- 1 - HC-KAR NC: 2026:KHC:19349 CRL.RP No. 480 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF APRIL, 2026 BEFORE THE HON'BLE MR. JUSTICE V SRISHANANDA CRIMINAL REVISION PETITION NO. 480 OF 2023 (397(Cr.PC) / 438(BNSS)) BETWEEN: RAFEEQ C H S/O ABDULLLA, AGED ABOUT 40 YEARS, R/AT MAROOR VILLAGE, VIRAJPET TALUK, KODAGU DISTRICT - 571254 …PETITIONER (BY SRI. N. RAVINDRANATH KAMATH, SENIOR ADVOCATE A/W SRI. MOHAMMED ASHHAR C K, ADVOCATE) AND: K K SIDDA S/O LATE KUTTAN, AGED ABOUT 43 YEARS R/AT THITHIMATHI, VIRAJPET TALUK S KODAGU - 571254 …RESPONDENT (BY SRI. BHANU PRAKASH H V., ADVOCATE) Digitally signed by KIRAN KUMAR R Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:19349 CRL.RP No. 480 of 2023 THIS CRL.RP IS FILED U/S.397 R/W 401 CR.P.C BY THE ADVOCATE FOR THE PETITIONER PRAYING THAT THIS HONOURABLE COURT MAY BE PLEASED TO A. SET ASIDE THE IMPUGNED DISMISSAL ORDER DATED 09.02.2023 PASSED IN CRL.A.NO.5004/2018 ON THE FILE OF THE II ADDITIONAL DISTRICT AND SESSIONS JUDGE, KODAGU MADIKERI SITTING AT VIRAJPET VIDE ANNEXURE-A AND JUDGMENT OF CONVICTION DATED 27.06.2018 PASSED IN C.C.NO.1165/2013 ON THE FILE OF THE CIVIL JUDGE AND JMFC AT PONNAMPET VIDE ANNEXURE B. B. ACQUIT THE PETITIONER IN THE C.C.NO.1165/2013 ON THE FILE OF THE CIVIL JUDGE AND JMFC AT PONNAMPET FOR THE OFFENCE P/U/S.138 OF NI ACT. THIS PETITION, COMING ON FOR REPORTING SETTLEMENT, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE V SRISHANANDA ORAL ORDER Heard Sri. N.Ravindranath Kamath, learned Senior Counsel on behalf of Sri. Mohammed Ashhar, learned counsel for the petitioner. 2. Accused who suffered an order of conviction dated 27.01.2018 for the offence under Section 138 of the Negotiable Instruments Act, 1881 in CC No.1165/2013 on the file of the Court of Civil Judge and JMFC, Ponnampet, confirmed in Criminal Appeal No.5004/2018 vide judgment dated 09.02.2023 by the Court of II Addl. District and - 3 - HC-KAR NC: 2026:KHC:19349 CRL.RP No. 480 of 2023 Sessions Judge, Kodagu-Madikeri, Sitting at Virajpet, is the revision petitioner. 3. Facts in the nutshell which are utmost necessary for disposal of the present revision petition as under: 3.1. A private complaint under Section 200 of Cr.PC came to be lodged by the respondent against the revision petitioner alleging the commission of the offence punishable under Section 138 of the Negotiable Instruments Act contending that, accused and complainant are known to each other for many years and on 07.06.2012, there was an agreement between complainant and Sri. H.T.Sundara to maintain and harvest coffee crop. 3.2. In the first week of March 2013, accused approached the complainant and purchased 270 bags of dry coffee worth ₹8,50,000/- and towards the sale consideration, accused passed on a cheque (Ex.P1). The said cheque, on presentation, returned with an endorsement ‘funds insufficient’. - 4 - HC-KAR NC: 2026:KHC:19349 CRL.RP No. 480 of 2023 3.3. Complainant issued a legal notice calling upon the accused to make good the amount covered under cheque, which was duly served on accused and an untenable reply vide Ex.P8 came to be issued. 4. Thereafter, complainant approached the learned Trial Magistrate to take action against the accused for commission of the offence punishable under Section 138 of the Negotiable Instruments Act. 5. Learned Trial Magistrate, after completing the necessary formalities, summoned the accused and recorded the plea. Accused pleaded not guilty. Therefore, trial was held. 6. In order to prove the case of the complainant, he got examined himself as PW1 and placed on record eight documents which were exhibited and marked as Exs.P1 to P9. 7. As against the material evidence placed on record on behalf of the complainant, accused got examined - 5 - HC-KAR NC: 2026:KHC:19349 CRL.RP No. 480 of 2023 himself as DW1 and two more witnesses namely Sri. P.U.Santhosh and Sri. K.D.Ramesh on behalf of the accused, no documentary evidence were placed on record. 8. Thereafter, learned Trial Magistrate heard the arguments of the parties and convicted the accused and sentenced as under: “ORDER The accused is convicted for the offence punishable under section 138 of Negotiable Instruments Act. Accused is sentenced to pay a fine of Rs.12,30,000/- (Rupees Twelve Lakh Thirty Thousand only). In default to pay the fine, accused shall undergo simple imprisonment for a period of six months. Further, acting under Sec.357(1)(b) of Cr.P.C., a sum of Rs.12,20,000/- (Rupees Twelve Lakh Twenty Thousand only) on recovery shall be paid to the complainant as compensation and Rs.10,000/- [Rupees Ten Thousand] shall be remitted to the state exchequer.” 