MANU/SC/1483/2019

Equivalent/Neutral Citation: 2020(208)AIC 40, AIR2019SC 5520, 2020 (1) ALD(C rl.) 182 (SC ), 2020 (111) AC C 674, 2020ALLMR(C ri)1431,
I(2020)BC 468(SC ), 2020(1)BLJ413, 2020(1)C ivilC C (S.C .), 2019(4)C rimes250(SC ), 2020(1)C riminalC C 260, 2019/INSC /1173, 2020(1)JC C 164,
2020(1)N.C .C .798, 2020(1)RC R(C riminal)94, (2019)10SC C 203

IN THE SUPREME COURT OF INDIA

Criminal Appeal No. 1598 of 2019 (Arising out of SLP (Crl.) No. 10408 of 2018)
Decided On: 21.10.2019
Appellants: Rahul Sudhakar Anantwar
Vs.
Respondent: Shivkumar Kanhiyalal Shrivastav
Hon'ble Judges/Coram:
R. Banumathi and Hrishikesh Roy, JJ.
Counsels:
For Appellant/Petitioner/Plaintiff: G.L. Bajaj, Shekhar Kumar and Siddharth Bansal, Advs.
For Respondents/Defendant: Sudheer Voditel and Ravindra Bana, Advs.
Case Category:
CRIMINAL MATTERS - MATTERS CHALLENGING PROSECUTION UNDER NEGOTIABLE
INSTRUMENTS ACT
Case Note:
Criminal - Conviction - Dishonour of cheque - Section 138 of Negotiable
Instruments Act, 1881 - Respondent-complainant paid earnest money to
Appellant-Accused pursuant to agreement of Sale - Due to certain
circumstances, Agreement, could not be fructified - Appellant had issued
cheque from account of firm in order to refund earnest money to Respondent
which was returned with endorsement Account Closed - Respondent-
complainant filed complaint against Appellant under Section 138 of Act - Trial
Court acquitted Appellant-Accused - On appeal, High Court reversed acquittal
of Appellant and convicted him under Section 138 of Act by observing that
there was sufficient evidence on record to show that said cheque was issued
to discharge legally enforceable debt - Hence, present appeal - Whether
impugned judgment of conviction under Section 138 of Act warrant any
interference.
Facts:
The Appellant-Accused and the Respondent-complainant entered into an
Agreement of Sale. The Respondent-complainant had paid an advance. Due to
certain circumstances, the Agreement, as agreed by the parties, could not be
fructified. The Appellant-Accused had issued a cheque from the account of a
firm which was returned with the endorsement Account Closed. The
Respondent-complainant filed a complaint against the Appellant under
Section 138 of the N.I. Act. Upon consideration of evidence, the Trial Court
acquitted the Appellant-Accused on the ground that the cheque was issued
from the account of a firm, and not in the name of the Appellant-Accused.

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Observing that there was sufficient evidence on record to show that the said
cheque was issued to discharge legally enforceable debt, the High Court had
reversed the acquittal of the Appellant-Accused and convicted him under
Section 138 of the N.I. Act.
Held, while dismissing the appeal:
(i) Admittedly, the parties had entered into an Agreement of Sale. It was also
an admitted fact that the Respondent-complainant had paid amount as an
advance/earnest money to the Appellant-Accused as per the terms of the
Agreement. As pointed out by the High Court, the Appellant-Accused had not
disputed his signature on the said cheque presented for clearance. Contention
of the Appellant that the cheque issued in the name of the Firm, was removed
from his office table was not convincing nor the same was supported by any
evidence. As pointed by the High Court in the statutory presumption under
Section 139 of N.I. Act, the Appellant-Accused had not satisfactorily rebutted
the statutory presumption. Therefore, there was no ground warranting
interference with the conviction of the Appellant-Accused under Section 138
of N.I. Act. [7]
JUDGMENT
1. Leave granted.
2. This appeal arises out of judgment and order 05.09.2018 in Criminal Appeal No. 140
of 2017 passed by the High Court of Judicature at Bombay, Nagpur Bench, in and by
which the High Court has reversed the acquittal of the Appellant Under Section 138 of
the Negotiable Instruments Act, 1881 and convicted him Under Section 138 of the said
Act and imposed a fine of Rs. 5,00,000/- (Rupees Five Lakhs) and also costs of Rs.
20,000/- (Rupees Twenty Thousand) total Rs. 5,20,000/- (Rupees Five Lakhs Twenty
Thousand)
3 . Brief facts while led to filing of this appeal by way of special leave petition is as
under. The Appellant-Accused and the Respondent-complainant entered into an
Agreement of Sale dated 28.02.2012 as per which the Appellant-Accused agreed to sell
the property, registered owner of which is the mother of the Appellant, in favour of the
Respondent-complainant. The parties have agreed that the sale consideration of the said
property would be Rs. 25,00,000/- (Rupees Twenty Five Lakhs) and the Respondent-
complainant has paid an advance of Rs. 2,50,000/- (Rupees Two Lakhs Fifty Thousand)
under the said Agreement dated 28.02.2012. Due to certain circumstances, the
Agreement, as agreed by the parties, could not be fructified. The Appellant-Accused had
issued a cheque from the account of a firm named Synergy and Solution Incorporation
of Rs. 2,50,000/- (Rupees Two Lakhs Fifty Thousand) in order to refund the earnest
money to the Respondent-complainant. When the said cheque was presented for
clearance by the Respondent-complainant the same was returned with the endorsement
"Account Closed". After issuing the legal Notice dated 23.08.2013, the Respondent-
complainant filed a complaint against the Appellant Under Section 138 of the N.I. Act.
4 . Upon consideration of evidence, the Trial Court acquitted the Appellant-Accused on
the ground that the cheque was issued from the account of a firm, namely, Synergy and
Solution Incorporation and the said account was in the name of one Vipin Dhopte and
not in the name of the Appellant-Accused. The Trial Court also pointed out that the said
account was closed due to the negative balance on 11.03.2006. The Trial Court

