Mangat Ram Mehta vs Hari Dutt Sharma

Surinder Singh, J.—On the compliant filed by the Appellant u/s 138 of the Negotiable Instruments Act, in short ''the Act'', Respondent was acquitted by the learned trial Court. Hence this appeal by the Appellant.

Respondent was put on the trial on the allegations that he had borrowed Rs. 17,500/- from the Appellant in the month of April, 1995 which was agreed to be returned on or before 31.1.1996. But the Respondent failed to repay the amount as such issued the cheque bearing No. 775473 dated 6.2.1996 for a sum of Rs. 17,500/- payable at Kangra Central Cooperative Bank on 19.2.1996, which was presented by the Appellant for its encashment but it was dishonoured and returned with the remarks "exceeds arrangements". Thus a legal notice Ext.P1/C was issued to the Respondent which was received and acknowledged by him as Ext.P1/E ,asking him to pay the cheque amount with interest and costs within 15 days from the receipt thereof.

Since the Respondent failed to make the payment, as such complaint was filed in the trial court.

Notice of accusation was put u/s 138 of the Act. Respondent pleaded that cheque in question only bears his signatures and a fraud was committed by the Appellant and no consideration amount had ever passed to him.

To prove its case, complainant examined himself as CW2 on 24.6.2002 and 1.7.2002. His later statement was considered as per his statement recorded before the learned trial court. He also produced Bank official CW1 Punit Singla to prove the memo Ext. P1/B with record of the account opened by the Respondent on 20.1.1996 by depositing an amount of Rs. 500/-.

Respondent in his statement u/s 313 of the Code of Criminal Procedure admitted his signatures on the cheque but according to him it was taken on blank cheques. According to him, he did not deposit any money in his account. He denied his signatures on the acknowledgement. However, he admitted its receipt. He denied having lent any money from the Appellant and opted to lead evidence in defense but no evidence in defense was actually led by him.

Learned trial Court, on the examination of the above evidence doubted the genuineness of the cheque and held that the signatures of the Respondent were different with different inks and took note of the cheque book Ext. D1 qua cheques No. 775471 to 775490 in which cheques from Sr. No. 775471 to 775477 were alleged to be missing and also the judgment passed by the learned CJM Hamirpur in private complaint No. 76-1 of 1996 filed by one Smt. Maya Devi against the Respondent with respect to cheque No. 775476 dated 2.2.1996 vide which the complaint was dismissed and also took into account the complaint dated 28.1.1996 with respect to cheque No. 775472 for a sum of Rs. 17,500/- in the name of Om Parkash son of the - 4 -Appellant and held that no genuineness was attached to the present complaint and also that the notice served upon the Respondent did not contain the specific amount of the cheque as such complaint was dismissed.

The learned Counsel for the Appellant vehemently argued that it stands proved that Respondent had lent the amount of Rs. 17,500/- and he had admitted his signatures on the cheque. It was legally enforceable liability and cheque was issued by the Respondent to satisfy the same. Therefore, the Respondent is liable to make the payment and further that there is no illegality in the notice which is admittedly received by the Respondent. The findings of the learned trial otherwise are incorrect. Hence the judgment of acquittal passed by the learned trial Court is liable to be set aside.

Contra Shri Ashok Sharma, learned Counsel for the Respondent has supported the impugned judgment of acquittal and referred to the cross-examination of the Appellant and urged that there is no fault in the judgment of acquittal.

To appreciate the rival contentions, I have carefully gone through the record of the learned trial Court.

Complainant as CW2 in his statement dated 1.7.2002 substantiated his complaint. He categorically stated that he had lent an amount of Rs. 17,500/- to the Respondent in the month of October, 1995 to which Respondent promised to return on or before 31.1.1996 but in lieu thereof, he issued cheque Ext. P1/A on 6.2.1996 under his signatures. On 19.2.1996, he presented it for encashment which was dishonoured and memo to this effect is Ext. P1/B and thereafter he issued notice Ext. P1/C dated 20.2.1996 and the receipt thereof is Ext. P1/D. The acknowledgement is Ext. P1/E. Notice was received on 22.2.1996 and on 19.3.1996 he filed the complaint.

