- 1 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 16TH DAY OF MARCH, 2026 BEFORE THE HON'BLE MR. JUSTICE V SRISHANANDA CRIMINAL REVISION PETITION No.762 OF 2018 (397(Cr.PC) / 438(BNSS) BETWEEN: MR ROHITH GULGULIA (WRONGLY WRITTEN AS ROHITH SIPANI) S/O MR.KIRAN CHAND GULGULIA AGED 33 YEARS, PARTNER, M/S SIPANI TIMBERS, GAVANAHALLI, K.M.ROAD, CHICKMANGALUR-577101. …PETITIONER (BY SRI I.S.PRAMOD CHANDRA FOR SRI P N HEGDE, ADVOCATES) AND: MR RAMESH B GOWDA S/O MR.BOMME GOWDA, AGED ABOUT 45 YEARS RESIDENT OF NO.325/1, 14TH MAIN, 5TH CROSS, R.M.V. EXTENSION, SADASHIVANAGAR, BANGALORE-560 080. …RESPONDENT (BY SRI VENKATRAMANA M K, HIGH COURT GOVERNMENT PLEADER) THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397 R/W 401 CODE OF CRIMINAL PROCEDURE PRAYING TO SET-ASIDE THE JUDGMENT AND SENTENCE DATED 03.05.2016 PASSED BY THE LEARNED XIX A.C.M.M., R Digitally signed by R MANJUNATHA Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 BANGALORE IN C.C.NO.9021/2012 AND SET-ASIDE THE JUDGMENT AND SENTENCE DATED 03.05.2018 PASSED BY THE LEARNED LXVII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BANGALORE (CCH-68) IN CRL.A.NO.665/2016. THIS PETITION, COMING ON FOR HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE V SRISHANANDA ORAL ORDER Heard Sri I.S.Pramod Chandra, learned counsel for the revision petitioner and Sri M.K. Venkatramana, learned counsel for the respondent. 2. Accused who suffered an order of conviction in C.C No.9021/2012 dated 03.05.2016 passed by the XIX Addl. CMM, Bengaluru, for the offence punishable under Section 138 of the Negotiable Instruments Act, confirmed in Criminal Appeal No.665/2016 dated 03.05.2018 on the file of the LXVII Addl. City Civil and Sessions Judge, Bengaluru, is the revision petitioner. 3. Facts in the nutshell which are utmost necessary for disposal of the present revision petition are as under: In respect of a dishonored cheque issued by the revision petitioner/accused towards the payment of price of silver oak - 3 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 wooden logs purchased by him, complainant has sought for action against the accused by filing a criminal complaint under Section 200 of the Code of Criminal Procedure. 4. The complaint averments would reveal that complainant has supplied 83 loads of silver oak tree logs to the accused, on the orders placed by the accused. On the last date of transaction, there subsisted an amount of Rs.50,00,000/- which became due and liable to be paid by the accused to the complainant for having purchased the said silver oak wooden logs from the complainant. 5. Thereafter, the parties who were on loggerheads sat together and settled the dispute amicably. In respect of the amount that was liable to be paid by the accused towards the part payment of the sale price, issued a cheque bearing No.259281 dated 01.12.2008 in a sum of Rs.10,00,000/- drawn on ING Vysya Bank, Chikkamagaluru Branch, drawn in favour of the complainant. 6. Said cheque, on presentation, returned with an endorsement ‘funds insufficient’ on 27.02.2009. A statutory - 4 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 notice as is contemplated under Section 138(b) of the Negotiable Instruments Act was issued calling upon the accused to make good the amount covered under the cheque. Accused failed to comply with the callings of the notice. Instead, he sent an untenable reply. 7. Therefore, complainant sought for action against the accused. 8. Learned Trial Judge, after taking cognizance of the offence alleged against the accused, summoned the accused and recorded the plea. Accused pleaded not guilty. Therefore, trial was held. 9. In order to establish the case of the complainant, K.N.Praveen-GPA holder of the complainant got examined himself as PW-1 and placed on record eight documentary evidence which were exhibited and marked as Exs.P-1 to P8, comprising of power of attorney, dishonored cheque, bank endorsement, copy of the legal notice, R.P.A.D postal receipts, acknowledgment cards and reply notice. - 5 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 10. As against the material evidence placed on record by the complainant, three witnesses were examined namely Rohit Gulgulia, Hemanth Kumar, Vincent Lobo as D.Ws.1 to 3, on behalf of the accused. So also, five documentary evidence were placed on record, which were exhibited and marked as Exs.D-1 to D5, comprising of three receipts vide Exs.D-1 to D- 3, 82 trip sheets vide Ex.D-4 and certified copy of the judgment in C.C No.146/2009 vide Ex.D-5. 11. Thereafter, learned Trial Judge heard the arguments of the parties and by considered judgment dated 03.05.2016, convicted the accused inter alia holding in paragraph Nos.46 to 52 as under: “46. The oral and documentary evidence adduced before this court by the accused will not take away the case of the Complainant and it will also rebut the presumption available to this Complainant u/Sec.139 of N.I. Act. The Accused has utterly failed to prove that there was no any business transaction in between him with this Complainant much less amounting to Rs.50,00,000/- and he has not issued Ex.P2 cheque towards the part-payment of the sale price amount after purchase of silver oak timber logs from the estate of this Complainant. - 6 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 47. Even when this Accused was questioned u/Sec. 313 Cr.P.C. by this court, the Accused except denying the incriminating evidence deposed against him by PW1, has not put forth any defence from his side to believe his defence. The Accused has utterly failed to rebut the presumption available to this Complainant u/Sec.118 and also u/Sec. 139 of N.I. Act it reads thus respectively. 