A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143 – Code of Criminal Procedure, 1973 (2 of 1974), Section 258 – Cheque bounce complaint – Summary trial – Discharge of accused – Compounding of offence -- Court can close the proceedings and discharge the accused on satisfaction that the cheque amount with assessed costs and interest is paid and if there is no reason to proceed with the punitive aspect –Though compounding requires consent of both parties, even in absence of such consent, the Court, in the interests of justice, on being satisfied that the complainant has been duly compensated, can in its discretion close the proceedings and discharge the accused -- Court is entitled to close the proceedings in exercise of its powers u/s 143 of the Act read with Section 258 Cr.P.C.

(Para 11, 18 (i)-(iii), 19)

B. Negotiable Instruments Act, 1881 (26 of 1881), Chapter XVII, Section 138 – Cheque bounce complaint – Summary trial -- Online hearing of case – Online appearance of accused – Exemption of accused from personal appearance -- Service of summons can be by post/ e-mail/ courier -- Summons ought to indicate that the accused could make specified payment by deposit in a particular account before the specified date and inform the court and the complainant by e-mail -- If the accused complies with such summons and informs the Court and the complainant by e-mail, the Court can ascertain the objection, if any, of the complainant and close the proceedings unless it becomes necessary to proceed with the case -- Some cases of Section 138 cases can be decided online -- If complaint with affidavits and documents can be filed online, process issued online and accused pays the specified amount online, it may obviate the need for personal appearance of the complainant or the accused -- Only if the accused contests, need for appearance of parties may arise which may be through counsel and wherever viable, video conferencing can be used -- Personal appearances can be dispensed with.

(Para 16, 17, 20)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143 – Code of Criminal Procedure, 1973 (2 of 1974), Section 357(3), 431 – Indian Penal Code, 1860 (45 of 1860), Section 64 -- Cheque bounce complaint – Summary trial -- Discretion of the Magistrate to hold that it was undesirable to try the case summarily as sentence of more than one year may have to be passed -- Court has jurisdiction u/s 357(3) Cr.P.C. to award suitable compensation with default sentence under Section 64 IPC and with further powers of recovery under Section 431 Cr.P.C -- With this approach, prison sentence of more than one year may not be required in all cases.

(Para 12, 18(iv))

D. Negotiable Instruments Act, 1881 (26 of 1881), Chapter XVII, Section 138, 143 – Code of Criminal Procedure, 1973 (2 of 1974), Section 264, 357(3) – Cheque bounce complaint – Summary trial – Procedure for summoning -- Evidence of the complaint can be given on affidavit -- Bank’s slip being prima facie evidence of the dishonor of cheque, it is unnecessary for the Magistrate to record any further preliminary evidence -- Such affidavit evidence can be read as evidence at all stages of trial or other proceedings – Normal rule for trial of cases under Chapter XVII of the Act is to follow the summary procedure except where exercise of power under second proviso to Section 143 becomes necessary.

(Para 18(iv), (v), 19)

E. Negotiable Instruments Act, 1881 (26 of 1881), Chapter XVII, Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Chapter XXIA -- Cheque bounce complaint – Plea bargaining -- Speedy trial -- It will be open to the Court to consider the provisions of plea bargaining -- Trial can be on day to day basis and endeavour must be to conclude it within six months.

(Para 20)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case – Legal enforceable liability – Limitation -- Admittedly loan was taken in the year 1990, the same could not be claimed by bringing an action through cheque dated 30.08.1997 for recovery of the amount of Rs.25,000/- -- Hence, action in question was clearly barred by law of limitation -- Consequently, the liability under cheque could not be said to be a legally enforceable liability, and, therefore the complaint was not maintainable.

(Para 5)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case – Statutory notice -- Requirement of -- Statutory notice u/s 138 of the N.I.Act has been held to be mandatory in the absence of which the complaint under Section 138 must fail.

(Para 7)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce case – Conviction in – Compromise of the matter – Sentence already undergone -- Taking into consideration the argument raised for the petitioners to the effect that he is not seeking acquittal, rather, since petitioner has undergone more than half of his sentence and a compromise has also been entered between the parties, Court feels that the ends of justice would be met, if the substantive sentence awarded is reduced to the period already undergone by him.

(Para 10)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) -- Cheque bounce case – Legal enforceable liability -- Money lending license – Onus of proof -- Appeal against acquittal – From the receipt it is clear that cheque in question was issued for recovery of the moneys advanced to him by way of cash from time to time with interest @ 2% per month -- Burden of proof to show that the complainant was a money lender under licence to do the business of money lending was upon the complainant but no document was produced -- Section 138 of the Act contemplates legally enforceable liability -- In the wake of the above finding and reasons discussed above, the appellant could not have enforced his claim into the cheque in question which was issued in illegal money lending transaction -- Appeal against acquittal is therefore dismissed.

