- 1 - NC: 2025:KHC-D:1888 CRL.P No. 100280 of 2020 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 30TH DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR. JUSTICE HEMANT CHANDANGOUDAR CRIMINAL PETITION NO. 100280 OF 2020 (482(CR.PC)/528(BNSS)) BETWEEN: MAHESH S/O. ACHUT NAIK, AGE: 42 YEARS, OCC: BUSINESS, R/O: SANE AMMANAVAR TEMPLE, HERVATTA, KUMTA. … PETITIONER (BY SRI. VENKATESH M. KHARVI, SRI. VAGISH R. HEDGE AND SRI. V.B. HEDGE, ADVOCATES) AND: SHRI. DINAKAR S/O. NARAYAN NAYAK, AGE: 65 YEARS, OCC: RETIRED TEACHER AND LIC AGENT, R/O: NUSHIKOTE CROSS, HIREGUTTI, KUMTA, KARWAR. … RESPONDENT (BY SRI. HARISH NAIK, ADVOCATE) THIS CRIMINAL PETITION IS FILED U/SEC.482 OF CR.P.C., PRAYING TO QUASH THE ENTIRE PROCEEDING IN C.C.NO.199/2019 IN P.C.NO.267/2017 ON THE FILE OF SENIOR CIVIL JUDGE AND PRL. JMFC COURT, KUMTA AND ALSO TAKING COGNIZANCE IN THE COMPLAINT FOR THE OFFENCE U/S 138 OF NI ACT. THIS PETITION IS COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: B K MAHENDRAKUMAR Digitally signed by B K MAHENDRAKUMAR Location: HIGH COURT OF KARNATAKA DHARWAD BENCH Date: 2025.02.01 13:32:24 +0530 - 2 - NC: 2025:KHC-D:1888 CRL.P No. 100280 of 2020 CORAM: THE HON'BLE MR. JUSTICE HEMANT CHANDANGOUDAR ORAL ORDER 1. The petitioner challenges the cognizance taken by the learned Magistrate for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the ‘NI Act’). 2. The respondent filed a private complaint under Section 200 of the Criminal Procedure Code, 1973 (hereinafter referred to as ‘Cr.P.C.’), alleging that the petitioner had borrowed a loan of ₹7 lakhs for the purchase of a property. Towards repayment of the said loan, the petitioner allegedly issued the subject cheque. However, when the cheque was presented for encashment, it was dishonoured due to insufficient funds. 3. Learned counsel for the petitioner submitted that the subject cheque was issued by one Raju Achyut Naik and that the bank account related to the cheque was in the name of Veeranjaneya Stone Crushers. Since the petitioner is not the drawer of the cheque, he cannot be prosecuted for the offence punishable under Section 138 of the NI Act. 4. In response, learned counsel for the respondent/complainant contended that whether the cheque was issued by the petitioner or a third person is a matter to be determined at trial and cannot be adjudicated at this stage. Hence, he sought dismissal of the petition. - 3 - NC: 2025:KHC-D:1888 CRL.P No. 100280 of 2020 5. After considering the arguments of both parties, the following observations are made: 6. A perusal of the subject cheque reveals that it was drawn on the State Bank of Mysore, Kumta Branch, and was issued by Raju Achyut Naik, Proprietor of Veeranjaneya Stone Crushers. The endorsement issued by the drawer’s bank indicated that the drawee was advised to present the cheque in the proper zone. However, the complainant has not produced any substantive evidence to establish that the subject cheque was issued by the petitioner. 7. Section 138 of the NI Act pertains to the dishonour of a cheque due to insufficiency of funds or exceeding the arrangement with the bank. It stipulates that if a person draws a cheque on an account maintained by them for the payment of money to another person, and the cheque is dishonoured due to insufficient funds or any other reason specified under the Act, such person shall be deemed to have committed an offence. Simply put, to prosecute a person under Section 138 of the NI Act, the cheque must have been issued by the accused for the discharge, in whole or in part, of a legally enforceable debt, and it must have been returned unpaid for want of funds. 8. In the present case, the subject cheque was not issued by the petitioner but by a third party. Since the petitioner is not the drawer of the cheque, he cannot be held liable under Section 138 - 4 - NC: 2025:KHC-D:1888 CRL.P No. 100280 of 2020 of the NI Act. Therefore, the continuation of criminal proceedings against the petitioner would amount to an abuse of the process of law. Accordingly, the petition is allowed. The impugned proceedings in CC No.199/2019 (PC No.267/2017) on the file of learned Senior Civil Judge & Prl. JMFC, Kumta, is hereby quashed. Sd/- (HEMANT CHANDANGOUDAR) JUDGE JTR CT:BCK List No.: 1 Sl No.: 30