A. Code of Criminal Procedure, 1973 (2 of 1974), Section 154, 156(3), 200, 210, 482 – Constitution of India, Article 226 -- Complaint as well as FIR – Legality of -- Merely because on the same set of facts with the same allegations and averments earlier the complaint is filed, there is no bar to lodge the FIR with the police station with the same allegations and averments -- However, at the same time, if it is found that the subsequent FIR is an abuse of process of law and/or the same has been lodged only to harass the accused, the same can be quashed in exercise of powers under Article 226 of the Constitution or in exercise of powers u/s 482 Cr.P.C -- In that case, the complaint case will proceed further in accordance with the provisions of the Cr.P.C.

(Para 5)

B. Code of Criminal Procedure, 1973 (2 of 1974), Section 154, 156(3), 200, 210, 482 -- Constitution of India, Article 226 -- Criminal proceedings – Quashing of – Inherent power of High Court -- Inherent jurisdiction u/s 482 Cr.P.C. and/or under Article 226 of the Constitution is designed to achieve salutary purpose that criminal proceedings ought not to be permitted to degenerate into weapon of harassment -- When the Court is satisfied that criminal proceedings amount to an abuse of process of law or that it amounts to bringing pressure upon accused, in exercise of inherent powers, such proceedings can be quashed.

(Para 6.1)

C. Indian Penal Code, 1860 (45 of 1860), Section 406, 420 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Constitution of India, Article 226 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 154, 156(3), 200, 210, 482 – Quashing of FIR – Abuse of process of law -- Inherent power of High Court -- Complaint u/s 138 of the NI Act pending -- After a period of three months, an application u/s 156(3) Cr.P.C. seeking registration of FIR – Ld. Magistrate declined to order registration of FIR and decided to inquire into the matter by treating the same as complaint case -- Ld. Sessions Judge remanded back the matter to the learned Magistrate with directions to pass a speaking order – Thereafter, after a period of two years, impugned FIR against the appellants with police station with the similar contents and allegations which were levelled in the application u/s 156(3) Cr.P.C – Complainant is not proceeding further with his application u/s 156(3) Cr.P.C., which is pending since last five years – In the FIR, no reference of application u/s 156(3) Cr.P.C. and complaint u/s 138 of the NI Act – Held, impugned FIR is nothing but an abuse of process of law and can be said to be filed with a view to harass the appellants -- High Court ought to have exercised the powers under Article 226 of the Constitution of India/482 Cr.P.C. and ought to have quashed the impugned FIR to secure the ends of justice – Appeal allowed, impugned criminal proceedings/FIR registered u/ss 420/406 IPC quashed.

(Para 7-9)

A. Insolvency and Bankruptcy Code, 2016 (31 of 2016), Section 14 –Object of moratorium -- Insolvency resolution process -- Object of a moratorium provision such as Section 14 is to see that there is no depletion of a corporate debtor’s assets during the insolvency resolution process so that it can be kept running as a going concern during this time, thus maximising value for all stakeholders -- Idea is that it facilitates the continued operation of the business of the corporate debtor to allow it breathing space to organise its affairs so that a new management may ultimately take over and bring the corporate debtor out of financial sickness, thus benefitting all stakeholders, which would include workmen of the corporate debtor.

(Para 23)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 -- Insolvency and Bankruptcy Code, 2016 (31 of 2016), Section 14 – Moratorium period – Corporate debtor – Natural persons -- Criminal liability in cheque bounce case -- Since the corporate debtor would be covered by the moratorium provision contained in Section 14 of the IBC, by which continuation of Section 138/141 proceedings against the corporate debtor and initiation of Section 138/141 proceedings against the said debtor during the corporate insolvency resolution process are interdicted would then become applicable -- Moratorium provision contained in Section 14 of the IBC would apply only to the corporate debtor, the natural persons mentioned in Section 141 continuing to be statutorily liable under Chapter XVII of the Negotiable Instruments Act -- Section 138/141 proceeding against a corporate debtor is covered by Section 14(1)(a) of the IBC.

(Para 77, 78)

Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 438 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case -- Proclaimed offender/person – Anticipatory bail -- Complaint u/s 138 of the N.I.Act, whereby the petitioner was declared as proclaimed offender -- Petitioner met with an accident and suffered fracture in his leg and arm, due to which, he could not walk -- He requested his counsel for his exemption, but due to some reason, he could not move appropriate application before the trial court -- Petition disposed of with a direction that, in case, the petitioner surrenders before the trial court within a period of one week, he shall be admitted on bail. Cost of Rs. 10,000/- imposed.

(Para 5, 6)

A. Negotiable Instruments Act, 1881 (26 of 1881), Sections 138, 139 – Indian Evidence Act, 1872 (1 of 1872), Section 118 – Admission of signatures on cheque -- Legal enforceable liability – Presumption of -- Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these ‘reverse onus’ clauses become operative -- Obligation shifts upon the accused to discharge the presumption imposed upon him – Held, once the 2nd Appellant had admitted his signatures on the cheque and the Deed of undertaking, the trial Court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt -- Trial Court fell in error when it called upon the Complainant-Respondent to explain the circumstances under which the appellants were liable to pay -- Such approach of the trial Court was directly in the teeth of the established legal position and amounts to a patent error of law.

(Para 14, 15)

B. Negotiable Instruments Act, 1881 (26 of 1881), Sections 138, 139 – Indian Evidence Act, 1872 (1 of 1872), Section 118 – Legal enforceable liability – Presumption of – Rebuttal of -- Presumptions raised u/s 118 and Section 139 are rebuttable in nature – A probable defence needs to be raised, which must meet the standard of “preponderance of probability”, and not mere possibility -- Bare denial of passing of consideration would not aid the case of accused.

(Para 16)

C. Indian Evidence Act, 1872 (1 of 1872), Section 118 – Deed of undertaking – Denial of genuineness – Relevance of -- Appellants’ mere bald denial regarding genuineness of the Deed of Undertaking, despite admitting the signatures of Appellant No. 2 thereupon, does not cast any doubt on the genuineness of the said document.

(Pare 17)

D. Negotiable Instruments Act, 1881 (26 of 1881), Sections 138, 139 – Indian Evidence Act, 1872 (1 of 1872), Section 118 – Blank signed cheque and stamp papers – Legal enforceable liability -- Presumption of – Rebuttal of -- Even if the arguments raised by the appellants at face value that only a blank cheque and signed blank stamp papers were given to the respondent, yet the statutory presumption cannot be obliterated.

(Para 18)

E. Negotiable Instruments Act, 1881 (26 of 1881), Sections 138, 139, Chapter XVII – Cheque bounce matters – Criminal and civil liability – Redressal of -- Object of Chapter XVII of the NIA is not only punitive but also compensatory and restitutive -- Provisions of NIA envision a single window for criminal liability for dishonour of cheque as well as civil liability for realisation of the cheque amount -- There needs to be a consistent approach towards awarding compensation and unless there exist special circumstances, the Courts should uniformly levy fine up to twice the cheque amount along with simple interest at the rate of 9% per annum.

