- 1 - HC-KAR NC: 2025:KHC:53235 CRP No. 280 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF DECEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE V SRISHANANDA CIVIL REVISION PETITION NO.280 OF 2024 (SC) BETWEEN: RAJESH PARAKH, PROPRIETOR OF M/S S R N ENTERPRISES, AGED ABOUT 58 YEARS, NO 1/1, 6TH CROSS, BHUVANESHWARI NAGARA, K P AGRAHARA, MAGADI ROAD, BENGALURU-560 023. …PETITIONER (BY SRI. VINEET J. JAIN FOR SRI. GOPAL SINGH, ADVOCATES) AND: SATYANARAYANA BHANSALI, S/O BANAKALLAL BHANSALI, MAJOR, NO 50/3, GROUND FLOOR, G K TEMPLE STREET, LAXMAN RAO ROAD, CHICKEPT CROSS, BENGALURU-560 053. …RESPONDENT (BY SRI. PUTTARAJA C P., ADVOCATE) THIS CRP IS FILED UNDER SEC.18 OF THE KARNATAKA SMALL CAUSES COURTS ACT., AGAINST THE JUDGMENT AND DECREE DATED 2.01.2024 PASSED IN SC NO.730/2022 ON THE FILE OF IX ASCJ AND ACMM, COURT OF SMALL CAUSES, BENGALURU., DECREEING THE SUIT FOR RECOVERY OF MONEY. THIS PETITION COMING ON FOR ADMISSION THIS DAY, ORDER WAS MADE THEREIN AS UNDER: Digitally signed by MALATESH K C Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:53235 CRP No. 280 of 2024 CORAM: HON'BLE MR. JUSTICE V SRISHANANDA ORAL ORDER Heard Sri Vineet J. Jain, learned counsel representing Sri Gopal Singh, counsel for the revision petitioner and Sri C.P. Puttaraju, learned counsel for the respondent. 2. Defendant is the revision petitioner challenging the judgment and decree passed in S.C.No.730/2022. 3. Operative portion of the trial Court judgment reads as under. “The suit is decreed with cost. The defendant is directed to pay Rs.1,38,000/ to the plaintiff within three months from the Judgment and decree. Further the defendant is directed to pay future interest at the rate of 24% p.a., of Rs.1,00,000/ from the date of the suit till realization of the entire due amount. In the event of failure of the defendant to pay the decreed amount along with interest the plaintiff is at liberty to recover the same by due process of law. Draw decree accordingly.” - 3 - HC-KAR NC: 2025:KHC:53235 CRP No. 280 of 2024 4. Facts in the nutshell which are utmost necessary for disposal of the revision petition are as under. 5. A suit for recovery of money came to be filed in S.C.No.730/2022 based on the dishonour of cheque. 6. Based on the rival contentions of the parties, the parties were directed to lead evidence wherein the plaintiff has placed on record the original cheque, bank endorsement, copy of the legal notice, written postal cover, notice issued by defendant, reply notice and rejoinder notice. 7. As against the material evidence on record placed by the plaintiff, defendant got examined as D.W.1 and placed on record ten documents comprising of canara Bank Passbook, Punjab National Bank Passbook. 8. Learned trial Judge after analyzing the material on record, decreed the suit stating that towards the repayment of the hand loan, the cheque at Ex.P2 came to - 4 - HC-KAR NC: 2025:KHC:53235 CRP No. 280 of 2024 be issued which came to be dishonored and decreed the suit by granting interest at 24% per annum. 9. Validity of the said judgment and decree is called in question in this revision petition on following grounds:  That the trial court has erred in coming to the conclusion that the loan that which was given by the respondent to the petitioner was on an interest @24% per annum. In the absence of any record submitted by the respondent, the trial court concluding that the loan was on an interest @24% per annum is a wrong finding. That, no evidence other than PW1 has tendered before the trial court. When no verbal nor documentary evidence is produced by the respondent before the trial court to substantiate that the loan was provided on condition of interest that remain unproved throughout, yet, the trial court has given a finding which is against the available evidence on record.  The trial court has committed grave error in accepting everything the respondent had to say. No legal value has been given to the reply to the legal notice tendered by the petitioner to the respondent. At that initial - 5 - HC-KAR NC: 2025:KHC:53235 CRP No. 280 of 2024 stage of demand, the petitioner had replied to the notice of the respondent that, he has not borrowed money on interest and that he never paid any amount terming it as interest. The schedule of repayment was based on the installments of Rs.2,000/- each which the respondent had accepted. That, the transaction alleged by the respondent was of the month July 2015 and the suit was filed in the year 2022. Thus the suit was a time barred debt therefore the respondent could not have taken any legal action against the petitioner. The available evidence before the trial court clearly supported the petitioner's version and the evidence, but the trial court has ignored and failed to appreciate the evidence tendered by the petitioner.  The trial court has also completely brushed aside the cross examination conducted by the petitioner on PW1. In the cross examination, the respondent has almost admitted the petitioner's version. The repayment made by the petitioner is accepted by the respondent. Nowhere did the petitioner agreed for the interest. The trial court has taken the assertion of interest claimed by the respondent blindly and without any proof, thus, the judgment is defective and is against the set principles of rule and law. - 6 - HC-KAR NC: 2025:KHC:53235 CRP No. 280 of 2024  That, the petitioner tendering his evidence as DW1 and brining in Exhibit D1 to D10 has exhibited that the cheques in question alleged by the respondent were not given during the said time as claimed by the respondent. The cheques were given at the time of taking the loan, therefore, all the say of the respondent to bring the suit within the time of limitation as per his version is falsified.  