Co.,A registered Partnership Firmby its Partnership1.K.Velkrishna2.K.Geetharepresented by their Power ofAttorney M.Shah Nawaz v. J.Vijayalakshmi

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 10.08.2007CORAM:THE HONOURABLE MR.JUSTICE A.C.ARUMUGAPERUMAL ADITYANCRL.A.NO.587 OF 2007M/s C.Krishna & Co.,A registered Partnership Firmby its Partnership1.K.Velkrishna2.K.Geetharepresented by their Power ofAttorney M.Shah Nawaz.. Appellants/Complainants-vs-J.Vijayalakshmi .. Respondent /accusedThis Revision is filed against the Judgment of the learned JudicialMagistrate No.V,Salem in C .C.No.28/1998 dated 21.7.2000.For appellants :: Mr.M.DuraisamyFor respondent :: Mr.P.JagadeesanJUDGMENTThis appeal has been preferred against the Judgment in C.C. No.28 of1998 on the file of the Judicial Magistrate No.V,Salem. 2) The appellants have filed a private complaint under Section 200Cr.P.C. against the accused for an offence under Section 138 of NegotiableInstruments Act 1881(hereinafter referred to as"the Act" on the groundthat the impugned cheque Ex P8 drawn by the accused for a sum ofRs.6,89,000/- to discharge a subsisting liability for a sum ofRs.5,50,000/- being the principal amount borrowed underEx P2 to ExP7 promissory notes including the future interest up to6.11.1997 ie., one day prior to the date of the drawal of Ex P8 impugnedcheque. The case of the complainants is that on presentation of theimpugned cheque ExP8 with the bank, the same was returned with anendorsement that there is no sufficient funds in the account of theaccused. Ex P9 is the memo of the bank sent along with Ex P8 impugnedcheque at the time of dishonouring the same. The complainant has issueda notice as contemplated under Section 138(b) of the Act under theoriginal of Ex P10, which was received by the accused under Ex P11.Sincethe accused has not chosen to send any reply notice nor made anyarrangement to repay the debt, the complainants have preferred thecomplaint. https://hcservices.ecourts.gov.in/hcservices/ 3) After recording the sworn statement of the complainants, thelearned Judicial Magistrate No.V,Salem had taken on file the case asC.C.No.28 of 1998 and on the appearance of the accused on summons,furnished copies under Section 207 of Cr.P.C. and when the offence wasexplained to the accused, and questioned, the accused pleaded not guilty.4) On the side of the complainant, the power of attorney wasexamined as P.W.1. Ex P1 is the deed of power of attorney in favour ofP.W.1 dated 15.12.1997. According to P.W.1, the accused along with herhusband had borrowed a sum of Rs.5,50,000/- from the complainants undersix promissory notes which are Exs P2 to P7 . As on 7.11.1997, the amountdue to the complainants towards principal and interest comes toRs.6,89,000/- and in order to discharge the said amount, the accused haddrawn a cheque dated 7.11.1997 in favour of the complainants' firm whichis ExP8, when the said cheque was presented in the bank for collection,the same was returned with an endorsement that there is no sufficient fundin the account of the accused to honour the same. EX P9 is the banker'smemo sent along with ExP8 impugned cheque. Thereafter, the complainantshad issued a notice dated 11.11.1997 under the original of Ex P10 whichwas received by the accused under Ex P11 acknowledgment on 17.11.1997,butno reply notice was sent by the accused. 5) P.W.2 is the Manager of Indian Overseas Bank, Alazhapuram Branch.He would admit that the complainants are having an account in his branchand that the impugned cheque Ex P8 was presented by the complainants forcollection on 7.11.1997, but the same was returned by the bank on theground that there is no sufficient funds in the account of the accused tohonour the same. Ex P9 is the memo sent along with ExP8 at the time whenthe same was dishonoured by the bank. Ex P12 is the copy of the statementof account relating to the accused. It is seen from Ex P12 statement ofaccount relating to the accused, a sum of Rs.633/- alone was in the creditof the account of the accused.6) When incriminating circumstances were put to the accused, theaccused would totally deny her complicity with the crime. On the side ofthe accused, D.W.1 and D.W.2 were examined and Exs D1 and D2 wereexhibited. 7)After going through the oral and documentary evidence, the learnedtrial Judge has come to the conclusion that the offence under Section 138of the Act was not attracted against the accused and accordingly dismissedthe case, which necessitated the complainants to prefer this appeal.8) Now the point for determination in this appeal is whether thefindings of the learned trial Judge is full of manifest error and perversein nature leading to miscarriage of justice warranting any interferencefrom this Court? https://hcservices.ecourts.gov.in/hcservices/ 9) Heard Mr. M.Duraiswamy, learned Counsel for the appellants andMr.P.Jagadeesan, the learned counsel appearing for the respondent andconsidered their respective submissions. 10) The point:The learned counsel for the appellants would draw the attention of thisCourt to the admissions about the borrowal of the accused's husband in hisevidence as D.W.2. The vain attempt made by D.W.2(the husband of theaccused) is that EX P8 impugned cheque is bearing the cheque leafNo.0122974. But the earlier cheque leaf Nos.0122975 and 0122976 have beendrawn by the accused on 4.10.1995 and 6.10.1995 respectively. So theearlier cheque leaf bearing No.0122974 would not have been drawn on7.11.1997 and the impugned cheque ExP8 which was given only as a securityfor the loan borrowed was manipulated and used by the complainants for thepurpose of this case. But the fact remains that even after the receipt ofthe statutory notice issued by the complainants as per Section 138(b) ofthe Act, the accused has not sent any reply raising a defence that theimpugned cheque is forged one and was not drawn by the accused on7.11.1997. The mere fact that Ex P8 impugned cheque leaf is earlier to thecheque drawn on 4.10.195 and 6.10.1995 will not lead us to an inferencethat it should have been drawn earlier to 4.10.1995 on which date thecheque leaf bearing No. 0122975 was drawn by the accused. 