- 1 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 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. 1032 OF 2019 BETWEEN: SRI SURESH Y SON OF LATE YANGANNA AGED ABOUT 50 YEARS No. 62/1 KRISHNA NILAYA 8TH CROSS, SAMPANGIRAMANAGARA BENGALURU – 560 026. AND ALSO AT: RAKSHITH’S HOT CHIPS No. 61, NANDANAVANA E STREET, JOGU PALYA HALASURU BENGALURU – 560 008. …PETITIONER (BY SRI S VENUGOPALA, FOR SRI SRINIVASA T P, ADVOCATES) AND: SRI RAJU S B SON OF SRI BYREGOWDA AGED ABOUT 43 YEARS RESIDING AT No. 71, 7TH CROSS CUBBONPET MAIN ROAD BENGALURU – 560 002. …RESPONDENT (BY SRI OMKAR BASAVA PRABHU, FOR SRI R SRINIVAS, ADVOCATES) Digitally signed by LAKSHMINARAYANA MURTHY RAJASHRI Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 THIS CRL.RP IS FILED UNDER SECTION 397 READ WITH SECTION 401 Cr.P.C PRAYING TO SET ASIDE THE JUDGMENT AND ORDER DATED 09.07.2019 PASSED IN CRIMINAL APPEAL No. 838/2018 BY THE HON'BLE LXIII ADDITIONAL CITY CIVIL AND SESSION JUDGE (CCH:64), BENGALURU, AND ALSO SET ASIDE THE JUDGMENT AND ORDER OF SENTENCE DATED 16.04.2018 PASSED IN C.C.No.11764/2017 ON THE FILE OF THE XIII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU. THIS PETITION COMING ON FOR FINAL HEARING THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR ORAL ORDER 1. This criminal revision petition is directed against the judgment dated 09.07.2019 passed in Crl.A. No. 838/2018 by the LXIII Additional City Civil and Sessions Judge, Bengaluru, whereunder the judgment of conviction dated 16.04.2018 passed in C.C. No. 11764/2017 by the XIII ACMM, Bengaluru, convicting the petitioner - accused for offence under Section 138 of Negotiable Instruments Act (hereinafter for the sake of brevity referred to as the `N.I. Act’) and sentencing to pay fine of Rs.7,50,000/- and in - 3 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 default, to undergo simple imprisonment for six months has been affirmed. 2. Heard learned counsel for petitioner and learned counsel for respondent. 3. Case of the prosecution before the trial Court was that the complainant and accused were known to each other since several years and petitioner - accused was taking financial assistance from respondent – complainant whenever he needed. Accordingly on 10.05.2016 petitioner - accused had approached respondent - complainant for hand loan of Rs.6,00,000/-. Respondent - complainant had advanced Rs.6,00,000/- to petitioner - accused on 11.05.2016. Petitioner – accused, in order to repay the amount borrowed had issued two cheques, bearing Nos. 321315 dated 28.10.2016 for a sum of Rs.3,00,000/- and 926936 dated 28.10.2016 for a sum of Rs.3,00,000/- both drawn on Canara Bank, Halsuru Branch, Bengaluru. Respondent - complainant presented the said cheques for encashment and they came to - 4 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 dishonoured for the reason `funds insufficient’ on 25.01.2017. Respondent - complainant got issued legal notice 01.02.2017 and the same was duly served on petitioner - accused on 03.02.2017 and 04.02.2017. Inspite of service of notice, petitioner - accused had not paid amount of two cheques within 15 days. Therefore, respondent - complainant had initiated proceedings against petitioner - accused under Section 138 of N.I. Act. Respondent - complainant examined himself as P.W.1 and got marked Ex.P.1 to Ex.P.12. Statement of petitioner - accused was recorded under Section 313 of Cr.P.C. Petitioner - accused has not let in any defence evidence. The trial Court, after hearing arguments on both sides and appreciating the evidence on record, has convicted the petitioner - accused for offence under Section 138 of N.I. Act and sentenced as noted supra. Said judgment of conviction and order on sentence was challenged before the Sessions Court in Crl.A. No. 838/2018 and the said appeal came to be dismissed on - 5 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 merits affirming the judgment of conviction and order on sentence passed by the trial Court. 4. Learned counsel for petitioner would contend that it was the defence of petitioner - accused that cheques had been given to one Rajanna as security for the amount borrowed by him and the same have been misused by the respondent - complainant. He further submits that respondent - complainant has no capacity to lend huge amount. Documents produced, which are at Ex.P.11 – rent agreement and Ex.P.12 – bank statement, does not pertain to the year of transaction. Therefore, respondent – complainant has failed to prove his capacity. On the grounds urged, learned counsel for petitioner has placed reliance on the following decisions. I. Adam Vs. Jayamala P. Shetty, Crl.R.P.No. 1302/2009 decided on 05.01.2024 II. Ans Rajashekar Vs. August Jeba Ananth, AIR 2019 SC 942 - 6 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 III. John K. Abraham Vs. Simon C Abraham and another, (2014) 2 SCC 236 IV. Rangappa Vs. Mohan, AIR 2010 SC 1898 V. Krishna Janardhan Bhat Vs. Dattatraya G. Heggade, AIR 2008 SC 1325. On these grounds, he prayed for allowing the revision petition and acquitting the petitioner - accused. 