III Spl. Magistrate Court, VSP 1 C.C.320/2016, DATED 30.03.2026
IN THE COURT OF SPECIAL MAGISTRATE-III, VISAKHAPATNAM.
Present: Sri Y.GANAPATHI RAO, Special Magistrate-III,
VISAKHAPATNAM.
Monday, 30th, March, 2026
C.C.320/2016
Between:
Sri. Guvvala Veerabhadra Reddy… Complainant.
And
Sri. Kuntamukkala Rama Mohana Rao… Accused
This case coming on for final hearing on 18.03.2026 before me in the presence of Sri. S.S. Chalam advocate for the Complainant and of Sri. G.
Satyanaranayana Murthy advocate for the accused, and having stood over for consideration till this day this Court delivered the following:
“J U D G M E N T“
1.This is a complaint filed U/Sec.200 of Cr.P.C to punish the accused for the offence punishable Under Sections 138 and 142 of Negotiable Instrument
Act,1881.
2. The brief allegations in the complaint are as follows:
On 27.05.2013 the accused to meet his family expenses and to discharge sundry debts borrowed a sum of Rs.15,00,000/- from the complainant and on the date, he executed promissory note promising to repay the same with interest @24% p.a., either to complainant or to his order on demand.
III Spl. Magistrate Court, VSP 2 C.C.320/2016, DATED 30.03.2026
Subsequently, the complainant demanded the accused to pay the amount but the accused postponing the same on some pretext or other, finally, issued a cheque bearing No.000061, dated 21.02.2015 drawn on Lakshmi Vilas Bank Ltd., CBM
Compound Branch, Visakhapatnam for a sum of Rs.10lakh towards part payment of amount due under the promissory note. On 21.02.2015 the complainant deposited the cheque in his account maintained with Corporation Bank,
Dwarakanagar Branch, Visakhapatnam but the same was returned unpaid with a memo dated 23.02.2015 mentioning the reasons for dishonour of cheque as funds insufficient. After receipt of return memo, the complainant approached the accused and intimated the same, the accused requested the complainant to present again as he will arrange funds. Believing his version during last week of April, 2015, the cheque was again presented for encashment but surprisingly the cheque was returned on 24.04.2015 with the same endorsement after receipt of return memo again he met the accused and informed the same but there is no response from the accused, on that the complainant got issued statutory notice dated 05.05.2015 demanding the accused to pay the amount borne-out by the cheque within 15days from the date of receipt of notice. The accused receive the notice on 12.05.2015 but not sent any reply and not paid the amount, hence, the complaint is filed to punish the accused accordingly to law.
3.The complaint was taken on file by the court of I Additional Chief
III Spl. Magistrate Court, VSP 3 C.C.320/2016, DATED 30.03.2026
Metropolitan Magistrate Court, Visakhapatnam as a case in C.C.1219/2015 for the offence U/sec.138 of Negotiable Instrument Acts,1881. Subsequently, the matter was transferred to this Court as per proceedings of Chief Metropolitan Magistrate,
Visakhapatnam in Dis.No.516 dated 08.08.2016 and after receipt of case material this Court reassigned a new number in C.C.320/2016 and proceeded with.
4. After appearance of both parties, this Court supplied copies of documents to the accused as contemplated U/s.207 of Cr.P.C. This Court examined the accused
U/Sec.251 of Cr.P.C by explaining the accusation made against him in which he denied the offence and pleaded not guilty and claimed to be tried.
5.To substantiate his case on behalf of complainant, Pws 1 to 4 are examined and got marked Ex.P1 to P8 and Ex.X1 to X6, At the time of dictating Judgment it is noticed X-series are referred as marked as Ex.X1 to X6 but serial No.X3 is not marked by mistake but the documents were referred as Ex.X1 to X6, hence, no document under Ex.X3 available.
6.After closure of the complainant's evidence, the accused was examined
U/sec.313 of Cr.P.C. by explaining the incriminating material appeared against him in which he stated that he has not executed promissory note and not issued the cheque, he has not received statutory notice, the complainant filed a false case.
III Spl. Magistrate Court, VSP 4 C.C.320/2016, DATED 30.03.2026
7.On behalf of accused, the accused himself is examined as DW.1.
8. Now the point that arises for consideration is:
Whether the complainant is able to bring home the guilt against the
accused beyond reasonable doubt for the offence punishable Under Section
138 of Negotiable Instrument Act?
9. Heard both the advocates.
10. While addressing arguments the advocate representing the complainant argued that the evidence of complainant as PW.1 that he lend an amount of
Rs.15,00,000/- on 27.05.2015 and after receipt of consideration the accused executed promissory note, the promissory note is marked as Ex.P1. The contents in Ex.P1 shows that the accused after receipt of consideration executed promissory note. The evidence of PW.2 who is second attestor to the promissory note established the execution of promissory note and passing of consideration thereunder and his evidence fully corroborated the evidence of PW.1 in all aspect.
