Karnataka High Court

M/S Janya Constructions Pvt Ltd vs M/S Rajesh Exports Ltd on 4 June, 2025

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  IN THE HIGH COURT OF KARNATAKA AT BENGALURU

        DATED THIS THE 04TH DAY OF JUNE, 2025

                        BEFORE
          THE HON'BLE MS JUSTICE J.M.KHAZI
     CRIMINAL REVISION PETITION NO.486 OF 2021
BETWEEN:

1.     M/S JANYA CONSTRUCTIONS PVT LTD
       NO.134, 2ND FLOOR, K N COMPLEX
       11TH CROSS, MALLESWARAM
       BANGALORE-560 003

2.     SRI NAGACHAND
       S/O LATE B.S.JAYARAM
       AGED ABOUT 59 YEARS
       MANAGING DIRECTOR AND
       AUTHORIZED SIGNATORY OF
       M/S JANYA CONSTRUCTIONS PVT LTD
       NO.8, SAPATHASHREE, 7TH CROSS
       2ND MAIN, MANINANJAPPA LAYOUT
       DINNUR, BANGALORE-560 032
                                        ...PETITIONERS
(BY SRI.H.S.CHANDRAMOULI, SR.COUNSEL FOR SRI.RAVI
KUMAR M B, ADVOCATE)

AND:

     M/S RAJESH EXPORTS LTD
     COMPANY INCORPORATED UNDER
     COMPANY'S ACT, HAVING ITS OFFICE
     AT NO.4, BATAVIA CHAMBERS,
     KUMARA KRUPA ROAD, KUMARA PARK EAST
     BANGALORE-560 001
     REPRESENTED BY ITS
     AUTHORIZED REPRESENTATIVE
     R M NANJUNDASWAMY
                                       ...RESPONDENT
(BY SRI.KIRAN.S.JAVALI, SR.COUNSEL FOR
SRI.P.RAJU, ADVOCATE)
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     THIS CRL.RP IS FILED U/S.397 R/W 401 CR.P.C BY THE
ADVOCATE FOR THE PETITIONER PRAYING TO SET ASIDE THE
ORDER OF CONVICTION AND SENTENCE PASSED BY THE
LEARNED XXV ADDL. CMM BANGALORE BY ITS JUDGMENT
DATED 15TH JULY, 2019 IN C.C. NO.32290/2010 AND
JUDGMENT IN CRIMINAL APPEAL NO. 1738/2019 PASSED BY
THE LXIV ADDL CITY CIVIL AND SESSION JUDGE, BANGALORE
DATED 26.02.2021 THEREBY CONFIRMING THE TRIAL COURT
JUDGMENT AND ACQUIT THE ACCUSED/PETITIONERS.

    THIS PETITION HAVING BEEN HEARD AND RESERVED
FOR ORDERS ON 02.04.2025, THIS DAY ORDER WAS
PRONOUNCED THEREIN AS UNDER:
CORAM:    HON'BLE MS JUSTICE J.M.KHAZI


                        CAV ORDER


     In this petition filed under Section 397 r/w Section

401 of Cr.P.C, accused have challenged their conviction

and sentence for the offence punishable under Section 138

of the Negotiable Instrument Act (for short "N.I.Act") by

the trial Court which came to be confirmed by the Sessions

Court by dismissing the appeal filed by them.


     2.    For the sake of convenience, parties are referred

to by their ranks before the trial Court.


     3.    Complainant filed a complaint under Section

200 Cr.P.C against accused Nos.1 and 2, contending that

accused No.1 is a company and accused No.2 is it's
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authorized signatory and responsible for its day-to-day

activities. Accused No.1 availed inter corporate deposit

(for short "ICD") amount         of ₹2,50,00,000/- promising to

repay the same with interest at 24% per annum. Towards

security of the same, immovable property was also

mortgaged. Since accused failed to pay the installments

with interest, a sum of ₹2,75,00,000/- was due. Towards

repayment of the same, accused No.2 issued cheque

No.056402 dated 27.03.2010 for a sum of ₹2,75,00,000/-

with     an   assurance   that    it   would   be    honoured    on

presentation. However, when complainant presented it for

encashment, it was dishonoured for want of sufficient

funds.      Complainant   got     issued   legal     notice   dated

09.04.2010. Notice sent through RPAD is returned with

endorsement       "addressee     not   found   and    returned   to

sender". Accused have neither paid the amount nor sent

any reply and hence the complaint.


