- 1 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE H.P.SANDESH CRIMINAL REVISION PETITION NO.927 OF 2021 BETWEEN: MR. K MOHAMMED IKRAM PROPRIETOR OF R B CHICKEN AND K R CHICKEN CENTRE AGED ABOUT 48 YEARS No.18/36, MYSORE ROAD OPP. GOVT. VETERINARY HOSPITAL BANGALORE - 560002 ALSO AT R/AT No.298, THIMMAIAH ROAD SHIVAJINAGAR, BENGALURU - 560051 …PETITIONER (BY SRI BHASKAR C R, ADVOCATE) AND: M/S LOTUS FARMS REP BY ITS SENIOR OFFICER ASSISTANT MANAGER SRI SIMHAM REDDY K AGED ABOUT 41 YEARS No.12A, ANANTHAPURA VILLAGE SINGNAYAKANAHALI POST YELAHANKA BANGALORE - 560064 …RESPONDENT (BY SRI M D ALAVANDAR, ADVOCATE) Digitally signed by DEVIKA M Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 THIS CRL.RP IS FILED U/S.397 R/W 401 CR.P.C PRAYING TO SET ASIDE THE JUDGMENT AND ORDER DATED 12.07.2021 IN CRL.A.NO.1612/2019 PASSED BY THE HONBLE LXXV ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, AT BENGALURU CITY AND ETC. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE H.P.SANDESH ORAL ORDER This revision petition is filed challenging the judgment of conviction and sentence dated 21.06.2019 passed in C.C.No.19781/2016 for the offence punishable under Section 138 of N.I. Act and also challenging the judgment of confirmation dated 12.07.2021 passed in Crl.A.No.1612/2021. 2. Heard the learned counsel appearing for the respective parties. 3. The factual matrix of the case of the complainant before the Trial Court that the complainant is the firm dealing with supply of broiler poultry birds and poultry chicken having its registered office at Domalguda, - 3 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 Hyderabad in the name and style of M/s Lotus Farms. Accused is running a shop under the name and style R B Chicken and K R Chicken Centre selling a retail and wholesale live bird/chicken in the poultry business. Accused is long standing and regular customer of the complainant company. In pursuance of the orders placed by the accused, the complainant regularly supplying the live birds, on credit basis. Accordingly, to the tune of Rs.10,27,185/-, the live birds were supplied to the accused on the credit basis on various invoices mentioned in the complaint. The accused was also made part payment to the complainant for the supply of the materials. Then, he became a defaulter in payment of the balance amount and he went on postponing in making the payment in one or the other pretext. On repeated demand, for outstanding due, accused issued a Cheque bearing No.000160 for Rs.10,27,185/- drawn in favour of the complainant assuring that the same will be honoured when it is presented for encashment. Accordingly, the complainant presented the said Cheque on 26.05.2016 - 4 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 and the same was returned with an endorsement ‘payment stopped by the drawer’. Hence, the complainant issued a legal notice calling upon the accused to repay the amount on 28.06.2016. The said notice was served on the accused and he gave untenable reply on 09.07.2016. Hence, the complainant filed the complaint against the accused. 4. The Trial Court took the cognizance for the offence and issued summons to the accused and the accused appeared before the Court and he did not plead guilty and claims for trial. In order to prove the case of the complainant, the authorized representative of the company examined as PW1 and got marked the documents at Ex.P1 to P12. To prove the defence, accused examined as DW1 and got marked the documents at Ex.D1 to D3. The Trial Court taken note of the fact of bouncing of Cheque Nos.159, 160 and 161 which was admitted by DW1 in his cross-examination. The Trial Court also taken note that DW1 also admitted that there - 5 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 was a transaction continued till 04.01.2016. The Trial Court also held that it is rightly pointed out by the complainant’s counsel that Cheque Nos.159, 160 and 161 were issued to M/s Lotus Farms and the same were find a place in the Cheque book counter file produced by the accused himself. The answer elicited from the mouth of DW1 was discussed by the Trial Court in paragraph 10 of the judgment wherein it is held that no doubt, Ex.D1 was not disclosed by the complainant but by non-disclosure of memorandum of understanding the question of considering the factum of not establishing the fact of supply of materials and also the accused was liable to pay the amount cannot be discarded. It is specifically stated that a business was continued on a weekly basis. If second party failed to pay the amount within one week, the security Cheque can be presented for the recovery of the amount. Though the accused firm has stopped the transaction in the year 2015, the security cheques were not presented to the bank till 2016. This type of act of the complainant will create a doubt with respect to the liability - 6 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 of the accused. The defence of the accused will be successfully proved and the question of considering the existence of legal liability does not arise at all and taken note of the contention of the accused also. 5. The Trial Court having considered the respective contentions of the complainant as well as the accused, in paragraph 11 of the judgment, held that the arguments of the counsel cannot be accepted since the document produced by the complainant at Ex.P9 to P11 are establishes the supply of materials and the non- payment of amount to the complainant. Though Ex.P8 has been issued and even in Ex.P8 also, accused has not stated about the memorandum of understanding. On the other hand, he has specifically admitted that he has issued the Cheque for a security purpose and it was filled up by the complainant and thereby the presumption can be drawn in favour of the complainant. The Trial Court also taken note of the reply notice which is marked as Ex.P8 