Cril.Appeal No.

343/2017 1

MHNG010120142017

Presented on : 14-12-2017
Registered on : 18-12-2017
Decided on : 23-06-2022
Duration : 4 years, 6 months, 9 days

Exh. No.16

IN THE COURT OF SESSIONS, NAGPUR

(Presided over by P.B. Ghuge)
(Addl.Sessions Judge­8, Nagpur)

CRIL.APPEAL NO. 343/2017

Vikas s/o Charandas Bankar )

Aged about 50 years, Occ : Business, )
R/o Juni Basti, Jaitala, Nagpur. ) .. Appellant
(Ori.Accused)

­­Vrs.­­

Rajnikant s/o Krushnagopal Mishra )

Aged about 23 years, Occ : Business, )
R/o Zingabai Takli, Gittikhadan, )
Nagpur. ) .. Respondent
(Ori. Complainant)

Criminal Appeal Under Section 374 of Criminal Procedure

Code
Appearances:
Advocate Smt. K.S. Laxmi for Appellant.
Advocate Mr. N.M. Raut for Respondent.

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JUDGMENT
(Delivered on this 23rd day of June, 2022)

1] Being aggrieved by the judgment and order in S.C.C.

No.16237/2014, dated 17.11.2017, passed by 26 th Jt. CJJD & JMFC
(Spl.Court for the offence punishable u/sec. 138 of N.I. Act),
Nagpur, the appellant (original accused) preferred this appeal.
The Trial Court convicted the accused by impugned judgment and
order for the offence punishable under section 138 of Negotiable
Instruments Act and sentenced him to suffer simple imprisonment
till rising of the Court. He was further directed to pay
compensation of Rs. 10,50,000/­ and in default of payment of
compensation to further suffer simple imprisonment for three
months.
(The parties shall be referred as per their nomenclature before the
Trial Court).

2] Facts in brief giving rise to the appeal are as under:

Both complainant and accused are well acquainted with
each other. The father of complainant is friend of accused. The
complainant has come with the case that in November 2013
accused approached him and requested to advance hand loan of
Rs. 10,50,000/­. Having regard to the friendly relationship
complainant agreed to advance the hand loan amount. He paid
an amount of Rs. 10,50,000/­ on 20.11.2013 in cash to the
accused. The parties executed an agreement on stamp paper of Rs.

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500/­ in token of the hand loan amount. The agreement came to

be executed in presence of two witnesses which include the father
of complainant. It is further contended that accused agreed to
repay the hand loan amount within period of six months.
According to the complainant, on 03.05.2014 accused issued bearer
cheque for an amount of Rs. 1,00,000/­ towards refund of the
hand loan amount. He also issued another cheque bearing
No.795915 dated 02.05.2014 drawn on Syndicate Bank, Nagpur
for an amount of Rs. 2,50,000/­ in favour of complainant. He also
issued another cheque towards repayment of remaining hand loan
amount of Rs. 7,00,000/­. He issued cheque bearing No.810929
dated 27.05.2014 drawn on Shikshak Sahakari Bank Ltd. Nagpur
for an amount of Rs. 7,00,000/­ in favour of complainant. Both
cheques were issued towards discharge of the debt outstanding
against him.

3] Both cheques were presented by the complainant for

encashment with his bank. Both cheques were returned unpaid on
account of the reason "insufficient funds". Complainant received
cheque return memo on 27.05.2014 and 28.05.2014. He then
issued legal notice through RPAD on 16.06.2014 demanding the
cheque amount. The notice was duly served upon the accused.
He failed to make the payment of cheque amount within statutory
period. Thus, on this cause of action, complaint is filed for
commission of offence under section 138 of N.I. Act.

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4] In pursuance to the process issued against the accused,

he appeared before the Trial Court. The particulars of the offence
were read over and explained to the accused in vernacular. He
pleaded not guilty and claimed trial.