5. Learned counsel for respondent would contend that the trial Court, on appreciating the evidence on record, has rightly convicted the petitioner - accused and the appellate Court has rightly re-appreciated the evidence and affirmed the conviction order passed by the trial Court. He further submits that power of revision can be exercised only if it is shown that there is glaring error or mistake committed by the trial Court and the appellate Court. He further submits that trial Court considering that the presumption under Section 139 of N.I. Act remained unrebutted has rightly convicted the petitioner - accused. On these grounds he prayed for dismissal of the revision petition. - 7 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 6. Having heard learned counsel for petitioner and learned counsel for respondent this Court has perused the impugned judgments, trial Court records and appellate Court records. 7. It is the specific case of respondent - complainant that petitioner - accused had borrowed Rs.6,00,000/- from him on 11.05.2016 and in order to repay the said amount he had issued two cheques for Rs.3,00,000/- each dated 28.10.2016. Said two cheques, on presentment, came to dishonoured for the reason `funds insufficient’. Petitioner - accused has admitted his signature on the cheques – Ex.P.1 and Ex.P.2. As signature on the cheques is admitted, a presumption has to be drawn under Section 139 of N.I. Act that the cheques are issued for discharge of debt. Said presumption is a rebuttable presumption. Standard of proof for rebutting the said presumption is preponderance of probability. 8. Petitioner - accused has not got issued any reply to the legal notice inspite of service of said legal notice - 8 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 putting forth his defence. Petitioner - accused had taken up a defence in the cross-examination of P.W.1. Said defence has been put to P.W.1 in his cross-examination. Defence of petitioner - accused in the cross-examination of P.W.1 is that petitioner - accused had borrowed money from Rajanna and given cheques as security for the amount borrowed and said cheques have been misused by respondent - complainant. In regard to the said defence certain suggestions were put to P.W.1 in his cross-examination. P.W.1 has denied the said suggestions. Except the said suggestions there are no material placed on record to establish the said defence. Therefore, petitioner - accused has failed to rebut the presumption drawn under Section 139 of N.I. Act. Consequence of non-rebuttal of presumption drawn under Section 139 of N.I. Act has been considered by the Hon’ble Apex Court in the case of Kalamani tex and Another Vs. P Balasubramanian, reported in 2021 (5) SCC 283 and has held as under: “13. Adverting to the case in hand, we find on a plain reading of its judgment that the - 9 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 trial Court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NIA. The Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these ‘reverse onus’ clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. This point of law has been crystalized by this Court in Rohitbhai Jivanlal Patel v. State of Gujarat in the following words: “18. In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the trial court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the trial court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record - 10 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant accused.” 9. The Hon’ble Apex Court in the case of Rajesh Jain Vs. Ajay Singh reported in AIR Online 2023 SC 807 has held as under: “55. As rightly contended by the appellant, there is a fundamental flaw in the way both the 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 - 11 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 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 petitioner – accused would contend that the respondent - complainant has not proved his financial capacity and on that point he placed reliance on the decision of this Court in the case of Adam (supra) which has been passed based on the judgment of the Hon’ble Apex Court in the case of Tedhi Sing Vs. Narayan Das Mahant reported in 2022 SCC Online Sc 302. Learned counsel for petitioner also placed reliance on the decision of the Hon’ble Apex Court in the case of John K. (supra) on the same point. - 12 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 11. Hon’ble Apex Court in the recent decision in the case of Ashok Singh Vs. State of Uttar Pradesh and another reported in 2025 LiveLaw (SC) 383 by referring to the decision in Bir Singh Vs. Mukesh Kumar, reported in (2019) 4 SCC 197, Rohitbhai Jivanlal Patil Vs. State of Gujarat, reported in 2019 (18) SCC 106 and John K. John Vs. Tom Varghese reported in (2007) 12 SCC 715 has held that the complainant has no onus to prove financial capacity at the threshold. Once the drawer admits signing the cheque, the presumption under Section 139 of N.I. Act cannot be rebutted merely by questioning the complainant’s debt giving capacity, especially when such a defence