- 1 - HC-KAR NC: 2026:KHC:35056 CRL.RP No. 456 of 2026 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF JULY, 2026 BEFORE THE HON'BLE MR. JUSTICE H.P.SANDESH CRIMINAL REVISION PETITION NO.456 OF 2026 BETWEEN: 1. RAJEEVA SHETTY, S/O HERIYANNA SHETTY, AGED ABOUT 52 YEARS, R/O GUJADI AJRI VILLAGE, KUNDAPURA TALUK, UDUPI DISTRICT-576283. …PETITIONER (BY SRI. ASHWATH C.M., ADVOCATE) AND: 1. SHEKHARA SHETTY, S/O LATE SHESHA SHETTY, AGED ABOUT 60 YEARS, R/O MUDAMUNDA POST, BELLALA VILLAGE, KUNDAPURA TALUK, UDUPI DISTRICT-576233. …RESPONDENT (BY SRI. B. VIJAY SHETTY, ADVOCATE) THIS CRL.RP IS FILED UNDER SECTION 397 R/W 401 CR.PC (FILED U/S 438 R/W 442 BNSS) PRAYING TO SET ASIDE THE JUDGMENT DATED 28.01.2026 PASSED BY THE HON'BLE I ADDITIONAL DISTRICT AND SESSIONS JUDGE, UDUPI SITTING AT KUNDAPURA IN CRL.A.NO.503/2025 AND THE JUDGMENT DATED 13.11.2024 PASSED BY THE HON'BLE II ADDITIONAL CIVIL JUDGE AND JMFC AT KUNDAPURA, IN C.C.NO.313/2023, AND ACQUIT THE ACCUSED FOR THE OFFENCES P/U/S 138 OF N.I ACT. Digitally signed by DEVIKA M Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:35056 CRL.RP No. 456 of 2026 THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE H.P.SANDESH ORAL ORDER Heard the learned counsel for the revision petitioner and the learned counsel for the respondent. This Court had heard the matter in the previous occasion and had directed the learned counsel for the * Respondent to produce the account extract for having received the amount of Rs.1,00,000/- and today the learned counsel has produced the document, wherein he acknowledged the receipt of an amount of Rs.1,00,000/-. 2. The factual matrix of the case of the complainant before the Trial Court while invoking the offence under Section 138 of the Negotiable Instruments Act (‘NI Act’ for short) is that the accused was liable to pay a sum of Rs.3,00,000/- to the complainant and in payment of the said dues, the accused had issued a cheque dated 10.06.2020. But when the said cheque was presented, the same was returned with an endorsement “funds insufficient” and hence, the complainant * Corrected vide Chamber Order dated 20.07.2026 - 3 - HC-KAR NC: 2026:KHC:35056 CRL.RP No. 456 of 2026 gave the notice and reply was also given denying the liability. The complaint was filed and cognizance was taken. The accused was secured and he pleaded not guilty and claimed the trial. The complainant examined himself as C.W.1 before the Trial Court to substantiate his case and got marked the documents at Exs.C.1 to 8. The accused examined himself as D.W.1 and got marked the document Ex.D.1 bank statement. 3. C.W.1 was subjected to cross-examination and in the cross-examination, he admits that he do not know writing Kannada and English and he knows only making signature and he is having acquaintance with the accused from last 10 years. He claims that the accused demanded an amount of Rs.3,00,000/- and he paid the amount two months prior to filing of this case. He paid the amount by way of cash and he did not obtain any documents and also no one was present at the time of lending the money. He do not remember even the denomination of the notes which he had paid by cash to the accused. He claims that he was having money from sale of arecanut and also was having other amount in the house. He admits that he had received notice of the letter written by the - 4 - HC-KAR NC: 2026:KHC:35056 CRL.RP No. 456 of 2026 accused to the bank. He says that he has not lent the money for interest, but he gave the money on friendship and also he did not mention about the interest in the notice and only the principal amount of Rs.3,00,000/- was mentioned. He admits that the accused gave the cheque on 10.06.2020 and he cannot tell the day. He says that he is not having any document to show that the accused had given the cheque. He says that when he demanded the money, the accused gave the cheque. He says that the accused gave the reply to the notice and he cannot tell what he had written, since he do not know to read. When a suggestion was made that he gave the amount of Rs.1,00,000/- through State Bank of Mysore Bank, the witness denies the same. It is suggested that he has obtained a cheque from the accused and the same was denied. It is suggested that the accused made the repayment of Rs.1,00,000/- through Mananje Vyavasaya Seva Sahakari Sangha and the same was denied. It is suggested that the accused demanded to return the cheque after repayment of the amount and the same was denied. He says that except the accused, he has not given money to anybody else. It is - 5 - HC-KAR NC: 2026:KHC:35056 CRL.RP No. 456 of 2026 suggested that he is doing money lending business and the same was denied. 4. When a suggestion was made to C.W.1 that he gave the money to Chandra Shetty, he says that he gave the money to him as he was a neighbour. He admits that he filed a case against Chandra Shetty and he claims that he gave an amount of Rs.1,50,000/- to him and case is also pending. He admits that he gave the amount of Rs.3,00,000/- to Udaya Shetty Ramanakodlu and that case is also pending. It is suggested that he filed a case against Gurukulal and the same is denied. He admits that he cannot tell the date and amount mentioned in Ex.C.1. But he claims that the accused only gave that cheque. When a suggestion was made that signature and writing differs in the cheque, he says that he cannot say. It is suggested that he has not given Rs.3,00,000/- to the accused and the same was denied. A suggestion was made that he was not having financial capacity to make such payment and the same was denied. He admits that he is having accounts in Canara Bank, Syndicate Bank and also in the Society. He says that he cannot produce the bank statement of the year 2020. - 6 - HC-KAR NC: 2026:KHC:35056 CRL.RP No. 456 of 2026 He says that he is not paying any income tax as he is not having such income. A specific suggestion was made that the accused had availed an amount of Rs.1,00,000/- and the same was returned and the same was denied. 