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IN THE HIGH COURT AT CALCUTTA

CRIMINAL APPELLATE JURISDICTION

APPELLATE SIDE

Present:-

HON’BLE JUSTICE CHAITALI CHATTERJEE DAS.

CRA 94 OF 2014

ANUP AGARWALA

VS

PIYOTOSH BISWAS

For the Petitioner : Mr. Kusal Kumar Mukherjee, Adv.

For the Respondent : Mr. Manas Kumar Das, Adv.

Mr. Aritra Kumar Thokdar, Adv.

Mr. Prabal Das, Adv.

Last heard on : 10.02.2026

Judgement on : 18.05.2026

Uploaded on : 18.05.2026

CHAITALI CHATTERJEE DAS :-

1. This criminal appeal has been filed against the judgement and order of

acquittal dated 19.12.2013 passed by the Learned Judicial Magistrate,

Tehatta, Nadia in connection with complaint case no. 386C/2012 under

Section 138 of the Negotiable Instruments Act. 1881.

Brief fact of the case

2. The case of the appellant in short is that a complaint was lodged by the

present appellant against the present respondent before the Learned Court of

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ACJM, Tehatta ,Nadia to proceed against him under Section 138/142 of the

Negotiable Instruments Act on 14.8.12 alleging dishonour of cheque which was

deposited by the complainant as issued by the present respondent on 26.6.12

of Rs. 1,00,000/-and Rs 2,00,000/-.

3. It is the case of the present appellant that there was a good friendship relation

between the complainant/ the appellant and the accused person and at the

request of the accused person to give him Rs 3,00,000/- as a loan for his

personal necessity on good faith the present appellant agreed to give the

amount as loan and he paid the said amount of Rs. 3,00,000/- in presence of

witness no 1 and 2. The respondent /accused person assured to re -pay the

said amount within 3 months but after expiry of the said period despite the

demand made by the complainant, the accused delayed the re-payment on

various pretext. Lastly on 25.6.12 the accused came to the house of the

complainant and gave two cheques bearing no. 294127 dated 26.6.12 of

Rs.1,00,000/- and 294126 dated 26.6.12 of Rs. 2,00,000/ - of HDFC Bank

Limited , to the complainant. The complainant /appellant deposited both these

cheques on 26.6.12 at State Bank of India Krishnanagar (Gopinathpur)

Branch. But the bank intimated that those cheques were dishonoured due to

insufficient fund and to that extent the bank issued a certificate to the

complainant. After that on 20.7.21012 the complainant sent a demand notice

to the accused person through registered post with A/D by his advocate which

was returned with an endorsement “7 days absent” on 7.8.12. The said person

did not repay the amount till filing of the complaint accordingly the case was

initiated. The Learned Court of ACJM, Tehatta passed the order of issuance of

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summon upon the accused person who surrender ed before the court and

obtained bail. On 26.9.12 the accused person was examined under Section

251 of the Code of Criminal Procedure and the substance of accusation was

read over and explained to the accused person who pleaded not guilty and

claimed to be tried. After that the evidence on behalf of the complainant

started. On completion of the examination the complainant and one Swapan

Kumar Ranu the accused person /petitioner was examined under Section 313

of the Code of Criminal Procedure and one Ananta Mondal also deposed as

D.W. 2. After hearing the argument of both the Learned Advocate s and

considering the materials of record the Learned Judicial Magistrate passed the

order of acquittal. Being aggrieved thereby this appeal has been filed.

