Accused in a Section 138 NI Act case challenged cognizance taken on a cheque dishonoured for a closed account, claiming it was a lost security cheque. The High Court held presumptions under Sections 118 and 139 arose and defences were for trial; petition dismissed.
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 20TH DAY OF NOVEMBER, 2024
BEFORE
THE HON'BLE MRS JUSTICE M G UMA
CRIMINAL PETITION NO. 4265 OF 2019
BETWEEN:
…PETITIONERS
(BY SRI. AKRAM PASHA .K., ADVOCATE (AB))
AND:
Digitally signed by SWAPNA V Location: high court of karnataka
M/S ESSILOR INDIA PRIVATE LIMITED, NO.71/1, BRIGADE PLAZA, 6TH FLOOR, S.C. ROAD, ANANDA RAO CIRCLE, GANDHINAGAR, BENGALURU - 560 009. REPT. BY MR. CHANDAN SHOP, S/O SHOP SHASHI KUMAR, AGED ABOUT 35 YEARS
…RESPONDENT
(BY SRI. GAURAV SINGH GAUR AND CH. HARIKADUTT, ADVOCATE)
THIS CRL.P IS FILED U/S.482 CR.P.C PRAYING TO QUASH THE ORDER DATED 08.03.2018 THE HONBLE LVIII A.C.M.M., MAYO HALL, BENGALURU, HAS TAKEN THE COGNIZANCE AGAINST THE
NC: 2024:KHC:47108 CRL.P No. 4265 of 2019
PETITIONER IN C.C.NO.52762/2018 FOR THE OFFENCE P/U/S 138 OF THE N.I ACT.
THIS CRL.P, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MRS JUSTICE M G UMA
ORAL ORDER
Petitioner being the accused in CC No.52762/2018 on the file of the learned LVIII ACMM, Mayohall, Bengaluru, is impugning the order dated 08.03.2018 taking cognizance of the offence punishable under Section 138 of Negotiable Instruments Act, 1881 ( for short NI Act) and registering the criminal case against him.
to be dishonored on presentation with an endorsement that the account is closed. When legal notice was issued, accused had issued reply denying that there was any amount that was due to be paid to the complainant and contended that the cheque in question was lost. The accused while admitting the business transaction with the complainant, contended that the last transaction was on 27.12.2016 and the bank account was closed on 19.12.2016, as he closed down the business. Therefore, the accused denied his liability to pay the cheque amount by issuing the reply notice. The complainant has filed the private complaint alleging commission of the offence punishable under Section 138 of NI Act. The Trial Court took cognizance of the offence by passing the order dated 08.03.2018, which is impugned herein.
the accused never denied the business dealing with the complainant, rather it is admitted. According to him, he has closed down the business. He contends that blank cheque was issued as security and the same was misused by the complainant. When the accused admits business transaction and admits issuance of the cheque with his signature, presumption under Section 139 of the NI Act would arise and the burden is on the accused to prove his defence, if any, before the Trial Court. There are prima-facie materials to prove the commission of the offence and on the basis of same, the Trial Court proceeded to take cognizance of the offence by passing a detailed order.
Under such circumstances, the contention taken by the petitioner does not serve any purpose and prays for dismissal of the petition.
“Whether the Petitioner has made out any grounds to allow the petition and to quash the criminal proceedings initiated against him?"
My answer to the above point is in ‘negative’ for the following:
R E A S O N S
under the name and style as M/s. Frontier Labs, Guwahati. He closed down the same on 01.03.2017. The reply notice dated 23.09.2017 is produced before the Court. According to which, the accused was running business, has last transacted with the complainant company on 27.12.2016 and the bank account was closed on 19.12.2016 as he closed down the business. The defence taken in the reply notice regarding date of closing
down the business do not match with the grounds made out in the petition. According to the petitioner, he had issued the cheque dated 12.07.2017. But it was a blank cheque issued as security. Once the accused admits issuance of cheque with his signature, the presumption under Sections 118 and 139 of NI Act would arise and the burden shifts on the accused to rebut the legal presumption. The complainant has filed the private complaint making specific allegations and complied with the requirements of law for the purpose of filing private complaint alleging the offence under Section 138 of NI Act.
are placed before the Court prima-facie discloses the commission of offence, the learned Magistrate was right in taking cognizance of the offence. The defence raised by the petitioner/accused in the grounds of petition could be his defence that may be taken before the trial Court, but the same cannot be a ground requiring this Court to hold a mini-trial to find out as to whether the offence in question is committed or not. When prima-facie materials are placed by the respondent/complainant before the Court regarding commission of the offence punishable under Section 118 of NI Act, I do not find any illegality or perversity in the order passed by the Trial Court. Hence, I do not find any reason to allow the same.
ORDER
Petition is dismissed .
Sd/(M G UMA) JUDGE
BH
List No.: 2 Sl No.: 63
1 issue framed by the court
Whether the petitioners made out grounds to quash the order taking cognizance under Section 138 NI Act in CC No.52762/2018?
4 provisions across 2 enactments
Frontier Labs, rep. by Dr. N.L. Agarwal
Dr. N.L. Agarwal
M/s Essilor India Private Limited, rep. by Mr. Chandan Shop
M G Uma
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
