- 1 - HC-KAR NC: 2025:KHC:26081 CRL.RP No. 294 of 2021 C/W CRL.RP No. 285 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR CRIMINAL REVISION PETITION No. 294 OF 2021 C/W CRIMINAL REVISION PETITION No. 285 OF 2021 IN CRL.RP No. 294/2021 BETWEEN: M/s. ORANGE BUDGET HOTELS AND HOSPITALITY PRIVATE LIMTIED REP. BY ITS MANAGING DIRECTOR MR MUSUNURU SRINIVAS AGED ABOUT 50 YEARS ITS REGISTERED OFFICE AT FLAT No.602, BALAJI DOLPHIN HEIGHTS APARTMENT, NORTH EXTENSION SEETHAMMADHARA, VISHAKAPATNAM ALSO AT VILLA No.711, PHASE III, ADARSH PALM RETREAT DEVARABEESANAHALLI BENGALURU – 560 103. …PETITIONER (BY SRI NITIN R, ADVOCATE) AND: SMT. CHOWDAMMA W/O LATE CHANDRAPPA AGED ABOUT 43 YEARS D No. 733/44, SAPTHAGIRI NILAYA NEAR BESCOM OFFICE Digitally signed by LAKSHMINARAYANA MURTHY RAJASHRI Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:26081 CRL.RP No. 294 of 2021 C/W CRL.RP No. 285 of 2021 CHOWDESWARAI LAYOUT MARAHAHALLI BENGALURU – 560 037 ALSO AT: SURVEY No.90/6, MUNNEKOLALA OUTER RING ROAD, MARATHAHALLI BENGALURU – 560 037. …RESPONDENT (BY SRI D HANUMANTHARAYA, ADVOCATE) THIS CRL.R.P. IS FILED UNDER SECTION 397 READ WITH SECTION 401 Cr.P.C. PRAYING TO SET ASIDE THE JUDGMENT AND ORDER DATED 11.02.2020 PASSED BY THE LXXII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, MAYO HALL, BENGALURU IN CRL.A. No.25192/2019 TO THE EXTENT OF MODIFICATION OF THE FINE AMOUNT FROM Rs.87,05,000/- TO Rs.48,76,250/- AND DIRECT AWARDING OF ENHANCED COMPENSATION BY TWICE THE AMOUNT OF CHEQUES TO THE PETITIONER FROM THE ACCUSED AND ETC., IN CRL.RP No. 285/2021 BETWEEN: M/s. ORANGE BUDGET HOTELS AND HOSPITALITY PRIVATE LIMITED REP. BY ITS MANAGING DIRECTOR MR MUSUNURU SRINIVAS AGED ABOUT 50 YEARS ITS REGISTERED OFFICE AT FLAT No.602 BALAJI DOLPHIN, HEIGHTS APARTMENT NORTH EXTENSION SEETHAMMADHARA, VISHAKAPATNAM. ALSO AT: VILLA # 711, PHASE III ADARSH PALM RETREAT DEVARABEESANAHALLI BENGALURU – 560 103. ...PETITIONER (BY SRI NITIN R, ADVOCATE) - 3 - HC-KAR NC: 2025:KHC:26081 CRL.RP No. 294 of 2021 C/W CRL.RP No. 285 of 2021 AND: SMT. CHOWDAMMA W/O LATE CHANDRAPPA AGED ABOUT 43 YEARS D.No.733/44 SAPTHAGIRI NILAYA NEAR BESCOM OFFICE CHOWDESHWARI LAYOUT MARATHAHALLI BENGALURU – 560 037. ALSO AT: SURVEY No.90/6, MUNNEKOLALA OUTER RING ROAD, MARATHAHALLI BENGALURU – 560 037. ...RESPONDENT (BY SRI D HANUMANTHARAYA, ADVOCATE) THIS CRL.R.P. IS FILED UNDER SECTION 397 READ WITH SECTION 401 Cr.P.C. PRAYING TO SET ASIDE THE JUDGMENT AND ORDER PASSED BY THE COURT OF LXXII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, MAYO HALL, BENGALURU IN CRL.A.No.25209/2019, DATED 11.02.2020 AND SET ASIDE THE JUDGMENT PASSED BY LVIII A.C.M.M., MAYO HALL, BENGALURU CITY DATED 02.07.2019 IN C.C.No.55968/2017 TO THE EXTENT OF NON IMPOSITION OF PENALTY OF FINE AND COMPENSATION ON THE ACCUSED OF TWICE THE AMOUNT OF CHEQUES FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF THE N.I ACT AND DIRECT THE AWARDING OF ENHANCED COMPENSATION TO THE PETITIONER FROM THE ACCUSED. THESE PETITIONS COMING ON FOR DICTATING ORDERS THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR - 4 - HC-KAR NC: 2025:KHC:26081 CRL.RP No. 294 of 2021 C/W CRL.RP No. 285 of 2021 ORAL ORDER 1. Crl.R.P. No. 294/2021 is directed against the judgment dated 11.02.2020 passed in Crl.A. No. 25192/2019 by LXXII Additional City Civil and sessions Judge, Bengaluru, to the extent of modifying the fine amount of Rs.87,05,000/- to Rs.48,76,250/-. 2. Crl.R.P. No. 285/2021 is directed against the judgment dated 11.02.2020 passed in Crl.A. No. 25209/2019 by LXXII Additional City Civil and sessions Judge, Bengaluru, dismissing the appeal filed by petitioner – complainant praying for enhancement of fine/compensation amount. 3. Heard learned counsel for petitioner – complainant. Learned counsel for respondent remained absent. 