JANSEVA URBAN CO OP CREDIT SO BHUSAWALversusKIRAN RAMA NHAVKAR

2026:BHC-AUG:44121


                                                                   CriAppeal-855-2006
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                         IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                    BENCH AT AURANGABAD

                                CRIMINAL APPEAL NO. 855 OF 2006

                 Janseva Urban Cooperative Credit
                 Society, Bhusawal.
                 Through : Ghansham Dattatraya Fegade,
                 Age 32 years, Occupation Business,
                 R/o. Near Pandurang Talkies,
                 New area Ward, Bhusawal,
                 District Jalgaon.                              … Appellant

                      Versus

                 Kiran Rama Nhavkar,
                 Age : 32 years, Occupation Business,
                 R/o New Area Ward, Kumbhar Wada,
                 Bhusawal, District Jalgaon.                       … Respondent
                                                   …..
                     Mr. Prathamesh Kundalwadikar h/f Mr. P. R. Katneshwarkar,
                                       Advocate for the Appellant.
                           Mr. Swapnil S. Patil, Advocate for the Respondent.
                                                   .....

                                        CORAM :       ABHAY S. WAGHWASE, J.
                                        Reserved on        : 23.09.2026
                                        Pronounced on      : 29.09.2026

                 JUDGMENT :


                 1.   Original complainant, who instituted proceedings under Section

                 138 of the Negotiable Instruments Act, 1881 (NI Act) has preferred

                 instant appeal, thereby questioning the judgment and order of

                 acquittal dated 08.08.2006 passed by learned J.M.F.C., Bhusawal in

                 Summary Criminal Case No. 2357 of 2004.
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2.          In short, appellant instituted proceedings under Section

138 of the NI Act against present respondent on the premise that,

appellant is a co-operative financial institution. That, respondent

accused had borrowed loan to the tune of Rs.48,515/-. That, towards

repayment of said loan, accused issued cheque but it was dishonoured

with remark as “funds insufficient”. Legal demand notice was

dispatched calling upon respondent to pay the cheque amount, but as

he failed, above proceedings were instituted seeking action under

Section 138 of the NI Act. Complaint was resisted by respondent

denying legally enforceable debt to the tune of amount reflected on

the instrument in question. Learned trial court, after hearing both

sides and on appreciating the oral and documentary evidence, held

that complainant failed to prove existence of essential ingredients of

Section 138 of the NI Act, and primarily it failed to establish legally

enforceable debt, and acquitted the accused by above referred

judgment. Hence instant appeal.



3.    Learned counsel for the appellant would point out that,

appellant is a co-operative financial institution authorized to disburse

loan to the borrowers. He pointed out that, accused was also a

borrower of loan and had agreed to repay the same by executing
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promissory note. That, cheque was also duly issued on demand

towards repayment of loan, but the said cheque was dishonoured.

Learned counsel emphasized that issuance of cheque or signature over

it is not denied. Equally, institution of promissory note is also not

denied and thus, according to him, presumption available under

Sections 118 and 139 of the NI Act automatically got attracted. That,

learned trial court failed to consider and appreciate the same and

erred in acquitting the accused. Hence, he urges to allow the appeal

by setting aside the impugned judgment.



4.    Per contra, learned counsel for the respondent justified the

judgment and order of acquittal and prayed to dismiss the appeal for

want of merits.



5.    Heard. Re-appreciated the entire oral and documentary

evidence adduced before the trial court. From the record it is

emerging that, complainant adduced his own evidence at Exhibit 14.

That apart, the resolution by Board of Directors authorizing

institution of complaint, promissory note dated 21.11.2002, cheque in

question, bank memo, copy of notice and postal acknowledgment,

were duly tendered as documentary evidence.
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6.    Defence of accused was of misuse of cheque tendered by way of

security while borrowing loan. There was specific denial of dues to

the tune of Rs.48,515/-.



7.    As pointed out by learned counsel for the respondent and on

going through the record, it is emerging that in his examination-in-

chief, complainant has deposed about accused obtaining loan to the

tune of Rs.40000/- and issuing promissory note Exhibit 31 dated

21.11.2002. But very complaint seems to be silent about this. While

facing cross, complainant seems to be unable to state exactly how

much loan was repaid and how much was due i.e. on the date of

issuance of cheque, neither any document was produced to

demonstrate that on the date of issuance of cheque, an amount of

Rs.48,515/- was due towards accused.



8.    Secondly, accused came with a case that, when a borrower of

loan fills up the deposit slip along with cheque and deposits it with

the complainant society, the complainant society accepts the same

and returns counter slip to the depositor. Though this case is not

refuted by CW1, he has not produced such counter slip to show that

the cheque in question was issued by accused to the complainant

society.
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9.    Further, it appears that the particulars of the cheque regarding

amount and the signature of complainant are appearing in distinct

ink. Therefore defence of accused that cheque issued by way of

security has been misused, stands probabilized.



10.   Specific defence of accused was that, loan amount of

Rs.24,000/- has been repaid. Here, it was expected of complainant to

place on record detailed statement of the loan account but

surprisingly the same is not placed on record so as to accept that the

dues were to the tune of Rs.48,515/-. Complainant has admitted in

cross that legal demand notice does not reflect about demand of

Rs.48,515/-.



11.   Therefore, with above shortfalls, when actual legal liability has

not been demonstrated, indeed essential ingredients of Section 138 of

the NI Act being missing, rigors of Section 138 would not get

attracted. In the light of difference in the ink for filling up the amount

and the signature over the cheque, accused has succeeded in

probabilizing his defence about cheque handed over by way of

security being misused.
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12.   Learned trial court has dealt with the case of complainant as

well as accused in its entirety. Indeed, as tried to be put forth that

when loan is not refuted along with issuance of cheque, presumption

available under Section 118 and 139 of NI Act does come into play,

but it will not so happen until legally enforceable debt is

demonstrated. Here, it is not done so. Hence, no fault can be found in

the manner of appreciation as well as findings and conclusion so as to

interfere. Hence, following order :

                                ORDER

                       The appeal is dismissed.



                                         [ABHAY S. WAGHWASE, J.]



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