was not raised in the reply notice by the accused. In the said decision the Hon’ble Apex Court has observed thus: “21. One of the grounds, which weighed heavily with the High Court to acquit the respondent no.2 was that the appellant was unable to prove the source of Rs.22,00,000/- (Rupees Twenty-Two Lakhs) given to the respondent no.2 as loan. Admittedly, the signature on the cheque is of the respondent no.2 himself. The decision in Rohitbhai Jivanlal Patel v. State of - 13 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 Gujarat, (2019) 18 SCC 106 can be profitably referred to: ‘18. In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the trial court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the trial court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant- accused. The aspect relevant for consideration had been as to whether the appellant-accused has brought on - 14 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 record such facts/material/circumstances which could be of a reasonably probable defence. 19. In order to discharge his burden, the accused put forward the defence that in fact, he had the monetary transaction with the said Shri Jagdishbhai and not with the complainant. In view of such a plea of the appellant- accused, the question for consideration is as to whether the appellant- accused has shown a reasonable probability of existence of any transaction with Shri Jagdishbhai? In this regard, significant it is to notice that apart from making certain suggestions in the cross-examination, the appellant-accused has not adduced any documentary evidence to satisfy even primarily that there had been some monetary transaction of himself with Shri Jagdishbhai. Of course, one of the allegations of the appellant is that the said stamp paper was given to Shri Jagdishbhai and another factor relied upon is that Shri Jagdishbhai had signed on the stamp paper in question and not the complainant. xxx - 15 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 20. Hereinabove, we have examined in detail the findings of the trial court and those of the High Court and have no hesitation in concluding that the present one was clearly a case where the decision of the trial court suffered from perversity and fundamental error of approach; and the High Court was justified in reversing the judgment of the trial court. The observations of the trial court that there was no documentary evidence to show the source of funds with the respondent to advance the loan, or that the respondent did not record the transaction in the form of receipt of even kachcha notes, or that there were inconsistencies in the statement of the complainant and his witness, or that the witness of the complaint was more in the know of facts, etc. would have been relevant if the matter was to be examined with reference to the onus on the complaint to prove his case beyond reasonable doubt. These considerations and observations do not stand in conformity with the presumption existing in favour of the complainant by virtue of Sections 118 and 139 of the NI Act. Needless to reiterate that the result of - 16 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 such presumption is that existence of a legally enforceable debt is to be presumed in favour of the complainant. When such a presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the accused has been able to rebut the presumption or not. The other observations as regards any variance in the statement of complainant and witness; or want of knowledge about dates and other particulars of the cheques; or washing away of the earlier cheques in the rains though the office of the complainant being on the 8th floor had also been irrelevant factors for consideration of a probable defence of the appellant. Similarly, the factor that the complainant alleged the loan amount to be Rs 22,50,000 and seven cheques being of Rs 3,00,000 each leading to a deficit of Rs 1,50,000, is not even worth consideration for the purpose of the determination of real questions involved in the matter. May be, if the total amount of cheques exceeded the alleged amount of loan, a slender doubt might have arisen, but, - 17 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 in the present matter, the total amount of 7 cheques is lesser than the amount of loan. Significantly, the specific amount of loan (to the tune of Rs 22,50,000) was distinctly stated by the appellant- accused in the aforesaid acknowledgment dated 21-3- 2017.” 