- 1 - HC-KAR NC: 2025:KHC-D:10308 CRL.A No. 100244 of 2017 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 14TH DAY OF AUGUST 2025 BEFORE THE HON'BLE MR. JUSTICE C.M. POONACHA CRIMINAL APPEAL NO. 100244 OF 2017 (A-) BETWEEN: SHRI. RAMESH BABUGOUDA PATIL, AGE: 49 YEARS, OCC: AGRICULTURE, R/O: TURMURI VILLAGE, TQ: BAILHONGAL, DIST: BELAGAVI. …APPELLANT (BY SRI. NEELENDRA D. GUNDE & SRI. HANUMESH M. DESAI, ADVOCATES) AND: SHRI JINNAPPA DEVANDRA JAYAKKANAVAR, AGE: MAJOR, OCC: BUSINESS, R/O: TIGADOLI VILLAGE, TQ: BAILHONGAL, DIST: BELAGAVI. …RESPONDENT (BY SRI. PRAVEEN S. PATTAR, ADVOCATE) THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378 (4) OF CR.P.C., SEEKING TO CALL FOR THE RECORDS AND TO ALLOW THIS CRIMINAL APPEAL BY SETTING ASIDE THE JUDGMENT AND ORDER OF ACQUITTAL DATED 01.07.2017 PASSED IN C.C.NO.6 OF 2017 (NEW) C.C.NO.846 OF 2009 (OLD) PASSED BY THE LEARNED V JMFC, BELAGAVI AND CONVICT THE RESPONDENT AND ETC. THIS APPEAL, COMING ON FOR HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: YASHAVANT NARAYANKAR Digitally signed by YASHAVANT NARAYANKAR Location: HIGHCOURT OF KARNATAKA DHARWAD BENCH DHARWAD - 2 - HC-KAR NC: 2025:KHC-D:10308 CRL.A No. 100244 of 2017 CORAM: THE HON'BLE MR. JUSTICE C.M. POONACHA ORAL JUDGMENT The present appeal is filed under Section 378(4) of the Code of Criminal Procedure1 by the complainant calling in question the judgment dated 01.07.2017 passed in CC No.846/2009 (Old)/CC No.06/2017 (New) by the V-JMFC., Belagavi2 whereunder the complaint filed by the complainant under Section 200 of Cr.P.C. against the respondent-accused for the offence punishable under Section 138 of Negotiable Instruments Act, 18813 was ordered upon and the accused was acquitted of the said offence. 2. The relevant facts in a nutshell leading to the present appeal are that the complainant filed a complaint under Section 200 of Cr.P.C., interalia contending that the accused had approached the complainant and requested for hand loan of Rs.5,00,000/- in the month of Novemeber-2008 assuring the complainant to repay the 1 Hereinafter referred as Cr.P.C. 2 Hereinafter referred as trial court 3 Hereinafter referred as the Act - 3 - HC-KAR NC: 2025:KHC-D:10308 CRL.A No. 100244 of 2017 same in the month of April, 2009. Having regard to the same, the complainant paid the said sum of Rs.5,00,000/- to the accused. That when the complainant approached the accused in April 2009 and requested for repayment of said amount, the accused issued cheque bearing No.084911 dated 14.04.2009 for Rs.5,00,000/- drawn on State Bank of India, A.D.B.Branch, Belagavi towards repayment of the said loan. That when the said cheuqe was presented for encashment by the complainant, the same was dishonored with the endorsement ”Funds Insufficient”. The complainant got issued legal notice on 21.04.2009 calling upon the accused to repay the amount and the said notice was served on the accused on 24.04.2009 with the postal endorsement as “Refused”. Hence, the complainant filed the complaint. 3. The accused entered appearance before the trial Court and filed a memo dated 30.10.2009, whereunder he under took to pay the amount which is in balance on the next date of hearing. However, since said - 4 - HC-KAR NC: 2025:KHC-D:10308 CRL.A No. 100244 of 2017 payment was not made, the proceedings were contested by the accused. 4. The complainant examined himself as PW1. Ex.P1 to P10 were marked in evidence. During the course of cross examination, an agreement dated 26.06.2008 was confronted to PW1 who, having admitted the same, the said agreement was marked as Ex.D1. Accused did not adduce any other evidence. The trial Court considering the material on record, acquitted the accused. Being aggrieved by the same, the present appeal is filed. 5. Heard submissions of the learned counsel Sri.Neelendra D. Gunde, for the appellant-complainant and learned counsel Sri.Praveen S. Pattar, for respondent- accused. 6. It is the contention of the appellant- complainant that the accused having filed a memo on 30.10.2009 before the trial Court undertaking to pay the amount, the trial Court erred in dismissing the complaint. It is further contended that the trial Court erred in - 5 - HC-KAR NC: 2025:KHC-D:10308 CRL.A No. 100244 of 2017 dismissing the complaint on the ground that the complainant had not filed the complaint with clean hands since the execution of the agreement dated 26.06.2008 (Ex.D1) was admitted which was not averred in the legal notice or in the complaint. It is further contended that even if the agreement (Ex.D1) was taking count, the same would not be contrary to the case of the complainant that the accused owed money to the complainant. That the accused not having issued any reply to the notice and not having adduced any evidence, since the accused did not dispute that the cheque (Ex.P1) was that of the accused, having regard to the presumption contained under Section 139 of the Act, the trial Court ought not to have dismissed the complaint. Hence, learned counsel seeks for allowing of the above appeal and granting of the reliefs as sought. 