Amolak Textiles vs Uphar Fashions

K. Sreedhar Rao, J.—All the seven appeals arise out of between the same parties and in respect of one and the same transaction where 15 cheques are issued towards repayment of loan liability. The cases are tried separately by the trial court and common judgment is rendered.

The appellant/complainant prosecuted the respondent (accused) for commission of offence u/s 138 of N.I. Act. It is the case of the complainant that the accused borrowed a loan of Rs. 1,95,000/- for his business purpose and issued 13 cheques valuing Rs. 15,000/- each.

Two of the cheques on presentation dishonoured because of ''Stop Payment'' instructions from the accused and other cheques are dishonoured for want of ''sufficient funds''. The Manager of the Bank is examined by the accused to prove that in respect of the 13 cheques, there was ''stop payment'' instruction.

The accused contends that his mother is ailing at Rajasthan and he had to go out and therefore, signed 13 self cheques, given it to his son to meet the financial needs of the business during his absence. The cheques so given, are lost. The accused issued ''stop payment'' instructions to the Bank. The accused denies the borrowing of loan and issuance of the cheque for repayment of the debt liability.

The trial court convicted the accused for the offence u/s 138 of N.I. Act. In appeal, the Sessions Court allowed the appeal of the accused and acquitted him. Hence these appeals by the complainant

The defence theory implicitly admits that the cheques in question pertain to the account of the accused and they bear his signatures. It is, however, contended that the accused had given the self signed cheques to meet the financial needs during his absence at Bangalore. It is also admitted that facing page of the cheque contains the handwriting of the accused. The cheques are drawn for payment between the period from 12.1.02 to 12.1.2003.

The stop payment instruction is given to the Bank on 29.11.01 prior to the dates mentioned in the cheques. In the reply notice and in the examination-in-chief, the accused states that he had to go to Rajasthan to meet his ailing mother, therefore, he signed the self-cheques and delivered the same to his son. The said were lost while in the custody of his son. But in the cross-examination, the accused states that he lost the three cheques along with other documents, he had cancelled his visit to Rajasthan. There is irreconcilable inconsistency in the theory regarding loosing of the cheques. In the first breadth, he says that the cheques were given to his son and it was lost in his custody. In the later version, the accused contends that he lost the cheques along with other documents. The accused also states that he cancelled his visit to Rajasthan and stayed back. This version is not stated in the reply notice where it is only stated that the cheques were given to his son, are lost and the same is misused. The accused has not examined his son to prove the defence theory. The theory that the cheques were lost, the accused unlawfully got the possession of cheques which are mis-used for the purpose of case is not established. The defence theory admits that the cheques belong to the account of the accused. The signature and writing in the cheques is also admitted. The accused has failed to prove that the complainant got the cheques by unlawful means. The presumption u/s 139 of N.I. Act arises in favour of the complainant The accused has not rebutted the presumption.

It is the contention that the cheques are issued as self-cheques, therefore, Section 138 of the N.I Act does not attract The perusal of the cheques discloses that the cheques issued are self cheques, but however, the accused has signed on the obverse of the cheque and endorsed in favour of the complainant Hence, it is to be inferred that the cheques have been duly endorsed and delivered to the complainant who in law is a holder in due course. The subsequent endorsement on the obverse of the cheque in favour of the complainant attracts Section 138 of N.I Act The Punjab and Haryana High Court in a case reported in Mahesh Goyal Vs. S.K. Sharma, has taken similar view with regard to self- cheque. in that view of the matter, the complainant has successfully established the guilt of the accused u/s 138 of N.I Act. Therefore, the order of acquittal is bad in law and the same is set aside.

The order of conviction recorded by the trial court is confirmed. The appeals are allowed.