Karnataka HC Upholds Woman’s Cheque-Bounce Conviction Despite Repayment Claim, Reduces Fine To ₹3 Lakh

In brief

The question

Whether the judgments of the trial court and appellate court suffered from illegality or infirmity warranting interference in revision

The court held

The revision petition was allowed in part. The conviction under Section 138 was maintained, but the sentence was modified: the accused was directed to pay a fine of ₹3,00,000 within three months, with the entire amount payable to the complainant as compensation.

It also directed

In default, she must undergo simple imprisonment for six months.

01Facts

The complainant alleged that the accused borrowed a total of ₹3,00,000 in two instalments and issued a cheque towards repayment. The cheque was dishonoured for insufficient funds; the complainant’s statutory notice was served, but the accused did not reply or pay.

pp. 3–4, 9

The accused maintained that she had borrowed only ₹1,00,000, repaid it with interest, and that the complainant had retained blank cheques; she relied on a notebook and a police complaint.

pp. 7–8

The trial court convicted her under Section 138 of the Negotiable Instruments Act, 1881, and imposed a fine of ₹3,26,000. The appellate court affirmed the conviction and sentence. The accused challenged both decisions in revision.

pp. 5–6

02Issues

i.Whether the judgments of the trial court and appellate court suffered from illegality or infirmity warranting interference in revision

¶ 12 · p. 6

ii.Whether the sentence imposed by the trial court should be modified in light of the accused’s asserted repayment and related circumstances

¶ 22–23 · pp. 12–13

03Law Applied

Section 138 of the Negotiable Instruments Act, 1881, penalises the dishonour of a cheque for insufficiency of funds where the statutory requirements are met.

pp. 2–4

The Court cited Ashok Singh v. State of Uttar Pradesh, AIR 2025 SC 1931, and Kunte Gowda v. Thurubaiah, SLP (Crl.) No. 2247/2024, decided 4 August 2026, for the principle that an accused should raise a defence at the earliest opportunity, particularly in response to the statutory notice, and cannot later introduce a defence not raised then.

¶ 20 · pp. 10–11

The revision was brought under Sections 397 and 401 of the Code of Criminal Procedure, 1973 (corresponding provisions identified in the judgment as Sections 438 and 442 of the Bharatiya Nagarik Suraksha Sanhita, 2023).

pp. 1–2

Provisions in the judgment · 6 · Linked ones open on LawLens

Code of Criminal Procedure, 1973 Section 397 Section 401 Section 313

Bharatiya Nagarik Suraksha Sanhita, 2023 Section 438 Section 442

Negotiable Instruments Act, 1881 Section 138

04Reasoning

The Court found that the complainant’s evidence supported her account of the two loans and that the cheque had been dishonoured; the accused had received the statutory notice but did not reply.

¶ 16–17 · pp. 8–9

It rejected the accused’s repayment defence, noting that her reliance on the notebook and police complaint did not establish repayment and that she had not raised the defence in response to the notice. The Court therefore found no basis to disturb the concurrent conviction.

¶ 18–21 · pp. 9–12

However, considering the accused’s claim that she had approached the complainant and lodged a police complaint after receiving the notice, the Court considered a reduction in sentence appropriate.

¶ 22–23 · pp. 12–13