- 1 - NC: 2025:KHC-D:6178 CRL.RP No. 100412 of 2023 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 7TH DAY OF APRIL, 2025 BEFORE THE HON'BLE MR. JUSTICE V.SRISHANANDA CRIMINAL REVISION PETITION NO. 100412 OF 2023 (397(CR.PC)/438(BNSS)) BETWEEN: MR. RAMESH S/O. LACHHIRAM AGARWAL AGE. 62 YEARS, OCC. PROP OF SACHIN ENTERPRISES R/O. PLOT NO. 553/B, BELUR, INDUSTRIAL AREA, DHARWAD-580011. …PETITIONER (BY SRI. GIRISH S. HULMANI, ADVOCATE) AND: 1. SRI. SAIRAM JAYAPPA JADAMALI SINCE DEAD BY HIS LR’S NAMELY 1.A SRI. JAYAPPA S/O. RAMAPPA JADAMALI AGE. 55 YEARS, OCC. ADOVCATE 1.B SMT. SHAILA W/O. JAYAPPA JADAMALLI, AGE.49 YEARS, OCC. HOUSEWIFE, 1.C KUM. OM S/O. JAYAPPA JADAMALI AGE.20 YEARS, OCC.STUDENT, R/O. ALL ARE RESIDENT OF OM SAI RAM NILAY, KELAGERI ROAD, DHARWAD-580008. …RESPONDENTS (BY SRI. SRI. GURUDEV GACHCHINAMATH, ADVOCATE) THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397 R/W. 401 OF CR.P.C. SEEKING TO ALLOW THE TOP NOTED CRIMINAL REVISION PETITION AND SET ASIDE V N BADIGER Digitally signed by V N BADIGER Location: High Court of Karnataka, Dharwad Bench Date: 2025.04.19 10:33:34 +0530 - 2 - NC: 2025:KHC-D:6178 CRL.RP No. 100412 of 2023 THE ORDER PASSED BY THE IV ADDL. DISTRICT AND SESSIONS JUDGE, DHARWAD AT DHARWAD IN CRL.A APPEAL NO.22/2022 DATED 04.10.2023 AND SET ASIDE THE ORDER OF CONVICTION PASSED BY PRL. CIVIL JUDGE AND JMFC, DHARWAD, AT DHARWAD IN CC NO.394/2019 DATED 18.01.2022 FOR OFFENCES PUNISHABLE UNDER SECTION 138 OF NI ACT. AND DISMISS THE COMPLAINT FILED BY THE COMPLAINANT/RESPONDENT AND THEREBY ACQUIT THE PETITIONER/ACCUSED FOR THE CHARGES LEVELED AGAINST HIM. THIS PETITION COMING ON FOR FINAL HEARING THIS DAY, ORDER WAS MADE THEREIN AS UNDER: ORAL ORDER (PER: THE HON'BLE MR. JUSTICE V.SRISHANANDA) Heard Sri Girish S. Hulamani, learned counsel for revision petitioner and Sri Gurudev Gachchinamath, learned counsel for respondent No.1(a to c). 2. Accused, who suffered an order of conviction in C.C. No.394/2019 for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (for short, N.I. Act) and ordered to pay a fine of Rs.3,05,250/- was ordered to be paid as compensation being the cheque amount and balance sum of Rs.5,000/- towards the defraying expenses of the State, which got confirmed in Crl.A.No.22/2022 is the revision petitioner. - 3 - NC: 2025:KHC-D:6178 CRL.RP No. 100412 of 2023 3. Facts in the nutshell which are utmost necessary for disposal of the revision petition are as under: 3.1. A complaint came to be Lord under Section 200 of Cr.P.C. alleging the commission of the offence under Section 138 of N.I. Act by contending that complainant sold cotton to the tune of 4,550 kg to the accused-firm. The cotton was unloaded through vehicle bearing No.KA- 09/2161 on 20.12.2018 at the rate of Rs.5,600/- per quintal. Accused has paid the amount in respect of the sold cotton to the complainant through cheque bearing No.206710 in a sum of Rs.2,46,710/- after deducting hamali and another charges. The said cheque was honoured and the amount therein was encashed by the complainant. 3.2. Again in respect of unloaded cotton to the tune of 5,590 kg through vehicle bearing No.KA-27/B-1582, accused said to have issued a cheque bearing No.206709 in a sum of Rs.3,03,350/- which on presentation, came to be dishonoured with an endorsement ‘payment stopped by - 4 - NC: 2025:KHC-D:6178 CRL.RP No. 100412 of 2023 the drawer’ on 17.01.2019. Legal notice was issued which was not complied by the complainant nor any reply was sent. Therefore, complaint came to be filed. 3.3. After completing necessary formalities, accused was summoned and plea was recorded. Accused pleaded not guilty. Therefore, trial was held. 4. Complainant got examined himself as PW-1 and placed on record 11 documents which are exhibited and marked as Exs.P-1 to P-11. 