K.Deivasagayam (Deceased) v. St. Joseph Charity Trust Kolathur, Chennai – 992. & Ors

IN THE HIGH COURT OF JUDICATURE AT MADRASDated: 30.04.2009CoramTHE HONOURABLE MR. JUSTICE S.TAMILVANANCrl.A.No.993 of 19991. K.Deivasagayam (Deceased)2. D.Kirubanayagam3. D.S.Jamesnayagam4. D.Inbanayagam5. D.Selvanayagam6. D.Jeevanayagam7. A.Santhoshrani8. B.Bala Bhaskar9. Hemachona ..Appellants(Appellants 2 to 9 were brought on record as per the order of this Court, dated 25.03.2009.)vs.1. St. Joseph Charity Trust Kolathur, Chennai – 992. Jayaseelan Naga Kesari ..RespondentsPRAYER :Appeal filed under Section 378 Cr.P.C, against the order,dated 07.05.1999 made in C.A.No.74 of 1999 on the file of the IIIAdditional Sessions Judge, Chennai, reversing the order of convictionof the respondents by order, dated 02.04.1998 made in C.C.No.1188 of1993 on the file of the XVII Metropolitan Magistrate, Saidapet,ChennaiFor Appellants :Mrs.G.ThilagavathiFor Respondents : Mr.R.C.Paul Kanagaraj J U D G M E N TThis Criminal Appeal has been preferred against the Judgment,dated 07.05.1999 passed in C.A.No.74 of 1999 on the file of the IIIAdditional Sessions Judge, Chennai, reversing the Judgment, dated02.04.1998 passed in C.C.No.1188 of 1993 on the file of the XVIIMetropolitan Magistrate, Saidapet, Chennai whereby the respondents /accused were convicted by the trial court. The appellants 2 to 9 in https://hcservices.ecourts.gov.in/hcservices/ the criminal appeal are the legal representatives of the deceasedappellant, who was the complainant before the trial court. 2. After the trial, considering the evidence available on recordand the arguments advanced by both sides, the trial court found thatthe respondents / accused were guilty under Section 138 of NegotiableInstruments Act, accordingly, convicted the second respondent hereinand sentenced him to undergo 3 months 10 days simple imprisonment.The first respondent was also convicted and sentenced and directed topay Rs.1,50,000/- towards the cheque amount as compensation to thecomplainant.3. On appeal, the aforesaid Judgement was reversed by the courtbelow, whereby the respondents herein were acquitted. Aggrieved bywhich, criminal appeal has been preferred by the deceasedcomplainant. After his demise, his legal representatives were addedas appellants 2 to 9.4. It is an admitted fact that the cheques were given pursuantto the sale agreement entered into between the respondents herein andthe deceased complainant. It is not in dispute that an advance amountof Rs.50,000/- was paid by way of cheque, that was encashed by thecomplainant. However, the other two cheques for a total sum ofRs.1,50,000/- issued for balance of sale consideration weredishonoured, due to which, the complaint was filed under Section 138of Negotiable Instruments Act.5. It is not in dispute that the sale deed was not executed bythe complainant, pursuant to the agreement. Mr.R.C.Paul Kanakaraj,learned counsel appearing for the respondents submitted that thepetitioners herein have not performed their part of the contract andtherefore, as held by the appellant court, the complainant has notestablished that the cheque was issued for an amount that was legallydue and payable by the respondents herein to the complainant or theappellants. As the cheques were issued towards the performance of thecontract by one party namely, the respondents herein, withoutperforming their part of the contract by executing the sale deed,neither the complainant nor the appellants can claim the balance ofsale consideration from the respondents. Further, when a civil caseis pending with regard to the said agreement for sale between theparties, without performing their part of performance under thecontract, the appellants cannot have legal right to claim the chequeamount.6. In the complaint itself, the original complainant, deceasedK.Deivasagayam has specifically stated that the first respondent,church represented by the second respondent, had given three chequesto the complainant as advance for the purchase of house site. Thefirst cheque, dated 14.07.1992 for a sum of Rs.50,000/- drawn on https://hcservices.ecourts.gov.in/hcservices/ Indian Overseas Bank, the second and third cheques, dated 22.07.1992for a sum of Rs.50,000/- and Rs.1,00,000/- respectively drawn onIndian Overseas Bank. The first cheque, dated 14.07.1992 waspresented for payment and the amount was realised, only the other twocheques were dishonoured due to insufficient funds. Subsequently,legal notice was issued to both the respondents, directing them topay the amounts, as per the cheques, that were dishonoured due toinsufficient funds. As the cheque amounts were not paid by therespondents, the complainant filed the complaint under