That the trial court has given over weightage to the alleged acknowledge of debt, Exhibit P1 which is proved wrong and fabricated by the cross examination. The Exhibit P1 makes out no sense. That it has been created by the respondent to proceed on a suit without their being any fulfillment of the requirement of law. No witness is produced to that the document and neither the respondent has signed it anywhere. It has been exhibited very loosely and it is done to avoid any probable action of forgery from the petitioner. Deliberate attempt is made by presenting a falsified document. Though the petitioner has proved the document Exhibit P1 a non-acceptable document, the trial court has given good amount of reliance on that document, therefore, a wrong judgment is into making. The petitioner has proved the respondent's case a time barred one, - 7 - HC-KAR NC: 2025:KHC:53235 CRP No. 280 of 2024 unlawful and without a cause, but, the trial court has made the petitioner to suffer by a decree.  The trial court has further committed grave error so as to that without prejudice, if believed that Exhibit P1 is an acknowledgment of debt dated: 14.08.2021, the acknowledgment is unlawful and invalid as it is a settled rule that the acknowledgement of debt even if made has to be made within the time of the closure of limitation. The provision of loan is alleged to be in the month of July 2015, therefore, any acknowledgment of debt should have been before the end of July 2018. The respondent claims that the petitioner acknowledged the debt on 14.08.2021. Thus, it is an unlawful document and even on that count, the respondent has had no case, yet the trial court the respondent by the impugned judgment and that judgment is improper, biased and unlawful.  Looking from any angle, the impugned judgment is not sustainable and it deserves dismissal.  The petitioner craves the indulgence of this Honorable court to permit him to raise any other grounds of revision during the hearing of the case.” - 8 - HC-KAR NC: 2025:KHC:53235 CRP No. 280 of 2024 10. Sri Vineet J Jain, learned counsel representing the counsel for petitioner Gopal Singh, submitted that the trial Court did not appreciate the probative value of Ex.D1 to D10 wherein the other cheques have been honoured by the defendant as could be seen from the passbook entries but the present cheque alone was dishonoured and therefore sought for allowing the revision petition. 11. Per contra, counsel for respondent supports the impugned order. 12. In reply, Sri Vineet J. Jain, learned counsel for the revision petitioner would contend that in the event this Court upholding the decree, interest ordered by the trial Court at the rate of 24% needs to be reduced to 6% by exercising the power under Section 34 of Code of Civil Procedure and sought for allowing the revision petition in part. 13. Having heard the arguments of both sides this Court perused the material on record meticulously. - 9 - HC-KAR NC: 2025:KHC:53235 CRP No. 280 of 2024 14. On such perusal of the material on record, it is crystal clear that the cheque at Ex.P2 is belonging to the defendant and the same on presentation came to be dishonoured for want of funds. 15. Signature of the defendant in Ex.P.2 cheque is not in dispute. Plaintiff carries the presumption under Section 118 as well as under Section 139 of the Negotiable Instruments Act. 16. However, Section 139 of the Negotiable Instruments Act is only for the purpose of the penal action that is initiated under Section 138 of the Negotiable Instruments Act. But, the presumption under Section 118 of the Negotiable Instruments Act is applicable even in the civil cases. 17. According to the plaint averments, towards the repayment of the loan, the cheque in question came to be issued. No doubt the presumption under Section 118 of the Negotiable Instruments Act is a rebuttable presumption. - 10 - HC-KAR NC: 2025:KHC:53235 CRP No. 280 of 2024 18. In order to rebut the same, defendant has been examined as D.W.1 and he has placed on record Exs.D.1 to D.10. They are the passbook entries of the account of the defendant in Canara Bank as well as Punjab National Bank. Merely marking those passbooks, the defendant was unable to rebut the presumption available to the plaintiff under Section 118 of the Negotiable Instruments Act. 19. Further, exchange of the notices and contents of the notice and reply has been discussed and learned Trial Judge in the impugned order has rightly come to the conclusion that the plaintiff has proved the suit claim and decreed the same. 20. This would take the Court to the next question namely, the interest ordered by the trial Judge at the rate of 24% p.a. 21. In this regard, it is just and necessary to cull out Section 80 of the Negotiable Instruments Act which reads as under: - 11 - HC-KAR NC: 2025:KHC:53235 CRP No. 280 of 2024 “80. Interest when no rate specified.— When no rate of interest is specified in the instrument, interest on the amount due thereon shall, 1[notwithstanding any agreement relating to interest between any parties to the instrument], be calculated at the rate of 2[eighteen per centum] per annum, from the date at which the same ought to have been paid by the party charged, until tender or realization of the amount due thereon, or until such date after the institution of a suit to recover such a mount as the Court directs. Explanation.—When the party charged is the indorser of an instrument dishonoured by non- payment, he is liable to pay interest only from the time that he receives notice of the dishonour.” 22. On close reading of the above provision, it is crystal clear that wherever there is a contractual rate of interest prescribed in a Negotiable Instruments, Courts are bound to grant such rate of interest as per Section 79 of the Negotiable Instruments Act. 23. But, when there is no rate specified in a Negotiable Instruments, the interest shall be paid at the rate of 18% per annum. - 12 - HC-KAR NC: 2025:KHC:53235 CRP No. 280 of 2024 24. Accordingly, grant of interest at the rate of 24% per annum by the trial Judge needs interference by granting 18% interest on the cheque amount from the date of suit till realization. 25. Accordingly, the following: ORDER (i) Revision petition is allowed in part. (ii) While maintaining the decree of the trial Court in a sum of Rs.1,38,000/-, the same shall carry interest at the rate of 18% per annum from the date of suit till realization. (iii) Ordered accordingly. Sd/- (V SRISHANANDA) JUDGE MR