Karnataka High Court
Vishwanath Reddy M.S vs Ratan Hanamant Gosavi on 11 September, 2025
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CRL.A No. 200359 of 2023
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IN THE HIGH COURT OF KARNATAKA,
KALABURAGI BENCH
DATED THIS THE 11TH DAY OF SEPTEMBER, 2025
BEFORE
THE HON'BLE MRS JUSTICE M G UMA
CRIMINAL APPEAL NO. 200359 OF 2023
(378(Cr.PC)/419(BNSS))
BETWEEN:
VISHWANATH REDDY M.S,
AGE: 44 YEARS, OCC: BUSINESS,
R/o. PLOT NO. 7, NAVBHAG,
NEAR BUS STAND,
VIJAYAPURA-586 101.
...APPELLANT
(BY SRI SACHIN M. MAHAJAN, ADVOCATE FOR
SRI R. S. SIDHAPURKAR, ADVOCATE)
Digitally signed AND:
by RAMESH
MATHAPATI
RATAN HANAMANT GOSAVI,
Location: HIGH AGE: MAJOR, OCC: GOVT SERVANT,
COURT OF
KARNATAKA R/o. SHUBHAMASTU COLONY,
NEAR MALLIKARJUN ASHRAMA
BLDE ENGINEERING COLLEGE ROAD,
VIJAYAPUR-586101,
AND ALSO AT R/O. CMC COLONY,
RANI BAGEECHA, STATION ROAD,
VIJAYAPUR-586 101.
...RESPONDENT
(RESPONDENT SERVED)
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CRL.A No. 200359 of 2023
HC-KAR
THIS CRIMINAL APPEAL IS FILED UNDER SECTION
378 (4) OF CR.P.C PRAYING TO SET ASIDE THE JUDGMENT
AND ORDER JUDGMENT AND ORDER OF ACQUITTAL PASSED
BY THE TRIAL COURT, V ADDL. CIVIL JUDGE AND JMFC,
VIJAYAPUR IN CC NO.4787/2018 DT. 16.8.2023 FOR THE
OFFENCE PUNISHABLE UNDER SECTION 138 OF NEGOTIABLE
INSTRUMENTS ACT, 1881 AND CONVICT THE RESPONDENT/
ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION
138 OF NEGOTIABLE INSTRUMENTS ACT, 1881 AND PASS
SUCH OTHER ORDERS AS DEEMS FIT IN THE CIRCUMSTANCES.
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 appellant being the complainant in
C.C.No.4787/2018 on the file of the learned V-Additional
Civil Judge & JMFC Court, Vijayapura [for short, 'the Trial
Court'], is impugning the judgment dated 16.08.2023
acquitting the respondent-accused for the offence
punishable under Section 138 of Negotiable Instruments
Act, 1881 [for short, 'the N.I.Act'].
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2. Facts of the case in brief are that, the appellant
-complainant has filed the private complaint in
P.C.No.623/2018 against the respondent-accused alleging
commission of the offence punishable under Section 138 of
N.I. Act. It is the contention of the complainant that, he is
a Businessmen by profession and the accused is a
Government Servant. The accused requested for hand
loan and accordingly he had lent an amount of
Rs.12,00,000/- during April 2017. The accused agreed to
repay the same and later issued a cheque for
Rs.12,00,000/- on 15.02.2018. When the said cheque was
presented for encashment, the same was dishonored as
there was insufficient fund in the account of the accused.
3. The complainant had not initiated any legal
action for dishonor of the said cheque, as the accused
requested him not to initiate action. He requested for
further hand loan of Rs.2,00,000/-, as he was in dire need
of the same. Accordingly, the complainant lent an
additional amount of Rs.2,00,000/- to the accused. It is
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contended that the accused, towards repayment of the
legally enforceable debt issued cheque as per Ex.P1 for
Rs.14,00,000/- on 11.07.2018. The cheque was presented
for encashment, but the same was dishonored as there
was insufficient fund in the account of the accused.
