IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
Criminal Revision No. 1576 of 2009 (O/M).
Date of Decision : August 06, 2009.
William Sidhu aged about 44 years, son of Sh. Gurdial Singh, resident of H.
No. 248, Urban Estate, Phase-I, Patiala, (Presently confined at Central Jail,
Patiala).
...... Petitioner .
Versus.
Tavinder Kumar son of Sh. Tarlochan Lal, resident of H. No. 461, Jattan
Wala Chowntra, Patiala.
..... Respondent .
CORAM:HON'BLE MR. JUSTICE AUGUSTINE GEORGE MASIH.
Present:- Mr. A.S. Jattana, Advocate,
for the petitioner .
Mr. S.P.S. Sidhu, Advocate,
for the respondent.
AUGUSTINE GEORGE MASIH, J.
The petitioner-accused having been convicted under Section
138 of the Negotiable Instruments Act, 1881, (hereinafter referred to as
“the Act”) and sentenced to undergo imprisonment for a period of one year
and to pay a fine of Rs. 1,000/- in default of payment thereof to further
undergo rigorous imprisonment for one month by the learned Judicial
Magistrate 1st Class, Patiala, vide order dated 09.01.2007 and thereafter the
appeal preferred by the petitioner-accused against the said order of
conviction and sentence having been dismissed by the learned Additional
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Sessions Judge, Patiala, vide judgment dated 27.05.2009, has filed the
present Criminal Revision Petition, challenging the conviction and sentence.
Counsel for the petitioner has contended that the Courts below
have not appreciated the evidence, which has been brought on record by the
petitioner-accused, wherein it has been specifically stated and proved by him
that the cheques, which have been dishonoured, although, have been signed
by the petitioner-accused, but were filled up in the handwriting of
respondent-complainant, therefore, cannot be said to be a valid tender under
the provisions of Section 138 of the Negotiable Instruments Act, 1881,
(hereinafter referred to as “the Act”). He submits that blank cheques were
handed over to the respondent-complainant as 10% security amount of
compensation to make payment to the respondent-complainant for getting
the compensation to the petitioner-accused for the plot of 1000 sq. yds.
situated at village Baran, which was in the name of Ms. Gurparkash Kaur
Sidhu (deceased sister of the petitioner-accused), and subsequently acquired
by P.U.D.A. He on this basis submits that the cheques having not been
drawn by the petitioner-accused, which is the requirement of Section 138 of
the Act, the said cheques could not be made the basis for filing a complaint
under Section 138 of the Act. He relies upon the judgment of Andhra
Pradesh High Court in the case of Avon Organics Limited Versus Poineer
Products Limited and others, 2004 (2) Civil Court Cases 579 and the
judgment of Kerala High Court in the case of Gopan Versus Tonny
Verghese, 2008 (1) Civil Court Cases, 642, in support of his contentions.
The second contention which has been raised is that the account
having been closed and the respondent-complainant being aware of the said
fact could not have presented the cheques to the Bank and, therefore, could
Crl. Revision No. 1576 of 2009. -3-
not make the petitioner-accused liable under Section 138 of the Act. It is his
contention that as per Section 138 of the Act, the cheque, which has been
drawn by a person, should be of an account maintained by him with a Bank
for payment of any amount of money. Since the account had already been
closed and that is the memo, which has been issued by the Bank, he cannot
be held guilty under the provisions of Section 138 of the Act. For this
contention, he relies upon the judgment of Hon’ble the Supreme Court in the
case of Joseph Versus Philip Joseph 2001(1) Civil Court Cases, 220
(Kerala).
It is further the contention of counsel for the petitioner that the
presumption under Section 139 of the Act is not absolute, but rebuttable on
the part of petitioner-accused. The petitioner has taken a stand that the
cheques in question were issued as security and not in discharge of any debt
or other liability, therefore, the conviction and sentence of the petitioner-
accused cannot be sustained. He relies upon the judgments of Hon’ble the
Supreme Court namely John K. John Versus Tom Verghese and another,
2007 (4) Civil Court Cases, 690, and K. Parkashan Versus P.K. Surenderan,
2007 (4) Civil Court Cases, 713 (S.C.).
On the other hand counsel for the respondent-complainant
submits that it has not been proved on record that the cheques have been
filled in by the respondent-complainant and in any case even if the said
cheques have been filled in by the respondent-complainant, the signatures on
the cheques have not been denied by the petitioner-accused and, thus, the
cheques are valid tender under the Act, and the petitioner-accused cannot
disown his liability merely because the cheques have not been filled in by
the petitioner-accused himself. As regards the contention of counsel for the
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petitioner-accused that the account was closed and therefore, the cheques,
which have been issued by the petitioner-accused would not come within the
ambit of Section 138 of the Act. He submits that nothing has come on
record, which would show that the date on which the cheques were issued,
the account had already stood closed. He further submits that if this
contention is accepted then the purpose for which the amendment has been
brought about by the Legislature, would stand nullified as the credibility of
the instrument would always be in question and a person who issues a
cheque would always with a malafide intention issue the said cheques,
which is not valid tender and circumvent the provisions of Section 138 of
the Act. As regards the contention that the presumption under Section 139 of
the Act is rebuttable, he contends that the onus was upon the petitioner-
accused, which he has failed to discharge that the cheques were issued not
for any debt or liability, which he has failed to discharge. On the other hand,
it has been proved by the respondent-complainant by producing evidence in
the form of his Bank Account and statement, where withdrawal of the
amount has been shown before the respective dates on which the amount is
alleged to have been given to the petitioner-accused by way of friendly loan.
