Section 138 Of The NI Act – Cheque Bounce Case Judgement

Cheque Bounce Case
Cheque Bounce

Cheque Bounce Case – Signature Dispute

An Undisputed Signature Alone Cannot Lead To Conviction Under Section 138 Of The NI Act – Excellent Cheque Bounce Case Judgement By The Punjab & Haryana High Court

Parveen Mehta Versus Vishal Joshi – Punjab and Haryana High Court

Cheque Bounce Case Complaint

A check for Rs.85,000/- was written and then returned with “insufficient funds” written on it. Under Section 138 of the Negotiable Instruments Act of 1881, the complaint was filed. A legal notice was disseminated.

The cheque was issued only as security and repaid – Respondent’s Defense

The respondent argued that the security cheque was misused. According to the respondent, he only borrowed Rs.5,000/- from the complainant and repaid it within the prescribed time frame. However, despite repeated requests, the complainant did not return the check. Later, he was shocked to discover a court summons for Rs. 85,000/- and a complaint against the respondent.

Income Tax Returns of the Complainant as defense evidence

The respondent relied upon the testimony of an official of the Income-tax Department and the income-tax returns filed by the complainant. Further evidence was adduced to show that the complainant was acting as a money lender. He filed a number of complaints under Section 138 of the Act by misusing security checks. If the amounts lent by him on the loan are compared with his income-tax returns, the loan amount was much higher.

Acquittal of Respondent in Cheque Bounce Case by the Trial Court

According to the trial court, the respondent’s argument was convincing, and the complainant couldn’t prove his case. The trial court also found the respondent not guilty because it is clear that the respondent signed the check.

Appeal against the Trial Court’s Order by the Complainant

In the High Court Appeal, the complainant said that there is no question that the respondent signed the check. Section 138 of the Act says that it is not part of the process to figure out how much money the complainant has. He went to a higher court to challenge the decision of the lower court. According to him, the respondent should have been held accountable for failing to pay off his debt by cashing the check given to him.

The appeal was dismissed by the High Court

The High Court ruled that the applicant’s arguments don’t warrant an appeal. The trial court has not determined the financial capability of the petitioner for lending the loan. The respondent provided evidence to support his claim that the security deposit check was misused and that he repaid Rs. 5,000.
The undisputed signatures of the respondent on the cheque are not sufficient for conviction under Section 138 of the Act. Section 138 of the Act requires that the cheque be issued for debt or other liability. The respondent rebutted the Section 139 presumptions against him, and the appellant failed to meet his burden. The view taken by the trial court is a plausible view.
Legal Disclaimer: The information contained in this blog post is for general information and educational purposes only. Nothing contained in this blog post should be construed as legal advice from The Aran Law Firm or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter.
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