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Manik Lodh Vs. State of Assam and anr. - Court Judgment

LegalCrystal Citation
Subject;Banking;Criminal
CourtGuwahati High Court
Decided On
Judge
AppellantManik Lodh
RespondentState of Assam and anr.
Excerpt:
- - the accused, in order to cover his liability, issued a blank cheque, without mentioning therein any date, and handed over the same, on good faith, to the complainant. that apart, the entire transaction of giving of the cheque to the complainant by the accused was in good faith and, hence, no offence under section 420 ipc can be said to have been committed by the accused. as the appeal preferred by the accused has failed to yield any favourable result, the accused has, now, come to this court with the help of the present revision petition. these conditions contemplate that the cheque must have been presented to the bank within a period of six months from the date on which it is drawn or within six months from the date of its validity, whichever is earlier, and that before the..... i.a. ansari, j.1. what is statutory or legal presumption? how does the statutory presumption differ from natural presumption or presumption of fact? how statutory or legal presumption can be discharged by an accused? what is the standard of proof required, in a criminal trial, to discharge a legal or statutory presumption? can statutory or legal presumption be taken to have been discharged by an accused probalises his defence by giving reasonable explanation as regards the evidence appearing against him? whether prosecution of a drawer of a cheque, for dishonour of the cheque on the ground of insufficiency of funds in the account of the drawer, is permissible if, between the date of the issue of the cheque and the date of presentation thereof to the bank for payment, a part of the.....
Judgment:

I.A. Ansari, J.

1. What is statutory or legal presumption? How does the statutory presumption differ from natural presumption or presumption of fact? How statutory or legal presumption can be discharged by an accused? What is the standard of proof required, in a criminal trial, to discharge a legal or statutory presumption? Can statutory or legal presumption be taken to have been discharged by an accused probalises his defence by giving reasonable explanation as regards the evidence appearing against him? Whether prosecution of a drawer of a cheque, for dishonour of the cheque on the ground of insufficiency of funds in the account of the drawer, is permissible if, between the date of the issue of the cheque and the date of presentation thereof to the bank for payment, a part of the amount, for which the cheque has been drawn, is paid to, and received by, the drawee? These are some of the prominent questions, which the present revision has thrown up for determination.

2. This revision is directed against the judgment and order, dated 12.9.01, passed, in Crl. Appeal No. 54(M)/2000, by the learned Additional Sessions Judge, Nagaon, dismissing the appeal and upholding thereby the judgment and order, dated 22.08.2000, passed by the learned Magistrate, 1st class, Nagaon, in CR Case No. 2150/96, whereby the accused-petitioner stood convicted under Section 138 of the Negotiable Instruments Act, 1881, and sentenced to undergo rigorous imprisonment for six months and pay a fine of Rs. 5,000/- and, in default of payment of fine, suffer rigorous imprisonment for a further period of three months.

3. Before I deal with the merit of the present revision petition, it is necessary to take note of the material facts, which have given rise to the present revision petition.

(i) The Opposite party No. 2 herein instituted a complaint case in the Court of the learned Chief Judicial Magistrate, Nagaon, the case of the complainant being, in brief, thus: M/s Sangita is a partnership firm dealing in electronic goods, namely, Akai, Onida and Panasonic products, the complainant being a partner of the said firm. The accused, as proprietor of a shop, which was run under the name and style of Dulal Store, used to buy television sets of Akai brand from the complainant's firm. Such purchases were made by the accused by making payments, sometimes, in cash and, on some occasions, by issuing cheques. On one occasion, when the credited amount of the accused swelled up to Rs. 75,000/-, the accused issued an Account Payee cheque, dated 31.5.96, amounting to Rs. 75,000/- drawn on the account maintained by him with the State Bank of India, the cheque having been drawn in favour of the complainant's firm, namely, M/s Sangita. The cheque was presented by the complainant's firm for encashment through United Bank of India, Nagaon Branch, where the complainant's firm had its account. The cheque, so presented, however, bounced, on 30.5.96, due to insufficiency of funds in the account of the accused. The said cheque was, thereafter, presented twice for encashment, once on 20.8.96 and, then, on 3.10.96, but the same was returned by the bank with the endorsement to the effect that the cheque could not be honoured due to insufficiency of balance. The complainant, then, issued a notice, dated 15.10.96, calling upon the accused to make payment of the amount of Rs. 75,000/- covered by the said cheque. As no payment was made by the accused, the complainant instituted the complaint.

