Madras High Court
Thavamoni Stephen Jeyaraj vs Muthukrishnan on 20 April, 2022
Author: G.K.Ilanthiraiyan
Bench: G.K.Ilanthiraiyan
CRL.A.(MD).No.395 of 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
RESERVED ON : 07.04.2022
PRONOUNCED ON : 20.04.2022
CORAM
THE HONOURABLE MR.JUSTICE G.K.ILANTHIRAIYAN
CRL.A.(MD).No.395 of 2021
and
Crl.M.P(MD)No.7379 of 2021
Thavamoni Stephen Jeyaraj,
S/o.Thavomoni,
No.32/L, 7-C, Kamaraj Nagar,
3rd Street, T.B.Road,
Valliyoor, Rathapuram Taluk,
Tirunelveli District now
Temporarily residing at
Abu Dhabi,
Represented by his power of attorney agent,
N.Senthil Arumugam
... Appellant/Respondent/Complainant
Vs.
Muthukrishnan ... Respondent/Appellant/Respondent
PRAYER : Criminal Appeal filed under Section 378 of Cr.P.C to call for
the records in Crl.A.No.62 of 2019 on the file of the learned IV
Additional Sessions Judge, Tirunelveli, reversing and setting aside
the order of conviction dated 01.04.2019 passed in C.C.No.87 of
2013 on the file of the learned Judicial Magistrate, Valliyoor,
Tirunelveli District and set aside the order of acquittal, dated
01.04.2019.
1/27
https://www.mhc.tn.gov.in/judis
CRL.A.(MD).No.395 of 2021
For Appellant : Mr.G.Prabhakaran
For Respondent : Mr.N.Anandha Padmanabhan
for Mr.V.Angusamy
JUDGMENT
This Appeal is directed as against the order of acquittal dated 16.04.2021 passed in Crl.A.No.62 of 2019 on the file of the learned IV Additional Sessions Judge, Tirunelveli, thereby reversing and setting aside the order of conviction, dated 01.04.2019 passed in C.C.No.87 of 2013 on the file of the learned Judicial Magistrate, Valliyoor, Tirunelveli District.
2.The appellant is the complainant and the respondent is the accused. The appellant lodged the complaint for the offence punishable under Section 138 of the Negotiable Instruments Act alleging that the respondent is the friend of the appellant. The respondent received a sum of Rs.1,25,00,000/- through ICICI Bank cheques in the year 2010-2011 for purchasing landed properties at Vallioor in favour of the appellant. Since the respondent failed to purchase any land, the appellant demanded the respondent to re-pay the said amount. The respondent made certain re-payment and the balance due amount is Rs.43,00,000/-. They also agreed by agreement dated 24.05.2012 for the final settlement of 2/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 Rs.43,00,000/-. In order to repay the said balance amount, the respondent issued cheque for the sum of Rs.43,00,000/- and the same was presented for collection. It was returned dishonoured for the reason that the 'funds insufficient'. After causing statutory notice, the respondent failed to pay the cheque amount. Hence, the appellant lodged the complaint and the same has been taken cognizance in C.C.No.87 of 2013 on the file of the learned IV Additional Sessions Judge, Tirunelveli.
3.On the side of the appellant, he himself was examined as P.W.1 and one Ganesan was examined as P.W.2 and marked Ex.P.1 to Ex.P.10 and on the side of the respondent, D.W.1 to D.W.4 were examined and Ex.D.1 to Ex.D.12 were marked. Through the Court, Ex.X.1 and Ex.X.2 were marked.
4.On a perusal of the oral and documentary evidence, the trial Court convicted the respondent for the offence punishable under Section 138 of the Negotiable Instruments Act and sentenced him to undergo one year imprisonment and also ordered compensation under section 357(3) of Cr.P.C to the tune of cheque amount, namely Rs.43,00,000/- payable to the appellant herein. 3/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021
5.Aggrieved by the same, the respondent preferred an Appeal in Crl.A.No.62 of 2019 on the file of the learned IV Additional District Judge, Tirunelveli and the Appellate Court set aside the conviction and sentence imposed on the respondent and acquitted him for the offence punishable under Section 138 of the Negotiable Instruments Act. Challenging the order of acquittal passed in Crl.A.No.62 of 2019 on the file of the learned IV Additional District Judge, Tirunelveli, the appellant has preferred the present Criminal Appeal.
