Tuesday, 4 February 2020

Supreme Court: Production of Account books/cash book is not necessary in prosecution for dishonour of cheque

As rightly
observed by the High Court production of the account books/cash
book may be relevant in the civil court; but may not be so in

the criminal case filed under Section 138 of the N.I.Act. This
is because of the presumption raised in favour of the holder of
the cheque. In view of the concurrent findings recorded by the
Trial Court as well as by the High Court we do not see any
ground warranting interference with the conviction of the
appellant under Section 138 of the N.I.Act.
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO(S). 132 OF 2020

D. K. CHANDEL Vs  M/S WOCKHARDT LTD

Dated:JANUARY 20, 2020.

R. BANUMATHI, J.:

Leave granted.
(2) This appeal arises out of judgment and order dated
20.12.2017 passed by the High Court of Punjab and Haryana at
Chandigarh in CRA-S-1717-SBA of 2005 in and by which the High
Court has set aside the Order of the First Appellate Court and
restored the judgment of the Trial Court and thereby convicting
the appellant under Section 138 of the Negotiable Instruments
Act and sentencing him to undergo imprisonment for six months
and also imposing fine of Rs.4,17,148/-.
(3) The case of the respondent-complainant is that the
appellant-accused purchased the pesticides on credit from the
respondent-company and made part payments. Both the appellant
and the respondent were maintaining the running accounts. In
lieu of payment due and payable to the respondent, the
appellant has issued a cheque on 30.04.1999 of Rs.4,17,148/-
drawn on State Bank of India at Bathinda (Punjab). When the
said cheque was presented for collection the same was returned
with the endorsement “insufficient funds”. The intimation of
dishonoured of cheque was received by the respondent on

26.05.1999. Since no payment was made and the amount was not
forthcoming, the respondent filed a complaint against the
appellant under Section 138 of the N.I. Act.
(4) Upon consideration of the evidence adduced by the
respondent-complainant, the Trial Court/Judicial Magistrate
found that the cheque was issued for discharge of the debt and
the same was proved on the basis of the statement of account of
the respondent-complainant and since the cheque was dishonoured
due to insufficient funds, the Trial Court held the appellant
guilty and convicted him for the offence punishable under
Section 138 of the N.I. Act and sentenced him imprisonment for
six months. Additionally, the Trial Court also imposed fine of
Rs.4,17,148/- and in default thereof the appellant to undergo
imprisonment for two months. Being aggrieved the appellant has
filed the appeal. Learned Additional Sessions Judge, Bathinda,
by Judgment dated 13.03.2004 set aside the conviction and
allowed the appeal. Learned Additional Sessions Judge held
that the respondent-complainant did not produce cash and
account books to prove that the amount was due and payable by
the appellant. Learned Additional Sessions Judge also held
that the authorising to file the complaint was much prior to
date of issue of cheque and on those grounds learned Additional
Sessions Judge reversed the conviction and acquitted the
appellant.
(5) Being aggrieved, the respondent-complainant has filed
revision before the High Court. By the impugned order, the
High Court has set aside the judgment of learned Sessions Judge

and allowed the appeal of the respondent. The High Court in
the impugned judgment held that “the reason given by the lower
Appellate Court that he did not bring the cash book or order
book etc. could well be understood, if civil suit is tried” but
on the contrary the order passed by the lower Appellate Court
is in the criminal case filed under Section 138 of the N.I.
Act. Insofar as the authorisation in favour of the respondent
to file the complaint is concerned, the High Court held that
the Resolution of the company dated 22.04.1999 empowered the
complainant to file a complaint in all such cases and therefore
has no relevant to the date of the cheque i.e. 30.04.1999.
(6) Being aggrieved, the appellant has preferred this appeal.
In compliance of Order passed by this Court on 11.05.2018, the
appellant has deposited fine amount of Rs.4,17,148/- on
08.01.2019 in the Registry of this Court and the same is lying
in non-interest bearing account. The appellant was also
granted exemption from surrendering by the Hon’ble Judge, In-
Chamber, on 16.02.2018
(7) We have heard Mr. Yadav Narender Singh, learned counsel
appearing for the appellant and Ms. Saman Ahsan, learned
counsel appearing for the respondent and also perused the
impugned judgment and the materials on record.
(8) As held by the Trial Court as well as by the High Court
that the cheque was issued towards the amount due and payable
by the appellant for purchase of pesticides. As rightly
observed by the High Court production of the account books/cash
book may be relevant in the civil court; but may not be so in

the criminal case filed under Section 138 of the N.I.Act. This
is because of the presumption raised in favour of the holder of
the cheque. In view of the concurrent findings recorded by the
Trial Court as well as by the High Court we do not see any
ground warranting interference with the conviction of the
appellant under Section 138 of the N.I.Act.
(9) So far as the question of sentence is concerned, the
cheque was issued by the appellant, for discharge of the debt,
way back in the year 1999. Considering the fact that the
cheque was issued in the year 1999 and having regard to the
other facts and circumstances of the case and in the interest
of justice we deem it appropriate to modify the sentence of
imprisonment imposed upon the appellant and also the fine
amount of Rs.4,17,148/-
(10) In the result, the impugned judgment is modified and the
appeal is partly allowed to the extent indicated below. For
the conviction under Section 138 of the N.I.Act, the appellant
is imposed upon only fine amount of Rs.4,17,148/- and the
sentence of imprisonment imposed upon the appellant is set
aside. The appellant has already deposited the said amount
with the Registry of this Court and the same be disbursed to
the respondent forthwith. No costs.
..........................J.
(R. BANUMATHI)
..........................J.
(A.S. BOPANNA)
NEW DELHI,
JANUARY 20, 2020.

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