Sri. a. Krishna Vs Sri. C. a. Varadaraju — Cheque Dishonour | Karnataka HC (2026)

Sri. a. Krishna Vs Sri. C. a. Varadaraju — Cheque Dishonour | Karnataka HC (2026)

What the court decided

AI extract

Outcome

No relief to the petitioner-accused; conviction and sentence stand. Direction: the amount in deposit before the Trial Court is permitted to be withdrawn by the respondent/complainant.

Issue for consideration

Whether the petitioner rebutted the presumption under Section 139 (read with Section 118) of the N.I. Act that the disputed cheque (Ex.P1) was issued towards repayment of the alleged loan of Rs.10,10,000/-, given his defence that it was one of two security cheques subsequently misused by the complainant after repayment. +1 more

Court's answer

The petitioner failed to rebut the presumption that arose against him under Section 139 read with Section 118 of the N.I. Act, and the courts below rightly found him guilty and convicted and sentenced him under Section 138 N.I. Act.

Ratio / Principle

The plea that Ex.P1 and Ex.P7 were two cheques issued together as security for a single loan was undermined because their numbers (Ex.P1 - 810467; Ex.P7 - 810458) are not running serial numbers; in normal circumstances two security cheques issued together would bear running numbers.

Key takeaways

By producing Ex.P7 and Ex.P8 the complainant proved that the petitioner had earlier issued a cheque for Rs.35,00,000/- (dated 05.04.2014, No.810458) which was presented in April 2014 and dishonoured; its presentation would definitely have come to the petitioner's knowledge.ratio¶¶56
The misuse defence was improbable: if the security cheque had been misused for Rs.35,00,000/-, the petitioner, a serving police constable, would not have repaid Rs.15,00,000/- through RTGS on 30.04.2014 (that payment being towards the dishonoured Rs.35,00,000/- cheque), and despite claiming misuse he took no action against the respondent for misusing the cheque and cheating him.ratio¶¶60

Detailed headnote1 paragraphs

Karnataka High Court, Bengaluru (S Vishwajith Shetty J), CRL.RP No. 457 of 2017, decided 13-01-2026 - Criminal revision under S.397 r/w S.401 Cr.P.C. by the accused in a Section 138 NI Act case dismissed. Complainant's case: cash loan of Rs.10,10,000/- (on-demand pronote Ex.P6, signed also by accused's son as witness); repayment cheque No.810467 dated 31.10.2014 on State Bank of Mysore, P&S Division, dishonoured for 'insufficient funds'; conviction by XXI ACMM, Bengaluru (03.03.2016; fine Rs.10,20,000/-, default simple imprisonment ten months) confirmed by LXII Addl. City Civil & Sessions Judge in Crl.A.No.421/2016 (08.03.2017). Holding: presumption under S.139 r/w S.118 NI Act stood unrebutted because (i) Ex.P1 (No.810467) and Ex.P7 (No.810458) do not bear running cheque numbers, negating the 'two security cheques' plea; (ii) Ex.P7/Ex.P8 proved an earlier Rs.35,00,000/- cheque presented and dishonoured in April 2014, with Rs.20,00,000/- cash and Rs.15,00,000/- RTGS (30.04.2014) accounted as settlement thereof; (iii) the petitioner, a serving police constable, took no action against the complainant for alleged misuse/cheating; (iv) DW2, the erstwhile partner witness, was himself arraigned in the complainant's pending cheque case (CC No.4614/2015), rendering his evidence unhelpful. Concurrent findings found free of illegality or irregularity; sentence held just and proportionate; deposit in the Trial Court permitted to be withdrawn by the complainant.

Procedural history

How this case reached the court

AI extract

Order under challenge
Judgment and order of conviction under Section 138 N.I. Act and sentence (fine of Rs.10,20,000/-, in default simple imprisonment for ten months) passed in CC No.3430/2015 on 03.03.2016, confirmed on appeal in Crl.A.No.421/2016 by judgment dated 08.03.2017.¶¶22
LXII Addl. City Civil and Sessions Judge, Bengaluru (Crl.A.No.421/2016), confirming the Court of XXI Addl. Chief Metropolitan Magistrate, Bengaluru (CC No.3430/2015) · 08.03.2017
Prior proceeding
Respondent/complainant initiated prosecution against the petitioner (accused) for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 in CC No.3430/2015 before the Court of XXI Additional Chief Metropolitan Magistrate, Bengaluru, alleging a cash loan of Rs.10,10,000/- (about May 2014) secured by an on-demand promissory note (Ex.P6) signed by the petitioner with his son as witness.¶¶24
Prior proceeding
Repayment cheque No.810467 dated 31.10.2014 drawn on State Bank of Mysore, P&S Division, Bengaluru, in favour of Sri Lakshmi Narasimha Enterprises (the complainant's proprietary concern), on presentation was dishonoured with remark 'insufficient funds'; legal notice was issued and the amount remained unpaid, leading to the complaint.¶¶28
Prior proceeding
At trial, the petitioner appeared on summons and claimed to be tried; the complainant examined himself as PW1 and marked Ex.P1 to P10; the petitioner examined himself as DW1 and one DW2 (erstwhile partner of the respondent); defence marked Ex.D1 to D4.¶¶29
Prior proceeding
By judgment and order dated 03.03.2016 the Trial Court convicted the petitioner under Section 138 N.I. Act and sentenced him to pay fine of Rs.10,20,000/-, in default to undergo simple imprisonment for ten months.¶¶33
Prior proceeding
The trial court's judgment and order of conviction and sentence was confirmed in Crl.A.No.421/2016 by the Court of LXII Addl. City Civil and Sessions Judge, Bengaluru, by judgment and order dated 08.03.2017, prompting the present revision.¶¶33