Uttarakhand High Court

Birendra Singh Chauhan ... vs Sohan Lal Kala on 10 November, 2021

HIGH COURT OF UTTARAKHAND AT NAINITAL

              Criminal Appeal No. 138 of 2018

Birendra Singh Chauhan                 ....Appellant/Complainant

                                 Versus

Sohan Lal Kala                            ....Respondent/accused

Present:-
              Mr. R.P. Nautiyal, Senior Advocate, assisted by Ms.
              Garima       Thapa,       Advocate      for     the
              appellant/complainant.
              Mr.     D.N.    Sharma,      Advocate     for   the
              respondent/accused.



Hon'ble Ravindra Maithani, J. (Oral)

Instant appeal is directed against the judgment

dated 19.04.2018 passed in Criminal Case No. 19 of

2014, Birendra Singh Chauhan Vs. Sohan Lal Kala (for

short, "the case") by the court of Chief Judicial

Magistrate, Pauri Garhwal. By the impugned judgment

and order, the respondent has been acquitted of the

accusation under Section 138 of the Negotiable

Instruments Act, 1881 (for short, "the Act").

2. Briefly stated, according to the appellant, he

filed a complaint under Section 138 of the Act, against the

respondent on 08.01.2014. According to it, both the

appellant and the respondent were known to each other.

The appellant advanced Rs.4 Lakh to the respondent. The

respondent assured to return it within a period of six

months. The respondent did not return the money. When

the appellant made repeated requests, on 20.11.2013,

according to the appellant, the respondent gave him two

cheques of Rs. 3 Lakh and Rs. 1 Lakh each. The

cheques, when presented, were dishonoured. Thereafter,

the appellant gave a notice on 02.12.2013 to the

respondent, but the respondent did not pay the money.

Hence, the complaint.

3. After conducting inquiry in the case,

cognizance was taken under Section 138 of the Act on

11.08.2017. The accusation was stated to the respondent.

At this stage, the respondent replied that he had returned

the money to the appellant. He admitted to have given

the cheques to the appellant.

4. In his examination-in-chief, the appellant filed

an affidavit. He was cross examined on 08.09.2014. The

respondent was examined under Section 313 of the Code

on 14.12.2017. At this stage, the respondent admitted to

have given two cheques to the appellant of Rs. 3 Lakh and

Rs. 1 Lakh each. It is the case of the respondent that

thereafter, the appellant told it to him that the cheques

had been lost. Therefore, the respondent gave Rs.1.5

Lakh, in cash to the appellant and also gave two cheques

of Rs. 1.5 Lakh and Rs.1 Lakh to the appellant. But, the

appellant presented all the cheques for payment in the

Bank.

5. After hearing the parties, mainly on two

grounds, the respondent has been acquitted. They are:-

(i) That there is evidence to show that the

respondent had returned Rs.4 Lakh as

taken by him from the appellant.

(ii) That the statement of the appellant does

not inspire confidence, because the

handwritings on both the cheques are

different, though, the appellant in his

statement has stated that it is the

respondent, who filled up the cheques,

with one pen alone.

6. Aggrieved by the acquittal, the appellant is

before this Court in appeal.

7. Heard learned counsel for the parties and

perused the record.

8. This is an appeal against acquittal. There is no

doubt that this is an appeal against acquittal. The powers

of the appellate court are defined under Section 386 of

the Code. It is as hereunder:-

"386. Powers of the Appellate Court.--After perusing such record and hearing the appellant or his pleader, if he appears, and the Public Prosecutor if he appears, and in case of an appeal under section 377 or section 378, the accused, if he appears, the Appellate Court may, if it considers that there is no sufficient ground for interfering, dismiss the appeal, or may--

(a) in an appeal from an order or acquittal, reverse such order and direct that further inquiry be made, or that the accused be re- tried or committed for trial, as the case may be, or find him guilty and pass sentence on him according to law;

