No Evidence To Reflect Part Payment Of Debt Before Presentation Of Cheque; Accused Not Entitled To Sec.56 NI Act Benefit: Gujarat High Court

The High Court was considering a revision application filed under Section 397 read with Section 401 of the Code of Criminal Procedure, 1973 (CrPC) by the applicant seeking quashing and setting aside of the judgment upholding this conviction under the NI Act.

The Single Bench of Justice Hasmukh D. Suthar held, “What the instruments in question reflect is that same were issued towards payment of Rs.3,50,000/- i.e.Rs.1,50,000/- and Rs.2,00,000/- however, nothing is on record to show that there was part-payment being made after issuance of notice or prior to the presentation of cheques. Hence, applicant – accused is not entitled to get the benefit of section 56 of the NI Act also and there is no need to make any endorsement under Section 15 of the NI Act or no requirement to record any part-payment as cheques are subsequently issued after the transactions of April and May, 2012. Hence, as on the date of issuance of cheques, there was a legally enforceable debt and sum of money was promised to be paid by the applicant – accused to the complainant.”

Advocate RJ Goswami represented the Applicant, while Advocate Anilkumar B Lalcheta represented the Respondent.

Factual Background

It was the case of the applicant that he was serving as a peon, whereas the complainant was serving as a Professor in M.S. University, Technology Faculty. They have known each other since 1995. In order to help the accused, the complainant had given him Rs 3.5 lakh as a hand loan against which the applicant had issued cheques to the complainant. It was the case of the complainant that on relying upon the assurance and promise of the accused, the said cheques were deposited, but they came to be dishonoured with endorsement “Funds Insufficient”. Thereafter, the complainant issued a Notice under the NI Act, which was duly served to the accused, but the accused did not give any reply. As per the complainant, the accused had committed an offence under Section 138 of the NI Act. Therefore, the complainant was constrained to file the complaint against the accused.

The Magistrate convicted the applicant for the offence under Section 138, imposed a punishment of three months’ simple imprisonment upon him and further ordered him to pay compensation of Rs 3,38,000. The applicant’s Criminal Appeal under Section 374 of the CrPC came to be dismissed by the Additional Sessions Judge. It was in such circumstances that the applicant filed the revision application.

Reasoning

On a perusal of the facts and the submissions made, the Bench noted that there was a transaction of money between the complainant and the accused. The Bench refused to accept the argument canvassed by the applicant for non-service of notice after noting that he had not disputed the service of summons, and after service of summons before the trial Court, he failed to make good or deposit the amount of the cheque.

The dispute raised in light of section 56 of the NI Act was that no endorsement was made, though part-payment of Rs 12,000. The Bench noted that the complainant had denied the said fact, and it appeared that more than one transaction was found. The Bench took note of the fact that the complainant and accused were in contact with each other from 1995 to 1996, and it was an admitted position that money transactions between the accused and complainant had been ongoing since 1998.

The Bench further found that as per the complaint, the amount of Rs 12,000 (Rs 5000 in April, 2012 & Rs 7000 in May, 2012) was paid and the cheques were issued in the month of August, 2012, i.e. after four months. “The fact that there were more than one transactions and though some amount was paid in April and May, 2012, the applicant – accused failed to prove that said amount was towards which instrument. Hence, no any evidence is brought on record by the accused which reflects that the partpayment of the debt prior to presentation of cheques for encashment of cheques or liability being done”, it held.

Thus, finding that the Trial Court had already appreciated the facts and reiterating that the question of re-appreciation of evidence by the revisional Court does not arise unless it is found to be totally perverse, the Bench dismissed the revision.

Cause Title: Rajubhai Kalidas Chunara v. Kantibhai Kalyanjibhai Shah (Neutral Citation: 2026:GUJHC:20689

Appearance

Applicant: Advocate RJ Goswami

Respondent: Advocates Anilkumar B Lalcheta, Jainish A Lalcheta, Additional Public Prosecutor Rohan Raval

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