K.Vijayan v. Appukutti

Bail SlipThe Petitioner/Accused namely K. Vijayan was directed to bereleased on bail as per order of this Court dated 10.9.03 inCrl.M.P.No.8602/03 in Crl.R.C.NO.1398/2003.IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 17.04.2007CORAM:THE HONOURABLE MR.JUSTICE A.C.ARUMUGAPERUMAL ADITYANCRL.R.C.NO.1398 OF 2003K.Vijayan.. Petitioner/accused-vs-Appukutti .. Respondent /complainantThis Revision is filed u/s 397 & 401 of Cr Pc against theJudgment of the learned Additional District and Sessions Judge( Fast Track Court ) Vellore in C.A.No.96 of 2002 dated 29.8.2003confirming the order passed in C.C.No.70 of 1999 dated 23.10.2002by the learned Judicial Magistrate No.2,Wallaja .For petitioner :: Mr.R.C.Paul KanagarajFor respondent :: No appearanceO R D E RThis revision has been preferred against the Judgment in C.A.No.96 of 2002 on the file of the Additional District and SessionsJudge(Fast Track Court), Vellore .2) A private complaint was filed under Section 200 Cr.P.C.Against the accused for an offence under Section 138 of NegotiableInstruments Act 1881 on the ground that the cheque drawn by theaccused for a sum of Rs.2,37,000/- in favour of the complainant on10.10.1998 in order to discharge a hand loan of Rs.2,37,000/-borrowed,on the same day, when presented for collection in theState Bank of India, Ranipet branch on 25.1.1999, the same wasreturned with an endorsement " Refer to drawer". Ex P1 is the chequedated 10.10.1998 for Rs.2,37,000/- drawn by the accused in favour of https://hcservices.ecourts.gov.in/hcservices/ the complainant. Ex P2 is the memo issued by the State Bank of India,Ranipet branch informing the complainant that the cheque wasreturned with an endorsement"Referred to drawer" The complainant hadissued a notice to the accused as contemplated under Section 138(2)of Negotiable Instruments Act 1881. Ex P3 is the copy of the notice.The said notice was returned by the postal authorities stating that"not claimed" on 18.2.1999. Ex P4 is the returned cover.Ex P5 is thepostal receipt.The said private complaint was taken on file by thelearned Judicial Magistrate No.2, Wallaja, Vellore District inC.C.No.70 of 1999 and on appearance of the accused on summons,copies under Section 207 Cr.P.C were furnished to the accused andwhen the offence was explained to the accused and questioned theaccused pleaded not guilty. 3) On the side of the complainant P.Ws 1 to 3 were examined.Exs P1 to P5 were exhibited. 4) P.W.2 is the branch Manager of State Bank of India,Ranipetbranch, wherein the complainant is having his account. He wouldstate that Ex P1 cheque dated 24.1.1999 was forwarded to IndianOverseas Bank, Sipcot Branch for collection but the same wasreturned by the said Bank with an endorsement"referred to drawer"on 26.1.1999.5) P.W.3 is an Assistant in the Indian Overseas Bank, Sipcotbranch wherein the accused is having account . According to P.W.3,Ex P1 cheque leaf was issued by their Bank in favour of the accusedand the said cheque was forwarded from State Bank of India, Ranipetbranch on 25.1.1999 for collection, the same was returned with anendorsement "referred to drawer".6) When incriminating circumstances were put to the accused,the accused would totally deny his complicity with the crime.7)After going through the oral and documentary evidence, thelearned trial Judge has held that the accused is guilty underSection 138 of Negotiable Instruments Act 1881 and convicted andsentenced him to six months rigorous imprisonment and a fine ofRs.5000/- with default sentence. The learned trial Judge has furtherawarded compensation of Rs.4,000/- from out of the fine amount ofRs.5000/- under Section 357(1) Cr.P.C. Aggrieved by the findings ofthe learned trial Judge, the accused had preferred an appeal inC.A.No.96 of 2002 before the learned Additional District andSessions Judge(Fast Track Court) Vellore. The first appellateJudge, after due deliberation to the submissions made by bothcounsels and after going through the judgment of the learned trialJudge and after scanning the evidence both oral and documentary hasultimately concurred with the findings of the learned trial Judge,thereby dismissing the appeal. Aggrieved by the findings of the https://hcservices.ecourts.gov.in/hcservices/ learned first appellate Judge the accused has preferred thisrevision.8) Now the point for determination in this revision is whetherthe findings of the first appellate Court requires any interferencefrom this Court?9) Heard Mr.R.C.Paul Kanagaraj, learned Counsel for therevision petitioner. 10) The point:The learned counsel appearing for the revision petitioner wouldcontend that Ex P1 cheque was returnend by the State Bank of India,Wallaja, with an endorsement" Referred to drawer". But there is noevidence let in on the side of the complainant to show that thedrawer of the cheque viz., the accused had no sufficient funds inhis account. In this regard, it is pertinent to note the evidence ofP.W.3 who is an assistant of Indian Overseas Bank, Spicot branchwherein, the accused is having his account. P.W.3 in categoricalterms would say that "referred to drawer" means, there is nosufficient amount in the account of the customer. So it is clearthat knowing fully well, that he has no sufficient money in hisaccount the accused had drawn Ex P1 cheque in favour of thecomplainant which squarely attracts an offence under Section 138 ofNegotiable Instruments Act 1881. Under Section 139 of the NegotiablelInstruments Act 1881 presumptioon will be only for a valuableconsideration, the cheque was drawn by the drawer/accusued in favourof the payee/complainant.11)The learned counsel would further contend that there wasno sufficient service of notice to the accused but the endorsementin Ex P4 returned postal cover" not claimed return to sender" willamply prove that since the accused had refused to receive thenotice, it was sent to the sender. Under such circumstances, I do not find any reason to interfere with the findings of the firstappellate Court that the case under Section 138 of NegotiableInstruments Act 1881 has been made out against the accused. Undersuch circumstances, conviction