Case Note & Summary
The case arises from a criminal revision application filed by Shobhnaben Jayendrakumar Panchal against the judgment of the Sessions Judge, Panchmahal at Godhra, which upheld her conviction under Section 138 of the Negotiable Instruments Act, 1881. The applicant had taken a loan of Rs.1,95,000 from Janta Sahkari Bank Ltd. on 19.06.2001 to purchase a vehicle. Due to default in repayment, an outstanding amount of Rs.1,96,668 remained. The applicant issued a cheque for Rs.86,168 dated 05.08.2002, which was dishonoured with the endorsement 'funds insufficient'. The bank filed a complaint, and the JMFC, Halol convicted the applicant to one year simple imprisonment and a fine of Rs.5,000. The appeal was dismissed. In revision, the applicant argued that the vehicle was seized by the bank before the cheque was issued, so there was no legally enforceable debt. The High Court held that the seizure of collateral does not extinguish the liability; the cheque was issued towards the outstanding loan, and the presumption under Section 139 NI Act applies. The concurrent findings were not perverse, so the revision was dismissed.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Legally Enforceable Debt - The applicant issued a cheque towards outstanding loan amount after default; the cheque was dishonoured due to insufficient funds. The court held that the seizure of the vehicle (collateral) does not extinguish the liability under the cheque, and the presumption under Section 139 NI Act that the cheque was issued for a legally enforceable debt remains. (Paras 3-5)
B) Criminal Procedure Code - Revision - Section 397 read with 401 - Scope of Interference - The revisional court cannot re-appreciate evidence unless the findings are perverse or illegal. The concurrent findings of the courts below were based on evidence and not perverse, hence no interference warranted. (Paras 5-6)
Issue of Consideration
Whether the conviction under Section 138 of the Negotiable Instruments Act, 1881 is sustainable when the vehicle purchased with the loan was seized by the bank before the cheque was issued?
Final Decision
The revision application is dismissed. The judgment and order of the Sessions Judge dated 24.08.2007 and the JMFC dated 13.07.2006 are confirmed.
Law Points
- Section 138 Negotiable Instruments Act
- 1881
- presumption of legally enforceable debt
- seizure of collateral does not extinguish liability
- concurrent findings not to be interfered in revision unless perverse
Case Details
2026 LawText (GUJ) (03) 403
R/Criminal Revision Application (Against Conviction - Negotiable Instrument Act) No. 511 of 2007
Mr. Arpit A. Kapadia for applicant, Mr. N.V. Solanki for respondent No.1, Mr. Rohan Raval, APP for respondent No.2
Shobhnaben Jayendrakumar Panchal
Janta Sahkari Bank Ltd. & Anr.
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Nature of Litigation
Criminal revision application against conviction under Section 138 of the Negotiable Instruments Act, 1881
Remedy Sought
Quashing and setting aside of the conviction and sentence imposed by the JMFC and upheld by the Sessions Judge
Filing Reason
The applicant was convicted for dishonour of cheque issued towards loan repayment; she contended that the vehicle purchased with the loan was seized by the bank before the cheque was issued, so there was no legally enforceable debt
Previous Decisions
JMFC, Halol convicted the applicant on 13.07.2006 in Criminal Case No.1097/2002; Sessions Judge, Panchmahal dismissed appeal on 24.08.2007 in Criminal Appeal No.14/2006
Issues
Whether the conviction under Section 138 of the Negotiable Instruments Act, 1881 is sustainable when the vehicle purchased with the loan was seized by the bank before the cheque was issued?
Whether the revisional court should interfere with concurrent findings of fact?
Submissions/Arguments
Learned advocate for the applicant submitted that the vehicle was seized by the bank before the cheque was issued, so there was no legally enforceable debt; the cheque was given under coercion.
Learned advocate for the respondent bank submitted that the cheque was issued towards outstanding loan, and seizure of vehicle does not extinguish liability; presumption under Section 139 NI Act applies.
Ratio Decidendi
The seizure of collateral (vehicle) does not extinguish the liability under the cheque; the presumption under Section 139 of the NI Act that the cheque was issued for a legally enforceable debt remains. The revisional court cannot re-appreciate evidence unless findings are perverse or illegal.
Judgment Excerpts
The seizure of the vehicle does not extinguish the liability of the applicant to repay the loan amount.
The presumption under Section 139 of the NI Act that the cheque was issued for a legally enforceable debt remains.
Procedural History
The complaint was filed in 2002 before JMFC, Halol, resulting in conviction on 13.07.2006. The applicant appealed to Sessions Court, Panchmahal, which dismissed the appeal on 24.08.2007. The applicant then filed the present revision application in the High Court on 18.03.2026.
Acts & Sections
- Negotiable Instruments Act, 1881: 138, 139
- Code of Criminal Procedure, 1973: 374, 397, 401
