₹60 Lakh Cheque Appeal: Karnataka HC Upholds Refusal To Admit Stamp-Duty Record On Complainant’s Third-Party Sale Agreement As Irrelevant to Liability

The respondent filed a complaint under Section 138 of the Negotiable Instruments Act, 1881, alleging that the petitioner’s cheque for ₹60,00,000 was dishonoured.

The trial court convicted the petitioner and imposed a fine of ₹65,00,000; the petitioner appealed.

During the appeal, he applied under Sections 391 and 91 of the Code of Criminal Procedure, 1973, to produce an endorsement from the Sub-Registrar concerning stamp duty on an agreement of sale marked as Ex.P7.

He contended that the endorsement would show that Ex.P7 was fabricated.

The appellate court rejected the application, noting that the petitioner had not challenged Ex.P7 or sought the endorsement at trial, despite having cross-examined the complainant’s witnesses and given defence evidence.

The petitioner challenged that rejection before the High Court.

Section 391 Cr.P.C. empowers an appellate court to take additional evidence, or direct that it be taken, when necessary for the proper disposal of the appeal.

The power serves the ends of justice, but is not an unrestricted opportunity to introduce material after an adverse decision, fill gaps in the evidence, or effectively conduct a retrial; the applicant must demonstrate the evidence’s necessity and that its absence may cause a failure of justice.

The provision may be invoked where the party was prevented from producing the evidence despite due diligence, or where the relevant facts emerged later.

Under Section 531(2)(a) of the Bharatiya Nagarik Suraksha Sanhita, 2023, the appeal, pending before the BNSS commenced, continued under the Cr.P.C.

Section 138 of the Negotiable Instruments Act concerns, among other matters, whether a cheque was issued in discharge of a legally enforceable debt or liability.

The proposed endorsement concerned stamp duty on Ex.P7, an agreement between the complainant and a third party to which the petitioner was not a party.

The petitioner did not establish how the stamp-duty issue or the alleged fabrication of that agreement bore on the liability arising from his cheque.

Further, he had the opportunity to address Ex.P7 at trial and provided no material showing that he could not obtain the endorsement despite due diligence, or that the relevant information became known only later.

The endorsement was therefore not shown to be necessary for deciding the appeal, and its admission would not satisfy Section 391’s requirements.

It dismissed the petition and upheld the appellate court’s order rejecting the application.

The petitioner remained at liberty to advance permissible arguments based on the evidence already on record, and the observations in the petition were not to influence the appellate court’s decision on the merits.