Smt S.arunasri

1

IN THE COURT OF THE ADDL. CHIEF JUDICIAL MAGISTRATE:

GANNAVARAM

Present: Dr.Smt.S.Aruna Sri Addl. Chief Judicial Magistrate, Gannavaram

Thursday, this the 14th day of May, 2026

CC.No.01/2024 (OLD C.C.NO. 06/2023, 187/2022)

Between: Musunuru Ratna Bose, S/o Venkata Subba Rao, Ex MLA, aged 74 years, R/o 2-79/1, Main Road, Gannavaram Village, Gannavaram Mandal, Krishna District. …Complainant.

And

Kuragayala Siva Kumar, S/o Late K.Satyanarayana, R/o Flat No.24, Kamalesh Enclave, 7/3 Chandramoulinagar, Guntur. … Accused.

This case has came up before me on 11.05.2026 for hearing in the presence of Sri Ch.Anjaiah, Learned counsel for complainant and the counsel for accused Sri C.Raghuramireddy and Sri V.Raja Sekhar Reddy, and upon hearing having stood over to this day for consideration, this court, delivered the following:

J U D G M E N T

1. This is a private complaint filed by the complainant under section 190 and 200 of Criminal Procedure Code, 1973 against the accused for the offence punishable U/Sec.138 r/w 142 of Negotiable instrument act 1881 (herein after referred to N.I. Act for brevity).

2. As per the complainant, the chain of facts unfolded in the following manner ;

a). The complainant/ Musunuru Ratna Bose is the Ex MLA, Resident of

Gannavaram Village, on knowing the potential of complainant, accused 2 approached the complainant with an ill motive to sell scheduled property to the complainant, in spite of knowing the fact that the said property is completely under the control of SEBI. The complainant believed the words of accused and accepted the offer made by the accused and entered into a sale agreement on 11.07.2019, as per the terms and conditions of the said agreement,accused received Rs.30,00,000/- as advance sale consideration.

Subsequently, the complainant came to know about the litigation surrendered to the property. The complainant discussed with accused relating to the schedule property and requested him to refund the sale consideration with interest at the rate of 24% per annum starting from the date of agreement of sale I.e 11.07.2019. accused confessed his malafide intention and settled the matter in the presence of elders and he agreed to refund the sale consideration amount with 24% interest rate per annum from the date of agreement of sale and gave Rs.5,00,000/- as a part of such refund.

b). Further the complainant repeatedly requested the accused but accused failed to perform his part of contract. On 11.11.2021, complainant having no other option approached the accused and informed to him that he will be initiated legal action against him on that on 15.11.2021, accused issued three cheques to the complainant and duly signed by the accused ie.

cheque bearing No.649213 for sum of Rs.30,00,000/-, another cheque bearing No.067060 for sum of Rs.7,45,966/- and another cheque bearing

No.067059 for a sum of Rs.7,45,966/- towards part payment of legally enforceable debt.

c). The complainant presented the said cheque bearing No.649213 drawn at SBI, Tadipatri, Ananthapur branch for sum of Rs.30,00,000/- through his banker SBI Branch, Srinagar colony, Gannavaram on 06.12.2021 and the same was returned vide return memo dated 06.12.2021 3 endorsed that ‘funds insufficient’. After receipt of memo complainant got issued statutory notice on 20.12.2021 to the accused by demanding to pay the cheque amount but accused received the notice on 08.01.2022 and gave reply with false and frivolous allegations. Hence, the complainant filed this complaint before this court.

3.The learned XII Addl.Metropolitan Magistrate Court, Gannavaram perused the entire record and sworn affidavit of the complainant, took cognizance of the offence u/s 138 r/w 142 N.I.Act and numbered as

CC.No.187/2022 and summons issued to the accused.

4. After receipt of summons accused appeared before court and copies furnished to him. The accused was examined U/s.251 of Cr.P.C and the substance of accusation for the offence u/s 138 N I Act and he pleaded not guilty and claimed for trail.

5. In pursuance of his case, the complainant himself examined as PW1, and got marked Ex. P-1 to P6 documents, on his behalf Pw2 to 4 were examined, at the stage of cross examination of PW.1, this case was transferred to the Spl.Magistrate Court, Gannavaram as per the orders of

Hon’ble District Court in Dis.No.4196 dt.02.06.2023 and renumbered as

C.C.No.06/2023. PW.1 was examined in cross, on his behalf PW.2, PW.3 filed their chief examination affidavits at the stage of cross examination of

PW.2 and PW.3, this matter was transferred to this court ie. Addl. chief

Judicial Magistrate court-cum-Civil Judge(Senior Division) and renumbered

as C.C.No.01/2024.

6. After closure of complainant’s evidence, the accused was examined under Sec.313 Cr.P.C, explaining incriminating material available on record and he denied the same. The accused reported for defence evidence. The 4 accused himself examined as DW.1 and on his behalf L.Srinivasa rao examined as DW.2 and got marked Exs.D1 to D11.

7. Arguments heard on either side. The learned counsel for accused filed written arguments.

a). learned counsel for the complainant argued that, the evidence of

P.W.1 to 4, amply substantiated through Ex.P.1 to Ex.P6 and nothing material could be elicited in the cross examination of P.W.1. Thus, the evidence of the complainant itself amply shows the complicity of the accused for the offence u/s 138 NI Act. Accused himself admitted his liability to return the balance sale consideration amount and issuance of cheques are admitted facts as such admitted facts need not be proved. Thus The complainant proved his case beyond all reasonable doubt and the accused is liable for the punishment. He requested the court to record conviction against the accused and sentenced him appropriately as per law.

b). On the other hand, learned counsel for the accused vehemently argued that the evidence of complainant will be nullified even by cross- examination. It is settled principle of law that the complainant is duty bound to unfold his case with consistent and cogent evidence beyond all reasonable doubt. He cannot depend upon the weakness or otherwise the case of the accused. The existence of legally enforceable debt is a conditional precedent to prove the case under Sec. 138 of Negotiable

Instruments Act. PW1 evidence is not trustworthy, PW.2 to PW.4 evidence not corroborated the evidence of PW.1 in any of the material aspects and their evidence is inconsistent among them.

c). Further argued that the accused was cheated in the hands of one

Purushotham and the entire PACL Properties were seized by the CBI in the year 2013, Government of India handed over the case to justice Lodha 5 committee and the properties were controlled by the Lodha committee. The management of the PACL approached the Supreme Court of India and filed

C.A No. 13394/2015, 13410 2015 for release of properties, the said purushottam created fake documents like board resolution of PACL and

SEBI letter and delivered to him, accused believed the version of

Purushottam and executed agreement in favour of the complainant and realized about cheating of Purushottam and approached the complainant and agreed to refund the advance sale consideration with 12% interest and that he paid part payment of Rs.5,00,000/- on 07.07.2021 to the complainant but coerced the accused and obtained three signed unfilled cheques and signed non judicial stamp papers. Accused gave stop payment instructions to his bank and got issued notice dt 17.11.2021 to the complainant not to present the cheques, the complainant got issued reply notice dt 29.11.2021 stating that accused issued cheques on 15.11.2021 for Rs.30,00,000/-,

Rs.7,45,966/-, Rs.7,45,966/- .

d). The accused further argued that date of issuance of cheque was mentioned as 15.11.2021 in Ex.D2, in Ex.P3 and in the evidence of PW.1,but in the cross examination PW.1 stated accused issued cheque on the date of agreement ie.,11.07.2019, on the date when accused gave Rs.5,00,000/- on that day, he issued two filled cheques through his driver. PW.2 and PW.3 deposed that accused issued two cheques on 15.11.2021 further stated he will send one more cheque through his driver but in the cross examination they stated due to typographical mistake date of issuance of cheque was mentioned as 15.11.2021 instead of 06.12.2021.PW.4 deposed that on 06.12.2021 accused issued three cheques to the complainant. Evidence of

PW.1 is inconsistent with regard to date of issuance of cheque PW.2 to

PW.4 also not corroborated the evidence of PW.1 itself shows that there is no legally enforceable debt.

6

e). Further, contended that accused returned Rs.5,00,000/- to the complainant he has to pay balance amount of Rs.25,00,000/- but PW.1 claimed in three cases total an extent of Rs.44,91,932/- how calculated the amount there is no calculation memo filed. Accused has no intention to cheat the complainant and he is the responsible person voluntarily went to the house of complainant and gave Rs.5,00,000/- and agreed to pay balance amount within 6 months, due to financial and family problems he unable to discharge the balance amount. In fact accused was cheated by one Purushottam, accused has no right to execute sale deeds as entire property was seized by SEBI. He also filed connected documentary evidence, complainant did not deny the Ex.D1 to D11 documents. Accused is scape goat in the hands of Purushottam. Complainant did not come to the court with clean hands to harass the accused filed this case suppressing the material facts. Hence he requested the court to dismiss the case.

08. Now the points for determination are :

i). Whether Ex.P1 cheque had been issued in discharge of

legally enforceable debt due to the complainant?

ii). Whether the accused had discharged his burden of proving that Ex.P1 cheque had not been issued for a debt or legally enforceable liability?

Iii). Whether the accused committed the offence under section 138 of N.I. Act?

09.Before adverting to the rival contentions it was seen whether the conditions stipulated under section 138 of Negotiable Instruments Act to invoke the provision or in existence as per the contents of the complainant or not is to be seen. The cheque was issued on 06.12.2021 as per Ex.P1 cheque and it was dishonored on 06.12.2021. Registered legal notice issued on 20.12.2021 and the same was received by the accused and issued reply notice. The complaint is filed on 02.02.2022, which clearly 7 discloses that all the conditions stipulated under section 138 & 142 NI Act is complied with.

10. In these circumstances it is pertinent to have a glance at Section 118 and 139 of NI Act. For a better understanding the section 118 and 139 NI

Act reads as follows:- Sec.118. Presumptions as to negotiable

instruments of consideration. — Until the contrary is proved, the

following presumptions shall be made: —

(a) of consideration — that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration.

Sec. 139. Presumption in favor of holder. — It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, or any debt or other liability.

Thus a perusal of above provision of law and it’s tenor of language

shows that it is mandatory on part of this court to draw the

presumption as to the existence of the consideration and the

instrument in question being drawn for discharge of the whole or part

of an existing liability ( legally enforceable).

11.Thus, it is abundantly clear that there is a statutory presumption which enjoins a duty upon this court to draw a statutory presumption that the cheque was issued only for consideration in discharge of a legally enforceable debt. Thus, the onus is on the shoulders of the accused to disprove that the cheque was not issued by him towards the discharge of legally enforceable debt and that the cheque was not supported by consideration. Thus, in order to rebut the presumption that is drawn under 8 118 and 139 of NI Act the material on record for the accused is that of cross examination of P.W.1 to PW4 and evidence of DW1, DW2. No doubt it is well neigh settled that, in order to rebut the presumption defendant need not get in to witness box he can as well do it even by cross examination of the witnesses of complainant. Hon'ble apex court held In Krishna Janardhan

Bhat V. Dattatreya G Hegde., AIR 2008 SC 1325,

12. Having heard arguments from both sides and perusing the evidence on record, this court decides the matter as follows:

Point No.1 & 2 : To raise presumption u/s 139 N.I Act that accused had issued Ex.P1 cheque to satisfy part or whole of the debt, it has to be proved that there is existing a legally enforceable debt or other liability, between the complainant and the accused, which is an important ingredient of section 138(NI) Act.

13.Coming to the evidence, the complainant got examined as PW1 and he reiterated the contents of his complaint through his affidavit filed in lieu of his chief examination. As per the evidence of complainant (PW1), the accused is a GPA agent for PACL India Limited, complainant being a

Ex.MLA knowing his potential accused approached him and offered to sell the property situated at Markapuram Sub Registrar, Pedda Dornala Mandal,

Pedda Bommalapuram village, total extent of Ac.91.50 cents, both entered into sale agreement on 11.07.2019 and complainant paid Rs.30,00,000/- advance sale consideration to the accused. Thereafter, he came to know that the said property is completely under the control of SEBI accused knowing fully well suppressed the said fact taking advantage of the innocence of complainant. On demand of the complainant accused agreed to refund the sale consideration with interest @ 24% per annum and gave

Rs.5,00,000/- part of such refund, on 15.11.2021 accused issued three 9 cheques for Rs.30,00,000/, two cheques for Rs.7,45,966/- each. PW.1 presented the said cheques on 6.12.2021 same was returned with endorsement that ‘funds insufficient’. Thereafter PW.1 issued legal notice on 20.12.2021, accused received the same but kept quite. Then PW.1 filed this complaint, through his evidence Ex.P1 to P6 are marked. The accused knowing fully well that he has no sufficient funds in his account issued the cheque, and thereby committed the offence U/s 138 of NI Act. through his evidence Ex.P1 to P6 marked.

14. On behalf of PW.1, one B.Kalyan and L.Murali Krishna examined as

PW.2 and PW.3. they filed chief examination affidavit stating that accused made a sale agreement with complainant in the year 2019 and received

Rs.30,00,000/- as advance sale consideration but accused failed to execute sale deed in favour of the complainant. After that negotiations took place between the accused and complainant in their presence and other elders accused agreed to pay said Rs.30,00,000/- along with 24% per annum.

Accordingly accused paid Rs.5,00,000/- and agreed to issue cheques to the complainant in their presence to discharge the debt and issued two bank cheques on 15.11.2021. Accused further agreed that he will sent one more cheque through driver of the complainant. Thereafter, they came to know cheques presented for en-cashment were dishonored and complainant filed cases against the accused. In re examination of PW.2, PW.3 clarified that date of issuance of cheques are on 6.12.2021 but in their chief affidavits wrongly mentioned that date of issuance of cheques are 15.11.2021.

During their cross examination, PW.2&PW.3 stated that in the year 2019 complainant negotiated with accused to purchase land by that time, they accompanied with complainant, on 06.12.2021 accused returned the

Rs.5,00,000/- to the complainant since land transaction canceled in between them and issued two cheques belongs to SBI and Axis Bank. It 10 was suggested that complainant is relative to the PW.2, PW3 and to help him they are deposing false, witnesses denied the same.

15. PW4 / P.Chitti babu is the driver of the PW1, he filed his chief examination affidavit stating that accused made a sale agreement with complainant in the year 2019 and received Rs.30,00,000/- as advance sale consideration but accused failed to execute sale deed in favour of the complainant. After that negotiations took place between the accused and complainant in their presence and other elders accused agreed to pay said

Rs.30,00,000/- along with 24% rate of interest per annum. Accordingly accused paid Rs.5,00,000/- and issued three cheques to the complainant.

Thereafter, he came to know cheques presented for encashment were dishonored and complainant filed cases against the accused. During his cross examination suggested that PW4 is driver to the complainant to help him deposing false without knowing any thing. Witness denied the same.

16. Firstly, I would like to discuss the cross examination of PW1, as the accused need not step into witness box, he can rebut the presumption by way of cross examination as such cross examination of PW1 is very much essential to the accused as such how far defence counsel elicited the material points in the cross examination of PW.1. In the cross examination, learned defence counsel confronted the legal notice dated 17.11.2021 along with acknowledgment, reply notice of PW.1 dated 29.11.2021 marked as

Ex.D1 & Ex.D2. In the cross examination, PW.1 stated that Ex.P1 is not a blank cheque and it is signed cheque on the date when accused gave

Rs.5,00,000/- he also issued two filled cheques through his driver it was suggested that PW.1 took the two cheques forcibly from accused. In further cross examination PW.1 admitted that accused issued cheque without date for Rs.30,00,000/- on the date of agreement ie. on 11.07.2019, he filled the date on the cheque on the date of presentation of cheque on 06.12.2021.

11 but accused did not deny the said fact suggesting that he did not issue any cheque on the date of Ex.P6. finally it was suggested Ex.P1 is not maintainable as he obtained cheque from accused without date, by threatening the accused witness denied the same. During the cross examination of PW.1 all are denials nothing material could be elicited to discard the version of the complainant except formal suggestions.

17. PW.2 and PW.3 are known persons, PW4 is the driver of the PW1 they totally corroborated the version of PW1 during their cross examination suggested that complainant took the three signed unfilled cheques from accused forcibly, to help the PW1 depose false, except suggestions nothing materiel could b elicited.

18. These are the admitted facts : The accused and complainant are known persons and there is no disputes regarding acquaintance of each other, further in between them there was an Ex.P6 agreement of sale dated 11.07.2019 transaction took place, in pursuance of Ex.P6 sale agreement complainant paid Rs.30,00,000/- to the accused later accused failed to perform his part of the contract,negotiations took place in between them, on that accused returned the Rs.5,00,000/- to the complainant and agreed to return the balance amount with in six months due to financial crises unable to pay the balance sale consideration.

19. On perusal of oral and documentary evidence of both sides accused himself admitted the ExP6 transaction and his liability to return the money to the complainant, non performance of ExP6 agreement of sale is the basis for this case, In general when both paries entered into agreement, they have to perform their part of the contract in the present case, accused failed to perform his part whatever may be the reasons for accused, he has to return the money to the accused thus the said transaction is legally enforceable liability as explained Sec.138 N.I act Explanation.-For the 12 purposes of this section, “debt or other liability” means a legally enforceable debt or other liability. but when cheques were issued, who filled the cheques, how much amount due, what is the interest rate, how the amount covered under the cheques were calculated these particulars are not clear.

Date of issuance of cheque is noted on Ex.P1 is 6.12.2021 but in compliant and chief affidavits of Pw1 to 3 noted as 15.11.2021 but complainant counsel found the same to rectify it, in the re-examination clarified the said fault from PW.2 and PW.3 stating that the date of issuance of cheques noted wrongly as 15.11.2021 instead of 6.12.2021, except mere suggestions there is no cross examination on this aspect to the Pw1 to 3 to shake the veracity of the witnesses and failed to elicit the material facts. Further as per the version of the accused on 07.7.2021 he came to complainant house to settle the matter and returned Rs.5,00,000/- to the complainant but complainant detained him and forced the accused as such accused brought the three cheques and gave the same to the PW1. That means on 07.07.2021, accused gave cheques to the complainant but he gave notice to the complainant on 17.11.2021 with an instructions not to present the cheques under Ex.D1, PW1 gave reply under Ex.D2.

20.Even though, the accused need not step into witness box, he can rebut the presumption by way of cross examination, but in the cross examination failed to elicit the material facts in favour of the defence. The accused himself examined as DW.1 on his behalf L.Srinivasarao examined as DW.2. The accused reiterated his averments in the cross examination of

Pw1 further deposed that one V.Purushotham acquainted to him through mediator Mallareddy, the said Purushotham is the project manager to PACL

India Limited, approached the accused and told to him that their company purchased lands an extent of Ac.91.50 cents at Peda Bomalpuram by way of GPA from different land owners in different survey numbers in the year 13 2004-2005 by way of agreement of sale, GPA. In the year 2018 the said

Purushotham gave GPA to him for Ac.91.50 cents basing on the GPA he intended to sell the said lands in that process PW.1 approached him through mediators and sale price fixed for Rs.2,45,000/- per acre he gave

Rs.30,00,000/- advance sale consideration on 11.07.2019 under Ex.P6 agreement of sale. He sent payments to the persons suggested by said

Purushotham by way of bank transfer and he has receipts for proof of payments to the others after sending money the said Purushotham not responded to his phone and his phone is switched off. He made enquiries at

Delhi PACL India Limited office came to know the said office was seized by

CBI and handed over to the SEBI through Ludra Committee, he came to conclusion that the said Purushotham suppressed the facts cheated him and MOU given by purushotham is fabricated document and the said purushotham disappeared whereabout not known, his enquiries revealed that Chairman of PACL, Subrathobhattacharya filed a case against PACL directors alleging that the said directors cheated him , the said case was pending in Delhi Court in Civil appeal No.13301/2015. Thereafter mediator

Mallareddy gave one fabricated letter allegedly issued by SEBI in favour of

Purushotam stating that SEBI accorded permission to get register the said land Ac.91.50 cents at Pedabommalapuram village, he suspected the letter made enquiries and came to know the matter is fabricated.

21. Accused further deposed that in meanwhile he tried to settle the matter by refund the money to the PW.1 but he insisted for land instead of refund of money on 07.07.2021 he went to the house of PW.1 with

Rs.5,00,000/- cash along with his driver Rambabu, mediator Mallareddy and

V.Kasulu, he agreed to give remaining amount within six months along with 12% interest but complainant detained him in his house after receipt

Rs.5,00,000/- cash and threatened him without giving cheques they will not 14 leave the accused as such, his driver Rambabu went to the house of accused in Guntur and brought the three filled cheques. Accordingly he signed in the said three cheques without filling the columns. On 17.11.2021, he issued notice to the complainant through his counsel and also issued stop payment instructions to the bank on 29.11.2021, complainant sent reply notice to the accused through his counsel with false averments stating that he himself voluntarily issued cheques on 15.11.2021 but not on 07.07.2021.

On 02.12.2021, the accused sent rejoinder to the complainant with an instructions not to present the cheque but the said rejoinder notice received by complaint counsel Sri Benarji but complainant not received notice with an endorsement that complainant is absent. Complainant presented the said three cheques through his bank even though he gave stop payment instructions to the bank, he has no intention to cheat the complainant and it is not legally enforceable debt hence he requested the court to acquit him.

During his cross examination he admitted the recitals in Ex.P6 agreement of sale further admitted that he failed to perform his part of contract he requested the complaint to grant six months time to return balance advance amount, he failed to give balance amount to the complainant with in six months, further admitted that he issued three cheques. on perusal of DW1 evidence it is no way useful to his contest.

22.Accused summoned the L. Srinivasarao, who is the clerk in the State

Bank of India, Srinagar Branch, Gannavaram, examined as DW.2 he deposed that he received summons from court. Ex.P1 cheque presented in his branch since payee is his customer they accepted the said cheque it is valid upto Rs.10,00,000/- however they accepted the said cheque since there is no balance in the account of the accused he issued cheque return memo stating that ‘insufficient funds’. He identified his signature on the back side of Ex.P1. Learned counsel for the complainant questioned that Ex.P1 15 cheque is valid upto Rs.10,00,000/-, how he received the cheque from complainant without return the same on the ground of invalid for that he replied initially they received the cheque for verification of signature and balance then they will return the same for want of sufficient funds. Further stated that he has no malafide intention to give the endorsement as ‘insufficient funds’. During his cross-examination, he stated that whenever customer presented cheque they will verify the balance amount of the said customer, if sufficient balance amount is available in the account they will verify the signature of the customer, in case the customer issued stop payment instruction to his mother branch there is no chance to know the same to the another branch. By examining the DW2 no useful material was elicited in favour of the accused.

23.After perusing the entire evidence on record complainant successful proved that Ex.P1 cheque was issued towards discharge of legally enforceable debt or liability. Now the sole point for consideration is how much amount due to the complainant, basing on the case record it is clear that DW.1/accused received Rs.30,00,000/- towards advance sale consideration thereafter the accused returned Rs.5,00,000/- to the complainant and remaining Rs.25,00,000/- is outstanding amount to the complainant but complainant claimed interest at the rate of 24% per annum from the date of agreement of sale whereas in Ex.P6 recited 18% interest but accused claimed that he agreed for 12% interest and accused not denied his liability but contended that complainant claiming excess interest and he did not issue cheque voluntarily and forcibly obtained unfilled signed cheques for that accused issued legal notice to the complainant under

Ex.D1 on 17.11.2021 where as on 07.07.2021 complainant took cheques why he waited for 4 months, 10 days to give legal notice to the complainant moreover immediately after threatening and detained the accused, he did 16 not give any police report and no explanation was offered for not giving notice to the complainant immediately. Accused mainly disputing the interest rate and manner of issuance of cheques but not his liability. However accused did not examine any of the persons who accompanied with him at the time of negotiations with complainant to prove his contention that he negotiated interest rate @ 12% per annum, for that accused explained his driver Rambabu, mediator Mallareddy are no more but another person

V.Kasalu is alive but accused failed to examined the said person on his behalf.

