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PUNJAB & HARYANA HIGH COURT
Mehinder Singh Sullar, J.
Narsi Dass - Appellant
Versus
Surender - Respondent
C.R.A. No. A-1101-MA of 2014
Decided On : 13-11-2014
NI Act - Negotiable Instruments Act - 138 - The Indian Evidence Act, 1872 - Bahi entries are not the instruments of advancement of loan like pronote, bonds or Bill of exchange etc., which can legally be enforced, as recognized in the NI Act. Such entries are only relevant u/s. 34 of The Indian Evidence Act, 1872, that too, in case, the same were kept regularly in the course of business. At the same time, such Bahi entries must be kept in conformity with some known system of accountancy, either in the official language or customary language well known to the parties and not otherwise. Where the books produced in a case are merely ledgers, these are not supported by any daybook or roznama, do not contain entries of transactions and there is no daily opening or closing balance, the same are meaningless. Therefore, such Bahi entries cannot and indeed should not be taken to be account book regularly kept in the course of business, as provided u/s. 34 of The Indian Evidence Act, in view of ratio of law laid down by the Assam High Court in case Chandi Ram Deka v. Jamini Kanta Deka, 1952 AIR (Assam) 92 and Orissa High Court in case Hira Meher and another v. Birbal Prasad Agarwala, 1958 AIR (Orissa) 4 and are not at all legally enforceable. Not only that, it is now well settled principle of law that an entry in the Bahi Khata merely is an admission by its maker in his own favour and it is only admissible in evidence if it is accepted by the opposite side (loanee) and not otherwise, which is entirely missing in the instant case. Such entries shall alone be not sufficient to charge any person with liability, in view of ratio of law laid by Hon'ble Apex Court in case Chandradhar Goswami v. Gauhati Bank Ltd., AIR 1967 Supreme Court 1058 and Rajasthan High Court in case Pit Ram Singh v. Vimla Devi, 1992 (2) R.C.R. (Rent) 606 : 1992 AIR (Raj.) 149. Moreover, it is a matter of very common knowledge that commission agents used to obtain such blank/undated cheques from the Farmers as a security in good faith, not in lieu of any legal liability, to which, the court can take judicial notice of it. Therefore, once it is ruled that such Bahi entries are not negotiable instruments of advancement of loan, such as, pro note, bonds and Bill of exchange etc., which can legally be enforceable, as contemplated by the NI Act, not alone sufficient to charge any person with liability and such cheques were issued as a security of the loan amount, then, the complainant was debarred from filing the complaint u/s. 138 of the NI Act against the respondent. The Punjab Registration of Money-lender's Act, 1938 - The Moneylender's Act - Section 3 - Section 4(2) - A conjoint and meaningful reading of the indicated provisions of social and beneficial legislation, would reveal that the complainant was only competent to advance agricultural loan if he holds the pointed valid licence/registration certificate. Having a money lender's license is a condition precedent to advance the loan to the Farmers. The advancement of loan by the complainant to the respondent without any valid licence is not only illegal, but, at the same time, he can be prosecuted u/s. 4 of the Moneylender's Act as well. In case a cheque is issued for time barred debt and it is dishonoured, then, it cannot be termed to have been issued, in lieu of legal enforceable liability/debt within the meaning of section 138 of the NI Act. Therefore, on the same analogy, once it is proved and the entire facts that the alleged Bahi entries are not negotiable instruments, which can be enforced, not alone sufficient to charge any person with liability, sequelae, the complainant was legally debarred to recover the alleged loan, as envisaged under the indicated provisions of the Money lender's Act and in view of such legal disabilities attached to the complaint, as discussed here-in-above, are put together, then, in that eventuality, to my mind, the conclusion is irresistible and inescapable that he (complainant) cannot adhere to initiate the criminal prosecution against the respondent within the meaning and in the garb of complaint u/s. 138 of the NI Act. Hence, the trial Court has correctly acquitted the respondent, by way of impugned judgment of acquittal dated 4.6.2014
Fact of the Case:
The complainant, a commission agent, filed a criminal complaint against the respondent, a farmer, for dishonoring a cheque issued in discharge of a loan. The trial court acquitted the respondent, leading to the present petition for leave to appeal.
