M/S Rajco Steel Enterprises vs Kavita Saraff and Another

Court

Supreme Court of India

Date

9 April 2024

Case No.

Petition for Special Leave to Appeal (Criminal) No. 5583 of 2022

Result

Dismissed

Bench

Aniruddha Bose, Sanjay Kumar

Citation

[2024] 4 S.C.R. 255 : 2024 INSC 288

Acts & Sections

Negotiable Instrument Act, 1881 CrPC

Issue for consideration

Issue arose as to whether the cheques were issued in discharge of a debt and if so, whether the respondent no.1 was able to rebut the presumption in terms of s. 118/139 of the Negotiable Instrument Act, 1881.

Headnote

Negotiable Instrument Act, 1881 – ss. 118/139 – Dishonour of cheque – Sum involved therein, if advanced in discharge of a legally enforceable debt – Raising of presumption u/s. 139 – Complaint by partnership firm alleging dishonour of cheques issued by the respondent no. 1 on the ground of insufficiency of funds – Case of partnership firm that it had granted financial assistance to the respondent no.1 and the said cheques were issued in discharge of her liability – Respondent no.1’s case that money was advanced to the respondent no.1 for undertaking stock market related transactions through her account – Trial court convicted the respondent no. 1 u/s.

138 since she failed to rebut the presumption – However, the first appellate court acquitted the respondent no. 1 holding that she rebutted the presumption – High Court upheld the same – Interference with:

Held: Not called for – As regards the sum involved in the cheques advanced in discharge of a legally enforceable debt or not, the complainant failed to show if any sum was advanced towards financial assistance – High Court found that the debt/liability, in discharge of which, according to the complainant, the cheques were issued, did not reflect in the complainant’s balance-sheet – Other partners of the firm did not depose as prosecution witnesses to establish that the cheque-amounts were advanced to the respondent no. 1 as financial assistance – Respondent no. 1 has put up a plausible defence as regards the reason for which the complainant’s funds had come to her account – Both the appellate fora, on going through the evidence did not find existence of any “enforceable debt or other liability” – Thus, it cannot be held that the findings of the High Court and the first appellate court were perverse, or based on no evidence. [Paras 11, 12]

Judgment Aniruddha Bose, J. The common petitioner in these four petitions for special leave to appeal is a partnership firm dealing in iron and steel products. The petitioner has assailed a common judgment of the High Court of Judicature at Calcutta, by which the petitioner’s appeal against acquittal of the first respondent in respect of offences under Section 138 of the Negotiable Instrument Act, 1881 (“1881 Act”) has been dismissed. The petitioner, through its partner, Ramesh Kumar Gupta, had lodged four complaint cases under the aforesaid provision, after four cheques, alleged to have be

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