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Blog by Advocate Vijay Premchandani

Blog submitted by

Respected Advocate Vijay Premchandani on 2009-09-05 08:46:51

Blog Title

Appeals in cheque return matters

Blog Details

Section 138 --- Appeal against conviction --- Sentence of two months simple imprisonment and deposit of compensation of Rs.50,000 or one month simple imprisonment --- Application for suspension of sentence rejected because accused (a lady) could not deposit Rs.50,000 and is in jail for about a month --- Held, condition of deposit of Rs.50,000 is very harsh and stringent. Court modified it to deposit of Rs.10,000 with Sessions Judge within two weeks time subject to which sentence will stand suspended. Seema M. Jadhav Vs. State of Maharashtra, 2008(2) Bom.C.R. (Cri.) 321. August.

Section 138 --- Application for leave to appeal against acquittal --- Magistrate acquitted accused on ground that dishonoured cheques were issued by way of security and not towards any existing liability/debt --- Held, on going through findings Court does not see any perversity in reasoning of Magistrate to warrant any interference. Hence no case for admission of appeal. Mahesh Sahakari Patsanstha ltd. Vs. Gunaram Atumal Tolani, 2008(2) Bom.C.R. (Cri.) (A.B.) 318. August.

Section 138 --- Cheque given as repayment for friendly loan extend over two years period --- Last loan transaction had taken place o 29-2-2000 – Cheques issued after 6 years from that date ---- No evidence to show that accused accepted liability for time barred loans ---- Accused discharged because loans transactions were time barred, 2007(1) Bom.C.R. 185(A.B.) – Held, a cheque cannot be taken as an acknolwedgment for debt under section 18 of Limitation Act, 2000 Bom.C.R. 9, because acknowledgment should have been before limitation for recovery was over. Reliance on 2006(6) Bom.C.R. 874 is not correct because in that case accused had given an undertaking/promise in favour of complainant and that amounted to a fresh cause of action. That being not case here mere giving a cheque did not extend limitation. Hence view taken by Magistrate is one possible reasonable view. Application is liable to be rejected. Kamalaksha Laxman Prabhu Vs. S.G. Mayekar, 2008(2) Bo,C.R. (Cri.) 299. August.

Section 138 --- Cheque issued for a given amount --- No particulars as to when and what amount was advanced and whether given to accused only --- Further complainant is house hold lady and has not shown source of income --- It is contended that she had taken amount from a Co-operative Bank to which it had been paying back by instalments --- But she has not produced any documents showing availability of Rs. 3.20 lakhs with her and she has also not been filing any income tax returns --- Held, in view of, it is difficult to accept that she had advanced alleged loan. In view of it Magistrate’s view in acquitting accused cannot be faulted. Anjana Balkrishna Shewale Vs. Chayya Baban Jagdale, 2008(2) Bom.C.R.(Cri.) 210. August.

Section 138 --- Cheque of Rs.14.50 lakhs --- No evidence produced to show when loan of equivalent amount was advanced by complainant to accused --- Cheque was also not addressed to complainant nor letter accompanying it indicated any liability towards complainant --- Complaint states that he had received cheque from Shrushti Financer, but it is not shown there was any transaction with said financier – Held, in given facts view taken by Magistrate is reasonable one and cannot be interfered with in appeal. Hence applicable liable to be rejected. Nandkishore Mehra Vs. Sudhir Transport Ltd., 2008(2) Bom.C.R.(Cri.) 292. August.

Section 138 --- Cheques issued by different banks --- And accused sought to be proceeded with in one complaint --- Held, two cases might be tried together but because cause of action in each case is different, cases may not be covered by section 219 of Code of Criminal Procedure. Magistrate has further concluded that there was no legal liability to pay because evidence of P.W. 1 and P.W. 2 is contradictory to each other. It is also come in evidence that amount was payable after 4 years period and that period had still not been completed, hence complaint could not, be tenable. Looking to evidence on record Court is of view that view taken by Magistrate is reasonable one and does not call for interference in appeal. Laxman Bhaguji Kawade Vs. Satyabhama Shivlata Chavan, 2008(2) Bom.C.R. (Cri.) 296. August.