(Para 3)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) -- Cheque bounce case – Acquittal of accused – Leave to appeal -- Accused has led sufficient evidence to prove that he is a sole proprietor of the firm M/s Pardeep Kumar and he had issued the cheque to the firm, namely, M/s Ganpati Fabrics, which is proprietorship concern of the son of the applicant – Held, trial Court has rightly held that neither the complainant has pleaded in his complaint that the accused has issued the cheque in discharge of his liability of third person with the proprietor of concern `Textile' nor there is any evidence, in support thereof -- It has come in the statement of the complainant himself that M/s Ganpati Fabrics is the proprietorship firm of his son and that the accused concern was having business dealing with the concern M/s Ganpati Fabrics -- Therefore, the version given by the accused is more probable that he has no existing legal liability towards the complainant-`Textile' – Acquittal of the accused is just and proper – Application seeking leave to appeal is dismissed.

(Para 12,13, 17)

Negotiable Instruments Act, 1881 (26 of 1881), Section 118(a), 138,139 -- Friendly loan of Rs. 20 lacs – Acquittal of accused --

--       Complainant has not mentioned in his complaint as to for what purpose, he had advanced such a substantial amount as loan to the accused.

--       While appearing in the witness box applicant has deposed that the loan was advanced to the respondent in the presence of her father-in-law but she has not examined this witness in support of her claim.

--       No other witness has been examined by her regarding the loan transaction. Applicant has also not produced on record any receipt or pronote for grant of loan to the accused. Therefore, the act and conduct of the applicant is highly improbable, as no sane person is expected to advance such a substantial amount as loan to any other person without any documentation or even receipt or acknowledgement.

--       Complainant has also failed to mention the date, month and year of advancement of loan or issuance of cheque in question by the accused in her favour either in her pleadings or in her evidence.

–       Complainant has also not produced any document which may show her income/expenditure/ account of business income or the income tax return, which may draw an inference that she is financially well placed.

--       She has not given any detail as to what business or profession she is carrying.

--       Only contention, which the complainant has raised is that she has advanced a loan of Rs.20 lakhs to the accused as she had sold an industrial shed at Panchkula, but neither such sale deed nor any other relevant document has been produced on record by the complainant, which can substantiate the plea that the amount of Rs.20 lakhs was collected by her after the sale of the said industrial unit situated in Panchkula.

When no evidence to connect the respondent-accused with the alleged offence is available on record, no case is made out for interference in the impugned judgment of acquittal.

(Para 10-12)

Negotiable Instruments Act, 1881 (26 of 1881), Section 118(a), 138, 139 -- Cheque bounce case -- Complaint u/s 138 – Presumption of – Rebuttal of -- Presumption u/s 139 can be rebutted by the accused by raising probable defence -- Giving no particulars of the loan amount, as to when it was advanced nor there being any document to support the loan transaction, corroborates the version that the accused has not borrowed the amount – Furthermore, the complainant in the evidence has stated that he himself borrowed the amount on interest @ 3 to 5% -- Defence of the accused is that he has given this cheque to son in 2008 --  Before issuing legal notice to the present accused, the complainant had issued legal notice to son of the accused – Presumption u/s 139 of the Act has been duly rebutted.

(Para 10, 11)

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 -- Cheque bounce case – Proclaimed person – Quashing of FIR-- Petitioner could not appear before the trial Court as he was stated to have not been served at the address, where he was residing -- After the passing of the impugned order declaring him as a proclaimed person, he had surrendered before the trial Court and was ordered to be released on bail -- In such circumstances, especially, when the petitioner has duly surrendered before the trial Court, continuation of proceedings under Section 174-A IPC would be an abuse of the process of Court.

(Para 5)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Complaint u/s 138 of NI Act – Dismiss in default – Restoration of -- Though Ld. trial Court has rightly dismissed the complaint on account of non-appearance of the complainant-appellant, however, considering the fact that the complainant-appellant was appearing in the case regularly and on the relevant date, he had to go out of station and the case was fixed for appearance of the accused – Held, the complainant-appellant deserves opportunity to pursue his complaint, which was otherwise not adjudicated on merits -- Proceedings u/s 138 of the Act are more or less civil in nature, even though the same may have criminal bearing -- Consequently, the complaint filed by the applicant u/s 138 of the Act is restored for its decision as per merit.

(Para 9-11)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Closing of evidence of complainant – Accused was absent -- Justification in – Order, closing the evidence of the complainant, on the date when the accused himself was not present is not justified and accordingly, the same is set aside.