6.The learned counsel appearing for the appellant would submit that Ex.P.6 is a complete document together with various endorsements. It clearly prove the nature of transaction between the appellant and the respondent and thus, the initial burden of the appellant to establish the nature of transaction and liability by the respondent stood fully discharged by the appellant and as such, the burden of the respondent under Section 139 as well as Section 118 of the Negotiable Instruments Act got activated, in which the respondent had miserably failed to rebut the evidence of the appellant. The trial Court rightly held and convicted the appellant. Whereas, the first Appellate Court held that the cheque in question was issued as a security and hence, it could not have been acted upon. Even assuming that though not admitting the cheque was 4/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 issued as a security for the due payment of Rs.43,00,000/- it is obvious that once the cheque got dishonoured, it was for the respondent to cogently establish by leading evidence that the liability as seen in the cheque has been duly discharged by him. While the first Appellate Court acquitted the respondent, failed to give any cogent reason as to why Ex.P.6 compromise agreement and the various detailed endorsements made thereon cannot be accepted upon in ascertaining the depth and liability of the respondent under the subject cheque.
7.The learned counsel appearing for the appellant further submitted that the first Appellate Court misdirected itself on the very fundamental legal rights governing the Negotiable Instruments Act and has erroneously held that the loan/debt is the sine quo non of a prosecution under Section 138 of the Negotiable Instruments Act. The first Appellate Court has overlooked the phrase “orany other liability” appearing the said Section under which category the case on hand falls as this is the liability incurred by the respondent on account of misappropriation of funds entrusted to him by the appellant. Further, the evidence of D.W.1 read with the reply issued by him which is marked as Ex.P.9 clearly probablises the case of the prosecution rather than the case of the respondent, as the issuance of cheque as well as the transaction leading to the issuance of 5/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 subject cheque have been clearly admitted in Ex.P.9 as well as in the evidence of D.W.1. In support of his contention, he relied upon the following decisions:-
“(i) (2016) 10 SCC 548 – Sampelly Sattanarayana Rao Vs. Indian Renewable Energy Development Agency Limited.
(ii) 2021 SCC Online SC 1002 - Sripati Singh (since deceased) Through his son Gaurav Singh Vs. State of Jharkhand and another.
(iii) 2021 SCC Online SC 1174 – Sunil Todi and others Vs. State of Gujarat and another.
(iv) (2014) 11 SCC 790 – A.C.Narayanan Vs. State of Maharashtra and another.
(v) (2010) 11 SCC 441 – Rangappa Vs. Sri Mohan” 6/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021
8.Per contra, the learned counsel appearing for the respondent would submit that P.W.1 represented through his power of attorney. The power of attorney holder does not have direct or personal knowledge about the transactions. Therefore, the first Appellate Court has rightly considered the same and acquitted the respondent for the offence punishable under Section 138 of the Negotiable Instruments Act. The appellant has suppressed the facts regarding the transactions between them, the execution of sale deeds which are to be reconveyed. Material documents, details of the transaction, especially the basis of it, being the undertaking document has to be produced.
9.The learned counsel appearing for the respondent would further submit that the power of attorney holder was examined as P.W.1 and he is only the hearsay witness. In fact, he categorically admitted that he does not know about the transaction between his brother, namely the complainant and the respondent. On the instruction given by his brother, the power of attorney issued notice as contemplated under Section 138 of the Negotiable Instruments Act. Further, he deposed that he was not a party to the agreement and it was between his brother and the respondent. He do not know the contents of the said agreement. When it being so, the appellant 7/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 failed to prove the case and as such, the first Appellate Court rightly acquitted the respondent. So far, the respondent conveyed so many properties in favour of the appellant and its worth more than the amount which was received by the respondent. Therefore, there is absolutely no due from the respondent to the appellant and the cheque which was issued for security purpose, presented for collection without any legally enforceable debt from the respondent. Even now, the respondent is ready to settle the entire amount on condition that whatever the property conveyed in favour of the appellant to be reconveyed in favour of the respondent. In the reply notice which was marked as Ex.P.9, the respondent categorically stated that the agreement was registered to reconvey the scheduled properties in the event of full settlement of their respective shares. In addition to that, as an additional collateral security, as demanded by the appellant, the respondent signed and delivered the alleged cheque. It was issued for a sum of Rs.43,00,000/- under pressure and coercion for sheer collateral purpose as a security for the funds to be recovered from the parties and settled among them as explained in the reply notice. Now, the said cheque was misused by the appellant which was given as a collateral security. On receipt of the same, the complainant failed to send any rejoinder to substantiate the claim made under the statutory notice. Considering all these grounds, the first Appellate Court rightly acquitted the 8/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 respondent for the offence punishable under Section 138 of the Negotiable Instruments Act.