       4.     It is also contended by the complainant that

accused No.2 being the Director of accused No.1 has

undertaken personal responsibility to discharge the amount
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due and executed a Memorandum of Declaration and

issued       cheque     No.968256      dated   27.03.2010    towards

repayment of ₹2,75,00,000/-. However, when it was

presented for encashment, it was also dishonoured for

want of sufficient funds. In this regard, complainant has

also issued a legal notice to the accused No.2. Despite due

service, he has neither paid the amount due nor sent any

reply        and      therefore   as     against   accused     No.2

C.C.No.32295/2010 was filed.


        5.    In both cases, accused appeared and pleaded

not guilty.


        6.         Vide order dated 15.06.2017, the trial Court

clubbed these two cases with a direction to lead common

evidence.


        7.         On behalf of the complainant, one witness is

examined as PW-1 and Exs.P1 to 11 are marked.


        8.     During the course of his statement under

Section 313 of Cr.P.C accused No.2 has denied the

incriminating evidence lead by the complainant.
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     9.    Accused No.2 has given evidence as DW-1 and

Exs.D1 to 4 are marked.


     10.    The trial Court convicted accused Nos.1 and 2 in

C.C.No.32290/2010 and sentenced accused No.2 to pay

fine Rs.2,75,00,000/- with the default sentence. However,

the trial Court acquitted accused in C.C.No.32295/2010 on

the ground that the complainant is not at liberty to present

two cheques in respect of the same liability.


     11.    It appears the complainant has not challenged

the acquittal of accused in C.C.No.32295/2010 and it has

attained finality.


     12.    Accused Nos.1 and 2 challenged their conviction

and sentence in Crl.A.No.1738/2019 before the Sessions

Court. However, Sessions Court dismissed the said appeal

and thereby confirmed judgment and order of the trial

Court.


     13.    Aggrieved by the concurrent findings of the trial

Court and Sessions Court, accused have come up with this

petition, contending that the impugned judgment and order
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are not tenable either in law or on facts and liable to be set

aside. The Courts below have failed to appreciate the oral

and documentary evidence in right perspective and thereby

fell into error. They ought to have acquitted the accused as

the cheques were not issued towards legally recoverable

debt or liability. On the other hand, the complainant has

misused the blank cheques issued by way of security.

Instead of filing a suit for recovery of money              the

complainant has filed criminal complaint. The complainant

has also not utilized the option of arbitration as per the

terms of mortgage deed. Against complainant charging

higher interest, accused No.2 has filed a private complaint

and it is referred to investigation under Section 156 (3) of

Cr.P.C. The trial Court and Sessions Court have not

appreciated the evidence led by the accused on this aspect.

The punishment imposed is too harsh and prayed to set

aside the judgment and order passed by the trial Court as

well as the Sessions Court.


     14.    On   the   other    hand,   learned   counsel   for

complainant supported the judgment and order of the trial
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Court and Sessions Court. He would submit that accused

have availed loan of Rs.2,50,00,000/- under ICD, agreeing

to repay the same with interest at 24% per annum. Though

certain sums have been paid towards interest, the accused

have failed to pay the principal amount. Therefore, the

cheque        was    issued and      when     it   was presented for

encashment, the same is                    dishonoured for want of

sufficient funds. When the accused failed to pay the

amount due after service of notice, without any alternative

complaint is filed.

   14.1 In the light of presumption under Section 139 of

N.I.Act, the trial Court rightly held that accused failed to

rebut the presumption and prove discharge of the amount

due. Therefore, the trial Court as well as the Sessions

Court have rightly held accused guilty. The punishment

imposed is also on the lower side and pray to the petition

also.


