Karnataka High Court
M/S Orange Budget Hotels And ... vs Smt Chowdamma on 15 July, 2025
Author: Shivashankar Amarannavar
Bench: Shivashankar Amarannavar
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CRL.RP No. 294 of 2021
C/W CRL.RP No. 285 of 2021
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 15TH DAY OF JULY, 2025
BEFORE
THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR
CRIMINAL REVISION PETITION No. 294 OF 2021
C/W
CRIMINAL REVISION PETITION No. 285 OF 2021
IN CRL.RP No. 294/2021
BETWEEN:
M/s. ORANGE BUDGET HOTELS AND
HOSPITALITY PRIVATE LIMTIED
REP. BY ITS MANAGING DIRECTOR
MR MUSUNURU SRINIVAS
AGED ABOUT 50 YEARS
ITS REGISTERED OFFICE AT
FLAT No.602, BALAJI DOLPHIN HEIGHTS
APARTMENT, NORTH EXTENSION
SEETHAMMADHARA, VISHAKAPATNAM
ALSO AT VILLA No.711, PHASE III,
ADARSH PALM RETREAT
Digitally signed by
LAKSHMINARAYANA DEVARABEESANAHALLI
MURTHY RAJASHRI BENGALURU - 560 103.
Location: HIGH ...PETITIONER
COURT OF
KARNATAKA
(BY SRI NITIN R, ADVOCATE)
AND:
SMT. CHOWDAMMA
W/O LATE CHANDRAPPA
AGED ABOUT 43 YEARS
D No. 733/44, SAPTHAGIRI NILAYA
NEAR BESCOM OFFICE
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CRL.RP No. 294 of 2021
C/W CRL.RP No. 285 of 2021
HC-KAR
CHOWDESWARAI LAYOUT
MARAHAHALLI
BENGALURU - 560 037
ALSO AT:
SURVEY No.90/6, MUNNEKOLALA
OUTER RING ROAD, MARATHAHALLI
BENGALURU - 560 037.
...RESPONDENT
(BY SRI D HANUMANTHARAYA, ADVOCATE)
THIS CRL.R.P. IS FILED UNDER SECTION 397 READ WITH
SECTION 401 Cr.P.C. PRAYING TO SET ASIDE THE JUDGMENT
AND ORDER DATED 11.02.2020 PASSED BY THE LXXII
ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, MAYO HALL,
BENGALURU IN CRL.A. No.25192/2019 TO THE EXTENT OF
MODIFICATION OF THE FINE AMOUNT FROM Rs.87,05,000/- TO
Rs.48,76,250/- AND DIRECT AWARDING OF ENHANCED
COMPENSATION BY TWICE THE AMOUNT OF CHEQUES TO THE
PETITIONER FROM THE ACCUSED AND ETC.,
IN CRL.RP No. 285/2021
BETWEEN:
M/s. ORANGE BUDGET HOTELS AND
HOSPITALITY PRIVATE LIMITED
REP. BY ITS MANAGING DIRECTOR
MR MUSUNURU SRINIVAS
AGED ABOUT 50 YEARS
ITS REGISTERED OFFICE AT FLAT No.602
BALAJI DOLPHIN, HEIGHTS APARTMENT
NORTH EXTENSION
SEETHAMMADHARA, VISHAKAPATNAM.
ALSO AT:
VILLA # 711, PHASE III
ADARSH PALM RETREAT
DEVARABEESANAHALLI
BENGALURU - 560 103.
...PETITIONER
(BY SRI NITIN R, ADVOCATE)
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CRL.RP No. 294 of 2021
C/W CRL.RP No. 285 of 2021
HC-KAR
AND:
SMT. CHOWDAMMA
W/O LATE CHANDRAPPA
AGED ABOUT 43 YEARS
D.No.733/44 SAPTHAGIRI NILAYA
NEAR BESCOM OFFICE
CHOWDESHWARI LAYOUT
MARATHAHALLI
BENGALURU - 560 037.
