Madras High Court
Natarajan vs Chinnasamy on 10 March, 2010
Author: T.Mathivanan
Bench: T.Mathivanan
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 10/03/2010 CORAM THE HONOURABLE MR. JUSTICE T.MATHIVANAN Criminal Appeal (MD) No.33 of 2008 Natarajan .. Appellant vs Chinnasamy .. Respondent Appeal is filed under Section 378 of Cr.P.C. against the judgment passed by the Judicial Magistrate, Sankarankovil, Tirunelveli District in S.T.C.No.1641 of 2006, dated 20.07.2007 acquitting the accused under Section 138 of Negotiable Instruments Act. !For appellant ... M/s.V.Kathirvelu ^For respondent ... No appearance :JUDGMENT
This memorandum of Criminal Appeal has been preferred by the appellant against the judgment dated 20.07.2007 and made in STC No.1641 of 2006, on the file of the learned Judicial Magistrate, Sankarankovil, Tirunelveli District, acquitting the respondent who is the accused in the above said case, on the ground that the offence under Section 138 of Negotiable Instruments Act, 1881, (in short the Act) has not been proved.
2. Challenging the impugned judgment, the appellant who is the complainant in the above said case has approached this Court by way of this memorandum of criminal appeal.
3. For easy reference, the appellant herein may hereinafter be referred to as complainant and the respondent herein may hereinafter be referred to as the accused.
4. The facts and relevant circumstances which giving rise to the memorandum of criminal appeal may be summarised briefly as follows:-
4.1. The complainant has been running a business on furniture under the name and style of Nisha Steel Industries. The accused has also been conducting a business on furniture under the name and style of Durka Arun Agencies. Both the complainant and the accused were having business transactions and as such the accused used to purchase bureaus and cots from the establishment of the complainant. On the basis of his business transactions, the accused had to pay a sum of Rs.95,000/- to the complainant. When this amount was demanded, the accused had issued a cheque in favour of the complainant on 13.04.2006 and drawn on Pandian Grama Bank, Kovilpatti bearing No.376584, for the value of Rs.95,000/-. This cheque was also signed by the accused. When the cheque was presented for encashment before Pandian Grama Bank, Sankarankovil Branch, in which the complainant was maintaining an account, it was returned back with an endorsement stating "insufficient funds". The cheque was marked as Ex.P1.
Whereas the collection list of Pandian Grama Bank, Sankarankovil, was marked as Ex.P2. The fact of returning of cheque was intimated to the Pandian Grama Bank, Sankarankovil Branch from Kovilpatti Branch on 20.04.2006. This fact was in turn informed to the complainant on 28.04.2006 through the Pandian Grama Bank, Sankarankovil Branch.
4.2. That on 03.05.2006, when the complaint had informed the accused about the returning of cheque on the ground of "insufficient funds", the accused had requested the complainant to present the cheque after forty days. Believing the words of the accused, the complainant had presented the cheque again on 12.06.2006 for encahsment before Pandian Grama Bank, Sankarankovil Branch, which was also returned on the same ground of "insufficient funds". The fact of returning of cheque was informed to Pandian Grama Bank, Sankarankovil Branch through Kovilpatti Branch. Thereafter, the complainant had issued a legal notice to the accused on 04.07.2006 demanding to repay the cheque amount within a period of fifteen days from the date of receipt of the notice. But, the accused had deliberately refused to receive the notice. Hitherto the accused had not repaid the cheque amount of Rs.95,000/-. Hence, this complaint.
4.3. When a charge under Section 138 of the Act was framed, explained and questioned, the accused had pleaded innocent and claimed to be tried. In order to establish his case, the complainant had examined himself as P.W.1 and marked Exs.P1 to P10 on his side. On the other hand, the accused had examined himself as D.W.1 and no documentary evidence was adduced on his behalf.
4.4. On appreciation of the evidences both the oral and documentary, the learned Judicial Magistrate, Sankarankovil had proceeded to pronounce the judgment on 20.07.2007 acquitting the accused on the ground that the cheque was not issued for discharging of the debt, but it was issued as a security for the business transactions of the accused with the complainant.
4.5. Being aggrieved by the judgment, the complainant had approached this Court by way of this memorandum of criminal appeal.
5. When the appeal came up for hearing on 03.03.2010, the respondent who is the accused in the case had not chosen to appear before this Court to answer the appeal even in spite of service of notice on him. Therefore, this Court had issued a direction to the Registry to verify as to whether any counsel had filed vakalat on behalf of the respondent. When this appeal came up again for hearing on 09.03.2010, the accused/respondent herein has not appeared and therefore, in his absence, the argument of the learned counsel appearing for the appellant was heard.
6. While advancing his argument, the learned counsel appearing for the appellant would submit that the Trial Court ought not to have accepted the evidence of the accused since he had deposed before the Trial Court that three years before he had issued the cheque to the complainant for discharging of the debt of Rs.5,000/-. After discharging this debt, when he demanded the cheque to be returned back, it was not returned. In this regard, the learned counsel appearing for the appellant has adverted to that the submissions made by the accused have created surprise and the evidence of the accused should not have been accepted by the Trial Court. Further, he would submit that the Trial Court had travelled beyond the scope of evidence and proceeded to pass the judgment acquitting the accused which is not correct in the eye of law.
