Madras High Court
S.Kamatchi vs M/S.Arkaa Medicament on 1 July, 2009
Author: A.Selvam
Bench: A.Selvam
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 01/07/2009 CORAM THE HONOURABLE MR.JUSTICE A.SELVAM Crl.A.Nos.1223 to 1226 of 2001 S.Kamatchi . . . Appellant in Crl.A.No.1223/2001/ Complainant P.Kalyanasundaram . . . Appellant in Crl.A.Nos.1224 & 1225/ 2001/Complainant P.Chandrasekaran . . . Appellant in Crl.A.No.1226/2001 /Complainant Vs. 1.M/s.Arkaa Medicament, through its Managing Director, Mr.A.Dhanasekaran 2.A.Dhanasekaran . . . Respondents in all the appeals/ Accused These criminal appeals have been filed under Section 378(4) of Cr.P.C. against the judgment dated 30.11.2001 passed in Criminal Appeal Nos.133 to 136 of 2000 by the Additional District and Sessions cum Fast Track Court No.III, Madurai, reversing the conviction and sentence passed in Calendar Case Nos.199, 277, 539 & 540 of 1998 by the Judicial Magistrate Court No.II, Madurai. !For appellants in all the appeals ... Mr.V.R.Shanmuganathan for M/s.A.L.Gandhimathi ^For respondents in all the appeals ... Mr.T.Muruganandham :COMMON JUDGMENT
Challenge in these criminal appeals is to the judgments passed in Criminal Appeal Nos.133 to 136 of 2000 by the Additional District and Sessions cum Fast Track Court No.III, Madurai, wherein the conviction and sentence passed in Calendar Case Nos.199, 277, 539 & 540 of 1998 by the Judicial Magistrate Court No.II, Madurai are set aside.
2.In the complaint filed in C.C.No.199 of 1998, it is stated that the first accused is a partnership firm and in which the second accused is one of its partners. The second accused has approached the complainant for getting financial assistance and borrowed money in the year 1990 and on 10.03.1995 the amount has been calculated to the tune of Rs.54,000/- and for the said amount, the second accused for himself and on behalf of the first accused, has executed a pro-note. The second accused has admitted and acknowledged the liability and with the intention to repay the same, he has given the cheque in question on 15.08.1997 for a sum of Rs.54,000/- in favour of the complainant and the same has been presented in the concerned bank and the concerned bank has retuned the cheque in question stating 'funds insufficient' and subsequently a legal notice has been issued and even after receipt of the same, the accused have failed to discharge their liability and under the said circumstances, the accused are said to have committed offence under Section 138 of the Negotiable Instruments Act, 1881.
3.In the complaint filed in C.C.No.539 of 1998, it is stated that the first accused is a partnership firm and in which the second accused is one of its partner. The second accused for himself and on behalf of the first accused has approached the complainant for getting loan and he received money in the year 1990 and on 10.03.1995 the amount has been calculated to the tune of Rs.21,080/- and on the same day, he has executed two pro-notes, each for a sum of Rs.10,540/- and he issued the cheque in question for a sum of Rs.21,080/- in favour of the complainant and the same has been presented in the concerned bank and the concerned bank has returned the same stating 'funds insufficient' and subsequently a legal notice has been issued to the accused and even after receipt of the same, the accused have failed to discharge their liability and under the said circumstances, the accused have committed offence under Section 138 of the Negotiable Instruments Act, 1881.
4.In the complaint filed in C.C.No.540 of 1998, it is stated that the first accused is a partnership firm and in which the second accused is one of its partner and the second accused for himself and on behalf of the first accused, has approached the complainant for getting money and he borrowed the same in the year 1990 and on 10.03.1995 the amount has been calculated to the tune of Rs.17,360/- and on that day, the second accused has executed a pro-note for the said sum in favour of the complainant and he has also issued a cheque for the said sum in favour of the complainant and the same has been presented in the concerned bank and the concerned bank has returned the same stating 'funds insufficient' and subsequently a legal notice has been issued and even after receipt of the same, the accused have failed to discharge their liability and under the said circumstances, they have committed offence under Section 138 of the Negotiable Instruments Act, 1881.
5.In the complaint filed in C.C.No.277 of 1998, it is stated that the first accused is a partnership firm and in which the second accused is one of its partners. The second accused has approached the complainant for getting financial assistance and he borrowed money in the year 1990 and on 10.03.1995 the amount has been calculated at Rs.21,300/- and on the same day, for the said sum of Rs.21,300/- the second accused has executed a pro-note and also issued a cheque for the said sum in favour of the complainant and the same has been presented in the concerned bank and the concerned bank has returned the same stating 'funds insufficient' and subsequently a legal notice has been issued and even after receipt of the same, the accused have failed to discharge their liability and under the said circumstances, the accused have committed offence under Section 138 of the Negotiable Instruments Act, 1881.