5. To rebut the presumption available to the complainant, accused got examined himself as DW-1 and two witnesses viz., Mallappa Halemani and Kiran T.R. as DW-2 and DW-3. Accused placed on record 15 documents which are exempted and marked as Exs.D-1 to D-15. 6. On conclusion of recording of evidence, learned Trial Judge heard the parties in detail and in view of the rival contentions of the parties, considered the material - 5 - NC: 2025:KHC-D:6178 CRL.RP No. 100412 of 2023 evidence on record convicted the accused inter alia holding in paragraph Nos.28 and 29 as under: “28. The counsel for the accused quoted some of the rulings which is reported in 1) Basalingappa V/S Mudibasapра (2019) 5 SCC 418, 2) Ramdas V/S Krishnanand 2015 Crl LJ 1156 3) Murtuja V/S Zakeet Crl App. No. 200123/2017 dated 16-09-2021 MANU/KA/4026/2021, 4) M. Suresh Gowda V/S Y. Rama Babu Crl. App. No. 100276/2015 dated 29-09- 2021 MANU/KA/4337/2021 The above rulings are not applicable to the present case on hand as the facts and circumstances are entirely different. The counsel for complainant quoted the citation which is reported in 1) 2001 AIR 300 CT Joseph-Vs- I.V. Philip. 29. From the above discussion it is clear that, the accused has raised untenable defense to avoid consequence of dishonour of cheque. Since the presumption under Section 139 of Act does not stand rebutted by any legal evidence. Then it would be presumed that Ex.P1 issued for legally recoverable debt or liability. But the accused failed to rebut the same. The said presumption under section 139 of N.I. Act has not been rebutted by the accused. For the above discussed reason I am of the view that towards the discharge of amount due by the accused had issued cheque bearing number 206709 dated: 15-01-2019, for a sum of Rs.3,03,250/-(Three lakh - 6 - NC: 2025:KHC-D:6178 CRL.RP No. 100412 of 2023 Three Thousand Two Fifty rupees only), drawn on the Corporation Bank, Dharwad Branch, Dharwad. The complainant presented the said cheque for encashment through his banker i.e., Karnataka Bank, Dharwad the cheque was dishonored with an endorsement "Payment Stopped by the drawer" as per Cheque Return Memo dated 17-01-2019., when it was presented for encashment and even after receipt of notice the accused has failed to pay the amount of cheque. On the other hand in the cross- examination of the complainant nothing was elicited from the mouth of the complainant. Complainant Case is proved as correct and the case of the complainant falls under the presumption contemplated under section 118 of N.I. Act. So on forgoing reasons and discussions on the Point No.1, I am of the opinion that, complainant has clearly, cogently proved his case by oral and documentary evidence. Therefore, the presumption is to be drawn in favour of the holder of the cheque who has received it for discharge of liability in view of the decision of the Hon'ble Supreme Court. Therefore, the accused has committed an offence punishable under Section 138 of Negotiable Instrument Act. Hence I answer Point No.1 and Point No.2 is in affirmative.” - 7 - NC: 2025:KHC-D:6178 CRL.RP No. 100412 of 2023 7. Being aggrieved by the same, accused filed an appeal before the District Court in Crl.A.No.22/2022. Learned Judge in the First Appellate Court after securing the records, heard the arguments of the parties in detail and dismissed the appeal. 8. Being further aggrieved by same, accused is before this Court in this revision petition. 