10.Heard the learned counsel appearing for the appellant and the learned counsel appearing for the respondent and perused the materials available on record.
11.On perusal of the materials available on record revealed that the appellant was looking to invest his earning from abroad in his homeland and the respondent advised the appellant to invest in immovable properties and offered to professionally assist him in finding the right kind of properties to purchase. Believing the said words, the appellant used to transfer funds from abroad to the account of the respondent to purchase the properties. However, the respondent played fraud and failed to purchase any property in favour of the appellant. Thereafter, there was negotiation between them and accordingly, the respondent conveyed a few properties and even thereafter, there was a shortfall of about Rs.50,00,000/-, for which, the respondent issued two cheques for Rs.25,00,000/- each. Both the cheques were presented for collection and both were returned dishonoured. Thereafter, again there was negotiation and the respondent paid a sum of Rs.7,00,000/- by cash as part payment and a detailed understanding deed of agreement dated 9/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 10.08.2012 was executed between them. Accordingly, the respondent issued cheque for the balance due of Rs.43,00,000/- in favour of the appellant. The said cheque was presented for collection and returned dishonoured for the reason “funds insufficient”.
12.The appellant caused statutory notice, dated 14.12.2012 as contemplated under Section 138 of the Negotiable Instruments Act and it was marked as Ex.P.3. On receipt of the same, the respondent had sent reply notice, dated 28.01.2013, which was marked as Ex.P.9. On perusal of reply notice revealed that the respondent stated that Ex.P.1 was issued for collateral purpose and the same was issued under coercion and compulsion. Though the respondent had taken a specific stand that Ex.P.1 was issued for collateral purpose as a security and also under compulsion and coercion, the respondent failed to substantiate the said contention by lodging any complaint. Therefore, the appellant lodged the complaint and the same has been taken cognizance in C.C.No.87 of 2013.
13.On a perusal of Ex.P.6 agreement entered between the appellant through his power of attorney and the respondent herein revealed that the respondent executed sale deeds for the amount 10/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 received from the appellant as follows:-
“(a) The property worth about Rs.30,00,000/- stands in the name of Rekha, namely the wife of the respondent, registered in favour of the appellant vide Document No.5054 of 2011.
(b) The property worth about Rs.20,00,000/-
owned by the brother of the respondent registered in favour of the appellant vide Document No.5052 of 2011.
(c) The property worth about Rs.25,00,000/- owned by another brother of the respondent registered in favour of the appellant vide Document No.5053 of 2011.” Thereby the properties worth about Rs.75,00,000/- conveyed in favour of the appellant by the respondent herein.
14.For the balance due amount of Rs.50,00,000/-, the respondent executed memorandum of undertaking dated 14.11.2011 and issued two cheques for a sum of Rs.25,00,000/- each. Further, the said amount was not paid by the respondent within the period stipulated in the document. Further period also extended for settling the said amount till 10.06.2012. Accordingly, on 09.06.2012, the respondent settled a sum of Rs.7,00,000/- and the same was duly recorded in Ex.P.6 executed by the respondent 11/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 on 09.06.2012. In fact, again time was extended for the payment of balance due till 15.09.2012 and issued Ex.P.1 for a sum of Rs.43,00,000/-. On issuance of Ex.P.1, the cheques which were already issued for totalling balance of Rs.50,00,000/- were returned to the respondent. On 10.08.2012, it was duly agreed and executed by the respondent herein. Therefore, Ex.P.1 cannot be said that it was issued for collateral purpose as a security. The relevant portion of Ex.P.6 reads as follows:-
“,e;j xg;ge;jj;jpy; fz;l fld; bjhif &.
50>00>000/- (&gha; Ik;gJ ,yl;rk;) j;jpy; ,d;W 09.06.2012> jpUbey;ntyp ICICI tq;fp fzf;F vz;.
