The interpretation of Section 56 of the Negotiable Instrument Act must be correctly applied to determine the enforceability of a cheque, especially in light of prior payments.

ORDER :

(S. V. PINTO, J.)

1. The present application is filed by the applicant – original complainant under Section 419(4) of Bharatiya Nagarik Surakhsha Sanhita, 2023 seeking leave to file an appeal against the judgement and order dated 04.12.2024 passed by the learned 18^th Chief Judicial Magistrate, NI Act Court No. 34, Ahmedabad City, (hereinafter referred to as the “learned Trial Court”) in Criminal Case No. 19796/2021, whereby, the learned Trial Court was pleased to acquit the accused from the offence under Section 138 of Negotiable Instrument Act, 1881 (hereinafter referred to “the NI Act” for short).

2. Heard learned advocate Mr. Manish Patel for the applicant and learned APP for the respondent State. When the matter is called out, learned advocate Mr. Arvind Gour for the respondent no. 1 is not present.

3. Learned advocate Mr. Manish Patel for the applicant submits that as per the case of the applicant, the applicant and the respondent no. 1 had financial transactions and on 23.12.2020, an amount of Rs. 5 lakhs was outstanding towards which the cheque no. 000297 dated 28.12.2020 for an amount of Rs. 5 lakhs on the account of respondent no. 1 with Andhra Bank, Ranip Branch, Ahmedabad. The cheque was deposited by the applicant in his account and the same returned unpaid with the endorsement “Payment Stopped by Drawer”. The demand statutory notice was given by the applicant and it was duly served to the respondent no. 1 but the amount remained unpaid and hence, the complaint was filed before the learned Chief Metropolitan Magistrate, Ahmedabad under Section 138 of NI Act. After the respondent no. 1 had appeared and his plea was recorded, the evidence of the applicant was taken on record, wherein, the applicant had also produced the promissory note at Exh. 9 and the cheque at Exh. 10. During the cross- examination by the applicant, it has emerged on record that the amount of RS. 60,000/- was paid by the respondent no. 1 in the year 2019 and the learned Trial Court, after appreciation of the evidence, came to a conclusion that as the amount of Rs. 60,000/- was paid and it was not endorsed on the cheque, the cheque was not a legally enforceable due. Learned advocate submits that it is the case of the applicant that the financial transactions had continued between the parties and on 23.12.2020, when the promissory note and the cheque was drawn, the amount of Rs. 5 lakhs was the legally enforceable due. That after this date, no amount has been paid by the respondent no. 1 and the learned Trial Court has erroneously interpreted Section 56 of the NI Act. That the applicant has a good case on merits and learned advocate submits that leave to appeal is required to be granted.

4. Learned APP Ms. Dhwani Tripathi for the respondent State has submitted that the learned Trial Court has considered all the documents produced by the applicant and has also considered the evidence and has passed the impugned order of acquittal considering the settled principles of law and hence, the leave to appeal may not be granted.

5. Considering the submissions of learned advocate for the applicant, prima facie, it appears that the ingredients of Section 56 of the NI Act has not been properly interpreted by the learned Trial Court and the application requires consideration.

6. In the peculiar facts and circumstances of the case in the considered opinion of this Court the application deserves to be considered. Consequently, the application for leave to appeal is granted and disposed off accordingly.