(ii) To the charges framed against him under Section 420 IPC and Section 138 of the Negotiable Instruments Act (in short, the 'N.I. Act'), the accused pleaded not guilty. In support of his case, the complainant examined six witnesses. The accused was, then, examined under Section 313 Cr.P.C. and, in his examination aforementioned, the accused denied that he had committed the offences alleged to have been committed by him, the case of the defence being, briefly stated, thus : The accused was liable to pay, in all, a sum of Rs. 20,000/- to the complainant's said firm. The accused, in order to cover his liability, issued a blank cheque, without mentioning therein any date, and handed over the same, on good faith, to the complainant. The complainant, instead of making the cheque for the said sum of Rs. 20,000/-, prepared the said cheque for a sum of Rs. 75,000/- and presented the cheque, so prepared, for encashment. On coming to know that the cheque had been dishonoured on 30.5.96, the accused issued another cheque for a sum of Rs. 20,000/-, which was the total liability of the accused. This cheque was encashed by the complainant and having, thus, realized the entire due amount, the complainant presented the first cheque, dated 11.5.96, which was shown to have been drawn for Rs. 75,000/-, to the bank twice, once on 28.8.96 and, then, on 17.9.96. As the complainant had no liability to pay the said amount of Rs. 75,000/- presentation of the cheque by the complainant and the dishonour thereof, on 28.8.96 and 17.9.96, by the bank cannot legally lead to prosecution of the accused under Section 138 of the N.I. Act. That apart, the entire transaction of giving of the cheque to the complainant by the accused was in good faith and, hence, no offence under Section 420 IPC can be said to have been committed by the accused. No evidence was, however, adduced by the defence.

4. Having found the accused guilty of the offences under Section 420 IPC and Section 138 of the N.I. Act, the learned trial Court convicted the accused accordingly and passed sentence against him as indicated above. As the appeal preferred by the accused has failed to yield any favourable result, the accused has, now, come to this Court with the help of the present revision petition.

5. I have heard Mr. A.M. Bora, learned Counsel for the accused-petitioner, and Mr. D. Baruah, learned Counsel for the complainant-opposite party.

6. Presenting the case, on behalf of the petitioner, Mr. Bora, learned Counsel for the accused-petitioner, submits that in the case at hand, the complainant, having accepted a part of the entire cheque amount of Rs. 75,000/- was not legally entitled to present the cheque for Rs. 75,000/- on any date subsequent to his receiving the payment of the amount of Rs. 20,000/- from the accused and, hence, the subsequent dishonour of the cheque, in question, by the bank could not have legally exposed the accused to prosecution under Section 138 of the N.I. Act; but this aspect of the case, contends Mr. Bora, appears to have completely escaped the attention of the learned Court below. In such circumstances, the conviction of the accused-petitioner, submits Mr. Bora, cannot be legally sustained.

7. Controverting the submissions made on behalf of the accused-petitioner, Mr. D. Baruah, learned Counsel for the complainant-opposite party, has submitted that under Section 139 N.I. Act, it is necessary for the Court to draw a legal presumption that the holder of a cheque had received the cheque for the discharge, in whole or in part, of any debt or other liability. In the case at hand, points out Mr. D. Baruah, when the complainant held the cheque for Rs. 75,000/-, the legal presumption arose in his favour that the accused had the liability to pay, at least, Rs. 75,000/-to the complainant and since this cheque was dishonoured, the accused was liable for conviction under Section 138 N.I. Act and he has, thus, been legally and justifiably convicted. In the present case, further submits Mr. D. Baruah, there is nothing in the evidence on record to show that the cheque for Rs. 20,000/- was issued by the accused as against his liability of Rs. 75,000/- and, in such circumstances, when no evidence has been adduced by the accused, the accused cannot be held to have discharged the burden, which had shifted to him in terms of the provisions of Section 139 of the N.I. Act and in such circumstances, the conviction of the accused-petitioner under Section 138 N.I. Act needs no interference.

