Rajendra Maheshwari vs N.K.B.Securities

This appeal has been filed by the appellant under Section 378(4) of Cr.P.C. being aggrieved by the judgement dated 22.02.2012 passed by the Court

of Judicial Magistrate First Class, Bhopal in RT No. 6926/2008 whereby the respondent was acquitted from the charge under Section 138 of the

Negotiable Instruments Act, 1881.

Brief facts of the case are that the respondent on 10.02.2008 delivered a cheque of Rs. 18,66,000/- of Canara Bank, Branch RNT Marg Indore for

the dues, in favour of the appellant. The appellant deposited the cheque at Allahabad Bank, Branch Kotwali Road, Bhopal which was returned without

payment along with endorsement, the “closure of bank accountâ€. Hence, after issuing notice to the respondent, the appellant filed a complaint

case against the respondent under Section 138 of Negotiable Instrument Act, before the trial Court.

The trial Court acquitted the respondent from the charge under Section 138 of Negotiable Instruments Act levelled against him on the grounds that

the complaint has failed to prove that the cheque holder/respondent received the aforesaid cheque for discharging the dues in favour of the appellant.

The aforesaid finding was upheld in criminal revision No. 405/2010 by the Sessions Judge, Bhopal.

The appellant claimed that the trial Court wrongly acquitted the respondent. Hence, he prayed to set aside the impugned judgment and convict the

respondent for the offence under Section 138 of the Negotiable Instrument Act.

Heard learned counsel for the parties at length. Perused the record.

A registered notice (Ex. P/4) has been given by the appellant to the respondent which was received by him. Thereafter, the respondent submitted

his reply vide Ex. P/9 and stated that the questioned cheque is forged. He contended that it was stolen from the house of the respondent without his

knowledge, then misused by the complainant.

From the cross-examination of the complainant, it appears that the accused (Narendra) is his brother-in-law. In paragraph 14, he deposed that

usually, he gave money to the respondent. Sometime, huge transactions were executed between them. In paragraph 21, he deposed that the cheque

Ex. P/1 was given by the respondent to the complainant at the complainant’s house. It was signed by partner Narendra.

The complainant strongly denied that the cheque was stolen by him from the house of the respondent partner Narendra. In this regard, it is

important that no report has been lodged by the respondent against the complainant/appellant for missing cheque. Further, it seems unnatural that the

cheque book was easily available to the complainant appellant at the house of the respondent. The respondent partner Narendra himself deposed that

his account was closed in the year 2000. This fact was in the knowledge of the appellant. His statement was recorded on 22.09.2011. Therefore, his

statement is found unreliable that the complainant himself filled and issued a cheque on 10.02.2008 in his favour.

In paragraph 8 of his statement, he deposed that from last 10 years, his relation with the appellant was not cordial nor they talked to each other. It

clears the doubt that the cheque Ex. P/1 was stolen from his house in the year 2008 then misused it. This contention seems unnatural and

unbelievable. In paragraph 12, he himself admitted that he has not complained anywhere against the appellant/complainant. In paragraph 15 of the

cross-examination, he further admits that firstly he put company seal on the cheque then signed on it. Cheque Ex. P/1 was sealed with the name of

respondent company. He further admits that he did not file complaint to the police about the aforesaid forgery. Both the witnesses of the respondent

admits that a counter foil of the cheque book was maintained by the cheque holder respondent.

In case of Modi Cements Ltd. vs. Kuchil Kumar Nandi, AIR 1998 SC 1057, once the cheque is issued by the drawer a presumption under Section

139 must follow and merely because the drawn issues a notice to the drawee or to the bank for stoppage of the payment it will not preclude an action

under Section 138 of the Act by the drawee or the holder of the cheque in due course.

The respondents had opportunity to produce said counter foil for rebutting the appellant’s testimony. This counter foil was not produced by him

to corroborated his defence.

However, the Negotiable Instrument Act incorporates two presumptions in this regard ; one containing in Section 118 of the Act and other in

Section 139 thereof. Section 118 (a) reads as under :-

“118. Presumption as to negotiable instruments.â€" Until the contrary is proved, the following presumptions shall be madeâ€

of consideration: that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted,

indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;â€​ Section 139 of the Act reads as under:-

“139. Presumption in favour of holder.-It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the

nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability.â€​

In case of Vijay vs. Laxman & Anr. (2013) 3 SCC 86, the Hon’ble while discussing the case law in case of P.Venugopal vs. Madan P.Sarathi

(2009) 1 SCC 492, it has been held that:

“…..existence of debt or other liabilities has to be proved in the first instance by the complainant but thereafter the burden of proving to the

contrary shifts to the accused. Thus, the plea that the instrument/cheque had been obtained from its lawful owner or from any person in lawful

custody thereof by means of an offence or fraud or had been obtained from the maker or acceptor thereof by means of an offence or fraud or for

unlawful consideration, the burden of disproving that the holder is a holder in due course lies upon him. Hence, this Court observed therein, that

indisputably, the initial burden was on the complainant but the presumption raised in favour of the holder of the cheque must be kept confined to the

matters covered thereby. Thereafter, the presumption raised does not extend to the extent that the cheque was not issued for the discharge of any

debt or liability which is not required to be proved by the complainant as this is essentially a question of fact and it is the defence which has to prove

that the cheque was not issued towards discharge of a lawful debt.â€​

There are concurrent findings of both the below that the complainant has failed to prove that the respondent received the aforesaid cheque for

discharging dues in favour of the appellant.

This Court finds that both the Courts below have not evaluated the evidence on record in the right perspective and wrongly acquitted the

respondent.

In case of Krishna Janardhan Bhat vs. Dattatraya G.Hegde, 2008 (4) SCC 54: 2008 (1) SCR 605 the Hon’ble Supreme Court has held that,

complaint under Section 138 must contain the following ingredients, viz., (I) that there is a legally enforceable debt; (ii) that the cheque was drawn

from account of bank for discharge in whole or in part of any debt or other liability which pre-supposes a legally enforceable debt; (iii) cheque so

issued had been returned due to insufficiency of funds.

In case of Kaushalya Devi Massand vs. Roopkishore Khore, AIR 2011 SC 2566, it was held that, the gravity of a complaint under the Negotiable

Instruments Act cannot be equated with an offence under the provisions of the Indian Penal Code or other criminal offences. An offence under

Section 138 of the Negotiable Instruments Act is almost in the nature of a civil wrong which has been given criminal overtones.

In the light of above discussion and principles laid down by the Apex Court respondent is liable to be convicted under Section 138 of the

Negotiable Instruments Act.

Accordingly, the impugned order dated 22.02.2012 is hereby set aside. Respondent is convicted under Section 138 of the Negotiable Instruments

Act and sentenced for one year rigorous imprisonment. In view of the judgment of Hon’ble Supreme Court in case of Sugandhi Suresh Kumar vs.

Jagdish & Ors, AIR 2002 SC 681, it is further directed that the respondent shall pay compensation amount of Rs. 37,32,000/-(Rs. Thirty Seven

Thousand Thirty Two Lakhs) to the appellant. In case of default of payment of compensation, respondent shall further undergo RI for six months.

Respondent is directed to surrender immediately before the concerned trial Court within five days from the date of order failing which the trial

Court shall take appropriate action under intimation to the registry.

With the aforesaid, the appeal stands allowed and disposed of.