- 1 - NC: 2025:KHC:17436 CRL.RP No. 1448 of 2019 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE S RACHAIAH CRIMINAL REVISION PETITION NO. 1448 OF 2019 (397(Cr.PC) / 438(BNSS)) BETWEEN: SHRI MOHAMMAD ISMAIL AGED ABOUT 34 YEARS, S/O HAJI K AHAMED, BAVA, RESIDING AT KOTE HOSE, BADRAYA MANZIL, PALIMAR, PALIMAR POST, UDUPI TQ. UDUPI DIST-574112. …PETITIONER (BY SRI NEGLUR ARAVIND., ADVOCATE) AND: BHARATHI SOUHARDA CREDIT CO OP LTD., R.NO.541, I FLOOR, JAFFAR TOWERS, KAPU-574106. REP BY SECRETARY, SHRI. SHASHIDHAR S. M, …RESPONDENT (BY SRI. VISHWAS, ADVOCATE FOR SRI. NISHITH KUMAR SHETTY, ADVOCATE) THIS CRL.RP FILED U/S 397 R/W 401 OF CR.PC PRAYING TO SET ASIDE THE JUDGMENT DATED 20.12.2016 IN C.C.NO.1145/2010 PASSED BY THE COURT OF THE ADDITIONAL CIVIL JUDGE AND JMFC, UDUPI AND ALSO THE JUDGMENT IN CRL.A.NO.8/2017 DATED 23.10.2019 PASSED BY THE PRINCIPAL DISTRICT AND SESSIONS JUDGE, UDUPI DISTRICT, UDUPI CONSEQUENTLY, ACQUIT THE PEITIONER HEREIN IN C.C.NO.1145/2010, AND ETC., THIS CRIMINAL REVISION PETITION HAVING BEEN HEARD AND RESERVED ON 24.02.2025 COMING ON FOR PRONOUNCEMENT OF ORDER, THROUGH VIDEO CONFERENCING, THIS DAY, THE COURT MADE THE FOLLOWING: Digitally signed by RENUKA Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:17436 CRL.RP No. 1448 of 2019 CORAM: HON'BLE MR JUSTICE S RACHAIAH CAV ORDER 1. This Criminal Revision Petition is filed by the accused/petitioner, being aggrieved by the judgment of conviction and order on sentence dated 20.12.2016 in C.C.No.1145/2010 on the file of the Addl. Civil Judge and JMFC, Court and its confirmation judgment and order dated 23.10.2019 in Crl.A.No.8/2017 on the file of Prl. District and Sessions Judge, Udupi District, Udupi, seeking to set aside the concurrent findings recorded by the Courts below, wherein the petitioner / accused is convicted for the offence punishable under Section 138 of Negotiable Instrument (for brevity, ‘N.I.’) Act. 2. The ranks of the parties would be considered henceforth as per their rankings in the Trial Court for convenience. The factual matrix of the case: 3. The complainant is the Society, doing business of banking. On 05.09.2008, the vehicle loan of Rs.1,50,000/- was sanctioned to the accused. However, - 3 - NC: 2025:KHC:17436 CRL.RP No. 1448 of 2019 the accused failed to repay the same. Hence, a demand notice was made. Despite demand notice, the accused did not repay the said loan amount. However, he had issued a cheque dated 26.08.2009 bearing No.564530 drawn on Karnataka Vikasa Bank for a sum of Rs.21,000/-. When the said cheque was presented for encashment on 27.08.2009, the same came to be dishonoured with an endorsement “funds insufficient”. Hence, a notice was issued to the accused for repayment of cheque amount within 15 days. After service of notice, the accused replied to the notice making bald and baseless allegations and bare denial of the transaction. However, he did not repay the cheque amount. Hence, a private complaint came to be lodged against the accused for the offence punishable under Section 138 of N.I. Act., before the Magistrate. After taking cognizance of the offence, a criminal case in C.C.No. 1145/2010 was registered against the accused for the aforesaid offence. 4. In order to prove the case, the authorized person of the complainant Society examined as P.W.1 and got marked 9 documents as Ex.P.1 to P9. On the contrary, the - 4 - NC: 2025:KHC:17436 CRL.RP No. 1448 of 2019 accused himself examined as D.W.1 and got marked a receipt issued by the complainant Society as Ex.D1. The Trial Court and Appellate Court concurrently held that the petitioner is guilty of the offence under the above said provisions and rendered the conviction. Hence, this revision petition. 5. Heard Sri. Neglur Aravind, learned counsel for the petitioner and Sri. Vishwas for Sri. Nishith Kumar Shetty, learned counsel for the respondent. 6. It is the submission of learned counsel for the accused that the impugned judgment passed by the Courts below are contrary to the evidence on record and also settled principles of law. The Trial Court committed error in disbelieving Ex.D.1-receipt issued by complainant- Society. In the meantime, the Appellate Court has also committed error by confirming the findings of the Trial Court. Though the amount has been paid as per Ex.D.1, the said aspect has not been considered by the Courts below. Therefore, the findings of the Courts below are required to be set aside. Making such submissions, the - 5 - NC: 2025:KHC:17436 CRL.RP No. 1448 of 2019 learned counsel for the petitioner prays to allow the petition. 