- 1 - HC-KAR NC: 2025:KHC:26984 CRL.RP No. 841 of 2018 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR CRIMINAL REVISION PETITION No. 841 OF 2018 BETWEEN: MR. MOHAMMED MUSTAQ S/O ABDHUL KHADER AGED ABOUT 40 YEARS R/A SAYYAD COMPOUND VIKAS NAGAR, KINNIKAMBA MANGALURU PRESENTLY R/A BANGLA GUDDE, GURUPUR MANGALURU-574 145 D.K. …PETITIONER (BY SRI H MALATESH, ADVOCATE) AND: MR. SUDHEER A S/O MOHAN AGED ABOUT 32 YEARS R/A JOGI COMPOUND N.G.ROAD, ATAVAR MANGALURU - 574 145. …RESPONDENT (BY SRI K RAVISHANKAR, ADVOCATE) Digitally signed by LAKSHMINARAYANA MURTHY RAJASHRI Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:26984 CRL.RP No. 841 of 2018 THIS CRL.RP IS FILED UNDER SECTION 397 READ WITH SECTION 401 Cr.P.C PRAYING TO SET ASIDE THE JUDGMENT OF CONVICTION DATED 23.12.2017 PASSED BY THE V ADDITIONAL CIVIL JUDGE AND J.M.F.C. MANGALURU, D.K., IN C.C.No.1368/2014 AND SET ASIDE THE JUDGMENT DATED 24.05.2018 PASSED BY THE PRINCIPAL SESSIONS JUDGE, D.K., MANGALURU IN CRL.A.No.4/2018 AND ACQUIT THE ACCUSED BY ALLOWING THIS CRL.RP AND ETC., THIS PETITION COMING ON FOR HEARING THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR ORAL ORDER This Criminal Revision Petition is directed against the judgment dated 24.05.2018 passed in Crl.A.No.4/2018 by the Principal Sessions Judge, Dakshina Kannada, Mangaluru wherein judgment of conviction dated 23.12.2017 passed in C.C.No.1368/2014 by the V Additional Civil Judge and JMFC, Dakshina Kannada, Mangaluru convicting the petitioner –accused for offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as “N.I Act” for brevity) and sentencing him to pay fine of - 3 - HC-KAR NC: 2025:KHC:26984 CRL.RP No. 841 of 2018 Rs.3,25,000/- (rupees Three Lakhs Twenty Five Thousand only) and in default to undergo simple imprisonment for a period of two months has been affirmed. 2. Heard learned counsel for the petitioner and learned counsel for the respondent. 3. The case of the respondent –complainant before the trial Court was that the petitioner –accused had taken hand loan of Rs.4,00,000/-(rupees Four Lakhs only) from the respondent –complainant in the month of October - 2011 to meet his urgent needs of business. The complainant paid the said amount from his savings and a part of it by borrowing from others. The petitioner – accused assured the complainant that he would repay the said amount within a short time. The accused had repaid a sum of Rs.80,000/- to the complainant as part payment and there was balance of Rs.3,20,000/-. Thereafter, the respondent –complainant requested to repay the balance amount and therefore, the petitioner –accused had issued - 4 - HC-KAR NC: 2025:KHC:26984 CRL.RP No. 841 of 2018 two cheques bearing Nos.874234 and 874235 for Rs.1,60,000/- each both dated 22.08.2012 drawn on Canara Bank, Bunder Branch towards repayment of balance amount of Rs.3,20,000/-. The complainant presented the said cheques for encashment on 24.08.2012 and both cheques came to be dishonoured for a reason “funds insufficient” under two bank memo both dated 27.08.2012. The complainant got issued legal notice dated 04.09.2012 to the petitioner –accused demanding payment of cheques amount within fifteen days. The said notice has been returned as “not claimed” on 18.09.2012. As the petitioner –accused has not paid amount of two cheques, the respondent –complainant has initiated proceedings against the petitioner –accused for offence punishable under Section 138 of the N.I Act. 4. The respondent -complainant has examined himself as P.W.1 and got marked documents as Ex.P1 to P8. The statement of the accused has been recorded under - 5 - HC-KAR NC: 2025:KHC:26984 CRL.RP No. 841 of 2018 Section 313 of Cr.P.C. The petitioner –accused has been examined himself as D.W.1 and got marked one document as Ex.D1. Learned Magistrate after hearing arguments on both side and appreciating evidence on record has convicted the petitioner –accused for the offence punishable under Section 138 of the N.I Act and sentenced to pay fine of Rs.3,25,000/- (rupees Three Lakhs Twenty Five Thousand only) and in default to undergo simple imprisonment for a period of two months. The said judgment of conviction has been challenged by the petitioner -accused before the Sessions Court in Crl.A.No.4/2018. The said appeal came to be dismissed on merits affirming the judgment of conviction and order on sentence passed by the trial Court. 