24. This Court carefully perused the oral and document evidence available on record and in the cross-examination of PW1 nothing material could be elicited by the accused to disprove the case of the complainant and accused adduced evidence is no way helpful to the accused case. Accused himself admitted his liability to return the amount to the PW1 further accused pleaded he was also cheated by others in the transaction of Ex.P6 and filed some documents to prove his innocency in the said transaction. Assuming a movement accused was cheated in the hands of V.Purushotham, it is in between the accused and the said Purushotham, whether accused took any legal action against said V.Purushotham is no evidence but complainant is no way concerned with the hardship and difficulties to perform the Ex.P6 agreement, it is the duty of the accused to return the money to the complainant more over the accused since begging expressed his intention to return the advance amount but due to financial crises he unable to pay the money, by way of admitting the case and expressed his intention to return the money to the complainant but argued minor discrepancies like on which date accused issued cheques, either force or voluntary, to prove the said discrepancies did not adduce any positive evidence and his evidence as Dw1 is no way useful to his contest since his cross examination by and 17 large all are admissions made by the accused. Admittedly several negotiations took place between them after this cases filed before the court too, as such both parties gave different dates to suit their version and accused failed to disprove the version of the complainant by way of cross examination of complainant and adducing his evidence since heavy burden lies on him u/s 139 N.I act.

25. Learned counsel for accused relied on the decisionreported in

Crl.Appeal No.04/2023 in between Vardhineedi Sriramanjaneyulu Vs.

Yeeda Sasibhushan, dated 09.04.2025. where in held that complainant failed to prove the existence of legally enforceable debt in between complainant and the accused, financial capacity of the complainant to lend such an amount, complainant did not produce any documents to show that he gave said amount to the accused. Hon’ble court referred the decision of

Hon’ble Apex Court reported in Crl.Appeal No.636 of 2019 in between

Basalingappa Vs. Mudi Basappa on 09.04.2019.

This court carefully perused the decisions relied by the accused with due respects of Hon’ble ladyship facts and circumstances are different not applicable to the present case facts.

26.These basic facts of the case inspire the invocation of the legal presumption U/Sec.139 of NI Act in favour of the complainant. Thus, the initial burden, that the accused gave cheques to the complainant, is discharged by the complainant. Considering all this, this court is of the opinion that the PW1 established the factual basis for raising such presumption through his evidence. Hence the presumption U/Sec.139 of NI

Act is available for the complainant.

27. S.139 of N.I.Act says that the court has to presume unless the contrary is proved that the holder of the cheque received the cheque for discharge in whole or in part of a debt or liability. This presumption is 18 rebuttable. Now it is the burden of the accused to establish that the Ex.P1 cheque had not been issued for a debt or legally enforceable liability i.e.,not of the nature referred to in Sec.138 of N.I Act. But the material elicited through the cross examination of PW1 is not sufficient to make the contention of the accused probable and sufficient to rebut the presumption.

After considering the entire evidence and material available on the record it appears to me that the contention of the accused is not probable and not convincing.

28.The perusal of the record, reveals that the circumstances raised by the defence are not enough to damage the credibility of the complainant case. There is absolutely no justification for discarding the complainant's case. Though the burden of the accused can not equally be compared with that of the complainant, I don't think that the evidence adduced by the accused is sufficient to rebut the presumption. Hence this court is of the opinion that the accused has failed to discharge his burden in proving that he has not issued the cheque in discharge of debt or liability as contended by him. Thus Point Nos 1 and 2 are answered in favour of the complainant.

29. Point No.3:

Coming to the Ex.P1, it is not the plea of the accused that the complainant forged the signatures on it. On the other hand accused admits his signature on it. There arises a presumption U/Sec.118(a) of N.I.Act, that cheque was issued for consideration. As seen, The complainant deposed and produced before the court the required documents that the Ex.P1 was dishonored for want of funds under Ex.P2 (cheque return memo), that legal notice under Ex.P3 there of was issued ,within the time allowed by the law.

30. In view of Sec.146 of N.I.Act, bankers slip is prima facie evidence and it does not require any supporting evidence. Admittedly Ex.P3 memo issued by the bank authorities discloses that the cheque has been 19 dishonoured due to FUNDS INSUFFICIENT in the account of the accused.

Further it is not the endorsement of the authorities that the accused was not having any account in their bank, so also his signatures were not tallying with that of the signatures mentioned in Ex.P1.

31. Thus the basic ingredients that the cheque was given, it was presented and dishonored, that written notice was given to the accused and same was received by the accused proved by the complainant hence point no.3 is answered in favour of the complainant.

32. In view of the failure of the accused to dislodge the version of the prosecution and in the light of the discussion of Point No.1 to 3, this court holds that the accused has committed offence U/Sec.138 of N.I.Act.

33. In the result, the accused is found guilty for the offence under sec.138 of NI Act accordingly accused is convicted U/Sec.255(2) of Cr.P.C.

Typed to my dictation to the Stenographer directly and corrected and

pronounced by me in open court on this the 14th day of May, 2026.

Addl. Chief Judicial Magistrate, Gannavaram

Hearing on quantum of sentence:

Accused is questioned with regard to quantum of sentence that can be imposed, for which he submitted that he is suffering from ill health and sustained huge financial loss and his entire family depend upon him.

Hence, he requested the court to take lenient view. This court is conscious that legislation has incorporated section 138 of the Act to curb the practices of issuing cheque without any funds and to bring harmony in business transactions. The nature of offence and the mode in which it was committed do not warrants the application of beneficial provisions of P.O.Act.

20

The Hon'ble SUPREME COURT in 'R. Vijayan Vs Baby and another' '[2012(1) S.C.C 260]' held that granting of compensation is must in cheque bounce cases to maintain uniformity in the decisions of the courts. It was held that “As the provisions of Chapter XVII of the Act strongly lean towards grant of reimbursement of the loss by way of compensation, the courts should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy fine upto twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount as compensation. Direction to pay compensation by way of restitution in regard to the loss on account of dishonour of the cheque should be practical and realistic, which would mean not only the payment of the cheque amount but interest thereon at a reasonable rate. Uniformity and consistency in deciding similar cases by different courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice.”

In view of the above decision and in the circumstances of this case, I am of the opinion that this is not a fit case to take a lenient view.

Further, there used to be some discussion as to whether the

default sentence can be imposed for non payment of compensation.

The said discussion is settled at rest and it has been held by the

Hon'ble SUPREME COURT in 'K.A.Abbas H.S.A. vs Sabu Joseph &

Anr.' [2010 STPL (Web) 384 S.C (D.B)] arising out of S.L.P (Crl) No. 334

of 2008 that default sentence can be imposed for non payment of

compensation.

Accordingly, the accused is sentenced to undergo simple

imprisonment for a period of Six months and to pay a compensation of

Rs. 30,00,000/- under section 357(3) of Cr.P.C to the complainant in this

case, in default, to suffer simple imprisonment for further period of

21

Three months. The accused is entitled for set off of remand period,

U/s. 428 of Cr.P.C from the substantial sentence, however, in this Case,

the accused never undergo judicial custody for any period. This Court

explained the right of appeal to the accused with free legal aid before

the Hon'ble District & Sessions Court, within 30 (thirty) days. Free

copy of judgment is furnished to the accused.

Typed to my dictation by Stenographer corrected and pronounced by me in open court on this the 14th day of May, 2026.

Addl. Chief Judicial Magistrate, Gannavaram

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

For Complainant: For Accused :

PW1 : M.Ratna BoseDW.1 –K.Siva Kumar. PW2 :Vempati KalyanDW.2 – L.Srinivasarao. PW.3: Lanka Murali Krishna. PW.4: Pendem Chittibabu.

DOCUMENTS MARKED

For Complainant:

Ex.P1 : Cheque bearing No.649213 for Rs.30,00,000/- executed by accused in favour of petitioner.

Ex.P2 : Cheque return memo dated 06.12.2021 from SBI, Srinagar colony,

Ex.P3 : Office copy of legal notice, dated 20.12.2021.

Ex.P4 : Postal acknowledgment for service of legal notice,

dated 08.01.2022.

Ex.P5 : Office copy of reply notice, dated 17.01.2022 issued by accused to the complainant through counsels.

Ex.P6 : Unregistered agreement of sale dated 11.07,.2019 executed by; the accused in favour of complainant.

22

For Accused :

Ex.D1: Legal notice dated 17.11.2021 along with acknowledgment(marked through PW.1)

Ex.D2 : Reply notice of PW.1, dt.29.11.2021(marked through PW.1)

Ex.D3: Certified copy of agreement of sale cum GPA bearing No.1483/2005,

dated 23.05.2005.

Ex.D4 :Minutes of board of directors of PACL Limited, dated 05.05.2014, (since it is downloaded copy from internet marked subject to objection proof and relevancy)

Ex.D5 :Certified copy of GPA executed by V.Purushotham, Project Manager, PACL Limited, in favour of K.Siva Kumar.

Ex.D6: Original acknowledgment/receipt issued by V.Purushotham,

dated 06.08.2019.

Ex.D7: Online copy of civil Appeal No.13301/2015, dated 23.01.2020.

Ex.D8: Letter addressed by accused to SBI to stop the payment relating to cheque No.649213 with acknowledgment stamp, dated 17.11.2021.

Ex.D9: Office copy of legal notice with two postal receipts,

dated 02.12.2021.

Ex.D10: Acknowledgment of advocate K.Benarjee, dated 04.12.2021.

Ex.D11: Returned registered notice cover of PW.1, dated 09.12.2021.

Addl. Chief Judicial Magistrate, Gannavaram 23

IN THE COURT OF THE ADDL. CHIEF JUDICIAL MAGISTRATE:

GANNAVARAM

CALENDAR & JUDGMENT

CC.No.01/2024 (OLD C.C.NO. 06/2023, 188/2022)

DATE OF :- Offence: 06.12.2021 Filing: 02.02.2022 Apprehension of accused: -- Released on bail: -- Commencement of trial: 09.05.2023 Close of trial: 25.02.2026 Sentence or order: 14.05.2026

Between : Musunuru Ratna Bose, S/o Venkata Subba Rao, Ex MLA, aged 74 years, R/o 2-79/1, Main Road, Gannavaram Village, Gannavaram Mandal, Krishna District. …Complainant.

And

Kuragayala Siva Kumar, S/o Late K.Satyanarayana, R/o Flat No.24, Kamalesh Enclave, 7/3 Chandramoulinagar, Guntur. … Accused. Explanation for delay: This case is taken on file before the XII Addl.Metropolitan Magistrate Court, Gannavaram on 05.03.2022 for the offence under Sec. 138 of NI Act numbered as C.C.No. 187/2022, after appearance of the accused, on 11.10.2022 copies of documents were furnished to him. On 24.01.2023 accused was examined u/Sec.251 Cr.P.C. During the course of trial, on behalf of the complainant, on 9.05.2023 Pw.1 examined in chief and got marked Exs.P1 to P5 and on 17.08.2023, PW.1 further examined in chief and marked Ex.P6 and cross examined Pw.1 in part and Ex.D1 and D2 marked on 05.12.2023 by the learned defence counsel. At the stage of cross examination of PW.1, this case was transferred to the Spl.Magistrate Court, Gannavaram as per the orders of Hon’ble District Court in Dis.No.4196/dt.02.06.2023 and renumbered as C.C.No.06/2023. PW.1 was examined in cross, on 23.04.2024, PW.2 was examined and on 31.07.2024, PW.3 was examined. At the stage of cross examination of PW.2 and PW.3, 24 this matter was transferred to this court ie. Addl. chief Judicial Magistrate court- cum- Civil Judge (Senior Division) and renumbered as C.C.No.01/2024. On 22.09.2025, PW.4 was examined. After the closure of complainant’s evidence, the accused was examined under sec.313 Cr.P.C, explaining incriminating material available on record and he denied the same and reported for defence evidence. On 03.11.2025, DW.1 was examined in chief and Ex.D3 to D11 were marked. On 25.02.2026, as per

Crl.M.P.No.360/2025, DW2 was examined in chief and cross. Hence,

defence side evidence is closed. Arguments heard from both sides. On 14.05.2026 the judgment is pronounced.

Offence: u/Sec. 138 of N.I. Act Plea of accused : Pleaded not guilty. Finding : Found guilty. Sentence or Order:

In the result, the accused is found guilty for the offence under sec.138 of NI Act and accordingly, he is convicted him U/Sec.255(2) of Cr.P.C. Accused is questioned with regard to quantum of sentence that can be imposed, for which he submitted that he is suffering from ill health and sustained huge financial loss and his entire family depend upon him. Hence, he requested the court to take lenient view. This court is conscious that legislation has incorporated section 138 of the Act to curb the practices of issuing cheque without any funds and to bring harmony in business transactions. The nature of offence and the mode in which it was committed do not warrants the application of beneficial provisions of P.O.Act. The Hon'ble SUPREME COURT in 'R. Vijayan Vs Baby and another' '[2012(1) S.C.C 260]' held that granting of compensation is must in cheque bounce cases to maintain uniformity in the decisions of the courts. It was held that “As the provisions of Chapter XVII of the Act strongly lean towards grant of reimbursement of the loss by way of compensation, the courts should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy fine upto twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount as compensation. Direction to pay compensation by way of restitu- tion in regard to the loss on account of dishonour of the cheque should be practical and realistic, which would mean not only the payment of the cheque amount but interest thereon at a reasonable rate. Uniformity and consistency in deciding similar cases by different courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice.” 25

In view of the above decision and in the circumstances of this case, I am of the opinion that this is not a fit case to take a lenient view.

Further, there used to be some discussion as to whether the

default sentence can be imposed for non payment of compensation.

The said discussion is settled at rest and it has been held by the

Hon'ble SUPREME COURT in 'K.A.Abbas H.S.A. vs Sabu Joseph &

Anr.' [2010 STPL (Web) 384 S.C (D.B)] arising out of S.L.P (Crl) No. 334

of 2008 that default sentence can be imposed for non payment of

compensation.

Accordingly, the accused is sentenced to undergo simple

imprisonment for a period of Six months and to pay a compensation of

Rs. 30,00,000/- under section 357(3) of Cr.P.C to the complainant in this

case, in default, to suffer simple imprisonment for further period of

Three months. The accused is entitled for set off of remand period,

U/s. 428 of Cr.P.C from the substantial sentence, however, in this Case,

the accused never undergo judicial custody for any period. This Court

explained the right of appeal to the accused with free legal aid before

the Hon'ble District & Sessions Court, within 30 (thirty) days. Free

copy of judgment is furnished to the accused.

ADDL. CHIEF JUDICIAL MAGISTRATE,

GANNAVARAM

Copy submitted to: The Hon”ble I Addl. District and Sessions Judge, Krishna, Machilipatnam for information.

26

1

IN THE COURT OF THE ADDL. CHIEF JUDICIAL MAGISTRATE:

GANNAVARAM

Present: Dr.Smt.S.Aruna Sri Addl. Chief Judicial Magistrate, Gannavaram

Thursday, this the 14th day of May, 2026

CC.No.01/2024 (OLD C.C.NO. 06/2023, 187/2022)

Between: Musunuru Ratna Bose, S/o Venkata Subba Rao, Ex MLA, aged 74 years, R/o 2-79/1, Main Road, Gannavaram Village, Gannavaram Mandal, Krishna District. …Complainant.

And

Kuragayala Siva Kumar, S/o Late K.Satyanarayana, R/o Flat No.24, Kamalesh Enclave, 7/3 Chandramoulinagar, Guntur. … Accused.

This case has came up before me on 11.05.2026 for hearing in the presence of Sri Ch.Anjaiah, Learned counsel for complainant and the counsel for accused Sri C.Raghuramireddy and Sri V.Raja Sekhar Reddy, and upon hearing having stood over to this day for consideration, this court, delivered the following:

J U D G M E N T

1. This is a private complaint filed by the complainant under section 190 and 200 of Criminal Procedure Code, 1973 against the accused for the offence punishable U/Sec.138 r/w 142 of Negotiable instrument act 1881 (herein after referred to N.I. Act for brevity).

2. As per the complainant, the chain of facts unfolded in the following manner ;

a). The complainant/ Musunuru Ratna Bose is the Ex MLA, Resident of

Gannavaram Village, on knowing the potential of complainant, accused 2 approached the complainant with an ill motive to sell scheduled property to the complainant, in spite of knowing the fact that the said property is completely under the control of SEBI. The complainant believed the words of accused and accepted the offer made by the accused and entered into a sale agreement on 11.07.2019, as per the terms and conditions of the said agreement,accused received Rs.30,00,000/- as advance sale consideration.

Subsequently, the complainant came to know about the litigation surrendered to the property. The complainant discussed with accused relating to the schedule property and requested him to refund the sale consideration with interest at the rate of 24% per annum starting from the date of agreement of sale I.e 11.07.2019. accused confessed his malafide intention and settled the matter in the presence of elders and he agreed to refund the sale consideration amount with 24% interest rate per annum from the date of agreement of sale and gave Rs.5,00,000/- as a part of such refund.

b). Further the complainant repeatedly requested the accused but accused failed to perform his part of contract. On 11.11.2021, complainant having no other option approached the accused and informed to him that he will be initiated legal action against him on that on 15.11.2021, accused issued three cheques to the complainant and duly signed by the accused ie.

cheque bearing No.649213 for sum of Rs.30,00,000/-, another cheque bearing No.067060 for sum of Rs.7,45,966/- and another cheque bearing

No.067059 for a sum of Rs.7,45,966/- towards part payment of legally enforceable debt.

c). The complainant presented the said cheque bearing No.649213 drawn at SBI, Tadipatri, Ananthapur branch for sum of Rs.30,00,000/- through his banker SBI Branch, Srinagar colony, Gannavaram on 06.12.2021 and the same was returned vide return memo dated 06.12.2021 3 endorsed that ‘funds insufficient’. After receipt of memo complainant got issued statutory notice on 20.12.2021 to the accused by demanding to pay the cheque amount but accused received the notice on 08.01.2022 and gave reply with false and frivolous allegations. Hence, the complainant filed this complaint before this court.

3.The learned XII Addl.Metropolitan Magistrate Court, Gannavaram perused the entire record and sworn affidavit of the complainant, took cognizance of the offence u/s 138 r/w 142 N.I.Act and numbered as

CC.No.187/2022 and summons issued to the accused.

4. After receipt of summons accused appeared before court and copies furnished to him. The accused was examined U/s.251 of Cr.P.C and the substance of accusation for the offence u/s 138 N I Act and he pleaded not guilty and claimed for trail.

5. In pursuance of his case, the complainant himself examined as PW1, and got marked Ex. P-1 to P6 documents, on his behalf Pw2 to 4 were examined, at the stage of cross examination of PW.1, this case was transferred to the Spl.Magistrate Court, Gannavaram as per the orders of

Hon’ble District Court in Dis.No.4196 dt.02.06.2023 and renumbered as

C.C.No.06/2023. PW.1 was examined in cross, on his behalf PW.2, PW.3 filed their chief examination affidavits at the stage of cross examination of

PW.2 and PW.3, this matter was transferred to this court ie. Addl. chief

Judicial Magistrate court-cum-Civil Judge(Senior Division) and renumbered

as C.C.No.01/2024.

6. After closure of complainant’s evidence, the accused was examined under Sec.313 Cr.P.C, explaining incriminating material available on record and he denied the same. The accused reported for defence evidence. The 4 accused himself examined as DW.1 and on his behalf L.Srinivasa rao examined as DW.2 and got marked Exs.D1 to D11.

7. Arguments heard on either side. The learned counsel for accused filed written arguments.

a). learned counsel for the complainant argued that, the evidence of

P.W.1 to 4, amply substantiated through Ex.P.1 to Ex.P6 and nothing material could be elicited in the cross examination of P.W.1. Thus, the evidence of the complainant itself amply shows the complicity of the accused for the offence u/s 138 NI Act. Accused himself admitted his liability to return the balance sale consideration amount and issuance of cheques are admitted facts as such admitted facts need not be proved. Thus The complainant proved his case beyond all reasonable doubt and the accused is liable for the punishment. He requested the court to record conviction against the accused and sentenced him appropriately as per law.

b). On the other hand, learned counsel for the accused vehemently argued that the evidence of complainant will be nullified even by cross- examination. It is settled principle of law that the complainant is duty bound to unfold his case with consistent and cogent evidence beyond all reasonable doubt. He cannot depend upon the weakness or otherwise the case of the accused. The existence of legally enforceable debt is a conditional precedent to prove the case under Sec. 138 of Negotiable

Instruments Act. PW1 evidence is not trustworthy, PW.2 to PW.4 evidence not corroborated the evidence of PW.1 in any of the material aspects and their evidence is inconsistent among them.

c). Further argued that the accused was cheated in the hands of one

Purushotham and the entire PACL Properties were seized by the CBI in the year 2013, Government of India handed over the case to justice Lodha 5 committee and the properties were controlled by the Lodha committee. The management of the PACL approached the Supreme Court of India and filed

C.A No. 13394/2015, 13410 2015 for release of properties, the said purushottam created fake documents like board resolution of PACL and

SEBI letter and delivered to him, accused believed the version of

Purushottam and executed agreement in favour of the complainant and realized about cheating of Purushottam and approached the complainant and agreed to refund the advance sale consideration with 12% interest and that he paid part payment of Rs.5,00,000/- on 07.07.2021 to the complainant but coerced the accused and obtained three signed unfilled cheques and signed non judicial stamp papers. Accused gave stop payment instructions to his bank and got issued notice dt 17.11.2021 to the complainant not to present the cheques, the complainant got issued reply notice dt 29.11.2021 stating that accused issued cheques on 15.11.2021 for Rs.30,00,000/-,

Rs.7,45,966/-, Rs.7,45,966/- .

d). The accused further argued that date of issuance of cheque was mentioned as 15.11.2021 in Ex.D2, in Ex.P3 and in the evidence of PW.1,but in the cross examination PW.1 stated accused issued cheque on the date of agreement ie.,11.07.2019, on the date when accused gave Rs.5,00,000/- on that day, he issued two filled cheques through his driver. PW.2 and PW.3 deposed that accused issued two cheques on 15.11.2021 further stated he will send one more cheque through his driver but in the cross examination they stated due to typographical mistake date of issuance of cheque was mentioned as 15.11.2021 instead of 06.12.2021.PW.4 deposed that on 06.12.2021 accused issued three cheques to the complainant. Evidence of

PW.1 is inconsistent with regard to date of issuance of cheque PW.2 to

PW.4 also not corroborated the evidence of PW.1 itself shows that there is no legally enforceable debt.

6

e). Further, contended that accused returned Rs.5,00,000/- to the complainant he has to pay balance amount of Rs.25,00,000/- but PW.1 claimed in three cases total an extent of Rs.44,91,932/- how calculated the amount there is no calculation memo filed. Accused has no intention to cheat the complainant and he is the responsible person voluntarily went to the house of complainant and gave Rs.5,00,000/- and agreed to pay balance amount within 6 months, due to financial and family problems he unable to discharge the balance amount. In fact accused was cheated by one Purushottam, accused has no right to execute sale deeds as entire property was seized by SEBI. He also filed connected documentary evidence, complainant did not deny the Ex.D1 to D11 documents. Accused is scape goat in the hands of Purushottam. Complainant did not come to the court with clean hands to harass the accused filed this case suppressing the material facts. Hence he requested the court to dismiss the case.

08. Now the points for determination are :

i). Whether Ex.P1 cheque had been issued in discharge of

legally enforceable debt due to the complainant?

ii). Whether the accused had discharged his burden of proving that Ex.P1 cheque had not been issued for a debt or legally enforceable liability?

Iii). Whether the accused committed the offence under section 138 of N.I. Act?

