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IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR
RAJENDRA KUMAR VANI
Ramesh Kumar Mehra – Appellant
Versus
Anand Malviya – Respondent
ORDER :
RAJENDRA KUMAR VANI, J.
With the consent of learned counsel for the parties, this appeal is heard finally.
2. The present appeal has been filed by the appellant (hereinafter referred to as the 'complainant') under Section 378(4) of Cr.P.C. being aggrieved by th the judgment dated 28.09.2018 passed by the 13 Additional Sssions Judge, Bhopal, District Bhopal in CRA No.381/2018 reversing the judgment dated 11.05.2018 of conviction and sentence passed in RT No.505/2016 by the JMFC, Bhopal, District Bhopal, whereby the respondent (hereinafter referred to as the 'accused') had been convicted under Section 138 of N.I. Act and sentenced to undergo six months RI and to pay Rs.2,40,000/- to the complainant, failing which to undergo further three months RI.
3. The prosecution case, in brief, is that there is a friendly relationship between the complainant and the accused and for his personal needs, the accused had asked for a loan of Rs.2,00,000/- from the complainant. Keeping in view the friendly relationship, the accused gave the amount of Rs.2,00,000/- to the accused on 24.04.2015 as a loan. While giving the said amount, the accused had told the complainant that he would return the sai
(1) Cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance.(2) When a cheque is issued and is treated as ‘security’ ....
The issuance of a cheque signifies a legally enforceable debt under Section 138 of the N.I. Act, and the burden to prove otherwise lies with the accused, not the complainant.
A cheque issued as security does not create criminal liability under Section 138 unless there is a legally enforceable debt at the time of its issuance.
The court emphasized that the determination of whether a cheque was issued for a legally enforceable debt or as security is a factual issue for trial.
The court emphasized that the determination of whether cheques were issued for a legally enforceable debt or as security is a matter for trial, not for quashing proceedings.
The court emphasized that the determination of whether cheques were issued for a legally enforceable debt or as security is a matter for trial, not for quashing proceedings.
A legally enforceable debt must exist at the time of cheque presentation for liability under Section 138 of the N.I. Act to arise.
Cheques issued as security can still be subject to Section 138 if a legally enforceable debt exists at the time of issuance.
Cheques issued in discharge of a lawful liability create a presumption of guilt under Section 138, which the accused must rebut to avoid conviction.
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