A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Loan/Cheque of Rs.18 lacs – Acquittal of accused -- No date, month and year has been mentioned in the complaint as to when the loan was given -- If the amount was given for the business purposes, then it looks unnatural that there were no terms and conditions to pay the interest -- Furthermore, no receipt or security document has been obtained at the time of advancing such a huge amount -- No particulars of loan transactions have been mentioned by stating that at which place and in whose presence this amount was given -- Furthermore, there is also no particular as to when the loan was demanded back -- Accused is entitled to acquittal.

(Para 6,7)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) -- Loan/Cheque of Rs.18 lacs – Acquittal of accused – Leave to appeal -- Complainant himself was under debt -- Accused has placed on record account statement of the complainant, which shows that the complainant was not having that much sufficient amount in his account to advance it to the accused – Cheque belongs to the cheque book issued in the year 2007 whereas, another cheque book was issued to the accused on 06.03.2010 and the Court held that why the accused would issue cheque in the year 2011 from the old cheque book -- There is difference of handwriting in the body of the cheque and signatures -- Keeping in view the above evidence, Ld. trial Court held defence by the accused is probable – Accused acquitted -- No ground is made out for grant of leave to appeal.

(Para 9-12)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) – Cheque bounce case -- Loan by father – Cheque by son – Acquittal in – In complaint no liability against accused – No evidence on record to show that accused ever stood surety or given in writing any undertaking to repay the loan of his father – Branch Manager admitted that no loan was taken by the accused – Cheque in question issued by the accused is not for the discharge of any legally enforceable debt against the State – No ground to grant leave to appeal against the order of acquittal.

(Para 1, 7-10)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Petitioner was a poor person who had taken a loan to obtain a vehicle for his livelihood and even thereafter he surrendered it upon finding he was unable to pay the installments -- Petitioner has already undergone more than 4 months of imprisonment – Sentence is reduced to already undergone, subject to payment of the fine of Rs.2000/-, in default of which the sentence would continue to operate for a period of 15 days.

(Para 8)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Admission of signature on cheque – Legal enforceable liability -- Merely on the basis of the admission of signatures by the accused on the cheque in question, he cannot be held guilty for its dishonour without any proof of a legally enforceable liability.

(Para 12)

Code of Criminal Procedure, 1973 (2 of 1974), Section 427 -- Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce case – Singular transaction -- Concurrent running of sentence -- Loan of Rs.5 lacs each on two different dates – Two transactions, though undertaken at different points of time, to be deemed as a singular transaction or two segments of one transaction -- Imperative essentiality of a single transaction as the decisive factor to enable the Court to direct the subsequent sentence to run concurrently with the previous one -- Direction for concurrent running of sentence would be limited to the substantive sentence alone – Substantive sentences of 10 months simple imprisonment awarded to the appellant in the two complaints would run concurrently – Default sentences, if the fine by way of compensation, as imposed, has not been paid by him would run consecutively.

(Para 14-17)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 427 -- Two complaints by different complainants u/s 138 of NI Act – Concurrent running of sentence -- In both case one year sentence besides fine was passed –Sentence ordered to be run concurrently -- However, the fine imposed by the trial Court and its default clause are maintained in both the cases.

(Para 1-6)

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)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 -- Cheque bounce case – Presumption of – Rebuttal of -- Section 139 of the Act raises a presumption in favour of the holder of cheque to presume that he had received the cheque in discharge of whole or in part liability or any debt -- Presumption is rebuttable one, it was the convict who was at liberty to have established it otherwise.

(Para 6)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case (Rs. 3 lacs) -- Loan advanced on 9.1.2007 – Cheque was issued by the accused on 21.12.2011 after more than four and a half years of the disbursement of the loan and even after the period of limitation for recovery of this loan having expired -- Sentence reduced to 9 months.

(Para 6, 7)

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)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case – Criminal liability -- To constitute the criminal liability the complainant is required to show that a cheque was issued; that it was presented in the bank in question; that on due presentation, it was dishonoured; that, as enshrined in the provision, requisite notice was served on the person who was sought to be made liable for criminal liability; and that in spite of service of notice, the person who has been arraigned as an accused did not comply with the notice by making payment or fulfilling other obligations within the prescribed period, that is, 15 days from the date of receipt of notice.

(Para 10)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 – Cheque issued by Company – Criminal liability -- If the person who commits an offence u/s 138 of the Act is a company, the company as well as other person in charge of or responsible to the company for the conduct of the business of the company at the time of commission of the offence is deemed to be guilty of the offence -- Thus, it creates a constructive liability on the persons responsible for the conduct of the business of the company.