 (Para 6)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 357, 389, 401 -- Cheque bounce case – Appeal against conviction – Suspension of sentence -- Accused was sentenced to undergo R.I. for a period of 1 year and compensation for amount of cheques in question – Accused preferred an appeal -- Suspension of sentence given, with a direction to accused-appellant to deposit 1/3rd of the compensation amount – Accused is aggrieved by such condition – Held, no merit in the revision petition, rather the same is not maintainable -- Appellate Court is justified in imposing any term or condition while suspending the sentence of the accused-appellant, rather the Appellate Court showed indulgence to the accused appellant by asking him to deposit 1/3rd of the compensation only, instead of the complete one -- No illegality or infirmity in the impugned order, which might have called for interference.

(Para 1-4)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 391 – Cheque bounce case -- Additional evidence at appellate stage -- In application pleading that he was not well-conversant with the technicalities of law and even his earlier counsel also did not give him proper advice and as such due to the negligence of his previous counsel, he could not produce the certified copies of the complaints as well as copy of the FIR – Held, respondent cannot be permitted to take the said pleas.

(Para 11)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 391 -- Cheque bounce case --Additional evidence at appellate stage -- Evidence sought to be produced by way of additional evidence regarding filing of similar complaints under Section 138 of the N.I. Act by the complainant against some other persons was well within the knowledge of the respondent, but he did not make any effort to lead any evidence to that effect before the trial Court itself at the time of his defence evidence – Application should not have been allowed by the Ld. Appellate court.

(Para 13, 15)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 391 – Cheque bounce case -- Additional evidence -- Bearing on the case -- Production of copies of complaints, judgments and the FIR so to be lodged by the respondent by way of additional evidence has no material bearing on the facts of the case inasmuch as each case has to be decided on its own merits -- Judgments of other cases may not influence while deciding a particular case and cannot be a guiding factor as each case has its own peculiar facts.

(Para 17)

Code of Criminal Procedure, 1973 (2 of 1974), Section 438 -- Negotiable Instruments Act, 1881 (26 of 1881) , Section 138 – Cheque bounce case -- Absence of accused – Non-bailable warrant – Anticipatory bail -- Accused remained absent without any intimation to the trial Court that is why the trial Court forfeited his surety and issued non-bailable warrants -- Without finding any fault with the order of the trial Court and Sessions Court, looking to the peculiar facts that the cheque amount of Rs.1,00,000/- is involved and the case being u/s 138 NI Act, there is no point to put the petitioner in custody – Non-bailable warrant set-aside, petitioner is granted anticipatory bail on the bail bonds earlier furnished by him before the trial Court.

(Para 7-9)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Civil Procedure, 1908 (V of 1908), Section 9 -- Cheque bounce case -- Acquittal in criminal case – Civil liability to pay -- Claim of the plaintiff was not based on dishonour of the cheques -- It was based on the basis of transaction of supply of poultry feed to the company and the bills raised therefore -- Merely, because defendant has been acquitted in criminal proceeding that does not mean that the claim of the plaintiff in civil proceedings ipso facto stand disproved.

(Para 6)

B. Indian Evidence Act, 1872 (1 of 1872), Section 34 – Books of accounts -- Bills and entries of accounts maintained in ordinary course of business can be proved by deposition on oath of the plaintiff -- Sales man and the other witnesses have also been produced to support the transaction and to prove the bills and accounts entries -- Company has been making payment from time to time and have never denied the supply of the material or the existence of the bills -- This tantamounts to acknowledgment.

(Para 7)

C. Code of Civil Procedure, 1908 (V of 1908), Section 100, Order 41 –Liability of Company -- Appeal – Right of -- Company or the Managing Director of the company has never come forward to dispute their liability or to dispute the transactions of supply of the material by the plaintiff to the company -- They have not even challenged the liability fastened upon them by the trial court – Appellant, who do not even claim to be authorised representative of the company cannot question the liability against the company by filing the present appeal -- She can at the best question her liability in her personal capacity -- Appellant was a Director of the company and also a share holder, therefore, whatever liability the company law imposes upon her she cannot escape that by filing a appeal even her personal capacity -- She would always remain liable qua the liability of the company but subject to the extent of her liability according to the prevalent company law.

 (Para 8)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case -- Substantive sentence – Petitioner has suffered agony of protracted trial as the complaint pertains to the year 2014 and has already undergone actual sentence of 04 months and 27 days as on 24.04.2017, out of substantive sentence of 02 years -- No previous conviction has either been alleged or proved against the accused -- Entire payment has been made and the complainant at this stage supports the case of the petitioner -- Sentence awarded to the petitioner is ordered to be reduced to the period already undergone.