5. Learned counsel for the petitioner would contend that the complainant has not stated what is exact date of lending of amount in his legal notice, complaint and in his chief examination. He has stated that he cannot - 6 - HC-KAR NC: 2025:KHC:26984 CRL.RP No. 841 of 2018 say what is exact date of lending of amount to the petitioner -accused. He submits that the petitioner – accused had borrowed Rs.1,00,000/- (rupees One Lakh only) from the respondent –complainant and he had repaid a sum of Rs.80,000/- by way of cheque on 19.12.2011 and there is entry to that effect in Ex.D1 and paid a sum of Rs.20,000/- by way of cash. He submits that cheques given as security for the said loan has been misused by the respondent –complainant. He submits that Ex.P7 is letter stated to have been written by the petitioner – accused and it is dated 29.10.2011 wherein the petitioner –accused had borrowed a sum of Rs.1,00,000/- from the complainant. He submits that Ex.P8 –loan agreement dated 31.10.2011, stamp paper has been purchased on 24.10.2011 prior to the date of Ex.P7. He submits that blank cheque and blank stamp paper taken by the respondent –complainant have been misused by him. He submits that the respondent –complainant has no capacity to lend huge amount of Rs.4,00,000/-(rupees Four Lakhs - 7 - HC-KAR NC: 2025:KHC:26984 CRL.RP No. 841 of 2018 only). The respondent –complainant has not examined any witness to prove that a part of said amount is borrowed for lending to the petitioner –accused. He submits that the respondent –complainant has to prove his capacity to lend amount of Rs.4,00,000/-. On that point he placed reliance on the following decisions; 1) H.V Jagannatha Vs Prabhakar J1 2) Sri. Dattatraya Vs Sharanappa2 3) Sri. Dattatraya Vs Sharanappa3 He placing reliance on the decision of Dattatraya (supra) which has been followed in other two decisions relied upon by him has contended that the respondent – complainant has to prove his capacity to lend amount. On these grounds, he prays to allow this Criminal Revision Petition and acquit the petitioner –accused for offence punishable under Section 138 of the N.I Act. 1 In Crl.A.No.533/2015 decided on 03.02.2025 2 In Crl.A.No.200139/2019 decided on 03.03.2023 3 Reported in 2024 INSC 586 - 8 - HC-KAR NC: 2025:KHC:26984 CRL.RP No. 841 of 2018 6. Learned counsel for the respondent would contend that the signature on cheques and issuance of cheques are not disputed by the petitioner –accused. Therefore, the presumption has to be drawn under Section 139 of the N.I Act that cheques are issued for discharge of debt. The said presumption has not been rebutted by the petitioner –accused. The defence of the petitioner – accused has been put to P.W.1 in his cross examination and he has denied the same. The petitioner –accused who has been examined as D.W.1 has stated his defence in his chief examination and same has been denied in the cross examination by the respondent –complainant. He submits that the petitioner –accused has admitted his signatures on Ex.P7, P8 and cheques –Ex.P1 and P2. As there is presumption under Section 139 of the N.I Act which is remained unrebutted, there is no need for the respondent –complainant to establish his capacity of lending of amount. On that point he placed reliance on the decisions of Hon’ble apex Court in the cases of Ashok Singh Vs - 9 - HC-KAR NC: 2025:KHC:26984 CRL.RP No. 841 of 2018 State of Uttar Pradesh and Anr4 and Rajesh Jain Vs Ajay Singh5 wherein consequence of non-rebuttal of the presumption has been stated. He submits that as the presumption is remained unrebutted there is no need for the respondent –complainant to establish the transaction and his capacity for lending amount. Considering all these aspects, learned Magistrate has rightly convicted the petitioner –accused for offence punishable under Section 138 of the N.I Act and the Appellate Court has rightly re - appreciated the evidence on record and affirmed the judgment of conviction and order on sentence passed by the trial Court. 7. Having heard learned counsels, this Court has perused impugned judgments, trial Court records and Appellate Court records. 8. It is specific case of the respondent – complainant that the petitioner –accused had borrowed a 4 Reported in 2025 INSC 427 5 Reported in 2023 10 SCC 148 - 10 - HC-KAR NC: 2025:KHC:26984 CRL.RP No. 841 of 2018 sum of Rs.4,00,000/- during the month of October -2011 to meet his urgent needs of business and thereafter he has paid Rs.80,000/- and for making payment of balance amount of Rs.3,20,000/- has issued two cheques which are at Ex.P1 and P2. Signatures on Ex.P1 and P2 – cheques are admitted by the petitioner –accused. As signature on cheques - Ex.P1 and P2 admitted, the presumption has to be drawn under Section 139 of the N.I Act that cheques are issued for discharge of debt. The said presumption is rebuttable presumption. The standard of proof for rebutting the said presumption is that of preponderance of probability. 