(Para 20)

F. Negotiable Instruments Act, 1881 (26 of 1881), Sections 138, 139 –Cheque bounce case – Sentence and compensation -- Neither did the respondent ask for compensation before the High Court nor has he chosen to challenge the High Court’s judgment -- Since, he has accepted the High Court’s verdict, his claim for compensation stands impliedly overturned -- Respondent, in any case, is entitled to receive the cheque amount of Rs.11.20 lakhs which the appellant has already deposited with the Registry of Court -- Appellant No.2 shall not be required to undergo the awarded sentence -- Registry is directed to transfer the amount of Rs.11.20 lakhs along with interest accrued thereupon to the respondent within two weeks.

(Para 21, 22)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 82 – Declaration of Proclaimed Person – Challenge to -- Complaint is u/s 138 of the N.I.Act, 1881, which is a bailable offence, petition disposed of with the observation that the petitioner may appear before the learned trial Court on or before 27.01.2021 -- On his doing so, he shall be enlarged on bail by the trial Court subject to his furnishing bail bonds and surety bonds to its satisfaction.

(Para 6)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Indian Penal Code, 1860 (45 of 1860), Section 174-A – Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 482 – Cheque bounce case – Compromise between parties -- Proclaimed offender/ person -- FIR u/s 174-A IPC – Quashing of -- Respondent/complainant withdrew his complaint -- In such circumstances, the continuation of the prosecution of the petitioner u/s 174-A IPC would be nothing but an abuse of the process of law – Order declaring the petitioner as proclaimed offender and FIR registered u/s 174-A IPC are both quashed along with all subsequent proceedings.

(Para 6, 7)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Indian Penal Code, 1860 (45 of 1860), Section 174-A -- Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 482 – Cheque bounce case -- Warrant remained unexecuted as accused-petitioner shifted – Proclamation on same address – Legality of – FIR u/s 174A of IPC – Sustainability of -- Without any basis, the Court formed an opinion that the petitioner is intentionally avoiding service and that he is either absconding or concealing himself -- Rather the Court was duty bound to ask the complainant to furnish his fresh address and ensure that the petitioner was duly served before commencing with the coercive process -- Held, trial Court was not required to invoke the provisions of Section 82 of Cr.P.C. -- Declaration of the petitioner as a proclaimed person, and the consequent registration of the impugned FIR cannot be sustained.

(Para 10-12)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Indian Penal Code, 1860 (45 of 1860), Section 174-A -- Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 482 – Cheque bounce case -- Proclaimed person – Settlement between parties – Quashing of FIR u/s 174A IPC -- Entire amount of the cheque in dispute stands paid -- Complainant does not have any objection, in case, the impugned order and FIR are quashed -- Once there is an amicable settlement between the parties and the main petition u/s 138 of N.I. Act, wherein accused was declared as a proclaimed person, stands withdrawn, proceedings u/s 174-A IPC cannot be permitted to continue -- Impugned order and FIR u/s 174-A, IPC quashed along with all consequential proceedings emanating therefrom.

(Para 13, 14)

***

Quashing of FIR u/s 174-A IPC -- Quashed upon withdrawal of the complaint under Section 138 of the NI Act, rendering the order declaring the petitioner a proclaimed person redundant.

***

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Indian Penal Code, 1860 (45 of 1860), Section 174-A – Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 482 -- Cheque bounce case – Proclaimed person -- FIR u/s 174-A of IPC – Settlement of complaint – Quashing of FIR -- Since the complaint u/s 138 of N.I.Act has been withdrawn, the order declaring the petitioner as proclaimed person has become redundant -- Under these circumstances, no useful purpose would be served by keeping the aforementioned FIR alive -- FIR u/s 174-A of IPC quashed along with all subsequent proceedings arising therefrom.

(Para 7, 8)

***

Quashing of FIR u/s 174-A IPC -- Dishonour of Cheque -- Petitioner had appeared before the trial Court and been granted bail after obtaining interim protection – FIR quashed.

***

Indian Penal Code, 1860 (45 of 1860), Section 174-A -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 482 – Cheque bounce case – Proclaimed offender – Quashing of FIR u/s 174-A of IPC – Petitioner had challenged the order, whereby he was declared as proclaimed offender and he was allowed interim bail and later the petition was disposed of as having been rendered infructuous as the petitioner had appeared before the trial Court and had been granted bail – Continuation of criminal proceedings against the petitioner u/s 174-A would be nothing but an abuse of process of law – Petition allowed and FIR u/s 174-A IPC and all consequential proceedings, arising therefrom, are quashed.

(Para 6-8)

***

Deposit of 20% Fine or Compensation – Dishonour of cheque -- Direction to deposit at least 20% of the fine or compensation amount is the general rule, and the Appellate Court should exercise its discretion in favour of such deposit unless exceptional circumstances justify deviation.

***

Deposit of 20% Fine or Compensation – Dishonour of cheque -- Appellate Court – The direction to deposit 20% of the fine or compensation within one month is contrary to the statutory provision prescribing 60 days for deposit, extendable by a further 30 days, and warrants correction.

***

Deposit of 20% Fine or Compensation – Dishonour of cheque -- Appeal Against Conviction – Deposit of 20% of the fine or compensation cannot be imposed as a precondition for entertaining a statutory appeal against conviction, as doing so would impermissibly restrict the right of appeal and potentially violate Article 21; conditions for suspension of sentence stand on a different footing.

***

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 148 -- Cheque bounce case -- Deposit of 20% amount of fine or compensation – Whether discretion of Appellate Court – Held, power vested with the lower Appellate Court, though discretionary is supposed to be a ‘rule’ and said discretion should be exercised in all the cases unless there are some exceptional circumstances justifying deviation from the said rule.

(Para 7, 8)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case -- Deposit of 20% amount of fine or compensation – Power of Appellate Court -- Amount is required to be deposited within a period of 60 days which may further be extended by another 30 days -- Lower Appellate Court having granted one month’s period only for depositing the amount, the same is contrary to the provisions of the Act -- Error needs to be rectified.

(Para 9, 10)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 372, 374 – Constitution of India, Article 21 -- Cheque bounce case – Appeal against conviction – Pre-condition of deposit of 20% of amount of fine or compensation – Interpretation of -- Section 374 Cr.P.C. does not prescribe any condition for admission of an appeal – Deposit of 20% of the compensation amount under no circumstances can be interpreted to be a condition pre-requisite for availing the right of appeal -- Imposition of any condition at the time of suspending of sentence may be a different matter failing which the order suspending sentence may be vacated -- While giving a wider connotation to Article 21 of Constitution of India, it can even be said that depriving a convict of his right to appeal by imposing any pre-requisite for availing his statutory right to challenge conviction in a higher Court would amount to depriving his liberty without adhering to the established procedure of law.