4. Case of the petitioner – complainant before the trial Court was that the complainant was running a hotel business in the name and style of M/s. Orange Budget Hotels and Hospitality Private Limited and respondent - - 5 - HC-KAR NC: 2025:KHC:26081 CRL.RP No. 294 of 2021 C/W CRL.RP No. 285 of 2021 accused was the owner of property bearing No. 90/6, BBMP Khatha No. 962 located at Munnekolala, Outer Ring Road, Marathahalli, consisting of cellar, ground + 3 upper floors. Petitioner - complainant entered into agreement with respondent - accused to carry out hotel business in the building of the accused. Respondent - accused and her family members agreed to let out the said premises to petitioner - complainant for running hotel business in the premises of the building belonging to respondent - accused. Petitioner - complainant invested huge sum of money in the building of respondent - accused to run the hotel. Petitioner - complainant also carried out repair to the building. Due to non-cooperation of respondent - accused, petitioner - complainant sustained huge loss in the business. Respondent - accused insisted for premature surrender of the lease. Therefore, petitioner - complainant and respondent - accused entered into an agreement and respondent - accused had agreed to pay compensation of Rs.1,60,00,000/- apart from returning the security deposit - 6 - HC-KAR NC: 2025:KHC:26081 CRL.RP No. 294 of 2021 C/W CRL.RP No. 285 of 2021 of Rs.35,00,000/-. Respondent - accused has repaid the security deposit of Rs.35,00,000/- and paid Rs.80,00,000/- towards part payment of compensation by Demand Draft under Memorandum of Understanding (MOU) and said Demand Draft is dated 09.01.2017. Respondent - accused further agreed to pay the remaining Rs.80,00,000/- within 3 months and under the said MOU 3 post dated cheques dated 01.05.2017 for Rs.30,00,000/-, dated 03.05.2017 for Rs.25,00,000/- and dated 06.05.2017 for Rs.25,00,000/- have been issued by the accused in favour of petitioner - complainant. Petitioner - complainant presented said 3 cheques and they came to be dishonoured for `insufficient funds’ on 03.05.2017, 04.05.2017 and 08.05.2017. Petitioner - complainant got issued legal notice on 15.05.2017. Inspite of service of said notice, respondent - accused has not paid the amount under the 3 cheques. Therefore, petitioner - complainant initiated proceedings against the respondent – accused for offence under Section 138 of Negotiable Instruments Act - 7 - HC-KAR NC: 2025:KHC:26081 CRL.RP No. 294 of 2021 C/W CRL.RP No. 285 of 2021 (hereinafter for the sake of brevity referred to as the `N.I. Act’). Representative of petitioner - complainant has been examined as P.W.1 and got marked Ex.P.1 to Ex.P.21. Respondent - accused has been examined as D.W.1 and got marked Ex.D.1 to Ex.D.15. Brother of respondent - accused as been examined as D.W.2. Learned Magistrate, after hearing arguments on both sides and appreciating evidence on record has convicted the respondent - accused for offence under Section 138 of N.I. Act and sentenced to pay fine of Rs.87,05,000/- out of which 5,000/- to be appropriated to the State as fine and in default of payment of fine, respondent - accused to undergo simple imprisonment for a period of 3 months. Respondent - accused challenged the said judgment of conviction and order on sentence before the Sessions Court in Crl.A. No. 25912/2019 and petitioner - complainant filed Crl.A. No. 25209/2019 being not satisfied with the award of fine/compensation and seeking its enhancement. Appellate Court, after hearing arguments - 8 - HC-KAR NC: 2025:KHC:26081 CRL.RP No. 294 of 2021 C/W CRL.RP No. 285 of 2021 on both sides, has passed common judgment in both appeals on 11.02.2020 partly allowing the appeal filed by the respondent - accused, affirming the conviction and reducing the fine to Rs.48,76,250/-. Appeal filed by petitioner - complainant has been dismissed. Aggrieved by the said judgments passed by the trial Court and the appellate Court petitioner - complainant has preferred these two revision petitions. 