This software is licensed to KGTHRI MOORTHY

Copyright © SCJ

2008 (0) SCJOnline(J&K) 108

HIGH COURT OF JAMMU & KASHMIR
J P Singh , J
Criminal Acquittal Appeal 22A of 2004
DECIDED ON : 3 November,2008
Madan Lal Sawhney Vs. Satpal Gupta

HEADNOTE
(A) Negotiable Instruments Act, 1881, Section 138 - Dishonour of cheque for insufficiency, etc.,
of funds in the account
ADVOCATES
V. R. Wazir, Rozina Afzal

[-] CASES REFERRED :

2004 9 SCC 186 - Bihari Nath Goswami versus Shiv Kumar Singh

EQUIVALENT CITATION :
SCJOnline(J&K) 2008 0 108 : SriLJ 2009 0 37 : Crimes(HC) 2009 1 186 : Crimes(J&K) 2009 1
186 : DCR 2009 1 497 : JKJ(HC) 2009 1 303

JUDGEMENT

1. Appellant Madan Lal Sawhney's complaint against Satpal Gupta/ respondent accusing him of
having committed offence punishable under Section 138 of the Negotiable Instruments Act,
1881, wherein he had accused him of having stopped payment of three cheques which he had
issued to the appellant for the amount he had borrowed from him, as a result whereof the
Jammu and Kashmir Bank Lakhdata Bazar, Jammu had returned the cheques to him unpaid,
was dismissed by Judicial Magistrate 1st Class (Sub-Judge), Jammu vide his order of
November 24, 2003.

2. Aggrieved by the dismissal of his complaint resulting in respondent's acquittal, the appellant
has preferred this appeal after obtaining Special Leave under Section 417 of the Criminal
Procedure Code 1989.

3. Appearing for the appellant, Mr. V.R. Wazir submitted that the learned Magistrate had
committed error in appreciating the appellant's evidence and relying heavily Oon the
respondent's evidence. Appellant's evidence on the records was sufficient enough to entail
respondent's conviction under Section 138 of the Negotiable Instruments Act, 1881, says the
learned counsel.
4. Per contra, Mrs. Rozina Afzal submitted that respondent's acquittal may not warrant
interference in view of the law laid down by Hon'ble Supreme Court of India in Bihari Nath
Goswami v. Shiv Kumar Singh and Ors., 2004 9 SCC 186.

5. Referring to the evidence which the respondent had led in the trial court to support his plea
that three cheques which had been issued by him to the appellant in lieu of the paddy, which the
later had to supply to him and payment whereof had been stopped in view of respondent's
returning the paddy to the appellant on finding that the same was sub-standard, learned counsel
urges that respondent had successfully proved his defence and in the absence of any evidence
to the contrary led by the appellant complainant, the well reasoned acquittal order recorded by
learned Judicial Magistrate would not warrant interference.

6. I have considered the submissions of learned counsel for the parties and gone through the
records.

7. The evidence produced by the respondent before the trial Court indicates that he had justified
his act of stopping payment of three cheques which had been issued by him to the appellant
when the paddy, in lieu whereof he had issued undated cheques, had been returned to the
appellant on its being found sub-standard. As against respondent's evidence, the appellant had
failed to prove by leading any evidence that the cheques issued by the respondent to the
appellant had been so issued for the discharge, in whole or in part, of any debt or other liability
of the respondent particularly when he had known about the respondent's defence which he had
taken right from the very beginning.

