- 1 - HC-KAR NC: 2025:KHC-D:10640 CRL.RP No. 100153 of 2018 C/W CRL.RP No. 100054 of 2019 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 21ST DAY OF AUGUST, 2025 BEFORE THE HON'BLE MR. JUSTICE VIJAYKUMAR A.PATIL CRIMINAL REVISION PETITION NO. 100153 OF 2018 (397 OF Cr.PC/438 OF BNSS) C/W CRIMINAL REVISION PETITION NO. 100054 OF 2019 IN CRL.RP. NO.100153/2018 BETWEEN SHRI VENKATARAMAN S/O. NAGENDRA HEGDE, A/A MAJOR, OCC: BUSINESS, R/O. BIDRALLI, POST: UMACHAGI, TALUK: YELLAPUR-581359. ...PETITIONER (BY SRI. DATTATRAYA T. HEBBAR, ADVOCATE) AND SHRI DATTATRAYA DAMODHAR SHET, AGE: MAJOR, OCC: NOT KNOWN, R/O. MARATIKOPPA, SIRSI-843333. …RESPONDENT (BY SRI. V. G. BHAT, ADVOCATE) THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397 READ WITH 401 OF CR.P.C., SEEKING TO SET ASIDE THE ORDER DATED 12.07.2018 PASSED IN CRL.A.5042/2016 PASSED BY THE I ADDITIONAL DISTRICT AND SESSIONS JUDGE, KARWAR SITTING AT SIRSI DISMISSING THE APPEAL FILED BY THE PETITIONER AGAINST THE ORDER OF CONVICTION PASSED BY THE I ADDITIONAL CIVIL JUDGE AND II ADDITIONAL J.M.F.C., SIRSI IN C.C.NO.576/2009 BY ORDER DATED 21.10.2016 AND THE Digitally signed by CHANDRASHEKAR LAXMAN KATTIMANI Location: High Court of Karnataka, Dharwad Bench - 2 - HC-KAR NC: 2025:KHC-D:10640 CRL.RP No. 100153 of 2018 C/W CRL.RP No. 100054 of 2019 PETITIONER BE ACQUITTED OF THE OFFENCE UNDER SECTION 138 OF NEGOTIABLE INSTRUMENT ACT. IN CRL.RP. NO.100054/2019 BETWEEN DATTATRAY DAMODHAR SHET, A/A: 62 YEARS, "GANESH NILAYA", OPP: ARASAPPAKATTE, DUNSHINAGAR, SIRSI (U.K.), PIN CODE: 581402. ..PETITIONER (BY SRI. V. G. BHAT, ADVOCATE) AND VENKATRAMAN NAGENDRA HEGDE, S/O. NAGENDRA SHIVARAM HEGDE, A/A: 62 YEARS, OCC: BUSINESS, AT: BIDRALLI, PO: UMMACHAGI, YALLAPUR, PIN CODE: 581359. RESPONDENT (BY SRI. DATTATRAYA T. HEBBAR, ADVOCATE) THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397 R/W. 401 OF CR.P.C., PRAYING TO AWARD A COMPENSATION AMOUNT TO BE GIVEN TO THE PETITIONER/COMPLAINANT BE INCREASED TO THE EXTENT OF RS.5,00,000/- (RUPEES FIVE LAKHS ONLY) UNDER SECTION 357 OF CODE OF CRIMINAL PROCEDURE AND SENTENCE OF PUNISHMENT BE INCREASED FOR THE PERIOD OF TWO YEARS AND ETC. THIS PETITION HAVING BEEN HEARD AND RESERVED ON 14.08.2025 AND COMING ON FOR PRONOUNCEMENT OF ORDER, THIS DAY, THE COURT PRONOUNCED THE FOLLOWING: - 3 - HC-KAR NC: 2025:KHC-D:10640 CRL.RP No. 100153 of 2018 C/W CRL.RP No. 100054 of 2019 CAV ORDER (PER: THE HON'BLE MR. JUSTICE VIJAYKUMAR A.PATIL) Criminal Revision petition 100153/2018 is filed by the accused challenging the judgment and order dated 21.10.2016 passed in C.C. No.576/2009 by the I Additional Civil Judge and II Additional JMFC, Sirsi (for short, ‘trial Court’) and Criminal Appeal No.5042/2016 dated 12.07.2018 by the I Additional District and Sessions Judge, U.K. Karwar, sitting at Sirsi (for short, ‘the Appellate Court’) 2. Criminal Revision petition 100054/2019 is filed by the complainant challenging the judgment and order dated 21.10.2016 passed in C.C. No.576/2009 by the I Additional Civil Judge and II Additional JMFC, Sirsi and Crl.A.No.5045/2016 dated 12.07.2018 by the I Additional District and Sessions Judge, U.K. Karwar, sitting at Sirsi, seeking to enhance the penalty to Rs.5,00,000/- and pay - 4 - HC-KAR NC: 2025:KHC-D:10640 CRL.RP No. 100153 of 2018 C/W CRL.RP No. 100054 of 2019 the same as a compensation and further to sentence the accused to imprisonment for a period of two years. 3. For the sake of convenience, the parties are referred as per the ranking before the trial Court. 4. The brief facts leading to filing of these petitions are that, the complainant and the accused were friends and the accused borrowed a hand loan of Rs.2,50,000/- from the complainant on 31.01.1996. The accused executed a bond for borrowing the amount and later he sends letter dated 26.01.1997, 15.05.1997 and 25.02.1998. It is averred that the accused issued a cheque for a sum of Rs.20,000/- for part payment and also executed promissory note on 14.05.2005 admitting the transaction. 