Dismissed¶71

Gangadharayya S/O Fakiraya Kulkarni v. Siddalingappa S/O Hulgappa Bommmanal

Karnataka HC12 Jun 2025CRL.A/100125/2017

Case brief

AI extract

What is this about?

Section 138 NI Act acquittal upheld; appeal against acquittal under Section 378(4) CrPC; presumptions under Sections 118 and 139 NI Act rebutted by probable defence; security cheque; hand loan; sleeping partner; legally recoverable debt not proved; dishonour endorsement 'funds insufficient'; demand notice 'unclaimed'; private complaint Section 200 CrPC; Karnataka High Court Dharwad Bench; Justice Rajesh Rai K; 2025.

What did the court decide?

No relief to the appellant; the judgment of acquittal is maintained. ¶71

Why is it important?

Gangadharayya S/O Fakiraya Kulkarni Vs Siddalingappa S/O… — Cheque Dishonour | Karnataka HC (2025)

What the court decided

AI extract

Outcome

No relief to the appellant; the judgment of acquittal is maintained.

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Issue for consideration

Whether the trial Court is justified in acquitting the respondent-accused for the offence punishable under Section 138 of the N.I. Act?

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Court's answer

Execution of cheque Ex.P3 and the accused's signature thereon were not seriously disputed; the contest centred on whether the debt was legally recoverable.

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Ratio / Principle

Per Ex.P13 partnership deed, the complainant is a sleeping partner of 'Vigneshwar Traders' and all financial activities of the firm were dealt with by his wife Smt. Savitri, the active partner.

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Key takeaways

There was no explanation in the complainant's evidence for his silence of nearly eight months between the alleged November-2008 cement purchase and the cheque dated 06.07.2009.ratio¶60
The complainant failed to establish the purchase of cement bags by the accused in November-2008 and therefore failed to prove the legally recoverable debt.ratio¶65

Detailed headnote1 paragraphs

Criminal appeal under Section 378(4) Cr.P.C. by the complainant against acquittal under Section 138 N.I. Act (C.C.No.4190/2015, JMFC-I Court, Hubballi, 02.03.2017). Cheque Ex.P3 for Rs.75,300/- dated 06.07.2009 (Allahabad Bank, Hubli Branch) was dishonoured on 09.07.2009 with endorsement 'funds insufficient'; signature on the cheque was not disputed. Complainant traced the debt to a hand loan of Rs.10,800/- (Ex.P1, 23.02.2007) and supply of 275 cement bags for Rs.64,500/- (Ex.P2, 18.11.2008). Held: acquittal justified — the complainant, shown by Ex.P13 to be only a sleeping partner of 'Vigneshwar Traders' whose finances were managed by his wife (active partner), failed to prove the legally recoverable debt; his unexplained silence of nearly eight months after the alleged purchase told against him; and the accused's probable defence that the cheque was security for a loan availed in February-2007 and repaid rebutted the presumptions under Sections 118 and 139 N.I. Act. Appeal dismissed.

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NC: 2025:KHC-D:7611 CRL.A No. 100125 of 2017

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 12^TH DAY OF JUNE, 2025

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BEFORE

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THE HON'BLE MR. JUSTICE RAJESH RAI K

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CRIMINAL APPEAL NO. 100125 OF 2017 (A)

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BETWEEN:

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GANGADHARAYYA S/O. FAKIRAYA KULKARNI, AGED ABOUT 56 YEARS, OCC. PARTNER M/S. VIGNESHWAR TRADERS, R/O. GURUNATH NAGAR, H.NO. 14/2, 2^ND STAGE, OLD HUBBALLI-PIN-580024 HUBBALLI, DIST. DHARWAD.

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…PETITIONER

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(BY SRI. RAVI HEGDE, ADVOCATE)

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AND:

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YASHAVANT NARAYANKAR Digitally signed by YASHAVANT NARAYANKAR Date: 2025.06.13 14:12:05 +0530

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SIDDALINGAPPA S/O. HULGAPPA BOMMMANAL, AGED ABOUT: MAJOR, WORKING AT NWKRTC MOFFUSIL DEPOT-II, GOKUL ROAD, HUBBALLI, DIST. DHARWAD.

