Partly allowed

Raj Kumar v. Sanjiv Kumar

Himachal Pradesh HC3 Oct 2024CR.A/128/2010

Case brief

AI extract

What is this about?

In this criminal appeal against acquittal, the High Court of Himachal Pradesh addressed whether repeated presentments of a cheque and multiple notices are bar to prosecution under Section 138 NI Act. Relying on Supreme Court precedents like MSR Leathers, the Court held that repeated presentment is permissible. However, since the First Appellate Court acquitted solely on this ground and ignored oth

What did the court decide?

The impugned order of acquittal by the Sessions Judge was set aside. The matter was remitted to the First Appellate Court for fresh disposal to consider all grounds of challenge.

Raj Kumar Vs Sanjiv Kumar — Cheque Dishonour | Himachal Pradesh HC (2024)

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2024:HHC:9467

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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

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Cr. Appeal No. 128 of 2010 Reserved on: 10.09.2024 Date of Decision: 03.10.2024

Raj Kumar

....Appellant

Versus

Sanjiv Kumar

....Respondent

Coram

Hon’ble Mr Justice Rakesh Kainthla, Judge. Whether approved for reporting? Yes

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For the Appellant	: Mr. P.K.Verma, Advocate vice Mr. K.B. Khajuria, Advocate.
For the Respondent	: Mr. Rohit Thakur, Advocate vice Mr. Parav Sharma, Advocate.

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. Rakesh Kainthla,Judge

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The present appeal is directed against thejudgment dated 11.02.2010 passed by learned Sessions Judge, Hamirpur, District Hamirpur, H.P. (learned First Appellate Court) vide which the appeal filed by respondent (accused before learned Trial Court) was allowed and the judgment and order dated 30.09.2009 and 26.10.2009, respectively passed by learned Judicial Magistrate

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Whether reporters of Local Papers may be allowed to see the judgment? Yes.

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2024:HHC:9467

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First Class, Court No.1 Hamirpur, H.P. (learned Trial Court) were set aside.(Parties shall hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for convenience).

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Briefly stated, the facts giving rise to the present appeal are that the complainant filed a complaint against the accused before the learned Trial Court for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act (NI Act). It was asserted that the complainant is the proprietor of M/S Raju and Company Cloth Merchant, Main Bazar, Hamirpur, District Hamirpur, H.P. The accused used to purchase the cloth material from the complainant for his cloth shop located at Ghumarwin, District Bilaspur, H.P. by making the payment to the complainant through cheques. The accused purchased the cloth from the complainant in 2007 and issued a cheque of ₹1,20,000/-drawn on H.P.State Co-Operative Bank Ltd, Bum, District Bilaspur, H.P. The complainant presented the cheque on 09.05.2007, 31.08.2007 and 29.09.2007 for payment butit was returned unpaid with the endorsements of “Exceeded arrangement and InsufÏcient funds”. Memos dated 09.05.2005, 31.08.2007 and 29.09.2007 were issued. The complainant issued a notice to the accused on 04.10.2007 through a registered post

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acknowledgement due. The registered letter was returned with

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2024:HHC:9467

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the remarks that the accused had left the address. No money was paid to the complainant. Hence, the complaint was filed against the accused for taking action as per law.

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3 Learned Trial Court found sufÏcient reasons to summon the accused. When the accused appeared, anotice of accusation was put to him for the commission of an offence punishable under Section 138 of N.I. Act, to which he pleaded not guilty and claimed to be tried.

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The complainant examined himself (CW-1), Amar Nath (CW-2) and Jagdish Chand (CW-3) to prove his case.

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The accused, in his statement recorded under Section 313 of Cr.P.C., denied the complainant’s case in its entirety. He stated that the cheque was handed over by him to the complainant as a security and a false complaint was filed against him. The accused initially stated that he wanted to lead evidence in defence, but no evidence was led subsequently.

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The learned Trial Court held that the issuance of a cheque was undisputed. The accused claimed that he had issued a blank cheque as security to the complainant, but he failed to prove this fact by providing satisfactory evidence. A cheque carries with it a presumption of consideration and mere denial is insufÏcient to rebut this presumption. The cheque was dishonoured due to

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2024:HHC:9467

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insufÏcient funds. A notice issued to the accused was returned undelivered and is deemed to be served. The accused failed to pay the amount despite deemed receipt of the notice. Hence, he was convictedof the commission of an offence punishable under Section 138 of N.I.Act and was sentenced to undergo simple imprisonment for six months,pay a fine of ₹2000/- and in default of payment of the fine to further undergo simple imprisonment for one month. The accused was also directed to pay a compensation of ₹2,40,000/-to the complainant.

