Case Note & Summary
The appeal before the High Court of Bombay at Goa arose from a complaint under Section 138 of the Negotiable Instruments Act, 1881. The appellant, Goa Handicrafts, Rural & Small Scale Industries Development Corporation Ltd., was the original complainant. Respondent No. 1 was a private limited company, and Respondent No. 2 was its managing director. The complainant alleged that the accused had issued a post-dated cheque dated 29-12-1999 for Rs.10,00,000 drawn on a co-operative bank towards discharge of existing liabilities for materials taken on credit. The cheque was dishonoured with the endorsement 'exceeds arrangement'. The complainant issued a statutory demand notice on 16-3-2000, but no payment was made within 15 days. A criminal complaint was then filed. The trial court convicted the accused under Section 138, sentencing them to imprisonment till rising of court and compensation of Rs.10,00,000 with a default sentence of six months' simple imprisonment. Against this, the accused preferred Criminal Appeal No. 78 of 2002 before the Additional Sessions Judge, Panaji, who allowed the appeal on 5-9-2003, setting aside the conviction on the grounds that there was no existing debt or liability and that the cheque was issued only as security. The complainant then filed the present criminal appeal against acquittal. The appellant argued that the Sessions Court had failed to consider the admission of debt in the cross-examination of the accused and had overlooked settled law that even a cheque given as security attracts Section 138. Reliance was placed on several Supreme Court and High Court judgments to support that proposition. The appellant also contended that the presumption under Section 139 had not been rebutted by the accused. The respondent argued that the scope for interference under Section 378 CrPC in an appeal against acquittal is limited, that two views were possible, and that the accused had adduced evidence to rebut the presumption. The text of the provided judgment is incomplete and does not contain the final decision of the High Court. Consequently, the outcome and the ratio decidendi are not available.
Issue of Consideration
Whether the Additional Sessions Judge erred in acquitting the accused by holding that there was no existing debt or liability and that the cheque was issued as security, thereby not attracting Section 138 of the Negotiable Instruments Act, 1881.
Case Details
2005 LawText (BOM) (06) 22
Criminal Appeal No. 13 of 2004
Mr. V. A. Lawande for appellant; Mr. S. D. Lotlikar, Senior Advocate with Ms. Pooja Bharne for respondents 1 and 2; Mr. S. N. Sardessai, Public Prosecutor for State
Goa Handicrafts, Rural & Small Scale Industries Development Corporation Ltd.
1. M/s Samudra Ropes Pvt. Ltd., 2. Shri Narayan P. Naik, 3. State of Goa
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Nature of Litigation
Criminal appeal against acquittal under Section 138 of the Negotiable Instruments Act, 1881.
Remedy Sought
Appellant seeks to set aside acquittal and restore conviction and sentence passed by trial court.
Filing Reason
The Additional Sessions Judge acquitted the accused on the ground that the cheque was issued as security and there was no existing debt or liability.
Previous Decisions
Trial Court convicted accused under Section 138 and sentenced to imprisonment till rising of court and compensation of Rs.10,00,000 with default sentence of six months simple imprisonment. The Additional Sessions Judge in Criminal Appeal No. 78 of 2002 set aside conviction and acquitted accused.
Issues
Whether the cheque issued by the accused was towards an existing debt or legally enforceable liability, attracting Section 138 of the Negotiable Instruments Act, 1881.
Whether a cheque issued as security can form the basis of a complaint under Section 138.
Whether the accused had rebutted the presumption under Section 139 of the Act.
Scope of interference by High Court in appeal against acquittal under Section 378 CrPC.
Submissions/Arguments
Appellant argued that Sessions Court ignored admission of debt in cross-examination; that even a cheque given as security attracts Section 138; that presumption under Section 139 was not rebutted; and that trial court had properly appreciated evidence.
Respondents argued that scope of interference in appeal against acquittal is limited; that two views were possible; that accused had adduced evidence and correspondence to rebut presumption; and that cheque was only as security, not to be acted upon.
Judgment Excerpts
The Complainant had issued a legal statutory notice dated 16-3-2000. However, the Accused did not give any reply to the said notice nor payment was made by the Accused within 15 days from the receipt of the said notice.
He submitted that the trial Court in fact had considered the evidence adduced by the Complainant and the admissions which were given by the Accused in its totality and thereafter had given a specific finding that the cheque was issued towards the existing debt and legally enforceable liability.
Procedural History
Complaint under Section 138 NI Act filed before JMFC, Panaji. Trial Court convicted accused and sentenced to imprisonment till rising of court and compensation with default sentence. Accused appealed in Criminal Appeal No. 78 of 2002 before Additional Sessions Judge, Panaji, who by judgment dated 5-9-2003 allowed appeal and acquitted accused. Complainant filed present Criminal Appeal No. 13 of 2004 before High Court.
Acts & Sections
- Negotiable Instruments Act, 1881: 138, 139, 142
- Code of Criminal Procedure, 1973: 378