Submissions

4. The Learned Advocate appearing on behalf of the appellant submitted that two

cheques were issued by the respondent, the execution of the said cheque was

never denied and on 26.6. 2012 these two cheques were dishonoured. The

notice of demand was issued within the statutory period and therefore the

presumption under Section 139 of N.I. Act was initially discharged. It is settled

law that the presumption under this provision is rebuttable but such rebuttal

is to be made while giving reply to the demand notice .In this case the notice

was not received and returned as ‘7 days absent as the accused intentionally

avoided the service . The accused person never expressed their intention to

repay the loan and there was no prima facie rebuttal even at the time of

adducing evidence in order to show that the cheques were not issued in

discharge of the existing debts or liabilities. The Learned Advocate relied upon

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the decision reported in Hiten P.Dalal vs Bratindranath Banerjee

1

D.Vinod

Shivappa vs Nanda Bellappa

2

and Subrata Mitra vs Alpana Das

3

para

14,15,27 and an unreported Judgement passed by the Learned Co -ordinate

Bench in CRA 20 of 2021 Sanjay Agarwala vs Ajoy Sarkar passed on

December19,2023.

5. The Learned Advocate representing the respondent on the other hand raised

vehement objection and argued that since the instant appeal has been filed

against an order of acquittal, the court must be very careful while reversing

the order of acquittal. It is submitted that the cheques were issued on 25

th

of

June, 2012 and on the next date it was placed for encashment that is on

26.6.12. On 27.7.2012 the demand notice was sent. The complainant is silent

about execution of any agreement. No acknowledgment receipt of the demand

notice either received or produced. The complainant admitted that at the time

of the issuance of cheques it was not against any loan but for promoting

business. In the examination under Section 313 the appellant specifically

denied of taking any loan. It is further argued that the appellant failed to prove

that it was not in discharge of debts or liabilities and hence the question of

rebuttal does not arise and the Learned Trial Court rightly passed the order of

acquittal .The Learned Advocate of the Opposite Party no. 2 relied upon the

decision of N. Vijay Kumar vs Vishwanath Rao N .

4

and prayed for dismissal

of the appeal.

1

AIR 2001 SC 3987

2

(2006) 2 SCC 114

3

2025 (2) AICLR 273 (Cal)

4

2025 SCC Online SC 873

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Analysis

6. Heard the submissions of both the Learned Advocate. In the above factual

matrix coupled with the submission it is to be seen whether the Learned

Judicial Magistrate rightly passed the order of acquittal or not. Section 138 of

Negotiable Instruments Act, 1881 provides that-

"138. Dishonour of cheque for insufficiency,

etc., of funds in the account .—Where any

cheque drawn by a person on an account

maintained by him with a banker for payment of

any amount of money to another person from out

of that account for the discharge, in whole or in

part, of any debt or other liability, is returned by

the bank unpaid, either because of the amount

of money standing to the credit of that account is

insufficient to honour the cheque or that it

exceeds the amount arranged to be paid from

that account by an agreement made with that

bank, such person shall be deemed to have

committed an offence and shall, without

prejudice to any other provision of this Act, be

punished with imprisonment for [a term which

may be extended to two years’], or with fine

which may extend to twice the amount of the

cheque, or with both:

Provided that nothing contained in this section

shall apply unless—

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(a) the cheque has been presented to the

bank within a period of six months from the date

on which it is drawn or within the period of its

validity, whichever is earlier;

(b) the payee or the holder in due course of

the cheque, as the case may be, makes a

demand for the payment of the said amount of

money by giving a notice; in writing, to the

drawer of the cheque, [within thirty days] of the

receipt of information by him from the bank

regarding the return of the cheque as unpaid;

and

(c) the drawer of such cheque fails to make

the payment of the said amount of money to the

payee or, as the case may be, to the holder in

due course of the cheque, within fifteen days of

the receipt of the said notice.

Explanation.—For the purposes of this section,

“debt of other liability” means a legally

enforceable debt or other liability.”

It is specific case of the complainant that on good faith he gave an amount of

Rs. 3, 00,000/- towards the personal necessity of the respondent and the

accused person assured him to repay the sum within 3 months . However, on

25.6.12 the accused gave him two cheques of HDFC Bank Limited Berhampore

Branch in his name which are 294127 dated 26.6.2012 for Rs. 1,00,000/- and

294126 dated 26.6. 2012 for Rs. 2, 00,000/- to the respondent who deposited

before the Bank. Both the parties in this case were attached with a business

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relates to Chit Fund. In course of argument it revealed that the CEO of the

said company is in correctional home on the allegation of cheating number of

persons who invested in their company. According to this witness two cheques

were issued by him for using it in the business by the complainant about 2

years ago without any date mentioned on those cheques. After closing the

business when he intended to return back those two cheques when the

complainant caused delay and taking advantage of his absence in his house

the complainant and the witness made a conspiracy and presented those

cheques in the Bank which he issued about a year ago. The respondent

specifically denied of receiving any money from complaint as loan and hence

there is no reason to repay any amount.