Therefore, the complainant established that there is a legally enforceable debt due under Ex.P1 promissory note. To discharge the same as part payment of the same the accused issued cheque bearing No.000061 dated 21.02.2015 for
Rs.10,00,000/- and the cheque is marked as Ex.P2, thereby, the complainant is a holder of cheque, the complainant deposited the cheque in his account maintained with Lakshmi Vilash Bank on two occasions for the first time the cheque deposited
III Spl. Magistrate Court, VSP 5 C.C.320/2016, DATED 30.03.2026 was returned unpaid with memo dated 20.03.2015 which is marked as Ex.P3 again as per the instruction of the accused the complainant deposited the cheque but the same was again dishonoured and the complainant received another cheque return memo dated 24.4.2015 which is marked as Ex.P4 after receipt of second return memo dated 24.04.2015, the complainant got issued statutory notice, the office copy of legal notice dated 05.05.2015 was marked as Ex.P5 along with the postal receipt which shows that the original notice was dispatched through registered post. The accused received the notice and the complainant received postal acknowledgment which is marked as Ex.P6, therefore, there is a statutory notice as contemplated U/Sec.138(b) of Negotiable Instrument Act for which no reply or compliance of demand, thereby, the accused committed an offence U/Sec.138 of Negotiable Instrument Act and he further argued that since the complainant is a holder of cheque presumption U/Sec.139 of Negotiable
Instrument Act arises in his favour. The accused has not rebutted the presumption
U/Sec.139 of N.I.Act and the accused as defence witness as DW.1 and the cross examination made to PWs 2 and 3 is not sufficient to rebut the presumption. The evidence of PW.3 Branch Manager, DBS Bank, Visakahapatnam that the Lakshmi
Vilas Bank merged with DBS bank during 2021, consequently, Branch Manager,
DBS Bank gave evidence through him account maintained in the name of K.
Rama Mohana Rao in A/c.No. 078730100013441(SB Account) maintained with
Lakshmi Vilas Bank and he produced copy of account No. 90787301000013441
III Spl. Magistrate Court, VSP 6 C.C.320/2016, DATED 30.03.2026 along with certificate which is marked as Ex.X1 and this witness further stated that the account holder has cheque book facility and he stated that Ex.P2 is a cheque leaf out of cheque book issued to account holder K. Rama Mohana Rao and as per his evidence the cheque bearing No.000006 came for clearance as per entry
dated 23.03.2015 which was dishonoured due to insufficient funds and he also
collected cheque dishonour charges by showing the charges as debit to the account the entry is marked as Ex.X2, therefore, the evidence of PW.3 clearly established that the cheque was dishonoured due to insufficient funds. The evidence of PW.4 relationship Manager, Union Bank of India, Dwarakanagar
Branch, Visakhapatnam he produced copy of statement of account maintained in the name of G. Veerabhadra Reddy in A/C.No. A/c.No.SB/003953(SB Account) for the period commencing from 10.02.2015 to 10.03.2015, previously Veerabadra
Reddy used to maintain account with Corporation Bank in SB/003953 subsequently Corporation Bank was merged with Union Bank of India and new account number is allotted in A/c.No.520101015256967 along with proceedings, the copy is marked as Ex.X5. This witness perused Ex.P2 cheque and testified that it was deposited in the account of Veerabhadra Reddy for encashment on 24.02.2015 and the same was dishonoured on the same day due to insufficient funds the cheque bearing No.0000061 and also collected Rs.67/- towards cheque bounce charges and the same is debited to the account these entries are marked as Ex.X6. Witness perused Ex.P4 return memo and testified that it was issued by
III Spl. Magistrate Court, VSP 7 C.C.320/2016, DATED 30.03.2026
Corporation Bank the Corporation Bank was merged with Union Bank of India with effect from 01.04.2021. After merger of the Corporation Bank with their Branch the account was continued by giving new number. As per this witness that the cheque was deposited in the account of complainant on two occasions and both the times the cheque was dishonoured due to insufficient funds this witness also testified the return memo issued by their bank, therefore, the complainant established that the cheque was dishonoured and he received return memo. The office copy of legal notice and the postal receipt discloses that the notice was dispatched through registered post and the accused has not complied the demand, he further argued that the contention of the advocate for the accused that the complaint was filed
before the court which has no jurisdiction and subsequently it was presented
before proper court but there is a delay in representing the complaint and the
delay is not an abnormal, as per the direction issued by the court the complaint was again represented, therefore, the complaint is not bared by limitation. The evidence of accused as DW.1 is not sufficient to rebut the presumption U/Sec.139 of Negotiable Instrument Act and the cross examination made to PWs 1 and 2 is also not sufficient to hold the presumption U/Sec.139 of Negotiable Instrument Act is rebutted. The defence of the accused that the complainant has no financial capacity is a nominal plea and the complainant in his cross examination categorically stated that he he has landed property on which he is getting income and also a private employee getting monthly income. Therefore, the
III Spl. Magistrate Court, VSP 8 C.C.320/2016, DATED 30.03.2026 complainant established that he has capacity to lend amount and the further cross examination made to PW.1 also discloses that the complainant also lend some amounts to others which was settled before the court of law after entering compromise with his debtors, therefore, the cross examination made to PW.1 is sufficient to establish that the complainant has financial capacity to lend amount and he further argued that without sending reply to the legal notice now the accused cannot be allowed to deny the financial capacity of complainant.