8. In support of his submission that the accused did not discharge, in accordance with law, the burden, which rested on him, to show that the said cheque for Rs. 75,000/- was not for any existing liability or debt of the accused-petitioner, Mr. D. Baruah has placed reliance on K.N. Beena v. Muniyappan and Anr. reported in : 2001CriLJ4745 , Dhanwantrai Balwantrai Desai v. State of Maharashtra : 1964CriLJ437 , Hiten P. Dalai v. Bratindranath Banerjee reported in : 2001CriLJ4647 , and State of Madras v. Vaidyanath Iyer : 1958CriLJ232 .

9. Mr. D. Baruah also contends that payment of a part of the sum, for which a cheque is drawn, does not absolve the drawer from prosecution under Section 138 N.I. Act if such a cheque is dishonoured for insufficiency of fund. In support of this contention, Mr. D. Baruah places reliance on P.V. Kochayippa v. P.N. Suprasidhan. Rajani Bhawan and Anr. reported in 2002 Crl. L.J. 4803 (Ker).

10. Before entering into the merit of the present revision, what is important to note is that the Negotiable Instruments Act, 1881, was amended by the Banking, Public Financial Institutions and Negotiable Instrument Laws (Amendment) Act, 1988, by incorporating a new chapter, in the form of Chapter XVII, prescribing penalties for dishonour of cheques due to insufficiency of funds in the account of the drawer of the cheque. These provisions were incorporated in order to encourage the culture of use of cheques and enhance the credibility of these instruments of payment. Apart from enhancing the punishment prescribed for such offence, a complete scheme has been laid down for prosecution of the drawer of a cheque if the cheque bounces because of insufficiency of funds. Section 138 of the N.I. Act prescribes certain conditions for making the drawer of a cheque liable for prosecution. These conditions contemplate that the cheque must have been presented to the bank within a period of six months from the date on which it is drawn or within six months from the date of its validity, whichever is earlier, and that before the prosecution is launched for the cheque having been dishonoured, a notice, in writing, demanding payment of the amount covered by the cheque, must have been issued by the drawee to the drawer and the drawer must have failed to make payment within 30 days from the date of receipt of the notice. This period of 30 days for the notice was, at the relevent point of time, it may be noted, a period of 15 days.

11. Be that as it may, from the provisions of Section 138, as indicated hereinabove, it clearly follows that if, on dishonour of a cheque for insufficiency of fund, a notice is not given to the drawer by the drawee and/or if the drawee receives, after the cheque stands dishonoured, any amount in discharge of the liability, partial or complete, which the cheque carried, the drawee, having received part payment of the cheque amount, shall not have the right to present to the bank such a cheque for payment of the whole amount, which the cheque, originally, mentioned, for, the drawer of such a cheque, having already made a part of the payment of the cheque, will not be liable to make payment of the amount for which the cheque had been, originally, drawn and in respect whereof, the notice had been issued, To put it differently, when a part payment of such a cheque has been made to, and received by, the drawee, the drawer shall have no liability to make payment of the full amount of the cheque to the drawee and, hence, in such a case, merely because of the fact that the drawee holds the cheque for the whole amount of the drawer's original liability, the drawee will not be entitled to prosecute the drawer, for, apart from the fact that such a drawer will not be liable to make payment of the entire amount of cheque, the drawer would not be liable to arrange such amount of fund or funds, as the cheque might have, originally, reflected.

12. What logically and clearly follows from the above discussion is that if, as against the cheque for Rs. 75,000/-, which the accused-petitioner had allegedly prepared and given to the complainants firm, a part-payment of Rs. 20,000/- had been received by the complainant's firm, the complaint's firm, having so received the said sum of Rs. 20,000/-, would not be entitled to prosecute the accused-petitioner, for, no cheque for Rs. 55,000/- can be said to have been issued by the accused-petitioner and no notice, demanding payment of the remaining amount of Rs. 55,000/-, can be said to have been received by the accused-petitioner. This inference gets strengthened, when this aspect of the case is analyzed from another angle. The presumption under Section 139 of the N.I. Act, as can be noticed, is to the effect that the holder of the cheque received the cheque either in discharge of a part of the debt or in discharge of the whole of the debt. The holder of the cheque will not be presumed to hold the cheque for an amount, which is more than the debt or liability of the drawer of the cheque. Hence, when, after receipt of the cheque for a given amount, the drawee accepts or receives a part-payment of the amount for which the cheque is prepared, the drawee cannot be presumed to be still entitled to receive the whole amount for which the cheque had been, originally, prepared.

