The High Court
Case Details
- 1 - NC: 2025:KHC:25855 CRL.RP No. 1388 of 2021 HC-KAR IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 14TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR CRIMINAL REVISION PETITION No. 1388 OF 2021 BETWEEN: S H YUVARAJ S/O HANUMANTHAPPA AGED 44 YEARS PROPRIETOR MARUTHI ELECTRICALS R/AT No. 3733, 6TH CROSS M.C.C. ‘B’ BLOCK KUVEMPU NAGARA DAVANAGERE - 577 002. …PETITIONER Digitally signed by LAKSHMINARAYANA MURTHY RAJASHRI Location: HIGH COURT OF KARNATAKA (BY SRI B K MANJUNATH, ADVOCATE) AND: K HEMACHANDRA S/O LATE KEMPAIAH AGED ABOUT 46 YEARS R/AT 3RD MAIN ROAD VALMIKI NAGAR ”POORNA CHANDRA NILAYA” TUMKUR TOWN TUMKUR - 572 102. …RESPONDENT (BY SRI RAGHU PRASAD B S, ADVOCATE) THIS CRL.RP IS FILED UNDER SECTION 397 READ WITH SECTION 401 Cr.P.C PRAYING TO SET ASIDE THE JUDGMENT DATED 30.10.2021 PASSED BY THE VI ADDITIONAL DISTRICT AND SESSIONS JUDGE, TUMAKURU IN CRL.A.No.37/2019 - 2 - NC: 2025:KHC:25855 CRL.RP No. 1388 of 2021 HC-KAR CONFIRMING THE JUDGMENT AND ORDER DATED 20.06.2019 PASSED BY THE PRINCIPAL CIVIL JUDGE AND J.M.F.C-1, TUMAKURU IN C.C.No.2551/2017 AND ETC., THIS PETITION COMING ON FOR HEARING THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR ORAL ORDER 1. This revision petition is directed against judgment dated 30.10.2021 passed in Crl.A. No. 37/2019 by VI Additional District and Sessions Judge at Tumakuru whereunder the judgment of conviction dated 20.06.2019 passed in C.C. No. 2551/2017 by the Principal Civil Judge and JMFC – I, Tumakuru, convicting petitioner - accused for offence under Section 138 of Negotiable Instruments Act (hereinafter for the sake of brevity referred to as the `N.I. Act’) and sentencing him to undergo simple imprisonment for a period of 1 year and to pay fine of
Facts
Rs.32,00,000/- has been affirmed. 2. Heard learned counsel for petitioner – accused
Legal Reasoning
this Court in following manner:- 25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability. 25.2 The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable for defence. The standard of proof - 14 - NC: 2025:KHC:25855 CRL.RP No. 1388 of 2021 HC-KAR rebutting preponderance of probabilities. the presumption is that of to
Arguments
and learned counsel for respondent - complainant. - 3 - NC: 2025:KHC:25855 CRL.RP No. 1388 of 2021 HC-KAR 3. Case of the respondent - complainant before the trial Court was that respondent - complainant and petitioner - accused were working as electrical contractors for 20 years and had been carrying on contract work within the State of Karnataka. They were working for KEB and its allied corporations, namely, BESCOM, CHESCOM and MESCOM. Petitioner - accused was allotted tender from BESCOM on 07.04.2016 to do some work. Petitioner - accused after getting the contract work from BESCOM, contacted respondent - complainant to carry out the contract work on his behalf by investing money. After negotiations they entered into terms and conditions but written agreement was not entered into between petitioner - accused and respondent - complainant as there was precondition in the agreement entered into between petitioner - accused and BESCOM that petitioner - accused shall not re-entrust the contract work to any third party. Respondent - complainant invested huge money for the project to the tune of more than Rs.3,00,00,000/- by - 4 - NC: 2025:KHC:25855 CRL.RP No. 1388 of 2021 HC-KAR borrowing from private persons as well as Sneha Sangama Co-operative Bank, Tumakuru. Every month contract amount was paid to petitioner - accused by the department. Petitioner - accused was not regularly making payment to respondent - complainant towards the work completed by him. Petitioner - accused was due in a sum of Rs.1,10,00,000/-. After repeated requests and persistent demand petitioner - accused issued cheuqe in favour of respondent - complainant for Rs.30,00,000/- bearing No. 916365 dated 16.03.2017 drawn on State Bank of India, Davanagere branch. On instructions of petitioner – accused, respondent - complainant presented the said cheque for encashment on 21.03.2017 through ECO Bank, Tumakuru. Said cheque was returned with endorsement `stop payment’ and endorsement was issued on 22.03.2017. Respondent - complainant got issued legal notice to petitioner - accused by RPAD dated 27.03.2017 calling upon him to pay the amount covered under the cheque. Said notice was served on petitioner - accused on - 5 - NC: 2025:KHC:25855 CRL.RP No. 1388 of 2021 HC-KAR 03.04.2017. Petitioner - accused has not paid the cheque amount within 15 days. Therefore, respondent - complainant initiated proceedings against petitioner - accused for offence under Section 138 of N.I. Act. Prior to initiating proceedings against petitioner - accused for offence under Section 138 of N.I. Act respondent - complainant had also filed a suit in O.S. No. 2331/2017 on the file of City Civil Court, Bengaluru, for recovery of Rs.1,10,00,000/- against petitioner. Respondent – complainant, in order to prove his case, has examined himself as P.W.1 and got marked Ex.P.1 to Ex.P.15. Statement of petitioner - accused has been recorded under Section 313 of Cr.P.C. Petitioner - accused has not lead any defence evidence. Learned Magistrate, after hearing arguments on both sides, convicted petitioner - accused for offence under Section 138 of N.I. Act by order dated 20.06.2019 and sentenced him to undergo simple imprisonment for a period of 1 year and to pay fine of Rs.32,00,000/-. Said judgment of conviction and order on - 6 - NC: 2025:KHC:25855 CRL.RP No. 1388 of 2021 HC-KAR sentence had been challenged by petitioner - accused before the Sessions Court in Crl.A. No. 37/2019. Said appeal came to be dismissed by affirming the judgment of conviction and order on sentence passed by the trial Court. 4. Learned counsel for petitioner would contend that the alleged contract entered into by respondent - complainant with petitioner - accused is not legally enforceable since there was restriction on petitioner – accused not to re-entrust the work allotted to him under tender by the BESCOM to any third party. Therefore, alleged liability is not legally enforceable. Petitioner - accused could not send his reply to the legal notice as his counsel advised him that suit filed by respondent - complainant is pending and it can be agitated there. Document stated to be Ex.P.9 has been created by respondent - complainant in collusion with employees of petitioner - accused. Said letter was not produced earlier in the case and it was produced subsequently. Respondent - 7 - NC: 2025:KHC:25855 CRL.RP No. 1388 of 2021 HC-KAR - complainant has not placed on record any evidence to show that he had capacity to invest huge sum of Rs.3,00,00,000/- in the alleged work. Defence of petitioner - accused is that respondent - complainant was employee under him, cheque was issued to him for making payment of salary/wages of his employees, subsequently he had paid the amount in cash, but said cheque was not returned and has been misused. Said defence has been put to P.W.1 in his cross-examination. Defence of petitioner - accused has been established on the basis of material placed on record and therefore, there is no necessity for petitioner – accused to lead any defence evidence. In the appeal, petitioner - accused has filed application under Section 91 read with Section 311 Cr.P.C. along with memo and documents seeking permission of the Court to produce those documents and said application has not been considered. The appellate Court has not passed any orders on the said application. He has placed reliance on the decision of the Hon’ble Supreme Court in - 8 - NC: 2025:KHC:25855 CRL.RP No. 1388 of 2021 HC-KAR the case of Yelahanka Merchants Finance Company Vs. Savitha reported in 2024 (2) Kar.L.R. 65. If an application is filed under Section 391 of Cr.P.C. for adducing additional evidence, the matter requires to be remanded. He further contended that as capacity and source of income is not established said