5. The accused examined himself as D.W.1 and in his evidence, he categorically stated that he had availed an amount of Rs.1,00,000/- through cash from the complainant in the year 2016 and the same was repaid. He says that he paid the interest of Rs.3,000/- every month till December and he repaid the amount of Rs.1,00,000/- on 14.03.2017 through Mananje Vyavasaya Seva Sahakari Sangha, but the complainant did not return the cheque. He says that later the complainant lodged the complaint and filed the present case. He admits that only on the receipt of the notice, he came to know that the complainant had misused the cheque for an amount of Rs.3,00,000/-. The accused was subjected to cross- examination. In the cross-examination a suggestion was made that there was a transaction between him and the complainant in the year 2020 and the same was denied. He admits that he repaid the amount of Rs.1,00,000/- in 2017. He says that while - 7 - HC-KAR NC: 2026:KHC:35056 CRL.RP No. 456 of 2026 giving the reply in terms of Ex.C.6, he had mentioned that he had written a letter to the bank to stop the payment. However, he admits Ex.C.1 cheque and his signature on the Cheque. He says that he has not given any complaint against the complainant for having misused the cheque. 6. Having re-assessed the evidence available before the Court i.e., the evidence of the complainant as well as the accused, the complainant has nowhere stated that there was a transaction between the accused and the complainant prior to this transaction of the year 2020. But the accused has taken a specific defence that he had borrowed an amount of Rs.1,00,000/- from the complainant in the year 2016 and repaid the same in 2017. The repayment of Rs.1,00,000/- in the year 2017 was not disputed by the complainant. The learned counsel for the revision petitioner brought to the notice of this Court that in the complaint or in the notice, nowhere it is mentioned that on what date the transaction was taken place, except stating that acknowledging the liability, cheque was issued. On perusal of the cross-examination of C.W.1, though he says that he has not advanced any amount to anybody else - 8 - HC-KAR NC: 2026:KHC:35056 CRL.RP No. 456 of 2026 except this accused, but he categorically admitted that he has lent the amount to others also and cases are also pending. Hence, the evidence of C.W.1 cannot be relied upon and particularly on what date he advanced the amount of Rs.3,00,000/- was not stated either in the complaint or in the notice. In the cross-examination, he admits that when he demanded the money from the accused, at that time the accused gave the cheque. But it is the case of the complainant that when he advanced the money, at that time only the cheque was given. These material contradictions were not taken note of by the Trial Court and the Appellate Court. The evidence available on record must inspire the confidence of the Court that there was a transaction. 7. No doubt, the cheque is admitted and signature is admitted by the accused. But it is the specific case of the accused that he had availed the loan in 2016 and the same was repaid in 2017, but the cheque was not returned. Having considered the material available on record, particularly the evidence of C.W.1, the same not inspires the confidence of the Court that transaction was taken place in 2020 and the same is - 9 - HC-KAR NC: 2026:KHC:35056 CRL.RP No. 456 of 2026 not specifically stated. If it was within the knowledge of the complainant, on what date the amount was advanced and for what purpose the amount was advanced, the same would have been mentioned in the complaint as well as in the legal notice and the same is silent except mentioning that the accused had issued the subject matter of the cheque. The very defence of the accused is very clear that earlier there was a transaction between the complainant and the accused. In the reply also specifically stated that he has repaid the amount, which he had received. The accused has made out a case of preponderance of probabilities and also rebutted the case of the complainant under Section 139 of NI Act specifically raising the defence in the reply statement as well as in his evidence. C.W.1 also not specifically stated on what date the amount was advanced and for what purpose it was advanced. In the cross-examination of D.W.1, except eliciting the answer that he has not given any complaint for misuse of the cheque, no effective cross- examination of D.W.1 when a specific defence was taken that no such transaction was taken place in 2020 and no such liability and the burden shifts on the complainant to probabilise the same. The accused led his evidence and rebutted the case - 10 - HC-KAR NC: 2026:KHC:35056 CRL.RP No. 456 of 2026 of the complainant by placing on record the bank statement before this Court when this Court directed to produce the document to see whether the complainant has received the amount of Rs.1,00,000/- and now it is admitted that the complainant received the amount of Rs.1,00,000/-. When such probable evidence is available before the Court, the complainant fails to prove his case for having lent the amount of Rs.3,00,000/- in the year 2020 as against the evidence of the accused. Both the Courts lost sight of the evidence available on record and also not considered the answers elicited from the mouth of C.W.1 with regard to the transaction is concerned and also with regard to the specific defence is concerned. Hence, the judgment of the Trial Court and the Appellate Court requires to be set aside. The offences alleged against the petitioner invoking Section 138 of the NI Act is not proved by the complainant. 8. In view of the discussions made above, I pass the following: ORDER (i) The criminal revision petition is allowed. - 11 - HC-KAR NC: 2026:KHC:35056 CRL.RP No. 456 of 2026 (ii) The judgment of the Trial Court and the Appellate Court are set aside. Consequently, the accused is acquitted for the offence punishable under Section 138 of the NI Act. (iii) The amount in deposit before the Trial Court is ordered to be released in favour of the revision petitioner/accused, on proper identification. Sd/- (H.P.SANDESH) JUDGE MD List No.: 1 Sl No.: 18