9. Sri Girish Hulmani, learned counsel for the revision petitioner reiterating the grounds urged in the revision petition vehemently contended that the very transaction alleged by the complainant with the accused has not been established by the complainant by placing cogent and convincing evidence on record which has been ignored by the learned Trial Judge before raising the presumption under Section 139 of the N.I. Act and Trial Judge failed to consider the probative value of the oral testimony of DW-1 to 3 and Exs.D-1 to D-15 resulting in miscarriage of justice and sought for allowing the revision petition. - 8 - NC: 2025:KHC-D:6178 CRL.RP No. 100412 of 2023 10. He would further contend that when the accused has issued the stop payment instructions to the complainant, the presumption under Section 139 of the N.I. Act ought not to have been raised by the learned Trial Judge resulting in miscarriage of justice and sought for allowing the revision petition. 11. In support of arguments Sri Girish Hulmani places on record the judgments of the Hon’ble Apex Court in the cases of Rangappa vs. Mohan1, Ramdas vs. Krishnanad2 and Basalingappa vs. Mudibasappa3. 12. Per contra, Sri Gurudev Gachchinamath, learned counsel for the respondent-complainant supports the impugned judgments. 13. Having heard the arguments of both the sides in detail, this Court perused the material on record meticulously. 1 AIR 2010 SC 1898 2 (2014) 12 SCC 625 3 (2019) 5 SCC 418 - 9 - NC: 2025:KHC-D:6178 CRL.RP No. 100412 of 2023 14. On such perusal of the material on record, cheque marked at Ex.P-1 belonging to the accused is not in dispute so also the signature found therein is not in dispute. Bank Return Memo clearly shows that cheque got dishonored on account of instructions of accused that “payment was stopped by the drawer.” 15. It is settled principles of law that requires no emphasis that mere issuance of the stop payment of cheque would not ipso facto absolve the criminal liability, especially in the absence of the accused establishing before the Court that as on the date of cheque, amount covered under the cheque was available in the account of the accused. 16. Therefore, argument put forth on behalf of the accused that stop payment instructions would be sufficient in not raising the presumption under Section 139 of N.I. Act cannot be countenanced in law. - 10 - NC: 2025:KHC-D:6178 CRL.RP No. 100412 of 2023 17. Insofar as the transaction that has been alleged by the complainant is concerned, following the dictum of the Hon’ble Apex Court in the case of Indian Bank Association and others vs. Union of India & others4, the trial should have commenced from the recording of the defence evidence. 18. In the case on hand, Trial Magistrate did not adhere to the principles of law enunciated in the case of Indian Bank Association. Nevertheless, since the complainant enjoys the presumption under Section 139 of the N.I. Act, it is for the accused to rebut the presumption by placing cogent evidence on record. 19. In the case of Rangappa referred to supra, the Hon’ble Apex Court did consider the effect of the presumption and in fact the principles of law enunciated in Rangappa would help the complainant rather than the accused. 4 (2014) 5 SCC 590 - 11 - NC: 2025:KHC-D:6178 CRL.RP No. 100412 of 2023 20. Further, the presumption under Section 139 of the N.I. Act is a rebuttable presumption. In order to rebut the presumption, accused got examined himself as DW-1 and 2 witnesses viz, Mallappa Halemani and Kiran T.R. 21. It is the specific case of DW-1 that the cheque was actually issued to one Sri M.G. Patil and complainant has been able to collude with Sri M.G. Patil and then misused the cheque for a fictitious transaction. 22. To establish the said aspect of the matter, for the reasons best known to the accused, accused did not cite Sri M.G. Patil as a witness on his behalf nor accused has taken any positive action either against the complainant or against Sri M.G. Patil for the alleged misappropriation of the cheque marked at Ex.P-1. 