In Criminal Appeal No. 835 of 2016, the High Court of Karnataka dismissed the appellant's appeal against the acquittal of the respondent for an offence under Section 138 of the N.I. Act, holding that no legally enforceable debt existed for the dishonoured cheque amount.
The Criminal Appeal was dismissed, upholding the acquittal of the respondent.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 6TH DAY OF DECEMBER, 2021
BEFORE:
THE HON’BLE MR.JUSTICE MOHAMMAD NAWAZ
CRIMINAL APPEAL No.835 OF 2016
BETWEEN:
M/S. PAXAL SURGICALS REPRESENTED BY ITS PROPRIETOR SRI. DHIRAJ KUMAR S/O. SRI. DINESH KUMAR AGED ABOUT 28 YEARS NO.207, “VASANTHI” 4TH FLOOR, POLICE ROAD RANASINGHPET BENGALURU – 560 053. ... APPELLANT
[BY SRI.H.V.VISHAKANTE GOWDA, ADVOCATE (ABSENT). SRI.S.RAJASHEKAR, ADVOCATE, APPOINTED AS AMICUS CURIAE VIDE COURT ORDER DATED 30.11.2021.]
AND:
SRI. ASHOK KUMAR S/O. LATE RATHANLAL DUGAR AGED ABOUT 52 YEARS PROPRIETOR M/S. SRI. MANGALDEEP PHARMA NO.6/1, 1ST FLOOR, P.S. LANE A.S. CHAR STREET BENGALURU – 560 053. ... RESPONDENT [BY SRI.D.PRABHAKAR, ADVOCATE]
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF THE CR.P.C. PRAYING TO SET ASIDE THE JUDGMENT AND ORDER DATED 28.03.2016 PASSED BY THE XXV A.C.M.M., BANGALORE, IN C.C.NO.7431/2013 - ACQUITTING THE
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RESPONDENT/ ACCUSED FOR OFFENCE PUNISHABLE UNDER SECTION 138 OF THE N.I. ACT.
THIS CRIMINAL APPEAL COMING ON FOR ADMISSION THROUGH VIDEO CONFERENCE/PHYSICAL HEARING, THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
This appeal is preferred by the complainant against the Judgment and Order dated 28.03.2016 passed by the XXV Addl. Chief Metropolitan Magistrate, Bengaluru, in C.C. No.7431/2013, acquitting the accused/respondent for offence punishable under Section 138 of the Negotiable Instruments Act [hereinafter referred to as ‘N.I. Act’ for short].
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complainant had raised VAT Invoice No.PSO 1986 dated 29.02.2012 for `4,80,900/- and supplied the items as per
VAT invoice. The accused received the said items and as part payment, he paid a sum of 2,40,450/- on 17.03.2012 and again a sum of 1,69,350/- on 24.05.2012. After deducting the above two payments, the accused was liable to pay a sum of 72,350/- towards full and final settlement. The accused issued a cheque bearing No.003026 dated 15.03.2012 for a sum of 2,40,450/- drawn on City Union Bank Limited, Sulthanpet Branch, Bengaluru. The said cheque was presented on 02.06.2012 for encashment, but it was returned unpaid on 05.06.2012 with a shara ‘payment stopped by drawee’. Thereafter, on 15.06.2012, a legal notice was issued to the accused calling upon him to pay the amount mentioned in the cheque. The accused received the legal notice on 16.06.2012, sent by RPAD. However, failed to pay the portion of the dishonoured cheque amount. On the other hand, issued a reply notice dated 23.06.2012 denying the liability and failed to make the payment within the stipulated time and thereby committed an offence under Section 138 of the N.I. Act.
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4,80,900/and against payment of the invoice amount, issued two cheques each for 2,40,450/-. It is his contention that in respect of one of the cheques bearing No.003025, the cheque amount was remitted by way of RTGS on 17.03.2012, which has been duly credited to the complainant’s account. From the sisters concern of the complainant, certain drugs were purchased and in this regard, a sum of 2,25,000/- was paid by way of cheque which was also duly encashed. However, since the goods supplied was nearing expiry and the said goods could not be sold, the complainant agreed to take back the unsold drugs and the balance amount was paid vide cheque No.003026 and settlement was reached between the complainant and the accused. Accused paid a sum of 1,69,350/- towards full and final settlement.5
debt, as even according to the complainant, there was payment as against total sum of `4,80,900/-.
2,40,450/- has been dishonoured. It is not in dispute that the cheque was issued by the accused with his signature. However, the case of the complainant itself is that initially as against the goods supplied to the accused, he was due a sum of 4,80,900/- and as against the said liability, the accused, as part payment, paid a sum of 2,40,450/- on 17.03.2012 and after deducting the above said part payment, again made payment of 1,69,350/-. Even according to the complainant, the accused was liable to pay an outstanding credit balance of `72,350/-. However, the cheque in question which was presented to6
the bank by the complainant is for a sum of `2,40,450/-, which admittedly was not due by the accused.
stated that after deducting part payment of 2,40,450/- and 1,69,350/-, the accused was liable to pay a sum of 72,350/- and towards discharge of the said liability, towards above said credit outstanding, as full and final settlement the accused issued the cheque in question dated 15.03.2012 for 2,40,450/-. The said evidence given by P.W.1 is contrary to his own case as it is his specific case that the amount due was only 72,350/-. If the accused was due a sum of 72,350/-, there was no question of issuing a cheque to the complainant for a sum of 2,40,450/-. In the cross-examination of P.W.1, he has admitted that he received a cheque at the time of issuing invoice to the accused. Even as per the ledger extract marked as Ex.P9, the outstanding amount as on 05.06.2012 was 72,350/-. In the said facts and circumstances, it cannot be said that the accused issued the cheque in question in discharge of his legally enforceable debt or liability. The complainant has failed to establish his case
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and therefore, there is no illegality committed by the trial Court in acquitting the accused. There are no grounds to interfere with the order passed by the trial Court. Hence, the appeal is dismissed.
Sri. S.Rajashekhar, learned Amicus Curiae is entitled for a sum of `3,000/- [Rupees Three Thousand only] and the same shall be payable by the High Court Legal Services Committee.
Sd/JUDGE
Ksm*
3 issues framed by the court
Whether the High Court should interfere with the acquittal of the accused when the cheque amount was not due as a legally enforceable debt.
Whether the complainant successfully established the existence of a legally enforceable debt or liability underlying the dishonoured cheque.
Whether the accused is liable for an offence under Section 138 of the Negotiable Instruments Act given the discrepancy between the dishonoured amount and the actual outstanding balance.
2 provisions across 2 enactments
M/s. Paxal Surgicals represented by its Proprietor Sri. Dhiraj Kumar
Sri. Ashok Kumar
Mohammad Nawaz
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court