SC: Production of account books/cash book to prove the amount due - May be relevant in civil suit but not so in a case under Section 138 of Negotiable Instruments Act

The SC upheld Punjab and Haryana HC and the trial court’s order that said the production of cash book is irrelevant in a criminal case under Section 138 of N.I Act but relevant only in a civil case, and ended a 20-year long dispute by showing leniency to the appellant and canceling their jail term.

Facts

The appellant purchased pesticides from respondents on credit and made part payments. On 30.04.1999, a cheque of Rs. 4,17,148/- drawn on State Bank of India at Bathinda was issued, and when presented it was returned with the endorsement 'insufficient funds’, intimated on 26.05.1999 to the respondent. The respondent filed a complaint against the appellant under section 138 of the N.I. Act. for the dishonour of cheque.

Trial Court

The trial court observed that payment was made to discharge the pre-existing debt. Thus, the appellant will be liable for the jail of 6 months under Section 138 of the N.I Act. The Trial Court also imposed a fine of L 4,17,148/- and in default thereof the appellant to undergo imprisonment for two months. Aggrieved, the appellant filed an appeal and ASJ set aside the conviction, allowed the appeal and held that not enough evidence was produced to prove that debt was payable, thereby

overturning the earlier decision.

Appeal to HC

The court again ruled in favor of respondents and rejected the lower appellate court’s reasoning. The HC observed the following, “The reason was given by the lower Appellate Court that he did not bring the cash book or order book etc. could well be understood, if a civil suit is tried" but on the contrary, the order passed by the lower Appellate Court is in the criminal case filed under section 138 of the N.I. Act. Insofar as the authorization in favor of the respondent to file the complaint is concerned, the High Court held that the Resolution of the company dated 22.04.1999 empowered the complainant to file a complaint in all such cases and therefore has no relevance to the date of the cheque i.e. 30.04.1999.”

From HC to SC

The court reiterated the HC’s findings and said that production of the account books/cash book may be relevant in the civil court, but may not be so in the criminal case filed under Section 138 of the N.I.Act. Thus even the SC did not interfere with the conviction of the appellant under Section 138 of N.I Act and gave a nod for the same. Regarding the sentence, the court said that since the case happened way back in 1999, in the interest of justice allowed only the payment of fine and set aside the imprisonment and since the fine was paid earlier, no cost was thus imposed.