09.Before adverting to the rival contentions it was seen whether the conditions stipulated under section 138 of Negotiable Instruments Act to invoke the provision or in existence as per the contents of the complainant or not is to be seen. The cheque was issued on 06.12.2021 as per Ex.P1 cheque and it was dishonored on 06.12.2021. Registered legal notice issued on 20.12.2021 and the same was received by the accused and issued reply notice. The complaint is filed on 02.02.2022, which clearly 7 discloses that all the conditions stipulated under section 138 & 142 NI Act is complied with.

10. In these circumstances it is pertinent to have a glance at Section 118 and 139 of NI Act. For a better understanding the section 118 and 139 NI

Act reads as follows:- Sec.118. Presumptions as to negotiable

instruments of consideration. — Until the contrary is proved, the

following presumptions shall be made: —

(a) of consideration — that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration.

Sec. 139. Presumption in favor of holder. — It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, or any debt or other liability.

Thus a perusal of above provision of law and it’s tenor of language

shows that it is mandatory on part of this court to draw the

presumption as to the existence of the consideration and the

instrument in question being drawn for discharge of the whole or part

of an existing liability ( legally enforceable).

11.Thus, it is abundantly clear that there is a statutory presumption which enjoins a duty upon this court to draw a statutory presumption that the cheque was issued only for consideration in discharge of a legally enforceable debt. Thus, the onus is on the shoulders of the accused to disprove that the cheque was not issued by him towards the discharge of legally enforceable debt and that the cheque was not supported by consideration. Thus, in order to rebut the presumption that is drawn under 8 118 and 139 of NI Act the material on record for the accused is that of cross examination of P.W.1 to PW4 and evidence of DW1, DW2. No doubt it is well neigh settled that, in order to rebut the presumption defendant need not get in to witness box he can as well do it even by cross examination of the witnesses of complainant. Hon'ble apex court held In Krishna Janardhan

Bhat V. Dattatreya G Hegde., AIR 2008 SC 1325,

12. Having heard arguments from both sides and perusing the evidence on record, this court decides the matter as follows:

Point No.1 & 2 : To raise presumption u/s 139 N.I Act that accused had issued Ex.P1 cheque to satisfy part or whole of the debt, it has to be proved that there is existing a legally enforceable debt or other liability, between the complainant and the accused, which is an important ingredient of section 138(NI) Act.

13.Coming to the evidence, the complainant got examined as PW1 and he reiterated the contents of his complaint through his affidavit filed in lieu of his chief examination. As per the evidence of complainant (PW1), the accused is a GPA agent for PACL India Limited, complainant being a

Ex.MLA knowing his potential accused approached him and offered to sell the property situated at Markapuram Sub Registrar, Pedda Dornala Mandal,

Pedda Bommalapuram village, total extent of Ac.91.50 cents, both entered into sale agreement on 11.07.2019 and complainant paid Rs.30,00,000/- advance sale consideration to the accused. Thereafter, he came to know that the said property is completely under the control of SEBI accused knowing fully well suppressed the said fact taking advantage of the innocence of complainant. On demand of the complainant accused agreed to refund the sale consideration with interest @ 24% per annum and gave

Rs.5,00,000/- part of such refund, on 15.11.2021 accused issued three 9 cheques for Rs.30,00,000/, two cheques for Rs.7,45,966/- each. PW.1 presented the said cheques on 6.12.2021 same was returned with endorsement that ‘funds insufficient’. Thereafter PW.1 issued legal notice on 20.12.2021, accused received the same but kept quite. Then PW.1 filed this complaint, through his evidence Ex.P1 to P6 are marked. The accused knowing fully well that he has no sufficient funds in his account issued the cheque, and thereby committed the offence U/s 138 of NI Act. through his evidence Ex.P1 to P6 marked.

14. On behalf of PW.1, one B.Kalyan and L.Murali Krishna examined as

PW.2 and PW.3. they filed chief examination affidavit stating that accused made a sale agreement with complainant in the year 2019 and received

Rs.30,00,000/- as advance sale consideration but accused failed to execute sale deed in favour of the complainant. After that negotiations took place between the accused and complainant in their presence and other elders accused agreed to pay said Rs.30,00,000/- along with 24% per annum.

Accordingly accused paid Rs.5,00,000/- and agreed to issue cheques to the complainant in their presence to discharge the debt and issued two bank cheques on 15.11.2021. Accused further agreed that he will sent one more cheque through driver of the complainant. Thereafter, they came to know cheques presented for en-cashment were dishonored and complainant filed cases against the accused. In re examination of PW.2, PW.3 clarified that date of issuance of cheques are on 6.12.2021 but in their chief affidavits wrongly mentioned that date of issuance of cheques are 15.11.2021.

During their cross examination, PW.2&PW.3 stated that in the year 2019 complainant negotiated with accused to purchase land by that time, they accompanied with complainant, on 06.12.2021 accused returned the

Rs.5,00,000/- to the complainant since land transaction canceled in between them and issued two cheques belongs to SBI and Axis Bank. It 10 was suggested that complainant is relative to the PW.2, PW3 and to help him they are deposing false, witnesses denied the same.

15. PW4 / P.Chitti babu is the driver of the PW1, he filed his chief examination affidavit stating that accused made a sale agreement with complainant in the year 2019 and received Rs.30,00,000/- as advance sale consideration but accused failed to execute sale deed in favour of the complainant. After that negotiations took place between the accused and complainant in their presence and other elders accused agreed to pay said

Rs.30,00,000/- along with 24% rate of interest per annum. Accordingly accused paid Rs.5,00,000/- and issued three cheques to the complainant.

Thereafter, he came to know cheques presented for encashment were dishonored and complainant filed cases against the accused. During his cross examination suggested that PW4 is driver to the complainant to help him deposing false without knowing any thing. Witness denied the same.

16. Firstly, I would like to discuss the cross examination of PW1, as the accused need not step into witness box, he can rebut the presumption by way of cross examination as such cross examination of PW1 is very much essential to the accused as such how far defence counsel elicited the material points in the cross examination of PW.1. In the cross examination, learned defence counsel confronted the legal notice dated 17.11.2021 along with acknowledgment, reply notice of PW.1 dated 29.11.2021 marked as

Ex.D1 & Ex.D2. In the cross examination, PW.1 stated that Ex.P1 is not a blank cheque and it is signed cheque on the date when accused gave

Rs.5,00,000/- he also issued two filled cheques through his driver it was suggested that PW.1 took the two cheques forcibly from accused. In further cross examination PW.1 admitted that accused issued cheque without date for Rs.30,00,000/- on the date of agreement ie. on 11.07.2019, he filled the date on the cheque on the date of presentation of cheque on 06.12.2021.

11 but accused did not deny the said fact suggesting that he did not issue any cheque on the date of Ex.P6. finally it was suggested Ex.P1 is not maintainable as he obtained cheque from accused without date, by threatening the accused witness denied the same. During the cross examination of PW.1 all are denials nothing material could be elicited to discard the version of the complainant except formal suggestions.

17. PW.2 and PW.3 are known persons, PW4 is the driver of the PW1 they totally corroborated the version of PW1 during their cross examination suggested that complainant took the three signed unfilled cheques from accused forcibly, to help the PW1 depose false, except suggestions nothing materiel could b elicited.

18. These are the admitted facts : The accused and complainant are known persons and there is no disputes regarding acquaintance of each other, further in between them there was an Ex.P6 agreement of sale dated 11.07.2019 transaction took place, in pursuance of Ex.P6 sale agreement complainant paid Rs.30,00,000/- to the accused later accused failed to perform his part of the contract,negotiations took place in between them, on that accused returned the Rs.5,00,000/- to the complainant and agreed to return the balance amount with in six months due to financial crises unable to pay the balance sale consideration.

19. On perusal of oral and documentary evidence of both sides accused himself admitted the ExP6 transaction and his liability to return the money to the complainant, non performance of ExP6 agreement of sale is the basis for this case, In general when both paries entered into agreement, they have to perform their part of the contract in the present case, accused failed to perform his part whatever may be the reasons for accused, he has to return the money to the accused thus the said transaction is legally enforceable liability as explained Sec.138 N.I act Explanation.-For the 12 purposes of this section, “debt or other liability” means a legally enforceable debt or other liability. but when cheques were issued, who filled the cheques, how much amount due, what is the interest rate, how the amount covered under the cheques were calculated these particulars are not clear.

Date of issuance of cheque is noted on Ex.P1 is 6.12.2021 but in compliant and chief affidavits of Pw1 to 3 noted as 15.11.2021 but complainant counsel found the same to rectify it, in the re-examination clarified the said fault from PW.2 and PW.3 stating that the date of issuance of cheques noted wrongly as 15.11.2021 instead of 6.12.2021, except mere suggestions there is no cross examination on this aspect to the Pw1 to 3 to shake the veracity of the witnesses and failed to elicit the material facts. Further as per the version of the accused on 07.7.2021 he came to complainant house to settle the matter and returned Rs.5,00,000/- to the complainant but complainant detained him and forced the accused as such accused brought the three cheques and gave the same to the PW1. That means on 07.07.2021, accused gave cheques to the complainant but he gave notice to the complainant on 17.11.2021 with an instructions not to present the cheques under Ex.D1, PW1 gave reply under Ex.D2.

20.Even though, the accused need not step into witness box, he can rebut the presumption by way of cross examination, but in the cross examination failed to elicit the material facts in favour of the defence. The accused himself examined as DW.1 on his behalf L.Srinivasarao examined as DW.2. The accused reiterated his averments in the cross examination of

Pw1 further deposed that one V.Purushotham acquainted to him through mediator Mallareddy, the said Purushotham is the project manager to PACL

India Limited, approached the accused and told to him that their company purchased lands an extent of Ac.91.50 cents at Peda Bomalpuram by way of GPA from different land owners in different survey numbers in the year 13 2004-2005 by way of agreement of sale, GPA. In the year 2018 the said

Purushotham gave GPA to him for Ac.91.50 cents basing on the GPA he intended to sell the said lands in that process PW.1 approached him through mediators and sale price fixed for Rs.2,45,000/- per acre he gave

Rs.30,00,000/- advance sale consideration on 11.07.2019 under Ex.P6 agreement of sale. He sent payments to the persons suggested by said

Purushotham by way of bank transfer and he has receipts for proof of payments to the others after sending money the said Purushotham not responded to his phone and his phone is switched off. He made enquiries at

Delhi PACL India Limited office came to know the said office was seized by

CBI and handed over to the SEBI through Ludra Committee, he came to conclusion that the said Purushotham suppressed the facts cheated him and MOU given by purushotham is fabricated document and the said purushotham disappeared whereabout not known, his enquiries revealed that Chairman of PACL, Subrathobhattacharya filed a case against PACL directors alleging that the said directors cheated him , the said case was pending in Delhi Court in Civil appeal No.13301/2015. Thereafter mediator

Mallareddy gave one fabricated letter allegedly issued by SEBI in favour of

Purushotam stating that SEBI accorded permission to get register the said land Ac.91.50 cents at Pedabommalapuram village, he suspected the letter made enquiries and came to know the matter is fabricated.

21. Accused further deposed that in meanwhile he tried to settle the matter by refund the money to the PW.1 but he insisted for land instead of refund of money on 07.07.2021 he went to the house of PW.1 with

Rs.5,00,000/- cash along with his driver Rambabu, mediator Mallareddy and

V.Kasulu, he agreed to give remaining amount within six months along with 12% interest but complainant detained him in his house after receipt

Rs.5,00,000/- cash and threatened him without giving cheques they will not 14 leave the accused as such, his driver Rambabu went to the house of accused in Guntur and brought the three filled cheques. Accordingly he signed in the said three cheques without filling the columns. On 17.11.2021, he issued notice to the complainant through his counsel and also issued stop payment instructions to the bank on 29.11.2021, complainant sent reply notice to the accused through his counsel with false averments stating that he himself voluntarily issued cheques on 15.11.2021 but not on 07.07.2021.

On 02.12.2021, the accused sent rejoinder to the complainant with an instructions not to present the cheque but the said rejoinder notice received by complaint counsel Sri Benarji but complainant not received notice with an endorsement that complainant is absent. Complainant presented the said three cheques through his bank even though he gave stop payment instructions to the bank, he has no intention to cheat the complainant and it is not legally enforceable debt hence he requested the court to acquit him.

During his cross examination he admitted the recitals in Ex.P6 agreement of sale further admitted that he failed to perform his part of contract he requested the complaint to grant six months time to return balance advance amount, he failed to give balance amount to the complainant with in six months, further admitted that he issued three cheques. on perusal of DW1 evidence it is no way useful to his contest.

22.Accused summoned the L. Srinivasarao, who is the clerk in the State

Bank of India, Srinagar Branch, Gannavaram, examined as DW.2 he deposed that he received summons from court. Ex.P1 cheque presented in his branch since payee is his customer they accepted the said cheque it is valid upto Rs.10,00,000/- however they accepted the said cheque since there is no balance in the account of the accused he issued cheque return memo stating that ‘insufficient funds’. He identified his signature on the back side of Ex.P1. Learned counsel for the complainant questioned that Ex.P1 15 cheque is valid upto Rs.10,00,000/-, how he received the cheque from complainant without return the same on the ground of invalid for that he replied initially they received the cheque for verification of signature and balance then they will return the same for want of sufficient funds. Further stated that he has no malafide intention to give the endorsement as ‘insufficient funds’. During his cross-examination, he stated that whenever customer presented cheque they will verify the balance amount of the said customer, if sufficient balance amount is available in the account they will verify the signature of the customer, in case the customer issued stop payment instruction to his mother branch there is no chance to know the same to the another branch. By examining the DW2 no useful material was elicited in favour of the accused.

23.After perusing the entire evidence on record complainant successful proved that Ex.P1 cheque was issued towards discharge of legally enforceable debt or liability. Now the sole point for consideration is how much amount due to the complainant, basing on the case record it is clear that DW.1/accused received Rs.30,00,000/- towards advance sale consideration thereafter the accused returned Rs.5,00,000/- to the complainant and remaining Rs.25,00,000/- is outstanding amount to the complainant but complainant claimed interest at the rate of 24% per annum from the date of agreement of sale whereas in Ex.P6 recited 18% interest but accused claimed that he agreed for 12% interest and accused not denied his liability but contended that complainant claiming excess interest and he did not issue cheque voluntarily and forcibly obtained unfilled signed cheques for that accused issued legal notice to the complainant under

Ex.D1 on 17.11.2021 where as on 07.07.2021 complainant took cheques why he waited for 4 months, 10 days to give legal notice to the complainant moreover immediately after threatening and detained the accused, he did 16 not give any police report and no explanation was offered for not giving notice to the complainant immediately. Accused mainly disputing the interest rate and manner of issuance of cheques but not his liability. However accused did not examine any of the persons who accompanied with him at the time of negotiations with complainant to prove his contention that he negotiated interest rate @ 12% per annum, for that accused explained his driver Rambabu, mediator Mallareddy are no more but another person

V.Kasalu is alive but accused failed to examined the said person on his behalf.

24. This Court carefully perused the oral and document evidence available on record and in the cross-examination of PW1 nothing material could be elicited by the accused to disprove the case of the complainant and accused adduced evidence is no way helpful to the accused case. Accused himself admitted his liability to return the amount to the PW1 further accused pleaded he was also cheated by others in the transaction of Ex.P6 and filed some documents to prove his innocency in the said transaction. Assuming a movement accused was cheated in the hands of V.Purushotham, it is in between the accused and the said Purushotham, whether accused took any legal action against said V.Purushotham is no evidence but complainant is no way concerned with the hardship and difficulties to perform the Ex.P6 agreement, it is the duty of the accused to return the money to the complainant more over the accused since begging expressed his intention to return the advance amount but due to financial crises he unable to pay the money, by way of admitting the case and expressed his intention to return the money to the complainant but argued minor discrepancies like on which date accused issued cheques, either force or voluntary, to prove the said discrepancies did not adduce any positive evidence and his evidence as Dw1 is no way useful to his contest since his cross examination by and 17 large all are admissions made by the accused. Admittedly several negotiations took place between them after this cases filed before the court too, as such both parties gave different dates to suit their version and accused failed to disprove the version of the complainant by way of cross examination of complainant and adducing his evidence since heavy burden lies on him u/s 139 N.I act.

25. Learned counsel for accused relied on the decisionreported in

Crl.Appeal No.04/2023 in between Vardhineedi Sriramanjaneyulu Vs.

Yeeda Sasibhushan, dated 09.04.2025. where in held that complainant failed to prove the existence of legally enforceable debt in between complainant and the accused, financial capacity of the complainant to lend such an amount, complainant did not produce any documents to show that he gave said amount to the accused. Hon’ble court referred the decision of

Hon’ble Apex Court reported in Crl.Appeal No.636 of 2019 in between

Basalingappa Vs. Mudi Basappa on 09.04.2019.

This court carefully perused the decisions relied by the accused with due respects of Hon’ble ladyship facts and circumstances are different not applicable to the present case facts.

26.These basic facts of the case inspire the invocation of the legal presumption U/Sec.139 of NI Act in favour of the complainant. Thus, the initial burden, that the accused gave cheques to the complainant, is discharged by the complainant. Considering all this, this court is of the opinion that the PW1 established the factual basis for raising such presumption through his evidence. Hence the presumption U/Sec.139 of NI

Act is available for the complainant.

27. S.139 of N.I.Act says that the court has to presume unless the contrary is proved that the holder of the cheque received the cheque for discharge in whole or in part of a debt or liability. This presumption is 18 rebuttable. Now it is the burden of the accused to establish that the Ex.P1 cheque had not been issued for a debt or legally enforceable liability i.e.,not of the nature referred to in Sec.138 of N.I Act. But the material elicited through the cross examination of PW1 is not sufficient to make the contention of the accused probable and sufficient to rebut the presumption.

After considering the entire evidence and material available on the record it appears to me that the contention of the accused is not probable and not convincing.

28.The perusal of the record, reveals that the circumstances raised by the defence are not enough to damage the credibility of the complainant case. There is absolutely no justification for discarding the complainant's case. Though the burden of the accused can not equally be compared with that of the complainant, I don't think that the evidence adduced by the accused is sufficient to rebut the presumption. Hence this court is of the opinion that the accused has failed to discharge his burden in proving that he has not issued the cheque in discharge of debt or liability as contended by him. Thus Point Nos 1 and 2 are answered in favour of the complainant.

29. Point No.3:

Coming to the Ex.P1, it is not the plea of the accused that the complainant forged the signatures on it. On the other hand accused admits his signature on it. There arises a presumption U/Sec.118(a) of N.I.Act, that cheque was issued for consideration. As seen, The complainant deposed and produced before the court the required documents that the Ex.P1 was dishonored for want of funds under Ex.P2 (cheque return memo), that legal notice under Ex.P3 there of was issued ,within the time allowed by the law.

30. In view of Sec.146 of N.I.Act, bankers slip is prima facie evidence and it does not require any supporting evidence. Admittedly Ex.P3 memo issued by the bank authorities discloses that the cheque has been 19 dishonoured due to FUNDS INSUFFICIENT in the account of the accused.

Further it is not the endorsement of the authorities that the accused was not having any account in their bank, so also his signatures were not tallying with that of the signatures mentioned in Ex.P1.

31. Thus the basic ingredients that the cheque was given, it was presented and dishonored, that written notice was given to the accused and same was received by the accused proved by the complainant hence point no.3 is answered in favour of the complainant.

32. In view of the failure of the accused to dislodge the version of the prosecution and in the light of the discussion of Point No.1 to 3, this court holds that the accused has committed offence U/Sec.138 of N.I.Act.

33. In the result, the accused is found guilty for the offence under sec.138 of NI Act accordingly accused is convicted U/Sec.255(2) of Cr.P.C.

Typed to my dictation to the Stenographer directly and corrected and

pronounced by me in open court on this the 14th day of May, 2026.

Addl. Chief Judicial Magistrate, Gannavaram

Hearing on quantum of sentence:

Accused is questioned with regard to quantum of sentence that can be imposed, for which he submitted that he is suffering from ill health and sustained huge financial loss and his entire family depend upon him.

Hence, he requested the court to take lenient view. This court is conscious that legislation has incorporated section 138 of the Act to curb the practices of issuing cheque without any funds and to bring harmony in business transactions. The nature of offence and the mode in which it was committed do not warrants the application of beneficial provisions of P.O.Act.

20

The Hon'ble SUPREME COURT in 'R. Vijayan Vs Baby and another' '[2012(1) S.C.C 260]' held that granting of compensation is must in cheque bounce cases to maintain uniformity in the decisions of the courts. It was held that “As the provisions of Chapter XVII of the Act strongly lean towards grant of reimbursement of the loss by way of compensation, the courts should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy fine upto twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount as compensation. Direction to pay compensation by way of restitution in regard to the loss on account of dishonour of the cheque should be practical and realistic, which would mean not only the payment of the cheque amount but interest thereon at a reasonable rate. Uniformity and consistency in deciding similar cases by different courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice.”

In view of the above decision and in the circumstances of this case, I am of the opinion that this is not a fit case to take a lenient view.

Further, there used to be some discussion as to whether the

default sentence can be imposed for non payment of compensation.

The said discussion is settled at rest and it has been held by the

Hon'ble SUPREME COURT in 'K.A.Abbas H.S.A. vs Sabu Joseph &

Anr.' [2010 STPL (Web) 384 S.C (D.B)] arising out of S.L.P (Crl) No. 334

of 2008 that default sentence can be imposed for non payment of

compensation.

Accordingly, the accused is sentenced to undergo simple

imprisonment for a period of Six months and to pay a compensation of

Rs. 30,00,000/- under section 357(3) of Cr.P.C to the complainant in this

case, in default, to suffer simple imprisonment for further period of

21

Three months. The accused is entitled for set off of remand period,

U/s. 428 of Cr.P.C from the substantial sentence, however, in this Case,

the accused never undergo judicial custody for any period. This Court

explained the right of appeal to the accused with free legal aid before

the Hon'ble District & Sessions Court, within 30 (thirty) days. Free

copy of judgment is furnished to the accused.

Typed to my dictation by Stenographer corrected and pronounced by me in open court on this the 14th day of May, 2026.

Addl. Chief Judicial Magistrate, Gannavaram

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

For Complainant: For Accused :

PW1 : M.Ratna BoseDW.1 –K.Siva Kumar. PW2 :Vempati KalyanDW.2 – L.Srinivasarao. PW.3: Lanka Murali Krishna. PW.4: Pendem Chittibabu.

DOCUMENTS MARKED

For Complainant:

Ex.P1 : Cheque bearing No.649213 for Rs.30,00,000/- executed by accused in favour of petitioner.

Ex.P2 : Cheque return memo dated 06.12.2021 from SBI, Srinagar colony,

Ex.P3 : Office copy of legal notice, dated 20.12.2021.

Ex.P4 : Postal acknowledgment for service of legal notice,

dated 08.01.2022.

Ex.P5 : Office copy of reply notice, dated 17.01.2022 issued by accused to the complainant through counsels.

Ex.P6 : Unregistered agreement of sale dated 11.07,.2019 executed by; the accused in favour of complainant.

22

For Accused :

Ex.D1: Legal notice dated 17.11.2021 along with acknowledgment(marked through PW.1)

Ex.D2 : Reply notice of PW.1, dt.29.11.2021(marked through PW.1)

Ex.D3: Certified copy of agreement of sale cum GPA bearing No.1483/2005,

dated 23.05.2005.

Ex.D4 :Minutes of board of directors of PACL Limited, dated 05.05.2014, (since it is downloaded copy from internet marked subject to objection proof and relevancy)

Ex.D5 :Certified copy of GPA executed by V.Purushotham, Project Manager, PACL Limited, in favour of K.Siva Kumar.

Ex.D6: Original acknowledgment/receipt issued by V.Purushotham,

dated 06.08.2019.

Ex.D7: Online copy of civil Appeal No.13301/2015, dated 23.01.2020.

Ex.D8: Letter addressed by accused to SBI to stop the payment relating to cheque No.649213 with acknowledgment stamp, dated 17.11.2021.