5] Statement of accused under section 313 of Cr.P.C. is

recorded vide Exh. 44. Defence of accused is of denial. He has
come with positive assertion that he never issued the cheques to
complainant towards discharge of any existing debt or liability. He
has come with a specific plea that he took hand loan of Rs.
6,00,000/­ from the father of complainant. He has given blank
and signed stamp paper alongwith the blank cheques as security to
the hand loan amount. Accused has made part payment of Rs.
1,50,000/­ to the father of complainant. According to him, an
amount of Rs. 4,50,000/­ is due and outstanding against him.
However, the stamp paper and cheques issued by him are misused
by the complainant.

6] In order to prove the case, complainant Rajnikant

Krushnagopal Mishra examined himself as C.W.1 (Exh.15). He also
examined Suresh Durgaprasad Tiwari as C.W.2 (Exh.33) who is
one of the attesting witness to the agreement, Subhash
Madhukarrao Deshpande as C.W.3 (Exh.39) and Smt. Shilpa Shetty
as C.W.4 (Exh.40) who are the bank witnesses.

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7] Accused Vikas Charandas Bankar examined himself as

D.W.1 (Exh.47). He also examined Sameer Sudhir Sagdev as
D.W.2 (Exh.64) and Sukhchand Jagannath Sakharkar as D.W.3
(Exh.72).

8] Both parties relied on documentary evidence which shall

be discussed in the later part of the judgment. The Trial Court
after considering the oral and documentary evidence of the parties
found that the accused failed to establish the defence on
preponderance of probabilities. He failed to rebut the presumption
available in favour of the complainant under section 118 r/w 139
of N.I. Act. It was also held that complainant has established
ingredients necessary to constitute the offence punishable under
section 138 of N.I.Act against the accused and thereupon the
accused was convicted by impugned judgment and order and
sentenced to suffer as aforementioned with further direction to pay
compensation.

9] The impugned judgment and order is assailed on the

ground that Trial Court failed to appreciate the evidence in proper
perspective and arrived at erroneous conclusions. It is assailed that
accused has availed hand loan amount of Rs. 6,00,000/­ from
father of complainant. He has already repaid Rs. 1,50,000/­ and
Rs. 4,50,000/­ outstanding against him. He gave blank stamp

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paper and the cheques which were misused by the complainant.

There is no privity of contract between the accused and the
complainant. The Trial Court failed to consider that complainant
was not having financial capacity to advance such huge amount as
hand loan. The transaction alleged to have been done in cash is
against the provisions of Income Tax Act. The Trial Court failed to
take into account that he took loan amount of Rs. 6,00,000/­ from
the father of complainant which was given through cheque on
30.12.2013. The complainant failed to examine his father who
was the material witness to tell the truth. The disputed cheques
were issued blank towards security. The Trial Court failed to
consider that those cheques were not issued for discharging any
subsisting legal liability on part of accused. The Trial Court also
over looked the reply notice given by the accused wherein he had
explained the above facts. Therefore, the findings recorded by the
Trial Court are perverse and deserves to be set aside.

10] Respondent (original complainant) supported the

impugned judgment and order. According to him, the Trial Court
has rightly drawn the presumption as provided under section 118
r/w 138 of N.I. Act. There is no infirmity in the findings recorded
by the Trial Court. The accused has failed to rebut the presumption
and the defence put forth is not substantiated. The impugned
judgment and order thus deserves to be confirmed.

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11] Heard Advocate Smt. K.S. Laxmi for appellant

(original accused) and Advocate Mr. N.N. Raut for respondent
(original complainant). Both parties have filed their written notes
of arguments.

12] Following points arise for my determination. I have

recorded my findings on the points with reasons thereon as under:

Sr.No. Points Findings

1 Whether the complainant proved
that the accused issued a cheque of
Rs. 2,50,000/­ bearing No.795915
dated 03.05.2014 drawn on
Syndicate Bank, Branch Law College
Square, Nagpur and the cheque of Rs. In the affirmative.
7,00,000/­ bearing No. 810929 dated
27.05.2015 drawn on Shikshak
Sahakari Bank Ltd. Branch
Dharampeth, Nagpur, in favour of
the complainant to discharge his
legally enforceable debt or liability?
2 Whether the complainant proved
that the accused has committed an In the Affirmative
offence punishable under section 138
of the Act?
3 Whether the impugned judgment and In the Negative
order requires interference?
4 What order? Appeal is dismissed.