(b) in an appeal from a conviction--

(i) reverse the finding and sentence and acquit or discharge the accused, or order him to be re-tried by a Court of competent jurisdiction subordinate to such Appellate Court or committed for trial, or

(ii) alter the finding, maintaining the sentence, or

(iii) with or without altering the finding, alter the nature or the extent, or the nature and extent, of the sentence, but not so as to enhance the same;

(c) in an appeal for enhancement of sentence--

(i) reverse the finding and sentence and acquit or discharge the accused or order him to be re-tried by a Court competent to try the offence, or (ii) alter the finding maintaining the sentence, or (iii) with or without altering the finding, alter the nature or the extent, or, the nature and extent, of the sentence, so as to enhance or reduce the same;

(d) in an appeal from any other order, alter or reverse such order;

(e) make any amendment or any consequential or incidental order that may be just or proper:

Provided that the sentence shall not be enhanced unless the accused has had an opportunity of showing cause against such enhancement:

Provided further that the Appellate Court shall not inflict greater punishment for the offence which in its opinion the accused has committed, than might have been inflicted for that offence by the Court passing the order or sentence under appeal."

9. It is settled law that if two views are possible,

the court in appeal should be slow to substitute the view

recorded by the trial court. In the case of two possible

views, the court leans towards the view which favours the

accused.

10. Learned counsel for the appellant at this stage

would submit that the court, in appeal against acquittal,

may reverse the finding of acquittal and record conviction.

In support of his contention, learned court placed reliance

on the principle of law, as laid down in the case of Guru

Dutt Pathak Vs. State of Uttar Pradesh, (2021) 6 SCC

116.

11. In the case of Guru Dutt Pathak (supra), the

Hon'ble Supreme Court referred to the various principles

of law in the matters of appeal against acquittal. In

paragraph 15 of the judgment, the Hon'ble Supreme

Court referred to various case laws. It is as hereunder:-

"15. In Babu v. State of Kerala [Babu v. State of Kerala, (2010) 9 SCC 189 : (2010) 3 SCC (Cri) 1179] , this Court has reiterated the principles to be followed in an appeal against acquittal under Section 378 CrPC. In paras 12 to 19, it is observed and held as under : (SCC pp. 196-

199) "12. This Court time and again has laid down the guidelines for the High Court to interfere with the judgment and order of acquittal passed by the trial court. The appellate court should not ordinarily set aside a judgment of acquittal in a case where two views are possible, though the view of the appellate court may be the more probable one. While dealing with a judgment of acquittal, the appellate court has to consider the entire evidence on record, so as to arrive at a finding as to whether the views of the trial court were perverse or otherwise unsustainable. The appellate court is entitled to consider whether in arriving at a finding of fact, the trial court had failed to take into consideration admissible evidence and/or had taken into consideration the evidence brought on record contrary to law. Similarly, wrong placing of burden of proof may also be a subject- matter of scrutiny by the appellate court. (Vide Balak Ram v. State of U.P. [Balak Ram v. State of U.P., (1975) 3 SCC 219 : 1974 SCC (Cri) 837] , Shambhoo Missir v. State of Bihar [Shambhoo Missir v. State of Bihar, (1990) 4 SCC 17 : 1990 SCC (Cri) 518] , Shailendra Pratap v. State of U.P. [Shailendra Pratap v. State of U.P., (2003) 1 SCC 761 : 2003 SCC (Cri) 432] , Narendra Singh v. State of M.P. [Narendra Singh v. State of M.P., (2004) 10 SCC 699 :

2004 SCC (Cri) 1893] , Budh Singh v. State of U.P. [Budh Singh v. State of U.P., (2006) 9 SCC 731 : (2006) 3 SCC (Cri) 377] , State of U.P. v. Ram Veer Singh [State of U.P. v. Ram