Sections 138and 142 of Negotiable Instruments Act.7. In the impugned judgment passed by the court below, it washeld that pursuant to the agreement for sale, there was a disputebetween both the parties and a civil dispute is pending.8. Learned counsel, Mr.R.C.Paul Kanagaraj, appearing for therespondents submitted that there was no intention of cheating on thepart of the respondents herein. It is not in dispute that neither thecomplainant, nor his legal representatives have executed the saledeed, as per the agreement for sale of immovable property, hence,they are not entitled to the cheque amounts.9. In a case under Section 138 r/w 142 of Negotiable InstrumentsAct, there should be a case made out that the cheque was issued forthe amount due and payable to the complainant. In other words, thecheques could have been issued towards any amount due and payable, asper law. 10. It is a settled proposition of law that when there is adishonour of cheque, both civil and criminal remedies are availableto the affected person, namely, the payee of the cheque, if it wasissued for a legally enforceable debt.11. In Bhagwan Lal vs. State of Rajasthan reported in 1999 (2)Bank CLR 434, Rajasthan High Court has held that when a civil suit ispending, wherein the subject matter is the cheque relating to thecriminal case, then filing of complaint based on the disputed chequeis not proper, since one can avail only one remedy at a time and notboth.12. It is a settled proposition of law that there should belegal liability to pay the cheque amount, otherwise, the drawer ofthe cheque is not liable for criminal action under Section 138 ofNegotiable Instruments Act. If the issuance of cheque is established,the burden is upon drawer of the cheque, that it was not supported byconsideration.13. Under Section 118 of the Negotiable Instruments Act, it ismade clear that every negotiable instrument was made or drawn for https://hcservices.ecourts.gov.in/hcservices/ consideration and that every such instrument, when it has beenaccepted, endorsed, negotiated or transferred, was accepted,endorsed, negotiated or transferred for consideration, until thecontray is proved. As contemplated under Section 118 of theNegotiable Instruments Act, 1881, it is a rebuttable presumption. 14. In the instant case, it is not in dispute that there was anagreement for sale relating to an immovable property between thecomplainant and the respondents herein. Towards payment of the saleconsideration, three cheques were issued by the respondents herein,out of which, one cheque for Rs.50,000/- was honoured and the amountwas realised, the other two cheques for a total value ofRs.1,50,000/- were admittedly dishonoured by the bank. However, thecomplainant or his legal representatives have not executed the saledeed. In such circumstances, the respondents are not bound to makeany payment, as the cheques were issued only for the balance of saleconsideration, payable towards the agreement for sale. It is anadmitted fact that civil dispute is also pending between theappellants and the respondents, with regard to the agreement forsale. Therefore, I am of the view that the presumption under Section118 of the Negotiable Instruments Act, which is rebuttable in natureis in favour of the respondents herein, based on the aforesaid fact. 15. Had the sale deed been executed in favour of therespondents, it could be the cheque issued for a legally enforceabledebt. In the instant case, admittedly the sale deed has not beenexecuted by the complainant or the appellants herein in favour of therespondents and therefore, on the date of filing of the suit,consideration was not passed on the respondents. The dishonouredcheques were not supported by consideration. The civil suit ispending, which is directly related to the cheque amount, that wasissued towards sale consideration and therefore, the issue has to bedecided only by the Civil Court. Hence, it is clear that the chequeswere not issued for a legally enforceable debt, since the sale deed,not being executed by the appellants. 16. On the above facts and circumstances, I am of the view thatthere is no error on the part of the court below, in reversing theJudgment rendered by the trial court and recording acquittal of thesecond respondent. Hence, the criminal appeal is liable to bedismissed.17. In the result, this criminal appeal is dismissed. Sd/Asst.Registrar/true copy/tsvnSub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ To1. The III Additional Sessions Judge Chennai.2. The XVII Metropolitan Magistrate, Saidapet, Chennai.3. The Public Prosecutor High Court, Madras.+ 1 c.c. to Mrs. G. Thilakavathy, Advocate. S.R.No.19813. Judgment in Crl.A.No.993 of 1999 MRD (CO)GSK 02.06.2009.