5. Learned counsel for petitioner – complainant would contend that the appellate Court has erred in not appreciating the evidence on record and misconstrued the payment of Rs.35,00,000/- by respondent - accused to petitioner – complainant, which is for return of security deposit under deed of surrender of lease – Ex.D.4 dated 18.01.2017, as part payment of compensation payable by respondent - accused under MOU – Ex.P.3 and erred in reducing the fine/compensation amount. He submits that it is not the case of respondent - accused that they have paid apart from Rs.80,00,000/- out of Rs.1,60,00,000/- - 9 - HC-KAR NC: 2025:KHC:26081 CRL.RP No. 294 of 2021 C/W CRL.RP No. 285 of 2021 any amount to petitioner - complainant as agreed under MOU – Ex.P.3. Cheques Ex.P.4 to Ex.P.6 are specifically stated in MOU - Ex.P.3 and they have been dishonoured. It is not the case of respondent - accused that they have paid any amount towards amount of the cheques Ex.P.4 to Ex.P.6. He further submits that there is a clause in the MOU – Ex.P.3 that if balance of compensation of Rs.80,00,000/- is not paid, as agreed in time, double the amount of balance of compensation i.e, 1,60,00,000/- has to be paid along with interest at the rate of 12% p.a. The trial Court and the appellate Court have not taken into consideration said aspect and erred in awarding fine/compensation amount. He further submits that respondent - accused has rented the said premises for Rs.8,00,000/- per month and earlier petitioner - complainant used to pay rent of Rs.4,00,000/- per month. Respondent - accused has utilized all the furniture, fixtures and alterations made by petitioner - complainant and got more income. Considering the said aspects compensation - 10 - HC-KAR NC: 2025:KHC:26081 CRL.RP No. 294 of 2021 C/W CRL.RP No. 285 of 2021 has been arrived at Rs.1,60,00,000/- under Ex.P.3 – MOU. As the terms of Ex.P.3 – MOU are not adhered to by respondent - accused, she is liable to pay total balance of compensation, i.e., Rs.80,00,000/- X 2 = 1,60,00,000/- along with interest at 12% compounded per annum to petitioner - accused as agreed in Ex.P.3 – MOU. The trial Court and appellate Court have not considered the case of petitioner - complainant for awarding fine/compensation. With this, he prayed to allow the revision petitions. 6. Having heard learned counsel for petitioner – complainant this Court has perused the impugned judgments, trial Court records and appellate Court records. 7. Respondent - accused has been convicted for offence under Section 138 of N.I. Act by the trial Court. Appeal filed by respondent - accused challenging the said judgment of conviction has been dismissed affirming the conviction. Respondent - accused has not challenged the said judgment of conviction passed by the trial Court and - 11 - HC-KAR NC: 2025:KHC:26081 CRL.RP No. 294 of 2021 C/W CRL.RP No. 285 of 2021 judgment passed by the appellate Court affirming the judgment passed by the trial Court for offence under Section 138 of N.I. Act. Therefore, the point that is to be considered in these revision petitions is, “whether the appellate Court was right in reducing the fine/compensation and whether the petitioner - complainant is entitled for enhancement of fine/compensation.” 