sridhar Reddy

FOR DEFENCE :

DW1 - Nil

EXHIBITS MARKED FOR THE COMPLAINANT;

Ex.P1: is the pronote dt.16.03.2020 for Rs.25,00,000/-

Ex.P2: Crossed Cheque bearing No.000042 dt. 10.10.2022 for Rs.25,00,000/- drawn on HDFC Bank, Srinagar Colony

Ex.P3: Cheque Return Memo issued by Axis Bank, Dt.31.10.2022

Ex.P4 : Office copy of legal notice dt. 04.11.2022.

Ex.P5: Postal receipt dt.04.11.2022.

Ex.P6:track consignment report.

Ex.P7 :is the reply notice dt. 28.11.2022.

Ex.P8 : Bank statement issued by Vardhaman Mahila Cooperative

Bank.

Ex.P9:Brake up details letter.

Ex.P10: Bank statement issued by Vardhaman Bank (3 pages)

Ex.P11: Account statement issued by Kotak Bank. (14 pages)

Ex.P12:Incorporation Certificate

Ex.P13:GST Form

Ex.P14:Special Resolution passed by Board of Directors dt.11.04.2018

Ex.P15:Memorandum of Association consisting of 16 Pages.

EXHIBITS MARKED FOR DEFENCE:

Ex.D1 :Deed of Sale Dt.04.06.2019

Sd/-

VI JUDICIAL MAGISTRATE OF FIRST CLASS,

HYDERABAD

//TRUE COPY//

1 Fair Judgment STC.NI.No. 7130 of 2022

IN THE COURT OF THE VI JUDICIAL MAGISTRATE OF FIRST

CLASS :: HYDERABAD.

PRESENT: Sri. P Shyam Prasad, VI Judicial Magistrate of First Class, Hyderabad.

Wednesday, the 7thday of January, 2026

STC. NI. No.7130 OF 2022

Between:-

M/s. Transwat Engineering Consultancy Pvt. Ltd., #8-2-686/K/1 & 2, 2nd Floor, Kimtee Square, Road No.12, Banjara Hills, Hyderabad – 500034, Rep. By its Managing Director, M.Sridhar Reddy, S/o.Late Sivarami Reddy.

...Complainant

AND

Mr. Narasimha Reddy Koduru, S/o. K. Krishna Reddy, Director of KNR Contractor Private Limited #8-2-1109/2, Flat No.102, Subadra Enclave, Srinagar Colony, Hyderabad.

… Accused

This case is coming on before me for final hearing on 30.12.2025 in presence of Nagesh Reddy and other counsel and other Counsels for complainant and B.Ravi Chandra, counsel for accused, hearing upon their arguments, and having stood over for consideration till this day, the court delivered the following :-

-: J U D G M E N T:-

1. This complaint is filed by the M/s. Transwat Engineering Consultancy

Private Limited represented by its Managing Director M. Sridhar Reddy through his counsel U/Sec. 200 Cr.P.C. against the Accused/ Mr.Narasimha

Reddy Konduru for the offence u/sec.138 of N.I.Act with the following 2 Fair Judgment STC.NI.No. 7130 of 2022 averments the Complainant is a Private Limited company Regd. Under the

Company Act 1956 is engaged in the business of Engineering Consultancy in the filed of Civil Engineering under the Name and Style of M/s.

Transwat Engineering Consultancy Private Limited, Managing Director of the company has the knowledge of the transaction took place between company and the Accused.

The Accused is a Director of M/s.KNR Contractors Private Limited is approached complainant representative for Inter Corporate Deposit loan for his working capital for his on going works considering the acquaintance between complainant and Accused. Complainant representative has agreed to lend Inter Corporate Deposit Loan to the

Accused. It is further averred in the complaint the complainant has transferred an amount of Rs.1,00,00,000/- (One Crore Rupees) to the

Accused through N.E.F.T/R.T.G.S. as mentioned below:-

Sl.No. Date Account Number & Bank Account Number & RTGS Amount of Complainant Bank of Accused Vardhaman Mahila HDFC Bank, Srinagar Coorperative Bank, Colony Branch, Banjarahills, Branch, Hyderabad Hyderabad 126.11.201800100052000004450200017378799NEFTCR-Rs.40,00,000/- YESB00CVB 002/ N33018017 1056851 201.12.201800100052000004450200017378799NEFTCR-Rs.10,00,000/- YESDOCVB0 02/ N33518017 3487874 3 Fair Judgment STC.NI.No. 7130 of 2022

Sl.No. Date Account Number & Account Number & RTGS Amount Bank of Complainant Bank of Accused Kotak Mahindra Bank, HDFC Bank, Srinagar Banjarahills, Branch, Colony Branch, Hyderabad Hyderabad 114.12.201878101100161850200017378799RTGS-Rs.10,00,000/- KKBKR5201 8121400696 105 229.12.201878101100161850200017378799NEFT Rs.20,00,000/- KKBKH1836 38776406 329.12.201878101100161850200017378799RTGSKKBKR Rs.20,00,000/- 5201812290 0878060

It is further averred in the complainant after transfer of the amount by the complainant to the Accused. The Accused promised to repay the same within six months and further he stated that he has to receive the amount from his business circle accordingly the accused has also transferred an amount of Rs.55,00,000/- on various dates as mentioned below through R.T.G.S. /N.E.F.T.

Sl.No. Date Account Number & Bank of RTGS Amount Complainant Vardhaman Mahila Coorperative Bank, Banjarahills, Branch, Hyderabad 115.04.2019001000520000044RTGS-UTR Rs.15,00,000/- No.000708 224.04.2019001000520000044Intra Bank TransferRs.40,00,000/- 4 Fair Judgment STC.NI.No. 7130 of 2022

It is further averred in the complaint the complainant received only

Rs.55,00,000/- from the Accused the balance amount of Rs.45,00,000/- yet to be receive from the Accused. When the complainant demanded for the balance amount accused promised the same would be paid in short period and keep on extending time to time. When the complainant demanded for payment of balance amount the Accused executed a promissory note in favour of Complainant in the month of 16.03.2020 for Rs.25,00,000/- also issued cheque No.00042 for Rs.25,00,000/- drawn on HDFC Bank,

Srinagar Colony Branch, Hyderabad for discharge of partial legally enforceable debt and requested complainant to present the cheque on his instructions. When the complainant further demanded for the total amount and promised that he will transfer the amount with in 15 days. It is further averred in the complaint that due to Pandemic Covid – 2019 indefinite lock down was imposed and further extension of Pandemic situation prevailed in the country. The Accused requested and took advantage on the same and extended time for repayment of amount from time to time. When the Complainant going on demanding the Accused for payment of Amount. The Accused instructed the Complainant to deposit the cheque of Rs.25,00,000/- in his bank amount and it would be honored on its presentation. When the Complainant questioned for balance

Rs.20,00,000/- and promised that the same would be arranged along with interest in short period.

Believing the words of the Accused the Complainant has presented cheque for Rs.25,00,000/- in the account bank Axis Bank, Banjara Hills

Branch, for clearance the cheque was returned by the bank with memo

dated 31.10.2022 for the reasons “Account Closed”. Thereafter the

5 Fair Judgment STC.NI.No. 7130 of 2022 complainant has got issued a legal notice dt.04.11.2022 by RPAD with acknowledgment through his counsel to the Accused demanding to make payment of the bounced cheque within 15 days from the date of receipt of the notice. The Notice served on the Accused on 07.11.2022 insufficient of making payment as demanded by Complainant. The Accused issued reply notice with a false averments denying the liability and evade the payment of amount to the complainant.

The Complainant finally approached this Court and filed this case to

Convict the Accused of 138 of N.I.Act. and also pray for to award

Compensation of 357(3) Cr.P.C. in the interest of Justice.

2. After filing the Sworn Affidavit of the Complainant the learned predecessor took the cognizance u/Sec.138 of N.I.Act against the

Accused and renumbered as STC.NI.7130/2022.

3.On appearance of the accused before this court, copies of all documents furnished to the Accused U/sec.207 Cr.P.C.

4.Accused is examined u/sec.251 Cr.P.C., He denied the contents of complaint.

5.During Trial the complainant filed himself examined as PW1 and got marked Ex.P1 to Ex.P15 and closed his evidence.

6.Accused examined u/Sec.313 Cr.P.C. He denied the evidence of PW1.

No defence witnesses examined but Ex.D1 is marked during cross of PW1.

7. Heard both sides. Both sides submitted their written arguments.

8. Now the point for determination is whether the complainant has proved the necessary ingredients u/Sec.138 of N.I.Act against the Accused beyond all reasonable doubt.

6 Fair Judgment STC.NI.No. 7130 of 2022

POINT

As per the settled proposition of law, the initial burden is cast upon the complainant to prove above the transaction.

The complainant is harping upon the statutory presumption u/Sec.139 of N.I.Act, contended that, when once the cheque is issued by the Accused, the presumption shall be that, it is towards discharge of legally enforceable debt. There is no dispute about the statutory presumption contained in Sec.139 of N.I. Act, but it is rebuttable presumption.

In order to Constitute the offence u/sec.138 of N.I.Act it is to be proved that the Accused must have drawn the cheque on the Account maintained by him in Bank for the discharge in whole, or in part of the debt, or liability and that the cheque has been presented for collection within period of its validity and that the same is dishonoured for the reason “Insufficient Funds” or it exceeds the amount arranged to be paid from the Account by an Agreement made with the Bank and that the

Accused failed to comply the legal notice issued calling upon him to pay the cheque amount within fifteen days.

