Dismissed¶¶57

M C Manoj Kumar v. B Shivakumar Swamy

Karnataka HC8 Dec 2025CRL.RP/1544/2023

Case brief

AI extract

What is this about?

Keywords: Section 138 NI Act; Section 139 presumption; cheque dishonour 'Account Closed'; criminal revision Sections 397/401 Cr.P.C.; concurrent findings; perversity; blank cheques as security; Venkatesh; Ex.D.1 legal notice; Ex.P.5 reply notice; financial capacity of complainant; Ex.P.6 bank statement; Rangappa v. Sri Mohan (2010) 11 SCC 441; Karnataka High Court, Bengaluru; CRL.RP No. 1544 of 2023; revision dismissed; conviction upheld; Mysuru trial and appellate courts.

What did the court decide?

None; the conviction under Section 138 NI Act and sentence, as confirmed in appeal, stand. ¶¶57

M C Manoj Kumar Vs B Shivakumar Swamy — Cheque Dishonour | Karnataka HC (2025)

What the court decided

AI extract

Outcome

None; the conviction under Section 138 NI Act and sentence, as confirmed in appeal, stand.

¶¶57

Issue for consideration

Whether the concurrent findings convicting the accused under Section 138 NI Act suffer from perversity, particularly the rejection of his defence that the cheque was issued to one Venkatesh as security and was misused to institute the complaint. +1 more

¶8 (¶46)

Court's answer

The accused's own deposition that he borrowed Rs.1,00,000/- from Venkatesh, who had obtained four blank cheques as security, amounted to an admission of his signature on Ex.P.1; the cheque being issued in the complainant's name, the trial Court was justified in extending the Section 139 presumption in favour of the complainant.

¶8 (¶46)

Ratio / Principle

Ex.D.1, the legal notice alleged to have been issued to Venkatesh on 11.06.2016 calling for return of cheques, must be treated with suspicion, because the accused's reply to the demand notice (Ex.P.5) did not disclose any such contention.

¶8 (¶50)

Key takeaways

Issuance and service of the demand notice established that the complainant knew the accused's address, and PW1's failure to remember the exact dates of demand and lending was not by itself fatal to the complainant's case.ratio¶9 (¶52)
Ex.P.6, the complainant's bank account statement for 11.12.2015 to 25.05.2016, revealing transactions running into a few crores of rupees in about six months, more than sufficiently established the complainant's financial capacity to lend the money.ratio¶10 (¶53)

Detailed headnote1 paragraphs

Criminal revision petition under Sections 397/401 Cr.P.C. by the convicted accused DISMISSED. Conviction under Section 138 NI Act (cheque no.000013 dated 12.09.2016 on HDFC Bank, dishonoured with endorsement 'Account Closed', for Rs.10,00,000/-), confirmed by the appellate Court, held not perverse. The defence that the cheque was handed to one Venkatesh as security for a loan and was misused to file the complaint was rejected: the accused's own deposition admitting borrowing of Rs.1,00,000/- from Venkatesh against four blank cheques amounted to an admission of his signature on Ex.P.1, which was issued in the complainant's name, extending the Section 139 presumption; Ex.D.1 (notice of 11.06.2016 to Venkatesh) was treated with suspicion as the reply notice Ex.P.5 omitted that plea. PW1's inability to recall exact dates of demand and lending held not fatal. Complainant's financial capacity held established by Ex.P.6 bank statement (transactions of a few crores in about six months; withdrawal of Rs.14,00,000/- on 27.01.2016). Rangappa v. Sri Mohan (2010) 11 SCC 441 relied on for the proposition that rebuttal of the Section 139 presumption need not be by independent defence evidence.

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NC: 2025:KHC:51791 CRL.RP No. 1544 of 2023

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 8^TH DAY OF DECEMBER, 2025

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BEFORE

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THE HON'BLE MR. JUSTICE RAVI V HOSMANI CRIMINAL REVISION PETITION NO. 1544 OF 2023

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BETWEEN:

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M.C. MANOJ KUMAR S/O N.A. CHANDRASHEKAR AGED ABOUT 36 YEARS NO.16/106, 2^ND MAIN 2^ND CROSS, AREKERE, MICO-LAYOUT BANNERGHATTA ROAD BENGALURU-560 076.

