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

(Para 27)

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

(Para 29)

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

(Para 30)

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

(Para 35)

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

(Para 11.1)

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

(Para 14)

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

(Para 16)

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

(Para 17)

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

(Para 20)

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

(Para 13)

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

(Para 9)

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

(Para 9)

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

(Para 10)

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

(Para 19)

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

(Para 36)

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

(Para 37)

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

(Para 38, 42)

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

(Para 39)

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

(Para 40)

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

(Para 41)

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

(Para 10)

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 -- Arbitration proceedings – Non-disclosure of issuance of cheque in arbitration matter -- Trial Court has taken one of the two possible views and High Court while exercising the powers in appeal against acquittal cannot substitute its views with the view taken by learned Magistrate.

(Para 4)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Acquittal in Cheque bounce case -- Security cheque presented before agreed date – Rs. 7,00,000/- is to be paid in 30 installments, starting from 18.1.2012 -- If till said date, entire amount is not returned, complainant will have right to present cheque given as security, before bank – Thirty months were to lapse on 18.7.2014 – Complainant presented cheque in question before bank on 25.10.2012 – Held, at the time of presentation of cheque before bank, there was no legally enforcement debtor liability – Complainant had received certain amounts, which has not been mentioned in his complainant and what is balance – Offence u/s 138 is not made out.

(Para 6)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 -- Legally enforceable liability – Rebuttal of presumption -- Standard of proof for rebuttal of the presumption u/s 139 of the Act is guided by a preponderance of probabilities.

(Para 10)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 -- Loan of Rs.15 lacs -- Legal enforceable liability – Presumption of -- Rebuttal of -- Defence was that the cheque was issued to the complainant on an assurance of a loan which would be obtained from a financial institution – Entire amount alleged to have been paid without obtaining a receipt or document evidencing the payment of the amount – Complainant failed to establish the source of funds -- Nothing was stated by the complainant in regard to the fate of the earlier two cheques which were allegedly issued by the accused -- Non-disclosure of the facts pertaining to the earlier two cheques, and the steps, if any, taken for recovery was again a material consideration which indicated that there was a doubt in regard to the transaction – Presumption stands rebutted -- Order of acquittal passed by the first appellate court was justified.

(Para 13-15)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque by company – Quashing of complaint -- Cheque singed by Director of company – Demand notice to Director – Complaint against Director – Company not impleaded as party/ accused -- Maintainability of complaint – Held, in the absence of the company being arraigned as an accused, a complaint against the appellant was not maintainable – In the absence of a notice of demand being served on the company and without compliance with the proviso to Section 138, the High Court was in error in holding that the company could now be arraigned as an accused – High Court was in error in rejecting the petition u/s 482 of the Cr.P.C. – Appeal allowed, Complaint quashed.

(Para 14-18)

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 -- Complainant is not aware about the business of the accused for which the alleged loan was advanced -- Complainant further testified that the amount in question was obtained from friends and relatives in order to give it to the accused for his business -- No source of income has been proved by the complainant -- DW1, Tax Assistant from Income Tax Office has proved the income tax return of the complainant, which do not contain the amount advanced as loan to the accused – Finding that cheque in question was not issued towards any debt or legal liability is based on correct appraisal of the evidence and a possible view had been adopted – Appeal dismissed.

(Para 6)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Second statutory notice – Complaint thereafter – Maintainability of -- Cheques were presented twice and notices were issued on 31.08.2009 and 25.01.2010 -- Complaint filed based on the second statutory notice is not barred.

(Para 8)

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 -- Nothing on record that amount was demanded back from accused -- No document to prove that complainant is doing joint business with accused – Accused produced DDR regarding loss of cheque – Trial Court acquitted the accused -- Nothing on record to show that findings are against evidence and law – No ground to grant leave to appeal.

(Para 8-10)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8 -- Cheque bounce case – Arbitration proceedings – No bar to proceed u/s 138 -- Even if arbitration proceedings have taken place, that cannot be a bar to the continuation of proceedings under Section 138 of the Act -- If the arbitration proceedings have been finalized and award has been pronounced, the Court deciding the matter under Section 138 of the Act would certainly look into the aspect whether there exists some legal liability for issuance of cheque or not.