(Para 12)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 – Cheque issued by Company – Criminal liability of Director/Executive Director – Issuance of summons – Challenge to -- Averments put forth in complaint relating to the respondent Nos. 2 and 3 herein that they are whole-time Director and Executive Director and they were in charge of day to day affairs of the Company – Held, High Court has fallen into grave error by coming to the conclusion that there are no specific averments in the complaint for issuance of summons against the said accused persons – Order of High Court set aside.

 (Para 34)

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 -- Complaint u/s 138 of NI Act – Dismiss in default – Restoration of -- In no way, by the absence, the complainant/appellant is to be benefitted in this complaint case nor there is anything on the record to show that there was any mala fide intention on the part of the complainant/appellant for his absence from the proceedings – Impugned order passed by the Ld. JMIC, has caused miscarriage of justice -- If this order is not set aside, the complainant/appellant will suffer irreparable loss -- Rights of the parties should be decided on merit as far as possible -- Court should do substantial justice between the parties and should not go into the technicalities of the law -- Where technical consideration and merit or cause of substantial justice are pitted against each other, the cause of merit and substantial justice is to prevail -- Complaint is restored at the stage from where it was dismissed by the trial Court.

(Para 8-14)

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 118 -- Pronote – Presumption of – Non-appearance of defendant – Non-initiating of criminal action – Effect of -- Defendant did not appear in the witness box to prove that the pronote and receipt relied upon by the plaintiff were forged documents -- Nothing on record to show that the defendant initiated any criminal action against the plaintiff and the attesting witnesses -- Defendant did not examine any finger print expert -- Plaintiff has proved that the pronote and receipt were duly executed by the defendant -- It is to be presumed that pronote was for consideration unless the presumption u/s 118 of the Act is rebutted – Held, the defendant has failed to rebut the presumption – Judgement and decree in favour of plaintiff passed by Ld. Lower Courts affirmed.

(Para 1, 8, 9)

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 -- Cheque bounce case – Conviction in – Compromise at the stage of High Court -- Compounding charges reduced from 15% to 10% -- In a case of dishonour of cheques, compensatory aspect of the remedy should be given priority over the punitive aspect – Competent Court can reduce the costs with regard to the specific facts and circumstances of a case, while recording reasons in writing for such variance -- Petitioner being a poor person, ends of justice would be met, if the requirement of deposit of 15% of the cheque amount is reduced to 10% of the cheque amount -- Petitioner is acquitted of the charges subject to deposit of 10% of the cheque amount with the State Legal Services Authority, Haryana.

(Para 10-14)

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)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce case – Demand Notice – Contradiction in – Value of -- Trial Court acquitted the accused and based its judgment only on the assumption that there were contradictions in the notice and what was stated in the Court – Trial Court had focused entirely on the notice without considering the facts, the pleadings and the material and the admission made by the accused – Held, there is no requirement that all the facts were to be mentioned in the notice, the true spirit behind has to be gathered -- Onus had shifted upon the accused and he was to explain why he made the cheque.

(Para 26)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 -- Counsel fees cheque – Presumption of consideration -- Accused had already admitted his signatures and date put by him -- Story that the accused had misplaced the cheque was a false defence -- Accused was not able to raise even a probable defence and the statutory presumption comes into play -- So far as the security cheque is concerned, the law is clear that it is an acknowledgment of liability on the part of the drawer that the cheque holder may use the security as an alternate mode of discharging his liability -- Complainant was only supposed to prove that the cheque issued by the respondent was dishonored -- Onus had shifted upon the respondent when he admitted his signatures and it was for him to explain -- Order of acquittal is set aside and the accused is convicted for four months.

(Para 27-31)

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)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 256 -- Complaint u/s 138 of NI Act – Dismiss in default for non appearance of complainant – Permissibility of -- Complainant had been appearing spanning over a period of almost three years and the Court having recorded the preliminary evidence passed summoning orders against the accused finding prima facie allegations to summon him for the commission of this offence, and who apparently had been evading his appearance for almost a period of two years -- Held, there was no necessity for the presence of the complainant on the date when the impugned order for dismissing in default was passed as it was the duty of the Court to have procured the presence of the accused in fulfillment of its summoning  orders – It was not appropriate and correct exercise of the powers envisaged under Section 256 Cr.P.C. – Complaint restored.

(Para 6-9)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 256 -- Complaint u/s 138 of NI Act – Case transfer to another court -- Dismiss in default for non appearance of complainant – Permissibility of -- When the case has been transferred to another Court, it was the obligation of the Court to have ensured that the complainant has been given due notice of the transfer of his case – Ld. Court below has not only acted in a haste but has also denied due justice to the appellant -- Impugned order, set aside directing the Court below to restore the complaint and to proceed ahead into the matter as per law.

