M/S Sarvana Alloy Steels P Ltd. Vs M/S Xindia Steels… — Cheque Dishonour | Karnataka HC (2026)

M/S Sarvana Alloy Steels P Ltd. Vs M/S Xindia Steels… — Cheque Dishonour | Karnataka HC (2026)

What the court decided

AI extract

Outcome

Criminal Revision Petition allowed; conviction judgment in CC No.31570/2014 dated 08.02.2018 and appellate judgment in Crl.A.No.332/2018 dated 18.05.2021 set aside; petitioners acquitted under Section 138 NI Act; bail bonds cancelled; respondent permitted to withdraw Rs.8,20,000/- trial-court deposit.

Issue for consideration

Whether, in view of the settlement arrived at between the parties before the Mediation Centre, the criminal revision petition against the conviction of the petitioners under Section 138 of the Negotiable Instruments Act, 1881 should be disposed of in terms of the settlement and the convictions set aside.

Court's answer

In view of the settlement arrived between the parties, the revision petition is disposed of in terms of the settlement and the impugned judgments of conviction and sentence passed by the Courts below are set aside.

Ratio / Principle

The petitioners are acquitted of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881, and bail bonds, if any, executed by them stand cancelled.

Key takeaways

The respondent/complainant is at liberty to withdraw the amount of Rs.8,20,000/- deposited by the petitioners before the Trial Court in CC No.31570 of 2014.ratio¶65

Detailed headnote1 paragraphs

Criminal Revision Petition (Ss.397/401 Cr.P.C.) filed by the accused — M/s Sarvana Alloy Steels P. Ltd and its four directors — against their conviction under S.138 NI Act in CC No.31570/2014 (XXIV Addl. Small Causes Judge & XXII ACMM (SCCH-26), Bengaluru, 08.02.2018) and the judgment in Crl.A.No.332/2018 (LXIV Addl. City Civil & Sessions Judge (CCH-65), Bengaluru, 18.05.2021). Before the High Court the parties reported a settlement effected at the Mediation Centre, Bengaluru, recorded in a Memorandum of Settlement of 10.12.2025: out of compensation of Rs.82,05,000/-, the accused agreed to pay Rs.81,61,447/- as full and final settlement (Rs.5,00,000/- paid 15.03.2014; Rs.20,00,000/- paid 12.01.2024; balance via trial-court deposit of Rs.8,20,000/- and demand drafts totalling Rs.48,41,447/-, receipt acknowledged in court). Taking the settlement on record, the Court allowed the revision petition, set aside both judgments, acquitted the petitioners of the offence under S.138 NI Act, cancelled their bail bonds, and permitted the respondent/complainant (M/s Xindia Steels Ltd) to withdraw the Rs.8,20,000/- deposit.

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NC: 2026:KHC:1379 CRL.RP No. 732 of 2022

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9^TH DAY OF JANUARY, 2026

BEFORE

THE HON'BLE MR. JUSTICE S VISHWAJITH SHETTY CRIMINAL REVISION PETITION NO. 732 OF 2022

BETWEEN:

M/S SARVANA ALLOY STEELS P. LTD HAVING ITS REGISTERED OFFICE AT NO.21/D, INDUSTRIAL SUBURB II STAGE, TUMKUR ROAD YESHWANTHPUR, BANGALORE - 560 022 REP. BY DIRECTOR NAGARAJ SARAVANA.

NAGARAJI SARAVANA AGED ABOUT 48 YEARS.

SASHI KUAMR NAGARAJI AGED ABOUT 43 YEARS.

SANJAY KUMAR NAGARAJI AGED ABOUT 40 YEARS.

SWAMINATHAN NAGARAJI AGED ABOUT 74 YEARS.

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

NO.2 TO 5 ARE DIRECTOR OF THE 1ST PETITIONERS COMPANY R/AT NO.680, 9TH A CROSS 11STAGE, WEST OF CHORD ROAD BENGALURU - 560 086.

…PETITIONERS

(BY SRI SEERAJ SAMPATH, ADV.)

AND:

M/S XINDIA STEELS LIMITED "THE ESTATE , 10TH FLOOR NO.121, DIKENSON ROAD BENGALURU - 560 042 REPRESENTED BY ITS AUTHORIZED

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REPRESENTATIVE SHRI VIKAS KULKARNI.

…RESPONDENT

(BY SRI ANJAN DEV N, ADV., V/O DTD: 28.10.2025)

THIS CRL.RP IS FILED U/S.397 R/W 401 CR.P.C PRAYING TO SET ASIDE THE IMPUGNED JUDGMENT AND ORDER DATED 18TH MAY 2021, PASSED BY THE LEARNED LXIV ADDITIONAL CITY CIVIL AND SESSIONS JUDGE (CCH-65), BENGALURU CITY, IN CRIMINAL APPEAL NO. 332/2018 AND ALSO THE JUDGMENT AND ORDER DATED 08.02.2018 PASSED IN C.C. NO. 31570/2014 BY THE LEARNED XXIV ADDITIONAL SMALL CAUSES JUDGE AND XXII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE (SCCH-26) BENGALURU CITY BY ALLOWING THIS CRIMINAL REVISION PETITION.

