Dismissed

Shantha Kumari W/O Late Nagaraja v. T Venkata Narasa Reddy S/O Kondareddy

Karnataka HC5 Jan 2026CRL.RP/100318/2022

Case brief

AI extract

What is this about?

Accused challenged her conviction under Section 138 NI Act for a dishonoured cheque of Rs.6 lakh, contending no legally recoverable debt and that the cheque was issued as surety for another person's rent. The High Court held the statutory presumption was not rebutted since the accused neither testified nor examined Smt. Ramadevi, and dismissed the revision petition while extending time for payment

What the court decided

AI extract

Shantha Kumari W/O Late Nagaraja Vs T Venkata Narasa… — Cheque Dishonour | Karnataka HC (2026)

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NC: 2026:KHC-D:10 CRL.RP No. 100318 of 2022

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA, AT DHARWAD DATED THIS THE 5^TH DAY OF JANUARY, 2026 BEFORE

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THE HON'BLE MR. JUSTICE V.SRISHANANDA

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CRIMINAL REVISION PETITION NO. 100318 OF 2022

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

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BETWEEN:

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SHANTHA KUMARI W/O. LATE NAGARAJA AGE. 47 YEARS, OCC. PEON/ATTENDER, WORKING IN NAGARA AND GRAMANTHARA YOJANA NIRDESHAKARA KACHERI, OPPOSITE, COURT COMPLEX, EDIGA HOSTEL, BALLARI 583 101.

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…PETITIONER

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(BY SRI. NARENDRA G. GUNDE, AMICUS CURIAE)

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Digitally signed by SAMREEN AYUB DESHNUR Location: High Court of Karnataka, Dharwad Bench

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AND:

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T. VENKATA NARASA REDDY S/O. KONDAREDDY 47 YEARS,

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R/O. ASHOK NAGAR CAMP, MOKA POST, BALLARI TALUK AND DISTRICT 583101

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…RESPONDENT

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(BY SRI BASAVANA GOUD T., ADVOCATE)

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NC: 2026:KHC-D:10 CRL.RP No. 100318 of 2022

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HC-KAR

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THIS CRIMINAL REVISION PETITION IS FILED U/S 397 R/W 401 OF CR.P.C., PRAYING TO CALL FOR THE RECORDS AND SET ASIDE THE JUDGMENT OF CONVICTION AND SENTENCE PASSED BY THE IV TH ADDITIONAL DISTRICT AND SESSIONS JUDGE (COMMERCIAL COURT) AT BALLARI IN DISMISSING THE CRIMINAL APPEAL NO.50/2019 DATED 12.07.2022, THEREBY CONFIRMING THE JUDGMENT OF CONVICTION AND SENTENCE PASSED BY THE VI TH ADDITIONAL CIVIL JUDGE AND JMFC AT BALLARI IN CC NO.184/2017 DATED 20.08.2019, THEREBY THE PETITIONER WAS CONVICTED AND SENTENCED FOR THE OFFENCES PUNISHABLE U/S 138 OF N.I. ACT, FOR SENTENCED TO PAY FINE OF RS.6,00,000/- IN DEFAULT OF PAY THE SAME, THE ACCUSED SHALL UNDERGO SIMPLE IMPRISONMENT FOR A PERIOD OF 03 MONTHS. FURTHER ORDER THAT, OUT OF FINE AMOUNT ON RECOVERY, A SUM OF RS.2,000/- SHALL BE DEFRAYED AS EXPENSES TO STATE. FURTHER OUT OF FINE AMOUNT ON RECOVERY A SUM OF RS.5,98,000/- SHALL BE PAID AS COMPENSATION TO THE COMPLAINANT, SO FAR AS REVISION PETITIONER IS CONCERNED IN THE ABOVE CRIMINAL REVISION PETITION.

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

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NC: 2026:KHC-D:10 CRL.RP No. 100318 of 2022

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HC-KAR

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ORAL ORDER

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(PER: THE HON'BLE MR. JUSTICE V.SRISHANANDA)

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Heard Sri.Neelendra Gunde, learned amicus

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curiae for the petitioner, and Sri.Basavana Goud T., learned counsel for the respondent.

