Introduction:

In Sudipta Ghosh v. State of West Bengal & Another (CRR 3434 of 2022), the Calcutta High Court delivered an important judgment reaffirming the significance of procedural fairness in criminal trials under the Negotiable Instruments Act, 1881. Justice Uday Kumar held that a prosecution under Section 138 of the Negotiable Instruments Act cannot be sustained where the accused is called upon to answer one cheque transaction at the stage of recording the plea under Section 251 of the Code of Criminal Procedure (CrPC) but is ultimately tried and convicted for an entirely different cheque transaction. The Court observed that such an error strikes at the very foundation of a fair trial and constitutes a structural defect rather than a mere procedural irregularity.

The dispute originated from a complaint filed by Chandana Pal, who alleged that she had advanced a friendly loan of ₹1.5 lakh to the accused, a chartered accountant, in May 2003. According to the complainant, the accused issued a cheque dated 12 March 2006 towards repayment of the loan. However, the cheque was dishonoured due to insufficient funds. After the statutory demand notice allegedly went unanswered, proceedings under Section 138 of the Negotiable Instruments Act were initiated before the trial court.

The trial court convicted the accused and sentenced him to six months’ simple imprisonment, besides directing payment of ₹3 lakh as compensation under Section 357(3) CrPC. The appellate court affirmed the conviction, following which the accused approached the Calcutta High Court in revision.

During the proceedings before the High Court, it emerged that while the complaint related to a cheque for ₹1.5 lakh, the particulars of the offence read over to the accused under Section 251 CrPC referred to an entirely different cheque bearing a different number and amounting to ₹5 lakh. This discrepancy became the central issue before the Court.

Arguments of the Parties:

The petitioner argued that the entire criminal trial stood vitiated because the notice of accusation framed under Section 251 CrPC did not correspond to the cheque forming the subject matter of the complaint. According to the petitioner, he was asked to defend himself against allegations relating to a cheque of ₹5 lakh, whereas he was ultimately convicted for dishonour of a different cheque involving ₹1.5 lakh. It was contended that such a serious discrepancy deprived him of a fair opportunity to prepare his defence and rendered the trial fundamentally defective.

The petitioner also questioned the complainant’s financial capacity to advance the alleged loan. During cross-examination, the complainant admitted that she was unemployed and that the amount had been provided by her father. However, the father was never examined as a witness, nor was any documentary evidence produced to establish the source of the funds. It was argued that this created a substantial evidentiary gap, sufficient to rebut the statutory presumptions available under the Negotiable Instruments Act.

The respondent opposed the revision and contended that the discrepancy in the cheque number and amount mentioned during the recording of the plea was merely a typographical or clerical error. It was argued that such an irregularity was curable under Section 465 CrPC and had not caused any real prejudice to the accused. The respondent further maintained that the essential ingredients of the offence under Section 138 stood established and that the conviction recorded by the courts below required no interference.

Court’s Judgment:

Justice Uday Kumar partly allowed the criminal revision and held that the proceedings suffered from a fundamental procedural defect affecting the fairness of the trial.

The Court emphasised that compliance with Section 251 CrPC is not a mere formality. In summons cases, where no formal charge is framed, the notice under Section 251 serves as the statutory mechanism through which the accused is informed of the precise allegations against him. The purpose of the provision is to ensure that the accused clearly understands the accusation so that an effective defence can be prepared.

The Court found that the complaint was based upon Cheque No. 169190 for ₹1.5 lakh, whereas the particulars of the offence read over to the accused referred to Cheque No. 901536 for ₹5 lakh. According to the Court, compelling an accused to answer one transaction and ultimately convicting him for another fundamentally undermines the fairness of the criminal process.

Rejecting the respondent’s contention that the discrepancy was merely a curable irregularity, the Court observed that the defect went to the root of the prosecution. Since the accused was never properly informed of the actual allegations he was required to defend, the trial suffered from a structural defect that could not be cured by invoking Section 465 CrPC.

The Court also examined the issue of the complainant’s financial capacity. It reiterated that once the execution of the cheque is admitted, statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act operate in favour of the complainant. However, these presumptions remain rebuttable.

In the present case, the complainant admitted that the loan amount had actually been arranged by her father. Despite this admission, neither the father was examined as a witness nor was any documentary evidence produced to establish the source of the funds. The Court observed that this created a significant evidentiary gap. It also noted that these circumstances were not put to the accused during his examination under Section 313 CrPC, thereby affecting the fairness of the proceedings.

However, the Court rejected the petitioner’s objections regarding limitation and service of the statutory demand notice. It held that issuance of the signed cheque within three years of the alleged loan constituted a valid acknowledgment under Section 18 of the Limitation Act, thereby extending the period of limitation. The Court also accepted that the statutory notice was duly served since it had been delivered at the petitioner’s office address, giving rise to the legal presumption of service.

Ordinarily, the Court observed, such a serious procedural defect would require the matter to be remanded for a fresh trial. However, considering that the litigation had remained pending since 2006, the Court found that directing a retrial after nearly two decades would serve no meaningful purpose.

The Court also took note of the fact that, pursuant to an interim order passed in 2022, the petitioner had already deposited ₹3 lakh before the trial court, which fully satisfied the compensation awarded to the complainant.

Recognising that proceedings under Section 138 of the Negotiable Instruments Act are primarily intended to ensure financial restitution to the complainant, the Court held that the ends of justice would be adequately served by maintaining the compensation while setting aside the sentence of imprisonment.

Accordingly, the High Court partly allowed the revision, quashed the sentence of six months’ simple imprisonment, upheld the direction to pay ₹3 lakh as compensation, permitted the complainant to withdraw the deposited amount and discharged the petitioner from his bail bonds.

The judgment underscores that procedural safeguards under criminal law are fundamental to a fair trial. Even in prosecutions under the Negotiable Instruments Act, an accused must be informed with precision about the allegations being faced, and any substantial deviation affecting that right cannot be treated as a mere technical irregularity.