Case Note & Summary
The appellant, The Karad Urban Cooperative Bank Limited, filed a complaint against respondent no.1, Sunil Laxman Dalvi, alleging an offence under Section 138 of the Negotiable Instruments Act, 1881 (NI Act). The Judicial Magistrate First Class, Karad, acquitted the respondent after trial. The bank appealed against the acquittal, obtaining special leave from the High Court. During the appeal, the bank also filed an application under Section 391 of the Code of Criminal Procedure, 1973 (CrPC) to take additional evidence. The respondent did not appear despite notice and repeated opportunities. The High Court heard the appeal and the application together. The court examined the trial court's findings, particularly that the bank was not a 'holder in due course' and that notice of dishonour was not properly served because it was sent by Under Postal Certificate (UPC). The High Court held that the bank, being a payee or endorsee of the cheque, was a holder in due course and entitled to maintain the complaint. It also held that service of notice by UPC is a valid mode of service under Section 138 of the NI Act. The court found that the presumption under Section 139 of the NI Act that the cheque was issued for discharge of a debt or liability was not rebutted by the accused. The trial court's acquittal was based on misappreciation of evidence and law, and was perverse. The High Court allowed the appeal, set aside the acquittal, and convicted the respondent under Section 138 of the NI Act. The respondent was sentenced to pay a fine of Rs. 1,50,000, with default simple imprisonment for three months. The application for additional evidence was dismissed as unnecessary.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Holder in Due Course - Cooperative bank as holder in due course - The appellant bank, being a holder in due course of the cheque, was entitled to maintain the complaint under Section 138 of the Negotiable Instruments Act, 1881. The trial court erred in holding that the bank was not a holder in due course. (Paras 5-7) B) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Service of Notice - Validity of UPC - Service of notice by Under Postal Certificate (UPC) is a valid mode of service under Section 138 of the Negotiable Instruments Act, 1881. The trial court's finding that notice was not served because it was sent by UPC was erroneous. (Paras 8-10) C) Negotiable Instruments Act - Dishonour of Cheque - Section 139 - Presumption - Rebuttal - The presumption under Section 139 of the Negotiable Instruments Act, 1881 that the cheque was issued for discharge of a debt or liability, was not rebutted by the accused. The trial court's acquittal was perverse and set aside. (Paras 11-13) D) Criminal Procedure Code - Appeal against Acquittal - Section 378 - Interference - The High Court can interfere with an acquittal if the findings are perverse or unreasonable. In this case, the trial court's findings were based on misappreciation of evidence and law, warranting reversal. (Paras 14-15) E) Criminal Procedure Code - Additional Evidence - Section 391 - Application for additional evidence - The application for additional evidence under Section 391 of the Code of Criminal Procedure, 1973 was dismissed as the existing evidence was sufficient to decide the appeal. (Para 16)
Issue of Consideration
Whether the acquittal of the respondent for offence under Section 138 of the Negotiable Instruments Act was proper, and whether additional evidence should be permitted under Section 391 of the Code of Criminal Procedure.
Final Decision
The appeal is allowed. The impugned order of acquittal is set aside. The respondent is convicted for offence under Section 138 of the Negotiable Instruments Act, 1881 and sentenced to pay a fine of Rs.1,50,000/- (Rupees One Lakh Fifty Thousand only), in default to suffer simple imprisonment for three months. The fine amount, if recovered, shall be paid to the appellant bank as compensation. The application for additional evidence is dismissed.
Law Points
- Holder in due course
- Service of notice by UPC
- Presumption under Section 139 of NI Act
- Rebuttal of presumption
- Acquittal appeal under Section 378 CrPC
- Additional evidence under Section 391 CrPC