7. On the contrary, the learned counsel for the respondent submitted that the complainant is the Financial Institution. It is admitted fact that a loan of Rs.1,50,000/- was sanctioned to the accused and he failed to repay the same. It is further submitted that the execution of the said cheque is admitted. Once the cheque is admitted, the presumption has to be raised in favour of the complainant by the Courts below. The Courts below have raised the presumption properly, consequently, the judgments are passed. Therefore, there is no infirmity in the findings of the Courts below in recording the conviction. As such, the learned counsel for the respondent prays to dismiss the petition. 8. Having heard the learned counsel for the respective parties and also perused the findings of the Courts below in recording the conviction, it is appropriate to narrate the settled Principles of law on the Negotiable Instrument - 6 - NC: 2025:KHC:17436 CRL.RP No. 1448 of 2019 Act, (for brevity, ‘N.I.Act’). Section 139 of N.I. Act which reads as under: “139. Presumption in favour of holder.- It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.” 9. On reading of the above said provisions, it makes it clear that once the execution of the cheque is admitted, the Court has to raise presumption in favour of complainant. The said presumption is rebuttable in nature. The accused has to rebut the presumption by leading cogent evidence. 10. Now, it is relevant to refer the evidence of the accused. According to him, he has paid Rs.42,000/- towards clearance of loan and his car was seized by the complainant-Society. Despite having cleared the loan of which he had borrowed, the cheque which was issued to the complainant Society as a security was misused by the complainant. Even in the reply notice, the said fact was narrated. The accused had denied the liability. - 7 - NC: 2025:KHC:17436 CRL.RP No. 1448 of 2019 11. Be that as it may, the complainant is the financial institution. It is an admitted fact that the accused had borrowed a sum of Rs. 1,50,000/- from the complainant- Society. The accused further submitted that he had paid the amount as per Ex.P.1 and also his vehicle was seized and sold the same in the auction. However, the complainant-Society did not inform the accused that what was the price that the vehicle was auctioned. 12. Even though, the accused had stated that he is not liable to pay the amount, the Courts below did not consider his defense. If the said defense had been considered by the Courts below, the burden would have been shifted to the complainant-Society to prove that the accused had to pay the balance of Rs.21,000/-. 13. Even on perusal of the entire records, the complainant- Society has neither produced any documents nor statements of accounts to show that had to pay the balance of Rs.21,000/-. In the absence of the records regarding the balance to be paid to the complainant- - 8 - NC: 2025:KHC:17436 CRL.RP No. 1448 of 2019 Society, it cannot be said that liability would arise on the cheque. 14. Both the Court have committed error in applying the proper principles of law on N.I.Act in the present case. Therefore, the said findings are required to be set aside. 15. In the light of the observations made above, I proceed to pass the following: ORDER (i) The Criminal Revision Petition is allowed. (ii) the judgment of conviction and order on sentence dated 20.12.2016 passed in C.C.No.1145/2010 by the Court of the Addl. Civil Judge and JMFC, Udupi and the judgment and order dated 23.10.2019 passed in Crl.A.No.8/2017 by the Prl. District and Sessions Judge, Udupi District, Udupi are set aside. - 9 - NC: 2025:KHC:17436 CRL.RP No. 1448 of 2019 (iii) The petitioner/accused is acquitted for the offence punishable under Section 138 of N.I. Act. (iv) Bail bonds executed, if any, stand cancelled. Sd/- (S RACHAIAH) JUDGE JS List No.: 19 Sl No.: 6