Triloki Singh vs State Of Jharkhand
2021 Latest Caselaw 3751 Jhar

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          IN THE HIGH COURT OF JHARKHAND AT RANCHI
                     Cr. Revision No.954 of 2012

           Triloki Singh, son of Late Tarkeshwar Singh,
           resident of nawatoli, P.O. & P.S. Medininagar,
           District - Palamau                       ...         Petitioner
                                  Versus
          1. State of Jharkhand
          2. D. N. Prasad, son of not known to the petitioner,
            Branch Manager, Bihar State Financial Corporation,
            Daltonganj Branch, Nasheman Building,
            Jail Compound, P.O. & P.S. - Daltonganj,
            District - Palamau                ...        Opposite Parties
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CORAM: Hon'ble Mrs. Justice Anubha Rawat Choudhary

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          For the Petitioner            : Mr. A.K. Sahani, Advocate
          For the Opp. Party No.2       : Mr. Anish Mishra, Advocate
          For the State                 :

                      Through:Video Conferencing

12/01.10.2021 Heard Mr. A.K. Sahani, learned counsel appearing on behalf of the petitioner.

2. Heard Mr. Anish Mishra, learned counsel for the State, Advocate.

3. Heard Mr. Tapas Roy, learned counsel appearing on behalf of the State.

4. Present revision petition is directed against the judgment dated 19th September 2012 passed by learned Additional Sessions Judge-I, Palamau at Daltonganj in Cr. Appeal No.20 of 2006, affirming the judgment of conviction, but modifying the sentence of the petitioner in connection with the offence under Section 138 of Negotiable Instrument Act, 1882 (Hereinafter referred as N.I. Act).

5. The petitioner was convicted vide judgment and sentence dated 27.02.2006 passed by learned Judicial Magistrate, 1 st Class, Palamau at Daltonganj in C.P. Case No.189 of 1997 (T.R. No.442 of 2006), under Section 138 of N.I. Act and was sentenced for simple imprisonment for a period of one year with a fine of Rs.2,000/- and in default of payment of fine, he was directed to

undergo further simple imprisonment for a period of three months.

6. The learned Appellate Court modified the sentence and directed that the petitioner would pay a fine of Rs.2,10,000/- and in default of payment of fine, he has to serve simple imprisonment for a period of six months.

Arguments of the petitioner

7. Learned counsel for the petitioner has submitted that the condition precedent for constituting an offence under Section 138 of N.I. Act has not been satisfied in the present case, in as much as, the legal notice regarding bouncing of cheques, which is said to have been sent by the complainant to the petitioner, has not been exhibited before the learned court below and there is no finding regarding date of dispatch and/or service of legal notice and only one receipt regarding registered post has been exhibited as exhibit-2. He has also been submitted that the postal receipt on account of dispatch by itself does not prove the dispatch of legal notice and further no date regarding dispatch of legal notice to the petitioner has been mentioned in the complaint petition or even in the oral evidence. He submits that mere bouncing a cheque is not enough to constitute an offence under section 138 N.I Act. Learned counsel submits that in view of the aforesaid facts, the conviction of the petitioner for the offence under Section 138 of N.I. Act cannot be sustained in the eyes of law.

Arguments of the opposite parties

8. The learned counsel appearing on behalf of the opposite party No.2 has opposed the prayer and has referred to a Judgment passed by the Hon'ble Supreme Court in (2018) 8 SCC 165 (Kishan Rao Vs. Shankargouda) to submit that there is presumption in favour of holder of cheque in terms of Section 139 of N.I. Act and in the instant case, issuance of cheque and the fact that it had bounced due to insufficient funds is not dispute. It is submitted that the petitioner, though was entitled

to raise a probable defence to create doubt with regard to existence of debt or liability, had not discharged his burden and accordingly the petitioner has been rightly convicted for the offence under Section 138 of N.I. Act. He has further submitted that there is no scope of re-appreciation of materials on record and coming to a different finding in revision jurisdiction and the discrepancies, which has been pointed out by learned counsel for the petitioner are not material discrepancies, so as to call for any interference in revisional jurisdiction. He submits that the learned courts below have rightly come to the concurrent findings with regards to the fact that condition precedent for constituting the offence under Section 138 of N.I. Act were satisfied and accordingly no interference is called for by this Court in revisional jurisdiction.

