Case title:
Roots Production Pvt Ltd vs Aarti Malhotra
Date of Order:
21st September, 2022
Bench:
Hon'ble Mr. Justice Purushaindra Kumar Kaurav
Parties:
Petitioner: Roots Production Private Limited
Respondent: Ms. Aarti Malhotra
SUBJECT:
The high court upheld the order of the Additional Sessions Judge and held that the respondent was not liable under section 138 of NI Act.
IMPORTANT PROVISIONS:
Section 138 of the NI Act- Dishonour of cheque
Section 251 Cr.P.C- Substance of accusation to be stated
OVERVIEW:
- The facts of the case are:
- The petitioner, a private limited firm, asserts that it offers its clients a solid base of seamless and faultless backend operations to guarantee a certain success in every event and activation service.
- The petitioner claims that the respondent ordered stall fabrication work from Ludhiana. The agreed-upon total for the job was Rs. 8,40,000; out of which, a cheque bearing No. 512396, dated Oct. 8, 2014, and drawn on State Bank of India, Anand Vihar, Delhi, claimed to have paid Rs. 3,43,000 out of that total.
- On October 10, 2014, the petitioner received notification from his bank that the aforementioned check was not honoured due to "payment stopped" and was not encashed.
- A legal notice dated 08.11.2014 was issued by the petitioner company. The petitioner company, filed a complaint case against the respondent under Section 138 of the NI Act since no payment was made by the respondent and a reply with a denial of liability was received on December 9, 2014.
- The respondent was found guilty of the offense punishable under Section 138 of the NI Act by the learned Magistrate in a judgment dated August 21, 2020, following the recording of the testimony of the petitioner and the respondent. By separate decision dated January 6, 2021, the respondent was ordered to serve simple imprisonment till rising of the court, and she was also ordered to pay the petitioner Rs. 3,43,000 in compensation within 30 days of the order's date.
- Both the orders were challenged by the respondent before the Additional Sessions Judge in appeal. The appeal preferred by the respondent was allowed and the judgment on conviction and order on sentence was set aside.
ISSUES RAISED:
The issue raised in this judgement is to revise the decision of the Additional Sessions Judge by convicting the respondent along with enhancement of her sentence.
ARGUMENTS ADVANCED BY THE APPELLANT:
- The petitioner's learned counsel claims that the contested order is unlawful and illegitimate and that it was made without knowledge of the established legal precedent.
- According to him, the respondent constantly kept switching up her defense. He further stated that although the respondent claimed that an order had been placed with the revisionist during the recording of the statement under Section 313 of the Criminal Procedure Code, her defense during the filing of an application under Section 145(2) of the NI Act and during cross-examination was that no order had been placed with the revisionist.
- According to him, since no documents were produced with respect to placement of the order, on this ground, the order of conviction and sentence would not have been set aside.
- According to him, Section 138 of the NI Act is essentially a civil wrong, and Section 139 of the NI Act's presumption places the burden of evidence on the accused.
JUDGEMENT ANALYSIS
- The High Court ruled that the conviction and sentencing judgment had been properly set aside by the Appellate Court because it had correctly determined that it was unsustainable.
- The court did not find any merit in the submissions made by learned counsel for the petitioner and therefore, the revision petition was dismissed.
- Regarding the enhancement of sentence, the revision petition for the enhancement of sentence had also been denied for the reasons that the learned Additional Sessions Judge had overturned the conviction and sentence itself, and the Additional Sessions Judge's order had been upheld.
- In light of this, both revision petitions had been denied.
CONCLUSION
The dishonour of cheque is addressed in Section 138 of the Negotiable Instruments Act of 1881. A cheque must be presented to the bank, whichever comes first, within six months of the day it was drawn or during the time of its validity. Dishonour of cheques amounts to a criminal offence in the form of enforcing a civil right. According to Section 138 of the Negotiable Instruments Act of 1881, there is a civil obligation that entails a fine that is twice the amount of the dishonored cheque. When it comes to criminal responsibility, Section 138 carries a sentence of two years in a row, and the drawer is prosecuted in accordance with Sections 417 and 420 of the Indian Penal Code, 1860. The acquired offenses are inherently bailable, compoundable, and non-cognizable.