7. Per contra, learned counsel for the respondent- accused justifying the order of dismissal passed by the trial Court contended that the PW.1 having admitted the execution of the agreement (Ex.D1), which has not been - 6 - HC-KAR NC: 2025:KHC-D:10308 CRL.A No. 100244 of 2017 averred by the complainant either in legal notice or in the complaint, the trial Court was justified in dismissing the complaint. 8. The submissions of both the learned counsel has been considered and the material on record including the records of the trial Court have been perused. The questions that arise for consideration of this Court are: i) Whether the trial Court was justified in acquitting the accused? ii) In the event, question No.(i) is answered in the negative, what order? Regarding question No.(i): 9. The complainant vide legal notice dated 21.04.2009 (Ex.P3/P6) has averred that the accused being in need of money had approached the complainant in the month of November-2008 and accordingly, the complainant having given the said amount, has assured the accused that he would repay in the month of April- 2009. That when the complainant sought for the said - 7 - HC-KAR NC: 2025:KHC-D:10308 CRL.A No. 100244 of 2017 amount, the accused issued the cheque dated 14.04.2009 bearing No.084911 for Rs.5,00,000/-. That since the cheque was dishonored, the complainant demanded repayment of the amount of Rs.5,00,000/- under the said cheque within 15 days vide the said legal notice (Ex.P3/P6). It is forthcoming that the said notice (Ex.P3/P6) was refused by the accused as is forthcoming from the returned postal acknowledgment cover (Ex.D5). 10. In the complaint, the averments made in the notice (Ex.P3/P6) have been reiterated with regard to the issuance of the cheque. 11. Accused had entered appearance before the trial Court and contested the proceedings by cross examining DW.1. 12. During the course of cross examination, the accused has confronted an agreement dated 26.06.2008 (Ex.D1). It is forthcoming from the same that the accused had offered to sell and complainant had agreed to purchase a residential plot for the total consideration of - 8 - HC-KAR NC: 2025:KHC-D:10308 CRL.A No. 100244 of 2017 Rs.8,00,000/- and that the complainant had paid an advance sum of Rs.5,00,000/-. The balance amount of Rs.3,00,000/- was to be paid at the time of execution of sale deed while handing over the possession. It is stated by the PW.1 in the cross examination that when he sought return of the advance amount, the accused had issued the cheque. 13. It is clear from the aforementioned that there were transactions between the complainant and the accused. The accused apart from cross examining PW.1 has not adduced any evidence. It is also clear that the accused has not disputed that the cheque ( Ex.P1) belongs to the accused. 14. It is the contention of the accused that there is no existence of debt or liability as on the date of issuance of the cheque. It is forthcoming that the cross examination of the PW.1 by the accused as well as the agreement (Ex.D1) would only fortify the case of the complainant that the accused was required to repay a sum of Rs.5,00,000/-. - 9 - HC-KAR NC: 2025:KHC-D:10308 CRL.A No. 100244 of 2017 15. At this juncture, it is pertinent to notice that under Section 139 of the Act, there is a presumption in favour of the holder of the cheque, that unless the contrary is proved, that the cheque has been received by the holder for the discharge of a debt or liability. The Hon’ble Supreme Court in the case of Rangappa Vs Mohan4 while interpreting the presumption as envisaged under Section 139 of the Act held as follows: “14. In light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat5 may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. Section 139 of the Act is an example of a 4 AIR 2010 SCC 1898 5 (2008) 4 SCC 54 - 10 - HC-KAR NC: 2025:KHC-D:10308 CRL.A No. 100244 of 2017 reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some - 11 - HC-KAR NC: 2025:KHC-D:10308 CRL.A No. 100244 of 2017 cases the accused may not need to adduce evidence of his/her own.” (emphasis supplied) 16. It is further pertinent to note that the accused has filed a memo dated 30.10.2009 before the trial Court which reads as under: “ IN THE COURT OF THE IIIRD J.M.F.C. BELGAUM AT: BELGAUM Between 1. R.B. Patil …Complainant And 1. J.D. Jayakannavar …Accused MEMO Herein the memo on behalf of the accused is as under: That the accused undertakes to pay the amount which is balance on the next date of hearing. Hence this memo. Belgaum sd/- Dated: 30.10.2009 Roopali Kunne Advocate for Accused Sd/- Accused “ 17. It is also forthcoming from the records of the trial Court that the said memo has been taken on record by the trial Court on 30.10.2009 and the matter was - 12 - HC-KAR NC: 2025:KHC-D:10308 CRL.A No. 100244 of 2017 adjourned as requested by the accused. Thereafter, since the said amount was not paid, the trial Court has proceeded with the adjudication of the complaint on its merits. 