7. The respondent did not challenge the signature appearing in the cheque or

denied about issuing those two cheques in favour of the complainant. He

denied the issuance of the cheque in favour of the complainant on 25.6.12 and

that receiving any notice. According to the respondent the complainant was in

a Ponzi scheme under him. On behalf of respondent /accused, one Ananta

Mondal deposed as OPW and he corroborated that on 21

st

July, 2012 the

accused went to Siliguri to see his ailing mother and returned home after 15

days thereafter. He further corroborated that the complainant was in a Chit

fund business namely TVI Express as an agent along with the accused person

who also offered him to join in his company. At the time of offering the said

proposal he showed him two cheques namely Rs. 1 , 00,000/- and Rs.

2,00,000/- respectively signed by the accused person and after some days he

came to learn that the Chit Fund business was closed. The accused person in

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his examination under Section 313 said that the cheques were not issued to

discharge any loan and he did not receive any demand notice and also denied

to take any loan from the complainant.

8. The Learned Judicial Magistrate considered the decision relied upon by the

appellant before this court reported in D. Vinod Shivappa v Nanada

Belliappa

5

where it was held that if a notice is issued and served upon the

drawer of the cheque ,no controversy arises .Similarly if the notice is refused by

the addressee it may be presumed to be served .But in the third situation

where notice could not be served on the address due to non- availability at the

time of delivery or premises is found to be locked the law is understood to

mean that there has been no service of notice but it was then held by the

Hon’ble Supreme Court that it would completely defeat the very purpose of the

Act and the unscrupulous person and dishonest drawer would be benefitted

as he can then be never prosecuted . It was observed that when the notice is

returned with the endorsement that the premises has always been found

locked or the addressee was not available at the time of postal delivery ,it will

be open to the complainant to prove at the trial by adducing evidence that the

endorsement was not correct and the drawer of the cheque qua the addressee

with the knowledge of the notice had deliberately avoided to receive the notice .

The Hon’ble Supreme Court further discussed Section 27 of General Clauses

Act which deals with the presumption of service of a letter sent by post and

observed this presumption is rebuttable as he has two option either to concede

to the stand of the sendee that he did not receive the notice alternatively to

5

(2006) 3 SCC (Cri) 114

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controvert the stand of the sendee with the risk to prove that in fact he received

notice. In this case the appellant did not adduce the evidence of the postal

authority.

9. In the instant case primarily the respondent could establish by adducing

evidence that he was not present for about 15 days when the other notice was

sent to his address. The postal endorsement was that for 7 days the person

concerned was absent and therefore it cannot be deemed as ‘served’. The

accused person at the time of trial established that because of his mother’s

illness he was not present therefore it cannot be considered that he had

deliberately and wilfully avoided the said service. The appellant did not make

any further attempt to send the notice further. However the Learned Magistrate

was of the view that service of notice upon the accused person was duly proved

in the case and the accused failed to prove that he was not present in his

house on and from 02.07.2015 to 08.08.2012 but this court failed to accept

such conclusion.

10. So far the allegation of receiving the amount as loan of Rs. 3,00,000/ by

the respondent followed by issuance of cheques in discharge of his liabilities,

the Learned Magistrate considered that the examination of P.W. 1 disclosed

that he gave the loan amount in presence of P.W 12 and on 25.6.12 he came

to his house handed over two cheques dated 26.6.which were deposited on on

26.6.2012 that is on the same day which got returned on 11.7.2012 . In

support of his contention he adduced two witnesses P.W. 2 Swapan kumsr

Ranu who said the amount was given by the complainant towards a loan for

the personal necessity of the accused and such money was given in his

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presence but during cross examination denied that in his presence the

complainant gave any amount to the accused and could not say the date or

time. The complainant himself failed to give any date when such loan amount

was given to the accused person but the hurriedness is very apparent as he

deposited the cheque on the date it was issued.

