- 1 - HC-KAR NC: 2025:KHC-D:8881 CRL.A No. 100049 of 2018 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 17TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE RAJESH RAI K CRIMINAL APPEAL NO.100049 OF 2018 (A) BETWEEN: MRS. PAVITRA W/O. PAVAN PRABHU, AGE: 53 YEARS, OCC. HOUSEWIFE AND BUSINESS, R/O. SHIRUR PARK VIDYANAGAR HUBBALLI, R/BY. HER GPA HOLDER, PAVAN MANJUNATH PRABHU, AGE: 58 YEARS, OCC. BUSINESS, R/O. SHIRUR PARK, VIDYANAGAR, HUBBALLI-580031. …APPELLANT (BY SRI. SURAJ M. KATAGI, ADVOCATE FOR SRI. V.G. BHAT, ADVOCATE) AND: M. SHAILESH S/O. M.K. SADASHIVAYYA, AGE: 47 YEARS, OCC. BUSINESS, R/O. NO.11-10-1018, T.T. ROAD, MANGALORE-575001. …RESPONDENT (BY SRI. U.J. HAVALDAR, ADVOCATE FOR SRI. SHIVARAJ S.BALLOLI, ADVOCATE) THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CR.P.C., SEEKING TO CALL FOR RECORDS IN C.C.NO.452/2015 ON THE FILE OF PRL.CIVIL JUDGE AND JMFC HUBBALLI AND TO SET ASIDE THE JUDGMENT AND ORDER DATED 02.11.2017 PASSED BY PRL. CIVIL JUDGE AND JMFC HUBBALLI IN C.C.NO.452/2015 BY PASSING THE JUDGMENT AND ORDER OF CONVICTION, CONVICTING RESPONDENT ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I. ACT AND TO PASS SUCH OTHER ORDER FOR COMPENSATION WITH INTEREST ETC. THIS APPEAL, COMING ON FOR FURTHER HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: THE HON'BLE MR. JUSTICE RAJESH RAI K YASHAVANT NARAYANKAR Digitally signed by YASHAVANT NARAYANKAR Date: 2025.07.22 10:20:22 +0530 - 2 - HC-KAR NC: 2025:KHC-D:8881 CRL.A No. 100049 of 2018 ORAL JUDGMENT (PER: THE HON'BLE MR. JUSTICE RAJESH RAI K) In this appeal, the appellant/complainant assailed the judgment passed in CC No.452/2015 dated 02.11.2017 by the Principal Civil Judge and JMFC, Hubballi1, whereby the learned Magistrate acquitted the accused/respondent for the offence punishable under Section 138 of Negotiable Instruments Act, 18812. 2. For the sake of convenience and easy reference, the parties are referred to as per their rankings before the trial Court. 3. Briefly stated the facts are that the complainant is a resident of Hubballi and he intended to purchase immovable property at Mangaluru. The father of the accused approached the complainant and offered to sell his property to the complainant for a sale consideration of Rs.21,00,000/-. Thereafter, the father of the accused and the complainant entered into a sale agreement dated 24.01.2009 and the complainant has paid a sum of Rs.10,00,000/- towards advance 1 Hereinafter referred to as ‘learned Magistrate’ for short 2 Hereinafter referred to as ‘NI Act’ for short - 3 - HC-KAR NC: 2025:KHC-D:8881 CRL.A No. 100049 of 2018 sale consideration. Though the father of accused agreed to execute the sale deed in favour of the complainant within four months, however, he failed to come forward to execute the sale deed in favour of the complainant. After negotiations, the father of the accused agreed to repay the earnest money of Rs.10,00,000/- and accordingly, he issued the cheque of accused bearing No.720608 dated 03.04.2009 for a sum of Rs.10,00,000/- drawn on Canara Bank, Shivbagh Branch, Mangaluru to the complainant. Later, the complainant presented the said cheque for encashment through his banker, however, the same came to be dishonoured with an endorsement “Insufficient Funds”. As such, the statutory notice is caused by the complainant to the accused, but the same was returned with an endorsement “not claimed”. Hence, left with no other option, the complainant filed a private complaint under Section 200 of Cr.P.C. for the offence punishable under Section 138 of NI Act before the trial Court. 4. To prove the case, the complainant examined himself as PW1 and marked 8 documents as Ex.P1 to P8. The accused examined himself as DW1 and marked 6 documents on his behalf as Ex.D1 to D6 before the trial Court. - 4 - HC-KAR NC: 2025:KHC-D:8881 CRL.A No. 100049 of 2018 5. On assessment of oral and documentary evidence, the learned Magistrate acquitted the accused for the offence punishable under Section 138 of NI Act vide judgment dated 02.11.2017, as stated supra. The said judgment is under challenge in this appeal by the complainant. 6. Heard the learned counsel Sri.Suraj M Katagi for learned counsel Sri.V.G. Bhat, for the appellant/complainant, so also learned counsel Sri.V.J. Havaldar for Sri.Shivaraj S Balloli, learned counsel for the respondent/accused. 