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The accused in C.C.No.184/2017 is the revision petitioner, who has challenged her conviction for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (short, ‘the N.I. Act’), which was confirmed in Criminal Appeal No.50/2019.

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The facts, in a nutshell, which are necessary for the disposal of the present petition, are as follows:

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A complaint came to be filed under Section 200 of the Code of Criminal Procedure (for short, ‘the Cr.P.C’.) alleging the commission of an offence punishable under Section 138 of the N.I.Act. It was contended that the revision petitioner/accused had obtained a hand loan of Rs.5,50,000/- from the complainant; towards repayment of

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the said amount, accused issued a cheque bearing No.204974 dated 27.03.2014 drawn on the State Bank of Mysore, Ballari Branch. Upon presentation, the said cheque was dishonoured with the endorsement “Funds Insufficient.”

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A legal notice was thereafter issued calling upon the accused to repay the amount covered under the cheque. There was neither compliance with the demand made in the notice nor any reply thereto. Consequently, the complainant sought initiation of legal action against the accused.

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The learned Trial Magistrate, after completing the necessary formalities, summoned the accused, recorded her plea, and thereafter proceeded to record the evidence of the complainant.

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During the course of cross-examination, two documents were confronted to the complainant on behalf of the accused and were marked as Exs.D1 and D2. Ex.D1 is the certified copy of the deposition of PW1 in C.C.No.1909/2016, and Ex.D2 is the consent letter.

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HC-KAR

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No other material evidence was placed on record

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on behalf of the accused. Thereafter, the learned Trial Judge heard the arguments of the parties and convicted the accused, disbelieving the defence put forth that the cheque in question was issued towards repayment of rent on behalf of Smt.Ramadevi, as contended under Ex.D2.

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Aggrieved by the said judgment of conviction, the accused preferred an appeal before the District Court in Criminal Appeal No.50/2019.

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The learned Appellate Judge, after securing the records and hearing the arguments of both parties, dismissed the appeal and confirmed the order of conviction passed by the learned Trial Magistrate.

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Being further aggrieved by the same, the complainant is before this Court.

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At the first instance, the complainant had engaged the services of free legal aid counsel, Sri.Manjunath G. Patil. There was no compliance with the interim order passed by this Court and, on account of non-

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compliance, the accused was taken into custody. Thereafter, Sri.Manjunath G. Patil, learned counsel retired from the case.

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This Court, in the interest of justice, appointed Sri.Neelendra D. Gunde as amicus curiae to assist the Court for and on behalf of the petitioner.

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Having heard the arguments of Sri. Neelendra D. Gunde, learned amicus curiae , and Sri. Basavana Goud T., learned counsel for the respondent, this Court has perused the material on record meticulously.

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On such perusal of the material on record, it is evident that the cheque in question, marked as Ex.P1, belongs to the revision petitioner and that the signature found thereon is that of the revision petitioner.

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Once these two aspects stand established, a statutory presumption automatically arises in favour of the complainant, in terms of the principles of law laid down by the Hon’ble Apex Court in Rajesh Jain Vs. Ajay Singh¹ ,

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1 (2023) 10 SCC 148

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wherein the principles enunciated in Rangappa Vs. Mohan² , have been reiterated.

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No doubt, it is a rebuttable presumption.

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However, to rebut the said presumption, there is no material evidence on record, except for confronting Exs.D1 and D2 to PW1.

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Atleast, Smt.Ramadevi should have been examined on behalf of the accused to establish that there was a transaction between the complainant and Ramadevi, and that the accused had issued the present cheque merely as a surety towards that transaction. No such attempt was made on behalf of the accused.

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As a feeble attempt, learned counsel for the petitioner contended that there was no legally recoverable debt which is sine qua non to attract offence punishable under Section 138 of the N.I.Act.

