Bombay High Court
Managing Director, Chopda Shetkari Sah ... vs Rajendra Sadashiv Lokre And Anr on 12 August, 2025
2025:BHC-AUG:21783
Cri.Appeal.784.2005
-1-
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
CRIMINAL APPEAL NO.784 OF 2005
Managing Director,
Chopda Shetkari Sahakari Karkhana Ltd.,
Chahardi, Tq. Chopda, Dist. Jalgaon. ... Appellant
(Orig. Complainant)
Versus
1. Rajendra Sadashiv Lokre,
Age : 48 years, Occu. : Business,
R/o. Behind Manohar Theatre,
Dhule, Dist. Dhule
2. The State of Maharashtra ... Respondent
.....
Ms. Pallavi Gavande h/f. Mr. V. B. Patil, Advocate for Appellant.
Mr. Tapan K. Sant, Advocate for Respondent No.1.
Mr. S. S. Dande, APP for Respondent No.2 - State.
.....
CORAM : ABHAY S. WAGHWASE, J.
RESERVED ON : 31 JULY 2025
PRONOUNCED ON : 12 AUGUST 2025
JUDGMENT :
1. Original complainant, who instituted proceedings under
section 138 of Negotiable Instruments Act against present
respondent, has hereby taken exception to judgment and order of
acquittal passed by learned J.M.F.C., Chopda, dated 05.02.2004 in
S.C.C. No. 119 of 1996.
2. In brief appellant's case before trial was, that
Cri.Appeal.784.2005
complainant is a sugar factory. They entered into an agreement with
present respondent - original accused for transporting sugarcane. On
request of original accused, it is complainant's case that accused
borrowed advance of Rs.20,000/- and such demand was complied by
taking a note in the ledger. Accused failed to meet the commitment
and undertaking, consequently legal notice was dispatched for return
of the amount, however, still accused failed to respond. On persuasion
accused issued cheque, but on its presentation it was dishonoured.
Complainant by way of resolution authorized PW1 Prabhakar to take
necessary steps for recovery. Proceedings under section 138 of N.I.
Act were instituted, wherein both, oral and documentary evidence
was adduced. Accused denied legal debt. Learned trial Judge
appreciated the evidence and vide judgment and order dated
05.02.2004 acquitted the accused. Hence, the appeal.
3. Learned counsel for appellant apprised this court about
above factual background and would emphasize that accused has
taken advance cash of Rs.20,000/-. That, there is noting of the same
in the ledger. That, sugar factory had by way of resolution authorized
PW1 Prabhakar to take necessary steps for recovery. That, said
resolution is the part of record. That, bank official is also examined to
demonstrate and establish presentation of cheque issued by accused
and its dishonour. According to learned counsel, legally enforceable
Cri.Appeal.784.2005
debt was established. As required legal notice was dispatched and it
was also received by accused, but he failed to repay the cheque
amount. Thus, according to learned counsel, all legal requirements
were met, however, learned trial court failed to appreciate the oral
and documentary evidence as well as law and erred in acquitting the
accused. Hence, it is urged that appeal be allowed.
4. In answer to above, learned counsel for respondent
supported the impugned judgment by pointing out that, complainant
appellant failed to make out the case under section 138 of N.I. Act.
That, there was no legally enforceable debt. That, there is no evidence
about alleged borrowing or advance. That, legal requirements of 138
of N.I. Act are completely missing. Alleged notice is undated. That,
there is no proof of service of notice. He would point out that, cheque
issued for security was misused. Hence for above reasons, he
supports the findings and conclusion reached at by learned trial
Judge and prays to dismiss the appeal for want of merits.
5. Reanalyzed the evidence i.e. both, oral and documentary
evidence. Apart from adducing evidence of one Prabhakar Gurav,
there is evidence of one Clerk of Jalgaon District Central Co-operative
Bank Limited. Complainant had adduced documentary evidence like
cheque in question, memo, legal notice and postal acknowledgment.
Cri.Appeal.784.2005
6. As stated, PW1 Prabhakar deposed at Exh.24 that he
serves as a Clerk in the sugar factory. Resolution was passed by
sugar factory authorizing him to look after the case, which he
identified to be at Exh.25. He reiterated about accused taking
advance of Rs.20,000/- for executing the work, but committed breach
of contract. Cheque issued on demand towards repayment was also
dishonoured, and therefore, after issuing notice, when there was
failure to repay, complaint was filed by him. His cross examination,
more particularly paragraphs 6, 7 and 8, with relevant portions, are
as under:-
"Cross Exam by Mr. Barma Adv.
"I am serving in the Sugar factory since 1994 as a clerk I
am dealing with agriculture table. I am not signatory of this
complaint. It is not true the M. D. has no right to launch the
complaint. I have not produced such resolution. The resolution
Exh.25 does not give details of this case. So as to point out I have
been authorised for this case. It is true Exh. 25 authorise two
more person alike me. Not true I have no right to give evidence
for and on behalf of complainant.
