Authority: High Court of Judicature at Bombay, Aurangabad Bench
Order Date: 29 September 2026
Case Overview
- Appellant: Janseva Urban Cooperative Credit Society, Bhusawal (represented by Advocate Ghansham Dattatraya Fegade).
- Respondent: Kiran Rama Nhavkar (represented by Advocate Swapnil S. Patil).
- The dispute arose under Section 138 of the Negotiable Instruments Act, 1881 concerning a cheque issued by the respondent for repayment of a loan allegedly amounting to Rs 48,515.
- The complainant alleged that the cheque was dishonoured for “insufficient funds” and issued a legal demand notice; the respondent denied the existence of a legally enforceable debt of that amount.
- The trial court (J.M.F.C., Bhusawal) acquitted the respondent on 8 August 2006, holding that the complainant failed to establish the essential ingredients of Section 138, particularly a legally enforceable debt.
- On appeal, the appellant argued that the loan and promissory note dated 21 November 2002 created a presumption under Sections 118 and 139 of the NI Act, which the trial court allegedly ignored.
- The High Court re‑examined the documentary evidence (Board resolution, promissory note, cheque, bank memo, notice, postal acknowledgment) and the oral testimony. It found that the complainant could not demonstrate the exact amount due on the date of the cheque, could not produce a counter‑slip confirming receipt of the cheque as security, and that the cheque’s amount and signature were in different inks, casting doubt on the allegation of misuse.
- Consequently, the court concluded that the essential ingredients of Section 138 were absent and the presumption under Sections 118/139 would not arise without proof of a legally enforceable debt.
Final Outcome
The appeal is dismissed, and the acquittal of Kiran Rama Nhavkar dated 8 August 2006 is upheld.
Topics: Section 138 NI Act, Cheque Bounce, Cooperative Credit Society