On this basis, counsel for the respondent-complainant submits that the
judgments passed by the Courts below are fully justified and do not call for
any interference by this Court.
I have heard counsel for the parties and with their able
assistance have gone through the records of the case.
The position, which stands culled out from the pleadings of the
parties, is that the petitioner-accused requested the respondent-complainant
to advance a friendly loan of Rs. 2 lakhs to him for business purposes with
Crl. Revision No. 1576 of 2009. -5-
an assurance to return the same within a period of three months. The
respondent-complainant withdrew the said amount from his Bank Account
on 03.03.2004 and the same was advanced to the petitioner-accused on
05.03.2004. The petitioner-accused in order to discharge this liability,
issued a cheque No. 255325 dated 05.03.2004 for an amount of Rs. 2 lakhs,
drawn on Bank of Punjab Limited, Branch Chhoti Baradari, Patiala, from his
account No. 14725066 in favour of the respondent-complainant. Thereafter,
on 20.04.2004, the petitioner-accused again approached the respondent-
complainant for a loan of Rs. 1.50 lakhs for the purpose of business and in
discharge of the said liability, the petitioner-accused issued a cheque No.
02000711 dated 04.06.2004 for an amount of Rs. 1.50 lakhs, drawn on Bank
of Punjab Limited, Branch Chhotti Baradari, Patiala, in favour of the
respondent-complainant. This amount of Rs. 1.50 lakhs, the respondent-
complainant has shown to have been withdrawn by him from his bank
account on 31.03.2004. In May,2004, the respondent-complainant requested
the petitioner-accused for return of Rs. 3.50 lakhs to which the petitioner-
accused responded by asking the respondent-complainant to present the
cheques issued by him. On 29.05.2004, the respondent-complainant
presented the cheque dated 05.03.2004 of Rs. 2 lakhs with the drawee Bank.
The said cheque was returned by the Bank with remarks “Account Closed”,
vide memo dated 29.05.2004. This fact was brought to the notice of the
petitioner-accused, who assured that the total payment of Rs. 3.50 lakhs will
be made to the respondent-complainant on or before 04.06.2004. On failure
of the petitioner-accused to comply with his assurance, the respondent-
complainant presented the second cheque dated 04.06.2004 of Rs. 1.50 lakhs
on 08.06.2004 with the drawee Bank, which again was dishonoured and
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returned, vide memo No. 08.06.2004 with the same remarks “Account
Closed”. Thereafter, a legal notice dated 11.06.2004 was served upon the
petitioner-accused to which the response was given by the accused, taking
therein the plea that these cheques were not given in discharge of any
liability or loan, but was a security amount of 10% of amount to be paid as
compensation to the petitioner-accused by P.U.D.A. for a plot of his
deceased sister on an assurance given by the respondent-complainant that he
would get that amount to the petitioner-accused. The petitioner-accused
having failed to make the payment of amount within the prescribed period
under the Act, a complaint under Section 138 of the Act was preferred by the
respondent-complainant.
A perusal of the evidence as led by the parties would clearly
show that the petitioner-accused cannot run away from the liability of
cheque No. 255325 dated 05.03.2004 for Rs. 2 lakhs, signed by him as the
respondent-complainant has been able to prove that he had withdrawn Rs. 2
lakhs from his Bank Account on 03.03.2004. As regards the liability of
cheque No. 02000711 dated 04.06.2004 for an amount of Rs. 1.50 lakhs is
concerned, the respondent-complainant has produced the evidence to show
that he had withdrawn Rs. 1.50 lakhs on 31.03.2004 from his bank account,
whereas in the pleadings, it has come that the petitioner-accused had
approached the respondent-complainant for a loan of Rs. 1.50 lakhs for the
purpose of business only on 20.04.2004. The contention, therefore, of the
respondent-complainant that he had withdrawn the amount to make the
payment to the petitioner-accused for the loan which he had sought from the
respondent-complainant, cannot be accepted, but that would not lead to
acquittal of the petitioner-accused as still cheque for an amount of Rs. 2
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lakhs drawn on 05.03.2004 would fall under the provisions of Section 138 of
the Act.
The contention of counsel for the petitioner that as the cheques,
which have been given by the petitioner-accused were blank, therefore, they
would not fall under the provisions of Section 138 of the Act, cannot also be
accepted as signatures thereon has been admitted by him. The respondent-
complainant on the basis of evidence led by him has been able to prove that
he had indeed withdrawn Rs. 2 lakhs on 03.03.2004 from his bank account,
which would go a long way to prove that the petitioner-accused had sought a
loan from the respondent-complainant, and therefore, in discharge of the
said loan, a cheque of Rs. 2 lakhs dated 05.03.2004 was issued by the
petitioner-accused.
