- 1 - HC-KAR NC: 2025:KHC:25646 CRL.RP No. 702 of 2018 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR CRIMINAL REVISION PETITION No. 702 OF 2018 BETWEEN: SRI M MADHAVAN S/O LATE MAYANDI AGED 84 YEARS R/AT No.507(&3) 10TH A CROSS, MUNESHWARA LAYOUT II MAIN ROAD, LAGGERE BANGALORE – 560 058. …PETITIONER (BY SRI M M ASHOKA, ADVOCATE) AND: SRI S DASARATH NAIDU S/O K.R.SUNDARAM NAIDU R/AT No.63/A, 13TH CROSS MAHALAKSHMI LAYOUT BENGALURU – 560 086. …RESPONDENT (BY SRI SUNIL S RAO, FOR SRI T SESHAGIRI RAO, ADVOCATES THIS CRL.RP IS FILED UNDER SECTION 397 READ WITH SECTION 401 Cr.P.C PRAYING TO SET ASIDE THE JUDGMENT PASSED IN CRL.A.No.1133/2016 DATED 19.06.2018, ON THE FILE OF THE LXVI ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BANGALORE CITY. (CCH-67) AND ALSO SET ASIDE THE ORDER PASSED IN C.C.No.1603/2015, DATED 09.09.2016, ON THE FILE OF THE XIX A.C.M.M., AT BANGALORE CITY AND Digitally signed by LAKSHMINARAYANA MURTHY RAJASHRI Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:25646 CRL.RP No. 702 of 2018 ACQUIT THE PETITIONER FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF THE N.I ACT. THIS PETITION COMING ON FOR FURTHER HEARING THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR ORAL ORDER 1. This Revision Petition is directed against the judgment dated 19.06.2018 passed in Crl.A. No. 1133/2016 by LXVI Additional City Civil and Sessions Judge, Bengaluru, whereunder the judgment of conviction dated 09.09.2016 passed in C.C. No. 1603/2015 by XIX Additional Chief Metropolitan Magistrate, Bengaluru, convicting the petitioner - accused for offence under Section 138 of the Negotiable Instruments Act (hereinafter referred to as the N.I. Act) and sentence to pay fine of Rs.2,45,000/- and in default to undergo simple imprisonment for a period of 6 months has been affirmed. 2. Heard learned counsel for petitioner and learned counsel for respondent. - 3 - HC-KAR NC: 2025:KHC:25646 CRL.RP No. 702 of 2018 3. Case of the respondent - complainant before the trial Court is, that the petitioner - accused is his friend and out of friendship petitioner - accused approached the respondent - complainant in the month of June 2013 and requested hand loan of Rs.2,00,000/- for his financial commitments. Respondent - complainant considering the request of petitioner - accused had advanced a sum of Rs.2,00,000/- in the month of June 2013 by way of cash and petitioner - accused after receipt of the said loan amount had agreed to repay the same within October 2013. Petitioner – accused, towards payment of loan amount, had issued a cheque bearing No. 464101 dated 15.10.2013 for a sum of Rs.2,00,000/- drawn on Janatha Co-operative Bank Limited, Malleshwaram Bangalore with a request to present the same after 20.10.2013. Respondent - complainant presented the said cheque on 21.10.2013 and it came to be dishonored with an endorsement `payment stopped by the drawer’ under memo dated 22.10.2013. Respondent - complainant got - 4 - HC-KAR NC: 2025:KHC:25646 CRL.RP No. 702 of 2018 issued demand notice to petitioner - accused and the same has been served on him. Petitioner – accused, in spite of service of notice, has not repaid the cheque amount but has sent reply. Therefore, respondent - complainant has initiated proceedings against the petitioner - accused for offence under Section 138 of the N.I. Act. Respondent - complainant has been examined as P.W.1 and got marked Ex.P.1 to Ex.P.7. Statement of petitioner - accused has been recorded under Section 313 of Cr.P.C. Petitioner - accused has been examined as D.W.1 and got marked Ex.D.1 to Ex.D.8. Learned Magistrate after hearing arguments on both sides and on appreciating evidence on record has convicted petitioner - accused for offence under Section 138 of the N.I. Act. Said judgment of conviction had been challenged by petitioner - accused before the Sessions Court in Crl.A. No. 1133/2016 and the same came to be dismissed on merits, affirming the judgment of conviction passed by the trial Court. - 5 - HC-KAR NC: 2025:KHC:25646 CRL.RP No. 702 of 2018 4. Learned counsel for petitioner – accused would contend