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CRL.P No. 10364 of 2023

HC-KAR

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 9^TH DAY OF JULY, 2026

BEFORE

THE HON'BLE MR. JUSTICE M.NAGAPRASANNA

CRIMINAL PETITION NO. 10364 OF 2023

BETWEEN:

SRI.S.P.PRABHU

S/O LATE PILLAMARAPPA,

AGED ABOUT 55 YEARS,

RESIDING AT SOMATHNAHALLI VILLAGE,

CHANNAARYAPATNA HOBLI,

DEVANAHALLI TALUK,

BANGALORE RURAL DISTRICT-562129.

…PETITIONER

(BY MS. ROCHANA P.R. FOR SRI. SRINIVAS V., ADVOCATE)

AND:

Digitally signed SMT.M. SHARADHAMMA

by

PADMAVATHI B W/O SEENAPPA @ SHINAPPA,

K

AGED ABOUT 60 YEARS,

Location: High

Court of

R/AT NO.343, RAMARA BEEDI,

Karnataka

BUDIGERE VILLAGE,

CHANNAARYAPATNA HOBLI,

DEVANAHALLI TALUK,

BANGALORE RURAL DISTRICT-562 129.

…RESPONDENT

THIS CRL.P IS FILED U/S.482 OF CR.P.C PRAYING TO

SET ASIDE THE ORDER DATED 07.06.2023 PASSED IN

C.C.NO.1043/2023 ON THE FILE OF PRINCIPAL CIVIL JUDGE

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CRL.P No. 10364 of 2023

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AND J.M.F.C., DEVANAHALLI, AND CONSEQUENTLY QUASH ALL

FURTHER PROCEEDINGS IN C.C.NO.1043/2023 REGISTERED

FOR AN OFFENCE P/U/S 138 OF N.I. ACT.

THIS PETITION, COMING ON FOR ADMISSION, THIS DAY,

ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA

ORAL ORDER

The petitioner is before the Court calling in question the

proceedings in C.C.No.1043/2023.

2. Heard the learned counsel Ms. Rochana P.R. for the

learned counsel Sri. Srinivasa V, appearing for the petitioner.

3. The petitioner is the accused and the respondent is

the complainant. A transaction between the petitioner and the

respondent happened between May-2021 to September-2021,

wherein the respondent - complainant is said to have lent an

amount of Rs.10,00,000/- in furtherance of which the petitioner

has issued a cheque belonging to the State Bank of Mysore.

The said cheque is presented only to be returned for want of

sufficient funds. The proceedings under Section 138 of the

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CRL.P No. 10364 of 2023

HC-KAR

Negotiable Instruments Act, 1881 ('the Act' for short) is thus

instituted against the petitioner in C.C.No.1043/2023.

4. The learned counsel appearing for the petitioner

submits that the petitioner is before the Court on the score that

the Reserve Bank of India has issued guidelines with regard to

the stale or invalid cheque, as the cheque was issued of State

Bank of Mysore long after its amalgamation with the State Bank

of India, which would be a non-CTS cheque.

5. The Reserve Bank of India itself has subsequently

clarified that non-CTS cheques also could become the subject

matter of the proceedings under Section 138 of the Act. This

Court in Criminal Petition No.4978/2023, disposed on

11.07.2023, while considering the said circular of the Reserve

Bank of India and whether non-CTS cheques would become

subject matter of proceedings under Section 138 of the Act,

and has held as follows:

"…. …. ….

8. The issue lies in a narrow compass. The

transaction between the parties is not in dispute. What is

issued by the petitioner is a non-CTS cheque. The cheque

truncated scheme was introduced by the Reserve Bank of

India in the year 2011 and the scheme was still in

operation upto 31.12.2018. Therefore, on and from

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CRL.P No. 10364 of 2023

HC-KAR

01.01.2019, the non-CTS cheque would lose its validity.

The Reserve Bank of India further clarifies that

though the non-CTS cheque loses its value from

01.01.2019, it would still be valid as a 'Negotiable

Instrument'.

9. In the teeth of the aforesaid facts, the

proceedings instituted by the complainant before the

concerned Court cannot be seen to be tumbling down.

10. It would be useful to refer to the Circular of the

Reserve Bank of India, which hold that non-CTS cheques

are valid as a Negotiable Instrument and clarification by

the Reserve Bank of India is as follows:

"4. Are non-CTS cheques invalid?

Banks have been advised to issue only CTS 2010

standard compliant cheques from September 30,

2012. Earlier, there were separate clearing

sessions for non-CTS cheques. However, they

were discontinued with effect fr