(Para 12, 13)

***

Quashing of FIR u/s 174-A IPC -- Quashed where the underlying complaint under Sections 138 and 142 of the NI Act and Section 420 IPC was compromised and withdrawn, rendering continuation of proceedings an abuse of process of law.

***

Indian Penal Code, 1860 (45 of 1860), Section 174-A, 420 – Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 482 – Proclaimed person -- Quashing of FIR u/s 174-A IPC -- Complaint u/s 138, 142 NI Act, 420 IPC compromised between the parties and the complainant has withdrawn the complaint – Held, continuation of the proceedings including the FIR is nothing but an abuse of process of law -- Petition allowed, FIR u/s 174-A of IPC as well as all the consequential proceedings arising therefrom, quashed.

(Para 7-9)

***

Quashing of FIR u/s 174A IPC -- Dishonour of Cheque – Order declaring the petitioner a proclaimed person and consequential FIR under Section 174-A IPC quashed where the entire loan stood cleared, a No Due Certificate was issued, and the bank withdrew the complaint.

***

Indian Penal Code, 1860 (45 of 1860), Section 174-A – Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 482 – Cheque bounce case -- Complaint u/s 138 N.I. Act withdrawn – Order declaring proclaimed person -- FIR u/s 174-A IPC – Sustainability of -- 'No Due Certificate' issued by the Bank shows that the entire loan amount outstanding in the name of petitioner stood cleared – Thereupon, the Bank withdrew the complaint -- In such a situation, neither the impugned order nor the consequential FIR can be sustained -- Continuation of proceedings u/s 174-A, IPC shall be nothing but an abuse of process of law – Petition allowed, impugned order and the FIR quashed alongwith all subsequent proceedings.

(Para 4, 10-12)

***

Non-Appearance Before Trial Court – Anticipatory Bail – Dishonour of Cheque – Where the accused failed to appear due to a leg fracture sustained in an accident, he was directed to surrender within 15 days and be released on bail upon furnishing bonds.

***

Code of Criminal Procedure, 1973 (2 of 1974), Section 438, 446 – Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142 – Cheque bounce case -- Non-appearance in Trail – Presence ordered to secure through warrant of arrest -- Anticipatory bail -- On account of an accident accused got fracture on his leg and could not appear -- Resultantly, his presence was ordered to be secured through warrant of arrest – Petition disposed of, accused shall surrender before trial Court within fifteen days positively and on surrender, he shall be enlarged on bail on his furnishing personal/ surety bonds to the satisfaction of trial Court -- Trial Court is at liberty to initiate proceedings u/s 446 Cr.P.C. against the petitioner in accordance with law -- Meanwhile, no coercive steps shall be initiated against the petitioner pursuant to warrant of arrest already issued against him.

(Para 5, 6)

***

Proclaimed Person – Anticipatory Bail – Dishonour of Cheque – Accused demonstrates a sincere intention to appear before the Court and agrees to deposit 20% of the cheque amount, protection from arrest granted.

***

Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 438 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce case – Proclaimed person – Anticipatory bail -- Petitioner ready to deposit 20% of cheque amount of Rs. 5 lacs – Held, if the accused shows his sincere intention and desire to appear before the Court, then it would not be unjustified to protect him from being arrested – Petition disposed of with a direction to the petitioner to surrender before the trial Court within 10 days, on doing so, he shall be released on bail subject to his furnishing fresh bail bond/surety bonds to the satisfaction of the trial Court and further subject to the condition that he would deposit Rs. 1.00 lac with the trial Court by way of demand draft in favour of Judicial Magistrate Ist Class and the said demand draft be deposited in a fixed deposit with bank, fetching the maximum rate of interest.

(Para 3, 7, 8)

***

Insolvency Proceedings – Impact on 138 NI proceedings -- Subsequent orders of the NCLT freezing the company’s accounts and taking over its assets cannot be invoked to challenge criminal proceedings under Section 138 where the cheque dishonour and service of legal notice occurred prior to commencement of insolvency proceedings.

***

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Insolvency and Bankruptcy Code, 2016 (31 of 2016), Section 7 -- Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, Rule 4 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque bounce case – Summoning of accused – Challenge to -- Insolvency proceedings – Effect of -- Account of the Company was frozen by virtue of orders dated 03.12.2018 passed by the NCLT -- All the moveable and immoveable assets of the Company have been taken over – Held, cheque in question is dated 12.06.2017, which was dishonoured on 29.07.2017 i.e. much prior to the passing of the order by the NCLT -- Even the legal notice dated 26.08.2017 served upon the petitioner is prior to commencement of IBC proceedings – Petitioner cannot thus take ruse under NCLT order passed after the institution of impugned complaint and passing of the summoning order.

(Para 3,4)

***

Proclaimed Person – Compromise – Dishonor of cheque -- Summoning order and order declaring the petitioner a proclaimed person/offender quashed in view of the compromise arrived at between the parties.

***

Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 482 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142 -- Cheque bounce case – Proclaimed person/offender – Quashing petition on the basis of compromise between the parties -- Summoning order and order declaring proclaimed person/offender quashed.

(Para 5-8)

***

Quashing of FIR u/s 174-A IPC – Compromise – FIR under Section 174-A IPC quashed where the complaint under Section 138 of the NI Act was compromised and withdrawn.

***

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 82 -- Indian Penal Code, 1860 (45 of 1860), Section 174-A – Cheque bounce case – Proclaimed person – Compromise in complaint -- Quashing of FIR -- Considering the fact that the complaint u/s 138 of the N.I. Act was compromised and later on the same was withdrawn -- Petitioner has also shown a bona fide cause for non-appearance before the trial Court -- Service was not effected at the ordinary place of residence of the petitioner and he was not aware of the said fact and immediately, on coming to know about the said order, the petitioner has compromised the matter with the complainant and the complaint u/s 138 of the Act was withdrawn later on -- Petition allowed FIR u/s Section 174-A IPC and all other subsequent proceedings arising thereof, quashed. Vikas Sharma vs. Gurpreet Singh Kohli and another, 2017, (3) L.A.R. 584 relied.

(Para 5-8)

***

FIR under Section 174-A IPC – Anticipatory bail -- Where the petitioner had surrendered before the trial Court and was granted regular bail in the main complaint under Section 138 of the NI Act, anticipatory bail granted in the FIR under Section 174-A IPC.

***

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 438 -- Complaint u/s 138 of NI Act – Declaration of proclaimed person -- Anticipatory bail in FIR u/s 174-A IPC -- Subsequently, the petitioner had surrendered before the trial Court and, thereafter, he was released on bail by the trial Court in the main case – Petition allowed, petitioner granted concession of anticipatory bail.