that the date of loan has not been mentioned in the legal notice, complaint and examination-in-chief of P.W.1. Petitioner - accused was aged more than 75 years and respondent No. 1 was aged about 37 years as on the date of the complaint. Considering the age gap between them, it cannot be said that there was friendship between them. Petitioner - accused has sent reply to the demand notice as per Ex.P.6 = Ex.D.4 and taken up the defence that he had not borrowed any loan from respondent - complainant and the cheque has been issued for the purpose of contract work for construction of his house as advance and same has not been acted upon since respondent - complainant stated that he will construct only ground and first floor and not second floor, as agreed earlier, for Rs.20,00,000/-. Therefore petitioner - accused has issued intimation to the banker for stop payment of Ex.P.1 - cheque. As on the date of dishonor of the cheque there was sufficient balance in the account of petitioner - - 6 - HC-KAR NC: 2025:KHC:25646 CRL.RP No. 702 of 2018 accused to honour the cheque and it can be seen from Ex.D.8 - bank account statement of petitioner - accused. Respondent - complainant who has been examined as P.W.1 has admitted that he knows one Sri. Dakshinamurthy and on his mediation respondent - complainant had agreed to construct ground + 2 floors of house of petitioner - accused for Rs.20,00,000/- and towards the same Ex.P.1 - cheque has been issued as security. Petitioner - accused had received Rs.5,00,000/- under sale agreement entered into by him with one Sri. Jayakumar during June 2013 and subsequently sale deed has been executed on 10.10.2013 wherein he has received the balance amount. Said balance sale consideration has been credited to the bank account of petitioner - accused on 12.10.2013 in a sum of Rs.16,43,400/-. As on the date of the cheque – Ex.P.1, there was sufficient balance in the account of petitioner - accused and there was no necessity for petitioner - accused to ask respondent - complainant to present after 20.10.2013. Considering all these aspects, - 7 - HC-KAR NC: 2025:KHC:25646 CRL.RP No. 702 of 2018 petitioner - accused has rebutted the presumption drawn under Section 138 of the N.I. Act. As the presumption is rebutted, onus shifted on respondent - complainant to prove the alleged transaction of hand loan and issuance of Ex.P.1 – cheque towards repayment of the said hand loan. Respondent - complainant has not established borrowing of hand loan of Rs.2,00,000/- by petitioner - accused. Without considering all these aspects, learned Magistrate has erred in convicting petitioner - accused for offence under Section 138 of N.I. Act. The appellate Court has also erred in affirming the judgment passed by the trial Court. On these grounds, he prayed to allow the revision petition and acquit petitioner - accused. 5. Learned counsel for respondent – complainant would contend that petitioner - accused has admitted the cheque and its contents in his handwriting in his cross- examination. As cheque is admitted, a presumption has to be drawn under Section 139 of N.I. Act. Petitioner - accused has taken up the defence in his reply notice - 8 - HC-KAR NC: 2025:KHC:25646 CRL.RP No. 702 of 2018 Ex.P.6. He has not established the said defence. The bank account of petitioner - accused did not have sufficient balance to honour the cheque prior to 12.10.2013 and the same can be seen from Ex.D.8 - bank account statement. The balance in the said bank account, as per Ex.D.8 itself indicates that petitioner – accused was in need of money and he borrowed hand loan from respondent – complainant. Sri. Dakshina Murthy and Sri. Jayakumar have not been examined by petitioner - accused. Respondent - complainant has not filed any complaint against petitioner – accused and Sri. Dakshina Murthy for misuse of the cheque. Considering all these aspects, learned Magistrate has rightly convicted petitioner - accused and the appellate Court has rightly affirmed the judgment of conviction passed by the trial Court. 