An endorsement of 'account frozen' on a dishonoured cheque, caused by the drawer's failure to maintain the account, does not absolve the drawer of liability under Section 138 of the N.I. Act; furthermore, the Act does not permit the awarding of interest on the cheque amount.

THIS CRL.RP IS FILED U/S.397 R/W 401 CR.P.C (U/S 438 R/W 442 BNSS) PRAYING THAT THIS HONOURABLE COURT MAY BE PLEASED TO SET-ASIDE THE ORDER PASSED BY THE HONBLE LVIII ADDL. CITY CIVIL AND SESSIONS JUDGE, AT BANGALORE (CCH-59) IN CRL.A.NO.817/2024, DATED 10-11-2025 AND C.C. NO. 21153/2021, DATED 16-04-2024 FOR THE OFFENCE U/S.138 OF N.I. ACT PASSED BY THE HON'BLE XII ADDL. CHIEF JUDICIAL MAGISTRATE AT BANGALORE.

THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE V SRISHANANDA

ORAL ORDER

Heard Sri. Mahesh S.N. and Sri. Babu T.C. learned counsel for the parties.

2. The Revision petitioner is the accused, who suffered an order of conviction for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as ‘N.I. Act’ for short) passed by the XII Additional CMM Bengaluru in C.C.No.21153/2021 dated 16.04.2024 which came to be modified by the LVIII Additional City Civil and Sessions Judge, Bengaluru in Crl.A.No.817/2024 dated 10.11.2025.

3. Facts in the nutshell which are utmost necessary for disposal of the present revision petition are as under:

A complaint came to be lodged by the respondent/complainant under Section 206 of Code of Criminal Procedure, 1973 (here in after referred to as ‘Cr.P.C.’ for short) alleging an offence punishable under Section 138 of N.I. Act by contending that complainant and accused are known to each other for seven years. Accused’s father was a real estate agent and complainant wanted to purchase a site through his father’s contacts.

4. On account of their acquaintance, in the month of February, 2019 accused approached the complainant for a hand loan of Rs.7,00,000/- to discharge the financial liabilities with a promise to repay the same. The complainant lent a sum of Rs.7,00,000/- and towards the repayment of the same accused issued three cheques bearing Nos.007878 in a sum of Rs.3,00,000/-, No.007879 in a sum of Rs.2,00,000/- and No.007880 in a sum of Rs.2,00,000/- all dated 01.12.2020.

5. When the complainant presented the cheques to the banker for collection the cheques got dishonoured with an endorsement dated 05.12.2020 as ‘account is frozen’.

6. However, the complainant again presented those cheques for encashment on 17.12.2020, again they came to be returned with an endorsement ‘account is frozen’. Thereafter complainant got issued a legal notice on 13.01.2021 calling upon the accused to pay the amount within 15 days. There was no compliance to the callings of notice and therefore action was initiated.

7. Learned trial Magistrate after completing the necessary formalities, as per the directions issued by the Hon’ble Apex Court in the case of Indian Bank Association Vs. Union of India reported in 2014 (5) SCC 590, posted the matter for recording the statement of the accused under Section 313 of Cr.P.C. and permitted the accused to cross-examine PW-1 treating the affidavit filed along with the complaint as the examination –in chief. In cross-examination of complainant there were no answers elicited except the fact that the cheques were returned with an endorsement ‘account frozen’.

8. In order to rebut the presumption available to the complainant, accused got examined himself as DW-1, however did not chose to place any material documents on record. In the cross-examination of DW-1, it has been elicited that he does not remember when the account is frozen and police had not issued any summons to him. He admits that the complainant had purchased one site from his father about seven years earlier.

9. Accused has also admitted his signatures in the cheques at Exs.P.1