against the accused in C.C.No.79 of1999 is to be confirmed.12) When coming to the question of sentence, the principleslaid down in Goa Plast (P) Ltd.v.Chico Ursula D'Souza (2004) 2Supreme Court Cases 235) is worth mentioning. The exact observationin the said case runs as follows:"Thus it has to be presumed that a cheque isissued in discharge of any debt or otherliability. The presumption can be rebutted byadducing evidence and the burden of proof is onthe person who wants to rebut the presumption. https://hcservices.ecourts.gov.in/hcservices/ This presumption coupled with the object ofChapter XVII of the Act which is to promote theefficacy of banking operation and to ensurecreditability in business transactions throughbanks persuades us to take a view that bycountermanding payment of post-dated cheque, aparty should not be allowed to get away from thepenal provision of Section 138 of the Act. Acontrary view would render Section 138 a deadletter and will provide a handle to personstrying to avoid payment under legal obligationsundertaken by them through their own acts whichin other words can be said to be taking advantageof one's own wrong. If we hold otherwise, bygiving instructions to banks to stop payment of acheque after issuing the same against a debt orliability, a drawer will easily avoid penalconsequences under Section 138. Once a cheque isissued by a drawer, a presumption under Section139 must follow and merely because the drawerissued notice to the drawee or to the bank forstoppage of payment, it will not preclude anaction under Section 138 of the Act by the draweeor the holder of the cheque in due course. Thiswas the view taken by this Court in Modi CementsLtd., v. Kuchil Kumar Nandi(1998)3 SCC 249). Onsame facts is the decision of this Court in AshokYeshwant Baddave.v. Surendra MadhavraoNighojakar. (2001)3 SCC (cri) 726). The decisionin Modi case (1998)3 SCC 249) overruled anearlier decision of this Court in ElectronicsTrade and Technology Development Corpn Ltd.,v.Indian Technologists & Engineers (Electronics)(P) Ltd., which had taken a contrary view. Weare in respectful agreement with the view takenin Modi case. The said view is in consonancewith the object of the legislation. On the faithof payment by way of a post-dated cheque, thepayee alters his position by accepting thecheque. If stoppage of payment before the duedate of the cheque is allowed to take thetransaction out of the purview of Section 138 ofthe Act, it will shake the confidence which acheque is otherwise intended to inspire regardingpayment being available on the duedate.". . . . . . . There is therefore norequirement that the complainant mustspecifically allege in the complaint that therewas a subsisting liability. The burden of proving https://hcservices.ecourts.gov.in/hcservices/ that there was no existing debt or liability wason the respondents. This they have to dischargein the trial. At this stage, merely on the basisof averments in the petitions filed by them theHigh Court could not have concluded that therewas no existing debt orliability.". . . . . . . . . . We have no doubtthat the respondent has committed an offencepunishable under the provisions of Section 138 ofthe Act and is liable to be punished. Thetransaction in question took place between theparties in the year 1993, therefore, Section138 , as it stood at the relevant time, would beapplicable to the present case. Section 138provides imprisonment for a term which may extendto one year, or with fine which may extend totwice the amount of the cheque, or with both.Section 138 has now been amended and the penaltyof imprisonment for a term which may extend toone year has been substituted by two years asprovided by the amending Act of 2002 and the finewhich may extend to twice the amount of thecheque. This has been prescribed as thepunishment for the offence under Section 138 ofthe Act. The object and the ingredients underthe provisions, in particular Sections 138 and139 of the Act cannot be ignored. Proper andsmooth functioning of all business transactions,particularly, of cheques as instruments,primarily depends upon the integrity and honestyof the parties. In our country, in a large numberof commercial transactions, it was noted that thecheques were issued even merely as a device notonly to stall but even to defraud the creditors.The sanctity and credibility of issuance ofcheques in commercial transactions was eroded toa large extent. Undoubtedly, dishonour of acheque by the bank causes incalculable loss,injury and inconvenience to the payee and theentire credibility of the business transactionswithin and outside the country suffers a serioussetback. Parliament,in order to restore thecredibility of cheques as a trustworthysubstitute for cash payment enacted the aforesaidprovisions. The remedy available in a civilCourt is a long-drawn matter and an unscrupulousdrawer normally takes various pleas to defeat thegenuine claim of the payee" https://hcservices.ecourts.gov.in/hcservices/ After holding that the accused is guilty under Section 138 of theNegotiable Instruments Act 1881, the Honourable Apex Court havedisposed of the appeal by awarding twice the amount of the chequeie., Rs.80,000/- as compensation to the appellant/complainant withdefault sentence giving a months time for payment. If wefollow the same yardstick here in this case also, the accusedis liable to pay Rs.4,74,000/- to the complainant. The point isanswered accordingly.13. In the result, the revision is dismissed with the followingmodification.The revision petitioner/accused shall pay a sum ofRs.4,74,000/- (Rupees four lakhs and seventy four thousand) onlytowards compensation to the complainant in default to suffer simpleimprisonment for six months instead 6 months RI and fine ofRs.5000/- with default sentence. Time for payment three months fromtoday.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.sgTo1. The Additional District and Sessions Judge(FTC ) Vellore.2. Do Thro The Principal District Judge, Vellore.3. The Judicial Magistrate NO.2,Wallaja.4. Do Thro The Chief Judicial Magistrate, Vellore.Crl.R.C.No.1398/2003NSM (CO)kk 21/4