613501201948y; &7>00>000/- ( &gha; VG yl;rk;) j;ij 2tJ egh; jdJ ICICI tq;fp fzf;F fhnrhiy vz;. 409414 %yk; brYj;jp 1-tJ egh; bgw;Wf; bfhz;lhh;.
nkw;go 1-tJ egh; rhh;ghf mtuJ Kftuhd re;jpunrfuDk;> 2-tJ egh; Kj;Jf;fpU\;zDk; ,e;j gzg;gw;W urPjpy; ifbaGj;J bra;fpnwhk;.
xg;gk; xg;gk;
uhkre;jpud; Kj;JfpU\;zd;
09.06.2012 (2-tJ egh;)”
“10.08.2012
Kd; gf;fj;jpy; fz;l xg;ge;j ruj;Jfspd;go 2tJ ghh;l;oapy; Kjy; eguhd V.Kj;JfpU\;zd; mth;fs; 1tJ ghh;lo 12/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 T.];Ogd; b$auh$; mth;fSf;F brYj;j ntz;oa bjhif &.50>00>000/- (&gha; Ik;gJ ,yl;rj;jpy;) 09.06.2012 njjpapy; &.7>00>000/- (&gha;
VG ,yl;rk;) kl;Lk; i\ V.Kj;JfpU\;zd; mth;fshy; 1tJ ghh;l;oapd; Kfth; rhk; re;jpunrfh; mth;fs; %ykhf fhnrhiyahf brYj;jg;gl;Ltpl;lJ.
kPjKs;s bjhif &.43>00>000/- (&gha; ehw;gj;J %d;W ,yl;rj;ij) brYj;j 10.06.2012 njjptiu fhy mtfhrk; Vw;fdnt 1tJ ghh;l;oahy; 2tJ ghh;l;o V.Kj;JfpU\;zd; mth;fSf;F bfhLf;fg;gl;oUe;jJ.
,Ue;j nghjpYk; i\ njjpf;Fs; brYj;j ,ayhj epiy Vw;gl;l fhuzj;jpdhy; 1tJ ghh;l;oapd; Kfth; rhk; re;jpunrfh; mth;fs; %ykhf nkw;bfhz;Lk; fhy ePl;og;g[ ju i\ V.Kj;JfpU\;zd; mth;fs; nfl;Lf;bfhz;ljw;F 1tJ ghh;l;o T.];Ogd; b$auh$; mjid Vw;W 10.08.2012 njjp tiuapy; fhy ePl;og;g[ bra;J bfhLj;jpUe;jhh;.
i\ 10.08.2012 njjp Koa fhyj;jpw;Fs; i\
V.Kj;JfpU\;zd; mth;fshy; xg;g[f;bfhz;lgo
i\ghf;fpj;bjhifia 1tJ ghh;l;of;F brYj;j ,ayhj
epiy Vw;gl;Ls;sJ.
,e;j epiyikapy; 1tJ ghh;l;o T.];Ogd; b$auh$;
mth;fs; i\ bjhifia i\ V.Kj;JfpU\;zd;
mth;fsplk; nfl;ljpy; nkw;bfhz;Lk; 15.09.2012 tiu fhyePl;og;g[ bra;J ju nfl;Lf;bfhz;ljpd; nghpy; 15.09.2012 njjp tiu fhyePl;og;g[ bra;JbfhLf;f 1tJghh;l;o rk;kjpj;jjpd;nghpy; 15.09.2012 njjptiu fhy ePl;og;g[ bra;ag;gl;Ls;sJ.
13/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 mJtiuapy; i\ V.Kj;JfpU\;zd; 1tJ ghh;l;o T.];Ogd; b$auh$; mth;fSf;F brYj;jntz;oa ghf;fpj;bjhif &.43>00>000/- &gha; ehw;gj;J %d;W ,yl;rj;Jf;F cj;juthjkhf 15.09.2012 njjpapl;l &.43>00>000/- &gha; ehw;gj;J %d;W ,yl;rj;jpw;fhd ts;spa{h;> jkpH;ehL bkh;f;fz;ily; tq;fpf;fpis 698242 vz;zpl;l fhnrhiyia i\ V.Kj;JfpU\;zd;
mth;fshy; 1tJ ghh;l;o T.];Ogd; b$auh$; mth;fs; trk; bfhLf;fg;gl;Ls;sJ.
