Smt Rukmini Manjunath v. B S Mohan

Karnataka HC9 Apr 2025CRL.RP/1560/2023

Case brief

AI extract

What is this about?

Karnataka HC (J.M. Khazi J, 09.04.2025), CRL.RP No. 1560 of 2023: Smt Rukmini Manjunath (accused) v. B S Mohan (complainant) — revision against S.138 NI Act conviction dismissed; fine of ₹3,05,000/- and concurrent findings confirmed; S.139 presumption unrebutted; chit-fund security-cheque defence rejected for non-examination of son; Rajesh Jain and Prabodh Kumar Tewari followed; defence-side precedents distinguished.

What did the court decide?

Since the cheque was drawn on the account of the accused maintained with her banker and bore her signature, the presumption under Section 139 of the N.I Act was attracted, placing the initial burden on the accused to establish that it was not issued towards repayment of any legally recoverable debt or liability; only after she rebutted it would the burden shift to the complainant. ¶15

Smt Rukmini Manjunath Vs B S Mohan — Income Tax | Karnataka HC (2025)

What the court decided

AI extract

Outcome

Dismissed

¶ORDER-1

Issue for consideration

Whether the accused rebutted the presumption under Section 139 of the N.I Act that the cheque was issued towards repayment of a legally recoverable debt or liability. +2 more

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Court's answer

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Ratio / Principle

The accused's defence that the cheque was taken by her son and given to the complainant as security for chit transactions was not proved: she had no personal knowledge of the alleged transaction, and it was incumbent on her to examine her son, which she did not do.

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Key takeaways

Even if the cheque had been issued as security and the chit amount repaid, the accused could have instructed her bank to stop payment and should have replied to the legal notice; her failures, coupled with absence of proof of the defence, led the Court to hold that she had taken a false defence without substance.ratio¶18
Given that the accused was desperately in need of funds and accepted banned notes during demonetization, the complainant's evidence that she insisted on cash payment was plausible; non-compliance with the requirement that transactions beyond Rs.20,000/- be made through cheques would not go to the root of the complainant's case and may at most be a violation of Income Tax Rules.ratio¶19

Detailed headnote1 paragraphs

Criminal Revision Petition under S.397 r/w 401 Cr.P.C by the accused against concurrent convictions under S.138 NI Act — trial court (XII ACMM, Bengaluru, C.C.No.23059/2017, judgment dated 29.02.2020) sentenced her to a fine of ₹3,05,000/- with default sentence; first appeal (Crl.A.No.812/2021) dismissed by the LV Addl. City Civil and Sessions Judge, Bengaluru on 04.09.2023. Complainant's case: loan of ₹2,50,000/- in December 2016; cheque dated 22.06.2017 dishonoured for insufficiency of funds; legal notice unanswered. Presumption under S.139 NI Act attracted as the cheque was drawn on the accused's account and bore her signature. Defence that a blank signed cheque was given as security for the accused's son's chit transactions rejected — son not examined, no stop-payment instruction to the bank, no reply to legal notice; held to be a false defence without substance. Cash payment during demonetization held plausible; non-compliance with the cheque-mandatory rule at most a violation of Income Tax Rules. Following the Supreme Court in Rajesh Jain and Oriental Bank of Commerce v. Prabodh Kumar Tewari, the burden does not shift to the complainant where basic facts are proved and the presumption remains unrebutted. Precedents cited by the accused held inapplicable. Petition dismissed; conviction and sentence confirmed.

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NC: 2025:KHC:15432 CRL.RP No. 1560 of 2023

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 9^TH DAY OF APRIL, 2025

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BEFORE

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THE HON'BLE MS JUSTICE J.M.KHAZI CRIMINAL REVISION PETITION NO. 1560 OF 2023

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(397(Cr.PC) / 438(BNSS))

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BETWEEN:

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SMT RUKMINI MANJUNATH W/O MANJUNATH AGED ABOUT 48 YEARS, NO.3586, NEHARU ROAD, 3^RD STAGE, BANASHANKARI, GIRINAGAR, BANGALORE-560085

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…PETITIONER

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(BY SRI. RAMU V, ADVOCATE)

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AND:

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Digitally signed by REKHA R Location: High Court of Karnataka

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B S MOHAN S/O SANNAPPA AGED ABOUT 43 YEARS, R/AT NO.76, 1^ST MAIN ROAD, VIVEKANANDA NAGAR, BSK 3^RD STAGE, BANGALORE-560 085

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…RESPONDENT

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(BY SRI. MAHESH B J, ADVOCATE)

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THIS CRL.RP IS FILED U/S.397 R/W 401 CR.P.C BY THE ADVOCATE FOR THE PETITIONER PRAYING TO a) SET

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NC: 2025:KHC:15432 CRL.RP No. 1560 of 2023

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ASIDE THE IMPUGNED ORDER DATED 04.09.2023 PASSED IN CRL.A.NO.812/2021 PASSED BY LV ADDITIONAL CITY CIVIL AND SESSIONS JUDGE AT BENGALURU AND ETC.,

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MS JUSTICE J.M.KHAZI

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ORAL ORDER

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This petition filed under Section 397 r/w 401 of Cr.P.C is by the accused, wherein she has challenged her conviction and sentence imposed by the trial Court for the offence punishable under Section 138 of Negotiable Instrument Act, which came to be confirmed by the Sessions Court by dismissing the appeal file by her.

