HON'BLE SRI JUSTICE N.R.L. NAGESWARA RAO
CRIMINAL APPEAL No.1694 of 2005
20.3.2012
Dasari Venkateswarlu
1. State of A.P., through its Public Prosecutor,High court of Andhra Pradesh,
Hyderabad & another.
Counsel for the appellant: Sri V. Parabrahma Sastri
Counsel for respondent No.1: Public Prosecutor
Counsel for respondent No.2: Sri K. Giridhar Raju, State Brief Legal Aid Counsel
? Cases referred:
1. AIR 1999 SC 1952
2. 2004 (2) ALD (Crl.) 54
3. 2004 Cri.L.J 3628
4. 1999 (3) ALD 719
JUDGMENT:
The appeal is filed against acquittal of the accused in Criminal Appeal
No.204 of 2002 by I Additional District and Sessions Judge, Ongole, setting
aside the conviction and sentence imposed by II Additional Judicial Magistrate
of First Class, Ongole, in C.C. No.195 of 2002.
2. A complaint under Section 138 of Negotiable Instruments Act (for short
'the Act') has been filed on the ground that the accused has borrowed a sum of
Rs.90,000/- from the complainant on 11.11.2000 and subsequently towards
discharge of the debt he has given cheque dated 02nd April 2002 which was
presented and it was dishonoured, as the account said to have been closed even
prior to the issue of the cheque. The court below, after conducting trial, has
accepted the prosecution case and convicted the accused for the offence under
Section 138 of the Act and sentenced him to undergo simple imprisonment for a
period of one year and to pay a compensation of Rs.1,20,000/-. As against that
judgment, the appellate court having accepted that the cheque was issued for a
legally enforceable liability as on the date of issue of the cheque, however,
found that the offence under Section 138 of the Act is not made out, as the
cheque was issued after closure of the account by the accused. Aggrieved by the
said judgment, the present appeal is filed.
3. The point for consideration is whether the acquittal of the accused
recorded by the court below is legal and sustainable?
4. Point:
Since the accused was avoiding to take summons, Sri K. Giridhar Raju,
advocate, is appointed as State Brief and legal aid counsel to represent on
behalf of the accused.
5. As can be seen from the record and findings of both the courts, the cheque
was issued for a legally enforceable liability. It is also not in dispute that
the cheque was dishonoured and the cheque was said to have been issued after
closure of the account. Though the counsel for the appellant relied on the
decision in N.E.P.C. Micon Limited V. Magma Leasing Limited1 whereunder the Apex
Court has held that an offence under Section 138 of the Act is made out even if
the account is closed after issuing of the cheque and it is dishonoured would
attract the punishment, but however the learned Sessions Judge relied upon
another judgment of Gujarat High Court in Urban Co-Operative Credit Society,
Borsad V. State of Gujarat2 wherein a distinction is drawn about issuing of a
cheque after closure of the account and closure of the account after issue of
the cheque. The learned Judge found that in this case the cheque was issued
after closure of the account and therefore following the reasoning of the
Gujarat High Court acquitted the accused.
6. The judgment of the Gujarat High Court was subsequently considered in
another decision in Hashmikant M. Sheth V. State of Gujarat and another3 and
held that dishonour of cheque which was issued after closure of the account
maintained by the drawer amounts to an offence under Section 138 of Negotiable
Instruments Act and the decision which was relied on by the court below of the
Gujarat High Court was held to be per incuriam.
7. The learned counsel for the appellant has relied upon the judgment of our
own High Court in G. Venkataramanaiah V. Sillakollu Venkateswarlu and another4
wherein it has been categorically held that where an account if closed after a
cheque is given or account is closed before the cheque is given, one can safely
say that, although it has been returned on account of closure of account but it
would in effect mean insufficiency of funds in the account of the person who
gave the cheque. Consequently the Court held that an offence under Section 138
of the Act has been made out and it was also found that a dishonest person would
resort to such types of tactics to avoid liabilities.
8. When the judgment of our own High Court lays down the correct law, it is
not permissible for the learned Sessions Judge to have relied upon the judgment
of the Gujarat High Court and acquitting the accused. Therefore, the judgment
of the appellate court is set aside and the accused is found guilty of the
offence under Section 138 of the Act and is accordingly convicted under Section
255 (2) Cr.P.C. The accused is sentenced to pay a fine of Rs.2.00 lakhs (Rupees
two lakhs only) out of which Rs.1,90,000/- (Rupees one lakh ninety thousand
only) shall be paid as compensation to the appellant. In default of payment of
fine within three months, accused to suffer rigorous imprisonment for one year.
The lower court is directed to take necessary steps.
9. Accordingly the criminal appeal is allowed. The fee of Legal Aid counsel
is Rs.1,500/- to be paid by the Legal Services Authority.
_____________________________
N.R.L. NAGESWARA RAO, J.
Date: March 20, 2012.