(Para 8-9)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque for Rs. 1,47,100/- -- Conviction in cheque bounce case -- Sentence reduced to 6 months – Petitioner/accused is facing the agony of trial, appeal and the present criminal revision petition for more than 13 years -- Petitioner is a labourer and for personal necessity, he had obtained the amount from the respondent, which he could not pay; the petitioner is neither required nor involved in any other case and, as such, a first offender; the petitioner remained on bail during the pendency of the trial, appeal and the present criminal revision petition, but he did not misuse the concession of bail; the petitioner had already suffered incarceration for 5 months and 8 days – Substantive sentence reduced to rigorous imprisonment for 6 months.

(Para 11)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 360 -- Probation of Offenders Act, 1958 (20 of 1958), Section 3 -- Cheque bounce case – Probation to convict in cheque bounce case -- Conviction upheld, however convict released on probation by Appellate Court – Order upheld by High Court.

(Para 1, 10-16)

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 – Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) -- Nothing on record to show that the applicant had advanced the amount in question to the respondent/accused -- Neither any receipt nor any authenticated document has been placed on record to substantiate his claim -- No document on record to show the legal liability of the respondent towards the applicant -- Allegations of the applicant appears to be vague -- In the circumstances, the finding of acquittal recorded by the trial Court cannot be said to be perverse or contrary to the material on record -- Even if a second view on appreciation of evidence is possible, the Court will not interfere in the acquittal of the accused.

(Para 6, 7)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142A -- Cheque bounce case – Jurisdiction of Court -- Cheque is drawn on the Union Bank of India, Chandigarh, dated 02.05.2006, was presented for encashment at the IDBI Bank, Indore, which intimated its dishonor to the appellant on 04.08.2006 -- Judicial Magistrate, First Class, Indore, would have the territorial jurisdiction to take cognizance of the proceedings, after the promulgation of the Negotiable Instruments (Amendment) Second Ordinance, 2015 -- Words “...as if that sub-section had been in force at all material times...” used with reference to Section 142(2), in Section 142A(1) gives retrospectivity to the provision -- Judgment in Dashrath Rupsingh Rathod’s case (2014) 9 SCC 129 would also not non-suit the appellant for the relief claimed.

(Para 11-13)

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)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce case – Offence by Company -- Section 138 casts criminal liability punishable with imprisonment or fine or with both on a person who issues a cheque towards discharge of a debt or liability as a whole or in part and the cheque is dishonoured by the Bank on presentation -- Section 141 extends such criminal liability in case of a Company to every person who at the time of the offence, was incharge of, and was responsible for the conduct of the business of the Company -- By a deeming provision contained in Section 141 of the Act, such a person is vicariously liable to be held guilty for the offence under Section 138 and punished accordingly.

(Para 10)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case -- Section 138 is the charging section creating criminal liability in case of dishonour of a cheque and its main ingredients are :

(i)    Issuance of a cheque.

(ii)   Presentation of the cheque

(iii)  Dishonour of the cheque

(iv)  Service of statutory notice on the person sought to be made liable, and

(v)   Non-compliance or non-payment in pursuance of the notice within 15 days of the receipt of the notice.

(Para 10)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 – Cheque bounce case -- Offence by Company -- Vicarious liability of officer of company – Section 141 contains conditions which have to be satisfied before the liability can be extended to officers of a company -- Since the provision creates criminal liability, the conditions have to be strictly complied with -- Persons who had nothing to do with the matter need not be roped in -- Officers of a Company who are responsible for acts done in the name of the Company are sought to be made personally liable for acts which result in criminal action being taken against the Company -- It makes every person who, at the time the offence was committed, was incharge of, and was responsible to the Company for the conduct of business of the Company, as well as the Company, liable for the offence – There is an escape route for persons who are able to 'prove' that the offence was committed without their knowledge or that they had exercised all due diligence to prevent commission of the offence -- Conclusion is inevitable that the liability arises on account of conduct, act or omission on the part of a person and not merely on account of holding an office or a position in a company -- Therefore, in order to bring a case within Section 141 of the Act the complaint must disclose the necessary facts which make a person liable.

(Para 11, 14)

D. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque bounce case – Quashing of complaint -- Petitioners had approached the Court primarily on the ground that the directors had resigned from the company -- The fact is disputed by the other side -- Petitioners failed to place on record the certified copies of Form-32 -- High Court is not inclined to go into that matter in the proceedings under Section 482 Cr.P.C.

