Authority: Calcutta High Court, Criminal Appellate Jurisdiction

Order Date: 14.07.2026

Case Overview

  • Parties: Appellant – Magma Leasing Limited; Respondents – Asim Mondal & Anr.
  • Nature of Proceeding: Appeal under Section 378(4) of the Code of Criminal Procedure against the judgment and order of acquittal dated 15.03.2006 passed by the Learned 6th Fast Track Judge, Calcutta, which had reversed a conviction under Section 138 of the Negotiable Instruments Act.
  • Background: The complainant (Magma Leasing Ltd) alleged that the respondent issued seven post‑dated cheques totaling Rs 16,772 to discharge existing liabilities. All cheques were deposited on 25.11.2002 at United Bank of India (UBI), Park Street Branch, but were returned un‑encashed on 26.11.2002 on the ground “exceeds arrangement”. A demand notice dated 04.12.2002 was sent to the respondent, returned as “not known” on 07.12.2002, and finally received by the complainant on 10.12.2002.
  • Complaint: Filed on 15.01.2003 before the Chief Metropolitan Magistrate under Section 200 Cr.P.C., alleging deliberate and fraudulent issuance of the cheques.
  • Trial Court Findings: The Metropolitan Magistrate convicted the respondent, imposing simple imprisonment for two years and a fine of Rs 20,000 (Rs 18,000 as compensation). The conviction was later set aside by the Sessions Court on the ground that one cheque (No. 154070 dated 26.11.2002) was presented before its date and another cheque (No. 154064 dated 26.05.2002) was presented after the six‑month validity period.
  • Evidence:
  • Cheque Details: Seven cheques, each Rs 2,396, numbered 154064 to 154070, dated monthly from 26.05.2002 to 26.11.2002, total Rs 16,772.
  • Witnesses: P.W.1 (UBI Park Street Branch supervisor) confirmed return memos citing “exceeds arrangement”. P.W.2 (Magma Leasing’s legal representative) testified that all cheques were deposited on 25.11.2002 and that the demand notice was served. P.W.3 (UBI Amtala Branch officer) corroborated the return memos and noted that cheque 154064 was “stayed due to expiry of validity period”.
  • Respondent’s Statement: Admitted issuing post‑dated cheques, cited personal hardship (father’s cancer), denied receipt of the demand notice, and contested the amount claimed.
  • Legal Issues:

1. Whether the demand notice, which combined all seven cheques and was returned as “not known”, satisfied the statutory requirement of precise amount and proper service under proviso (b) of Section 138 NI Act.

2. Whether a cheque presented after the statutory six‑month period (or before its date) can give rise to criminal liability.

3. Whether the conviction and fine imposed by the Magistrate were within jurisdiction.

  • Court’s Reasoning:
  • Cited Kaveri Plastics v Mahdoom Bawa Bahruden Noorul (2025) stating that a notice lacking the correct cheque amount or precise details is invalid.
  • Observed that cheque 154070 was presented a day before its date, rendering the demand notice premature for that cheque.
  • Noted that cheque 154064 was presented after the six‑month validity, and the return memo explicitly recorded it as “out of date”.
  • Concluded that because the demand notice was defective and not properly served, the criminal complaint could not stand.
  • Reaffirmed that a cheque presented after six months cannot be the basis of a Section 138 offence, as the drawee bears responsibility for the delay.

Final Outcome

  • The High Court dismissed CRA 441 of 2006, affirming the order of the Learned Appellate Court that set aside the conviction and fine.
  • The Department was directed to forward the Transfer Certificate of Release (T.C.R.) to the concerned court for intimation and appropriate action.
  • An urgent certified copy of the order was to be provided to the parties upon compliance with procedural requirements.

Topics: Negotiable Instruments, Criminal Law