The Karnataka High Court dismissed a criminal revision petition under Section 397 Cr.P.C. challenging a conviction under Section 138 of the Negotiable Instruments Act, 1881 for dishonoured post-dated cheques issued as part payment for a business purchase.
Revision petition dismissed and underlying judgment of conviction and sentence affirmed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 01ST DAY OF SEPTEMBER, 2023
BEFORE
THE HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR
CRIMINAL REVISION PETITION NO.1165/2019
BETWEEN:
M/s. VARAVINAYAK VENTURES, DULY REPRESENTED BY ITS PARTNERS
(BY SRI. DEEPAK B. R., ADVOCATE)
AND:
RAJESH SHARMA S/O. O.P. SHARMA, AGED ABOUT 60 YEARS, JAM RESIDENCY, NO.C-301, S.T. BED, KORAMANGALA, BENGALURU – 560095.
…RESPONDENT
(BY SMT. PRIYANKA RAO, ADVOCATE)
THIS CRIMINAL REVISION PETITION FILED UNDER SECTION 397 R/W 401 CR.P.C. BY THE ADVOCATE FOR THE PETITIONER PRAYING THAT THIS HON’BLE COURT MAY BE PLEASED TO SET ASIDE THE IMPUGNED JUDGMENT DATED 06.02.2019 PASSED BY THE LVIII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU IN CRL.A. NO.472/2015 WHICH IS AT ANNEXURE-A AND ALSO SET ASIDE THE JUDGMNET OF CONVICTION PASSED BY THE XX ADDL. C.M.M., BENGALURU IN C.C. NO.173/2013 VIDE ORDER DATED 17.03.2015 WHICH IS AT ANNEXURE-B AND TO ACQUIT THE PETITIONERS/ACCUSED.
THIS CRIMINAL REVISION PETITION IS COMING ON FOR ADMISSION ON 07.07.2023 AND THE SAME HAVING BEEN HEARD AND RESERVED FOR PRONOUNCEMENT OF ORDER, THIS DAY, THE COURT PASSED THE FOLLOWING:
ORDER
Appellants/accused Nos.1 to 5 have preferred this petition under Section 397 of Cr.P.C., challenging the judgment of conviction and sentence passed against them by the XX Additional Chief Metropolitan Magistrate, Bengaluru in C.C. No.173/2013 for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the ‘N.I. Act’, for brevity) and affirmed by the LVIII Additional City Civil and Sessions
Judge (CCH–59), Bengaluru in Criminal Appeal No.472/2015 dated 06.02.2019.
Brief facts of the case are as under:
5. Learned Magistrate after following the
procedure with regard to the filing of a private complaint, permitted the complainant to lead evidence to substantiate his allegations made in the complaint.
of Rs.10,000/- was ordered to be deposited to the State towards the expenses incurred in the prosecution.
it shows that, there is no application of mind by the Trial
Court. The so called statutory notice issued by the complainant was properly replied by the accused persons. There was no business transaction with the complainant by these accused persons. It is submitted that the contents of the reply notice themselves answer the case of the complainant. The complainant has misused the cheque. Out of the total amount, Rs.17,50,000/- was paid. The payment was stopped as the said cheques were issued by way of security.
mind. Therefore, he prays to allow the revision petition and to acquit all the accused persons.
for the complainant Smt. Priyanka Rao, also relies upon the admission of DW.1 and also the documents so produced by both the sides. It is her submission that, learned Trial Court and first appellate Court have rightly appreciated the evidence and have come to the conclusion that the accused persons have committed the offence as alleged in the complaint.
between the complainant and Shri. B.P. Ramesh as party of first part on behalf of ‘M/s. Vara Vinayak Ventures’ partnership firm, represented by accused Nos.1 to 5 as second party.
that day, the complainant received Rs.5,50,000/- by way of cash. It was agreed between the accused persons and
the complainant that, the balance amount of
Rs.8,00,000/- was to be paid to the complainant/Rajesh Sharma by way of four cheques dated 15.07.2012, 15.08.2012, 15.09.2015 and 15.10.2012 as mentioned in
the business purchase agreement. These factual features stated supra brought on record by both the sides are not disputed by the defense i.e., accused Nos.1 to 5.
and accused is to the effect that, when the complainant on receipt of the said cheques presented the same, they were dishonored with endorsement “Payment Stopped”.
contents of the complaint in his evidence on oath. He has been directed with severe cross examination. He admits
that the partnership firm in which himself and Shri. B.P. Ramesh are the partners is not a registered partnership
firm. It is suggested that there was business agreement on 12.06.2012. Thus, Ex.D.1 is an admitted document between both the sides, with regard to the sale of restaurant business for Rs.25,50,000/-. It is further admitted that, out of that amount, Rs.17,50,000/- was paid together to the complainant and Shri. B.P. Ramesh. It is denied that those four cheques were issued by way of security.
