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2025 Supreme(Kar) 445

IN THE HIGH COURT OF KARNATAKA AT BENGALURU 
SHIVASHANKAR AMARANNAVAR, J.
Sri. M. Ramesha S/o Gante Muniyappa - Appellant 
Versus 
Sri. G.V. Ashwathanarayana Reddy, S/o Late Venkata Reddy - Respondent 
Criminal Revision Petition No. 457 of 2016
Decided on : 18-06-2025

Advocates:
Advocate Appeared:
For the Appellant :SRI. PRAKASHA M, ADVOCATE
For the Respondent:SRI. N.R. NAIK, ADVOCATE

The presumption of issuance of a cheque in discharge of a debt under Section 139 of the N.I. Act is rebuttable, placing the burden on the accused to prove otherwise, with convictions upheld when the presumption remains unchallenged.

Headnote:(A) Negotiable Instruments Act - Section 138 - Conviction for dishonor of cheque - The revision petition challenges the conviction affirmed by the appellate court regarding the dishonor of a cheque for insufficient funds. The presumption under Section 139 is applicable, placing the burden of proof on the accused to rebut the presumption of issuance for a debt. The petitioner failed to establish the defense of cheque misuse or interpolation of date. The trial court and appellate court's findings are supported by sufficient evidence. (Paras 1, 3, 7, 10, 15, 21)

(B) Burden of proof - The issuance of the cheque raises a rebuttable presumption that it was issued to settle a debt. The accused must provide evidence to counter this presumption. Failure to do so results in conviction under Section 138. (Paras 8, 9, 10)

Facts of the case:
The appellant borrowed a loan of Rs.1,00,000/- from the respondent and issued a cheque for repayment, which was later dishonored. The legal notice was served after the cheque bounced. Appellant contended the cheque was misused for a different transaction.

Findings of Court:
The trial court found the evidence supported the conviction for the dishonor of the cheque, affirming the decision despite the appellant's claims of the cheque being issued as security.

Issues: Whether the cheque was issued for a legitimate debt or misused, and whether the service of demand notice was valid.

Ratio Decidendi: The appellate court held that the presumption under Section 139 obliges the accused to rebut it with evidence. The accused's failure to do so justified the conviction.

Result: Petition dismissed.

Table of Content
1. conviction for dishonor of cheque under n.i. act (Para 1 , 3)
2. disputes regarding issuance and timing of notice (Para 4 , 5)
3. presumption under section 139 of n.i. act (Para 6 , 7 , 21)
4. burden of proof and evidential standards for rebutting presumption (Para 8 , 10 , 12)
5. validity of cheque presentation and response timeframes (Para 9 , 18 , 20)
6. clarifications on cheque dates and lending evidence (Para 14 , 15 , 19)
7. final judgment dismissing the appeal (Para 22)

ORDER :

SHIVASHANKAR AMARANNAVAR, J.

1. This revision petition is directed against the judgment dated 13.01.2016 passed in Crl.A. No. 42/2015 by II Additional District and Sessions Judge, Chikkaballapura (sitting at Chintamani) where under the judgment of conviction dated 13.05.2015 passed in C.C. No. 103/2011 by Additional Civil Judge and JMFC, Chintamani convicting the petitioner for offence punishable under Section 138 of the Negotiable Instruments Act (hereinafter referred to as the N.I. Act) has been affirmed.

2. Heard learned counsel for petitioner – accused and learned counsel for respondent – complainant.

3. Case of the respondent - complainant is that the petitioner - accused had borrowed hand loan of Rs.1,00,000/- for his family and other legal necessities in the second week of January 2010 before the witnesses, namely. Sri. Rajanna, Sri. L.A. Maregowda, Sri. C. Vasudev and Sri. Shaik Hussain and agreed to repay within 3 months and accordingly the respondent - complainant requested the petitioner - accused for repayment of the said hand loan. The petitioner - accused gave cheque dated 10.04.2010 bearing No. 578613 for Rs.1,00,000/- drawn on State Bank of India, Yelahanka New Town Branch, Bangalore. The respondent - complainant presented the said cheque for realization on 20.09.2010 and it was returned unpaid for reason `insufficient funds’ under memo dated 20.09.2010 which was received on 15.10.2010. Thereafter the respondent - complainant got issued a legal notice dated 03.11.2010 by registered post which was returned with shara that `party refused’, but, notice sent under certificate of posting was personally served on 12.11.2010. The petitioner – accused neither replied nor complied the demand made in the notice and therefore the respondent - complainant filed complaint against the petitioner – accused for offence punishable under Section 138 of the N.I. Act. The respondent - complainant examined himself as P.W.1 and got marked Ex.P.1 to Ex.P.7 and also examined two witnesses as P.W.2 and P.W.3. Statement of the petitioner - accused has been recorded under Section 313 of Cr.P.C. The petitioner - accused has not led any defense evidence. The trial Court appreciating the evidence on record has convicted the petitioner - accused for offence under Section 138 of the N.I. Act. Said judgment of conviction was challenged by the petitioner - accused before the Sessions Court in Crl.A. No. 42/2015. Said appeal came to be dismissed affirming the judgment of conviction.

4. Learned counsel for petitioner – accused would contend that the cheque has not been issued for payment of debt but it has been issued for a different transaction to some other person and that cheque has been misused by the respondent - complainant. He placed reliance on the documents produced under memo at the time of recording statement under Section 313 of Cr.P.C. that the cheque has been issued to one Sri. Lakshmaiah as a security for the transaction entered into by the petitioner with him. He further contended that the notice sent under certificate of posting has been served on the petitioner on 06.11.2010 and the notice sent by RPAD/Speed Post returned with endorsement `party refused’ and on the cover of the said notice it is endorsed that `delivery has been attempted on 06.11.2010’ and therefore there is deemed service of notice on 06.11.2010. Considering the said deemed service of notice on 06.11.2010, the complaint filed on 23.12.2010 is beyond period of limitati

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