48. As per the provisions of Sec.118, which reads thus: a. Of consideration – that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration; b. As to date – that every negotiable instrument bearing a date was made or drawn on such date; c. As to time of acceptance – that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity; d. As to time of transfer – that every transfer of a negotiable instrument was made before its maturity; e. As to order of endorsements – that the endorsements appearing upon a negotiable instrument were made in the order in which they appear thereon; - 7 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 f. As to stamps – that a lost promissory note, bill of exchange or cheque was duly stamped; g. That holder is a holder in due course – that the holder of a negotiable instrument is a holder in due course; Like wise he also failed to rebut the presumption available u/s. 139 of NI Act which reads: It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability. 49. There is nothing on record to believe the defence of the Accused that this Accused had given his duly signed blank cheque in favour of DW3 towards security of the sale price amount after purchase of the timber logs and in turn DW3 colluding with this Complainant, misused his cheque and filed this false complaint against this Accused. 50. The arguments canvassed by the Learned Counsel for the Accused that the Complainant colluding with DW3, misused the blank cheques issued in favour of DW1 through his brother DW2 towards the security of the sale price amount after purchase of timber logs from the estate of this Complainant and DW3 in turn issued the duly signed blank cheque of this DW1 collected from DW2 towards the security of the sale price amount after he purchased the timber logs from his estate and this Complainant has created the cheque for Rs.10,00,000/- - 8 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 and filed this false complaint and therefore, the complaint has to be dismissed by acquitting this Accused, is not convinced this Accused and it cannot be acceptable. Likewise, his further arguments that this accused by adducing oral and documentary evidence before this court, has successfully proved his defence and he has successfully rebutted the presumption available to this Complainant u/Sec.139 of N.I. Act, is also not convinced this court and it holds no merit. 51. On the contrary, the learned Counsel for the Complainant has vehemently argued that the Complainant before filing of this complaint, has followed all the procedures prescribed u/Sec.138 of N.I. Act and this Accused even after receipt of the Legal Notice has not chosen to make payment of the cheque amount well within the period of limitation but he has sent his false reply with an intention to ran away from his liability to pay the cheque amount. He has argued that the Accused knowing fully well that he has no sufficient funds in his bank account, had issued a bogus cheque, only with an intention to cheat this Complainant. He has argued that the entire burden is on this Accused to rebut the presumption available to this Complainant u/Sec.139 of N.I. Act and this Accused has totally failed to prove his defence to the satisfaction of the court. He further argued that the oral and documentary evidence adduced before this court by the accused are not sufficient and convincing and it will not rebut the presumption available to this Complainant u/Sec.139 of N.I. Act. - 9 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 52. He has further stated that the Accused only with an intention to ran away from his liability to pay the cheque amount, has taken up the false defence that his cheque was misused by this DW3 colluding with this Complainant. He has further stated that the Complainant by adducing the oral and documentary evidence before this court, proved the guilt of the Accused beyond all reasonable doubts and therefore by considering the facts and evidence of the case, the Accused has to be convicted for the offence punishable u/Sec.138 of N.I. Act. The arguments canvassed by the learned Counsel for the Complainant, is fully convinced this court and therefore, it is accepted. The learned Counsel for the Complainant in support of his arguments has relied upon the judgements reported in, 2015 (3) DCR 362 Delhi High Court between Suresh Chandra Goyal Vs. Amit Singhal wherein it is held that; “So long as there is debt existing in respect where of cheque is issued the same may be presented for recovery of debt. “ AIR 2016 Supreme Court 740 between Don Ayengia Vs. The State of Assam and Anr. wherein it is held that; “N.I Act (26 of 1881), S.138 – cheque dishonour – Cheque issued whether in discharge of “any debt or other liability” – Agreement between parties wherein cheques issued by Complainant to one “N’ – Upon termination of agreement amount paid to “N” was refundable to Complainant - Promissory note executed by - 10 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 “n’ contained an