High Court · 2025

Legal Reasoning

Cri.Appeal.784.2005-1-IN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADCRIMINAL APPEAL NO.784 OF 2005Managing Director,Chopda Shetkari Sahakari Karkhana Ltd.,Chahardi, Tq. Chopda, Dist. Jalgaon.… Appellant (Orig. Complainant)Versus1.Rajendra Sadashiv Lokre,Age : 48 years, Occu. : Business,R/o. Behind Manohar Theatre,Dhule, Dist. Dhule2.The State of Maharashtra… Respondent…..Ms. Pallavi Gavande h/f. Mr. V. B. Patil, Advocate for Appellant.Mr. Tapan K. Sant, Advocate for Respondent No.1.Mr. S. S. Dande, APP for Respondent No.2 - State.…..CORAM :ABHAY S. WAGHWASE, J.RESERVED ON :31 JULY 2025PRONOUNCED ON :12 AUGUST 2025 JUDGMENT : 1.Original complainant, who instituted proceedings undersection 138 of Negotiable Instruments Act against presentrespondent, has hereby taken exception to judgment and order ofacquittal passed by learned J.M.F.C., Chopda, dated 05.02.2004 inS.C.C. No. 119 of 1996.2.In brief appellant’s case before trial was, that Cri.Appeal.784.2005-2-complainant is a sugar factory. They entered into an agreement withpresent respondent – original accused for transporting sugarcane. Onrequest of original accused, it is complainant’s case that accusedborrowed advance of Rs.20,000/- and such demand was complied bytaking a note in the ledger. Accused failed to meet the commitmentand undertaking, consequently legal notice was dispatched for returnof the amount, however, still accused failed to respond. On persuasionaccused issued cheque, but on its presentation it was dishonoured.Complainant by way of resolution authorized PW1 Prabhakar to takenecessary steps for recovery. Proceedings under section 138 of N.I.Act were instituted, wherein both, oral and documentary evidencewas adduced. Accused denied legal debt. Learned trial Judgeappreciated the evidence and vide judgment and order dated05.02.2004 acquitted the accused. Hence, the appeal. 3.Learned counsel for appellant apprised this court aboutabove factual background and would emphasize that accused hastaken advance cash of Rs.20,000/-. That, there is noting of the samein the ledger. That, sugar factory had by way of resolution authorizedPW1 Prabhakar to take necessary steps for recovery. That, saidresolution is the part of record. That, bank official is also examined todemonstrate and establish presentation of cheque issued by accusedand its dishonour. According to learned counsel, legally enforceable Cri.Appeal.784.2005-3-debt was established. As required legal notice was dispatched and itwas also received by accused, but he failed to repay the chequeamount. Thus, according to learned counsel, all legal requirementswere met, however, learned trial court failed to appreciate the oraland documentary evidence as well as law and erred in acquitting theaccused. Hence, it is urged that appeal be allowed.4.In answer to above, learned counsel for respondentsupported the impugned judgment by pointing out that, complainantappellant failed to make out the case under section 138 of N.I. Act.That, there was no legally enforceable debt. That, there is no evidenceabout alleged borrowing or advance. That, legal requirements of 138of N.I. Act are completely missing. Alleged notice is undated. That,there is no proof of service of notice. He would point out that, chequeissued for security was misused. Hence for above reasons, hesupports the findings and conclusion reached at by learned trialJudge and prays to dismiss the appeal for want of merits. 5.Reanalyzed the evidence i.e. both, oral and documentaryevidence. Apart from adducing evidence of one Prabhakar Gurav,there is evidence of one Clerk of Jalgaon District Central Co-operativeBank Limited. Complainant had adduced documentary evidence likecheque in question, memo, legal notice and postal acknowledgment. Cri.Appeal.784.2005-4-6.As stated, PW1 Prabhakar deposed at Exh.24 that heserves as a Clerk in the sugar factory. Resolution was passed bysugar factory authorizing him to look after the case, which heidentified to be at Exh.25. He reiterated about accused takingadvance of Rs.20,000/- for executing the work, but committed breachof contract. Cheque issued on demand towards repayment was alsodishonoured, and therefore, after issuing notice, when there wasfailure to repay, complaint was filed by him. His cross examination,more particularly paragraphs 6, 7 and 8, with relevant portions, areas under:- “Cross Exam by Mr. Barma Adv. “I am serving in the Sugar factory since 1994 as a clerk Iam dealing with agriculture table. I am not signatory of thiscomplaint. It is not true the M. D. has no right to launch thecomplaint. I have not produced such resolution. The resolutionExh.25 does not give details of this case. So as to point out I havebeen authorised for this case. It is true Exh. 25 authorise twomore person alike me. Not true I have no right to give evidencefor and on behalf of complainant.Qus. Can you details of the agreement took place between thecomplainant and accused? Ans. : Yes. The accused had agreed to carry sugarcane in his truckfrom the land of agriculturist to the