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…RESPONDENT

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(BY SRI. MRUTYUNJAYA S. HALLIKERI, ADVOCATE)

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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378 (4) OF CR.P.C., PRAYING TO CALL FOR RECORDS AND AFTER EXAMINING THE SAME SET ASIDE THE JUDGMENT PASSED IN C.C.NO. 4190 OF 2015 DATED 02.03.2017 ON THE FILE OF JMFC I COURT, HUBBALLI FOR FURNISHABLE UNDER SECTION 138 OF NI ACT, IN THE INTEREST OF JUSTICE AND EQUITY.

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THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS MADE THEREIN AS UNDER:

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CORAM: THE HON'BLE MR. JUSTICE RAJESH RAI K

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NC: 2025:KHC-D:7611 CRL.A No. 100125 of 2017

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HC-KAR

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ORAL JUDGMENT

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(PER: THE HON'BLE MR. JUSTICE RAJESH RAI K)

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In this appeal the appellant/complainant assailed the judgment passed in C.C.No.4190/2015 dated 02.03.2017 by the JMFC-I Court, Hubbali (hereinafter referred to as the 'learned Magistrate'), whereby, the learned Magistrate acquitted the accused/respondent for the offences punishable under Sections 138 of the Negotiable Instruments Act, 1881 (for short 'N.I. Act').

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For the sake of convenience, the parties are referred to as per their rankings before the trial Court.

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The abridged facts of the case are as under:

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The complainant and the accused are childhood friends and the respondent-accused approached the complainant in the year 2008 for a hand loan of ₹10,800/and the complainant agreed to advance the loan subject to condition that the accused shall repay the same within three months. Later, the accused again approached the

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HC-KAR

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complainant and requested him to supply cement bags on credit basis for construction of his house. Based on friendship, the complainant supplied 275 bags of cement from his shop ‘Vigneshar Traders’ on 18.11.2008 for a sum of ₹64,500/- on credit basis. However, the accused failed to repay the total amount of ₹75,300/- and on repeated request made by the complainant, the accused issued a cheque bearing No.322013 drawn on Allahabad Bank, Hubli Branch for a sum of ₹75,300/- on 06.07.2009. The complainant presented the said cheque for encashment, but it was returned with an endorsement ‘funds insufficient’ on 09.07.2009. Thereafter, the complainant informed the said fact to the accused by causing a demand notice. The said notice was not received by the accused and was returned with an endorsement ‘unclaimed’. Left with no other alternative, the complainant presented private complaint under Section 200 of Cr.P.C., against the accused before the learned Magistrate for the offence punishable under Section 138 of N.I.Act.

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HC-KAR

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To prove the case before the trial Court, the

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complainant himself examined as PW.1 and got marked 26 documents as Exs.P1 to P26. The accused also examined himself as DW.1, however did not mark any documents on his behalf.

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On assessment of oral and documentary

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evidence, the learned Magistrate acquitted the accused for the offence punishable under Section 138 of N.I Act. Aggrieved by the same, the complainant preferred this appeal.

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Heard the learned counsel Sri. Ravi Hegade for

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the appellant and learned counsel Mrityunjaya S Hallikeri for the respondent.

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Besides urging several contentions, learned counsel for the appellant/complainant submitted that the trial Court grossly erred while acquitting the accused for the offence punishable under Section 138 of N.I. Act, despite the complainant placing on record sufficient

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HC-KAR

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evidence. He contended that PW1-complainant has categorically stated in his evidence that Ex.P3/cheque in question was issued by the accused for repayment of hand loan of ₹10,800/- vide Ex.P1 receipt dated 23.02.2007 and purchase of 275 bags of cement from the shop of the complainant i.e. ‘Vigneshwara Traders’ for a sum of ₹64,500/- vide receipt dated 18.11.2008 as per Ex.P2. According to the learned counsel, these material documents Ex.P1 and Ex.P2 clearly prove the case of the complainant. Despite, the learned Magistrate acquitted the accused without assigning proper reasons. Accordingly, he prays to set aside the judgment of acquittal of the accused for the offence punishable under Section 138 of N.I.Act.

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Per contra, learned counsel appearing for the respondent-accused contended that the judgment under challenge does not suffer from any perversity or illegality. The learned Magistrate, after examining the evidence of the complainant and accused at length, acquitted the accused for the offence under Section 138 of the N.I. Act.

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HC-KAR

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As such, no interference is called for at the hands of this Court. He further contended that on perusal of Ex.P1 and Ex.P2, the same depicts, Ex.P1-receipt was for a payment of hand loan of the year 2007 and Ex.P2-receipt was for purchase of cement bags by the accused in the year 2008.

