M/S Just Stitch Vs Baseer Pasha — Cheque Dishonour | Karnataka HC (2026)

M/S Just Stitch Vs Baseer Pasha — Cheque Dishonour | Karnataka HC (2026)

What the court decided

AI extract

Outcome

None to the petitioners; the respondent/complainant is permitted to withdraw any amount deposited by the petitioners before the Trial Court; I.A.No.1 of 2022 does not survive for consideration; services of Amicus Curiae Sri Harsha G. appreciated and his fee fixed at Rs.15,000/-.

Issue for consideration

Whether the presumptions arising against the petitioners under Sections 139 and 118 of the N.I. Act were rebutted by their defence that the cheques were issued only as security for a loan earlier borrowed (of ₹5,00,000), which was repaid, and that the cheques were subsequently misused by the respondent. +1 more

Court's answer

The defence raised by the accused must be probable; unless the accused establishes a probable defence, the presumption arising against the accused under Section 139 r/w Section 118 of the N.I. Act is not rebutted and the accused is liable to be convicted under Section 138 of the N.I. Act.

Ratio / Principle

Having failed to establish a probable defence, the petitioners were rightly convicted by the Trial Court and the Appellate Court for the offence punishable under Section 138 of the N.I. Act.

Key takeaways

The order of sentence imposed by the Courts below against the petitioners is just and proportionate and does not call for any interference.ratio¶52

Detailed headnote1 paragraphs

Criminal revision under Sections 397 r/w 401 Cr.P.C. against a Section 138 N.I. Act conviction — dismissed; conviction and sentence affirmed. The respondent/complainant claimed to have invested ₹8,00,000 in the petitioners' partnership business; towards repayment, five cheques (Nos.016223–016227, dt. 30.10.2016) totalling ₹8,85,000 drawn on Jammu and Kashmir Bank, Frazer Town Branch, Bengaluru, were issued and dishonoured for 'insufficient' funds; statutory notice was duly served and unpaid. At trial (C.C.No.10811/2017, XV Addl. Chief Metropolitan Magistrate, Bengaluru, order dt. 23.03.2018), the complainant was examined as PW1 with Ex.P1–P28 and accused no.2 as DW1 without defence documents; the cheque signatures were not disputed, so presumptions under Sections 139 and 118 N.I. Act arose. Conviction with fine of ₹8,85,000 (default: simple imprisonment for one year; ₹8,80,000 compensation to the complainant, ₹5,000 forfeited to the State) was confirmed in Crl.A.No.712/2018 dt. 23.12.2019 by the LVIII Addl. City Civil & Sessions Judge, Bengaluru. Held: the accused's defence must be probable; the defence that the cheques were given only as security for a repaid loan of ₹5,00,000 and were later misused was unsupported by any material and did not rebut the presumptions; the Courts below rightly convicted the petitioners and the sentence was just and proportionate. Any deposit before the Trial Court was permitted to be withdrawn by the complainant; the services of Amicus Curiae Sri Harsha G. were appreciated and his fee fixed at Rs.15,000/-.

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20^TH DAY OF JANUARY, 2026 BEFORE

THE HON'BLE MR. JUSTICE S VISHWAJITH SHETTY CRIMINAL REVISION PETITION NO. 231 OF 2020

BETWEEN:

M/S JUST STITCH NO.4, OLD SHOP NO.6 K.KAMARAJ ROAD CORPORATION WARD NO.79 BANGALORE - 560 001 BY ITS PROPRIETOR MOHAMMED YUNUS KHAN.

MOHAMMED YUNUS KHAN S/O HAFEEZULLA KHAN AGED ABOUT 36 YEARS R/A NO.33, ALI MASJID ROAD AMAR JYOTHI LAYOUT HOREB CHURCH CROSS BANGALORE - 560 077.

…PETITIONERS

(BY SRI HARSHA G., AMICUS CURIAE, V/O DTD:05.01.2026)

AND:

Digitally signed by NANDINI M S Location: HIGH COURT OF KARNATAKA

BASEER PASHA S/O ALTE MUNEER PASHA AGED ABOUT 35 YEARS R/A NO.A-004, 2ND FLOOR, INFINTE N.R.GREENWODD APARTMENT, NO.9, 5TH CROSS SHAMPURMAIN ROAD, R.T.NAGAR POST, BANGALORE-560032.

…RESPONDENT

(BY SRI NAVEED AHAMED, ADV.)

THIS CRL.RP IS FILED U/S.397 R/W 401 OF CR.P.C PRAYING TO SET ASIDE THE JUDGMENT AND ORDER DATED 23.03.2018 CONVICTING THE PETITIONER TO PAY A FINE OF RS.8,85,000/(EIGHT LAKHS EIGHTY FIVE THOUSAND ONLY), THE COMPLAINANT/ RESPONDENT BEING ENTITLED FOR COMPENSATION OF RS.8,80,000/- REMAINING AMOUNT OF RS.5,000/- IS TO BE

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FORFEITED TO THE STATE IN DEFAULT TO UNDERGO SIMPLE FOR ONE YEAR, PASSED BY THE XV A.C.M.M., BENGALURU IN C.C.NO.10811/2017 AND CONFIRMED IN CRL.A.NO.712/2018 DATED 23.12.2019 BY THE LEARNED VIII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE (CCH-59) BENGALURU CITY.

THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S VISHWAJITH SHETTY

ORAL ORDER

Petitioners are before this Court in this revision petition filed under Section 397 R/w Section 401 of Cr.P.C, with a prayer to set aside the judgment and order of conviction and sentence passed in C.C.No.10811/2017 by the Court of XV Addl. Chief Metropolitan Magistrate, Bengaluru dated 23.03.2018 and the judgment and order passed in Criminal Appeal No.712 of 2018 dated 23.12.2019 passed by the Court of LVIII Addl. City Civil & Sessions Judge, Bengaluru City.

