Dilip vs Nishant Sahakari Gramin Pat
2011 Latest Caselaw 196 Bom

                               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.

                               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

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

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.

                              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

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

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

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

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.