Factual disputes regarding the repayment of a loan and whether a cheque was issued as security are matters of evidence to be decided at trial and cannot be the basis for quashing proceedings under Section 482 of the CrPC.

THIS CRL.P IS FILED UNDER SECTION 482 OF THE CODE OF CRIMINAL PROCEDURE, 1973 PRAYING TO QUASH THE ORDER DATED 05.02.2021 BY TAKING THE COGNIZANCE IN P.C.R.NO.211/2020 BY THE J.M.F.C.-III COURT, SHIVAMOGGA CONSEQUENTLY QUASH CRIMINAL PROCEEDINGS IN C.C.NO.78/2021 FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I. ACT, PENDING BEFORE THE J.M.F.C.-III COURT, SHIVAMOGGA UPON THE PRIVATE COMPLAINT OF THE RESPONDENT.

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

CORAM: HON'BLE MR. JUSTICE R. NATARAJ

Digitally signed by HEMALATHA J Location: HIGH COURT OF KARNATAKA S. JAGADISH

ORAL ORDER

1. The petitioner has challenged the proceedings initiated against him by the respondent, in C.C.No.78/2021 before the JMFC-III, Shivamogga, for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (henceforth referred to as 'the NI Act').

2. The petitioner contends that the respondent filed PCR No.211/2020 against the petitioner alleging an offence punishable under Section 138 of the NI Act. The respondent claimed in the private complaint that the petitioner was the owner of a bus bearing registration No.KA-17-B-0546 and is also a member of the respondent. On 03.11.2016 he approached the respondent for financial assistance to the tune of Rs.8,00,000/- and that on 10.03.2017, the respondent advanced loan of Rs.7,00,000/- in account bearing No.3400132. He also executed various loan documents and agreed to repay the loan in 36 installments along with interest. It was claimed by the respondent that the petitioner did not pay the loan amount and therefore, he became a chronic defaulter. It was alleged that the petitioner after being persuaded, issued a post-dated cheque bearing No.764707, dated 20.08.2020 drawn on Vijaya Bank, Nallur for Rs.8,63,963/-. The said cheque was dishonored due to insufficient funds on 14.09.2020. The respondent therefore issued a notice of demand, which was not complied with by the petitioner and hence, it initiated prosecution of the petitioner for an offence under Section 138 of the NI Act. The trial Court after recording the sworn statement of the respondent took cognizance of the aforesaid offences and issued process. The petitioner being aggrieved by the same is before this Court.

3. The learned counsel for the petitioner submitted that the petitioner had earlier raised a loan of Rs.6,00,000/-, which was paid off. He thereafter raised another loan of Rs.6,00,000/- and certain cheques were drawn towards security for repayment of the said loan. He contends that the said loan of Rs.6,00,000/- was also cleared and the cheques that were given in respect of second loan of Rs.6,00,000/- is misutilized by the respondent to now claim that the respondent had advanced loan of Rs.7,00,000/-. He therefore contends that the prosecution launched against the petitioner deserves to be halted.

4. The learned counsel for the respondent however contended that the petitioner had raised a loan of Rs.7,00,000/- in the year 2017 and had executed documents agreeing to repay the same in 36 installments. He therefore contends that the question whether the petitioner has cleared the loan or not and whether the cheque in question was given to be retained as security for the earlier loan or not are all questions of fact which are to be established by the petitioner before the trial Court and not in a petition under Section 482 of the Code of Criminal Procedure, 1973.

5. I have considered the submissions of the learned counsel for the petitioner and the learned counsel for the respondent.

6. The petitioner's defence is that the cheque in question w