- 1 - NC: 2025:KHC-D:5837 CRL.RP No. 100436 of 2024 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 1ST DAY OF APRIL, 2025 BEFORE THE HON'BLE MR. JUSTICE RAVI V.HOSMANI CRIMINAL REVISION PETITION NO. 100436 OF 2024 BETWEEN: SRI VIJAYAKUMAR R.B. AGE: 53 YEARS, OCC: PWD CONTRCTOR, R/O. SRI CHANDRAMMA NILAYA, KURVANGI ROAD, CHIKKAMANGALURU-577101. … PETITIONER (BY SRI SHIVAKUMAR S.BADAWADAGI, ADVOCATE) AND: SRI VEERAYYA S/O FAKKIRAPPA LAKSHMESHWARNATH, AGE: 47 YEARS, OCC: PAINTER, R/O. HOUSE NO.5, VEERABHADRESHWAR COLONY, JADHAV FARM, UNKAL, HUBBALLI, DIST. DHARWAD-580031. … RESPONDENT (BY SHASHWATH S.HIREMATH, ADVOCATE) THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397 (1) OF CRIMINAL PROCEDURE (READ WITH UNDER SECTION 401 OF CR.P.C. (SECTION 438 READ WITH UNDER SECTION 442 OF BNSS), SEEKING TO CALL FOR THE RECORDS AND SENT ASIDE THE JUDGMENT OF CONVICTION AND ORDER OF SENTENCE DATED 06.01.2024 PASSED BY THE COURT OF I ADDL.CIVIL JUDGE AND J.M.F.C., HUBBALLI, IN CC NO.1335/2018 CONFIRMED BY THE V ADDL. DISTRICT AND SESSIONS JUDGE, DHARWAD SITTING AT HUBBALLI, VIDE ITS JUDGMENT DATED 23.10.2024 PASSED IN CRL. APPEAL NO.5013/2024 OFFENCE UNDER SECTION 138 OF N.I. ACT, AND ACQUIT THE PETITIONER. THIS CRIMINAL REVISION PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 21.02.2025, COMING ON FOR PRONOUNCEMENT OF ORDER, THROUGH VIDEO CONFERENCING FROM BANGALORE BENCH, THIS DAY, THE COURT DELIVERED THE FOLLOWING: Digitally signed by GEETHAKUMARI PARLATTAYA S Location: High Court of Karnataka - 2 - NC: 2025:KHC-D:5837 CRL.RP No. 100436 of 2024 CORAM: THE HON'BLE MR. JUSTICE RAVI V.HOSMANI CAV ORDER (PER: THE HON'BLE MR. JUSTICE RAVI V.HOSMANI) Challenging judgment/order dated 23.10.2024 passed by V Addl. District and Sessions Judge, Dharwad, sitting at Hubballi (‘Appellate Court’, for short) in Crl.A.no.5013/2024 and judgment/order dated 06.01.2024 passed by I Addl. Civil Judge and J.M.F.C., Hubballi, (‘Trial Court’, for short) in C.C.no.1335/2018, this revision petition is filed. 2. Sri Shivakumar S. Badawadagi, learned counsel for petitioner submitted, respondent (complainant) had filed private complaint against petitioner, stating that complainant was doing painting work since 15 to 20 years, while petitioner was Civil Contractor and about a year and half earlier, they came in contact with each other through common acquaintance Suresh Paste. Due to same, complainant was entrusted with painting work of Income Tax Building at Mangalore from GC and Company, Mangalore ('GC’, for short), for sum of Rs.18,00,000/-. In course of said work, when complainant sought advance payment, petitioner issued cheque bearing no.31851 dated 16.02.2018, for Rs.4,00,000/-, drawn at Bank of India, Chikmagaluru Branch. - 3 - NC: 2025:KHC-D:5837 CRL.RP No. 100436 of 2024 3. When same was presented for collection on 17.02.2018, it returned dishonored with endorsement ‘funds insufficient’ and same was intimated on 18.02.2018. Thereafter, when legal notice was got issued on 05.03.2018, even after receipt of same on 14.03.2018, petitioner failed to pay cheque amount within 15 days and replied with untenable reasons and denied for payment. Therefore, complaint was filed on 13.04.2018 alleging commission of offence under Section 138 of Negotiable Instruments Act, 1881 (‘NI Act’, for short). 4. It was further submitted, after appearance, when substance of accusation was read over and explained, petitioner pleaded not guilty and claimed to be tried. It was submitted, complainant examined himself as PW.1 and got marked Exs.P1 to P5. On being apprised of incriminating circumstances, statement of petitioner denying same was recorded under Section 313 of CrPC. Thereafter, petitioner availed opportunity, examined herself as DW.1 and another as DW.2 and no documents were marked. 5. It was submitted, though petitioner had set up substantial defence denying not only acquaintance and having any financial transaction with complainant, but also alleged misuse of cheque given by respondent, trial Court convicted - 4 - NC: 2025:KHC-D:5837 CRL.RP No. 100436 of 2024 petitioner by sentencing to pay fine of Rs.4,10,000/- in default of payment to undergo simple imprisonment for a period of six months and payment of Rs.10,000/- as fine amount to State. Aggrieved thereby, petitioner preferred Crl.A.no.5313/2024 on various grounds. 6. Upon consideration of said grounds, first appellate Court dismissed appeal and confirmed judgment passed by trial Court. Aggrieved thereby, this revision petition was filed. 