1 2025:CGHC:42426 AFR HIGH COURT OF CHHATTISGARH AT BILASPUR ACQA No. 33 of 2019 Shoaib Khan S/o Mehraj Khan, Aged About 28 Years R/o Sidhi Vinayak Nagar, Ghuru Road, Tifra, Tahsil And District Bilaspur Chhattisgarh … Appellant (s) versus Vishal Sangram S/o Late Laju Sangram, Aged About 27 Years, R/o A/229, SECL, Vasant Vihar Colony, Thana Sarkanda, District : Bilaspur, Chhattisgarh ... Respondent(s) For Appellant : Ms. Priyanka Rai, Advocate : Hon'ble Shri Justice Deepak Kumar Tiwari Judgment On Board 21/08/2025 1. This Acquittal Appeal has been filed against the judgment dated 20.3.2018 passed by the Fourth Additional Sessions Judge, SHYNA AJAY Digitally signed by SHYNA AJAY DN: cn=SHYNA AJAY, o=PERSONAL, st=Chhattisgarh, c=IN 2 Bilaspur (CG) in Criminal Appeal No.99/2017, reversing the judgment dated 30.6.2017 passed by the Judicial Magistrate First Class (JMFC), Bilha District Bilaspur, in Complaint Case No.698/15 was set-aside, whereby, the respondent/accused has been convicted under Section 138 of the Negotiable Instruments Act, 1881 (in short “the Act, 1881”) and sentenced to undergo three months’ simple imprisonment along with a compensation of Rs.1,50,000/-. In default of payment of compensation, the respondent was directed to undergo an additional imprisonment of 15 days. By the impugned judgment, the respondents/accused has been acquitted from the said charge. 2. Brief facts, as per the complaint, are that the respondent/complainant filed Complaint Case No.698/2015 on 3.11.2015, making averments inter alia that the complainant and the respondent/accused had been acquainted with each other for several years. On 2.10.2014, the respondent/accused borrowed a cash loan of Rs.1,50,000/- from the complainant for the medical treatment of his mother and promised to repay the same on an earlier date. For repayment of the aforesaid money, the respondent/accused issued two cheques: Cheque dated 12.10.2015 for Rs.75,000/- (Ex.P/1) and Cheque dated 14.10.2015 for Rs.75,000/- (Ex.P/2). When the said cheques were presented for encashment, they were dishonoured, as communicated by the Bank Return Memo (Ex.P/3). Thereafter, a legal notice dated 14.10.2015 (Ex.P/4) was sent to the respondent by the registered post at about 15:27 hours vide the postal receipt 3 (Ex.P/5). The respondent/accused sent a reply dated 23.10.2015 (Ex.P/6). However, when the payment of the cheque(s) amount was not made, the present complaint was filed. 3. During trial, the respondent/accused abjured his guilt and claimed to be tried. In order to prove his case, the appellant has examined himself and exhibited 6 documents vide Ex.P/1 to Ex.P/6. In his statement recorded under Section 313 of the Cr.PC, the respondent/accused stated that he had been falsely implicated, asserting that the cheque book had been lost and regarding the same, he had informed Police Station Sarkanda and the Branch Manager, SBI, SECL Branch, Bilaspur. In support of this claim, a copy of the acknowledgment has also been annexed. 4. The respondent/accused examined himself as DW-1 and his mother Kamla Bai Sangram (DW-2). The respondent/accused has stated that he was not acquainted with the complainant, had no financial transactions with him and had never borrowed any money from him. Mother of the respondent/accused namely Kamla Bai Sangram (DW-2) also deposed that she has never suffered any serious ailment and being a pensioner of the SECL establishment, she is provided free treatment at a premier institution i.e. Apollo Hospitals, Bilaspur and in support thereof, documents Ex.D/1 to D/5 were filed. 5. The trial Court after appreciation of evidence, convicted the respondent/accused, against which, he has preferred an appeal, which has been allowed by the impugned judgment. Hence, this Appeal. 4 6. Learned counsel for the appellant would submit that the Appellate Court has not appreciated the evidence in its proper perspective, whereas, the trial Court has assigned cogent reasons in support of its judgment. He would further submit that the cheques were drawn from the personal account of the respondent/accused. He would also submit that the cheques were dishonoured not only due to insufficiency of funds but also due to an alteration, which required authentication by the drawer, as mentioned in the Bank Memo (Ex.P/3). She would submit that there is a legal presumption under Sections 118 and 139 of the Act, 1881. She would also submit that the Appellate Court relied on the judgment rendered in the matter of Raj Kumar Shukla Vs. Subodh Agrahari1, wherein the Hon’ble Madhya Pradesh High Court relied on the decision rendered in the matter of Vinod Tanna and another Vs. Zaher Siddiqui and others 2 and in that case as well, the drawer’s signature was incomplete. She would submit that the decision rendered in Vinod Tanna (supra) was further explained in the judgment rendered in the matter of Laxmi Dyechem Vs. State of Gujarat and others3, wherein the Supreme Court explicitly held that at the time of presentation of the cheque, dishonour due to insufficiency of funds is a genus and dishonour for reasons such as “as account Closed”, “payment stopped”, “referred to the drawer”, “signatures do not match” or 1. 