- 1 - HC-KAR NC: 2025:KHC-D:7393 CRL.RP No. 100081 of 2020 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 6TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR. JUSTICE K V ARAVIND CRIMINAL REVISION PETITION NO.100081 OF 2020 (397(Cr.PC)/438(BNSS)) BETWEEN: MAHABALESHWAR VENKATRAMAN HEGADE, AGE: 68 YEARS, OCC: AGRICULTURIST, R/O: HULGOL, TQ: SIRSI, DIST: KARWAR, PIN:541802. …PETITIONER (BY SRI. S.V. YAJI, ADVOCATE) AND: SAMYUTKA FIANCE (R) RITTI BUILDING HOSPET ROAD, SIRSI (UK), REPT. BY: MANAGER SRI. P.S. HEGADE, AGE: 63 YEARS, R/O: SIRSI, TQ: SIRSI, DIST: KARWAR, PIN: 581401. …RESPONDENT (BY SRI. VISHWANATH HEDGE, ADVOCATE) THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397 R/W SECTION 401 OF CR.P.C., PRAYING TO SET ASIDE THE JUDGMENT AND ORDER OF CONVICTION DATED 28.07.2015 PASSED BY THE ADDITIONAL CIVIL JUDGE AND II ADDITIONAL JMFC, SIRSI IN CASE NO.CC 414/2009 SENTENCING THE PETITIONER/ACCUSED TO PAY FINE OF RS.5,60,000/- IN DEFAULT HE SHALL UNDERGO SIMPLE IMPRISONMENT FOR PERIOD OF 6 MONTHS AND FURTHER ORDER TO PAY RS.5,50,000/- AS COMPENSATION TO THE COMPLAINANT AND WHICH IS CONFIRMED BY THE ORDER DATED 05.02.2020 PASSED BY THE I ADDITIONAL DISTRICT & SESSIONS JUDGE, UTTARA KANNADA KARWAR SITTING AT SIRSI IN CRIMINAL APPEAL NO.98/2015 BY ALLOWING THE REVISION PETITION AND ACQUITTING THE PETITIONER THROUGHOUT AND ETC. Digitally signed by CHANDRASHEKAR LAXMAN KATTIMANI Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC-D:7393 CRL.RP No. 100081 of 2020 THIS CRIMINAL REVISION PETITION, COMING ON FOR FINAL HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: ORAL ORDER (PER: THE HON'BLE MR. JUSTICE K V ARAVIND) Heard Sri S.V. Yaji, learned counsel for the revision petitioner, and Sri Vishwanath Hegde, learned counsel for the respondent. 2. This criminal revision petition is directed against the order dated 28.07.2015 passed in C.C. No.414/2009 on the file of the II Additional JMFC, Sirsi (hereinafter referred to as the ‘Trial Court’), and the judgment dated 05.02.2020 passed in Crl.A. No.98/2015 on the file of the I Additional District and Sessions Judge, Uttara Kannada, Karwar, sitting at Sirsi (hereinafter referred to as the ‘Appellate Court’). 3. The respondent filed a complaint under Section 200 of the Code of Criminal Procedure, 1973 (hereinafter referred to as ‘Cr.P.C.’), alleging commission of an offence punishable under Section 138 of the Negotiable - 3 - HC-KAR NC: 2025:KHC-D:7393 CRL.RP No. 100081 of 2020 Instruments Act, 1881 (hereinafter referred to as the ‘Act’), against the accused. 4. The case of the complainant is that the accused, on 01.08.2008, visited the complainant’s office along with one Sri. Venkataraman Mahabaleshwar Hegde and Sri. Sreepad Vishweshwara Hegde, and expressed willingness to stand as a guarantor for the loan amount of Rs.5,00,000/- borrowed by Venkataraman Mahabaleshwar Hegde. Accordingly, the accused executed documents in favour of the complainant's finance company, undertaking to repay the said amount with interest at the rate of 16% per annum. It was agreed that the repayment would be made on or before 30.08.2008. However, the same was not honoured. In discharge of his liability as guarantor, the accused issued a cheque bearing No.001435 drawn on Corporation Bank, Sirsi, when he visited the complainant- company on 29.08.2008. The complainant presented the cheque for encashment; however, it was returned unpaid with the endorsement ‘insufficient funds’. The complainant - 4 - HC-KAR NC: 2025:KHC-D:7393 CRL.RP No. 100081 of 2020 issued a legal notice dated 17.09.2008, which was served upon the accused on 20.09.2008. Despite service of notice, the accused neither responded nor made payment. Hence, the complaint under Section 200 of the Cr.P.C. came to be filed. The Trial Court, after recording the evidence of the complainant, found that the accused had committed an offence under Section 138 of the Act. The defence set up by the accused that the cheque was stolen and misused was rejected by the Trial Court. 5. Being aggrieved by the order of conviction dated 28.07.2015, the accused preferred an appeal in Crl.A. No.98/2015. The First Appellate Court, upon re- appreciation of the evidence, dismissed the appeal and confirmed the judgment of the Trial Court by its order dated 05.02.2020. 6. Sri S.V. Yaji, learned counsel for the revision petitioner, submits that during the pendency of this revision petition, the respondent–company instituted O.S. - 5 - HC-KAR NC: 2025:KHC-D:7393 CRL.RP No. 100081 of 2020 No.27/2011, wherein the principal borrower, and the guarantors, including the petitioner, were arrayed as defendants. It is further submitted that, as the principal borrower had expired, his wife and daughter were impleaded as parties to the suit. 7. Learned counsel submits that the issues framed by the Trial Court in the said suit included, inter alia, whether the plaintiff proves that a loan of Rs.5,00,000/- was advanced to the deceased Venkataraman Mahabaleshwar Hegde, for which the petitioner stood as guarantor. Another issue related to the cheque in question and whether it was issued in the capacity of a guarantor. 