Karnataka HC Upholds Hotelier’s ₹1.2 Lakh Cheque Conviction, Citing No Complaint Over Alleged Former-Employee Cheque Misuse

The complainant alleged that, at the request of his brother-in-law, Satyanarayan Jadhav, he lent the accused ₹1,30,000 in cash on 2 October 2013.

After the accused repaid ₹10,000, he allegedly issued a cheque for the remaining ₹1,20,000; the cheque was dishonoured for insufficient funds.

The complainant sent a statutory notice, which was returned, and then filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 (NI Act).

The accused admitted that the cheque and signature were his, but denied borrowing from the complainant.

He claimed that he had given blank cheques to Jadhav, who had misused one; he also relied on a statement marked Ex.P5 referring to a loan from Jadhav and a remaining balance of ₹62,000.

The trial court convicted the accused and ordered payment of ₹1,30,000, including ₹1,20,000 as compensation; the first appellate court affirmed.

The accused’s revision challenged both decisions.

Sections 118 and 139 of the NI Act create rebuttable presumptions concerning consideration and the existence of a legally enforceable debt once execution of the cheque is admitted.

The accused may rebut those presumptions on a balance of probabilities; the accused need not prove the defence beyond reasonable doubt, but a bare denial is insufficient.

The court also referred to the limited scope of revisional review, observing that revision is not an occasion to reassess evidence as if exercising trial or appellate jurisdiction; interference is warranted where a legal bar or a manifest error justifies it.

The judgment records the parties’ reliance on Basalingappa v. Mudibasappa, M/s Kumar Exports v. M/s Sharma Carpets, and Pushparaj R. Ullal v. Herald D’Souza, among other authorities.

The accused admitted the cheque and his signature, thereby attracting the statutory presumptions.

Although he claimed that Jadhav had supplied the cheque and that the debt was owed to Jadhav rather than the complainant, the court found that the accused had not acted against Jadhav for the alleged misuse and admitted that they remained on cordial terms.

It also considered Ex.P4, concerning creditors seeking repayment, and Ex.P5, which recorded Jadhav’s role in arranging the money, alongside the cheque, return memo and notice.

The court concluded that the concurrent findings that the complainant had proved the debt were supported by the record and disclosed no glaring or manifest error warranting revision.

It confirmed the first appellate court’s judgment affirming the trial court’s conviction and sentence under Section 138 of the NI Act, and directed that the original records be returned with a copy of the judgment.