Therefore, the defence by way of cross examination to PWs 1 and 2 and the accused as DW.1 is not sufficient to rebut the presumption and on the other hand the accused raised a plea that he has transactions with Sampath Constructions and the complainant also worked as Accountant to that firm and the accused gave blank promissory note and blank cheeque to Sampath Constructions and the complainant might have snatched away one of the blank promissory note and cheque and were misused in filing the complaint but the accused has not filed any document to show that the he handed over blank promissory note and blank cheque to Sampath Constructions and he also failed to examine any of the persons from Sampath Constructions to establish the same, therefore, the plea of the accused gave blank promissory note and blank cheque to Sampath constructions in connection with material purchased is not established but the cross examination made to PW.1 in that connection the accused admitted his signature on the promissory note as well as his signature on the cheque and the
III Spl. Magistrate Court, VSP 9 C.C.320/2016, DATED 30.03.2026 cheque belongs to accused as per the evidence of PW.3, therefore, non-denial of signatures on the cheque as well as on the promissory note a presumption
U/Sec.118(a) of Negotiable Instrument Act is also available to the complainant, therefore, the complainant established that he received Ex.P2 cheque as part payment of the amount due under Ex.P1 promissory note and the accused has not paid the amount even after receipt of legal notice, the complainant established guilt against accused beyond reasonable doubt and he relied on decision reported in 2004(1) ALT (Crl.) 390 (A.P.) rendered in Ratakonda Raghu Naidu Vs. Kolla
Sivaram Prasad and Another, 2) 2019 (3) ALT (Crl.) 333 (SC) rendered in
Uttam Ram Vs. Devinder Singh Hudan and Another, 3) 2010 3 Crimes(SC) 40
rendered in Rangappa Vs. Sri Mohan, 4) 2019 2 ALD (Cri) (SC) 767 rendered
in Bir Singh Vs. Mukesh Kumar, 5) 2019 0 AIR (SC) 1876 rendered in
Rohitbhai Jivanlal Patel Vs. State of Gujarat and Another, 6) 2007 (5)
Supreme 277 rendered in C.C.Alavi Haji Vs. Palapetty Muhammed and
Another and finally prays to convict the accused.
11.In addition to oral arguments the advocate representing the accused filed written arguments, the sum and substance of both oral and written arguments is to the effect that the complaint is barred by limitation, the complainant failed to establish his financial capacity in lending the amount, the evidence of PWs 1 and 2 is not sufficient to establish the execution of promissory note and passing of
III Spl. Magistrate Court, VSP 10 C.C.320/2016, DATED 30.03.2026 consideration thereunder. The accused has not received statutory notice the signature on the postal acknowledgment Ex.P6 does not belongs to accused, therefore, there is no statutory notice as contemplated U/Sec.138(b) of Negotiable
Instrument Act when once there is no statutory notice the question of non- compliance of demand does not arise, consequently, no cause of action arose in filing the complaint. The evidence of the accused as DW.1 clearly established that the complainant who worked as accountant in Sampath Constructions with whom the accuse has credit transactions as well as cash tractions in purchasing material and as security for the transaction he gave blank promissory note and blank cheques and the complainant who is accountant might have snatched away blank promissory note and blank cheque and misused the same in filing the complaint.
The evidence of PW.2 is not sufficient to establish the execution of promissory note and passing of consideration thereunder. The financial capacity as stated by complainant in his cross examination is not sufficient to establish that the complainant has cash of Rs.15,00,000/- by the date of promissory note. The complainant is doing money lending business unauthorized and filed many cases which was admitted by him in his cross examination as PW.1, thereby, the transaction under Ex.P1 is unaccounted money which can be termed as unenforceable debt, therefore, there is no legally enforceable debt due under
Ex.P1 promissory note. The evidence of accused as DW.1 is sufficient to rebut the presumption U/Sec.139 of Negotiable Instrument Act and the evidence of PWs 1
III Spl. Magistrate Court, VSP 11 C.C.320/2016, DATED 30.03.2026 and 2 is not sufficient to establish the execution of promissory note and passing of consideration. The admission made by PW.1 that he worked as accountant in
Sampath Constructions also established the defence of the accused. There is no proper explanation for delay in representing the complaint before a proper court and by the date of representation of the complaint after it was returned is beyond the period of limitation as contemplated U/Sec.142(b) of Negotiable Instrument
Act, thereby, the complaint is hopelessly barred by limitation. Since, the complainant failed to establish the existence of legally enforceable debt, thereby, the filing of case U/Sec.138 of Negotiable Instrument Act is not maintainable. The documents marked on behalf of complainant are also not sufficient to establish the case of the complainant and the copy of account maintained in the name of complainant which was marked through PW.4 does not contain any entry showing that there is huge funds in the account of complainant and those were withdrawn prior to lending of amount. The accused has not received statutory notice on that ground also the complaint is not maintainable. DW.1 evidence established the defence which can be termed as probable defence to rebut the presumption
U/Sec.118(a) & 139 of Negotiable Instrument Act, therefore, the complainant failed to establish the guilt against accused and he relied on decision reported in 2002(1)
ALD (Cri) 645 rendered in Rayala Sima Agro Enterprises and Others Vs.
Gujarat Agro Industries Corporation Ltd. And Others, 2) 2020 (1) ALD (Crl.)
274 (A.P.) rendered in Chokkakula Eswara Ra Vs. Badireddi Suryanarayana
III Spl. Magistrate Court, VSP 12 C.C.320/2016, DATED 30.03.2026
and others, 3) 2025 (3) ALD (Crl.) 584 (SC) rendered in Kaveri Plastics Vs.
Mahdoom Bawa Bahrudeen Noorul, 4) 2019 (2) ALD (Crl.) 732 (SC) rendered
in Basalingappa Vs. Mudibasappa, 5) AIR 2024 SC 4103 rendered in
Dattatraya Vs. Sharanappa and finally prays to acquit the accused.
12. POINT:Since the complainant filed this case to punish the accused for the offence U/Sec.138 of N.I.Act he has to establish the following points for consideration:
(I) Whether the cheque was issued towards discharge in whole or in part of any debt or other liability?
(II) Whether the cheque was dishonoured and a statutory notice as contemplated U/Sec.138(b) of Negotiable Instrument Act was issued for which no compliance within stipulated period as contemplated U/Sec.138(c) of N.I.Act,1881?
(III) Whether there is any cause of action in filing the complaint?
(I) Whether the cheque was issued towards discharge in whole or in
part of any debt or other liability?
