- 1 - NC: 2025:KHC-D:2339 CRL.P No. 101615 of 2023 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 6TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR. JUSTICE HEMANT CHANDANGOUDAR CRIMINAL PETITION NO. 101615 OF 2023 (482(Cr.PC)/528(BNSS)) BETWEEN: SHRIKANT S/O. HULUGAPPA DODDAMANI, AGE. 52 YEARS, OCC. ADVOCATE, R/O. AT POST. HARTI VILLAGE, TQ. AND DIST. GADAG-591312. …PETITIONER (BY SMT. VAIBHAVI INAMDAR, ADVOCATE FOR SRI. DINESH M.KULKARNI, ADVOCATE) AND: LAXMAN S/O. SHEKAPPA SUNAGAR, AGE. 27 YEARS, OCC. AGRIL, R/O. AT POST HARTI VILLAGE, TQ. AND DIST. GADAG-591312. …RESPONDENT (BY SRI. M.M.PATIL, ADVOCATE) THIS CRIMINAL PETITION IS FILED U/SEC. 482 OF CR.P.C. SEEKING TO SET ASIDE THE ORDER PASSED BY THE II ADDL. CIVIL JUDGE AND JMFC II, GADAG DATED 28.02.2023 IN CC NO.237/2023 VIDE ANNEXURE-A, OFFENCE P/U/SEC. 138 OF N.I. ACT, NULL AND VOID AND QUASH THE PROCEEDINGS. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: THE HON'BLE MR. JUSTICE HEMANT CHANDANGOUDAR Digitally signed by B K MAHENDRAKUMAR Location: HIGH COURT OF KARNATAKA DHARWAD BENCH Date: 2025.02.13 11:17:44 +0530 - 2 - NC: 2025:KHC-D:2339 CRL.P No. 101615 of 2023 ORAL ORDER 1. The petitioner has challenged the order taking cognizance of the offense under Section 138 of the Negotiable Instruments Act, 1881 (“NI Act”), in the present petition. 2. The respondent/complainant filed a private complaint under Section 200 of the Code of Criminal Procedure, 1973 (“Cr.P.C.”), alleging that the accused had borrowed a hand loan of ₹1,50,000/-. Towards the discharge of the said loan, the subject cheque was issued. However, upon presentation for realization, the cheque was dishonored with the remark that “on scanning the cheque in the CTS machine, the cheque was not being fetched by the system due to an old instrument and was rejected.” 3. Upon perusal of the private complaint and the supporting documents, the learned Magistrate took cognizance of the offense and initiated proceedings against the accused. 4. Learned counsel for the petitioner contended that the cheque dated 31.12.2022 was drawn on Corporation Bank, which had already merged with Indian Overseas Bank as of 01.01.2021. As a result, when the cheque was presented for clearance, it was not considered a valid instrument under proviso (a) to Section 138 of the NI Act. In support of this contention, reliance was placed on the judgment of the Allahabad High Court in the case of Smt. Archana Singh Gautam v. State of U.P. and Another. 5. In response, learned counsel for the complainant argued that the cheque was issued towards a legally enforceable - 3 - NC: 2025:KHC-D:2339 CRL.P No. 101615 of 2023 debt, and although it was returned as invalid, the accused was under an obligation to clear the outstanding amount upon receipt of the statutory notice issued under Section 138 of the NI Act. Therefore, the decision relied upon by the petitioner was not applicable to the present case, and the petition deserved to be dismissed. 6. After considering the submissions of both parties, the following observations are made: • The subject cheque is dated 31.12.2022 and was drawn on Corporation Bank. • Corporation Bank had merged with Indian Overseas Bank with effect from 01.01.2021. • By the time the cheque was issued, Corporation Bank had ceased to exist as an independent entity, and all its operations had been transferred to Indian Overseas Bank. • The Indian Overseas Bank issued an endorsement dated 19.01.2023, stating that the cheque was invalid and could not be honored. • In identical circumstances, the Allahabad High Court in Smt. Archana Singh Gautam (supra) ruled that a cheque issued from an account maintained in the erstwhile Allahabad Bank (post-merger with Indian Bank) was not valid on the date of presentation. Consequently, dishonor of such a cheque did not attract liability under Section 138 of the NI Act. - 4 - NC: 2025:KHC-D:2339 CRL.P No. 101615 of 2023 7. In view of the above findings, and considering that the cheque in question was issued on Corporation Bank, which had merged with Indian Overseas Bank, its dishonor does not attract liability under Section 138 of the NI Act. Hence, I pass the following: ORDER i) Accordingly, the criminal petition is allowed. ii) The criminal proceedings in C.C. No.237/2023 pending on the file of the II Additional Civil Judge & JMFC II, Gadag, against the petitioner herein, is hereby quashed. Pending I.As., if any, do not survive for consideration and are disposed of accordingly. Sd/- (HEMANT CHANDANGOUDAR) JUDGE KMS Ct:VH List No.: 1 Sl No.: 57