7. On a perusal of the evidence of D.W.1, he has admitted that he had issued the disputed cheque in favour of the complainant. It is the case of the accused that he had been maintaining business transactions with the complainant for the past three years and for security purpose, he had issued the disputed cheque in favour of the complainant.
8. On a perusal of the Chief Examination of the accused, it is revealed that on account of his business transactions with the complainant he had to pay a sum of Rs.5,000/- only and after discharging that amount, when he demanded the complainant to return back the cheque, he had represented that the cheque was lost and that the present case was foisted against him by misusing the cheque which was issued to the complainant some three years back. It is obvious to note here that this contention has not been proved with the support of adequate evidence. It is also revealed in his cross-examination that the disputed cheque was issued by him to the complainant and that the signature find a place in the cheque has also been admitted by him. The learned Judicial Magistrate has also observed in his judgment that the accused had accepted that he had issued the cheque and that the signature find a place in the cheque has also been admitted by him. But, in spite of that the learned Judicial Magistrate has proceeded to say that the complainant had miserably failed to produce the related books of accounts which was maintained by him in respect of the business transactions with the accused. This is not correct position of law. Once the issuance of the cheque and the signature of the disputed cheque is admitted by the accused, the other contentions raised on behalf of the accused has become pale into insignificance.
9. Section 118 of the Negotiable Instruments Act, 1881, reads as follows:
"Until the contrary is proved, the following presumptions shall be made -
a) of consideration: That every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration."
10. As rightly held in K.Mathivanan v. Suriyakumar (2010 Cri.L.J. 814) by this Court, the accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused.
11. Now, the complainant has satisfied the requirements of the proviso to Section 138 of Negotiable Instruments Act, 1881, which reads thus:
"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 discharging, 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."
12. Section 139 of the Act also says that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability.
13. As envisaged under Section 138 of the Act, the complainant has satisfactorily established his case and on the other hand, the contrary that is the stand taken by the accused that the cheque was issued only as security for maintaining transactions with the complainant has not been proved. Therefore, Section 139 of the Act stands in favour of the case of the complainant.
14. In the case of Goa Plast (P) Ltd, v. Chico Ursula D'Souza reported in AIR 2004 Supreme Court 408, a Division Bench of the Supreme Court comprising Their Lordships Hon'ble Thiru.Justice B.P.Singh and Dr.Justice AR.Lakshmanan has held that the object and the ingredients under the provisions, in particular, Sections 138 and 139 of the Act cannot be ignored. Proper and smooth functioning of all business transactions, particularly, of cheques as instruments, primarily depends upon the integrity and honesty of the parties. In our country, in a large number of commercial transactions, it was noted that the cheques were issued even merely as a device not only to stall but even to defraud the creditors. The sanctity and credibility of issuance of cheques in commercial transactions was eroded to a large extent. Undoubtedly dishonour of a cheque by the Bank causes incalculable loss, injury and inconvenience to the payee and the entire credibility of the business transactions within and outside the country suffers a serious set back. The Parliament, in order to restore the credibility of cheque as a trustworthy substitute for cash payment enacted the aforesaid provisions. The remedy available in a Civil Court is a long drawn matter and an unscrupulous drawer normally takes various pleas to defeat the genuine claim of the payee. Therefore, while penning down the judgment on behalf of the Division Bench, the Hon'ble Dr.Justice AR.Lakshmanan had granted one month time from the date of pronouncement of the judgment to the respondent therein to pay a sum of Rs.80,000/- (twice the amount of the cheque) by way of Demand Draft drawn in favour of the appellant. In default thereof, the respondent shall suffer simple imprisonment for six months.
15. On a careful appreciation of the materials available on record, I hold that the Trial Court has not properly weighed the evidences both the oral and documentary adduced on behalf of both sides. In view of the circumstance narrated above, the accused is found guilty under Section 138 of the Act and in consequent thereof the judgment of the Trial Court is liable to be set aside.
16. Insofar as the given case on hand is concerned, the same principle which is applied in the Goa Plast (P) Ltd., case as adumbrated supra can also be applied. Accordingly, the accused is convicted under Section 138 of the Act and sentenced to pay a sum of Rs.95,000/- being the value of the cheque by way of Demand Draft drawn in favour of the appellant within a period of two months from the date of receipt of a copy of this order, in default, to suffer a simple imprisonment of six months.
In the result, this criminal appeal is allowed and the judgment dated 20.07.2007 made in S.T.C.No.1641 of 2006, is set aside. The learned Judicial Magistrate, Sankarankovil, is directed to take steps to commit the accused to undergo default sentence of Simple Imprisonment if the direction of this Court is not complied with by him within the stipulated period of two months.
srm To The Judicial Magistrate, Sankarankovil, Tirunelveli District.