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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
RAVI V.HOSMANI, J.
K.V. Vijay Kumar S/o Late Kumaravenkanna – Appellant
Versus
V. Madaiah S/o Late Veerabhadraiah – Respondent
Criminal Revision Petition No. 36 of 2022
Decided On : 06-01-2026
Concurrent findings of conviction under Section 138 of the NI Act are perverse and liable to be set aside in revision where lower courts fail to properly appreciate the accused's probable defence, material inconsistencies, and omissions in the prosecution evidence, resulting in acquittal of the accused. [11][20][21]
The accused is acquitted when the prosecution's case is rendered improbable by the complainant's failure to examine a material witness, non-disclosure of financial capacity, and the accused's credible explanation probabilising misuse of the cheque through documentary evidence. [18][19][20][21]
Perversity in judicial findings arises from non-consideration of the entire record, including the accused's replies denying the transaction and detailing alternative issuance of the cheque, warranting acquittal upon success of the revision petition. [15][17][20][21]
ORDER :
1. Challenging judgment dated 17.04.2021 passed by LXIX Additional City Civil and Sessions Judge, Bengaluru, in Crl.A.No.572/2016 confirming judgment dated 06.04.2016 passed by XXI ACMM, Bengaluru, in CC no.27601/2014, this revision petition is filed.
2. Sri A Madhusudhan Rao, learned counsel for petitioner submitted, this revision petition is against concurrent findings convicting petitioner (accused) for offence punishable under Section 138 of Negotiable Instruments Act, 1881 ('NI Act' for short).
3. It was submitted, present proceedings arise out of a private complaint filed by respondent - complainant under Section 200 of Code of Criminal Procedure, 1973, (‘CrPC’ for short), stating that accused was Telugu Film Distributor and well known to R. Venkateshappa of Anekal, a close friend of complainant, who had introduced accused to him and they had become friends. On 10.06.2013, accused borrowed Rs.5,00,000/- as hand loan assuring return within three months by issuing cheque no.320409 dated 10.09.2013, which when presented returned with endorsement ‘insufficient funds’ and despite demand notice got issued by complainant being served, accused failed to repay amount within time and thereby committed offence punishable under Section 138 of NI Act.
4. It was submitted, on appearance accused denied charges and sought trial, where upon complainant deposed as PW-1 and got marked Exhibits-P1 to P7, while accused confronted PW.1, and got marked Exhibit-D1. Thereafter, when substance of incriminating material was explained, accused denied it and his statement under Section 313 of CrPC was recorded. Thereafter he deposed as DW.1 and got marked Exhibit-D2. Though he raised various defences and substantiated same, without proper consideration, trial Court convicted him. Even appeal was dismissed without proper re-appreciation, leading to this revision petition.
5. It was submitted, in cross-examination, PW-1 denied contents of his complaint and examination-in-chief affidavit. It was submitted, accused had deposed that R. Venkateshappa had collected 16 cheques from him for Chit subscription, including cheque in question and had failed to return them after completion of chit transaction and that complainant had misused one of them. It was submitted, accused had filed complaint against R. Venkateshappa on 07.07.2014 as per Ex.D1 for abuse of his cheques and PW-1 admitted being summoned by police for enquiry. Accused had also produced Ex.D2 - reply dated 15.10.2013 to legal notice dated 16.09.2013 got issued by R. Venkateshappa, wherein he had mentioned details of all 16 cheques issued to R. Venkateshappa for chit subscription. This cast grave doubt over alleged loan transaction by accused from complainant herein. It was submitted, failure to examine R. Venkateshappa, despite stating there was no difficulty to do so, ought to have attracted adverse inference to upset presumption under Sections 118 and 139 of NI Act.
6. It was submitted, when there was sufficient explanation about Ex.P1 – cheque being part of 16 cheques issued by accused to R. Venkateshappa and Exs.D1 and D2 corroborating said contention, reasoned assigned by trial Court in Para-15 of its judgment that there was no explanation for issuance of 16 cheques would be erroneous, contrary to record and perverse, as such and calling for interference.
7. Even, PW-1 contradicted himself by deposing that accused approached him for hand loan, but admitting in cross- examination that accused had not approached him, but R. Venkateshappa had asked complainant to lend money. Similarly, after stating accused was his friend, he denied knowing his place of residence, office etc. Apart from above, accused disputed financial capacity. Complainant claimed, he had cash of Rs.5,00,000/- at home derived from agriculture and business. But, same was not stated in Ex.P3 – demand notice.
8. In support of his submissions, learned counsel relied upon ratio laid down by Hon'ble Supreme Court in M.S. Narayana
The burden to prove financial capability lies on the complainant when the accused raises a probable defense, not requiring proof beyond reasonable doubt.
The court upheld the conviction under Section 138 of the NI Act, emphasizing that the presumption of a cheque being issued for a legally enforceable debt was not successfully rebutted by the accused.
The presumption of a legally enforceable debt under Sections 138 and 139 of the N.I. Act is strong and requires evidence to the contrary by the accused, which was not provided.
The omission of particulars in lending does not negate a conviction for dishonor of a cheque if sufficient evidence of issuance exists; excessive interest imposition may be modified.
NI Act s.139 presumption rebutted by evidence of prior unpaid loans, pending litigations, and improbability of further advance; revisional jurisdiction under CrPC s.397 limited to perversity or ignor....
The presumption of liability under Section 139 of the N.I. Act is rebuttable, and the burden lies on the complainant to prove the existence of a legally enforceable debt beyond reasonable doubt.
To convict under Section 138 of the NI Act, it is essential to establish the signature and due execution of the cheque, with the burden resting on the accused to disprove after admission.
Criminal Law - Dishonoured of Cheque - Appeal against conviction - Petitioner in this case, did not raise any probable defence which would create doubts in mind of Court. Court find no reason to inte....
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