Negotiable Instruments Act| Person Bound To Face Criminal Trial If Cheque Amount Not Paid Despite Notice & Opportunity To Pay: Delhi High Court

Emphasising that once a person issues a cheque it must be honoured, the Delhi High Court has observed that such a person is bound to face criminal trial and consequences in case the cheque amount is not paid despite issuance of notice and opportunity to pay the said amount.

Noting that the Negotiable Instruments Act provides sufficient opportunity to a person who issues the cheque, Justice Rajnish Bhatnagar said thus:

"Once a cheque is issued by a person, it must be honored and if it is not honored, the person is given an opportunity to pay the cheque amount by issuance of a notice and if he still does not pay, he is bound to face the criminal trial and consequences."

The Court was of the view that once issuance of a cheque and signature are admitted, the presumption of a legally enforceable debt in favour of the holder of the cheque arises.

"It is for the accused to rebut the said presumption, though accused need not adduce his own evidence and can rely upon the material submitted by the complainant, however, mere statement of the accused may not be sufficient to rebut the said presumption," the Court added.

The Court also observed that while imposing sentence on the accused after his conviction, it is to be kept in mind that the sentence for offence under sec. 138 of the Act should be of such nature as to give proper effect to the object of legislation and no drawer of the cheque can be allowed to take dishonour of cheque issued by him light heartedly.

"The Magistrate can alleviate the grievance of the complainant by making resort to Section 357(3) Cr.P.C. wherein no limit of compensation to be awarded by the Magistrate has been mentioned and, thus, the Magistrate is empowered to impose a reasonable amount of compensation payable to complainant," the Court said.

The Court was dealing with a revision petition seeking quashing of the judgment dated 26.03.2021 passed by the Trial Court filed against impugned judgment passed by MM Court whereby the MM held the petitioner guilty.

The MM Court had sentenced the petitioner to undergo simple imprisonment for a period of 3 months and to pay fine of Rs. 7,00,000 which completely shall be paid as compensation to the complainant, by which the ASJ dismissed the appeal of the petitioner and modified the sentence and directed to pay fine of Rs. 7,00,000 to the complainant and in default of payment of fine within 4 weeks, he shall undergo simple imprisonment for 3 months.

The Court noted that the revisionist had taken different stands with regard to the cheque in question. While it was stated that the cheque in question was lost and a complaint was also lodged in the year 2014 however the original complaint was not placed on record by the revisionist.

The Court noted that the revisionist neither informed the concerned bank about the cheque in question, which got stolen nor requested the bank to get the payment stopped against the said cheque, which shows his malafides.

Regarding the argument of the revisionist that he was a stranger to the complainant and that he had no legal liability towards him, the Court observed that the revisionist had failed to rebut the presumption in favour of the complainant and that mere statement by the revisionist in itself was insufficient to raise suspicion with regards to the entire case of prosecution.

"Therefore, in view of the discussions mentioned hereinabove, I find no infirmity in the impugned Judgment dated 26.03.2021 passed by the Ld. Trial Court, the same is, therefore, upheld. Consequently, the revision petition is dismissed and Crl. M. (Bail) 1244/2021 is also disposed of accordingly," the Court said.

Title: SANJAY GUPTA v. THE STATE & ANR.

Citation: 2022 LiveLaw (Del) 240

Click Here To Read Order