wherein accused has stated that the complainant has - 7 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 breached the covenants of memorandum of understanding. But it has to be specifically noted that covenants of memorandum of understanding will cast the burden on the accused to pay the amount within the stipulated time. To establish the fact that he has paid the amount within the stipulated time, no material is placed on record. On the contrary, the clear unequivocal admissions of DW1 and the documents produced by the complainant, will clearly establish that the accused was liable to pay the Cheque amount as a legally recoverable debt and for that purpose, he has issued the Cheque. Having considered this material, reasoning and also Ex.P9, the same relates to only 15 days and if really the accused has paid the amount, he might have placed the material, but no material is placed before the Court. Having considered Exs.P9 to P11, the Trial Court comes to the conclusion that stop payment also attracts Section 138 of N.I. Act and the Trial Court convicted and sentenced the accused. - 8 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 6. Being aggrieved by the said reasoning, an appeal is filed in Crl.A.No.1612/2019. Having considered the grounds urged in the appeal memo, an application is also filed by the appellant before the First Appellate Court invoking Section 391 of Cr.P.C. and the First Appellate Court also formulated point Nos.1 to 3, whether the Trial Court rightly convicted the accused for the offence under Section 138 of N.I. Act, whether the judgment requires interference and a point is also raised whether sufficient ground is made to allow the application filed under Section 391 of Cr.P.C. 7. The First Appellate Court having considered the grounds urged as well as on re-appreciation of evidence on record, taken note of document of Ex.P2, subject matter of Cheque which is also signed by accused. The First Appellate Court also taken note of legal notice and also reply i.e., Ex.P8 and the same is discussed in paragraph No.18 and observation is made that D.W.1 has admitted that he has not taken any legal action against the - 9 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 complainant so far for misuse of Ex.P2-Cheque. It is also observed that, thus, it can be presumed that, statutory notice was served on the accused, despite of that, he has not complied, but gave evasive reply in terms of Ex.P8 and also taken note of documents which have been placed before the Court in paragraph No.19 as well as in paragraph No.20. The First Appellate Court also taken note of documents Ex.P9 to Ex.P12 and documentary evidence i.e., challans for having supplied the material and recitals of Exs.P9 to P11 and in order to discharge the said amount, the accused has issued Ex.P2 to the complainant and the same was dishonoured is taken note of in paragraph No.23. Hence, the First Appellate Court having reassessed the material, comes to the conclusion that the accused had not placed any record for having paid the amount in terms of the demand made by the complainant and so also answered point No.3 with regard to filing of application under Section 391 Cr.P.C., though application was filed, no document was placed before the Court. Hence, comes to the conclusion that no ground to - 10 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 allow the application filed under Section 391 Cr.P.C. and dismissed the appeal. Being aggrieved by the finding of the Trial Court convicting and sentencing the petitioner and also confirmation made by the First Appellate Court, present revision petition is filed before this Court. 8. Learned counsel for the petitioner in his argument would contend that the Trial Court failed to consider the cross-examination of P.W.1 to the effect that there is part payment of the amount due, still the Trial Court held that there is entire amount due to the respondent/complainant and failed to apply their minds to the said fact and committed an error. It is also contended that the Trial Court erroneously comes to the conclusion though document Ex.D1 produced by the respondent/accused, inspired no confidence in the mind of the Court and there are no conditions as to the terms of the business governing the appellant and respondent herein and the Trial Court comes to the conclusion that the document produced by the petitioner/accused is of no use. - 11 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 Learned counsel would vehemently contend that when there was no legally enforceable liability or debt either in part or full, the Trial Court as well as the First Appellate Court ought not to have convicted and confirmed the same. Learned counsel would vehemently contend that at the first instance, the respondent P.W.1 did not admit the existence of any agreement/MOU between the respondent and the petitioner and respondent was adamant and evasive and ultimately it was he who conceded the fact of existence of the said MOU between the respondent and petitioner when the document was confronted with the original agreement that existed between both of them. The fact of concealment of said agreement/MOU on the part of the respondent and misleading of the Court by resorting to the criminal proceedings deserves to be seriously considered by the Trial Court. Hence, the both the Courts committed an error. 