Karnataka High Court
Sidaray M. Biradar vs Basavaraj on 10 September, 2025
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CRL.A No. 200003 of 2021
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IN THE HIGH COURT OF KARNATAKA,
KALABURAGI BENCH
DATED THIS THE 10TH DAY OF SEPTEMBER, 2025
BEFORE
THE HON'BLE MRS JUSTICE M G UMA
CRIMINAL APPEAL NO.200003 OF 2021
(378(Cr.PC)/419(BNSS))
BETWEEN:
SRI SIDARAY M. BIRADAR,
AGED ABOUT 64 YEARS, OCC:BMTC RTD. EMPLOYEE,
R/O. MURANKERI, VIJAYAPUR-586 101
...APPELLANT
(BY SRI S. S. MAMADAPUR, ADVOCATE)
AND:
SRI BASAVARAJ
Digitally signed S/O MALLAPPA YADAVANNAVAR,
by RAMESH AGED ABOUT 54 YEARS, OCC:BUSINESS,
MATHAPATI R/O NEAR TEKADE GALLI,
Location: HIGH YADAVANNAVAR CHAWL, VIJAYAPUR-586 101.
COURT OF ...RESPONDENT
KARNATAKA
(BY SRI SHIVANAND V. PATTANASHETTI, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION
378(4) OF CR.P.C PRAYING TO SET ASIDE THE JUDGMENT
DATED 09.10.2020 PASSED BY THE HON'BLE II ADDL. CIVIL
JUDGE AND JMFC-II, VIJAYPUR IN CC NO.5324/2018 AND
CONSEQUENTLY CONVICT THE RESPONDENT FOR THE
OFFENCE PUNISHABLE UNDER SECTION 138 OF NI ACT.
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THIS APPEAL COMING ON FOR FINAL HEARING, THIS
DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MRS JUSTICE M G UMA
ORAL JUDGMENT
(PER: HON'BLE MRS JUSTICE M G UMA)
The complainant in C.C.No.5324/2018 on the file of
learned II Additional Civil Judge and JMFC-II Vijayapur (for
short 'Trial Court'), registered for the offence punishable
under Section 138 of Negotiable Instruments Act, 1881
(for short 'N.I.Act'), is impugning the judgment of
acquittal dated 09.10.2020, acquitting the
respondent/accused for the above said offence.
2. For the sake of convenience, the parties are
referred to as per their rank before the Trial Court.
3. The complainant has filed the private complaint
in P.C.No.624/2018 before the Trial Court against the
accused alleging commission of the offence punishable
under Section 138 of N.I.Act. It is the contention of the
complainant that, he was having cordial relationship with
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the accused since 2014. During February, 2018 the
accused approached the complainant and sought for loan
of Rs.10,00,000/- to meet his family necessities. The
complainant and his son have promised to arrange for the
same and accordingly, gave Rs.10,00,000/- to the accused
who agreed to repay the same. When the complainant
insisted for returning the amount, the accused issued the
cheque as per Ex.P1 dated 08.08.2018 for Rs.10,00,000/-.
When the cheque was presented for encashment, the
same was dishonoured for 'insufficient funds' in the
account of the accused. Legal notice as per Ex.P3 was
issued to the accused, calling upon him to repay the
cheque amount. Instead of repaying the cheque amount,
the accused has issued reply as per Ex.P6 by taking
untenable defence. Thereby, he has committed the
offence punishable under Section 138 of the N.I.Act.
Therefore, the complainant requested the Trial Court to
take cognizance of the offence and to initiate legal action
against the accused.
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4. The Trial Court took cognizance of the offence,
registered the criminal case and summoned the accused.
The accused appeared before the Trial Court, pleaded not
guilty and claimed to be tried. The complainant examined
himself as PW.1 and got marked Exs.P1 to P6 in support
his contention. The accused has denied all the
incriminatory materials in his statement under Section 313
of Cr.P.C. and examined himself as DW.1. The Trial Court
after taking into consideration all these materials on
record came to the conclusion that, the complainant is not
successful in proving the guilt of the accused beyond
reasonable doubt and therefore, passed the impugned
judgment of acquittal. Being aggrieved by the same, the
complainant is before this Court.
5. Heard Sri S.S.Mamadapur, learned counsel for
the appellant and Sri Shivanand V. Pattanashetti, learned
counsel for the respondent. Perused the materials on
record including the Trial Court records.