9. It is defence of the petitioner –accused that he had borrowed only a sum of Rs.1,00,000/- and at the time of borrowing he had given blank signed cheques, bond paper and stamp paper and he repaid a sum of Rs.80,000/- through cheque and Rs.20,000/- by way of cash and bond paper and cheques given by him have been - 11 - HC-KAR NC: 2025:KHC:26984 CRL.RP No. 841 of 2018 misused by the respondent –complainant. The suggestion has been put to P.W.1 in his cross examination regarding the said defence and P.W.1 has denied the said suggestion. D.W.1 in his cross examination has admitted his signatures on Ex.P7 and 8 and they are confronted to him and they are marked as Ex.P7(a), Ex.P8(a) and Ex.P8 (b). Under Ex.P7, the petitioner –accused has borrowed a sum of Rs.1,00,000/- from the complainant on 29.10.2011. The accused has not disputed the fact that he had borrowed Rs.1,00,000/- from the complainant. Under Ex.P8 there is lending of Rs.3,00,000/- by the complainant to the petitioner –accused on 31.10.2011. The petitioner –accused has admitted his signatures on Ex.P8 which are at Ex.P8(a) in the first page and Ex.P8(b) on the second page. Merely because the said bond paper has been purchased on 24.10.2011 it cannot be said that it is given to the complainant at the time of borrowing of Rs.1,00,000/-. Ex.D1 is bank account pass book of the petitioner –accused wherein there is an entry that the - 12 - HC-KAR NC: 2025:KHC:26984 CRL.RP No. 841 of 2018 cheque issued to the respondent –complainant for Rs.80,000/- has been en-cashed by him on 19.12.2011. The complainant has not disputed the fact that Rs.80,000/- has been repaid by the petitioner –accused. D.W.1 in his cross examination has admitted that he has not got issued any legal notice demanding return of cheques and blank signed stamp paper. Considering all these aspects, materials placed on record will not rebut the presumption drawn under Section 139 of the N.I Act that cheques are issued for discharge of debt. More so Ex.P7 and P8 will establish that respondent -complainant has lent amount of Rs.1,00,000/- and Rs.3,00,000/- to the petitioner –accused. What are consequences of non- rebuttal of the presumption drawn under Section 139 of the N.I Act has been considered by the Hon’ble Apex Court in the case of Rajesh Jain (supra) wherein it is held as under; “55. As rightly contended by the appellant, there is a fundamental flaw in the way both the - 13 - HC-KAR NC: 2025:KHC:26984 CRL.RP No. 841 of 2018 Courts below have proceeded to appreciate the evidence on record. Once the presumption under Section 139 was given effect to, the Courts ought to have proceeded on the premise that the cheque was, indeed, issued in discharge of a debt/liability. The entire focus would then necessarily have to shift on the case set up by the accused, since the activation of the presumption has the effect of shifting the evidential burden on the accused. The nature of inquiry would then be to see whether the accused has discharged his onus of rebutting the presumption. If he fails to do so, the Court can straightaway proceed to convict him, subject to satisfaction of the other ingredients of Section 138. If the Court finds that the evidential burden placed on the accused has been discharged, the complainant would be expected to prove the said fact independently, without taking aid of the presumption. The Court would then take an overall view based on the evidence on record and decide accordingly.” 10. Learned counsel for the petitioner placing reliance on the decision of Hon’ble Apex Court in the case of Dattatreya (supra) has contended that the - 14 - HC-KAR NC: 2025:KHC:26984 CRL.RP No. 841 of 2018 complainant has to prove his capacity to lend money. Subsequently the Hon’ble Apex Court has considered the said decision in the case of Dattatreya (supra) in Ashok Singh (supra) and placing reliance on the decision of Hon’ble Apex Court in the case of Tedhi Singh Vs. Narayan Dass Mahant6 has held that there is no need to establish the capacity to lend money. 11. Considering all these aspects, there are no grounds made out to allow this Criminal Revision Petition. Hence, this Criminal Revision Petition is dismissed. Sd/- (SHIVASHANKAR AMARANNAVAR) JUDGE DSP List No.: 1 Sl No.: 21 6 Reported in (2022) 6 SCC 735