Veer Singh, (2007) 13 SCC 102 : (2009) 2 SCC (Cri) 363] , S. Rama Krishna v. S. Rami Reddy [S. Rama Krishna v. S. Rami Reddy, (2008) 5 SCC 535 : (2008) 2 SCC (Cri) 645] , Arulveluv. State [Arulvelu v. State, (2009) 10 SCC 206 : (2010) 1 SCC (Cri) 288] , Perla Somasekhara Reddy v. State of A.P. [Perla Somasekhara Reddy v. State of A.P., (2009) 16 SCC 98 : (2010) 2 SCC (Cri) 176] and Ram Singh v. State of H.P. [Ram Singh v. State of H.P., (2010) 2 SCC 445 : (2010) 1 SCC (Cri) 1496] )

13. In Sheo Swarup v. King Emperor [Sheo Swarup v. King Emperor, 1934 SCC OnLine PC 42 : (1933-

34) 61 IA 398 : AIR 1934 PC 227 (2)] , the Privy Council observed as under : (SCC OnLine PC : IA p. 404) '... the High Court should and will always give proper weight and consideration to such matters as (1) the views of the trial Judge as to the credibility of the witnesses; (2) the presumption of innocence in favour of the accused, a presumption certainly not weakened by the fact that he has been acquitted at his trial; (3) the right of the accused to the benefit of any doubt; and (4) the slowness of an appellate court in disturbing a finding of fact arrived at by a Judge who had the advantage of seeing the witnesses.'

14. The aforesaid principle of law has consistently been followed by this Court. (See Tulsiram Kanu v. State [Tulsiram Kanu v. State, AIR 1954 SC 1 : 1954 Cri LJ 225] , Balbir Singh v. State of Punjab [Balbir Singh v. State of Punjab, AIR 1957 SC 216 : 1957 Cri LJ 481] , M.G. Agarwal v. State of Maharashtra [M.G. Agarwal v. State of Maharashtra, AIR 1963 SC 200 : (1963) 1 Cri LJ 235] , Khedu Mohton v. State of Bihar [Khedu Mohton v. State of Bihar, (1970) 2 SCC 450 : 1970 SCC (Cri) 479] , Sambasivan v. State of Kerala [Sambasivan v. State of Kerala, (1998) 5 SCC 412 : 1998 SCC (Cri) 1320] , Bhagwan Singh v. State of M.P. [Bhagwan Singh v. State of M.P., (2002) 4 SCC 85 : 2002 SCC (Cri) 736] and State of Goa v. Sanjay Thakran [State of Goa v. Sanjay Thakran, (2007) 3 SCC 755 : (2007) 2 SCC (Cri) 162] .)

15. In Chandrappa v. State of Karnataka, Chandrappa v. State of Karnataka, (2007) 4 SCC 415 : (2007) 2 SCC (Cri) 325] , this Court reiterated the legal position as under : (SCC p. 432, para 42) '42. ... (1) An appellate court has full power to review, reappreciate and reconsider the evidence upon which the order of acquittal is founded.

(2) The Code of Criminal Procedure, 1973 puts no limitation, restriction or condition on exercise of such power and an appellate court on the evidence before it may reach its own conclusion, both on questions of fact and of law. (3) Various expressions, such as, "substantial and compelling reasons", "good and sufficient grounds", "very strong circumstances", "distorted conclusions", "glaring mistakes", etc. are not intended to curtail extensive powers of an appellate court in an appeal against acquittal. Such phraseologies are more in the nature of "flourishes of language" to emphasise the reluctance of an appellate court to interfere with acquittal than to curtail the power of the court to review the evidence and to come to its own conclusion.

(4) An appellate court, however, must bear in mind that in case of acquittal, there is double presumption in favour of the accused. Firstly, the presumption of innocence is available to him under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly, the accused having secured his acquittal, the presumption of his innocence is further reinforced, reaffirmed and strengthened by the trial court. (5) If two reasonable conclusions are possible on the basis of the evidence on record, the appellate court should not disturb the finding of acquittal recorded by the trial court.'