9. The learned counsel for the opposite party state has supported the learned counsel for the opposite party no.2. Findings of this court

10. After hearing the learned counsel for the parties, this Court finds that it was specific case of the complainant that a term loan of Rs.11.50 lacs was sanctioned and disbursed by Bihar State Financial Corporation ( hereinafter referred to as BSFC), Daltonganj to the petitioner, which was to be repaid with interest. Later on, the petitioner made request for fixing instalment and tendered post-dated cheques. As per the terms and condition, post dated cheque dated 25.02.97 amounting to Rs.75,000/- and dated 25.10.96 amounting to Rs.30,000/- were presented for collection but the same were returned unpaid with remarks exceeds arrangement. Thereafter the matter was informed by the bank to BSFC who sent a notice to the petitioner in this respect through its lawyer under registered post for payment of cheque amounts within 15 days, but all efforts went in vain and thereafter the complaint case was filed on 03.05.1997.

11. This Court finds that in the complaint, the material particulars in connection with the date, on which, the BSFC

received informed about the bouncing of cheques from the bank ; the date of which the legal notice was sent and the date on which the legal notice, if any, was served / deemed to have been served, have not been mentioned. Even the legal notice has not been exhibited before the learned court below. However, the complaint case was filed on 3.05.1996, and the learned Trial Court found a prima facie case for offence under Section 138 of N.I. Act and under Section 420 of Indian Penal Code vide order dated 3.04.2000 and the charge was also framed under the same sections on 11.03.2003, which was read over to the petitioner and he pleaded not guilty and claimed to be tried. The statement of the petitioner was recorded under Section 313 of Cr.P.C. on 21.12.2005 and the petitioner pleaded not guilty and claimed himself to be innocent.

12. The complaint had examined altogether five witnesses and proved two cheques, which was marked Ext.1 and 1/1 and proved the postal receipt, which was marked as Ext-2.

13. On the other hand, the defence though did not examine any oral witness, but proved the letter dated 16.10.1996 of BSFC and the original receipt of BSFC dated 7.02.1997 and original receipt of BSFC dated 27.05.1997, which was marked as Ext. A, Ext. B and Ext- B/1 respectively. Ext.- B and B/1 were the receipt of Rs.35,000/- and Rs.25,000/- respectively issued by BSFC.

14. Although five witnesses were examined including complainant, who was examined as PW - 3, but his evidence also was lacking in the material particulars in connection with the date of knowledge relating to bouncing of cheques, the date of issuance of legal notice, the date on which the legal notice was served / deemed to have been served upon the petitioner, even the postal receipt, which has been exhibited as exhibit -2 , no date has been mentioned with regard to the postal receipt and no date has been mentioned regarding the legal notice which has not even been exhibited before the learned court below although PW-3 had deposed that a notice regarding dishonour of cheques

was given to the petitioner and in spite service of notice, the loan amount is not deposited. The certificate of the bank by which the complainant was communicated about bouncing of the cheque was also considered by the learned court below.

15. The learned trial court considered the evidence on record and recorded its findings at para - 14 of the judgment and recorded that the basic ingredients for offence under Section 420 of IPC was not made out and acquitted the petitioner for the offence under Section 420 IPC.

16. So far as the offence under Section 138 of N.I. Act is concerned, the finding was recorded as under:

"Whereas the liability for the dishonour of the alleged cheque against the accused person has been found true supported by documentary evidence Ext- 1, 1/1 and 2 and also certificate of the bank, admitted documents, all the ingredients for the offence under Section 138 of N.I. Act is satisfied with the present facts and circumstances of the case. Hence the accused person is found guilty for offence committed by him under Section 138 of N.I. Act, accordingly he is convicted.".

17. So far as the appellate court is concerned, the findings recorded in para 10 and 11, are as follows: -

10. The complainant proved certain documents which have been marked as Exts. viz. Cheque no. 645194 dated 25.10.96 - Ext. 1, cheque no. 645198 dated 25.2.97 Ext. 1/1 and acknowledgment of post office to show service of registered legal notice- Ext.2. The defence has also produced certain documents which have been marked as Exhibits viz. Letter of Bihar State Financial Corporation Memo No. Zone IV/485/96-97 dated 16/17.10.96 Ext. A, receipt of Bihar State Financial Corporation for Rs. 35,000/- and Rs. 20,000/-dated 7.2.97 and 27.5.97 respectively- Ext. B and B/1. The certificate of bank regarding dishonour of cheques with a remark "exceed arrangement" is an admitted document and defence has not made any objection to the same.