unequivocal acknowledgement of not only debt/liability aforementioned but promise to liquidate same within one month with interest at bank rate – Five cheques handed over to Complainant were to be returned but only upon payment of amount in question – It cannot be said that cheques had nothing to do with any debt or to her liability – Words “security” qua cheques used in promissory note – Imply that once amount was paid, cheques shall have to be returned – There would be no reason for their rentention by Complainant or for their presentation – Endorsement made by respondent on promissory note that cheques can be presented on date mentioned – Failure on part of “N” to liquidate liability within one month – Dishonour of cheque on ground of insufficiency of funds – Conviction of respondent who acknowledged to liquidate debt owned by ‘N’ – proper. “2014 (2) DCR 93 Karnataka High Court between Venkatesh Prasad Vs. Subray V. Bhat wherein it is held that; “whenever cheques are issued, a presumption has to be drawn under Section 139 of N.I.Act that cheque has been issued towards discharge of his liability and the said presumption also includes the presumption of - 11 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 existence of legally enforceable debt or liability.” AIR 2015 Supreme Court 2579 between Mainuddin Abdul Sattar Shaikh Vs. Vijay D. Salvi wherein it is held that; (A) Negotiable Instruments Act (26 of 1881), S. 138 - dishonour of cheque – Liability – Cheque drawn by respondent in his personal capacity and not by company of which he is Managing Director – Company is not liable even if it is for discharging dues of company – Respondent being drawer of cheque is alone liable for offence under Sec.138. “ The law laid in these judgements are amply applicable to the facts of the present case on hand and it will helpful to the case of the Complainant.” 12. Being aggrieved by the same, accused filed an appeal before the District Court in Criminal Appeal No.665/2016. 13. Learned Judge in the First Appellate Court, after securing the records, heard the arguments of the parties in detail. In the light of the arguments put forth on behalf of the parties, re- appreciated the material evidence on record and dismissed the appeal by considered judgment dated 03.05.2018. - 12 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 14. Being further aggrieved by the same, accused is before this Court on following grounds:  It is humbly submitted that the impugned Judgment and sentence passed by the learned Magistrate are opposed to law, facts and circumstances and probabilities of the case. The reasoning assigned by the learned Sessions dismissing the Appeal challenging the findings of the learned Magistrate are also not probable or maintainable in the facts and circumstances of the case and thus both the judgments of the Courts below are liable to be set aside.  It is humbly submitted that judgment and conviction passed by the learned Magistrate is not based on any cogent, proper, sufficient and reliable evidence and even the consideration of the same by the learned Sessions Judge is also not in accordance with law and as such, both the said judgments are liable to be set-aside.  It is submitted that the very Notice issued under Sec. 138 of the Ν.Ι. Act and also the initiation of the proceedings under the Act is bad in law for the reason that the Accused was not the Proprietor of M/s Sipani Timbers but Sipani Timbers is a partnership Concern and without addressing a notice or initiating any action against the partnership concern, the proceedings initiated against the Accused are bad in law and cannot be sustained.  It is submitted that the specific case of the Complainant against the Accused was that the accused had purchased timber from the Complainant for a value of Rs.50.00 - 13 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 Lakhs and that for the balance of Rs. 10.00 Lakhs payable, the Accused had issued the cheque in question. In the instant case, for the reasons best known to the Complainant, he did not step into the witness box and he was represented by his power of attorney. However, no iota of materials placed were Complainant before the Court to prove that there was a transaction to the tune of Rs. 50.00 Lakhs and that a sum of Rs. 10.00 Lakhs was, in fact, due from the Accused. When the said fact or the existence of a was not legally recoverable debt established, it was incumbent upon the learned Magistrate to hold that the Complainant has not proved his and acquitted case However, taken a the Accused. learned the Magistrate strange complete view drawing the provisions of Sec. 118 and 139 of the Act to fix the burden on the Accused, which is completely unsustainable submitted in that law. unless It is the Complainant the initial burden of proving the existence of a legally enforceable debt as against the Accused, the case could not proceed any further but the view expressed by the learned Magistrate is completely contrary to the settled principles of law.  It is submitted that as soon as the Notice of the dishonour of the cheque was received by the Accused, the facts as existed were brought forth by way of a Reply and the same was served on the complainant. Inspite of the same, learned Magistrate has taken an extraneous view in the matter fixing the guilt against the Accused, which cannot be sustained. - 14 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018  It is submitted that D.W.