Bombay High Court

Shashikant S/O. Pandurang Giri vs Narayan S/O. Babasaheb Narwade on 12 July, 2022

Bench: R. G. Avachat

                                                  Criminal Appeal No.331/2018
                                      :: 1 ::


           IN THE HIGH COURT OF JUDICATURE OF BOMBAY
                               BENCH AT AURANGABAD


                     CRIMINAL APPEAL NO.331 OF 2018


 Shashikant s/o Pandurang Giri
 Age 37 years, Occu. Business,
 R/o plot No.159, New S.T. Colony,
 Meenatai Thakare Nagar,
 N-2, CIDCO, Aurangabad
 District Aurangabad                                 ... APPELLANT

          VERSUS

 Narayan s/o Babasaheb Narwade,
 Age major, Occu. Business,
 R/o C/o Madhukar Vishwanath Hande,
 "DHANAI", Plot No.367,
 CIDCO Mahanagar-1, Aurangabad                       ... RESPONDENT

                              .......
 Shri R.B. Ade, Advocate for appellant
 Shri Ketan D. Pote, Advocate for respondent (appointed)
                              .......

                                  CORAM :       R. G. AVACHAT, J.

                  Date of reserving judgment : 1st February, 2022
                  Date of pronouncing judgment : 12th July, 2022

 JUDGMENT:

This is an appeal against acquittal. The appellant

herein is the original complainant in Summary Criminal Case,

being S.C.C. No.954/2015 instituted for the offence

punishable under Section 138 of the Negotiable Instruments

Act. The respondent herein was the accused in the said case.

Criminal Appeal No.331/2018 :: 2 ::

The trial Court, on appreciation of evidence in the case,

acquitted the respondent simply on the ground that the

statutory demand notice did not disclose what type of

transaction it was between the appellant and the respondent.

The trial Court held that the receiver of a notice must at least

know his legal liability for which cheque was issued. Since

such details were not in the demand notice, the notice was

held to be not legal and proper.

2. This Court had admitted the appeal. On service of

notice of this appeal, the respondent marked his appearance

through an Advocate. When the appeal was taken up for final

hearing, neither the respondent nor his Advocate were

present. This Court, therefore, appointed Shri Ketan G. Pote,

learned counsel to assist the Court in this matter by

representing the respondent herein.

3. Learned counsel for the appellant would submit

that, issuance of the cheque is the fact not in dispute. On

receipt of the statutory demand notice, the respondent did not

reply. A sum of Rs.3,05,000/- was paid to the respondent as

a hand loan in the presence of witnesses. During trial, the

respondent failed to make out his case or rebut a statutory

Criminal Appeal No.331/2018 :: 3 ::

presumption. According to learned counsel, the statutory

demand notice need not necessarily contain details of

transaction. Learned counsel has relied on the judgment of

the Apex Court in case of Central Bank of India Vs. M/s

Saxons Farms [ 2000(1) Mh.L.J. 366 ]. He ultimately urged

for allowing the appeal with grant of compensation amounting

to twice the amount of cheque.

4. The learned counsel for the respondent would, on

the other hand, submit that, the respondent examined himself

on oath. It is in his evidence that he had paid the amount to

the appellant time to time. The appellant torn a colour photo

copy of the cheque. The respondent thought that the original

cheque was destroyed. No monetary transaction did exist

between the two post destroy of the cheque. According to

learned counsel, the statutory demand notice is silent to

disclose what kind of transaction it was. The learned counsel

reiterated the reasons given by the trial Court in support of

the judgment of acquittal.

5. Considered the submissions advanced. Perused

the evidence relied on. Gone through the citation placed on

record. Before adverting to the factual matrix, reference to

Criminal Appeal No.331/2018 :: 4 ::

the relevant provisions of the Negotiable Instruments Act,

1881 is necessary. Sections 138, 139 and 142 of the Act are,

therefore, reproduced below :-

"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 a 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 arranged to be paid from that account by an agreement made with the bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may be extended 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 thirty 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

Criminal Appeal No.331/2018 :: 5 ::

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.

Explanation :- For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.

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.

...................

142. Cognizance of offences :-

(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), -

(a) no Court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque;

(b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138.

Provided that the cognizance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period;

(c) no Court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class

Criminal Appeal No.331/2018 :: 6 ::

shall try any offence punishable under Section 138.

(2) The offence under section 138 shall be inquired into and tried only by a Court within whose local jurisdiction, -

(a) if the cheque is delivered for collection through an account, the branch of the bank where the payee or holder in due course, as the case may be, maintains the account, is situated; or

(b) if the cheque is presented for payment by the payee or holder in due course, otherwise through an account, the branch of the drawee bank where the drawer maintains the account, is situated.

Explanation:- For the purposes of clause (a), where a cheque is delivered for collection at any branch of the bank of the payee or holder in due course, then the cheque shall be deemed to have been delivered to the branch of the bank in which the payee or holder in due course, as the case may be, maintains the account."

6. The respondent admitted issuance of a cheque in

favour of the appellant/ complainant. Necessarily

presumption under Section 139 of the Act does get attracted.

The relations between the appellant and the respondent were

friendly. The appellant was in construction business. The

respondent was sand supplier. According to the respondent,

he had made a bid in an auction of a sandspot. The

Government had granted stay for some time. The stay was

subsequently withdrawn. He had agreed to pay 3% of the

Criminal Appeal No.331/2018 :: 7 ::

income from the business to the appellant. It is further his

case that, whatever was due from him to the appellant had

been paid. The appellant, in turn, torn the cheque in his

presence. He then realised what was torn was a colour photo

copy of the original cheque.

7. As against this, the appellant reiterated his case to

have had paid a sum of Rs.3,05,000/- to the respondent as a

hand loan. According to him, he had obtained the said

amount from his father since he has retired from service on

superannuation. From the evidence on record, a true nature

of transaction between the two is not forthcoming. The fact,

however, remains that the respondent had issued a cheque in

favour of the appellant. It has, therefore, to be presumed

that the cheque was issued in discharge of legally enforceable

debt. When the statutory demand notice was issued to the

respondent, and the same was received by him, he failed to

respond to the notice. He had every opportunity to put forth

his case in reply to the notice. Whatever he has deposed to in

his defence evidence may be said to be afterthought. The

trial Court has observed everything in favour of the appellant/

complainant, but acquitted the respondent only on the ground

that the statutory demand notice did not contain what kind of

Criminal Appeal No.331/2018 :: 8 ::

transaction it was between the two. In view of this Court, the

trial Court erred in so observing. In case of Central Bank of

India (supra), the Apex Court observed :-

"Negotiable Instruments Act, Section 138(b) - Dishonour of cheque - Notice demanding amount of cheque - No form of notice is prescribed in Section 138(b) - The requirement is that notice shall be given in writing within fifteen days of receipt of information from the bank regarding return of cheque as unpaid and in the notice demand for payment of amount of cheque has to be made."

8. The statutory demand notice (Exh.18) is on

record. It has been specifically mentioned therein that the

respondent was called upon to pay the appellant a sum of

Rs.3,05,000/-, being the amount under the cheque. No fault

with the demand notice (Exh.18), therefore, could be found.

The order of acquittal passed by the trial Court, therefore,

needs to be interfered with.

9. Since the amount was said to have been given to

the respondent as a hand loan, and it was a friendly

relationship between the two, this Court do not propose to

saddle the respondent with either compensation or fine equal

Criminal Appeal No.331/2018 :: 9 ::