(Para 15, 18)

E. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 – Cheque bounce case – Offence by Company – Quashing of complaint -- Petitioners have not placed on record the memorandum or articles of association to show who were the working Directors -- Directors are aware of the affairs of the company and it would be a matter of evidence which would be led at the trial – At this stage, the specific allegations in the complaint are enough – High Court is not inclined to go into that matter in the proceedings under Section 482 Cr.P.C.

(Para 16-18)

F. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 202 – Cheque bounce case – Postponement of issue of process -- Provisions of section 202 of Cr.P.c. are not applicable to the complaints filed under Section 138 of the Negotiable Instruments Act.

(Para 19)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case – Acquittal of accused -- Wherever two views are possible, the view which goes in favour of the acquittal, deserves to be adopted by the Courts.

 (Para 10)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 118 – Pronote and receipts – Consideration – Presumption of – Presumption provides that every negotiable instrument was made or drawn for consideration, and every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration -- However, the presumption is rebuttable once the defendant by direct or circumstantial evidence proves on record that the promissory note was not supported by consideration in the manner stated therein -- Defendant can rebut the presumption under Section 118 of the Act by showing preponderance of probability in his favour and against the plaintiff.

(Para 14)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 118 – Pronote and receipts for Rs.6 lacs – Consideration – Presumption of – As per plaintiff’s income tax return he himself is a debtor to the tune of Rs. 3 lacs -- This circumstance makes a dent upon the capacity of plaintiff to lend huge amount -- Non-production of record sought by the defendants has strengthened their defence in dislodging the presumption under Section 118 of the Act -- Plea was further shattered by the fact that the loan amount was never reflected in the income tax returns of plaintiff – In the absence of proof of money being available with the plaintiff, defendant(s) had succeeded in proving that the pronotes and receipts were without consideration.

(Para 21-23)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 118 – Pronote and receipts for Rs. 6 lacs – Income tax returns – Relevancy of -- Contention that the plaintiff was not required to mention the loan advanced to defendants in his income tax returns, is not only erroneous but also not accepted from a person who himself is an income tax practitioner for the last three decades.

(Para 24)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Conviction in cheque bounce case – Whether amounts to Moral Turpitude – Termination of service -- Conviction u/s 138 of N.I. Act even though have a criminal colour cannot be termed to be such as the genesis of the dispute essentially arising from a civil transaction which should not, therefore, ordinarily have any bearing on the service of an employee -- Punishment order of termination of services of the petitioner is extremely harsh – Termination order set aside.

 (Para 4-6)

Negotiable Instruments Act, 1881 (26 of 1881), Section 118 – Pronote and receipt – Execution of – Proof of -- Presumption of consideration – Onus to rebut -- Courts below have found unrebutted and unshattered testimony of plaintiff and marginal witness as suffice to prove the execution of the pronote and receipt -- In case, the pronote and receipt were not bearing the thumb impression of the defendant, an opportunity was available with her to prove the same by examining a handwriting and finger print expert – Plaintiff was not required to examine any expert witness to prove that the pronote and receipt are bearing the thumb impressions of defendant -- Once the pronote and receipt are duly proved, presumption is drawn under Section 118 of Negotiable Instruments Act that it was executed for consideration -- Initial onus was on the defendant to prove that these pronote and receipt were executed without consideration.

(Para 8)

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 of accused – Leave to appeal -- No particulars were given as to when and how much amount has been given, no dates, months and years have been mentioned in the complaint -- When the complainant came into witness box, he took totally different stand by stating that the amount has been given to the accused by way of cheque of Rs.3 lacs – In statement of accounts no such entry regarding the withdrawal of sum of Rs.3 lacs by way of cheque has been specifically pointed out by the complainant -- Complainant also failed to prove source of such a huge amount -- Statement of complainant is contradictory to the version given in the complaint -- Complainant is working as commission agent, he has not produced on record his account books to show entry regarding advancement of loan to the accused -- Rather, in cross-examination, he has stated that he has not reflected the said amount in books of account -- Presumption under Section 139 of the Negotiable Instruments Act has been duly rebutted by the accused – Trial Court acquitted the accused -- No ground is made out to grant permission for leave to appeal.

(Para 6-8)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Cheque bounce case – Capacity to pay loan --  No documentation for loan – Accused acquitted -- When the loan was given, it was not shown in the income tax return nor in any other document -- Furthermore, the complainant was not even having the mobile number or any other number of the accused to show that he has friendly relations with the accused and it creates doubt -- Moreover, no security document has been taken at the time of lending the loan -- No source of huge amount of Rs.3,50,000/- has been disclosed by the complainant -- It looks doubtful that complainant will lend such an huge amount of Rs.3,50,000/- without getting executed any document -- No document is there regarding advancement of any other earlier loan -- Presumption u/s 139 of the N.I. Act has been rebutted.