Heard the learned amicus curiae on behalf of the petitioners and learned counsel for the respondents.

Respondent herein had initiated proceedings against the petitioners for offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short 'N.I.Act') before

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the Court of Addl. Chief Metropolitan Magistrate, Bengaluru in C.C.No.10811 of 2017. It is the case of the respondent that he had invested a sum of ₹.8,00,000/- in the partnership business of the petitoners and after a dispute arose between the parties towards repayment of the amount invested, the respondent had issued the five cheques bearing Nos.016223 to 016227 dated 30.10.2016, totally for a sum of ₹8,85,000/- drawn on Jammu and Kashmir Bank, Frazer Town Branch, Bengaluru. Since the said cheques were dishonored by the drawee bank for the reason that funds were "insufficient" in the bank account of the petitioners, the respondent got issued legal notice to the petitioners which was duly served on them. In spite of service of notice, the petitioners had not paid the amount covered under the cheques in question to the respondent and therefore he had initiated proceedings against the petitioners for offence punishable under Section 138 of the N.I.Act.

The petitioners, who had appeared before the Trial Court had claimed to be tried and therefore to substantiate his case the respondent had examined himself as PW1 and got marked 28 documents as Ex.P1 to Ex.P28. In support of the

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defence, accused No.2 was examined as DW1. However, no documents were got marked in support of the defence. The Trial Court after hearing the arguments addressed on both sides had convicted the petitioners for offence punishable under Section 138 of the N.I. Act and sentenced the accused no.2 to pay fine of ₹8,85,000/- and in default to undergo simple imprisonment for one year. The said judgment and order of conviction and sentence passed by the Trial Court has been confirmed in Criminal Appeal No.712 of 2018 by the Court of LVIII Addl. City Civil & Sessions Judge, Bengaluru City by judgment and order dated 23.12.2019. Being aggrieved by the same, the petitioners are before this Court.

Learned amicus curiae appearing on behalf of the petitioners having reiterated the grounds urged in the memorandum of petition submits that, the cheques in question were issued as security to the loan earlier borrowed by the petitioners from the respondent. Though, the said loan has been repaid, the cheques were not returned and subsequently the said cheques have been misused by the respondent.

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Per contra, learned counsel for the respondent has

argued in support of the order impugned and submits that the presumption that arose against the petitioners has not been rebutted by them by putting forward any probable defence. Therefore, the judgment and order of conviction and sentence passed by the Courts below are justified. Accordingly, he prays to dismiss this petition.

It is not in dispute that respondent / complainant had invested a sum of ₹8,00,000/- with the petitioners herein for the purpose of business. According to the respondent, after a dispute arose between the parties towards repayment of the amount invested, the cheques in question totally for a sum of ₹8,85,000/- were issued by the petitioners in his favour and on presentation of the said cheques for realisation, the drawee bank had dishonoured the said cheques. It is not in dispute that after the cheques were dishonoured, a statutory notice was issued by the complainant to the petitioners, which was duly served and since, the petitioners had failed to repay the amount covered under the cheques in question, in spite of

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service of statutory notice, proceedings was initiated against

them for offence punishable under Section 138 of N.I. Act.

In support of his case, respondent / complainant

had examined himself as PW1 and 28 documents have been marked as Ex.P1 to P28. Ex.P1 to Ex.P5 are the original cheques in dispute. The signature found in the cheques in questions were not disputed and it is also not in dispute that the cheques in question were drawn on the bank account of the petitioners maintained by them in Jammu and Kashmir Bank, Frazer Town Branch, Bengaluru. Therefore, a presumption arises against the petitioners as provided under Section 139 of the N.I. Act R/w Section 118 of the N.I. Act. Unless the said presumption is successfully rebutted by the petitioners by putting forward a probable defence, they are liable to be convicted for the offence punishable under Section 138 of N.I. Act.

It is the specific defence of the petitioners that accused no.2 / petitioner no.2 had earlier borrowed a sum of ₹5,00,000/- from the respondent and towards security of the amount borrowed, the cheques in question were given. It is

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their further case that though the said amount of ₹.5,00,000/which was borrowed in the month of April 2016 was repaid, the cheques which were given as security were not returned and subsequently the said cheques have been misused by the respondent / complainant. Except the oral testimony of PW1, there is no other material produced before the Court, in support of the defence raised by the petitioners.

It is trite that the defence raised by the accused should be probable and unless the accused establishes a probable defence, the presumption that arises against the accused under Section 139 R/W Section 118 of N.I. Act does not get rebutted and eventually the accused is liable to be convicted for offence punishable under Section 138 of N.I. Act.

The Trial Court as well as the Appellate Court having appreciated the aforesaid aspects of the matter have rightly convicted the petitioners for the offence punishable under Section 138 of N.I. Act. Even the order of sentence imposed by the Courts below as against the petitioners is just and proportionate, which does not call for any interference. Under the circumstances, I do not find any merit in this petition.

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Accordingly, the criminal revision petition is dismissed. Amount deposited by the petitioners, if any before the Trial Court is permitted to be withdrawn by the respondent/complainant.

In view of the disposal of the petition, I.A.No.1 of 2022 does not survive for consideration.

The services of the learned Amicus Curiae Sri Harsha G is appreciated and is placed on record, and the fees of the Amicus Curiae is fixed at Rs.15,000/-.

Sd/(S VISHWAJITH SHETTY) JUDGE

NMS

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