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For the sake of convenience, parties are

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referred to by their ranks before the trial Court.

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3. Complainant filed the complaint against accused

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alleging that he and accused are known to each other since many years. With that acquaintance, accused borrowed a sum of ₹2,50,000/- to cope up with her

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financial constraints during December 2016. She gave assurance that it would be repaid within a span of two months. However, accused failed to fulfil her promise and on repeated request and demand issued cheque dated 22.06.2017, with an assurance that it would be honoured on presentation. However, on presentation of the cheque on the due date, it was returned dishonoured for reason “Funds insufficient”. Complainant got issued legal notice dated 06.07.2017. Despite service, the accused has neither repaid the amount due nor sent any reply and without any alternative, he has approached the trial Court with a complaint.

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Accused pleaded not guilty to the charge and claimed trial.

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In order to prove the allegation against the accused, complainant examined himself as PW-1 and got marked Exs.P1 to 5.

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NC: 2025:KHC:15432 CRL.RP No. 1560 of 2023

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During the course of her statement under

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Section 313 Cr.P.C, the accused has denied incriminating evidence led by the complainant.

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The accused has also led defence evidence by examining herself as DW-1. No documents are marked on her behalf.

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The trial Court convicted the accused and sentenced her to pay fine of ₹3,05,000/- with default sentence of imprisonment.

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Accused challenged her conviction and sentence

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before the Session Court, but it was dismissed.

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Aggrieved by the concurrent findings of the trial Court as well as the Sessions Court, the accused is before this Court contending that both Courts below have erred in appreciating the facts, oral and documentary evidence placed on record. They are opposed to law, facts and probability of the case. The First Appellate Court has

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blindly accepted the findings of the trial Court without reexamining the evidence. Consequently, they have come to a wrong conclusion that the presumption is not rebutted by the accused. They also not appreciated the fact that complainant has not stated the date on which loan was advanced to the accused. Viewed from any angle, the impugned judgment in order are not sustainable and hence the petition.

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In support of his arguments, learned counsel for

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accused has relied upon the following decisions:

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(i) K.Subramani Vs. K.Damodara ( K.Subramani )¹

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(ii) Dattatraya Vs. Sharnappa ( Dattatraya )²

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(iii) Yeshwanth Kumar Vs. Shanth Kumar N

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( Yeshwanth Kumar )³

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(iv) S.K.Honappa Vs. S.A.Murthy ( Honappa )⁴

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(v) Adam Vs. Jayamala P.Shetty ( Adam )⁵

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(vi) Jeevan Prakash M Vs. Lakshmamma

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( Jeevan Prakash )⁶

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(vii) H.R. Sheshadri Vs. U.V.Nataraj ( Sheshadri )⁷

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1 (2015) SCC 99

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2 (2024) SCC Online SC 1899

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3 Crl.A.No.939/2010 Dt: 07.08.2019

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4 Crl.RP.No.768/2018 Dt:12.08.2024

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5 Crl.RP.No.1302/2019 Dt:05.01.2024

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6 Crl.RP.No.688/2019 Dt:11.01.2024

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On the other hand, supporting the impugned judgment and order, the learned counsel for the complainant submitted that in the light of the fact that they do not dispute that the cheque in question is drawn on the account of the accused maintained with her banker and it bears her signature and on presentation, it is dishonoured for want of sufficient funds, the presumption under Section 139 of the N.I Act is attracted, placing the initial burden on the accused to rebut the presumption, only after which the burden would shift on the complainant to prove her case. Not only the accused has failed to rebut the presumption and prove the circumstances in which the cheque has reached the hands of complainant, but also the complainant has proved the basic facts leading to the filing of the complaint. Both trial Court as well as the Sessions Court, on proper appreciation of oral and documentary evidence have rightly held that the accused is guilty of the offence punishable under Section 138 of N.I Act and punished him. The punishment imposed is also

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7 Crl.RP.No.573/2019 Dt:18.01.2024

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reasonable and there is no scope for interference and sought for dismissal of the petition.

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In support of his arguments, learned counsel for

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complainant has relied upon the following decisions:

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(i) Rajesh Jain Vs. Ajay Singh ( Rajesh Jain )⁸

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(ii) Oriental Bank of Commerce Vs.

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Prabodh Kumar Tewari ( Prabodh )⁹

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Heard arguments and perused the record.