-3 Mr.Vincent Lobo was the person who had negotiated and purchased the timber from the Complainant and D.W.-3 in turn negotiated with D.W.-2 and had sold the timber in favour of the Firm headed by D.W.-1 and all kinds of negotiations as regards the price and the quantity was finalized between D.W.-2 and D.W.-3 and there was not an occasion in which the Complainant in which he had any say in the matter or the negotiations had taken place between the Complainant and D.W.-1 so as to attract the offence under Sec. 138 of the N.I.Act or to make the liability a legally recoverable debt.  It is submitted that in order to place the facts before the Court, the Accused had got examined himself examined on oath and also got examined the other 2 witnesses in support of the case. However, the learned Magistrate has taken a very strange view and held that the case of the Accused was not worth believing, which is contrary to the facts and circumstances of the case and also the materials available on record.  It is submitted that the very subject matter of the case, i.e.. sale of the timber logs to D.W.-3 was the subject matter of a criminal case in C.C. No. 146/2009 on the file of the learned Principal Civil Judge and J.M.F.C., at Mudigere and in the said case, the Manager of the Complainant's Estate had lodged complaint against D.W.-3 and 4 others with respect to the very subject matter herein and it is clearly held in the said case that - 15 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 the timber was sold in favour of D.W.-3 by the Complainant and the finding of fact which has not been challenged in the said case has been upset by the learned Magistrate in the present and it appears that the learned Magistrate has lost sight of the facts that were brought forth therein and the said judgment sets on rest the contentions and that the transactions never existed between the Accused and the Complainant and thus, the very case initiated by the Complainant was a concocted one and thus, the Accused had to be acquitted from the case.  It is submitted that the on appreciation of the evidence record and the materials therein by the learned Magistrate is completely illegal and not permissible in law and the accused has been seriously prejudiced by the manner in which the evidence has been appreciated by the learned Magistrate. It is submitted that with due respect that the appreciation of evidence by the learned Magistrate is opposed to the cannons of criminal jurisprudence and the same is capricious, highly prejudicial to the accused and thus, the same is liable to be dismissed.  It is submitted that the facts, circumstances and the evidence let in the complainant are sufficient to establish a case against the Accused whereas the evidence let in by the Accused is not only but is overwhelming to establish that the presumption under Secs. 118 and 139, N.I. Act stands rebutted and that the reasoning of the - 16 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 learned Magistrate is highly unacceptable. It is submitted that the learned Magistrate has not at all canvassed the arguments raised by the Accused and has considered the arguments addressed on behalf of the Complainant in a very choosy manner and came to a conclusion far from truth and acceptance and thus, the same suffers from illegality.  It is submitted that strangely, the learned Sessions Judge, before whom the Appeal was preferred was pleased to read only the Judgment of the Trial Court and the pleadings therein, without actually venturing to the defence of the accused-Petitioner or the points which have been raised by the Petitioner, which are not only valid, lawful but which were ignored by Magistrate in the judgment passed in the case. Further, even the learned Sessions Judge failed to appreciate the contents and the facts that were canvassed and held by the learned Magistrate, at Mudigere in C.C. No. 146/2009, which was marked as Ex. D-5 before the learned Trial Court in this case. However, no whisper is made on the said Document, which had reached a finality and when a Court of competent jurisdiction had dealt over the matter pertaining to the issue in question in this case, both the Courts have strangely ignored the said Judgment, contrary to law.  It is submitted that thus judgments of the Courts below suffer not only in respect of facts but the law on a serious issue establishment of the of case of the - 17 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 complainant. Though it was the prima facie burden of the Complainant to prove the existence of a legally enforceable liability or debt, the learned Magistrate has drawn an adverse presumption for not proving the case of the Accused-Petitioner, ignoring the very fact that the Complainant had not proved his case against the Petitioner. The views of the Courts below are not only a mockery of the Judgment passed in C.C. No. 146/2009 but are a serious shortfall in appreciation of a case under Sec. 138 of the N.I. Act. Thus, both the said judgments are liable to be set aside.  It is submitted that the materials on record need to be reappreciated in the right perspective and the judgment of the learned Magistrate and the learned Session Judge deserve to be reversed in order to meet the ends of justice and equity.” 