aspect will rebut the presumption and on that point he placed reliance on the decision of the Hon’ble Apex Court in the case of John K. Abraham Vs. Simon C. Abraham and another reported 2014 (2) SCC 236, K. Subramani Vs. K. Damodara Naidu reported in 2015 (1) SCC 99, Charlies Harry Vs. Praveen Jain reported in 2023 (4) AKR 638 and N. Padmavathi Vs. Rajanna reported in 2024 (3) KCCR 2256. He also placed reliance on the following decisions on the points urged by him. I. S.N. Lakshmipathi Vs. M. Suresh, 2024 (4) Kar.L.R. 221 II. K.S. Ranganath Vs. Vittal Shetty, 2022 (1) KCCR 1 (SC) - 9 - NC: 2025:KHC:25855 CRL.RP No. 1388 of 2021 HC-KAR III. Dattatraya Vs. Sharanappa, (2024) 8 SCC 418 IV. Basalingappa Vs. Mudibasappa, 2019 (5) SCC 418 V. H.R. Sheshadri Vs.U.V.Nataraj, 2024 (4) KCCR 3684 VI. Jalaja alias Jalajakshi Vs. G. Venkta Durga Sarojini, 2023 (1) AKR 433 On these grounds, he prayed to allow the revision petition and acquit petitioner - accused. 5. Learned counsel for respondent – complainant would contend that Ex.P.9 – letter of petitioner - accused is on his letterhead and it bears his signature and in the said letter cheque number, amount, date etc., are all mentioned. Said letter Ex.P.9 has been sent by petitioner - accused through post from Davanagere to Tumakuru to the address of respondent - complainant and postal cover is at Ex.P.10. Petitioner - accused had taken up the defence that the cheque was given to respondent - complainant for making payment of employees working - 10 - NC: 2025:KHC:25855 CRL.RP No. 1388 of 2021 HC-KAR under him, subsequently he paid cash, cheque had not been returned to him and cheque had been misused. Said defence has not been established. Suggestion put to P.W.1 in that regard has been denied by him. Petitioner - accused has not entered the witness box to establish the said defence. Petitioner - accused who has simply denied Ex.P.9 letter has not chosen to examine any of his employees to prove that it is created one. Even petitioner - accused has not entered into witness box to prove that said letter is created. Petitioner - accused has not denied his signature on Ex.P.9 – letter and that letter is on his letterhead. Ex.P.11 is a document whereunder respondent - complainant has availed loan of Rs.50,00,000/- which itself establishes that he had money for carrying out the work entrusted by petitioner - accused to him. Decisions relied upon by learned counsel for petitioner - accused with regard to financial capacity of respondent - complainant are in the matters wherein loan had been lent by complainant to accused. But, in the case on hand there - 11 - NC: 2025:KHC:25855 CRL.RP No. 1388 of 2021 HC-KAR is no such lending by complainant to accused. Petitioner - accused has not filed any complaint against respondent - complainant or any other persons for misusing the cheque issued by him or for creation of the letter – Ex.P.9. Petitioner - accused who had filed application under Section 91 Cr.P.C. (for summoning documents) and Section 311 Cr.P.C. (recalling of witnesses or issuance of summons to persons) but it is not filed under Section 391 of Cr.P.C. for leading additional evidence. Even documents produced along with the said application are taken into consideration, they will not prove the case of petitioner - accused. As no proper application was filed, the appellate Court has not considered the said application. He placed reliance on the following decisions. I. S.N. Jyothi Vs. M.S. Subramani, 2025 (2) AKR 342 II. Smt. B.l. Lolakshmma Vs. Srikanth S.D. Lakshminarayana, 2025 (2) AKR 313 - 12 - NC: 2025:KHC:25855 CRL.RP No. 1388 of 2021 HC-KAR III. M/s. Eminence Build Tech Pvt. Ltd., Bangalore and others Vs. V. Vijayakumar, 2025 (1) AKR 493 IV. H.G. Suman Vs. Vincent Pinto, 2025 (2) AKR 45 V. R.K. Surendra Babu Vs. C. Ashoka, 2025 (1) AKR 264 6. Having heard learned counsel for the parties this Court has perused the impugned judgments, trial Court records and appellate Court records. 