- 1 - NC: 2025:KHC:13769 CRL.P No. 8948 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR CRIMINAL PETITION NO. 8948 OF 2024 BETWEEN: KUMAR K, S/O LATE KENCHAPPA, AGED ABOUT 32 YEARS, AGRICULTURIST, RESIDENT OF KALKERE, BALLALASAMUDRA POST, HOSADURGA TALUK, CHITRADURGA DISTRICT - 577 597. …PETITIONER (BY SRI. GANGADHARAPPA A.V., ADVOCATE) AND: M/S. CHOLAMANDALAM INVESTMENT AND FINANCE CO. LTD., HAVING ITS REGISTERED OFFICE AT DARE HOUSE, NO.2, N S C BOSE ROAD, PARYS, CHENNAI - 600 001. AND HAVING ITS REGIONAL OFFICE, NO.45, PRESTIGE LIBRTS, ABOVE PASSPORT SEVA KENDRA, LALBAG ROAD, BANGALORE - 560 027. REPRESENTED BY ITS POWER OF ATTORNEY HOLDER, RAVI T.J. (FATHER NAME NOT KNOWN TO THE PETITIONER). …RESPONDENT (BY SRI. ASHWATH C.M., ADVOCATE) Digitally signed by KAVYA R Location: High Court of Karnataka - 2 - NC: 2025:KHC:13769 CRL.P No. 8948 of 2024 THIS CRL.P. IS FILED U/S 482 OF CR.P.C., (FILED U/S 528 BNSS) PRAYING TO ALLOW THIS PETITION, SET ASIDE THE ORDER DATED 13.01.2023 ORDERING TO TAKE COGNIZANCE OF THE OFFENCE P/U/S 138 OF N.I ACT AND THE ENTIRE PROCEEDINGS IN C.C.NO.837/2023 PENDING BEFORE THE XIV ADDL.SMALL CAUSES JUDGE AND A.C.M.M AT BENGALURU CITY. 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 order passed by the learned Magistrate taking cognizance of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as “the N.I. Act”). 2. The respondent-complainant filed a private complaint under Section 200 of the Cr.P.C., for the offence punishable under Section 138 of the N.I. Act, alleging that the petitioner had borrowed a sum of Rs.5,30,000/- for purchasing a tractor. The petitioner made two installment payments amounting to Rs.99,454/- and Rs.97,340/-. The subject cheque for an amount of Rs.7,42,931/-, issued by the petitioner towards repayment of the loan, was dishonored upon presentation for realization due to insufficient funds. - 3 - NC: 2025:KHC:13769 CRL.P No. 8948 of 2024 3. Learned counsel for the petitioner submitted that the respondent-bank’s action of seizing the tractor was challenged before the District Consumer Disputes Redressal Forum, Chitradurga. In those proceedings, the Forum directed the respondent-bank to close the loan account and return all the original documents pledged with the bank upon receiving a sum of Rs.2,00,000/- from the petitioner-accused. The order passed by the District Consumer Disputes Redressal Forum has attained finality. The complaint was filed by suppressing this order. Therefore, in the absence of any legally enforceable debt against the petitioner, the cognizance taken by the Magistrate is an abuse of the process of law. 4. In response, learned counsel for the respondent- complainant submitted that the subject cheque was issued towards repayment of the loan, and therefore, there is a presumption under Section 138 of the N.I. Act that the cheque was issued towards a legally enforceable debt. Thus, the various grounds urged by the petitioner can be considered only during the trial and cannot be addressed at this stage. 5. The arguments of the learned counsel for the petitioner have been duly considered. - 4 - NC: 2025:KHC:13769 CRL.P No. 8948 of 2024 6. Admittedly, the petitioner had borrowed a loan of Rs.5,30,000/- from the complainant-bank, of which he paid two installments amounting to Rs.99,545/- and Rs.97,340/-. It is alleged that since the petitioner defaulted in repayment of the loan amount, the tractor hypothecated to the bank was seized. 7. Following the seizure of the tractor, the petitioner filed a petition under Section 12 of the Consumer Protection Act, 2019. The District Consumer Disputes Redressal Forum, by order dated 21.02.2019, directed the respondent-bank to collect an amount of Rs.2,00,000/- from the petitioner, hand over all the documents collected from him at the time of sanctioning the loan, and issue a hypothecation cancellation letter to the concerned Regional Transport Office. 8. The order passed by the District Consumer Disputes Redressal Forum was challenged by the complainant before the State Consumer Disputes Commission in Appeal No.1212/2019. During the pendency of the appeal, the original borrower died, and as the complainant did not take steps to bring the legal representatives on record, the State Consumer Disputes Redressal Commission dismissed the appeal as abated and also on merits by order dated 04.07.2023. However, it directed the amount deposited to - 5 - NC: 2025:KHC:13769 CRL.P No. 8948 of 2024 be transmitted to the concerned District Commission, payable to the complainant. 9. The order passed by the State Consumer Disputes Redressal Commission directing the District Consumer Disputes Redressal Forum to pay the deposited amount prompted the petitioner to file a petition before this Court, which is currently pending consideration. The order of the District Consumer Disputes Redressal Forum, directing the complainant to close the loan account upon accepting a sum of Rs.2,00,000/-, has attained finality. The petitioner also states that the amount of Rs.2,00,000/- was deposited on time in compliance with the order of the District Consumer Disputes Redressal Forum. 10. The complainant, suppressing the order passed by the District Consumer Disputes Redressal Forum, filed a private complaint under Section 138 of the N.I. Act. Therefore, in the absence of any legally enforceable debt against the petitioner, the cognizance taken for the alleged offence under Section 138 of the N.I. Act is impermissible and constitutes an abuse of the process of law. 11. Accordingly, I pass the following order. ORDER (i) The petition is allowed. - 6 - NC: 2025:KHC:13769 CRL.P No. 8948 of 2024 (ii) The impugned proceedings in C.C.No.837/2023 on the file of XIV Additional Small Causes Judge and Additional Chief Metropolitan Magistrate, Bengaluru City is hereby quashed. Sd/- (HEMANT CHANDANGOUDAR) JUDGE GH List No.: 1 Sl No.: 5