Andhra Pradesh High Court: Civil Court Judgment Binding on Criminal Court in Cheque Bouncing Case

Andhra Pradesh High Court: Civil Court Judgment Binding on Criminal Court in Cheque Bouncing Case

The Andhra Pradesh High Court has ruled in a cheque bounce case that the judgment of the civil court is binding on the criminal court to prove the existence of a legally enforceable debt. The unsuccessful complainant had appealed against a lower court judgment in which the magistrate found the respondent/accused not guilty of the offence under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) and acquitted him under Section 255(1) of the Criminal Procedure Code (CrPC).

A single-judge bench of Justice A.V. Ravindra Babu observed that the judgment of the civil court is binding on the criminal court. He noted that the learned magistrate had elaborately discussed all aspects of the case and concluded that the civil court had found that the complainant's claim of a huge amount of ₹75,000 was not believable and that the amount due was only ₹25,000. In such circumstances, Justice Ravindra Babu found it doubtful whether the accused could have issued a cheque for ₹75,000.

The Court said that the evidence does not show that the accused owed the complainant a legally enforceable debt related to the chit transaction. This is an important link in the case, and without it, the prosecution cannot prove that the accused committed the offence under Section 138 of the NI Act.

The appellant/complainant was represented by Advocate N. Siva Reddy, and the respondent/accused was represented by Advocate K. Kanaka Raju.

The complainant alleged that the accused joined a chit group run by the complainant, with a chit value of ₹1,00,000 payable in 25 monthly instalments of ₹4,000 each. The accused paid some instalments, participated in an auction, and became the highest bidder. He agreed to forfeit ₹36,500 and received prize money of ₹63,500 from the complainant. However, he did not pay all of the remaining instalments, despite repeated requests and demands.

The complainant further alleged that, after being pressed by the complainant's officials, the accused issued a cheque for ₹70,000 as part payment of the chit amount due to the complainant.

The complainant tried to cash the cheque, but it was dishonoured with the endorsement "Exceeds Arrangement." He sent the accused a legal notice demanding payment. The accused came to the complainant's company and asked them not to file a case. He took the dishonoured cheque and issued another one, promising that it would be honoured. The complainant believed the accused and presented the second cheque, but it was also dishonoured.

The magistrate heard both sides and looked at the evidence. He found the accused not guilty of the offence under Section 138 of the Negotiable Instruments Act. The complainant was unhappy with this decision and appealed to the High Court.

The High Court noted that there is no dispute that the cheque was dishonoured, but the complainant must prove that it was issued towards the discharge of a legally enforceable debt. The evidence on record does not prove this. This is an appeal against an order of acquittal. Having reviewed the judgment of the trial court, the High Court found that the learned III Additional Judicial Magistrate of First Class did not decide the matter on unreasonable grounds.

The High Court further said that there are no grounds to interfere with the magistrate's judgment and that the complainant failed to prove the offence under Section 138 of the NI Act against the respondent/accused beyond reasonable doubt.

Accordingly, the High Court dismissed the appeal and upheld the magistrate's judgment.