Petitioner's defence of lost cheque and lack of written loan agreement rejected; courts affirm statutory presumptions under Negotiable Instruments Act, 1881
In a significant judgment dated September 30, 2026, the Calcutta High Court, presided over by Justice Uday Kumar, dismissed the criminal revision petition filed by Tuhin Gangopadhyay challenging his conviction under Section 138 of the Negotiable Instruments Act, 1881. The case pertained to the dishonour of a cheque amounting to Rs. 30,000 issued in the course of a modest proprietary cloth business, "Madhukari Textile."
The litigation traces back to 2016 when the complainant, Benukar Sikdar, filed a formal complaint alleging that the petitioner had borrowed Rs. 30,000 for business purposes and issued a cheque for repayment. The cheque was dishonoured due to a stop-payment instruction by the drawer. The petitioner claimed that the cheque leaf was lost along with his money bag on the date the cheque was issued and supported this defence with a contemporaneous General Diary (G.D.) entry and bank stop-payment instructions.
Both the Trial Court and the First Appellate Court rejected the defence, holding that mere lodging of a G.D. entry and stop-payment instructions without independent corroboration or evidence of misuse of the cheque before presentation could not rebut the statutory presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act. The courts emphasized that once the signature on the cheque is admitted, it is presumed to have been issued for discharge of a legally enforceable debt or liability.
The petitioner also contended that the absence of a written loan agreement and non-reflection of the loan amount in the complainant's Income Tax Returns (ITR) should invalidate the prosecution. The High Court, however, held that while such factors might be relevant in large unexplained transactions, they cannot be treated as an inflexible rule to negate every small hand loan, especially where the accused failed to raise a probable defence or establish the complainant's incapacity to lend.
Further, the petitioner's argument that the proprietary business name was not separately arraigned in the complaint was dismissed by the Court. The judgment clarified that a proprietary concern is not a distinct legal entity from its proprietor; thus, prosecution of the individual proprietor alone is maintainable.
The Court also addressed a preliminary objection regarding the petitioner's inconsistent description of his employment status but found that this discrepancy did not amount to suppression of material facts warranting dismissal of the revision petition at the outset.
In exercising its revisional jurisdiction, the High Court underscored that it cannot act as a second appellate court to reappreciate evidence unless there is patent perversity or miscarriage of justice. Finding no such infirmity in the concurrent findings, the Court upheld the conviction. However, it modified the sentence by exempting the petitioner from undergoing the seven-day simple imprisonment imposed by the Appellate Court while maintaining the enhanced compensation of Rs. 35,000 with appropriate directions for credit of amounts already deposited.
The Court directed immediate disbursement of the compensation to the complainant upon realization and authorized the Trial Court to invoke coercive measures if payment defaults occurred.
This judgment reinforces the stringent application of statutory presumptions in cheque dishonour cases under the Negotiable Instruments Act and elucidates the limited scope of revisional interference in criminal proceedings.
Bottom Line:
Negotiable Instruments Act, 1881 Section 138 Once signature on cheque is admitted, presumptions under Sections 118(a) and 139 arise - Mere General Diary entry alleging loss of blank signed cheque and stop-payment instruction, without independent corroboration, is insufficient to rebut presumptions - Non-reflection of small hand loan in ITR and absence of written loan agreement not fatal in case of modest amount - Proprietary concern need not be separately arraigned as it is not distinct from proprietor - In revision, concurrent findings ordinarily not to be re-appreciated - Conviction upheld, substantive imprisonment exempted, compensation maintained.
Statutory provision(s):
Negotiable Instruments Act, 1881 Sections 118(a), 138, 139; Code of Criminal Procedure, 1973 Sections 313, 357, 397, 401, 421, 431, 482
Tuhin Gangopadhyay v. State of West Bengal, (Calcutta) : Law Finder Doc Id # 2993164