It was the observation of the Learned Court of Magistrate that complainant

could not say the personal reason or why he took the loan of Rs. 3,00,000/-

however there was no business transaction between the parties and therefore

without any knowledge or the necessity of the complainant commits

Rs.3,00,000/- without executing any agreement . In absence of any agreement

and when the complainant failed to substantiate the date time or month when

he gave such loan coupled with the hurriedness shown in presenting the

cheque certainly creates a doubt in the mind of the court that the amount at

all was given or not and . According to the Learned Court since they were

members of the Ponzy scheme mentioned as TVI Express which is a scheme in

which an investor get more interest and in addition to the transacted money he

would get more interest than bank interest. It was held by the Learned

Magistrate that since the main purpose of the scheme was to attract investor

by showing some unreasonable growth of money and to attract investor by

officer of a higher rank of his lower rank officer by issuing cheque is not

improbable. Therefore the case was not proved beyond the reasonable doubt.

11. In the decision as relied upon by the Learned Advocate of the respondent the

parties known to each other for the decade and assured a friendly relationship

and complainant extended the loan of Rs. 20,00,000/- to the accused and in

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discharge of this alleged loan the accused issued a cheque in favour of the

complainant but on presentation for encashment the said cheque was

dishonoured with an endorsement referred to drawer’s bank and insufficient

fund in the accused account. Statutory legal notice was sent and in reply the

accused denied his liability. The Hon’ble Supreme Court discussed in Section

118 and 139 of the N.I. Act which raised the presumption which are reads as

under.

“118.Presumptions as to negotiable instruments. -Until the contrary is

proved, the following presumptions shall be made:-

(a) of consideration:- that every negotiable

instrument was made or drawn for consideration,

and that every such instrument, when it has been

accepted, indorsed, negotiated or transferred, was

accepted ,indorsed, negotiated or transferred for

consideration:

X X X

139. Presumption in favour of holder.- It shall be

presumed, unless the contrary is porved, that the

holder of a cheque received the cheque of the

nature referred to in section 138 for the discharge,

in whole or in part, of any debt or other liability.”

12. The Hon’ble Supreme quoted the paragraph 17 of the decision of

Mallavarapu Kasivisweswara Rao v. Thadikonda Ramulu and others

6

Firm, this Court observed as under:

6

(2008)7SCC 655

Page 12 of 19

“17. Under Section 118(a) of the Negotiable

Instruments Act, the court is obliged to presume,

until the contrary is proved, that the promissory

note was made for consideration. It is also a

settled position that the initial burden in this

regard lies on the defendant to prove the non-

existence of consideration by bringing on record

such facts and circumstances which would lead

the court to believe the non-existence of the

consideration either by direct evidence or by

preponderance of probabilities showing that the

existence of consideration was improbable,

doubtful or illegal. In this connection, reference

may be made to a decision o f this Court in

Bharat Barrel & Drum Mfg. Co. v. Amin

Chand Payrelal [(1999) 3 SCC 35]. In para 12

of the said decision, this Court observed as

under : (SCC pp. 50- 51)

“12. Upon consideration of various judgments as

noted hereinabove, the position of law which

emerges is that once execution of the promissory

note is admitted, the presumption under Section

118 (a) would arise that it is supported by a

consideration. Such a presumption is rebuttable.