8. While appreciating the evidence led by the parties and dealing with it in view of the law laid
down in various judgments of Hon'ble Supreme Court of India, as mentioned in the order,
learned Magistrate had held as follows :"Here in the present case, it appears that the accused
has not played hide and seek in passing of direction to the banker for stoppage of payment to
the complainant Madan Lai Sawhney. He by writing a letter to the Chief General Manager J&K
Bank Lakhdata Bazar, Jammu got stopped the payment of cheques to the complainant. He has
specifically referred the number and amount of the cheques along with the dates. It appears
that the complainant made an attempt to encash the cheques and accused however instructed
for stoppage of the same. It is nothing on record which can suggest that as to why the
complainant has not presented the cheques for their encashment earlier. Averments in the
complaint or otherwise evidence available on record, nu where suggest the reasons for non-
presentation of the cheques earlier to the date, they were presented in the bank. Simultaneously,
it appears the cheques were presented by the complainant and application was made by the
accused for getting the stoppage of payment. Here, it appears that the accused has not got the
stoppage of payment just to avoid making of payment to the complainant as in the present
case, the development for the stoppage of the payment appears to have been taken place with
the supply of the sub-standard paddy by the complainant and after returning the same to him by
the accused. There is sufficient, cogent,unambiguous and specific evidence which can prove the
arrangement of issuance of cheques for the purchase of the paddy by the accused from the
complainant. There is further on record which can suggest that same was returned back by the
accused after finding the same as sub-standard. It does not appear that there was dishonest
intention of the accused in instructing the bank to stop the payment. His intention was not mala
fide to escape from his liability for making payment by directing the bank for stoppage of
payment. This is required to be proved, by the complainant in order to hold that accused is liable
for the commission of offence under Section 138 Negotiable Instruments Act, where he got
stoppage of payment of cheques issued by the accused. This has been held in the AIR. 1996 SC
2339 as discussed and referred hereinabove.

In view of the aforesaid I hereby hold that the rebuttal evidence as led by the accused for
proving that cheques were issued without any consideration much less for amount referred, is
sound, cogent, unambiguous and convincing. I have already referred hereinabove that
accused has every right to rebut the presumption that the cheques were issued without any
consideration, as such the offence u/s 138 of Negotiable Instrument Act is not made out and
as such he is not liable for the same. I am forfeiteq of my aforesaid assumption from the
citation as referred by the LC for the complainant and the accused as discussed hereinabove.
1 further here hold that accused has discharge his liability in rebutting the evidence that
cheques were received by the holder/complainant under an agreement which was breached
by him. In other words, it can be said that it has not been proved y the complainant that the
same were issued for the discharge of any debut or other liability. He has deposed in his
statement before the court that on 17.12.99, he has paid money in cash. In lieu of that
accused issued hree post dated cheques of amount one for Rs.30,000 and two for Rs.50,000
ach. However, no interest was agreed to be paid by the accused. Two were filled in English and
one was filled in Urdu. It can be gathered from the aforesaid statement of the complainant
that he paid money on 17.12.99 and in the same day three post dated cheques were issued. It
is further not cleared that why two cheques were filled in English and one in Urdu. It is not
digestable as to why the interest was not agreed to be paid on the advanced amount.

However, the date referred by the complainant in his statement for advance of the amount is
an afterthought as there is no any reference of the same either in the demand notice issued by
the complainant or in the averments of the complainant. The complainant was required to
aver specifi-cally the detail, date and manner of making payment by him, to the accused when
the accused has already take a defence that post dated cheques were issued subject to the
arrangement for supply of paddy, in the reply of the demand notice.

In view of the aforesaid, hereby hold that the complainant has failed to prove the liability of the
accused for payment of the sum as referred in the complaint beyond all shadows of doubts.
Furthermore, mala fide and dishonest intention of the accused in getting the stoppage of the
payment of the cheques in favour of the complainant has not been proved beyond all
reasonable doubts. Furthermore, ingredients of the offence under Section 138 Negotiable
Instruments Act has also not otherwise been proved beyond all shadows of doubts, I have
already referred hereinabove that rebuttal evidence led by the accused is more convincing,
cogent, unambiguous and as such is required to be believed and relied upon."

9. In view of the evidence which the parties had led before the trial court, no other view other
than the one taken by the learned Magistrate may be justified because the appellant had not led
any evidence before the trial Court to dislodge the defence which had been set up by the
respondent.

10. I, therefore, do not find any ground to interfere with the well reasoned acquittal order
recorded by learned Judicial Magistrate 1st Class (Sub-Judge), Jammu,

11. This appeal, therefore, lacks merit and warrants dismissal. Ordered accordingly.
2008 (0) SCJOnline(J&K) 108