Ashwani Kumar vs The Bhagat Urban Cooperative Bank Ltd

Headnote AI-drafted · Reviewed and approved

The petitioner/accused was convicted by the learned Judicial Magistrate First Class, Solan, for the offence punishable under Section 138 of the Negotiable Instruments Act and sentenced to simple imprisonment for three months along with compensation of ₹80,000/- to the complainant-bank. The conviction arose from dishonour of a cheque of ₹60,000/- issued towards repayment of a loan of ₹2,00,000/- advanced by the respondent Cooperative Bank, with the cheque being returned with the endorsement 'funds insufficient'. The accused contended that the cheque was issued as security and had been misused by the complainant, and that the loan account number in the demand notice was incorrect.

The Additional Sessions Judge (I), Solan, dismissed the appeal, concurring with the Trial Court that all ingredients of Section 138 of the NI Act were satisfied, including issuance of the cheque, its dishonour, service of valid demand notice, and failure to repay within the stipulated period. The accused's admission of having taken the loan and issued the cheque raised a statutory presumption of consideration and liability, which he failed to rebut by declining to lead defence evidence despite multiple opportunities.

The High Court, exercising revisional jurisdiction, held that concurrent findings of two courts based on proper appreciation of evidence do not warrant interference unless there is a patent defect, error of jurisdiction, or error of law. Finding no such infirmity, the revision was dismissed.

Catchwords: Negotiable Instruments Act · cheque dishonour · funds insufficient · security cheque · statutory presumption · Section 138 NI Act · revisional jurisdiction · concurrent findings · cooperative bank · loan repayment · demand notice

Cheque dishonour (Section 138 NI Act)