ALSO AT:
SURVEY No.90/6, MUNNEKOLALA
OUTER RING ROAD, MARATHAHALLI
BENGALURU - 560 037.
...RESPONDENT
(BY SRI D HANUMANTHARAYA, ADVOCATE)
THIS CRL.R.P. IS FILED UNDER SECTION 397 READ WITH
SECTION 401 Cr.P.C. PRAYING TO SET ASIDE THE JUDGMENT
AND ORDER PASSED BY THE COURT OF LXXII ADDITIONAL
CITY CIVIL AND SESSIONS JUDGE, MAYO HALL, BENGALURU
IN CRL.A.No.25209/2019, DATED 11.02.2020 AND SET ASIDE
THE JUDGMENT PASSED BY LVIII A.C.M.M., MAYO HALL,
BENGALURU CITY DATED 02.07.2019 IN C.C.No.55968/2017
TO THE EXTENT OF NON IMPOSITION OF PENALTY OF FINE
AND COMPENSATION ON THE ACCUSED OF TWICE THE
AMOUNT OF CHEQUES FOR THE OFFENCE PUNISHABLE UNDER
SECTION 138 OF THE N.I ACT AND DIRECT THE AWARDING OF
ENHANCED COMPENSATION TO THE PETITIONER FROM THE
ACCUSED.
THESE PETITIONS COMING ON FOR DICTATING ORDERS
THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR
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CRL.RP No. 294 of 2021
C/W CRL.RP No. 285 of 2021
HC-KAR
ORAL ORDER
1. Crl.R.P. No. 294/2021 is directed against the
judgment dated 11.02.2020 passed in Crl.A. No.
25192/2019 by LXXII Additional City Civil and sessions
Judge, Bengaluru, to the extent of modifying the fine
amount of Rs.87,05,000/- to Rs.48,76,250/-.
2. Crl.R.P. No. 285/2021 is directed against the
judgment dated 11.02.2020 passed in Crl.A. No.
25209/2019 by LXXII Additional City Civil and sessions
Judge, Bengaluru, dismissing the appeal filed by petitioner
- complainant praying for enhancement of
fine/compensation amount.
3. Heard learned counsel for petitioner -
complainant. Learned counsel for respondent remained
absent.
4. Case of the petitioner - complainant before the
trial Court was that the complainant was running a hotel
business in the name and style of M/s. Orange Budget
Hotels and Hospitality Private Limited and respondent -
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accused was the owner of property bearing No. 90/6,
BBMP Khatha No. 962 located at Munnekolala, Outer Ring
Road, Marathahalli, consisting of cellar, ground + 3 upper
floors. Petitioner - complainant entered into agreement
with respondent - accused to carry out hotel business in
the building of the accused. Respondent - accused and her
family members agreed to let out the said premises to
petitioner - complainant for running hotel business in the
premises of the building belonging to respondent -
accused. Petitioner - complainant invested huge sum of
money in the building of respondent - accused to run the
hotel. Petitioner - complainant also carried out repair to
the building. Due to non-cooperation of respondent -
accused, petitioner - complainant sustained huge loss in
the business. Respondent - accused insisted for premature
surrender of the lease. Therefore, petitioner - complainant
and respondent - accused entered into an agreement and
respondent - accused had agreed to pay compensation of
Rs.1,60,00,000/- apart from returning the security deposit
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of Rs.35,00,000/-. Respondent - accused has repaid the
security deposit of Rs.35,00,000/- and paid
Rs.80,00,000/- towards part payment of compensation by
Demand Draft under Memorandum of Understanding
(MOU) and said Demand Draft is dated 09.01.2017.
Respondent - accused further agreed to pay the remaining
Rs.80,00,000/- within 3 months and under the said MOU 3
post dated cheques dated 01.05.2017 for Rs.30,00,000/-,
dated 03.05.2017 for Rs.25,00,000/- and dated
06.05.2017 for Rs.25,00,000/- have been issued by the
accused in favour of petitioner - complainant. Petitioner -
complainant presented said 3 cheques and they came to
be dishonoured for `insufficient funds' on 03.05.2017,
04.05.2017 and 08.05.2017. Petitioner - complainant got
issued legal notice on 15.05.2017. Inspite of service of
said notice, respondent - accused has not paid the amount
under the 3 cheques. Therefore, petitioner - complainant
initiated proceedings against the respondent - accused for
offence under Section 138 of Negotiable Instruments Act
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(hereinafter for the sake of brevity referred to as the `N.I.
