J&K High Court Sets Aside Section 138 NI Act Conviction Where Accused Never Made Unqualified Admission of Guilt Under Section 251 CrPC

Justice Sanjay Dhar held that a Trial Magistrate cannot convict on the basis of a Section 251 CrPC statement that is neither unambiguous nor unconditional, remanding the case for fresh trial at Chadoora.

The High Court of Jammu & Kashmir and Ladakh at Srinagar has set aside a conviction under Section 138 of the Negotiable Instruments Act (“NI Act”) on the ground that the accused's statement recorded under Section 251 of the Code of Criminal Procedure (“CrPC”) did not constitute an unqualified, unambiguous, or voluntary admission of guilt. Justice Sanjay Dhar, sitting singly, allowed the criminal revision petition filed by Adil Ahmad Sofi against the concurrent findings of the Judicial Magistrate 1st Class (Munsiff), Chadoora and the Principal Sessions Judge, Budgam. The court held that the Trial Magistrate's treatment of a qualified, conditional statement as a plea of guilt, and the subsequent conviction, were legally unsustainable. The matter has been remanded for fresh proceedings in accordance with law.

The Cheque Complaint and Trial Proceedings

Javid Ahmad Sofi filed a complaint against Adil Ahmad Sofi alleging commission of an offence under Section 138 of the NI Act. The subject matter of the complaint was a cheque for Rs. 9,60,000 issued by the petitioner in favour of the respondent. The complainant alleged that the said amount was due on account of business transactions between the parties.

After taking cognizance and issuing process, the Trial Magistrate recorded the petitioner's plea on 10 March 2023 under Section 251 CrPC. In that statement, the petitioner admitted issuing the cheque but stated that it had been handed over as a security deposit in connection with an ongoing business transaction. He said he was unaware that his bank account had insufficient funds. He also claimed that he had invested Rs. 30,40,000 in the business while the respondent had invested Rs. 9,60,000, and that payment would be made once he received his own share from the complainant.

During the pendency of the complaint, the petitioner paid Rs. 50,000 to the respondent, and his counsel sought time to repay the balance. The Trial Magistrate read the Section 251 CrPC statement as an admission of guilt and convicted the petitioner on 12 July 2023, sentencing him to simple imprisonment of one year and imposing a fine of Rs. 19,20,000 directed to be paid to the respondent as compensation.

The Appellate Court's Decision and the Jurisdiction Question

The petitioner filed an appeal before the Principal Sessions Judge, Budgam. By order dated 28 May 2024, the Appellate Court dismissed the appeal and upheld the Trial Magistrate's conviction.

Before the High Court, the petitioner contended that he had never pleaded guilty and that there was no unequivocal admission of guilt in his statement. He argued that the Trial Magistrate was legally bound to hold trial rather than record conviction. He also contended that the procedure under Section 252 CrPC, which he called mandatory, had not been followed, and that his statement under Section 251 CrPC had not been properly appreciated.

Justice Dhar addressed a threshold jurisdictional issue as well. Section 375 CrPC bars an appeal against a conviction recorded on the basis of a plea of guilt. The court found that if the Trial Magistrate's conviction had properly rested on a genuine plea of guilt, the Sessions Court would have had no jurisdiction to entertain the appeal at all. The impugned order of the Appellate Court was therefore also without jurisdiction on its own terms.

The Legal Standard for a Plea of Guilt in a Summons Case

Section 251 CrPC requires that when an accused appears before a Magistrate in a summons case, the particulars of the offence must be stated to him and he must be asked whether he pleads guilty or has any defence to make. No formal charge need be framed. Section 252 CrPC then provides that if the accused pleads guilty, the Magistrate shall record the plea as nearly as possible in the words used by the accused and may, in his discretion, convict him.

Justice Dhar surveyed the binding and persuasive authorities on these provisions. The Supreme Court in Mahant Kaushalya Das v. State of Madras, AIR 1966 SC 22, had held that the requirements of the equivalent provision in the old Code are mandatory, and that violation vitiates the trial and renders conviction legally invalid. The Supreme Court had emphasised that because an accused convicted on a plea of guilt has no right of appeal under Section 375 CrPC, exact compliance is necessary to prevent mistake or misapprehension.

This court had earlier, in New Raginaya Goods Mart and another v. State, AIR 1960 J&K 108, held that the accused must admit in clear terms all facts constituting the offence before a conviction on a plea of guilty can be recorded. In Waheed Hussain v. Mohammad Farooq Rangrez, 2006 (I) S.L.J. 155, this court had further held that the Magistrate must state the particulars of the offence to the accused and ask him to show cause why he should not be convicted.

The Madras High Court's decision in P. Saravanan v. State (Crl. R.C(MD) No.354 of 2016, decided on 13 July 2016) was also cited. That court had observed that a plea of guilty in a summons case must be “unqualified, unambiguous, clear cut and voluntary” before the Magistrate can accept it, and that a Magistrate has the discretion to decline to accept the plea and direct the prosecution to produce witnesses.

Drawing from these authorities, Justice Dhar stated the composite rule: unless an accused makes an unqualified, unambiguous, clear, and voluntary admission of the accusations levelled against him, he cannot be convicted. Strict compliance with Sections 251 and 252 CrPC is mandatory precisely because conviction on a plea of guilt extinguishes the accused's right of appeal under Section 375 CrPC. A Magistrate must be very sure that the admission is voluntary, unqualified, and unambiguous before proceeding to convict.

Applying the Standard: Why the Statement Was Insufficient

Turning to the petitioner's actual statement, Justice Dhar identified two independent deficiencies.

The first was substantive. The petitioner had admitted issuing the cheque and signing it, but he had gone on to say that the cheque was given as security, that the parties had a running business account where he had invested substantially more than the complainant, and that he would pay only after receiving his own share from the respondent. He had not admitted a legally enforceable debt. He had not admitted that he would pay unconditionally. The statement was plainly conditional.

The second deficiency was procedural. Service of a notice of demand upon the accused is an essential ingredient of an offence under Section 138 of the NI Act. A review of the Section 251 CrPC statement showed that the Trial Magistrate had not put to the petitioner the allegations relating to service of such a notice. Because the Magistrate failed to state all the facts alleged in the complaint that constitute the offence, the statement recorded under Section 251 CrPC was incomplete on its face and could not amount to a complete admission of guilt.

The respondent's argument that partial payment of Rs. 50,000 during pendency and a counsel's statement about repaying the balance were sufficient to ground conviction was rejected. The petitioner had throughout maintained a specific stand about mutual business accounts and outstanding dues running in both directions. Partial payment in that context did not constitute an unqualified admission.

On both counts — the conditional nature of the statement and the Magistrate's failure to put all essential ingredients of the offence to the accused — the court held that conviction under Section 252 CrPC was not open to the Trial Magistrate.

Outcome

Justice Sanjay Dhar allowed Crl R No.24/2024 on 17 July 2026. The conviction recorded by the Judicial Magistrate 1st Class (Munsiff), Chadoora on 12 July 2023 and the order of the Principal Sessions Judge, Budgam dated 28 May 2024 dismissing the appeal were both set aside. The matter was remanded to the Trial Magistrate with a direction to proceed further in the complaint in accordance with law. A copy of the judgment was directed to be sent to the Trial Magistrate for information and compliance.