(Para 5, 6)

***

Impounding of Passport – Dishonour of Cheque – Proclaimed Person – Impounding of the petitioner’s passport despite her appearance before the Magistrate and grant of bail, rendering the proclamation inoperative -- Regional Passport Office directed to release the passport within 15 days and pay costs of Rs.1 lakh.

***

Passports Act, 1967 (15 of 1967), Section 10 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 82 – Constitution of India, Article 21 -- Cheque bounce case -- Proclaimed Person – Released on bail – Impounding of passport – Legality of – Petitioner appeared before the Judicial Magistrate, she was granted bail and, thus, the proclamation order ceased to be operative -- Said fact was well within the knowledge of respondent-Regional Passport Office -- Moreover, in a bailable offence, no condition can be imposed by the Court regarding surrender of the passport -- Fundamental Rights of the petitioner breached -- Hence, the impugned action is highly deprecated -- Petition allowed with a costs of Rs.1.00 lakh to be paid by respondent-RPO to the petitioner -- Respondent-RPO directed to release the passport of the petitioner within 15 days.

(Para 19-25)

***

Revisional Jurisdiction – Sentencing Powers – While exercising revisional jurisdiction, the Court possesses appellate powers to alter the nature or extent of the sentence.

***

Sentencing – An offence under Section 138 NI Act is quasi-criminal and not an offence against society; while imposing sentence, the Court must balance legislative intent, deterrence and restitution, keeping in view the possibility of settlement between the parties.

***

Sentencing – Dishonour of Cheque – Imposition of the maximum sentence of two years’ rigorous imprisonment for dishonour of a cheque of Rs.4 lakhs held arbitrary in view of the petitioner’s financial condition and protracted trial of nearly ten years; sentence reduced to 18 months’ rigorous imprisonment while maintaining compensation with interest at 9% per annum.

***

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143-A, 147, 148 – Code of Criminal Procedure, 1973 (2 of 1974), Section 386, 401 (1) – Cheque bounce case -- Sentence to accused -- Revisional power – Nature of -- While exercising revisional jurisdiction, the Court possesses exercises all the powers conferred on an Appellate Court to alter the nature or the extent or the nature and extent of the sentence.

(Para 7)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143-A, 147, 148 – Cheque bounce case – Not an offence against society – Imposition of sentence -- Offence u/s 138 of the Act is quasi criminal in nature -- It is not an offence against society and an accused can escape punishment by settling with the complainant -- Thus, while imposing a sentence u/s 138 of the Act, the Court must be alive to the concern of the Legislature in inserting Chapter XVII in the Act and then amending the provisions thereof to make the same more stringent as well as the jurisprudential principles of deterrence and restoration and that the offence is quasi criminal in nature.

(Para 10-14)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 147 – Cheque bounce case – Cheque amount of Rs.4 lacs -- Maximum sentence of R.I. for two years imposed -- Compensation of payment of the cheque amount along with interest @ 9% per annum from the date of issuance of cheque till the date of the judgment also awarded -- Award of maximum sentence is held to be arbitrary -- Petitioner is a poor person and having undergone a protracted trial of almost 10 years, also exist -- Sentence is reduced to RI for a period of one year and six months along with payment of compensation as awarded by the trial Court.

(Para 15-17)

***

Compromise at Revisional Stage – Proceedings under Section 138 NI Act can be compounded during the pendency of revision before the High Court, warranting setting aside of conviction and sentence and acquittal of the accused.

***

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 401 -- Cheque bounce case – Conviction of accused -- Compromise at revisional stage – Acquittal from -- Matter can be compromised at the stage of pendency of revisional proceedings before the High Court -- Conviction and sentence of the accused can be set aside -- Petition allowed, petitioner is acquitted of the charge levelled against him. Damodar S. Prabhu’s case AIR 2010 Supreme Court 1907 and Sri Ashish Subba’s case 2018 (1) RCR (Criminal) 971 relied.

(Para 8-10)

***

Vicarious Liability – Company – Dishonour of Cheque – Complaint and summoning orders quashed qua the petitioner who was neither a signatory to the cheques nor shown to be a director or in-charge of the company's affairs by any supporting material.

***

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 -- Cheque bounce case of Company – Incharge of the affairs of the Company, no document to support – Accused neither Director nor a signatory of cheque -- Quashing of complaint –

(a) The complaint is based on a Memorandum of Understanding, which is not signed by the petitioner and is rather signed by accused No.3. The dishonoured cheques were given to the complainant at the time of signing of the Memorandum of Understanding.

(b) The cheque numbers of the disputed cheques are duly mentioned in the body of the Memorandum of Understanding signed by accused No.3, which show that he was the person In-charge of the Company as he entered into a Memorandum of Understanding on behalf of accused No.1-Company and had issued the cheques in favour of the complainant.

(c) Even the cheques are not signed by the petitioner and the same are signed by accused Nos.2 and 3.

(d) In the complaints, the only allegation in para 3 is that accused No.4-petitioner is In-charge of the affairs of accused No.1-Company, however, there is no document to support this version and rather in the reply filed by the complainant in High Court, nowhere reflects that the petitioner is the In-charge of the affairs of accused No.1-Company, in any manner.

(e) There is nothing on record to support the complaints that the petitioner is one Director of accused No.1-Company as it is the case of the petitioner that he never remained the Director of accused No.1-Company at any stage and this fact is not disputed in the reply.

Summoning orders and all other subsequent proceedings arising therefrom, are ordered to be quashed qua the petitioner.

(Para 15,16)

***

Loss of cheque/ Denal of signature -- Adverse inference drawn against the accused for alleging loss of cheques and denying signatures without lodging a police complaint, informing the bank, or producing expert evidence.

***

Revisional Jurisdiction – Cheque bounce case -- High Court cannot re-appreciate evidence in revision absent perversity or misreading of evidence.

***

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 -- Cheque bounce case – Cheque lost plea – Denial of signature on cheques -- Case of the accused that the three cheques were lost but neither any complaint to the police nor any information was given to the bank qua the same at any stage -- Accused/ petitioner has denied his signatures on the cheques in question, but has failed to produce any expert nor any such objection has been raised by the drawee bank -- Adverse inference drawn against the petitioner/accused.

(Para 15,16)

B. Code of Criminal Procedure, 1973 (2 of 1974), Section 401 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 -- Cheque bounce case – Revisional jurisdiction -- In a revision petition, High Court is not to re-appreciate the evidence like Court of an appeal - - Not pointed out as to how the findings given by the courts below are perverse or against the evidence -- Nothing has been pointed out as to which material evidence has been misread and which material evidence has not considered by the courts below -- Presumption u/s 139 of the N.I.Act arose against the accused and it was first for him to rebut the same -- But he failed to rebut the presumption -- Rather, the complainant led even cogent evidence to prove his case beyond any doubt -- Concurrent findings given by both the courts below based on appreciation of evidence in right perspective – Revision dismissed.