7. At outset, it was submitted, there was no transaction between complainant and petitioner. Therefore, there was no legally enforceable debt, as alleged in complaint. Further, painting work was assigned by GC. Bare reference to same would be insufficient to cast liability on petitioner. It was submitted, complainant has not produced any document or material to establish contract between them. It was contended, cheque was issued only for security purpose, but misused by complainant. 8. It was submitted, during cross-examination complainant specifically admitted that transaction was entered into between himself and GC. Admittedly, petitioner was not contracting party nor part of any transaction. Even complainant admitted, entrustment of painting work from GC was through - 5 - NC: 2025:KHC-D:5837 CRL.RP No. 100436 of 2024 Suresh Paste. Though, complainant stated that at time of entrustment of work, Suresh Paste was present, to substantiate same he was not examined. 9. It was submitted, complainant alleged multiple transactions and payments made by petitioner. But, in cross- examination, he admitted lack of particulars about same. It was submitted, though petitioner deposed as DW.1, complainant failed to elicit any admissions to establish transaction or contract between them. On other hand, petitioner examined Kishore Kumar - painter, who completed painting of Income Tax Building at Mangalore for GC as DW.2, who deposed that he was assigned painting work by GC and completed it. Under above circumstances, mere proof of issuance of cheque by petitioner, which was for security purposes, without establishing petitioner being in debt would not attract Section 138 of NI Act. It was submitted, first appellate Court merely concurred with findings of trial Court, without re-appreciation. Consequently, both Courts failed to appreciate material factors. Hence, impugned judgments/orders called for interference. 10. Learned counsel relied on decision of Hon'ble Supreme Court in Indus Airways Pvt. Ltd. and Anr. v. Magnum Aviation Pvt. Ltd., and Anr., reported in 2014 - 6 - NC: 2025:KHC-D:5837 CRL.RP No. 100436 of 2024 (12) SCC 539, for proposition that, when cheque was issued as advance payment for purchase of goods and if for any reason, purchase was not made either due to cancellation or otherwise, cheque issued cannot be held to be drawn towards existing debt or liability. It was also held, for attracting criminal liability under Section 138 of NI Act, enforceable debt or liability subsisting as on date of drawl of cheque was necessary. 11. On other hand, Sri Shashwath S. Hiremath, learned counsel for respondent sought to oppose petition. At outset, it was submitted, revision petition under Section 397 of CrPC was filed by accused against concurrent findings on appreciation of evidence rightly convicting petitioner for offence under NI Act. Therefore, scope of interference or re-appreciation would be limited. 12. In support of his submission, learned counsel relied on decision of this Court in case Hanumant v. S.M. Associations (Crl.R.P.no.100006/2022 disposed of on 16.01.2025), wherein contention of accused that issuance of cheque was for security and not towards discharge of legally enforceable debt was negatived. On above ground, sought for dismissal of revision petition. - 7 - NC: 2025:KHC-D:5837 CRL.RP No. 100436 of 2024 13. Heard learned counsel and perused impugned judgment and order. 14. From above, point that arises for consideration is: “Whether revision petitioner has made out a case for interference with concurrent findings?” 15. This revision petition is under Section 397 read with Section 401 of CrPC. Hon’ble Supreme Court in case of Amit Kapoor v. Ramesh Chander and Anr. reported in (2012) 9 SCC 460, held, scope of interference against concurrent findings is extremely limited and normally limited only on questions of law and not findings of fact. 16. Admittedly, revision petition is against concurrent findings. Main grounds of challenge are lack of privity of contract and issuance of cheque as security for purchase of goods would not attract provisions of NI Act. 17. In complaint, complainant asserts that GC had contract for painting of Income Tax Building at Mangalore, petitioner and Suresh Paste worked on contract with it and they assigned painting work to complainant for Rs.18,00,000/- and - 8 - NC: 2025:KHC-D:5837 CRL.RP No. 100436 of 2024 for expenses issued Ex.P1 - cheque for Rs.4,00,000/-, which was dishonored constituting offence under NI Act. 18. On other hand, petitioner opposed complaint on very same grounds urged herein. In Ex.P.3 - Demand Notice, it was stated, complainant knew Suresh Paste, resident of Vidyanagar, Hubbali. He introduced petitioner as a Civil Contractor, who had completed works in several buildings. When complainant informed petitioner that he was doing painting work by employing about 15-20 workers, petitioner told him about painting work of Income Tax Building at Mangalore and assigned it to complainant for Rs.18,00,000/- under oral agreement. While complainant was doing that work, petitioner had issued Ex.P1 - cheque for Rs.4,00,000/- towards labour/material expenses. Said cheque when presented was dishonored. Same facts were reiterated in complaint. 