Ex.D9: Office copy of legal notice with two postal receipts,

dated 02.12.2021.

Ex.D10: Acknowledgment of advocate K.Benarjee, dated 04.12.2021.

Ex.D11: Returned registered notice cover of PW.1, dated 09.12.2021.

Addl. Chief Judicial Magistrate, Gannavaram 23

IN THE COURT OF THE ADDL. CHIEF JUDICIAL MAGISTRATE:

GANNAVARAM

CALENDAR & JUDGMENT

CC.No.01/2024 (OLD C.C.NO. 06/2023, 188/2022)

DATE OF :- Offence: 06.12.2021 Filing: 02.02.2022 Apprehension of accused: -- Released on bail: -- Commencement of trial: 09.05.2023 Close of trial: 25.02.2026 Sentence or order: 14.05.2026

Between : Musunuru Ratna Bose, S/o Venkata Subba Rao, Ex MLA, aged 74 years, R/o 2-79/1, Main Road, Gannavaram Village, Gannavaram Mandal, Krishna District. …Complainant.

And

Kuragayala Siva Kumar, S/o Late K.Satyanarayana, R/o Flat No.24, Kamalesh Enclave, 7/3 Chandramoulinagar, Guntur. … Accused. Explanation for delay: This case is taken on file before the XII Addl.Metropolitan Magistrate Court, Gannavaram on 05.03.2022 for the offence under Sec. 138 of NI Act numbered as C.C.No. 187/2022, after appearance of the accused, on 11.10.2022 copies of documents were furnished to him. On 24.01.2023 accused was examined u/Sec.251 Cr.P.C. During the course of trial, on behalf of the complainant, on 9.05.2023 Pw.1 examined in chief and got marked Exs.P1 to P5 and on 17.08.2023, PW.1 further examined in chief and marked Ex.P6 and cross examined Pw.1 in part and Ex.D1 and D2 marked on 05.12.2023 by the learned defence counsel. At the stage of cross examination of PW.1, this case was transferred to the Spl.Magistrate Court, Gannavaram as per the orders of Hon’ble District Court in Dis.No.4196/dt.02.06.2023 and renumbered as C.C.No.06/2023. PW.1 was examined in cross, on 23.04.2024, PW.2 was examined and on 31.07.2024, PW.3 was examined. At the stage of cross examination of PW.2 and PW.3, 24 this matter was transferred to this court ie. Addl. chief Judicial Magistrate court- cum- Civil Judge (Senior Division) and renumbered as C.C.No.01/2024. On 22.09.2025, PW.4 was examined. After the closure of complainant’s evidence, the accused was examined under sec.313 Cr.P.C, explaining incriminating material available on record and he denied the same and reported for defence evidence. On 03.11.2025, DW.1 was examined in chief and Ex.D3 to D11 were marked. On 25.02.2026, as per

Crl.M.P.No.360/2025, DW2 was examined in chief and cross. Hence,

defence side evidence is closed. Arguments heard from both sides. On 14.05.2026 the judgment is pronounced.

Offence: u/Sec. 138 of N.I. Act Plea of accused : Pleaded not guilty. Finding : Found guilty. Sentence or Order:

In the result, the accused is found guilty for the offence under sec.138 of NI Act and accordingly, he is convicted him U/Sec.255(2) of Cr.P.C. Accused is questioned with regard to quantum of sentence that can be imposed, for which he submitted that he is suffering from ill health and sustained huge financial loss and his entire family depend upon him. Hence, he requested the court to take lenient view. This court is conscious that legislation has incorporated section 138 of the Act to curb the practices of issuing cheque without any funds and to bring harmony in business transactions. The nature of offence and the mode in which it was committed do not warrants the application of beneficial provisions of P.O.Act. The Hon'ble SUPREME COURT in 'R. Vijayan Vs Baby and another' '[2012(1) S.C.C 260]' held that granting of compensation is must in cheque bounce cases to maintain uniformity in the decisions of the courts. It was held that “As the provisions of Chapter XVII of the Act strongly lean towards grant of reimbursement of the loss by way of compensation, the courts should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy fine upto twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount as compensation. Direction to pay compensation by way of restitu- tion in regard to the loss on account of dishonour of the cheque should be practical and realistic, which would mean not only the payment of the cheque amount but interest thereon at a reasonable rate. Uniformity and consistency in deciding similar cases by different courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice.” 25

In view of the above decision and in the circumstances of this case, I am of the opinion that this is not a fit case to take a lenient view.

Further, there used to be some discussion as to whether the

default sentence can be imposed for non payment of compensation.

The said discussion is settled at rest and it has been held by the

Hon'ble SUPREME COURT in 'K.A.Abbas H.S.A. vs Sabu Joseph &

Anr.' [2010 STPL (Web) 384 S.C (D.B)] arising out of S.L.P (Crl) No. 334

of 2008 that default sentence can be imposed for non payment of

compensation.

Accordingly, the accused is sentenced to undergo simple

imprisonment for a period of Six months and to pay a compensation of

Rs. 30,00,000/- under section 357(3) of Cr.P.C to the complainant in this

case, in default, to suffer simple imprisonment for further period of

Three months. The accused is entitled for set off of remand period,

U/s. 428 of Cr.P.C from the substantial sentence, however, in this Case,

the accused never undergo judicial custody for any period. This Court

explained the right of appeal to the accused with free legal aid before

the Hon'ble District & Sessions Court, within 30 (thirty) days. Free

copy of judgment is furnished to the accused.

ADDL. CHIEF JUDICIAL MAGISTRATE,

GANNAVARAM

Copy submitted to: The Hon”ble I Addl. District and Sessions Judge, Krishna, Machilipatnam for information.

26

1

IN THE COURT OF THE ADDL. CHIEF JUDICIAL MAGISTRATE:

GANNAVARAM

Present: Dr.Smt.S.Aruna Sri Addl. Chief Judicial Magistrate, Gannavaram

Thursday, this the 14th day of May, 2026

CC.No.01/2024 (OLD C.C.NO. 06/2023, 187/2022)

Between: Musunuru Ratna Bose, S/o Venkata Subba Rao, Ex MLA, aged 74 years, R/o 2-79/1, Main Road, Gannavaram Village, Gannavaram Mandal, Krishna District. …Complainant.

And

Kuragayala Siva Kumar, S/o Late K.Satyanarayana, R/o Flat No.24, Kamalesh Enclave, 7/3 Chandramoulinagar, Guntur. … Accused.

This case has came up before me on 11.05.2026 for hearing in the presence of Sri Ch.Anjaiah, Learned counsel for complainant and the counsel for accused Sri C.Raghuramireddy and Sri V.Raja Sekhar Reddy, and upon hearing having stood over to this day for consideration, this court, delivered the following:

J U D G M E N T

1. This is a private complaint filed by the complainant under section 190 and 200 of Criminal Procedure Code, 1973 against the accused for the offence punishable U/Sec.138 r/w 142 of Negotiable instrument act 1881 (herein after referred to N.I. Act for brevity).

2. As per the complainant, the chain of facts unfolded in the following manner ;

a). The complainant/ Musunuru Ratna Bose is the Ex MLA, Resident of

Gannavaram Village, on knowing the potential of complainant, accused 2 approached the complainant with an ill motive to sell scheduled property to the complainant, in spite of knowing the fact that the said property is completely under the control of SEBI. The complainant believed the words of accused and accepted the offer made by the accused and entered into a sale agreement on 11.07.2019, as per the terms and conditions of the said agreement,accused received Rs.30,00,000/- as advance sale consideration.

Subsequently, the complainant came to know about the litigation surrendered to the property. The complainant discussed with accused relating to the schedule property and requested him to refund the sale consideration with interest at the rate of 24% per annum starting from the date of agreement of sale I.e 11.07.2019. accused confessed his malafide intention and settled the matter in the presence of elders and he agreed to refund the sale consideration amount with 24% interest rate per annum from the date of agreement of sale and gave Rs.5,00,000/- as a part of such refund.

b). Further the complainant repeatedly requested the accused but accused failed to perform his part of contract. On 11.11.2021, complainant having no other option approached the accused and informed to him that he will be initiated legal action against him on that on 15.11.2021, accused issued three cheques to the complainant and duly signed by the accused ie.

cheque bearing No.649213 for sum of Rs.30,00,000/-, another cheque bearing No.067060 for sum of Rs.7,45,966/- and another cheque bearing

No.067059 for a sum of Rs.7,45,966/- towards part payment of legally enforceable debt.

c). The complainant presented the said cheque bearing No.649213 drawn at SBI, Tadipatri, Ananthapur branch for sum of Rs.30,00,000/- through his banker SBI Branch, Srinagar colony, Gannavaram on 06.12.2021 and the same was returned vide return memo dated 06.12.2021 3 endorsed that ‘funds insufficient’. After receipt of memo complainant got issued statutory notice on 20.12.2021 to the accused by demanding to pay the cheque amount but accused received the notice on 08.01.2022 and gave reply with false and frivolous allegations. Hence, the complainant filed this complaint before this court.

3.The learned XII Addl.Metropolitan Magistrate Court, Gannavaram perused the entire record and sworn affidavit of the complainant, took cognizance of the offence u/s 138 r/w 142 N.I.Act and numbered as

CC.No.187/2022 and summons issued to the accused.

4. After receipt of summons accused appeared before court and copies furnished to him. The accused was examined U/s.251 of Cr.P.C and the substance of accusation for the offence u/s 138 N I Act and he pleaded not guilty and claimed for trail.

5. In pursuance of his case, the complainant himself examined as PW1, and got marked Ex. P-1 to P6 documents, on his behalf Pw2 to 4 were examined, at the stage of cross examination of PW.1, this case was transferred to the Spl.Magistrate Court, Gannavaram as per the orders of

Hon’ble District Court in Dis.No.4196 dt.02.06.2023 and renumbered as

C.C.No.06/2023. PW.1 was examined in cross, on his behalf PW.2, PW.3 filed their chief examination affidavits at the stage of cross examination of

PW.2 and PW.3, this matter was transferred to this court ie. Addl. chief

Judicial Magistrate court-cum-Civil Judge(Senior Division) and renumbered

as C.C.No.01/2024.

6. After closure of complainant’s evidence, the accused was examined under Sec.313 Cr.P.C, explaining incriminating material available on record and he denied the same. The accused reported for defence evidence. The 4 accused himself examined as DW.1 and on his behalf L.Srinivasa rao examined as DW.2 and got marked Exs.D1 to D11.

7. Arguments heard on either side. The learned counsel for accused filed written arguments.

a). learned counsel for the complainant argued that, the evidence of

P.W.1 to 4, amply substantiated through Ex.P.1 to Ex.P6 and nothing material could be elicited in the cross examination of P.W.1. Thus, the evidence of the complainant itself amply shows the complicity of the accused for the offence u/s 138 NI Act. Accused himself admitted his liability to return the balance sale consideration amount and issuance of cheques are admitted facts as such admitted facts need not be proved. Thus The complainant proved his case beyond all reasonable doubt and the accused is liable for the punishment. He requested the court to record conviction against the accused and sentenced him appropriately as per law.

b). On the other hand, learned counsel for the accused vehemently argued that the evidence of complainant will be nullified even by cross- examination. It is settled principle of law that the complainant is duty bound to unfold his case with consistent and cogent evidence beyond all reasonable doubt. He cannot depend upon the weakness or otherwise the case of the accused. The existence of legally enforceable debt is a conditional precedent to prove the case under Sec. 138 of Negotiable

Instruments Act. PW1 evidence is not trustworthy, PW.2 to PW.4 evidence not corroborated the evidence of PW.1 in any of the material aspects and their evidence is inconsistent among them.

c). Further argued that the accused was cheated in the hands of one

Purushotham and the entire PACL Properties were seized by the CBI in the year 2013, Government of India handed over the case to justice Lodha 5 committee and the properties were controlled by the Lodha committee. The management of the PACL approached the Supreme Court of India and filed

C.A No. 13394/2015, 13410 2015 for release of properties, the said purushottam created fake documents like board resolution of PACL and

SEBI letter and delivered to him, accused believed the version of

Purushottam and executed agreement in favour of the complainant and realized about cheating of Purushottam and approached the complainant and agreed to refund the advance sale consideration with 12% interest and that he paid part payment of Rs.5,00,000/- on 07.07.2021 to the complainant but coerced the accused and obtained three signed unfilled cheques and signed non judicial stamp papers. Accused gave stop payment instructions to his bank and got issued notice dt 17.11.2021 to the complainant not to present the cheques, the complainant got issued reply notice dt 29.11.2021 stating that accused issued cheques on 15.11.2021 for Rs.30,00,000/-,

Rs.7,45,966/-, Rs.7,45,966/- .

d). The accused further argued that date of issuance of cheque was mentioned as 15.11.2021 in Ex.D2, in Ex.P3 and in the evidence of PW.1,but in the cross examination PW.1 stated accused issued cheque on the date of agreement ie.,11.07.2019, on the date when accused gave Rs.5,00,000/- on that day, he issued two filled cheques through his driver. PW.2 and PW.3 deposed that accused issued two cheques on 15.11.2021 further stated he will send one more cheque through his driver but in the cross examination they stated due to typographical mistake date of issuance of cheque was mentioned as 15.11.2021 instead of 06.12.2021.PW.4 deposed that on 06.12.2021 accused issued three cheques to the complainant. Evidence of

PW.1 is inconsistent with regard to date of issuance of cheque PW.2 to

PW.4 also not corroborated the evidence of PW.1 itself shows that there is no legally enforceable debt.

6

e). Further, contended that accused returned Rs.5,00,000/- to the complainant he has to pay balance amount of Rs.25,00,000/- but PW.1 claimed in three cases total an extent of Rs.44,91,932/- how calculated the amount there is no calculation memo filed. Accused has no intention to cheat the complainant and he is the responsible person voluntarily went to the house of complainant and gave Rs.5,00,000/- and agreed to pay balance amount within 6 months, due to financial and family problems he unable to discharge the balance amount. In fact accused was cheated by one Purushottam, accused has no right to execute sale deeds as entire property was seized by SEBI. He also filed connected documentary evidence, complainant did not deny the Ex.D1 to D11 documents. Accused is scape goat in the hands of Purushottam. Complainant did not come to the court with clean hands to harass the accused filed this case suppressing the material facts. Hence he requested the court to dismiss the case.

08. Now the points for determination are :

i). Whether Ex.P1 cheque had been issued in discharge of

legally enforceable debt due to the complainant?

ii). Whether the accused had discharged his burden of proving that Ex.P1 cheque had not been issued for a debt or legally enforceable liability?

Iii). Whether the accused committed the offence under section 138 of N.I. Act?

09.Before adverting to the rival contentions it was seen whether the conditions stipulated under section 138 of Negotiable Instruments Act to invoke the provision or in existence as per the contents of the complainant or not is to be seen. The cheque was issued on 06.12.2021 as per Ex.P1 cheque and it was dishonored on 06.12.2021. Registered legal notice issued on 20.12.2021 and the same was received by the accused and issued reply notice. The complaint is filed on 02.02.2022, which clearly 7 discloses that all the conditions stipulated under section 138 & 142 NI Act is complied with.

10. In these circumstances it is pertinent to have a glance at Section 118 and 139 of NI Act. For a better understanding the section 118 and 139 NI

Act reads as follows:- Sec.118. Presumptions as to negotiable

instruments of consideration. — Until the contrary is proved, the

following presumptions shall be made: —

(a) of consideration — that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration.

Sec. 139. Presumption in favor of holder. — It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, or any debt or other liability.

Thus a perusal of above provision of law and it’s tenor of language

shows that it is mandatory on part of this court to draw the

presumption as to the existence of the consideration and the

instrument in question being drawn for discharge of the whole or part

of an existing liability ( legally enforceable).

11.Thus, it is abundantly clear that there is a statutory presumption which enjoins a duty upon this court to draw a statutory presumption that the cheque was issued only for consideration in discharge of a legally enforceable debt. Thus, the onus is on the shoulders of the accused to disprove that the cheque was not issued by him towards the discharge of legally enforceable debt and that the cheque was not supported by consideration. Thus, in order to rebut the presumption that is drawn under 8 118 and 139 of NI Act the material on record for the accused is that of cross examination of P.W.1 to PW4 and evidence of DW1, DW2. No doubt it is well neigh settled that, in order to rebut the presumption defendant need not get in to witness box he can as well do it even by cross examination of the witnesses of complainant. Hon'ble apex court held In Krishna Janardhan

Bhat V. Dattatreya G Hegde., AIR 2008 SC 1325,

12. Having heard arguments from both sides and perusing the evidence on record, this court decides the matter as follows:

Point No.1 & 2 : To raise presumption u/s 139 N.I Act that accused had issued Ex.P1 cheque to satisfy part or whole of the debt, it has to be proved that there is existing a legally enforceable debt or other liability, between the complainant and the accused, which is an important ingredient of section 138(NI) Act.

13.Coming to the evidence, the complainant got examined as PW1 and he reiterated the contents of his complaint through his affidavit filed in lieu of his chief examination. As per the evidence of complainant (PW1), the accused is a GPA agent for PACL India Limited, complainant being a

Ex.MLA knowing his potential accused approached him and offered to sell the property situated at Markapuram Sub Registrar, Pedda Dornala Mandal,

Pedda Bommalapuram village, total extent of Ac.91.50 cents, both entered into sale agreement on 11.07.2019 and complainant paid Rs.30,00,000/- advance sale consideration to the accused. Thereafter, he came to know that the said property is completely under the control of SEBI accused knowing fully well suppressed the said fact taking advantage of the innocence of complainant. On demand of the complainant accused agreed to refund the sale consideration with interest @ 24% per annum and gave

Rs.5,00,000/- part of such refund, on 15.11.2021 accused issued three 9 cheques for Rs.30,00,000/, two cheques for Rs.7,45,966/- each. PW.1 presented the said cheques on 6.12.2021 same was returned with endorsement that ‘funds insufficient’. Thereafter PW.1 issued legal notice on 20.12.2021, accused received the same but kept quite. Then PW.1 filed this complaint, through his evidence Ex.P1 to P6 are marked. The accused knowing fully well that he has no sufficient funds in his account issued the cheque, and thereby committed the offence U/s 138 of NI Act. through his evidence Ex.P1 to P6 marked.

14. On behalf of PW.1, one B.Kalyan and L.Murali Krishna examined as

PW.2 and PW.3. they filed chief examination affidavit stating that accused made a sale agreement with complainant in the year 2019 and received

Rs.30,00,000/- as advance sale consideration but accused failed to execute sale deed in favour of the complainant. After that negotiations took place between the accused and complainant in their presence and other elders accused agreed to pay said Rs.30,00,000/- along with 24% per annum.

Accordingly accused paid Rs.5,00,000/- and agreed to issue cheques to the complainant in their presence to discharge the debt and issued two bank cheques on 15.11.2021. Accused further agreed that he will sent one more cheque through driver of the complainant. Thereafter, they came to know cheques presented for en-cashment were dishonored and complainant filed cases against the accused. In re examination of PW.2, PW.3 clarified that date of issuance of cheques are on 6.12.2021 but in their chief affidavits wrongly mentioned that date of issuance of cheques are 15.11.2021.

During their cross examination, PW.2&PW.3 stated that in the year 2019 complainant negotiated with accused to purchase land by that time, they accompanied with complainant, on 06.12.2021 accused returned the

Rs.5,00,000/- to the complainant since land transaction canceled in between them and issued two cheques belongs to SBI and Axis Bank. It 10 was suggested that complainant is relative to the PW.2, PW3 and to help him they are deposing false, witnesses denied the same.

15. PW4 / P.Chitti babu is the driver of the PW1, he filed his chief examination affidavit stating that accused made a sale agreement with complainant in the year 2019 and received Rs.30,00,000/- as advance sale consideration but accused failed to execute sale deed in favour of the complainant. After that negotiations took place between the accused and complainant in their presence and other elders accused agreed to pay said

Rs.30,00,000/- along with 24% rate of interest per annum. Accordingly accused paid Rs.5,00,000/- and issued three cheques to the complainant.

Thereafter, he came to know cheques presented for encashment were dishonored and complainant filed cases against the accused. During his cross examination suggested that PW4 is driver to the complainant to help him deposing false without knowing any thing. Witness denied the same.

16. Firstly, I would like to discuss the cross examination of PW1, as the accused need not step into witness box, he can rebut the presumption by way of cross examination as such cross examination of PW1 is very much essential to the accused as such how far defence counsel elicited the material points in the cross examination of PW.1. In the cross examination, learned defence counsel confronted the legal notice dated 17.11.2021 along with acknowledgment, reply notice of PW.1 dated 29.11.2021 marked as

Ex.D1 & Ex.D2. In the cross examination, PW.1 stated that Ex.P1 is not a blank cheque and it is signed cheque on the date when accused gave

Rs.5,00,000/- he also issued two filled cheques through his driver it was suggested that PW.1 took the two cheques forcibly from accused. In further cross examination PW.1 admitted that accused issued cheque without date for Rs.30,00,000/- on the date of agreement ie. on 11.07.2019, he filled the date on the cheque on the date of presentation of cheque on 06.12.2021.

11 but accused did not deny the said fact suggesting that he did not issue any cheque on the date of Ex.P6. finally it was suggested Ex.P1 is not maintainable as he obtained cheque from accused without date, by threatening the accused witness denied the same. During the cross examination of PW.1 all are denials nothing material could be elicited to discard the version of the complainant except formal suggestions.

17. PW.2 and PW.3 are known persons, PW4 is the driver of the PW1 they totally corroborated the version of PW1 during their cross examination suggested that complainant took the three signed unfilled cheques from accused forcibly, to help the PW1 depose false, except suggestions nothing materiel could b elicited.

18. These are the admitted facts : The accused and complainant are known persons and there is no disputes regarding acquaintance of each other, further in between them there was an Ex.P6 agreement of sale dated 11.07.2019 transaction took place, in pursuance of Ex.P6 sale agreement complainant paid Rs.30,00,000/- to the accused later accused failed to perform his part of the contract,negotiations took place in between them, on that accused returned the Rs.5,00,000/- to the complainant and agreed to return the balance amount with in six months due to financial crises unable to pay the balance sale consideration.

19. On perusal of oral and documentary evidence of both sides accused himself admitted the ExP6 transaction and his liability to return the money to the complainant, non performance of ExP6 agreement of sale is the basis for this case, In general when both paries entered into agreement, they have to perform their part of the contract in the present case, accused failed to perform his part whatever may be the reasons for accused, he has to return the money to the accused thus the said transaction is legally enforceable liability as explained Sec.138 N.I act Explanation.-For the 12 purposes of this section, “debt or other liability” means a legally enforceable debt or other liability. but when cheques were issued, who filled the cheques, how much amount due, what is the interest rate, how the amount covered under the cheques were calculated these particulars are not clear.

Date of issuance of cheque is noted on Ex.P1 is 6.12.2021 but in compliant and chief affidavits of Pw1 to 3 noted as 15.11.2021 but complainant counsel found the same to rectify it, in the re-examination clarified the said fault from PW.2 and PW.3 stating that the date of issuance of cheques noted wrongly as 15.11.2021 instead of 6.12.2021, except mere suggestions there is no cross examination on this aspect to the Pw1 to 3 to shake the veracity of the witnesses and failed to elicit the material facts. Further as per the version of the accused on 07.7.2021 he came to complainant house to settle the matter and returned Rs.5,00,000/- to the complainant but complainant detained him and forced the accused as such accused brought the three cheques and gave the same to the PW1. That means on 07.07.2021, accused gave cheques to the complainant but he gave notice to the complainant on 17.11.2021 with an instructions not to present the cheques under Ex.D1, PW1 gave reply under Ex.D2.