4. The legal notice was issued to the accused
informing him regarding dishonor of the cheque and
calling upon to pay the cheque amount. The accused had
not claimed the notice after knowing its contents and the
same was returned to the complainant as per Ex.P6.
However, another notice sent to the accused was served
on him as per postal acknowledgement Ex.P5. The accused
had not repaid the cheque amount nor did he reply to the
legal notice and thereby he has committed the offence
punishable under Section 138 of N.I. Act. Accordingly, the
complainant requested the Trial Court to take cognizance
of the offence and to initiate legal action.
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5. The Trial Court took cognizance of the offence
and registered the case in C.C.No.4787/2028. The accused
has appeared before the Trial Court, pleaded not guilty
and claimed to be tried. In order to prove his conteiont,
the complainant examined himself as PW-1 and got
marked Exs.P-1 to P-9. The accused has denied all the
incriminating materials available on record, but has not led
any evidence in support of his defence. The Trial Court,
after taking into consideration all these materials on
record, came to the conclusion that the complainant has
not proved his financial capacity to lend an amount of
Rs.14,00,000/-. Therefore, the accused is successful in
rebutting the legal presumption under Sections 118 and
139 of N.I. Act. Accordingly, the impugned judgment of
acquittal came to be passed. Being aggrieved by the
same, the complainant is before this Court.
6. Heard Sri. Sachin M.Mahajan, learned counsel
for Sri. R.S.Sidhapurkar, learned counsel for the appellant.
Respondent though served has remained absent. Hence,
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his argument is taken as nil. Perused the materials,
including the Trial Court records.
7. In view of the contentions urged by the learned
counsel for the appellant, the point that would arise for my
consideration is:
"Whether the judgment of the Trial Court
acquitting the accused suffers from infirmities
and calls for interference by this Court?"
My answer to the above point is in the 'Affirmative'
for the following:
REASONS
8. It is the specific contention of the complainant
that he is a businessmen and had lent in all
Rs.14,00,000/- to the accused. Towards repayment of the
same, the accused issued the cheque as per Ex.P1, which
came to be dishonored as there was insufficient fund in
the account of the accused. Even though one of the legal
notices was served, the other notice was not claimed by
the accused. However, he had not repaid the cheque
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amount and thereby he has committed the offence under
Section 138 of N.I. Act.
9. In order to prove his contention, the
complainant has filed the affidavit in lieu of examination-
in-chief re-iterating his contention taken in the complaint.
The witness was cross-examined by the learned counsel
for the accused. It is elicited during cross-examination that
the complainant is working as Village Accountant in the
Revenue Department. It is stated that, he knows the
accused since about 11 years. He pleaded his ignorance
regarding the date on which the loan was lent. It is stated
that he had not taken any security while lending the
amount. It is suggested to the witness that, one Shankar
Nadageri, is also working along with the accused as
contract employee and the complainant knows him very
well. Complainant admits that he has cited the said
Shankar Nadageri as witness in the complaint and he is
very much alive. Witness stated that, when the first
cheque given by the accused was dishonored, he had not
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issued any legal notice. However, on enquiry with the
accused, he had lent additional amount of Rs.2,00,000/-.
It is suggested to the witness that the cheque Ex.P1 was
obtained by the complainant through the said Shankar
Anand Nadageri and he filed the complaint by misusing the
same. It is suggested to the witness that Ex.P1 is a bearer
cheque and the same was not issued by the accused to
repay the legally enforceable debt. It is also suggested
that the complainant had colluded with the postal officials
to have false endorsement that the accused has not
claimed the legal notice. All these suggestions were denied
by the complainant.
10. The tenor of cross-examination of PW.1
discloses that the accused admits that the cheque Ex.P1
belongs to his bank account and it bears his signature.
Once the accused admits issuance of cheque with his
signature, the legal presumption under Sections 118 and
139 of N.I. Act, will arise. The burden shifts on the
accused to rebut the legal presumption.
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11. In this regard, I may refer to the decision of the
Hon'ble Apex Court in Bir Singh Vs. Mukesh Kumar1,
wherein the Apex Court by referring to its earlier decisions
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."