19. On other hand, in Ex.P5 - reply to Ex.P.3 demand notice, petitioner stated complainant was carrying on painting work since 15 years, came in contact with Suresh Paste, doing interior decoration/repair work of buildings at Hubballi and Mangalore. It was stated, petitioner and Suresh Paste were working in GC on contract basis for carrying repairs, interior - 9 - NC: 2025:KHC-D:5837 CRL.RP No. 100436 of 2024 decoration instance of GC, since 5 years. And when complainant approached Suresh Paste for painting work, he was assigned painting work of Income Tax Building at Mangalore for Rs.18,00,000/-. And further, for said work, GC agreed to supply material from Jangam Shetty and Sons, Vijayapura (‘JSS’ for short), by deducting same from amount payable to complainant. Though material worth Rs.4,89,607/- was supplied, complainant carried out work for only Rs.1,94,819/-. 20. When complainant failed to employ sufficient labour, GC was forced to take assistance of Kishore to complete work, therefore, complainant was entitled for only Rs.1,94,819/-. It was stated when GC delayed payment to JSS resulting in refusal to supply material, complainant approached Suresh Paste for some guarantee to be given to JSS. In view of same, Suresh Paste advised petitioner to issue cheque for Rs.4,00,000/- to complainant. Therefore, petitioner issued Ex.P.1 - cheque to complainant to be given to JSS, as security and to obtain material. It was also asserted that GC had subsequently made payment to JSS, and cleared his dues. Such being case, after executing fraction of work, complainant - 10 - NC: 2025:KHC-D:5837 CRL.RP No. 100436 of 2024 abandoned work. While GC was contemplating action against complainant for default, complainant cunningly misused Ex.P.1 - cheque and filed complaint even though there was no contractual relationship between petitioner and complainant. Denying assertions in para 3 of complaint, it was stated, cheque was issued only to bolster confidence of complainant with JSS and not with any ill motive. It was alleged, complainant had betrayed trust, presented cheque for collection and filed complaint without any basis. 21. During cross-examination of PW.1, it was elicited that painting work at Income Tax Building at Mangalore was allotted to GC. That complainant got painting work of Income Tax Building at Mangalore at instance of Suresh Paste. Interestingly, suggestion was made that petitioner had taken contract of painting of Income Tax Building at Mangalore from GC and assigned it to complainant and that there was no privity of contract between complainant and GC, were admitted by PW.1. Even further suggestion that petitioner had given painting work as piece- work contract to complainant is also got admitted. And that - 11 - NC: 2025:KHC-D:5837 CRL.RP No. 100436 of 2024 agreement between GC and petitioner is documented and that he had not produced same. 22. PW.1 also admits suggestion that complete painting contract was awarded to GC and it had given same to complainant. He also admits, that there was no written agreement between petitioner and complainant, but states that it was purely on trust for Rs.18,00,000/- and that Suresh Paste was present at time of oral agreement during February, 2017. It is elicited that complainant had not pleaded same in complaint or in evidence. He stated that painting work was begun in March, 2017 and completed it by December, 2017. It is also elicited that petitioner had made small payment of Rupees Four Lakhs and Eighty Thousands towards expenses to JSS, on behalf of GC. It is further elicited that when JSS, refused to issue material on credit, GC had made payment of Rs.4,80,000/-. It is seen, PW.1 claimed to have completed work and claimed payment, but received cheque for Rs.4,00,000/- only. It is elicited that he had not initiated any proceedings for recovery of balance amount. Suggestions that petitioner had not got any work allotted to complainant and therefore, was not liable for any amount, was denied. - 12 - NC: 2025:KHC-D:5837 CRL.RP No. 100436 of 2024 23. On other hand, DW.1 (petitioner) deposed since 2017, he was working as Supervisor with GC on monthly salary, at Mangaluru. Complainant came to Mangaluru for painting work of Income Tax Building from contract holder GC. He states complainant got said work for Rs.18,00,000/- through Suresh Paste with whom he had entered into some agreement, but, left it midway. He stated that for executing work, he got material from JSS in name of GC. And due to failure of GC to make payment, work was discontinued. He states that on request of complainant, petitioner had issued one cheque for Rs.4,00,000/- to JSS. Thereafter, JSS issued painting material in name GC and subsequently, GC cleared payment of Rs.4,00,000/- to JSS. He further stated, GC were required to pay only Rs.1,90,000/-. He also stated he was unaware whether GC made such payment to complainant. He also stated, when he demanded return of cheque, complainant refused and filed false complaint misusing cheque. 