As regards the writing on the body of cheque is concerned, the
petitioner-accused has not been able to prove it beyond doubt, although
D.W.3 Shri Navdeep Gupta, handwriting expert has given his opinion that
the disputed hand writing on the cheque in question when compared with
standard Ex. D.W.2/A and the signature of the respondent-complainant
available on the order sheet dated 23.06.2006, do tally and the statement of
D.W.2 Amarinder Singh, who is a practising Advocate at Patiala cast a
doubt regarding genuineness of receipt Ex.D.W.2/A. While deposing
Amarinder Singh has stated that he was neither a summoned witness nor he
was asked by any of the parties to appear in the Court. He has further stated
that he was not called by petitioner-accused William Sidhu and stated that he
had come to the Court personally after coming to know about the case. In
any case merely because the body of cheque does not depict the same to
have been filled in by the petitioner-accused, cannot be said to be a ground
Crl. Revision No. 1576 of 2009. -8-
for holding the cheque to be not a valid tender when the signatures thereon
are not disputed by the petitioner-accused. The onus was, therefore, heavily
on the petitioner-accused to show and prove under what circumstances the
said blank cheques were given. The petitioner-accused has failed to prove
his contention by any evidence showing that Smt. Gurparkash Kaur Sidhu
deceased sister of the petitioner-accused was at the first place having a plot
measuring 1000 sq. yds. situated at village Baran and the acquisition thereof
by P.U.D.A. Nothing has come on record by way of evidence that there was
any dispute regarding payment of compensation pending with P.U.D.A. nor
has it come on record as to how the complainant could have got the matter
settled between P.U.D.A. authorities, and the petitioner-accused. Having
failed to show as to for what purpose the cheques were issued by the
petitioner-accused, the presumption as provided under Section 139 of the
Act goes in favour of the respondent-complainant and the respondent-
complainant has, by cogent evidence, been able to prove that he had
withdrawn an amount of Rs. 2 lakhs from the Bank a few days before the
same was handed over to the petitioner-accused and the petitioner -accused
issued a cheque in discharge of that liability.
The judgments of Andhra Pradesh High Court and Kerala High
Court, relied upon by counsel for the petitioner in the case of Avon Organics
Limited (supra) and Gopan Versus Tonny Verghese (supra) would not be of
any help in the present case to the petitioner-accused.
The contention of counsel for the petitioner that the cheques
have been dishonoured with the remarks “Account Closed”, therefore, the
liability under Section 138 of the Act would not arise, cannot be accepted.
There is nothing on record to suggest that on the date when the cheque dated
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05.03.2004 was issued by the petitioner-accused, the account already stood
closed and even if such a contention is allowed to be raised then the
judgments of Kerala High Court in Joseph Versus Philip Joseph (supra)
would not be applicable to the facts of the present case as in that case the
account stood closed before the issuance of the cheque. The account in the
case before Kerala High Court, was closed in the year, 1987, whereas the
cheque was issued in the year, 1990. In any case, if the contention as raised
by counsel for the petitioner is accepted that very purpose and intent for
which the amendment was brought about by the Legislature in the
Negotiable Instruments Act, would be frustrated. The objects and reason of
the amendment Act of 2002, whereby Chapter XVII was incorporated
provides for penalties in case of dishonour of a cheque. These provisions
were incorporated with a view to enhance the credibility of the instruments.
If it is held that a person can issue a cheque where the account stands closed
and then wriggle out of the liability by stating that it would not be covered
by provisions of Section 138 of the Act, it would amount to nullifying the
effect of amendment of the year, 2002, and, therefore, this contention of
counsel for the petitioner cannot be accepted. In any case, in the absence of
any evidence to the effect that when the cheque dated 05.03.2004 was issued
by the petitioner-accused, the account stood closed, the requirement of
Section 138 of the Act, if read, as has been tried to be projected by counsel
for the petitioner, would still be within the requirement of law as on the date
when the cheque was issued, the account would be operative and not closed.
In view of this position, the judgments of Hon’ble the Supreme
Court in the case of John K. John (supra) and K. Parkashan (supra) would
not be of any help to the petitioner.
Crl. Revision No. 1576 of 2009. -10-
In view of the above, I have come to a conclusion that the
respondent-complainant has proved that cheque No. 255325 dated
05.03.2004 for a sum of Rs. 2 lakh issued in favour of the respondent-
complainant stood dishonoured on the ground that the account stood closed
and, therefore would fall within the ambit of Section 138 of the Act and,
thus, stands rightly convicted and sentenced for the same by the Courts
below.
The orders passed by the Courts below do not call for any
interference by this Court and, therefore, the present Revision Petition stands
dismissed.
(AUGUSTINE GEORGE MASIH)
JUDGE
August 06, 2009.
sjks.