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REASONS

As to Point Nos. 1 to 4 :

13] Rajnikant (C.W.1) reiterated the averments set out in

the complaint. According to him, on 20.11.2013 on request of the
accused and considering the friendly relationship he advanced
hand loan amount of Rs. 10,50,000/­. Both parties executed hand
loan agreement which was reduced into writing on stamp paper of
Rs. 500/­ in presence of two witnesses. He further deposed that
accused has repaid an amount of Rs. 1,00,000/­ on 03.05.2014
through bearer cheque. Accused issued disputed two cheques for
total amount of Rs. 9,50,000/­ towards refund of the hand loan
amount. Suresh (C.W.2) is one of the attesting witness over the
hand loan agreement. He supported the testimony of the
complainant as regards transaction of hand loan amount of Rs.
10,50,000/­ by the complainant to the accused. It has come in his
evidence that the hand loan amount was paid in his presence to
the accused. He further deposed that agreement was executed by
accused in his presence. The agreement is duly proved vide
Exh.18. According to him, both complainant and accused signed
the hand loan agreement in his presence. During cross
examination he further gave the details of denomination of the
currency notes given to the accused as hand loan amount. There is
nothing in the evidence of this witness to discard his testimony.

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14] It is the defence of accused that he took hand loan

amount of Rs. 6,00,000/­ from the father of complainant. He
issued the disputed blank cheques and one stamp paper signed by
him as security for the said amount. According to him, an amount
of Rs. 1,50,000/­ is already repaid by him. He admits that an
amount of Rs. 4,50,000/­ is outstanding against him as against the
father of complainant. According to him, the stamp paper and two
blank cheques are misused by the complainant. There is no
subsisting legal liability for which he was required to issue the
disputed cheques. During cross examination accused admits his
signature on both disputed cheques (Exh.19 & Exh.21). He also
admits his signature on the hand loan agreement (Exh.18).

15] Now, it is required to be seen whether the defence put

forth by accused is probable. As discussed earlier, the signature
on both disputed cheques is of accused. Complainant is the holder
in due courses of both disputed cheques. The presumption
envisaged under section 118 of the N.I. Act will have to be
invoked in favour of complainant to infer that those cheques were
issued for consideration on the dates mentioned on the cheques.
Similarly, in view of section 139 of N.I. Act, it must be presumed
that the holder of the cheque received it for refund of debt and
liability. In the backdrop of this presumption, the evidence
adduced on behalf of accused is required to be scrutinized
minutely. Accused (D.W.1) deposed in accordance to his defence.

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During cross examination he has admitted his signatures on the

disputed cheques and hand loan agreement. He further admits tht
in his reply notice (Exh.50) he has not mentioned that he took
hand loan amount from the father of the complainant. If the
defence of the accused is that he took hand loan amount from the
father of the complainant then he got the opportunity to reply the
demand notice and specifically state the actual transaction. He has
not taken any further action on receipt of notice about misuse of
his blank stamp paper or both disputed cheques. Therefore, mere
statement of the accused that blank signed documents were
misused by the complainant is not sufficient to draw such
inference.

16] The Advocate for appellant (original accused) submits

that the entire theory of the complainant to have advanced hand
loan amount of Rs. 10,50,000/­ in cash is against the provisions of
section 269(ss) and 269(t) of Income Tax Act. Hon'ble Supreme
Court in reported case Ram Kewal Mahto ..Vs.. Shiv Kumar
Mahto, C.C. No.8864/2019 dated 14.10.2020, observed that,
"Bare denial of the consideration and existence of debt apparently
would not serve the purpose of the accused and something which is
probable has to be brought on record by the accused".