        15.    Heard arguments and perused the record.


        16.    The     fact   that     accused      availed   loan   of

₹2,50,00,000/- by way of ICD from the complainant is not
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in dispute. Ex.P3 is the declaration given by accused

regarding the said loan, wherein they have agreed to pay

interest at 24% per annum.          Ex.P3 also disclose that

₹2,50,00,000/-   were   paid   by   way   of   cheque   dated

27.11.2008. The said document also indicate issue of a

post dated cheque No.056402 for ₹2,75,00,000/-, which is

the subject matter of the complaint and marked as Ex.P4.

It is also not in dispute that by way of security to the said

loan, the accused have also executed a mortgage deed,

creating charge over immovable property.


     17.   In fact, during his cross-examination, accused

No.2 who is examined as DW-1 has admitted that he was

the authorized signatory of accused No.1 company and the

subject cheque is drawn on the company account and it

bears his signature. The contents of Ex.P4 clearly indicate

that the cheque is in the handwriting of accused No.2,

except the date. It appears an undated cheque was issued

and later on the date of presentation the date has been

mentioned since the date portion is in the different

handwriting. In other words, the cheque at Ex.P4 was
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issued by way of security for the ICD facility availed by the

accused persons. As held by the Hon'ble Supreme Court in

Sunil Todi and others vs State of Gujarat and Anr. (Sunil

Todi)1, a cheque issued by way of security also attract the

liability under Section 138 of the N.I.Act.


         18.     Having regard to the fact that the cheque in

question is drawn on the account of accused No.1 company

and it bears the signature of accused No.2, who is the

authorized signatory, presumption under Section 139 of

N.I.Act is attracted, placing the initial burden on the

accused to establish that it was not issued towards any

legally recoverable debt or liability or as claimed in the

present case, as on the date of presentation there were no

dues to be recovered from the accused.


         19.    It is pertinent to note that despite issue of legal

notice, the accused have failed to pay the amount due

under the cheque and also send any reply putting forth

their defence at the earliest available opportunity. At the

trial, they have come up with case that the entire loan
1
    AIR 2022 SC 147
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amount together with interest is paid and therefore the

complainant was not supposed to present the cheque and it

ought to have been returned to the accused. Though the

accused have relied upon Ex.P1 which is a statement of

interest received from the accused persons on the ICD of

Rs.2,50,00,000/-     taken    from       the    complainant,     this

statement clearly indicate that what is paid is only the

interest.   The   accused    have      also    not   produced   their

statement of account to indicate that not only the interest

but also the principal amount is repaid. Admittedly, the

mortgage is also still subsisting. Of course the complainant

has not chosen to enforce the said mortgage. The

arbitration clause is in the mortgage and therefore the

contention of the accused that complainant ought to have

approached the arbitration is not correct.


     20.    Anyhow, the accused have failed to prove that

in addition to amount paid towards interest, the principal

sum of ₹2,50,00,000/- is also repaid. Thus, the accused

have failed to prove discharge and consequently they have

failed to rebut the presumption. On the other hand, the
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evidence led by the complainant establish that Ex.P4

cheque was issued by way of security for the ICD availed

by the accused. On their failure to repay the same, the

complainant has exercised the option of presenting the

cheque for encashment and on its dishonour filed the

complaint.


     21.     The trial Court as well as the Sessions Court on

appreciation of the entire evidence placed on record has

rightly held the accused guilty. In fact, looking to the

interest paid by the accused, the trial Court has imposed

flea bite sentence and it cannot be said to be on the higher

side. There is no perversity in the conclusions arrived at

and the findings given by the trial Court as well as the

Sessions Court. There are no grounds to interfere in

exercise of revisional jurisdiction by this Court. In the

result the petition fails and accordingly the following:

                         ORDER
i) Petition filed by the accused under Section
397 r/w 401 of Cr.P.C is dismissed.
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ii) The impugned judgment and order dated
15.07.2019 in C.C.Nos.32295 and
32290/2010 on the file of XXV ACMM,
Bengaluru and judgment and order dated
26.02.2021 in Crl.A.No.1738/2019 on the
file of LXIV Addl.City Civil and Sessions
Judge, (CCH-65) Bengaluru, are
confirmed.
iii) The Registry is directed to send back the