13. Bearing in mind what has been indicated above, let me, now, turn to Section 139 of the N.I. Act. For the sake of proper appreciation of what Section 139 conveys, Section 139 is reproduced hereinbelow:

139. Presumption in favour of holder--It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability.

14. When read carefully, it becomes transparent that this section (Section 139) makes it mandatory for the Court, unless the contrary is proved, to presume that the holder of the cheque holds the cheque for the discharge, in whole or in part, of the debt or other liability of the drawer. This, in turn, means that if a person holds the cheque for a particular sum of money, it shall be presumed by the Court that the drawer of the cheque had the liability to pay, at least, the sum of money for which the cheque has been drawn. There is, indeed, a difference between the expressions 'may presume', on the one hand, and 'shall presume' or “it shall be presumed', on the other. When the legislature uses the expression 'may presume', such presumption is called a natural presumption or presumption of fact, which a Court is entitled to raise if the facts of a given case so require. However, when the statute uses the expression 'shall presume' or 'it shall be presumed', such a presumption is a presumption of law as distinguished from the presumption of fact. In a given case, when the facts established make it a case for raising a presumption of law, it becomes obligatory for the Court to raise such a presumption. Clarified succinctly this position of the law of presumption, when the Apex Court, in State of Madras v. A. Vaidyanatha Iyer : 1958CriLJ232 , the Apex Court held thus:

14. ...It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused. It may here be mentioned that the legislature has chosen to use the words 'shall presume' and not 'may presume', the former a presumption of law and latter of fact. Both these phrases have been defined in the Indian Evidence Act, no doubt for the purpose of that Act. but Section 4 of the Prevention of Corruption Act is in pari materia with the Evidence Act because it deals with a branch of law of evidence e.g., presumptions, and therefore should have the same meaning. 'Shall presume' has been defined in the Evidence Act as follows:

Whenever it is directed by this Act that the Court shall presume a fact, it shall regard such fact as proved until and unless it is disproved.

It is a presumption of law and therefore it is obligatory on the Court to raise this presumption in every case brought under Section 4 of the Prevention of Corruption Act because unlike the case of presumption of fact, presumption of law constitute a branch of jurisprudence. While giving the finding quoted above the learned judge seems to have disregarded the special rule of burden of proof under Section 4 and therefore his approach in this case has been on erroneous lines.

15. Thus, while under Section 114 of the Evidence Act, it is open to the Court to draw or not to draw a presumption as to the existence of a fact from the proof of another fact, the Court is, under Section 139 of the N.I. Act, is obliged to raise presumption. Thus, in the case of a presumption of law, the Court has no option, but to raise presumption if the facts, required for raising such a presumption, exist. The Constitution Bench, in Dhanwantrai Balwantrai Desai v. State of Maharashtra reported in 1964 (I) Cr. LJ 437 (SC) made explicit this position of law, when it held thus:

12. …It is well to bear in mind that whereas under Section 114 of the Evidence Act it is open to the Court to draw or not to draw a presumption as to the existence of one fact from the proof of another fact and it is not obligatory upon the Court to draw such presumption, under Sub-section (1) of Section 4, however, it a certain fact is proved, that is, where any gratification (other than legal gratification) or any valuable thing is proved to have been received by an accused person the Court is required to draw a presumption that the person received that thing as a motive of reward such as is mentioned in Section 161, I.P.C. Therefore, the Court has no choice in the matter, once it is established that the accused person has received a sum of money, which was not due to him as a legal remuneration. Of course, it is open to that person to show that though that money was not due to him as legal remuneration it was legally due to him in some other manner or that he had received it under a transaction or an arrangement, which was lawful. The burden resting on the accused person in such a case would not be as light as it is where a presumption is raised under Section 114 of the Evidence Act and cannot be held to be held to be discharged merely by reason of the fact that the explanation offered by the accused is reasonable and probable. It must further be shown that the explanation is a true one. The words 'unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by 'proof and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before it the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exists. Unless, therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted.