17] The Advocate for appellant (original accused) submits

that the complainant has got no evidence on record to show that

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he possessed financial capacity to advance such huge amount in

cash. Moreover, the alleged transaction of advancement of hand
loan amount is against the provisions of Income Tax Act.
Therefore, it is quite improbable that complainant has advanced
such huge amount in favour of accused. On the other hand
advocate for respondent (original complainant) submits that the
signature on both disputed cheques and the agreement is not
under dispute. There is cogent evidence of the witness in whose
presence hand loan amount was given to the accused. Moreover,
the presumption under section 118 r/w 139 of the Act is in favour
of complainant. Therefore, mere irregularity as regards the
advancement of the hand loan amount in cash cannot be made a
ground to rebut the presumption. He relied on reported case
Bipin Madhurdas Thakkar ..Vs.. Samir @ Sameer Dessai, 2015
(1) BCR (Cri.) 601, wherein Hon'ble Bombay High Court
considered the question about the legal proposition as held in the
case of Krishna Janardhan Bhat ..Vs.. Dattartaya C Hegde, 2008
4 SCC 54, wherein it was held that, "the existence of legally
enforceable debt was not a matter of presumption under section
139 of N.I. Act". The Hon'ble Bombay High Court further observed
that, "The Law laid down in the case of Krishna Bhat (Supra) is
over ruled in later case of Rangappa ..Vs.. Sri Mohan, AIR 2010
SC 1898. The question about advancement of the cash amount
in contravention to the provisions of Income Tax Act was also
considered.

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18] In the present case the presumption is available in

favour of the complainant. There is nothing in the evidence of
accused or his witnesses to establish on preponderance of
probabilities that accused had taken loan from the father of
complainant against which the disputed blank cheques were issued
as security. The accused has failed to bring any material on record
to disbelieve the case of complainant. The ground of which
capital is made by the accused that advancement of cash loan
amount was against the provisions of Income Tax Act will not
prove to be of much assistance to discard the presumption available
in favour of complainant. Complainant has duly established that
both disputed cheques (Exh.9 & Exh.21) were issued by the
accused towards discharge of legally enforceable debt.

19] Now, so far as the evidence on the point of presentation

of both cheques and its dishonor is concerned, the cheque return
memo (Exh.20 & Exh.22) do establish that both cheques were
returned unpaid on account of "insufficient funds". The testimony
of bank witnesses examined by either side also support the
contention of the complainant about the presentation and dishonor
of both cheques. Complainant issued legal notice (Exh.25) through
registered post. Receipt of notice is not put under dispute. In fact
accused has given reply to the notice vide Exh.50. He failed to
repay the cheque amount within statutory period. Thus the
ingredients to constitute the offence under section 138 of N.I. Act

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are fulfilled. The Trial Court has considered all the aspects in
proper perspective and arrived at just and correct conclusion.
There is no infirmity or perversity in the findings recorded against
the accused. Hence, I answer Point Nos. 1 and 2 in the affirmative
and point No.3 in the negative.

20] The Trial Court while convicting the accused has taken
into consideration the object behind enactment of N.I. Act. The
cost of the litigation and the duration for which the complainant is
deprived of the cheque amount is also taken into consideration
while awarding the compensation under the provisions of section
357(3) of the Cr.P.C. The Trial Court while awarding
compensation has granted time of one month from the date of
order to deposit the compensation amount. After dismissal of the
appeal, the time period given for deposit of compensation amount
deserves to be confirmed. The appeal is devoid of merits and
deserves to be dismissed by confirming the impugned judgment
and order convicting the accused. In result, I pass following order.
ORDER

1] Appeal is dismissed.
2] On failure of accused to deposit the compensation
amount within the period of one month from the date of
order, the default sentence and further execution be
made in accordance with law.

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3] Inform the Trial Court.

4] Judgment dictated and pronounced in open Court.

Nagpur. (P.B. Ghuge)

Dt. 23.06.2022. Addl. Sessions Judge­8, Nagpur.

Judgment
Digitally signed by PRADEEP
BHIMRAO GHUGE
Location: Nagpur
Date: 2022.06.24 11:39:04
+0530

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CERTIFICATE

I affirm that the contents of this P.D.F. file

Judgment/order are same, word to word, as per original Judgment.

Name of the Stenographer : Sau.S.S. Mulkalwar

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