11. The evidence on record as regards the alleged dishonour cheques is consistent, cogent, corroborated and reliable. This is an admitted case of appellant that dishonour of cheques had occurred. Moreover, it is obvious that complaint case has been filed which is not hit by any infraction of the procedural requirement under the N.I. Act. The legal requirement is that the cheque must be presented within six months from the date

on which it is drawn or within the period of its validity and the drawee/payee/holder in due course must make a demand for the payment of the cheque amount by giving a written notice to the drawer of the cheque within 15 days (now within 30 days) of the receipt of the information of dishonour of cheque. The complaint must be made within one month of the date on which the cause of action arises, in absence of sufficient cause for not making the complaint within such period. In this case two cheques have been issued which give rise to the presumption that the cheques were issued in discharge of any debt or other liability, if the contrary is not proved. In this case the convict-appellant has totally failed to rebut the said presumption of law against him. The defence of the appellant that the repayment was made does not hold good as the alleged repayment was not in connection with the dishonour cheques. All the ingredients of sec. 138 of N.I.Act are satisfied in view of the materials available on record. The learned lower court has rightly found the accused- Triloki Singh guilty and convicted him for committing the offence punishable u/s 138 of N.I. Act.

18.The findings of the appellate court has referred to Ext. 2 as "acknowledgment of postal office to show service of registered legal notice- Ext. 2". The said Ext.- 2 was referred to as "postal receipt" in the impugned appellate judgement at para 4 . The exhibit -2 has been referred to as "receipt of postal office to show the service of registered legal notice "by the Trial Court at para

10. Thus, the description of exhibit-2 has been differently given at different places in the impugned judgements. The learned counsel for the petitioner has submitted that exhibit-2 was the postal receipt which has not been disputed by the learned counsel for the opposite parties. Upon perusal of the lower court records, this court finds that Ext-2, is postal receipt issued by the post office and is neither acknowledgment regarding receipt of legal notice nor the same is the legal notice.

19.Thus, from the case records, it appears that the prosecution had exhibited the cheques and also proved the postal receipt and successfully proved that the cheques were issued by the petitioner, which had bounced due to insufficient funds.

20. So far as the legal notice is concerned, neither any date of dispatch of the legal notice has been mentioned in the evidence, nor the legal notice has been exhibited, much less, any evidence or finding regarding service of legal notice / deemed service of legal notice is on record.

21. In the judgment passed by the Hon'ble Supreme Court reported in 2014 (10) SCC 713 (Yogendra Pratap Singh Vs. Savitri Pandey and Another), the ingredients of offence under section 138 of N.I. Act has been considered in details and it has been held by the Hon'ble Supreme Court as follows: -

"30. Section 138 of the NI Act comprises of the main provision which defines the ingredients of the offence and the punishment that would follow in the event of such an offence having been committed. Appended to this section is also a proviso which has three clauses viz. (a), (b) and (c). The offence under Section 138 is made effective only on fulfilment of the eventualities contained in clauses (a), (b) and (c) of the proviso. For completion of an offence under Section 138 of the NI Act not only the satisfaction of the ingredients of offence set out in the main part of the provision is necessary but it is also imperative that all the three eventualities mentioned in clauses (a), (b) and (c) of the proviso are satisfied mere issuance of a cheque and dishonour thereof would not constitute an offence by itself under Section 138.

31. Section 138 of the NI Act has been analysed by this Court in Kusum Ingots & Alloys Ltd. wherein this Court said that the following ingredients are required to be satisfied for making out a case under Section 138 of the NI Act. "(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability,

(ii) that 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,

(iii) that cheque is returned by the bank unpaid, either because the amount of money standing to the credit of the 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

(iv) the payee or the holder in due course of the cheque 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 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;

(v) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice."

36. A complaint filed before the expiry of 15 days from the date on which notice has been served on drawer/accused cannot be said to disclose the cause of action in terms of clause (c) of the proviso to Section 138 and upon such complaint which does not disclose the cause of action the court is not competent to take cognizance. A conjoint reading of Section 138, which defines as to when and under what circumstances an offence can be said to have been committed, with Section 142(b) of the NI Act, that reiterates the position of the point of time when the cause of action has arisen, leaves no manner of doubt that no offence can be said to have been committed unless and until the period of 15 days, as prescribed under clause (c) of the proviso to Section 138, has, in fact, elapsed. Therefore, a court is barred in law from taking cognizance of such complaint. It is not open to the court to take cognizance of such a complaint merely because on the date of consideration or taking cognizance thereof a period of 15 days from the date on which the notice has been served on the drawer/accused has elapsed. We have no doubt that all the five essential features of Section 138 of the NI Act, as noted in the judgment of this Court in Kusum Ingots & Alloys Ltd. and which we have approved, must be satisfied for a complaint to be filed under Section 138. If the period prescribed in clause (c) of the proviso to Section 138 has not expired, there is no commission of an offence nor accrual of cause of action for filing of complaint under Section 138 of the NI Act."