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Being aggrieved from the judgment and order passed by the learned Trial Court, the accused filed an appeal, which was decided by the learned Sessions Judge, Hamirpur, H.P. (learned First Appellate Court). Learned First Appellate Court held that the complainant had sent two notices to the accused. The first notice was received by the accused. The issuance of this notice was concealed by the complainant. It is not permissible to issue two notices regarding one cheque as the cause of action arises only once. Reliance was placed upon the judgment of Hon’ble Supreme Court in Sil Import, USA versus Exim Aides Silk Exporters, Banglore, (1999) 4 Supreme Court Cases 567 and judgment of this Court in Ramesh Sachdeva versus Shahbaz Khan, Latest HLJ 2009 (HP) 735. Hence, the appeal was allowed and the accused was acquitted.

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2024:HHC:9467

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Being aggrieved from the judgment passed by the learned First Appellate Court, the complainant has filed the present appeal asserting that the learned Appellate Court erred in acquitting the accused. The judgment is not based on the material on record. The evidence was appreciated in a perfunctory and cursory manner. The statement of the complainant, corroborated by the documentary evidence, was ignored. The learned First Appellate Court had wrongly relied upon the first notice issued by the complainant. The complainant had not relied upon this notice, and the finding recorded by the learned First Appellate Court is not sustainable. Hence, it was prayed that the present appeal be allowed and the judgment passed by the learned First Appellate Court be set aside.

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I have heard Mr P.K.Verma, learned counsel representing the petitioner/complainant and Mr. Rohit Thakur, learned counsel representing the respondent/accused.

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Mr. P.K. Verma, learned vice counsel for the petitioner/complainant, submitted that the learned First Appellate Court erred in holding that the cheque can be presented only once. There is no bar in the repeated presentation of the cheque and issuance of the notice. He relied upon the judgment of

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the Hon’ble Supreme Court in MSR Leathers v. S.

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Palaniappan(2013) 1 SCC 177 and Kamlesh Kumar v. State of

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Bihar(2014) 2 SCC 424 in support of his submission.

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Mr. Rohit Thakur, learned vice counsel for the respondent/accused, supported the judgment passed by the learned First Appellate Court and submitted that no interference is required with it. He prayed that the present appeal be dismissed.

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I have given considerable thought to the submissions made at the bar and have gone through the records carefully.

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The present appeal is filed against a judgment of acquittal. It was laid down by the Hon’ble Supreme Court in Mallappa v. State of Karnataka, (2024) 3 SCC 544: 2024 SCC OnLine SC 130 that an appeal against acquittal cannot be allowed merely on the difference of opinion. It was observed:

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“25. We may first discuss the position of law regarding the scope of intervention in a criminal appeal. For that is the foundation of this challenge. It is the cardinal principle of criminal jurisprudence that there is a presumption of innocence in favour of the accused unless proven guilty. The presumption continues at all stages of the trial and finally culminates into a fact when the case ends in acquittal. The presumption of innocence gets concretised when the case ends in acquittal. It is so because once the trial court, on appreciation of the evidence on record, finds that the accused was not guilty, the presumption gets strengthened, and a higher threshold is expected to rebut the same in appeal.

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2024:HHC:9467

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26. No doubt, an order of acquittal is open to appeal, and there is no quarrel about that. It is also beyond doubt that in the exercise of appellate powers, there is no inhibition on the High Court to reappreciate or re-visit the evidence on record. However, the power of the High Court to reappreciate the evidence is a qualified power, especially when the order under challenge is of acquittal. The first and foremost question to be asked is whether the trial court thoroughly appreciated the evidence on record and gave due consideration to all material pieces of evidence. The second point for consideration is whether the finding of the trial court is illegal or affected by an error of law or fact. If not, the third consideration is whether the view taken by the trial court is a fairly possible view. A decision of acquittal is not meant to be reversed on a mere difference of opinion. What is required is an illegality or perversity.