The defendant can prove the non-existence of a

consideration by raising a probable defence. If

the defendant is proved to have discharged the

initial onus of proof showing that the existence of

consideration was improbable or doubtful or the

same was illegal, the onus would shift to the

plaintiff who will be obliged to prove it as a

matter of fact and upon its failure to prove would

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disentitle him to the grant of relief on the basis of

the negotiable instrument. The burden upon the

defendant of proving the non- existence of the

consideration can be either direct or by bringing

on record the preponderance of probabilities by

reference to the circumstances upon which he

relies. In such an event, the plaintiff is entitled

under law to rely upon all the evidence led in the

case including that of the plaintiff as well. In

case, where the defendant fails to discharge the

initial onus of proof by showing the nonexistence

of the consideration, the plaintiff would

invariably be held entitled to the benefit of

presumption arising under Section 118(a) in his

favour. The court may not insist upon the

defendant to disprove the existence of

consideration by leading direct evidence as the

existence of negative evidence is neither possible

nor contemplated and even if led, is to be seen

with a doubt. The bare denial of the passing of

the consideration apparently does not appear to

be any defence. Something which is probable

has to be brought on record for getting the benefit

of shifting the onus of proving to the plaintiff. To

disprove the presumption, the defendant has to

bring on record such facts and circumstances

upon consideration of which the court may either

believe that the consideration did not exist or its

nonexistence was so probable that a prudent

man would, under the circumstances of the case,

shall act upon the plea that it did not exist.”

From the above decision of this Co urt, it is

pellucid that if the defendant is proved to have

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discharged the initial onus of proof showing that

the existence of consideration was improbable or

doubtful or the same was illegal, the onus would

shift to the plaintiff who would be obliged to

prove it as a matter of fact and upon its failure to

prove would disentitle him to the grant of relief

on the basis of the negotiable instrument. It is

also discernible from the above decision that if

the defendant fails to discharge the initial onus

of proof by showing the non-existence of the

consideration, the plaintiff would invariably be

held entitled to the benefit of presumption arising

under Section 118(a) in his favour.”

13. In a Three-Judges Bench in Rangappa vs Srimohan

7

where it was held:-

“Section 139 of the Act is an example of a

reverse onus clause that has been included in

furtherance of the legislative objective of

improving the credibility of negotiable

instruments. While Section 138 of the Act

specifies a strong criminal remedy in relation to

the dishonour of cheques, the rebuttable

presumption under Section 139 is a device to

prevent undue delay in the course of litigation.

However, it must be remembered that the offence

made punishable by Section 138 can be better

described as a regulatory offence since the

bouncing of a cheque is largely in the nature of a

civil wrong whose impact is usually confined to

the private parties involved in commercial

transactions. In such a scenario, the test of

7

(2010)11 SCC 441

Page 15 of 19

proportionality should guide the construction and

interpretation of reverse onus clauses and the

accused/defendant cannot be expected to

discharge an unduly high standard of proof. In

the absence of compelling justifications, reverse

onus clauses usually impose an evidentiary

burden and not a persuasive burden. Keeping

this in view, it is a settled position that when an

accused has to rebut the presumption

under Section 139, the standard of proof for

doing so is that of `preponderance of

probabilities'. Therefore, if the accused is able to

raise a probable defence which creates doubts

about the existence of a legally enforceable debt

or liability, the prosecution can fail.

14. In the decision as relied upon by the Hon’ble Advocate appearing on behalf of

the Appellant in Subrata Mitra versus Alpana Das and Another . (Supra)

the Learned Co-Ordinate Bench took note of the decision by the Hon’ble

Supreme Court in K.N. Bina versus Muniappan and another reported in

8

and Bir Singh versus Mukesh Kumar reported in

9

and held that once the

presumption arises questioning the source of fund runs contrary to the law

laid down by the apex court.

15. In the instant case the question was not about the source of fund but

whether at all any amount was taken as a loan and the cheque were issued in

discharge of any debt or liability .The issuance of the cheque was admitted and

it is settled proposition of law that once the holder of a cheque received the

8

(2001) 8 SCC 451

9

(2019) 4 SCC 197

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cheque the evidential burden lies on the accused to prove that the cheque was

not received by the Bank towards the discharge of any de bt or liability.