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2 (2010) 11 SCC 441

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HC-KAR

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Under such circumstances, the principles of law enunciated by the Co-ordinate Bench in the case of R. Parimala Bai W/o B.S. Krishnan Vs. Bhaskar

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Narasimhaiah S/o Late Sampath³ , would come into play.

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This Court has perused the said judgment meticulously, and in paragraphs 23 to 26, it has been held as under:

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“23. On careful perusal of the above said decisions, it is crystal clear that in order to attract Section 138 of the Negotiable Instruments Act, the ingredients of Section 138 have to be established primarily by the complainant by pleading in the complaint with regard to the existence of any legally recoverable debt or liability on the part of the accused. Even a semblance of doubt is raised with regard to the existence or non existence of legally recoverable debt, then also it should be established during the course of trial by means of pleading the facts and leading evidence. It is the defence taken up by the accused that there was no legally enforceable debt, and further that, it is not only the defence, but also the court has to examine whether on complete reading of the complaint itself whether any offence u/s. 138 of the Negotiable Instruments Act is constituted or not. It is a very

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3 2018 SCC Online Kar 3989

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well recognized principle of criminal jurisprudence that, if on plain and meaningful reading of the complaint or the FIR, the allegations made in the complaint or in the FIR do not constitute any offence or under any penal law for the time being in force, the continuation of such prosecution amounts to abuse of process of law. Therefore, the court has to examine without reference to the defence of the accused on the basis of the complaint itself whether, there existed ingredients of Section 138 of the Negotiable Instruments Act. Even in order to take cognizance and issuance of process against the accused, such exercise has to be done, to nip the case at the bud to avoid unnecessarily accused facing the trial.

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24. Now, coming to the factual aspects of this case. It is clear from the complaint averments that it is the case of the complainant that, the complainant has a son by name B. Sharath, the accused and complainant were known to each other since long. The complainant met the accused and in fact the accused had assured to provide a job to his son in HAL factory. In this context, the accused had requested the complainant to pay an amount of Rs. 10 lakhs and he demanded the same for the purpose of providing a job to the son of the complainant. In this context, it is stated that, on various occasions, the complainant has paid some amounts to him. As the accused could not get the job to the son of the complainant, the complainant approached the accused. Then the accused again demanded for further amount for making payment to the Officers. As per the demand, the complainant paid amount to him. In

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total, lot of amount has been paid to the accused for the purpose of securing job to the son of the complainant. As the accused was not able to secure the job in HAL to the complainant's son, the complainant demanded for repayment of the money. In that context, it is said that on 1.5.2009, the accused issued a cheque bearing No. 262871 for a sum of Rs. 10 lakhs and on presentation of the said cheque it came to be dishonoured on the ground of ‘funds insufficient’. After complying the other provisions of Section 138 of the Negotiable Instruments, it appears the complaint came to be lodged.

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25. It is seen that, there are absolutely no allegations whatsoever that the accused has taken this money as a loan or a debt or as a liability at any point of time. It is clear cut case of the complainant that, he has paid money for the purpose of securing job for his son, even without examining whether the accused has got any authority to provide job to his son or not and what is the procedure that is required to be followed by the HAL factory for the purpose of selecting any candidate for the purpose of providing any job. Therefore, without examining anything, the complainant himself has entered into a void contract with the accused and paid money as against the public policy for illegal purpose.

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As could be seen from the rulings cited by the learned counsel for the petitioner and the provision of Section 23 of the Indian Contract Act, it is crystal clear that if on the basis of a void contract and particularly if the consideration is illegal, and consideration is for immoral or illegal purposes or which is against the public

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policy, then the whole transaction becomes void, the consideration paid in such contract becomes an illegal consideration and when it is said it is legal or unlawful consideration, it can not be at any stretch of imagination called as a legally recoverable debt.”

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In the case on hand, since the accused did not

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appear as a witness nor examined Smt.Ramadevi on her behalf to establish that the cheque in question was issued by the petitioner merely as a surety for a legally recoverable sum from Ramadevi, this Court is of the considered opinion that the principles of law enunciated in the aforesaid decision are of no assistance to the petitioner in setting aside the impugned order.

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