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…PETITIONER

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(BY SRI. VISHWANATH M.P., ADVOCATE)

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AND:

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Digitally signed by GEETHAKUMARI PARLATTAYA S Location: High Court of Karnataka

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B. SHIVAKUMAR SWAMY S/O BASAVANACHAR H.G. AGED ABOUT 55 YEARS RESIDING AT NO.414 17^TH CROSS, 1^ST STAGE VISHVESWARA NAGARA MYSURU-570 008.

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…RESPONDENT

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(BY SRI. VENKATESH R. BHAGAT, ADVOCATE)

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THIS CRL.RP IS FILED UNDER SECTION 397 READ WITH 401 CR.P.C PRAYING TO SET ASIDE THE ORDER OF THE III ADDITIONAL SESSIONS JUDGE, MYSURU IN CRIMINAL APPEAL NO.241/2022 VIDE ORDER DATED 31.08.2023 AND FURTHER BE PLEASED TO SET ASIDE THE JUDGMENT AND ORDER OF CONVICTION PASSED BY THE LEARNED

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NC: 2025:KHC:51791 CRL.RP No. 1544 of 2023

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HC-KAR

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II ADDITIONAL CIVIL JUDGE AND J.M.F.C., MYSURU IN C.C.NO.3297/2016, DATED 21.07.2022 AND FURTHER BE PLEASED TO ACQUIT THE PETITIONER.

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE RAVI V HOSMANI

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ORAL ORDER

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Challenging judgment dated 31.08.2023 passed by III Addl. Sessions Judge, Mysuru, in Crl.A.no.24/2022 confirming judgment of conviction and order of sentence dated 21.07.2022 passed by II Addl. Civil Judge & JMFC., Mysuru, in C.C.no.3297/2016, this revision petition is filed.

¶25

Sri Vishwanath MP, learned counsel for petitioner (accused) submitted, complainant (respondent) and accused were acquainted with each other and in January, 2016, accused had borrowed loan of Rs.10,00,000/- from complainant to clear some personal hand-loans and towards repayment issued cheque no.000013 dated 12.09.2016 drawn on HDFC Bank, which when presented for collection, returned dishonored with endorsement 'Account Closed' on 15.09.2016 and even when demand notice got issued by complainant was served on

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NC: 2025:KHC:51791 CRL.RP No. 1544 of 2023

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HC-KAR

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10.10.2016, accused had failed to repay amount and issued untenable reply on 24.10.2016, thereby committed offence punishable under Section 138 of NI Act.

¶30

On appearance accused denied charges, seeking trial. Thereafter, complainant got examined himself as PW 1 and got marked Exs.P.1 to P.6. Statement of accused denying incriminating material explained was recorded under Section 313 of Cr.P.C. In defence evidence, accused deposed as DW1 and got marked Exs.D.1 and 2.

¶31

It was submitted, accused had setup substantial defence denying any transaction with complainant and contending that cheque in question was issued to one Venkatesh as security for loan, which was cleared. But, due to dispute with said Venkatesh regarding interest, instant proceedings was got filed. It was submitted, as early as on 11.06.2016, accused had got issued legal notice - Ex.D1 calling upon Venkatesh for return of cheques. Immediately thereafter Venkatesh got complainant herein to initiate these proceedings. It was submitted during cross-examination PW1 admitted that he did not know place of residence of accused nor date of

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NC: 2025:KHC:51791 CRL.RP No. 1544 of 2023

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HC-KAR

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demand or lending. It was submitted accused also disputed financial capacity of complainant to lend amount. In crossexamination PW1, it was elicited that during January, 2016, complainant had obtained loan of Rs.20,00,000/- from bank and also admitted that he had not declared amount lent to accused in his income tax returns. This would probablise defence taken and therefore trial Court was not justified in convicting petitioner based purely on presumption under Section 139 of NI Act. On above grounds sought for allowing revision.