20.Even though, the accused need not step into witness box, he can rebut the presumption by way of cross examination, but in the cross examination failed to elicit the material facts in favour of the defence. The accused himself examined as DW.1 on his behalf L.Srinivasarao examined as DW.2. The accused reiterated his averments in the cross examination of

Pw1 further deposed that one V.Purushotham acquainted to him through mediator Mallareddy, the said Purushotham is the project manager to PACL

India Limited, approached the accused and told to him that their company purchased lands an extent of Ac.91.50 cents at Peda Bomalpuram by way of GPA from different land owners in different survey numbers in the year 13 2004-2005 by way of agreement of sale, GPA. In the year 2018 the said

Purushotham gave GPA to him for Ac.91.50 cents basing on the GPA he intended to sell the said lands in that process PW.1 approached him through mediators and sale price fixed for Rs.2,45,000/- per acre he gave

Rs.30,00,000/- advance sale consideration on 11.07.2019 under Ex.P6 agreement of sale. He sent payments to the persons suggested by said

Purushotham by way of bank transfer and he has receipts for proof of payments to the others after sending money the said Purushotham not responded to his phone and his phone is switched off. He made enquiries at

Delhi PACL India Limited office came to know the said office was seized by

CBI and handed over to the SEBI through Ludra Committee, he came to conclusion that the said Purushotham suppressed the facts cheated him and MOU given by purushotham is fabricated document and the said purushotham disappeared whereabout not known, his enquiries revealed that Chairman of PACL, Subrathobhattacharya filed a case against PACL directors alleging that the said directors cheated him , the said case was pending in Delhi Court in Civil appeal No.13301/2015. Thereafter mediator

Mallareddy gave one fabricated letter allegedly issued by SEBI in favour of

Purushotam stating that SEBI accorded permission to get register the said land Ac.91.50 cents at Pedabommalapuram village, he suspected the letter made enquiries and came to know the matter is fabricated.

21. Accused further deposed that in meanwhile he tried to settle the matter by refund the money to the PW.1 but he insisted for land instead of refund of money on 07.07.2021 he went to the house of PW.1 with

Rs.5,00,000/- cash along with his driver Rambabu, mediator Mallareddy and

V.Kasulu, he agreed to give remaining amount within six months along with 12% interest but complainant detained him in his house after receipt

Rs.5,00,000/- cash and threatened him without giving cheques they will not 14 leave the accused as such, his driver Rambabu went to the house of accused in Guntur and brought the three filled cheques. Accordingly he signed in the said three cheques without filling the columns. On 17.11.2021, he issued notice to the complainant through his counsel and also issued stop payment instructions to the bank on 29.11.2021, complainant sent reply notice to the accused through his counsel with false averments stating that he himself voluntarily issued cheques on 15.11.2021 but not on 07.07.2021.

On 02.12.2021, the accused sent rejoinder to the complainant with an instructions not to present the cheque but the said rejoinder notice received by complaint counsel Sri Benarji but complainant not received notice with an endorsement that complainant is absent. Complainant presented the said three cheques through his bank even though he gave stop payment instructions to the bank, he has no intention to cheat the complainant and it is not legally enforceable debt hence he requested the court to acquit him.

During his cross examination he admitted the recitals in Ex.P6 agreement of sale further admitted that he failed to perform his part of contract he requested the complaint to grant six months time to return balance advance amount, he failed to give balance amount to the complainant with in six months, further admitted that he issued three cheques. on perusal of DW1 evidence it is no way useful to his contest.

22.Accused summoned the L. Srinivasarao, who is the clerk in the State

Bank of India, Srinagar Branch, Gannavaram, examined as DW.2 he deposed that he received summons from court. Ex.P1 cheque presented in his branch since payee is his customer they accepted the said cheque it is valid upto Rs.10,00,000/- however they accepted the said cheque since there is no balance in the account of the accused he issued cheque return memo stating that ‘insufficient funds’. He identified his signature on the back side of Ex.P1. Learned counsel for the complainant questioned that Ex.P1 15 cheque is valid upto Rs.10,00,000/-, how he received the cheque from complainant without return the same on the ground of invalid for that he replied initially they received the cheque for verification of signature and balance then they will return the same for want of sufficient funds. Further stated that he has no malafide intention to give the endorsement as ‘insufficient funds’. During his cross-examination, he stated that whenever customer presented cheque they will verify the balance amount of the said customer, if sufficient balance amount is available in the account they will verify the signature of the customer, in case the customer issued stop payment instruction to his mother branch there is no chance to know the same to the another branch. By examining the DW2 no useful material was elicited in favour of the accused.

23.After perusing the entire evidence on record complainant successful proved that Ex.P1 cheque was issued towards discharge of legally enforceable debt or liability. Now the sole point for consideration is how much amount due to the complainant, basing on the case record it is clear that DW.1/accused received Rs.30,00,000/- towards advance sale consideration thereafter the accused returned Rs.5,00,000/- to the complainant and remaining Rs.25,00,000/- is outstanding amount to the complainant but complainant claimed interest at the rate of 24% per annum from the date of agreement of sale whereas in Ex.P6 recited 18% interest but accused claimed that he agreed for 12% interest and accused not denied his liability but contended that complainant claiming excess interest and he did not issue cheque voluntarily and forcibly obtained unfilled signed cheques for that accused issued legal notice to the complainant under

Ex.D1 on 17.11.2021 where as on 07.07.2021 complainant took cheques why he waited for 4 months, 10 days to give legal notice to the complainant moreover immediately after threatening and detained the accused, he did 16 not give any police report and no explanation was offered for not giving notice to the complainant immediately. Accused mainly disputing the interest rate and manner of issuance of cheques but not his liability. However accused did not examine any of the persons who accompanied with him at the time of negotiations with complainant to prove his contention that he negotiated interest rate @ 12% per annum, for that accused explained his driver Rambabu, mediator Mallareddy are no more but another person

V.Kasalu is alive but accused failed to examined the said person on his behalf.

24. This Court carefully perused the oral and document evidence available on record and in the cross-examination of PW1 nothing material could be elicited by the accused to disprove the case of the complainant and accused adduced evidence is no way helpful to the accused case. Accused himself admitted his liability to return the amount to the PW1 further accused pleaded he was also cheated by others in the transaction of Ex.P6 and filed some documents to prove his innocency in the said transaction. Assuming a movement accused was cheated in the hands of V.Purushotham, it is in between the accused and the said Purushotham, whether accused took any legal action against said V.Purushotham is no evidence but complainant is no way concerned with the hardship and difficulties to perform the Ex.P6 agreement, it is the duty of the accused to return the money to the complainant more over the accused since begging expressed his intention to return the advance amount but due to financial crises he unable to pay the money, by way of admitting the case and expressed his intention to return the money to the complainant but argued minor discrepancies like on which date accused issued cheques, either force or voluntary, to prove the said discrepancies did not adduce any positive evidence and his evidence as Dw1 is no way useful to his contest since his cross examination by and 17 large all are admissions made by the accused. Admittedly several negotiations took place between them after this cases filed before the court too, as such both parties gave different dates to suit their version and accused failed to disprove the version of the complainant by way of cross examination of complainant and adducing his evidence since heavy burden lies on him u/s 139 N.I act.

25. Learned counsel for accused relied on the decisionreported in

Crl.Appeal No.04/2023 in between Vardhineedi Sriramanjaneyulu Vs.

Yeeda Sasibhushan, dated 09.04.2025. where in held that complainant failed to prove the existence of legally enforceable debt in between complainant and the accused, financial capacity of the complainant to lend such an amount, complainant did not produce any documents to show that he gave said amount to the accused. Hon’ble court referred the decision of

Hon’ble Apex Court reported in Crl.Appeal No.636 of 2019 in between

Basalingappa Vs. Mudi Basappa on 09.04.2019.

This court carefully perused the decisions relied by the accused with due respects of Hon’ble ladyship facts and circumstances are different not applicable to the present case facts.

26.These basic facts of the case inspire the invocation of the legal presumption U/Sec.139 of NI Act in favour of the complainant. Thus, the initial burden, that the accused gave cheques to the complainant, is discharged by the complainant. Considering all this, this court is of the opinion that the PW1 established the factual basis for raising such presumption through his evidence. Hence the presumption U/Sec.139 of NI

Act is available for the complainant.

27. S.139 of N.I.Act says that the court has to presume unless the contrary is proved that the holder of the cheque received the cheque for discharge in whole or in part of a debt or liability. This presumption is 18 rebuttable. Now it is the burden of the accused to establish that the Ex.P1 cheque had not been issued for a debt or legally enforceable liability i.e.,not of the nature referred to in Sec.138 of N.I Act. But the material elicited through the cross examination of PW1 is not sufficient to make the contention of the accused probable and sufficient to rebut the presumption.

After considering the entire evidence and material available on the record it appears to me that the contention of the accused is not probable and not convincing.

28.The perusal of the record, reveals that the circumstances raised by the defence are not enough to damage the credibility of the complainant case. There is absolutely no justification for discarding the complainant's case. Though the burden of the accused can not equally be compared with that of the complainant, I don't think that the evidence adduced by the accused is sufficient to rebut the presumption. Hence this court is of the opinion that the accused has failed to discharge his burden in proving that he has not issued the cheque in discharge of debt or liability as contended by him. Thus Point Nos 1 and 2 are answered in favour of the complainant.

29. Point No.3:

Coming to the Ex.P1, it is not the plea of the accused that the complainant forged the signatures on it. On the other hand accused admits his signature on it. There arises a presumption U/Sec.118(a) of N.I.Act, that cheque was issued for consideration. As seen, The complainant deposed and produced before the court the required documents that the Ex.P1 was dishonored for want of funds under Ex.P2 (cheque return memo), that legal notice under Ex.P3 there of was issued ,within the time allowed by the law.

30. In view of Sec.146 of N.I.Act, bankers slip is prima facie evidence and it does not require any supporting evidence. Admittedly Ex.P3 memo issued by the bank authorities discloses that the cheque has been 19 dishonoured due to FUNDS INSUFFICIENT in the account of the accused.

Further it is not the endorsement of the authorities that the accused was not having any account in their bank, so also his signatures were not tallying with that of the signatures mentioned in Ex.P1.

31. Thus the basic ingredients that the cheque was given, it was presented and dishonored, that written notice was given to the accused and same was received by the accused proved by the complainant hence point no.3 is answered in favour of the complainant.

32. In view of the failure of the accused to dislodge the version of the prosecution and in the light of the discussion of Point No.1 to 3, this court holds that the accused has committed offence U/Sec.138 of N.I.Act.

33. In the result, the accused is found guilty for the offence under sec.138 of NI Act accordingly accused is convicted U/Sec.255(2) of Cr.P.C.

Typed to my dictation to the Stenographer directly and corrected and

pronounced by me in open court on this the 14th day of May, 2026.

Addl. Chief Judicial Magistrate, Gannavaram

Hearing on quantum of sentence:

Accused is questioned with regard to quantum of sentence that can be imposed, for which he submitted that he is suffering from ill health and sustained huge financial loss and his entire family depend upon him.

Hence, he requested the court to take lenient view. This court is conscious that legislation has incorporated section 138 of the Act to curb the practices of issuing cheque without any funds and to bring harmony in business transactions. The nature of offence and the mode in which it was committed do not warrants the application of beneficial provisions of P.O.Act.

20

The Hon'ble SUPREME COURT in 'R. Vijayan Vs Baby and another' '[2012(1) S.C.C 260]' held that granting of compensation is must in cheque bounce cases to maintain uniformity in the decisions of the courts. It was held that “As the provisions of Chapter XVII of the Act strongly lean towards grant of reimbursement of the loss by way of compensation, the courts should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy fine upto twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount as compensation. Direction to pay compensation by way of restitution in regard to the loss on account of dishonour of the cheque should be practical and realistic, which would mean not only the payment of the cheque amount but interest thereon at a reasonable rate. Uniformity and consistency in deciding similar cases by different courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice.”

In view of the above decision and in the circumstances of this case, I am of the opinion that this is not a fit case to take a lenient view.

Further, there used to be some discussion as to whether the

default sentence can be imposed for non payment of compensation.

The said discussion is settled at rest and it has been held by the

Hon'ble SUPREME COURT in 'K.A.Abbas H.S.A. vs Sabu Joseph &

Anr.' [2010 STPL (Web) 384 S.C (D.B)] arising out of S.L.P (Crl) No. 334

of 2008 that default sentence can be imposed for non payment of

compensation.

Accordingly, the accused is sentenced to undergo simple

imprisonment for a period of Six months and to pay a compensation of

Rs. 30,00,000/- under section 357(3) of Cr.P.C to the complainant in this

case, in default, to suffer simple imprisonment for further period of

21

Three months. The accused is entitled for set off of remand period,

U/s. 428 of Cr.P.C from the substantial sentence, however, in this Case,

the accused never undergo judicial custody for any period. This Court

explained the right of appeal to the accused with free legal aid before

the Hon'ble District & Sessions Court, within 30 (thirty) days. Free

copy of judgment is furnished to the accused.

Typed to my dictation by Stenographer corrected and pronounced by me in open court on this the 14th day of May, 2026.

Addl. Chief Judicial Magistrate, Gannavaram

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

For Complainant: For Accused :

PW1 : M.Ratna BoseDW.1 –K.Siva Kumar. PW2 :Vempati KalyanDW.2 – L.Srinivasarao. PW.3: Lanka Murali Krishna. PW.4: Pendem Chittibabu.

DOCUMENTS MARKED

For Complainant:

Ex.P1 : Cheque bearing No.649213 for Rs.30,00,000/- executed by accused in favour of petitioner.

Ex.P2 : Cheque return memo dated 06.12.2021 from SBI, Srinagar colony,

Ex.P3 : Office copy of legal notice, dated 20.12.2021.

Ex.P4 : Postal acknowledgment for service of legal notice,

dated 08.01.2022.

Ex.P5 : Office copy of reply notice, dated 17.01.2022 issued by accused to the complainant through counsels.

Ex.P6 : Unregistered agreement of sale dated 11.07,.2019 executed by; the accused in favour of complainant.

22

For Accused :

Ex.D1: Legal notice dated 17.11.2021 along with acknowledgment(marked through PW.1)

Ex.D2 : Reply notice of PW.1, dt.29.11.2021(marked through PW.1)

Ex.D3: Certified copy of agreement of sale cum GPA bearing No.1483/2005,

dated 23.05.2005.

Ex.D4 :Minutes of board of directors of PACL Limited, dated 05.05.2014, (since it is downloaded copy from internet marked subject to objection proof and relevancy)

Ex.D5 :Certified copy of GPA executed by V.Purushotham, Project Manager, PACL Limited, in favour of K.Siva Kumar.

Ex.D6: Original acknowledgment/receipt issued by V.Purushotham,

dated 06.08.2019.

Ex.D7: Online copy of civil Appeal No.13301/2015, dated 23.01.2020.

Ex.D8: Letter addressed by accused to SBI to stop the payment relating to cheque No.649213 with acknowledgment stamp, dated 17.11.2021.

Ex.D9: Office copy of legal notice with two postal receipts,

dated 02.12.2021.

Ex.D10: Acknowledgment of advocate K.Benarjee, dated 04.12.2021.

Ex.D11: Returned registered notice cover of PW.1, dated 09.12.2021.

Addl. Chief Judicial Magistrate, Gannavaram 23

IN THE COURT OF THE ADDL. CHIEF JUDICIAL MAGISTRATE:

GANNAVARAM

CALENDAR & JUDGMENT

CC.No.01/2024 (OLD C.C.NO. 06/2023, 188/2022)

DATE OF :- Offence: 06.12.2021 Filing: 02.02.2022 Apprehension of accused: -- Released on bail: -- Commencement of trial: 09.05.2023 Close of trial: 25.02.2026 Sentence or order: 14.05.2026

Between : Musunuru Ratna Bose, S/o Venkata Subba Rao, Ex MLA, aged 74 years, R/o 2-79/1, Main Road, Gannavaram Village, Gannavaram Mandal, Krishna District. …Complainant.

And

Kuragayala Siva Kumar, S/o Late K.Satyanarayana, R/o Flat No.24, Kamalesh Enclave, 7/3 Chandramoulinagar, Guntur. … Accused. Explanation for delay: This case is taken on file before the XII Addl.Metropolitan Magistrate Court, Gannavaram on 05.03.2022 for the offence under Sec. 138 of NI Act numbered as C.C.No. 187/2022, after appearance of the accused, on 11.10.2022 copies of documents were furnished to him. On 24.01.2023 accused was examined u/Sec.251 Cr.P.C. During the course of trial, on behalf of the complainant, on 9.05.2023 Pw.1 examined in chief and got marked Exs.P1 to P5 and on 17.08.2023, PW.1 further examined in chief and marked Ex.P6 and cross examined Pw.1 in part and Ex.D1 and D2 marked on 05.12.2023 by the learned defence counsel. At the stage of cross examination of PW.1, this case was transferred to the Spl.Magistrate Court, Gannavaram as per the orders of Hon’ble District Court in Dis.No.4196/dt.02.06.2023 and renumbered as C.C.No.06/2023. PW.1 was examined in cross, on 23.04.2024, PW.2 was examined and on 31.07.2024, PW.3 was examined. At the stage of cross examination of PW.2 and PW.3, 24 this matter was transferred to this court ie. Addl. chief Judicial Magistrate court- cum- Civil Judge (Senior Division) and renumbered as C.C.No.01/2024. On 22.09.2025, PW.4 was examined. After the closure of complainant’s evidence, the accused was examined under sec.313 Cr.P.C, explaining incriminating material available on record and he denied the same and reported for defence evidence. On 03.11.2025, DW.1 was examined in chief and Ex.D3 to D11 were marked. On 25.02.2026, as per

Crl.M.P.No.360/2025, DW2 was examined in chief and cross. Hence,

defence side evidence is closed. Arguments heard from both sides. On 14.05.2026 the judgment is pronounced.

Offence: u/Sec. 138 of N.I. Act Plea of accused : Pleaded not guilty. Finding : Found guilty. Sentence or Order:

In the result, the accused is found guilty for the offence under sec.138 of NI Act and accordingly, he is convicted him U/Sec.255(2) of Cr.P.C. Accused is questioned with regard to quantum of sentence that can be imposed, for which he submitted that he is suffering from ill health and sustained huge financial loss and his entire family depend upon him. Hence, he requested the court to take lenient view. This court is conscious that legislation has incorporated section 138 of the Act to curb the practices of issuing cheque without any funds and to bring harmony in business transactions. The nature of offence and the mode in which it was committed do not warrants the application of beneficial provisions of P.O.Act. The Hon'ble SUPREME COURT in 'R. Vijayan Vs Baby and another' '[2012(1) S.C.C 260]' held that granting of compensation is must in cheque bounce cases to maintain uniformity in the decisions of the courts. It was held that “As the provisions of Chapter XVII of the Act strongly lean towards grant of reimbursement of the loss by way of compensation, the courts should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy fine upto twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount as compensation. Direction to pay compensation by way of restitu- tion in regard to the loss on account of dishonour of the cheque should be practical and realistic, which would mean not only the payment of the cheque amount but interest thereon at a reasonable rate. Uniformity and consistency in deciding similar cases by different courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice.” 25

In view of the above decision and in the circumstances of this case, I am of the opinion that this is not a fit case to take a lenient view.

Further, there used to be some discussion as to whether the

default sentence can be imposed for non payment of compensation.

The said discussion is settled at rest and it has been held by the

Hon'ble SUPREME COURT in 'K.A.Abbas H.S.A. vs Sabu Joseph &

Anr.' [2010 STPL (Web) 384 S.C (D.B)] arising out of S.L.P (Crl) No. 334

of 2008 that default sentence can be imposed for non payment of

compensation.

Accordingly, the accused is sentenced to undergo simple

imprisonment for a period of Six months and to pay a compensation of

Rs. 30,00,000/- under section 357(3) of Cr.P.C to the complainant in this

case, in default, to suffer simple imprisonment for further period of

Three months. The accused is entitled for set off of remand period,

U/s. 428 of Cr.P.C from the substantial sentence, however, in this Case,

the accused never undergo judicial custody for any period. This Court

explained the right of appeal to the accused with free legal aid before

the Hon'ble District & Sessions Court, within 30 (thirty) days. Free

copy of judgment is furnished to the accused.

ADDL. CHIEF JUDICIAL MAGISTRATE,

GANNAVARAM

Copy submitted to: The Hon”ble I Addl. District and Sessions Judge, Krishna, Machilipatnam for information.

26

1

IN THE COURT OF THE ADDL. CHIEF JUDICIAL MAGISTRATE:

GANNAVARAM

Present: Dr.Smt.S.Aruna Sri Addl. Chief Judicial Magistrate, Gannavaram

Thursday, this the 14th day of May, 2026

CC.No.03/2024 (OLD C.C.NO. 08/2023, 189/2022)

Between: Musunuru Ratna Bose, S/o Venkata Subba Rao, Ex MLA, aged 74 years, R/o 2-79/1, Main Road, Gannavaram Village, Gannavaram Mandal, Krishna District. …Complainant.

And

Kuragayala Siva Kumar, S/o Late K.Satyanarayana R/o Flat No.24, Kamalesh Enclave, 7/3 Chandramoulinagar, Guntur. … Accused.

This case has came up before me on 11.05.2026 for hearing in the presence of Sri Ch.Anjaiah, Learned counsel for complainant and the counsel for accused Sri C.Raghuramireddy and Sri V.Raja Sekhar Reddy, and upon hearing having stood over to this day for consideration, this court, delivered the following:

J U D G M E N T

1. This is a private complaint filed by the complainant under section 190 and 200 of Criminal Procedure Code, 1973 against the accused for the offence punishable U/Sec.138 r/w 142 of Negotiable instrument act 1881 (herein after referred to N.I. Act for brevity).

2. As per the complainant, the chain of facts unfolded in the following manner ;

a). The complainant/ Musunuru Ratna Bose is the Ex MLA, Resident of

Gannavaram Village, on knowing the potential of complainant, accused approached the complainant with an ill motive to sell scheduled property to 2 the complainant, in spite of knowing the fact that the said property is completely under the control of SEBI. The complainant believed the words of accused and accepted the offer made by the accused and entered into a sale agreement on 11.07.2019, as per the terms and conditions of the said agreement, accused received Rs.30,00,000/-as advance sale consideration.

Subsequently, the complainant came to know about the litigation surrendered to the property. The complainant discussed with accused relating to the schedule property and requested him to refund the sale consideration with interest at the rate of 24% per annum starting from the date of agreement of sale ie., 11.07.2019. Accused confessed his malafide intention and settled the matter in the presence of elders and he agreed to refund the sale consideration amount with 24% interest rate per annum from the date of agreement of sale and gave Rs.5,00,000/- as a part of such refund.

b). Further the complainant repeatedly requested the accused but accused failed to perform his part of contract. On 11.11.2021, complainant having no other option approached the accused and informed to him that he will be initiated legal action against him on that on 15.11.2021, accused issued three cheques to the complainant and duly signed by the accused ie.

cheque bearing No.649213 for sum of Rs.30,00,000/-, another cheque bearing No.067060 for sum of Rs.7,45,966/- and another cheque bearing

No.067059 for a sum of Rs.7,45,966/- towards part payment of legally enforceable debt.

c). The complainant presented the said cheque bearing No.649213 drawn at SBI, Tadipatri, Ananthapur branch for sum of Rs.30,00,000/- through his banker SBI Branch, Srinagar colony, Gannavaram on 06.12.2021 and the same was returned vide return memo dated 06.12.2021 endorsed that ‘funds insufficient’. After receipt of memo complainant got 3 issued statutory notice on 20.12.2021 to the accused by demanding to pay the cheque amount but accused received the notice on 08.01.2022 and gave reply with false and frivolous allegations. Hence, the complainant filed this complaint before this court.

3.The learned XII Addl.Metropolitan Magistrate Court, Gannavaram perused the entire record and sworn affidavit of the complainant, took cognizance of the offence u/s 138 r/w 142 N.I.Act and numbered as

CC.No.188/2022 and summons issued to the accused.