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The cheque in question was issued in the name of ‘Vigneshwar Traders’ in the year 2009. As admitted by the complainant, he is a sleeping partner in the said firm. It could be gathered from records, the complainant has failed to prove the legally recoverable debt since he was a sleeping partner in ‘Vigneshwar Traders’ and as per the partnership deed Ex.P13, the financial aspects of the firm was totally dealt by his wife, who was the active partner of the firm. Per contra, the defence of the accused, the cheque in question was issued as a security for the loan obtained by the accused from the complainant in the year 2008, however the said loan was repaid by the accused. Despite, the complainant without returning the cheque in question, misused the same for unlawful gain. By placing

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HC-KAR

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this probable defence, the accused rebutted the initial presumption arising under Section 118 and 139 of the N.I. Act. Accordingly, the trial Court has rightly acquitted the accused and hence, he prays to dismiss the appeal.

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Having heard the learned counsel for the parties

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and on perusal of the entire material available on record, the only point that would surface for my consideration is:

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“Whether the trial Court is justified in acquitting the respondent-accused for the offence punishable under Section 138 of the N.I. Act?”

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I have given my anxious consideration to the arguments advanced by both the learned counsel and perused the materials on record.

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On careful scrutiny of the evidence available on record, it could be gathered that the cheque in question i.e. Ex.P3 and the signature of the accused on Ex.P3 is not seriously disputed. The specific defence of the accused is that, the cheque in question was issued as security for

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HC-KAR

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repayment of the hand loan which he had obtained from the complainant in the year 2008, which he has already repaid. It is the case of the complainant that the accused had obtained hand loan of ₹10,800/- in the year 2007 and thereafter in the month of November-2008, the accused purchased 275 bags of cement for a sum of ₹64,500/- on credit basis from the shop ‘Vigneshwar Traders’ which belongs to the complainant. To prove the said hand loan and purchase of cement bags, the complainant relied on Ex.P1 and Ex.P2 receipts.

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On careful perusal of the same, the receipt for having received hand loan of ₹10,800/- is dated 23.02.2007 and the receipt for having purchased cement bags for a sum of ₹64,500/- is dated 18.11.2008. The cheque in question is dated 06.07.2009. There is no explanation whatsoever forthcoming in the evidence of the complainant as to why he kept quiet for a period nearly eight months after accused purchasing the cement bags from his shop i.e. in the month of November-2008. The

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HC-KAR

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complainant produced the partnership deed as per Ex.P13 to substantiate the aspect that the complainant and his wife Smt.Savitri are the partners of ‘Vigneshwar Traders’. However, on perusal of the said document, the recitals clearly depicts that the complainant is a sleeping partner

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of the said firm and all financial activities of the firm are dealt by his wife Smt. Savitri, who is active partner of the firm.

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In such circumstances, the complainant has failed to establish the aspect of purchase of cement bags by the accused in the month of November-2008. In such circumstances, as rightly contended by the learned counsel for the accused, the complainant is failed to prove the legally recoverable debt by the accused. Additionally, the accused had put forth a probable defence that the cheque in question was issued for security of the loan he had obtained in the year 2007. On perusal of Ex.P1 receipt depicts that the accused had availed hand loan of ₹10,800/- in the month of February-2007. In such

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HC-KAR

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circumstances, the defence put forth by the accused is a probable one. No doubt, the initial presumption arise under Section 118 and 139 of the N.I. Act favours the accused, nevertheless the same can be rebutted by placing probable defence by the accused as held by this Court and the Hon’ble Apex Court in catena of judgments. This aspect is properly appreciated by the learned Magistrate. I find no good grounds to interfere in the acquittal judgment. In that view of the matter, I answer point raised above in the affirmative and proceed to pass the following:

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ORDER

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The Criminal Appeal No.100318/2017 is hereby

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dismissed .

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SD/(RAJESH RAI K) JUDGE

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YAN

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CT:PA, LIST NO.: 1 SL NO.: 5

Gangadharayya S/O Fakiraya Kulkarni v. Siddalingappa S/O Hulgappa Bommmanal

Case brief

What is this about?

What did the court decide?

Why is it important?

Gangadharayya S/O Fakiraya Kulkarni v. Siddalingappa S/O Hulgappa Bommmanal

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Statutes considered

Procedural history

Parties & counsel

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Case details

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