Point of Law: It is a settled position of law that cheque given as “security” can be enforced under law on failure to make payment of amount borrowed.

JUDGMENT :

Heard Mr. S. Nawaz, learned counsel for the petitioner. Also heard Mr. K. Bhattacharjee, learned counsel for the respondent.

2. The respondent as complainant filed a complaint case under Section 138 of Negotiable Instrument Act (hereinafter referred to as “N.I. Act”) against the petitioner in connection with dishonour of Cheque bearing No.084407 dated 06.07.2017. The learned Trial Court vide judgment dated 20.01.2021 convicted the petitioner under Section 138 of N.I. Act and sentenced him to undergo 1 (one) year rigorous imprisonment and to pay Rs.38,00,000/-(Rupees thirty eight lakh) as compensation, in default of payment of compensation to undergo simple imprisonment for another 2 (two) months.

3. The petitioner preferred an appeal against his conviction and sentence. However, vide judgment dated 12.08.2022, the learned Additional Sessions Judge No.2, Kamrup(M) confirmed the judgment of conviction. The learned First Appellate Court modified the sentence to 6 (six) months rigorous imprisonment instead of one year as imposed by the learned Trial Court. The quantum of compensation would remain as.

4. The case of the petitioner is that in the year 2015 the petitioner hired one JCB and 2 numbers of dumpers from the respondent. The rate of fare for the JCB was Rs.700/-per hour and the rate of fare for each dumber was Rs.500/- per hour. In this regard, the petitioner paid the respondent Rs.1,00,000/-as advance. An agreement was executed accordingly. Around 1½ years later, the respondent executed another agreement with the petitioner. The petitioner trusting the word of the respondent for it’s contents, signed the agreement. In 2016, the respondent claimed that there had been some discrepancies in the payment. According to the petitioner, he had been making the payment regularly. The respondent asked the petitioner to make further payments by way of cheque. The petitioner accordingly obtained a Cheque Book for doing so. A few days later, the respondent told the petitioner that his brick business had shut down and he was facing financial woes. On the request of the respondent, the petitioner gave him 5 signed blank cheques to use as collateral. Thereafter in the year 2017, the petitioner on account of ill health and financial crises decided to return the vehicles which he received earlier. The petitioner asked the respondent for his account book so that he could clear his pending dues. As per the petitioner, the total fare had come to Rs.51,92,845/-out of which he had already paid around Rs.50,74,000/-. After making necessary adjustments, the balance came to Rs.1,18,202/-. The petitioner asked the respondent to deduct the advance payment of Rs.1,00,000/-from the balance amount and receive Rs.18,202/- from him.

5. It is further stated that the respondent kept in delaying the receipt of the payment. On the contrary, the respondent filed an FIR against the petitioner. The respondent also deposited one of the cheques i.e. Cheque No.084407 for encashment by filling it up by himself. The cheque got dishonoured on account of insufficiency of funds. Realising the ill motive of the respondent, the petitioner filed an FIR against the respondent for misusing his cheques. The said FIR was registered as Kachua P.S. Case No.229/2017 under Sections 420/406 IPC. The petitioner also wrote to his Bank Manager to stop payment what he had given to the respondent. But in the meantime, the respondent filed the complaint against the petitioner under Section 138 of N.I. Act.

6. The learned counsel for the petitioner has argued that the learned Trial Court and the First Appellant Court failed to appreciate the fact that the petitioner had no subsisting debt or liability against the respondent, who misused a cheque issued to him by the petitioner. The fact that no debt or liability is existed at the time of submission of the cheque was manifest from the evidence on record. It is also submitted that the cheque was dishonestly filled up by the respondent a