Qus. Can you details of the agreement took place between the
complainant and accused?
Ans. : Yes.
The accused had agreed to carry sugarcane in his truck
from the land of agriculturist to the factory.
Cri.Appeal.784.2005
I cannot say whether accused has furnished any surety.
The portion mark A in the complaint now read over to me that
the agreement was regarding surety is correct. Not true to say in
view of the surety agreement a blank cheque under signature of
accused was obtained from him. I have not produced document
to show that accused demanded advance. It is not true no
amount was paid in advanced to accused. On giving advance
payment to the accused receipt in that regard was given by the
accused in favour of the complainant. I have not produced said
receipt. I cannot assign any reason why it has not been produced.
I cannot specify the date on which the complainant demanded
the refund of advance payment. I have not produced copy of
earlier demand notice. It is true my complaint is silent regarding
earlier demand. Not true as no demand was raised therefore such
contention is not raised in the complaint.
7. It is not true the accused had given the cheque exh.27 to
the complainant as a security. It is not true it was the bank
cheque and the complainant has filled other details in the
cheque. Not true the cheque was not tendered in the bank for
encashment.
8. It is true it is not mentioned in the complaint that the bank
intimation shows the word" Referred to Drawer is not written. It
is true the very endorsement is not written in the notice exh. 29.
I cannot say any reason thereof. It is not true it is incorrectly
written in the complaint that the accused was knowing that there
is no sufficient fund in his bank account at the time of issuing
cheque. It is not true it is incorrectly written in the complaint that
the cheque was returned unpaid due to insufficient fund in the
account of accused with the bank."
Cri.Appeal.784.2005
7. Another witness PW2 is Ravishankar Gujarathi a Clerk of
the Bank and he in his evidence at Exh.33 testified about account of
bank with them, about receipt of cheque drawn by accused, it being
dishonoured with remark "insufficient funds". He identified bank
memo.
8. Learned counsel for appellant submitted that all legal
requirements of section 138 of N.I. Act were met and available.
However, here, though PW1 Prabhakar deposed about contract being
entered between accused and complainant, copy of the same is not
placed on record. Only extract of ledger entry is placed on record, but
unless it carries details of need for payment, mere oral submissions
and ledger copy would itself not be sufficient to accept the case of any
agreement and contract being forged between the parties.
9. Secondly, on re-appreciation it is emerging that, in cross
examination, PW1 Prabhakar has admitted that, in the very
complaint under section 138 of N.I. Act, there is no reference about
endorsement or remark "Referred to Drawee". He has also admitted
that, even demand notice allegedly issued to the accused, is also
silent on above aspect.
10. Learned counsel for respondent has denied very receipt
of legal notice. It is pointed out that, Exh.29 so called notice is
Cri.Appeal.784.2005
undated. On visiting said Exhibit, apparently it is undated. Date has
bearing because 138 of N.I. Act requires timeline to be followed for
presentation of cheque, requirement of clear remark on bank memo/
intimation and further requirement on dispatching notice. However,
here notice is undated and therefore complainant's case suffers a
serious impact.
11. The Hon'ble Supreme Court in the case of H. N. Jagdeesh
v. R. Rajeshwari, (2019) 16 SCC 730, held that, "service of a
statutory notice demanding payment is a necessary precondition for
filing a complaint under Section 138". Here, as stated above, very
notice is undated and therefore exactly when it was issued and when
it was received is not cogently proved.
12. Therefore, prima facie, essential requirements of section
138 of N.I. Act are patently missing in the appellant's case before
trial court.
13. Specific defence of accused is that, there was no legally
enforceable debt and complainant failed to discharge the very
primary burden of proving existence of legally enforceable debt.
Stand taken is of issuance of cheque for security. The Hon'ble Apex
Court in the case of Sudhir Kumar Bhalla v. Jagdish, (2008) 7 SCC
Cri.Appeal.784.2005
137 held that, "the offence under section 138 of the N.I. Act applies
when cheques are issued to discharge a debt or other liability, not
when issued as security".
As stated above, no case even for drawing presumption
available under section 139 of N.I. Act is made out. On the contrary,
in view of above discussion, there are several technical and vital
defects. As pointed out by learned counsel for respondent, doubt is
also entertained about authenticity of signature of accused
respondent over the instrument and there is discussion on this by the
trial court in paragraph 24 of the judgment. Learned counsel for
appellant has not clarified such findings nor has challenged it.
14. To sum up, here, complainant has failed to make out a
case for action under section 138 of N.I. Act. This court finds no fault
or perversity so as to interfere in the impugned judgment. Hence,
appeal is dismissed.
(ABHAY S. WAGHWASE, J.)
Tandale