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6. In view of the rival contentions urged by
learned counsel for the parties, the point that would arise
for my consideration is:
"Whether the judgment of acquittal
passed by the Trial Court suffers from
infirmities and calls for interference by this
Court?"
My answer to the above point is in the 'Affirmative',
for the following:
REASONS
7. It is the contention of the complainant that, the
accused had availed loan of Rs.10,00,000/- promising to
repay the same within a short period. Towards repayment
of the said amount, the accused had issued cheque as per
Ex.P1, which came to be dishonoured as there was
insufficient funds in the account of the accused. In spite
of service of legal notice, the accused has not repaid the
cheque amount. On the other hand, he has issued reply
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notice as per Ex.P6 by taking untenable defence. Thereby,
the accused has committed the offence punishable under
Section 138 of N.I.Act.
8. To prove his contention, the complainant
examined himself as PW.1 and has reiterated the
contention as taken in the private complaint. The witness
was cross-examined by the learned counsel for the
accused. The tenor of cross-examination discloses that,
the accused has disputed availing of loan from the
complainant. On the other hand, it is his contention that
he was in need of loan of Rs.1,00,000/- and therefore, he
has approached Siddhasiri Souharda Sahakari Limited,
Vijayapur and got sanctioned the loan through the
daughter of the complainant, who was working there and
as security, he has issued the blank cheque - Ex.P1. The
same was misused by the complainant with the help of his
daughter. Thus, it is his contention that, there is no
legally recoverable debt but the cheque - Ex.P1, which
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was blank has been misused by the complainant and
therefore, he is entitled to be acquitted.
9. Ex.P6 is the reply notice issued by the accused
at the earliest point of time. As per the defence taken by
the accused in Ex.P6, he had approached the daughter of
the complainant, who was working in Siddhasiri Souharda
Sahakari Limited, Vijayapur and requested her for hand-
loan. She lent the amount of Rs.1,00,000/- and took the
signed blank cheque bearing No.034166 i.e., Ex.P1. Even
when the accused approached the daughter of the
complainant and expressed his willingness to repay the
loan amount and asked her to return the said cheque, she
had not returned the same. The cheque in question was
misused by handing it over to the complainant and
therefore, he has not repaid the cheque amount.
10. The accused has stepped into the witness box
and deposed as DW.1. He has reiterated his contention
taken during the cross-examination of the complainant
that, he was in need of Rs.1,00,000/- during April, 2015
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and went to Siddhasiri Souharda Sahakari Limited,
Vijayapur where Shobha Biradar - the daughter of the
complainant was working. He applied for loan in the Bank
and the said loan was sanctioned. The Bank as per its
procedure obtained the blank cheque. Within three
months, he went to the said Bank to repay the loan
amount, but said Shobha Biradar stated that, she has not
brought the blank cheque. In the mean time, he has
received the notice from the complainant.
11. During cross-examination, the witness admitted
that, if a person wants to avail loan from the Bank, he
should be the member of the said Bank and has to provide
surety. The application for loan should be placed before
the Board of Directors and after his approval, the loan will
be sanctioned. He also admits that, on sanction of the
loan, it will be credited to his Bank account and he has to
withdraw the same from his Bank account only. He
further admits that, if the cheque is given as security, the
same has to be handed over to the Manager of the Bank.
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The witness further admits that, if there was any misuse of
the cheque, complaint should be lodged with the Board of
Director, but he had not filed any complaint either with the
Board of Director or with the police. Even after receipt of
the legal notice as per Ex.P3, he has not filed any
complaint.
12. The reply notice - Ex.P6, cross-examination of
PW.1 and evidence of DW.1 disclose that, the accused has
admitted that Ex.P1 belongs to his Bank account and he
has signed the same. When the accused admits issuance
of the cheque with his signature, the presumption under
Sections 118 and 139 of the N.I.Act would arise and the
burden shifts on the accused to rebut the legal
presumption.
13. To highlight the position of law on the subject, I
may refer to the decision of the Hon'ble Apex Court in Bir
Singh vs. Mukesh Kumar1, wherein the Apex Court by
(2019) 4 SCC 197
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referring to its earlier decision held in paragraph Nos.34
and 36 as under:
"34. If a signed blank cheque is voluntarily presented to
a payee, towards some payment, the payee may fill up the
amount and other particulars. This in itself would not invalidate
the cheque. The onus would still be on the accused to prove
that the cheque was not in discharge of a debt or liability by
adducing evidence.