(Para 5)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case -- Cheque amounting to Rs.6 lacs – Substantive sentence reduced from the period of R.I. for 1 ½ years to R.I. for one year.

(Para 2,6)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 --  Code of Criminal Procedure, 1973 (2 of 1974), 482 – Cheque bounce case – Vicarious liability – Quashing of complaint -- Contention that the cheque in question not issued and signed by petitioner  – Fact of complaint are that he was director and authorized signatory and the firm issued cheque in question and upon presentation it was dishonoured with the remarks “Insufficient Funds” – Held, the petitioner has been summoned in view of Section 141 of Negotiable Instruments Act which imposes vicarious liability upon every person who at the time of offence was in charge of conducting the business of the company – No ground to quash the impugned complaint or to interfere with the well reasoned order of summoning.

(Para 2,8)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Dishonour of cheque – Presumption of legal enforceable liability – Rebuttal of -- Complainant has not produced any document on record to show the loan transaction -- Neither income tax return nor any account books have been produced to show the transaction -- Agreement has not been proved on record as per law, but the oral statements support and corroborate the defence version -- Cheque is signed in Punjabi and filled by some other person of complainant side -- By raising probable defence, which is supported and corroborated by the cross-examination of the complainant's witnesses and by the defence witnesses, the presumption has been duly rebutted by the accused.

(Para 10)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 147 -- Seven cases u/s 138 of N.I. Act – Compounding of – Total amount of Cheques i.e. Rs.10,68,650/- paid and complainant has not objection in compounding of case – Petitioner shall together in all the seven cases pay compensatory non-refundable costs of Rs.50,000/- with the office of Deputy Commissioner within 15 days -- Conviction orders quashed by way of compounding/compromise.

(Para 9)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141, 142 -- Cheque bounce case – Director of Company -- Vicarious liability – Acquittal in -- No mention that accused was in-charge of the respondent-Company and was responsible for the business and affairs of the company -- Cheque has been issued by other accused, who had already died -- No averment in the complaint that accused was also responsible for the day to day business of the Company -- Director can only be held as liable if he is actively doing and taking part in the business of the company and this fact is to be specifically pleaded in the complaint – Accused has been rightly acquitted by the Court below.

(Para 9-11)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Complaint u/s 138 of N.I. Act – Quashing of -- Loan agreement nowhere shows that cheques in question have been taken by the respondent as security cheques -- Whether the respondent has taken blank signed cheques as security or post-dated cheques for payment of loan installments in case of default as security is to be decided by the trial Court on the basis of the evidence produced before it -- Finding of fact cannot be given at this stage by High Court without any evidence – No ground is made out for quashing the complaints.

(Para 5, 7)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Arbitration clause -- Complaint u/s 138 of N.I. Act – Quashing of -- Contention that there is arbitration clause in the agreement, therefore, complaints are not maintainable – Held, this argument has no force -- When the cheques have been dishonoured and returned back unpaid by the Bank and legal notices have been sent, then non-payment of the amount within prescribed period gave cause of action to file the complaints under Section 138 of the Negotiable Instruments Act.

(Para 6, 7)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 311 – Cheque bounce case -- Application for additional witness -- Complaint was filed by Prop. of Firm through G.P.A. -- During the pendency of the proceedings, an application u/s 311 Cr.P.C. was filed to the effect that proprietor of firm was inadvertently not examined during the evidence of complainant – Held, filing of application u/s 311 Cr.P.C. is nothing but has been filed to fill up the lacuna in this case -- If application is allowed and the complainant is allowed to fill up the lacuna, then it will cause prejudice to the case of the accused – Application rightly dismissed.

(Para 6-9)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Conviction u/s 138 of N.I. Act – Moral turpitude – Dismissal from service -- Dispute was of private nature -- Offence at best, though has a criminal colour to it cannot be held to be an offence involving moral turpitude – Dismissal from service simplicitor on the ground of conviction u/s 138 of the Act without holding a regular inquiry, as envisaged under the Rules, is not sustainable and deserves to be set aside -- Removal from service is set aside -- Petitioner would be deemed to be in service with all consequential benefits.

(Para 6-11)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 --  Code of Criminal Procedure, 1973 (2 of 1974), Section 357(3), 421(1), 431 – Indian Penal Code, 1860 (45 of 1860), Section 70 – Cheque bounce case – Compensation not paid – Default sentence undergone -- Whether the compensation still recoverable -- High Court held that despite the fact that the default sentence was undergone, yet, under the provisions of the Code of Criminal Procedure, compensation was recoverable – Held, object of the legal fiction created by Section 431 is to extend for the purpose of recovery of compensation until such recovery is completed and this would necessarily take not only to Section 421 of the Cr.P.C. but also to Section 70 of the Penal Code – Judgment of High Court, upheld.