16. In Ghurey Lal v. State of U.P. [Ghurey Lal v. State of U.P., (2008) 10 SCC 450 : (2009) 1 SCC (Cri) 60] , this Court reiterated the said view, observing that the appellate court in dealing with the cases in which the trial courts have acquitted the accused, should bear in mind that the trial court's acquittal bolsters the presumption that he is innocent. The appellate court must give due weight and consideration to the decision of the trial court as the trial court had the distinct advantage of watching the demeanour of the witnesses, and was in a better position to evaluate the credibility of the witnesses.

17. In State of Rajasthan v. Naresh [State of Rajasthan v. Naresh, (2009) 9 SCC 368 : (2009) 3 SCC (Cri) 1069] , the Court again examined the earlier judgments of this Court and laid down that : (SCC p. 374, para 20) '20. ... An order of acquittal should not be lightly interfered with even if the Court believes that there is some evidence pointing out the finger towards the accused."

18. In State of U.P. v. Banne [State of U.P. v. Banne, (2009) 4 SCC 271 : (2009) 2 SCC (Cri) 260] , this Court gave certain illustrative circumstances in which the Court would be justified in interfering with a judgment of acquittal by the High Court. The circumstances include : (Banne case [State of U.P. v. Banne, (2009) 4 SCC 271 : (2009) 2 SCC (Cri) 260] , SCC p. 286, para 28) '28. ... (i) The High Court's decision is based on totally erroneous view of law by ignoring the settled legal position;

(ii) The High Court's conclusions are contrary to evidence and documents on record;

(iii) The entire approach of the High Court in dealing with the evidence was patently illegal leading to grave miscarriage of justice;

(iv) The High Court's judgment is manifestly unjust and unreasonable based on erroneous law and facts on the record of the case;

(v) This Court must always give proper weight and consideration to the findings of the High Court;

(vi) This Court would be extremely reluctant in interfering with a case when both the Sessions Court and the High Court have recorded an order of acquittal.' A similar view has been reiterated by this Court in Dhanapal v. State [Dhanapal v. State, (2009) 10 SCC 401 : (2010) 1 SCC (Cri) 336] .

19. Thus, the law on the issue can be summarised to the effect that in exceptional cases where there are

compelling circumstances, and the judgment under appeal is found to be perverse, the appellate court can interfere with the order of acquittal. The appellate court should bear in mind the presumption of innocence of the accused and further that the trial court's acquittal bolsters the presumption of his innocence. Interference in a routine manner where the other view is possible should be avoided, unless there are good reasons for interference."

(emphasis supplied)

12. The Court proceeds to decide the appeal on the

basis of settled proposition of law.

13. Learned senior counsel for the appellant would

submit that the appellant, as PW1 has proved the case.

He has proved that the respondent had taken Rs.4 Lakh

from him and in return of it, he has given the cheques,

which when presented were dishonoured on the ground of

insufficient funds.

14. Learned senior counsel has also taken the

following points in his arguments:-

(i) At each stage, i.e. at the stage of Section

251 of the Code and Section 313 of the

Code, the respondent has admitted to

have given cheques to the appellant.

(ii) The signatures of the respondent on the

cheques are admitted by the respondent.

(iii) The respondent has also admitted to have

taken Rs.4Lakh loan from the appellant.

(v) The notice under Section 138 of the Act

was sent to the respondent through

registered post at his correct address,

therefore, it shall be presumed that notice

had already been served on him. The

appellant had filed receipt of the Postal

Department, by which, the registered post

was sent to the respondent. Information

received from the postal department

under the Right To Information Act, 2005

reveals that the envelope was delivered at

the given address.

(vi) The respondent did not reply to the notice

given to him by the appellant.

(vii) Section 139 of the Act, provides that in

such a situation, presumption shall be

made in favour of its holder and it has not

been rebutted by the respondent.

