Supreme Court to High Courts: Revisional Jurisdiction Is Not a Backdoor Appeal — Cheque-Bounce Conviction Restored

Kuntegowda v. Thurubaiah, 2026 INSC 790 | Supreme Court sets aside Karnataka High Court’s acquittal, reaffirms narrow scope of revisional powers under Section 397 CrPC/Section 438 BNSS
New Delhi, August 4, 2026

A Bench of Justices B.V. Nagarathna and Ujjal Bhuyan has restored a Section 138 Negotiable Instruments Act conviction after finding that the Karnataka High Court exceeded its revisional jurisdiction by re-appreciating evidence and reversing concurrent findings of two lower courts — without any perversity on record to justify doing so.

Background
The complainant alleged that he extended a hand loan of ₹4,50,000 to the accused in December 2010 for the purchase of a house site, to be repaid within a year at 16% interest. When the accused’s cheque for the amount bounced in March 2013 for insufficient funds, the complainant issued a statutory demand notice and, upon non-payment, filed a complaint under Section 138 of the NI Act.
The trial court convicted the accused in 2015, imposing a fine of ₹9 lakh (later reduced to ₹6.5 lakh on appeal). Both the Magistrate and the Sessions Court found the statutory presumptions under Sections 118 and 139 of the NI Act squarely applicable, since the accused admitted his signature on the cheque.
In 2023, however, the Karnataka High Court — exercising revisional jurisdiction — overturned both concurrent findings and acquitted the accused. Its reasoning: the complainant, earning only ₹20,000–25,000 a month, had failed to explain how he arranged ₹4,50,000, and had not specified which relatives he borrowed the money from. On this basis, the High Court held that the accused had successfully rebutted the presumption of a legally enforceable debt.

What the Supreme Court Held

• Revisional courts cannot re-appreciate evidence like an appellate court.
  This is the crux of the ruling. Relying on State of Kerala v. Puttumana Illath Jathavedan Namboodiri (1999) and the recent Sanjabij Tari v. Kishore S. Borcar (2025 INSC 1158), the Court held that a High Court exercising revisional jurisdiction cannot disturb concurrent findings of conviction unless the lower courts’ findings are perverse, grossly erroneous, or based on no material — or unless relevant material was ignored altogether. The mere possibility of a different view on the same facts is not enough. The Bench found that the Karnataka High Court had done precisely what it wasn’t supposed to: conducted a fresh, appellate-style re-evaluation of witness testimony and documentary evidence, without pointing to any glaring illegality in the trial or appellate court’s reasoning.
• The Section 118/139 presumption survives complainant’s modest income.
  The Court reaffirmed that once execution of a cheque is admitted, the presumptions of consideration and legally enforceable debt under Sections 118 and 139 of the NI Act arise automatically and shift the burden to the accused. A complainant is not required, as part of his initial case, to affirmatively prove his financial capacity to advance the loan.
• Financial-incapacity defence should be raised at the notice-reply stage — a pointer for defence counsel.
  Notably, the Court observed that if an accused wishes to contest the complainant’s financial capacity to lend, this ground ought to be specifically pleaded in the reply to the Section 138 demand notice. Absent such an early plea, the accused must independently establish the complainant’s lack of means — through witnesses, documents, or effective cross-examination — rather than expect the complainant to prove capacity as part of his own case.
• Defence documents created after litigation begins carry little weight.
  The accused’s claim — that the cheque had been given as security for an unrelated ₹40,000 loan and was later misappropriated — was undercut by the timing of his own legal notice raising this claim: it was sent in September 2014, over a year after the complaint was filed and after the complainant’s evidence was already recorded. The Court treated this as an afterthought manufactured to build a defence, with no evidentiary value.
  Why It Matters
  For NI Act litigators, this judgment is a reminder on two fronts: first, that the Section 139 presumption remains a formidable hurdle for accused persons to clear, and a bare assertion about the complainant’s income is unlikely to survive scrutiny on its own. Second, and more broadly, it is another in a growing line of decisions — following Sanjabij Tari — where the Supreme Court has pulled up High Courts for treating revision petitions as a second appeal in disguise. Counsel drafting or opposing Section 397 CrPC/Section 438 BNSS petitions in cheque-dishonour matters would do well to keep both threads in mind.
• Case: Kuntegowda v. Thurubaiah, Criminal Appeal (arising out of SLP (Crl.) No. 2247 of 2024), 2026 INSC 790, decided August 4, 2026.