- 1 - HC-KAR NC: 2026:KHC:20118 CRL.RP No. 1409 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF APRIL, 2026 BEFORE THE HON'BLE MR. JUSTICE V SRISHANANDA CRIMINAL REVISION PETITION NO.1409 OF 2024 BETWEEN: 1. M/S COBANA FOODS PVT., LTD., NO.239. GURU GOBIND SINGH, IND ESTATE OFF: WESTERN EXPRESS HIGHWAY, GOREGAON (E), MUMBAI – 400 063. 2. MR. PAUSTIN MENDONCA MAJOR R/AT 4TH FLOOR LOURDS TOWERS, OPP: ORIEM CHURCH, MALAD (WEST), MUMBAI – 400 087. …PETITIONERS (BY SRI. AKSHAYA B.M., ADVOCATE) AND: MR. LANCY A PEREIRA MAJOR, S/O BONAVENTURE PEREIRA R/AT PEREIRA COTTAGE MAIN ROAD BELTHANGADY, DAKSHINA KANNADA - 574 214. …RESPONDENT (BY SRI. SAIPRAKASH V.SURYAVANSHI, ADVOCATE) Digitally signed by R MANJUNATHA Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:20118 CRL.RP No. 1409 of 2024 THIS CRL.RP FILED U/S 397 R/W 401 CR.P.C (FILED U/S 438 R/W 442 BNNS) PRAYING TO SET ASIDE THE IMPUGNED JUDGMENT DATED 24/07/2023 IN CRIMINAL APPEAL NO.295 OF 2023 ON THE FILE OF IV ADDL. DISTRICT AND SESSIONS JUDGE, D.K., MANGALURU THEREBY DISMISSING THE APPEAL FILED BY THE PETITIONER/ ACCUSED AND CONFIRMING THE JUDGMENT AND ORDER OF CONVICTION AND ORDER OF SENTENCE OF THE TRIAL COURT DATED 07/08/2008 IN CC NO. 2572 OF 2005 ON THE FILE OF THE V JMFC, MANGALORE, D.K. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE V SRISHANANDA ORAL ORDER Heard Sri Akshaya B.M., learned counsel for the petitioners and Sri Sai Prakash V.Surya Vamshi, learned counsel for the respondent. 2. The revision petitioners are the accused who suffered an order of conviction in C.C.No.2572/2005 for the offence punishable under Section 138 of the Negotiable Instruments Act, (hereinafter referred to as the “NI Act” for short), which was confirmed in Crl.A.No.295/2008. - 3 - HC-KAR NC: 2026:KHC:20118 CRL.RP No. 1409 of 2024 3. The facts of the case which are utmost necessary for disposal of the present petition are as under: 3.1 A private complaint came to be lodged under Section 200 of Cr.P.C., for taking action for the dishonour of a cheque (Ex.P.1), which was issued towards the legally recoverable debt of the business which the complainant had with the accused. Accused No.1 is a Private Limited Company and accused Nos.2 and 3 are the Directors of the said Company. Ex.P.1-cheque is signed by both the accused persons. Before the First Appellate Court, accused No.3 died and therefore, the present revision petition is filed by accused Nos.1 and 2. 3.2 The cheque on presentation having been dishonored with an endorsement “funds insufficient”, legal notice was issued and an untenable reply came to be issued. Therefore, action was sought. - 4 - HC-KAR NC: 2026:KHC:20118 CRL.RP No. 1409 of 2024 3.3 The learned trial Magistrate after completing the necessary formalities on receipt of complaint, recorded the sworn statement and on perusal of the sworn statement and the material placed along with the sworn statement, took cognizance of the offence punishable under Section 138 of NI Act and summoned the accused persons and recorded the plea. The accused persons pleaded not guilty. Therefore, trial was held. 3.4 In order to bring home the guilt of the accused, Mr.Lancy Pereira and Mr.Ronald Pereira of the complainant were examined as P.W.1 and P.W.2. On behalf of the complainant, 23 documents were placed on record, which were exhibited and got marked as Ex.P.1 to Ex.P.23 comprising of dishonour of cheque, bank endorsement, copy of the legal notice, postal receipts, postal envelope and few more notices and postal correspondence in this regard was also placed on record. Ex.P17 is the memorandum of understanding between the complainant and accused, Ex.P.18 is the partnership deed, Ex.P.19 is - 5 - HC-KAR NC: 2026:KHC:20118 CRL.RP No. 1409 of 2024 the postal cover, Ex.P.20 is the letter and Ex.P.21 is the postal acknowledgement for having sent the letter vide Ex.P.20. Photocopies of the demand drafts were marked as Ex.P.22 and correspondence between the parties is marked as Ex.P.23. 3.5 As against the material evidence placed on record on behalf of the complainant, Mr.Roland Jacques who is accused No.3 examined himself as D.W.1 and on his behalf, 18 documents were placed on record, which were exhibited and got marked as Ex.D.1 to Ex.D.18. Among them, Ex.D.1 is the stop payment letter issued to the Bank, Ex.D.2 to Ex.D.4 are the passbooks, Ex.D.5 is the letter and Ex.D.6 is the postal receipt for having sent Ex.D.5-letter to the complainant. Ex.D.7 is the complaint to the police, which is in Marathi language and translated copy of Ex.D.7 is marked as Ex.D.8, Ex.D.9 to Ex.D.17 are the letter correspondence and reply notice issued to the complainant on behalf of the accused. Ex.D.18 is another police complaint dated 13.06.2006. It is in Marathi - 6 - HC-KAR NC: 2026:KHC:20118 CRL.RP No. 1409 of 2024 language and no translation copy is filed. However, the gist of the said Ex.D.18 is that the accused wanted to take action against his Banker. 