5. It is further averred that the accused issued two cheques in favour of the complainant for a sum of Rs.1,25,000/- each and on presenting the said cheque by the complainant through his banker, the same was - 5 - HC-KAR NC: 2025:KHC-D:10640 CRL.RP No. 100153 of 2018 C/W CRL.RP No. 100054 of 2019 returned on 13.08.2008 with an endorsement ‘Account closed’. It is also averred that the complainant immediately issued notices to the accused to his addresses. He filed a private complaint under Section 200 of Cr.P.C against the accused for the offences punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, 138 of N.I. Act). 6. The accused appeared before the trial Court, his plea was recorded. The complainant in order to prove his case, examined himself as PW1 and got marked documents Exs.P1 to P18(a). The accused examined himself as DW1 and got examined other two witnesses as DW2 and DW3 and also got marked documents Exs.D1 to D5. 7. The trial Court after considering the submissions, evaluated the oral and documentary evidence and passed the impugned judgment convicting the accused for the offence punishable under Section 138 - 6 - HC-KAR NC: 2025:KHC-D:10640 CRL.RP No. 100153 of 2018 C/W CRL.RP No. 100054 of 2019 of N.I. Act. The accused was sentenced to pay a fine of Rs.3,25,000/- and in default ordered to undergo simple imprisonment for a period of six months. It was further directed that a sum of Rs.3,15,000/- shall be paid to the complainant as a compensation. Being aggrieved, the complainant as well as accused preferred Criminal Appeal Nos.5042/2016 and 5045/2016 respectively. The District and Sessions Court dismissed both the appeals. Being aggrieved, these revision petitions are filed. 8. Sri. Dattatraya Timmanna Hebbar, learned counsel appearing for the accused/petitioner submits that the trial Court as well as the appellate Court committed a grave error in appreciating the evidence on record. It is submitted that the notice as required under law was not served on the accused. It is further submitted that the complainant is not capable of advancing a hand loan of Rs.2,50,000/- and the accused is not an income tax assessee and the complainant stole the blank signed cheques from the house of the accused which has been - 7 - HC-KAR NC: 2025:KHC-D:10640 CRL.RP No. 100153 of 2018 C/W CRL.RP No. 100054 of 2019 elicited in the cross examination of the complainant. It is also submitted that the documents at Exs.P1 to P6 are created documents as is evident from the evidence of DW2. However, the trial Court as well as the appellate Court has failed to appreciate the evidence in its proper perspective. It is contended that the accused’s account was closed and the cheques were not returned for insufficiency of the funds and such being the case, there cannot be any conviction under Section 138 of N.I. Act. These aspects have not been properly analyzed by the trial Court as well as appellate Court, resulting in passing of the impugned judgments of conviction, which are perverse and contrary to law, and calls for interference in these petitions. 9. Per contra, Sri. V.G. Bhat, learned counsel appearing for complainant/respondent supports the impugned judgment of the trial Court insofar as conviction of the accused is concerned and submits that the appellate Court ought to have allowed the appeal filed by the - 8 - HC-KAR NC: 2025:KHC-D:10640 CRL.RP No. 100153 of 2018 C/W CRL.RP No. 100054 of 2019 complainant by sentencing the accused to pay fine of Rs.5,00,000/- and also imprisonment of two years as provided under Section 138 of N.I. Act. It is submitted that the transaction is of the year 1996 and till date the complainant is unable to realize the amount. Hence, it is a fit case to enhance the fine amount to Rs.5,00,000/- and also order the compensation to the complainant/victim. He seeks to allow the petition by dismissing the petition filed by the accused. 10. I have heard the arguments made by the learned counsel for the accused, learned counsel for the complainant and on meticulous perusal of the material on record including the trial Court record, following points would arise for consideration: i. The complainant and the accused are friends, the accused borrowed a sum of Rs.2,50,000/- from the complainant as a hand loan on 31.01.1996. The accused executed bond dated 28.08.1996 which is - 9 - HC-KAR NC: 2025:KHC-D:10640 CRL.RP No. 100153 of 2018 C/W CRL.RP No. 100054 of 2019 marked as Ex.P1. The letters communicated by the accused to the complainant dated 26.01.1997, 15.05.1997 and 25.02.1998, marked as Ex.P3 to P5 indicates