2010(1) MPLJ 179 2. (2002) 7 SCC 541 3. (2012) 13 SCC 375 5 “image is not found”, are only species of that genus. She would refer to paragraph 16 of the above judgment, which reads as under : 16. The above line of decisions leaves no room for holding that the two contingencies envisaged under Section 138 of the Act must be interpreted strictly or literally. We find ourselves in respectful agreement with the decision in Magna case (NEPC Micon Ltd. vs. Magma Leasing Ltd, (1994) 4 SCC 253) that the expression “amount of money …………. is insufficient” appearing in Section 138 of the Act is a genus and dishonour for reasons such “as account closed”, “payment stopped”, “referred to the drawer” are only species of that genus. Just as dishonour of a cheque on the ground that the account has been closed is a dishonour falling in the first contingency referred to in Section 138, so also dishonour on the ground that the “signatures do not match” or that the “image is not found”, which too implies that the specimen signatures do not match the signatures on the cheque would constitute a dishonour within the meaning of Section 138 of the Act: 16.1 This Court has in the decisions referred to above taken note of situations and contingencies arising out of deliberate acts of omission or commission on the part of the drawers of the cheques which would inevitably result in the dishonour of the cheque issued by them. For instance, this Court has held that if after issue of the cheque the drawer closes the account it must be presumed that the amount in the account was nil hence insufficient to meet the demand of the cheque. A similar result can be brought about by the drawer changing his specimen signature given to the bank or in the case of a company by the company changing the mandate of those authorised to sign the cheques on its behalf. Such changes or alteration in the mandate may be dishonest or fraudulent and that would inevitably result in dishonour of all cheques signed by the previously authorised signatories. There is in our view no qualitative difference between a situation where 6 the dishonour takes place on account of the substitution by a new set of authorised signatories resulting in the dishonour of the cheques already issued and another situation in which the drawer of the cheque changes his own signatures or closes the account or issues instructions to the bank not to make the payment. So long as the change is brought about with a view to preventing the cheque being honoured the dishonour would become an offence under Section 138 subject to other conditions prescribed being satisfied. 16.2 There may indeed be situations where a mismatch between the signatories on the cheque drawn by the drawer and the specimen available with the bank may result in dishonour of the cheque even when the drawer never intended to invite such a dishonour. We are also conscious of the fact that an authorised signatory may in the ordinary course of business be replaced by a new signatory ending the earlier mandate to the bank. Dishonour on account of such changes that may occur in the course of ordinary business of a company, partnership or an individual may not constitute an offence by itself because such a dishonour in order to qualify for prosecution under Section 138 shall have to be preceded by a statutory notice where the drawer is called upon and has the opportunity to arrange the payment of the amount covered by the cheque. It is only when the drawer despite receipt of such a notice and despite the opportunity to make the payment within the time stipulated under the statute does not pay the amount that the dishonour would be considered a dishonour constituting an offence, hence punishable. Even in such cases, the question whether or not there was a lawfully recoverable debt or liability for discharge whereof the cheque was issued would be a matter that the trial Court will examine having regard to the evidence adduced before it and keeping in view the statutory presumption that unless rebutted the cheque is presumed to have been issued for a valid consideration. Learned counsel for the appellant would lastly submit that 7 considering the aforesaid backdrop, the appeal may be allowed. 7. Heard learned counsel for the parties and also perused the record with utmost circumspection. 