6.The trial Court, after considering all the evidence available on record, has found both the accused guilty under Section 138 of the Negotiable Instruments Act, 1881 and imposed a fine of Rs.1,000/- with default clause against the first accused and six months simple imprisonment against the second accused and also directed both the accused to pay the amount mentioned in each cheque as compensation. Against the conviction and sentence passed in C.C.Nos.199, 277, 539 & 540 of 1998, the accused as appellants have preferred Criminal Appeal Nos.133 to 136 of 2000 on the file of the first appellate Court.
7.The first appellate Court, after hearing both sides and after reappraising the evidence available on record, has allowed all the appeals and thereby set aside the conviction and sentence passed by the trial Court in Calendar Case Nos.199, 277, 539 & 540 of 1998. Against the judgment passed by the first appellate Court in Criminal Appeal Nos.133 to 136 of 2000, these criminal appeals have been filed at the instance of the complainant in each case.
8.The contentions mentioned in all the complaints are that the first accused is a partnership firm and the second accused is one of its partners and during the year 1990, the second accused for himself and on behalf of the first accused has approached the complainants to get financial assistance and accordingly the amount mentioned in each complaint has been advanced to the second accused and the second accused has received the same for himself and on behalf of the first accused and on 10.03.1995 amounts have been calculated and to that extent the second accused has executed pro-notes in favour of the complainants and on the same day, he issued the cheques in question in favour of the complainants and the cheques in question have been presented in the concerned bank and the concerned bank has returned the same stating 'funds insufficient' and subsequently all legal formalities have been observed.
9.The trial Court, has found both the accused guilty under Section 138 of the Negotiable Instruments Act, 1881 and invited conviction and sentence as stated supra. But, the first appellate Court, has come to the conclusion that the cheques in question have been given in respect of time barred debts and therefore, the accused cannot be mulcted with punishment under Section 138 of the Negotiable Instruments Act, 1881.
10.Since common questions of law and facts are involved in these criminal appeals, common judgment is pronounced.
11.Before contemplating the rival submissions made by either counsel, it would be apropos to look into the provision of Section 138 of the Negotiable Instruments Act, 1881 and the same reads as follows;
"Dishonour of cheque for insufficiency, etc., of funds in the accounts.- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless-
(a)the cheque has been presented to the bank within a period of six months from the date of on which it is drawn or within the period of its validity, whichever is earlier.
(b)the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid, and
(c)the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation.- For the purpose of this section, "debt or other liability"
means a legally enforceable debt or other liability."
12.From the explanation given to the said section one can easily discern that the cheque in question should be given in connection with a legally enforceable debt or other liability and in a nut-shell on the date of issuance of cheque in question a legally enforceable debt or other liability must be in existence. If a cheque has been given not with regard to legally enforceable debt or other liability, the Court cannot come to a conclusion that the drawer of the cheque has committed offence under Section 138 of the Negotiable Instrument Act, 1881.
13.The learned counsel appearing for the appellants/complainants in all the criminal appeals has repeatedly contended that the first accused is a partnership firm and the second accused is one of its partners and during the year 1990, the second accused has approached the complainants to get financial assistance and he obtained loan from the complainants in the said year and on 10.03.1995 the amounts due from the accused have been arrived at and on the same day, the second accused for himself and on behalf of the first accused has executed pro-notes mentioned in the complaints in favour of the respective complainant and he also issued the cheques in question in favour of the respective complainant and even though the loans have been advanced to the accused in the year 1990, the accused have paid interest and therefore, the loan mentioned in each complaint is not barred by limitation and the trial Court, after considering all the contentions raised on either side has rightly found both the accused guilty under Section 138 of the Negotiable Instruments Act, 1881, but the first appellate Court, without considering the contentions urged on the side of the respective complainant, has erroneously come to the conclusion that on the date of issuance of the cheques in question loans in question have become time barred and the cheques in question have not been issued on the basis of legally enforceable debt and therefore, the conclusion arrived at by the first appellate Court is totally erroneous and the same is liable to be set aside.