8. Ex.P.3 is MOU entered into between the petitioner - complainant and respondent - accused. Ex.D.4 is the deed of surrender of lease. Both Ex.P.3 and Ex.D.4 are dated 18.01.2017. Lease agreement entered into between the petitioner - complainant and respondent – accused is at Ex.P.2. Term of the said lease is for 10 years commencing from 01.12.2009. Petitioner – complainant has surrendered the said lease even prior to 10 years under deed of surrender – Ex.D.4 dated 18.01.2017. Under Ex.D.4 – surrender deed, security deposit of Rs.35,00,000/- paid by petitioner - complainant - 12 - HC-KAR NC: 2025:KHC:26081 CRL.RP No. 294 of 2021 C/W CRL.RP No. 285 of 2021 to respondent - accused under lease agreement – Ex.P.2 has been agreed to be repaid by respondent - accused to petitioner - complainant and it has been repaid on 18.01.2017 by way of D.D. and it is mentioned in Ex.D.4. As the lease was surrendered before 10 years at the instance of respondent - accused, for premature surrender of lease respondent - accused has agreed to pay compensation of Rs.1,60,00,000/- and towards part payment has paid Rs.80,00,000/- by way of D.D. dated 09.01.2017. For the balance amount of Rs.80,00,000/- respondent - accused has issued 3 cheques and they are mentioned in Clause 5 of MOU – Ex.P.3. Said 3 cheques are at Ex.P.4 to Ex.P.6 and total amount of the said 3 cheques is Rs.80,00,000/-. Total amount payable by respondent - accused under Ex.P.3 and Ex.D.4 is Rs.1,60,00,000/- (compensation) + Rs.35,00,000/- (security deposit). There is no other payment made by respondent - accused except Rs.35,00,000/- under Ex.D.4 – surrender deed and Rs.80,00,000/- under Ex.P.3 – MOU. - 13 - HC-KAR NC: 2025:KHC:26081 CRL.RP No. 294 of 2021 C/W CRL.RP No. 285 of 2021 Considering both Ex.P.3 – MOU and Ex.D.4 – surrender deed total amount payable is Rs.1,95,00,000/-. Respondent - accused has paid Rs.35,00,000/- + Rs.80,00,000/- = Rs.1,15,00,000/-. Even though the appellate Court has observed that aspect, it has miscalculated and adjusted the total amount paid to petitioner - complainant at Rs.1,15,00,000/- towards compensation of Rs.1,60,00,000/- and held that respondent - accused has to pay further amount of Rs.45,00,000/- to petitioner - complainant. Respondent - accused has made payment of Rs.35,00,000/- towards return of security deposit under Ex.D.4 – surrender deed. Respondent - accused has also made payment of Rs.80,00,000/- towards part payment of compensation out of total compensation of Rs.1,60,00,000/- under Ex.P.3 – MOU. Therefore, respondent - accused was due in a sum of Rs.80,00,000/- towards balance of compensation amount as agreed under Ex.P.3 – MOU. Ex.P.4 to Ex.P.6 cheques are issued for making payment of said balance - 14 - HC-KAR NC: 2025:KHC:26081 CRL.RP No. 294 of 2021 C/W CRL.RP No. 285 of 2021 amount of Rs.80,00,000/-. Said 3 cheques Ex.P.4 to Ex.P.6 have been dishonoured. As respondent - accused has not paid the amount in the said cheques, the trial Court has rightly convicted respondent - accused and appellate Court has rightly affirmed the conviction of respondent - accused for offence under Section 138 of N.I. Act. 9. The appellate Court has erred in holding that respondent - accused has paid Rs.1,15,00,000/- out of compensation of Rs.1,60,00,000/- and balance due to petitioner - complainant is Rs.45,00,000/- and erred in reducing the sentence of fine/compensation amount. 10. Clauses 5, 6 and 7 in Ex.P.3 – MOU read as under: “5. Since the First Party could not give proper security in the form of valid Landed Property, she offered a post dated Rs.30,00,000/- by way of cheque no.639649, on dated:1st May 2017, Rs.25,00,000/- by way of cheque No.639652, 3rd May 2017, and 25,00,000/- by way cheque No.639651, dated 6th May 2017 drawn on Bank of - 15 - HC-KAR NC: 2025:KHC:26081 CRL.RP No. 294 of 2021 C/W CRL.RP No. 285 of 2021 India, jayanagar Branch, for total Rs 80,00,000/- (Rupees Eighty Lakhs). The First Party has assured to the Second Party to pay the balance amount within three months from date of this MOU. The Second Party shall present this cheque when it falls due on 1st May 2017 without the need for any intimation to First Party, being the balance amount due to him. In case of non-payment of all dues to Second Party, the right of the Second party cannot be questioned by the First party and her men and the same is not in substitution of his right to file a case under Section 138 of N.I.Act for dishonor of cheque. 