The High Court of Gujarat has dismissed a criminal revision application seeking to quash the conviction of an individual for cheque bouncing under Section 138 of the Negotiable Instruments Act (NI Act). The Court, presided over by Justice Hasmukh D. Suthar, held that part-payments made prior to the actual issuance of cheques do not automatically invalidate the “legally enforceable debt” represented by those cheques, especially when the accused fails to prove that the payments were directed toward those specific instruments.
Background of the Dispute
The litigation involved a Peon (the applicant/accused, Rajubhai Kalidas Chunara) and a Professor at M.S. University (the respondent/complainant, Kantibhai Kalyanjibhai Shah). According to the complainant, he provided hand loans totaling ₹3,50,000 to the applicant between 2006 and 2010.
To settle this debt, the applicant issued two cheques from UCO Bank, Dandia Bazar Branch, Vadodara: one for ₹1,50,000 dated July 24, 2012, and another for ₹2,00,000 dated April 27, 2012. Both cheques were deposited on August 11, 2012, but were returned by the bank on August 13, 2012, with the endorsement “Funds Insufficient.” Despite receiving a statutory demand notice, the applicant failed to reply or settle the amount.
The 11th Additional Senior Civil Judge and Additional Chief Judicial Magistrate, Vadodara, convicted the applicant on June 2, 2016, awarding three months of simple imprisonment and ₹3,38,000 in compensation. This order was subsequently upheld in appeal by the Additional Sessions Judge, Vadodara, on October 5, 2016.
Key Arguments by the Applicant
Learned advocate Mr. R.J. Goswami, appearing for the applicant, raised several legal defenses:
- Section 56 Defense: He argued that the complainant admitted to receiving part-payments of ₹5,000 in April 2012 and ₹7,000 in May 2012. He contended that because no endorsement of these payments was made on the cheques, the debt mentioned in the cheques was not “legally enforceable” at the time of presentation.
- Service of Notice: The applicant denied receiving the statutory notice, claiming the signature on the acknowledgement slip was not his.
- Misuse of Security: It was argued that the cheques were blank security cheques issued for earlier transactions and were misused by the complainant.
The Court’s Analysis
The High Court systematically addressed these contentions using established legal precedents:
1. Presumption of Service The Court rejected the argument regarding non-service of notice, noting that the notice was sent to the correct address used throughout the litigation. Citing C.C. Alavi Haji vs. Palapetty Muhammed & Anr. (2007), the Court observed that a mere denial is insufficient to rebut the presumption under Section 27 of the General Clauses Act.
2. Rebuttal of Presumptions under Sections 118 and 139 Justice Suthar noted that since the signature on the cheques was admitted, the statutory presumption that the cheques were issued for a legally enforceable debt is triggered. Citing Tedhi Singh v. Narayan Dass Mahant (2022) and Rajesh Jain v. Ajay Singh (2023), the Court held:
“Once the signature is admitted, it is required to be presumed that the cheque was issued towards consideration for a legally enforceable debt.”
3. Clarification on Part-Payment and Section 56 The Court scrutinized the timing of the part-payments (April and May 2012) versus the date of the cheques and their presentation (August 2012). It found that there were multiple ongoing transactions between the parties dating back to 1998. The Court observed:
“…no requirement to record any part-payment as cheques are subsequently issued after the transactions of April and May, 2012. Hence, as on the date of issuance of cheques, there was a legally enforceable debt and sum of money was promised to be paid.”
The Court distinguished this from the Supreme Court’s ruling in Dashrathbhai Trikambhai Patel vs Hitesh Mahendrabhai Patel (2023), noting that in the present case, the payments occurred before the cheques were even issued for the August presentation, and the applicant failed to prove these payments were meant for these specific instruments.
Final Decision
The Court concluded that the lower courts had properly appreciated the evidence. Invoking the principles of revisional jurisdiction as laid out in Amit Kapoor vs. Ramesh Chander (2012) and Malkeet Singh Gill vs. State of Chhatisgarh (2022), the Court stated that it would not re-appreciate facts unless the findings were “totally perverse.”
Finding no such perversity, the High Court dismissed the revision application and discharged the rule. The Court ordered the applicant to forthwith surrender before the trial court to serve the remaining sentence.
Case Details
- Case Title: Rajubhai Kalidas Chunara vs. Kantibhai Kalyanjibhai Shah & Anr.
- Case Number: R/Criminal Revision Application No. 984 of 2016
- Court: High Court of Gujarat at Ahmedabad
- Bench: Justice Hasmukh D. Suthar
- Date: March 18, 2026