4. After receipt of summons accused appeared before court and copies furnished to him. The accused was examined U/s.251 of Cr.P.C and the substance of accusation for the offence u/s 138 N I Act and he pleaded not guilty and claimed for trail.

5. In pursuance of his case, the complainant himself examined as PW1, and got marked Ex. P-1 to P6 documents, on his behalf PW2 to 4 were examined, at the stage of cross examination of PW.1, this case was transferred to the Spl.Magistrate Court, Gannavaram as per the orders of

Hon’ble District Court in Dis.No.4196/dt.02.06.2023 and renumbered as

C.C.No.07/2023. PW.1 was examined in cross, on his behalf PW.2, PW.3 filed their chief examination affidavits at the stage of cross examination of

PW.2 and PW.3, this matter was transferred to this court ie. Addl. chief

Judicial Magistrate court-cum-Civil Judge(Senior Division) and renumbered

as C.C.No.02/2024.

6. After closure of complainant’s evidence, the accused was examined under Sec.313 Cr.P.C, explaining incriminating material available on record and he denied the same. The accused reported for defence evidence. The accused himself examined as DW.1 and got marked Exs.D1 to D10.

4

7. Arguments heard on either side. The learned counsel for accused filed written arguments.

a). learned counsel for the complainant argued that, the evidence of

P.W.1 to 4, amply substantiated through Ex.P.1 to Ex.P6 and nothing material could be elicited in the cross examination of P.W.1. Thus, the evidence of the complainant itself amply shows the complicity of the accused for the offence u/s 138 NI Act. Accused himself admitted his liability to return the balance sale consideration amount and issuance of cheques are admitted facts as such admitted facts need not be proved. Thus The complainant proved his case beyond all reasonable doubt and the accused is liable for the punishment. He requested the court to record conviction against the accused and sentenced him appropriately as per law.

b). On the other hand, learned counsel for the accused vehemently argued that the evidence of complainant will be nullified even by cross- examination. It is settled principle of law that the complainant is duty bound to unfold his case with consistent and cogent evidence beyond all reasonable doubt. He cannot depend upon the weakness or otherwise the case of the accused. The existence of legally enforceable debt is a conditional precedent to prove the case under Sec. 138 of Negotiable

Instruments Act. PW1 evidence is not trustworthy, PW.2 to PW.4 evidence not corroborated the evidence of PW.1 in any of the material aspects and their evidence is inconsistent among them .

c). Further argued that the accused was cheated in the hands of one

Purushotham and the entire PACL Properties were seized by the CBI in the year 2013, Government of India handed over the case to justice Lodha committee and the properties were controlled by the Lodha committee. The management of the PACL approached the Supreme Court of India and filed

C.A.No.13394/2015 and C.A.No. 13410/2015 for release of properties, the 5 saidpurushottam created fake documents like board resolution of PACL and

SEBI letter and delivered to him, accused believed the version of

Purushottam and executed agreement in favour of the complainant and realized about cheating of Purushottam and approached the complainant and agreed to refund the advance sale consideration with 12% interest and that he paid part payment of Rs.5,00,000/- on 07.07.2021 to the complainant but coerced the accused and obtained three signed unfilled cheques and signed non judicial stamp papers. Accused gave stop payment instructions to his bank and got issued notice dt 17.11.2021 to the complainant not to present the cheques, the complainant got issued reply notice dt 29.11.2021 stating that accused issued cheques on 15.11.2021 for Rs.30,00,000/-,

Rs.7,45,966/-, Rs.7,45,966/- .

d). The accused further argued that date of issuance of cheque was mentioned as 15.11.2021 in Ex.D2, in Ex.P3 and in the evidence of PW.1, but in the cross examination PW.1 stated accused issued cheque on the date of agreement ie.,11.07.2019, on the date when accused gave

Rs.5,00,000/- on that day, he issued two filled cheques through his driver.

PW.2 and PW.3 deposed that accused issued two cheques on 15.11.2021 further stated he will send one more cheque through his driver but in the cross examination they stated due to typographical mistake date of issuance of cheque was mentioned as 15.11.2021 instead of 06.12.2021. PW.4 deposed that on 06.12.2021 accused issued three cheques to the complainant. Evidence of PW.1 is inconsistent with regard to date of issuance of cheque PW.2 to PW.4 also not corroborated the evidence of

PW.1 itself shows that there is no legally enforceable debt.

e). Further, contended that accused returned Rs.5,00,000/- to the complainant he has to pay balance amount of Rs.25,00,000/- but PW.1 claimed in three cases total an extent of Rs.44,91,932/- how calculated the 6 amount there is no calculation memo filed. Accused has no intention to cheat the complainant and he is the responsible person voluntarily went to the house of complainant and gave Rs.5,00,000/- and agreed to pay balance amount within 6 months, due to financial and family problems he unable to discharge the balance amount. In fact accused was cheated by one Purushottam, accused has no right to execute sale deeds as entire property was seized by SEBI. He also filed connected documentary evidence, complainant did not deny the Ex.D1 to D10 documents. Accused is scape goat in the hands of Purushottam. Complainant did not come to the court with clean hands to harass the accused filed this case suppressing the material facts. Hence he requested the court to dismiss the case.

08. Now the points for determination are :

i). Whether Ex.P1 cheque had been issued in discharge of

legally enforceable debt due to the complainant?

ii). Whether the accused had discharged his burden of proving that Ex.P1 cheque had not been issued for a debt or legally enforceable liability?

Iii). Whether the accused committed the offence under section 138 of N.I. Act?

09.Before adverting to the rival contentions it was seen whether the conditions stipulated under section 138 of Negotiable Instruments Act to invoke the provision or in existence as per the contents of the complainant or not is to be seen. The cheque was issued on 06.12.2021 as per Ex.P1 cheque and it was dishonored on 06.12.2021. Registered legal notice issued on 20.12.2021 and the same was received by the accused and issued reply notice. The complaint is filed on 02.02.2022, which clearly discloses that all the conditions stipulated under section 138 & 142 NI Act is complied with.

7

10. In these circumstances it is pertinent to have a glance at Section 118 and 139 of NI Act. For a better understanding the section 118 and 139 NI

Act reads as follows:- Sec.118. Presumptions as to negotiable

instruments of consideration. — Until the contrary is proved, the

following presumptions shall be made: —

(a) of consideration — that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration.

Sec. 139. Presumption in favor of holder. — It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, or any debt or other liability.

Thus a perusal of above provision of law and it’s tenor of language

shows that it is mandatory on part of this court to draw the

presumption as to the existence of the consideration and the

instrument in question being drawn for discharge of the whole or part

of an existing liability ( legally enforceable).

11.Thus, it is abundantly clear that there is a statutory presumption which enjoins a duty upon this court to draw a statutory presumption that the cheque was issued only for consideration in discharge of a legally enforceable debt. Thus, the onus is on the shoulders of the accused to disprove that the cheque was not issued by him towards the discharge of legally enforceable debt and that the cheque was not supported by consideration. Thus, in order to rebut the presumption that is drawn under 118 and 139 of NI Act the material on record for the accused is that of cross examination of P.W.1 to PW4 and evidence of DW1. No doubt it is well neigh settled that, in order to rebut the presumption defendant need not get 8 in to witness box he can as well do it even by cross examination of the witnesses of complainant. Hon'ble apex court held In Krishna Janardhan

Bhat V. Dattatreya G Hegde., AIR 2008 SC 1325,

12. Having heard arguments from both sides and perusing the evidence on record, this court decides the matter as follows:

Point No.1 & 2 : To raise presumption u/s 139 N.I Act that accused had issued Ex.P1 cheque to satisfy part or whole of the debt, it has to be proved that there is existing a legally enforceable debt or other liability, between the complainant and the accused, which is an important ingredient of section 138(NI) Act.

13.Coming to the evidence, the complainant got examined as PW1 and he reiterated the contents of his complaint through his affidavit filed in lieu of his chief examination. As per the evidence of complainant (PW1), the accused is a GPA agent for PACL India Limited, complainant being a

Ex.MLA knowing his potential accused approached him and offered to sell the property situated at Markapuram Sub Registrar, Pedda Dornala Mandal,

Pedda Bommalapuram village, total extent of Ac.91.50 cents, both entered into sale agreement on 11.07.2019 and complainant paid Rs.30,00,000/- advance sale consideration to the accused. Thereafter, he came to know that the said property is completely under the control of SEBI accused knowing fully well suppressed the said fact taking advantage of the innocence of complainant. On demand of the complainant accused agreed to refund the sale consideration with interest @ 24% per annum and gave

Rs.5,00,000/- part of such refund, on 15.11.2021 accused issued three cheques for Rs.30,00,000/, two cheques for Rs.7,45,966/- each. PW.1 presented the said cheques on 6.12.2021 same was returned with endorsement that ‘funds insufficient’. Thereafter PW.1 issued legal notice on 20.12.2021, accused received the same but kept quite. Then PW.1 filed this 9 complaint, through his evidence Ex.P1 to P6 are marked. The accused knowing fully well that he has no sufficient funds in his account issued the cheque, and thereby committed the offence U/s 138 of NI Act. through his evidence Ex.P1 to P6 marked.

14. On behalf of PW.1, one B.Kalyan and L.Murali Krishna examined as

PW.2 and PW.3. they filed chief examination affidavit stating that accused made a sale agreement with complainant in the year 2019 and received

Rs.30,00,000/- as advance sale consideration but accused failed to execute sale deed in favour of the complainant. After that negotiations took place between the accused and complainant in their presence and other elders accused agreed to pay said Rs.30,00,000/- along with 24% per annum.

Accordingly accused paid Rs.5,00,000/- and agreed to issue cheques to the complainant in their presence to discharge the debt and issued two bank cheques on 15.11.2021. Accused further agreed that he will sent one more cheque through driver of the complainant. Thereafter, they came to know cheques presented for en-cashment were dishonored and complainant filed cases against the accused. In re examination of PW.2, PW.3 clarified that date of issuance of cheques are on 6.12.2021 but in their chief affidavits wrongly mentioned that date of issuance of cheques are 15.11.2021.

During their cross examination, PW.2&PW.3 stated that in the year 2019 complainant negotiated with accused to purchase land by that time, they accompanied with complainant, on 06.12.2021 accused returned the

Rs.5,00,000/- to the complainant since land transaction canceled in between them and issued two cheques belongs to SBI and Axis Bank. It was suggested that complainant is relative to the PW.2, PW3 and to help him they are deposing false, witnesses denied the same.

15. PW4 / P.Chitti babu is the driver of the PW1, he filed his chief examination affidavit stating that accused made a sale agreement with 10 complainant in the year 2019 and received Rs.30,00,000/- as advance sale consideration but accused failed to execute sale deed in favour of the complainant. After that negotiations took place between the accused and complainant in their presence and other elders accused agreed to pay said

Rs.30,00,000/- along with 24% rate of interest per annum. Accordingly accused paid Rs.5,00,000/- and issued three cheques to the complainant.

Thereafter, he came to know cheques presented for encashment were dishonored and complainant filed cases against the accused. During his cross examination suggested that PW4 is driver to the complainant to help him deposing false without knowing any thing. Witness denied the same.

16. Firstly, I would like to discuss the cross examination of PW1, as the accused need not step into witness box, he can rebut the presumption by way of cross examination as such cross examination of PW1 is very much essential to the accused as such how far defence counsel elicited the material points in the cross examination of PW.1. In the cross examination, learned defence counsel confronted the legal notice dated 17.11.2021 along with acknowledgment, reply notice of PW.1 dated 29.11.2021 marked as

Ex.D1 & Ex.D2. In the cross examination, PW.1 stated that Ex.P1 is not a blank cheque and it is signed cheque on the date when accused gave

Rs.5,00,000/- he also issued two filled cheques through his driver it was suggested that PW.1 took the two cheques forcibly from accused. In further cross examination PW.1 admitted that accused issued cheque without date for Rs.30,00,000/- on the date of agreement ie. on 11.07.2019, he filled the date on the cheque on the date of presentation of cheque on 06.12.2021.

but accused did not deny the said fact suggesting that he did not issue any cheque on the date of Ex.P6. Finally it was suggested Ex.P1 is not maintainable as he obtained cheque from accused without date, by threatening the accused witness denied the same. During the cross 11 examination of PW.1 all are denials nothing material could be elicited to discard the version of the complainant except formal suggestions.

17. PW.2 and PW.3 are known persons, PW4 is the driver of the PW1 they totally corroborated the version of PW1 during their cross examination suggested that complainant took the three signed unfilled cheques from accused forcibly, to help the PW1 depose false, except suggestions nothing materiel could be elicited.

18. These are the admitted facts : The accused and complainant are known persons and there is no disputes regarding acquaintance of each other, further in between them there was an Ex.P6 agreement of sale dated 11.07.2019 transaction took place, in pursuance of Ex.P6 sale agreement complainant paid Rs.30,00,000/- to the accused later accused failed to perform his part of the contract,negotiations took place in between them, on that accused returned the Rs.5,00,000/- to the complainant and agreed to return the balance amount with in six months due to financial crises unable to pay the balance sale consideration.

19. On perusal of oral and documentary evidence of both sides accused himself admitted the ExP6 transaction and his liability to return the money to the complainant, non performance of ExP6 agreement of sale is the basis for this case, In general when both paries entered into agreement, they have to perform their part of the contract in the present case, accused failed to perform his part whatever may be the reasons for accused, he has to return the money to the accused thus the said transaction is legally enforceable liability as explained Sec.138 N.I act Explanation.-For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability. but when cheques were issued, who filled the cheques, how much amount due, what is the interest rate, how the amount covered under the cheques were calculated these particulars are not clear.

12

Date of issuance of cheque is noted on Ex.P1 is 6.12.2021 but in compliant and chief affidavits of PW1 to PW.3 noted as 15.11.2021 but complainant counsel found the same to rectify it, in the re-examination clarified the said fault from PW.2 and PW.3 stating that the date of issuance of cheques noted wrongly as 15.11.2021 instead of 6.12.2021, except mere suggestions there is no cross examination on this aspect to the Pw1 to 3 to shake the veracity of the witnesses and failed to elicit the material facts. Further as per the version of the accused on 07.7.2021 he came to complainant house to settle the matter and returned Rs.5,00,000/- to the complainant but complainant detained him and forced the accused as such accused brought the three cheques and gave the same to the PW1. That means on 07.07.2021, accused gave cheques to the complainant but he gave notice to the complainant on 17.11.2021 with an instructions not to present the cheques under Ex.D1, PW1 gave reply under Ex.D2.

20.Even though, the accused need not step into witness box, he can rebut the presumption by way of cross examination, but in the cross examination failed to elicit the material facts in favour of the defence. The accused himself examined as DW.1. The accused reiterated his averments in the cross examination of Pw1 further deposed that one V.Purushotham acquainted to him through mediator Mallareddy, the said Purushotham is the project manager to PACL India Limited, approached the accused and told to him that their company purchased lands an extent of Ac.91.50 cents at

Peda Bomalpuram by way of GPA from different land owners in different survey numbers in the year 2004-2005 by way of agreement of sale, GPA.

In the year 2018 the said Purushotham gave GPA to him for Ac.91.50 cents basing on the GPA he intended to sell the said lands in that process PW.1 approached him through mediators and sale price fixed for Rs.2,45,000/- per acre he gave Rs.30,00,000/- advance sale consideration on 11.07.2019 13 under Ex.P6 agreement of sale. He sent payments to the persons suggested by said Purushotham by way of bank transfer and he has receipts for proof of payments to the others after sending money the said

Purushotham not responded to his phone and his phone is switched off. He made enquiries at Delhi PACL India Limited office came to know the said office was seized by CBI and handed over to the SEBI through Ludra

Committee, he came to conclusion that the said Purushotham suppressed the facts cheated him and MOU given by purushotham is fabricated document and the said purushotham disappeared whereabout not known, his enquiries revealed that Chairman of PACL, Subrathobhattacharya filed a case against PACL directors alleging that the said directors cheated him , the said case was pending in Delhi Court in Civil appeal No.13301/2015.

Thereafter mediator Mallareddy gave one fabricated letter allegedly issued by SEBI in favour of Purushotam stating that SEBI accorded permission to get register the said land Ac.91.50 cents at Pedabommalapuram village, he suspected the letter made enquiries and came to know the matter is fabricated.

21. Accused further deposed that in meanwhile he tried to settle the matter by refund the money to the PW.1 but he insisted for land instead of refund of money on 07.07.2021 he went to the house of PW.1 with

Rs.5,00,000/- cash along with his driver Rambabu, mediator Mallareddy and

V.Kasulu, he agreed to give remaining amount within six months along with 12% interest but complainant detained him in his house after receipt

Rs.5,00,000/- cash and threatened him without giving cheques they will not leave the accused as such, his driver Rambabu went to the house of accused in Guntur and brought the three filled cheques. Accordingly he signed in the said three cheques without filling the columns. On 17.11.2021, he issued notice to the complainant through his counsel and also issued 14 stop payment instructions to the bank on 29.11.2021, complainant sent reply notice to the accused through his counsel with false averments stating that he himself voluntarily issued cheques on 15.11.2021 but not on 07.07.2021.

On 02.12.2021, the accused sent rejoinder to the complainant with an instructions not to present the cheque but the said rejoinder notice received by complaint counsel Sri Benarji but complainant not received notice with an endorsement that complainant is absent. Complainant presented the said three cheques through his bank even though he gave stop payment instructions to the bank, he has no intention to cheat the complainant and it is not legally enforceable debt hence he requested the court to acquit him.

During his cross examination he admitted the recitals in Ex.P6 agreement of sale further admitted that he failed to perform his part of contract he requested the complaint to grant six months time to return balance advance amount, he failed to give balance amount to the complainant with in six months, further admitted that he issued three cheques. on perusal of DW1 evidence it is no way useful to his contest.

22.After perusing the entire evidence on record complainant successful proved that Ex.P1 cheque was issued towards discharge of legally enforceable debt or liability. Now the sole point for consideration is how much amount due to the complainant, basing on the case record it is clear that DW.1/accused received Rs.30,00,000/- towards advance sale consideration thereafter the accused returned Rs.5,00,000/- to the complainant and remaining Rs.25,00,000/- is outstanding amount to the complainant but complainant claimed interest at the rate of 24% per annum from the date of agreement of sale whereas in Ex.P6 recited 18% interest but accused claimed that he agreed for 12% interest and accused not denied his liability but contended that complainant claiming excess interest and he did not issue cheque voluntarily and forcibly obtained unfilled signed 15 cheques for that accused issued legal notice to the complainant under

Ex.D1 on 17.11.2021 where as on 07.07.2021 complainant took cheques why he waited for 4 months, 10 days to give legal notice to the complainant moreover immediately after threatening and detained the accused, he did not give any police report and no explanation was offered for not giving notice to the complainant immediately. Accused mainly disputing the interest rate and manner of issuance of cheques but not his liability. However accused did not examine any of the persons who accompanied with him at the time of negotiations with complainant to prove his contention that he negotiated interest rate @ 12% per annum, for that accused explained his driver Rambabu, mediator Mallareddy are no more but another person

V.Kasalu is alive but accused failed to examined the said person on his behalf.

23. This Court carefully perused the oral and document evidence available on record and in the cross-examination of PW1 nothing material could be elicited by the accused to disprove the case of the complainant and accused adduced evidence is no way helpful to the accused case. Accused himself admitted his liability to return the amount to the PW1 further accused pleaded he was also cheated by others in the transaction of Ex.P6 and filed some documents to prove his innocency in the said transaction. Assuming a movement accused was cheated in the hands of V.Purushotham, it is in between the accused and the said Purushotham, whether accused took any legal action against said V.Purushotham is no evidence but complainant is no way concerned with the hardship and difficulties to perform the Ex.P6 agreement, it is the duty of the accused to return the money to the complainant more over the accused since begging expressed his intention to return the advance amount but due to financial crises he unable to pay the money, by way of admitting the case and expressed his intention to 16 return the money to the complainant but argued minor discrepancies like on which date accused issued cheques, either force or voluntary, to prove the said discrepancies did not adduce any positive evidence and his evidence as Dw1 is no way useful to his contest since his cross examination by and large all are admissions made by the accused. Admittedly several negotiations took place between them after this cases filed before the court too, as such both parties gave different dates to suit their version and accused failed to disprove the version of the complainant by way of cross examination of complainant and adducing his evidence since heavy burden lies on him u/s 139 N.I act.

24. Learned counsel for accused relied on the decisionreported in

Crl.Appeal No.04/2023 in between Vardhineedi Sriramanjaneyulu Vs.

Yeeda Sasibhushan, dated 09.04.2025. where in held that complainant failed to prove the existence of legally enforceable debt in between complainant and the accused, financial capacity of the complainant to lend such an amount, complainant did not produce any documents to show that he gave said amount to the accused. Hon’ble court referred the decision of

Hon’ble Apex Court reported in Crl.Appeal No.636 of 2019 in between

Basalingappa Vs. Mudi Basappa on 09.04.2019.

This court carefully perused the decisions relied by the accused with due respects of Hon’ble ladyship facts and circumstances are different not applicable to the present case facts.

25.These basic facts of the case inspire the invocation of the legal presumption U/Sec.139 of NI Act in favour of the complainant. Thus, the initial burden, that the accused gave cheques to the complainant, is discharged by the complainant. Considering all this, this court is of the opinion that the PW1 established the factual basis for raising such 17 presumption through his evidence. Hence the presumption U/Sec.139 of NI

Act is available for the complainant.

26. S.139 of N.I.Act says that the court has to presume unless the contrary is proved that the holder of the cheque received the cheque for discharge in whole or in part of a debt or liability. This presumption is rebuttable. Now it is the burden of the accused to establish that the Ex.P1 cheque had not been issued for a debt or legally enforceable liability i.e.,not of the nature referred to in Sec.138 of N.I Act. But the material elicited through the cross examination of PW1 is not sufficient to make the contention of the accused probable and sufficient to rebut the presumption.

After considering the entire evidence and material available on the record it appears to me that the contention of the accused is not probable and not convincing.

27.The perusal of the record, reveals that the circumstances raised by the defence are not enough to damage the credibility of the complainant case. There is absolutely no justification for discarding the complainant's case. Though the burden of the accused can not equally be compared with that of the complainant, I don't think that the evidence adduced by the accused is sufficient to rebut the presumption. Hence this court is of the opinion that the accused has failed to discharge his burden in proving that he has not issued the cheque in discharge of debt or liability as contended by him. Thus Point Nos 1 and 2 are answered in favour of the complainant.

28. Point No.3:

Coming to the Ex.P1, it is not the plea of the accused that the complainant forged the signatures on it. On the other hand accused admits his signature on it. There arises a presumption U/Sec.118(a) of N.I.Act, that cheque was issued for consideration. As seen, The complainant deposed and produced before the court the required documents that the Ex.P1 was 18 dishonored for want of funds under Ex.P2 (cheque return memo), that legal notice under Ex.P3 there of was issued, within the time allowed by the law.

29. In view of Sec.146 of N.I.Act, bankers slip is prima facie evidence and it does not require any supporting evidence. Admittedly Ex.P3 memo issued by the bank authorities discloses that the cheque has been dishonoured due to FUNDS INSUFFICIENT in the account of the accused.

Further it is not the endorsement of the authorities that the accused was not having any account in their bank, so also his signatures were not tallying with that of the signatures mentioned in Ex.P1.

30. Thus the basic ingredients that the cheque was given, it was presented and dishonored, that written notice was given to the accused and same was received by the accused proved by the complainant hence point no.3 is answered in favour of the complainant.

31. In view of the failure of the accused to dislodge the version of the prosecution and in the light of the discussion of Point No.1 to 3, this court holds that the accused has committed offence U/Sec.138 of N.I.Act.

32. In the result, the accused is found guilty for the offence under sec.138 of NI Act accordingly accused is convicted U/Sec.255(2) of Cr.P.C.