The complaint is filed to punish the accused for the offence U/Sec.138 of Negotiable Instrument Act on the allegations that the accused borrowed amount of Rs.15lakh from the complainant on 27.05.2013 and executed a promissory note
III Spl. Magistrate Court, VSP 13 C.C.320/2016, DATED 30.03.2026 on the same day subsequently he issued a cheque bearing No.000061, dated 21.02.2015 as part payment of amount due under the promissory note. The complainant deposited the cheque in his account which was dishonoured after receipt of return memo, the complainant got issued a statutory notice for which no compliance of demand. The defence of the accused that he has not borrowed amount and not issued cheque and he gave blank promissory note and blank cheque duly signed by him in connection with material purchased from Sai
Sampath constructions and the complainant worked as accountant in Sai Sampath constructions and he might have takeaway the blank promissory note and cheque and misused those documents and filed this case. Therefore, his contention is that the cheque was not issued towards discharge of legally enforceable debt since the complainant styled himself as holder of cheque presumption U/Sec.139 of
Negotiable Instrument Act shall follows in his favour. In order better appreciation the presumption U/Sec.139 of Negotiable Instrument Act is extracted hereunder.
Presumption in favour 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, of any debt or other liability. On careful reading of above proposition of law it contains a phrase unless the contrary is proved which casts burden on the accused to rebut the presumption. As per decision [2008] 1 SC 54 rendered in
Krishna Janardhan Batt Vs. Dattatreya G. Hedge Supreme Court held that
III Spl. Magistrate Court, VSP 14 C.C.320/2016, DATED 30.03.2026 the accused has a constitutional right to keep silence and no necessity for him to step into witness box but he can establish his/her defence by cross examine complainant who is examined as P.W.1 or with the material available on record”.
In the subsequent decision the Honourable Supreme Court in Rangappa Vs Sri
Mohan reported in 2010 (4) Supreme Court 169 wherein it was held in page
no.14 to 16 as when an accused has to rebut the presumption U/Sec.139 of
N.I.Act the standard of proof for doing so is that of preponderance of probabilities, therefore if the accused is able to raise a probable defence which creates a doubt about the existence of legally enforceable debt or other liability the prosecution can fail. At the same time their lordship further held when an accused has to rebut the presumption U/Sec.139 of N.I.Act standard of proof for doing so is that of preponderance of probabilities the presumption mandated by Section 139 of
N.I.Act does indeed includes existence of legally enforceable debt or liability. The same observation also further fortified by cateena of decision rendered by
Honourable Supreme Court of India in Rohitbhai Jivanlal Patel Vs. State of
Gujarat and Another reported in AIR 2019 SC Page 1876 at Para 20 their lordship held that the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated.
At the same time, it is clear that bare denial of passing of consideration and existence of debt, apparently would not serve the purpose of accused. Something
III Spl. Magistrate Court, VSP 15 C.C.320/2016, DATED 30.03.2026 which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances upon consideration of which, the court may either believe that the consideration and debt did not exist or their non- existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the
Evidence Act to rebut the presumptions arising under Section 118 and 139 of
N.I.Act. The accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial.
By following the ratio rendered in above case now it has to be seen whether there is any probable defence available on behalf of accused. In this case, the accused himself is examined as DW.1 who stated in his chief
III Spl. Magistrate Court, VSP 16 C.C.320/2016, DATED 30.03.2026 examination that he is a partner in Surya Chandra Constructions, Sai Sampath
Constructions belongs to his relative, he used to purchase material from Sai
Sampath Constructions on credit basis in that connection he issue two blank promissory notes and two blank cheques duly signed by him to Sai Sampath
Constructions in connection with purchase of material and those cheques were relating his account maintained with Lakshmi Vilas Bank and Karur Vysya Bank and complainant Veerabhaddra Reddy worked in Sai Sampath Constructions as accountant, the complainant used to calculate the balance amount payable to Sai
Sampath Constructions on that he used to pay the balance amount, the complainant filed this case using the blank cheque and blank promissory note available with Sai Sampath constructions, therefore, as per his evidence as DW.1 in the chief examination he admitted his signature on the cheque as well as on the promissory note. The same evidence also find place in the cross examination made to PW.1 but a suggestion was given to PW.1 that PW.1 takeaway the blank promissory note and blank cheque from Sai Sampath Constructions this was denied by the complainant as PW.1 as per the observation made by Honourable
Supreme Court in Rangappa Vs. Sri Mohan if the accused admitted his signature on the promissory note and on the cheque a presumption U/Sec.118(a) of
Negotiable Instrument Act will attract and the burden is on the accused to rebut the same. Except the sole testimony of accused as DW.1 he has not taken any interest in get summoning ay persons from Sai Sampath Constructions to
III Spl. Magistrate Court, VSP 17 C.C.320/2016, DATED 30.03.2026 establish that he handed over blank cheque and blank promissory note in connection with purchase of material on credit basis and the evidence does not discloses that even after closer of Sai Sampath Constructions the accused has issued any notice to Sai Sampath Constructions to return his documents containing his signature, therefore, the plea that he handed over blank promissory note and blank cheque to Sai Sampath Constructions is remained unproved and the same can be brushed aside as unbelievable under law. My opinion is also fortified by decision relied on by the advocate for complainant Ratakonda Raghu
Naidu Vs. Kolla Sivaram Prasasd and Another reported in 2004 (1) ALT (Crl.)