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

ORAL ORDER

This criminal revision petition under Section 397 read with Section 401 of Cr.P.C. is filed by the accused with a prayer to set-aside the judgment and order of conviction and sentence passed in CC No.31570/2014 by the Court of XXIV Addl. Small Causes Judge and XXII ACMM (SCCH-26), Bengaluru dated 08.02.2018 and the judgment and order dated 18.05.2021 passed in Crl.A.No.332/2018 by the Court of LXIV Addl. City Civil and Sessions Judge (CCH-65), Bengaluru.

Learned counsel for the petitioners and learned counsel

for the respondent jointly submit that the parties have settled

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their dispute before the Mediation Centre at Bengaluru and the settlement terms have been reduced to writing under a Memorandum of Settlement. They submit that revision petition may be disposed off taking into consideration the settlement arrived between the parties and the impugned judgment and order of conviction and sentence may be set-aside.

The submission made on behalf of the parties and the Memorandum of Settlement executed by the parties before the Mediation Centre at Bengaluru are taken on record.

The Memorandum of Settlement is signed by the parties and by their respective Advocates. The parties, who are present before the Court have been identified by their respective Advocates. In paragraph No.III of the Memorandum of Settlement executed between the parties before the Mediation Centre at Bengaluru on 10.12.2025, it is stated as follows:-

"III. The aforesaid petition was referred to mediation for resolving the dispute between the parties. During the course of mediation, the Petitioners/Accused are represented by its Finance Manager Mr. Kubendiran.P.M and the Respondent/Complainant represented by its authorized Mr. Ravindra Desai and their respective

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advocates were present to resolve their disputes and they have agreed the following terms and conditions:

1. Both the parties state that out of the compensation of Rs.82,05,000/- (Rupees Eighty Two Lakhs Five Thousand Only) the petitioners/accused has agreed to pay a sum of Rs.81,61,447/- (Rupees Eighty One Lakhs Sixty One Thousand Four Hundred Forty Seven Only) to the Respondent/Complainant as full and final settlement of all the claims of the Respondent/Complainant. Out of the agreed amount the Petitioners/Accused has already paid a sum of Rs. 5,00,000/- (Rupees Five Lakhs Only) to the Respondent/Complainant on 15.03.2014 and a sum of Rs. 20,00,000/- (Rupees Twenty Lakhs Only) on 12.01.2024 and the receipt of the same was acknowledged by the Respondent/Complainant. The remaining balance amount of Rs. 56,61,447/- (Rupees Fifty Six Lakhs Sixty One Thousand Four Hundred Forty Seven Only) in the following manner:

a) The Respondent/Complainant is entitled to withdraw a sum of Rs. 8,20,000/- (Rupees Eight Lakhs Twenty Thousand Only) which was deposited by the Petitioners/Accused before the Hon'ble XXII Additional Chief Metropolitan Magistrate (SCCH-26) in C.C.No.31570/2014, for which the Petitioners/Accused has no objection.

b) A sum Rs.45,00,000/- (Rupees Forty Five Lakhs Only) will be paid by the Petitioners/Accused to the

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Respondent/Complainant by way of three demand drafts as mentioned below:

A demand draft bearing No.001677 dated 08.12.2025 drawn on Axis Bank, Dr. Modi Hospital, Bengaluru for a sum of Rs.30,00,000/- (Rupees Thirty Lakhs Only)

A demand draft bearing No.001678 dated 08.12.2025 drawn on Axis Bank, Dr. Modi Hospital, Bengaluru for a sum of Rs.5,00,000/- (Rupees Five Lakhs Only)

A demand draft bearing No.001679 dated 08.12.2025 drawn on Axis Bank, Dr. Modi Hospital, Bengaluru for a sum of Rs.10,00,000/- (Rupees Ten Lakhs Only)

The balance amount of Rs.3,41,447/- (Rupees Three Lakhs Forty One Thousand Four Hundred Forty Seven Only) will be paid by to the Petitioners/Accused to the Respondent/Complainant by way of demand draft bearing No.001684 dated 10.12.2025 drawn on Axis Bank, Dr. Modi Hospital, Bengaluru.

The aforesaid demand drafts will be handed over to the Respondent/Complainant at the time of reporting settlement before the Hon'ble Court. The Respondent/Complainant has agreed to receive the agreed amount as mentioned above…"

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Mr. Ravindra Desai, who is the authorized representative

of the respondent/complainant, is present before the Court and has acknowledged receipt of Demand Draft from the petitioners for a total sum of Rs.48,41,447/-.

In view of the settlement arrived between the parties, this revision petition is required to be disposed off in terms of the settlement and consequently, the impugned judgment and order of conviction and sentence passed by the Courts below needs to be set-aside. Accordingly, the following order:-

The Criminal Revision Petition is allowed. The judgment and order of conviction and sentence passed in CC No.31570/2014 by the Court of XXIV Addl. Small Causes Judge and XXII ACMM (SCCH-26), Bengaluru dated 08.02.2018 and the judgment and order dated 18.05.2021 passed in Crl.A.No.332/2018 by the Court of LXIV Addl. City Civil and Sessions Judge (CCH-65), Bengaluru are set-aside and the petitioners are acquitted of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. Bail bonds, if any, executed by petitioners, stand cancelled.

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Respondent/complainant is at liberty to withdraw the

amount of Rs.8,20,000/- deposited by the petitioners before the Trial Court in CC No.31570 of 2014.

Sd/(S VISHWAJITH SHETTY) JUDGE

DN

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