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of <h1>Revision allowed: Section 138 NI Act conviction set aside as cheque didn't discharge enforceable debt of different licensed entity</h1> <h3>Pushpa Devi Thapa Versus Usha Goel and another</h3> Pushpa Devi Thapa Versus Usha Goel and another - 2025: HHC: 27641 ISSUES PRESENTED AND CONSIDERED 1. Whether the conviction under Section 138 of the Negotiable Instruments Act could be sustained where the cheque was issued in the name of one concern but the supporting cash memo/bill bore a different trade name and registration particulars, raising doubt as to whether the cheque was issued in discharge of a legally enforceable debt. 2. Whether the revisional court in exercise of jurisdiction under Sections 397-401 Cr.P.C. (and cognate statutory power) may reappreciate evidence and resolve factual conflicts that were concurrently decided by the trial and appellate courts. 3. Whether the plea that the payee on the cheque and the supplier on the bill are distinct legal entities (and hence absence of a subsisting liability) can be raised in revisional proceedings where it was not expressly canvassed before the lower courts. 4. Whether the concurrent findings of conviction by the trial and appellate courts suffer from any patent legal or jurisdictional defect or perversity warranting interference in revision. 5. Directions concerning interim custodial status / bail on setting aside conviction (application of statutory bail provisions). ISSUE-WISE DETAILED ANALYSIS Issue 1 - Sufficiency of evidence to show cheque was issued in discharge of legal liability Legal framework: For an offence under Section 138 NI Act the prosecution must prove (i) issuance of cheque, (ii) presentation and dishonour, (iii) service of notice and failure to pay within stipulated period, and (iv) that cheque was issued for discharge of a legally enforceable debt/liability. A rebuttable presumption arises when issuance of the cheque is not disputed that it was given in discharge of liability. Precedent treatment: The Court applied settled law that the presumption arising from an undisputed issuance is rebuttable and that the prosecution must prove the existence of legally enforceable debt. Interpretation and reasoning: The record showed the cheque in question was drawn in the name 'Mahalaxmi Jewellers' while the cash credit memo was made out to 'Goel's Mahalaxmi Jewellers' with differing registration/licence numbers and dates. The complainant's witness gave inconsistent explanations regarding the name and registration particulars. The Court held these discrepancies produced a reasonable doubt whether the entity to whom the liability was owed and the entity named on the cheque were the same legal person/concern. As the presumption is rebuttable, such reasonable doubt benefits the accused. Ratio vs. Obiter: Ratio - where documentary evidence (trade name and registration particulars) on record do not establish identity between payee named on cheque and seller on invoice, benefit of doubt goes to accused and prosecution fails to establish legally enforceable debt necessary for Section 138 conviction. Obiter - observations on what might have been sufficient (e.g., identical registration numbers) are illustrative. Conclusion: The conviction could not be sustained because the prosecution failed to prove that the cheque was issued in discharge of a legally enforceable liability in favour of the complainant identified in the complaint. Issue 2 - Scope of revisional jurisdiction: reappreciation of evidence Legal framework: Revisional jurisdiction under Sections 397-401 Cr.P.C. is supervisory and limited to correcting patent defects, errors of jurisdiction or law, perversity, non-consideration of relevant material, or decisions based on no evidence. It is not appellate; the High Court ordinarily must not re-appreciate evidence or substitute its view where concurrent findings exist unless one of the recognised exceptional grounds is shown. Precedent treatment: The Court followed the established principle that revisional courts must exercise restraint and not re-evaluate facts and evidence unless there is perversity, gross illegality, or material misreading/ignoring of evidence amounting to miscarriage of justice. Interpretation and reasoning: The Court accepted that revisional interference is narrowly confined but found that the lower courts had failed to address a jurisdictional fact - whether the legally enforceable debt existed in favour of the complainant - despite documentary inconsistencies on record. Because the existence of the debt is a jurisdictional fact for trial under Section 138, the omission to consider the documentary discrepancies supplied a legal error within revisional scope. Ratio vs. Obiter: Ratio - revisional court may interfere where lower courts neglect consideration of material evidence going to jurisdictional facts (e.g., identity of payee/seller and existence of debt), even though revisional power is generally limited. Obiter - general admonitions about restraint in revision and the narrow compass of reappreciation were reiterated. Conclusion: While the revisional court cannot ordinarily reappreciate evidence, it may intervene where a jurisdictional fact is not properly considered by the courts below; the omission in the present record warranted interference. Issue 3 - Permissibility of raising the distinct-entity plea in revision Legal framework: Points going to jurisdictional facts can be entertained in revision; however, normally a party should raise contentions before lower courts and may not introduce new pleas in revisional proceedings that were not canvassed earlier unless they pertain to jurisdictional defects or are evident on record. Precedent treatment: The Court applied the principle that existence of legally enforceable debt is a jurisdictional requirement for Section 138 and can be assailed at revisional stage if established from record. Interpretation and reasoning: The Court rejected the submission that the plea was impermissible in revision because the documentary record and the complainant's own witness disclosed the discrepancy between the bill and the cheque. The trial record therefore contained the very material that raised the jurisdictional question; this enabled the revisional court to adjudicate the point even if the precise plea had not been flagged in earlier rounds. Ratio vs. Obiter: Ratio - where the record itself discloses a jurisdictional defect (e.g., lack of proof that cheque payee and creditor are the same), the revisional court may entertain and decide that question even if the precise plea was not pressed below. Obiter - cautionary remarks on when new pleas may be permitted in revision. Conclusion: The distinct-entity contention, being a challenge to a jurisdictional fact apparent on record, was properly considered in revision and found to create reasonable doubt for the accused's conviction. Issue 4 - Whether concurrent findings are perverse or suffer legal defect Legal framework: Concurrent findings will not be disturbed in revision unless perverse, wholly unreasonable, based on no evidence, or where material facts are ignored leading to miscarriage of justice. Precedent treatment: The Court reiterated the established tests for interference in revisional jurisdiction and applied them to the record. Interpretation and reasoning: Although both lower courts treated issuance of the cheque as undisputed and applied the presumption of discharge of liability, they did not address the inconsistency between the entities named in the cash memo and the cheque and the differing registration/licence particulars. That omission was not a mere alternative view but a failure to consider material evidence going to the very jurisdictional core of the offence. Consequently the concurrent findings were vitiated by that failure. Ratio vs. Obiter: Ratio - concurrence of findings does not immunize a conviction where the courts below have ignored material documentary discrepancies that negate the existence of legally enforceable debt; such omission constitutes a ground for revisional interference. Obiter - restatement of restraint otherwise applicable to revision. Conclusion: The concurrent findings were set aside because they overlooked material documentary inconsistencies that raised a reasonable doubt on the prosecution's case on a jurisdictional fact. Issue 5 - Bail directions on setting aside conviction Legal framework: On acquittal or setting aside of conviction in revisional/arising proceedings the Court may direct bail conditions in accordance with applicable statutory bail provisions and ancillary safeguards pending any further proceedings (including higher court intervention). Interpretation and reasoning: The Court ordered furnishing of bail bonds on specified terms and duration, with a stipulation concerning appearance before the higher forum if special leave is filed - a practical direction consistent with statutory bail scheme and supervisory power to secure attendance if appellate proceedings follow. Ratio vs. Obiter: Ratio - where conviction is set aside in revision, appropriate bail conditions may be imposed to regulate interim liberty and attendance in potential appellate litigation. Obiter - particulars of time limits and bond amounts are case-specific implementation. Conclusion: Bail was directed on specified terms and duration concomitant with the order setting aside the conviction, with obligation to appear before the higher forum if proceedings are instituted.
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