(Para 4, 29)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case – Cheque amounting to Rs. 1,30,000/- -- Trial Court convicted the accused for 2 years and fine of Rs.2,000/- -- Keeping in view the facts and circumstances of the case, the sentence is reduced to 1 year and 3 months but the fine is enhanced to Rs.10,000/-.

(Para 1,9)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 82, 438, 482 -- Indian Penal Code, 1860 (45 of 1860), Section 174-A -- Cheque bounce case – Proclamation u/s 82 Cr.P.C. – FIR u/s 174-A – Quashing of – Inherent jurisdiction of High Court -- Held, looking to the nature of the prosecution against the petitioner-accused under Section 138 of the Act, it would make no difference if he allowed a chance to participate in the prosecution against him, without finding any fault with the trial Court's order -- Petitioner will have to furnish bail bonds with the trial Court on his appearance before the trial Court and shall attend the trial with promptitude for its disposal in accordance with law – In that view of the matter, proclamation order and consequent FIR u/s 174-A of IPC are quashed under the inherent powers of High Court.

(Para 3,4)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce case – Alteration in cheque -- Report from F.S.L., show that in the cheque in question '0' has been inserted to make the cheque from Rs.48,000/- to Rs.4,80,000/- -- In another cheque, digit '2' has been added, Rs.20,000/- converted to Rs.2,20,000 -- Nothing on the record to rebut this report – Held, cheque itself becomes void instrument even if the liability exists towards the accused – Acquittal order upheld.

(Para 10-12)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) -- Cheque bounce case – Acquittal in – Friendly loan amounting to Rs.11,30,000/- to the accused – However, there is no evidence that the complainant had the capacity to advance Rs.11,30,000/- or that amount allegedly given on loan to the respondent is shown in the Income Tax Return – Respondent-accused stated that the appellant had misused the cheque which he gave to his (appellant) brother, this fact is duly proved by the statement of independent witness -- Except self serving statement of the appellant there is no material evidence on record to prove the factum of advancement of loan – Ld. Trial Court acquitted the respondent -- Even if a second view on appreciation of evidence is possible, the Court will not interfere in the acquittal of the accused -- In the cases of acquittal, there is double presumption in his favour; first the presumption of innocence, and secondly the accused having secured an acquittal, the Court will not interfere until it is shown conclusively that the inference of guilt is irresistible.

(Para 5,6)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- General Clauses Act, 1897 (10 of 1897), Section 27 -- Indian Evidence Act, 1872 (1 of 1872), Section 114 – Cheque bounce case – Notice by registered post – Presumption of -- 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 stands complied, if notice is sent in the prescribed manner -- However, the drawer is at liberty to rebut this presumption -- Notice sent by registered post and is returned with postal endorsement “refused” or “not available in the house” or “house locked” or “shop closed” or “addressee not in station”, due service has to be presumed

(Para 13-15)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce case – Second notice – Meaning of -- First notice was effective and notice was deemed to have been served on the first respondent -- Second notice could be construed as a reminder of respondent’s obligation to discharge his liability -- As the complaint, was filed within the stipulated time contemplated under Clause (b) of Section 142 of the N.I. Act, therefore Section 138 r/w 142 of N.I. Act is attracted.

(Para 16)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) – Acquittal in cheque bounce case – Leave to appeal – Appellant secured loan amount of Rs.2,00,000/- from one person and handed over to the accused -- However, there is no evidence that said person had the capacity to advance Rs.2,00,000/- or that amount allegedly given on loan to the appellant is shown in the Income Tax Return or in any other record maintained by said person -- Appellant has not even examined that person -- In his cross-examination, the appellant had stated that he had given the loan amount to the respondent on interest -- However, the appellant does not hold any licence for money lending -- No document was accepted by the appellant regarding advancing of loan or that respondent has furnished any security for repayment of amounting to Rs.2,00,000/- appears to be highly improbable – Acquittal order upheld.

(Para 5-7)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) – Acquittal in cheque bounce case – Leave to appeal -- Except self serving statement of the appellant there is no material evidence on record to prove the factum of legally enforceable debt of the respondent towards appellant – No oral or documentary evidence to prove the advancement of loan – In the cases of acquittal, there is double presumption in accused’s favour; first the presumption of innocence, and secondly the accused having secured an acquittal, the Court will not interfere until it is shown conclusively that the inference of guilt is irresistible – Keeping in view the above, the finding of acquittal recorded by the trial court cannot be said to be perverse or contrary to the material on record.