6. Having heard learned counsel for the parties, this Court has perused the impugned judgments and trial Court records. - 9 - HC-KAR NC: 2025:KHC:25646 CRL.RP No. 702 of 2018 7. It is the specific case of respondent - complainant that he and petitioner – accused were friends and petitioner - accused had borrowed a sum of Rs.2,00,000/- as hand loan during June 2013 agreeing to repay the same within October 2013 and issued cheque dated 15.10.2013 for Rs.2,00,000/- in favour of respondent - complainant for making repayment of the amount borrowed and requested to present the cheque after 20.10.2013. Petitioner - accused has admitted the cheque Ex.P.1 and therefore, a presumption has to be drawn under Section 139 of N.I. Act that the cheque is issued for discharge of the debt. Said presumption is a rebuttable presumption. Standard of proof for rebutting the said presumption is preponderance of probability. 8. Petitioner - accused has sent his reply to the demand notice as per Ex.P.6 equivalent to Ex.D.4. putting forth his defence. The defence taken up by petitioner - accused in reply notice Ex.P.6 is as under: - 10 - HC-KAR NC: 2025:KHC:25646 CRL.RP No. 702 of 2018 3. My client informs that soon after entering into agreement to sell in the month of June 2013, my client had expressed his intention to put up construction in a portion of the property belonging to my client at Muneshwara Layout, Laggeri, Bangalore and coming to know of the same, Sri. Dakshinamurthy requested my client to give the construction contract to your client and immediatly your client demanded my client to give advance amount of Rs.2,00,000/-(rupees Two Lakhs) only to commence the construction work and also agreed that he would take care of obtaining the sanction plan etc and also assured for a sum of Rs.20,00,000/-( rupees Twenty Lakhs) your client would put up construction of Ground, First and Second Floors measuring approximately 14- 15 squares and believing your client based on the representations and promises made by him, on 11/10/2013 my client had issued the subject matter of the cheque without date, as your client informed that he would write the date after consulting the manager of Janatha Co-operative Bank Ltd., and your client along with my client went to the bank and since there was no huge cash in the Branch, the branch manager informed to collect the cash on 15/10/2013, since there bank was continuous general holidays and the said cheque issued by my client was only a bearer cheque and not crossed at the time of handing over the cheque to your client. 4. 4. Further soon after receipt of the cheque from my client for Rs.2,00,000/- (rupees Twenty Lakhs)only, your client started informing that he would construct only the Ground and First Floor and not Second Floor as promised earlier for the sem of Rs.20,00,000/-(rupees Twenty Lakhs) only agreed to be paid to your client and my client got suspicious about the conduct of your client as he had changed the promise in the initial - 11 - HC-KAR NC: 2025:KHC:25646 CRL.RP No. 702 of 2018 state itself after receipt of advance cheque and on enquiry with others learnt that your client had no good reputation in construction and hence demanded your client through Dakshinamurthy to return back the cheque, as my was not interested to give the construction contract to your client and on the refusal of your client, instructed the banker to stop payment of the cheque, 5. Further, Dakshninamurthy informed my client to pay Rs.50,000/- to your client in order to take back the cheque and my client refused to do the same and continuously, Dakshniamurthy and your client visited my client 3-4 times and requested to honour the cheque and again your client assured that he would under take the contract of construction of Ground, First and Second floors for the earlier agreed amount, but my client refused to agree and your client and Dakshinamurthy have also criminally intimidated to cause hurt and threatened with gree consequences and on informing that my client would lodge police complaint, Dakshinamurthy persuaded my client to pay Rs.50,000/- to collect back the cheque and your client informed that he would bring the cheque and thereafter, on 4/12/2013, my client was shocked to receive the notice issued by you on behalf of your client giving a different story. 