15. Sri I.S.Pramod Chandra, learned counsel for the revision petitioner reiterating the grounds urged in the revision petition, vehemently contended that the cheque in question was misused by the complainant and in that regard there were several disputes between the parties including the criminal case that has been filed against the accused by the complainant wherein accused got acquitted by a considered judgment marked at Ex.D-5. - 18 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 16. Therefore, the finding of guilt recorded by the learned Trial Magistrate confirmed by the learned Judge in the First Appellate Court has resulted in grave miscarriage of justice. 17. He would further emphasize that the complainant failed to establish the fact that the cheque in question carried the legally recoverable debt to the tune of Rs.10,00,000/- as there was no transaction at all between the accused and the complainant. 18. He would point out that there is a specific answer given by the accused during his cross-examination on behalf of the complainant that he purchased the silver oak tree logs from Vincent Lobo who is examined as DW-3. Therefore, there is no privity between the complainant and accused and thus sought for allowing the revision petition. 19. Per contra, Sri M.K.Venkatramana, learned counsel for the respondent/complainant supports the impugned judgments. 20. He would further contend that the complainant enjoys the statutory presumption under Section 139 of the Negotiable - 19 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 Instruments Act and therefore, the defence evidence of misusing the cheque cannot be countenanced in law. 21. He would further point out that in the absence of any positive action taken by the accused against the complainant for the alleged misuse of the cheque, said defence gets into insignificance and therefore Order of the Trial Magistrate confirmed by the First Appellate Court needs no interference, that too, in the revisional jurisdiction of this Court and sought for dismissal of the revision petition. 22. Having heard the arguments of both sides this Court perused the material on record meticulously. 23. On such perusal of the material on record, it is not in dispute that the cheque in question belongs to the accused and signature found therein is that of the accused. 24. Admittedly cheque came to be dishonored with an endorsement ‘funds insufficient’. Legal notice is served on the accused and Ex.P-8 is the reply notice that has been issued by the accused through his advocate. - 20 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 25. In the reply notice itself, it has been mentioned that the complainant has sold the silver oak tree logs to Vincent Lobo and the cheque in question was issued towards the security and not towards the legally recoverable debt. Therefore, he sought for desisting from the intended action. 26. Further, he has taken a specific contention that on 25.11.2008 and on 04.11.2008, Sri James has taken Rs.10,00,000/- and Rs.5,00,000/- in cash. In other words, accused was pleading discharge. 27. Admittedly, the transaction as is contended by the complainant stands established by virtue of the answers elicited in the cross-examination of DW-1 coupled with the oral testimony of the complainant. There is a plea of discharge taken by the accused by contending that on two specific dates James has collected Rs.10,00,000/- and Rs.5,00,000/- from the accused for and on behalf of the complainant. 28. If that is so, nothing prevented the accused to examine said James by summoning him inasmuch as when he could summon Sri. Vincent Lobo and Sri Hemanth Kumar. No receipt - 21 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 is placed on record for having paid Rs.10,00,000/- and Rs.5,00,000/- to Sri James who received the money for and on behalf of the complainant. 29. Further, there is a specific answer elicited in the cross- examination of DW-1 that he did not take any positive action against the complainant for the misuse of the cheque marked at Ex.P-2. 30. Admittedly, when the accused has taken a stand in the reply notice itself that there is misuse of the cheque which was given for security, no normal prudent person would keep quiet from taking any action especially any positive action against the complainant for the alleged misuse especially when he had the services of an advocate while issuing the reply at Ex.P-8. 31. Even after receipt of summons from the Magistrate Court about the dishonour of the cheque, there was no positive action taken by the accused against the complainant for the alleged misuse. 32. It is needless to emphasize that complainant enjoys the presumption under Section 139 of the Negotiable Instruments - 22 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 Act, apart from the presumption as to the consideration etc., which is available under Section 118 of the Negotiable Instruments Act. 33. When presumption under Section 118 of the Negotiable Instruments Act is already available to the complainant, the intention of the legislature in carving out a separate statutory presumption under Section 139 of the Negotiable Instruments Act, is not a mere formality. 