24. In cross-examination, it is elicited that when JSS, refused to issue painting material on behalf of GC, complainant had obtained cheque from petitioner. A further admission about that GC had made payment of Rs.4,89,607/- to JSS is also elicited. Admission is elicited - 13 - NC: 2025:KHC-D:5837 CRL.RP No. 100436 of 2024 that petitioner was aware about GC granting work to complainant for Rs.18,00,000/-. It is elicited that petitioner had not filed any case against complainant. 25. It would be relevant to note that suggestions that petitioner got painting work from GC to complainant; that cheque was issued towards labour payment; that petitioner falsely stated complainant had done work worth Rs.1,94,819/- only; that petitioner had falsely stated about demanding return of cheque etc. are denied. However, suggestion that Engineer of GC had informed petitioner that complainant had executed work worth Rs.1,94,819/- is admitted. Further suggestion that agreement was between GC and complainant and petitioner was not concerned is also admitted. Further suggestion that GC had authority to cancel agreement with complainant and that it had cancelled it is admitted. 26. And though, Kishorekumar, who alleged completed painting work for GC was examined as DW.2, wherein he stated, he agreed to do painting work for Rs.16,00,000/-, commenced in 2017 and completed it in 2019 and received payment from GC, in cross-examination, it is elicited that he - 14 - NC: 2025:KHC-D:5837 CRL.RP No. 100436 of 2024 does not know anything about case and did not produce records. Therefore, his deposition would be unreliable. 27. Though complainant asserts that petitioner and Suresh Paste were working on contract with GC, nature of their responsibilities in GC are not disclosed. It is not clarified, whether petitioner had issued Ex.P.1 - cheque on behalf of GC as he had not made any claim against it, despite stating that at instance of Suresh Paste, complainant got work of painting of Income Tax Building at Mangalore from GC for Rs.18,00,000/-. Admittedly, there is no other transaction between petitioner and complainant. 28. From above, it is seen, there is admission about cheque issued by petitioner to complainant. As rightly submitted by learned counsel for complainant, presumption under Section 139 of NI Act that, cheque was issued in discharge of legally enforceable debt would be attracted. He would be further justified in submitting (relying upon decision of this Court in Hanumant’s case) that a bare contention about issuance of cheque for security purposes would not be sufficient to rebut presumption. But, as held by Hon'ble Supreme Court in Rangappa v. Mohan, reported in AIR 2010 SC 1898, said - 15 - NC: 2025:KHC-D:5837 CRL.RP No. 100436 of 2024 presumption would be rebuttable even based on evidence led by complainant. 29. In instant case, rebuttal of presumption is sought to be based on assertions/admissions. Firstly, in Demand Notice (Ex.P3) and in complaint, complainant claims petitioner and Suresh Paste were working on contract with GC had got painting work of Income Tax building at Mangaluru, assigned to complainant for Rs.18,00,000/- and petitioner issued Ex.P1 – cheque for covering material expenses. In his deposition, complainant states suggestion made and admission elicited contradictory are to effect that petitioner was working as supervisory in GC was acquainted with complainant through Suresh Paste had obtained painting work contract. He states said work was obtained from GC. As per arrangement, material for work could be taken from JSS on account of GC to be deducted later after payment from complainant. But, while carrying out work, JSS refused to issue material due to delayed payment by GC and therefore, complainant approached and requested Suresh Paste for providing security to JSS. Therefore, Ex.P1 came to be issued. It is admitted by complainant, JSS supplied material after issuance of cheque. It - 16 - NC: 2025:KHC-D:5837 CRL.RP No. 100436 of 2024 is also admitted that GC made payment of Rs.4,80,000/- to JSS. 30. Though, it is claimed that a cheque was issued towards labour payment, an admission is elicited that petitioner was