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27. It may be noted that the possibility of two views in a criminal case is not an extraordinary phenomenon. The “ two-views theory ” has been judicially recognised by the courts, and it comes into play when the appreciation of evidence results in two equally plausible views. However, the controversy is to be resolved in favour of the accused. For, the very existence of an equally plausible view in favour of the innocence of the accused is in itself a reasonable doubt in the case of the prosecution. Moreover, it reinforces the presumption of innocence. Therefore, when two views are possible, following the one in favour of the innocence of the accused is the safest course of action. Furthermore, it is also settled that if the view of the trial court, in a case of acquittal, is a plausible view, it is not open for the High Court to convict the accused by reappreciating the evidence. If such a course is permissible, it would make it practically impossible to settle the rights and liabilities in the eye of the law.

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28. In Selvaraj v. State of Karnataka [ Selvaraj v. State of Karnataka , (2015) 10 SCC 230: (2016) 1 SCC (Cri) 19] : (SCC pp. 236-37, para 13)

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“ 13 . Considering the reasons given by the trial court and on an appraisal of the evidence, in our considered view, the view taken by the trial court was a possible one. Thus, the High Court should not have

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2024:HHC:9467

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interfered with the judgment of acquittal. This Court in Jagan M. Seshadri v. State of T.N. [Jagan M. Seshadri v. State of T.N., (2002) 9 SCC 639: 2003 SCC (L&S) 1494] has laid down that as the appreciation of evidence made by the trial court while recording the acquittal is a reasonable view, it is not permissible to interfere in appeal. The duty of the High Court while reversing the acquittal has been dealt with by this Court, thus : (SCC p. 643, para 9)

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‘ 9 . … We are constrained to observe that the High Court was dealing with an appeal against acquittal. It was required to deal with various grounds on which acquittal had been based and to dispel those grounds. It has not done so. Salutary principles while dealing with appeals against acquittal have been overlooked by the High Court. If the appreciation of evidence by the trial court did not suffer from any flaw, as indeed none has been pointed out in the impugned judgment, the order of acquittal could not have been set aside. The view taken by the learned trial court was a reasonable view, and even if by any stretch of the imagination, it could be said that another view was possible, that was not a ground sound enough to set aside an order of acquittal.’”

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29. In Sanjeev v. State of H.P. [Sanjeev v. State of H.P., (2022) 6 SCC 294: (2022) 2 SCC (Cri) 522] , the Hon'ble Supreme Court analysed the relevant decisions and summarised the approach of the appellate court while deciding an appeal from the order of acquittal. It observed thus: (SCC p. 297, para 7)

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“ 7 . It is well settled that:

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7.1 . While dealing with an appeal against acquittal, the reasons which had weighed with the trial court in acquitting the accused must be dealt with in case the appellate court is of the view that the acquittal rendered by the trial court deserves to be upturned (see Vijay Mohan Singh v. State of Karnataka [Vijay Mohan Singh v. State of Karnataka, (2019) 5 SCC 436 : (2019) 2 SCC (Cri) 586 ] and Anwar Ali v. State of

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2024:HHC:9467

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H.P. [Anwar Ali v. State of H.P., (2020) 10 SCC 166 : (2021) 1 SCC (Cri) 395] ).

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7.2 . With an order of acquittal by the trial court, the normal presumption of innocence in a criminal matter gets reinforced (see Atley v. State of U.P. [Atley v. State of U.P., 1955 SCC OnLine SC 51: AIR 1955 SC 807] ).

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7.3 . If two views are possible from the evidence on record, the appellate court must be extremely slow in interfering with the appeal against acquittal (see Sambasivan v. State of Kerala [Sambasivan v. State of Kerala, (1998) 5 SCC 412: 1998 SCC (Cri) 1320] ).”

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The present appeal has to be decided as per the parameters laid down by the Hon’ble Supreme Court.

