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2024 Supreme(Guj) 1618
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
GITA GOPI, J.
M. SETU MADHAVAN – Appellant
Versus
STATE OF GUJARAT – Respondent
Criminal Revision Application (Against Conviction - Negotiable Instrument Act) No. 634 of 2024, Criminal Revision Application No. 648 of 2024
Decided On : 01-07-2024
Advocate Appeared:
For the Appellant : NARENDRA L. JAIN.
For the Respondents: K.J. PANCHAL, HARDIK MEHTA.
IMPORTANT POINT
A cheque dishonor case under Section 138 requires proof of a legally enforceable debt and proper service of legal notice, both of which were lacking in this case.
Headnote:
Revision - Criminal Procedure - Code of Criminal Procedure, 1973 (Sections 397, 401) and Negotiable Instruments Act (Section 138) - The court quashed previous judgments due to lack of legal notice and enforceable debt.
Fact of the Case:
The revisionist was accused of dishonoring cheques issued to a bank for a loan taken by a relative. The cheques were returned due to insufficient funds, leading to complaints under Section 138 of the N.I. Act. The revisionist argued that he was not liable as he had no direct connection to the loan and did not receive proper legal notice.
Finding of the Court:
The court found that the prosecution failed to prove that the revisionist had a legally enforceable debt or that proper legal notice was served. The judgments of the lower courts were deemed unjust and perverse.
Issues: Whether the revisionist was liable under Section 138 of the N.I. Act without proper legal notice and enforceable debt.
Ratio Decidendi: The court emphasized that for liability under Section 138, there must be a legally enforceable debt and proper service of legal notice, which were not established in this case.
Result: The court quashed the judgments and orders of the lower courts.
JUDGMENT :
GITA GOPI, J.
1. Rule. Mr. Hardik Mehta, learned APP and Mr. K.J. Panchal, learned advocate, waive service of notice of Rule on behalf of respective parties. Rule is fixed forthwith.
2. The present revision applications have been filed under section 397 read with section 401 of Code of Criminal Procedure, 1973 (hereinafter referred to as ‘C.R.P.C.’ for short) with prayer in Criminal Revision Application No. 634 of 2024 to quash and set aside the judgment and order dated 20.04.2024 passed in Criminal Appeal No. 177 of 2019 by the 2nd Additional Sessions Judge, Surat and the judgment and order dated 26.04.2019 passed in Criminal Case No. 19541 of 2011 by the 6th Additional Chief Judicial Magistrate, Surat. While, in Criminal Revision Application No. 648 of 2024, the prayer is made to quash and set aside the judgment and order dated 20.04.2024 passed in Criminal Appeal No. 176 of 2019 by the 2nd Additional Sessions Judge, Surat and the judgment and order dated 26.04.2019 passed in Criminal Case No. 19540 of 2011 by the 6th Additional Chief Judicial Magistrate, Surat.
2.1 The judgment of the 6th Additional Chief Judicial Magistrate, Surat on 26.04.2019 was a common judgment in Criminal Case Nos.19541 of 2011 and 19540 of 2011. The learned Additional Chief Judicial Magistrate, Surat, while recording the facts, has noted the reason for joint decision of the matters. According to the learned trial Court Judge, the amount due of the complainant is much lessor than the amount of cheque, hence, that was a consideration, which weighed in the mind of the Court to pronounce a decision on both the cases in a joint order considering it to be in the interest of justice. The learned trial Court Judge also noted that exhibits of the documents and the depositions are almost same, hence, it would not be difficulty for any authority in case of any challenge of the order.
3. The trial Court Judge noted that the complainant-Udhana Citizens Cooperative Bank Ltd. which merged in Kalupur Commercial Cooperative Bank Ltd. from 15.12.2013, is registered under Cooperative Society Act vide No. 2940 dated 21.10.1995 having licence No. SA1198/P, dated 01.01.1996. The person authorized to file the complaint is serving as a Senior Officer in the Bank and was also holding an authority from the Bank.
3.1 While recording the facts of the case, it was noted that the accused was Chairman in the Bank and is the relative of K.N. Mohanan, the proprietor of ‘Rubis’. K.N. Mohanan had received Cash Credit Loan in the capacity of proprietor of ‘Rubis’ from the bank vide Account No. CC-199/2004 and had executed necessary documents in favour of Bank. On 28.02.2011, the amount worth Rs.1,84,79,541/- was due from the said loan account.
3.2 It has further been noted that the present revisionist - accused had agreed to pay the dues and accepted the liabilities and had executed the cheques in favour of the Bank with following details:
| S. No. | Bank | Cheque No. | Date | Amount |
| Cheques of CC No. 19540/2011 | ||||
| 1 | State bank of India, Udhana, Udhyognagar, Surat | 578409 | 4-2-2011 | 25,00,000/- |
| 2 | “ | 578410 | 5-02-2022 | 25,00,000/- |
| 3 | “ | 578411 | 7-02-2011 | 25,00,000/- |
|
|
|
| Total Amount | 75,00,000/- |
| Cheques of CC No. 19541/2011 | ||||
| 1 | State bank of India, Udhana, Udhyognagar, Surat | 578406 | 1-2-2011 | 25,00,000/- |
| 2 | “ | 578407 | 2-02-2011 | 25,00,000/- |
| 3 | “ | 578408 | 3-02-2011 | 25,00,000/- |
|
|
|
| Total Amount | 75,00,000/- |
3.3 The total amount, as noted in Criminal Case No. 19540 of 2011 is Rs.75,00,000/- with three cheques issued on the dates, as noted hereinabove. And in Criminal Case No. 19541 of 2011, the same total amount of Rs.75,00,000/- is the amount stated to be agreed upon to be paid. The complainant deposited the cheques in the Bank, but cam
