A cheque issued in relation to an illegal transaction does not constitute a legally enforceable debt under Section 138 of the Negotiable Instruments Act.

Versus o Mohan Singh Thakur ...Respondent Coram Hon’ble Mr Justice Rakesh Kainthla, Judge.

Whether approved for reporting?¹ No.

For the PetitioneCr : Mr. Sudhir Thakur, Senior Advocate, with Mr. Karun Negi, Advocate.

For the Rhespondent : M/s. Amrik Singh & Hitesh Kumar, Advocates.

Rakesh Kainthla, Judge The present appeal is directed against the judgment dated 20.04.2018, passed by learned Sessions Judge, Kinnaur, Session Division at Rampur Bushahr Camp at Reckong Peo, H.P. (learned Appellate Court), vide which the judgment of conviction and order of sentence dated 24.06.2017 passed by learned Chief Judicial Magistrate Kinnaur, at Reckongpeo (learned Trial Court) were set aside and the accused was

1 Whether reporters of Local Papers may be allowed to see the judgment? Yes.

acquitted of the commission of an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (NI Act). (Parties shall hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for convenience.)

2. Briefly stated, the facts giving rise to the present appeal are that the complainant filed a complaint before the learned Trial Court against the accused for the commission of an offence punishable under Section 138 of the NI Act. It was asserted that the complainant is an Agriculturalist and a Registered Government Contractor. Accused promised the complaina nt to get the contract work of construction in Tarni Hydro Pvt. Ltd in the year 2014. Accused demanded a sum of ₹15,00,000/- from the complainant for this purpose. The complainant paid the amount to the accused in instalments. The accused failed to obtain the work. He issued two cheques i.e., one amounting to ₹10,00,000/- and another amounting to ₹5,00,000/- to return the amount. The complainant presented the cheque of ₹5,00,000/- to his bank; however, the cheque was returned with the remark “insufÏcient funds”. The complainant served a notice upon the accused asking him to repay the amount within 15 days from the date of receipt of the notice. The notice was duly served upon the accused, but the accused failed to repay the money. Hence, the complaint was filed before the learned Trial Court to take action as per law.

3. The learned Trial Court found sufÏcient reasons to summon the accused. When the accused appeared before the learned Trial Court, a notice of accusation was put to him for the commission of an offence punishable under Section 138 of the NI Act, to which he pleaded not guilty and claimed to be tried.

4. The complainant examined himself (CW1) to prove his case.

5. hThe accused, in his statement recorded under Section 313g of Cr.P.C., stated that the cheque was issued as security. He iadmitted that the notice was served upon him and claimed that he had sent a reply to the notice. He stated that he was innocent and was falsely implicated. He was not liable to repay any amount to the complainant. He did not choose to lead any defence evidence.

6. Learned Trial Court held that the issuance of the cheque was not disputed. The accused claimed that the cheque was issued as a security, but mere issuance of a cheque as security will not absolve the accused of the commission of crime. The accused did not prove that the contract was awarded to the complainant as promised by him. Accused was a Technical Advisor and had nothing to do with the process of the award of the tender. He misled the complainant by using his ofÏcial position and assured the complainant that the work would be awarded to him. He obtained ₹15,00,000/- from the complainant for this purpouse. Since the work was not awarded to the complainant, theroefore, the accused was liable to return the amount of ₹15,C00,000/-. The cheque was dishonoured with endorsement “insufÏcient fu