34. The additional presumption that has been made available to the holder of a cheque under Section 139 of the Negotiable Instruments Act is to the effect that the cheque so issued which stood dishonored which is subject matter of the criminal prosecution under Section 138 of the Negotiable Instruments Act, is to the effect that the cheque is issued for the legally recoverable debt or other liability. 35. The principles of law which would govern the proper interpretation of Section 139 of the Negotiable Instruments Act is no longer res integra. Hon'ble Supreme Court in the case of - 23 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 Rangappa vs. Sri Mohan reported in AIR 2010 SC 1898, at paragraphs 27 and 28, has held as under: “27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant-accused cannot be expected to discharge an unduly high standard or proof. 28. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of “preponderance of probabilities”. Therefore, if the accused is able to raise a probable defence which - 24 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.” 36. Again the Hon'ble Supreme Court in the case of Rajesh Jain vs. Ajay Singh reported in (2023)10 SCC 148 has held as under: “61. The fundamental error in the approach lies in the fact that the High Court has questioned the want of evidence on the part of the complainant in order to support his allegation of having extended loan to the accused, when it ought to have instead concerned itself with the case set up by the accused and whether he had discharged his evidential burden by proving that there existed no debt/liability at the time of issuance of cheque.” 37. Taking note of the statutory presumption, the accused is required to place such rebuttal evidence on record to rebut the statutory presumption that there existed no legally recoverable debt or other liability under Ex.P-2. - 25 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 38. In the case on hand, it is the specific contention of the accused himself in Ex.P-8 that the said cheque is issued as a security. 39. What happens in respect of a cheque which has been issued as a ‘security’ is also decided by the Hon'ble Apex Court in the case of Sripathi Singh (since deceased) through his son Gaurav Singh vs. State of Jharkhand and another reported in (2022)18 SCC 614. 40. Relevant paragraph in the said decision is at paragraph 22 which is culled out hereunder for ready reference: “22. When a cheque is issued and is treated as “security” towards repayment of an amount with a time period being stipulated for repayment, all that it ensures is that such cheque which is issued as “security” cannot be presented prior to the loan or the instalment maturing for repayment towards which such cheque is issued as security. Further, the borrower would have the option of repaying the loan amount or such financial liability in any other form and in that manner if the amount of loan due and payable has been discharged within the agreed period, the cheque issued as security cannot thereafter be presented. Therefore, the prior discharge of the loan or there being an altered situation due to which there would be understanding between the parties is a sine - 26 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 qua non to not present the cheque which was issued as security. These are only the defences that would be available to the drawer of the cheque in a proceeding initiated under Section 138 of the NI Act. Therefore, there cannot be a hard-and-fast rule that a cheque which is issued as security can never be presented by the drawee of the cheque. If such is the understanding a cheque would also be reduced to an “on demand promissory note” and in all circumstances, it would only be a civil litigation to recover the amount, which is not the intention of the statute. When a cheque is issued even though as “security” the consequence flowing therefrom is also known to the drawer of the cheque and in the circumstance stated above if the cheque is presented and dishonoured, the holder of the cheque/drawee would have the option of initiating the civil proceedings for recovery or the criminal proceedings for punishment in the fact situation, but in any event, it is not for the drawer of the cheque to dictate terms with regard to the nature of litigation.” 41. On considering the above legal principles and applying the same to the case on hand, though accused has tried to rebut the presumption available to the complainant under Section 139 of the Negotiable Instruments Act by examining himself as DW-1 and two more witnesses i.e., DW-2 and DW-3, this Court is of the considered opinion that the inaction on the - 27 - HC-KAR NC: 2026:KHC:15515 CRL.RP No. 762 of 2018 part of the accused to take proper remedy as against the alleged misuse of the cheque having been not established, the presumption available to the complainant under Section 139 of the Negotiable Instruments Act did not get rebutted. 42. Therefore, the conviction recorded by the learned Trial Magistrate confirmed by the First Appellate Court needs no interference, that too, in the limited revisional jurisdiction. 43. Accordingly, this Court does not find any good grounds to interfere with the well reasoned orders passed by the learned Trial Magistrate confirmed by the First Appellate Court. 44. Hence, the following: ORDER Revision Petition is meritless and is hereby dismissed. Sd/- (V SRISHANANDA) JUDGE kcm List No.: 1 Sl No.: 70