CC.NI.No.2221 of 2018Page No.1
IN THE COURT OF THE PRINCIPAL JUNIOR CIVIL JUDGE - CUM
VII ADDL. JUDICIAL MAGISTRATE OF FIRST CLASS
MEDCHAL-MALKAJGIRI DISTRICT, AT MEDCHAL
Present: Ms. V. Sravani Yadav,
Prl. Junior Civil Judge-cum- VII Addl. Judicial Magistrate of First Class, At Medchal.
THURSDAY, THIS THE 07th DAY OF MAY, 2026
CC.NI. No. 2221 OF 2018
Between :
Mrs. Yekabote Vimala W/o. Yekabote Nagraj Rao, Age : 50 years, Occ: Housewife, R/o. H.No.1-3-49/50/6/1, Kadri Enclave, Opp: ZPHS School, Landmark Ambedkar Statue, Old Alwal, Secunderabad – 500 010. …. Complainant
AND
M/s. Srinivasa Constructions, Represented by its Managing Partner, Sri. K. Ramakrishna Raju S/o. KVSN Raju, Age : 59, Occ: Managing partner, Authorised Signatory of Srinivasa Constructions, Plot NO.179, Sy.No.338 & 343, Siri Valley, Nizampet Village, Quthbullapur Mandal, Hyderabad 500 072, Telangana
K. Rama Krishna Raju, Managing partner of M/s. Srinivasa Constructions, Registered officer, Alluri Commerical Complex Bhagya Nagar Colony, Opp : KPHB Kukatpally, Hyderabad.
…… Accused
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This case is coming up before me for final hearing in the presence of M/s. Bandi Varaprasada Rao, learned Counsel for the Complainant and
Sri. B. Venkat Reddy learned Counsel for the Accused. Having heard both sides and having stood over for consideration, the Court now delivers the following.
J U D G M E N T
1.This is a private complaint filed against the above named accused for the offence punishable under Section 138 of Negotiable
Instruments Act (hereinafter referred to as N.I. Act).
2.After consideration the material available on record, the learned
XXI Metropolitan Magistrate took cognizance was taken on file for the offence under section 138 Negotiable Instruments Act against the accused. Subsequently, this case was transferred to this court as per the orders of the Hon’ble Prl.District and Sessions Judge, Ranga Reddy
District vide Order Dis.No.3174/2021 dtd. 20.12.2021, the case is transferred to the Prl. Junior Civil Judge cum XX Addl. Metropolitan
Magistrate, At Medchal.
The complainant’s case in brief is as follows:
3.The complainant submits that the accused entered into an
Agreement of Sale dated 12.08.2016 with the complainant and her husband for sale of a semi-finished triplex house bearing Plot No.179 admeasuring 205 square yards situated at Siri Valley, Nizampet
Village, Quthbullapur Mandal, Ranga Reddy District. The accused received an advance sale consideration of Rs.15,00,000/-from the complainant under the said agreement. It is further submitted that as per the terms of the agreement, the accused agreed to complete the construction within nine months with a grace period of one month, but failed to complete the same within the stipulated period.
The complainant and her husband approached the accused and
CC.NI.No.2221 of 2018Page No.3 demanded either completion of construction or return of the advance amount. The accused failed to give satisfactory explanation and agreed to return the amount. It is the case of the complainant that the accused repaid Rs.5,00,000/- and agreed to pay the balance amount of
Rs.10,00,000/-. Despite repeated demands the accused delayed the payment on one pretext or the other. Ultimately, the accused issued a cheque bearing No.003142 dated 30.03.2018 drawn on Karur Vysya
Bank, Kukatpally Branch, Hyderabad for Rs.10,00,000/-towards discharge of the said liability. The complainant presented the said cheque through her banker i.e., State Bank of India, Macha Bolarum
Branch, Hyderabad, and the same was returned unpaid on 27.06.2018 with the endorsement “Funds Insufficient”. Thereafter, the complainant issued legal notice dated 03.07.2018 to the accused demanding payment of cheque amount. The said notice was returned with endorsements “Insufficient Address” and “Unclaimed”. Despite deemed service of notice, the accused failed to pay the amount.