factory. Cri.Appeal.784.2005-5- I cannot say whether accused has furnished any surety.The portion mark A in the complaint now read over to me thatthe agreement was regarding surety is correct. Not true to say inview of the surety agreement a blank cheque under signature ofaccused was obtained from him. I have not produced documentto show that accused demanded advance. It is not true noamount was paid in advanced to accused. On giving advancepayment to the accused receipt in that regard was given by theaccused in favour of the complainant. I have not produced saidreceipt. I cannot assign any reason why it has not been produced.I cannot specify the date on which the complainant demandedthe refund of advance payment. I have not produced copy ofearlier demand notice. It is true my complaint is silent regardingearlier demand. Not true as no demand was raised therefore suchcontention is not raised in the complaint.7. It is not true the accused had given the cheque exh.27 tothe complainant as a security. It is not true it was the bankcheque and the complainant has filled other details in thecheque. Not true the cheque was not tendered in the bank forencashment.8.It is true it is not mentioned in the complaint that the bankintimation shows the word” Referred to Drawer is not written. Itis true the very endorsement is not written in the notice exh. 29.I cannot say any reason thereof. It is not true it is incorrectlywritten in the complaint that the accused was knowing that thereis no sufficient fund in his bank account at the time of issuingcheque. It is not true it is incorrectly written in the complaint thatthe cheque was returned unpaid due to insufficient fund in theaccount of accused with the bank.” Cri.Appeal.784.2005-6-7.Another witness PW2 is Ravishankar Gujarathi a Clerk ofthe Bank and he in his evidence at Exh.33 testified about account ofbank with them, about receipt of cheque drawn by accused, it beingdishonoured with remark “insufficient funds”. He identified bankmemo. 8.Learned counsel for appellant submitted that all legalrequirements of section 138 of N.I. Act were met and available.However, here, though PW1 Prabhakar deposed about contract beingentered between accused and complainant, copy of the same is notplaced on record. Only extract of ledger entry is placed on record, butunless it carries details of need for payment, mere oral submissionsand ledger copy would itself not be sufficient to accept the case of anyagreement and contract being forged between the parties. 9.Secondly, on re-appreciation it is emerging that, in crossexamination, PW1 Prabhakar has admitted that, in the verycomplaint under section 138 of N.I. Act, there is no reference aboutendorsement or remark “Referred to Drawee”. He has also admittedthat, even demand notice allegedly issued to the accused, is alsosilent on above aspect. 10.Learned counsel for respondent has denied very receiptof legal notice. It is pointed out that, Exh.29 so called notice is Cri.Appeal.784.2005-7-undated. On visiting said Exhibit, apparently it is undated. Date hasbearing because 138 of N.I. Act requires timeline to be followed forpresentation of cheque, requirement of clear remark on bank memo/intimation and further requirement on dispatching notice. However,here notice is undated and therefore complainant's case suffers aserious impact. 11.The Hon’ble Supreme Court in the case of H. N. Jagdeeshv. R. Rajeshwari, (2019) 16 SCC 730, held that, “service of astatutory notice demanding payment is a necessary precondition forfiling a complaint under Section 138”. Here, as stated above, verynotice is undated and therefore exactly when it was issued and whenit was received is not cogently proved.12.Therefore, prima facie, essential requirements of section138 of N.I. Act are patently missing in the appellant’s case beforetrial court.13.Specific defence of accused is that, there was no legallyenforceable debt and complainant failed to discharge the veryprimary burden of proving existence of legally enforceable debt.Stand taken is of issuance of cheque for security. The Hon’ble ApexCourt in the case of Sudhir Kumar Bhalla v. Jagdish, (2008) 7 SCC Cri.Appeal.784.2005-8-137 held that, “the offence under section 138 of the N.I. Act applieswhen cheques are issued to discharge a debt or other liability, notwhen issued as security”. As stated above, no case even for drawing presumptionavailable under section 139 of N.I. Act is made out. On the contrary,in view of above discussion, there are several technical and vitaldefects. As pointed out by learned counsel for respondent, doubt isalso entertained about authenticity of signature of accusedrespondent over the instrument and there is discussion on this by thetrial court in paragraph 24 of the judgment. Learned counsel forappellant has not clarified such findings nor has challenged it. 14.To sum up, here, complainant has failed to make out acase for action under section 138 of N.I. Act. This court finds no faultor perversity so as to interfere in the impugned judgment. Hence,appeal is dismissed. (ABHAY S. WAGHWASE, J.) Tandale