9. Learned counsel for the petitioner also relied upon the judgment of the Apex Court in DASHRATHBHAI - 12 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 TRIKAMBHAI PATEL VS. HITESH MAHENDRABHAI PATEL & ANR. reported in CRL.A.NO.1497 OF 2022 and brought to notice of this Court the reasoning and also conclusion with regard to commission of an offence under Section 138, the Cheque that is dishonoured must represent a legally enforceable debt on the date of maturity or presentation; if the drawer of the Cheque pays a part or whole of the sum between the period when the Cheque is drawn and when it is encashed upon maturity, then the legally enforceable debt on the date of maturity would not be the sum represented on the Cheque and also brought to notice of this Court point No.3 and the observation made by the appellate Court. Hence, learned counsel referring this judgment would contend that when there is an admission on the part of P.W.1 regarding part payment is concerned, ought not to have filed the case against the respondent. 10. Learned counsel for the petitioner also brought to notice of this Court paragraph No.11, wherein an - 13 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 admission was given by D.W.1 that as per running ledger account extract, the accused made part payment and the same is also stated in the complaint itself. When such admission is given, the respondent cannot maintain a case invoking Section 138 of N.I. Act. 11. Per contra, learned counsel for the respondent would vehemently contend that the very case of the complainant is that there was a transaction between the complainant and the accused and the same is a continuous business from 2010 onwards and having made the part payment in respect of earlier transaction is concerned, learned counsel would contend that, in the legal notice, specific claim is made in respect of particular challans that the accused is due in respect of amount of Rs.10,27,185/- as claimed in Ex.P2 and details are also given in respect of total 25 challans. The counsel would contend that it is specifically mentioned that the claim is in respect of 25 invoices and total amount of Rs.10,27,185/- is also mentioned and subject matter of Cheque is also - 14 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 mentioned in the notice itself. Learned counsel would further contend that when the Cheque was dishonoured with the endorsement ‘payment stopped by the drawer’, legal notice was issued and untenable reply was given and in order to substantiate the contention of the complainant, apart from the document of Ex.P2 and legal notice, reply notice is also marked. Learned counsel also brought to notice of this Court Ex.P9-24 challans for which claim is made before the Trial Court, Ex.P10-24 invoices and statement of account is also marked before the Trial Court in terms of Ex.P11. Hence, the very contention that part payment is made in respect of this claim cannot be accepted and no such part payment is made in respect of dues. 12. Learned counsel also brought to notice of this Court that there is a clear admission with regard to issuance of subject matter of Cheque towards liability and the same is not issued for any security as contended by learned counsel for the petitioner. Learned counsel for the - 15 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 respondent also brought to notice of this Court the admission given by D.W.1 in paragraph No.9 of the judgment of the Trial Court with regard to issuance of three Cheques, wherein there was no mention that said Cheques are issued towards security as per Ex.D2. Hence, cannot contend that subject matter of Cheque was given as security and not towards liability. Learned counsel would contend that even Ex.D1 is also marked at the instance of the petitioner and Clause No.4 is very specific that there was an understanding between both of them that business is continued on a weekly basis, if the second party fails to pay the Bill/amount to the first party, first party can present the security cheques for his pending due amount. In respect of the amount due towards purchase of the chicken and eggs from the first party, second party issued blank cheques. Hence, learned counsel would contend that both the Trial Court and the First Appellate Court considered the material on record and it does not require interference of this Court. - 16 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 13. Having heard learned counsel for the petitioner and learned counsel for the respondent and also considering the principles laid down in the judgment of the Apex Court referred by the learned counsel for the petitioner, the points that would arise for consideration of this Court are: (1) Whether Courts below have committed an error in convicting and sentencing the accused and confirmation of sentence for the offence punishable under Section 138 of N.I. Act and whether it requires interference of this Court by exercising revisional jurisdiction? (2) What order? Point No.(1) 14. Having heard the respective counsels, on perusal of the material on record, specific averments are made in he complaint that there was a business transaction between the complainant and the accused and no dispute with regard to the transaction is concerned. The main contention of learned counsel for the petitioner - 17 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 is that Cheque which was obtained for security purpose was misused. Learned counsel would contend that transaction was stopped in the year 2015 itself and thereafter there was no transaction. When such being the case, both the Courts committed an error in not considering the material on record. The Court has to take note of the averment made in the complaint as well as demand made in the notice and issuance of notice is not in dispute and also issuance of reply is not in dispute. The evidence placed before the Court is also relied upon by both the Trial Court and the First Appellate Court and scope of revision is very limited and only if there is any perversity in finding of the Trial Court and First Appellate Court, then Court can exercise revisional jurisdiction and the scope and ambit of revision is also very limited and Court can look into the evidence only for the purpose of perversity. The specific case of the complainant is that in respect of 25 challans, claim is made. It is also an admitted fact that