Nagpur court acquits Ashok Potbhare in Rs 40 lakh cheque bounce case

A court in Nagpur has acquitted Ashok Potbhare, proprietor of Shri Hanuman Minerals, in a Rs 40 lakh cheque bounce case. The case had drawn considerable attention in the city. The verdict was delivered by A.V. Dakhore, Special Judge, Section 138 NI Act, Nagpur. He heard both sides, examined what emerged in the cross-examination of the complainant's witness and also looked at the documents produced by the defence.

The complaint was filed by the industrial firm Sunflag Iron and Steel Company Limited under Section 138 of the Negotiable Instruments Act. The company alleged that, following a business transaction involving the processing of manganese ore, the accused had a legal liability of Rs 40 lakh and that the cheque was given in payment of it.

The defence argued the opposite. It said the cheque was given only as security and not to discharge any proven liability.

According to the complaint, Sunflag and Shri Hanuman Minerals entered into a business agreement in 2013 to process manganese ore into silico manganese. The company alleges that it supplied a total of 857.135 metric tonnes of manganese ore for this. According to the company, only 40.530 metric tonnes of the finished silico manganese was allegedly returned by the accused. The remaining 735.545 metric tonnes was not returned, and the dispute arose over this accounting.

The company also said that under the agreement the accused was responsible for returning the goods, but allegedly did not. The complaint alleges that the two sides met in 2014 to settle the dispute and the accused allegedly agreed to return the remaining material, but the goods were not returned even afterwards. According to the company's claim, the accused then gave a cheque for Rs 40 lakh towards the alleged dues. When presented at the bank, the cheque was dishonoured. The company sent a legal notice demanding payment but did not receive the amount. It then filed a complaint in court and sought a total of Rs 80 lakh, including compensation over and above the principal amount.

Advocates Kamal Satuja, Kailash Dodani and Akbar Sheikh appeared for the accused, Ashok Potbhare. They said the accused had been falsely implicated and that the cheque was never issued for any legal liability. According to them, the cheque was given as security and the company later used it against the accused. They also said that the mere issuing of a cheque and its bouncing does not automatically prove a liability of Rs 40 lakh, and that the complainant must produce firm evidence for it.

Advocate Dilip Daga argued for the complainant company. The company had made one of its authorised representatives its witness. According to the defence, in cross-examination this witness admitted that he had no direct knowledge of the original business transaction between the company and the accused. The defence also said that the alleged work order and the terms of the agreement were stated to have been signed by another company official, Jagish Jha, but he was not produced to testify.

The defence said the company had not produced any sufficient document proving a liability of exactly Rs 40 lakh. According to it, a letter from the company and the accused's reply also show that the cheque was given as security. In support of its case, the defence cited several judgments of the Supreme Court and the Bombay High Court.

After hearing all the arguments, the court acquitted Ashok Potbhare. The precise legal grounds of the verdict will become clear only when the detailed order and a copy of its findings are available.