As per the ratio laid down by the Hon’ble Apex Court in

i) M/s. Kusum Ingots & Alloys Limited Vs. M/s. Pennar Peterson Securities

Limited and others reported in 2000(2) SC 218

Where the cheques were drawn by the Accused for payment of certain amount of Money due to the complainant from the Account in the 7 Fair Judgment STC.NI.No. 7130 of 2022

Bank and said cheques were dishonoured by the Bank and the amount remained unpaid even after lapse of 15 days, from the date of notice issued by the Complainant after the cheques were dishonured, so the ingredients u/Sec.138 of N.I.Act are found established prima facie in taking cognizance of the said offence.

As per the case of Complainant, the Accused, who is a Director of

M/s.KNR Contractors Private Limited approached the Complainant seeking Inter Corporate Deposit (ICD) for working Capital requirements, for which the Complainant advanced a total amount of Rs.1,00,00,000/- (One Crore Rupees) to the Accused between 26.11.2018 and 29.12.2018 through RTGS/NEFT the accused agreed to repay the same amount within six months. Accordingly he repaid only Rs.55,00,000/- (Fifty Five Lakhs

Rupees) in April, 2019, for repayment of Balance amount of Rs.45,00,000/- (Forty Lakhs Rupees) upon several demands the Accused executed a promissory note Ex.P1 dt.16.03.2020, for Rs.25,00,000/- and issued cheque Ex.P2 Bearing No.000042 dt. 10.10.2022 for Rs.25,00,000/- (Twenty Five Lakhs Rupees) drawn on HDFC Bank, Srinagar Colony

Branch, Hyderabad, When Complainant presented the Ex.P2 cheque in his

Account Bank the same is dishonoured as “Account Closed”. After issue of

Statutory legal notice, the Accused issued reply notice denying the liability, thereby the Accused is liable for punishment u/Sec.138 of N.I.Act.

The counsel for the Accused contended that, the Complainant lacks authority to file the present complaint on behalf of M/s. Transwat

Engineering Consultancy Private Limited.

8 Fair Judgment STC.NI.No. 7130 of 2022

The Complainant has not been filed by a properly authorized person.

On perusal of the contents Ex.P14, clearly shows that, the Board of

Directors of the Complainant company duly authorized the Managing

Director to take decisions on behalf of the company, including lending and borrowing of funds and also to prosecute the legal matters pertaining to the Complainant Company Ex.P14 shows that the Complainant is the

Director of Complainant Company and Ex.P15 shows the Complainant is the Director of the Complainant Company.

The Counsel for the Complainant contended that, when a complaint is filed by the Managing Director, no specific authorization is required to file complaint, as such Ex.P14 and Ex.P15 are sufficient to prove that PW1 is authorized to file complaint. So, I accept the contention of learned counsel for the complainant on this aspect. The contention of learned counsel for Accused cannot be accepted.

The next contention of the learned counsel for the Accused is that,

PW1 admitted that only his signature is on Ex.P14 did not provide evidence of a valid board meeting authorizing him to initial legal proceeding.

On perusal of the cross of PW1 it is suggested that, Ex.P14 and

Ex.P15 are created and fabricated for the purpose of this case. He denied the suggestion. No doubt PW1 admitted that only his signature available on Ex.P14.

9 Fair Judgment STC.NI.No. 7130 of 2022

On perusal of the contents of Ex.P14 in para (c) it is mentioned that the Complainant/Mr. M.Sridhar Reddy, Director be further authorized to execute necessary documents, if required including taking up legal course of action for recovery of the amounts.

The Counsel for the Accused relied on the ruling reported in Jawahar

Mills Ltd., rep. By its authorized Agent S.Kalidas Vs. M/s. General

Diffutions Rep. By its Power Agent Sadashivam and another in Crl. A 44/1999, Dt.05.01.2007, Madras High Court.

I have carefully gone through the above rulings, not applicable to this case.

So, the contention of learned counsel for the Accused cannot be accepted on this aspect.

The Counsel for the Accused further contended that, the

Complainant company does not have the legal capacity to act as a lending institution and Ex.P15 does not contain any clause authorising the

Managing Director or any person to lend money to other person or companies. Counsel further contended that the loan itself is ultra vires of the companies Memorandum it can not be considered a legally enforceable debt u/sec.138 of N.I.Act.

The documents filed by the complainant i.e. Ex.P14 and Ex.P15 clearly shows and establish the Board of Directors of the Complainant 10 Fair Judgment STC.NI.No. 7130 of 2022

Company duly authorized the Managing Director to take decisions on behalf of the company, including lending Money and borrowing funds and also to prosecute the Legal matters pertaining to the Complainant

Company. So, the Contention Counsel of the Accused cannot be accepted on this aspect.

The Counsel for the Accused further contended that, the

Complainant failed to demonstrate compliance with Sec.186(2) of the

Companies Act 2013, which restricts the lending of funds to individuals.

As the Complainant is a Corporate entity governed by statue, any loan advanced in violation of these regulatory limits is void abinitio, thereby rebutting the presumption of a legally enforceable debt. u/sec.139 of

N.I.Act.

On perusal of the cross of PW1, there is no cross with regard to

Sec.186(2) of Companies Act 2013. The Accused can not take advantage one after the other, it shows only to escape from liability, once he received

One Crore Rupees from the Complainant by way of on line transaction and repaid Rs.55,00,000/- through on line transaction and repaid

Rs.55,00,000/- through on line, by discharging part liability and Ex.P2 cheque along with Ex.P1, Promissory note for consideration, he can not take advantage by putting several questions to the complainant under

Companies Act. Since this transaction is under RTGS/NEFT between both parties but the Companies Act is not applicable to this case and there is no necessity to show company as one of the Accused.

11 Fair Judgment STC.NI.No. 7130 of 2022

Ex.P14 dt.11.04.2018, clearly shows the Complainant Company passed Special resolution and the above transaction took place in the month of November, December 2018, and there is no necessity of passing

Special resolution and the contention of counsel for Accused cannot be accepted on this aspect.

The Counsel for the Accused further contended that, PW1 failed to produce any document to show that the Accused was the Managing

Director of KNR Contractors Private Limited as on the date of alleged lending of the money. The other arguments regarding Companies Act are not relevant at this stage without any proof.

Admittedly Ex.P2 cheque given by the Accused to PW1 for

Rs.25,00,000/- along with Ex.P1 pronote, as per the contents of Chief

Affidavit, Accused borrowed an amount of Rs.1,00,00,000/- (One Crore

Rupees) which was paid by the PW1 through on line under Ex.P8 to

Ex.P11 bank statements, out of which Accused paid Rs.55,00,000/- to PW1 as part payment under Ex.P10 for remaining amount of Rs.45,00,000/-, he issued Ex.P1 promissory note, and Ex.P2 cheque only for Rs.25,00,000/-.

Accused not denying his signature on Ex.P1, Ex.P2 but his specific defence is that, as per his cross of PW1, it is suggested that One Ganesh

Reddy who worked in KNR Contractors Private Limited stolen the cheque and in collusion with the said Ganesh Reddy PW1 misused and filed this case. He denied the suggestion.

12 Fair Judgment STC.NI.No. 7130 of 2022

If really Ganesh Reddy stolen the cheque, the Accused should have given the complaint to the Police, nor addressed a letter to the Bank for

Stop Payment.

The Counsel for the Accused further contended that, the promissory note Ex.P1 and the Ex.P2 were not issued for a fresh liability but were perhaps obtained under different circumstances or are fabricated.

As per the evidence of PW1 the Accused borrowed an amount of

Rs.1,00,00,000/- (One Crore Rupees) by way of on line transaction under

RTGS/NEFT under different dates, out of which the Accused repaid an amount of Rs.55,00,000/- through RTGS as admitted by PW1, When PW1 demanded for balance amount, the Accused executed Ex.P1 promissory note and issued cheque for Rs.25,00,000/-.

When PW1 deposited Ex.P2 cheque in his Bank Account, the Accused deliberately closed the Account, only to escape from liability. Ex.P2 cheuqe issued only to clear the remaining part of the loan amount, even then, the Accused is due an amount of Rs.20,00,000/- Ex.P8 to Ex.P10

Bank statements clearly shows, the transaction between PW1 and Accused

Ex.P2 cheque supported by Ex.P1 promissory note to prove the consideration.

As per the ratio laid down in K.Bhaskaran Vs. Shankaran Vaidhyan

Balan and another reported in AIR 1999 SC 3762(1), and in D.Achyutha

Reddy Vs. State of A.P. reported in 2014(1) ALD (Crl) 233 (A.P.) when the 13 Fair Judgment STC.NI.No. 7130 of 2022 signature on cheque was not denied by the Accused, the presumption that the cheque was made or drawn for consideration on the date which the cheque bears arises. The holder of the cheque presumed to have received it for discharge of liability.

As per ratio laid down in Rangappa Vs. Sri Mohan reported in 2010 (5) SCJ 700 held that, the presumption mandated by sec.139 of N.I.Act does indeed include the existence of a legally enforceable debt or liability.

There can be no doubt that there is on initial presumption which favours the complainant.

The standard of proof to rebut the presumption is that of preponderance of probabilities for which the Accused can rely on the materials submitted by the complainant.

In the case on hand, the issuance of the cheque by the Accused by drawing from his Account and signature on the cheque also admitted.

Thus from the settled ratio, it is mandatory on the court to draw the presumption u/sec.118 and 139 N.I.Act in favour of the complainant and the Accused has not rebutted the presumption.