Typed to my dictation to the Stenographer directly and corrected and

pronounced by me in open court on this the 14th day of May, 2026.

Addl. Chief Judicial Magistrate, Gannavaram

Hearing on quantum of sentence:

Accused is questioned with regard to quantum of sentence that can be imposed, for which he submitted that he is suffering from ill health and sustained huge financial loss and his entire family depend upon him.

19

Hence, he requested the court to take lenient view. This court is conscious that legislation has incorporated section 138 of the Act to curb the practices of issuing cheque without any funds and to bring harmony in business transactions. The nature of offence and the mode in which it was committed do not warrants the application of beneficial provisions of P.O.Act.

The Hon'ble SUPREME COURT in 'R. Vijayan Vs Baby and another' '[2012(1) S.C.C 260]' held that granting of compensation is must in cheque bounce cases to maintain uniformity in the decisions of the courts. It was held that “As the provisions of Chapter XVII of the Act strongly lean towards grant of reimbursement of the loss by way of compensation, the courts should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy fine upto twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount as compensation. Direction to pay compensation by way of restitution in regard to the loss on account of dishonour of the cheque should be practical and realistic, which would mean not only the payment of the cheque amount but interest thereon at a reasonable rate. Uniformity and consistency in deciding similar cases by different courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice.”

In view of the above decision and in the circumstances of this case, I am of the opinion that this is not a fit case to take a lenient view.

Further, there used to be some discussion as to whether the

default sentence can be imposed for non payment of compensation.

The said discussion is settled at rest and it has been held by the

Hon'ble SUPREME COURT in 'K.A.Abbas H.S.A. vs Sabu Joseph &

Anr.' [2010 STPL (Web) 384 S.C (D.B)] arising out of S.L.P (Crl) No. 334

20

of 2008 that default sentence can be imposed for non payment of

compensation.

Accordingly, the accused is sentenced to undergo simple

imprisonment for a period of Six Months and to pay a compensation of

Rs. 7,45,966/- under section 357(3) of Cr.P.C to the complainant in this

case, in default, to suffer simple imprisonment for further period of

Three months. The accused is entitled for set off of remand period,

U/s. 428 of Cr.P.C from the substantial sentence, however, in this Case,

the accused never undergo judicial custody for any period. This Court

explained the right of appeal to the accused with free legal aid before

the Hon'ble District & Sessions Court, within 30 (thirty) days. Free

copy of judgment is furnished to the accused.

Typed to my dictation by Stenographer corrected and pronounced by me in open court on this the 14th day of May, 2026.

Addl. Chief Judicial Magistrate, Gannavaram

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

For Complainant: For Accused :

PW1 : M.Ratna Bose DW.1 –K.Siva Kumar. PW2 :Vempati Kalyan PW.3: Lanka Murali Krishna. PW.4: Pendem Chittibabu.

DOCUMENTS MARKED

For Complainant:

Ex.P1 : Cheque bearing No.067059 for Rs.7,45,966/- drawn on Axis bank Limited, Markapuram Branch, dated 06.12.2021 issued by the accused in favour of complainant.

Ex.P2 : Cheque return memo dated 10.12.2021 issued by Axis bank, Gannavaram Branch.

21

Ex.P3 : Office copy of statutory legal notice got issued by Axis bank, Gannavaram branch, dated 20.12.2021.

Ex.P4 : Postal acknowledgment of the accused in token of receipt of Ex.P3 legal notice.

Ex.P5 : Reply notice, dated 17.01.2022 issued by accused.

Ex.P6 : Unregistered agreement of sale dated 11.07.2019 executed by the accused in favour of complainant.

For Accused :

Ex.D1: Legal notice dated 17.11.2021 along with acknowledgment(marked through PW.1)

Ex.D2 : Reply notice of PW.1, dt.29.11.2021(marked through PW.1)

Ex.D3: Certified copy of agreement of sale cum GPA bearing No.1483/2005,

dated 23.05.2005.

Ex.D4 :Minutes of board of directors of PACL Limited, dated 05.05.2014, (since it is downloaded copy from internet marked subject to objection proof and relevancy)

Ex.D5 :Certified copy of GPA executed by V.Purushotham, Project Manager, PACL Limited, in favour of K.Siva Kumar.

Ex.D6:Certified copy of acknowledgment/receipt issued by V.Purushotham,

dated 06.08.2019.

Ex.D7:Certified copy of online copy of civil Appeal No.13301/2015,

dated 23.01.2020.

Ex.D8: Certified copy of legal notice with two postal receipts dt. 02.12.2021.

Ex.D9: Certified copy of acknowledgment of advocate K.Benarjee,

dated 04.12.2021.

Ex.D10: Certified copy of returned registered notice cover of PW.1,

dated 09.12.2021.

(Ex.D3 to D10 are marked in CC.No.01/2024 and certified copies filed in this case)

Addl. Chief Judicial Magistrate, Gannavaram 22

IN THE COURT OF THE ADDL. CHIEF JUDICIAL MAGISTRATE:

GANNAVARAM

CALENDAR & JUDGMENT

CC.No.03/2024 (OLD C.C.NO. 08/2023, 189/2022)

DATE OF :- Offence: 06.12.2021 Filing: 02.02.2022 Apprehension of accused: -- Released on bail: -- Commencement of trial: 10.07.2023 Close of trial: 18.11.2025 Sentence or order: 14.05.2026

Between : Musunuru Ratna Bose, S/o Venkata Subba Rao, Ex MLA, aged 74 years, R/o 2-79/1, Main Road, Gannavaram Village, Gannavaram Mandal, Krishna District. …Complainant.

And

Kuragayala Siva Kumar, S/o Late K.Satyanarayana, R/o Flat No.24, Kamalesh Enclave, 7/3 Chandramoulinagar, Guntur. … Accused.

Explanation for delay: This case is taken on file before the XII Addl.Metropolitan Magistrate Court, Gannavaram on 05.03.2022 for the offence under Sec. 138 of NI Act numbered as C.C.No.189/2022, after appearance of the accused, on 11.10.2022 copies of documents were furnished to him. On 24.01.2023 accused was examined u/Sec.251 Cr.P.C. During the course of trial, on behalf of the complainant, on 10.07.2023 Pw.1 examined in chief and got marked Exs.P1 to P5 and on 15.09.2023, PW.1 further examined in chief and marked Ex.P6 and cross examined Pw.1 in part and Ex.D1 and D2 marked on 06.12.2023 by the learned defence counsel. At the stage of cross examination of PW.1, this case was transferred to the Spl.Magistrate Court, Gannavaram as per the orders of Hon’ble District Court in Dis.No.4196/dt.02.06.2023 and renumbered as C.C.No.08/2023. PW.1 was 23 examined in cross, on 23.04.2024, PW.2 was examined and on 31.07.2024, PW.3 was examined. At the stage of cross examination of PW.2 and PW.3, this matter was transferred to this court ie. Addl. Chief Judicial Magistrate court-cum-Civil Judge(Senior Division) and renumbered as C.C.No.03/2024. On 22.09.2025, PW.4 was examined. After the closure of complainant’s evidence, on 06.10.2025, the accused was examined under sec.313 Cr.P.C, explaining incriminating material available on record and he denied the same and reported defence evidence. On 18.11.2025, DW.1 was examined in chief and Ex.D3 to D10 were marked by the complainant counsel. Hence, defence side evidence is closed. On 11.05.2026, arguments heard from both sides. On 14.05.2026 the judgment is pronounced.

Offence: u/Sec. 138 of N.I. Act Plea of accused : Pleaded not guilty. Finding : Found guilty. Sentence or Order:

In the result, the accused is found guilty for the offence under sec.138 of NI Act and accordingly, he is convicted him U/Sec.255(2) of Cr.P.C. Accused is questioned with regard to quantum of sentence that can be imposed, for which he submitted that he is and his entire family depend upon him. He again pleaded innocence and stated did not commit alleged offence. Hence, he requested the court to take lenient view. This court is conscious that legislation has incorporated section 138 of the Act to curb the practices of issuing cheque without any funds and to bring harmony in business transactions. The nature of offence and the mode in which it was committed do not warrants the application of beneficial provisions of P.O.Act. The Hon'ble SUPREME COURT in 'R. Vijayan Vs Baby and an- other' '[2012(1) S.C.C 260]' held that granting of compensation is must in cheque bounce cases to maintain uniformity in the decisions of the courts. It was held that “As the provisions of Chapter XVII of the Act strongly lean to- wards grant of reimbursement of the loss by way of compensation, the courts should, unless there are special circumstances, in all cases of convic- tion, uniformly exercise the power to levy fine upto twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount as compensation. Direction to pay compensation by way of restitu- tion in regard to the loss on account of dishonour of the cheque should be practical and realistic, which would mean not only the payment of the 24 cheque amount but interest thereon at a reasonable rate. Uniformity and consistency in deciding similar cases by different courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice.”

In view of the above decision and in the circumstances of this case, I am of the opinion that this is not a fit case to take a lenient view.

Further, there used to be some discussion as to whether the

default sentence can be imposed for non payment of compensation.

The said discussion is settled at rest and it has been held by the

Hon'ble SUPREME COURT in 'K.A.Abbas H.S.A. vs Sabu Joseph &

Anr.' [2010 STPL (Web) 384 S.C (D.B)] arising out of S.L.P (Crl) No. 334

of 2008 that default sentence can be imposed for non payment of

compensation.

Accordingly, the accused is sentenced to undergo simple

imprisonment for a period of Six Months and to pay a compensation of

Rs. 7,45,966/- under section 357(3) of Cr.P.C to the complainant in this

case, in default, to suffer simple imprisonment for further period of 3

months. The accused is entitled for set off of remand period, U/s. 428

of Cr.P.C from the substantial sentence, however, in this Case, the

accused never undergo judicial custody for any period. This Court

explained the right of appeal to the accused with free legal aid before

the Hon'ble District & Sessions Court, within 30 (thirty) days. Free

copy of judgment is furnished to the accused.

ADDL. CHIEF JUDICIAL MAGISTRATE,

GANNAVARAM

Copy submitted to: The Hon’ble I Addl.District & Sessions Judge, Krishna, Machilipatnam for information.

25

1

IN THE COURT OF THE ADDL. CHIEF JUDICIAL MAGISTRATE:

GANNAVARAM

Present: Dr.Smt.S.Aruna Sri Addl. Chief Judicial Magistrate, Gannavaram

Thursday, this the 14th day of May, 2026

CC.No.02/2024 (OLD C.C.NO. 07/2023, 188/2022)

Between: Musunuru Ratna Bose, S/o Venkata Subba Rao, Ex MLA, aged 74 years, R/o 2-79/1, Main Road, Gannavaram Village, Gannavaram Mandal, Krishna District. …Complainant.

And

Kuragayala Siva Kumar, S/o Late K.Satyanarayana R/o Flat No.24, Kamalesh Enclave, 7/3 Chandramoulinagar, Guntur. … Accused.

This case has came up before me on 11.05.2026 for hearing in the presence of Sri Ch.Anjaiah, Learned counsel for complainant and the counsel for accused Sri C.Raghuramireddy and Sri V.Raja Sekhar Reddy, and upon hearing having stood over to this day for consideration, this court, delivered the following:

J U D G M E N T

1. This is a private complaint filed by the complainant under section 190 and 200 of Criminal Procedure Code, 1973 against the accused for the offence punishable U/Sec.138 r/w 142 of Negotiable instrument act 1881 (herein after referred to N.I. Act for brevity).

2. As per the complainant, the chain of facts unfolded in the following manner ;

a). The complainant/ Musunuru Ratna Bose is the Ex MLA, Resident of

Gannavaram Village, on knowing the potential of complainant, accused approached the complainant with an ill motive to sell scheduled property to 2 the complainant, in spite of knowing the fact that the said property is completely under the control of SEBI. The complainant believed the words of accused and accepted the offer made by the accused and entered into a sale agreement on 11.07.2019, as per the terms and conditions of the said agreement, accused received Rs.30,00,000/-as advance sale consideration.

Subsequently, the complainant came to know about the litigation surrendered to the property. The complainant discussed with accused relating to the schedule property and requested him to refund the sale consideration with interest at the rate of 24% per annum starting from the date of agreement of sale ie., 11.07.2019. Accused confessed his malafide intention and settled the matter in the presence of elders and he agreed to refund the sale consideration amount with 24% interest rate per annum from the date of agreement of sale and gave Rs.5,00,000/- as a part of such refund.

b). Further the complainant repeatedly requested the accused but accused failed to perform his part of contract. On 11.11.2021, complainant having no other option approached the accused and informed to him that he will be initiated legal action against him on that on 15.11.2021, accused issued three cheques to the complainant and duly signed by the accused ie.

cheque bearing No.649213 for sum of Rs.30,00,000/-, another cheque bearing No.067060 for sum of Rs.7,45,966/- and another cheque bearing

No.067059 for a sum of Rs.7,45,966/- towards part payment of legally enforceable debt.

c). The complainant presented the said cheque bearing No.649213 drawn at SBI, Tadipatri, Ananthapur branch for sum of Rs.30,00,000/- through his banker SBI Branch, Srinagar colony, Gannavaram on 06.12.2021 and the same was returned vide return memo dated 06.12.2021 endorsed that ‘funds insufficient’. After receipt of memo complainant got 3 issued statutory notice on 20.12.2021 to the accused by demanding to pay the cheque amount but accused received the notice on 08.01.2022 and gave reply with false and frivolous allegations. Hence, the complainant filed this complaint before this court.

3.The learned XII Addl.Metropolitan Magistrate Court, Gannavaram perused the entire record and sworn affidavit of the complainant, took cognizance of the offence u/s 138 r/w 142 N.I.Act and numbered as

CC.No.188/2022 and summons issued to the accused.

4. After receipt of summons accused appeared before court and copies furnished to him. The accused was examined U/s.251 of Cr.P.C and the substance of accusation for the offence u/s 138 N I Act and he pleaded not guilty and claimed for trail.

5. In pursuance of his case, the complainant himself examined as PW1, and got marked Ex. P-1 to P6 documents, on his behalf PW2 to 4 were examined, at the stage of cross examination of PW.1, this case was transferred to the Spl.Magistrate Court, Gannavaram as per the orders of

Hon’ble District Court in Dis.No.4196/dt.02.06.2023 and renumbered as

C.C.No.07/2023. PW.1 was examined in cross, on his behalf PW.2, PW.3 filed their chief examination affidavits at the stage of cross examination of

PW.2 and PW.3, this matter was transferred to this court ie. Addl. chief

Judicial Magistrate court-cum-Civil Judge(Senior Division) and renumbered

as C.C.No.02/2024.

6. After closure of complainant’s evidence, the accused was examined under Sec.313 Cr.P.C, explaining incriminating material available on record and he denied the same. The accused reported for defence evidence. The accused himself examined as DW.1 and got marked Exs.D1 to D10.

4

7. Arguments heard on either side. The learned counsel for accused filed written arguments.

a). learned counsel for the complainant argued that, the evidence of

P.W.1 to 4, amply substantiated through Ex.P.1 to Ex.P6 and nothing material could be elicited in the cross examination of P.W.1. Thus, the evidence of the complainant itself amply shows the complicity of the accused for the offence u/s 138 NI Act. Accused himself admitted his liability to return the balance sale consideration amount and issuance of cheques are admitted facts as such admitted facts need not be proved. Thus The complainant proved his case beyond all reasonable doubt and the accused is liable for the punishment. He requested the court to record conviction against the accused and sentenced him appropriately as per law.

b). On the other hand, learned counsel for the accused vehemently argued that the evidence of complainant will be nullified even by cross- examination. It is settled principle of law that the complainant is duty bound to unfold his case with consistent and cogent evidence beyond all reasonable doubt. He cannot depend upon the weakness or otherwise the case of the accused. The existence of legally enforceable debt is a conditional precedent to prove the case under Sec. 138 of Negotiable

Instruments Act. PW1 evidence is not trustworthy, PW.2 to PW.4 evidence not corroborated the evidence of PW.1 in any of the material aspects and their evidence is inconsistent among them .

c). Further argued that the accused was cheated in the hands of one

Purushotham and the entire PACL Properties were seized by the CBI in the year 2013, Government of India handed over the case to justice Lodha committee and the properties were controlled by the Lodha committee. The management of the PACL approached the Supreme Court of India and filed

C.A.No.13394/2015 and C.A.No. 13410/2015 for release of properties, the 5 saidpurushottam created fake documents like board resolution of PACL and

SEBI letter and delivered to him, accused believed the version of

Purushottam and executed agreement in favour of the complainant and realized about cheating of Purushottam and approached the complainant and agreed to refund the advance sale consideration with 12% interest and that he paid part payment of Rs.5,00,000/- on 07.07.2021 to the complainant but coerced the accused and obtained three signed unfilled cheques and signed non judicial stamp papers. Accused gave stop payment instructions to his bank and got issued notice dt 17.11.2021 to the complainant not to present the cheques, the complainant got issued reply notice dt 29.11.2021 stating that accused issued cheques on 15.11.2021 for Rs.30,00,000/-,

Rs.7,45,966/-, Rs.7,45,966/- .

d). The accused further argued that date of issuance of cheque was mentioned as 15.11.2021 in Ex.D2, in Ex.P3 and in the evidence of PW.1, but in the cross examination PW.1 stated accused issued cheque on the date of agreement ie.,11.07.2019, on the date when accused gave

Rs.5,00,000/- on that day, he issued two filled cheques through his driver.

PW.2 and PW.3 deposed that accused issued two cheques on 15.11.2021 further stated he will send one more cheque through his driver but in the cross examination they stated due to typographical mistake date of issuance of cheque was mentioned as 15.11.2021 instead of 06.12.2021. PW.4 deposed that on 06.12.2021 accused issued three cheques to the complainant. Evidence of PW.1 is inconsistent with regard to date of issuance of cheque PW.2 to PW.4 also not corroborated the evidence of

PW.1 itself shows that there is no legally enforceable debt.

e). Further, contended that accused returned Rs.5,00,000/- to the complainant he has to pay balance amount of Rs.25,00,000/- but PW.1 claimed in three cases total an extent of Rs.44,91,932/- how calculated the 6 amount there is no calculation memo filed. Accused has no intention to cheat the complainant and he is the responsible person voluntarily went to the house of complainant and gave Rs.5,00,000/- and agreed to pay balance amount within 6 months, due to financial and family problems he unable to discharge the balance amount. In fact accused was cheated by one Purushottam, accused has no right to execute sale deeds as entire property was seized by SEBI. He also filed connected documentary evidence, complainant did not deny the Ex.D1 to D10 documents. Accused is scape goat in the hands of Purushottam. Complainant did not come to the court with clean hands to harass the accused filed this case suppressing the material facts. Hence he requested the court to dismiss the case.

08. Now the points for determination are :

i). Whether Ex.P1 cheque had been issued in discharge of

legally enforceable debt due to the complainant?

ii). Whether the accused had discharged his burden of proving that Ex.P1 cheque had not been issued for a debt or legally enforceable liability?

Iii). Whether the accused committed the offence under section 138 of N.I. Act?

09.Before adverting to the rival contentions it was seen whether the conditions stipulated under section 138 of Negotiable Instruments Act to invoke the provision or in existence as per the contents of the complainant or not is to be seen. The cheque was issued on 06.12.2021 as per Ex.P1 cheque and it was dishonored on 06.12.2021. Registered legal notice issued on 20.12.2021 and the same was received by the accused and issued reply notice. The complaint is filed on 02.02.2022, which clearly discloses that all the conditions stipulated under section 138 & 142 NI Act is complied with.

7

10. In these circumstances it is pertinent to have a glance at Section 118 and 139 of NI Act. For a better understanding the section 118 and 139 NI

Act reads as follows:- Sec.118. Presumptions as to negotiable

instruments of consideration. — Until the contrary is proved, the

following presumptions shall be made: —

(a) of consideration — that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration.

Sec. 139. Presumption in favor of holder. — It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, or any debt or other liability.

Thus a perusal of above provision of law and it’s tenor of language

shows that it is mandatory on part of this court to draw the

presumption as to the existence of the consideration and the

instrument in question being drawn for discharge of the whole or part

of an existing liability ( legally enforceable).

11.Thus, it is abundantly clear that there is a statutory presumption which enjoins a duty upon this court to draw a statutory presumption that the cheque was issued only for consideration in discharge of a legally enforceable debt. Thus, the onus is on the shoulders of the accused to disprove that the cheque was not issued by him towards the discharge of legally enforceable debt and that the cheque was not supported by consideration. Thus, in order to rebut the presumption that is drawn under 118 and 139 of NI Act the material on record for the accused is that of cross examination of P.W.1 to PW4 and evidence of DW1. No doubt it is well neigh settled that, in order to rebut the presumption defendant need not get 8 in to witness box he can as well do it even by cross examination of the witnesses of complainant. Hon'ble apex court held In Krishna Janardhan

Bhat V. Dattatreya G Hegde., AIR 2008 SC 1325,

12. Having heard arguments from both sides and perusing the evidence on record, this court decides the matter as follows:

Point No.1 & 2 : To raise presumption u/s 139 N.I Act that accused had issued Ex.P1 cheque to satisfy part or whole of the debt, it has to be proved that there is existing a legally enforceable debt or other liability, between the complainant and the accused, which is an important ingredient of section 138(NI) Act.

13.Coming to the evidence, the complainant got examined as PW1 and he reiterated the contents of his complaint through his affidavit filed in lieu of his chief examination. As per the evidence of complainant (PW1), the accused is a GPA agent for PACL India Limited, complainant being a

Ex.MLA knowing his potential accused approached him and offered to sell the property situated at Markapuram Sub Registrar, Pedda Dornala Mandal,

Pedda Bommalapuram village, total extent of Ac.91.50 cents, both entered into sale agreement on 11.07.2019 and complainant paid Rs.30,00,000/- advance sale consideration to the accused. Thereafter, he came to know that the said property is completely under the control of SEBI accused knowing fully well suppressed the said fact taking advantage of the innocence of complainant. On demand of the complainant accused agreed to refund the sale consideration with interest @ 24% per annum and gave

Rs.5,00,000/- part of such refund, on 15.11.2021 accused issued three cheques for Rs.30,00,000/, two cheques for Rs.7,45,966/- each. PW.1 presented the said cheques on 6.12.2021 same was returned with endorsement that ‘funds insufficient’. Thereafter PW.1 issued legal notice on 20.12.2021, accused received the same but kept quite. Then PW.1 filed this 9 complaint, through his evidence Ex.P1 to P6 are marked. The accused knowing fully well that he has no sufficient funds in his account issued the cheque, and thereby committed the offence U/s 138 of NI Act. through his evidence Ex.P1 to P6 marked.

14. On behalf of PW.1, one B.Kalyan and L.Murali Krishna examined as

PW.2 and PW.3. they filed chief examination affidavit stating that accused made a sale agreement with complainant in the year 2019 and received

Rs.30,00,000/- as advance sale consideration but accused failed to execute sale deed in favour of the complainant. After that negotiations took place between the accused and complainant in their presence and other elders accused agreed to pay said Rs.30,00,000/- along with 24% per annum.

Accordingly accused paid Rs.5,00,000/- and agreed to issue cheques to the complainant in their presence to discharge the debt and issued two bank cheques on 15.11.2021. Accused further agreed that he will sent one more cheque through driver of the complainant. Thereafter, they came to know cheques presented for en-cashment were dishonored and complainant filed cases against the accused. In re examination of PW.2, PW.3 clarified that date of issuance of cheques are on 6.12.2021 but in their chief affidavits wrongly mentioned that date of issuance of cheques are 15.11.2021.

During their cross examination, PW.2&PW.3 stated that in the year 2019 complainant negotiated with accused to purchase land by that time, they accompanied with complainant, on 06.12.2021 accused returned the

Rs.5,00,000/- to the complainant since land transaction canceled in between them and issued two cheques belongs to SBI and Axis Bank. It was suggested that complainant is relative to the PW.2, PW3 and to help him they are deposing false, witnesses denied the same.