Vw;fdnt bfhLf;fntz;oa bjhiff;F cj;juthjk; bfhLj;J i\ V.Kj;JfpU\;zd; mth;fshy; 1tJghh;l;o trk; bfhLf;fg;gl;l 14.02.2012 njjpapl;l ,uz;L fhnrhiyfs; jyh &.25>00>000/-
&gha; ,Ugj;ije;J ,yl;rk; kjpg;gpyhd ICICI Bank jpUbey;ntyp $q;\d; fpis fhnrhiy vz;fs; 409404 kw;Wk; 409405 1tJ ghh;l;o T.];Ogd; b$auh$;
mth;fshy; jpUk;g i\ V.Kj;JfpU\;zd; mth;fsplk; bfhLf;fg;gl;L mjid i\ahUk; bgw;Wf;bfhz;lhh;.
xg;gk; xg;gk;
T.];Ogd; b$auh$; Kj;JfpU\;zd;
10.08.2012
16.08.2012”
15.Unfortunately, the first Appellate Court misconstrued the fact that Ex.P.6 does not reveal the true picture which had transpired between the complainant and the accused earlier to it 14/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 especially in November, 2011. From the evidence of P.W.1, the starting point is the agreement dated 14.11.2011 and at no point the brother of the respondent had admitted that the amount due from the accused is Rs.1,25,00,000/- and for the balance due Ex.P.1 was issued. As stated supra, the subsequent endorsement made by the respondent are very clear that for the balance due of Rs.43,00,000/-, Ex.P.1 was issued by the respondent. It is also evident from the execution of sale deeds for the total consideration of Rs.75,00,000/- in favour of the appellant herein and for the balance due of Rs.50,00,000/-, two cheques were issued and subsequently both were returned to the respondent on issuance of Ex.P.1. Therefore, it cannot be said that Ex.P.1 was issued as collateral purpose for a security. Even assuming that Ex.P.1 issued as a security purpose, it cannot be simply discarded as a security cheque and the same shall be deemed to be issued to clear debt of liability as per the agreement.
16.In this regard, the learned counsel appearing for the appellant relied upon the Judgment of the Honourable Supreme Court of India in (2016) 10 SCC 548 – Sampelly Sattanarayana Rao Vs. Indian Renewable Energy Development Agency Limited, wherein it has been held as follows:- 15/27
https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 “9.We have given due consideration to the submission advanced on behalf of the appellant as well as the observations of this Court in Indus Airways (supra) with reference to the explanation to Section 138 of the Act and the expression “for discharge of any debt or other liability” occurring in Section 138 of the Act. We are of the view that the question whether a post-dated cheque is for “discharge of debt or liability” depends on the nature of the transaction. If on the date of the cheque, liability or debt exists or the amount has become legally recoverable, the Section is attracted and not otherwise.
10.Reference to the facts of the present case clearly shows that though the word “security” is used in clause 3.1(iii) of the agreement, the said expression refers to the cheques being towards repayment of installments. The repayment becomes due under the agreement, the moment the loan is advanced and the installment falls due. It is undisputed that the loan was duly disbursed on 28th February, 2002 which was prior to the date of the cheques. Once the loan was disbursed and installments have fallen due on the date of the cheque as per the agreement, dishonour of such cheques would fall under Section 138 of the Act. The cheques undoubtedly represent the outstanding liability.” In the case on hand, as per the agreement Ex.P.6, dated 24.05.2012, Ex.P.1 was issued for discharge of debt or liability. 16/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 Admittedly, there was due payable by the respondent to the tune of Rs.43,00,000/- on the date of issuance of cheque. Therefore, the dishonoured of subject cheque would fall under Section 138 of the Negotiable Instruments Act and it undoubtedly represented the outstanding liability.
17.The learned counsel appearing for the appellant relied upon another Judgment of the Honourable Supreme Court of India in 2021 SCC Online SC 1002 - Sripati Singh (since deceased) Through his son Gaurav Singh Vs. State of Jharkhand and another, wherein it has been held as follows:-
“17.A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. ‘Security’ in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is 17/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of N.I. Act would flow.”