15. Learned senior counsel would submit that the

entries in the Bank record, which have been relied upon

by the court below, pertain to 20.05.2010 and

16.01.2012. It is argued that if on that dates, any money

was deposited in the account of the appellant, it may not

be construed as discharge of the loan, which was taken

by the respondent in the year 2013, because the loan

taken in the year 2013, could not have been repaid

sometimes in the year 2010 and 2012. It is argued that

the finding with regard to the handwritings, on the

cheques, has no force of evidence because the signatures

and delivery of cheques have been admitted by the

respondent himself. Therefore, it is submitted that the

impugned judgment and order is bad in the eyes of law.

The appellant has proved the case beyond reasonable

doubt. The respondent is liable to be convicted for the

offence under Section 138 of the Act. Therefore, the

appeal deserves to be allowed.

16. On the other hand, learned counsel for the

respondent would submit that in view of the explanation

attached to Section 138 of the Act, there is no legally

enforceable debt or other liability, because it is argued

that the date, time and place when allegedly Rs.4 Lakh

were taken by the respondent has not been revealed at

any stage by the appellant Learned counsel also raised

the following points in his submission:-

(i) In his statement, the appellant as a

witness has told that the respondent filled

up the cheques with one pen, whereas, a

bare perusal of the cheques reveals that

they are not filled up with one pen alone.

The finding of the court below on this

point is based on sound reasonings.

(ii) Respondent had already paid the loan

which he had taken from the appellant

and this fact has categorically been

discussed, examined and evaluated in

para 12 of the impugned judgment.

17. Learned counsel for the respondent would

submit that the appellant failed to prove its case beyond

reasonable doubt and the court below rightly acquitted

the accused. Therefore, it is submitted that the appeal

deserves to be dismissed.

18. The case is based on a complaint under Section

138 of the Act, which deals with the dishonouring of

cheques, due to insufficiency of funds in the account. The

argument with regard to service of notice has been raised on

behalf of the respondent. In his complaint, the appellant

has stated that he had sent a notice through registered

post. The postal receipts dated 02.12.2013 has been filed

along with the list of documents dated 08.01.2014 by the

appellant. The receipt categorically reveals that it is

addressed to the respondent. In addition to it, the

appellant has also filed the information, which is received

by him, under the Right to Information Act, 2005, from

the Postal Department. According to which, the envelope

addressed to the respondent had been delivered on him

on 04.12.2013.

19. In the case of N. Parameswaran Unni Vs. G.

Kannan and another, (2017) 5 SCC 737, the Hon'ble

Supreme Court, interpreted the provisions of Section 27

of the General Clauses Act, 1897 and Section 114 of the

Indian Evidence Act, 1872 and observed as hereunder:-

"13. It is clear from Section 27 of the General

Clauses Act, 1897 and Section 114 of the Evidence Act,

1872, that once notice is sent by registered post by

correctly addressing to the drawer of the cheque, the

service of notice is deemed to have been effected. Then

requirements under proviso (b) of Section 138 stand

complied, if notice is sent in the prescribed manner.

However, the drawer is at liberty to rebut this

presumption."

20. In the instant case, the postal receipt has been

filed by the appellant and information received under the

Right to Information Act, 2005 has also been filed by the

appellant relating to postal receipts, by which the Postal

Department had informed that the item had been

delivered on the respondent. In his affidavit given in the

examination-in-chief, the appellant has deposed about

these facts. It categorically establishes that, in fact,

service had been sufficient on the respondent. There is no

doubt about it.

21. On behalf of the respondent, reference has

been made to explanation to Section 138 of the Act.

Section 138 of the Act reads as hereunder:-

"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 that 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 two years' or with fine which may extend 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 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 of other liability" means a legally enforceable debt or other liability."

22. While referring to the complaint and the

statement of the appellant, learned counsel for the

respondent submits that nowhere, the appellant had

revealed the date, time when the loan was taken by the

respondent and place, where the loan was taken by him.

Based on it, it is submitted that non-disclosure of date,

time and place where the loan taken infers that there was

no legally enforceable debt or other liability.

