P.Subramaniam v. K.Naravana Bhat

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED :: 27-04-2007CORAMTHE HONOURABLE MR.JUSTICE S.TAMILVANANCRIMINAL APPEAL No.463 of 2001P.Subramaniam ... Appellant /Complainan-vs-K.Naravana Bhat ... Respondent/AccusedCriminal Appeal filed against the Judgment, dated 03.04.2001 made inC.C.No.447 of 2000 on the file of the Judicial Magistrate No.I, Erode. For appellant : Mr.N.ManokaranFor respondent : Mr.AR.M.ArunachalamJ U D G M E N TThis Criminal appeal has been preferred by the complainant againstthe judgment of acquittal, dated 03.04.2001 made in C.C.No.447 of 2000 onthe file of the Judicial Magistrate No.I, Erode.2. The brief facts of the case are as follows : On the complaint given by the appellant / complainant, underSection 138 r/w 142 of Negotiable Instruments Act, the case in C.C.No.447of 2000 was taken on file by the trial court. According to the appellant /complainant, the respondent had received Rs.3,00,000/- from him, on24.03.2000 and issued two cheques, one for a sum of Rs.2,00,000/- andanother for a sum of Rs.1,00,000/- drawn on Syndicate Bank, Puthur Branchand as requested by the respondent / accused, he presented the cheque forcollection on 29.04.2000, but the same was dishonoured on account ofinsufficient funds on 04.05.2000. Subsequently, the appellant /complainant issued a legal notice, for which the respondent / accused senta reply denying the averments, subsequently, the appellant filed thecase. https://hcservices.ecourts.gov.in/hcservices/

3. Considering the oral and documentary evidence adduced by bothsides, the learned Judicial Magistrate held that the respondent / accusedwas not guilty under Section 138 r/w 142 of Negotiable Instruments Act andaccordingly, acquitted the accused.4. It is seen that the defence raised by the respondent / accused isthat he had never borrowed any amount from the appellant / complainant.According to the respondent / accused, the appellant / complainant hadagreed to sell his lorry bearing Registration No.KA-01-M-6615 for a sum ofRs.3,25,000/- and out of which, he received an advance of Rs.25,000/- fromthe respondent / accused. For the balance amount Rs.3,00,000/-, theappellant / complainant received the aforesaid two cheques, one forRs.2,00,000/- and another for Rs.1,00,000/-, but subsequently, theappellant / complainant has taken back his lorry from the custody of therespondent / accused. Hence, the respondent / accused asked theappellant / complainant to return his cheques, but the appellant presentedthe cheques for collection and subsequently filed the case, though thesame is not maintainable.5. Mr.N.Manokaran, learned counsel appearing for the appellant wouldcontend that the trial court has failed to note that Section 139 ofCr.P.C. creates a statutory presumption that the cheque, is always issuedin discharge of debt or other liability and that the trial court wronglyshifted the burden of proof on the appellant / complainant.6. Per contra, Mr.AR.M.Arunachalam, learned counsel appearing for therespondent / accused would contend that the appellant / complainant hadagreed to sell his lorry for a sum of Rs.3,25,000/- and after gettingRs.25,000/- in cash from the respondent / accused, received the aforesaidtwo cheques from the respondent / accused and handed over the lorry tohim, but subsequently, he took back the lorry and therefore, therespondent / accused is not liable to pay the cheque amount. Suppressingthe above facts, the case was filed by the appellant / complainant,considering the evidence, the same was rightly dismissed by the trialcourt.7. As per Section 139 of Negotiable Instruments Act, it shall bepresumed, unless the contrary is proved, that the holder of a cheque hasreceived the cheque of the nature referred to in Section 138 for thedischarge, in whole or in part, or any debt or other liability. But thispresumption is a reputable presumption and the burden is upon the personwho issued the cheque.8. In the complaint filed under Section 138 of Negotiable InstrumentsAct, the appellant / complainant has stated that the respondent / accusedhad borrowed a sum of Rs.3,00,000/- from him on 24.03.2000 as hand loan.As found by the trial court, the appellant / complainant has stated in hisevidence that for lending a sum of Rs.3,00,000/- neither any pronote, nor https://hcservices.ecourts.gov.in/hcservices/ receipt was obtained by him from the respondent / accused. He does notknow anything about the father, mother and brothers of the respondent /accused. Further, he has admitted that he had borrowed