(Para 7)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Post dated security cheque – Dishonour of – Offence u/s 138 of NI Act -- Whether a post-dated cheque is for “discharge of debt or liability” depends on the nature of the transaction -- If on the date of the cheque liability or debt exists or the amount has become legally recoverable, the Section is attracted and not otherwise.

(Para 10)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Post dated security cheque – Dishonour of – Offence u/s 138 of NI Act -- Though the word “security” is used in the agreement, the said expression refers to the cheques being towards repayment of installments -- Repayment becomes due under the agreement, the moment the loan is advanced and the installment falls due -- Disbursement of loan was prior to the date of the cheques -- Once the loan was disbursed and installments have fallen due on the date of the cheque as per the agreement, dishonour of such cheques would fall under Section 138 of the Act.

(Para 11)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Post dated security cheque – Dishonour of – Offence u/s 138 of NI Act -- Cheques undoubtedly represent the outstanding liability -- Dishonour of cheque issued for discharge of later liability is clearly covered by the statute in question.

(Para 11-12)

D. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Post dated Security cheque – Dishonour of – Offence u/s 138 of NI Act -- Crucial question to determine applicability of Section 138 of the Act is whether the cheque represents discharge of existing enforceable debt or liability or whether it represents advance payment without there being subsisting debt or liability.

(Para 13)

E. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 – Post dated security cheque – Dishonour of – Offence u/s 138 of NI Act – Quashing of Complaint -- Reference to the complaint shows that as per the case of the complainant, the cheques which were subject matter of the said complaint were towards the partial repayment of the dues under the loan agreement – While dealing with a quashing petition, the Court has ordinarily to proceed on the basis of averments in the complaint -- Defence of the accused cannot be considered at this stage -- Court considering the prayer for quashing does not adjudicate upon a disputed question of fact.

(Para 17)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) -- Cheque bounce case – Acquittal of – Leave to appeal -- Cheque amounting to Rs.5 lacs -- No date, month or years has been mentioned in the complaint as to when the loan was given -- Neither the place where the loan was given nor any fact has been mentioned as to in whose presence, the loan was given -- Even no security document has been taken from the accused at the time of granting loan nor receipt was taken -- No document of any type has been placed on record to show the loan transaction and withdrawal of huge amount from any bank etc. -- Presumption u/s 139 of the Negotiable Instruments Act has been rebutted -- No ground to grant leave to the applicant to file an appeal.

(Para 8,9)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 378 (4) – Cheque bounce case – Acquittal of -- Post dated cheques – Stipulation in the sale deed itself shows that if the post dated cheques are not encashed in time then without the intervention of the Court, the sale deed shall be deemed to be cancelled – Thereafter compromise arrived between the parties to the effect that the post dated cheques were to be returned by the complainant to the accused, which apparently he did not return -- It was also mentioned in the sale deed that in case cheques are not encashed by the seller, he shall be entitled to 28% of the developed land – Held, post dated cheques, issued at the time of sale deed, were not for discharge of legal debt or liability -- As such, offence u/s 138 of N.I. Act is not made out -- Application under Section 378(4) Cr.P.C. for grant of leave to appeal being devoid of any merit is dismissed.

(Para 12-17)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) – Cheque bounce case – Acquittal in -- Rebuttal of presumption – Leave to appeal -- In the reply to legal notice, the accused has specifically mentioned that he had borrowed an amount of Rs.10,000/- from complainant and not Rs.4 lacs and the cheque was handed over to the complainant as security cheque – Nothing in the complaint or in the evidence as to on which date and in which month and year, what amount was given to the accused as loan -- It was necessary, specifically, when the accused is alleging that he has taken loan of Rs.10,000/- only -- One pen has been used for signing the cheque, other pen has been used for putting the date on the cheque and third pen has been used for filling the amount in words as well as in figure -- No cogent evidence on the record to show as to why a huge amount of Rs.4 lacs was given without getting any receipt or getting executed any security document i.e. pronote etc. from the accused -- Nothing on the record to show that from where Rs.4 lacs was withdrawn and paid to the accused – Presumption u/s 139 stand rebutted – Order of acquittal passed by the Ld. Trial Court upheld.

(Para 8-12)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 20, 118 -- Security cheque – Filling of cheque by drawee – Validity of -- Negotiable Instruments Act raises a presumption u/s 118 that a negotiable instrument is presumed to be fully supported by consideration -- If a cheque is issued as security or with an authority given to the drawee that it could be filled up or used for certain claims which are later ascertained, it is still a valid instrument as per Section 20 of the Negotiable Instruments Act which states that document which is inchoate with authority granted to the drawee to fill up the recitals, the document would become the full-fledged enforceable negotiable instrument, the moment the recitals were filled up by the drawee of the negotiable instrument.