23. This Court is of the view that this argument

does not merit acceptance. The explanation to Section

138 of the Act, clarifies the words "debts or other liability"

as used in Section 138 of the Act and according to it, the

"debts and other liability" means legally enforceable debts

or other liability. Even if particular date, time and place is

not mentioned in the complaint or at any place, it does

not mean that the respondent was not under any debt or

legally enforceable liability. Even otherwise, Section 139

of the Act makes presumption in such a situation, which

is as hereunder:-

"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."

24. The appellant is holder of the cheques. In view

of the presumption under Section 139 of the Act, also it

shall be presumed that he received the cheques for the

discharge of debt. This Court will further discuss as to

whether contrary to it has been proved, as held in the

impugned judgment. But, before that the Court deals with

the issued with regard to the handwritings on the

cheques.

25. An argument has been advanced on behalf of

the respondent that according to the statement of

appellant, both the cheques were filled up by the

respondent by one pen. But, it is argue that a bare

perusal of the cheques reveal that they are written by the

different pen/ink. It, according to learned counsel, doubts

the case of the appellant. This argument has less

significance in view of the fact that the respondent

himself in his statement under Section 251 and Section

313 of the Code has admitted to have given cheques to

the appellant. At the stage of Section 251 of the Code, the

respondent has categorically admitted to have given

cheques, but his defence then was that he had repaid the

loan and the appellant misused the cheques. It is not the

case of the respondent that he did not sign or fill up the

cheques. It is not the case of the respondent that he did

not give the cheques.

26. Similarly, at the stage of his statement under

Section 313 of the Code also the respondent had taken a

stand that despite repayment of loan, the appellant

presented the cheques and got them dishonored.

Although, in this statement, the amount of cheques is

varying.

27. The acquittal has mainly been recorded on the

ground that the respondent had repaid the loan.

28. The point which requires determination is as to

whether the respondent had repaid the loan taken by

him. In other words, had he proved contrary to the

presumption as envisaged under Section 139 of the Act.

29. The court below had taken into consideration

two entries in the account of the appellant, which are

dated 20.05.2010 and 16.01.2010, by which, Rs.1 Lakh

and Rs.3 Laks respectively have been deposited in the

account of appellant. Based on these entries, the court

below held that the respondent had discharged the

liability. This finding is against the weight of evidence.

The respondent has admitted to have given cheques. The

signatures are not in dispute. Notices were served on him,

which he did not reply. The cheques are dated

20.11.2013. If respondent had given cheques on

20.11.2013, the loan amount could not have been repaid.

Prior to it, in the year 2010 and 2012. Therefore, this

Court is of the view that the respondent could not prove

otherwise that he had discharged the liability or he had

repaid the loan, which he had taken from the appellant.

The findings of the court below on this aspect cannot be

upheld.

30. The appellant has proved beyond reasonable

doubt that the respondent had taken a loan of Rs.4 Lakh

from him and to repay it, he had given two cheques to the

appellant. The cheques were dishonoured. Notice was

given, which was duly served on the rerspondent, but he

did not pay the amount. The accused ever did not pay the

amount post issuance of the cheques.

31. In view thereof, the Court is of the view that

the appellant has been able to prove the offence under

Section 138 of the Act against the respondent. The court

below recorded the finding of acquittal, which is not in

accordance with law. Therefore, the impugned judgment

and order deserves to be set aside and respondent is

liable to be convicted under Section 138 of the Act.

32. The question of sentence has also comes up for

consideration. The Court heard learned counsel for the

parties on the question of sentence also.

33. Learned counsel for the respondent would

submit that it is appeal against acquittal. The complaint

and the accused both were friends. Admittedly, as per the

appellant also they were Contractors. The punishment

under Section 138 of the Act may extend up to the term of

two years with a fine of double the amount of cheque or

with both.

