Rakesh Kumar Khandelwal vs State of Uttaranchal and Another

Prafulla C. Pant, J.—This revision, is directed against the judgment and order dated 27.04.2001, passed by Additional Sessions Judge/1st Fast Track Court, Nainital in criminal appeal No. 05 of 1999, whereby said court has affirmed the judgment and order dated 08.01.1999, passed by Judicial Magistrate, Haldwani, in criminal complaint case No. 59 of 1995. By said order dated 08.01.1999, the trial court had convicted the Petitioner u/s 138 of Negotiable Instruments Act, 1881 and sentenced him to simple imprisonment for a period of one month and further directed him to pay fine of Rs. 5,000/-.

Heard learned Counsel for the parties present.

Brief facts of the case are that Respondent No. 2-B.P. Bajaj, filed criminal complaint case No. 59 of 1995, stating that the revisionist Rakesh Kumar Khandelwal, had taken a loan of Rs. 10,000/- from the complainant Bharat Finance Ltd. To repay part of said loan, the accused/revisionist Rakesh Kumar Khandelwal, issued cheque No. 340263, dated 13.12.1994, for an amount of Rs. 10,000/- of Nainital Bank Ltd., Branch Haldwani. Said cheque (Ext. A-1) when presented by the complainant (present Respondent No. 2) before the Canara Bank, Haldwani, it was received back by said bank from Nainital Bank Ltd. with the endorsement (Ext. A-5) that there is no sufficient fund in the account No. 328 of the accused/revisionist. On this, complainant sent a notice to the accused/revisionist by post to make the payment within a period of 15 days. However, the accused refused to accept the notice and did not pay the amount, hence the criminal complaint was filed.

The Magistrate on the aforesaid complaint recorded the statement of the complainant u/s 200 of Code of Criminal Procedure and also perused the documents, filed with the criminal complaint and summoned the accused Rakesh Kumar Khandelwal to face the trial in respect of offence punishable u/s 138 of Negotiable Instruments Act, 1881. Thereafter, P.W. 1 B.P. Bajaj (complainant), P.W. 2 Rajendra Lal (an Accountant of the complainant company) and P.W. 3 Rajendra Bhatt (Assistant Manager of Nainital Bank), were examined. The evidence was put to the accused u/s 313 Code of Criminal Procedure in reply to which he alleged that the evidence is false. The trial court after hearing the parties found accused Rakesh Kumar Khandelwal, guilty of offence punishable u/s 138 of Negotiable Instruments Act, 1881 and sentenced to him simple imprisonment for a period of one month and also directed to pay fine of Rs. 5,000/-. Aggrieved by said judgment and order dated 08.01.1998, passed by Judicial Magistrate, Haldwani, in criminal complaint No. 59 of 1995, an appeal No. 05 of 1999, was preferred by the convict before the Sessions Judge, Nainital. Said appeal was heard and disposed of vide judgment and order dated 27.04.2001, passed by Additional Sessions Judge/1st Fast Track Court, Nainital, affirming the judgment and order passed by the trial court. Hence this revision.

Section 138 of Negotiable Instruments Act, 1881, provides that where any cheque drawn by a person on an account, maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, of any debt, or other liability, is returned by the bank unpaid informing that account is insufficient to honour the cheque, such person shall be deemed to have committed an offence, which shall be punishable with imprisonment for a period of not more than two years, or with fine, which may extend to twice of the amount of cheque, or with both.

Learned Counsel for the revisionist pointed out that from the cheque (Ext. A-1) and from the statement given in cross examination by P.W. 1 B.P. Bajaj, it is clear that the cheque given by the revisionist was issued in favour of "self". As such, it cannot be said that the ingredient of offence punishable u/s 138 of Negotiable Instruments Act, 1881, is made out. On perusal of provision contained in Section 138 of Negotiable Instruments Act, this Court finds that cheque must be drawn by a person for payment of money to another person. On further perusal of the lower court record, this Court finds that the cheque in question is issued by accused (revisionist) in favour of "self". P.W. 1 B.P. Bajaj, has admitted in his cross examination that the cheque in question was issued in favour of "self" by the accused Rakesh Kumar Khandelwal. This Court is of the view that unless and until such cheque is endorsed in writing by the payee in favour of the complainant, it cannot be said that merely by being a holder in due course, complainant can prosecute the payee in respect of offence punishable u/s 138 of Negotiable Instruments Act, 1881. Expression "holder in due course" is defined in Section 9 of the aforesaid Act. On the other hand, expression "for payment of any amount of money to another person" in Section 138 expressly makes it clear that the intention of the drawer must be clear to make payment to another person. Since in the present case, the perusal of the cheque (Ext. A-1), shows that there is no endorsement made by the drawer in favour of the complainant in the cheque issued in favour of "self", it cannot be said that the ingredients of the offence punishable u/s 138 of Negotiable Instruments Act, 1881, are made out. Similar view has been expressed by Guwahati High Court in Dr. Jiten Barkakoti v. Subrata Patangia and Anr. 2006 (1) CCC 654.

For the reasons, as discussed above, this Court is of the view that the trial court as well as the lower appellate court have committed error of law in convicting the accused Rakesh Kumar Khandelwal (revisionist) u/s 138 of Negotiable Instruments Act, 1881, on the basis of cheque, issued by him in favour of "self" without making endorsement in favour of the complainant. Therefore, the revision is allowed. The impugned judgment and order dated 08.01.1999, passed by Judicial Magistrate, Haldwani, in criminal complaint case No. 59 of 1995 and judgment and order dated 27.04.2001, passed in criminal appeal No. 05 of 1999, in respect of offence punishable u/s 138 of Negotiable Instruments Act, 1881, is hereby set aside. Revisionist stands acquitted of said offence.

Lower court record be sent back. Revision accordingly stands allowed.