11) Further before the trial Court, the accused has not taken anysteps to show that Ex P8 impugned cheque was forged by the complainantsonly for the purpose of this case. It is a definite case of P.W.1, thepower of attorney holder of the complainants, before the trial Court thatEx P8 impugned cheque was drawn on 7.11.1997 by the accused only todischarge both the principal as well as the interest due under Exs P2 toP7 promissory notes. A memo of calculation was also filed before thisCourt, which shows that as on 6.11.1997 the amount due to the complainantsunder Exs P2 to P7 promissory notes inclusive of the accused comes toRs.6,89,545/- whereas Ex P8 impugned cheque was drawn only for a sum ofRs.6,89,000/- . It is seen from the evidence of P.W.2, the Manager of theIndian Overseas Bank, Alazhapuram Branch, who has also been examined asD.W.1 on the side of the accused, Ex P8 impugned cheque was presented bythe complainants for collection on 7.11.1997 itself, but the same wasreturned by the bank on the ground that there is no sufficient funds inthe account of the accused to honour the same. Ex P9 is the banker's memosent along with Ex P8 impugned cheque at the time of dishonour. There isno acceptable explanation has been given by the accused for not sendingany reply to the notice received by him under the original of Ex P10, evenafter the receipt of the same under Ex P11 acknowledgment. The presumptionunder Section 139 of the Act is unless the contrary is proved, the holderof a cheque received the same only for the discharge of whole or in partof any debt or other liability. The reasoning given by the learnedJudicial Magistrate in dismissing the case, in my opinion is full ofmanifest error and perverse in nature leading to miscarriage of justicewarrants interference from this Court. Point is answered accordingly. https://hcservices.ecourts.gov.in/hcservices/ 12)As held by the Honourable Apex Court in Goa Plast (P) Ltd.v.ChicoUrsula D'Souza (2004) 2 Supreme Court Cases 235) the accused is liable tobe pay double the total amount of the cheque. In this case, it comes toRs.13,78,000/-. The relevant observation of the honourable Apex Court inthe above said ratio decidenti runs as follows:". . . . . . . . . . We have no doubt that therespondent has committed an offence punishable underthe provisions of Section 138 of the Act and is liableto be punished. The transaction in question tookplace between the parties in the year 1993, therefore,Section 138 , as it stood at the relevant time, wouldbe applicable to the present case. Section 138provides imprisonment for a term which may extend toone year, or with fine which may extend to twice theamount of the cheque, or with both. Section 138 hasnow been amended and the penalty of imprisonment for aterm which may extend to one year has been substitutedby two years as provided by the amending Act of 2002and the fine which may extend to twice the amount ofthe cheque. This has been prescribed as the punishmentfor the offence under Section 138 of the Act. Theobject and the ingredients under the provisions, inparticular Sections 138 and 139 of the Act cannot beignored. Proper and smooth functioning of all businesstransactions, particularly, of cheques as instruments,primarily depends upon the integrity and honesty of theparties. In our country, in a large number ofcommercial transactions, it was noted that the chequeswere issued even merely as a device not only to stallbut even to defraud the creditors. The sanctity andcredibility of issuance of cheques in commercialtransactions was eroded to a large extent. Undoubtedly,dishonour of a cheque by the bank causes incalculableloss, injury and inconvenience to the payee and theentire credibility of the business transactions withinand outside the country suffers a serious setback.Parliament,in order to restore the credibility ofcheques as a trustworthy substitute for cash paymentenacted the aforesaid provisions. The remedy availablein a civil Court is a long-drawn matter and anunscrupulous drawer normally takes various pleas todefeat the genuine claim of the payee"13)In fine, the appeal is allowed and the Judgment in C.C.No.28 of1998 on the file of the Judicial Magistrate No.V,Salem is set aside and the accused is convicted under Section 138 of the NegotiableInstruments Act 1881 and given six months time to pay a sum ofRs.13,78,000/-(Rupees Thirteen Lakhs seventy eight thousand)only (doublethe amount of the cheque)towards compensation to the complainants indefault to suffer simple imprisonment for one year . https://hcservices.ecourts.gov.in/hcservices/

14. The learned counsel appearing for the respondent would representthat a Civil Suit O.S.No.132 of 2005 on the file of Fast Track CourtNO.2, Salem, has been filed by the complainants on the basis of Ex P2 toEx P7 promissory notes. It is made clear that any payment made in thiscase shall be adjusted towards the decree amount in O.S.No.132 of 2005 onthe file of Fast Track Court No.II, Salem.sd/-Asst.Registrar/true copy/Sub Asst.RegistrarsgTo1. The Judicial Magistrate No.V,Salem2. Fast Track Court No.II, Salem,3. do- through the Chief Judicial Magistrate , Salem.+ 1 cc to Mr.M.Dudraiswamy Advocate SR.NO.50004+ 1 cc to Mr.P.Jagadeesan Advocate SR.NO.50133GK (CO)RD 18.8.07Crl.A.No.587/2007