- 1 - NC: 2025:KHC-D:6601 CRL.A No. 100029 of 2018 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 17TH DAY OF APRIL 2025 BEFORE THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR CRIMINAL APPEAL NO.100029 OF 2018 BETWEEN: SRI. KAMAL KUMAR JAIN S/O. SHANTILAL JAIN, AGE: 56 YEARS, OCC: BUSINESS, PROPRIETOR OF SHRI. BALAJI SWAMI MINERALS LIMITED, HOSAPETE, R/O: NEAR BALANJANEYA SWAMY TEMPLE, 29TH WARD, M.J. NAGAR, HOSAPETE, R/BY POWER OF ATTORNEY HOLDER, B. NISSAR AHAMMAD S/O. B. ABDUL RAHIMAN, AGE: 49 YEARS, OCC: WORKING AS MANAGER, IN SHRI BALAJI SWAMI MINERALS LIMITED, HOSAPETE. …APPELLANT (BY SRI. PRANAV BADAGI FOR SRI. R. H. ANGADI, ADVOCATEs) AND: 1. BENAKA SPONGE IRON PVT. LTD., REGD. OFFICE AT E-WING, 2ND FLOOR, KENDRIYA SADAN, KORAMANGALA, BENGALURU – 560 034, R/BY RESPONDENT NO.2. 2. AJAY KUMAR BHUWALKA, AGE: ABOUT 50 YEARS, OCC: DIRECTOR OF BENAKA SPONGE IRON PVT. LTD., R/O: NO.2996, 12A MAIN, 5TH CROSS, HAL, 2ND STAGE, INDIRA NAGAR, BENGALURU – 560 038. …RESPONDENTS (BY SRI. V. SHIVARAJ HIREMATH, ADVOCATE) THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CR.P.C. SEEKING TO CALL FOR THE RECORDS AND TO SET-ASIDE THE JUDGMENT PASSED IN C.C.NO. 2402/2012, DATED 27.11.2017, PASSED BY THE LEARNED ADDITIONAL CIVIL JUDGE AND J.M.F.C., Digitally signed by SAMREEN AYUB DESHNUR Location: High Court of Karnataka, Dharwad Bench, Dharwad Digitally signed by SAMREEN AYUB DESHNUR Location: High Court of Karnataka, Dharwad Bench, Dharwad - 2 - NC: 2025:KHC-D:6601 CRL.A No. 100029 of 2018 HOSAPETE, AND CONSEQUENTLY CONVICT THE ACCUSED NO.1 AND 2 FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I.ACT. KINDLY GRANT OTHER RELIEF DEEMED FIT IN THE FACTS OF AND CIRCUMSTANCES OF THE CASE BE AWARDED. AN ORDER MAY KINDLY BE PASSED ACCORDINGLY TO MEET THE ENDS OF JUSTICE. THIS CRIMINAL APPEAL, COMING ON FOR FINAL HEARING THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR ORAL JUDGMENT This appeal is filed by the complainant challenging the judgment of acquittal dated 27.11.2017 passed in C.C. No.2402/2012 by the learned Additional Civil Judge and JMFC, Hosapete, wherein the respondents/accused Nos.1 and 2 have been acquitted of the offence under Section 138 of the Negotiable Instruments Act (hereinafter referred to as the ‘NI Act’, for short). 2. The case of the complainant in brief is as under: The complainant is the proprietor of Sri.Balaji Swami Minerals Private Limited, Hosapete, carrying on mine trading business. Accused No.1 being a company doing - 3 - NC: 2025:KHC-D:6601 CRL.A No. 100029 of 2018 sponge iron business and accused No.2 being its Director used to purchase iron ore and its allied products from the complainant since 2010. Accused No.1 purchased iron ore on credit basis from the complainant from 10.06.2010 to 05.07.2010 to the tune of Rs.50,00,000/- under different invoices. Accused No.2 had promised to repay the said amount within a short period. However, accused No.2 did not keep up his promise. After several requests, accused No.2 has issued a cheque bearing No.633192 dated 31.01.2012 drawn on IDBI bank, Bengaluru branch pertaining to accused No.1. The said cheque has been presented for encashment on 05.04.2012. The said cheque came to be dishonoured with reasons ‘funds insufficient in the account of the accused’. The same was intimated to accused No.2. Accused No.2 requested the complainant to represent the said cheque once again in the 3rd week of May 2012. The complainant presented the said cheque for collection on 23.05.2012 and it came to be dishonoured with reasons ‘payment stopped by drawer’. The complainant got issued a legal notice to accused Nos.1 and - 4 - NC: 2025:KHC-D:6601 CRL.A No. 100029 of 2018 2 dated 29.05.2012 demanding the cheque amount. The notice sent to accused No.1 has been returned as ‘no such company existing in the address’. The complainant did not receive either acknowledgment or RPAD cover sent to accused No.2. The complainant filed a complaint before the Postal