 (Para 6-12)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque by husband – Criminal liability -- Liability was of M/s Karan Traders which is Sole Proprietorship – Cheque was issued by Husband of the Sole Proprietor – Held, there was no legal liability on the part of husband – Complaint rightly dismissed by Trial court.

(Para 2-5)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 378 (4) – Loan of Rs.8 lacs – Cheque bounce case – Presumption of – Rebuttal of -- In the complaint, it has been simply stated that the loan of Rs.8 lakhs was advanced to the accused in the month of March 2015 -- No specific date has been mentioned -- No other particulars have been given -- No security document had been obtained from the accused -- Complainant had also not taken any receipt of the loan -- There is no document on record to show the loan transaction -- There is no date as to when the loan was demanded back -- In the cross-examination, the complainant stated that he does not know accused and his family personally he knows them through brother-in-law of the accused -- Complainant admits that a sale deed was executed in his favour by the mother of the accused and further three cases were withdrawn by him -- All this evidence supports the defence version raised by the accused -- Presumption under Section 139 of the NI Act has been rebutted by the accused by raising probable defence -- Leave to file appeal dismissed.

(Para 8,9)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 –Loan of Rs.3 lacs – No document case – Presumption – Rebuttal of -- No date, month and year has been mentioned in the complainant as to when liability arose -- No document to show the loan transaction -- No receipt or security document was got executed while lending a huge amount of Rs.3 lakhs to the accused – Complainant is also doing business of shuttering and might be maintaining account books but he has also not produced any account books to show this loan transaction -- Complainant himself has stated that he could not tell exact date of advancement of loan of Rs.3 lakhs but stated in cross-examination that it was in the month of October 2012 – Presumption u/s 139 rebutted.

 (Para 14-21)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case – Acquittal of accused -- Complainant has not mentioned any date, month, year as to when the loan was advanced to the accused -- No receipt or security document was got executed while lending huge amounts to the accused -- Otherwise also, there are no particulars, that at which place, in whose presence the loan was advanced and what was the mode of giving the amount, whether by cheque or by cash nor there is anything that the amount was withdrawn from the bank or it was lying with the complainant at his home -- When the first complaint regarding dishonour of the cheque is already pending in the Court, then complainant will not lend such a huge amount again to the same accused -- Accused acquitted.

(Para 10-13)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) -- Cheque bounce case – One more complaint pending – Effect of – Rebuttal of Presumption – Complaint for dishonour of the cheque already filed in November 2011 – It is not explained, why again amount of Rs.2 lakhs were lent in June 2012 and that too without any document -- No ordinary person will do this -- Presumption has been rebutted.

 (Para 12)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141  -- Code of Criminal Procedure, 1973 (2 of 1974), Section 397, 482 – Cheque bounce case -- Summoning of accused – Quashing of summoning order and complaint – Maintainability of petition u/s 482 Cr.P.C. -- Revisional Jurisdiction -- Alternative remedy available – Objection of -- Held, in exercise of revisional power, Court of Sessions or the High Court is not vested with the power of quashing a criminal complaint -- This power is available to the High Court alone under Section 482 Cr.P.C., whereunder the High Court, in exercise of its inherent powers, can pass orders to prevent abuse of process of any Court or to secure the ends of justice -- Thus, the prayer made in this petition could not have been granted by the revisional Court and, therefore, it cannot be said that the petitioner had an alternative remedy before the Court of Sessions in the first instance.

(Para 5)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 -- Cheque bounce case – Offence by Company -- Liability of Ex-officio Director -- Every person who was incharge of the business of the Company and responsible to the Company for the conduct of its business is vicariously liable apart from the Company itself -- Such a person may be somebody other than a 'Director' so long as he is an officer of the Company -- However, an Ex-officio Director is not liable.

