2019 (11) TMI 899 - HC - Indian Laws

Dishonor of Cheque - section 138 of NI Act - Cheque was issued only for guarantee - acquittal of the accused, i.e., respondent - HELD THAT - It is settled law that the important ingredient for the offence punishable under Section 138 is that cheque must have been issued for the discharge in whole or in part of any debt or other liability. If the cheque is not issued for the discharge of any debt or other liability, Section 138 can not be invoked. The complainant in his cross examination has admitted that the cheque issued was only for guarantee - The important ingredient for the offence punishable under Section 138, therefore, has not been dealt with. On this ground itself the impugned judgment has to be upheld. Further, the fact that the complainant has been giving different dates on which the cheque has been issued also shows that he is economical with truth. It is necessary to note that one who comes to the court, must come with clean hands. More often than not, process of the Court is being abused. Unscrupulous persons from all walks of life find the court-process a convenient lever to retain the illegal-gains indefinitely. Appeal dismissed.

Summary

Issues:
- Appeal against acquittal under Section 378 of the Code of Criminal Procedure.
- Dispute over a cheque issued as security or for the discharge of debt.
- Reliability of evidence presented by the complainant.
- Application of legal precedents regarding the purpose of the cheque under Section 138.

Analysis:

1. The appeal was filed challenging the order of acquittal by the Judicial Magistrate. The appellant, an agriculturist, alleged that the respondent, a trader, purchased grapes but failed to make full payment, issuing a cheque that bounced due to stop payment instructions. The complainant initiated legal action after the respondent did not honor the payment request.

2. Despite the appellant's absence, the court, assisted by the State's counsel and respondent's legal representation, reviewed the case records, evidence, and the judgment. The appellant claimed the cheque was issued for payment, while the respondent argued it was a security cheque, denying any outstanding debt.

3. Witness testimonies revealed discrepancies in the complainant's statements regarding the cheque issuance date, casting doubt on the reliability of the appellant's evidence. The respondent contended that the cheque was provided as security, with no legal liability due, as the stop payment instructions predated the cheque.

4. The court highlighted the importance of establishing that a cheque was issued for the discharge of debt or liability to invoke Section 138. Citing legal precedents, it emphasized that if a cheque serves as security for a contract and not for debt settlement, the offense under Section 138 is not applicable.

5. The appellant's admission during cross-examination that the cheque was for guarantee, not debt payment, aligned with the legal precedents cited. The court concluded that the cheque was not issued to settle a debt, warranting the dismissal of the appeal. Emphasizing the need for truthfulness in legal proceedings, the court warned against abusing the court process for unjust gains.

6. In light of the evidence and legal principles, the court upheld the acquittal, underscoring the necessity for clean hands in approaching the court and the consequences of pursuing false claims. The judgment serves as a reminder of the legal requirements for invoking Section 138 and the repercussions of misleading the court.

Conclusion:
The appeal challenging the acquittal was dismissed based on the finding that the cheque in question was issued as security, not for the discharge of debt, aligning with legal precedents. The court emphasized the importance of truthfulness in legal proceedings and warned against abusing the court process for unjust gains, affirming the principle that those approaching the court must do so with clean hands.