Sri Kuruvatteppa S/O. Basappa Hadapada Vs Sri. Tirukappa… — Cheque Dishonour | Karnataka HC (2025)

Sri Kuruvatteppa S/O. Basappa Hadapada Vs Sri. Tirukappa… — Cheque Dishonour | Karnataka HC (2025)

What the court decided

AI extract

Outcome

Dismissed

Issue for consideration

Whether the judgment of the learned Magistrate acquitting the respondent under Section 138 NI Act in C.C.No.684/2006 should be set aside and the respondent convicted under Sections 138 and 142 of the Negotiable Instruments Act and Section 420 IPC. +1 more

Court's answer

The aspect (rebuttal of presumption by probable defence) was properly appreciated by the learned Magistrate; the appellate court found no good grounds to interfere in the acquittal judgment and dismissed the appeal, upholding the acquittal.

Ratio / Principle

Issuance of cheque Ex.P1 and the accused's signature on it were undisputed; the accused's specific defence was that the cheque had been issued in 2003 as security for a loan of Rs. 1,20,000/- obtained in 2003 and repaid in 2005, after which the complainant did not return the cheque.

Key takeaways

The GPA holder of the complainant (PW.1) admitted in cross-examination that he did not know the date of the hand loan, the loan transaction, the date of issuance of the cheque, its presentation, or the issuance of legal notice, and the complainant was present in court while the GPA holder testified, creating doubt in his evidence.ratio¶48
The complainant was totally silent about the accused's defence that the cheque was issued as security for the 2003 loan transaction; accordingly the initial presumption arising under Sections 118 and 139 of the N.I Act was rebutted by the accused by placing a probable defence.ratio¶51

Detailed headnote1 paragraphs

High Court of Karnataka, Dharwad Bench (single judge, Rajesh Rai K, 12.06.2025) dismisses Criminal Appeal No.100318 of 2017 filed under S.378(4) Cr.P.C. by the complainant against his acquittal in C.C.No.684/2006 (Addl. Civil Judge & II Addl. JMFC, Ranebennur) for the offence punishable under S.138 of the Negotiable Instruments Act, 1881. While issuance of cheque No.665361 dated 05.07.2006 for Rs.2,00,000/- and the accused's signature were undisputed, the complainant's GPA holder (PW.1) conceded ignorance of the date of the hand loan, the loan transaction, the cheque issuance, presentation and legal notice, and the complainant was present in court during that testimony, casting doubt on the evidence. The complainant was silent on the accused's defence that the cheque had been issued in 2003 as security for a Rs.1,20,000/- loan repaid in 2005. The Court held the initial presumptions under Ss.118 and 139 N.I Act were rebutted by this probable defence, found no grounds to interfere with the acquittal, and dismissed the appeal. No precedents were cited.

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

BEFORE

THE HON'BLE MR. JUSTICE RAJESH RAI K

CRIMINAL APPEAL NO. 100318 OF 2017 (A)

BETWEEN:

SRI. KURUVATTEPPA S/O. BASAPPA HADAPADA, AGE: 71 YEARS, OCC. RETIRED EMPLOYEE, R/O. KAVALETTU, TQ. RANEBENNUR, DIST. HAVERI.

…PETITIONER

(BY SRI. HANUMANTHAREDDY SAHUKAR, ADVOCATE)

AND:

YASHAVANT NARAYANKAR Digitally signed by YASHAVANT NARAYANKAR Date: 2025.06.13 14:12:15 +0530

SRI. TIRUKAPPA S/O. SANNAPPA ORAGONDAR, AGE: MAJOR, OCC. BUSINESS, SRI. BANASHANKARI COMMISSION AGENCY, APMC YARD, RANEBENNUR, PRESENTLY PROPRIETOR, R/O. BASAVANAGUDI NAGAR, RANEBENNUR, DIST. HAVERI. …RESPONDENT (BY SRI. SAJID GOODWALA, ADVOCATE FOR SRI. JAGADISH PATIL, ADVOCATE) THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378 (4) OF CR.P.C., PRAYING TO SET ASIDE JUDGEMENT DATED 06.03.2013 IN C.C.NO. 684 OF 2006 PASSED BY THE ADDL. CIVIL JUDGE AND II ADDL. JMFC, RANEBENNUR, DIST. HAVERI AND CONVICT THE RESPONDENT FOR THE OFFENCES PUNISHABLE UNDER SECTIONS 138, 142 OF THE NEGOTIABLE INSTRUMENT ACT AND SECTION 420 OF IPC, BY ALLOWING THE ABOVE APPEAL AS PRAYED FOR WITH COST.