Act'). Representative of petitioner - complainant has been
examined as P.W.1 and got marked Ex.P.1 to Ex.P.21.
Respondent - accused has been examined as D.W.1 and
got marked Ex.D.1 to Ex.D.15. Brother of respondent -
accused as been examined as D.W.2. Learned Magistrate,
after hearing arguments on both sides and appreciating
evidence on record has convicted the respondent -
accused for offence under Section 138 of N.I. Act and
sentenced to pay fine of Rs.87,05,000/- out of which
5,000/- to be appropriated to the State as fine and in
default of payment of fine, respondent - accused to
undergo simple imprisonment for a period of 3 months.
Respondent - accused challenged the said judgment of
conviction and order on sentence before the Sessions
Court in Crl.A. No. 25912/2019 and petitioner -
complainant filed Crl.A. No. 25209/2019 being not
satisfied with the award of fine/compensation and seeking
its enhancement. Appellate Court, after hearing arguments
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on both sides, has passed common judgment in both
appeals on 11.02.2020 partly allowing the appeal filed by
the respondent - accused, affirming the conviction and
reducing the fine to Rs.48,76,250/-. Appeal filed by
petitioner - complainant has been dismissed. Aggrieved by
the said judgments passed by the trial Court and the
appellate Court petitioner - complainant has preferred
these two revision petitions.
5. Learned counsel for petitioner - complainant
would contend that the appellate Court has erred in not
appreciating the evidence on record and misconstrued the
payment of Rs.35,00,000/- by respondent - accused to
petitioner - complainant, which is for return of security
deposit under deed of surrender of lease - Ex.D.4 dated
18.01.2017, as part payment of compensation payable by
respondent - accused under MOU - Ex.P.3 and erred in
reducing the fine/compensation amount. He submits that
it is not the case of respondent - accused that they have
paid apart from Rs.80,00,000/- out of Rs.1,60,00,000/-
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any amount to petitioner - complainant as agreed under
MOU - Ex.P.3. Cheques Ex.P.4 to Ex.P.6 are specifically
stated in MOU - Ex.P.3 and they have been dishonoured. It
is not the case of respondent - accused that they have
paid any amount towards amount of the cheques Ex.P.4 to
Ex.P.6. He further submits that there is a clause in the
MOU - Ex.P.3 that if balance of compensation of
Rs.80,00,000/- is not paid, as agreed in time, double the
amount of balance of compensation i.e, 1,60,00,000/- has
to be paid along with interest at the rate of 12% p.a. The
trial Court and the appellate Court have not taken into
consideration said aspect and erred in awarding
fine/compensation amount. He further submits that
respondent - accused has rented the said premises for
Rs.8,00,000/- per month and earlier petitioner -
complainant used to pay rent of Rs.4,00,000/- per month.
Respondent - accused has utilized all the furniture, fixtures
and alterations made by petitioner - complainant and got
more income. Considering the said aspects compensation
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has been arrived at Rs.1,60,00,000/- under Ex.P.3 - MOU.
As the terms of Ex.P.3 - MOU are not adhered to by
respondent - accused, she is liable to pay total balance of
compensation, i.e., Rs.80,00,000/- X 2 = 1,60,00,000/-
along with interest at 12% compounded per annum to
petitioner - accused as agreed in Ex.P.3 - MOU. The trial
Court and appellate Court have not considered the case of
petitioner - complainant for awarding fine/compensation.
With this, he prayed to allow the revision petitions.
6. Having heard learned counsel for petitioner -
complainant this Court has perused the impugned
judgments, trial Court records and appellate Court
records.
7. Respondent - accused has been convicted for
offence under Section 138 of N.I. Act by the trial Court.