Since the entire transaction between PW1 and Accused are on line transactions under Ex.P8 to Ex.P10, there is no necessity to file any

Income Tax returns as alleged by the defence counsel. The Bank statements clearly proves that the complainant is having financial capacity 14 Fair Judgment STC.NI.No. 7130 of 2022 to lend such huge amount to the Accused when he has not borrowed the

One Crore Rupees from PW1, what is the necessity to repay Rs.55,00,000/- to PW1 through RTGS and issuance of cheque for Rs.25,00,000/-.

Mere marking Ex.D1 through PW1 is no way helpful to the Accused, the borrowed amount by the Accused in the month of November and

December, 2018. Much prior to the execution of Ex.D1. So, Ex.D1 is no way helpful to the accused. It is only to escape from liability. The Accused brought Ex.D1.

Regarding reply notice, the Accused simply denied the averments made in the legal notice, without any probable defence, No reliance can placed on Ex.P7 reply notice.

The entire cross examination done by the Accused counsel is only by way of suggestions and denied by the witness, the documents filed by the complainant amply proves the transactions between PW1 and Accused.

The Accused has not placed any probable defence either oral or by way of documents to rebutt the presumption expect suggestions and denied by the witness.

The Counsel for the Accused relied on the following rulings:-

i) Jawahar Mills Limited Vs. General Diffutions ii) AC Naryanan Vs. State of Maharastra and Another Crl.A. 73/2007 iii) Basalingappa Vs. Mudibasappa Crl.A.636/2019, dt.09.04.2019 iv) M/s. UKG Steel Private Limited Vs. Erotic Buildcon Private Limited, dt.31.05.2021.

15 Fair Judgment STC.NI.No. 7130 of 2022

I have carefully gone through the above rulings, the facts and circumstances of above rulings are not applicable to the present case.

The counsel for the Complainant relied on the following rulings:-

i) Manu/SC/0376/2010 Rangappa Vs. Sri Mohan. ii) Manu/SC 1096/2023 Rajesh Jain Vs. Ajay Singh. iii) Manu/SC/0154/2019 Bir Singh Vs. Mukesh Kumar, iv) Rohitbhai Jivanlal Patel Vs. State of Gujarath and another

I have carefully gone through the above cited rulings, which are applicable to the case on hand.

In view of my aforesaid discussion, I hold that the complainant successfully proved the necessary ingredients u/Sec.138 of N.I.Act against the Accused beyond reasonable doubt.

In the result, the Accused is found guilty for the offence u/Sec.138 of

Negotiable Instrument Act, accordingly he is Convicted u/Sec.255(2)

Cr.P.C.

Directly typed to my dictation by the steno of this court, corrected, on this the 7 th day of January, 2026.

Sd/-

VI JUDICIAL MAGISTRATE OF FIRST CLASS,

HYDERABAD.

The Accused is questioned with regard to the Quantum of sentence to be imposed against him, he says he was 70 years old and undergone heart operation.

16 Fair Judgment STC.NI.No. 7130 of 2022

Considering submission made by the Accused this is not a fit case to release the Accused under P.O.Act.

Hence the Accused is sentenced to undergo Simple Imprisonment for a period of One year and to pay Compensation of Rs.30,00,000/- (Thirty

Lakhs Rupees) to the Complainant/PW1 u/Sec.357 (3) Cr.P.C. within one month from the date of Judgment. In default payment of Compensation the

Accused shall suffer Simple Imprisonment for a period of four (04) months.

Directly typed to my dictation by the steno of this court, corrected, on this the 7 th day of January, 2026.

Sd/-

VI JUDICIAL MAGISTRATE OF FIRST CLASS,

HYDERABAD.

17 Fair Judgment STC.NI.No. 7130 of 2022

APPENDIX OF EVIDENCE

WITNESSES EXAMINED ON BEHALF

FOR complainant :

PW1 – M. Sridhar Reddy

FOR DEFENCE :

DW1 - Nil

EXHIBITS MARKED FOR THE COMPLAINANT;

Ex.P1: is the pronote dt.16.03.2020 for Rs.25,00,000/-

Ex.P2: Crossed Cheque bearing No.000042 dt. 10.10.2022 for Rs.25,00,000/- drawn on HDFC Bank, Srinagar Colony

Ex.P3: Cheque Return Memo issued by Axis Bank, Dt.31.10.2022

Ex.P4 : Office copy of legal notice dt. 04.11.2022.

Ex.P5: Postal receipt dt.04.11.2022.

Ex.P6:track consignment report.

Ex.P7 :is the reply notice dt. 28.11.2022.

Ex.P8 : Bank statement issued by Vardhaman Mahila Cooperative

Bank.

Ex.P9:Brake up details letter.

Ex.P10: Bank statement issued by Vardhaman Bank (3 pages)

Ex.P11: Account statement issued by Kotak Bank. (14 pages)

Ex.P12:Incorporation Certificate

Ex.P13:GST Form

Ex.P14:Special Resolution passed by Board of Directors dt.11.04.2018

Ex.P15:Memorandum of Association consisting of 16 Pages.

EXHIBITS MARKED FOR DEFENCE:

Ex.D1 :Deed of Sale Dt.04.06.2019

Sd/-

VI JUDICIAL MAGISTRATE OF FIRST CLASS,

HYDERABAD

//TRUE COPY//

1 Fair Judgment STC.NI.No. 7130 of 2022

IN THE COURT OF THE VI JUDICIAL MAGISTRATE OF FIRST

CLASS :: HYDERABAD.

PRESENT: Sri. P Shyam Prasad, VI Judicial Magistrate of First Class, Hyderabad.

Wednesday, the 7thday of January, 2026

STC. NI. No.7130 OF 2022

Between:-

M/s. Transwat Engineering Consultancy Pvt. Ltd., #8-2-686/K/1 & 2, 2nd Floor, Kimtee Square, Road No.12, Banjara Hills, Hyderabad – 500034, Rep. By its Managing Director, M.Sridhar Reddy, S/o.Late Sivarami Reddy.

...Complainant

AND

Mr. Narasimha Reddy Koduru, S/o. K. Krishna Reddy, Director of KNR Contractor Private Limited #8-2-1109/2, Flat No.102, Subadra Enclave, Srinagar Colony, Hyderabad.

… Accused

This case is coming on before me for final hearing on 30.12.2025 in presence of Nagesh Reddy and other counsel and other Counsels for complainant and B.Ravi Chandra, counsel for accused, hearing upon their arguments, and having stood over for consideration till this day, the court delivered the following :-

-: J U D G M E N T:-

1. This complaint is filed by the M/s. Transwat Engineering Consultancy

Private Limited represented by its Managing Director M. Sridhar Reddy through his counsel U/Sec. 200 Cr.P.C. against the Accused/ Mr.Narasimha

Reddy Konduru for the offence u/sec.138 of N.I.Act with the following 2 Fair Judgment STC.NI.No. 7130 of 2022 averments the Complainant is a Private Limited company Regd. Under the

Company Act 1956 is engaged in the business of Engineering Consultancy in the filed of Civil Engineering under the Name and Style of M/s.

Transwat Engineering Consultancy Private Limited, Managing Director of the company has the knowledge of the transaction took place between company and the Accused.

The Accused is a Director of M/s.KNR Contractors Private Limited is approached complainant representative for Inter Corporate Deposit loan for his working capital for his on going works considering the acquaintance between complainant and Accused. Complainant representative has agreed to lend Inter Corporate Deposit Loan to the

Accused. It is further averred in the complaint the complainant has transferred an amount of Rs.1,00,00,000/- (One Crore Rupees) to the

Accused through N.E.F.T/R.T.G.S. as mentioned below:-

Sl.No. Date Account Number & Bank Account Number & RTGS Amount of Complainant Bank of Accused Vardhaman Mahila HDFC Bank, Srinagar Coorperative Bank, Colony Branch, Banjarahills, Branch, Hyderabad Hyderabad 126.11.201800100052000004450200017378799NEFTCR-Rs.40,00,000/- YESB00CVB 002/ N33018017 1056851 201.12.201800100052000004450200017378799NEFTCR-Rs.10,00,000/- YESDOCVB0 02/ N33518017 3487874 3 Fair Judgment STC.NI.No. 7130 of 2022

Sl.No. Date Account Number & Account Number & RTGS Amount Bank of Complainant Bank of Accused Kotak Mahindra Bank, HDFC Bank, Srinagar Banjarahills, Branch, Colony Branch, Hyderabad Hyderabad 114.12.201878101100161850200017378799RTGS-Rs.10,00,000/- KKBKR5201 8121400696 105 229.12.201878101100161850200017378799NEFT Rs.20,00,000/- KKBKH1836 38776406 329.12.201878101100161850200017378799RTGSKKBKR Rs.20,00,000/- 5201812290 0878060

It is further averred in the complainant after transfer of the amount by the complainant to the Accused. The Accused promised to repay the same within six months and further he stated that he has to receive the amount from his business circle accordingly the accused has also transferred an amount of Rs.55,00,000/- on various dates as mentioned below through R.T.G.S. /N.E.F.T.