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Having regard to the fact that the cheque is drawn on the account of the accused maintained with her banker and it bears her signature, the presumption under Section 139 of the N.I Act is pressed into service, placing the initial burden on the accused to establish that it was not issued towards repayment of any legally recoverable debt or liability and the circumstances in which cheque has

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reached the hands of complainant. Only after accused

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8 (2023) 10 SCC 148: AIR 2023 SC 5018

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9 2022 Live Law (SC) 714

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rebut the presumption, burden would shift on the complainant to prove his case.

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It is pertinent to note that the accused has taken a defence that complainant was running a chit fund business and son of accused had participated in the said chit funds and the subject cheque which was blank, except the signature of accused was taken by her son and given to the complainant by way of security. Even though the amount due under the chit was repaid, complainant did not return the cheque for one or the other reason and utilising the same, she has filed a false complaint. Of course, the complainant has denied the said allegations.

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Though during the course of evidence accused has deposed that the cheque in question was taken by her son and given to the complainant by way of security, examination of her evidence makes it clear that she has no personal knowledge about the alleged transaction between her son and the complainant. Consequently, it

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was incumbent upon the accused to examine her son to prove the said fact. However, for reasons best known to her, the accused has not chosen to examine her son to prove her defence.

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Even where it is accepted that the cheque was issued as security for the chit transaction between the complainant and the son of the accused and the chit amount due was repaid, on the failure of complainant to return the cheque, there was no impediment for the accused to instruct her banker to stop payment of the cheque, specifying the reasons. For reasons, best known to her, the accused has not chosen to do so. On service of legal notice, the accused has also not chosen to send reply, reflecting her defence at the earliest available opportunity. In the absence of proof of the defence taken by her, this Court has no hesitation to hold that accused has taken false defence, without there being any substance.

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18.1 Even though the complainant has admitted that he know the son of the accused, he has denied that he was running a chit fund and son of the accused was participating in one such chit. The cross-examination of complainant reveal that the transaction between him and accused took place during the period of demonetization. In this regard, complainant has explained that even though notes of ₹500/- and ₹1,000/- were banned, there was sufficient time for exchanging the notes and on the insistence of the accused, he has extended the loan through the banned notes. Therefore, the evidence of the son of accused would have thrown enough light on this aspect. However, the accused has also not taken the trouble of examining him.

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As rightly held by the trial Court, during the course of evidence, the accused has not stated that she was not knowing the complainant and no suggestions are made to this effect during the course of cross-examination

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of PW-1. The accused has contended that any

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transaction beyond Rs.20,000/- out to have made through cheques. Having regard to the fact that accused was desperately in need of funds and gone to the extent of accepting banned notes during demonetization, the evidence of complainant that accused insisted payment in cash appears to be plausible. Non-compliance of the said requirement would not go to the root of the complainant's case. It may be violation of Income Tax Rules.

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In the absence of accused leading evidence that there was chit transaction and the cheque was issued by way of security the defence of accused cannot be accepted. At least accused could have produced some evidence to show that certain repayments have been made to the complainant to corroborate her defence that it was a chit transaction. At least the complainant could have instructed the bank to stop payment of the cheque on the ground that the payment due is paid and cheque was issued only by way of security.

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So far as the decisions relied upon by the accused are concerned, they are not applicable to the facts and circumstances of the present case.

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In Rajesh Jain and Prabodh , referred to supra, the Hon'ble Supreme Court held that where the complainant has proved the basic facts leading to the filing of the complaint and accused has failed to rebut the presumption, the burden would not shift on the complainant.

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The trial Court as well as Sessions Court on appreciation of oral and documentary evidence have rightly held that the allegations against accused are proved and convicted him. The conclusions arrived at by both Courts are consistent with the evidence on record. This Court finds no perversity. The sentence passed is also in commensurate with the gravity of the offence. In the result, the petition fails and accordingly the following:

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NC: 2025:KHC:15432 CRL.RP No. 1560 of 2023

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ORDER

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Petition filed by the accused under Section 397(1) r/w 401 Cr.P.C is hereby dismissed.

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The impugned judgment and order dated 29.02.2020 in C.C.No.23059/2017 on the file of XII ACMM, Bengaluru and judgment and order dated 04.09.2023 in Crl.A.No.812/2021 on the file of LV Addl.City Civil and Sessions Judge, Bengaluru (CCH-56) are confirmed.

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The Registry is directed to return the trial Court as well as Sessions Court records along with a copy of this order forthwith.

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Sd/(J.M.KHAZI) JUDGE

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RR List No.: 1 Sl No.: 56

Smt Rukmini Manjunath v. B S Mohan

Case brief

What is this about?

What did the court decide?

Smt Rukmini Manjunath v. B S Mohan

Case brief

What is this about?

What did the court decide?

What the court decided

Issues for consideration

Cases cited

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