22. As per the learned court below has held that for constituting an offence under section 138 of N.I. Act, "the legal requirement is that the cheque must be presented within six months from the date on which it is drawn or within the period of its validity and the drawee/payee/holder in due course must make a demand for the payment of the cheque amount by giving a written notice to the drawer of the cheque within 15 days (now within 30 days) of the receipt of the information of dishonour of cheque. The complaint must be made within one month of the date on which the cause of action arises, in absence of sufficient cause for not making the complaint within such

period. In this case two cheques have been issued which give rise to the presumption that the cheques were issued in discharge of any debt or other liability, if the contrary is not proved."

23. This court finds that the learned court below has neither mentioned the essential dates regarding the issuance of legal notice as well as receipt of legal notice nor the same could have been recorded in absence of any averment in the complaint petition and also in absence of any evidence to this effect. The learned court below has even failed to consider that the legal notice was not even brought on record from the side of the prosecution and the case of the petitioner was of total denial.

24. This Court is of the considered view while applying the ratio of aforesaid judgment of Hon'ble Supreme Court that all the conditions which have been set out in para 31 of the said judgment are required to be fulfilled to constitute an offence under Section 138 of N.I. Act. In fact, it has been held in the said judgment that a complaint filed before the expiry of 15 days from the date on which the notice has been served on the accused, by itself cannot be said to disclose cause of action.

25. This court further of the considered view that mere bouncing of the cheque coupled with a further statement that legal notice was issued but in-spite of its service the amount was not paid are not enough to constitute an offence under section 138 of N.I. Act. The time lines as prescribed under the N.I. Act which has been fully explained by the Hon'ble Supreme Court in the aforesaid judgement are essential ingredients to be proved for convicting the accused under section 138 of N.I. Act. Further, in absence of the legal notice brought on record by way of exhibit, it certainly cannot be assumed that the document which was sent through registered post was the legal notice pursuant to bouncing of the cheques. The learned court below have not even recorded any finding regarding service/deemed service of legal notice much less date of service of legal notice. Mere bouncing of cheque signed by the accused does not constitute an offence

unless other ingredients of the offence under section 138 of N.I. Act are also proved. In the aforesaid facts and such circumstances of this case, the basic ingredient to constitute an offence under Section 138 of N.I. Act have not been proved by the prosecution.

26. So far as the judgment relied upon by the counsel for the opposite party no. 2 is concerned, there is no doubt that there is presumption in connection with a cheque in favour of the holder of the cheque under Section 139 of N.I. Act, but that presumption by itself is not sufficient to constitute an offence under Section 138 of N.I. Act, unless the other ingredients have been proved. The presumption with regard to the debt or liability in connection with issuance of cheques is not in dispute from the side of the petitioner but the same is not sufficient to uphold the conviction of the petitioner. The legal presumption has already been duly relied upon by the learned appellate court. The judgement relied upon by the learned counsel for the opposite party no. 2 does not help him in any manner whatsoever.

27. In view of the aforesaid findings, this court is of the considered view that the conviction of the petitioner for offence under section 138 of N.I. Act is perverse and suffers from material irregularity which calls for interference in revisional jurisdiction to meet the ends of justice.

28. Accordingly, the impugned judgment of conviction passed by the learned trial court as well as the learned appellate court are set-aside and the petitioner is acquitted of the offence under section 138 of N.I. Act.

29. This revision application is allowed.

30. As such the judgment passed by the appellate court in Cr. Appeal No.20 of 2006 dated 19th September 2012 passed by learned Additional Sessions Judge-I, Palamau at Daltonganj as well as the judgment passed by learned Judicial Magistrate, 1st Class, Palamau at Daltonganj in C.P. Case No.189 of 1997 (T.R. No.442 of 2006) are, hereby set-aside.

31. Pending interlocutory applications, if any, are hereby, closed.

32. Let the lower court record be sent back forthwith to the concerned court.

33. Let this order be communicated to the court concerned through FAX / email.

(Anubha Rawat Choudhary, J.) R.Kumar/