that, the said partnership firm wherein, the complainant and Shri. B.P. Ramesh are the partners have to pay the
demand of accused i.e., Rs.71,644/- towards electricity charges, Rs.75,000/- towards CCTV Camera, Rs.20,000/towards new Tandoor, Rs.10,000/- towards projector, Rs.40,000/towards two air condition equipments, Rs.5,500/- towards 32 inches Television, Rs.4,500/towards TVS box and Rs.2,000/- towards Telephone bill. Unless the complainant pays the said amount, the claim of the said partnership firm cannot be settled. It is stated that, as the said partnership party No.1 deliberately avoided to pay the said amount therefore, as they were avoiding their duties and responsibilities, the accused had issued “stop payment” instructions.
persons are bound by the contents of Ex.D.1 which is “undisputed document”.
accused persons has come before the Trial Court and specifically admits with regard to the issuance of the cheque. According to his evidence, the complainant has to pay Rs.3,00,000/- towards various liabilities stated supra. He has been thoroughly cross examined. He admits so many suggestions directed to him. It is stated by him that, the accused has issued four blank signed cheques. According to him those cheques were issued by way of security. It is suggested to PW.1 that they have paid Rs.5,50,000/- to the complainant. But his answer was that, they have paid the said amount to both complainant and Shri. B.P. Ramesh. When recital in the business purchase agreement shows that, towards full and final settlement of the claim of Shri. B.P. Ramesh, Rs.12,00,000/- was paid to him by way of a D.D. as mentioned in Ex.D.1. The question of paying Rs.5,50,000/- to both the complainant and Shri. B.P.
Ramesh do not arise at all. It may be an after thought defence of the accused persons which cannot be accepted. If really the amount which was to be settled to be paid to both the complainant and Shri.B.P.Ramesh, why cheque i.e., Ex.P.1 and other cheques were issued in the name of complainant is not explained by DW.1. When the complainant is entitled for his balance amount and had received Rs.5,50,000/- by way of cash towards part payment and for remaining amount, the accused persons have issued four cheques with different dates, now the accused Nos.1 to 5 cannot give a go by to the recitals of the Ex.D.1 and falsify the case of the complainant. Ex.D.2 is the acknowledgement of registration forms of ‘M/s. Vara Vinayak Ventures’, Ex.D.3 is the authorization letter. Even
if at all there is some amount due from the party No.1, a separate remedy is very much available to party No.2 for recovery of the same. For that, party No.2 i.e., accused have to take proper legal steps. On the guise of such recovery from the said party No.1 i.e., amount so mentioned in the reply notice, they cannot escape the liability to pay the cheque amount and cannot instruct
their Banker to “stop the payment” which clearly attracts
the provision of Section 138 of the N.I. Act.
“ Dishonour of cheque for insufficiency, etc., of funds in the accounts:
Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for [a term which may be extended to two years,] or with fine which may extend to twice the amount of the cheque, or with both:
PROVIDED that nothing contained in this section shall apply unless-
a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation: For the purpose of this section, “debt or other liability” means a legally enforceable debt or other liability.”
particularly Sections 20, 87 and 139 of N.I Act, make it amply clear that, a person who signs a cheque and makes it over, payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of debt or in discharge of a liability.
respectively. The balance amount which was to be paid to the complainant was paid by way of post dated cheques. When the said cheques were presented, the said cheques were dishonored with a endorsement “Payment Stopped”. This itself goes to establish that, just for the sake of defense the accused must have taken such a defense which holds no water.
petitioners/accused persons. Thus petition merits no
consideration and therefore, it is liable to be dismissed.
ORDER
(i) Revision petition filed by the
petitioners/accused Nos.1 to 5 under Section
397 of Cr.P.C. is dismissed.
(ii) Judgment of conviction of sentence
passed by the XX Additional Chief Metropolitan Magistrate, Bengaluru in C.C.No.173/2013 affirmed by the LVIII Additional City Civil and Sessions Judge, Bengaluru are hereby
confirmed.
(iii) Send back the Trial Court and appellate Court records forthwith along with copy of this judgment.
Sd/-
JUDGE
SMM
2 issues framed by the court
Whether the High Court could dismiss the revision petition filed under Section 397 Cr.P.C. challenging the conviction for cheque dishonour.
Whether the discharge of liability by the accused towards one partner could defeat the complainant's right to enforce the cheque.
Colour shows how this judgement treated each authority
None cited directlyReferred
3 provisions across 2 enactments
M/s. VARAVINAYAK VENTURES (Through Partners Pawan Kumar, Rajashekhar Gummadi, Vinay Krishnamurthy, Prajwal Hegde, Dee B)
RAJESH SHARMA
RAMACHANDRA D. HUDDAR
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