the loan transaction between the accused and complainant. The accused executed promissory note on 14.05.2005 which is marked as Ex.P6, which evidences that the accused has borrowed Rs.2,50,000/- from the complainant. The accused issued two cheques bearing Nos.415182 and 415183 for Rs.1,25,000/- each of Varada Grameena Bank, Sirsi Branch. The said cheques are of the accused pertaining to his Saving Bank Account No.3741. The complainant presented the cheques through his banker and the same were returned on 13.08.2008 with endorsement that the “Account Closed”. The complainant as per the requirement of law, - 10 - HC-KAR NC: 2025:KHC-D:10640 CRL.RP No. 100153 of 2018 C/W CRL.RP No. 100054 of 2019 got issued legal notices to the addresses of the accused. The notice sent to the earlier addresses of the accused returned as “House vacated” and one notice was returned as ‘Refused’. Another notice sent was served on one Rohini, thereafter, the complainant filed a private complaint under Section 200 of Cr.P.C. The evidence of complainant narrates the issuance of cheques, the correspondence between the complainant and the accused, the signing of a promissory note by the accused, the issuance of two cheques, bank endorsements and the issuance and service of a legal notice. The evidence of PW1 and the Exs.P1 to P18(a) indicate that there was a legal transaction between the complainant and the accused and accused had borrowed a sum of Rs.2,50,000/- and to discharge the loan, the accused has issued two cheques - 11 - HC-KAR NC: 2025:KHC-D:10640 CRL.RP No. 100153 of 2018 C/W CRL.RP No. 100054 of 2019 referred supra which came to be dishonoured. ii. The primary contention of the accused in the aforesaid proceeding is that two signed cheques of the accused were stolen by the complainant. The said defence of the accused is rightly rejected by the trial Court as the same is not supported with any evidence to substantiate the said contention. The cheques in question were dated on 18.05.2008 and as soon as the accused came to know about the stealing of cheque or immediately when the complainant initiated the proceedings against the accused for dishonour of cheque, the accused ought to have taken steps by filing complaint of theft. iii. The second contention of the accused is that the legal notice is not served. The trial Court recorded a clear finding that the notices were - 12 - HC-KAR NC: 2025:KHC-D:10640 CRL.RP No. 100153 of 2018 C/W CRL.RP No. 100054 of 2019 sent to different addresses of the accused and one notice returned to the sender as “House vacated”. The postal cover returned with the said endorsement is marked as Ex.P11(a). The address on the said cover is of the accused and his village is written as “Bidralli village of Yellapur Taluk”. The notice sent to the accused was served as is evident from Ex.P12. The postal acknowledgement indicates that one Rohini has received the notice. The other notices sent to the addresses of the accused returned with a shara that the “addressee has left the village”. The address shown in the cause title of the complaint of the accused is Bidralli village, Umachagi Post, Yellapur Taluk. The deposition of accused-DW1 also indicates that he is a resident of Bidralli village, Umachagi Post, Yellapur Taluk. Considering - 13 - HC-KAR NC: 2025:KHC-D:10640 CRL.RP No. 100153 of 2018 C/W CRL.RP No. 100054 of 2019 these aspects, the trial Court has clearly recorded the finding that the notice issued to the accused is duly served. iv. The third contention of the accused is that the Bank account of the accused was closed even before issuance of the cheque. Hence, there cannot be any offence under the provisions of Section 138 of N.I. Act. The material on record indicates that the Account was closed by the Bank as there were no transaction in the said account. Knowing fully well, that the account was closed, the accused has proceeded to issue two cheques to the complainant which came to be returned with endorsement that the accused’s “Account is closed”. Further the complainant has categorically stated in his evidence that the accused has given requisition for stopping the payment to the - 14 - HC-KAR NC: 2025:KHC-D:10640 CRL.RP No. 100153 of 2018 C/W CRL.RP No. 100054 of 2019 Banker. When things stood thus, the accused cannot