IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Rajesh H. Shukla, J.
Gopalchand Hotchand - Appellants
Vs.
Vaswani Gurmukhdas Bhagwandas and Ors. - Respondent
Criminal Appeal No. 1834 of 2005
Decided On: 04.11.2015
Negotiable Instruments Act - Acquittal under Section 138 - 138 - Summary: The court discussed the applicability of Section 138 of the Negotiable Instruments Act and the interpretation of 'cheque drawn on an account maintained by the drawer'. The court emphasized that the cheque must be drawn on an account maintained and closed by the drawer, and the phrase 'account maintained' includes 'an account maintained and closed in the past'. The court also highlighted the purpose of Section 138 as penal in nature to enhance the credibility of banking operations and induce faith in commercial transactions. The judgment of the High Court in Urban Co-operative Credit Society v. State of Gujarat was held to be per incuriam and not a good law. The court concluded that the acquittal based solely on the earlier judgment was misconceived and set aside the acquittal, holding the accused guilty under Section 138 of the Negotiable Instruments Act.
Fact of the Case:
The appellant filed an appeal against the acquittal of the respondent accused under Section 138 of the Negotiable Instruments Act. The appellant contended that the cheque was drawn on a closed account, while the respondent argued that the notice was not served and the debt was time-barred.
Finding of the Court:
The court found that the cheque was drawn on an account maintained and closed by the drawer, and the judgment of the High Court in Urban Co-operative Credit Society v. State of Gujarat was held to be per incuriam and not a good law. The court set aside the acquittal and held the accused guilty under Section 138 of the Negotiable Instruments Act.
Issues: The issues revolved around the applicability of Section 138 of the Negotiable Instruments Act, service of notice, and the time-barred debt.
Ratio Decidendi: The court emphasized that the cheque must be drawn on an account maintained and closed by the drawer, and the judgment of the High Court in Urban Co-operative Credit Society v. State of Gujarat was held to be per incuriam and not a good law. The court also highlighted the purpose of Section 138 as penal in nature to enhance the credibility of banking operations and induce faith in commercial transactions.
Final Decision: The court set aside the acquittal and held the accused guilty under Section 138 of the Negotiable Instruments Act. The accused was ordered to pay a fine of Rs. 1000 and the appellant was awarded Rs. 35,000 towards the dues.
Rajesh H. Shukla, J.
1. Leave to amend the surname of the Accused No. 1 as "VASWANI"
2. The present Appeal is directed against the impugned judgment and order rendered in Criminal Case No. 543 of 2000 by the learned Judicial Magistrate First Class dated 8.1.2004 recording acquittal of Respondent No. 1/Original Accused for the offence under Section 138 of the Negotiable Instruments Act.
3. Heard learned Advocate Shri Amar D. Mithani for the Appellant/Original Complainant, learned Advocate Shri Kunal S. Shah for Respondent No. 1/Original Accused and learned APP Shri H.L. Jani for the Respondent - State of Gujarat.
4. Learned Advocate Shri Amar D. Mithani has referred to the reasons recorded for the findings and conclusion recording acquittal and submitted that the court below has accepted the submissions with regard to the payment of cheque and other liability as well as the other aspects. However, as could be seen from the judgment, only on the basis of the judgment of the High Court, the acquittal is recorded. He submitted that as observed in the judgment of the High Court of Gujarat reported in 2003 (3) GLR 2207 in case of Urban Co-operative Credit Society v. State of Gujarat that the cheque must be drawn on an account maintained by the drawer. He submitted that on the basis of this judgment it has been observed that the date on which the cheque was drawn on 20.10.1999 the account was already closed on 28.9.1999 and therefore the cheque was not drawn on an account which was operational or maintained. Learned Advocate Shri Amar D. Mithani submitted that this judgment has been held to be per incuriam by subsequent judgment of High Court reported in 2005 (1) GLR 638 in case of Hashmikant m. Sheth v. State of Gujarat & Anr. He pointedly referred to the observations made in this judgment and submitted that it has been observed that the judgment of the Hon'ble High Court reported in case of Urban Cooperative Credit Society v. State of Gujarat (supra) is not a good law. He also referred to the background of the facts and submitted that the court below has accepted the version of the complainant in all count and only relying on the aforesaid judgment it has not been held to be good law, acquittal is recorded.
5. Learned Advocate Shri Amar D. Mithani referred to the testimony of the complainant at Exh. 27. He also referred to the testimony of PW-2 Branch Manager and submitted that the witness has confirmed the cheque and the signature of Respondent No. 1/Original Accused and the memo with the cheque returned due to the closure of the account. He emphasized that a specific question was put and it has been stated in response thereto that Respondent No. 1 - Original Accused was not even maintaining the minimum balance and the cheques are used to return and therefore the account has been closed. He submitted that the notice as required under the law has been given which has also not been replied. Therefore, learned Advocate Shri Mithani submitted that the notice was served upon Respondent No. 1/Original Accused for which he referred to the notice and the acknowledgment produced on record at Exh. 33 to Exh. 35. Learned Advocate Shri Mithani has also referred to and relied on the judgment of the Hon'ble Apex court reported in (2012) 13 SCC 375 in case of Laxmi Dyechem v. State of Gujarat and Ors.
6. Learned Advocate Shri Kunal S. Shah for Respondent No. 1/Original Accused has referred to the papers and submitted that the notice has not been served to Respondent No. 1-Original Accused as the address is different and the signature is also different on the cheque which has been confirmed in the testimony of the complainant. He therefore submitted that as no notice can be said to have been served, the judgment and order recording acquittal is just and proper. In support of this submission, he has referred to and relied on the judgment of the Hon'ble Apex Court reported in 2009 (0) GLHEL-SC 43950 in case of M.D. Thomas v. P.S. Jaleel and submi
Urban Co-operative Credit Society v. State of Gujarat
Hashmikant m. Sheth v. State of Gujarat & Anr.
Laxmi Dyechem v. State of Gujarat and Ors.
Krishna Janardhan Bhatt v. Dattatraya G. Hegde
Chandrappa & Ors. v. State of Karnataka
State of Madhya Pradesh v. Madanlal
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