6. In case the First Party fails to clear the balance amount before 30th April, which includes the grace period, the Second Party will have the undisputed right to claim damages, and the First Party has unconditionally agreed to pay as penalty /damages amount, an additional Rs 80,00,000/- (Rupees Eighty Lakhs) to the Second Party. 7. In case of non-payment of all dues to Second Party, the right of the Second Party cannot be questioned by the First party and her men to recover the entire balance including damages amount with interest @ 12% compounded per annum from 1st May 2017.” - 16 - HC-KAR NC: 2025:KHC:26081 CRL.RP No. 294 of 2021 C/W CRL.RP No. 285 of 2021 11. Under clause 5 details of cheques - Ex.P.4 to Ex.P.6 are mentioned. There is an agreement that the said cheques have to be presented for encashment on 01.05.2017. Clause 6 provides that if the first party i.e., respondent - accused fails to clear balance amount before 30th April, has unconditionally agreed to pay as penalty/damage an additional amount of Rs.80,00,000/- to the second party i.e., petitioner - complainant. Clause 7 provides that petitioner - complainant can recover the said entire balance compensation of Rs.80,00,000/- and additional amount of Rs.80,00,000/- with interest at the rate of 12% compounded per annum from 01.05.2017. Considering clauses 6 and 7 contained in Ex.P.3 – MOU petitioner - complainant is entitled to total balance compensation i.e., Rs.80,00,000 (balance compensation) + Rs.80,00,000 (additional amount) = Rs.1,60,00,000/- along with interest at 12% compounded per annum. 12. Total amount of cheques involved in the case is Rs.80,00,000/-. Even though petitioner - complainant is - 17 - HC-KAR NC: 2025:KHC:26081 CRL.RP No. 294 of 2021 C/W CRL.RP No. 285 of 2021 entitled for compensation of Rs.1,60,00,000/- under clause 6 and interest at the rate of 12% compounded per annum on Rs.1,60,00,000/- under clause 7, sentence that can be imposed should not exceed double the amount of cheque. Considering the above aspect, petitioner - complainant has made out a case for enhancement of fine amount to the extent of double amount of cheque i.e., Rs.1,60,00,000/-. Considering these aspects, the trial Court has erred in imposing fine and awarding compensation of Rs.87,05,000/-. The appellate Court erred in dismissing the appeal of petitioner - complainant seeking enhancement of fine/compensation as awarded by the trial Court. Considering all these aspects both the revision petitions deserve to be allowed. 13. In view of the above, the following; O R D E R I. Crl.R.P. No. 294/2021 and Crl.R.P. No. 285/2021 are allowed. - 18 - HC-KAR NC: 2025:KHC:26081 CRL.RP No. 294 of 2021 C/W CRL.RP No. 285 of 2021 II. Order on sentence passed by the trial Court and modified by the appellate Court are set aside. III. Sentence imposed by the trial Court has been enhanced as under: a. Respondent - accused is sentenced to pay fine of Rs.1,60,00,000/- out of which Rs.1,59,00,000/- shall be paid as compensation to petitioner - complainant in terms of Section 357(3) of Cr.P.C. and Rs.1,00,000/- shall be appropriated to the State as fine. b. In default of payment of fine, respondent - accused shall undergo simple imprisonment for a period of 1 year. Sd/- (SHIVASHANKAR AMARANNAVAR) JUDGE LRS List No.: 1 Sl No.: 26