Appeal filed by respondent - accused challenging the said
judgment of conviction has been dismissed affirming the
conviction. Respondent - accused has not challenged the
said judgment of conviction passed by the trial Court and
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judgment passed by the appellate Court affirming the
judgment passed by the trial Court for offence under
Section 138 of N.I. Act. Therefore, the point that is to be
considered in these revision petitions is, "whether the
appellate Court was right in reducing the
fine/compensation and whether the petitioner -
complainant is entitled for enhancement of
fine/compensation."
8. Ex.P.3 is MOU entered into between the
petitioner - complainant and respondent - accused.
Ex.D.4 is the deed of surrender of lease. Both Ex.P.3 and
Ex.D.4 are dated 18.01.2017. Lease agreement entered
into between the petitioner - complainant and respondent
- accused is at Ex.P.2. Term of the said lease is for 10
years commencing from 01.12.2009. Petitioner -
complainant has surrendered the said lease even prior to
10 years under deed of surrender - Ex.D.4 dated
18.01.2017. Under Ex.D.4 - surrender deed, security
deposit of Rs.35,00,000/- paid by petitioner - complainant
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to respondent - accused under lease agreement - Ex.P.2
has been agreed to be repaid by respondent - accused to
petitioner - complainant and it has been repaid on
18.01.2017 by way of D.D. and it is mentioned in Ex.D.4.
As the lease was surrendered before 10 years at the
instance of respondent - accused, for premature surrender
of lease respondent - accused has agreed to pay
compensation of Rs.1,60,00,000/- and towards part
payment has paid Rs.80,00,000/- by way of D.D. dated
09.01.2017. For the balance amount of Rs.80,00,000/-
respondent - accused has issued 3 cheques and they are
mentioned in Clause 5 of MOU - Ex.P.3. Said 3 cheques
are at Ex.P.4 to Ex.P.6 and total amount of the said 3
cheques is Rs.80,00,000/-. Total amount payable by
respondent - accused under Ex.P.3 and Ex.D.4 is
Rs.1,60,00,000/- (compensation) + Rs.35,00,000/-
(security deposit). There is no other payment made by
respondent - accused except Rs.35,00,000/- under Ex.D.4
- surrender deed and Rs.80,00,000/- under Ex.P.3 - MOU.
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Considering both Ex.P.3 - MOU and Ex.D.4 - surrender
deed total amount payable is Rs.1,95,00,000/-.
Respondent - accused has paid Rs.35,00,000/- +
Rs.80,00,000/- = Rs.1,15,00,000/-. Even though the
appellate Court has observed that aspect, it has
miscalculated and adjusted the total amount paid to
petitioner - complainant at Rs.1,15,00,000/- towards
compensation of Rs.1,60,00,000/- and held that
respondent - accused has to pay further amount of
Rs.45,00,000/- to petitioner - complainant. Respondent -
accused has made payment of Rs.35,00,000/- towards
return of security deposit under Ex.D.4 - surrender deed.
Respondent - accused has also made payment of
Rs.80,00,000/- towards part payment of compensation out
of total compensation of Rs.1,60,00,000/- under Ex.P.3 -
MOU. Therefore, respondent - accused was due in a sum
of Rs.80,00,000/- towards balance of compensation
amount as agreed under Ex.P.3 - MOU. Ex.P.4 to Ex.P.6
cheques are issued for making payment of said balance
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amount of Rs.80,00,000/-. Said 3 cheques Ex.P.4 to
Ex.P.6 have been dishonoured. As respondent - accused
has not paid the amount in the said cheques, the trial
Court has rightly convicted respondent - accused and
appellate Court has rightly affirmed the conviction of
respondent - accused for offence under Section 138 of N.I.
Act.
9. The appellate Court has erred in holding that
respondent - accused has paid Rs.1,15,00,000/- out of
compensation of Rs.1,60,00,000/- and balance due to
petitioner - complainant is Rs.45,00,000/- and erred in
reducing the sentence of fine/compensation amount.
