Sri Sadashiv S/O Rajappa Ganganalli vs. Sri Basava Agency
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The petitioner, Sri Sadashiv S/o Rajappa Ganganalli, is the accused in a complaint filed under Section 200 of the Cr.P.C. for an offense punishable under Section 138 of the Negotiable Instruments Act, 1881. The complaint was filed by Sri Basava Agency, represented by its owner Sri Suresh S/o Shankrappa Konnur. The petitioner allegedly purchased cement bags worth Rs. 5,52,960/- from the respondent between December 1, 2020, and December 30, 2020. Towards payment, the petitioner issued a cheque for Rs. 5,00,000/-, which was dishonored with the endorsement "Accounts Blocked." The petitioner failed to comply with the legal notice. The trial court convicted the petitioner and imposed a fine of Rs. 5,00,000/-, with Rs. 4,90,000/- as compensation and Rs. 10,000/- for state expenses. The appellate court confirmed this conviction and sentence.
Held
The High Court held that the petitioner's defense that the cheque was given as security was not substantiated by any documentary evidence. The petitioner admitted the purchase of cement bags but disputed the quantity and claimed repayment, relying solely on oral testimony. The Court found no other material on record to rebut the presumption under Section 139 of the Negotiable Instruments Act, 1881. Conversely, a GST certificate marked as Exhibit P6 was found to establish the sale of cement bags to the accused and the tax payable to the government, which was included in the bills. Therefore, the Court concluded that the orders of conviction and sentence passed by both the lower courts did not warrant interference. The revision petition was dismissed, and any amount deposited was ordered to be withdrawn by the complainant.
Key Issues
1. Whether the cheque issued by the petitioner was given as security for a past debt, and therefore, not for a legally recoverable debt under Section 138 of the Negotiable Instruments Act, 1881? Petitioner's Argument: The petitioner argued that the cheque was given as security and not towards a legally recoverable debt, leading to a miscarriage of justice. They contended that both the trial court and the appellate court failed to consider this aspect. Respondent's Argument: The respondent supported the impugned judgments, implying that the debt was legally recoverable and the cheque was issued for that purpose. 2. Whether the presumption under Section 139 of the Negotiable Instruments Act, 1881, stands rebutted by the evidence on record? Petitioner's Argument: The petitioner's defense was that the purchase of cement bags was made 7-8 years prior, and the money had been repaid, with the cheque given as security. They argued that this defense, supported by oral testimony, should have been sufficient to rebut the presumption. Respondent's Argument: The respondent's support for the impugned judgments implies they contended that the presumption under Section 139 was not rebutted, especially given the documentary evidence presented by the complainant.
Sections Cited
Section 138, Section 139, Section 200, Section 397, Section 401
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Cause title — parties, addresses and appearances
ORAL ORDER
(PER: THE HON'BLE MR. JUSTICE V.SRISHANANDA)
Heard Smt. Bhagyashree N.B. learned counsel for the revision petitioner and Sri.Shivaraja P. Mudhol, learned counsel for the respondent.
Accused is the revision petitioner who suffered an order of conviction in C.C.No.617/2021 confirmed in Crl.A.No.5041/2023 is the revision petitioner.
Accused has been convicted for the offence punishable under Section 138 of the Negotiable Instrument Act, 1881 (for short, ‘the N.I.Act’) and ordered to pay fine amount of Rs.5,00,000/- of which sum of Rs.4,90,000/- is ordered to be paid as compensation and Rs.10,000/- towards the defraying expenses of the State. NC: 2025:KHC-D:6321
Facts in a nutshell for disposal of the revision petition are as under:
1 A complaint came to be filed under Section 200 of the Criminal Procedure Code (for short, ‘the Cr.P.C.’) alleging the commission of offence punishable under Section 138 of the N.I.Act contending that accused purchased cement bags from the shop named as Sri.Basava Agency at Mudhol, to the tune of Rs.5,52,960/- from the period 01.12.2020 to 30.12.2020. 4.2 Towards the payment of the price of the cement bags, accused said to have issued cheque bearing No.508628 dated 25.01.2021 in a sum of Rs.5,00,000/- which on presentation came to be dishonoured with an endorsement “Accounts Blocked”.
3 There was no compliance to the calling of legal notice and therefore, action was sought against the accused. NC: 2025:KHC-D:6321
Learned trial Magistrate after completing necessary formalities, summoned the accused and after due trial, accused has been convicted for the offence punishable under Section 138 of the N.I.Act.
The defence of the accused is that he had purchased cement bags about 7-8 years earlier to the present complaint and he had repaid the money. A cheque was given as security. To substantiate said aspect of the matter, there is no documentary proof placed on record.
In other words, plea of discharge is not established by the accused and therefore, learned trial judge raising the presumption under Section 139 of the N.I. Act, noting the fact that cheque belongs to the accused and signature found therein is that of the accused and there was no reply to the legal notice and convicted the accused.
Learned Judge in the First Appellate Court on re-appreciation of the material on record, maintained the order of conviction and sentence. NC: 2025:KHC-D:6321
Being further aggrieved by the same, accused is before this Court.
Smt.Bhagyashree N.B. learned counsel for the petitioner reiterating the grounds urged in the petition vehemently contended that both the Courts failed to note that the cheque was given as security. Therefore, there was no legally recoverable debt covered under the cheque marked at Ex.P.1 and recording an order of conviction has resulted in miscarriage of justice and sought for allowing the revision petition.
Per contra, Sri.Anand Bagewadi, learned counsel for the respondent/complainant supports the impugned judgement.
Having heard the arguments of both sides, this Court has perused the material on record meticulously.
On such perusal of the material on record, it is crystal clear that cheque marked at Ex.P1 belongs to the accused and signature found therein is not in dispute. According to the accused, cheque was given as security. NC: 2025:KHC-D:6321 He admitted the purchase of cement bags; but denied the quantity of the cement bags purchased and also contended that he had repaid the price of the cement bags.
To substantiate said aspect of the matter, there is no documentary evidence placed on record by the accused except oral testimony. Except the oral testimony of DW1, there is no other material on record to rebut the presumption under Section 139 of the NI Act.
On the contrary, GST certificate marked at exhibit P6 would establish that the sale of the cement bags to the accused and the tax payable to the Government has been included in the bills as per GST certificate.
Therefore, the order of conviction and sentence recorded by both the Courts does not call for any interference in this revision petition. Hence, the following order: NC: 2025:KHC-D:6321 ORDER (i) Revision petition is dismissed. (ii) Amount in deposit if any, is ordered to be withdrawn by the complainant under due identification. (V.SRISHANANDA) JUDGE
AC-Up to para 13 HMB – Para 14 to end. CT:PA LIST NO.: 2 SL NO.: 9
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.