Section 138 --- Complaint --- Leave to appeal --- Against acquittal – Cheque amount of Rs. 7.23 lakhs issued but no documentary proof to show when and at what dates and places amount was advanced by him to accused --- Complainant admitted a few months before issue of cheques his economic condition was bad and he owned amounts to bank --- Held, in given facts when he had no sufficient money to pay his own loans it is impossible to believe that he would have advnaced such huge amount. An alleged transaction in which about 6 vehicles of accused were taken over by complainant is cited as cause for loan but in such a case amount could be payable to accused and not to complainant. Hence no case for interference with order of Magistrate. Clint B. Rodrigues Vs. State of Maharashtra, 2008(2) Bom.C.R. (Cri.) 211. August.

Section 138 --- Complaint --- Dismissed in default of complainant and his Counsel --- Contention that dismissal of complaint for absence of complainant on a single date was not proper and complaint liable to be restored see 2003(1) Bom.C.R. (S.C.) 524 : 2003 Bom.C.R.(Cri.) (S.C.) 146 --- Held, facts show that there was no explanation for absence on given date and further it was not absence of one date only. There have been absence earlier also for which adjournment was sought since no explanation is given for absence there is no merit in application. Hence Application for leave to appeal is dismissed. Sonam Finance Lease Co. Pvt. Ltd. Vs. Vasantsingh Shankar Narayansingh, 2008(2) Bom.C.R. (Cri.) (A.B.) 315. August.

Section 138 --- Cross complaints --- One under section 138 of N.I.Act for dishonour of cheques --- Other under sections 420, 463 etc. of I.P.C. by appellants against respondents alleging that figures on cheques were altered by respondents and that cheques were given to security for business transactions and were wrongly used by them to file false complaint under section 138 N.I.Act --- Magistrate dismissed complaint of respondents under Act and proceeded with complaint filed by appellants --- One appeal in High court against orders, High Court ordered conviction of appellants under section 138 N.I.Act for dishonour of cheques holding that figures of amount of cheques were supported by figures written in words therefore, contention of alteration etc. is not tenable and further quashed proceedings against respondents --- Special Leave Petition against same by appellants --- Held, Single Judge in this case has not addresed himself to that legal question raised by appellants that criminal proceedings under section 138 N.I. Act is attracted on account of dishonour of cheques issued in discharge of a liability and not for cheques towards issued as security. Court has also not given cogent / convincing reasons on point of alteration of figures of amounts due on cheques by adding zeros to figure of amounts which had been proved by expert evidence led by appellants. In view of it Court is of opinion that Judgment and orders of High Court cannot be sustained on aforesaid legal questions. Hence matters are being remitted to High Court to decide both appeals and Misc. Petitions for quashing proceedings without being influenced by observations of court in accordance with law. Sudhir Kumar Bhalla Vs. Jagdish Chand etc. etc., 2008(2) Bom.C.R. (Cri.) (S.C.) 215. August.
Sudhir Kumar Bhalla Vs. Jagdish Chand etc. etc., 2008(5) Bom.C.R. (Cri.) (S.C.) 486. September

Section 138 --- Leave to appeal --- Against acquittal – contention that payment was made in liue of sale of goods by complainants, but because goods supplied were defective, unless question of liability was settled no payment could be due – Complainant admit that he had taken back goods with Rs. 25,000 from accused --- Held, it is settled position of law that if view taken by Magistrate is reasonable one Appellate Court cannot interfere with Magistrate’s order. Jayeshbhai Sejpal Vs. State of Maharashtra, 2008(2) Bom.C.R. (Cri.) 214. August.