18. It is vehement contention of the learned counsel for the appellant-complainant that having regard to Section 58 of the Evidence Act, an admitted fact need not be proved and in view of the accused having admitted his liability to pay the amount, the order of the trial Court is erroneous. 19. It is forthcoming that the trial Court while appreciating the material on record, after noticing the cross examination of PW.1, wherein he admitted execution of agreement (Ex.D1), recorded a finding that the complainant has approached the Court without clean hands and hence, proceeded to dismiss the complaint. The said finding of the trial Court is erroneous and liable to be interfered having regard to the fact that the trial Court did - 13 - HC-KAR NC: 2025:KHC-D:10308 CRL.A No. 100244 of 2017 not notice the presumption available under Section 139 of the Act in the proper perspective. The accused having admitted the issuance of the cheque at Ex.P1 and it being forth coming from Ex.D1 that there was a transaction between the parties, the trial Court erred in acquitting the accused. 20. It is the vehement contention on behalf of the respondent-accused that the complainant has not averred either in the notice or in the complaint regarding the transaction between the parties as is forthcoming from the agreement (Ex.D1) It is pertinent to note here that it is not the case of the accused that the transaction as contemplated under the agreement (Ex.D1) has been completed and the property has been conveyed by the accused to the complainant. On the contrary, it is forthcoming from the testimony of PW.1 that since transaction as contemplated under agreement (Ex.D1) could not be completed, the accused had agreed return/refund the advance amount of Rs.5,00,000/-. - 14 - HC-KAR NC: 2025:KHC-D:10308 CRL.A No. 100244 of 2017 21. In view of the aforementioned, it is clear that the accused has admitted that he had received a sum of Rs.5,00,000/- from the complainant and having regard to the fact the cheque (Ex.P1) has not been disputed, keeping in mind the presumption under Section 139 of the Act as interpreted by the Hon’ble Supreme Court in the case of Rangappa4, as also having regard to the fact that the accused had filed a memo before the trial court agreeing to repay the amount due by him, the acquittal of the accused by the trial Court is erroneous and liable to be interfered with. 22. Since the complainant has adequately demonstrated the existence of a debt payable by the accused and the accused having issued a cheque towards repayment of the same which cheque has been dishonored, the complainant has adequately demonstrated the commission of the offence by the accused under Section 138 of the NI Act. Accordingly, question Nos.(i) is answered in the negative. - 15 - HC-KAR NC: 2025:KHC-D:10308 CRL.A No. 100244 of 2017 Regarding question No.(ii): 23. In view of the discussion and finding recorded above that the respondent/accused is guilty of commission of the offence under Section 138 of the N.I. Act, having regard to the nature of transaction between the parties, it is just and proper that the accused be sentenced to pay double the amount of the cheque as fine. Hence, the question No.(ii) framed for consideration is answered accordingly. 24. In view of the aforementioned, the following: ORDER (i) The appeal is allowed. (ii) The judgment and order of acquittal dated 01.07.2017 passed in CC No.6/2017(New)/CC No.846/2009(Old) passed by the V-JMFC., Belagavi is set aside. (iii) The respondent-accused is convicted of the offence punishable under Section 138 of the N.I. - 16 - HC-KAR NC: 2025:KHC-D:10308 CRL.A No. 100244 of 2017 Act and is sentenced to pay a fine of Rs.10,00,000/- within four weeks, in default of which, the accused shall undergo simple imprisonment for a period of six months. (iv) Out of the fine amount, a sum of Rs.9,50,000/- shall be paid to the appellant-complainant as compensation and the remaining sum of Rs.50,000/- shall be paid to the State. Sd/- (C.M. POONACHA) JUDGE HMB List No.: 1 Sl No.: 11