7. The primary contention of the learned counsel for the appellant/complainant is that the trial Court grossly erred while acquitting the accused for the offence punishable under Section 138 of NI Act, despite the complainant placing sufficient evidence on record to prove the case. According to the learned counsel, the cheque in question and the signature of the accused on it, is not disputed by the accused. Further, the statutory requirement under the provision of Section 138 of NI Act is fulfilled by the complainant before filing the private complaint. He also contended that the cheque in question was issued in respect of transaction between the complainant and - 5 - HC-KAR NC: 2025:KHC-D:8881 CRL.A No. 100049 of 2018 the father of accused; nevertheless, the accused was a guarantor to the said transaction and the cheque in question was issued for payment of earnest money paid by the complainant to the father of accused. In such circumstances, the complainant has proved the offence under Section 138 of NI Act against the accused. However, the learned Magistrate has committed an error in acquitting the accused. Thus, he prays to allow the appeal by setting aside the impugned judgment of acquittal and to convict the accused for the offence under Section 138 of NI Act. 8. Per contra, learned counsel for the respondent/accused contended that the trial Court after meticulously examining the entire evidence on record passed a well-reasoned judgment, which does not warrant interference at the hands of this Court. He contended that it is an admitted fact that the cheque in question was issued by the accused in respect of agreement executed between his father and the complainant. As such, there is no legally enforceable debt against the accused. He also contended that the complainant has already filed original suit in OS No.100/2012 for recovery of the said earnest money of Rs.10,00,000/- and the said suit was - 6 - HC-KAR NC: 2025:KHC-D:8881 CRL.A No. 100049 of 2018 decreed in favour of the complainant and the execution petition is pending before the jurisdictional Court. In such circumstance, the trial Court has rightly appreciated the evidence on record and acquitted the accused for the offence under Section 138 of NI Act. Accordingly, he prays to dismiss the appeal. 9. Having heard the learned counsel for the respective parties and on perusal of the material evidence available on record, the sole point that arise for my consideration is: “Whether the trial Court is justified in acquitting the accused for the offence punishable under Section 138 of NI Act?” 10. I have given my anxious consideration to the submissions made by the learned counsels for the respective parties, so also evidence and documents available on record. 11. It could be gathered from the records that issuance of cheque in question and the signature of the accused on it, is not seriously disputed by the accused. However, it is the specific defence of the accused that the cheque in question was issued by him on behalf of his father to return the earnest money of Rs.10,00,000/- paid by the complainant in respect of purchase of landed property under sale agreement dated - 7 - HC-KAR NC: 2025:KHC-D:8881 CRL.A No. 100049 of 2018 24.01.2009. The said cheque was issued only for the security purpose by the father of accused to the complainant. Subsequently, the father of accused failed to refund the earnest money to the complainant. Thereafter, the complainant filed the suit against father of the accused for recovery of said earnest money of Rs.10,00,000/-. The said suit was decreed in favour of the complainant and the execution petition was also filed by the complainant against the father of accused, which is pending consideration before the jurisdictional Court. 12. I have perused the plaint in OS No.100/2012, wherein it is categorically stated by the complainant that the sale agreement was executed between himself and the father of the accused, since father of the accused failed to come forward to execute a sale deed and after negotiations between them to refund the earnest money, father of the accused has issued the cheque in question. By perusal of the plaint averments, it is clear that there is no such transaction between the complainant and the accused and there is no legally enforceable debt by the accused in favour of the complainant. No doubt, initial presumption arises under Sections 118 and 139 of NI Act to favour the complainant. However, it is well - 8 - HC-KAR NC: 2025:KHC-D:8881 CRL.A No. 100049 of 2018 settled position of law by this Court as well as by the Hon’ble Apex Court in catena of decisions that initial presumption can be rebutted by placing probable defence. In the instant case, on a careful perusal of the evidence available on record, the accused rebutted initial presumption by placing cogent documents and evidence on record that the cheque in question was not issued by the accused for legally enforceable debt and the same was issued as security for the transaction between the complainant and father of the accused. In that view of the matter, I am of the considered view that the trial Court has rightly acquitted the accused for the offence punishable under Section 138 of NI Act. Therefore, interference does not call for in the impugned judgment. Accordingly, I answer the point raised above in the “affirmative” and proceed to pass the following: ORDER The Criminal Appeal No.100049/2018 stands dismissed. SD/- (RAJESH RAI K) JUDGE JTR CT:PA LIST NO.: 1 SL NO.: 3