22. The High Court while allowing the criminal revision has primarily proceeded on the presumption that it was obligatory on the part of the complainant to establish his case on the basis of evidence by giving the details of the bank account as well as the date and time of the withdrawal of the said amount which was given to the accused and also the date and time of the payment made to the accused, including the date and time of receiving of the cheque, which has not been done in the present case. Pausing here, such presumption on the complainant, by the High Court, appears to be erroneous. The onus is not on the complainant at the threshold to prove his capacity/financial wherewithal to make the payment in discharge of which the cheque is alleged to have been issued in his favour. Only if an objection is raised that the complainant was not in a financial position to pay the amount so claimed by him to have been given as a loan to the accused, only then the complainant would have to bring before the Court cogent material to - 18 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 indicate that he had the financial capacity and had actually advanced the amount in question by way of loan. In the case at hand, the appellant had categorically stated in his deposition and reiterated in the cross-examination that he had withdrawn the amount from the bank in Faizabad (Typed Copy of his deposition in the paperbook wrongly mentions this as ‘Firozabad’). The Court ought not to have summarily rejected such stand, more so when respondent no.2 did not make any serious attempt to dispel/negate such stand/statement of the appellant. Thus, on the one hand, the statement made before the Court, both in examination-in-chief and cross- examination, by the appellant with regard to withdrawing the money from the bank for giving it to the accused has been disbelieved whereas the argument on behalf of the accused that he had not received any payment of any loan amount has been accepted. In our decision in M/s S. S. Production v. Tr. Pavithran Prasanth, 2024 INSC 1059, we opined: ‘8. From the order impugned, it is clear that though the contention of the petitioners was that the said amounts were given for producing a film and were not by way of return of any loan taken, which may have been a probable defence for the petitioners in the case, but rightly, the High Court has taken - 19 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 the view that evidence had to be adduced on this point which has not been done by the petitioners. Pausing here, the Court would only comment that the reasoning of the High Court as well as the First Appellate Court and Trial Court on this issue is sound. Just by taking a counter-stand to raise a probable defence would not shift the onus on the complainant in such a case for the plea of defence has to be buttressed by evidence, either oral or documentary, which in the present cases, has not been done. Moreover, even if it is presumed that the complainant had not proved the source of the money given to the petitioners by way of loan by producing statement of accounts and/or Income Tax Returns, the same ipso facto, would not negate such claim for the reason that the cheques having being issued and signed by the petitioners has not been denied, and no evidence has been led to show that the respondent lacked capacity to provide the amount(s) in question. In this regard, we may make profitable reference to the decision in Tedhi Singh v Narayan Dass Mahant, (2022) 6 SCC 735:‘10. The trial court and the first appellate court have noted that in the - 20 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 case under Section 138 of the NI Act the complainant need not show in the first instance that he had the capacity. The proceedings under Section 138 of the NI Act is not a civil suit. At the time, when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. To that extent, the courts in our view were right in holding on those lines. However, the accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable which he can do by producing independent materials, namely, by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further, more importantly, achieve this result through the crossexamination of the witnesses of the complainant. Ultimately, - 21 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 it becomes the duty of the courts to consider carefully and appreciate the totality of the evidence and then come to a conclusion whether in the given case, the accused has shown that the case of the complainant is in peril for the reason that the accused has established a probable defence.’ (emphasis supplied)’ (underlining in original;emphasis spplied by us in bold) 12. In the case of Krishna Janardhan Bhat (supra) the presumption drawn under Section 139 of N.I. Act has been rebutted and therefore burden of proving transactions has been shifted to complainant. In the case on hand presumption under Section 139 has not been rebutted, therefore, said decision does not apply to present case. 13. Considering the said aspect there is no necessity of respondent - complainant proving his financial capacity as the presumption drawn under Section 139 of the N.I. Act remained unrebutted. Considering all these aspects learned - 22 - HC-KAR NC: 2025:KHC:27147 CRL.RP No. 1032 of 2019 Magistrate has rightly convicted petitioner - accused for offence under Section 138 of the N.I. Act and the appellate Court has rightly re-appreciated and affirmed the order on sentence and judgment of conviction. There are no grounds to allow this revision petition. Hence, revision petition is dismissed. Sd/- (SHIVASHANKAR AMARANNAVAR) JUDGE LRS List No.: 1 Sl No.: 57 Ct.sm