Section 138 --- Notice of dishonour for admitted liability --- Issued by complainant but not replied to by accused --- In defence controversy is being raised whether that accused is not a member or nominal member of complainant society --- Held, notice having not been replied by accused complainant could not meet defence. Further lower Court has taken view that loan to a non-member was an illegality and could not be recovered is without any support of legal mandate. Hence appeal allowed. Complainant society given right to a reasonable opportunity and will be entitled to file additional documents and lead further examination-in-chief if necessary. Hinganghat Nagri Sahakari Path Sanstha Maryadit Vs. Gulab Krushnaji Pimpalshendem, 2008(2) Bom.C.R. (Cri.) (N.B.) 187. August. &
Hinganghat Nagri Sahakari Path Sanstha Maryadit Vs. Gulab Krushnaji Pimpalshendem, 2008(4) Bom.C.R. (N.B.) 509. August.

Sections 138 & 20 --- Refer cheque to hand writing expert --- Application rejected --- High court, Court held that facts show that cheque book was issued by bank in 1997 and once signature on cheque by (accused) is admitted contents of cheque need not be proved in view of section 20 of N.I.Act and no need for referring it to handwriting expert --- Special Leave Petition against it – Held, as per section 20 of Act a right is created in holder of cheque and prima facie authority is granted to complete an inchoate negotiable instrument. Provision is a rider to sections 118 and 139 of Act as to presumptions of consideration etc. which can be rebutted by accused by adducing evidence for which an opportunity to him has to be given. What should be evidence in rebuttal should not be left at discretion of Court alone. Cort has not examine whether application by accused is bona fide and whether he wants to bring on record a relevant material. Normally Court should allow such applications as to summoning of witnesses etc. though a party may not be allowed to unnecessarily protract proceedings. In present case (where defence of misue of instrument is there) application by accused appears bona fide. As to reference to this Court decision in 2007(1) Bom.C.R. (Cri.) (S.C.) 1, that “it is essential that rules of procedure should be scrupulously followed to see that there is no breach of them. Application is therefore liable to be allowed. However it is not necessary to have any expert opinion on question other than whether writing on cheque on front page is written on same day and time when cheque was signed. Whether age of writing on Ex. P-2 on front page is same as that of signature of T.Nagappa. However application under section 293 of Cri.P.C. that number of section was wrongly mentioned would not be of any relevance if Court had jurisdiction to pass order. For reasons above appeal is being allowed. T.Nagappa Vs. Y.R. Muralidhar, 2008(2) Bom.C.R. (Cri.) (S.C.) 237. August.

Sections 138, 141 & 142 --- Appeal against acquittal --- Cheque of Rs. 1 lakh --- Acquittal on sole ground that complainant does not prove that he was authorised by bank to file complaint --- Held, though sufficient opportunity was given to manager (who filed complaint) to produce authorisation from bank he did not produce any. Decision in 2001 DGLS (soft) 1417 does not help complainant because in this case decision is given after recording of evidence. Looking to evidence and reliance placed by Magistrate on case of 2006(2) Bom.C.R. (Cri.) 717 (where in complaint was said to be not sufficiently represented before Court) view taken by Magsitrate is reasonable one and does not call for interference. Annasaheb Chougule Urban Co-op. Bank Ltd. Vs. Narayan Pandurang Korgaonkar, 2008(2) Bom.C.R. (Cri.) 269. August.

Section 138 --- Recall of order – Dismissing complaint under N.I. Act on account of absence of complainant --- Application was made within working hours of same day – Whether an appeal and not a revision will lie against order – Contention that in view of 2004(1) Bom.C.R.(Cri.) 805 Magistrate may not have inherent power to review his order, but revision against that is maintainable --- Contra that in view of decision in 1986 Cri.L.J. 1074 only an appeal can lie --- Held, prima facie there appear to be divergent views of two coordinate Bences, but in 2006(1) Bom.C.R.(Cri.) (A.B.) 756 learned Single Judge has considered case of 2004(1) Bom.C.R. (Cri.) 805 and analysed legal position. There is consistent view that when a private complaint is dismissed under section 256 Cri.P.C. only an appeal can lie against that. This cannot be upset without any substantial reason. In Court’s view a Magistrate has no power to review his order of dismissal of a complaint. Hence no matter in application filed under section 482 Cri.P.C. Vinaykumar Ashokkumar Maliwal Vs. Tamesh Kishanlal Saboo, 2008(2) Bom.C.R. (A.B.) 175. April.