(Para 17-22)

***

Money Lending Licence – Trial Magistrate’s approach was misconceived and erroneous in dismissing the complaint u/s 138 NI Act, solely on the ground that the complainant was required to hold a money-lending licence – Matter remitted back for fresh consideration.

***

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Punjab Registration of Money Lenders Act, 1938 (3 of 1938), Section 3, 4 – Cheque bounce case – Money Lending Licence -- Complainant having visiting terms with accused -- Since accused was in dire need of money, loan amount Rs.5,40,000/- with an agreement was advanced – Accused issued a Cheque of Rs. 5 lacs – Cheque dishonoured on account of insufficiency of funds -- Trial Magistrate dismissed the complaint observing that for entering into loan transaction, a licence under Money Lender's Act was necessary – Held, the approach of the trial Magistrate was misconceived and erroneous -- Dismissing the complaint for the reason of complainant having been found to be a professional money lender practicing money lending without licence is not sustainable – Appeal allowed, matter remanded back.

(Para 20)

***

Rebuttal of presumption -- Despite admission of the cheque signatures, the accused may rebut the presumption u/s 139 NI Act, by exposing deficiencies in the complainant’s evidence without leading defence evidence.

***

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Cheque bounce case – Rebuttal of presumption -- Initial presumption is in favour of holder of the cheque in view of Section 139 of the Act, however, the same is rebuttable -- It is permissible for the accused to rebut the same on the basis of evidence led by the prosecution.

(Para 6)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) – Acquittal in cheque bounce case – Leave to appeal -- Signatures on the cheque is not denied, yet the complainant has failed to prove any friendly relationship with the accused -- No acknowledgement has been placed on record nor in the income tax returns Mark `A’ and Mark `B’, there is any reference of loan when it is an admitted fact that the wife of attorney (complainant) had been into the business of Hire Purchase and Investment for the last 20 years -- It is permissible for the accused to point out contradictions/deficiencies in the evidence led by the prosecution and that it is not necessary for the accused to lead evidence in defence to rebut the presumption -- No ground to grant leave to appeal. ANSS Raja Shekhar’s case (2019) SCC 185 & Kishan Rao’s case (2018) 8 SCC 165 relied.

(Para 14-17)

***

Quashing of FIR – Forged Receipts: Where the genuineness of receipts and alleged forged signatures is already under consideration in a pending civil suit, continuation of an FIR registered solely on the basis of a handwriting expert’s opinion may prejudice the parties and amount to abuse of the process of law.

***

Presumption of Legally Enforceable Debt -- Once the accused admits or issuance of the cheque is established, the presumption u/s 139 NI Act, operates in favour of the complainant, and the complaint should not be quashed under Section 482 CrPC where disputed questions of fact require adjudication through evidence.

***

A. Code of Criminal Procedure, 1973 (2 of 1974), Section 154, 482 -- Code of Civil Procedure, 1908 (V of 1908), Section 9 – Civil suit – Handwriting expert report – F.I.R. w.r.t. forged receipts – Sustainability of -- Quashing of FIR -- Handwriting expert in civil suit has opined that signatures in all the four receipts did not tally with the sample signatures which were of respondent No.2 -- It was only thereafter, FIR was registered -- In the Summary Suit, issue No.5 has been framed by the Court “whether the defendant proved that the plaintiff has fabricated the forged signature illegally and created forged receipts” – Held, when the issue as to the genuineness of the receipts is pending consideration in the civil suit, the FIR ought not to have been allowed to continue as it would prejudice the interest of the parties and the stand taken by them in the civil suit -- Based on the sole opinion of the handwriting expert, the FIR ought not to have been registered -- Continuation of FIR would amount to abuse of the process of Court – Petition u/s 482 Cr.P.C. to quash the FIR allowed.

(Para 18, 19)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Indian Evidence Act, 1872 (1 of 1872), Sections 45, 72, 118(a) -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque bounce case – Quashing of complaint -- Presumption of legal enforceability debt – Rebuttal of -- ‘Y’ admitted the issuance of cheques -- Once the issuance of cheque is admitted/established, the presumption would arise u/s 139 of the N.I. Act in favour of the holder of cheque that is the complainant-appellant No.3 -- Burden lies upon the accused to rebut the presumption by adducing evidence -- High Court did not keep in view that until the accused discharges his burden, the presumption u/s 139 of N.I. Act will continue to remain -- When disputed questions of facts are involved which need to be adjudicated after the parties adduce evidence, the complaint u/s 138 of the N.I. Act ought not to have been quashed by the High Court by taking recourse to Section 482 Cr.P.C.

(Para 20)

***

Proclaimed Person – Quashing of FIR under Section 174-A IPC -- Accused establish bona fide grounds for non-appearance due to lack of proper service and subsequently settle the cheque-dishonour complaint -- FIR under Section 174-A IPC and consequential proceedings quashed.

***

Indian Penal Code, 1860 (45 of 1860), Section 174-A -- Code of Criminal Procedure, 1973 (2 of 1974), Section 82 – Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141, 142 -- Proclaimed person – FIR u/s 174-A IPC – Quashing of -- Petitioners have shown a bona fide cause for non-appearance before the trial Court as service was not effected at the ordinary place of residence of the petitioners and they were not aware of the said fact and immediately, on coming to know about the said order, they compromised the case with the complainant and the complaint u/s 138 of the Act was withdrawn later on – Petition allowed, impugned order as well as FIR u/s 174-A IPC and all other subsequent proceedings arising thereof, quashed.

(Para 7,8)

***

Second Complaint and Double Jeopardy -- Filing a second complaint u/s 138 NI Act, on the same cause of action after an earlier premature complaint does not amount to double jeopardy under Article 20(2) of the Constitution or Section 300 CrPC.

***

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142 – Constitution of India, Article 20(2) -- Code of Criminal Procedure, 1973 (2 of 1974), Section 300 -- Second Complaint u/s 138 of NI Act – Double jeopardy -- Trial court convicted the accused – Appellate Court acquitted the accused solely based upon Yogendra Pratap Singh’s case, 2015 (1) RCR (Civil) 550 -- Hon’ble Apex Court held in that case, where the complaint was filed before the expiry of the period 15 days stipulated in the notice, the Court cannot take the cognizance thereof, however, the second complaint on the same cause of action has been held to be maintainable and the delay in filing such complaint shall be deemed to have been condoned -- Held, it cannot be said that the filing of the second complaint and passing of the summoning order therein, amounts to double jeopardy to the petitioner.

(Para 6-10)

A. Indian Penal Code, 1860 (45 of 1860), Section 499, 500 – Complaint u/s 138 of NI Act by Bank – Acquittal from – Defamation -- Merely because the Court comes to the conclusion that no offence is made out, does not give a handle to the accused to launch the defamation proceedings against the complainant.