contend that he has not committed an offence under Section 138 of N.I. Act. v. The other contention of the accused is that the complainant got executed Exs.P1, P2 - loan agreements and Ex.P6-Promisory note, at a later point, by ante-dating. To support the said contention, he got examined DW2 who claims to be a Typist at Sirsi Bar Association. The oral testimony of DW2 is not trustworthy as there were later communications between complainant and accused as per Exs.P3 to 5, which indicate that there was a financial transaction between the accused and complainant. The accused has not stated anything with regard to Exs.P3 to 5. In the absence of any explanation to the correspondence between the complainant and accused and later - 15 - HC-KAR NC: 2025:KHC-D:10640 CRL.RP No. 100153 of 2018 C/W CRL.RP No. 100054 of 2019 issuance of two cheques by the accused and his intimation to the Bank to not honour those cheques clearly indicates that there was a legal transaction between the complainant and the accused. The accused to discharge the said debt had issued two cheques which came to be dishonoured and has committed the offence under Section 138 of N.I. Act. vi. The contention of the accused that the payment of cash by the complainant to the accused is in violation of provisions of the Income Tax Act has no merit. The accused has not raised the said defence before the trial Court nor before the Appellate Court and if there is any contravention of the Income Tax Act, the said authority would initiate action and such contention would not exonerate the accused from his liability. - 16 - HC-KAR NC: 2025:KHC-D:10640 CRL.RP No. 100153 of 2018 C/W CRL.RP No. 100054 of 2019 11. The trial Court on judicious appreciation of the oral and documentary evidence on record, has recorded a finding that the accused has failed to rebut the statutory presumption under Section 139 of the N.I. Act by producing legally acceptable evidence. The complainant was able to prove that the accused has issued two cheques to discharge a legally enforceable debt and the trial Court proceeded to convict the accused for offence under Section 138 of the N.I. Act. The said finding of the trial Court is strictly in consonance with law and evidence on record and the said finding is neither perverse nor contrary to the law calling for interference. The Appellate Court has relooked the entire evidence and affirmed the finding of fact recorded by the trial Court with regard to the commission of offence by the accused. I do not find any perversity or error in the finding recorded by the trial Court and the Appellate Court convicting the accused for offence under Section 138 of N.I. Act. - 17 - HC-KAR NC: 2025:KHC-D:10640 CRL.RP No. 100153 of 2018 C/W CRL.RP No. 100054 of 2019 12. The complainant has filed a criminal revision petition seeking for enhancement of the fine amount and the sentence. The trial Court sentenced the accused to pay a fine of Rs.3,25,000/- and in default ordered to undergo simple imprisonment for a period of six months and further directed a sum of Rs.3,15,000/- to be paid to the complainant as compensation. The transaction between the complainant and accused is of the year 1996 which is more than 28 years and from the date of issuance of cheque, till date, the complainant has not received any amount which is more than 17 years. Considering the rate of interest paid by the nationalized Banks on the term deposits which is 6% p.a., the interest of justice would be met if the sentence is enhanced by imposing total fine of Rs.5,00,000/-. 13. For the aforementioned reasons, I proceed to pass the following: - 18 - HC-KAR NC: 2025:KHC-D:10640 CRL.RP No. 100153 of 2018 C/W CRL.RP No. 100054 of 2019 ORDER i. Criminal revision petition No.100153/2018 is rejected. ii. Criminal revision petition No.100054/2019 is partly allowed. iii. The impugned judgments and order convicting the accused is upheld. The accused is sentenced to pay a fine of Rs.5,00,000/-, in default the accused shall undergo simple imprisonment for a period of six months. Further, acting under Section 357(1)(b) of the Cr.P.C., a sum of Rs.4,90,000/- is ordered to be paid to the complainant as compensation and Rs.10,000/- as a fine to the State. Sd/- (VIJAYKUMAR A.PATIL) JUDGE RKM /CT-AN List No.: 1 Sl No.: 1