Finding of the Court:
The court found that the complainant failed to provide sufficient evidence to support the complaint and that the complainant's actions were legally debarred due to the absence of a valid money lender's license.
Issues: The issues revolved around the enforceability of Bahi entries as instruments of loan advancement, the legal requirements for advancing agricultural loans, and the implications of issuing a cheque for a time-barred debt.
Ratio Decidendi: The court held that Bahi entries are not legally enforceable instruments of loan advancement and that the complainant's actions were legally debarred due to the absence of a valid money lender's license. Additionally, issuing a cheque for a time-barred debt does not constitute a legally enforceable liability under section 138 of the NI Act.
Final Decision: The court dismissed the petition for leave to appeal, maintaining the judgment of acquittal due to the absence of substantial and compelling reasons to disturb the trial court's decision.
1. The matrix of the facts & evidence, unfolded during the course of trial, which needs a necessary mention for the limited purpose of deciding the core controversy, involved in the instant petition for leave to appeal and emanating from the record, is that initially, petitioner-complainant Narsi Dass s/o. Kartar Singh (for brevity "the complainant"), who was running a shop of commission agent, styled as M/s. Ompal Satish Kumar, has instituted a criminal complaint, in which, respondent Surender s/o. Chanda Ram was summoned to face the trial for the commission of an offence punishable u/s. 138 of the Negotiable Instruments Act, 1881 (hereinafter to be referred as "the NI Act") by the trial Court. The case set up by the complainant, in brief in so far as relevant, was that the respondent was a Farmer at the relevant time. He used to borrow money from him for agricultural purpose with an understanding that he would repay the amount of loan along with interest at the rate of 24% per annum. At the same time, he had promised to sell his agricultural produce at the shop of complainant. Subsequently, he stopped doing so in the year 2010. Thereafter, the complainant requested the respondent to repay the amount borrowed by him along with interest. Instead of paying the loan amount, he had issued impugned cheque dated 16.5.2011 for ` 1,50,000/- drawn at Oriental Bank of Commerce, Nissing in his (complainant's) favour in discharge of part of his liability. The cheque was presented for encashment, but it was returned unpaid with the remarks "Insufficient Funds", vide memo dated 17.5.2011 by the bank. Thereafter, the statutory legal notice dated 23.5.2011 was served upon the respondent, by virtue of which, he was called upon to make the payment of the amount of impugned cheque within a stipulated period, but in vain. Then, the complainant filed a criminal complaint against the respondent in the manner depicted here-in-above.
2. Having completed the codal/statutory procedure of the trial and after closing the evidence by the complainant, the statement of the respondent was recorded. The entire incriminating material/evidence was put to enable him to explain any circumstance appearing against him on the record, as contemplated under section 313 Cr.P.C. He has stoutly denied the entire evidence of complainant in its totality and termed the pointed complaint as false.
3. Likewise, considering the entire oral as well as documentary evidence brought on record, the trial Court dismissed the complaint of complainant and acquitted the respondent from the indicated offence, by way of impugned judgment of acquittal dated 4.6.2014.
4. Aggrieved thereby, the complainant has preferred the present petition for leave to appeal to challenge the impugned judgment of acquittal, invoking the provisions of section 378(4) Cr.P.C. That is how I am seized of the matter.
5. Having heard the learned counsel for the petitioner, having gone through the evidence on record with his valuable assistance and after bestowal of thoughts over the entire matter, to my mind, there is no merit in the instant petition in this context.
6. At the very outset, it may be added here that the jurisdiction of the appellate Court in case of acquittal, was determined by the Hon'ble Apex Court in a celebrated judgment of Ghurey Lal v. State of U.P. 2008 (10) SCC 450. Having considering the scope of sections 378, 386Cr.P.C. and a line of various judgments on the point, it was ruled as under (Para 75):-
"75. In light of the above, the High Court and other appellate courts should follow the well settled principles crystallized by number of judgments if it is going to overrule or otherwise disturb the trial court's acquittal:
1. The appellate court may only overrule or otherwise disturb the trial court's acquittal if it has "very substantial and compelling reasons" for doing so.
A number of instances arise in which the appellate court would have "very substantial and compellin
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