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acquitted the Appellant-Accused by observing that the complainant has failed to prove
the guilt of the Accused Under Section 138 of the N.I. Act beyond reasonable doubt and
that the Appellant has nothing to do with the cheque issued on the account of the firm
named Synergy and Solution Incorporation.
5. Challenging the order of acquittal of the Trial Court, the Respondent-complainant has
filed an appeal before the High Court. The High Court has pointed that the Appellant has
not disputed his signature on the said cheque presented for clearance and that there is
nothing on record to show that the said Firm by name Synergy and Solution
Incorporation was a firm or a company and that the account was maintained by one
Vipin Dhopte. The High Court has also held that it is not the case of the Appellant-
Accused that other entries in said cheque is not in his own handwriting. The High Court
has held that the Trial Court has not appreciated the evidence in the right perspective
and in the light of the provisions of Section 139 of the N.I. Act which create statutory
presumption in favour of the holder of cheque and the burden is on the Accused to
rebut the statutory presumption. Observing that there is sufficient evidence on record to
show that the said cheque was issued to discharge "legally enforceable debt", the High
Court has reversed the acquittal of the Appellant-Accused and convicted him Under
Section 138 of the N.I. Act and imposed fine amount of Rs. 5,00,000/- (Rupees Five
Lakhs) and also imposed costs of Rs. 20,000/- (Rupees Twenty Thousand) on the
Appellant.
6. We have heard Mr. G.L. Bajaj, learned Counsel appearing for the Appellant-Accused
and Mr. Sudheer Voditel, learned Counsel appearing for the Respondent-complainant
and also perused the impugned judgment and the evidence/materials on record.
7. Admittedly, the parties had entered into an Agreement of Sale dated 28.02.2012. It is
also an admitted fact that the Respondent-complainant had paid Rs. 2,50,000/- (Rupees
Two Lakhs Fifty Thousand) as an advance/earnest money to the Appellant-Accused as
per the terms of the Agreement. As pointed out by the High Court, the Appellant-
Accused has not disputed his signature on the said cheque presented for clearance.
Contention of the Appellant that the cheque issued in the name of the Firm, named,
Synergy and Solution Incorporation was removed from his office table is not convincing
nor the same is supported by any evidence. As pointed by the High Court in the
statutory presumption Under Section 139 of N.I. Act, the Appellant-Accused has not
satisfactorily rebutted the statutory presumption. In view of the above, we do not find
any ground warranting interference with the conviction of the Appellant-Accused Under
Section 138 of N.I. Act.
8 . Insofar as the amount directed to be deposited, the High Court has directed the
Appellant to deposit Rs. 5,00,000/- (Rupees Five Lakhs) and also costs of Rs. 20,000/-
(Rupees Twenty Thousand) whereas the cheque amount is only Rs. 2,50,000/- (Rupees
Two Lakhs Fifty Thousand). Though Section 138 of the N.I. Act enable the court to
impose the higher amount than the cheque amount, however, considering the facts and
circumstances of the case we are of the view that the amount of Rs. 5,00,000/- (Rupees
Five Lakhs) ordered to be deposited is on the higher side and the same has to be
reduced to Rs. 2,80,000/- (Rupees Two Lakhs Eighty Thousand) plus costs of Rs.
20,000/- (Rupees Twenty Thousand). Ordered accordingly. Mr. Sudheer Voditel, learned
Counsel appearing for the Respondent-complainant, has submitted that the Respondent-
complainant has already received Rs. 2,50,000/- plus Rs. 20,000/- (towards costs). An
amount of Rs. 30,000/- (Rupees Thirty Thousand) be disbursed to the Respondent-
complainant and the balance amount of Rs. 2,20,000/- (Rupees Two Lakhs Twenty
Thousand) be returned to the Appellant-Accused along with the accrued interest, if any.

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9. The appeal is accordingly disposed of.
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