1 Criminal Revision No.280/2007
IN THE HIGH COURT OF JUDICATURE OF BOMBAY
BENCH AT NAGPUR
Criminal Revision Application No. 280/2007
Dilip S/o Rambhau Ingle,
aged about 55 years,
Occupation Labourer,
R/o Sasti, Tahsil Patur,
Dist. Akola .. Applicant
Versus
Nishant Sahakari Gramin Pat
Puravatha Sanstha Maryadit
Akola Headquarter at Nishant Towers,
Gandhi Road, Akola,
through its Manager. .. Respondent.
...
Shri S. V. Bhutada, Advocate for the applicant.
Shri A. B. Patil, Advocate for the respondent.
..
Coram : A. P. Bhangale, J.
Dated : 9/12/2011.
ORAL JUDGMENT :
1] This Revision Application was earlier dismissed in default on 7.6.2010. Thereafter, it was restored by order dated 5 th July, 2010 and posted for final hearing. Learned counsel for the applicant Shri S.
V. Bhutada was heard on 22nd March, 2011 and on 5.12.2011. Today I have heard Shri A. B. Patil, learned counsel for the respondent.
::: Downloaded on - 09/06/2013 17:59:39 ::: 2 Criminal Revision No.280/2007
2] By this revision application, the applicant has challenged
the question of legality, propriety and correctness of the impugned judgment and order dated 29th August 2007 delivered by learned Adhoc Additional Sessions Judge-II, Akola in Criminal Appeal No. 2/2006 arising from the judgment and order dated 17 th December 2005 delivered by Joint Judicial Magistrate, Akola in Summary Criminal Case No.17559/1996.
3] Perused the record and proceedings.
4] The facts, which appear from the record, are as under:-
The complainant is the Co-operative Society doing banking business in the district of Akola. The applicant (accused) had taken loan in the sum of Rs. 20,000/- for the purpose of business with promise to repay amount within 24 months by equal monthly installments of Rs. 1015/-, but the accused did not repay the loan as agreed. The accused, after insisting from the complainant-bank to repay the loan, gave a cheque bearing No. 761370 dated 11.7.1996 drawn upon State Bank of India at Sasti branch in the sum of Rs.26,478.80 ps. The cheque was presented by the complainant-
society for encashment in the bank, but it was returned dishonoured with Memo dated 17.8.1996 with remark "account closed". The ::: Downloaded on - 09/06/2013 17:59:39 ::: 3 Criminal Revision No.280/2007 complainant then issued notice of demand dated 31.8.1996 which was neither replied nor the accused complied with the demand. It is thus alleged that offence punishable under Section 138 of the Negotiable Instruments Act was committed. Thus, complaint came to be filed before the learned Judicial Magistrate First Class, Akola.
5] The accused was charged as per Exhibit 57 to which he pleaded not guilty. The complainant led evidence of its Manager PW 1 Pradeep Kale, Branch Manager of State Bank of India, PW 2 Arun Galgalikar, in order to prove the complaint. PW 1 Pradeep gave evidence regarding transaction which occurred in the year 1994. The accused had borrowed sum of Rs. 20,000/- from the complainant-
society and agreed to repay the amount within 24 months by means of equal monthly installments and furthermore; the fact that cheque issued by the accused in the sum of Rs. 26,478.80 ps on 11.7.1996 drawn upon State Bank of India, branch at Sasti when presented on 7.8.1996 for encashment, it returned dishonoured with Memo dated 17.8.1996 intimating the complainant that the accused had stopped the payment with remark "Payment Stopped". Under these circumstances, notice of demand dated 31.8.1996 was sent by R.P.A.D. as well as under certificate of posting, but the accused did not repay the amount as demanded. Thus, the complainant-society ::: Downloaded on - 09/06/2013 17:59:39 ::: 4 Criminal Revision No.280/2007 was constrained to lodge the complaint. PW 2 Arun, Branch Manager of State Bank of India, Sasti Branch, deposed about the account of the accused with the State Bank of India with cheque-book facility in the name of Swastik Industries. The cheque in question was returned unpaid with remark "payment stopped" vide Memo Exhibit 74.
6] The learned Trial Magistrate, who considered the evidence led, concluded that the accused had committed offence punishable under Section 138 of the Negotiable Instruments Act and convicted the accused accordingly and sentenced him to suffer simple imprisonment of three months and to pay fine of Rs. 1000/- in default the accused was directed to suffer simple imprisonment of one month.
In addition, the accused was directed to pay amount of Rs. 30,000/-
to the complainant towards compensation, expenses etc. 7] The judgment of the conviction and sentence was challenged in Criminal Appeal No.2/2006 before the learned Adhoc Additional Sessions Judge-II, Akola, who by the judgment and order dated 29.8.2007 found that the facts were established. In the result, it was concluded that the learned Trial Magistrate was right in finding of guilt and awarding sentence to the applicant.
::: Downloaded on - 09/06/2013 17:59:39 ::: 5 Criminal Revision No.280/2007
8] On behalf of the applicant, it is argued that the finding
recorded by the Courts below was not proper and sustainable.