(Para 8)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 -- Cheque bounce case – Offence by Company -- Ex-officio-Director of the Company -- Petitioner-Director had resigned and cheque in dispute had been issued much later -- For imposing vicarious liability upon the petitioner, as a person responsible for the business of the company, it was necessary to make specific averments in the complaint regarding his role in the conduct of the business of the Company -- No such averment having been made, the Magistrate was not justified in summoning the petitioner.

(Para 21)

D. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce case – Summoning of accused -- At the stage of summoning of an accused person, the trial Court/Magistrate must be satisfied on the basis of material produced before it that prima facie the accused persons have committed an offence.

(Para 21)

E. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482  -- Cheque bounce case – Offence by Company – Liability of Director of the Company – Quashing of Complaint and summoning order -- Averment made in the legal notice “You address No. 3 being Chairman/Director of addressee No. 1 are also being incharge and being responsible person of address No. 1 company for conduct to the business of the Company are also liable for the punishment prescribed under the Act ibid.” – Held, averments made in the legal notice u/s 138 of the Act cannot be construed to be averments made in the complaint -- Even the averments made in the legal notice, do not fulfill the requirement of law -- Summoning orders as well as Complaints alongwith consequential proceedings having arisen therefrom, are quashed qua the petitioner.

(Para 25-27)

F. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 204 – Cheque bounce case – Offence by Company -- Summoning of Directors of the Company -- Held in order to reduce litigation it would be appropriate for the concerned Magistrates to seek copies of Form No. 32 and the latest Annual Return filed by the Company so that only those persons who are Directors on the date of commission of the offence are summoned – Directions given that in all cases where the accused is a 'Company', before issuing summons to the accused persons the trial Court/Magistrate shall direct the complainant to produce a copy of Form No. 32 and the annual Return filed by the Company in order to determine the persons, who were Directors on the date of commission of the offence -- In cases where the accused–Director is the Chairman or Managing Director or Joint Managing Director or authorized signatory of the cheque, they may be summoned without any averment regarding their role in the conduct of the affairs of the Company -- For summoning of any other Director or officer of the Company the necessary averment regarding their role in the conduct of the business of the Company, must be insisted upon -- In respect of whole time Directors, mere reproduction of the words of Section 141 of the Act would be sufficient.

(Para 28, 29)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Cheque bounce case -- Conviction in – Compromise – Setting aside of conviction and sentence -- As per settlement, the petitioner has paid a sum of Rs. 4 lacs against the disputed amount as full and final settlement -- When the parties have amicably settled their dispute, the conviction and sentence of the accused, u/s 138 of the N.I. Act, can be set aside -- Judgment of conviction and order of sentence as well as judgment passed by the lower appellate Court, are set aside. Sri Ashish Subba’s case 2018 (1) R.C.R. (Criminal) 971 relied.

(Para 3,4)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 --Cheque bounce case – Presumption of – Rebuttal of -- Presumption u/s 139 arises when the cheque is in favour of holder of the cheque which was issued by the accused but the accused can rebut the presumption by raising probable defence.

(Para 10)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 --Cheque bounce case – Acquittal in -- Presumption of – Rebuttal of -- Cheque has not been issued by the accused nor it was from his account -- Document Expert, has been examined to show that cheque- Ex.C2 was not signed by the accused -- No expert, in rebuttal, has been examined by the complainant --- Therefore, case of the complainant qua the cheque-Ex.C2 is doubtful -- Otherwise also, as this cheque was not from the account of the drawer, therefore, one of the necessary ingredient also goes -- Accused-respondent has been rightly acquitted.

(Para 11-13)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 --Cheque amounting more than liability – Acquittal in -- Presumption of – Rebuttal of -- Cheque amount of Rs.2,36,290/- -- All the documents of the complainant pertain to alleged transactions of the accused and if the amount is calculated, remaining amount of receipts comes to Rs.1,73,179/- only, which is less than the cheque amount -- DW-1 stated that amount of Rs.1,79, 070/- is only outstanding against the accused as per Ex.D1 -- Complainant has given legal notice to pay an amount of Rs.2,36,290/- qua which there was no liability outstanding against the accused – Trial Court held presumption has been duly rebutted, the cheque amount was not due and legal notice is of more amount than actually payable -- Accused-respondent has been rightly acquitted.

