- 1 - NC: 2025:KHC:15218 CRL.P No. 546 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR CRIMINAL PETITION NO. 546 OF 2025 BETWEEN: 1. M/S SURESH ARTS #245, 5TH MAIN, 10TH CROSS NGEF LAYOUT, NAGARABHAVI BENGALURU 560 072 BY ITS PROPRIETOR SRI K A SURESH AGED ABOUT 50 YEARS 2. M/S SURESH ARTS PRIVATE LIMITED REGD OFF #66, 1ST MAIN BALAJINAGAR MYLASANDRA KENGERI MYSORE ROAD BENGALURU 560 058 BY ITS MANAGING DIRECTOR APPAIAH SURESH @ K A SURESH 3. M/S SURESH ARTS PRIVATE LIMITED REGD OFF #66, 1ST MAIN BALAJINAGAR MYLASANDRA KENGERI, MYSORE ROAD BENGALURU 560 058 BY ITS DIRECTOR SMT SAVITHA @ RAMAIAH SURESH SAVITHA …PETITIONERS (BY SRI. MANJUNATH K S.,ADVOCATE) AND: M/S SRI POORNACHANDRA FILM A PATNERSHIP FIRM HAVING ITS OFFICE #152, 3RD CROSS, R K GARDENS RV II STAE, NEW BEL ROAD BENGALURU 560 054 Digitally signed by R HEMALATHA Location: High Court of Karnataka - 2 - NC: 2025:KHC:15218 CRL.P No. 546 of 2025 REPRESENTED BY ITS PARTNER SRI. CHINNEGOWDA MAJOR …RESPONDENT (BY SRI. JAGADEESHA REDDY R, ADVOCATE) THIS CRL.P IS FILED U/S 482 CR.PC (FILED U/S 528 BNSS) PRAYING TO ALLOW THIS PETITION ON THE GROUNDS URGED SUPRA AND OTHERS TO BE SUBMITTED AT THE TIME OF HEARING AND FURTHER PLEASED TO QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.38385/2024 PENDING ON THE FILE OF THE LEARNED 36TH A.C.J.M BENGALURU CITY (ANNEXURE- G AND H) AND ETC. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR ORAL ORDER 1. The petitioner challenges the cognizance of the offence under Section 138 of the N.I. Act. A private complaint was filed under Section 200 of the Cr.P.C., stating that accused No.1 had approached the complainant for financial assistance and had pledged the dubbing rights of a Kannada film titled Thothapuri as security for repayment of the loan. The complainant further stated that accused No.1 voluntarily wrote a letter assuring repayment of the entire financial assistance received along with royalty and accordingly issued two cheques dated 30.01.2024 one for a sum of Rs.1 crore 8 lakh and another for Rs.57 lakh. When the said cheques were presented for encashment, they were returned for want of funds. - 3 - NC: 2025:KHC:15218 CRL.P No. 546 of 2025 2. Learned counsel for the petitioner submitted that a part of the cheque amount was already paid to the complainant and that the cheques were presented without any endorsement acknowledging receipt of the part payment. Therefore, he contended that the offence under Section 138 of the N.I. Act is not attracted. 3. In support of this submission, reliance is placed on the case of Dashrathbhai Trikambhai Patel vs. Hitesh Mahendrabhai Patel & Anr. 4. He further submitted that the agreement does not contain any clause relating to payment of royalty. Therefore, the allegation that the cheque for Rs.57 lakh was issued towards royalty is without substance. In the absence of a legally enforceable debt, the complaint filed under Section 138 of the N.I. Act is not maintainable. 5. Learned counsel for the respondent–complainant submitted that the subject cheques are dated 30.01.2024, and no part payment was made as alleged by the petitioner–accused. Except for a sum of Rs.1 lakh, all other payments were made prior to the issuance of the cheques. The Rs.1 lakh was paid after - 4 - NC: 2025:KHC:15218 CRL.P No. 546 of 2025 the issuance of the cheques in favour of one Sri Chinnegowda, a partner of the complainant firm, and not in favour of the firm itself. 6. The arguments of the learned counsels have been fully considered, and the material on record has been perused. 7. A perusal of the agreement indicates that accused No.1 had received financial assistance from the complainant and had pledged the dubbing rights of the Kannada film Thothapuri as security for repayment of the loan. The petitioner has stated that payments were made as enumerated in paragraph J of the petition, amounting to a total sum of Rs.6,55,000/-. However, the payments listed at serial numbers 1 to 4 were made prior to the issuance of the cheques, and the payment dated 19.02.2024 for Rs.1 lakh was made in favour of Sri Chinnegowda, a partner of the complainant firm, and not to the firm itself. Admittedly, the subject cheques were issued to the complainant firm. Whether part payments were made to the firm is a matter to be considered at the time of trial and cannot be adjudicated at this stage. Therefore, the decision cited by learned - 5 - NC: 2025:KHC:15218 CRL.P No. 546 of 2025 counsel for the petitioner is not applicable to the facts of this case. 8. Further, the learned counsel for the petitioner contended that the cheque for Rs.57 lakh was obtained through undue influence and coercion. Whether it was obtained by such means is also a matter to be considered at the time of trial and cannot be examined in this petition. 9. Admittedly, accused No.1 is the drawer of the cheques, and accused Nos.2 and 3 are in no way connected with the issuance of the cheques or the affairs of accused No.1’s firm. Therefore, the cognizance taken in relation to accused Nos.2 and 3, who are not the drawers of the cheques, is not maintainable. The learned Magistrate has committed an error in taking cognizance of the offence punishable under Section 138 of the N.I. Act against accused Nos.2 and 3. 10. Accordingly, the petition is allowed in part. The impugned proceedings in C.C. No.38385/2024 on the file of the 36th Additional Chief Judicial Magistrate, Bengaluru City, insofar as they relate to accused Nos.2 and 3, are hereby quashed. The trial is permitted to - 6 - NC: 2025:KHC:15218 CRL.P No. 546 of 2025 proceed against accused No.1. All contentions of the parties are left open. 11. Pending I.As. do not survive for consideration. Sd/- (HEMANT CHANDANGOUDAR) JUDGE BS List No.: 1 Sl No.: 20