14.Per contra, the learned counsel appearing for the respondents/accused in each criminal appeal has also equally contended that in each complaint, it has been specifically stated that the loans in question have been given in the year 1990 and no document has been produced so as to establish the alleged fact that the accused one and two have paid interest to the respective complainant and the trial Court, without considering the question of limitation properly, has erroneously found the accused guilty under Section 138 of the Negotiable Instruments Act, 1881, but the first appellate Court has rightly come to the conclusion that the cheques in question have not been issued so as to discharge a legally enforceable debt and therefore, the conclusion arrived at by the first appellate Court in each appeal is perfectly correct and the same need not be interfered with.
15.In order to perpend the rival submissions made by either counsel, the Court has to look into the allegations made in the complaints. In all the complaints, it has been specifically stated that the second accused on behalf of the first accused has approached the complainants in the year 1990 and obtained the amount mentioned in the respective complaint by way of loan and on 10.03.1995 the amounts due have been arrived at and on the same day, the second accused on behalf of the first accused has executed pro-notes in favour of the respective complainant and also issued the cheques in question.
16.The only legal point that has now winched to the fore in the present criminal appeals is ;
"Whether the cheques in question have been issued in respect of legally enforceable debts or not?"
17.The specific case of the complainant in each complaint is that the second accused on behalf of the first accused has received loan in the year 1990 and on 10.03.1995 the amounts due from the accused have been arrived at and the second accused has executed pro-notes in favour of the respective complainant. But, to utter dismay, no such pro-note has been marked on the side of the complainant in each case. The admitted case of the complainant in each case is that the loan in question has been advanced in the year 1990. The learned counsel appearing for the appellants/ complainants has argued that after getting loan in the year 1990, the accused have paid interest on several occasions. But, to prove the same, no document has been marked on the side of the complainants. Further as stated earlier, even though a settlement has been arrived at on 10.03.1995 and pro-notes have been executed by the accused, no pro-note has been marked on the side of the complainants. Therefore, it is quite clear that the cheque mentioned in each complaint has been given in respect of time barred debt.
18.The cheque in question which has been marked in C.C.No.199 of 1998 has been given on 15.08.1997. The cheque in question which has been marked in C.C.No.539 of 1998 has been given on 15.08.1997. Likewise, the cheque in question which has been marked in C.C.No.540 of 1998 has been given on 15.09.1997. The cheque in question which has been marked in C.C.No.277 of 1998 has been given on 01.08.1997.
19.It has already been pointed out that as per the explanation given under Section 138 of the Negotiable Instruments Act, 1881, the cheque in question must be given only in respect of legally enforceable debt or other liability. In the instant cases, the debt mentioned in every complaint has become time barred on the date of issuance of the cheque in question. Further no valid acknowledgement of debt has been established on the side of the complainants. As per Section 19 of the Limitation Act, a debt should be acknowledged within the period of limitation. In the instant cases, as taunted earlier, even though it has been contended on the side of the appellants that the accused have paid interest, no document has been forthcoming to that effect. Further a time barred debt cannot be construed as a legally enforceable debt. Under the said circumstances, the Court can safely come to a conclusion that the cheques in question have not been given in respect of legally enforceable debts and on that score alone, all the complaints are liable to be dismissed.
20.The learned counsel appearing for the appellants/complainants has also advanced another limb of argument stating that in the instant cases, no defence has been taken on the side of the accused with regard to limitation and therefore, the Court is not bound to look into it, but the first appellate Court has unnecessarily given a finding to the effect that the cheques in question have been given only in respect of time barred debts and the finding given by the first appellate Court is nothing but supernumerary and the same is liable to be rejected.
21.It is an everlasting principle of law that a person who institutes a legal proceeding is bound to say that the same is within the contour of limitation. But it is not the duty of opposite party to take the plea of limitation as a defence and the Court is having ample power to look into limitation even though the same has not been taken as a defence. Further in the present cases, the complainants have not at all explained that the alleged transactions made between them and accused are not barred by limitation. Therefore, the entire arguments advanced by the learned counsel appearing for the appellants/ complainants are of no use.
22.The learned counsel appearing for the appellants/complainants has accited the following decisions:
a) In AIR 2002 Supreme Court 985 (A.V.Murthy Vs. B.S.Nagabasavanna) it has been held that dismissal of a complaint filed under Section 138 of the Negotiable Instruments Act, at threshold on the ground that as amount was advanced 4 years prior to the issuance of cheque, is illegal.
In the above case, the Honourable Apex Court has come to the conclusion that with regard to the amount in question, the accused therein has shown the same in his balance sheet for every year and the same amounts to valid acknowledgement. Under the said circumstances, the Honourable Aped Court has held that the dismissal of the complaint at threshold is improper.