(Para 11-13)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Complaint through attorney – Maintainability of – Mother of the Applicant-complainant appeared as his general attorney after due permission from the Court on acceptance of her application to permit her to file complaint and pursue the same as attorney -- Maintainability of the complaint is well-proved on the record.

(Para 10)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4) -- Admission of signature on cheque – Effect of -- Since the respondent-accused has not denied his signature on the cheque in question, nor led any evidence in defence to this effect, therefore, applicant is granted leave to file the instant appeal -- Respondent is held guilty for commission of offence u/s 138 of the Act -- Matter is referred back to the trial Court to afford an opportunity of hearing to the respondent on the quantum of sentence.

 (Para 12, 13)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 320, 401, 482 -- Conviction u/s 138 of the NI Act – Compounding at Revisional stage -- Conviction by Ld. JMIC upheld by Ld. ASJ -- Parties are allowed to compound the offence, consequently, judgment of conviction and order of sentence passed by the Ld. JMIC and judgment passed by the Ld. Additional Sessions Judge stand set aside.

(Para 6)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case – Discrepancy in statement of witness -- Once the factum of giving money to the accused is proved by the eye witness then; merely because the transaction of loan happens to be subsequent to the date alleged when the money is stated to have been given to the petitioners is totally irrelevant – Witness was deposing after 7-8 years, therefore, such kind of minor discrepancy cannot discredit the entire case of the prosecution.

(Para 9)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 147 – Cheque bounce case – Compounding of – Conviction – Setting aside of -- Considering the fact that the parties have amicably settled their dispute before the Mediation and Conciliation Centre and no other litigation is pending between them, the permission granted to compound the offence under the provisions of Section 147 of the N.I. Act -- Judgment of conviction and order of sentence passed by the trial Court, as well as judgment passed by the lower appellate Court, are set aside.

(Para 12-14)

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 -- Complainant admitted that the accused had taken a loan from the finance company and he has returned the same and, thereafter, again he had taken loan of Rs. 11,000/- and returned the same – Complainant has failed to explain in his complaint and the legal notice as to when and for what purpose, the amount of Rs.70,000/- was taken by the accused, specially when in the complaint neither any date, month, year nor the purpose is mentioned – Trial Court acquitted the accused -- Leave to appeal against the judgment is declined.

(Para 9-11)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Code of Criminal Procedure, 1973 (2 of 1974), Section 378 (4) -- Legal enforceable liability – Presumption of – Rebuttal of -- No document to show the loan transaction -- No particulars at which place and in whose presence the amount was given; whether it was given in cash or through cheque -- Nothing on record as to when the demand was raised; whether any security document was obtained -- Father of the accused filed a written complaint against the complainant to take action for breaking the glass of the car etc. -- When the relations between complainant and accused families were strained and the complaint was filed against the complainant and that was pending, it is improbable that the complainant will give a loan of Rs.3,63,000/- to the accused without even getting any receipt or security document -- Presumption u/s 139 of the NI Act can be rebutted by raising probable defence and the accused had raised a probable defence and the presumption was rebutted.

 (Para 11)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 311 -- Affidavit in evidence – Wrong date of cheque mentioned – Re-examination of -- Application u/s 311 Cr.P.C. is allowed -- Complainant allowed to appear as a witness and submit a fresh affidavit.

(Para 2-8)

Negotiable Instruments Act, 1881 (26 of 1881). Section 138, 139 – Legal enforceable liability – Presumption of – Rebuttal of -- Complainant proved the issuance of cheque which contained signatures of the accused and on presentation of the cheque, the cheque was returned with endorsement “insufficient funds” -- Bank official-witnesses proved that the cheque was not returned on the ground that it did not contain signatures of the accused rather it was returned due to insufficient funds – Trial court as well as the Appellate Court found that cheque contained the signatures of the accused – Defence that cheque was stolen complainant – No evidence led by accused -- Defence taken that cheque was stolen rejected by the two courts below – No basis for the High court coming to the conclusion that the accused has been successful in creating doubt in the mind of the Court with regard to the existence of the debt or liability.