16. In no uncertain words has clarified the Apex Court, in Hiten P. Dalal (supra), that when the necessary facts are established, the Court is bound to presume, unless the contrary is proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of the debt or liability towards the holder.

17. Presumptions, let us bear in mind, are rules of evidence and do not conflict with the presumption of innocence of the accused, for, the burden, on the prosecution, to prove its case, beyond all reasonable doubt, still remains intact. When the facts give rise to a presumption of law, the prosecution shall be taken to have discharged its obligation to prove its case beyond reasonable doubt. In such a case, the onus shifts to the accused to prove the contrary.

18. What is, now, of immense importance to note is that while a presumption of fact can be rebutted by an accused by offering an explanation, which is reasonable and plausible, a presumption of law cannot be discharged by explanation alone. What must be proved is that the explanation is true.

19. It needs to be, however, borne in mind that a fact is said to be proved, according to Section 3 of the Evidence Act, when, after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists. What surfaces from the above discussion is that the holder of a cheque shall be presumed, in the light of the provisions of Section 139 of the N.I. Act, to have received the cheque in discharge of the debt or liability, which the drawer of the cheque had. This presumption cannot be discharged by the drawer by merely offering a reasonable or plausible explanation. Such a presumption can be discharged only when the drawer proves that he had no such debt or liability as the sum, mentioned in the cheque, reflects. This, in turn, shows that the burden, placed on a drawer of a cheque, cannot be discharged by a mere explanation, which may sound reasonable or probable; rather, the explanation must be proved to be true.

20. To sum up, when a person holds a cheque, Section 139 makes it, as already indicted above, obligatory for the Court to presume that the holder of the cheque has received the cheque for discharge, in whole or in part, of a debt or other liability. Once such presumption is raised, the burden shifts to the accused to prove that the drawee did not hold the cheque in discharge of debt or liability of the drawer. When a presumption of fact is raised, the liability of the accused is treated to have been discharged if the explanation offered by the accused is reasonable or probable. But in the case of presumption of law, the accused has the onus of showing not only that his explanation is reasonable and probable, but also that his explanation is a true one. The expression 'unless the contrary is proved', which occur in Section 139, makes it clear that the presumption has to be rebutted by proof and not by a mere explanation, howsoever plausible such an explanation may be, A fact is said to be proved, I may recall, when its existence is directly established, or when, based on the materials placed before it, the Court finds its existence to be so probable that a reasonable man ought to act on the supposition that it exists.

21. The question, now, is as to how to discharge the burden to prove that the explanation, offered by the drawer, is true. This can be done either by eliciting materials from the cross-examination of the complainant and his witnesses or by adducing defence evidence, for, in a given case, the defence may be able to succeed in eliciting, during the course of cross-examination of the prosecution witnesses, sufficient evidence, on record, showing that the explanation offered by the accused is such that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.

22. Thus, when, in a given case, the complainant holds a cheque for a sum of Rs. 1,00,000/- and the accused, during the course of cross-examination of the complainant, makes the complainant admit that the actual liability of the accused was of a sum of Rs. 50,000/- and that after the dishonour of the cheque, based on which the complaint has been made, the accused has already made payment of Rs. 50,000/- and that the accused had no further debt or other liability towards the complainant before the date, when the notice, demanding payment of the sum mentioned in the cheque was made, the burden of the accused, as envisaged under Section 139, must be treated to have been discharged and it cannot be insisted that notwithstanding the fact that the case of the defence had been admitted by none other than the complainant himself, the Court must presume, because of the fact that the complainant holds the cheque, that the accused had the liability to pay the amount mentioned in the cheque. To put it differently, it is not necessary, in order to discharge the burden, which shifts to the accused under Section 139, that the accused must discharge the burden by adducing defence evidence. What is required is that the accused shall prove that he has no liability as the sum mentioned in the cheque reflects and this burden an accused can discharge either by adducing his own evidence or he may, for this purpose, rely on the evidence of the prosecution.

23. In Abdul Rashid Ibrahim Mansuri v. State of Gujarat reported in : 2000CriLJ1384 , the Apex Court considered Section 35 of the Narcotic Drugs and Psychotropic Substances Act, 1985, which reads as follows:

35. Presumption of culpable mental state--(1) If any prosecution for an offence under this Act which requires a culpable mental state of the accused, the court shall presume the existence of such mental state but it shall be defence for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in the prosecution.