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The learned First Appellate Court acquitted the accused solely on the ground that the repeated presentation of the cheque and issuance of notice are not permissible. This finding of the learned First Appellate Court cannot be accepted. It was laid down by the Hon’ble Supreme Court in MSR Leathers (supra) that there is nothing in the N.I.Act to prevent the repeated presentation of the cheque or issuance of successive notices. It was observed:

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“33. Applying the above rule of interpretation and the provisions of Section 138, we have no hesitation in holding that a prosecution based on a second or successive default in payment of the cheque amount should not be impermissible simply because no prosecution based on the first default, which was followed by a statutory notice and a failure to pay had not been launched. If the entire purpose underlying Section 138 of the Negotiable Instruments Act is to compel the drawers to honour their

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2024:HHC:9467

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commitments made in the course of their business or other affairs, there is no reason why a person who has issued a cheque which is dishonoured and who fails to make payment despite statutory notice served upon him should be immune to prosecution simply because the holder of the cheque has not rushed to the court with a complaint based on such default or simply because the drawer has made the holder defer prosecution promising to make arrangements for funds or any other similar reason. There is, in our opinion, no real or qualitative difference between a case where default is committed, and prosecution immediately launched and another where the prosecution is deferred till the cheque presented again gets dishonoured for the second or successive time.

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*********

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35. In the result, we overrule the decision in the Sadanandan case [(1998) 6 SCC 514: 1998 SCC (Cri) 1471] and hold that the prosecution based upon second or successive dishonour of the cheque is also permissible so long as the same satisfies the requirements stipulated in the proviso to Section 138 of the Negotiable Instruments Act. The reference is answered accordingly. The appeals shall now be listed before the regular Bench for hearing and disposal in light of the observations made above.”

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This position was reiterated in Kamlesh Kumar (supra),

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and it was held that the complainant could present the cheque repeatedly and issue the notices successively. It was observed:

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“8. In the present case, the complainant had not filed the complaint on the dishonour of the cheque in the first instance but presented the said cheque again for encashment. This right of the complainant in presenting the same very cheque for the second time is available to him under the aforesaid provision.”

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This position was reiterated in Bir Singh v. Mukesh

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Kumar, (2019) 4 SCC 197: (2019) 2 SCC (Cri) 40 : (2019) 2 SCC (Civ)

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309: 2019 SCC OnLine SC 138, wherein it was observed at page 203:

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"7. Having regard to the object of Section 138 of the Negotiable Instruments Act, a prosecution based on a second or successive default in payment of the cheque amount is not impermissible simply because no statutory notice had been issued after the first default and no proceeding for prosecution had been initiated. As held by this Court in MSR Leathers v. S. Palaniappan [MSR Leathers v. S. Palaniappan, (2013) 1 SCC 177 : (2013) 1 SCC (Civ) 424 : (2013) 2 SCC (Cri) 458] , there is no real or qualitative difference between a case where default is committed and prosecution immediately launched and another where the prosecution is deferred till the cheque presented again gets dishonoured for the second time or successive times."

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Therefore, the learned First Appellate Court erred in

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acquitting the accused on the ground that the cheque was presented repeatedly and the notices were issued twice. Hence, the judgment passed by the learned First Appellate Court is not sustainable.

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Since, the learned First Appellate Court has not touched the other grounds challenging the judgment and order passed by the learned Trial Court, therefore, the matter is required to be remitted to the learned First Appellate Court for its afresh disposal as per the law. This is also necessary because the scope of appeal against the conviction is wider than the scope of appeal against the acquittal and it is not permissible for this Court to simply afÏrm the judgment of the learned Trial Court when the accused had no opportunity to get the finding on the points raised

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by him before learned First Appellate Court.

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2024:HHC:9467

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In view of the above, the present appeal is allowed and

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the judgment passed by the learned Sessions Judge, Hamirpur, is ordered to be set aside. The matter is remitted to the Court of learned Sessions Judge, Hamirpur, for its afresh disposal as per law.

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The parties, through their respective counsel, are directed to appear before the learned First Appellate Court on 24^th October, 2024.

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Records of the learned Courts below be sent back forthwith, so as to reach well before the date fixed.

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The appeal stands disposed of, so also the pending application(s), if any.

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(Rakesh Kainthla) Judge

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03^rd October, 2024 (ravinder)

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Digitally signed by KARAN SINGH GULERIA Date: 2024.10.03 11:12:16 UTC

Raj Kumar v. Sanjiv Kumar

Case brief

What is this about?

What did the court decide?

Raj Kumar v. Sanjiv Kumar

Case brief

What is this about?

What did the court decide?

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