(Para 15-22)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case – Substantive sentence -- Conviction by Trial Court for three months and compensation of Rs.2,45,000/- -- Compensation amount and additional amount of Rs.1,00,000/- deposited by the accused -- Interest of justice would be subserved if the Sentence of three months is modified and in lieu thereof, additional compensation amount of Rs.1,00,000/- is directed to be payable to complainant.

(Para 2, 8)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 401 – Cheque bounce case – Conviction of accused – Compromise/Compounding of offence -- Accused is acquitted from all the charges framed against him, in view of Section 320(6) of Cr.P.C., which provides that a High Court or Court of Session acting in the exercise of its powers of revision under Section 401 may allow any person to compound any offence which such person is competent to compound under this Section.

(Para 4)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 391 – Cheque bounce case -- Additional evidence -- Expert-examination – Application for additional evidence, which was filed for examination of a Hand-writing Expert to compare the writing on the body of the cheque, which has been asserted by the petitioner to have not been written by him does not have any material significance especially when the signatures on the cheque have been admitted by the petitioner.

(Para 7)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Advocate Client relationship – Issuance of cheque by client – Dishonour of – Complaint u/s 138 of NI Act -- Mere issuance of cheque by the client may not debar him from contesting the liability -- If liability is disputed, the advocate has to independently prove the contract.

(Para 18)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 --Advocate Client relationship – Professional misconduct -- Issuance of cheque by client as percentage – Dishonour of – Complaint u/s 138 of NI Act – Maintainability of -- Claim based on percentage of subject matter in litigation cannot be the basis of a complaint u/s 138 of the Act -- Claim of the respondent advocate being against public policy and being an act of professional misconduct, proceedings in the complaint filed by him have to be held to be abuse of the process of law and have to be quashed -- Issue of professional misconduct is left to be dealt with at the appropriate forum.

(Para 18-20)

C. Advocates Act, 1961 (25 of 1961), Section 35 – Constitution of India, Article 39A -- Advocate Client relationship – Professional misconduct -- Can justice be secured with the legal professionals failing to uphold the professional ethics? -- Commercialization to the extent of exploiting the litigant and misbehavior to the extent of browbeating the Court, breach of professional duties to the court and the litigant on the part of some members of the legal profession, affecting the right of the litigants to speedy and inexpensive justice, need to be checked – Court hoping that the concerned authorities in the Government will take cognizance of the issue of introducing requisite legislative changes for an effective regulatory mechanism to check violation of professional ethics and also to ensure access to legal services which is major component of access to justice mandated under Article 39A of the Constitution.

(Para 23-31)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 143 -- Cheque bounce case – Sentence for simple imprisonment of one year and also to pay a fine of Rs.11,50,000/-, in default, to suffer further simple imprisonment for six months -- Parties amicably settled their dispute -- Parties to abide by the terms and conditions as contained in the Memorandum of Settlement without fail -- Impugned order passed by the High Court set aside and sentence imposed upon the appellant quashed.

(Para 2-6)

Negotiable Instruments Act, 1881 (26 of 1881), Section 118, 138 -- Issuance of cheque – Non-reply/Refusal of legal notice – Meaning of -- Petitioner/accused did not respond to the legal notice served by the respondent/complainant to him, rather the same was refused as per report, which amounts to his admission of issuance of cheque in question to the respondent-complainant.

(Para 7)

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-- Non-appearance of the petitioner before Ld. Trial Court is justified for the reason that he was not served at the given address -- After passing of the order, the petitioner has been granted anticipatory bail -- Matter compromised, complainant has withdrawn the complaint u/s 138 of the NIA Act -- Continuation of criminal proceedings against the petitioner under Section 174-A IPC would amount to abuse of process of law – Order declaring proclaimed person and subsequent FIR quashed.

 (Para 1, 7,8)

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)