¶36

On other hand, Sri Venkatesh R Bhagat, learned counsel for complainant opposed revision. It was submitted contentions urged by accused in revision were untenable. Attention of this Court was drawn to Ex.P.5 - reply notice, copy of which was made available for perusal, wherein, in para no.4, it was admitted that blank cheques were obtained by one Venkatesh of Venkateshwara properties from whom accused had borrowed loan. It was submitted, that loan was repaid cheques were not returned. Under such circumstances, it was incumbent upon accused to have issued intimation to his bank

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NC: 2025:KHC:51791 CRL.RP No. 1544 of 2023

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HC-KAR

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to stop payment in respect of cheques. On other hand closure of account would indicate intention to cause loss to complainant and same would attract presumption under Section 139 of NI Act.

¶41

Insofar as financial capacity, complainant produced statement of account of his bank as per Ex.P.6 from 11.12.2015 to 25.05.2016, which disclosed total transaction during that period to be Rs.52,00,000/-. This would sufficiently substantiate financial capacity of complainant. Besides, it was stated that Ex.P.6 also showed that withdrawal of sum of Rs.14,00,000/- on 27.01.2016, which would corroborate complainant's version of lending. While passing impugned judgment, both Courts had appreciated material on record and passed well reasoned findings resulting in conviction. In view of accused admitting his signatures on cheques, presumption was extended to complainant and in absence of accused substantiating probable defence, trial Court was justified in recording finding of conviction. Even appellate Court had confirmed same on independent re-appreciation. Therefore impugned judgments did not call for interference.

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6 - NC: 2025:KHC:51791 CRL.RP No. 1544 of 2023

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HC-KAR

¶44

Heard learned counsel, perused impugned

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judgments and records.

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This revision is by accused challenging concurrent findings convicting him for offence punishable under Section 138 of NI Act and challenge is mainly on ground of perversity of findings. Firstly, insofar as cheque issued to one Venkatesh being misused for purpose of claim and secondly, about financial capacity. Insofar as first contention, indeed not only in cross-examination of PW1, but also in his own deposition accused stated he borrowed sum of Rs.1,00,000/- from Venkatesh, who had obtained four blank cheques as security. This contention itself would amount to admission of signature of accused on Ex.P.1 - cheque. Further, Ex.P.1 is issued in name of complainant. Thus, trial Court would be justified in extending presumption in favour of complainant. Indeed as held by Hon'ble Supreme Court in Rangappa v. Sri Mohan reported in (2010) 11 SCC 441 , that there is no mandatory requirement for accused to lead rebuttal evidence to establish probable defence and same can be achieved relying on evidence led by complainant. Though, accused claimed to have

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NC: 2025:KHC:51791 CRL.RP No. 1544 of 2023

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HC-KAR

¶50

issued legal notice to Venkatesh on 11.06.2016 with regard to unreturned cheques and said notice is got marked as Ex.D.1. While issuing reply to demand notice as per Ex.P.5, such a contention is not disclosed. Therefore Ex.D.1 would have to be treated with suspicion.

¶51

Insofar as admission elicited about complainant not

¶52

knowing residence of accused, date of demand and lending, substanting defence denying loan transaction, admittedly, Ex.P.3- demand notice got issued by complainant was served on accused to which he issued reply as stated above. Issuance of demand notice would establish that complainant knew address of accused. Failure to remember exact dates of demand and lending by themselves may not be fatal. In instant case, however, it is seen that complainant has stated that both demand and payment were made in month of January, 2015, which would not create doubt as would upset presumption.

¶53

Insofar as financial capacity, perusal of Ex.P.6 - bank account statement of complainant for period 11.12.2015 to 25.05.2016 would reveal transactions to tune of few crores

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8 - NC: 2025:KHC:51791 CRL.RP No. 1544 of 2023

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HC-KAR

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of rupees during small period of six months. This would more than sufficiently establish financial capacity of complainant to lend money. Thus, both Courts have arrived at reasoned conclusion in favour of complainant based on presumption under Section 139 of NI Act. Since accused failed to upset said presumption, findings cannot be held to be suffering from perversity.

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In that view, revision petition is without merit and is dismissed .

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Sd/(RAVI V HOSMANI) JUDGE

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PSG List No.: 1 Sl No.: 40

M C Manoj Kumar v. B Shivakumar Swamy

Case brief

What is this about?

What did the court decide?

M C Manoj Kumar v. B Shivakumar Swamy

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

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