Hence, the present complaint.
4.Upon appearance of the accused, copies were furnished under
Section 207 Cr.P.C. The substance of accusation was explained under
Section 251 Cr.P.C., for which the accused pleaded not guilty and claimed to be tried.
5.To prove the case, the complainant examined herself as PW1 and marked Ex.P1 to Ex.P10. Ex.P1 is the cheque bearing No.003142 dt.
30.03.2018 for Rs.10,00,000/-. Ex.P2 is the Cheque return memo dt.
27.06.2018. Ex.P3 is the Receipt dt.01.08.2016. Ex.P4 is the receipt dt.
08.08.2016. Ex.P5 is the Sale Agreement dt. 12.08.2016. Ex.P6 is the legal notice dtd. 03.07.2018. Ex.P7 is the Postal Receipt dt. 03.07.2018. Ex.P8 is the Return Registered Post with Acknowledgment due dt. 06.07.2018. Ex.P9 is the returned Registered post with acknowledged due dt. 07.07.2018.
Ex.P10 is the Statement of Bank of accused for the period from 04.08.2016 to 20.09.2016.
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6.PW1 was cross-examined by learned counsel for the accused. For brevity, the relevant admissions and contradictions are discussed in the findings.
7.After closure of complainant evidence, the accused was examined under Section 313 Cr.P.C., wherein he denied the incriminating evidence. Crl.M.P No.332 of 2024 was granted leave to lead defence evidence in person. The accused examined himself as
DW1 and another witness one Srikanth as DW2 in support of his defence.
8.Heard arguments on both sides the counsel for complainant has filed written arguments along with memo by submitting that the
Judgments which are in the favor of the complainant I.e I) Ms.
Kalamani Tex v. P. Balasubramanian (2021) 5 SCC 283
II). R. Vijayan v. Baby (2012) 1 SCC 260 III). Subhash Chand v.
M/s. Amba Shaki Ispat, Himachal pradesh High court and counsel for accused filed written argument relied upon the Judgment
I.e I) Supreme Court of India Crl.A.No.125/1998 Sridhar M.A
Vs. Metalloy N Steel Corporation G.B. Pattanaik, G.N. Ray JJ
II) ALD (CRI) -2005 2-449, High Court of Andhra Pradesh S.
Damodar Reddy Vs. S. Narsimhulu Coram : P.S Narayana J. and perused the record. After carefully hearing the arguments presented by both sides, the following points arise for determination.
Now the point for determination is that
I.Whether the complainant proves that the cheque in question was issued towards discharge of legally enforceable debt or liability?
II.Whether the accused has rebutted the presumption under
Sections 118 and 139 of the N.I. Act?
III.To what order?
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9.Before adjudicating the points for determination whether the cheque was issued in discharge of any existing debt or liability by the accused in favour of the complainant and whether the accused could rebut the presumption available to the complainant under the Act.
It would fit thing to draw attention on section 138,139 and 118 of
NI Act for better appreciation of the facts of the case.
Conditions precedent for constituting an offence under S.
138 of NI Act
10.There are five distinct conditions precedent, which must be satisfied before the dishonour of a cheque can constitute an offence and become punishable.
i.The cheque ought to have been presented to the bank within a period 6 months (3 months as per RBI vide Circular
RBI/2011-12/251 DBOD AML BC No. 47/14.01.001/2011-12,
dated 4-11-2011) from the date on which it is drawn or within the
period of its validity, whichever is earlier.
ii. That the cheque was drawn from the account of the accused bank for discharge in whole or in part of any debt or other liability which pre-supposes a legally enforceable debt and iii. The cheque was returned unpaid by the bank due to either insufficiency of funds in the account to honour the cheque or that it exceeds the amount arranged to be paid from that account on an agreement made with that bank; iv. The payee or the holder in due course of the cheque, as the case may be, ought to make a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid.