(Para 9)

B. Code of Civil Procedure, 1908 (V of 1908), Order 37 – Summary suit by public limited company – Leave to defend – Condition for deposit of security, while granting leave to defend – Validity of --  Held, suits filed by a Company through a power of attorney could hardly be a matter of serious defence -- Plea that the cheques are issued as security is not really a stout plea that admits of any serious consideration; at least prima facie so -- As regards the contention that there is no privity of contract with the plaintiff or some of the defendants and that the liability to Punjab Tractors cannot be enforced through the plaintiff, it is not a defence worthy of substance if the High Court has passed an order of amalgamation empowering the transferee Company to claim all rights of transferor Company -- Non-production of the original cheques also would not assume significance in these cases, for, it has been explained that the dishonour of cheques resulted in actions for offences under Section 138 of the Negotiable Instruments Act before court of competent jurisdiction and that therefore certified copies of cheques have been filed along with the plaints – Held, none of the defenses in any of the cases of the defendants has any prima facie merit and if the defendants are given an opportunity to defend, it is by way of mercy and, therefore, the condition imposed was tenable – Defendants are directed to deposit security of 50% of the suit amount.

(Para 9-12)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974),  Section 311, 399, 482 --  Summon to witness u/s 311 of Cr.P.c. -- Intermediatory order -- Inherent Powers of High Court – Revision -- Maintainability of -- Complaint under Section 138 of N.I. Act -- Application of complainant to examine two witnesses rejected by Magistrate -- It is an Intermediatory order and is clearly a revisable order -- In the scheme of hierarchy, the party should seek invocation from the lowest court if there is concurrent jurisdiction -- Petitioner should seek redressal of his grievance before Court of Session under Section 399 Cr.P.C. as it would be more appropriate.

(Para 11-15)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) – Cheque bounce case – Acquittal in – Leave to appeal -- No agreement to sell for harvesting combine -- No document regarding ownership of the harvesting combine -- Nothing on the record regarding the payment of Rs.10 lacs by the complainant to the accused – Accused has also appeared as defence witness and stated that she had litigation with “AS” and after received full and final payment he withdrew the complaint and complainant misused the cheque by taking the same from “AS” – In cross-examination, the accused admitted that he has taken cheque from “AS” – Presumption u/s 139 of the Act has been duly rebutted -- Nothing to show the capacity of the complainant to pay such a huge amount -- Amount in question has not been shown in the income tax return nor bank record has been produced to show from where this amount has been withdrawn – Finding of Trial Court acquitting the accused upheld.

(Para 8-12)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case – Conviction of accused – Compromise between parties -- Compounding of offence after conviction -- Hon’ble Apex Court in Damodar S. Prabhu’s case 2010(2) RCR (Criminal) 851 has held that in a case of dishonour of cheques, compensatory aspect of the remedy should be given priority over the punitive aspect – As the matter has been finally settled and the liability is discharged and the petitioner has also deposited 15% of the cheque amount with the Punjab State Legal Services Authority, necessary permission to compound the offence u/s 138 of the Act is granted -- Conviction and order of sentence are set aside and the petitioner is acquitted of the charge levelled against him.

(Para 9-11)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce case -- Security cheque – Dishonour of -- Conviction of accused -- Promissory note executed contained an unequivocal acknowledgment of not only the debt/liability but promised to liquidate the same within one month with interest at the bank rate -- Five cheques handed over were to be returned but only upon payment of the amount in question -- Such being the fact situation, it cannot be said that the cheques had nothing to do with any debt or other liability -- In case the amount was not paid within the period stipulated, the cheques were liable to be presented for otherwise there was no logic or reason for their having been issued and handed over in the first instance and delivery of any such cheques would be meaningless and futile if not absurd – High Court fell in error in upsetting the conviction recorded by the Courts below – Conviction order restored.

(Para 11, 12)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139, 142 -- Cheque bounce case -- Friendly loan of Rs. 21 lacs -- Held, such a huge amount of Rs.21 Lakhs cannot be given by a person without executing any document – Complainant-property dealer has not produced the account books to show the lending of this amount of Rs.21 Lakhs -- No document to show that this amount had been withdrawn from any bank account – Fact that the complainant borrowed Rs.21 Lakhs to give it a friendly loan to another person also creates doubt in the version of the complainant – Ld. Trial Court acquitted the accused – No ground to grant leave to appeal.

