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Issues Involved:
1. Acquittal under Section 138 of the Negotiable Instruments Act, 1881 2. Presentation and dishonour of cheque 3. Statutory notice and compliance 4. Application under Section 391 of the Code of Criminal Procedure, 1973 5. Authorization and subsequent withdrawal of letter 6. Interpretation of Supreme Court precedents regarding payment before filing of complaint 7. Circumstances under which the letter was issued and its impact on the agreement 8. Payment tendered after notice period and its acceptance 9. Entitlement to deduct amount from cheque and its legal implications Detailed Analysis: 1. Acquittal under Section 138 of the Negotiable Instruments Act, 1881 The complainant appealed against the acquittal of the accused by the Chief Judicial Magistrate (CJM) under Section 138 of the Negotiable Instruments Act, 1881. The CJM had acquitted the accused on the grounds that the complainant had authorized a deduction from the cheque amount, altering the contractual obligation. 2. Presentation and Dishonour of Cheque The cheque in question was presented by the complainant for encashment and was dishonoured due to "funds insufficient." The statutory notice was sent, and the accused received it but did not comply within the stipulated period. 3. Statutory Notice and Compliance The statutory notice was sent on 28-3-2002 and received by the accused on 2-4-2002. The accused was required to comply by 17-4-2002, which he did not. The complainant filed the complaint on 1-7-2002, and the accused later deposited a sum of Rs. 2,50,000/- without prejudice. 4. Application under Section 391 of the Code of Criminal Procedure, 1973 The complainant filed an application to produce a letter dated 30-4-2002, which was allowed by the court despite objections from the accused's counsel. The letter was relevant as it was produced by the accused in another case. 5. Authorization and Subsequent Withdrawal of Letter The complainant had given a letter on 15-4-2002 authorizing the accused to deduct Rs. 1,21,351/- from the balance amount. This letter was later withdrawn by the complainant on 30-4-2002. The CJM considered this letter as an alteration of the contract, leading to the acquittal of the accused. 6. Interpretation of Supreme Court Precedents Regarding Payment Before Filing of Complaint The court discussed the Supreme Court's observations in Suman Sethi v. Ajay K. Churiwal, which mentioned that payment before filing the complaint absolves liability under Section 138. However, it was argued that this was a casual observation and not binding as a precedent. The court relied on other Supreme Court judgments to conclude that the offence is completed upon failure to comply with the notice, and subsequent payments can only mitigate the sentence. 7. Circumstances Under Which the Letter Was Issued and Its Impact on the Agreement The complainant explained that the letter dated 15-4-2002 was issued under duress and was later withdrawn. The CJM failed to consider this explanation and the fact that the accused did not act on the letter before its withdrawal. The court held that this letter did not alter the original agreement. 8. Payment Tendered After Notice Period and Its Acceptance The accused tendered a payment of Rs. 5,00,000/- after the notice period, which was not accepted by the complainant as it did not comply with the complainant's conditions. The court held that payment after the offence is committed does not absolve criminal liability but can be considered for sentencing. 9. Entitlement to Deduct Amount from Cheque and Its Legal Implications The accused argued that he was entitled to deduct Rs. 1,21,351/- from the cheque amount. The court rejected this argument, stating that the accused did not comply with the statutory notice by paying the balance amount. The letter authorizing the deduction was withdrawn, and the accused did not provide evidence of acting on it. Conclusion: The appeal was allowed, and the judgment of acquittal was set aside. The accused was convicted under Section 138 of the Act and directed to pay a fine of Rs. 5,000/- within three weeks, failing which he would undergo simple imprisonment for fifteen days. The fine, if deposited, would be paid to the complainant.
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