Sections 138 & 141 --- Dishonour of cheque --- By company --- Quashing of process – Whether case for --- complaint against managers and two authorized signatories with other directors --- Magistrate refused to quash process and Sessions Judge confirmed order in revision – Petition against that – A-6 was nominated as Director on behalf of Government of Karnataka under section 27 of State Financial Corporations Act --- Held, under section 141 of N.I. Act every person of accused firm who was incharge of and responsible for business of company shall be guilty of offence. Unless he proves that offence was committed without his knowledge. Averments as to accused’s responsibility have to be there and in absence of that complaint is not tenable. Complaint has not alleged that said accused A-2 to 7 and particularly A-5 and 6 one liable for day to day business of company when offence was committed. Complaint therefore, against A-5 and 6 cannot proceed. They deserve to be discharged. Likewise A-3 who was one of authorised signatory of cheque with other Director A-4 could not be liable, because cheque in question had not been presented within 6 months time and date of its validity was altered to extend without his knowledge. Managing Director and Secretary of company however cannot escape liability. Trail to proceed against A-1 company, A-2 Managing Director and A-4 against whom order dated 3-11-98 has become final. Skyline Aquatech Export Ltd. Vs. Sachima Agro Industries Pvt. Ltd., 2008(2) Bom.C.R. (P.B.) 267. April .

Sections 138 & 141 --- Quashing of process --- Whether case for Cheque issued towards liability for discounting of bills at request of accused-company – Petitioner accused 3 a director opposing process on ground that there are no averments against him in terms of section 141 of N.I. Act in complaint or even in verification before Magistrate – Contention, that director is responsible and alongwith other person who are in charge and responsible for conduct of business of company --- Held, in view of section 141 of Act a person not holding any office or designation in a company may be liable if he satisfies main requirement of being in charge of and responsible for conduct of business of a Company at relevant time. Liability depends on role one plays in affair of a Company and not on designation or status which he holds in company. In instant case accused is said to be vicariously liable and there is no whisper or evidence as to any act committed by him. Hence accused 3 as director cannot be made liable. A Magistrate had to see baisc averments as to how one is involved in alleged crime. At a later stage if evidence showing that other persons are also liable, there are sufficient prowers with Court under Cri. P.C. to add them as additional accused. In view of it order of Magistrate refusing to quash porceedings against applicant/accused 3 is set aside and trail against others can proceed. Kapal Mehra Vs. Industrial Enterprises & Finance Ltd., 2008(2) Bom.C.r. 359. April .

Sections 138, 141 & 142 --- Appeal against acquittal --- Of accused 3 and 5 directors of company --- Accused 1 company and accused 2 director who signed cheques ere convicted – Accused 3 and 5 acquitted because there was no averments that they were responsible for day to day business of company – Earlier names of other 4 directors of company had been deleted by complainant – One of those deleted (accused 8) was whole time director and another accused was whole time employee of company – Held, Apex Court in 2005(2) Bom.C.R.(Cri.) (S.C.) 696 has observed that liability arises on account of conduct of a person and not by merely holding an office or position. On facts as came on record it cannot be said that accused 3 and 5 were responsible for day to day business of company and therefore, vicarious liability for dishonour of cheques cannot be fastened on them. Further in cases of appeal against acquittal, if there are two possible views of a matter Appellate Court should not interfere. 2007 DGLS 1113 applied. Kotak Mahindra Bank Ltd. Vs. Bharat S. Dahanukar, 2008(2) Bom.C.R. 118. April.