34. In fact, this matter was finally heard on

28.10.2021. When the judgment was dictated in the open

Court. In fact, sentence that was to be imposed on the

respondent had also been dictated. But, before the

judgment could be signed, this Court found that, in fact,

on the question of sentence, the matter has not been

deliberately effectively. Therefore, on that date, this Court

passed the following order:-

"This is an appeal against acquittal of the respondent under Section 138 of the Negotiable Instruments Act, 1881.

Arguments heard, judgment dictated in the open Court, whereby the appeal allowed and the order on sentence has also been dictated. But, before the judgment could be signed, it is revealed that on the question of sentence the matter has not been deliberated effectively.

Since, the judgment has yet not been signed, this Court is of the view that to the limited extent, on the question of sentence, the matter may further be

heard (see the judgment in the case of Kaushalbhai Ratanbhai Rohit and others Vs. State of Gujarat, (2014) 9 SCC 124).

On the question of sentence alone, this matter shall be further heard on 10.11.2021.

List this matter on 10.11.2021, as a first case in the cause list."

35. Today, learned counsel for the parties have

further been heard on the question of sentence.

36. Learned counsel for the respondent would

submit that this is a matter pending since 2013 and both

the appellant and the respondent were in property

dealing. They had their business, therefore, minimum of

the sentence may be imposed.

37. On the other hand, learned Senior Counsel

appearing for the appellant would submit that out from

the sentence, the appellant may be awarded the amount

of cheque i.e. `4 Lacs along with the interest.

38. The offences under Section 138 of the Act, in

fact, though is criminal in nature, but, it has an element

of enforcing negotiable instruments to ensure free and fair

transactions. It has an element of civil liability, as well.

Admittedly, both the parties had their business dealings.

It is also admitted that, in fact, in the past, the

respondent had paid certain amounts to the appellant. In

the case of Somnath Sarkar vs. Utpal Basu Mallick and

another, (2013)16 SCC, 465, the Hon'ble Supreme Court

had discussed the issue relating to sentence in cases

falling under Section 138 of the Act and in para 13 to 17

held as hereunder:-

"13. Having said that we have no hesitation in adding that the High Court may have indeed been justified in setting aside the sentence of imprisonment awarded to the appellant in the facts and circumstances of the case. We say so having regard to a three-Judge Bench decision of this Court in Damodar S. Prabhu v. Sayed Babalal H. [Damodar S. Prabhu v. Sayed Babalal H., (2010) 5 SCC 663 : (2010) 2 SCC (Civ) 520 : (2010) 2 SCC (Cri) 1328] where this Court briefly examined the object sought to be achieved by the provisions of Section 138 and the purpose underlying the punishment provided therein. This Court has held that unlike other crimes, punishment in Section 138 cases is meant more to ensure payment of money rather than to seek retribution. The Court said : (SCC p. 670, para 17) "17. Unlike that for other forms of crime, the punishment here (insofar as the complainant is concerned) is not a means of seeking retribution, but is more a means to ensure payment of money. The complainant's interest lies primarily in recovering the money rather than seeing the drawer of the cheque in jail. The threat of jail is only a mode to ensure recovery. As against the accused who is willing to undergo a jail term, there is little available as remedy for the holder of the cheque."

14. This Court also took note of the number of cases involving dishonour of cheques choking the criminal justice system of this country, especially at the level of the Magisterial Courts, and held that dishonour of cheque being a regulatory offence, aimed at ensuring the reliability of negotiable instruments, the provision for imprisonment extending up to two years was only intended to ensure quick recovery of the amount payable under the instrument. The following passages from the decision are in this regard apposite : (Damodar S. Prabhu case [Damodar S.