(Para 6-8)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Conviction in Cheque bounce case – Compounding of -- Offence under Section 138 of NI Act is compoundable -- This offence, as per the statutory provision of law contained in NI Act itself, is compoundable at every stage of litigation -- Once the parties have arrived at an amicable settlement and the complainant has received the agreed amount, conviction and sentence of the petitioner cannot be sustained any further – Amicable settlement arrived between the parties -- Petitioner is acquitted of the charges framed against him.

 (Para 11-17)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case – Cheque amounting to Rs.2,50,000/- -- Trail Court convicted the petitioner for 1 year – Sentence is ordered to be reduced to already undergone (10 months-appox).

(Para 2, 15,16)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce case -- Compounding of offence – Accused paid the cheque amount alongwith 6% interest per annum to complainant -- Compounding is allowed on deposit of costs @ 7.5% instead of 15% of cheque amount.

(Para 5)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 427 – Cheque bounce case -- Concurrent running of sentences -- Basic thumb rule is that concurrent sentences are to be awarded in a case of single transaction -- It is only in those circumstances when different transactions relating to offences are involved, sentences may not be allowed to run concurrently – Held, there is only one transaction i.e. storage of paddy and misappropriation thereof -- Prosecution has invoked two different remedies available with it i.e. registration of FIR u/s 420/406 IPC and to invoke proceedings in complaint u/s 138 of the Negotiable Instruments Act -- Sentence in complaint u/s 138 NI Act is ordered to run concurrently with the sentence awarded in FIR case. Jang Singh’s case 2008(1) RCR (Criminal) 323 relied.

(Para 8-11)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142 – Cheque bounce case – Territorial jurisdiction to try case -- Cheque in question was presented for encashment by the complainant at Sangrur -- Hence, the Court at Sangrur has the jurisdiction to try the complaint.

(Para 5)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 372, 378(4) -- Cheque bounce case -- Acquittal of accused – Appeal before Session Court – Maintainability of -- Complainant could have approached High Court seeking leave to appeal against the order of acquittal passed by the Trial Court -- However, the appeal before the Sessions Court was not maintainable.

(Para 5)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case -- Liability to pay amount – Drawer of cheque -- Appellant-complainant supplied goods to M/s. Shah Agencies – Accused carried their business in the names of M/s. Shah Enterprises and M/s. Shah Agencies -- In part discharge of the liability of M/s. Shah Agencies, two cheques for Rs. 5 lakhs each were issued by the accused on an account maintained by M/s. Shah Enterprises – Cheques were dishonoured due to insufficient fund -- Case made out in the complaint was that the goods were sold and supplied to M/s. Shah Enterprises and the liability was of M/s. Shah Enterprises -- While in the affidavit in lieu of examination-in-chief, the Complainant came out with a case that the liability was that of M/s. Shah Agencies as goods were sold and supplied to M/s. Shah Agencies and it was not the case of the appellant that the accused had agreed to take over and discharge the liabilities of M/s. Shah Agencies – Acquittal of accused upheld.

(Para 1, 4, 11)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Liability to pay amount – Drawer of cheque -- First and foremost essential ingredient for attracting a liability under this Section is that the person who is to be made liable should be the drawer of the cheque and should have drawn the cheque 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 discharge, in whole or part, of any debt or other liability.

(Para 9)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case – Acquittal in – Accused demanded friendly loan of Rs.1,50,000/- -- Complainant stated that at the relevant time he was not having Rs.1,50,000/- and was having only Rs.1,35,000/-, rather has got Rs.1,35,000/- from his Mamaji by mortgaging the gold -- Petitioner-complainant could not tell the name of his Mamaji, from whom he has borrowed the money -- It shows that the story formulated by the petitioner is pulpably false -- Moreover, the petitioner has admitted the fact that the cheques issued by the accused were returned to him after receiving the payment from him – Acquittal order upheld.

(Para 8)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142(b) -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Complaint u/s 138 of NI Act within 15 days of notice of demand – Maintainability of – Quashing of -- Complaint was premature and not maintainable -- Impugned complaint and subsequent proceedings taken therein are quashed – Permission given to complainant to file fresh complaint within one month -- Delay in filing the complaint will be treated as having been condoned under the proviso to clause (b) of Section 142 of the Act.

(Para 11-13)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 438 – Proclaimed offender in cheque bounce case – Anticipatory bail -- Point for determination is whether the petitioner has been rightly declared proclaimed offender -- Otherwise also, the offence u/s 138 of the Act is bailable in nature -- Petitioner has already given an undertaking that he would submit to the process of law and would furnish the bail bonds to the satisfaction of the trial Court – Direction given to the petitioner to appear before trial court and furnish bail bond has been complied with – Interim order is made absolute.

(Para 6-8)