390 (A.P.) in Para No.7 of the above decision the honourable judge of High
Court of A.P. categorically opined when the accused himself as
witness(DW.1) admits that the cheque and promissory note in question bear
his signature is sufficient to accept that the accused issued those
documents promissory note and cheque for consideration and his lordship
relied on the ratio rendered in Hiten P. Dalal Vs. Bratindranath Banerjee
wherein Apex Court held the presumption presumption U/Sec.118 and 139 of
the N.I.Act will play in favour of the complainant that he received the cheque
and the promissory note towards consideration when the accused failed to
examine any person to whom he handed over the blank cheque and blank
promissory note duly signed by him their lordship in 2019 (3) ALT Crl. 333
(SC) in Uttam Ram Vs. Devinder Singh Hudan and Another their lordship
III Spl. Magistrate Court, VSP 18 C.C.320/2016, DATED 30.03.2026
held a dishonour of cheque carries statutory presumption of consideration,
holder of cheque in due course is required to prove that the cheque was
issued by the accused and the same was dishonoured when presented for
encashment and burden on the accused to rebut the presumption by reliable
evidence that the cheque was issued not for any other debt or other liability.
In this case, the accused admitted his signature on the promissory note and cheque and stated that he handed over those blank cheque and promissory note to Sai Sampath Constructions, therefore, the evidence adduced on behalf of accused as DW.1 and the cross examination made to P.W.1 is not sufficient to rebut the presumption U/Sec.139 of Negotiable Instrument Act as the accused completely failed to establish the circumstance under which he handed over the blank promissory note and blank cheque to Sai Sampath Constructions and the complainant received those documents, therefore, the presumption U/Sec.139 and 118 remained unrebutted.
The defence of the accused that the complainant has no capacity to lend amount of Rs.15,00,000/- and to that extent the cross examination made to
PW.1 dated 22.07.2024 stated as Surya Chandra Constructions used to pay remuneration of Rs.50,000/- per annum in lumpsum and he also maintained account in four banks i.e., State Bank of India, Waltair Branch, Corporation Bank,
Lakshmi Vilas Bank and Karuru Vysya Bank he used to supply construction
III Spl. Magistrate Court, VSP 19 C.C.320/2016, DATED 30.03.2026 material for cash only and this witness as PW.1 at first line of cross examination he is doing business for supply of construction material, therefore, his evidence is to the effect that he is doing business but he has not filed any document to show that he is doing business as per his evidence he is doing business and no name is provided to his business. As per his cross examination he is living in a rented house in Visakhapatnam as he is not the native of Visakhapatnam and he originally belongs to Reddigudem, Visannapeta Mandalam, Krishna District and he also purchased a car during 2021 which appears bearing registration No.AP39 HA 2566 he owns AC-4.00 of land in his native place on which he is getting lease amount periodically annual wise and he used to get Rs.50,000/- per annum as salary from Sai Sampath Constructions upto 2005 to 2010 and in the further cross examination he stated that he also find some civil suit and cheque bounce cases against some persons which were ended in compromise and some cases were pending trial and through him the copy of saving account is marked is Ex.P7 and another copy of account maintained in the name of his wife which is marked as
Ex.P8 which shows substantially balance of Rs.3,00,000/- on one occasion, therefore, his attempt shows that he is a solvent person though his account does not contain full amount of Rs.15lakh at any date but he is maintaining four bank accounts and in each and every bank account there is substantial account and he is getting lease amount on his lands situated at his native place and also getting salary as accountant in Sai Sampath Constructions and he also used to look after
III Spl. Magistrate Court, VSP 20 C.C.320/2016, DATED 30.03.2026 the account of accused also. The evidence on record shows that the notice issued
U/Sec.138(b) of Negotiable Instrument Act to the address of accused was received by the wife of accused for which no reply was sent questing the financial capacity of complainant, in order to take a plea in questioning the financial status of the complainant, the accused has to issue reply notice by questioning the financial capacity of the complainant. In this case, the accused has not sent any reply though the notice was received by his wife and as per his admission made by accused as DW.1 his evidence himself and his wife are in cordial terms.
Therefore, the accused cannot be allowed to plead that he has no knowledge of receipt of notice by his wife and as per the decision rendered in Ashok Singh Vs.
State of Uttar Pradesh and another reported in 2025 LiveLaw SC 383 his
lordship held that once the drawer of cheque admits his signature on the cheque presumption U/Sec.138 of Negotiable Instrument Act cannot be rebutted merely by questioning the complainant debt giving capacity without such a defence was raised in the reply notice sent by the accused in this case the accused not sent reply notice. Therefore, the plea of the accused that the complainant has no capacity in lending the amount is unsustainable under law and the same cannot be accepted. The other plea of the accused that the complainant has not filed any suit basing on the promissory note is sufficient to rebut the presumption as held by Honourable High Court of A.P. in 2023 (1) ALT Crl. A.P.
rendered in Mandava Ramesh Vijayawada Vs. B. Kranthi Kumar Vijayawada
III Spl. Magistrate Court, VSP 21 C.C.320/2016, DATED 30.03.2026
and another their lordship at para No.29 of the above decision categorically
held It is curious enough to note that, the accused did not offer any
explanation as to how Ex. P1 promissory note came into existence and
except putting a suggestion to the complainant that non filing of suit based
on Ex. P1 makes it clear that it is a forged document, he did not take any
steps to prove that it is a forged document. Mere non filing of suit would not
lead to any inference regarding forged nature of Ex. P1 promissory note and
para No.21 held non-filing of suit basing on the promissory note no right accrued to accused that the suit amount is not consideration. In this case, the accused admitted the signature on the promissory note as well as on the cheque but failed to establish the circumstances under which the complainant received those documents from Sai Sampath Constructions, thereby, the accused is not entitle to take any plea by way of defence that the complainant has no financial capacity to lend amount. Consequently, the written arguments filed on behalf of accused and the decision relied on by the advocate for accused in Basalingappa Vs.
