Jabalpur Sessions Court: In an appeal filed under Section 413, Nagarik Suraksha Sanhita, 2023 (BNSS), against the judgment passed by Judicial Magistrate First Class, Jabalpur where the respondent was acquitted from the charges under Section 138, Negotiable Instruments Act, 1881 (NI Act), Krishnamurty Mishra, Sessions Judge, set aside the order of acquittal after holding that in a partnership firm, a partner can initiate proceedings without the permission of other partners and all the ingredients of Section 138 were made out against the respondent and even if the cheque was issued as security, upon becoming due, it is enforceable under Section 138 as mere characterisation of the cheque as a “security cheque” does not prevent the “payee” or “holder in due course” from initiating proceedings. It was also held that discrepancies in amount actually due and mentioned in demand notice, do not negate the existence of a legally enforceable liability and once issuance of cheque is proved, the presumption under Section 139 follows and the Court must proceed on the basis that the cheque was issued in discharge of a legally enforceable debt or liability.
Background
The respondent, for his outstanding dues towards the appellant, issued him a cheque of ₹1,57,000 but the cheque was returned dishonoured when presented for encashment. A legal notice was sent but despite receiving it, the respondent did not make payment. So, the appellant filed a complaint against the respondent under Section 138, NI Act for dishonour of cheque for insufficiency of funds in the account.
The Magistrate took cognizance and the evidence presented by the appellant were recorded. The respondent was examined under Section 313, Criminal Procedure Code, 1973. It was the contention of the respondent that he does not owe any money to the appellant as he issued a blank cheque to the appellant which was misused by him. But no evidence were presented to support this contention.
The Magistrate recorded that since it could not be proved that the appellant firm was a partnership firm or Vijay Kant Sayani was a partner of the appellant firm and whether he was duly authorised to file the complaint on firm’s behalf, therefore, Vijay Kant Sayani was not proved to be “Payee” and “Holder in due course” of the cheque under Section 7, NI Act and therefore, the complaint was not maintainable. Moreover, since the amount due was ₹1,56,633 but ₹1,57,000 was mentioned in the demand notice which is a material discrepancy and the appellant failed to prove that the sum of ₹1,57,000 was due to the respondent, it was held by the trial court that the appellant had failed to prove that the cheque in question was issued in discharge of a legally enforceable debt or liability. Hence, the case was not made out against the respondent and accordingly he was acquitted, against which this appeal was filed.
The appellant also moved an application under Section 432 BNSS for taking additional documents on record. The application states that the complaint was erroneously dismissed on the ground that letter of authorisation is sine qua non for maintaining a complaint under Section 138 on behalf of partnership firm. And, a separate letter of authorisation is not mandatory at the stage of filing a complaint.
Issues
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Whether the learned trial court is justified in acquitting the respondent by holding that the offence under Section 138, NI Act is not made out against the respondent?
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Whether the application filed by the appellant under Section 432 BNSS can be allowed and the documents filed along with the application can be taken on record as additional evidence?
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Whether the impugned judgment warrants any interference by this Court?
Analysis
The Court observed that the complainant is one of the partners of the appellant firm was not challenged by the respondent. The appellant firm had filed the authorisation letter, partnership deed and certificate of registration along with application under Section 432 BNSS, which indicated that the firm is a registered partnership firm and Vijay Kant Sayani is one of the partners.
The Court observed that no clause in the partnership deed said that one partner cannot initiate proceedings without the permission of other partners and although the said documents were not on record before the trial court but in view of the cases referred, it cannot be said that the complaint cannot be filed by one partner without authorisation by the others.
Therefore, the Court held that the trial court erred in law in dismissing the complaint holding it to be not maintainable for want of authorisation.
On the next issue of cheque being a legally enforceable debt, the Court noted that the amount due against the respondent was ₹1,56,633 but in the demand notice it was ₹1,57,000 which was slightly higher than the amount due but it was not disputed that the cheque was tendered by the respondent himself to the appellant.
The contention that the cheque was issued as security was also defeated by the judgments referred as it was held that the cheque issued as security, upon becoming due, is enforceable under Section 138 and mere characterisation of the cheque as a “security cheque” does not prevent the “payee” or “holder in due course” from initiating proceedings.
The Court took note of the ingredients of Section 138 and stated that the minor variation or discrepancies in amount mentioned in the cheque and demand notice from actual dues, did not go to the root of the matter, particularly when the cheque amount remained unchanged in the demand notice.
Thus, the Court opined that the trial court adopted a hypertechnical approach. Criminal liability under Section 138 cannot be defeated merely because the appellant mentioned ₹1,57,000 in the notice instead of ₹1,56,633, when the cheque amount and the demand made through the notice remained substantially clear and unequivocal, which also proves that the legal notice was in compliance with Section 138 proviso (b). The discrepancy in the amount is neither material nor prejudicial to the accused. Minor errors or clerical discrepancies do not invalidate the notice if the demand is otherwise clear and understandable and the discrepancy does not negate the existence of a legally enforceable liability. Hence, the dismissal of the complaint by the trial court was erroneous and unsustainable in law.
The Court further observed that the trial court rejected evidence on the ground that they are computer generated documents but no objection was taken by the respondent as to their admissibility when they were exhibited in evidence, so the appellant did not present a certificate under Section 65-B, Evidence Act, 1872. The Court held that the trial court should not have discarded documentary evidence for want of submitting certificate under Section 65-B and thus, the finding recorded was not sustainable.
Further, regarding the point of presumption under Section 139, NI Act, the Court held that once issuance of cheque is proved, the presumption under Section 139 must necessarily follow and the Court must proceed on the basis that the cheque was issued in discharge of a legally enforceable debt or liability. The evidentiary burden shifts entirely upon the accused to rebut presumption by producing cogent and credible evidence but mere denial is not enough. The accused is required to bring on record material showing that no debt or liability existed or that its non-existence was so probable that a prudent person would accept it.
The Court noted that the respondent failed to discharge the evidentiary burden upon him by virtue of presumptions. Therefore, it was the finding of the Court that all the ingredients of Section 138 were clearly made out and the trial court had gravely erred in law in dismissing the complaint and acquitting the respondent.
Decision
The impugned judgment was set aside by the Court as the respondent was found guilty of the offence punishable under Section 138, NI Act and was convicted for same. The application filed under Section 432 BNSS was dismissed because the respondent had been found guilty
even without taking into consideration the additional documents filed along with the application.
Regarding the sentence, the Court said that the offence under Section 138 is quasi criminal in nature and is generally treated as civil wrong and thus, sentenced, the respondent to fine of ₹2,00,000, which will be paid to the appellant as compensation under Section 395(1) BNSS and in default of payment of fine, simple imprisonment for a period of 6months.
Also Read: Section 138 NI Act Complete Guide | Cheque Bounce Law Explained
[Vijay Steel Centre v. Ranveer Singh Saluja, Registration No. CRA/398/2025, decided on 19-5-2026]
Judgment authored by: Sessions Judge Krishnamurty Mishra
Advocates who appeared in this case :
For Appellant: Aman Dawra
For Respondent: Navratna Pachori