3.6 The learned Trial Magistrate on conclusion of the recording of evidence, heard the arguments of the parties in detail and convicted the accused and sentenced as under: “ORDER Acting under Sec.255(2) of Cr.P.C., the accused Nos.1 to 3 are convicted for the offence punishable under Sec.,138 of the Negotiable Instruments Act and they are sentenced to pay jointly and severally a fine of Rs.25,00,000/- (Rupees Twenty five lakhs only). In default to pay the fine the accused Nos.2 and 3 shall undergo simple imprisonment for a period of six months. Further, acting under Sec.357(1) of Cr.P.C., the entire fine amount of Rs.25,00,000/- (Rupees Twenty five lakhs only) on recovery shall be paid as compensation to the complainant. Bail bond and surety bond of the accused shall stand cancelled. Supply a free copy of this Judgment to the accused.” 4. Being aggrieved by the same, accused persons filed an appeal before the District Court in - 7 - HC-KAR NC: 2026:KHC:20118 CRL.RP No. 1409 of 2024 Crl.A.No.295/2008. The learned Judge in the First Appellate Court after securing the records noted that accused No.3 was no more and dismissed the appeal as abated insofar as accused No.3 is concerned and dismissed the appeal on merits insofar as accused Nos.1 and 2 are concerned. Being further aggrieved by the same, accused persons are before this Court. 5. Sri Akshaya B.M., learned counsel appearing for the revision petitioners reiterating the grounds urged in the petition would vehemently contend that Ex.P.1-cheque was stolen by the complainant and it has been misused and in this regard, a complaint under Ex.D.7 came to be issued, which has not been investigated by the police and no further action has been taken pursuant to Ex.D.7 and as such, there is no legally recoverable debt under Ex.P1. 6. He would further contend that the unit of accused No.1 was closed of which accused Nos.2 and 3 are the Directors and when the unit itself was not functioning for several years, the question of transaction which alleged - 8 - HC-KAR NC: 2026:KHC:20118 CRL.RP No. 1409 of 2024 to have taken place between the complainant and accused persons is doubtful and a stop payment instructions were also given by the accused to his banker namely the Bank of Maharashtra vide Ex.D.1 and despite the same, the complainant in collusion with the officials of the Bank of Maharashtra got the cheque dishonored with an endorsement “funds insufficient” and in this regard also, a complaint was filed to the jurisdictional police vide Ex.D.18 and these aspects of the matter has not been properly considered by the learned Trial Magistrate while convicting the accused and so also by the First Appellate Court while confirming the order of conviction resulting in miscarriage of justice and sought for allowing the revision petition. 7. He would also contend that defence evidence placed on record by examining third accused as D.W.1 and correspondence marked vide Ex.D.1 to Ex.D.18 including the police complaints and stop payment instructions which would make it clear that there is no legally recoverable debt existed under Ex.P.1 which has been substantiated by - 9 - HC-KAR NC: 2026:KHC:20118 CRL.RP No. 1409 of 2024 placing rebuttal evidence on record. Same is not properly considered by both courts and thus, sought for allowing the revision petition. 8. Per contra, Sri Sai Prakash V.Surya Vamshi, learned counsel for the respondent would support the impugned judgments. 9. Having heard the arguments of both sides perused the material available on record meticulously. On such perusal of material on record, transactions that existed between the parties earlier to its closure is not in dispute. The memorandum of understanding placed on record would substantiate the said contentions of the complainant. 10. According to the accused, Ex.P.1-cheque is stolen by complainant. The oral evidence of P.W.1 and P.W.2 coupled with the documentary evidence placed on record was sufficient enough to raise the presumption that as it is available to the complainant under Section 139 of - 10 - HC-KAR NC: 2026:KHC:20118 CRL.RP No. 1409 of 2024 NI Act as held by the Hon’ble Apex Court in the case of Rangappa Vs. Sri Mohan reported in (2010) 11 SCC 441 and also in the case of Rajesh Jain Vs. Ajay Singh reported in (2023) 10 SCC 148. The principles of law enunciated in the aforesaid decisions are reiterated in the case of Sanjabij Tari Vs. Koshore S.Borcar and Another reported in 2025 SCC ONLINE SC 2069. 