MR K DEVENDRANATH vs YES BANK LIMITED

Court
Karnataka High Court

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HC-KAR
NC: 2026:KHC:58220
CRL.P No. 6983 of 2025


CNR: KAHC010325002025




IN THE HIGH COURT OF KARNATAKA AT BENGALURU


TH
DATED THIS THE 15 DAY OF OCTOBER, 2026

BEFORE

THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

CRIMINAL PETITION NO. 6983 OF 2025 (482(Cr.PC)

/ 528(BNSS)-)

BETWEEN:

MR K DEVENDRANATH
S/O. KESHAVALU,
AGED ABOUT 41 YEARS,
TH
NO.22, 4 MAIN ROAD,
TH
9 CROSS, NEAR K. P. AGRAHARA POLICE STATION,
BENGALURU-560 023.

AND ALSO AT
FOR B J K D AND BROTHERS
BY ITS, PROPRIETOR
K DEVENDRANATH
TH TH
NO.22 4 MAIN ROAD, 9 CROSS,
NEAR K P AGRAHARA POLICE STATION,
BENGALURU 560023

…PETITIONER
(BY SRI. MURALIDHARA G S.,ADVOCATE)

AND:

YES BANK LIMITED
HAVING ITS REGISTERED OFFICE AT
YES BANK LTD.,
OFF WESTERN EXPRESS HIGHWAY
SANTACRUZ EAST
MUMBAI-400 055,
HAVING BRANCH OFFICE AT
PRESTIGE OBELISK MUNCIPAL NO.3,
GROUND FLOOR, KASTURBA ROAD,
BANGALORE-560 001,
REPRESENTED BY ITS LEGAL MANAGER,











Digitally Signed By:
SURAJ GOVINDA RAJ
05/11/2026, 13:38, Bengaluru
Verified

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HC-KAR
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CRL.P No. 6983 of 2025


CNR: KAHC010325002025


MR. SRIDHAR,
CONTACT NO. 91 8050242528.

…RESPONDENT
(BY SRI. FRANCIS XAVIER., ADVOCATE)

THIS CRIMINAL PETITION IS FILED U/S 482 CR.PC (FILED U/S
528 BNSS) PRAYING TO ALLOW THIS PETITION AND QUASH THE
PROCEEDINGS IN C.C.NO.12356/2024 IS AT ANNEXURE-E PENDING
BEFORE XI ADDL. SCJ AND ACJM AT BENGALURU (SCCH-12) FILED
U/S 200 OF CRPC R/W 138 OF NEGOTIABLE INSTRUMENTS ACT,
1881 TO THE EXTENT OF THIS PETITIONER IS CONCERNED.

THIS CRIMINAL PETITION, COMING ON FOR ADMISSION, THIS
DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

ORAL ORDER


1. Mr.Francis Xavier, counsel is directed to accept notice
for respondent No.2.


2. The petitioner is before this Court seeking for the
following reliefs:

“Allow this petition and quash the proceedings in
C.C.No.12356/2024 is at Annexure-E pending before XI
Addl. SCJ and ACJM at Bengaluru (SCCH-12) filed u/s
200 of CRPC r/w 138 of Negotiable Instruments Act,
1881 to the extent of this petitioner is concerned.”


3. Respondent No.2 filed a private complaint in PCR
No.13803/2024 under Section 200 of the Code of
Criminal Procedure, 1973, read with Sections 138
Digitally Signed By:
SURAJ GOVINDA RAJ
05/11/2026, 13:38, Bengaluru
Verified

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HC-KAR
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CRL.P No. 6983 of 2025


CNR: KAHC010325002025


and 142 of the Negotiable Instruments Act, 1881,
alleging that the cheque issued by the petitioner was
dishonoured on 03.04.2024 on account of
insufficiency of funds. Cognizance having been taken
and summons having been issued to the petitioner,
the petitioner is before this Court challenging the
proceedings in C.C.No.12356/2024.


4. Learned counsel for the petitioner submits that the
cheque in question had been issued only as security
and not towards discharge of any legally enforceable
debt or liability. It is submitted that respondent No.2
had sanctioned a loan to the petitioner for the
purpose of purchasing a property and that the
transaction has been vitiated by fraud allegedly
perpetrated by the officers of the Bank. It is further
submitted that the sale deed executed in favour of
the petitioner came to be cancelled after the original
owner disclosed that he had never executed the sale
deed in favour of the petitioner. Learned counsel also
submits that the petitioner has lodged a complaint
against the officials of the Bank in relation to the
alleged fraud. It is, therefore, contended that no
legally enforceable liability exists so as to attract the
Digitally Signed By:
SURAJ GOVINDA RAJ
05/11/2026, 13:38, Bengaluru
Verified

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CRL.P No. 6983 of 2025


CNR: KAHC010325002025


provisions of Section 138 of the Negotiable
Instruments Act.


5. Learned counsel further submits that proceedings
have also been initiated before the Debt Recovery
Tribunal for recovery of the amount in question and
that the Bank cannot simultaneously maintain
proceedings under Section 138 of the Negotiable
Instruments Act and proceedings for recovery of the
same amount.