15. PW4 / P.Chitti babu is the driver of the PW1, he filed his chief examination affidavit stating that accused made a sale agreement with 10 complainant in the year 2019 and received Rs.30,00,000/- as advance sale consideration but accused failed to execute sale deed in favour of the complainant. After that negotiations took place between the accused and complainant in their presence and other elders accused agreed to pay said

Rs.30,00,000/- along with 24% rate of interest per annum. Accordingly accused paid Rs.5,00,000/- and issued three cheques to the complainant.

Thereafter, he came to know cheques presented for encashment were dishonored and complainant filed cases against the accused. During his cross examination suggested that PW4 is driver to the complainant to help him deposing false without knowing any thing. Witness denied the same.

16. Firstly, I would like to discuss the cross examination of PW1, as the accused need not step into witness box, he can rebut the presumption by way of cross examination as such cross examination of PW1 is very much essential to the accused as such how far defence counsel elicited the material points in the cross examination of PW.1. In the cross examination, learned defence counsel confronted the legal notice dated 17.11.2021 along with acknowledgment, reply notice of PW.1 dated 29.11.2021 marked as

Ex.D1 & Ex.D2. In the cross examination, PW.1 stated that Ex.P1 is not a blank cheque and it is signed cheque on the date when accused gave

Rs.5,00,000/- he also issued two filled cheques through his driver it was suggested that PW.1 took the two cheques forcibly from accused. In further cross examination PW.1 admitted that accused issued cheque without date for Rs.30,00,000/- on the date of agreement ie. on 11.07.2019, he filled the date on the cheque on the date of presentation of cheque on 06.12.2021.

but accused did not deny the said fact suggesting that he did not issue any cheque on the date of Ex.P6. Finally it was suggested Ex.P1 is not maintainable as he obtained cheque from accused without date, by threatening the accused witness denied the same. During the cross 11 examination of PW.1 all are denials nothing material could be elicited to discard the version of the complainant except formal suggestions.

17. PW.2 and PW.3 are known persons, PW4 is the driver of the PW1 they totally corroborated the version of PW1 during their cross examination suggested that complainant took the three signed unfilled cheques from accused forcibly, to help the PW1 depose false, except suggestions nothing materiel could be elicited.

18. These are the admitted facts : The accused and complainant are known persons and there is no disputes regarding acquaintance of each other, further in between them there was an Ex.P6 agreement of sale dated 11.07.2019 transaction took place, in pursuance of Ex.P6 sale agreement complainant paid Rs.30,00,000/- to the accused later accused failed to perform his part of the contract,negotiations took place in between them, on that accused returned the Rs.5,00,000/- to the complainant and agreed to return the balance amount with in six months due to financial crises unable to pay the balance sale consideration.

19. On perusal of oral and documentary evidence of both sides accused himself admitted the ExP6 transaction and his liability to return the money to the complainant, non performance of ExP6 agreement of sale is the basis for this case, In general when both paries entered into agreement, they have to perform their part of the contract in the present case, accused failed to perform his part whatever may be the reasons for accused, he has to return the money to the accused thus the said transaction is legally enforceable liability as explained Sec.138 N.I act Explanation.-For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability. but when cheques were issued, who filled the cheques, how much amount due, what is the interest rate, how the amount covered under the cheques were calculated these particulars are not clear.

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Date of issuance of cheque is noted on Ex.P1 is 6.12.2021 but in compliant and chief affidavits of PW1 to PW.3 noted as 15.11.2021 but complainant counsel found the same to rectify it, in the re-examination clarified the said fault from PW.2 and PW.3 stating that the date of issuance of cheques noted wrongly as 15.11.2021 instead of 6.12.2021, except mere suggestions there is no cross examination on this aspect to the Pw1 to 3 to shake the veracity of the witnesses and failed to elicit the material facts. Further as per the version of the accused on 07.7.2021 he came to complainant house to settle the matter and returned Rs.5,00,000/- to the complainant but complainant detained him and forced the accused as such accused brought the three cheques and gave the same to the PW1. That means on 07.07.2021, accused gave cheques to the complainant but he gave notice to the complainant on 17.11.2021 with an instructions not to present the cheques under Ex.D1, PW1 gave reply under Ex.D2.

20.Even though, the accused need not step into witness box, he can rebut the presumption by way of cross examination, but in the cross examination failed to elicit the material facts in favour of the defence. The accused himself examined as DW.1. The accused reiterated his averments in the cross examination of Pw1 further deposed that one V.Purushotham acquainted to him through mediator Mallareddy, the said Purushotham is the project manager to PACL India Limited, approached the accused and told to him that their company purchased lands an extent of Ac.91.50 cents at

Peda Bomalpuram by way of GPA from different land owners in different survey numbers in the year 2004-2005 by way of agreement of sale, GPA.

In the year 2018 the said Purushotham gave GPA to him for Ac.91.50 cents basing on the GPA he intended to sell the said lands in that process PW.1 approached him through mediators and sale price fixed for Rs.2,45,000/- per acre he gave Rs.30,00,000/- advance sale consideration on 11.07.2019 13 under Ex.P6 agreement of sale. He sent payments to the persons suggested by said Purushotham by way of bank transfer and he has receipts for proof of payments to the others after sending money the said

Purushotham not responded to his phone and his phone is switched off. He made enquiries at Delhi PACL India Limited office came to know the said office was seized by CBI and handed over to the SEBI through Ludra

Committee, he came to conclusion that the said Purushotham suppressed the facts cheated him and MOU given by purushotham is fabricated document and the said purushotham disappeared whereabout not known, his enquiries revealed that Chairman of PACL, Subrathobhattacharya filed a case against PACL directors alleging that the said directors cheated him , the said case was pending in Delhi Court in Civil appeal No.13301/2015.

Thereafter mediator Mallareddy gave one fabricated letter allegedly issued by SEBI in favour of Purushotam stating that SEBI accorded permission to get register the said land Ac.91.50 cents at Pedabommalapuram village, he suspected the letter made enquiries and came to know the matter is fabricated.

21. Accused further deposed that in meanwhile he tried to settle the matter by refund the money to the PW.1 but he insisted for land instead of refund of money on 07.07.2021 he went to the house of PW.1 with

Rs.5,00,000/- cash along with his driver Rambabu, mediator Mallareddy and

V.Kasulu, he agreed to give remaining amount within six months along with 12% interest but complainant detained him in his house after receipt

Rs.5,00,000/- cash and threatened him without giving cheques they will not leave the accused as such, his driver Rambabu went to the house of accused in Guntur and brought the three filled cheques. Accordingly he signed in the said three cheques without filling the columns. On 17.11.2021, he issued notice to the complainant through his counsel and also issued 14 stop payment instructions to the bank on 29.11.2021, complainant sent reply notice to the accused through his counsel with false averments stating that he himself voluntarily issued cheques on 15.11.2021 but not on 07.07.2021.

On 02.12.2021, the accused sent rejoinder to the complainant with an instructions not to present the cheque but the said rejoinder notice received by complaint counsel Sri Benarji but complainant not received notice with an endorsement that complainant is absent. Complainant presented the said three cheques through his bank even though he gave stop payment instructions to the bank, he has no intention to cheat the complainant and it is not legally enforceable debt hence he requested the court to acquit him.

During his cross examination he admitted the recitals in Ex.P6 agreement of sale further admitted that he failed to perform his part of contract he requested the complaint to grant six months time to return balance advance amount, he failed to give balance amount to the complainant with in six months, further admitted that he issued three cheques. on perusal of DW1 evidence it is no way useful to his contest.

22.After perusing the entire evidence on record complainant successful proved that Ex.P1 cheque was issued towards discharge of legally enforceable debt or liability. Now the sole point for consideration is how much amount due to the complainant, basing on the case record it is clear that DW.1/accused received Rs.30,00,000/- towards advance sale consideration thereafter the accused returned Rs.5,00,000/- to the complainant and remaining Rs.25,00,000/- is outstanding amount to the complainant but complainant claimed interest at the rate of 24% per annum from the date of agreement of sale whereas in Ex.P6 recited 18% interest but accused claimed that he agreed for 12% interest and accused not denied his liability but contended that complainant claiming excess interest and he did not issue cheque voluntarily and forcibly obtained unfilled signed 15 cheques for that accused issued legal notice to the complainant under

Ex.D1 on 17.11.2021 where as on 07.07.2021 complainant took cheques why he waited for 4 months, 10 days to give legal notice to the complainant moreover immediately after threatening and detained the accused, he did not give any police report and no explanation was offered for not giving notice to the complainant immediately. Accused mainly disputing the interest rate and manner of issuance of cheques but not his liability. However accused did not examine any of the persons who accompanied with him at the time of negotiations with complainant to prove his contention that he negotiated interest rate @ 12% per annum, for that accused explained his driver Rambabu, mediator Mallareddy are no more but another person

V.Kasalu is alive but accused failed to examined the said person on his behalf.

23. This Court carefully perused the oral and document evidence available on record and in the cross-examination of PW1 nothing material could be elicited by the accused to disprove the case of the complainant and accused adduced evidence is no way helpful to the accused case. Accused himself admitted his liability to return the amount to the PW1 further accused pleaded he was also cheated by others in the transaction of Ex.P6 and filed some documents to prove his innocency in the said transaction. Assuming a movement accused was cheated in the hands of V.Purushotham, it is in between the accused and the said Purushotham, whether accused took any legal action against said V.Purushotham is no evidence but complainant is no way concerned with the hardship and difficulties to perform the Ex.P6 agreement, it is the duty of the accused to return the money to the complainant more over the accused since begging expressed his intention to return the advance amount but due to financial crises he unable to pay the money, by way of admitting the case and expressed his intention to 16 return the money to the complainant but argued minor discrepancies like on which date accused issued cheques, either force or voluntary, to prove the said discrepancies did not adduce any positive evidence and his evidence as Dw1 is no way useful to his contest since his cross examination by and large all are admissions made by the accused. Admittedly several negotiations took place between them after this cases filed before the court too, as such both parties gave different dates to suit their version and accused failed to disprove the version of the complainant by way of cross examination of complainant and adducing his evidence since heavy burden lies on him u/s 139 N.I act.

24. Learned counsel for accused relied on the decisionreported in

Crl.Appeal No.04/2023 in between Vardhineedi Sriramanjaneyulu Vs.

Yeeda Sasibhushan, dated 09.04.2025. where in held that complainant failed to prove the existence of legally enforceable debt in between complainant and the accused, financial capacity of the complainant to lend such an amount, complainant did not produce any documents to show that he gave said amount to the accused. Hon’ble court referred the decision of

Hon’ble Apex Court reported in Crl.Appeal No.636 of 2019 in between

Basalingappa Vs. Mudi Basappa on 09.04.2019.

This court carefully perused the decisions relied by the accused with due respects of Hon’ble ladyship facts and circumstances are different not applicable to the present case facts.

25.These basic facts of the case inspire the invocation of the legal presumption U/Sec.139 of NI Act in favour of the complainant. Thus, the initial burden, that the accused gave cheques to the complainant, is discharged by the complainant. Considering all this, this court is of the opinion that the PW1 established the factual basis for raising such 17 presumption through his evidence. Hence the presumption U/Sec.139 of NI

Act is available for the complainant.

26. S.139 of N.I.Act says that the court has to presume unless the contrary is proved that the holder of the cheque received the cheque for discharge in whole or in part of a debt or liability. This presumption is rebuttable. Now it is the burden of the accused to establish that the Ex.P1 cheque had not been issued for a debt or legally enforceable liability i.e.,not of the nature referred to in Sec.138 of N.I Act. But the material elicited through the cross examination of PW1 is not sufficient to make the contention of the accused probable and sufficient to rebut the presumption.

After considering the entire evidence and material available on the record it appears to me that the contention of the accused is not probable and not convincing.

27.The perusal of the record, reveals that the circumstances raised by the defence are not enough to damage the credibility of the complainant case. There is absolutely no justification for discarding the complainant's case. Though the burden of the accused can not equally be compared with that of the complainant, I don't think that the evidence adduced by the accused is sufficient to rebut the presumption. Hence this court is of the opinion that the accused has failed to discharge his burden in proving that he has not issued the cheque in discharge of debt or liability as contended by him. Thus Point Nos 1 and 2 are answered in favour of the complainant.

28. Point No.3:

Coming to the Ex.P1, it is not the plea of the accused that the complainant forged the signatures on it. On the other hand accused admits his signature on it. There arises a presumption U/Sec.118(a) of N.I.Act, that cheque was issued for consideration. As seen, The complainant deposed and produced before the court the required documents that the Ex.P1 was 18 dishonored for want of funds under Ex.P2 (cheque return memo), that legal notice under Ex.P3 there of was issued, within the time allowed by the law.

29. In view of Sec.146 of N.I.Act, bankers slip is prima facie evidence and it does not require any supporting evidence. Admittedly Ex.P3 memo issued by the bank authorities discloses that the cheque has been dishonoured due to FUNDS INSUFFICIENT in the account of the accused.

Further it is not the endorsement of the authorities that the accused was not having any account in their bank, so also his signatures were not tallying with that of the signatures mentioned in Ex.P1.

30. Thus the basic ingredients that the cheque was given, it was presented and dishonored, that written notice was given to the accused and same was received by the accused proved by the complainant hence point no.3 is answered in favour of the complainant.

31. In view of the failure of the accused to dislodge the version of the prosecution and in the light of the discussion of Point No.1 to 3, this court holds that the accused has committed offence U/Sec.138 of N.I.Act.

32. In the result, the accused is found guilty for the offence under sec.138 of NI Act accordingly accused is convicted U/Sec.255(2) of Cr.P.C.

Typed to my dictation to the Stenographer directly and corrected and

pronounced by me in open court on this the 14th day of May, 2026.

Addl. Chief Judicial Magistrate, Gannavaram

Hearing on quantum of sentence:

Accused is questioned with regard to quantum of sentence that can be imposed, for which he submitted that he is suffering from ill health and sustained huge financial loss and his entire family depend upon him.

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Hence, he requested the court to take lenient view. This court is conscious that legislation has incorporated section 138 of the Act to curb the practices of issuing cheque without any funds and to bring harmony in business transactions. The nature of offence and the mode in which it was committed do not warrants the application of beneficial provisions of P.O.Act.

The Hon'ble SUPREME COURT in 'R. Vijayan Vs Baby and another' '[2012(1) S.C.C 260]' held that granting of compensation is must in cheque bounce cases to maintain uniformity in the decisions of the courts. It was held that “As the provisions of Chapter XVII of the Act strongly lean towards grant of reimbursement of the loss by way of compensation, the courts should, unless there are special circumstances, in all cases of conviction, uniformly exercise the power to levy fine upto twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount as compensation. Direction to pay compensation by way of restitution in regard to the loss on account of dishonour of the cheque should be practical and realistic, which would mean not only the payment of the cheque amount but interest thereon at a reasonable rate. Uniformity and consistency in deciding similar cases by different courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice.”

In view of the above decision and in the circumstances of this case, I am of the opinion that this is not a fit case to take a lenient view.

Further, there used to be some discussion as to whether the

default sentence can be imposed for non payment of compensation.

The said discussion is settled at rest and it has been held by the

Hon'ble SUPREME COURT in 'K.A.Abbas H.S.A. vs Sabu Joseph &

Anr.' [2010 STPL (Web) 384 S.C (D.B)] arising out of S.L.P (Crl) No. 334

20

of 2008 that default sentence can be imposed for non payment of

compensation.

Accordingly, the accused is sentenced to undergo simple

imprisonment for a period of Six Months and to pay a compensation of

Rs. 7,45,966/- under section 357(3) of Cr.P.C to the complainant in this

case, in default, to suffer simple imprisonment for further period of

Three months. The accused is entitled for set off of remand period,

U/s. 428 of Cr.P.C from the substantial sentence, however, in this Case,

the accused never undergo judicial custody for any period. This Court

explained the right of appeal to the accused with free legal aid before

the Hon'ble District & Sessions Court, within 30 (thirty) days. Free

copy of judgment is furnished to the accused.

Typed to my dictation by Stenographer corrected and pronounced by me in open court on this the 14th day of May, 2026.

Addl. Chief Judicial Magistrate, Gannavaram

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

For Complainant: For Accused :

PW1 : M.Ratna Bose DW.1 –K.Siva Kumar. PW2 :Vempati Kalyan PW.3: Lanka Murali Krishna. PW.4: Pendem Chittibabu.

DOCUMENTS MARKED

For Complainant:

Ex.P1 : Cheque bearing No.067059 for Rs.7,45,966/- drawn on Axis bank Limited, Markapuram Branch, dated 06.12.2021 issued by the accused in favour of complainant.

Ex.P2 : Cheque return memo dated 10.12.2021 issued by Axis bank, Gannavaram Branch.

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Ex.P3 : Office copy of statutory legal notice got issued by Axis bank, Gannavaram branch, dated 20.12.2021.

Ex.P4 : Postal acknowledgment of the accused intoken of receipt of Ex.P3 legal notice.

Ex.P5 : Reply notice, dated 17.01.2022 issued by accused.

Ex.P6 : Unregistered agreement of sale dated 11.07.2019 executed by the accused in favour of complainant.

For Accused :

Ex.D1: Legal notice dated 17.11.2021 along with acknowledgment(marked through PW.1)

Ex.D2 : Reply notice of PW.1, dt.29.11.2021(marked through PW.1)

Ex.D3: Certified copy of agreement of sale cum GPA bearing No.1483/2005,

dated 23.05.2005.

Ex.D4 :Minutes of board of directors of PACL Limited, dated 05.05.2014, (since it is downloaded copy from internet marked subject to objection proof and relevancy)

Ex.D5 :Certified copy of GPA executed by V.Purushotham, Project Manager, PACL Limited, in favour of K.Siva Kumar.

Ex.D6:Original acknowledgment/receipt issued by V.Purushotham,

dated 06.08.2019.

Ex.D7:Certified copy of online copy of civil Appeal No.13301/2015,

dated 23.01.2020.

Ex.D8: Certified copy of legal notice with two postal receipts dt. 02.12.2021.

Ex.D9: Certified copy of acknowledgment of advocate K.Benarjee,

dated 04.12.2021.

Ex.D10: Certified copy of returned registered notice cover of PW.1,

dated 09.12.2021.

(Ex.D3 to D10 are marked in CC.No.01/2024 and certified copies filed in this case)

Addl. Chief Judicial Magistrate, Gannavaram 22

IN THE COURT OF THE ADDL. CHIEF JUDICIAL MAGISTRATE:

GANNAVARAM

CALENDAR & JUDGMENT

CC.No.02/2024 (OLD C.C.NO. 07/2023, 188/2022)

DATE OF :- Offence: 06.12.2021 Filing: 02.02.2022 Apprehension of accused: -- Released on bail: -- Commencement of trial: 10.07.2023 Close of trial: 18.11.2025 Sentence or order: 14.05.2026

Between : Musunuru Ratna Bose, S/o Venkata Subba Rao, Ex MLA, aged 74 years, R/o 2-79/1, Main Road, Gannavaram Village, Gannavaram Mandal, Krishna District. …Complainant.

And

Kuragayala Siva Kumar, S/o Late K.Satyanarayana, R/o Flat No.24, Kamalesh Enclave, 7/3 Chandramoulinagar, Guntur. … Accused.

Explanation for delay: This case is taken on file before the XII Addl.Metropolitan Magistrate Court, Gannavaram on 05.03.2022 for the offence under Sec. 138 of NI Act numbered as C.C.No.188/2022, after appearance of the accused, on 11.10.2022 copies of documents were furnished to him. On 24.01.2023 accused was examined u/Sec.251 Cr.P.C. During the course of trial, on behalf of the complainant, on 10.07.2023 Pw.1 examined in chief and got marked Exs.P1 to P5 and on 15.09.2023, PW.1 further examined in chief and marked Ex.P6 and cross examined Pw.1 in part and Ex.D1 and D2 marked on 06.12.2023 by the learned defence counsel. At the stage of cross examination of PW.1, this case was transferred to the Spl.Magistrate Court, Gannavaram as per the orders of Hon’ble District Court in Dis.No.4196/dt.02.06.2023 and renumbered as C.C.No.07/2023. PW.1 was 23 examined in cross, on 23.04.2024, PW.2 was examined and on 31.07.2024, PW.3 was examined. At the stage of cross examination of PW.2 and PW.3, this matter was transferred to this court ie. Addl. chief Judicial Magistrate court-cum-Civil Judge(Senior Division) and renumbered as C.C.No.02/2024. On 22.09.2025, PW.4 was examined. After the closure of complainant’s evidence, on 06.10.2025, the accused was examined under sec.313 Cr.P.C, explaining incriminating material available on record and he denied the same and reported defence evidence. On 18.11.2025, DW.1 was examined in chief and Ex.D3 to D10 were marked by the complainant counsel. Hence, defence side evidence is closed. On 11.05.2026, arguments heard from both sides. On 14.05.2026 the judgment is pronounced.

Offence: u/Sec. 138 of N.I. Act Plea of accused : Pleaded not guilty. Finding : Found guilty. Sentence or Order:

In the result, the accused is found guilty for the offence under sec.138 of NI Act and accordingly, he is convicted him U/Sec.255(2) of Cr.P.C. Accused is questioned with regard to quantum of sentence that can be imposed, for which he submitted that he is and his entire family depend upon him. He again pleaded innocence and stated did not commit alleged offence. Hence, he requested the court to take lenient view. This court is conscious that legislation has incorporated section 138 of the Act to curb the practices of issuing cheque without any funds and to bring harmony in business transactions. The nature of offence and the mode in which it was committed do not warrants the application of beneficial provisions of P.O.Act. The Hon'ble SUPREME COURT in 'R. Vijayan Vs Baby and an- other' '[2012(1) S.C.C 260]' held that granting of compensation is must in cheque bounce cases to maintain uniformity in the decisions of the courts. It was held that “As the provisions of Chapter XVII of the Act strongly lean to- wards grant of reimbursement of the loss by way of compensation, the courts should, unless there are special circumstances, in all cases of convic- tion, uniformly exercise the power to levy fine upto twice the cheque amount (keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss) and direct payment of such amount as compensation. Direction to pay compensation by way of restitu- tion in regard to the loss on account of dishonour of the cheque should be practical and realistic, which would mean not only the payment of the 24 cheque amount but interest thereon at a reasonable rate. Uniformity and consistency in deciding similar cases by different courts, not only increase the credibility of cheque as a negotiable instrument, but also the credibility of courts of justice.”

In view of the above decision and in the circumstances of this case, I am of the opinion that this is not a fit case to take a lenient view.

Further, there used to be some discussion as to whether the

default sentence can be imposed for non payment of compensation.

The said discussion is settled at rest and it has been held by the

Hon'ble SUPREME COURT in 'K.A.Abbas H.S.A. vs Sabu Joseph &

Anr.' [2010 STPL (Web) 384 S.C (D.B)] arising out of S.L.P (Crl) No. 334

of 2008 that default sentence can be imposed for non payment of

compensation.

Accordingly, the accused is sentenced to undergo simple

imprisonment for a period of Six Months and to pay a compensation of

Rs. 7,45,966/- under section 357(3) of Cr.P.C to the complainant in this

case, in default, to suffer simple imprisonment for further period of 3

months. The accused is entitled for set off of remand period, U/s. 428

of Cr.P.C from the substantial sentence, however, in this Case, the

accused never undergo judicial custody for any period. This Court

explained the right of appeal to the accused with free legal aid before

the Hon'ble District & Sessions Court, within 30 (thirty) days. Free

copy of judgment is furnished to the accused.

ADDL. CHIEF JUDICIAL MAGISTRATE,

GANNAVARAM

Copy submitted to: The Hon’ble I Addl.District & Sessions Judge, Krishna, Machilipatnam for information.

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