Sl.No. Date Account Number & Bank of RTGS Amount Complainant Vardhaman Mahila Coorperative Bank, Banjarahills, Branch, Hyderabad 115.04.2019001000520000044RTGS-UTR Rs.15,00,000/- No.000708 224.04.2019001000520000044Intra Bank TransferRs.40,00,000/- 4 Fair Judgment STC.NI.No. 7130 of 2022

It is further averred in the complaint the complainant received only

Rs.55,00,000/- from the Accused the balance amount of Rs.45,00,000/- yet to be receive from the Accused. When the complainant demanded for the balance amount accused promised the same would be paid in short period and keep on extending time to time. When the complainant demanded for payment of balance amount the Accused executed a promissory note in favour of Complainant in the month of 16.03.2020 for Rs.25,00,000/- also issued cheque No.00042 for Rs.25,00,000/- drawn on HDFC Bank,

Srinagar Colony Branch, Hyderabad for discharge of partial legally enforceable debt and requested complainant to present the cheque on his instructions. When the complainant further demanded for the total amount and promised that he will transfer the amount with in 15 days. It is further averred in the complaint that due to Pandemic Covid – 2019 indefinite lock down was imposed and further extension of Pandemic situation prevailed in the country. The Accused requested and took advantage on the same and extended time for repayment of amount from time to time. When the Complainant going on demanding the Accused for payment of Amount. The Accused instructed the Complainant to deposit the cheque of Rs.25,00,000/- in his bank amount and it would be honored on its presentation. When the Complainant questioned for balance

Rs.20,00,000/- and promised that the same would be arranged along with interest in short period.

Believing the words of the Accused the Complainant has presented cheque for Rs.25,00,000/- in the account bank Axis Bank, Banjara Hills

Branch, for clearance the cheque was returned by the bank with memo

dated 31.10.2022 for the reasons “Account Closed”. Thereafter the

5 Fair Judgment STC.NI.No. 7130 of 2022 complainant has got issued a legal notice dt.04.11.2022 by RPAD with acknowledgment through his counsel to the Accused demanding to make payment of the bounced cheque within 15 days from the date of receipt of the notice. The Notice served on the Accused on 07.11.2022 insufficient of making payment as demanded by Complainant. The Accused issued reply notice with a false averments denying the liability and evade the payment of amount to the complainant.

The Complainant finally approached this Court and filed this case to

Convict the Accused of 138 of N.I.Act. and also pray for to award

Compensation of 357(3) Cr.P.C. in the interest of Justice.

2. After filing the Sworn Affidavit of the Complainant the learned predecessor took the cognizance u/Sec.138 of N.I.Act against the

Accused and renumbered as STC.NI.7130/2022.

3.On appearance of the accused before this court, copies of all documents furnished to the Accused U/sec.207 Cr.P.C.

4.Accused is examined u/sec.251 Cr.P.C., He denied the contents of complaint.

5.During Trial the complainant filed himself examined as PW1 and got marked Ex.P1 to Ex.P15 and closed his evidence.

6.Accused examined u/Sec.313 Cr.P.C. He denied the evidence of PW1.

No defence witnesses examined but Ex.D1 is marked during cross of PW1.

7. Heard both sides. Both sides submitted their written arguments.

8. Now the point for determination is whether the complainant has proved the necessary ingredients u/Sec.138 of N.I.Act against the Accused beyond all reasonable doubt.

6 Fair Judgment STC.NI.No. 7130 of 2022

POINT

As per the settled proposition of law, the initial burden is cast upon the complainant to prove above the transaction.

The complainant is harping upon the statutory presumption u/Sec.139 of N.I.Act, contended that, when once the cheque is issued by the Accused, the presumption shall be that, it is towards discharge of legally enforceable debt. There is no dispute about the statutory presumption contained in Sec.139 of N.I. Act, but it is rebuttable presumption.

In order to Constitute the offence u/sec.138 of N.I.Act it is to be proved that the Accused must have drawn the cheque on the Account maintained by him in Bank for the discharge in whole, or in part of the debt, or liability and that the cheque has been presented for collection within period of its validity and that the same is dishonoured for the reason “Insufficient Funds” or it exceeds the amount arranged to be paid from the Account by an Agreement made with the Bank and that the

Accused failed to comply the legal notice issued calling upon him to pay the cheque amount within fifteen days.

As per the ratio laid down by the Hon’ble Apex Court in

i) M/s. Kusum Ingots & Alloys Limited Vs. M/s. Pennar Peterson Securities

Limited and others reported in 2000(2) SC 218

Where the cheques were drawn by the Accused for payment of certain amount of Money due to the complainant from the Account in the 7 Fair Judgment STC.NI.No. 7130 of 2022

Bank and said cheques were dishonoured by the Bank and the amount remained unpaid even after lapse of 15 days, from the date of notice issued by the Complainant after the cheques were dishonured, so the ingredients u/Sec.138 of N.I.Act are found established prima facie in taking cognizance of the said offence.

As per the case of Complainant, the Accused, who is a Director of

M/s.KNR Contractors Private Limited approached the Complainant seeking Inter Corporate Deposit (ICD) for working Capital requirements, for which the Complainant advanced a total amount of Rs.1,00,00,000/- (One Crore Rupees) to the Accused between 26.11.2018 and 29.12.2018 through RTGS/NEFT the accused agreed to repay the same amount within six months. Accordingly he repaid only Rs.55,00,000/- (Fifty Five Lakhs

Rupees) in April, 2019, for repayment of Balance amount of Rs.45,00,000/- (Forty Lakhs Rupees) upon several demands the Accused executed a promissory note Ex.P1 dt.16.03.2020, for Rs.25,00,000/- and issued cheque Ex.P2 Bearing No.000042 dt. 10.10.2022 for Rs.25,00,000/- (Twenty Five Lakhs Rupees) drawn on HDFC Bank, Srinagar Colony

Branch, Hyderabad, When Complainant presented the Ex.P2 cheque in his

Account Bank the same is dishonoured as “Account Closed”. After issue of

Statutory legal notice, the Accused issued reply notice denying the liability, thereby the Accused is liable for punishment u/Sec.138 of N.I.Act.

The counsel for the Accused contended that, the Complainant lacks authority to file the present complaint on behalf of M/s. Transwat

Engineering Consultancy Private Limited.

8 Fair Judgment STC.NI.No. 7130 of 2022

The Complainant has not been filed by a properly authorized person.

On perusal of the contents Ex.P14, clearly shows that, the Board of

Directors of the Complainant company duly authorized the Managing

Director to take decisions on behalf of the company, including lending and borrowing of funds and also to prosecute the legal matters pertaining to the Complainant Company Ex.P14 shows that the Complainant is the

Director of Complainant Company and Ex.P15 shows the Complainant is the Director of the Complainant Company.

The Counsel for the Complainant contended that, when a complaint is filed by the Managing Director, no specific authorization is required to file complaint, as such Ex.P14 and Ex.P15 are sufficient to prove that PW1 is authorized to file complaint. So, I accept the contention of learned counsel for the complainant on this aspect. The contention of learned counsel for Accused cannot be accepted.

The next contention of the learned counsel for the Accused is that,

PW1 admitted that only his signature is on Ex.P14 did not provide evidence of a valid board meeting authorizing him to initial legal proceeding.

On perusal of the cross of PW1 it is suggested that, Ex.P14 and

Ex.P15 are created and fabricated for the purpose of this case. He denied the suggestion. No doubt PW1 admitted that only his signature available on Ex.P14.

9 Fair Judgment STC.NI.No. 7130 of 2022

On perusal of the contents of Ex.P14 in para (c) it is mentioned that the Complainant/Mr. M.Sridhar Reddy, Director be further authorized to execute necessary documents, if required including taking up legal course of action for recovery of the amounts.

The Counsel for the Accused relied on the ruling reported in Jawahar

Mills Ltd., rep. By its authorized Agent S.Kalidas Vs. M/s. General

Diffutions Rep. By its Power Agent Sadashivam and another in Crl. A 44/1999, Dt.05.01.2007, Madras High Court.

I have carefully gone through the above rulings, not applicable to this case.

So, the contention of learned counsel for the Accused cannot be accepted on this aspect.

The Counsel for the Accused further contended that, the

Complainant company does not have the legal capacity to act as a lending institution and Ex.P15 does not contain any clause authorising the

Managing Director or any person to lend money to other person or companies. Counsel further contended that the loan itself is ultra vires of the companies Memorandum it can not be considered a legally enforceable debt u/sec.138 of N.I.Act.

The documents filed by the complainant i.e. Ex.P14 and Ex.P15 clearly shows and establish the Board of Directors of the Complainant 10 Fair Judgment STC.NI.No. 7130 of 2022

Company duly authorized the Managing Director to take decisions on behalf of the company, including lending Money and borrowing funds and also to prosecute the Legal matters pertaining to the Complainant

Company. So, the Contention Counsel of the Accused cannot be accepted on this aspect.

The Counsel for the Accused further contended that, the

Complainant failed to demonstrate compliance with Sec.186(2) of the

Companies Act 2013, which restricts the lending of funds to individuals.

As the Complainant is a Corporate entity governed by statue, any loan advanced in violation of these regulatory limits is void abinitio, thereby rebutting the presumption of a legally enforceable debt. u/sec.139 of

N.I.Act.

On perusal of the cross of PW1, there is no cross with regard to

Sec.186(2) of Companies Act 2013. The Accused can not take advantage one after the other, it shows only to escape from liability, once he received

One Crore Rupees from the Complainant by way of on line transaction and repaid Rs.55,00,000/- through on line transaction and repaid

Rs.55,00,000/- through on line, by discharging part liability and Ex.P2 cheque along with Ex.P1, Promissory note for consideration, he can not take advantage by putting several questions to the complainant under

Companies Act. Since this transaction is under RTGS/NEFT between both parties but the Companies Act is not applicable to this case and there is no necessity to show company as one of the Accused.

