Karnataka HC Upholds Enhanced Penalties In Builder’s Two Cheque Cases After Travel Operator Admitted ₹11 Lakh Liability

The complainant initiated proceedings under Section 138 of the Negotiable Instruments Act, 1881, alleging that the accused had issued cheques for ₹5,00,000 and ₹6,00,000 towards a liability arising from a transaction concerning the proposed sale of a passenger bus; the cheques were dishonoured and the demand was not met

The Trial Court convicted the accused in C.C. Nos. 1496/2015 and 1497/2015 and ordered payment of ₹6,10,000 and ₹5,10,000 respectively

The Sessions Court dismissed the accused’s appeals and allowed the complainant’s revision petitions, enhancing the amounts to ₹10,20,000 and ₹8,50,000 respectively and providing for six months’ imprisonment in default

The accused challenged the convictions and the enhancement before the High Court

Section 138 of the Negotiable Instruments Act criminalises dishonour of a cheque where the statutory requirements, including those in clauses (a), (b) and (c) of its proviso, are fulfilled

Under Section 58 of the Evidence Act, facts admitted need not be proved

The Court relied on Yogendra Pratap Singh v. Savitri Pandey, (2014) 10 SCC 713, for the proposition that the offence under Section 138 becomes effective upon fulfilment of the proviso’s requirements

It distinguished Navneetdas Narayandas Barshikar v. Bacchubhai Mulji Tanna, 2012 (1) MWN (Cr.) (DCC) 87 (Bom.), because, unlike that case, the accused here had admitted the relevant liability

The High Court noted that the accused did not dispute issuance of the cheques, their dishonour, or the demand; further, the Court found that the reply notice and the accused’s evidence contained an admission of liability in relation to the cheques

In light of that admission, the Court rejected the argument that the cheques related to a different transaction and that the presumption had been rebutted; it considered the cited authorities distinguishable or inapplicable

Finding no basis to disturb the lower courts’ factual conclusions, the Court declined to interfere

It expressly stated that its observations did not concern the separate case in which the accused had been acquitted and an appeal was pending, and should not influence the court hearing that appeal