8. It is submitted that the Trial Court answered the first issue, relating to the genuineness of the loan transaction, in the negative, and in view of the pendency of the present petition, refrained from answering Issue No.2. - 6 - HC-KAR NC: 2025:KHC-D:7393 CRL.RP No. 100081 of 2020 9. It is the submission of the learned counsel for the petitioner that, when the Civil Court in the civil proceedings has recorded a finding of fact that the respondent failed to establish the loan alleged to have been advanced, pursuant to which the petitioner is said to have issued the cheque in question, the very issuance of the cheque towards discharge of liability, and thereby invoking the provisions of Section 138 of the Act, is not sustainable in law. 10. Sri Vishwanath Hegde, learned counsel appearing for the respondent, submits that the issuance of the cheque and the signature thereon are not in dispute. It is contended that the Civil Court, in O.S. No.27/2011, has erroneously recorded a finding that the respondent– finance company had not extended any loan in favour of the late Venkataraman Mahabaleshwar Hegde. The said judgment is under challenge in R.A. No.5007/2024, which is pending consideration before the Additional District Judge, Sirsi. It is further submitted that if the present - 7 - HC-KAR NC: 2025:KHC-D:7393 CRL.RP No. 100081 of 2020 petitioner seeks to rely upon the judgment in O.S. No.27/2011, the rights and contentions of the finance company in the pending appeal would prejudice. 11. Having considered the submissions of the learned counsel for the parties and upon perusal of the material on record, it is evident that, although the Trial Court and the Appellate Court have examined the matter in the context of the essential ingredients of Section 138 of the Negotiable Instruments Act, 1881, the judgment in O.S. No.27/2011 assumes significance, particularly in light of the contention raised by the accused/revision petitioner that the cheque in question was misused after being stolen from him. 12. Both the Trial Court and the Appellate Court have proceeded on the premise that the cheque for a sum of Rs.5,00,000/– was issued towards repayment of a loan allegedly availed by one Venkataraman Mahabaleshwar Hegde, and that the dishonour of the said cheque due to - 8 - HC-KAR NC: 2025:KHC-D:7393 CRL.RP No. 100081 of 2020 insufficiency of funds constituted an offence punishable under Section 138 of the Act. However, such finding was recorded in the context of proceedings under Section 138 of the Act, providing presumption against the accused. 13. In contrast, in O.S. No.27/2011 filed by the respondent–finance company, the Civil Court has recorded a categorical finding that the plaintiff–finance company failed to establish that the said Venkataraman Mahabaleshwar Hegde had borrowed a loan of Rs.5,00,000/– and that the petitioner had stood as guarantor for the same. The respondent’s case in the criminal proceedings is also premised on the allegation that the cheque in question was issued towards discharge of that very loan. In view of the finding recorded by the Civil Court, the foundation for the issuance of the cheque stands materially altered. 14. Accordingly, the concurrent findings recorded by the Trial Court and the Appellate Court cannot be - 9 - HC-KAR NC: 2025:KHC-D:7393 CRL.RP No. 100081 of 2020 sustained in the light of the subsequent and contrary finding of the Civil Court in O.S. No.27/2011. 15. However, the contention of the respondent that the judgment in O.S. No.27/2011 has not attained finality and is under challenge in R.A. No.5007/2024, pending before the Additional District Judge, Sirsi, also cannot be ignored. It is to be noted that the said appeal has been filed by the respondent–finance company, and both parties to the present proceedings are parties to the pending regular appeal. The outcome of the said appeal would be binding on both parties. 16. If the respondent succeeds in the appeal, the amount involved in the cheque may be recovered through enforcement of the decree, if any, passed therein. Therefore, keeping this revision petition pending would serve no distinct purpose, as the very basis of the claim is sub judice in the regular appeal. - 10 - HC-KAR NC: 2025:KHC-D:7393 CRL.RP No. 100081 of 2020 17. In the above circumstances, this revision petition is disposed of, reserving liberty to both parties to pursue their respective contentions in accordance with law, depending on the outcome of R.A. No.5007/2024. 18. At this stage, learned counsel for the petitioner, Sri S.V. Yaji, submits that a sum of Rs.2,05,000/- and Rs.75,000/- has been deposited before the Trial Court. It is submitted that the said amount may be retained in deposit, subject to the outcome of R.A. No.5007/2024. The submission made by the learned counsel is fair and reasonable, and is accordingly accepted. 19. In the light of the aforesaid facts and circumstances, the following order is passed: ORDER (i) Criminal Revision Petition is disposed of. (ii) Order of conviction in C.C.No.414/2009 dated 28.07.2015 on the file of II Addl. JMFC, Sirsi confirmed in Crl.A.No.98/2015 dated - 11 - HC-KAR NC: 2025:KHC-D:7393 CRL.RP No. 100081 of 2020 05.02.2020 on the file of I Addl. District and Sessions Judge, Uttara Kannada, Karwar, sitting at Sirsi, are hereby set aside. (iii) The amount in deposit before the Trial Court shall be deposited in interest bearing investment for a period of one year renewable during the pendency of the appeal in R.A.No.5007/2024 pending on the file of Addl. District Judge, Sirsi. (iv) The amount in deposit shall be disbursed as per the outcome of the pending R.A. No.5007/2024. (v) The contention of both the parties are kept open to be agitated in pending regular appeal. (vi) No order as to costs. (vii) Registry to return the records to the trial Court. Sd/- (K V ARAVIND) JUDGE CLK CT: UMD