A local court sentenced Pankaj Goel, authorised signatory of Svocan Handicrafts, to nine months in jail for dishonouring a cheque worth ₹ 4 lakh issued in favour of HDFC Bank. The court also directed him to pay compensation equivalent to the cheque amount, along with 6% annual simple interest from the cheque date until the judgment.
It further held that the demand notice had been duly served. Rejecting these arguments, the court held that a security cheque could attract penal consequences under Section 138 if the underlying debt had become due and remained unpaid. It noted that the loan had been disbursed in September 2016 and the accused failed to establish that the outstanding liability had been cleared. The court concluded that Goel failed to rebut the statutory presumption under Section 139 of the Negotiable Instruments Act that the cheque had been issued toward a legally enforceable debt or liability. Goel’s counsel submitted that his business had shut down after the Covid-19 pandemic and that he had no savings While seeking leniency during sentencing. The court, however, awarded the bank compensation of ₹ 4.6 lakh with 6% simple annual interest, payable within the period specified in the order after the appeal period expires or the appeal, if filed, is disposed of.
The court also declined to accept the defence’s reliance on emails regarding cancellation of the cheques, finding that the electronic records had not been proved according to the applicable law.