In the instant cases, no such occasion has arisen. As taunted earlier, no acknowledgement has been proved on the side of the complainants. Therefore, the decision referred to supra cannot be attuned in the present case.
b)In 2007 STPL (DC) 988 Bombay (Purushottam Vs. Manohar K.Deshmukh & another), it has been held that the accused has admitted during his examination under Section 313 of the Code of Criminal Procedure that he had received money from the complainant and under the said circumstances, the order of acquittal is improper.
In the instant cases, no such admission has been made by the accused 1 & 2 and therefore, the decision referred to above is not having application to the facts of the present cases.
c)In 2008 STPL(DC) 322 Bombay (Nagpur Bench) (Vijay Ganesh Gondhlekar Vs. Indranil Jairaj Damale) it has been held that the loan in question has been advanced on 01.03.1995 and the cheque in question has been issued on 01.03.1999 and during interregnum period the loan has been renewed in the year 1996 and also in the year 1997. Under the said circumstances, a valid acknowledgement has been made within the meaning of Section 18 of the Limitation Act.
As stated earlier, no acknowledgement has been made in the present cases and the alleged payment of interest has not at all been proved by the complainants and therefore, the facts of the present cases are totally contra to the facts of the decisions referred to supra and under the said circumstances, the decision referred to supra cannot be relied upon.
d)In 2001(4) CTC 382 (SC) (K.N.Beena Vs. Muniyappan and another) in view of the presumption contains in Sections 118 and 139 of the Negotiable Instruments Act, the Court has to presume that the cheque had been issued for debt or other liability and the presumption is rebuttable.
In the instant cases, the specific contention of the complainant is that the loans in question have been given in the year 1990 and subsequently amounts have been calculated till 10.03.1995 and on the same day, pro-notes have come into existence and thereafter, the cheques in question have been issued on various dates. But, the above aspects have not been proved on the side of the complainants. Under the said circumstances, the presumptions available under Sections 118 and 139 of the Negotiable Instruments Act cannot be drawn in favour of the complaints.
e)In (III) 2007 BC 752 Karnataka (S.Parameshwarappa and another Vs. S.Choodappa) it has been held that the accused-drawer cannot seek dismissal of complaint on the ground of want of consideration or legally enforceable debt for issuance of the cheque. Only after cheque presented after its valid period, such contentions would arise.
It has already been discussed in detail and ultimately found that the cheque in question under Section 138 of the Negotiable Instruments Act, 1881 must be given only in respect of a legally enforceable debt or other liability and a time barred debt cannot be construed as a legally enforceable debt. Therefore, in the instant cases all the cheques in question have been given only in respect of time barred debts. Under the said circumstances, it cannot be said that the accused have committed offences under the said sections.
23.The first appellate Court has mainly relied upon the following decisions;
a)In 1997 (2) Crimes 658 (Andhra Pradesh High Court) it has been held that the alleged loan has been advanced in the year 1985 and the cheque has been issued in the year 1990 and the debt has become time barred. By issuance of cheque, limitation has not been extended.
b) In 2001 MLJ (Crl.) 115 (Kerala) (Joseph Vs. Devassia) it has been held that the alleged loan has been given to the accused in January 1988 and the cheque has been issued in February 1991 and debt has become time barred and there is no valid acknowledgement of liability.
24.Since this Court is of the considered view that a time barred debt would not come within the meaning of a legally enforceable debt and since the same view has been taken by the High Courts of Andharpradesh and Kerala as per the decisions mentioned supra, this Court is not in a position to rely upon the decision rendered by the Karnataka High Court reported in (III) 2007 BC 752 Karnataka (S.Parameshwarappa and another Vs. S.Choodappa). Therefore, viewing from any angle, the entire contentions urged on the side of the appellants/complainants cannot be accepted.
25.The first appellate Court, after having threadbare discussion in each appeal has clearly come to the conclusion that the debt mentioned in each complaint is barred by limitation and this Court has not found any valid reason to make interference with the well merited judgments passed by the first appellate Court and altogether the present criminal appeals deserve dismissal.
27.In fine, these criminal appals deserve dismissal and accordingly are dismissed. The judgments rendered in Criminal Appeal Nos.133 to 136 by the Additional District and Sessions cum Fast Track Court No.III, Madurai are confirmed.
gcg To
1.The Additional District and Sessions Judge, FTC No.III, Madurai.
2.The Judicial Magistrate No.II, Madurai.