Section 138 NI Act: Documentary proof is required for showing the liability if cheque is claimed to have been received as consideration for sale-purchase of property [Read the SC Order]

Supreme Court has observed that in the absence of any document/proof for sael-purchase of property, the claim that cheque was given towards consideration for purchase of a property cannot be accepted.

A bench of Justice Lalit and Justice Bose has passed the order in the case titled as B. KRISHNA REDDY vs SYED HAFEEZ (DIED) PER LR. SMT. NASEEMA BEGUM on 30.09.2019.

The allegations in the complaint were that there was an oral sale of a property and towards consideration for said purchase, the appellant had given the cheque for Rs.4,00,000/-. However, the evidence on record discloses that no conveyance was executed in favour of the appellant and, as such, the very basic ingredient was not proved. In the circumstances, the Trial Court found that no case was established as against the appellant and therefore the Trial Court vide its judgment and order dated 06.06.2008 acquitted the appellant of the charge levelled against him.

The matter was carried in appeal by the original complainant by filing Criminal Appeal No.1086 of 2008 in the High Court. The view taken by the Trial Court was upset by the High Court; the appeal was allowed; the appellant was found guilty of the offence under Section 138 of the Negotiable Instruments Act, 1881, and was sentenced to suffer imprisonment till rising of the Court and was also directed to pay a fine of Rs.4,25,000/-, out of which an amount of Rs.4,00,000/- was to be paid to the complainant towards compensation and the remaining amount of Rs.25,000/- was to be paid towards fine to the State.

The Supreme Court in such circumstances acquitted the accused saying "In our view, the offence alleged was that a cheque was given towards consideration for purchase of a property. Neither any document was produced on record nor there was any evidence that any conveyance was executed in favour of the appellant. Thus, the submission of the appellant that there was no existing debt or liability against which the cheque was given had to be accepted. In our view, the High Court was in error in accepting the appeal and upsetting the view taken by the Trial Court".

Read the Order here:

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