Mudibasapa rendered in 2019 (2) ACR 978 in Crl.A.No. 636/2019 Arising out
of SLP in Crl.A.No. 8641/2018 are not applicable to the present facts involved
in this case as for the cross examination made to PW.1 clearly shows that
the complainant has financial capacity to lend amount. The facts of
decisions relied on the accused rendered in Kaveri Plastics Vs. Mahddom
Bawa Bahrudeen Noorul in Crl.A.Nos. 4142-4143/2025(Arising out of Special
III Spl. Magistrate Court, VSP 22 C.C.320/2016, DATED 30.03.2026
Leave Petition (Crl.) Nos. 11184-11185/2024 decided on 19.09.2025 are not
applicable to the present facts involved in this case. The evidence of PW.1 was corroborated by the evidence of PW.2 who is the second attestor to the promissory note clearly corroborated the evidence of PW.1 in all aspects and the cross examination made to PW.1 is no way shattered the evidence of PW.1.
Therefore, the evidence of Pws 1 and 2 clearly established that Ex.P1 promissory note supported by consideration and the accused executed the same after receipt of consideration and as part payment of the same the accused issued Ex.P2 cheque. Therefore, it can be safely concluded that the complainant received Ex.p2 cheque towards part payment of amount due under the promissory note which can be termed there is legally enforceable debt. Accordingly this point is held.
(II) Whether the cheque was dishonoured and a return memo
wasissued by bank and a statutory notice as contemplated U/Sec.138(b) of
Negotiable Instrument Act was issued for which no compliance ?
As per averments in the complaint as well as the evidence of complainant as PW.1, he deposited the cheque for encashment in his account maintained with Corporation Bank, Dwarakangar Branch, Visakhapatnam on 21.02.2015 for enashment but the same was returned unpaid with a return memo
dated 23.02.2015 stating the reasons for dishonour of cheque as funds
insufficient. After receipt of return memo, he approached the accused and informed the same, at request of accused he again deposited the cheque for
III Spl. Magistrate Court, VSP 23 C.C.320/2016, DATED 30.03.2026 encashment during last week of April, 2015 i.e., 23.04.2015 but the cheque was again returned unpaid and returned with a return memo dated 24.04.2015 after receipt of return memo dated 24.04.2015 he got issued statutory notice on 05.05.2015 demanding the accused to pay the amount borne-out by the cheque within 15days from the date of receipt of return memo. The accused received the notice on 12.05.2015 but failed to comply the demand and not sent any reply, as per Section 138(c) of Negotiable Instrument he waited for 15days and later filed the complaint within the period prescribed U/Sec.142(b) of Negotiable Instrument
Act. The contention of the accused as DW.1 as well as the cross examination made to PW.1 by his advocate he has not received the notice, therefore, there is no cause of action in filing the compliant and further contending that the complaint was filed beyond the period of limitation and same is barred by time.
As per return memo dated 24.04.2015 issued by Corporation Bank, Dwarakanagar
Branch ,Visakhapatnam the cheque bearing No. 000061 for Rs.10lakh was returned due to insufficient funds in the account of drawer of cheque and the return memo containing the seal as well as the signature of the bank which issued therefore, it comes under purview of Section 146 of Negotiable Instrument Act.
The accused has not disputed the contents in Ex.P4 cheque return memo, therefore, presumption U/Sec.146 of Negotiable Instrument Act remained unrebutted, consequently, this court can accept the return memo Ex.P4 as valid
III Spl. Magistrate Court, VSP 24 C.C.320/2016, DATED 30.03.2026 return memo, the return memo bears dated 24.04.2015 and the office copy of legal notice which is marked as Ex.P5 bears dated 05.05.2015 addressed to K. Rama
Mohan Rao, S/o. Chittaranjan Das, D.No.T-2, D.No.6-18-6, Srivarashini
Residency, East point Colony, Chinna waltair, Visakhapatnam-17 which is within 30days as contemplated U/Sec.138(b) of Negotiable Instrument Act the postal receipt containing half portion of receipt shows the particulars of postal receipt which the notice was dispatched shows that it was dispatched at post office situated at District Court Building in RN1967498539IN addressed K. Rama Mohan
Rao, Kovvur Head Office dated 06.05.2015 which shows that the notice prepared on 05.05.2015 and the original notice dispatched on 06.05.2015 the postal acknowledgment which is marked as Ex.P6 addressed to K. Rama Mohan Rao,
S/o. Chittaranjan Das, D.NO. 6-18-6, Srinivashini Residency, East Point Colony,
Chinnawaltair, Visakhapatnam which contains the signature of recipient. As per the evidence on record the postal acknowledgment shows the copy of notice was also sent to residential address of accused at Chinnawaltair, Visakhapatnam which was received by K. Padma who is the wife of accused as admitted by accused as
DW.1 in his chief examination “my wife received notice address to my residential address on 08.05.2015”, and postal seal on the postal acknowledgment which is marked as Ex.P6 shows that the notice was served on 12.05.2015 by branch office. The contention of the advocate for accused while cross examining PW.1 and as per the evidence of accused as DW.1 that the notice was not served on
III Spl. Magistrate Court, VSP 25 C.C.320/2016, DATED 30.03.2026 12.05.2015 but the contention of the advocate for the complainant that the notices were issued to native address of accused at Kovvuru as well as his residential address(temporary address) at Chinnawaltair which was received by his wife under Ex.P6 postal acknowledgment. The contention of the advocate for accused the notice served on other than the accused is not a service of notice, therefore, there is no statutory notice but Ex.P5 shows that it was dispatched through registered post but the accused has not disputed the address particulars mentioned in Ex.P5 as well as on Ex.P6 postal acknowledgment. Even if the accused has not received the notice and his wife might have received the notice the accused would have knowledge regarding the notice, if his wife has not received the notice the notice will return to the complainant and the address particulars mentioned in Ex.P5 and P6 are not disputed and the notice was dispatched through registered post it attracts a presumption U/Sec.27 of General