8. The Appellate Court by taking one of the grounds i.e. the Bank Return Memo (Ex.P/3), held that the cheques were dishonoured for two reasons: (i) insufficient funds; and (ii) alteration on the cheque(s) requiring the drawer’s authentication. In support of this finding, the said Court placed reliance on Rajkumar Shukla (supra). However, in view of the judgment rendered by the Hon’ble Supreme Court in Laxmi Dyechem (supra), wherein various contingencies were examined, it has been categorically held that there may be cases involving deliberate acts of omission or commission on the part of the drawers of the cheques which would inevitably result in the dishonour of the cheques issued by them. After the issue of the cheque, if the drawer closes the account, changes his specimen signature given to the Bank or in the case of a company changes the mandate of those authorised to sign the cheques on its behalf, such changes or alteration in the mandate may be dishonest or fraudulent and that would inevitably result in dishonour of all cheques signed by the previously authorised signatories. The Supreme Court has cautioned that there may be situations where a mismatch between the signatories on the cheque drawn by the drawer and the specimen available with the Bank may result in dishonour of the cheque even when the drawer never intended to invite such a dishonour. 8 9. Reverting to the facts of the case, as the Bank Return Memo (Ex.P/3) cited two reasons for the dishonour of the cheques, one of which is insufficiency of funds, this Court is of the view that in such circumstances, the dishonour of the cheque is complete. 10. Nevertheless, the material question is whether the cheque was issued for valid consideration towards the discharge of a legally enforceable liability. In this regard, upon examining the evidence, it is evident that the complainant claimed to have been acquainted with the respondent/accused for several years. However, the respondent/accused, who examined himself as DW-1, stated that he was not acquainted with the complainant, had never entered into any transaction with him, and had neither borrowed money nor taken any loan from him. A specific defence was also taken by the respondent/accused to the effect that his cheque book had been lost and was misused. Except for the complainant’s general statement that he was acquainted with the respondent, there is no specific evidence to prove as to how they are acquainted with each other. Furthermore, during the cross-examination of the complainant, it was revealed that he was not aware that the father of the respondent/accused was an employee of SECL. Although the complainant deposed that he was acquainted with the respondent/accused, he also stated that he was unaware that the accused had obtained a compassionate appointment in the year 2011 and was employed at the same location as his father. The complainant admitted that the mother of the accused is receiving pension from SECL, however, he is unaware that the accused’s 9 family is receiving free treatment at a premier institution I.e. Apollo Hospital , Bilaspur. 11. Before advancing the cash loan, the complainant did not examine the genuineness of the demand and did not meet with the mother of the respondent/accused - Kamla Bai Sangram (DW-2). Mother of the respondent has stated that she never suffered any serious ailments and being a pensioner, received free treatment at a leading hospital in Bilaspur i.e. Apollo Hospital , Bilaspur. The complainant has further deposed that at the time of advancing the loan, the said money was kept at home. The complainant is a Government Servant and at the relevant time, his income was about Rs.20,000/-, as he explained in his cross-examination at para 13. Moreover, the complainant also did not obtain any document/receipt from the respondent for advancing such a large sum of money, despite being a Government employee. Further, lending or laundering money by a Government employee is regulated by the respective Conduct Rules. Section 269 SS of the Income Tax Act makes it a punishable offence to advance any cash loan exceeding Rs.20,000/- with the penalty prescribed under Section 271D of the said Act. 12. In the matter of Constable 907 Surendra Singh & another vs. State of Uttrakhand4, the law has been reiterated that the interference with the finding of acquittal recorded by the learned trial Judge would be warranted by the High Court only if the judgment of acquittal suffers from patent perversity; and that the 4. 2025 INSC 114 10 same is based on a misreading/omission to consider material evidence on record; and that no two reasonable views are possible. 13. For the foregoing, this Court does not find any illegality or infirmity in the impugned judgment(s) passed by the Appellate Court and the view taken by it is a possible one. 14.Resultantly, the Appeal fails and is hereby dismissed. Sd/- (Deepak Kumar Tiwari) Judge Shyna