SRINAGAR: In a significant judgment clarifying the law governing summary trials under the Negotiable Instruments Act, the High Court of Jammu & Kashmir and Ladakh has set aside the conviction of a Budgam businessman in a cheque dishonour case, holding that a court cannot convict an accused merely because he admits issuing a cheque unless there is an unqualified, unambiguous and voluntary admission of guilt.
Justice Sanjay Dhar, allowing a criminal revision petition filed by Adil Ahmad Sofi, ruled that both the Trial Magistrate and the appellate court had committed legal errors by treating the accused’s statement recorded under Section 251 of the Code of Criminal Procedure (CrPC) as a plea of guilt, despite the accused having disputed the existence of any legally enforceable debt.
The judgment was reserved on July 7, 2026, and pronounced on July 17, 2026.
The petitioner was represented by Advocate Sheikh Hilal, assisted by Advocate Shaziya Kamal, while Advocate Ateeb Kanth appeared for the respondent, Javid Ahmad Sofi.
The dispute arose from a complaint filed under Section 138 of the Negotiable Instruments Act, relating to a cheque for Rs 9.60 lakh issued by Adil Ahmad Sofi in favour of Javid Ahmad Sofi.
The complainant alleged that the amount represented money due from business transactions between the parties.
On July 12, 2023, the Judicial Magistrate First Class (Munsiff), Chadoora, convicted the accused and sentenced him to one year’s simple imprisonment besides imposing a fine of Rs 19.20 lakh, directing that the amount be paid to the complainant as compensation.
The conviction was later upheld by the Principal Sessions Judge, Budgam, on May 28, 2024.
Aggrieved, the accused approached the High Court through a criminal revision petition.
Before the Magistrate, the accused had admitted issuing the cheque but maintained that it had been handed over as security during business dealings between the parties.
He stated that while the complainant had invested Rs 9.60 lakh in the business, he himself had invested Rs 30.40 lakh, and the accounts between them were yet to be settled. He further stated that he would clear the complainant’s dues after receiving his own share from the business.
The Trial Magistrate treated this statement as an admission of guilt and convicted him without recording evidence or conducting a trial.
Justice Dhar held that the approach adopted by the Trial Magistrate was contrary to law.
Analysing Sections 251 and 252 of the Code of Criminal Procedure, the court observed that a conviction on the basis of a plea of guilt is permissible only when the admission is clear, unconditional and voluntary.
“Unless an accused makes an unqualified, unambiguous, clear and voluntary admission of accusations levelled against him, he cannot be convicted of the offences alleged,” the court held.
The judgment stressed that strict compliance with the statutory procedure is mandatory because an accused convicted on a plea of guilt ordinarily loses the statutory right to appeal.
The High Court noted that the accused had admitted only one fact—that he had issued the cheque.
He had not admitted that he owed a legally enforceable debt, an essential ingredient for conviction under Section 138 of the Negotiable Instruments Act.
“The only admission which he has made is with regard to issuance of cheque and the signatures appearing on the said cheque. Beyond this, he has not admitted anything.”
Justice Dhar further observed: “The petitioner has not admitted that there is a legally enforceable debt due to the respondent from him, nor has he admitted that he is going to pay the cheque amount to the respondent unconditionally.”
The court concluded that such a statement could never be construed as a plea of guilt.
The judgment also found serious procedural lapses in the manner in which the Trial Magistrate recorded the accused’s plea.
Justice Dhar pointed out that service of the statutory demand notice, an essential ingredient of an offence under Section 138 of the Negotiable Instruments Act, had never been put to the accused while recording his plea under Section 251 CrPC.
“The allegations relating to service of notice upon the petitioner have not at all been put to the petitioner while recording his plea under Section 251 of the Cr.P.C.”
Consequently, the court held: “The alleged admission made by the petitioner… is not unqualified, unambiguous and unconditional. On the basis of such a statement, it was not open to the learned Trial Magistrate to record conviction.”
The complainant had argued that during the pendency of the complaint the accused had paid Rs 50,000 and his lawyer had expressed willingness to pay the remaining amount.
Rejecting this argument, the High Court held that partial payment during litigation could not by itself amount to an admission of criminal liability.
“Mere payment of Rs.50,000… would not form a ground for convicting the petitioner,” the court ruled, particularly when the accused had consistently maintained that the business accounts between the parties required settlement.
The judgment also contains an important finding on appellate jurisdiction.
Justice Dhar observed that Section 375 CrPC bars an appeal against a conviction based on a plea of guilt. Since the Trial Magistrate had treated the conviction as one based on a guilty plea, the Sessions Court itself lacked jurisdiction to entertain the appeal.
“Therefore, the learned Appellate Court had no jurisdiction to entertain the appeal… The impugned order passed by the learned Appellate Court is, therefore, without jurisdiction.”
Allowing the revision petition, the High Court set aside both the conviction recorded by the Trial Magistrate and the appellate judgment affirming it.
The court remanded the matter to the Judicial Magistrate, Chadoora, directing the trial court to proceed with the complaint afresh in accordance with law.
The judgment reinforces that courts dealing with cheque dishonour complaints cannot dispense with a trial merely because an accused admits issuing a cheque. Unless every ingredient of the offence is admitted through a clear, voluntary and unequivocal plea, the prosecution must prove its case in accordance with law.