11 Fair Judgment STC.NI.No. 7130 of 2022

Ex.P14 dt.11.04.2018, clearly shows the Complainant Company passed Special resolution and the above transaction took place in the month of November, December 2018, and there is no necessity of passing

Special resolution and the contention of counsel for Accused cannot be accepted on this aspect.

The Counsel for the Accused further contended that, PW1 failed to produce any document to show that the Accused was the Managing

Director of KNR Contractors Private Limited as on the date of alleged lending of the money. The other arguments regarding Companies Act are not relevant at this stage without any proof.

Admittedly Ex.P2 cheque given by the Accused to PW1 for

Rs.25,00,000/- along with Ex.P1 pronote, as per the contents of Chief

Affidavit, Accused borrowed an amount of Rs.1,00,00,000/- (One Crore

Rupees) which was paid by the PW1 through on line under Ex.P8 to

Ex.P11 bank statements, out of which Accused paid Rs.55,00,000/- to PW1 as part payment under Ex.P10 for remaining amount of Rs.45,00,000/-, he issued Ex.P1 promissory note, and Ex.P2 cheque only for Rs.25,00,000/-.

Accused not denying his signature on Ex.P1, Ex.P2 but his specific defence is that, as per his cross of PW1, it is suggested that One Ganesh

Reddy who worked in KNR Contractors Private Limited stolen the cheque and in collusion with the said Ganesh Reddy PW1 misused and filed this case. He denied the suggestion.

12 Fair Judgment STC.NI.No. 7130 of 2022

If really Ganesh Reddy stolen the cheque, the Accused should have given the complaint to the Police, nor addressed a letter to the Bank for

Stop Payment.

The Counsel for the Accused further contended that, the promissory note Ex.P1 and the Ex.P2 were not issued for a fresh liability but were perhaps obtained under different circumstances or are fabricated.

As per the evidence of PW1 the Accused borrowed an amount of

Rs.1,00,00,000/- (One Crore Rupees) by way of on line transaction under

RTGS/NEFT under different dates, out of which the Accused repaid an amount of Rs.55,00,000/- through RTGS as admitted by PW1, When PW1 demanded for balance amount, the Accused executed Ex.P1 promissory note and issued cheque for Rs.25,00,000/-.

When PW1 deposited Ex.P2 cheque in his Bank Account, the Accused deliberately closed the Account, only to escape from liability. Ex.P2 cheuqe issued only to clear the remaining part of the loan amount, even then, the Accused is due an amount of Rs.20,00,000/- Ex.P8 to Ex.P10

Bank statements clearly shows, the transaction between PW1 and Accused

Ex.P2 cheque supported by Ex.P1 promissory note to prove the consideration.

As per the ratio laid down in K.Bhaskaran Vs. Shankaran Vaidhyan

Balan and another reported in AIR 1999 SC 3762(1), and in D.Achyutha

Reddy Vs. State of A.P. reported in 2014(1) ALD (Crl) 233 (A.P.) when the 13 Fair Judgment STC.NI.No. 7130 of 2022 signature on cheque was not denied by the Accused, the presumption that the cheque was made or drawn for consideration on the date which the cheque bears arises. The holder of the cheque presumed to have received it for discharge of liability.

As per ratio laid down in Rangappa Vs. Sri Mohan reported in 2010 (5) SCJ 700 held that, the presumption mandated by sec.139 of N.I.Act does indeed include the existence of a legally enforceable debt or liability.

There can be no doubt that there is on initial presumption which favours the complainant.

The standard of proof to rebut the presumption is that of preponderance of probabilities for which the Accused can rely on the materials submitted by the complainant.

In the case on hand, the issuance of the cheque by the Accused by drawing from his Account and signature on the cheque also admitted.

Thus from the settled ratio, it is mandatory on the court to draw the presumption u/sec.118 and 139 N.I.Act in favour of the complainant and the Accused has not rebutted the presumption.

Since the entire transaction between PW1 and Accused are on line transactions under Ex.P8 to Ex.P10, there is no necessity to file any

Income Tax returns as alleged by the defence counsel. The Bank statements clearly proves that the complainant is having financial capacity 14 Fair Judgment STC.NI.No. 7130 of 2022 to lend such huge amount to the Accused when he has not borrowed the

One Crore Rupees from PW1, what is the necessity to repay Rs.55,00,000/- to PW1 through RTGS and issuance of cheque for Rs.25,00,000/-.

Mere marking Ex.D1 through PW1 is no way helpful to the Accused, the borrowed amount by the Accused in the month of November and

December, 2018. Much prior to the execution of Ex.D1. So, Ex.D1 is no way helpful to the accused. It is only to escape from liability. The Accused brought Ex.D1.

Regarding reply notice, the Accused simply denied the averments made in the legal notice, without any probable defence, No reliance can placed on Ex.P7 reply notice.

The entire cross examination done by the Accused counsel is only by way of suggestions and denied by the witness, the documents filed by the complainant amply proves the transactions between PW1 and Accused.

The Accused has not placed any probable defence either oral or by way of documents to rebutt the presumption expect suggestions and denied by the witness.

The Counsel for the Accused relied on the following rulings:-

i) Jawahar Mills Limited Vs. General Diffutions ii) AC Naryanan Vs. State of Maharastra and Another Crl.A. 73/2007 iii) Basalingappa Vs. Mudibasappa Crl.A.636/2019, dt.09.04.2019 iv) M/s. UKG Steel Private Limited Vs. Erotic Buildcon Private Limited, dt.31.05.2021.

15 Fair Judgment STC.NI.No. 7130 of 2022

I have carefully gone through the above rulings, the facts and circumstances of above rulings are not applicable to the present case.

The counsel for the Complainant relied on the following rulings:-

i) Manu/SC/0376/2010 Rangappa Vs. Sri Mohan. ii) Manu/SC 1096/2023 Rajesh Jain Vs. Ajay Singh. iii) Manu/SC/0154/2019 Bir Singh Vs. Mukesh Kumar, iv) Rohitbhai Jivanlal Patel Vs. State of Gujarath and another

I have carefully gone through the above cited rulings, which are applicable to the case on hand.

In view of my aforesaid discussion, I hold that the complainant successfully proved the necessary ingredients u/Sec.138 of N.I.Act against the Accused beyond reasonable doubt.

In the result, the Accused is found guilty for the offence u/Sec.138 of

Negotiable Instrument Act, accordingly he is Convicted u/Sec.255(2)

Cr.P.C.

Directly typed to my dictation by the steno of this court, corrected, on this the 7 th day of January, 2026.

Sd/-

VI JUDICIAL MAGISTRATE OF FIRST CLASS,

HYDERABAD.

The Accused is questioned with regard to the Quantum of sentence to be imposed against him, he says he was 70 years old and undergone heart operation.

16 Fair Judgment STC.NI.No. 7130 of 2022

Considering submission made by the Accused this is not a fit case to release the Accused under P.O.Act.

Hence the Accused is sentenced to undergo Simple Imprisonment for a period of One year and to pay Compensation of Rs.30,00,000/- (Thirty

Lakhs Rupees) to the Complainant/PW1 u/Sec.357 (3) Cr.P.C. within one month from the date of Judgment. In default payment of Compensation the

Accused shall suffer Simple Imprisonment for a period of four (04) months.

Directly typed to my dictation by the steno of this court, corrected, on this the 7 th day of January, 2026.

Sd/-

VI JUDICIAL MAGISTRATE OF FIRST CLASS,

HYDERABAD.

17 Fair Judgment STC.NI.No. 7130 of 2022

APPENDIX OF EVIDENCE

WITNESSES EXAMINED ON BEHALF

FOR complainant :

PW1 – M. Sridhar Reddy

FOR DEFENCE :

DW1 - Nil

EXHIBITS MARKED FOR THE COMPLAINANT;

Ex.P1: is the pronote dt.16.03.2020 for Rs.25,00,000/-

Ex.P2: Crossed Cheque bearing No.000042 dt. 10.10.2022 for Rs.25,00,000/- drawn on HDFC Bank, Srinagar Colony

Ex.P3: Cheque Return Memo issued by Axis Bank, Dt.31.10.2022

Ex.P4 : Office copy of legal notice dt. 04.11.2022.

Ex.P5: Postal receipt dt.04.11.2022.

Ex.P6:track consignment report.

Ex.P7 :is the reply notice dt. 28.11.2022.

Ex.P8 : Bank statement issued by Vardhaman Mahila Cooperative

Bank.

Ex.P9:Brake up details letter.

Ex.P10: Bank statement issued by Vardhaman Bank (3 pages)

Ex.P11: Account statement issued by Kotak Bank. (14 pages)

Ex.P12:Incorporation Certificate

Ex.P13:GST Form

Ex.P14:Special Resolution passed by Board of Directors dt.11.04.2018

Ex.P15:Memorandum of Association consisting of 16 Pages.

EXHIBITS MARKED FOR DEFENCE:

Ex.D1 :Deed of Sale Dt.04.06.2019

Sd/-

VI JUDICIAL MAGISTRATE OF FIRST CLASS,

HYDERABAD

//TRUE COPY//

1 Fair Judgment STC NI.No. 650 of 2023

IN THE COURT OF THE VI JUDICIAL MAGISTRATE OF FIRST

CLASS :: HYDERABAD.

PRESENT: Sri. P Shyam Prasad, VI Judicial Magistrate of First Class, Hyderabad.