18.The learned counsel appearing for the appellant relied upon the Judgment of the Honourable Supreme Court of India in 2021 SCC Online SC 1174 – Sunil Todi and others Vs. State of Gujarat and another, wherein it has been held as follows:-
“35.The submission which has been urged on behalf of the appellants, however, is that the fact that the cheques in the present case have been issued as a security is not in dispute since it stands admitted from the pleading of the second respondent in the suit instituted before the High Court of Madras. The legal requirement which Section 138 embodies is that a cheque must be drawn by a person for the payment of money to another “for the discharge, in whole or in part, of any debt or other liability’. A cheque may be issued to facilitate a commercial transaction between the parties. Where, acting upon the underlying purpose, a commercial arrangement between the parties has fructified, as in the present case by the supply of electricity under a PSA, the presentation of the cheque upon the failure of the buyer to pay is a consequence which would be within the contemplation 18/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 of the drawer. The cheque, in other words, would in such an instance mature for presentation and, in substance and in effect, is towards a legally enforceable debt or liability. This precisely is the situation in the present case which would negate the submissions of the appellants.” The Honourable Supreme Court of India held that the cheque issued as a security to a financial transaction cannot be considered as a worthless piece of paper and security cheques also covered under Section 138 of the Negotiable Instruments act, as it is a security ensuring certain payment under a transaction and the same would be a valid cheque in the event of failure on the part of the borrower to pay the money.
19.In the case on hand, as per Ex.P.6 agreement, Ex.P.1 was issued and as such, it would mature for prosecution and would become as a cheque envisaged under Section 138 of the Negotiable Instruments Act. Thus, the above Judgments are squarely applicable to the case on hand.
20.Insofar as the power of attorney is concerned, when the power of attorney holder had got due knowledge as to the transaction and when such knowledge was asserted in the 19/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 complaint/averment and thus, there is no illegality in prosecution of complaint under Section 138 of the Negotiable Instruments Act cannot be found. Further, when the relatives/legal heirs happened to be power agent, they cannot deemed to be strangers to the complainant, since their right to continuation of prosecution, in the event of the death of original complaint as his legal heir or successor in whole. Moreover, the mere bare/bald denial of passing consideration and transaction by itself would not amount to raising of probable defense to rebut the prosecution. The presumption under Section 139 of the Negotiable Instruments Act is not only for mere existence of any debt or liability, but also include existence of legally enforceable debtor liability. The reverse onus in order to rebut the presumption, imposes a evidentiary burden and it is not a persuasive burden. Mere asserting the probable defense is not sufficient, but such probable defense shall cause and create reasonable doubts as to the very existence of the legally enforceable debt liability. Therefore, the trial Court rightly found that the respondent guilty for the offence punishable under Section 138 of the Negotiable Instruments Act.
21.That apart, on the complaint lodged by the brother of the respondent, the Inspector of Police, Valliyoor Police Station registered the F.I.R in Crime No.113 of 2013 and the final report 20/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 was taken cognizance in C.C.No.8 of 2017 on the file of the Special Court for Land Grabbing Cases, Tirunelveli and the same was under
challenge before this Court in Crl.O.P(MD)Nos.3993 and 3994 of 2017, which was marked as Ex.P.10. The brother of the respondent lodged complaint alleging that there was business transaction between the appellant and the respondent and in the said business transaction, the respondent owns certain amounts. On 13.11.2011, the appellant and his wife had gone to the house of the brother of the respondent herein and demanded the said amount and also threatened the brother of the respondent herein to convey the property as security towards repayment of amount due and payable by the respondent. On the compulsion and pressure exerted by the appellant and his wife, the wife of the respondent and brothers of the respondent herein had executed three sale deeds in favour of the appellant herein and the three sale deeds were executed only as a security and there was no intention to pass on the title to the appellant herein.