CC.NI.No.2221 of 2018Page No.6 v.The drawer of such a cheque should have failed to make payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within 15 days of the receipt of the said notice.
The proviso appended of legal requirements before a complaint or a petition can be acted upon by a court of law.
11.It is only upon the satisfaction of all the five conditions mentioned above and enumerated under the proviso to Section 138 as clauses (a), (b) and (c) along with the conditions to be fulfilled as stipulated under Section 142 NI Act to take the cognizance against the offence under Section 138 of NI Act.
Presumptions
12.The Negotiable Instrument Act contains provisions raising presumptions as regards the negotiable instruments under section 118(a) of the Act as also under section 139 of Negotiable Instrument
Act. The said presumptions are rebuttal. Whether the presumption is rebutted or not would depend upon facts and circumstances of each case.
13.Under Section 118 of Negotiable Instrument Act, unless the contrary is proved, it is to be presumed that the Negotiable
Instrument (including a cheque) had been made or drawn for consideration. Under section 139 of Negotiable Instruments Act, the
Court has to presume unless the contrary was proved that the cheque or holder of the cheque received the cheque for discharge in whole or in part of a debt or liability. Thus in complaints under section 138 of
Negotiable Instruments Act, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttal. However, the burden of proving that a cheque had not been issued for a debt or liability is on the accused.
CC.NI.No.2221 of 2018Page No.7
The accused presented the following defenses during the trial.
14.The accused during the trial has taken the defence that he has already repaid the entire amount of Rs.15,00,000/- to the complainant out of which Rs.5,00,000/- was paid through bank transaction and
Rs.10,00,000/- was paid in cash. The accused further contended that the cheque in question was issued only for security purpose and not towards discharge of any legally enforceable debt. The accused also stated that the complainant has misused the said cheque and filed a false case against him. He further contended that he did not receive any legal notice from the complainant and that no amount is due from him to the complainant. Another defence taken by the accused is that the complainant did not initiate any civil proceedings for speciftc performance of agreement and that the transaction was cancelled orally.
The accused further contended that the complainant has suppressed the true facts and ftled the present complaint only to harass him.
POINT NO I
15.The case of the complainant is that the accused issued cheque in discharge of his liability and when the cheque Ex.P1 was presented in bank, it was returned for the reason “Funds
Insufficient” on 27.06.2018 vide Ex.P2. Thereafter, the complainant got issued Ex.P6 statutory legal notice dated 03.07.2018 by RPAD to the address of the accused and that the same wasreturned with endorsements “Insufficient Address” and “Unclaimed” as per Ex.P8 and Ex.P9. Hence, it is contended that the complainant has complied with the requirement of issuing notice to the accused in terms of clause (b) of proviso to Section 138 of N.I. Act.
16.PW1 in her cross-examination deposed that “ It is not true to suggest that I have not sent legal notice to the correct address of the
CC.NI.No.2221 of 2018Page No.8 accused. It is not true to suggest that the notice was not served on the accused and that I am deposing false.”
17.The learned counsel for the accused strongly argued that no legal notice was served on the accused and that the complainant failed to prove proper service of notice. It is further contended that the notices were returned and therefore the mandatory requirement under Section 138 of N.I. Act is not complied with. The counsel also argued that the accused did not receive any notice and hence the complaint is not maintainable.
18.On perusal of the record and evidence, it is evident that the complainant has sent the statutory notice to the correct address of the accused as mentioned in the agreement and other documents.
The returned covers clearly disclose the endorsement “Unclaimed”. It is a settled principle of law that when a notice is sent to the correct address and returned as “Unclaimed”, it amounts to deemed service under Section 27 of the General Clauses Act.
19.The accused has not placed any material to show that the address mentioned in the notice is incorrect. Further, the accused has admitted the said address in the documents. Mere denial of receipt of notice is not sufficient to rebut the presumption of service.
Therefore, the contention of the accused that no notice was served is not sustainable.