9. Being aggrieved by the same, accused filed an appeal before the District Court in Crl. Appeal No. 5004/2018. - 6 - HC-KAR NC: 2026:KHC:19349 CRL.RP No. 480 of 2023 10. Learned Judge in the First Appellate Court, after securing the records, heard the arguments of the parties in detail and on re-appreciation of the material evidence on record, dismissed the appeal of the accused by considered judgment dated 09.02.2023. 11. Subsequent thereto, the accused has preferred the present revision petition on the following grounds: 12. Sri. Ravindranath Kamath, learned Senior Counsel for the petitioner, reiterating the grounds urged in the revision petition would contend that, there is a specific stand taken by the accused in the reply notice vide Ex.P8 itself that the cheque in question was stolen by the complainant. Therefore, there was no legally recoverable debt involved under Ex.P1, which has not been properly appreciated by both the Courts, resulting in miscarriage of justice. 12.1. He would further emphasize that, complainant was working as a servant under the accused and he had - 7 - HC-KAR NC: 2026:KHC:19349 CRL.RP No. 480 of 2023 the access to the office room and other places which has been misused by the complainant in stealing away five to six cheques and one such cheque has been misappropriated by the complainant and filed a false case against the accused. Said aspect of the matter is not properly appreciated by both the Courts. 12.2. He would also contend that, complainant had no coffee estate of his own, therefore, selling 270 bags of coffee to the accused would not arise, which has not been appreciated. It is also his contention that, oral evidence of DW2 and DW3 would make it clear that the cheque in question was actually handed over to the complainant to be given to them for supply of coffee, which has been misused by the complainant and therefore, there is no legally recoverable debt and thus, sought for allow the reasoned petition. 13. Learned counsel for the respondent is not present today. - 8 - HC-KAR NC: 2026:KHC:19349 CRL.RP No. 480 of 2023 14. In the light of the argument put forth on behalf of the petitioner, this Court perused the matter on record meticulously. 15. On such perusal of the material on record, it is crystal clear that there is no dispute that Ex.P1 cheque belongs to the accused and signature found therein is that of the accused. To explain as to how Ex.P1 reached the hands of the complainant, accused has set up a theory that Ex.P1 was stolen by complainant as he had the access to the office room and all other places of the accused. 16. It is also the contention of the accused that complainant was working as a servant in the office of the accused right from his father's period. Therefore, he had gained necessary trust from the members of the family of the accused, namely his father and his elder brother Sri. Basheer. Misutilising such trust reposed by the accused in complainant, he has stolen Ex.P1 and misutilised the same. - 9 - HC-KAR NC: 2026:KHC:19349 CRL.RP No. 480 of 2023 17. To substantiate the said aspect of the matter, there is no material evidence placed on record except the oral testimony of DW1. It is also contention of the accused that he used to send the blank signed cheques to different persons from whom the accused used to purchase coffee and after the payment is made in cash, the cheque used to be returned which was sent as security by the accused. 18. To establish said aspect of the matter, on behalf of the accused, two persons have been examined namely Sri. P.U.Santosh and Sri. K.D.Ramesh as DW2 and DW3. Both of them deposed before the Court stating that, accused and complainant are known to each other. 19. While DW2 answered that, upto 2013, complainant worked with the accused, his deposition is silent about complainant working as a cook with the accused in contrast to the oral testimony of DW1. 20. DW3 has not stated anything about the complainant working as a servant with the accused. If the - 10 - HC-KAR NC: 2026:KHC:19349 CRL.RP No. 480 of 2023 theory that is put forward by the accused is to be appreciated that Ex.P1 is stolen, then the oral evidence of DW2 and DW3 is unnecessary. 