7. It is the specific case of respondent - complainant that petitioner - accused who had got contract work from BESCOM had entrusted the contract work to the complainant to carry out in the name of accused and therefore, there were no documents in that regard as there was restriction in the contract not to entrust the work to third parties. It is further case of respondent - complainant that petitioner - accused paid some amount due by him to respondent - complainant for the work carried out and he was due in a sum of - 13 - NC: 2025:KHC:25855 CRL.RP No. 1388 of 2021 HC-KAR Rs.1,10,00,000/- and for making part payment of the same he had issued cheque – Ex.P.1 and sent it to respondent - complainant by post along with letter – Ex.P.9. Petitioner - accused has not disputed his signature on the cheque – Ex.P.1. As signature on the cheque is not disputed, a presumption has to be drawn under Section 139 of N.I. Act that the cheque is issued for discharge of liability. Said presumption is a rebuttable presumption. Standard of proof for rebutting the said presumption is that of preponderance of probability. The Hon’ble Apex Court in the case of Basalingappa (supra) has held as under: “25. We having noticed the ratio laid down by this Court in above cases on Sections 118(a) and 139, we now summarise the principles enumerated by
Decision
25.3 To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in raise a probable defence. order Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. 25.4 That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden. 25.5 It is not necessary for the accused to come in the witness box to support his defence.” 8. As per the ratio laid down in the said decision it is not necessary for the accused to lead defence evidence to prove his defence and he can rebut the presumption based on the materials brought on record by the parties. Petitioner - accused has not produced any documents in support of his contention. Defence of petitioner - accused is that he had given cheque – Ex.P.1 to respondent - - 15 - NC: 2025:KHC:25855 CRL.RP No. 1388 of 2021 HC-KAR complainant in order to make payment of salary/wages to his employees through his managers Basavaraju S.M. and N. Jagadeeshwaraiah, subsequently he got cash, he paid cash but, respondent - complainant has not returned the said cheque. Said defence had been suggested to P.W.1 in his cross-examination, but, P.W.1 has denied the said suggestion. In order to establish the said defence, except the said suggestion, no other material has been brought on record. Staff of petitioner – accused, namely Basavaraju S.M. and N. Jagadeeshwaraiah have not been examined. Even said defence has not been stated initially while sending reply to legal notice – Ex.P.3 which is served on petitioner - accused as per postal acknowledgement – Ex.P.5 on 03.04.2017. It is the contention of petitioner - accused that he has not issued reply notice as suit was pending as on the date of service of notice and his counsel had advised him that matter can be agitated in the pending suit. In his written statement – Ex.P.8 filed in O.S. No.2331/2017 petitioner - accused has stated that he - 16 - NC: 2025:KHC:25855 CRL.RP No. 1388 of 2021 HC-KAR has been served with legal notice during first week of May, 2017. Considering Ex.P.5 – postal acknowledgement said contention that notice was served during May, 2017 is false. Even though suit in O.S. No. 2331/2017 was filed on 01.04.2017, petitioner - accused who was defendant in that said suit was not aware of pendency of the said suit since summons/notice was not served on him as on the date when legal notice was served on him. 9. Decisions relied upon by learned counsel for petitioner - accused that the complainant has to prove his capacity are rendered in cases where in cheques were issued for repayment of money borrowed. In the case on hand there is no such loan transaction between complainant and accused. Document produced at Ex.P.11 – memorandum of deposit of title deed executed by respondent - complainant in favour of Sneha Sangama Souharda Pattina Sahakari Niyamita, Tumakuru establish that respondent - complainant had borrowed Rs.50,00,000/- loan on 30.04.2015 and Ex.P.2 indicates - 17 - NC: 2025:KHC:25855 CRL.RP No. 1388 of 2021 HC-KAR that he availed mortgage loan of Rs.25,00,000/- and O.D. loan of Rs.25,00,000/- from Sneha Sangama Souharda Pattina Sahakari Niyamita, Tumakuru on 28.04.2015. Said documents establish that respondent - complainant had funds for carrying out the work entrusted to him by petitioner – accused. 