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HIGH COURT OF GUJARAT
MS. JUSTICE S.V. PINTO, J
GUJARAT STATE CO OP. AGRICULTURE AND RURAL DEVELOPMENT BANK LTD THRO RATANSINH CHANDANSINH VAGHELA – Appellant
Versus
STATE OF GUJARAT – Respondent
R/CRIMINAL MISC.APPLICATION (FOR LEAVE TO APPEAL)NO. 4919 of 2025 In F/CRIMINAL APPEAL NO. 40645 of 2024
(A) Negotiable Instruments Act, 1881 - Section 138 - Loan default - The applicant, a bank, filed a complaint against the respondent for cheque dishonor due to 'no such account' after a loan was not repaid. The trial court acquitted the respondent, citing a discrepancy in the notice regarding the cheque's return reason. (Paras 2-4)
(B) Acquittal - The court noted that the respondent did not challenge the loan aspect, indicating a need for further review of the case. (Paras 2-4)
Facts of the case:
The applicant bank provided a loan to the respondent, who issued a cheque that was returned unpaid. A statutory notice was sent, but the trial court acquitted the respondent due to incorrect information in the notice.
Findings of Court:
The court found that the loan was not contested by the respondent, warranting a reevaluation of the acquittal.
Issues: The main issue was whether the discrepancy in the notice regarding the cheque's return justified the acquittal.
Ratio Decidendi: The court reasoned that the lack of challenge to the loan by the respondent necessitated reconsideration of the trial court's judgment.
Result: Application allowed.
ORDER :
(S. V. PINTO, J.)
1. Heard learned advocate Mr.Amit Joshi for the applicant and learned APP Ms. Dhwani Tripathi for the respondent – State.
2. Learned advocate Mr.Amit Joshi for the applicant states that the applicant – Gujarat State Cooperative Agriculture and Rural Development Bank Ltd., Junagadh had given a loan to the respondent No.2 and the loan was not paid up by the respondent No.2, towards which, cheque No.974725 dated 02.05.2016 for an amount of Rs.5,92,005/- from his account with the Bank of Baroda, Veraval Branch was given. On depositing the said cheque, it was returned unpaid with the endorsement “no such account”. Thereafter, the applicant has given a demand statutory notice to the respondent No.2 but the respondent No.2 did not give reply to the said notice, and hence, the complaint under Section 138 of the N.I.Act was filed by the applicant before the learned Additional Chief Judicial Magistrate, Vadodara. The respondent No.2 appeared and plea was recorded and the evidence of the applicant including 8 documentary evidence was produced and the learned Trial Court, by the impugned judgment and order, was pleased to acquit the respondent No.2 mainly on the ground that in the demand statutory notice, the applicant has mentioned that the cheque was returned with the endorsement “Insufficient Funds”, when, in fact, the return memo was returned with the endorsement ‘no such account”. Learned advocate for the applicant further submits that because of genuine and bonafide mistake, the cheque was sent back with such endorsement, and therefore, he urges this Court to allow the present application.
3. Learned APP Ms.Dhwani Tripathi for the respondent –State submits that the impugned judgment and order is just and proper and no interference of this Court is required and therefore, the present application may be rejected.
4. Considering the submissions made by learned advocate Mr.Amit Joshi for the applicant and perusing the impugned judgment and order, prima facie, it appears that the aspect of loan was not challenged by the respondent No.2 and hence, the matter requires consideration and accordingly, is allowed.
The discrepancy in the statutory notice regarding cheque dishonor does not negate the loan's existence, and acquittal requires reevaluation when the loan is unchallenged.
A cheque returned with the endorsement 'account closed' constitutes dishonour under Section 138 of the N.I. Act, and the statutory presumption of liability under Section 139 applies unless rebutted b....
The court emphasized the necessity for proper evaluation of evidence in cases involving acquittal under the Negotiable Instrument Act.
A demand notice under the relevant Act must contain essential particulars, including the cheque number and correct date, to be legally valid. Failure to include these details renders the notice insuf....
Cheques post-bank merger returned 'Funds Insufficient' attract Section 146 presumption; validity expiry defence triable at trial, not quashable under Section 482 CrPC despite potential non-compliance....
The legal notice under section 138 of the N.I. Act serves the purpose of intimating the drawer about the liability to remit the amount, and a literal interpretation of the law should be avoided to pr....
Under Section 138 of the Negotiable Instruments Act, only the drawer of a cheque can be prosecuted; improper notice destroys maintainability.
The dishonour of a cheque due to 'Account Closed' falls within the parameters of Section 138 of the N.I. Act, and the presumption under Section 139 applies.
Proper service of notice under Section 138 is crucial, but if sent to the last known address, it is deemed sufficient, maintaining the presumption in favor of the complainant.
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