On 16 July 2026, the Calcutta High Court quashed the conviction and the six-month sentence that had been imposed on chartered accountant Sudipta Ghosh under Section 138 of the Negotiable Instruments Act, 1881. In the ruling, the Court held that there were material inconsistencies between what was stated in the complaint and the particulars of the accusation that were later explained to the accused, and because of that, there was a breach of the principles of a fair trial. Still, the Court did not disturb the order directing payment of ₹3 lakh as compensation to the complainant, Chandana Pal, because that amount had already been deposited, and the direction accordingly remained in force.
Background of the Case
In this matter, it was alleged that Chandana Pal had advanced a friendly loan of ₹1.5 lakh to Sudipta Ghosh in May 2003, and Ghosh issued a cheque dated 12 March 2006 towards repayment of that liability. Thereafter, when the cheque was dishonoured because of insufficiency of funds, proceedings were initiated under Section 138 of the Negotiable Instruments Act. The Trial Court convicted the accused, and the Appellate Court thereafter affirmed that conviction. From there, the matter reached the Calcutta High Court in revision.
Calcutta High Court Finds a Procedural Loophole in Section 138 Proceedings
The High Court noted that the criminal proceedings suffered from a fundamental procedural irregularity. As per the judgment, the particulars of the offence communicated to Ghosh under the relevant criminal procedure did not correspond with the allegations contained in the original complaint. The Court stressed that an accused has to be informed of the precise accusations against them so that an effective defence can be presented. When the particulars of the accusation materially differ from the complaint, the fairness of the trial stands compromised.
Cheques: Discrepancies in the Figures and Numbers
The judgment records that the complaint related to a cheque worth ₹1.5 lakh, bearing Cheque No. 169190. However, the plea that was recorded before the Magistrate referred to Cheque No. 901536 for ₹5 lakh. The High Court held that these discrepancies were not merely clerical, because they related to two different cheque transactions. In the Court’s view, requiring the accused to answer allegations connected with one cheque, while the prosecution proceeded on another transaction, constituted a procedural defect that affected the legality and validity of the trial.
Fair Trial Principles Reaffirmed
The High Court then underlined that procedural safeguards are a fundamental component of criminal adjudication. It also linked this to the constitutional guarantee of a fair trial and observed that an accused has to be given proper and clear notice of the allegations so that the defence can be effective.
The judgment also makes it clear that even if statutory presumptions arise under Section 138 of the Negotiable Instruments Act, those presumptions cannot override the mandatory procedural requirements governing criminal trials.
Scope of Section 138 of the Negotiable Instruments Act
Section 138 of the Negotiable Instruments Act lays down criminal liability where a cheque that was issued in discharge of a legally enforceable debt or liability is dishonoured, but only on certain stated grounds and only if the prescribed statutory conditions are fulfilled.
The provision does prescribe penal consequences for cheque dishonour. Still, the criminal proceedings under the Act have to comply with the principles of natural justice and procedural fairness that apply to every criminal prosecution.
Importance of Section 251 CrPC Compliance
The Court also looked at what Section 251 of the Code of Criminal Procedure requires. The Magistrate must first state the particulars of the offence to the accused before recording the plea. Now, for corresponding cases, these provisions are covered under the Bharatiya Nagarik Suraksha Sanhita, where applicable.
In the judgment, it is stated that if the particulars of the alleged offence are not communicated in a correct and clear manner, then it amounts to a serious procedural defect, especially when the accused is called upon to answer allegations that are materially different from what was mentioned in the complaint.
Compensation Order Upheld
Even though the conviction and sentence were later set aside, the High Court did not interfere with the direction to pay ₹3 lakh as compensation to the complainant. The Court noted that this amount had already been deposited pursuant to an earlier interim order.
The High Court also refused to remit the matter for a fresh trial, observing that the proceedings had remained pending for almost two decades. According to the Court, ordering a retrial would not advance the cause of justice in the facts and circumstances of the case.
Legal Significance of the Judgment
The decision reiterates that procedural compliance in criminal proceedings is not a mere technical formality but an essential safeguard for ensuring a fair trial. The judgment underscores that material inconsistencies between the complaint and the particulars communicated to the accused may render criminal proceedings legally unsustainable.
The ruling is likely to serve as a persuasive reference on the importance of accurately recording the particulars of an offence in prosecutions under the Negotiable Instruments Act and reinforces the obligation of trial courts to ensure strict adherence to procedural requirements.
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