Prabhu v. Sayed Babalal H., (2010) 5 SCC 663 : (2010) 2 SCC (Civ) 520 : (2010) 2 SCC (Cri) 1328] , SCC p. 666, paras 4-5) "4. ... It is quite evident that the legislative intent was to provide a strong criminal remedy in order to deter the worryingly high incidence of dishonour of cheques. While the possibility of imprisonment up to two years provides a

remedy of a punitive nature, the provision for imposing a 'fine which may extend to twice the amount of the cheque' serves a compensatory purpose. What must be remembered is that the dishonour of a cheque can be best described as a regulatory offence that has been created to serve the public interest in ensuring the reliability of these instruments. The impact of this offence is usually confined to the private parties involved in commercial transactions.

5. Invariably, the provision of a strong criminal remedy has encouraged the institution of a large number of cases that are relatable to the offence contemplated by Section 138 of the Act. So much so, that at present a disproportionately large number of cases involving the dishonour of cheques is choking our criminal justice system, especially at the level of Magistrates' Courts. As per the 213th Report of the Law Commission of India, more than 38 lakhs cheque bouncing cases were pending before various courts in the country as of October 2008. This is putting an unprecedented strain on our judicial system."

15. We do not consider it necessary to examine or exhaustively enumerate situations in which courts may remain content with imposition of a fine without any sentence of imprisonment. There is considerable judicial authority for the proposition that the courts can reduce the period of imprisonment depending upon the nature of the transaction, the bona fides of the accused, the contumacy of his conduct, the period for which the prosecution goes on, the amount of the cheque involved, the social strata to which the parties belong, so on and so forth. Some of these factors may indeed make out a case where the court may impose only a sentence of fine upon the defaulting drawer of the cheque. There is for that purpose considerable discretion vested in the court concerned which can and ought to be exercised in appropriate cases for good and valid reasons. Suffice it to say that the High Court was competent on a plain reading of Section 138 to impose a sentence of fine only upon the appellant. Inasmuch as the High Court did so, it committed no jurisdictional error. In the absence of a challenge to the order passed by the High Court deleting the sentence of imprisonment awarded to the appellant, we do not consider it necessary or proper to say anything further at this stage.

16. Coming then to the question whether the additional amount which the High Court has directed the appellant to pay could be levied in lieu of the sentence of imprisonment, we must keep two significant aspects in view. First and foremost is the fact that the power to levy fine is circumscribed under the statute to twice the cheque amount. Even in a case where the court may be taking a lenient view in favour of the accused by not sending him to prison, it cannot impose a fine more than twice the cheque amount. That statutory limit is inviolable and must be respected. The High Court has, in the case at hand, obviously overlooked the

statutory limitation on its power to levy a fine. It appears to have proceeded on the basis as though payment of compensation under Section 357 CrPC is different from the power to levy fine under Section 138, which assumption is not correct.

17. The second aspect relates precisely to the need for appreciating that the power to award compensation is not available under Section 138 of the Negotiable Instruments Act. It is only when the court has determined the amount of fine that the question of paying compensation out of the same would arise. This implies that the process comprises two stages. First, when the court determines the amount of fine and levies the same subject to the outer limit, if any, as is the position in the instant case. The second stage comprises invocation of the power to award compensation out of the amount so levied. The High Court does not appear to have followed that process. It has taken payment of Rs 80,000 as compensation to be distinct from the amount of fine it is imposing equivalent to the cheque amount of Rs 69,500. That was not the correct way of looking at the matter. Logically, the High Court should have determined the fine amount to be paid by the appellant, which in no case could go beyond twice the cheque amount, and directed payment of compensation to the complainant out of the same."

39. As stated, in the instant case, parties were in

business dealing. They were dealing in the property. They

have transactions in the past, as well. Therefore, this

Court is of the view that the interest of justice would be

served, if a fine of `6 Lacs is imposed on the respondent.

Out of the fine, `4 Lacs should be paid to the appellant as

compensation. In default of payment of fine, the

respondent shall undergo simple imprisonment for a

period of six months.

40. The appeal is allowed. The impugned judgment

and order dated 19.04.2018, passed in Criminal Case

No.19 of 2014, Birendra Singh Chauhan vs. Sohan Lal