6. 6. My client informs that your client and Dakshinamurthy taking advantage of the advanced age of my client and also after coming to know of the money received by my client towards the sale of Bovipalya house by my client, your client and Dakshnamurthy entered into criminal conspiracy with each other with a common dishonest intention to cheat my - 12 - HC-KAR NC: 2025:KHC:25646 CRL.RP No. 702 of 2018 client falsely represented and promised that your client would construct Ground, First and Second floors house for Rs.20,00,000/- and after receipt of the cheque, started bargaining that your client would only construct the Ground and First floor and even after informing your client to return back the cheque by my client, sine yhour client in collusion with Dakshinamurty have stared extortion to return back the cheque.” 9. Said defence taken up by petitioner - accused in reply notice Ex.P.6 has been put as a suggestion to P.W.1 in his cross examination. P.W.1 has denied the said suggestion. P.W.1 has admitted that he is doing real estate business. He has also admitted that he is acquainted with Sri. Dakshinamurthy. P.W.1 in his cross- examination has stated that earlier to the present transaction petitioner - accused had once borrowed money from him and thereafter he had executed a letter and the same has been taken back by petitioner - accused at the time of giving the cheque. Said aspect has not been stated by respondent - complainant in his complaint. In - 13 - HC-KAR NC: 2025:KHC:25646 CRL.RP No. 702 of 2018 the complaint there is no mention of petitioner - accused borrowing any money prior to June 2013. 10. In the legal notice - Ex.P.3, complaint and examination-in- chief of P.W.1 there is no mention of specific date on which petitioner - accused borrowed hand loan from respondent - complainant. What is stated is that petitioner - accused borrowed hand loan during the month of June 2013. P.W.1 has stated in his cross-examination that petitioner - accused has borrowed money from him on 07.06.2013. P.W.1 has admitted that he has not stated the date of borrowing either in the notice or in the complaint and he has stated the same for the first time. 11. Cheque – Ex.P.1 is dated 15.10.2013. As per the complainant, it is presented on 21.10.2013 and it is dishonored on 22.10.2013. Respondent – complainant in the complaint and legal notice has stated that petitioner - accused had requested him to present the cheque after 20.10.2013. Ex.D.8 is bank account statement of the account of petitioner - accused. There was sufficient - 14 - HC-KAR NC: 2025:KHC:25646 CRL.RP No. 702 of 2018 balance to honour the cheque – Ex.P.1 as on 12.10.2013. There was balance of Rs.16,68,884.43 as on 12.10.2013. The cheque – Ex.P.1 is dated 15.10.2013. As on the date of the cheque also there was sufficient balance in the account of petitioner - accused to honour the cheque. When there was sufficient balance to honour the cheque, the contention of respondent - complainant that petitioner - accused requested him to present the cheque only after 20.10.2013 is unbelievable. As per Ex.D.8, petitioner - accused had given information to the bank to stop payment of the cheque bearing number 464101 on 21.10.2013. As per petitioner - accused, he had given cheque on 10.10.2013 to petitioner - accused towards part payment of the contract for construction of house of ground + 2 floors as agreed by respondent - complainant. Subsequently, respondent - complainant intimated petitioner – accused that he cannot construct the second floor for a sum of Rs.20,00,000/-, that too, after receipt of cheque – Ex.P.1 and that made petitioner – accused to - 15 - HC-KAR NC: 2025:KHC:25646 CRL.RP No. 702 of 2018 cancel the said contract and issue stop payment intimation to his banker on 21.10.2013. Said intimation issued on 21.10.2013 and dishonor of the cheque – Ex.P.1 on 22.10.2013 itself probabilises the defence of petitioner - accused. The fact that the