11. No doubt, it is a rebuttable presumption. In order to rebut the said presumption available to the complainant, accused No.3 got examined as D.W.1. 12. He deposed before the Court about the complainant stealing the cheque from the office of the accused persons as they had entry to the office of the accused on account of the business relationship. In that regard, Ex.D.1 came to be issued to his banker. Ex.D.1 was considered and thereafter, a reply has been issued by the Bank of Maharashtra vide Ex.D.8 stating that the cheque could have also been dishonored with an endorsement stop payment in view of Ex.D1. - 11 - HC-KAR NC: 2026:KHC:20118 CRL.RP No. 1409 of 2024 13. Pertinently, Ex.D.1 is dated 09.03.2005 that is much earlier to the filing of the present complaint. But, it is pertinent to note that in Ex.D.1, it is not mentioned that the said cheque is stolen away by somebody, but it is mentioned that cheque bearing No.500304 (Ex.D.1) is missing from cheque book. 14. Why signed cheque was kept in the office and that too signed by accused Nos.2 and 3 was kept in the office without proper security is a question that remains unanswered on behalf of the accused. 15. It is settled principles of law and requires no emphasis that stop payment instructions are to be acted upon by the banker of the drawer of the cheque provided, if sufficient balance is made available. 16. In the case on hand, admittedly, as on the date of presentation of the cheque, there was no sufficient balance and even according to the accused, unit was closed long ago. - 12 - HC-KAR NC: 2026:KHC:20118 CRL.RP No. 1409 of 2024 17. Under such circumstances, the stop payment instructions not being acted upon and Ex.D.17 being issued by the banker would not affect the case of the complainant to any extent nor it would improve the case of the accused in rebutting the presumption available to the complainant under Section 139 of the NI Act. 18. A complaint to the police is no doubt given vide Ex.D.7 which is in Marathi language and translated copy is made available by Ex.D.8. The contents of the complaint would make it clear that Ex.P.1 was never issued by the accused persons on behalf of M/s Cobana Foods Private Limited as the factory was closed long back. Therefore, there is a specific request to take action against P.W.1 and P.W.2 in the complaint. 19. However, after accused came to know about the institution of the case by the complainant, no action has been taken to pursue the complaint filed vide Ex.D.7 with the jurisdictional police nor any private complaint has been filed against the complainant for misuse of the - 13 - HC-KAR NC: 2026:KHC:20118 CRL.RP No. 1409 of 2024 cheque that too in a sum of Rs.20,00,000/-. More so when the petitioners had the services of an advocate and when they have already corresponded with the police much earlier to the filing of the case alleging that cheque is missing from cheque book. Accused persons were duty bound to pursue the criminal complaint against the complainant and should have brought it to a logical end. 20. No explanation is forthcoming on record as to why they did not do so. Pertinently, accused persons especially accused Nos.2 and 3 are not illiterate and signatures of accused Nos.2 and 3 are found on Ex.P1. 21. Under such circumstances, the rebuttal evidence namely the theory of theft of cheque by the complainant had not been established by placing cogent and convincing evidence on record. Non-taking any action against the complainant for the alleged theft of Ex.P.1, the learned trial Magistrate and the learned Judge of the First Appellate Court were justified in convicting the accused for the offence punishable under Section 138 of the NI Act - 14 - HC-KAR NC: 2026:KHC:20118 CRL.RP No. 1409 of 2024 with the aid of presumption available to the complainant under Section 139 of the NI Act. 22. Thus, this Court does not find any good grounds to set aside the orders of conviction passed by the learned trial Magistrate and confirmed by the First Appellate Court. Hence, the following ORDER (i) The revision petition is dismissed. (ii) The amount in deposit is ordered to be withdrawn by the complainant under due identification. SD/- (V SRISHANANDA) JUDGE PB List No.: 2 Sl No.: 26