Karnataka HC Dismisses Cheque-Bounce Accused’s Challenge As Infructuous After Sale Agreement Marked, Without Ruling On Stamp Duty

The respondent filed a private complaint under Section 200 Cr.P.C. alleging cheque dishonour under Section 138 of the Negotiable Instruments Act.

The Magistrate allowed the respondent’s application under Section 311 Cr.P.C. to recall the complainant for further examination and production of an agreement of sale dated 9 June 2011, imposing costs of ₹500.

The petitioner challenged that order, arguing that the agreement was insufficiently stamped and should have been examined and impounded before being marked in evidence.

By the time the High Court considered the petition, the complainant had been recalled, the agreement had been marked, and the matter was posted for judgment.

Section 33 of the Karnataka Stamp Act, 1957 provides for examination and impounding of instruments that appear not to be duly stamped.

Its proviso to subsection (2), clause (a), permits a Magistrate or Judge of a Criminal Court, in proceedings other than those specified there, not to examine or impound an instrument if the court does not think fit to do so.

The expression “if he does not think fit so to do” entails judicial discretion; an objection to the sufficiency of stamp duty may be considered by the court.

The petitioner relied on G.M. Shahul Hameed v. Jayanthi R. Hedge, AIR 2024 SC 3339, for the proposition that admission of an instrument in evidence requires judicial determination of its admissibility where stamping is disputed.

Section 311 Cr.P.C. was the basis of the application to recall the complainant.

The Court acknowledged that Section 33’s proviso involves judicial discretion and that the petitioner’s precedent emphasised judicial determination of a stamp-duty objection.

However, the petition sought to set aside only the order allowing recall under Section 311 Cr.P.C.; it did not independently challenge the marking of the agreement or seek specific relief concerning its admission.

Since the complainant had already been recalled and the agreement marked, setting aside the recall order would serve no purpose.

The Court therefore did not decide the agreement’s stamp-duty sufficiency or admissibility.

The Court expressly left open the admissibility and evidentiary value of the agreement, as well as the merits of the Section 138 complaint.