Case Law Details
Dashrathbhai Trikambhai Patel Vs Hitesh Mahendrabhai Patel & Anr. (Supreme Court of India)
Conclusion: In present facts of the case, the Hon’ble Supreme Court while dismissing the appeals held that the offence under Section 138 of the Negotiable Instruments Act 1881 would not be committed if the drawer of the cheque pays a part or whole of the sum between the period when the cheque is drawn and when it is encashed upon maturity, then the legally enforceable debt on the date of maturity would not be the sum represented on the cheque; and when a part or whole of the sum represented on the cheque is paid by the drawer of the cheque, it must be endorsed on the cheque as prescribed in Section 56 of the Act. If the cheque that is endorsed is dishonoured when it is sought to be encashed upon maturity, then the offence under Section 138 will stand attracted;
Facts: In present case, the appeal arises from a Judgment dated 12 January 2022 of the High Court of Gujarat, wherein the High Court dismissed an appeal against the judgment of the Additional Chief Judicial Magistrate by which the first respondent was acquitted of the offence under Section 138 of the Negotiable Instruments Act 1881. The main issue to be considered was whether the offence under Section 138 of the NI Act would deem to be committed if the cheque that is dishonoured does not represent the enforceable debt at the time of encashment.
In present facts of the case, on 10 April 2014, the appellant issued a statutory notice under Section 138 of the Act to the first respondent-accused. It was alleged that the first respondent borrowed a sum of Rs. 20,00,000/- from the appellant on 16 January 2012 and to discharge the liability, issued a cheque dated 17 March 2014. It was further alleged that the cheque when presented on 2 April 2014 was dishonoured due to insufficient funds. The appellant issued the notice calling the first respondent to pay the legally enforceable debt of Rs. 20,00,000.
The Trial Court acquitted the first respondent on the ground that the first respondent paid the appellant a sum of Rs. 4,09,3015/- between 08.04.2012 and 30.12.2013 partly discharging his liability in respect of the debt of Rs. 20,00,000/-. And it was observed that the appellant has failed to prove that he was owed a legally enforceable debt of rupees twenty lakhs.
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