22.Further, on 14.11.2011, the respondent executed a deed of undertaking in favour of the appellant wherein he has stated that out of the payable amount due and payable of a sum of Rs.1,25,00,000/-, the sale deeds covers a sum of Rs.75,00,000/- and for balance due of Rs.50,00,000/-, two cheques for a sum of 21/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 Rs.25,00,000/- each were also given in favour of the appellant. On receipt of the said complaint, the Inspector of Police, Valliyoor Police Station registered the F.I.R in Crime No.113 of 2013 for the offences under Section 420, 506(i), 406 of I.P.C r/w 120(b) of I.P.C. The entire proceedings were challenged before this Court and this Court in Crl.O.P(MD)Nos.3993 and 3994 of 2017, dated 22.10.2018, while quashing the entire proceedings observed as follows:-
“17.The prosecution wants to place reliance upon the statement given by witnesses and the agreements dated 14.11.2011 said to have been executed by the first petitioner, in order to substantiate their case that the sale deed itself was given only as a security. This attempt made by the prosecution files against the settled principles of law that where the terms of a contract or a disposition of property has been reduced in the form of document, which requirement is imposed by law to be so made, no evidence shall be given in proof of the terms of such contract or other disposition of property, except the document itself and no evidence can be given for the purpose of contradicting, varying, adding to or subtracting from its terms.
18.It can be seen in this case that the entire dispute between the parties is purely civil in nature.22/27
https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 L.W.4 owed money to the first petitioner and in the course of the repayment of the money, three sale deeds were executed in favour of the first petitioner covering of a sum of Rs.75,00,000/- and for the balance Rs.50,00,000/- L.W.4 has executed two cheques. The cheques given by the L.W.4 for dishonour of cheque under Section 138 of the Negotiable Instruments Act. It will be very relevant to state that the complaint was given against L.W.4 on 28.01.2013. The cognizance was taken on 15.03.2013 and notice was issued to L.W.4 returnable by 19.0.2013. In the mean time, the defacto complainant has given a complaint on 03.04.2013 against the petitioners. If the defacto complainant and the wife of L.W.4 had approached the first petitioner and the third petitioner for repayment of the money in the year 2012 and the same was refused, there was nothing to prevent them, from giving the complaint in the year 2012. However, the complaint given on 03.04.2013 against the petitioners assumes a lot of significance since by then the first petitioner had initiated proceedings against L.W.4 for dishonour of cheque. The entire attempt of the complaint was to cover up L.W.4 from facing a prosecution under Section 138 of the Negotiable Instruments Act.
19.In the considered view of this Court, no offence has been made out for cheating or criminal breach of trust. Both these offences are projected 23/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 against the petitioners on the ground that the sale deed was executed only as a security. Whether the sale deed was executed as a security and whether the vendors actually did not intend the title in the property to pass on to the first petitioner, are all matters which can be decided only by a competent civil Court, in the absence of any such terms found in the sale deeds. The respondent police ought not to have ventured to file a final report in this case since even the entire reading of the allegations made in the final report, even if they are taken at their face value and accepted in entirety, do not make out a case against the accused persons. The criminal intimidation in this case is said to have taken place in the year 2011 and the complaint has been given in the year 2013. That by itself shows that there is no genuineness in the allegation made in the complaint.” Therefore, Ex.P.1 was issued in order to repay the balance due as per the deed of undertaking which was marked as Ex.P.6. As such, the complaint lodged by the respondent is nothing but to escape from the clutches of the proceedings initiated as against the respondent for the offence punishable under Section 138 of the Negotiable Instruments Act. Thus, the appellant proved his case against the respondent for the offence punishable under Section 138 of the Negotiable Instruments Act.
24/27 https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021
23.In fine, the order of acquittal, dated 16.04.2021 passed in Crl.A.No.62 of 2019 on the file of the learned IV Additional Sessions Judge, Tirunelveli, is liable to be set aside and accordingly, the same is set aside and the conviction and sentence, dated 01.04.2019 passed in C.C.No.87 of 2013 on the file of the learned Judicial Magistrate, Valliyoor, Tirunelveli District is hereby confirmed and the Criminal Appeal is allowed. Consequently, connected Miscellaneous Petition is closed.
20.04.2022 Index: Yes/No Internet: Yes ps Note :
In view of the present lock down owing to COVID-19 pandemic, a web copy of the order may be utilized for official purposes, but, ensuring that the copy of the order that is presented is the correct copy, shall be the responsibility of the advocate / litigant concerned.25/27
https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 To
1.The IV Additional Sessions Judge, Tirunelveli.
2.The Judicial Magistrate, Valliyoor, Tirunelveli District.26/27
https://www.mhc.tn.gov.in/judis CRL.A.(MD).No.395 of 2021 G.K.ILANTHIRAIYAN, J.
ps CRL.A.(MD).No.395 of 2021 20.04.2022 27/27 https://www.mhc.tn.gov.in/judis