it was a business transaction from 2010 to 2015. No doubt, in the cross-examination of P.W.1 it is - 18 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 elicited regarding mentioning of 12 items, but did not mention 25 items and it is mentioned as etc. and there is an admission for not mentioning the details of 25 challans and also there is an admission that, if amounts are not paid and complainant can present the Cheque and also regarding supply is concerned, it is elicited that in terms of MOU, if payments are not made, not to supply the same. But, P.W.1 says that he is a regular customer, hence continued to supply the same. 15. The main contention of learned counsel for the petitioner is that they have made payment in respect of all the claims and that the Cheque which was given for security was misused. On perusal of evidence of D.W.1, he also not disputes the fact that he has given the Cheque for security. But he claims that subject matter of Cheque and other two Cheques were also given towards the security. But, in the cross-examination, he admits regarding transaction and supply is concerned and that he was doing credit business and in view of the fact that he - 19 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 was doing retail as well as trading business, he will not be in the shop from the morning and his uncle Ashok will be there in the shop and suggestion is also made with regard to delivery of 12 challans, but denied the signature. He admits with regard to issuance of post-dated Cheque bearing No.000007 and he categorically admits that other than the security Cheque, Cheques have been given to the complainant and payments were made. The Cheques which were given for security were bounced and later made the payment and those answers are elicited in the evidence of D.W.1 and specific questions are put with regard to issuance of Cheque Nos.000159, 000160 and 00061 and categorical admission is obtained from D.W.1 that in Ex.D2, specific note was made that Cheque was issued in favour of Lotus Farms and there was no mention that those Cheques are issued towards security. 16. Having taken note of those admissions on the part of D.W.1, it is very clear that it was a continuous business between the complainant and accused and also - 20 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 produced the document of challans i.e., in total 25 challans and Ex.P10 series of invoices as well as Ex.P11 i.e., Lotus Farm statement of account between the complainant and accused. When specific contention was taken and payment was made against the accused, no document was placed before the Court and the Trial Court and First Appellate Court taken note of said fact into consideration. The Trial Court has taken note of Ex.D2, wherein also taken note of subject matter of Cheque as well as two Cheques are issued in favour of the complainant and also answer is elicited that such Cheque was not issued towards security and in the answer elicited from D.W.1 there is a specific averment and the same is not the subject matter of Cheque in the issue involved between both the parties. 17. No doubt, learned counsel for the revision petitioner brought to notice of this Court there is an admission, when the transaction is a continuous transaction, when the payment was made in respect of - 21 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 earlier transaction is concerned, there cannot be a contention that part payment is towards the liability and specific case of the complainant is that in respect of 25 challans, no payment was made. Hence, notice was issued and no dispute with regard to the principles laid down in the judgment of the Apex Court that with regard to the part payment, there must be endorsement under Section 56 of the Act. When no such payment was made in respect of this claim of the complainant, the judgment relied upon by the learned counsel for the petitioner will not come to the aid of the petitioner. Both the Courts have taken note of the material on record, particularly the supply of material in terms of Ex.P9 –delivery challans, invoices and also statement of account which is marked as Ex.P11 and Cheque was issued by the petitioner is not in dispute. But, only contention is that the same was issued towards security and when the answer is elicited from D.W.1 that he has not mentioned about said Cheque was issued towards security, the very contention of learned counsel for the petitioner cannot be accepted and the Trial - 22 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 Court and the First Appellate Court has not committed any error. 18. The other contention of learned counsel for the petitioner is that the First Appellate Court not considered the application under Section 391 Cr.P.C. and the said contention cannot be accepted. The First Appellate Court formulated point No.3 and specific observation is made that along with the application, no documents were placed before the Court. When such being the case, question of allowing the application does not arise, when reasoning is given by the Trial Court and no document placed before the First Appellate Court, question of allowing the application does not arise. Hence, the Trial Court and the First Appellate Court not committed any error and re- appreciated the material on record. Therefore, I do not find any ground in the revision petition to come to an other conclusion to exercise the revisional jurisdiction and unless there is a perversity in the finding of the Trial Court and the First Appellate Court and when the material is - 23 - NC: 2025:KHC:11619 CRL.RP No. 927 of 2021 considered by both the Courts, question of interference does not arise. Accordingly, I answer point No.1 as ‘negative’. Point No.(2) 19. In view of the discussion made above, I pass the following: ORDER The criminal revision petition is dismissed. Sd/- (H.P.SANDESH) JUDGE SN/ST