Krishna Shetty Vs Avin Enterprises — Cheque Dishonour | Karnataka HC (2025)

Krishna Shetty Vs Avin Enterprises — Cheque Dishonour | Karnataka HC (2025)

What the court decided

AI extract

Outcome

None - the criminal revision petition was dismissed, leaving intact the conviction under Section 138 NI Act as confirmed by the appellate Court.

Issue for consideration

Scope of the High Court's interference in a criminal revision under Sections 397/401 CrPC against concurrent findings of the trial Court and the appellate Court convicting the accused under Section 138 NI Act - whether confined to perversity or contravention of statutory provisions, and whether the impugned judgments satisfy that test. +3 more

Court's answer

Applying the limited revisional scope against concurrent findings (confined to perversity or statutory contravention), this Court found that the trial Court and the Appellate Court had, on independent appreciation, arrived at reasoned conclusions which do not suffer from perversity; hence the concurrent convictions were not liable to interference.

Ratio / Principle

The ledger extracts, though not bearing the accused's countersignature, were accompanied by a certificate under Section 65B of the Evidence Act, and nothing contradictory was elicited in cross-examination of PW.1 to discredit the record; accordingly the proof of the debt/transaction was not dislodged.

Key takeaways

The accused's adoption of the defence that the cheque was issued as security for an earlier transaction amounts to an admission of his signature on the cheque, thereby attracting the presumption available to the holder under Section 139 NI Act; consequently the security-cheque plea does not defeat the claim of legally enforceable debt.ratio¶10
Merely making suggestions in cross-examination that documents were created for the case does not upset the presumption under Section 139 NI Act.ratio¶11
The accused's admitted non-reply to the demand notice, together with his failure to step into the witness box, leads to the drawing of an adverse inference against him.

Detailed headnote1 paragraphs

Criminal Revision Petition under Sections 397 read with 401 CrPC by the accused against concurrent judgments convicting him under Section 138 of the Negotiable Instruments Act, 1881 - HELD: (i) relying on Amit Kapoor v. Ramesh Chander & Anr., (2012) 9 SCC 460, the High Court's interference against concurrent findings is limited to examining perversity or contravention of statutory provisions, and the trial Court and Appellate Court having independently appreciated the material, their conclusions are reasoned and not perverse; (ii) computerised ledger extracts (Exs.P7, P9, P11 etc.) accompanied by certificates under Section 65B of the Evidence Act sufficiently prove the debt despite absence of the accused's countersignature, nothing contradictory having been elicited in cross-examination of PW.1; (iii) the defence that the cheque was issued as security for an earlier transaction amounts to an admission of the accused's signature, attracting the presumption under Section 139 NI Act; (iv) bare suggestions in cross-examination cannot rebut the Section 139 presumption, and the accused's non-reply to the demand notice and failure to enter the witness box draw an adverse inference - Revision petition dismissed; conviction and sentence stand.

Issues for consideration

4 issues framed by the court

AI extract

1.
Scope of the High Court's interference in a criminal revision under Sections 397/401 CrPC against concurrent findings of the trial Court and the appellate Court convicting the accused under Section 138 NI Act - whether confined to perversity or contravention of statutory provisions, and whether the impugned judgments satisfy that test.¶9
The court held
Applying the limited revisional scope against concurrent findings (confined to perversity or statutory contravention), this Court found that the trial Court and the Appellate Court had, on independent appreciation, arrived at reasoned conclusions which do not suffer from perversity; hence the concurrent convictions were not liable to interference.ratio¶11
2.
Whether the computerised ledger extracts (Exs.P7, P9, P11 etc.), bills and tax invoices, which do not bear the accused's countersignature, credibly establish the transactional relationship and legally enforceable debt between complainant and accused.¶5
The court held
The ledger extracts, though not bearing the accused's countersignature, were accompanied by a certificate under Section 65B of the Evidence Act, and nothing contradictory was elicited in cross-examination of PW.1 to discredit the record; accordingly the proof of the debt/transaction was not dislodged.ratio¶10
3.
Whether the accused's contention that the cheque was given as security for an earlier transaction defeats the claim of legally enforceable debt, given that such a defence amounts to an admission of the accused's signature on the cheque attracting the holder's presumption.¶7
The court held
The accused's adoption of the defence that the cheque was issued as security for an earlier transaction amounts to an admission of his signature on the cheque, thereby attracting the presumption available to the holder under Section 139 NI Act; consequently the security-cheque plea does not defeat the claim of legally enforceable debt.ratio¶10
4.
Whether the accused rebutted the Section 139 NI Act presumption through bare suggestions in cross-examination that exhibits were fabricated, or whether his non-reply to the demand notice and failure to enter the witness box attract an adverse inference against him.¶11
The court held
Merely making suggestions in cross-examination that documents were created for the case does not upset the presumption under Section 139 NI Act.ratio¶11