(Para 13-17)

B. Indian Penal Code, 1860 (45 of 1860), Section 499, 500 – Complaint u/s 138 of NI Act by Bank – Acquittal from -- Defamation – Mens-rea -- Bank or its employees cannot be in any case held to have committed an offence u/s 500 IPC because, the most essential ingredient of the said offence i.e. ‘mensrea’ would be missing as a Bank or its employees -- Mensrea or criminal intention is lacking on the part of the petitioners and hence, they cannot be held guilty of offence of defamation within the meaning of Section 499 IPC.

(Para 14-16)

***

Dismissal for Non-Prosecution -- Complaint u/s 138 NI Act -- Dismissal solely due to the complainant’s absence on one occasion is unjustified; a petition under Section 482 CrPC is maintainable, and the complaint may be restored to its original number to ensure adjudication on merits.

***

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Accused summoned u/s 138 NI Act -- Absence of complainant -- Dismissal of complaint for non-prosecution – Petition u/s 482 Cr.P.C. – Maintainability of -- On account of absence of complainant on one occasion dismissal of the complaint for non-prosecution was not justified, since, it is always desirable that a lis should be decided on merits, rather than, non-suiting the parties on technical grounds -- Present petition challenging the impugned order is maintainable and no fault can be found with the same -- Petition accepted; impugned order set aside and the complaint is ordered to be restored at its original number.

(Para 7)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) -- Cheque bounce case – Presumption u/s 139 of N.I. Act -- Dismissal of complaint – Appellant/complainant has averred that the amount of cheque is part of sale consideration which stands belied from the reading of registered sale deed -- Once on preponderance of probabilities the defence creates doubt, the onus shifts on the complainant to prove its case beyond shadow of reasonable doubt and the protective umbrella of Section 139 of the N.I. Act is no more available. Dismissal of complaint order, upheld. Rangappa’s case, (2010) 11 SCC 441 relied.

(Para 1,7)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 145 -- Indian Evidence Act, 1872 (1 of 1872), Section 3 -- Complaint in cheque bounce case – Evidence of accused by way of affidavit – Permissibility of -- Accused, who is facing trial in complaint under the provisions of Negotiable Instruments Act, is not competent to tender his evidence through affidavit.

(Para 8)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 82 -- Cheque bounce case -- Proclaimed offender -- Order challenged after 4 years -- There may not be any reason to allow, however keeping in view the fact that the matter actually arises out of proceedings u/s 138 of the N.I. Act and petitioner undertakes to continue appearing before the trial Court on each and every date and also and a mother of two minor children (less than 10 years of age), impugned order set aside, upon the petitioner furnishing adequate bail bonds and surety bonds to the satisfaction of the trial Court.

(Para 1)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 219 -- Cheque bounce case – Four cheque bounced – One legal notice issued – Consolidation of trial -- There is no provision of consolidation of cases in the Code of Criminal Procedure – Only relief that can be granted, Trial Magistrate directed to fix all the four cases on one date so that it is convenient to both the parties to attend the hearing of all the four cases on one date.

(Para 3-5)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 87, 138 – Blank Cheque -- Material alteration -- Filling in the blank shall not be always required to be treated as a material alteration -- Alteration in the common parlance is understood to mean, something already been written has been changed/altered subsequently -- Alteration is not synonymous to the word “filling up the unfilled column or space” -- Alteration is permissible, if it is made in order to carry out the common intention of the original parties.

(Para 24)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Quashing of complaint u/s 138 of NI Act -- Power u/s 482 Cr.P.C. can be exercised in favour of the petitioner only when the Court is certain that the continuation of the proceedings would be of no use and the Court is in a position to record from finding that continuation of such proceedings would result in abuse of the process of the Court -- Once there is a doubt or there are certain questions which need adjudication on appreciation of evidence, the High Court should not exercise powers under Section 482 Cr.P.C. to quash the complaint.

(Para 25)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143A – Code of Criminal Procedure, 1973 (2 of 1974), Section 421 -- Cheque bounce complaint – Interim compensation – Recovery of -- In case an accused, against whom an order to pay interim compensation u/s 143A of the Act is passed, fails or is unable to pay the amount of interim compensation, the process u/s 421 can be taken resort to which may inter alia result in coercive action of recovery of the amount of interim compensation as if the amount represented the arrears of land revenue – Extent and rigor of the procedure prescribed for such recovery may vary from State to State but invariably, such procedure may visit the person concerned with coercive methods.

(Para 12)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143A – Section 138, 143A – Cheque bounce complaint – Interim compensation – Whether Section 143A of the Act is retrospective in operation and can be invoked in cases where the offences punishable u/s 138 of the Act were committed much prior to the introduction of Section 143A – Section 143A held to be prospective in operation and that the provisions of said Section 143A can be applied or invoked only in cases where the offence under Section 138 of the Act was committed after the introduction of said Section 143A in the statute book.

(Para 14-24)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143-A, 148 – Cheque bounce case -- Directions to deposit certain percentage of compensation/fine – Adjustment of amount recovered under 'the SARFAESI Act' – Courts are well within their power to order adjustment -- Amount recovered under the SARFAESI Act shall be deemed to have been adjusted towards 20% of the compensation as ordered by the Court.

(Para 12-23)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143-A – Code of Criminal Procedure, 1973 (2 of 1974), Section 421 – Cheque bounce case – Interim compensation -- Non-deposit of – It is nowhere, specifically provided in the Act that if the payment as ordered has not been deposited, the bail granted shall be liable to be consequently cancelled – Recovery can be made of such defaulted amount as if it is a fine under Section 421 Cr.P.C. -- During the trial of the case, the Court should not cancel the bail already granted on this ground alone.

(Para 25)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143-A – Cheque bounce case -- Directions to deposit certain percentage of compensation/fine – Non-deposit of – Once the legislature or framers of the NI Act have not made any specific provision for automatic cancellation of the bail granted by the trial court or the appellate court on account of default of payment of interim compensation or certain percentage of compensation or fine, it would not be appropriate to hold it otherwise.

(Para 24,25)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 148 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 357(2), 389 – Appeal against conviction u/s 138 of NI Act – Suspension of Sentence – Pre-condition of deposit 20% -- Power of -- Amended Section 148 of the N.I. Act confers power upon the Appellate Court to pass an order pending appeal to direct the Appellant-Accused to deposit the sum which shall not be less than 20% of the fine or compensation either on an application filed by the original complainant or even on the application filed by the Appellant-Accused under Section 389 of the Cr.P.C. to suspend the sentence.

(Para 9, 10)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 148 – Appeal against conviction u/s 138 of NI Act – Provision of 20% deposit – Mandatory or Directory -- Nature of -- Considering the amended Section 148 of the N.I. Act as a whole to be read with the Statement of Objects and Reasons of the amending Section 148 of the N.I. Act, though it is true that in amended Section 148 of the N.I. Act, the word used is “may”, it is generally to be construed as a “rule” or “shall” and not to direct to deposit by the appellate court is an exception for which special reasons are to be assigned – Such a purposive interpretation would be in furtherance of the Objects and Reasons of the amendment in Section 148 of the N.I. Act and also Sec 138 of the N.I. Act.