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

ORAL JUDGMENT

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

In this appeal the appellant/complainant assailed the judgment passed in C.C.No.684/2006 dated 03.03.2013 by the Addl. Civil Judge and II Addl. JMFC, Ranebennur (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').

For the sake of convenience, the parties are

referred to as per their rankings before the trial Court.

The abridged facts of the case are as under:

The accused is known to the complainant and he has borrowed a sum of Rs.2,00,000/- in the year 2006 as hand loan from the complainant with a promise to repay the

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same. As such, he issued cheque bearing No.665361 dated 05.07.2006 for Rs.2,00,000/- drawn on Union Bank of India, Ranebennur Branch in favour of the complainant. On instructions, the complainant presented the said cheque for encashment, however, the same was dishonoured with an endorsement 'funds insufficient' dated 18.07.2006. The said aspect was intimated to the accused by the complainant by causing a legal notice dated 09.08.2006. The said Notice was replied by the accused on 19.08.2006. However, the accused failed to repay the cheque amount. As such, the complainant presented the complaint under Section 200 of Cr.P.C. before the trial Court for the offence punishable under Section 138 of N.I Act against the accused.

To prove the case before the trial Court, the complainant himself examined as PW.1 and got marked 9 documents as Exs.P1 to P9. However, the accused also examined himself as DW.1 and got marked 5 documents as Exs.D1 to D5.

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On assessment of oral and documentary

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.

Heard the learned counsel Sri.

Hanumanthareddy Sahukar for the appellant, learned counsel Sri. Sajid Goodwala for Sri.Jagadish Patil, counsel for the respondent.

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 without appreciating the evidence on record in a right perspective. He further contended that the reasoning of the learned trial court that the complainant failed to prove the legally enforceable debt is totally not correct, per contra the GPA Holder of the Complainant has

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categorically stated in his evidence about the hand loan borrowed by the accused and issuance of cheque in question by the accused. The said initial presumption has not been rebutted by the accused by a probable defence. Accordingly, he prays to allow the appeal.

Per contra, the learned counsel for the respondent contended that, the cheque in question was issued in favour of K.B Hadapath, however he has not given any evidence before the Court and his GPA Holder one Marthandappa Mallappa Yaklasa has examined as PW.1, in his evidence he has categorically stated that he does not know as to when the accused obtained hand loan of Rs.2,00,000/from the complainant. In such circumstance, the complainant failed to prove the legally enforceable debt from the accused. Per contra, the accused himself examined as DW.1 and clearly stated that the cheque in question was obtained by the complainant for security purpose to the loan obtained by him in the year 2003 i.e. for a sum of Rs.1,20,000/- and the same

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was repaid by the accused thereafter, but the cheque was not returned by the complainant and presented later for encashment for unlawful gain. Hence, the trial Court has rightly dismissed the complaint. Accordingly, he prays to dismiss the appeal.

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

As could be gathered from the records that the issuance of the cheque in question i.e., Ex.P1 and the signature of the accused on Ex.P1 is undisputed. The specific defence of the accused is that, the cheque in question was issued in the year 2003 as a security for the loan of Rs. 1,20,000/- obtained by him in the year 2003. According to him, the said loan was repaid by him in the year 2005. However, the complainant failed to return the cheque in question and presented the same for unlawful gain.

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Admittedly, the cheque in question was issued in favour of one K.B Hadapad i.e. the Complainant, however, on his behalf his GPA Holder one Marthandappa Mallappa Yaklase examined before the Court. On careful analysis of his evidence, he has categorically deposed in his cross examination that, he does not aware about the date of lending hand loan by the complainant to the accused and the loan transaction between the accused and the complainant. He also admitted that, he do not know the date when the accused issued the cheque in question to the complainant, the date of presentation of the said cheque and issuance of legal notice. Interestingly, it is forthcoming in his evidence that, the complainant-K.B Hadapad was very much present in the Court while his GPA holder adducing his evidence. In such circumstance, a doubt creates in the evidence of the GPA Holder of the complainant. Further, the complainant is totally silent about the defence of the accused that the cheque in question was issued as security for the loan transaction

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between himself and the accused in the year 2003. Hence, the initial presumption arising under section 118 and 139 of N.I Act is rebutted by the accused by placing probable defence. This aspect is properly appreciated by the learned Magistrate. I find no good grounds to interfere in the acquittal judgment. Accordingly, I proceed to pass the following:

ORDER

The Criminal Appeal No.100318/2017 is hereby

dismissed .

SD/(RAJESH RAI K) JUDGE

HKV CT:PA List No.: 1 Sl No.: 9