Monday, the 19thday of January, 2026

STC. NI. No.650 OF 2023

Between:-

Shaik Riyaz, S/o. Shaik Mahmood, Aged about 36 years, Occ : Business, R/o.8-2-682/32/310, NB Nagar, Banjara Hills, Road No.13, Hyderabad.

...Complainant

AND

Shazada Qumar, S/o. Md. Omer Aged about 47 years, Occ : Business, R/o. 3-3-53/6, Nagina Bakery Building, Kachiguda Station Road, Chappal Bazar, Hyderabad. … Accused

This case is coming on before me for final hearing on 12.01.2026 in presence of M/s.S.W. Hydri and other Counsels for complainant and Sri.

M.R. Arun Kumar, counsel for accused, hearing upon their arguments, and having stood over for consideration till this day, the court delivered the following :-

-: J U D G M E N T:-

1. This complaint is filed by the Complainant/Shaik Riyaz through his

GPA Holder Gulam Taher Siddiqui u/sec.200 Cr.P.C. through his counsel against the Accused/Shazada Qumar for the offence U/sec.138 &142 of

N.I.Act with the following averments.

2 Fair Judgment STC NI.No. 650 of 2023

The Complainant and Accused are having good acquaintance since long time, by taking advantage, the Accused approached the

Complainant and obtained hand loan of Rs.16,50,000/- for his personal requirements and necessities, after several requests by the complainant, the accused paid only Rs.1,50,000/- out of 16,50,000/-.

After settlement between both parties in the presence of well wishers and elders, the accused executed a M.O.U. dt. 25.07.2019, As per the clause No.1 of M.O.U., the Accused agreed to pay Rs.50,000/- to the

Complainant on or before every 5th day of English Calender month but the Accused failed to pay even single month. It is further averred that, in the intervention of the elders, the Accused issued four cheques in the name of four different persons including Complainant for the payment of

Rs.15,00,000/- as per the M.O.U.

1. Cheque No.137526 dt.18.03.2020, for Rs.3,75,000/- issued in the name of Shaik Imtiyaz

2. Cheque No.137527 Dt.18.03.2020 for Rs.3,75,000/- issued in the name of Md.Abdul Razzak.

3.Cheque No.137528 Dt.18.03.2020 for Rs.3,75,000/- issued in the name of Shaik Riyaz

4. Cheque No.137529 DT.18.03.2020 FOR Rs.3,75,000/- issued in the name of Shaik Afroz

When the complainant and others presented the cheques in their account bank, all the four cheques dishonored and return with memos as “Funds Insufficient”.

3 Fair Judgment STC NI.No. 650 of 2023

After informing the same to the accused, the Complainant got issued legal notice to the Accused demanding him to repay the cheque amount. Notice served on the Accused on 12.04.2021, but the Accused failed to pay cheque amount nor gave any reply.

The Complainant approached the court and filed this case, to punish the Accused u/Sec.138 of N.I. Act.

2.After filing the Sworn Affidavit of Complainant/Shiak Riyaz my learned predecessor took the cognizance u/Sec.138 of N.I.Act against the

Accused and numbered as STC NI.No.650/2023.

3.On appearance of the accused before this court, copies furnished to him U/sec.207 Cr.P.C.

4.The Accused is examined u/sec.251 Cr.P.C., on 13.07.2023, he denied the contents of complaint.

5.During Trial the Counsel for the Complainant filed petition u/sec.33 of Civil Rules of Practice along with Affidavit of Complainant/ Shaik Riyaz to appoint GPA Holder by name Gulam Taher Siddiqui to adduce evidence in this cross, after hearing both sides, my learned predecessor permitted the GPA Holder, Gulam Taher Siddiqui to adduce evidence on behalf of

Complainant vide Crl.MP.No.352/2024, dt.25.01.2024.

6.Accordingly, the GPA Holder filed his Chief Affidavit evidence on behalf of Complainant on 10.12.2024, Ex. P1 to Ex.P6 marked and closed the Complainant evidence.

4 Fair Judgment STC NI.No. 650 of 2023

7.Accused examined u/Sec.313 Cr.P.C. He denied the evidence of PW1 and says No Defence evidence.

8. Heard both sides. Both sides submitted their written arguments the counsel for Accused submitted ruling on behalf of his arguments.

9. Now the point for determination is whether the complainant has proved the necessary ingredients u/Sec.138 of N.I.Act against the

Accused beyond all reasonable doubt.

POINT

The case of the Complainant in not shall is that the Accused borrowed an amount of Rs.16,50,000/- for his personal requirements and necessities. Out of the said amount; after several requests, the Accused paid only Rs.1,50,000/- and remaining amount of Rs.15,00,000/- is payable by the accused, but in the intervention of elders, There was

M.O.U. Ex.P1 between both parties, dt.25.07.2019, in which Accused agreed to pay on installment basis of Rs.50,000/- on or before 5th of every

English Calender month, but the Accused failed to pay even single month, when issue was resolved between both parties before the elders, the Accused issued four cheques for Rs.3,75,000/- each in the name of different persons including complainant. Ex.P2 is the cheque pertaining to this case, when presented in the bank the same is dishonored after issuing legal notice, the complainant filed this case to punish the Accused u/Sec.138 of N.I.Act.

5 Fair Judgment STC NI.No. 650 of 2023

The defence of the Accused is total denial. His further defence is that, the cheques were stolen by some body and misused the Ex.P2 cheque filed this case.

As per the settled propositions of law, the initial burden is cast upon the complainant to prove the alleged transaction.

The complainant is harping upon the statutory presumption u/Sec.139 of N.I.Act, contended that, when once the cheque is issued by the Accused, the presumption shall be that it is towards discharge of legally enforceable debt. There is no dispute about the statutory presumption contained in Sec. 139 of N.I. Act, but it is rebuttable presumption. So, we have to see whether the Accused has rebutted the statutory presumption.

During the trial, the Complainant who is in abroad, appointed GPA

Holder by name Gulam Taher Siddiqui to file this case and filed petition, this court permitted him to represent on behalf of the complainant. After filing his Chief Affidavit as PW1, but the Complainant not marked the GPA and marked Ex.P1 to Ex.P6 and closed his evidence.

PW1/GPA holder deposed as per contents of complaint.

The Counsel for the Accused contended that, the G.P.A. Holder has not marked the GPA granted by the complainant authorizing him to 6 Fair Judgment STC NI.No. 650 of 2023 appear in this case, as such his evidence does not have any validity and the entire evidence is vitiated.

On perusal of the evidence of PW1, the G.P.A. document has not marked though this court permitted unless the said document is marked this court can not look in to the unmarked document.

The counsel further contended the contents of chief evidence speaks that, the G.P.A. holder has lended the amount to the Accused and entire proceedings was done by the G.P.A. Holder only which is contrary to the complainant.

On perusal of the Chief Affidavit, evidence at para 2 it is mentioned that, as if G.P.A. Holder advanced loan amount to the Accused. So I accept the contention of learned counsel for Accused on this aspect.

The Counsel further contented that, the complainant has not fulfill the necessary ingredients u/Sec.138 of N.I.Act.

The Counsel further contended that, the Complainant has not mentioned the place of transaction and issuing of cheque in his complaint and Affidavit.

On perusal of the contents of Chief Affidavit and Complaint, the

Complainant has not mentioned, where the alleged transaction took place, where the accused approached him for alleged loan amount.

It is for the Complainant to mention in his Complaint and Chief

Affidavit, the alleged place of transaction and date, time and place but not mentioned the same. On perusal of the Cross of PW1, he admitted that the complainant not mentioned the date of transaction. As per the evidence of PW1, the alleged amount of Rs.16,50,000/- borrowed by the 7 Fair Judgment STC NI.No. 650 of 2023 accused. But the Complaint and Chief Affidavit shows there is no date and place mentioned, PW1 further says in his cross, that out of

Rs.16,50,000/- the Accused paid Rs.1,50,000/-, but the complainant not mentioned the alleged date and time and place of payment of

Rs.1,50,000/-. PW1 further says in his cross after payment of

Rs.1,50,000/- Accused executed Ex.P1 MOU and complainant also filed

Civil Suit vide OS.No.2771/2021 on the file of III Junior Civil Judge Court prior to this case, as per the contents of Complaint and Chief Affidavit and Ex.P1 MOU, the Accused issued four cheques in the name of different persons each cheque issued for Rs.3,75,000/- and Accused admitted that, he will pay Rs.50,000/- every month before 5th every month of English

Calender, Ex.P2 in the subject cheque filed in this case. PW1 says in his cross the alleged amount paid in his presence but he did not say the day and date and place.

The Counsel for the Accused further contended that, PW1 has not filed any books of accounts before this court to show his Financial

Capacity.

Admittedly, the alleged loan amount is Rs.16,50,000/- but the

Complainant not mentioned, the date and place as to when the Accused approached him, and how he secured the amount of Rs.16,50,000/- not stated in his Complaint and Chief Affidavit are contradictory. The

Complainant has not examined any one of the witness of M.O.U. Ex.P1 to support the evidence of PW1. It seems Ex.P1 M.O.U. is self prepared document which is in type writing and obtained thumb impression of 8 Fair Judgment STC NI.No. 650 of 2023

Accused, No doubt Ex.P2 cheque pertaining to the Accused Account and it is in the hands of PW1. Accused says it was stolen and filed this case, since the initial burden is on the Complainant. The Accused has got right to rebutt the presumption u/Sec.139 of N.I.Act, by way of cross, there is no necessity to the Accused to enter in to the witness box.