(Para 6, 7)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Cheque bounce case – Statement of accused before Appellate Court regarding compromise – Effect of -- Statement of the accused given before Ld. Addl. Sessions Judge that he has compromised with the complainant and he will pay the amount to the complainant – Held, on the basis of this statement the accused can be convicted -- There may be so many reasons for making this statement i.e. to save himself from the harassment of the criminal trial etc. -- This statement can be held as confession before the Court.

(Para 8)

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)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Complaint u/s 138 of NI Act – Blank cheque – Enforceability of – Complainant himself admitted that he had filled in the body of the cheque in his own handwriting and accused was not present at that time – A blank cheque cannot be enforced even if it is issued for a legal liability – Filling of contents of cheque by the complainant amounts to alteration of cheque which is not permissible in law.

(Para 5)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Security cheque – Enforceability of – Complaint u/s 138 of NI Act -- Since the cheque was issued as a security, therefore, no liability under Section 138 of the Negotiable Instruments Act can be fastened upon the accused.

(Para 5)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Complaint u/s 138 of NI Act – Hire purchase agreement for Rs.2,88,000/- -- Out of it the complainant had received Rs.1,53,500/- from the respondent -- Cheque in question was for an amount of Rs.3,20,000/- -- It does not appeal to reason that the respondent would still issue a cheque for Rs.3,20,000/- to the complainant -- Complainant himself produced photocopy of the affidavit, whereby the respondent sold the said vehicle in the year 2003 -- It casts a shadow of doubt whether the respondent actually issued a cheque to the complainant in the year 2005 or not -- Trial court rightly granted the benefit of doubt to the respondent, acquitting him from the charges levelled against him.

(Para 10-12)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Complaint u/s 138 of NI Act – Benefit of doubt -- Wherever two views are possible, the view which goes in favour of the acquittal, deserves to be adopted by the Courts.

(Para 13)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case – Sentence of imprisonment -- Petitioner has paid Rs.3,47,000/- in all to the complainant which includes the cheque amount (Rs.3,00,000/-) in question – Sentence reduced to the period already undergone (more than 1 month).

(Para 3-4)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce case – Dismiss in default -- When the case was dismissed, it was fixed for presence of accused -- Presence of the complainant was not necessary -- A very hyper-technical and pedantic approach had been adopted by the Court below by dismissing the complaint only for a single default -- Complainant was diligently pursuing his remedies -- He has given an explanation -- It is always in the interest of justice that the case should be adjudicated on merits -- Matter is remitted back to the trial court.

 (Para 8,9)

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, 139 – Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) -- Cheque not supported by pronote or receipt – Acquittal of accused – Leave to appeal -- Nothing on record to show that the applicant/complainant had advanced the amount in question to the respondent -- No date, month or year was mentioned that when the accused borrowed the money -- It is highly improbable that applicant advanced an amount of Rs.2,40,000/- to the accused without any receipt or pronote -- There is no document on record to show the legal liability of the respondent towards the applicant -- Allegations of the applicant appears to be vague -- In the circumstances, the finding of acquittal recorded by the trial Court cannot be said to be perverse or contrary to the material on record.

(Para 6)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) -- Acquittal of accused – Leave to appeal – 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. C. Antony’s case 2002(4) RCR (Criminal) 750 relied.

(Para 6)

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, 139 – Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) – Debt of Chit fund business – Legally enforceability of – Maintainability of complaint u/s 138 of NI Act -- Applicant/ complainant in her statement has deposed that she is not aware of the fact that chit fund business has been banned in Haryana and admits that she has been running the chit fund business without any license – Held, the liability or debt will not come under the ambit of Section 138 of the Act – Acquittal order of Trial Court and dismissal of appeal on the ground of maintainability, upheld.

(Para 1, 11, 12)

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, 139 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) – Acquittal of accused – Leave to appeal -- Transaction pertains to the year 2002, however the cheque in question is dated 15.09.2008 – A complaint was also made to the police station with regard to non-return of cheque after clearance of debt -- Once the accused himself moved a complaint against the applicant/ complainant then the story of issuance of cheque is not sustainable -- Neither any receipt nor any authenticated document has been placed on record to substantiate the claim of the applicant – Finding of acquittal recorded by the trial Court cannot be said to be perverse or contrary to the material on record -- Leave to appeal stands declined.

(Para 6-9)

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)