- 1 - HC-KAR NC: 2025:KHC:33371 CRL.P No. 10815 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF AUGUST, 2025 BEFORE THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM CRIMINAL PETITION NO.10815 OF 2025 BETWEEN: 1. M/S. DIAMOND TRADING COMPANY, REPRESENTED BY ITS PROPRIETOR MOHAMMED AAZAM MEMON, S/O. MOHAMMED HAROON, AGED ABOUT 51 YEARS, R/AT FLAT NO.103, NO.78, NANDANVAN COLONY, SOHAIL APARTMENT, MANIK BAG ROAD, INDORE, MADHYA PRADESH-451 010. …PETITIONER (BY SRI. HARIPRASAD M.B., ADVOCATE) AND: 1. M/S. USMAN TRADERS, REPRESENTED BY PROPRIETOR: MOHAMMED MUSEB, S/O. RUKMUDDIN SHARIEF, AGED ABOUT 38 YEARS, R/AT NO.2750/2681, BLOCK NO.03, RAILWAY STATION ROAD, BIRUR, KADUR TALUK, CHIKMAGALURU DISTRICT, KARNATAKA-577 116. …RESPONDENT Digitally signed by DEVIKA M Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:33371 CRL.P No. 10815 of 2025 THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.PC (FILED UNDER SECTION 528 BNSS) PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.1000 OF 2025 (P.C.R. NO.74 OF 2025), ON THE FILE OF THE LEARNED III ADDITIONAL CIVIL JUDGE AND JMFC, KADUR, FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT. THIS PETITION COMING ON FOR ADMISSION THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM ORAL ORDER The captained petition is filed by the accused seeking quashing of the proceeding pending in C.C.No.1000/2025. 2. The respondent/complainant instituted a private complaint under Section 223 of the Bharatiya Nagarik Suraksha Sanhita, 2023, alleging commission of an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (“NI Act” for short). The complainant contends that he supplied 300 bags (21,000 kgs) of arecanuts to the petitioner. According to the complainant, the petitioner had assured that the sale proceeds of the arecanuts would be paid after disposal of the stock. Despite repeated demands, no payment was made. Eventually, against the complainant’s demand of Rs.18,70,000/-, the petitioner is alleged to have issued a - 3 - HC-KAR NC: 2025:KHC:33371 CRL.P No. 10815 of 2025 cheque bearing No.000049 dated 02.01.2025 for a sum of Rs.10,00,000/-. When presented for encashment, the cheque was dishonoured with the bank’s endorsement indicating “payment stopped by drawer.” A statutory legal notice dated 06.02.2025 was thereafter issued by the complainant, followed by filing of the present private complaint. 3. The learned Magistrate, on recording the sworn statement of the complainant, took cognizance of the offence and issued summons to the petitioner. The said order is under challenge in the present proceedings, the petitioner seeking quashing on the ground that no legally enforceable debt exists and that the ingredients of Section 138 NI Act are not attracted. 4. On a perusal of the petitioner’s legal notice dated 03.01.2025, it emerges that the underlying transaction between the parties is not in dispute. The petitioner’s grievance, as set out in the said notice, is that the arecanuts supplied were of inferior quality, a portion being rotten and hence unmarketable. The petitioner asserts that he had called upon the complainant to take back 100 bags weighing about - 4 - HC-KAR NC: 2025:KHC:33371 CRL.P No. 10815 of 2025 7,000 kgs and, consequently, terminated the business arrangement with the complainant. He therefore maintains that there were no subsisting transactions. 5. It is further contended that the cheque in question, which forms the basis of the complaint, was not voluntarily issued towards discharge of a legally enforceable debt. According to the petitioner, the complainant procured the cheque by resorting to coercion and threats to the petitioner and his son. The cheque, it is alleged, was handed over under duress and not in the normal course of business, and therefore the essential ingredient of Section 138 NI Act, existence of a legally recoverable debt is not satisfied. 6. Having heard the learned counsel for the petitioner and on close scrutiny of the notice dated 03.01.2025 relied upon by the petitioner, it is evident that the factum of transaction between the parties is not in dispute. The petitioner primarily seeks to resist liability on two grounds: first, that the goods supplied were defective and, therefore, the trading arrangement was terminated; and second, that the cheque was allegedly obtained by the complainant through threats to life - 5 - HC-KAR NC: 2025:KHC:33371 CRL.P No. 10815 of 2025 and was not issued towards discharge of a lawful debt. The petitioner, thus, sets up a defence that the cheque presented cannot be said to be for a legally enforceable liability. 7. On a careful consideration of the rival contentions, what becomes evident is that the issuance of the cheque by the petitioner is not in dispute. The only controversy raised by the petitioner is with regard to the circumstances under which the cheque came to be issued, namely, that it was allegedly obtained by the complainant under coercion and threat, and therefore was not issued voluntarily in discharge of any legally enforceable liability. Whether the cheque was voluntarily issued towards discharge of a subsisting debt or liability, or whether the complainant procured the same under force, is essentially a question of fact which cannot be adjudicated at the stage of proceedings under Section 482 Cr.P.C., and is required to be established during the course of a full-fledged trial. 8. At this stage, it is apposite to refer to Section 139 of the NI Act. The said provision mandates that the Court shall presume, unless the contrary is proved, that the holder of a cheque received the same for the discharge, in whole or in - 6 - HC-KAR NC: 2025:KHC:33371 CRL.P No. 10815 of 2025 part, of a debt or other liability. The statutory presumption under Section 139 NI Act is a legal presumption of wide amplitude, which operates in favour of the complainant once the execution and issuance of the cheque are admitted or established. This presumption, however, is rebuttable. The burden lies heavily upon the accused to raise a credible defence and to demonstrate, on a preponderance of probabilities, that the cheque was not issued towards discharge of any legally enforceable debt or liability. 9. In the present case, the petitioner seeks to rebut the presumption by alleging that the cheque was forcibly obtained under threat. Such a defence, even if raised, constitutes a matter of evidence and can only be examined during trial upon appreciation of oral and documentary material. At the threshold stage, this Court cannot embark upon a roving enquiry into disputed facts. The petitioner’s contention, therefore, at best amounts to setting up a defence, which cannot be a ground to quash the proceedings under Section 482 Cr.P.C. - 7 - HC-KAR NC: 2025:KHC:33371 CRL.P No. 10815 of 2025 10. In the light of the statutory presumption under Section 139 of NI Act, and in the absence of any material to conclusively establish at this stage that the cheque was not issued in discharge of debt or liability, this Court finds no reason to exercise its inherent jurisdiction to interdict the criminal proceedings. Without expressing any opinion on the merits of the defence sought to be raised by the petitioner, the petition stands dismissed. Sd/- (SACHIN SHANKAR MAGADUM) JUDGE MD List No.: 1 Sl No.: 4