The counsel for the Accused relied on the following rulings in support of his citations

1.Kaveri Plastics Vs. Mahdoom Bawa Bahrudeen Noorul 2025 Live

Law (SC) 927

2.A C Sreeram Vs. Sumija J High Court of Karnataka, Criminal

Appeal No.194 of 2015 dt.05.02.2025

3.2025 Live Law SC (SC) 889 Criminal Appeal No. 2025 arising out of SLP (Crl.) No.2002/2025, H.S. Oberoi BuildTech Pvt. Ltd & Others.

Vs. M/s.Wootech

On the other hand the counsel for the Complainant contended that, the accused admitted that the cheque Ex.P2 was signed and issued to the complainant and returned under Ex.P3 for Insufficient Funds, though the

Complainant issued legal notice Ex.P4, Accused received the same failed to pay cheque amount; and complainant proved all necessary ingredients u/sec. 138 of N.I.Act. The counsel further contended that, the Accused has taken vague defence that Ex.P2 cheque was stolen and further contended that, the Accused not produced any defence evidence nor gave any complaint to police and failed to discharge the heavy burden placed upon him, the presumption u/Sec.118, 139 N.I.Act therefore the stand unrebutted and strengthened and prayed to convict the Accused.

9 Fair Judgment STC NI.No. 650 of 2023

I have carefully gone through the entire evidence on record and documents filed by PW1 Ex.P1 to Ex.P6, and also gone through the rulings cited, by defence counsel.

Admittedly this complaint is filed by the complainant/Shaik Riyaz but the Chief Affidavit evidence filed by, Sri Gulam Taher Siddiqui who appointed as GPA Holder, but at the time of filing his Chief Evidence he has not marked the GPA to proceed on behalf of Complainant who is in abroad, so, this complaint is prime facie not maintainable. Coming to the averments of Complainant and chief affidavit are quite contradictory and

G.P.A. holder PW1 is not having knowledge of the transaction between the Complainant and Accused, unless the complainant entered in to the witness box to prove the alleged transaction and issue of cheque. If really complainant lend the amount of Rs.16,50,000/- to the accused he should have mentioned the date and place of transaction in his complaint. PW1 unable to say date and place in his cross, complainant also not stated in his complaint nor in the chief evidence, as to how he secured the alleged huge amount of Rs.16,50,000/- and also not stated on which date and place where the Accused paid Rs.1,50,000/-. Admittedly the alleged transaction took place between complainant; but four (4) cheques issued in the name of different persons, including Complainant Ex.P2 is subject cheque, the Complainant should have examined one of the attestor of

Ex.P1, to prove consideration the complainant also not shown the alleged amount in his Income Tax returns, as per version of PW1 in his cross, he filed suit vide O.S.No.2771/2021 before III Junior Civil Judge, copy of the suit not filed, no doubt Accused has not given any complaint to Police 10 Fair Judgment STC NI.No. 650 of 2023 about the theft of cheques, but complainant cannot take any advantage by keeping the cheque with him the initial burden is on the complainant to prove the alleged transaction, with probable evidence, but the

Complainant failed to examine any supporting witness, in whose presence the alleged transaction took place. If Complainant taken the amount from other cheque holders, and given to the Accused, he should have examined them, the same is not mentioned in his complaint.

I have gone through the rulings filed by defence counsel which are applicable to the case on hand.

So in view of aforesaid discussion, I hold that the Complainant failed to prove the necessary ingredients u/Sec.138 of N.I.Act against the

Accused, beyond all reasonable doubt, the Accused rebutted the presumption u/Sec.139 of N.I.Act.

In the result, the Accused is found not guilty for the offence u/Sec.138 of Negotiable Instrument Act. Accordingly, he is Acquitted u/Sec.255(1) Cr.P.C. The Bailbonds of Accused shall stands cancelled after expiry of appeal time.

Directly typed to my dictation by the steno of this court, corrected, on this the 19 th day of January, 2026.

Sd/-

VI JUDICIAL MAGISTRATE OF FIRST CLASS,

HYDERABAD.

11 Fair Judgment STC NI.No. 650 of 2023

APPENDIX OF EVIDENCE

WITNESSES EXAMINED ON BEHALF

FOR COMPLAINANT :

PW1 – Gulam Taher Siddiqui

FOR DEFENCE :

DW1 - Nil

EXHIBITS MARKED FOR THE COMPLAINANT;

Ex.P1: is the M.O.U. dt.25.07.2019.

Ex.P2: is the Original Crossed Cheque bearing No.137528 dt.

18.03.2020 for Rs.3,75,000/- drawn on State Bank of India,

Kachiguda Branch, Hyderabad.

Ex.P3: is the Cheque Return Memo issued by Kotak Mahindra dt.20.03.2020

Ex.P4 : is the office copy of Legal Notice dt. 10.04.2021.

Ex.P5 : is the Original Postal receipt dt.10.04.2021.

Ex.P6.: is the Postal track Consignment report.

EXHIBITS MARKED FOR DEFENCE:

- NIL-

sd/-

VI JUDICIAL MAGISTRATE OF FIRST CLASS,

HYDERABAD

//TRUE COPY//

1 Fair JudgmentCC.NI.No. 4278 of 2022

IN THE COURT OF THE VI JUDICIAL MAGISTRATE OF FIRST

CLASS :: HYDERABAD.

PRESENT: Sri. P Shyam Prasad, VI Judicial Magistrate of First Class,

Hyderabad.

Tuesday, the 30thday of December, 2025

CC. NI. No.4278 OF 2022

Between:-

M/s. V.S. Projects, Rep. by its Managing Partner, Mr. Meka Venkatarathnam, S/o. Late Krishnaiah, Aged : 44 years, R/o. Flat No.G1, Royal Banjara Apartment, H.No.8-2-695/R, Road No.12, Meenakshi Towers, Banjara Hills, Khairathabad, Hyderabad.

...Complainant

AND

1. Mr. Saket Talwar, S/o. Sunil Talwar, Age : 39 years, Occ : Business, R/o. H.No.8-2-293/82, Plot No.26, Huda Heights, MLA Colony, Lotus Pond, Banjara Hills, Road No.12, Khairatabad, Hyderabad.

2. M/s. Sakaal Paintings, Rep. By its Authorised Signatory, Mr. Saket Talwar, S/o. Sunil Talwar, Age : 39 years, Occ : Business, R/o. H.No.8-2-293/82, Plot No.26, Huda Heights, MLA Colony, Lotus Pond, Banjara Hills, Road No.12, Khairatabad, Hyderabad.

… Accused 2 Fair JudgmentCC.NI.No. 4278 of 2022

This case is coming on before me for final hearing on 29.12.2025 in presence of M/s.Kuriti Bhaskara Rao and other Counsels for complainant and M/s.V.Raj Prakash, counsel for accused, hearing upon their arguments, and having stood over for consideration till this day, the court delivered the following :-

-: J U D G M E N T:-

1. This complaint is filed by the Complainant herein through his counsel against the Accused U/Sec. 200 Cr.P.C for the offence u/sec.138 of N.I.Act with the following averments.

The Complainant has purchased an extent of 4 acres 34.05 guntas situated at Penjerla village Gram Panchayat, Kothur Mandal,

Ranga Reddy District through Registered sale deed from Pattadars in

Survey No. 323/RU, 324/RUU, 328/AA5, 329/RUU, 329/EE/A, 323/U, 324/RUU, the complainant has obtained DTCP approved layout vide

LP.No.91/2007/HRO/H2 from the Regional Deputy Director, Town &

Country planning Hyderabad in the name and style of “VALENCIA

TOWN”, Block H, and the complainant has put for sale of their plots to the different individuals.

3 Fair JudgmentCC.NI.No. 4278 of 2022

The Complainant further averred that, A1 approached him through mediator that he wants to purchase plots more than 1000 yards and he expressed that he is a businessman and having crores of turnover and he expressed that he want to purchase Plot Nos. 24,25,26 and 67 in

Block H, altogether 1063 Sq. Yards in the above Sy.Nos. Situated at

Valencia Town, Penjerla Gram Panchayath, the complainant has blocked the above plots thereafter A1 requested the complainant firm that he want to purchase the above plots by way of Registered Document.

It is further averred in the complaint that, the Accused A1 has expressed that right now he does not possess cash on hand and he will issue cheque for Rs.16,00,000/- (Sixteen Lakhs) which will include all development charges maintenance charges to his plot, and cheque issued by A1 for Rs.16,00,000/- who is authorized signatory on behalf of

A2 company and requested to present the cheque No.18.06.2019 for clearance.

4 Fair JudgmentCC.NI.No. 4278 of 2022

When complainant presented the cheque on 18.06.2019 in his

Account Bank, ICICI Bank, Banjara Hills, branch, the same is returned with memo dt. 19.06.2019 for the reason “Payment Stopped by

Drawer”.

After informing the same to the accused, he got issued legal notice

dt. 26.06.2019 to the Accused No.1 and 2 through Speed Post the

Accused received the same on 29.06.2019, due to typographical mistake, the complainant got sent the Corrigendum Notice on 08.07.2019, and the same also received, but the Accused failed to repay the cheque amount nor gave reply, and approached the court to punish the Accused u/Sec.138 of N.I.Act and to award Compensation u/Sec.357

Cr.P.C.

2. After filing Sworn Affidavit of the Complainant before the III Addl.

CMM, Hyderabad on 22.01.2020, took the cognizance u/Sec.138 of

N.I.Act has been taken against A1, A2 and numbered as CC.578/2020.