23. It is highly unimaginable that a normal prudent person would keep quiet if a cheque in a sum of Rs.3,03,350/- is misused by a person who is totally stranger to the complainant at least after he appeared - 12 - NC: 2025:KHC-D:6178 CRL.RP No. 100412 of 2023 before the Trial Magistrate and engaged the services of an advocate. The silence or inaction of accused in this regard is significant enough in appreciating the rival contentions of the parties. 24. In other words, accused have taken a responsibility to establish before the Court that Ex.P-1 no doubt belongs to him and signature therein is also that of his signature, but it has been misused has to establish the same by placing cogent evidence on record. 25. In this regard, he has also examined DW-2 and DW-3. The oral evidence of DW-2 and DW-3 is of no avail to the accused inasmuch as their evidence is nothing but the self-serving testimony in the absence of cogent material evidence placed on record to establish the defence. 26. DW-2 in his cross-examination admits that he did not verify any other documents other than Ex.P-11 which is produced before the Court. Ex.P-8 is the - 13 - NC: 2025:KHC-D:6178 CRL.RP No. 100412 of 2023 document that has been produced to the APMC and in Ex.P-8 at Sl.Nos.8 and 9 it has been mentioned as ‘M G PATIL SAIRAM’. Sai Ram is none other than the complainant. DW-2 also admits that the details of the cheques issued by the accused are mentioned in Ex.P-10. He also admits that in Ex.D-4 there is a mention that ‘pay to Sairam’. If at all the version of the accused is to be accepted that complainant is a stranger and he has misused the check that has been issued to the M.G. Patil, why D.W.2 would admit that too in Ex.D-4 the endorsement ‘pay to Sai Ram’ is a question that remains unanswered. 27. Further, in Ex.P.13, amount of Rs.2,46,710/- has been encashed by the complainant in respect of earlier transaction is admitted by D.W.2. Therefore, the theory that the complainant is a stranger to the accused gets demolished by cross-examination of D.W.2. 28. D.W.3 admits the document at Ex.D.7. However, he failed to answer before the Court whether the - 14 - NC: 2025:KHC-D:6178 CRL.RP No. 100412 of 2023 amount covered under the cheque at Ex.P.1 was available in the account of the accused as on the date of dishonor of the cheque. 29. Therefore, the sum total of the evidence that is been placed on record by the parties was not sufficient enough to rebut the presumption available to the complainant under Section 139 of the Negotiable Instruments Act. 30. Coming to the decision of the Hon’ble Apex Court in Ramdas and also the decision in Basalingappa are concerned, latest judgment of the Hon’ble Apex Court in the case of Rajesh Jain v. Ajay Singh5, wherein the Hon’ble Apex Court in paragraph Nos.43, 44 and 54 has held as under: 43. The accused may adduce direct evidence to prove that the instrument was not issued in discharge of a debt/liability and, if he adduces acceptable evidence, the burden again shifts to the complainant. At the same time, the accused may also rely upon circumstantial evidence and, if the circumstances so 5 (2023) 10 SCC 148 - 15 - NC: 2025:KHC-D:6178 CRL.RP No. 100412 of 2023 relied upon are compelling, the burden may likewise shift to the complainant. It is open for him to also rely upon presumptions of fact, for instance those mentioned in Section 114 and other sections of the Evidence Act. The burden of proof may shift by presumptions of law or fact. In Kundan Lal case [Kundan Lal Rallaram v. Custodian (Evacuee Property), 1961 SCC OnLine SC 10 : AIR 1961 SC 1316] when the creditor had failed to produce his account books, this Court raised a presumption of fact under Section 114, that the evidence, if produced would have shown the non-existence of consideration. Though, in that case, this Court was dealing with the presumptive clause in Section 118 NI Act, since the nature of the presumptive clauses in Sections 118 and 139 is the same, the analogy can be extended and applied in the