Vikas Jain and Others vs Mukesh Agrawal and Others

Sanjay K. Agrawal, J.—This order shall govern disposal of above mentioned both the revisions as common question of fact and law are involved and shall stand disposed of by this common order. The complainant-Mukesh Agrawal filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter called as "NI Act"), stating inter alia that on 8-9-2003 towards the existing liability, the accused-Vikas Jain issued a cheque No. 237579 amounting Rs. 30,740/- to him which was dishonoured on account of insufficient fund in his account. After serving legal notice, when the amount was not repaid, the complaint was filed for commission of offence punishable under Section 138 of the Act, in which, the accused-Vikas Jain abjured the guilt by pleading that he has falsely been implicated in the case and entered into defence.

In order to prove the offence, the complainant examined himself as P.W. 1 and brought eight documents on record, whereas, the defence examined two witnesses and brought six documents on record.

The Trial Magistrate after considering contentions of the parties and evidence available on record, convicted the accused Vikas Jain for offence under Section 138 of the Act and sentenced him to undergo imprisonment for six months and to pay fine of Rs. 4000/-. On appeal preferred by the accused-Vikas Jain, the Appellate Court maintained the conviction order, however, modified the sentence by enhancing the fine amount from Rs. 4000 to Rs. 39,740/- and further directed that amount Rs. 35000/- will be paid to the complainant as compensation.

Feeling dissatisfied with the conviction for offence under Section 138 of the Act, the accused-Vikas Jain preferred Criminal Revision No. 18/06, whereas the complainant-Mukesh Agrawal being dissatisfied with the sentence of fine only, preferred Criminal Revision No. 63/06. Both the above stated revisions were clubbed together for analogous hearing. This is how, two criminal revisions have been tagged and placed before this Court for hearing.

Shri M.K. Bhaduri, learned Counsel appearing for the accused-Vikas Jain would submit that conviction recorded and sentence awarded by both the Courts below are absolutely illegal in view of fact that there is no pre-existing liability on his part towards complainant-Mukesh Agrawal and as such the conviction recorded is bad in law and deserves to be set aside.

Shri Rakesh Pandey, learned Counsel appearing for the complainant-Mukesh Agrawal submits that the only sentence of fine imposed by the Appeal Court is contrary to the punishment prescribed in Section 138 of the NI Act, therefore, the impugned judgment be set aside and the accused-Vikas Jain be awarded jail sentence in addition to fine sentence.

I have heard the learned Counsel appearing for the parties and perused the order impugned including records of the case carefully.

Upon hearing both the Counsels, following two questions arise for determination:--

(I) Whether the conviction of Vikas Jain for offence under Section 138 of the Act is just and proper ?

(II) Whether the only punishment of fine imposed upon the accused - Vikas Jain by the Appeal Court is just and proper?

Answer to question No. 1:

I shall first take up the plea of Shri Bhaduri that there was no preexisting liability against the complainant to make payment of Rs. 30,740/- by cheque stating that the purchased articles have been delivered back to the complainant-Mukesh Agrawal and duly received by Ramchandra Agrawal, i.e., employee of complainant-Mukesh Agrawal vide Exh. D-3. The Trial Court has clearly recorded a finding that the cheque has been issued towards pre-existing liability and the accused-Vikas Jain has failed to establish that there was no such liability as Ramchandra Agrawal who had allegedly received the goods in question back from the accused has not been examined by the accused.

Section 139 of the NI Act provides 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."

The presumption mandated by Section 139 of the Act was considered by the Supreme Court in a decision reported in Rangappa Vs. Sri Mohan, , it has been held the presumption available under Section 139 of the NI Act includes presumption that there exists a legally enforceable debt or liability, though such presumption is rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. Thus, the initial presumption provided in aforesaid provision favors the complainant and accused can rebut the said presumption and discharge the reverse onus by adducing evidence. The aforesaid decision has been followed and retaliated by the Supreme Court in S. Natarajan Vs. Sama Dharman, .

The Trial Magistrate has clearly recorded a finding that there was a legally enforceable liability and in discharge of that, cheque in question was issued to the complainant and that has returned due to insufficiency of fund in the account of accused, and the accused-Vikas Jain has failed to establish the fact that he had no pre-existing liability as the goods in question had already been returned to the complainant. Thus, the said findings of Trial Court has been affirmed by the Appellate Court. The said finding is based on evidence available on the record and in which, I do not find any illegality and as such the applicant has rightly been convicted by Trial Court and the Appellate Court has not committed any illegality in affirming the same.

Answer to Question No. 2:

The material portion of Section 138 of the NI Act provides as under:--

"138. Dishonour of cheque for insufficiency, etc., of funds in the account.--Where any cheque drawn by a person on an account maintained by him with banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arrange to be paid from that account by an agreement made with that banker, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for a term, which may extend to one year, or with fine, which may extend to twice the amount of the cheque, or with both:

Provided that nothing contained in this section shall apply unless :--

(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice."

By virtue of Section 138 of the NI Act, the Criminal Court after convicting the accused has to impose punishment of imprisonment, which may extend to one year, or with fine, which may extend to twice the amount of the cheque, or with both.

The Trial Court after convicting the applicant sentenced him to undergo RI for six months and also imposed sentence of fine of Rs. 4000/-. The Appellate Court, after due consideration, modified the sentence by enhancing fine amount from Rs. 4000/- to Rs. 39740/-.

In case of State of Maharashtra Vs. Jugamander Lal, . Their Lordships of the Supreme Court has held that, expression "shall be punishable for imprisonment and also for the fine", means that the Court is bound to impose a sentence comprising both imprisonment and fine.

Furthermore, Their Lordships of the Supreme Court in a decision reported in The Assistant Commissioner, Assessment-II, Bangalore and Others Vs. Velliappa Textiles Ltd. and Others, , has held as under:--

""35. ......Where the legislature has granted discretion to the Court in the matter of sentencing, it is open to the Court to use its discretion. Where, however, the legislature, for reasons of policy, has done away with this discretion, it is not open to the Court to impose only a part of the sentence prescribed by the legislature, for that would amount rewriting the provisions of the statute."

But, here in the instant case, in Section 138 of the NI Act the word "or" has been employed and discretion has been conferred to the Criminal Court sentencing the convicted person for offence under Section 138 of the NI Act. Thus, there is a discretion left with the Criminal Court either to sentence him with imprisonment or to punish him with the sentence of fine only considering the facts and circumstances of the case.

The First Appellate Court, in exercise of its appellate jurisdiction has considered the matter and exercised the discretion vested in law and modified the sentence by enhancing the sentence of fine to Rs. 39,740/- holding that the imposition of sentence of fine would serve the ends of justice considering the nature and gravity of the offence. In the considered opinion of this Court, the discretion exercised by the Appellate Court imposing only sentence of fine, which is permissible under Section 138 of the NI Act is based on sound reasons and it cannot be concluded that the learned Sessions Judge has committed an illegality in awarding only sentence of fine for commission of offence punishable under Section 138 of the NI Act.

Consequently, both the revisions being sans substratum are liable to be and hereby dismissed. Copy of this order be placed on record of Criminal Revision No. 63/2006. No order as to cost(s).