JAYANTILAL MAGANLAL BRAHMBHATT Vs. STATE OF GUJARAT

JUDGEMENT

(1.) THIS appeal is directed against the judgment and order dated 12th April, 2007 passed by the learned 6 th Additional Senior Judicial Magistrate, Gandhinagar in Criminal Case No.5293/2002 whereby he has acquitted the respondent accused of the offences punishable under section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "the Act").

(2.) BRIEFLY stated, the facts of the present case are that the appellant (original complainant) lodged a complaint before the learned Judicial Magistrate First Class, Gandhinagar alleging that he was a native of Devda village of Vijapur taluka and presently, he was residing at Gandhinagar and was leading a retired life. The accused was residing at Mumbai and was working as a Chartered Accountant at Mumbai and was the proprietor of the said firm. The complainant had worked as the Manager of the Babulnath Temple Trust from 1977 to 1998 where the accused used to come for the purpose of internal audit; hence, the accused knew the complainant since several years. During the period 1991 to 1997, the accused, in instalments, had taken money from the complainant and, in all, an amount of Rs.42 lakhs was outstanding which was to be recovered by the complainant. In respect of such outstanding amount, the accused had issued eight cheques drawn in favour of the complainant on the Bombay Mercantile Co-operative Bank Ltd. for a total sum of Rs.42 lakhs. On 24th June, 2002, the accused had signed eight cheques and given the same to the complainant. The accused had given the complainant cheque No.114110 for Rs.15,00,000/-, cheque No.114111 for Rs.5,00,000/-, cheque No.114112 for Rs.5,00,000/-, cheque No.114113 for Rs.5,00,000/-, cheque No.114114 for Rs.5,00,000/-, cheque No.624532 for Rs.6,00,000/-, cheque No.624533 for Rs.50,000/- and cheque No.927198 for Rs.50,000/-. At the time of issuing the cheques, the accused had assured him that the moment the cheques were presented before the bank, the same would be honoured and he would receive the amount stated therein. It is further the case of the complainant that he had presented all the aforesaid eight cheques at the Gandhinagar branch of the State Bank of India on 16th July, 2002, however, to the surprise of the complainant, cheques No.114110 to 114114 issued by the accused, for a total amount of Rs.35 lakhs, were returned by the banker of the accused by a return memo dated 29 th July, 2002 with endorsement No.7 "stop payment". Also, the other cheques bearing No.624532, 624533 and 927198, for a total amount of Rs.7 lakhs, came to be returned by the banker of the accused by a return memo dated 29th July, 2002 with the endorsement "insufficient funds". In this regard, the banker of the complainant had sent a letter dated 8th August, 2002 to the complainant through courier, which he had received on 14 th August, 2002. Thereafter, he had issued notice to the bank through his advocate under section 138 of the Act on 17 th August, 2002 by way of Registered A.D. Post and U.P.C. Despite the fact that such notice has been served upon the accused, he had not paid the amount of Rs.42 lakhs to the complainant till date, and thereby committed the offence under section 138 of the Act.

(3.) MR . R.C. Jani, learned advocate for the appellant assailed the impugned order by submitting that the learned Magistrate has failed to appreciate the evidence on record in proper perspective and more particularly, has ignored very significant evidence which had been brought on record by the complainant in the nature of the compromise purshis filed by the accused (Exh.94) whereby he had agreed to settle the matter with the complainant and pay compensation of Rs.25 lakhs to him. It was submitted that in view of the above admission of the accused, which formed part of the proceedings, the complainant had proved that the accused had accepted the existence of a legally enforceable debt and that the said settlement purshis could also be treated as an acknowledgment by the accused of the debt, which would automatically extend the period of limitation. It was further submitted that in the facts of the present case, it may be that the loan was given during the period from 1991 to 1997, however, the very fact that the accused had given cheques in respect of the said loan to the complainant was indicative of the fact that he had accepted and acknowledged the existence of the loan. Under the circumstances, the learned Magistrate was not justified in holding that the cheques had not been issued in respect of a legally enforceable debt. Attention was also drawn to the fact that though the notice under section 138 of the Act had been duly issued to the accused, he had not bothered to reply to the same and hence, the defence during the course of trial ought not to have been accepted by the learned Magistrate. Attention was invited to Exh.81 namely, the deposition of Arif Hussain Gulam Farid Shaikh, who was discharging duties in the legal department of the Khanpur branch of the Bombay Mercantile Co-operative Bank. It was submitted that the said witness had admitted the signature of the accused on all the cheques. The appellant has also placed alongwith the appeal memo copies of twelve receipts, which according to him had been issued by the accused. The learned counsel, by placing reliance upon the said receipts had submitted that the said receipts are evidence of the fact that there is a clear admission on the part of the accused of having received the amount in question. Reference was made to clause (iii) of section 25 of the Act to submit that during the pendency of the trial, the accused by virtue of the purshis Exh.94 had made a clear admission of the acceptance of the amount and had also accepted that the same was in his handwriting in his cross-examination, under the circumstances, the learned Magistrate was not justified in ignoring the said piece of evidence which was a very significant piece of evidence. The learned advocate also took the court through the depositions of the complainant as well as the other witnesses to submit that through the testimonies of the said witnesses, it had been duly established that the accused had issued the eight cheques in favour of the complainant, which upon presentation had been dishonoured on the ground of 'stop payment' and 'lack of sufficient funds'. Under the circumstances, the offence under section 138 of the Act has not been clearly made out and the learned Magistrate was, therefore, not justified in acquitting the accused.