working as Supervisor with GC, there was oral agreement between GC and complainant about painting work and petitioner was not concerned with it, would cast serious doubt about complainant’s version probabilizing defence thereby, rebutting presumption. As held by this Court in Santosh v. Haribhai (Crl.A.no.2784/2012 disposed of on 11.12.2020), on rebuttal of presumption, complainant would be required to establish his case beyond reasonable doubt. When complainant admitted that issuance of cheque by complainant was towards labour payment in relation to painting work of Income Tax building at Mangaluru and admitted oral agreement insofar as said work was between complainant and GC, issuance of cheque cannot be held to be towards legally recoverable debt. Especially so, in absence of pleading, oral or documentary evidence about existence of any other contract between petitioner and complainant for which petitioner was liable to make payment of cheque amount. - 17 - NC: 2025:KHC-D:5837 CRL.RP No. 100436 of 2024 31. Even admission elicited that petitioner had made payment of Rs.4,00,000/- to JSS, on account of GC, would not take forward complainant’s case much further without existence of any contract, obligation of liability to make such payment. In fact, suggestion made by petitioner and admission elicited from complainant that GC had made payment to JSS and complainant would support version of petitioner, while running contrary to complainant’s case. Though, PW.1 attempts to establish a case of written agreement between GC and petitioner about painting work and oral agreement between petitioner and complainant is sought to be substantiated in his cross-examination as PW.1, suggestions made and admissions elicited about oral agreement between GC and complainant and about petitioner being unconcerned would run counter to complainant’s case. 32. While passing impugned judgment, trial Court appears swayed by admission by petitioner about issuance of cheque and its dishonor while examining his contention that it was issued for security purposes and not towards legal enforceable debt. By concluding that petitioner had failed to - 18 - NC: 2025:KHC-D:5837 CRL.RP No. 100436 of 2024 rebut presumption, it held petitioner guilty of offence under Section 138 of NI Act. 33. Even though in appeal, first appellate Court re- appreciated entire evidence. It referred to admission by petitioner about issuance of cheque by petitioner to complainant drawn on his account, its presentation, dishonor on ground of insufficient funds, receipt of demand notice, failure to make payment within 30 days, attracting presumption under Section 139 of NI Act. Thereafter, referring to admission by DW.1 that he was working with GC since 2017, that GC had entrusted painting work of Income Tax building at Mangaluru to complainant for Rs.18,00,000/- and admission by petitioner about working as Supervisor with GC and issuance of Ex.P1, drew adverse inference against petitioner for issuing said cheque, unless there was agreement with complainant. It reinforced its inference with reasoning about failure to establish demand for return of cheque as well as payment being made by GC to JSS to conclude that petitioner failed to probabilise his defence. Holding that there was failure to rebut presumption, it concurred with trial Court and dismissed appeal. - 19 - NC: 2025:KHC-D:5837 CRL.RP No. 100436 of 2024 34. Thus, both Courts have failed to take note of specific pleadings in demand notice and complaint as well as admissions given in suggestions made to DW.1 so also admissions elicited in cross-examination of PW.1, which has held above probabilise defence taken leading to rebuttal of presumption, requiring complainant to establish commission of offence beyond reasonable doubt. As held above, complainant failed to establish commission of offence beyond reasonable doubt, therefore, judgments of conviction and orders of sentence passed against petitioner would be suffering from perversity. Hence, point for consideration is answered in affirmative. Consequently following: ORDER i. Criminal Revision Petition is allowed. ii. Judgment of conviction and order of sentence dated 23.10.2024 passed by V Addl. District and Sessions Judge, Dharwad sitting at Hubballi in Crl.A.no.5013/2024 and judgment of conviction and order of sentence dated 06.01.2024 passed by I Addl. Civil Judge and J.M.F.C., Hubballi in C.C.no.1335/2018 are set-aside. - 20 - NC: 2025:KHC-D:5837 CRL.RP No. 100436 of 2024 iii. Petitioner is acquitted of offence punishable under Section 138 of NI Act. iv. Bail/sureties bond if any, stand cancelled. Petitioner would be entitled to withdraw deposits made if any. Sd/- (RAVI V.HOSMANI) JUDGE Psg/AV/GRD List No.: 19 Sl No.: 2