Explanation: In this section 'culpable mental state' includes intention, motive, knowledge of a fact and belief in, or reason to believe, a fact.

(2) For the purpose of this section, a fact is said to be proved only when the Court believes it to exist beyond a reasonable doubt and not merely when its existence is established by preponderance of probability.

24. From a bare reading of Section 35, it is clear that the presumption required to be raised under Section 35 is a legal presumption and the standard of proof required for the purpose of discharge of this presumption is proof beyond reasonable doubt. Explaining how such a burden can be discharged by an accused, the Supreme Court, in Abdul Rashid Ibrahim Mansuri (supra), observed and held thus:

22. The burden of proof cast on the accused under Section 35 can be discharged through different modes. One is that he can rely on the materials available in the prosecution evidence. Next is, in addition to that, he can elicit answers from prosecution witnesses through cross-examination to dispel any such doubt. He may also adduce other evidence when he is called upon to enter on his defence. In other words, if circumstances appearing in the prosecution appearing in the prosecution case or in the prosecution evidence are such as to give reasonable assurance to the Court that the appellant could not have had the knowledge of the required intention, the burden cast on him under Section 35 of the Act would stand discharged even if he has not adduced any other evidence of his own when he is called upon to enter his defence.

25. From the case of Abdul Rashid Ibrahim Mansuri (supra), it becomes transparent that an accused need not adduce evidence to discharge a legal presumption even if standard of discharge of such a presumption raised against him is 'proof beyond reasonable doubt'.

26. In the present case, there can be no dispute that when the complainant held the cheque, in question, for a sum of Rs. 75,000/-, the Court was entitled and, is still entitled, to raise a presumption, under Section 139 of N.I. Act, that the cheque had been issued for the purpose of discharge, in whole or in pat, of the debt or other liability of the accused-petitioner. In fact, such a presumption was and, indeed, is obligatory for the Court to raise. Once such a presumption is raised, burden shifts to the accused to prove the contrary, namely, that the cheque, in question, was not in the discharge of whole or part of the debt or liability of the accused-petitioner.

27. Bearing in mind what is indicated above, let me, now, turn to the factual matrix of the present complaint. In this regard, it is quite pertinent to note that according to the complaint, lodged by the complainant-opposite party, the cheque for Rs. 75,000/- was issued by the accused against an amount of Rs. 75,000/-, which the accused owed to the complainant's firm, for buying Akai television sets on credit. In fact, setting at rest any confusion or misunderstanding in this regard, the complainant deposed, in no uncertain words, in his examination-in-chief itself, that the liability of the accused went up to the tune of Rs. 75,000/- and since the accused could not make payment, in cash, for his such liability, he issued the cheque. The evidence, so given by none other than the complainant himself, makes it transparent that the total liability of the accused, when he had issued the cheque on 11.5.96, was a sum of Rs. 75,000/-.

28. Coupled with the above, it is also worth noticing that when the complainant was examined as a witness, he did not even whisper that at any time, after the accused had become liable to pay Rs. 75,000/- to the complainant's firm and had issued the cheque, in question, the accused incurred any further liability. It is, therefore, glaringly noticeable that the liability of the accused remained all along, even according to the complainant, at Rs. 75,000/-. As against the case, so set up by the complainant, the case of the accused-petitioner was that his liability was to the extent of Rs. 20,000/-, he had given a blank cheque to the complainant and the complainant had prepared the cheque for Rs. 75,000/- and that after this cheque was dishnoured, the accused discharged his liability of Rs. 20,000/- by giving a cheque to the complainant and the complainant encashed the said cheque on 10.7.96,

29. In short, thus, while the case of the complainant was that in order to discharge his total liability, the accused issued a cheque, on 11.5.96, for a sum of Rs. 75,000/- and this cheque was dishonoured, on 30.5.96, the case of the accused was that after the cheque was dishonoured on 30.5.96, he had made the payment of his total liability, on 10.7.96, by giving a cheque for Rs. 20,000/- and it was, thereafter, that the complainant presented the earlier cheque, dated 11.5.96, to the bank, on 20.8.96 and on 17.9.96, and got the same dishonoured.

