High Court emphasizes lack of evidence proving liability or involvement under Section 138 of the NI Act
In a significant judgment delivered on January 28, 2026, the Bombay High Court upheld the acquittal of the accused in a cheque dishonour case under Section 138 of the Negotiable Instruments Act, 1881. The case, titled "Mr. Vijaykant Motilal Kothari v. State of Maharashtra," revolved around a hand loan alleged to have been undertaken by the accused on behalf of a third party, Mr. Hirachand Raichand Pagaria. The court found the appellant's claims unsubstantiated, primarily due to the absence of concrete evidence establishing a contractual relationship or liability between the accused and the complainant.
The appellant, Mr. Vijaykant Motilal Kothari, argued that the accused, being associates of Mr. Pagaria, had issued a cheque to settle a hand loan of Rs. 56,50,000/- with interest. However, the cheque issued for Rs. 78,00,000/- was dishonoured upon presentation. The trial court initially convicted the accused, but the Additional Sessions Court reversed this decision, leading to the present appeal.
Justice Dr. Neela Gokhale, presiding over the matter, meticulously examined the evidence and reiterated the principles governing appellate intervention in acquittals. The judgment cited precedents from the Supreme Court, emphasizing that an appellate court can only overturn acquittals if findings are perverse or if no reasonable view other than the guilt of the accused is possible. In this case, the High Court found that the prosecution failed to demonstrate the accused's involvement in the firm's affairs or their liability concerning the dishonoured cheque.
The judgment further highlighted the necessity of specific averments in complaints against partners or directors of a firm, stating that mere designation is inadequate for prosecution. The complainant's failure to provide evidence of any privity of contract or liability acceptance by the accused led to the dismissal of the appeal.
Legal experts suggest that this judgment reinforces the burden of proof required in cheque dishonour cases, especially concerning third-party liabilities. It underscores the importance of precise allegations and evidence when prosecuting individuals associated with firms or partnerships.
Bottom Line:
Section 138 of the Negotiable Instruments Act, 1881 - Appellate Court's interference in acquittal - Absence of evidence proving liability or involvement of the accused in the offence under Section 138 of NI Act - Acquittal upheld when no specific role of accused or privity of contract was established.
Statutory provision(s): Section 138 of the Negotiable Instruments Act, 1881, Section 386(b)(i) of the Code of Criminal Procedure, 1973, Section 313 of the Code of Criminal Procedure, 1973, Section 378 of the Code of Criminal Procedure, 1973
Mr. Vijaykant Motilal Kothari v. State of Maharashtra, (Bombay) : Law Finder Doc id # 2844917