10. Clauses 5, 6 and 7 in Ex.P.3 - MOU read as
under:
"5. Since the First Party could not give proper
security in the form of valid Landed Property, she
offered a post dated Rs.30,00,000/- by way of
cheque no.639649, on dated:1st May 2017,
Rs.25,00,000/- by way of cheque No.639652, 3rd
May 2017, and 25,00,000/- by way cheque
th
No.639651, dated 6 May 2017 drawn on Bank of
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India, jayanagar Branch, for total Rs 80,00,000/-
(Rupees Eighty Lakhs). The First Party has assured
to the Second Party to pay the balance amount
within three months from date of this MOU. The
Second Party shall present this cheque when it falls
due on 1st May 2017 without the need for any
intimation to First Party, being the balance amount
due to him. In case of non-payment of all dues to
Second Party, the right of the Second party cannot
be questioned by the First party and her men and
the same is not in substitution of his right to file a
case under Section 138 of N.I.Act for dishonor of
cheque.
6. In case the First Party fails to clear the
balance amount before 30th April, which includes
the grace period, the Second Party will have the
undisputed right to claim damages, and the First
Party has unconditionally agreed to pay as penalty
/damages amount, an additional Rs 80,00,000/-
(Rupees Eighty Lakhs) to the Second Party.
7. In case of non-payment of all dues to Second
Party, the right of the Second Party cannot be
questioned by the First party and her men to
recover the entire balance including damages
amount with interest @ 12% compounded per
annum from 1st May 2017."
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11. Under clause 5 details of cheques - Ex.P.4 to
Ex.P.6 are mentioned. There is an agreement that the said
cheques have to be presented for encashment on
01.05.2017. Clause 6 provides that if the first party i.e.,
respondent - accused fails to clear balance amount before
30th April, has unconditionally agreed to pay as
penalty/damage an additional amount of Rs.80,00,000/-
to the second party i.e., petitioner - complainant. Clause
7 provides that petitioner - complainant can recover the
said entire balance compensation of Rs.80,00,000/- and
additional amount of Rs.80,00,000/- with interest at the
rate of 12% compounded per annum from 01.05.2017.
Considering clauses 6 and 7 contained in Ex.P.3 - MOU
petitioner - complainant is entitled to total balance
compensation i.e., Rs.80,00,000 (balance compensation)
+ Rs.80,00,000 (additional amount) = Rs.1,60,00,000/-
along with interest at 12% compounded per annum.
12. Total amount of cheques involved in the case is
Rs.80,00,000/-. Even though petitioner - complainant is
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entitled for compensation of Rs.1,60,00,000/- under
clause 6 and interest at the rate of 12% compounded per
annum on Rs.1,60,00,000/- under clause 7, sentence that
can be imposed should not exceed double the amount of
cheque. Considering the above aspect, petitioner -
complainant has made out a case for enhancement of fine
amount to the extent of double amount of cheque i.e.,
Rs.1,60,00,000/-. Considering these aspects, the trial
Court has erred in imposing fine and awarding
compensation of Rs.87,05,000/-. The appellate Court
erred in dismissing the appeal of petitioner - complainant
seeking enhancement of fine/compensation as awarded by
the trial Court. Considering all these aspects both the
revision petitions deserve to be allowed.
13. In view of the above, the following;
ORDER
I. Crl.R.P. No. 294/2021 and Crl.R.P. No. 285/2021
are allowed.
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II. Order on sentence passed by the trial Court and
modified by the appellate Court are set aside.
III. Sentence imposed by the trial Court has been
enhanced as under:
a. Respondent - accused is sentenced to
pay fine of Rs.1,60,00,000/- out of
which Rs.1,59,00,000/- shall be paid as
compensation to petitioner -
complainant in terms of Section 357(3)
of Cr.P.C. and Rs.1,00,000/- shall be
appropriated to the State as fine.
b. In default of payment of fine,
respondent - accused shall undergo
simple imprisonment for a period of 1
year.
Sd/-
(SHIVASHANKAR AMARANNAVAR)
JUDGE
LRS