10. It is submitted that the suit filed by respondent - complainant against petitioner - accused for recovery of Rs.1,10,00,000/- in O.S. No. 2331/2017 has been decreed and execution case filed by respondent - complainant to execute the decree passed in the said suit is pending. It is also submitted that petitioner - accused has challenged the judgment and decree passed in O.S. No. 2331/2017 and appeal is pending before this Court. Said aspect itself indicates that the claim of respondent - complainant against petitioner - accused is legally enforceable liability. 11. Petitioner - accused, in the appeal filed before the Sessions Court, had filed an application under Section 91 read with Section 311 of Cr.P.C. seeking permission to - 18 - NC: 2025:KHC:25855 CRL.RP No. 1388 of 2021 HC-KAR produce documents with a memo. Under the said memo following documents were sought to be produced: I. Plaint in O.S. 2331/2017 II. Written Statement filed in OS. 2331/2017 III. Affidavit filed by Jagadeeshwaraiah in MFA. 5866/2017 IV. Counter affidavit filed by Jagadeeshwaraiah in MFA . 5866/2017 V. Objection to counter affidavit filed by Hemachandra in MFA. 5866/2017 VI. Affidavit filed in MFA. No.5866/2017 by K.G.Sadashivaiah VII. Order passed in MFA.5866/2017. 12. On perusal of the said documents it is clear that even if those documents were taken on record, they will not establish the case/defence of petitioner - accused. More so, the application filed by petitioner - accused is not under the correct provision of law. Therefore, the appellate Court might not have taken the said application into consideration. Even if the said application was allowed and documents produced along with the said application were taken on record, the same would not have established the - 19 - NC: 2025:KHC:25855 CRL.RP No. 1388 of 2021 HC-KAR defence of petitioner - accused. Considering all these aspects learned Magistrate has rightly appreciated the evidence on record and convicted the petitioner - accused for offence under Section 138 of N.I. Act. The appellate Court also rightly re-appreciated the evidence on record and affirmed the conviction of petitioner - accused for offence under Section 138 of N.I. Act. 13. Sentence passed by the trial Court and affirmed by the appellate Court is, simple imprisonment for a period of 1 year and fine of Rs.32,00,000/-. 14. Purpose and object of offence under Section 138 of N.I. Act is to see that the negotiable instrument/cheque is to be honoured and the drawee gets back his amount due under the cheque. Purpose and object of the said provision is not to send the accused to the prison to suffer sentence of imprisonment. Therefore, sentence of imprisonment passed by the trial Court and affirmed by the appellate Court requires to be set aside by - 20 - NC: 2025:KHC:25855 CRL.RP No. 1388 of 2021 HC-KAR maintaining the fine/compensation amount as awarded by the trial Court. 15. For the reasons stated above, I proceed to pass the following; O R D E R I. Revision petition is allowed in part. II. Conviction of petitioner - accused for offence under Section 138 of N.I. Act passed by the trial Court and affirmed by the appellate Court is affirmed. III. Sentence of simple imprisonment for one year passed by the trial Court and affirmed by appellate Court is set aside. IV. Imposition of fine and award of compensation are maintained and affirmed. Sd/- (SHIVASHANKAR AMARANNAVAR) JUDGE LRS List No.: 1 Sl No.: 24