20.The complainant has presented the cheque within the validity period and after dishonour issued legal notice within the statutory period. The accused failed to make payment within 15 days from the date of deemed service of notice. The complaint is filed within the limitation period. With regard to territorial jurisdiction, the cheque was presented through the complainant’s bank which falls within the jurisdiction of this Court. Hence, the requirements under
Section 142 of the N.I. Act are complied with.
CC.NI.No.2221 of 2018Page No.9
Therefore, Point No.1 is decided in favour of the complainant.
POINT II and III :-
21.For convenience sake, this court feels it desirable to discuss these two points together to avoid repetition in discussing the evidence that has come on record before the court on behalf of both the parties.
22.During the course of trial, the complainant having invoked the provisions of Section 145(1) of the Negotiable Instruments Act, filed her affidavit with a prayer to treat the same as her examination-in- chief and the same was permitted. As seen from the facts incorporated in the said affidavit filed by the complainant who was examined as PW1, it is reiteration of the facts mentioned in the complaint.
23.A careful scrutiny of the documents relied upon by the complainant shows that the statutory requirements under Section 138 of the N.I. Act have been complied with and the complaint is filed within limitation. Thus, the complainant is entitled to rely on the statutory presumptions enshrined under Section 118 read with
Section 139 of the N.I. Act.
24.No doubt, the said presumptions are rebuttable in nature. The accused can take a probable defence on the scale of preponderance of probabilities to rebut the presumption available to the complainant. Let me examine whether the accused has successfully rebutted the said presumptions. The accused has denied his liability and contended that the cheque was not issued towards discharge of legally enforceable debt.
CC.NI.No.2221 of 2018Page No.10
25.It is useful to refer to the judgment of the Hon’ble Supreme
Court in Kalamani Tex & Anr. v. P. Balasubramanian (2021) 5
SCC 283, wherein it was held that once the signature on the cheque is admitted, the presumption under Section 139 of the N.I. Act arises in favour of the complainant and the burden shifts upon the accused to rebut the same.
26.It is also useful to refer to the judgment of the Hon’ble Apex
Court in Rangappa v. Sri Mohan (2010) 11 SCC 441, wherein it was held that the standard of proof for rebutting the presumption is that of preponderance of probabilities and the accused can rely on the material brought on record by the complainant.
27.In the present case, the accused has not denied his signature on the cheque Ex.P1 and has also admitted the transaction under
Ex.P5 agreement of sale. Hence, the presumption under Section 118 read with Section 139 of the N.I. Act operates in favour of the complainant.
28.PW1 in her chief examination stated that the accused entered into an agreement of sale and received Rs.15,00,000/- as advance amount. She further stated that the accused failed to complete the construction and agreed to return the amount. It is further stated that the accused repaid Rs.5,00,000/- and issued cheque for Rs.10,00,000/- towards the balance amount.
29.PW1 in her cross-examination deposed that “It is true that I have not filed any civil suit for specific performance. It is true that accused repaid Rs.5,00,000/- through bank transaction. It is not true to suggest that accused has repaid Rs.10,00,000/- in cash and that I have received the same without issuing any receipt. It is not true to suggest that I have obtained the cheque forcibly or misused the same.”
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30.DW1 in his evidence stated that he has repaid Rs.10,00,000/- in cash to the complainant. However, he admitted in cross- examination that he has not obtained any receipt for the said payment and has not produced any document to show the source of such payment. He further admitted that he has not issued any notice to the complainant for return of cheque.
31.DW2, who is examined as a witness to support the accused, stated that the cash payment was made in his presence. However, he admitted that no document is available to prove the same and he does not remember the exact date of transaction. His evidence is not supported by any independent material and appears to be interested.
32. The defence of the accused that he repaid Rs.10,00,000/- in cash is not supported by any documentary evidence. No receipt is obtained, no proof of source is shown and no independent corroboration is available. Mere oral assertion is not sufficient to rebut the statutory presumption. If really the accused had repaid the amount and the cheque was misused he would have taken steps such as issuing notice for return of cheque or lodging complaint.
