IMPORTANT POINT
Dishonour of cheque – Provision does not say that a person cannot advance more than Rs.20,000/- in cash to another person.

JUDGMENT

This appeal is directed against a judgment and order of acquittal rendered by the Metropolitan Magistrate 50th Court, Vikroli, Mumbai on 1st September, 2008 in C.C No.1578/SS of 2007, thereby acquitting respondent No.1-accused of an offence punishable under section 138 of the Negotiable Instruments Act, 1881 (for short “N.I Act”).

2. Appellant and respondent No.1 were friends and neighbours. In the month of January, 2007, the appellant had advanced a friendly loan of Rs.3,00,000/- to respondent No.1, pursuant to respondent No.1’s request as she was in financial need due to the ailment of her husband who was suffering from blood cancer as well as daughter of respondent No.1 was also in need of financial help as she was undergoing a training as an Air Hostess.

3. The appellant, on humanitarian grounds, lent an amount of Rs.3,00,000/- to respondent No.1 by way of loan, which she promised to refund by the end of June, 2007. It is the contention of the appellant that in lieu of the said amount, respondent No.1 had issued four cheques, details of which are as under;—

(a) Cheque No.445883 dated 24th July, 2007 for Rs.1,25,000/-;

(b) Cheque No.445881 dated 24th May, 2007 for Rs.1,25,000/-;

(c) Cheque No.445260 dated 24th July, 2007 for Rs.25,000/- and

(d) Cheque No.445882 dated 23th June, 2007 for Rs.25,000/-.

The cheques were drawn on UTI Bank Limited Ghatkopar which was subsequently known as Axis Bank. Upon instructions of respondent No.1, the appellant had deposited the cheques in the Bank as respondent No.1 could not repay the amount till June, 2007.

4. The appellant had initially deposited two cheques of Rs.1,25,000/- each in the Axis Bank on 3rd October, 2007 at it’s Mulund Branch. On 5th October, 2007, she received a memo from the Axis Bank informing her that cheques deposited by her were dishonoured for insufficiency of funds.

5. A legal notice dated 8th October, 2007 was issued to respondent No.1 calling upon her to repay the amount of Rs.3,00,000/- within a period of 15 days. It was duly received by respondent No.1 on 11th October, 2007. The notice was not replied by respondent No.1 which resulted in filing of the complaint against her by the appellant-complainant in the Court of Metropolitan Magistrate, Vikhroli bearing Complaint No.1578/SS/2007 under section 138 of the N.I Act in order to enforce the legal liability.

6. The learned Metropolitan Magistrate, after recording the evidence of the complainant as well as respondent No.1 acquitted respondent No.1 of the offence punishable under section 138 of the N.I. Act.

7. At the outset, Mr. Desai, learned Counsel for the appellant contended that the trial Court has committed grave error in both law and facts in acquitting respondent No.1 since findings returned by the Magistrate are sans considering the vital admissions given by respondent No.1 in her cross-examination as well as certain aspects which were surfaced even during the cross-examination of the appellant substantiating the appellant’s case. Mr. Desai would argue that the Court below had emphasized more on the source of income of the complainant which is immaterial in view of the ratio laid down by this Court in case of Krishna P. Morajkar, S/o Late Paras Morajkar Vs. Mr. Joe Ferrao S/o Domnic Ferrao and State of Goa, 2013 SCC Online Bom 862. He submits that the Court below wrongly relied upon the provisions of Section 269-SS of the Income Tax Act which had absolutely no bearing in the given set of facts and circumstances. The Counsel would argue that in view of the facts, circumstances and evidence on record, the appeal needs to be allowed.

8. On the other hand, Mr. Jain, learned Counsel for respondent No.1 vehemently argued the appellant has failed in making out any case under section 138 of the N.I Act as the evidence on record is quite insufficient to hold respondent No.1 guilty for the said offence. Mr. Jain, at the outset, would argue that the cheques in question were stolen by the appellant and