complainant - PW1 is doing real estate business and on his mediation along with the Sri. Daksinamurthy, the property of petitioner - accused has been sold to one Sri. Jayaumar during June, 2013, and petitioner - accused has paid commission of Rs.55,000/- to respondent - complainant and Sri. Dakshinamurthy has been stated by D.W.1 in his chief-examination. D.W.1 in his cross-examination has stated that he had told Sri. Dakshinamathy that he intended to sell the house situated by Bhovipalya. He also stated that on 10.10.2013 he had given Rs.55,000/- to Sri. Dakshinamurthy as commission. D.W.1 has stated that he had received Rs.5,00,000/- under the sale agreement from Sri. Jayakumar during June 2013 and the same has not been denied in the cross- examination and that itself shows that he had money - 16 - HC-KAR NC: 2025:KHC:25646 CRL.RP No. 702 of 2018 during June 2013 and he was in no need of money to be borrowed from others. Considering all these aspects, petitioner - accused has taken the probable defence and rebutted the presumption drawn under the N.I. Act. As the presumption is rebutted, it is for respondent - complainant to establish the transaction of borrowing and issuance of cheque for making payment of amount borrowed. Respondent - complainant has not stated the exact date of borrowing in his legal notice, complaint and cross- examination. What is stated therein is regarding borrowing during June 2013. But, P.W.1 in his cross-examination has stated that petitioner - accused borrowed money on 07.06.2013. 12. Age of petitioner - accused was about 75 years and that of complainant about 37 years as on the date of complaint. There is huge gap between the age of petitioner - accused and respondent - complainant. Considering the huge gap in the age, the contention of - 17 - HC-KAR NC: 2025:KHC:25646 CRL.RP No. 702 of 2018 respondent - complainant that petitioner - accused is his friend is unbelievable. 13. P.W.1 has not placed any document to show that he had cash of Rs.2,00,000/- during June 2013 to lend it to petitioner - accused. Income of respondent - complainant per month was Rs.20,000/- and he had household expenses of Rs.8,000/- per month. That itself indicates that he had no capacity to lend Rs.2,00,000/- to petitioner - accused. Apart from the cheque – Ex.P.1, respondent - complainant has not placed any document or evidence on record to establish that petitioner - accused borrowed Rs.2,00,000/- from him. Even the said Sri. Dakshinamurthy has not been examined by respondent - complainant. Considering all these aspects, respondent - complainant has failed to establish that petitioner - accused has borrowed Rs.2,00,000/- from him during June 2013 and for making payment of the same he had issued the cheque – Ex.P.1. Without considering the above aspects and without appreciating the evidence on record - 18 - HC-KAR NC: 2025:KHC:25646 CRL.RP No. 702 of 2018 properly, learned Magistrate has convicted petitioner - accused for offence under Section 138 of N.I. Act. Learned Magistrate has erred in convicting petitioner – accused for offence under Section 138 of N.I. Act. Learned Sessions Judge did not re-appreciate the evidence on record properly and erred in affirming the judgment of conviction passed by the trial Court. Therefore, the judgment of the trial Court and the appellate Court requires to be set aside and the petitioner - accused is required to be acquitted. 14. In the result, the following; O R D E R I. Revision petition is allowed. II. Judgment of the trial Court dated 09.09.2016 passed in C.C. No. 1603/2015 by XIX Additional Chief Metropolitan Magistrate, Bengaluru is set aside. III. Judgment passed by the appellate Court dated 19.06.2018 in Crl.A. No. 1133/2016 by LXVI - 19 - HC-KAR NC: 2025:KHC:25646 CRL.RP No. 702 of 2018 Additional City Civil and Sessions Judge, Bengaluru, is also set aside. IV. The petitioner - accused is acquitted for offence under Section 138 of N.I. Act. V. Amount in deposit, if any, deposited by the petitioner is ordered to be refunded to him. Sd/- (SHIVASHANKAR AMARANNAVAR) JUDGE LRS List No.: 1 Sl No.: 27 Ct.sm