Apparently no date is disclosed either by the complainant or by the witness

who in fact denied about witnessing anything .Therefore the factual aspect

both the parties were engaged in a Ponzy scheme which raises the probability

of issuance of the cheque for the purpose of their business and this court find

substance in the view taken by the Learned Magistrate that presumption

under Section 139 of the Negotiable Instrument Act cannot be said to be

substantiated.

16. In the decision as relied upon in Sanjoy Agarwala Versus Ajoy Sarkar

passed by the Learned Co-Ordinate Bench on 19

th

December, 2023 in CRA 20

of 2021 . A loan was taken by the accused on two occasions and promised to

repay and an agreement was entered betwe en the parties to that effect. The

accused issued an account payee cheque which was dishonoured due to

insufficient fund. The demand notice was sent which was duly served but no

payment of the said cheque was made and accordingly the complaint was

lodged under Section 138 of Negotiable Instrument Act. In that case taking

note of the accused of Hiten P.Dalal vs. Bratindranath Banjerjee reported

in

10

the Hon’ble Court held that both Section 138-139 requires that the Court

“shall presume” the liability of the drawer of the cheques were drawn , it is

obligatory to raise the presumption in every case where the factual basis for the

raising of such presumption had been established. The Hon’ble Supreme

Court took note of the decision of State of Madras versus A. Vaidyanatha

10

AIR 2001 Supreme Court 3896

Page 17 of 19

Lyer

11

, in the said decision the Learned Hon’ble Bench also discussed the

legal standards to constitute an offence under Section 138 of the Negotiable

Instrument Act and the prosecution ought to have establish the essential

ingredients for the offence which were mentioned in “paragraph 9” which is as

followed.

9. Before handling with the facts of the

present case it would be apposite to focus on the

legal standards to constitute an offence under

Section 138 of the NI Act. The prosecution must

fulfill all the essential ingredients for offence;

 the cheque was drawn by a person on an

account maintain by him for payment of money

and same is presented for payment within a

period of three months 9 from the date on which

it is drawn or within the period of its validity,

whichever is earlier;

 The cheque was drawn by the drawer for

discharge of any legally enforceable debt or

other liability;

 The cheque was returned unpaid by the bank

due to either insufficiency of funds in the account

to honour the cheque or that it exceeds the

amount arranged to be paid from the account on

an agreement made with that bank;

 A demand of the said amount has been made

by the payee or holder in due course of the

cheque by a notice in writing given to the drawer

11

AIR 1958 SC 61

Page 18 of 19

within 30 days of the receipt of the information

of the dishonour of cheque from the bank;

 The drawer fails to make payment of the said

amount of money within 15 days from the date

receipt of the notice.

Conclusion

17. Therefore from the above it is a settled proposition of law as can be found

that the cheque to be drawn by the drawer for discharge of any legally

enforceable debt or other liability. Even if it is considered that in the instant

case the cheques were issued by the respondent which were placed and it was

dishonoured Section 138 of Negotiable Instrument Act cannot be attracted

since the complainant/ appellant failed to prove that the cheque was drawn by

the drawer for discharge of any enforceable debt or other liability. Considering

the nature of business in which both of them were engaged coupled with

absence of any specific details of the loan when paid to the accused in

absence of any agreement between the parties and non-service of demand

notice upon the respondent who has primarily established his absence on the

ground of the illness of his mother he never had any occasion to give the reply

to the said notice and his denial in examination under Section 313 Cr.P.C.

about taking any loan ,gives this court to draw a statutory conclusion that the

rebuttal is conclusively established . Therefore considering all establish of the

matter this court fails to consider the case of the appellant and hence finds no

merit in the appeal.

18. Accordingly this CRA is stands dismissed. The judgement and order passed

by the Learned Additional Chief Judicial Magistrate is affirmed.

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19. All connection applications are hereby disposed of.

20. Copy of the T.C.R. be sent down to the concerned Court.

21. Urgent Photostat certified copies of this order, if applied for, be supplied to

the parties upon compliance of all necessary formalities.

[CHAITALI CHATTERJEE (DAS), J.]