Clauses Act as deemed service, therefore, the objection raised by the advocate for accused that there is no statutory notice as contemplated U/Sec.138(b) of
Negotiable Instrument Act holds no water. In view of presumption U/Sec.27 of
General Clauses Act even if the notice was returned unserved which was dispatched through registered post through correct address particulars it amounts to due service of notice as held by Honourable Supreme Court of India in CC
Halvi Haji Vs. Palapetty Mohammad 2007 6 SCC 555 the Honourable Supreme
Court held such a presumption would apply even in cases arising U/Sec 138 of
III Spl. Magistrate Court, VSP 26 C.C.320/2016, DATED 30.03.2026
N.I.Act 1881 when once a letter sent to a person known address is returned with an endorsement not known due service has to be presumed. Therefore, it can be safely concluded that there is a valid statutory notice as contemplated
U/Sec.138(b) of Negotiable Instrument Act the accused deemed to received the notice on 12.05.2015, therefore, the complainant has to wait for 15days for compliance of demand as contemplated U/Sec.138(c) of N.I.Act. In this case, the accused has not sent any reply or paid any amount, therefore, cause of action will arise on 27.05.2015, therefore, the complainant has to file the complaint within one month as contemplated U/Sec.142(b) of Negotiable Instrument Act. In view of the contention of the advocate for accused that the complaint was filed within the period of limitation as contemplated U/Sec.142(b) of Negotiable Instrument Act.
On careful perusal of complaint the complaint appears to be presented before I
Additional Chief Metropolitan Magistrate, Visakhapatnam in DDR.No.4864, dated
24.06.2015 that was returned by IV ACMM who is the FAC of IACMM,
Visakhapatnam on 08.07.2015 with a endorsement present in proper court since
N.I.Act(amend Act) 06/2015 dated 15.06.2015 the same was represented as complainant bank is situated at Dwarakanagar Branch, Visakhapatnam which is within jurisdiction of IV Town Police station, hence, the honourable court got jurisdiction to entertain the complaint. The representation bears dated 10.07.2015 again the matter was returned with an endorsement original promissory note shall file and the same was complied, finally the case was taken on file by I ACMM,
III Spl. Magistrate Court, VSP 27 C.C.320/2016, DATED 30.03.2026
Visakhapatnam as C.C.1219/2015 for the offence punishable U/Sec.138 of
N.I.Act, therefore, the delay if any is due to return of complaint and representation of complaint but the complaint was presented initially on 24.06.2015 which is well within time as contemplated U/Sec.142(b) of N.I.Act, therefore, there is no delay as rightly arguedd by the advocate for complainant. The facts of the decisions relied on by the advocate for accused rendered in Rayala Sima Agro Enterprises
and Others Vs. Gujarat Agro Industries Corporation Ltd., and Others decided
on 19.02.2002 reported in 2002(1) ALD (Cri) 645 and another decision
reported in 2020(1) ALD (Crl.) 274 (AP) rendered in Chokkakula Eswara Ra
Vs. Badireddi Suryanarayana and Others are not applicable to the present facts involved in this case as the objection raised by the court at the time of presentation of complaint was answered on representation of complaint the court of IACMM taken the matter on file, therefore, there is no delay and the complaint is filed within time prescribed period as contemplated U/Sec.142(b) of Negotiable
Instrument Act, consequently the plea of the accused that the complaint is barred by limitation has no legs to stand and is unsustainable under law and the same is rejected. In view of the discussion in non-compliance of demand within period stipulated U/Sec.138(c) of N.I.Act the act of the accused attracts an offence
U/Sec.138 of Negotiable Instrument Act. Accordingly this point is held.
III Spl. Magistrate Court, VSP 28 C.C.320/2016, DATED 30.03.2026
(III) Whether there is any cause of action in filing the complaint?
In view of the discussion in point No.1 and 2 this court came to the conclusion that the accused borrowed amount of Rs.15,00,000/- from the complainant on 27.05.2013 and executed promissory note and as part payment of the same the accused issued a cheque bearing No.000061 dated 21.01.2015 for
Rs.10lakh which was dishonoured and after receipt of statutory notice
U/Sec.138(b) of Negotiable Instrument Act the accused failed to comply the demand, thereby, cause of action arose and the complaint is rightly filed and is maintainable under law.
13.In view of the present facts and circumstances of the case and documentary evidence adduced by the complainant and observation made in
Point No.1 this court is of considered view that the complainant established guilt against the accused beyond reasonable doubt for the offence U/Sec 138 of
Negotiable Instrument Act and the accused is liable for punishment.
14.In the result the accused is found guilty for the offence U/Sec 138 of
Negotiable Instrument Act and is convicted U/Sec 255(2) of Cr.P.C.
Dictated to the Typist and transcribed by her, corrected and
pronounced by me in the open court, this the 30th, March, 2026.
III Special Magistrate Visakhapatnam.
III Spl. Magistrate Court, VSP 29 C.C.320/2016, DATED 30.03.2026
When the accused is examined U/Sec 255(2) of Cr.P.C regarding the quantum of sentence he prays to take lenient view.