(Para 9)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 82 -- Indian Penal Code, 1860 (45 of 1860), Section 174-A -- Cheque bounce case – Proclaimed offender / person – F.I.R. u/s 174-A of IPC – Quashing of -- Petitioner has undergone substantive sentence in the proceedings u/s 138 of the N. I. Act -- Petitioner made the payment to the complainant who entered into a compromise with the petitioner after his claim was satisfied, sentence was reduced to the period already undergone by him – Both F.I.R.s registered u/s 174-A IPC are hereby quashed along with all the subsequent proceedings, however, subject to payment of costs of Rs.3,000/- to be deposited with the District Legal Services Authority.

(Para 9-10)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) -- Cheque bounce case -- DDR for misplace of cheque – Presumption u/s 139 of NI Act – Rebuttal of -- Acquittal of accused – Leave to appeal -- DDR Ex.DW.1/A dated 18.9.2012, recorded on the statement of accused, he has averred that his cheque book of account of HDFC Bank has been misplaced containing cheques of the serial Nos.220856 to 220865 -- Number of present cheque is 220861 -- DDR has been registered even before the advancement of loan as stated by the complainant -- Presumption u/s 139 of the NI Act has been duly rebutted – No ground to grant leave to appeal.

(Para 8-11)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce case -- Loan of Rs. 2 lacs -- No documentation -- Complainant has not mentioned any date, month, year as to when the loan was advanced to the accused -- No receipt or security document was got executed while lending amount of Rs.2 lakhs to the accused -- Otherwise also, there are no particulars, that at which place, in whose presence the loan was advanced and what was the mode of giving the amount, whether by cheque or by cash nor there is anything that the amount was withdrawn from the bank or it was lying with the complainant at his home -- No document on record to show the loan transaction -- No income tax return has been produced to show the lending of the amount in question to the accused -- All these facts are fatal to the case of the complainant. Vijay’s case, 2013(1) RCR (Criminal) 1028 (SC) relied.

(Para 10)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Indian Contract Act, 1872 (9 of 1872), Section 30 -- Cheque bounce case – Void agreement – Presumption u/s 139 of NI Act – Rebuttal of -- Statement of account is not pertaining to any loan raised by the accused but the same is regarding chit fund/lottery system run by the complainant -- Transaction comes under the agreement by way of wager, which is void as per Section 30 of the Contract Act -- Both the parties were involved in chit fund/lottery system -- Presumption u/s 139 of Act can be rebutted by raising probable defence – Accused raised probable defence – Acquittal order, upheld.

(Para 10-12)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce case -- Loan of Rs. 7 lacs -- No documentation -- No receipt or security document was got executed while lending such a huge amount of Rs.7 lakhs to the accused – No particulars, that at which place, in whose presence the loan was advanced and what was the mode of giving the amount, whether by cheque or by cash nor there is anything that the amount was withdrawn from the bank or it was lying with the complainant at his home -- No document on record to show the loan transaction -- No income tax return has been produced to show the lending of the amount in question to the accused -- All these facts are fatal to the case of the complainant. Vijay’s case 2013(1) RCR (Criminal) 1028 (SC) relied.

(Para 11)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 118(a), 139 -- Signature not denied on cheque -- Legally enforceable liability – Presumption of – Rebuttal of – Presumption of Complainant being holder of cheque and the signature on the cheque having not been denied by the accused, presumption shall be drawn that cheque was issued for the discharge of any debt or other liability – Presumption u/s 139 is a rebuttable presumption.

(Para 10)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 118(a), 139 -- Legally enforceable liability – Presumption of – Rebuttal of – Law summarised in following manner:-

(i)      Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.

(ii)     The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.

(iii)    To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.

(iv)    That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.

(v)     It is not necessary for the accused to come in the witness box to support his defence.

(Para 23)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 118(a), 139 -- Legal enforceable liability – Financial capacity – Onus of proof – Acquittal of accused -- During cross-examination, when financial capacity to pay Rs.6 lakhs to the accused was questioned, there was no satisfactory reply given by the complainant -- Evidence on record, thus, is a probable defence on behalf of the accused, which shifted the burden on the complainant to prove his financial capacity and other facts – Order acquitting the accused by Trial Court, upheld.

(Para 24-29)

D. Negotiable Instruments Act, 1881 (26 of 1881), Section 118(a), 139 -- Legal enforceable liability – Financial capacity – Onus of proof – Acquittal of accused -- During the period from 2009 to November, 2011, amount of Rs.18 lakhs was given by the complainant to different persons including the accused, which put a heavy burden to prove the financial capacity when it was questioned on behalf of the accused -- It was incumbent on the complainant to have explained his financial capacity -- Court cannot insist on a person to lead negative evidence -- Order acquitting the accused by Trial Court, upheld.

(Para 25-28)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 143-A, 148 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 5 -- All the provisions relating to punishment, execution thereof, fine and compensation and recovery thereof, as contained in the Cr.P.C, has to be read in conjunction and in harmony with Section 143-A and Section 148 of the Act.

(Para 27)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143-A – Complaint u/s 138 of the NI Act -- Provision for deposit of 20% in complaint -- Substantive obligation -- Prospective in nature -- Section 143-A of the Act cast a substantive obligation upon the accused and thereby effect the substantive right of the accused -- Since the Amendment Act has not made the provision applicable retrospectively, specifically, to pending cases, hence, it cannot be applied retrospectively, to pending cases; which arose from the default of the accused which has taken place before coming into force of this provision.

(Para 29)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143-A -- Provision for deposit of 20% in complaint  --  Nature of -- Standalone liability -- Closing of defence not permissible – This section does not authorize the Trial Court to pass any order, having consequences against the accused qua the steps of the trial; in case of non-payment of interim compensation -- This section does not authorize the Court to close the defense or to take any other step for speeding up the trial as such -- This provision is intended to create a 'stand alone liability' which has to be discharged independent of the trial and which shall have consequences outside the trial only.

(Para 30)

D. Negotiable Instruments Act, 1881 (26 of 1881), Section 148 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 378, 421, 424 -- Appeal against conviction -- Provision for deposit of 20% in Appeal --  Nature of -- Procedural in nature – Applicability on pending appeals -- Provisions for recovery of fine or compensation from the appellant/convict already existed in the existing procedure relating to the recovery, therefore, the provision introduced vide Section 148 of the Act; which relates only to recovery of amount partly, as interim measure, has to be treated purely procedural only, which is otherwise also beneficial for the appellant as compared to the pre-existing provisions -- Hence it has to be held that provision of Section 148 of the Act shall govern all the appeals pending on date of enforcement of this provision or filed thereafter.