21. If it is the case of the accused that signed cheque which was sent under trust to DW2 or DW3 by the accused through the complainant which has been misutilised, then there could be only one cheque which could be misutilised. 22. Whether the cheque that has been issued by the accused sent to DW2 is misutilised or cheque which has been signed and sent to DW3 has been misutilised is not forthcoming on record. 23. Moreover, DW1 has stated that five to six cheques have been stolen and he does not remember the date, number and the bank on which the signed cheques were stolen away from the iron safe by misutilising the trust reposed by the accused in complainant. - 11 - HC-KAR NC: 2026:KHC:19349 CRL.RP No. 480 of 2023 24. Further, when the accused came to know that there is a misutilisation of cheque marked at Ex.P1, a detailed reply has been sent by the accused with the aid of an Advocate. No normal prudent person would keep quiet if the cheque in a sum of ₹8,50,000/- is stolen and misutilised. 25. Non-filing of any complaint against the complainant by the accused in this regard exposes the hollowness in the defence setup by the accused. 26. Since the complainant has established before the Court through his oral evidence and documentary evidence placed on record about he managing the coffee estate of Sathish, Vinu and Vishwanath, which has been admitted by DW2 and DW3, sale of 270 bags of coffee by the complainant to the accused cannot be ruled out. Thus, the complainant having discharged the initial burden to raise the presumption available to the complainant under Section 139 of the Negotiable Instruments Act, it was for - 12 - HC-KAR NC: 2026:KHC:19349 CRL.RP No. 480 of 2023 the accused to rebut the same by placing necessary rebuttal evidence on record. 27. Accused has failed to rebut the said material evidence on record and in this regard, the principles of law enunciated by the Hon'ble Apex Court in the case of Sanjabij Tari Vs. Kishore S. Borcar and Another [2025 SCC OnLine SC 2069] assumes importance. Relevant paragraphs in the said judgment are culled out hereunder for ready reference: “14. Consequently, this court is of the view that the intent behind introducing Chapter XVII is to restore the credibility of cheques as a trustworthy substitute for cash payment and to promote a culture of using cheques. Further, by criminalizing the act of issuing cheques without sufficient funds or for other specified reasons, the law promotes financial discipline, discourages irresponsible practices and allows for a more efficient and timely resolution of disputes compared to the previous pure civil remedy which was found to involve the payee in a long-drawn out process of litigation. Once execution of cheque is admitted, presumptions under sections 118 and 139 of the Negotiable Instruments Act, arise - 13 - HC-KAR NC: 2026:KHC:19349 CRL.RP No. 480 of 2023 15. In the present case, the cheque in question has admittedly been signed by respondent No. 1-accused. This court is of the view that once the execution of the cheque is admitted, the presumption under section 118 of the Negotiable Instruments Act, that the cheque in question was drawn for consideration and the presumption under section 139 of the Negotiable Instruments Act, that the holder of the cheque received the said cheque in discharge of a legally enforceable debt or liability arise against the accused. It is pertinent to mention that observations to the contrary by a two-judge Bench in Krishna Janardhan Bhat v. Dattatraya G. Hegde [(2008) 141 Comp Cas 665 (SC); (2008) 4 SCC 54; (2008) 2 SCC (Cri) 166; 2008 SCC OnLine SC 106.] have been set aside by a three-judge Bench in Rangappa v. Sri Mohan [(2010) 11 SCC 441; (2010) 4 SCC (Civ) 477; (2011) 1 SCC (Cri) 184; 2010 SCC OnLine SC 583.] . 16. This court is further of the view that by creating this presumption, the law reinforces the reliability of cheques as a mode of payment in commercial transactions. 17. Needless to mention that the presumption contemplated under section 139 of the Negotiable Instruments Act, is a rebuttable presumption. However, the initial onus of proving that the cheque is not in discharge of any debt or other liability is on the accused/drawer of the cheque (see : Bir Singh v. Mukesh - 14 - HC-KAR NC: 2026:KHC:19349 CRL.RP No. 480 of 2023 Kumar [(2019) 5 Comp Cas-OL 560 (SC); (2019) 4 SCC 197; (2019) 2 SCC (Cri) 40; (2019) 2 SCC (Civ) 309; 2019 SCC OnLine SC 138.] . 