Borrower cannot escape from prosecution and criminal liability for the dishonour of cheque

Last updated: 20 January 2023

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Quick Summary

The Karnataka High Court has ruled that a borrower cannot escape criminal liability for a dishonoured cheque under Section 138 of the Negotiable Instruments Act, 1881. The court overturned a previous acquittal, finding that common defences such as the demand notice not being served directly, minor alterations on the cheque, or the transaction violating the Income Tax Act, do not exempt the borrower. The court emphasised that failure to prove a defence leads to conviction.

Court :
Karnataka High Court

Brief :
The Hon'ble Karnataka High Court in Sri Karibasappa v. Sri Mallikarjun [Criminal Appeal No. 200106/2020, dated December 16, 2022] set aside the acquittal order passed by the Trial Court and sentenced the accused to pay a fine of INR 2,00,000/- or to undergo imprisonment of 3 months. Further,prescribeda list of grounds that wouldn't exempt the borrower to escape from the prosecution and criminal liability for the dishonour of cheque under Section 138 of the Negotiable Instruments Act, 1881 ("the NI Act").

Citation :
Criminal Appeal No. 200106/2020, dated December 16, 2022

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