Authority on 23.06.2012. The Postal Authority issued an endorsement on 23.06.2012 stating that, notice sent to accused No.2 at his office address was served on 30.05.2012 and notice sent to his residential address was served on 05.06.2012. Despite service of notice, the accused did not pay the cheque amount. Therefore, the complainant has filed a complaint against the accused persons for offence under Section 138 of NI Act. 3. The learned Magistrate has taken cognizance and registered C.C. No.2402/2012 against the respondents for offence under Section 138 of NI Act. The plea of the accused persons has been recorded. 4. The complainant in order to prove his case has examined one B. Nissar Ahammad as PW.1 and got - 5 - NC: 2025:KHC-D:6601 CRL.A No. 100029 of 2018 marked Exs.P-1 to P-17. Ex.D-1 came to be marked in the cross-examination of PW.1. The statement of the accused has been recorded under Section 313 of Cr.P.C. The accused did not lead any defence evidence. 5. The learned Magistrate, after hearing the arguments on both sides, has formulated the points for consideration and passed the impugned judgment of acquittal. The said judgment of acquittal has been challenged by the complainant in this appeal. 6. Heard the learned counsel for the appellant and the learned counsel for the respondents. 7. Learned counsel for the appellant would contend that the signature on the cheque has been admitted and the tax invoices Exs.P-13 to P-15 show supply of material to the accused persons by the complainant. As signature on the cheque is admitted, presumption has to be drawn under Section 139 of NI Act that the cheque has been issued for discharge of debt or - 6 - NC: 2025:KHC-D:6601 CRL.A No. 100029 of 2018 liability. Without considering all these aspects, the learned Magistrate has erred in acquitting the respondents/accused by the impugned judgment. With these, he prayed to allow the appeal. 8. Learned counsel for the respondents would contend that, on perusal of Ex.P-16-Ledger extract, the due amount is shown as 30,99,556/- but the cheque is issued for Rs.50,00,000/-, which is more than the amount due and therefore, offence under Section 138 of NI Act is not attracted. Considering the same, the learned Magistrate has rightly acquitted the respondents/accused of the offence under Section 138 of NI Act. With these, he prayed for dismissal of the appeal. 9. Having heard the learned counsel, the Court has perused the impugned judgment and the trial Court records. 10. It is the specific case of the complainant that, he supplied iron ore and allied material to the accused and - 7 - NC: 2025:KHC-D:6601 CRL.A No. 100029 of 2018 for making payment of the amount due, Ex.P-1-cheque was issued. Ex.P-1 is issued for Rs.50,00,000/-. Ex.P-16 is the statement of account of the accused maintained by the complainant. Ex.P-16 would indicate that the amount due is Rs.30,99,556/-. The due amount is lesser than the cheque amount. There is no endorsement made on the Ex.P-16 as required under Section 56 of NI Act regarding any part payment of the amount due. A similar case has been considered by the Hon’ble Apex Court in the case of Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel and another1 where the cheque was issued for higher amount than the amount due, the Hon’ble Apex Court has held that, it does not attract the offence under Section 138 of NI Act. In the case on hand also, the cheque is issued for Rs.50,00,000/- even though the amount due is Rs.30,99,556/-. Therefore, the cheque amount of which is not due, offence under Section 138 of NI Act is not attracted. 1 (2023) 1 SCC 578 - 8 - NC: 2025:KHC-D:6601 CRL.A No. 100029 of 2018 11. Considering the said aspect, the learned Magistrate has rightly acquitted the respondents of the offence under Section 138 of NI Act by reasoned judgment. There are no grounds made out for setting the impugned judgment of acquittal. In the result, the appeal is dismissed. Sd/- (SHIVASHANKAR AMARANNAVAR) JUDGE kmv CT-ASC