(Para 35)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 118(a), 138, 139 -- Acquittal of accused in cheque bounce case – Setting aside of -- Jurisdiction of Appellate Court -- Ordinarily, the Appellate Court will not be upsetting the judgment of acquittal, if the view taken by Trial Court is one of the possible views of matter and unless the Appellate Court arrives at a clear finding that the judgment of the Trial Court is perverse, i.e., not supported by evidence on record or contrary to what is regarded as normal or reasonable; or is wholly unsustainable in law -- Such general restrictions are essentially to remind the Appellate Court that an accused is presumed to be innocent unless proved guilty beyond reasonable doubt and a judgment of acquittal further strengthens such presumption in favour of the accused -- Same rule with same rigour cannot be applied in a matter relating to the offence u/s 138 of the NI Act, particularly where a presumption is drawn that the holder has received the cheque for the discharge, wholly or in part, of any debt or liability -- Appellate Court is certainly entitled to examine the evidence on record in order to find if preponderance indeed leans in favour of the accused.

(Para 11.1)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 118(a), 138, 139 -- Legally enforceable liability – Presumption of – Rebuttal of – Onus of proof -- Accused-appellant could not deny his signature on the cheques in question -- It is required to be presumed that the cheques in question were drawn for consideration and the holder of the cheques i.e., the complainant received the same in discharge of an existing debt -- Onus, therefore, shifts on the accused-appellant to establish a probable defence so as to rebut such a presumption.

(Para 14)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 118(a), 138, 139 -- Legally enforceable liability – Rebuttal of presumption – Probable defence -- On the aspects relating to preponderance of probabilities, the accused has to bring on record such facts and such circumstances which may lead the Court to conclude either that the consideration did not exist or that its non-existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist.

(Para 16)

D. Negotiable Instruments Act, 1881 (26 of 1881), Section 118(a), 138, 139 -- Legally enforceable liability – Presumption of – Source of fund for loan – Requirement of law – After purportedly drawing the presumption u/s 139 of the NI Act, the Trial Court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused -- This approach of the Trial Court had been at variance with the principles of presumption in law -- After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the accused-appellant.

(Para 17)

E. Negotiable Instruments Act, 1881 (26 of 1881), Section 118(a), 138, 139 -- Legally enforceable liability – Presumption of – Rebuttal of – Creation of doubt is not sufficient -- Trial Court proceeded to pass the order of acquittal on the mere ground of 'creation of doubt' -- Trial Court appears to have proceeded on a misplaced assumption that by mere denial or mere creation of doubt, the appellant had successfully rebutted the presumption as envisaged by Section 139 of the NI Act -- In the scheme of the NI Act, mere creation of doubt is not sufficient.

(Para 20)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Agreement to sell – Payment by cheque – Dishonour of – Legal enforceable liability -- Though an agreement to sell does not create any interest in immoveable property, it nonetheless constitutes a legally enforceable contract between the parties to it -- A payment which is made in pursuance of such an agreement is hence a payment made in pursuance of a duly enforceable debt or liability for the purposes of Section 138.

(Para 13)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Offence by Company – Liability of Director – Quashing of Complaint by High court -- Law requires that the complaint must contain a specific averment that the Director was in charge of, and responsible for, the conduct of the company’s business at the time when the offence was committed – High Court, in deciding a quashing petition u/s 482, Cr.P.C., must consider whether the averment made in the complaint is sufficient or if some unimpeachable evidence has been brought on record which leads to the conclusion that the Director could never have been in charge of and responsible for the conduct of the business of the company at the relevant time -- High Court must exercise its power u/s 482, Cr.P.C. when it is convinced, from the material on record, that allowing the proceedings to continue would be an abuse of process of the Court.

(Para 9)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Object of Section 138 of NI Act -- Object of Section 138 of the Negotiable Instruments Act is to infuse credibility to negotiable instruments including cheques and to encourage and promote the use of negotiable instruments including cheques in financial transactions -- Penal provision of Section 138 of the Negotiable Instruments Act is intended to be a deterrent to callous issuance of negotiable instruments such as cheques without serious intention to honour the promise implicit in the issuance of the same.

(Para 9)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque presented two times – Complaint after second default – Permissibility of -- Prosecution based on a second or successive default in payment of the cheque amount is not impermissible simply because no statutory notice had been issued after the first default and no proceeding for prosecution had been initiated.

(Para 10)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Conviction of accused – Revisional Jurisdiction of High court -- It is well settled that in exercise of revisional jurisdiction, the High Court does not, in the absence of perversity, upset concurrent factual findings -- It is not for the Revisional Court to re-analyse and re-interpret the evidence on record.

(Para 19)

D. Negotiable Instruments Act, 1881 (26 of 1881), Section 118(a), 138, 139 -- Post-dated cheque – Rebuttal of presumption -- Onus to rebut the presumption u/s 139 that the cheque has been issued in discharge of a debt or liability is on the accused -- Fact that the cheque might be post-dated does not absolve the drawer of a cheque of the penal consequences of Section 138 of the Negotiable Instruments Act.

(Para 36)

E. Negotiable Instruments Act, 1881 (26 of 1881), Section 20,87,138,139 -- Cheque signed by drawer – Cheque filled by other – Effect of -- It is immaterial that the cheque may have been filled in by any person other than the drawer -- If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted.

(Para 37)

F. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Blank signed cheque – Subsequent filing of cheque by other – Effect of --Rebuttal of presumption – Onus of proof -- Payee may fill up the amount and other particulars, this in itself would not invalidate the cheque -- Onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence -- Subsequent filling in of an unfilled signed cheque is not an alteration.

(Para 38, 42)

G. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 -- Fiduciary relation -- Legally enforceable liability – Presumption of – Rebuttal of -- Existence of a fiduciary relationship between the payee of a cheque and its drawer, would not disentitle the payee to the benefit of the presumption u/s 139 of the Act, in the absence of evidence of exercise of undue influence or coercion.

(Para 39)

H. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 -- Blank cheque leaf -- Legally enforceable liability – Presumption of – Rebuttal of -- Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption u/s 139 of the Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.

(Para 40)

I. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 -- Friendly loan without receipt – Effect of -- Fact that the loan may not have been advanced by a cheque or demand draft or a receipt might not have been obtained would make no difference.

(Para 41)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 145 – Constitution of India, Article 141 -- Cheque bounce case – Stare Decisis -- Accused’s evidence by way of affidavit – Permissibility of – Accused, while appearing as his own witness in defence does not have any right to lead the evidence by way of affidavit – Held, even if the judgment of the Supreme Court in case of Indian Bank Association 2014 (2) RCR (Criminal) 598 is taken to be suggesting contrary to the judgment of the Supreme Court rendered in Mandvi Co-op Bank Ltd., 2010(1) JT 259, then also, it is the Judgment rendered by the Supreme Court in Mandvi Co-op Bank Ltd., which shall hold the field, being earlier in point of time and having been delivered by a Bench of equal strength.

(Para 10)