12. 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 Judge Bench of
the Apex Court discussed at length about 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
(2019) 4 SCC 197
(2021) 5 SCC 283
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earlier decision in the case of 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 complainant's case could not have
been raised for want of evidence regarding the
source of funds for advancing loan to the appellant-
accused....."
AIR 2019 SC 1983
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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
Kerala, 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 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)
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13. The accused had received one of the legal
notice, as per postal acknowledgement-Ex.P5, the other
legal notice was returned as not claimed, as per Ex.P6.
However, he had not chosen to give any reply at the
earliest point of time. The defence taken by the accused as
could be made out from the cross-examination of PW.1, is
that the cheque Ex.P1 was with one Shankar Nadageri who
was working along with the accused. It was the said
Shankar Nadageri, who had handed over the cheque to
the complainant and later he misused the same. It is not
explained by the accused as to when and why he had
issued the signed cheuqe to Shankar Nadageri to enable
him to hand it over to the complainant.
14. It is pertinent to note that, the complainant has
cited the very same Shankar Nadageri as a witness in the
private complaint. Taking advantage of the same, a
suggestion appears to have been made to PW.1, that he
had received the cheque Ex.P1 from Shankar Nadageri. It
is not the contention of the accused that, the said Shankar
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Nadageri was in inimical terms with him. Under such
circumstances, the accused could have stepped into the
witness box and deposed about his defence and also could
have examined the said Shankar Nadageri as his witness.
The accused has not chosen to step into the witness box
to depose about his defence. Mere, cross-examination of
PW.1, suggesting that the cheque was handed over to the
complainant by the Shankar Nadageri will not probablize
his defence. Unless the accused probablizes his defence, it
cannot be said that, he is successful in rebutting the legal
presumption under Sections 118 and 139 of N.I. Act.
Unless the accused rebut the legal presumption, he is
liable for conviction.
15. It is pertinent to note that the accused has
produced Exs.P8 and P9, the income tax returns submitted
for the year 2017-18 and 2018-19. In the statement
pertaining to loans and advances for the period from
01.04.2017 to 31.03.2018 in the income tax return
submitted by the complainant, there is a reference to the
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name of accused and lending of loan amount of
Rs.14,00,000/- by the complainant. There is absolutely no
cross-examination to PW.1 with regard to the said
document. Under such circumstance, I do not find any
reason to discard this evidence. Hence, the accused is
liable for conviction.
16. I have gone though the impugned judgment of
acquittal passed by the Trial Court. It has proceeded to
acquit the accused by forming an opinion that the
complainant has not proved his financial capacity to lend
the amount, which is erroneous in view of the settled
proposition of law. Hence, I am of the opinion that the
impugned judgment of acquittal passed by the Trial Court
is liable to be set aside and the accused is liable for
conviction.
17. Heard regarding sentence.
18. The cheque Ex.P-1 is dated 11.07.2018. Taking
into consideration the facts and circumstances, I am of the
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opinion that reasonable amount of Rs.20,00,000/- can be
imposed as fine on the accused.
19. In view of the above, I answer the above point
in the affirmative and proceed to pass the following:
ORDER
(i) The appeal is allowed.
(ii) The impugned judgment of acquittal dated
16.08.2023 passed by the V Additional Civil
Judge and JMFC, Vijayapura in
C.C.No.4787/2018 is hereby set aside.
(iii) Consequently, respondent-accused is
convicted for the offence punishable under
Section 138 of N.I. Act and he is sentenced
to pay fine of Rs.20,00,000/- [Rupees
Twenty Lakh only] within four months. In
default to pay, he shall undergo simple
imprisonment for a period of one year.
(iv) Out of the fine amount to be paid by the
accused, a sum of Rs.19,90,000/- is
ordered to be paid to the complainant-
appellant as compensation.
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Registry is directed to send back the Trial Court
records along with copy of this judgment for information
and needful action i.e., for issuance of conviction warrant
against the accused.
Sd/-
(M G UMA)
JUDGE
MSR