Sections 138 & 142 --- Dishonour of cheque --- Complaint --- Filed by respondent No.1 --- Who calim to be having special powers of attorney of deceased – Application under section 256 on account of demise of complaint --- Application on respondent No.1 seeking permission to continue proceedings legal representative of deceased --- Application by applicants for recalling process --- Contention, respondent No. 1 not holder of cheque in due course, not properly verified, no legal authority to file complaint under his own signature --- Held, complaint filed by respondent was defective because it was not signed by complainant. Defect as curable, that was not donw. Copy of Special Power of Attorney does not show that respondent undertake liability to indemnify accused persons if complaint found to be frivolous or false. Issuances of process on such verified statement illegal and improper. 2002(4) All. M.R. (Journal) 6; 1998(2) Crimes 347; 2007(2) om.c.R. (Cri.) 198; 2005(3) Bom.C.R.(S.C.) 846; 2000 Vol. 102(1) Bom.L.R. 908 relied on. Roy Joseph Creado Vs. Tamisuddin Nazir Ahmed, 2008(2) Bom.C.R. (A.B.) 242(A). April

Sections 138 & 142 --- Dishonour of cheque --- Death of complaint --- Complaint filed by respondent No.1, who claims to have Special Power of Attorney --- After death of complaint --- Respondent No.1 filed application seeking permission to continue complaint proceedings --- Held, respondent No.1 did not seek his substitution as legal heir of deceased. Secondly initial complaint itself was defective and process could not be issued thereunder, no question of substitution of complainant under section 256 of Cr.P.C. Impugned order is illegal. Roy Joseph Creado Vs. Tamisuddin Nazir Ahmed, 2008(2) Bom.C.R. (A.B.) 242(C). April.

Section 138 --- Quashing of process --- Cheque of Rs.50 lakhs issued by co-operative society in favour of certified auditor of societies (complainant) for his services for auditing accounts – Contention, that said cheque was found missing from petitioner society and for that a complainant had already been lodged with Dist. Central Co-operative Bank – Further alledged there was no contrct to pay him fees and that complainant had clandestinely taken away a signed blank cheque from petitioner company and sought to encash same hence complaint is not tenable – Held, in a complaint under section 138 of N.I.Act if a prima facie case is made out, a process on verification of complaint can be issued. Defences as may be there can be raised at trial stage when evidence is adduced. 2002 Bom.c.R.(Cri.) (S.C.) 11 referred to. Sahakar Maharshi Shankarrao Mohite Patil Nagari Gramin Sahakari Pathsanstha Vs. Subhash Bhimrao Gavsane, 2008(1) Bom.C.R. 97. January

Sections 138, 46 & 139 --- Dishonour of cheques --- Cheques sent with conditions to be presented of conditions were satisfied --- Presented and dishonored --- Contention, that under section 46 N.I. Act cheques were delivered conditionally and not with absolute transfer of property therein --- Contra, that section 139 of Act presumes that cheque was issued towards accepted debt liability --- Held, at this stage Magistrate cannot got into niceties of defence. At appropriate stage defence can show same were issued conditionally. Order issuing process does not suffer from any patent illegality. Lloyds Metals & Eng. Ltd. Vs. IFCI Limited, 2008(1) Bom.C.R. 380. January.

Section 138 --- Complaint --- Filing of, by Power of Attorney Holder ---- Validity --- Complainant being bed-ridden filed petition requesting Court to permit his son his G.P.A. holder to represent him ---- Petition allowed --- Quash petition – Held, power of attorney holder can file a complaint after obtaining permission from Court either before or after filing complaint – Since Court granted permission, power of attorney holder can continue prosecution on behalf of his father --- If there is any bar for GPA holder to give evidence on behalf of complaintant, petitioner can take advantge of said situation during course of trial --- No ground to quash proceedings --- Criminal petition dismised. Bodapati Naga Krishna Gandhi Vs. Ilapakurthi Sri Ramulu. 2008 ALL MR (Cri) JOURNAL 30 January C

Section 138 --- Criminal P.C. (1973), S.378 --- Appeal against acquittal --- Dishonour of cheque --- Complaint u/s.138 of N.I.Act --- Accused acquitted --- Application to seek leave to prefer appeal against order of acquittal --- Complaint not filed for and on behalf of Kamgar Utkarsh Nidhi nor the said Kamgar Utkarsh Nidhi had authorised complainant / applicant to file complaint in his individual capacity --- Accused / respondent acquitted on this ground – No fault in reasons for acquittal --- Hence, leave to prefer appeal refused. Bavtis Francis Fernandes Vs. Nitin Govind Raichur. 2008 ALL MR (Cri) 174 January. A
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