Court sets aside conviction under Section 138 of NI Act due to undated cheque, orders refund to accused

The court allowed the criminal revision petition, setting aside the conviction of the accused under Section 138 of the Negotiable Instruments Act. The judgment held that the undated cheque filled after a significant period was not legally maintainable, and the dishonour did not establish criminal liability. The court ordered the refund of the deposited amount to the accused, emphasizing that filling an undated cheque after a considerable time does not lead to criminal liability under the Act.

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Issues Involved:
The judgment involves the issue of criminal liability under Section 138 of the Negotiable Instruments Act based on the dishonour of a cheque, the validity of an undated cheque filled after a significant period, and the legal maintainability of a complaint under Section 138.

Issue 1: Criminal Liability under Section 138 of the Negotiable Instruments Act
The respondent/complainant alleged that the revision petitioner/accused failed to pay the due amount of &8377; 1,14,471/- and issued a cheque which was dishonoured. The respondent lodged a complaint under Section 138 of the Act. The trial court and the appellate court convicted the revision petitioner. The revision petitioner contended that the undated cheque was issued as collateral security in 1998 and was misused by the respondent in 2000, making the complaint legally unsustainable.

Issue 2: Validity of Undated Cheque
The revision petitioner argued that the undated cheque handed over in 1998 was filled with a date in 2000 by the respondent, which was beyond the statutory period of six months for presenting a cheque. The courts below confirmed the conviction without considering the legal aspect under the Act. The revision petitioner cited legal precedents to support the argument that filling up an undated cheque after a significant period would not create criminal liability.

Issue 3: Legal Maintainability of Complaint under Section 138
The revision petitioner contended that the dishonoured cheque amount was higher than the actual balance due, as per the bills issued by the respondent. Citing legal precedents, the revision petitioner argued that a cheque issued for a higher amount than the due would not create a cause of action under Section 138. The respondent relied on the presumption of liability under the Act and the need for consideration.

The judgment analyzed the evidence, legal precedents, and the provisions of the Negotiable Instruments Act. It concluded that the undated cheque filled after one and a half years was not legally maintainable, and the dishonour did not create criminal liability. The criminal revision petition was allowed, setting aside the conviction and ordering the refund of the deposited amount to the revision petitioner.

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