36. Even a blank cheque leaf, voluntarily signed and
handed over by the accused, which is towards some payment,
would attract presumption under Section 139 of the Negotiable
Instruments Act, in the absence of any cogent evidence to show
that the cheque was not issued in discharge of a debt."
14. I may also refer to the decision of the Hon'ble
Apex Court in M/s.Kalamani Tex and Another Vs. P
Balasubramanian2, wherein the three Judges Bench of
the Apex Court discussed at length about the position of
law with regard to the burden of proof in the offence
punishable under Section 138 of N.I.Act. It referred to its
(2021) 5 SCC 283
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earlier decision in Basalingappa Vs. Mudibasappa3, and
held in paragraph Nos.14, 15, 16 and 18 as under:
"14. Adverting to the case in hand, we find on a plain
reading of its judgment that the trial Court completely
overlooked the provisions and failed to appreciate the
statutory presumption drawn under Section 118 and Section
139 of NIA. The Statute mandates that once the signature(s)
of an accused on the cheque/negotiable instrument are
established, then these 'reverse onus' clauses become
operative. In such a situation, the obligation shifts upon the
accused to discharge the presumption imposed upon him. This
point of law has been crystalized by this Court in Rohitbhai
Jivanlal Patel v. State of Gujarat in the following words:
"In the case at hand, even after
purportedly drawing the presumption under
Section 139 of the NI Act, the trial court
proceeded to question the want of evidence on
the part of the complainant as regards the
source of funds for advancing loan to the
accused and want of examination of relevant
witnesses who allegedly extended him money for
advancing it to the accused. This approach of the
trial court had been at variance with the
principles of presumption in law. After such
presumption, the onus shifted to the accused
and unless the accused had discharged the onus
by bringing record such facts and circumstances
as to show the preponderance of probabilities
tilting in his favour, any doubt on the
AIR 2019 SC 1983
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complainant's case could not have been raised
for want of evidence regarding the source of
funds for advancing loan to the appellant-
accused....."
15. Once the 2nd Appellant had admitted his signatures
on the cheque and the Deed, the trial Court ought to have
presumed that the cheque was issued as consideration for a
legally enforceable debt. The trial Court fell in error when it
called upon the Complainant-Respondent to explain the
circumstances under which the appellants were liable to pay.
Such approach of the trial Court was directly in the teeth of
the established legal position as discussed above, and amounts
to a patent error of law.
16. No doubt, and as correctly argued by senior counsel
for the appellants, the presumptions raised under Section 118
and Section 139 are rebuttable in nature. As held in MS
Narayana Menon v. State of Kerela, which was relied upon in
Basalingappa (supra), a probable defence needs to be raised,
which must meet the standard of "preponderance of
probability", and not mere possibility. These principles were
also affirmed in the case of Kumar Exports (supra), wherein it
was further held that a bare denial of passing of consideration
would not aid the case of accused.
18. Even if we take the arguments raised by the
appellants at face value that only a blank cheque and signed
blank stamp papers were given to the respondent, yet the
statutory presumption cannot be obliterated. It is useful to cite
Bir Singh v. Mukesh Kumar, where this court held that:
"Even a blank cheque leaf, voluntarily
signed and handed over by the accused, which is
towards some payment, would attract
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presumption under Section 139 of the Negotiable
Instruments Act, in the absence of any cogent
evidence to show that the cheque was not issued
in discharge of a debt."
(Emphasis supplied)
15. I may also refer to the decision of the Hon'ble
Apex Court in APS Forex Services Pvt. Ltd. Vs. Shakti
International Fashion Linkers and Others4, wherein it
is held in paragraph No.7 as under:
"7. Coming back to the facts in the present case and
considering the fact that the accused has admitted the
issuance of the cheques and his signature on the cheque
and that the cheque in question was issued for the second
time, after the earlier cheques were dishonoured and that
even according to the accused some amount was due and
payable, there is a presumption under Section 139 of the
N.I. Act that there exists a legally enforceable debt or
liability. Of course such presumption is rebuttable in nature.
However, to rebut the presumption the accused was
required to lead the evidence that full amount due and
payable to the complain-ant has been paid. In the present
case, no such evidence has been led by the accused. The
story put forward by the accused that the cheques were
given by way of security is not believable in absence of
further evidence to rebut the presumption and more
particularly the cheque in question was is-sued for the
AIR 2020 SC 945
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second time, after the earlier cheques were dishonoured.