According to the applicant, the award in the sum of Rs. 30,000/- by way of compensation is unsustainable on the ground that there is no provision for awarding of compensation separately and that the Court acted without jurisdiction to award the compensation in the sum of Rs. 30,000/-. In the alternative, it is submitted that the punishment awarded was disproportionate and harsh. The learned Advocate for the applicant also argued that if the cheque is dishonoured on account of endorsement "account closed" the case would not be governed by Section 138 of the Negotiable Instruments Act. However, learned counsel appearing for the respondent submitted that such remark to the effect that account was closed by the drawer of the cheque cannot come to the rescue of the accused assuming that it was so pleaded by the accused in the Trial Court. The learned Advocate for the respondent has made reference to the ruling in NEPC Micon Ltd. and others Vs. Magma Leasing Ltd. reported in 1999 (4) ALL MR 367 (Supreme Court) and submitted that closure of the account would be an eventuality after the entire amount in the account is withdrawn.
After issuance of the cheque drawn on 'an account maintained' a person, if he closes his account, then apart from the fact that it may amount to offence of cheating also it would certainly be an offence ::: Downloaded on - 09/06/2013 17:59:39 ::: 6 Criminal Revision No.280/2007 punishable under Section 138 of the Negotiable Instruments Act because there was no sufficient fund to honour the cheque in that account or there was no fund to honour the cheque in that account.
The drawer draw a cheque of an account maintained by him. It is submitted that if one would draw a cheque knowing that it would not be honoured he could have necessarily equally guilty animus. It is further submitted that under Section 138 of the Negotiable Instruments Act intention of the Legislature is to suppress mischief and to advance remedy as the whole object is to promote efficacy of banking transactions. It is submitted that in the present case payment was stopped by the drawer. Therefore, the accused cannot be allowed to take shelter of the fact after having closed the account maintained with his bank. The reference is also made to the ruling in Shivendra Sansguiri Vs. M/s. Adineo and another, reported in 1996 Cr.L.J. 1816 in order to submit that this Court had observed with reference to penal liability under Section 138 of the Negotiable Instruments Act that it is not necessary to prove that there was bank account alive at the time of presentation of cheque in bank. Penal liability under Section 138 of the Negotiable Instruments Act is attracted once the cheque issued by the drawer is dishonoured intentionally by non-payment despite demand in writing. Thus, the debtor who with an ulterior motive issued the cheque in discharge of his debt and then ::: Downloaded on - 09/06/2013 17:59:39 ::: 7 Criminal Revision No.280/2007 closes the bank account either before and after issuance of cheque to avoid debt, he will do so at his own risk of prosecution. Because cheque facility is provided by banker to its customer only when a customer opens an account with the bank by depositing funds. If any customer closes bank account with the bank then it is legal responsibility of the Banker to see that all unused cheque leaves are surrendered to the bank and to ensure that the cheque issued by the customer before closure of the account is honoured. The statutory presumption which arises from the issuance of cheque, and unless such presumption is rebutted by the accused, he continues to remain liable on the ground that cheque was issued in respect of account which he maintained with the bank. The penal liability under Section 138 of the Negotiable Instruments Act is attracted when cheque is dishonoured by non-payment and the amount remains unpaid within the stipulated time, despite legal demand made in respect of dishonoured cheque. Thus, argument is acceptable that closure of the account in the facts and circumstances of this case would not come to the rescue of the applicant to avoid penal liability under Section 138 of the Negotiable Instruments Act.
9] Considering the necessary ingredients of offence punishable under Section 138 of the Negotiable Instruments Act that ::: Downloaded on - 09/06/2013 17:59:39 ::: 8 Criminal Revision No.280/2007 the cheque was drawn by the accused of an account maintained by him with the banker (1) it was presented to the banker but dishonoured by non-payment with remark "payment stopped" by the drawer (2) legal demand was made for the amount of the cheque within stipulated time after the fact of dishonour was intimated to the complainant and (3) the accused had failed to make payment as demanded within the stipulated period after receipt of the demand notice.
10] All these ingredients were found satisfied by the Courts below for which attracted penal liability against the accused under Section 138 of the Negotiable Instruments Act. It cannot be said that in the facts and circumstances that wrong view of the law was taken by any of the Courts below. The impugned judgments are well reasoned and no fault is found with them.
11] In the result, revision application is dismissed.
12] At this stage, learned Advocate for the applicant prays for suspension of sentence of imprisonment for a period of eight weeks on the ground that the applicant would like to approach the higher Court. Learned Advocate for the respondent objected this prayer. If ::: Downloaded on - 09/06/2013 17:59:39 ::: 9 Criminal Revision No.280/2007 the amount of compensation is deposited in the Trial Court within a period of 15 days from the receipt of this order, the substantive sentence of imprisonment shall remain suspended for a period of eight weeks and this order of suspension of sentence shall stand automatically vacated after expiry of eight weeks.
JUDGE Ambulkar.
::: Downloaded on - 09/06/2013 17:59:39 :::