30. The question, now, is as to what, eventually, emerged from the evidence on record. In this regard, when the cross-examination of the complainant is put to a microscopic scrutiny, it clearly surfaces that the complainant admitted, in his cross-examination, at the hands of the accused, that he did receive a cheque from the accused for Rs. 20,000/- and got the same encashed. In fact, the bank accounts, produced by the complainant himself, show receipt of a sum of Rs. 20,000/- by the complainant on 10.7.96. There is nothing, either in the complaint or in the evidence on record, indicating that the accused incurred any further liability or debt after he had issued the said cheque for Rs. 75,000/-. These facts, in turn, clearly show that either the complainant had received the said cheque for Rs. 20,000/- in total discharge of the liabilities of the accused or in partial discharge of the liabilities of the accused. At any rate, it is clear that having paid, by way of the second cheque, a sum of Rs. 20,000/-, the accused did not remain liable to pay the sum of Rs. 75,000/-, which the cheque, held by the complainant, reflected. When the debt or liability of the accused had become less than Rs. 75,000/-, the complainant could not have presented the cheque for Rs. 75,000/- to the bank and institute a proceeding under Section 138 of the N.I. Act, when the cheque, in question, which was for Rs. 75,000/-, got bounced for insufficiency of funds. I may also hasten to add that had the complainant instituted proceedings immediately on dishonour of the cheque on 30.5.06, the situation would have been different; but in the case at hand, the complainant, as the evidence on record discloses, received, after the cheque stood dishonoured on 30.5.96, a sum of Rs. 20,000/- against the petitioner's total liability of Rs. 75,000/- and, thereafter, the complainant, once again, presented the same cheque of Rs. 75,000/- for encashment and when the cheque, so presented, was dishonoured on 28.8.96 and 17.9.96, the complainant issued notice, on 30.10.96, to the accused demanding payment for the whole amount of Rs. 75,000/-.

31. What logically follows from the above discussion is that when, upon dishonour of a cheque of a certain amount of money, the holder of the cheque receives part payment towards the total amount for which the cheque stood issued, the holder of the cheque cannot, thereafter, demand payment of the entire cheque amount and cannot, on the dishonour of such a cheque for insufficiency of funds, launch prosecution against the drawer of the cheque, for, on receipt of apart payment of the debt of the drawer, the cheque either needs to be cancelled and a fresh cheque needs to be issued for the remaining liability or the same cheque can be validated for the sum, which the drawer had actually remained liable to pay as his debt.

32. In P.V. Kochayippa (supra), which Mr. D. Baruah relies upon, the accused was convicted on the basis of the facts of the said case, for, the Court found that the accused had closed the account after the cheque, which had led to the prosecution of the accused, already stood issued. This apart, it was the complainant's case, in P.V. Kochayippa (supra), that apart from the liability, which was, originally, created by the said cheque, the accused was also liable to pay interest on the, said amount and it was for the total amount that the cheque stood issued. The case of P.V. Kochayippa (supra) does not, therefore, lay down any law of universal application. To the facts of the case at hand, therefore, this case is not attracted.

33. What emerges from the above discussion is that the complainant was not entitled to receive the sum of Rs. 75,000/-, which the cheque, in question, reflected and when the accused had not remained liable to pay Rs. 75,000/-, the cheque, issued by the accused for the said sum of Rs. 75,000/-, ought not to have been presented to the bank for encashment and, upon its dishonour for insufficiency of fund, on 28.8.96 and on 17.9.96, the prosecution under Section 138 N.I. Act could not have been launched against the accused-petitioner. Considered thus, it is abundantly clear that the prosecution launched against the accused-petitioner was wholly impermissible in law and the accused ought not to have been he have been convicted under Section 420 IPC, for, ingredients of the offence of cheating, as defined under Section 415 IPC, were not present at all.

34. Because of what have been discussed and pointed out above, this revision succeeds. The impugned judgments and orders are hereby set aside. The accused-petitioner is held not guilty of the offences under Section 138 of the N.I. Act and under Section 420 IPC and he is acquitted of the same.

35. With the above observations and directions, this revision shall stand disposed of. No order as to costs.


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