Therefore, both the courts below have materially erred in
not properly appreciating and considering the presumption
in favour of the complainant that there exists legally
enforceable debt or liability as per Section 139 of the N.I.
Act. It appears that both, the Learned Trial Court as well as
the High Court, have committed error in shifting the burden
upon the complain-ant to prove the debt or liability, without
appreciating the presumption under Section 139 of N.I. Act.
As observed above, Section 139 of the Act is an example of
reverse onus - clause and therefore once the issuance of
the cheque has been admitted and even the signature on
the cheque has been admitted, there is always a
presumption in favour of the complainant that there exists
legally enforceable debt or liability and thereafter it is for
the accused to rebut such presumption by leading evidence.
16. Thus, the position of law on the subject is very
well settled. If the same are applied to the facts and
circumstances of the present case, I am of the opinion
that, the complainant has discharged his initial burden of
proving existence of legally recoverable debt since the
accused has admitted issuance of cheque with his
signature. The burden then shifts on the accused to rebut
the said presumption.
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17. The accused has taken inconsistent defences.
As per Ex.P6, it is his contention that, he had availed
hand-loan of Rs.1,00,000/- from Shobha Biradar - the
daughter of the complainant and handed over the blank
cheque to her as security. But during cross-examination
of PW.1, the accused contends that, he had availed loan
from Siddhasiri Souharda Sahakari Limited, Vijayapur
where Shobha Biradar is an employee. The accused when
stepped into the witness box and deposed as DW.1 has
further stated that, he had submitted an application to
Siddhasiri Souharda Sahakari Limited, Vijayapur for grant
of loan. The same was accepted and the loan was
sanctioned by the Bank. The amount was credited to his
Bank account. No scrap of paper is produced by the
accused to substantiate his contention in that regard. He
could have summoned the manager of the Bank or he
could have produced his cheque book to show that he has
availed loan of Rs.1,00,000/- from the said Bank.
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18. Interestingly, the accused had not complained
to the Board of Director or to the police against Shobha
Biradar for having received the cheque - Ex.P1. The
accused has not instructed the Bank to stop payment
when Shobha Birader has refused to return the blank
cheque said to have been issued by him as security. The
conduct of the accused in taking inconsistent pleas and his
failure to probablise his defence, makes him liable for
conviction.
19. I have gone through the impugned judgment of
acquittal passed by the Trial Court. The Trial Court has
proceeded to acquit the accused solely on the ground that,
the complainant has not produced any document to show
that he has lent Rs.10,00,000/- to the accused and also
payment of the said amount by the complainant is in
violation of Section 269(S.S.) of the Income Tax Act.
Thus, the Trial Court formed an opinion that, reverse
burden lies on the complainant to prove the existence of
legally recoverable debt. The Trial Court wholly misleads
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itself in forming such opinion ignoring the settled position
of law. When the accused has taken inconsistent defence,
after admitting issuance of the cheque with his signature
and fails to probablise the same, the burden will never
shift on the complainant, as that will not amount to
rebutting the legal presumption. Hence, the impugned
judgment of acquittal passed by the Trial Court is liable to
be set aside.
20. Heard learned counsel for the respondent on
sentence.
21. Learned counsel for the respondent submits
that instead of imposing substantive sentence, reasonable
fine may be imposed on the accused.
22. In view of the above, I answer the above point
in the affirmative and proceed to pass the following:
ORDER
(i) The criminal appeal is allowed.
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(ii) The impugned judgment of acquittal dated
09.10.2020 passed in Criminal Case
No.5324/2018 by the learned II Additional
Civil Judge and JMFC-II, Vijayapur, is
hereby set aside.
(iii) Consequently, the respondent/accused is
convicted for the offence punishable under
Section 138 of the N.I.Act. He is sentenced
to pay fine of Rs.15,00,000/- (Rupees
Fifteen Lakhs Only) within a period of three
months from today and in default of
payment of fine, he shall undergo simple
imprisonment for a period of one year.
(iv) Out of the fine amount to be deposited by
the respondent/accused, a sum of
Rs.14,90,000/- is ordered to be paid to the
appellant/complainant as compensation.
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Registry to send back the Trial Court records along
with copy of this judgment for information and needful
action.
Sd/-
(M G UMA)
JUDGE
SRT
CT:PK
