SUKANT PAPERS Vs. OM PRAKASH JAIN

JUDGEMENT

(1.) By this appeal under Section 374 Cr.P.C, the appellant has assailed his conviction under Section 138 of Negotiable Instruments Act and order on sentence whereby he was sentenced to a fine of Rs.40,000/-, in default of payment of fine, to undergo rigorous imprisonment for three months. Out of Rs.40,000/-, Rs.35,000/- was to be paid to the complainant as compensation.

(2.) The complaint against the petitioner was filed by the respondent/ complainant under Section 138 of NI Act as a cheque of Rs.25,000/- issued by the appellant was dishonoured and despite service of demand notice, the appellant failed to pay the amount. The complainant had examined himself and clerk of Dena Bank and proved issuance of cheque against supply of goods and dishonour of cheque. The notice of demand was proved as Ex.PW3/B. The postal receipt of notice is Ex.PW3/C and the acknowledgment received back showing receipt of notice as Ex.PW3/F. The appellant had not denied issuance of cheque and dishonour of cheque. He had not taken any defence at the time of accepting notice and simply pleaded not guilty. During cross examination, various defences were tried. One of the defences was that no goods were supplied despite assurance. The second defence was that the cheque was without consideration. The third was that the cheque was issued against membership of chit fund. The dishonoured memo showed that the cheque was issued by the appellant on a closed account. The learned trial court (in this case, the trial court was court of Sessions since by an administrative order of High Court, for some time, cases under Section 138 N I Act were sent for trial to the court of Sessions) held that even if the cheque was issued on a closed account, the provisions of Section 138 NI Act would be applicable and the offence under Section 138 was made out and convicted the appellant.

(3.) The counsel for the appellant argued that it was in the knowledge of complainant that the cheque was of a closed account since the earlier cheque issued by the appellant had come back with a dishonour memo saying that the account was closed. The second cheque was put by the complainant in the bank despite knowing that the account was closed and, therefore, no offence under Section 138 NI Act was made out.