18. The judgment of this court in APS Forex Services P. Ltd. v. Shakti International Fashion Linkers [(2020) 12 SCC 724; (2020) 4 SCC (Cri) 505; 2020 SCC OnLine SC 193.] relied upon by learned counsel for respondent No. 1-accused only says that the presumption under section 139 of the Negotiable Instruments Act is rebuttable and when the same is rebutted, the onus would shift back to the complainant to prove his financial capacity, more particularly, when it is a case of giving loan by cash. This judgment nowhere states, as was sought to be contended by learned counsel for respondent No. 1-accused, that in cases of dishonour of cheques, in lieu of cash loans, the presumption under section 139 of the Negotiable Instruments Act does not arise. Approach of some courts below to not give effect to the presumptions under sections 118 and 139 of the Negotiable Instruments Act, is contrary to mandate of Parliament 19. Recently, the Kerala High Court in P.C. Hari v. Shine Varghese [2025 SCC OnLine Ker 5535.] has taken the view that a debt created by a cash transaction above Rs. 20,000 (rupees twenty thousand) in violation of the provisions of section 269SS of the Income-tax Act, 1961 - 15 - HC-KAR NC: 2026:KHC:19349 CRL.RP No. 480 of 2023 (for short “IT Act, 1961”) is not a “legally enforceable debt” unless there is a valid explanation for the same, meaning thereby that the presumption under section 139 of the Act will not be attracted in cash transactions above Rs. 20,000 (rupees twenty thousand). 20. However, this court is of the view that any breach of section 269SS of the Income-tax Act, 1961 is subject to a penalty only under section 271D of the Income-tax Act, 1961. Further neither section 269SS nor 271D of the Income-tax Act, 1961 states that any transaction in breach thereof will be illegal, invalid or statutorily void. Therefore, any violation of section 269SS would not render the transaction unenforceable under section 138 of the Negotiable Instruments Act, or rebut the presumptions under sections 118 and 139 of the Negotiable Instruments Act, because such a person, assuming him/her to be the payee/holder in due course, is liable to be visited by a penalty only as prescribed. Consequently, the view that any transaction above Rs. 20,000 (rupees twenty thousand) is illegal and void and therefore does not fall within the definition of “legally enforceable debt” cannot be countenanced. Accordingly, the conclusion of law in P.C. Hari v. Shine Varghese [2025 SCC OnLine Ker 5535.] is set aside. 21. This court also takes judicial notice of the fact that some district courts and some High Courts are not giving effect to the presumptions incorporated in sections - 16 - HC-KAR NC: 2026:KHC:19349 CRL.RP No. 480 of 2023 118 and 139 of the Negotiable Instruments Act, and are treating the proceedings under the Negotiable Instruments Act, as another civil recovery proceedings and are directing the complainant to prove the antecedent debt or liability. This court is of the view that such an approach is not only prolonging the trial but is also contrary to the mandate of Parliament, namely, that the drawer and the bank must honour the cheque, otherwise, trust in cheques would be irreparably damaged. No documents and/or evidence led with regard to the financial incapacity of the appellant 22. It is pertinent to mention that in the present case, respondent No. 1- accused has filed no documents and/or examined any independent witness or led any evidence with regard to the financial incapacity of the appellant- complainant to advance the loans in question. For instance, this court in Rajaram v. Maruthachalam [(2023) 16 SCC 125; 2023 SCC OnLine SC 48.] has held that the presumptions under sections 118 and 139 of the Negotiable Instruments Act, can be rebutted by the accused examining the Income-tax Officer and bank officials of the complainant/drawee. When the evidence of PW-1 is read in its entirety, it cannot be said that the appellant-complainant had no wherewithal to advance loan” - 17 - HC-KAR NC: 2026:KHC:19349 CRL.RP No. 480 of 2023 28. In the light of above principles of law, taking note of factual aspects of the matter, the conviction order recorded by the learned Trial Magistrate confirmed by the First Appellate Court needs no interference by this court, that too, under the revisional jurisdiction. 29. Accordingly, the following: ORDER The revision petition is meritless and hereby dismissed. Sd/- (V SRISHANANDA) JUDGE PA List No.: 2 Sl No.: 65