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2025 Supreme(Kar) 166

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
J.M. KHAZI, J.
C. Prakash Somayaji S/o Late Krishna Somayaji - Appellant
Versus
R. Ravi S/o S.K. Ramachandran - Respondent 
Criminal Revision Petition No. 50 of 2021
Decided On : 02-07-2025

Advocates:
Advocate Appeared:
For the Appellant : Krishnamurthy G. Hasyagar
For the Respondent: K. Krishna Prasad

The transaction related to the dishonoured cheque was barred by limitation, resulting in the acquittal of the accused for the offence under the Negotiable Instruments Act.

Headnote:(A) Negotiable Instruments Act - Sections 138, 87, 118, and 139 - Accused convicted and sentenced for dishonouring a cheque. The trial court's decision was upheld by the sessions court, but found to be erroneous on appeal due to failure to consider the transaction was barred by limitation. (Paras 18, 26)

(B) Dishonour of Cheque - Presumptions under Sections 118 and 139 create a presumption in favor of the complainant regarding the cheque being issued for a legally recoverable debt unless the accused proves otherwise. (Paras 16, 27)

(C) Evidence - The absence of the complainant in person and reliance on a Power of Attorney holder does not diminish evidentiary weight of documents presented. (Paras 12, 18)

Facts of the case:
The complainant alleged that the accused issued a cheque for unpaid debts related to Urea Formaldehyde raisin purchases, which was later dishonoured. A legal notice was issued but no payment was made, leading to the complaint.

Findings of Court:
The concurrent findings of the lower courts were found erroneous, and the accused was acquitted as the transaction was barred by limitation.

Issues: Whether the cheque was issued for a legally enforceable debt or liability and if the transaction was barred by limitation.

Ratio Decidendi: The court concluded that the transaction was barred by limitation due to evidence presented by the accused, thus overturning the conviction.

Result: Petition allowed; accused acquitted of charges.

Table of Content
1. conviction based on dishonored cheque (Para 1 , 3 , 8)
2. arguments against validity of cheque (Para 10 , 11 , 19)
3. presumption of cheque validity (Para 12 , 13 , 14)
4. burden of proof on accused (Para 16 , 17 , 26)
5. arguments regarding evidence and transaction validity. (Para 18)
6. assessment of cheque validity and legal standards. (Para 20)
7. exploration of material alterations and legal implications. (Para 22)
8. decision to allow petition and acquit accused (Para 27)

ORDER :

1. In this Criminal Revision Petition, petitioner who is arraigned as accused has challenged his conviction and sentence imposed by the trial Court for the offence punishable under Section 138 of Negotiable Instrument Act ('N.I. Act' for short), which came to be confirmed by the Sessions Court by dismissing the appeal filed by him.

2. For the sake of convenience, parties are referred to by their ranks before the trial Court.

3. Complainant filed a complaint against accused contending that he is a manufacturer of Urea Formaldehyde raisin at Mysuru. Accused used to purchase the said product for his business of manufacturing of plywood and black board, etc. Towards discharge of a sum of Rs. 8,58,765/- due towards purchase of the product on the credit basis, accused issued cheque number 619301 dated 15.08.2006 drawn on Karnataka Bank, Buntwala, with an assurance that on presentation, it would be honoured. However, on 27.11.2006 when complainant presented the cheque for encashment, it was dishonoured for want of sufficient funds as per endorsement dated 01.12.2006. He has received the endorsement from his banker on 07.12.2006. In this regard, complainant got issued legal notice to the accused calling upon him to pay the amount due under the cheque. Instead of paying the amount, he has a sent an evasive reply and hence the petition.

4. Accused appeared through counsel and contested the case by pleading not guilty.

5. In order to prove his case, complainant examined his Power of Attorney holder as PW-1 and relied upon Exs.P1 to 52.

6. During the course of statement under Section 313 Cr.P.C, the accused has denied the incriminating evidence led by the complainant.

7. He has also given evidence as DW-1 and relied upon Ex.D1 to 4.

8. The trial Court convicted the accused and sentenced him to pay a sum of Rs. 8,68,765/- as fine with the default sentence.

9. Aggrieved by the same, accused filed Crl.A.No.54/2019 before the Sessions Court, which came to be dismissed, confirming the judgment and order of the trial Court.

10. Aggrieved by the concurrent findings of the trial Court as well as the Sessions Court, the accused is before this Court contending that the same are contrary to law and evidence on record. They have failed to appreciate that the cheque in question was issued during 1995–96 and date has been inserted by the complainant to suit his convenience and there are material alteration in the cheque and as such, it is void under Section 87 of N.I Act.

11. The Courts below have also failed to appreciate that in CC.No.215/2006, it is suggested to the accused that cheque No.619301 has been issued by the accused in February 1996. As on the date of the cheque i.e., 15.08.2006 said to have been issued, there was no legally enforceable debt or liability.

12. PW-1 Priyanka V.S, the Power of Attorney holder of the complainant was not present when the transaction took place and she has no personal knowledge. Complainant has not chosen to enter the witness box and give evidence and therefore adverse inference is required to be drawn. M/s Spectro colours in whose favour cheque is issued is not the complainant. The legal notice is also not sent on behalf of M/s Spectro colours.

13. In support of his arguments, learned counsel for petitioner has relied upon the following decisions:

(i) Milind Shripad Chandurkar Vs. Kalim M. Khan and Anr. 2011 AIR SCW 1773

(ii) Janki Vashdeo Bhojwani and Anr. Vs. Indusind Bank Ltd. and Ors. (2005) 2 SCC 217

(iii) A.C. Narayanan

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