This is not a fit case to release him under P.O. Act as the offence involved
U/Sec.138 of N.I.Act.
In the result the accused is sentenced to undego S.I. for a period of six months and to pay a fine of Rs.10,10,000/-(Rupees Ten Lakh and Ten
Thousand only) out of which an amount of Rs.10,000/- shall be paid before this court as fine payable to Government and the remaining amount of Rs.10,00,000/- shall be paid to the complainant as compensation u/Sec.357 of Cr.P.C within Two months from the date of this Judgment, if the complainant refused to receive the amount of Rs.10,00,000/- as compensation the accused is at liberty to deposit the same before this court In Default Simple Imprisonment for Three months. The period of remand if any shall be set off U/Sec.428 of Cr.P.C.
The accused is informed with regard to the right to prefer an appeal and if necessary to provide legal aid to defend him in the appeal through the legal services authority.
III Special Magistrate Visakhapatnam.
III Spl. Magistrate Court, VSP 30 C.C.320/2016, DATED 30.03.2026
Appendix of Evidence
Witnesses examined for complainant :-
P.W.1 Sri. G.Veerabhadra Reddy
PW.2 Sri. M.Venkata Reddy
PW.3 Sri. S. Mani Kumar, Branch Manager, DBS Bank, Visakhapatnam
PW.4 Sri. S.A.V. Prasad, Relationship Manager, Union Bank of India,
Dwarakanagar Branch, Visakhapatnam.
Witnesses examined for accused :-
DW.1 Sri. K. Rama Mohana Rao
Documents marked for complainant :-
Ex.P1 is the promissory note dated 27.05.2013 for Rs.15,00,000/-
Ex.P2 is the cheque bearing No.000061 dated 21.02.2015 for Rs.10,00,000/-
Ex.P3 is the cheque return memo dated 23.02.2015
Ex.P4 is the Another cheque return memo dated 24.04.2015
Ex.P5 is the Office copy of legal notice dated 05.05.2015 along with postal receipt
Ex.P6 is the Postal Acknowledgment
Ex.P7 is the Copy of statement of account of complainant
Ex.P8 is the pass book of wife of complainant
Ex.X1 is the copy of statement of account of accused along with certificate
Ex.X2 is the entry
Ex.X3 not marked by mistake
Ex.X4 is the authorisation letter
Ex.X5 is the copy of statement of account of accused
Ex.X6 is the entries in Ex.X5
Documents marked for accused:-Nil
III Special Magistrate Visakhapatnam.
III Spl. Magistrate Court, VSP 31 C.C.320/2016, DATED 30.03.2026
CALENDAR AND JUDGMENT
DISTRICT : : VISAKHAPATNAM
IN THE COURT OF THE SPECIAL MAGISTRATE-III, VISAKHAPATNAM
C.C.320/2016
DATE OF OFFENCE: : 23-02-2015
1. Report of complaint: 24-06-2015/15-09-2015 2.Apprehension of accused: --
3. Release of Bail: -----
4. Commencement of trial: 16-10-2016
5. Close of trial: 18-03-2026
6. Sentence of order: 30-03-2026
EXPLANATION FOR THE DELAY: This case was received by transfer from II
A.C.M.M Court, Visakhapatnam on 03-04-2024. This matter was made over to this court as per proceedings of Chief Metropolitan Magistrate, Visakhapatnam in
Dis.No.516 dated 18.08.2016. NBWs pending since long time hence, the delay.
JUDGMENT IN CALENDAR CASE NO: C.C.320/2016 on the file of III Special
Magistrate Court, Visakhapatnam.
COMPLAINANT : Sri. Guvvala Veerabhadra Reddy, S/o. Krishna Reddy, Hindu, aged about 42years, R/at D.No.9-9-26/4, Doctor’s Colony, Sivajipalem, Visakhapatnam-530017.
ACCUSED :Sri. K. Ramamohana Rao, S/o. Chitharanjan Das, aged 49years, R/at T-2, D.No.6-18-6, Sirivarshini Residency, East Point Colony, Chinnawaltair, Visakhapatnam-17 presently residing at Malakapalli Village Tallapudi Mandal, West Godavari District.
FINDING:Found guilty.
III Spl. Magistrate Court, VSP 32 C.C.320/2016, DATED 30.03.2026
SENTENCE: The accused is found guilty for the offence U/Sec.138 of N.I.Act and is convicted U/Sec.255(2) of Cr.P.C., the accused is sentenced to undergo S.I. for a period of six months and to pay a fine of Rs.10,10,000/-(Rupees Ten Lakh and Ten Thousand only) out of which an amount of Rs.10,000/- shall be paid before this court as fine payable to Government and the remaining amount of Rs.10,00,000/- shall be paid to the complainant as compensation u/Sec.357 of Cr.P.C within Two months from the date of this Judgment, if the complainant refused to receive the amount of Rs.10,00,000/- as compensation the accused is at liberty to deposit the same before this court In Default Simple Imprisonment for Three months. The period of remand if any shall be set off U/Sec.428 of Cr.P.C.
Fine amount of Rs.10,000/- paid under receipt No.12213, dated 30.03.2026 sentence of imprisonment only suspended till 30.04.2026 on executing bond for an amount of Rs.5,000/- with one surety for a like sum as per the order in Crl.M.P.No.1211/2026
dated 30.03.2026 and the accused is released as he executed
the bond as ordered in the above said Crl.M.P.
Sd/- Y. Ganapathi Rao
III Special Magistrate Visakhapatnam.
//True Copy//