Respondent did not respond to the said notice. He was subjected to meticulous crossexamination on behalf of the Respondent. He testified that he had sold his Van and was having Rs. 60,000/- in cash with him. Out of which he advanced Rs. 17,500/- to the Respondent. He further stated that cheque Ext. P1/A was filled- in by the Respondent under his signatures. He denied that his - 6 -son had forcibly opened the account of the Respondent in the Kangra Central Cooperative Bank at Una in the month of January, 1996 and that he was made to sign seven blank cheques and later cheque book Ext. D-1 was thrown into his house. He also denied that he had used one of the cheques in the name of Maya Devi who was instrumental in filing the criminal complaint against him. He denied that said Maya Devi was his relative rather stated that he did not know her.

On the scrutiny of the aforesaid evidence it is manifest that the cheque in question was issued by the Respondent for the said amount which was dishonoured as stated by CW1 Punit Singla, Clerk of the aforesaid Bank. Thereafter the legal notice aforesaid was issued which was admittedly received by the Respondent and despite that he did not respond. The legal notice Ext. CW1/C clearly states the cheque amount and also the interest and costs of the notice. Thus I do not find that there has absolutely been no ambiguity and learned trial court misapplied the judgments of Suman Sethi Vs. Ajay K. Churiwal and Another, in the facts and circumstances of this case.

The findings of the learned trial court that the notice itself was defective as the cheques amount was inseparable, is devoid of any substance. In fact, notice aforesaid clearly indicates the cheque amount and also the additional amount which was claimed by him through it, as stated above but it was never responded. The story with respect to the sale of truck aforesaid has no bearing on the merits of this case. Once cheque stands signed by the Respondent to discharge liability, he enters into the commercial world.

To enhance the acceptability of the cheques in settlement of liabilities by making the drawer liable for penalty, in case of bouncing the cheque due to insufficient arrangements made by the drawer with adequate safe guards to prevent harassment of honest drawers, Negotiable Instruments Laws (Amendment) Act 1988 was introduced and passed by the Parliament and it came into force w.e.f. 1st April, 1989. If the cheque is dishonoured for the ''insufficiency of funds'' and that it ''exceeds amount of arrangement'' to be paid, the drawer is required to be punished. The object of - 8 -bringing Section 138 in the Statute appears to be to inculcate faith for the efficacy of banking operation and credible transactive business of negotiable instruments.

In the instant case, it stands proved that the cheque was issued for debt or for that matter, satisfying ''other liability''. It was presented for encashment within the period of validity.

u/s 138 of the Act, there are certain admitted facts and circumstances in which the law raises presumption that the accused is guilty. Moreover there is presumption u/s 139 of the Act in favour of the holder of the cheque. Section 138 and 139 of the Act are only in consonance with the definition contained in Section 4 of the Evidence Act. Section 138 of the Act does not exclude the applicability of Section 243 of the Code of Criminal Procedure which provides for calling into defence by the Court to produce evidence.

In the instant case when the accused was called upon to lead his evidence in defence, he did not opt to do so and his case, as put in the cross examination to the Appellant to which he denied, remained unsubstantiated that the account was - 9 -opened by the Appellant for and on his behalf and he was also introduced by him and blank cheques were taken by the Appellant from him. Even for that matter he also did not choose to send reply to the notice and repell it on the facts as alleged.

Therefore, in these circumstances, in my considered opinion, presumption is in favour of the Appellant who is holder of the cheque, which was presented by him with in six months from its issue to satisfy the debt liability or any other liability knowing fully well that he would be held liable in case the cheque so issued is dishonoured. Therefore, the acquittal of the Respondent recorded by the learned trial Court is perverse. As such for the reasons aforesaid I hold him guilty for the offence punishable u/s 138 of the Negotiable Instruments Act 1988 as amended up to date, as he stands convicted. Since the offence is compoundable as such an opportunity is given to the Respondent to compound the offence. Therefore, the parties be produced on 5.1.2011.