High Court of Karnataka Upholds Conviction in Cheque Bounce Case but Reduces Compensation Amount. Dishonour of Cheque for Rs. 7,10,000 under Section 138 of Negotiable Instruments Act, 1881 - Sentence reduced from Rs. 7,10,000 to Rs. 4,70,000.

High Court: Karnataka High Court Bench: BENGALURU
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Case Note & Summary

The petitioner, M/s. Banavathy & Company, filed a criminal revision petition under Section 397 read with Section 401 Cr.P.C. against the judgment dated 30.04.2016 passed in Crl.A.No.968/2014 by the LXVI Additional City Civil and Sessions Judge, Bangalore. The appellate court had affirmed the judgment of conviction dated 06.08.2014 passed in C.C.No.25343/2010 by the XX ACMM, Bangalore, but reduced the sentence from Rs. 7,10,000 to Rs. 4,70,000. The case pertains to dishonour of a cheque under Section 138 of the Negotiable Instruments Act, 1881. The petitioner was the complainant in the trial court. The respondents were the accused. The trial court convicted the accused and ordered compensation of Rs. 7,10,000. On appeal, the conviction was upheld but the compensation was reduced. The petitioner sought restoration of the original compensation amount. The High Court heard the learned counsel for the petitioner. The respondents' counsel was absent. The court noted that the appellate court had reduced the compensation without assigning reasons. However, the court found that the compensation amount of Rs. 4,70,000 was reasonable and did not warrant interference. The court dismissed the revision petition, upholding the appellate court's order.

Headnote

A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Presumption of Legally Enforceable Debt - The petitioner challenged conviction for cheque dishonour. The court upheld the conviction, affirming the presumption under Section 139 that the cheque was issued for a legally enforceable debt. The appellate court had reduced the compensation from Rs. 7,10,000 to Rs. 4,70,000. The High Court found no grounds to interfere with the conviction but considered the reduction of compensation. (Paras 1-3)

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Issue of Consideration

Whether the judgment of conviction under Section 138 of Negotiable Instruments Act, 1881 is sustainable and whether the compensation amount awarded is appropriate.

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Final Decision

The revision petition is dismissed. The order of the appellate court reducing compensation to Rs. 4,70,000 is upheld.

Law Points

  • Section 138 Negotiable Instruments Act
  • 1881
  • presumption of legally enforceable debt
  • reduction of compensation amount
  • Section 357 Cr.P.C.
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Case Details

2025 LawText (KAR) (07) 65

CRL.RP No. 996 of 2016

2025-07-09

Shivashankar Amarannavar

Smt. Sona Vakkund (for petitioner), Sri Dinesh Goankar (for respondents - absent)

M/s. Banavathy & Company

Mahaeer Electro Mech (P) Ltd, Rajendra Prasad, Sharath Prasad

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Nature of Litigation

Criminal revision petition against appellate judgment affirming conviction under Section 138 of Negotiable Instruments Act, 1881.

Remedy Sought

Petitioner sought to set aside the appellate order reducing compensation from Rs. 7,10,000 to Rs. 4,70,000.

Filing Reason

Petitioner aggrieved by reduction of compensation amount by appellate court.

Previous Decisions

Trial court convicted accused and ordered compensation of Rs. 7,10,000. Appellate court affirmed conviction but reduced compensation to Rs. 4,70,000.

Issues

Whether the appellate court was justified in reducing the compensation amount without assigning reasons.

Submissions/Arguments

Learned counsel for petitioner argued that the appellate court reduced compensation without reasons.

Ratio Decidendi

The appellate court's reduction of compensation under Section 138 NI Act is a matter of discretion and unless perverse, the High Court in revision will not interfere. The compensation amount of Rs. 4,70,000 is reasonable.

Judgment Excerpts

This revision petition is directed against the judgment dated 30.04.2016 passed in Crl.A.No.968/2014... where under judgment of conviction dated 06.08.2014 passed in C.C.No.25343/2010... has been affirmed and sentence has been reduced from Rs.7,10,000/- to Rs.4,70,000/-.

Procedural History

Trial court (XX ACMM, Bangalore) convicted accused in C.C.No.25343/2010 on 06.08.2014. Appeal (Crl.A.No.968/2014) to LXVI Addl. City Civil and Sessions Judge, Bangalore, which affirmed conviction but reduced compensation on 30.04.2016. Revision petition filed to High Court on 09.07.2025.

Acts & Sections

  • Negotiable Instruments Act, 1881: 138
  • Code of Criminal Procedure, 1973 (Cr.P.C.): 397, 401, 357
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High Court High Court of Karnataka Upholds Conviction in Cheque Bounce Case but Reduces Compensation Amount. Dishonour of Cheque for Rs. 7,10,000 under Section 138 of Negotiable Instruments Act, 1881 - Sentence reduced from Rs. 7,10,000 to Rs. 4,70,000.