Subsequently transferred to this Court and renumbered as CC. 20/2021 5 Fair JudgmentCC.NI.No. 4278 of 2022

3.On appearance of the accused before this court, copies furnished to the Accused U/sec.207 Cr.P.C.

4.The Accused is examined u/sec.251 Cr.P.C., and the Accused denied the contents of complaint.

5.During Trial the complainant filed his chief affidavit evidence on 11.07.2023 Ex.P1 to Ex.P6 are marked, he was cross examined and closed the complainant evidence.

6.Accused is examined u/Sec.313 Cr.P.C. He denied the evidence of

PW1, he himself examined as DW1 and Ex.D1 marked defence closed.

7. Heard both sides. Both sides submitted their written arguments.

8. Now the point for determination is whether the complainant has proved the necessary ingredients u/Sec.138 of N.I.Act against the

Accused beyond all reasonable doubt.

POINT 6 Fair JudgmentCC.NI.No. 4278 of 2022

As per the settled proposition of law, the initial burden is cast upon the complainant to prove the alleged transaction.

Complainant examined as PW1, and deposed as per the contents of complaint, and marked the following documents:-

Ex.P1: is the Attested copy of Sale Deed document No.5971/2019 dt.14.05.2019. Ex.P2: is the Original Cheque bearing No.000060 dt. for Rs.16,00,000/- , dt.18.06.2019. Ex.P3: is the Cheque Return Memo, dt.19.06.2019. Ex.P4 : is the two postal receipts dt. 28.06.2019. Ex.P5: is the office copy of Legal Notice dt. 26.06.2019. Ex.P6:is the postal track consignment report.

Complainant evidence closed.

The complainant is harping upon the statutory presumption u/Sec.139 of N.I.Act, contended that when once the cheque is issued by the Accused, the presumption shall be that it is towards discharge of legally enforceable debt. There is no dispute about the statutory presumption contained in Sec.139 of N.I. Act, but it is rebuttable presumption. So, we have to see whether the Accused has rebutted the presumption u/sec.139 of N.I.Act.

7 Fair JudgmentCC.NI.No. 4278 of 2022

The counsel for the complainant contended that, the amount paid under Ex.D1 is not the amount pertaining to this case, as the Accused purchased number of plots by way of other sale deeds from the same venture issued different cheques and those cheques also dishonored, and the amount paid by the complainant is not the amount of present cheque account, which is pertaining to the other plots and prayed to convict the Accused.

On the other hand, the counsel for the Accused contended that the cheque Ex.P2 issued a blank cheque without date for security purpose, complainant without knowledge of the Accused filled two cheques with date and amount without his consent present the same in the bank, after it is returned, after receiving legal notice, the Accused paid the

Rs.16,00,000/- to the complainant under RTGS under Ex.D1 and admitted the same by PW1 in his cross, when accused demanded for return of his blank cheque, the same is misused and filed this case for wrongful gain and prayed to dismiss the complaint.

On perusal of the cross of PW1, he says he do not remember for how much amount he sold the property under Ex.P1 but Accused issued 8 Fair JudgmentCC.NI.No. 4278 of 2022

Ex.P2 cheque for Rs.16,00,000/-. He admitted that he did not mentioned the date of cheque in Ex.P1. He denied the date of cheque in Ex.P1. He denied the suggestion that Ex.P2 issued towards a security and it was not issued for payment of any legal liability. He further says the date was written on Ex.P2 by one Venkateshwarlu who is his partner. He denied the suggestion that receiving legal notice Accused transferred

Rs.16,00,000/- to his account through RTGS.

On the other hand Accused himself examined as DW1, and deposed that, he is well acquainted with the complainant and agreed to purchase plots 24,25,26 and 67 in M/s. VALENCIA TOWN for total consideration of Rs.24,50,500/- at the time of executing Registered sale deed, he paid Rs.8,50,000/- by way of Cash and agreed to pay balance amount Rs.16,00,000/- within 3 months and executed registered sale deed document No.5971/2019 dt.14.05.2019 and complainant demanded undated cheque for Rs.16,00,000/-, accordingly he issued

Ex.P2 cheque as mentioned under Ex.P1 and complainant agreed to return the security cheque after receipt of amount. Complainant without his knowledge by filling the date presented the cheque in his account 9 Fair JudgmentCC.NI.No. 4278 of 2022 bank which was return after receiving legal notice he repaid the cheque amount under RTGS, by misusing the undated cheuqe he filed this case for wrongful gain. He filed Bank statement marked as Ex.D1. In the cross, he says after receipt of legal notice from the complainant he paid the entire amount to the complainant through RTGS on 02.07.2019 marked as Ex.D1. He denied the suggestion that the said cheque is not pertaining to this liability. Further cross deferred but counsel for complainant failed to further cross examination and closed as Nil.

I have carefully gone through the entire evidence on record and documents filed by both parties. As per the contents of Ex.P1, PW1 offered to sale plots 24, 25, 26 and 67 in the Sy.Nos.323, 324, 328, 329 to an extent 21063 Sq.yards for sale consideration Rs.8,50,500/-, as per sale deed the complainant received the same amount by way of cheque, the accused says he gave cheque Ex.P2 for Rs.16,00,000/- without date to the complainant, for security purpose, but not issued for any payment of legal debts, the accused further says without his knowledge and consent the complainant put the date on the cheque and presented in the bank for clearance and later it was returned under memo as 10 Fair JudgmentCC.NI.No. 4278 of 2022 “Payment Stopped”. The complainant says the accused issued cheque

Ex.P2 to discharge his liability, towards purchase of plots and maintenance charges for Rs.16,00,000/-, as he was not possess cash in his hand. During cross examination PW1 admitted that the date was written on cheque by one Venkateshwarlu, who is his partner. The

Accused as DW1 says the total sale consideration of the above plots

Rs.24,50,500/- at the time of executing Registered sale deed, he has paid an amount of Rs.8,50,000/- by way of cash and agreed to pay balance amount of Rs.16,00,000/- with in period of two months, for which the complainant agreed and executed Registered Sale Deed, under Ex.P1 when the complainant demanded to issue undated cheque, the Accused issued Ex.P2 cheque Rs.16,00,000/- towards security the complainant after return of the cheque from bank, got issued legal notice under Ex.P5, the Accused received the same and paid

Rs.16,00,000/- to the complainant through RTGS on 02.07.2019, under

Ex.D1. It is admitted in the cross examination by DW1. The complainant counsel suggested to DW1, the cheque is not pertaining to this liability by taking wrong defence of security cheque. There is no further cross examination by the complainant counsel on all aspects though this court 11 Fair JudgmentCC.NI.No. 4278 of 2022 granted sufficient time finally, the further cross examination treated as

Nil. The evidence of DW1 clearly shows that, the accused has already paid Rs.16,00,000/- to the complainant under Ex.D1, but the complainant not produced any further evidence either in oral or documentary proof, to show that the subject cheque pertaining to other transaction, when the initial burden is cast upon the complainant, it is for him to prove the alleged transaction, but the accused rebutted the presumption u/sec.139 of N.I.Act with probable defence showing that the amount under Ex.P2 has already paid, without consent of the accused he filled the date with one Venkateshwarlu and submitted in the bank for clearance, after receipt of notice the accused paid cheque amount through RTGS. The complainant cannot take any advantage by keeping the cheque issued by the Accused for security purpose when he received the entire amount it is for him to return the cheque and filed this case with dishonest intention. There may be other transaction between the accused and other persons regarding land transaction but there is no evidence on record to prove the same.

12 Fair JudgmentCC.NI.No. 4278 of 2022

In view of my aforesaid discussion, I hold that the complainant failed to prove the necessary ingredients u/Sec.138 of

N.I.Act against the Accused beyond reasonable doubt. The Accused rebutted the presumption u/Sec.139 of N.I.Act.

In the result, the Accused No.1 representing of Accused No.2 is found not guilty for the offence u/Sec.138 of Negotiable Instrument Act.

accordingly, the accused is acquitted u/Sec.255(1) Cr.P.C. The Bailbonds of Accused shall stands cancelled after appeal time.

Directly typed to my dictation by the steno of this court, corrected, on this the 30 th day of December, 2025.

Sd/-

VI JUDICIAL MAGISTRATE OF FIRST CLASS,

HYDERABAD.

13 Fair JudgmentCC.NI.No. 4278 of 2022

APPENDIX OF EVIDENCE

WITNESSES EXAMINED ON BEHALF

FOR complainant :

PW1 – Meka Venkatarathnam

FOR DEFENCE :

DW1 - Saket Talwar

EXHIBITS MARKED FOR THE COMPLAINANT;

Ex.P1: is the attested copy of Sale Deed document No.5971/2019 dt.14.05.2019. Ex.P2: is the Original Crossed Cheque bearing No.000060 dt. for Rs.16,00,000/- drawn on HDFC Bank, Banjara Hills, dt.18.06.2019. Ex.P3: is the Cheque Return Memo issued by ICICI Bank, Banjara Hills, dt.19.06.2019. Ex.P4 : is the two postal receipts dt. 28.06.2019. Ex.P5: is the office copy of Legal Notice dt. 26.06.2019. Ex.P6:is the postal track consignment report.

EXHIBITS MARKED FOR DEFENCE:

Ex.D1 :is the bank statement issued by HDFC for the period from 01-01-2019 to 31.12.2019 for the account Sakaal Paintings consists of 2 pages.

Sd/-

VI JUDICIAL MAGISTRATE OF FIRST CLASS,

HYDERABAD

//TRUE COPY//