6. Heard learned counsel for the petitioner and perused
the papers.


7. The issuance of the cheque by the petitioner and the
fact that the cheque was drawn on an account
maintained by the petitioner are not in dispute. The
principal contention raised is that the cheque had
been issued only as security and not towards
discharge of any legally enforceable debt or liability.
The petitioner also disputes the underlying loan
transaction on the ground that fraud had been
committed by the officials of the Bank, resulting in
the execution and subsequent cancellation of the sale
deed in respect of the property sought to be
purchased.
Digitally Signed By:
SURAJ GOVINDA RAJ
05/11/2026, 13:38, Bengaluru
Verified

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CRL.P No. 6983 of 2025


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8. Insofar as the contention relating to the cheque
having been issued as security is concerned, the
mere description of a cheque as a security cheque
would not, by itself, take the same outside the
purview of Section 138 of the Negotiable Instruments
Act. The relevant consideration is whether, on the
date on which the cheque became payable and was
presented for encashment, an enforceable debt or
liability existed.


9. Even a cheque described as a security cheque would
attract Section 138 of the Negotiable Instruments Act
where the liability had become due and payable on
the date of the cheque. It is trite that a cheque
issued as security pursuant to a financial transaction
cannot be treated as a worthless instrument and
that, upon the underlying liability becoming due,
such cheque may be presented for encashment.


10. In the present case, the contention of the petitioner
that the cheque was issued only as security and that
no legally enforceable liability existed on the relevant
date would have to be examined with reference to
the nature of the loan transaction, the terms
governing repayment, the amount disbursed and the
Digitally Signed By:
SURAJ GOVINDA RAJ
05/11/2026, 13:38, Bengaluru
Verified

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CRL.P No. 6983 of 2025


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liability outstanding when the cheque was presented.
The same cannot be determined merely on the basis
of the petitioner's assertion that the cheque was
issued as security.


11. Insofar as the allegation of fraud by the officials of
the Bank is concerned, the petitioner has stated that
the property transaction was vitiated by fraud and
that the sale deed executed in his favour was
subsequently cancelled after the original owner
disputed its execution. The petitioner has also stated
that a separate complaint has been lodged against
the officials of the Bank in this regard.


12. These are matters which would require consideration
on the basis of the evidence and material placed on
record. The question as to whether the officials of the
Bank had acted fraudulently or in collusion with any
other person, whether such conduct had any bearing
on the loan transaction and whether the same has
any consequence on the liability of the petitioner
towards the Bank are matters which cannot be
conclusively determined in the present proceedings,
particularly when they involve disputed questions of
fact.
Digitally Signed By:
SURAJ GOVINDA RAJ
05/11/2026, 13:38, Bengaluru
Verified

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CRL.P No. 6983 of 2025


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13. It is also relevant to notice that, once the
foundational facts relating to the drawing of the
cheque and its execution are admitted or
established, the statutory presumptions under
Sections 118 and 139 of the Negotiable Instruments
Act would operate in favour of the holder of the
cheque. The said presumptions are rebuttable, and it
would be open to the petitioner to place material
before the Trial Court to establish that no legally
enforceable debt or liability existed on the relevant
date. The petitioner would also be entitled to rely
upon the circumstances relating to the alleged fraud
and the cancellation of the sale deed in support of his
defence.


14. While considering a petition seeking quashing of
proceedings under Section 138 of the Negotiable
Instruments Act, this Court would ordinarily proceed
on the basis of the averments in the complaint and
would not adjudicate disputed questions of fact by
accepting the defence of the accused at that stage.


15. Insofar as the contention that the Bank has initiated
proceedings before the Debt Recovery Tribunal for
recovery of the amount and, therefore, cannot
Digitally Signed By:
SURAJ GOVINDA RAJ
05/11/2026, 13:38, Bengaluru
Verified

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CRL.P No. 6983 of 2025


CNR: KAHC010325002025


maintain a complaint under Section 138 of the
Negotiable Instruments Act is concerned, the same
cannot be accepted. The proceedings before the Debt
Recovery Tribunal are for recovery of the amount
due under the loan transaction, whereas the
proceedings under Section 138 of the Negotiable
Instruments Act arise from the dishonour of a cheque
and the failure to comply with the statutory demand.
The two proceedings operate in different fields, and
the mere institution of recovery proceedings before
the Debt Recovery Tribunal would not, by itself,
preclude the Bank from pursuing a complaint under
Section 138 of the Negotiable Instruments Act.


16. No illegality can be attributed to the Bank merely on
the ground that it has initiated proceedings for
recovery of the loan amount before the Debt
Recovery Tribunal as well. Needless to state, any
amount recovered or realised in the recovery
proceedings will have to be duly accounted for, and
there can be no question of the Bank recovering the
same liability twice.


17. In view of the above, this Court is of the considered
opinion that the contentions raised by the petitioner,
Digitally Signed By:
SURAJ GOVINDA RAJ
05/11/2026, 13:38, Bengaluru
Verified

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insofar as they relate to the alleged fraud in the
underlying transaction, the cancellation of the sale
deed and the absence of any legally enforceable
liability, are matters which can be urged by the
petitioner before the Trial Court by way of defence.
The petitioner would be at liberty to rely upon all
such material and raise all such grounds as are
available to him in law during the course of trial. No
opinion is expressed on the merits of those defences.


18. In the above circumstances, no ground is made out
for interference with the proceedings in exercise of
the inherent jurisdiction of this Court. The petition is
accordingly dismissed , reserving liberty to the
petitioner to raise all contentions and defences urged
in the present petition before the Trial Court in
accordance with law.

Digitally Signed By:
SURAJ GOVINDA RAJ
05/11/2026, 13:38, Bengaluru

Verified
(SURAJ GOVINDARAJ)
JUDGE



PRS
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