The Bombay High Court on 15/11/2019 dismissed a criminal appeal filed against the verdict supplied by the trial court. The verdict pronounced that the accused was acquitted of the charges levied upon him under the provisions of Section 138 of Negotiable Instruments Act 1881.
The appellant had moved the court on grounds that the accused had dishonoured a cheque issued by him in favour of the appellant. The appellant claimed that the accused had paid the cheque in favour of an outstanding liability for the purchase of grapes. While the accused did not deny that, he stated that the cheque was simply a security amount and that the amount outstanding had already been met out in three separate installments. The trial court found that the accused was not guilty and hence acquitted him. This aggrieved the appellant and filed an instant appeal.
The Bombay High Court stated that “if the cheque is issued only as security for performance of a certain contract or an agreement and not towards the discharge of any debt or other liability, offence punishable under Section 138 is not made out.” It is a well settled law that the most important provision for this punishable offence under Section 138 is that the cheque forwarded must be made with the intent to pay for or a part of the outstanding amount in earnest. Hence if the cheque was not issued for the clearance of any debt, the aforementioned section could not be invoked.
The Court also noted that the in the instant case, the appellant under cross examination accepted the fact that the cheque was issued only for guarantee. taking note of the already established course of law for this aforementioned Section, the Court held that since the cheque was not granted for the settlement of any due, the law had no hold upon the accused and acquitted him. The Court also reproached the fact that the appellant had been trying to tamper with the true facts of the case and said that if the case was based on falsehood, the person did not have any right to approach the court. Based on these grounds, the Court dismissed the instant appeal.