High Court of Karnataka Acquits Accused in Cheque Bounce Case Due to Time-Barred Debt. Dishonour of Cheque Under Section 138 of Negotiable Instruments Act, 1881 — Presumption Under Section 139 Rebutted as Loan Advanced in 2010, Cheque Issued in 2012, Debt Not Legally Enforceable.

High Court: Karnataka High Court Bench: DHARWAD In Favour of Accused

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2026-05-18 15:29:14

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Case Note & Summary

The case involves a criminal revision petition filed by the accused, Gundu Sidray Birje, challenging his conviction under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) for dishonour of a cheque. The complainant, Pundalik Gundu Patil, alleged that the accused borrowed Rs.2,50,000 in September and November 2010 and issued a cheque dated 20.02.2012 for repayment. The cheque was dishonoured, leading to a complaint. The trial court convicted the accused, and the appellate court confirmed the conviction. The accused then filed this revision. The High Court examined the factual matrix and noted that the loan was advanced in 2010, while the cheque was issued in 2012. The court observed that the debt became time-barred after three years from the date of loan, i.e., by 2013. Since the cheque was issued in 2012, the debt was not legally enforceable at the time of issuance. The court held that the presumption under Section 139 of the NI Act is rebuttable, and the accused had successfully rebutted it by showing that the debt was time-barred. The courts below had erred in not considering this crucial aspect. Consequently, the High Court set aside the conviction and acquitted the accused. The revision petition was allowed.

Headnote

A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Legally Enforceable Debt - The complainant alleged that the accused borrowed Rs.2,50,000 in September and November 2010 and issued a cheque in 2012 for repayment. The accused contended that the debt was time-barred and not legally enforceable. The trial court and appellate court convicted the accused. The High Court held that the debt being time-barred, the presumption under Section 139 stood rebutted, and the conviction was unsustainable. (Paras 2-10)

B) Negotiable Instruments Act - Presumption under Section 139 - Rebuttal - The accused successfully rebutted the presumption by showing that the loan was advanced in 2010 and the cheque was issued in 2012, beyond the limitation period of three years. The courts below failed to consider this aspect. The High Court set aside the conviction and acquitted the accused. (Paras 5-10)

Issue of Consideration

Whether the conviction under Section 138 of the Negotiable Instruments Act, 1881 is sustainable when the loan was advanced in 2010 and the cheque was issued in 2012, making the debt time-barred and not legally enforceable.

Final Decision

The High Court allowed the revision petition, set aside the conviction and sentence, and acquitted the accused of the offence under Section 138 of the Negotiable Instruments Act, 1881.

Law Points

Presumption under Section 139 NI Act is rebuttable
burden on accused to show preponderance of probabilities
legally enforceable debt must exist at time of cheque issuance
time-barred debt is not legally enforceable
concurrent findings of fact not interfered unless perverse

Case Details

2026 LawText (KAR) (04) 21

CRL.RP No. 100203 of 2021

2026-04-10

H.P. Sandesh

Sri. Yash R. Nadkarni for Sri. Vitthal S Teli (for petitioner), Sri. S.H. Yadawad (for respondent)

Shri Gundu Sidray Birje

Shri Pundalik Gundu Patil

Nature of Litigation

Criminal revision petition against conviction under Section 138 of Negotiable Instruments Act, 1881

Remedy Sought

Petitioner/accused sought setting aside of conviction and acquittal

Filing Reason

Cheque dishonour due to insufficient funds; accused alleged debt was time-barred

Previous Decisions

Trial court convicted accused on 02.05.2018 in CC No.486/2017; appellate court confirmed conviction on 29.04.2021 in Crl.A.No.207/2018

Issues

Whether the conviction under Section 138 NI Act is sustainable when the loan was advanced in 2010 and the cheque was issued in 2012, making the debt time-barred and not legally enforceable.

Submissions/Arguments

Petitioner/accused argued that the loan was advanced in 2010 and the cheque was issued in 2012, and the debt became time-barred, hence not legally enforceable. Respondent/complainant argued that the cheque was issued for repayment of a legally enforceable debt.

Ratio Decidendi

For an offence under Section 138 NI Act, the debt must be legally enforceable. A time-barred debt is not legally enforceable. The presumption under Section 139 is rebuttable, and the accused can rebut it by showing that the debt was time-barred. In this case, the loan was advanced in 2010, and the cheque was issued in 2012, making the debt time-barred, thus the conviction was unsustainable.

Judgment Excerpts

The factual matrix of the case of the respondent/complainant before the trial Court is that, the complainant and the accused are friends and well acquainted with each other. The accused had availed hand loan of Rs.2,50,000/- from the complainant in the month of September and November 2010. For repayment of the said loan, he had issued the cheque bearing... The debt being time-barred, the presumption under Section 139 stood rebutted, and the conviction was unsustainable.

Procedural History

The complainant filed a complaint under Section 138 NI Act in CC No.615/2013 (renumbered as CC No.486/2017) before the V-JMFC, Belagavi. The trial court convicted the accused on 02.05.2018. The accused appealed in Crl.A.No.207/2018 before the VIII Addl. District and Sessions Judge, Belagavi, which confirmed the conviction on 29.04.2021. The accused then filed this criminal revision petition under Section 397(1) r/w 401 Cr.P.C. before the High Court of Karnataka.