context of Section 139 as well. 44. Therefore, in fine, it can be said that once the accused adduces evidence to the satisfaction of the Court that on a preponderance of probabilities there exists no debt/liability in the manner pleaded in the complaint or the demand notice or the affidavit- evidence, the burden shifts to the complainant and the presumption “disappears” and does not haunt the accused any longer. The onus having now shifted to the complainant, he will be obliged to prove the existence of a debt/liability as a matter of fact and his failure to prove would result in dismissal of his complaint case. Thereafter, the presumption under Section 139 does not again come to the complainant's rescue. Once both parties have adduced evidence, the Court has to consider the same and the burden of proof loses all its importance. 54. As rightly contended by the appellant, there is a fundamental flaw in the way both the courts below - 16 - NC: 2025:KHC-D:6178 CRL.RP No. 100412 of 2023 have proceeded to appreciate the evidence on record. Once the presumption under Section 139 was given effect to, the courts ought to have proceeded on the premise that the cheque was, indeed, issued in discharge of a debt/liability. The entire focus would then necessarily have to shift on the case set up by the accused, since the activation of the presumption has the effect of shifting the evidential burden on the accused. The nature of inquiry would then be to see whether the accused has discharged his onus of rebutting the presumption. If he fails to do so, the court can straightaway proceed to convict him, subject to satisfaction of the other ingredients of Section 138. If the court finds that the evidential burden placed on the accused has been discharged, the complainant would be expected to prove the said fact independently, without taking aid of the presumption. The court would then take an overall view based on the evidence on record and decide accordingly. 31. Therefore, the decisions laid on by the learned counsel for the revision petitioner is of no avail in accepting the arguments put forth on behalf of the revision petitioner. 32. Therefore, conviction order recorded by the learned Trial Magistrate confirmed by the First Appellate Court needs no interference that too in the limited scope of revisional jurisdiction. - 17 - NC: 2025:KHC-D:6178 CRL.RP No. 100412 of 2023 33. Having said thus, sum of Rs.5,000/- is imposed by the learned Trial Magistrate confirmed by the First Appellate Court towards defraying expenses of the State needs interference by this Court inasmuch as lis is privy to the parties and no State machinery is involved. 34. Therefore, from the above discussion, following: ORDER i. Revision petition is allowed in part. ii. While maintaining the order of conviction for the offence punishable under Section 138 of the Negotiable Instruments Act, fine amount of Rs.3,08,250/-, ordered by the learned Trial Magistrate confirmed by the First Appellate Court is reduced to sum of Rs.3,03,250/- . iii. Entire sum of Rs.3,03,250/- is ordered to be paid as compensation to the complainant under due identification. iv. Time is extended to pay the balance amount till 15.05.2025. - 18 - NC: 2025:KHC-D:6178 CRL.RP No. 100412 of 2023 v. Failure to pay the fine amount of Rs.3,03,250/- on or before 15.05.2025, simple imprisonment ordered by the learned Trial Magistrate confirmed by the First Appellate Court stands restored automatically. vi. Fine amount of Rs.5,000/- imposed by the learned Trial Magistrate confirmed by the First Appellate Court towards defraying expenses of the State is hereby set aside. Office is directed to return the Trial Court Records with copy of this order forthwith. SD/- (V.SRISHANANDA) JUDGE NAA - Paragraph Nos.1 to 21, KAV – Paragraph Nos.22 to end Ct-cmu LIST NO.: 2 SL NO.: 61