However, no such steps are taken by the accused. This creates an adverse inference against the accused under Section 114 of the
Evidence Act.
33.In the absence of any cogent evidence, the defence taken by the accused cannot be accepted. The complainant has successfully proved that the cheque was issued towards discharge of legally enforceable debt. From the facts and evidence on record, it is clear that the accused failed to rebut the presumption under Section 139 of the N.I. Act. The complainant has established her case by proving the transaction and issuance of cheque.
Therefore, Point No.II & III are decided in favour of the complainant.
CC.NI.No.2221 of 2018Page No.12
POINT IV
34.For the aforesaid reasons and findings in Points No.I to III, I proceed to pass the following:
In the result, the accused is found guilty for the offence punishable under Section 138 of the N.I. Act and consequently he is convicted under Section 255(2) Cr.P.C.
(Typed in my laptop directly, corrected and pronounced by me in the Open court on this the 07 th day of May, 2026).
Sd/-
VII Addl. Judicial First Class Magistrate At:Medchal
CC.NI.No.2221 of 2018Page No.13
Crl.M.P.No.203/2026 is allowed. Accused is present and Heard the
accused on Quantum of Sentence.
35. Though as per section 255 of Criminal Procedure Code, hearing of the accused on the quantum of sentence is not within the ambit of the said section. Though the section does not manifest on hearing of the accused on quantum of sentence, still this court is of an opinion that the accused must be given an opportunity for hearing him on the quantum of sentence while imposing punishment in the interest of Justice and to meet the ends of justice.
36. The accused was heard on the quantum of sentence and submitted that he is 69 years old and suffering from age-related ailments. The accused pleaded for mercy and requested the court to take a lenient view.
37.The cheque amount in this case is Rs.10,00,000/- and twice the amount of cheque would come to Rs.20,00,000/- and the court can impose fine on the accused up to Rs.20,00,000/-.
38.In the result, the accused is found guilty for the offence punishable U/Sec.138 of the Negotiable Instrument Act and consequently he is convicted U/sec.255(2) of the Code of Criminal
Procedure and sentenced to pay an amount of Rs. 1 5 ,00,000/- and in default to undergo simple imprisonment for a period of s i x months. The amount of Rs.15,00,000/- shall be paid to the
CC.NI.No.2221 of 2018Page No.14 complainantascompensationU/Sec.357(3)Cr.P.Cwithinone month. The bail bonds of the accused shall remain in force for the period of Six (6) months in terms of section 437-A of Code of
Criminal Procedure. Office is directed to furnish a free copy of this
Judgment to the accused under proper acknowledgment as per
Sec.363 Cr.P.C r/w Rule 72 of Criminal Rules of Practice and
Circular Orders, 1990. No order as to property.
(Typed in my laptop directly, corrected and pronounced by me in the Open court on this the 08 th day of May, 2026).
Sd/-
VII Addl. Judicial First Class Magistrate At:Medchal
CC.NI.No.2221 of 2018Page No.15
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Complainant:
PW1 : Y. Vimala
For Accused:
DW1: Ramakrishna Raju
DW2 : Srikanth
EXHIBITS MARKED
For Complainant:
Ex.P1 is the cheque bearing No.003142 dt. 30.03.2018 for Rs.10,00,000/-.
Ex.P2 is the Cheque return memo dt. 27.06.2018.
Ex.P3 is the Receipt dt.01.08.2016.
Ex.P4 is the receipt dt. 08.08.2016.
Ex.P5 is the Sale Agreement dt. 12.08.2016.
Ex.P6 is the legal notice dtd. 03.07.2018.
Ex.P7 is the Postal Receipt dt. 03.07.2018.
Ex.P8 is the Return Registered Post with Acknowledgment due dt. 06.07.2018.
Ex.P9 is the returned Registered post with acknowledged due dt. 07.07.2018.
Ex.P10 is the Statement of Bank of accused for the period from 04.08.2016 to 20.09.2016.
For Accused: NIL
Sd/-
VII Addl. Judicial First Class Magistrate At:Medchal