the amount from hisfriend one Moorthy and gave the same to the respondent / accused. There isno interest for the said amount, payable by the respondent / accused. Inthe cross-examination, the appellant / complainant has stated that he hasno connection whatsoever with the vehicle, bearing Registration No.KA-01-M-6615 and he did not know whether the Registration Number relates to alorry or not and that there is no transaction between himself and therespondent / accused with regard to the vehicle, but strangely in thesubsequent portion of his evidence, he has admitted that he was the ownerof the lorry bearing Registration No.KA-01-M-6615 and sold the same tosome other person, six months prior to the date of deposing evidence. Hehas stated that he does not know the name of the person, to whom he soldthe lorry and also the sale consideration, but he has admitted that Ex.D.1was entered into between himself and the respondent / accused, he has alsoadmitted the contents of the agreement, as true.9. It is seen that as per Ex.D.1, the appellant / complainant,entered into an agreement with the respondent / accused on 30.12.1999 tosell his lorry, bearing Registration No.KA-01-M-6615 for a sale price ofRs.3,00,000/-. Out of the said amount, the respondent / accused had to payRs.2,00,000/- on or before 28.12.2000 and the balance of Rs.1,00,000/- onor before 30.03.2000. The second paragraph reads thus . That party No.2K.Narayana Bhat had today paid an advance of Rs.25,000/- (Twenty fivethousand ) to party No.1, That party No.1 hereby accepts receipt the aboveamount of Rs.25,000/-.. It is seen without any attestation, a portion ofthis paragraph has been scored out.10. Paragraph Number 6 reads thus . If party No.2 fails to pay thebalance amount of Rs.3,00,000/- within the above period, party No.2 willloose the advance paid by him and he must hand over the lorry and Rig unitin good condition to party No.I..11. As stated in the agreement party number 1 is the appellant /complaint and party number 2 is the respondent / accused. It is seen thatthe appellant / complainant has completely suppressed the lorrytransaction and also the agreement between himself and the respondent /accused, which was marked on admission during cross-examination of theappellant/ complainant.12. As found by the trial court, the appellant / complainant hasadmitted in his evidence that he had taken back the lorry from the custodyof the respondent / accused, through his accountant and subsequently soldthe same to some other third party. As found by the trial court, theevidence would clearly show that the two cheques, dated 24.04.2000 werehanded over by the respondent / accused only towards the saleconsideration of the lorry, which was agreed to be sold to the https://hcservices.ecourts.gov.in/hcservices/ respondent / accused. Though the lorry had been handed over to therespondent/ accused, after the agreement, Ex.D.1, even according to theappellant / complainant, R.C.Book was with him and after taking back thelorry, the appellant / complainant sold it to some other third party thathas also been admitted in his cross-examination. Therefore, it has beenestablished that the presumption under Section 139 has been rebutted andproved that the cheques were not supported by consideration. 13. It is seen further that Ex.P.5 is the copy of the legal notice,said to have been sent by the appellant / complainant to the respondent /accused. Ex.P.7 is the reply notice, dated 30.05.2000 sent by therespondent / accused through his counsel, wherein it has been stated asfollows: .My client is highly surprised to receive an empty cover sent byRegd. Post with A.D. on 19.05.2000 for reasons best known to you only.This is for your kind information..14. From this reply, the respondent / accused has clearly stated tothe counsel for the appellant / complainant that the registered post withacknowledgement sent by the Advocate was only an empty cover. As the replywas admittedly received by the counsel for the appellant / complainant,hence, immediately, he could have sent a copy of the notice, but despitethe reply without sending any further notice or furnishing copy of thenotice, the appellant / complainant has filed a case under Section 138 ofNegotiable Instruments Act. 15. As per Section 138 (b) of Negotiable Instruments Act, provisio tothe Section, the payee or the holder in due course of a cheque, as thecase may be, makes a demand for the payment of the said amount of money bygiving a notice, in writing, to the drawer of the cheque, within fifteendays of the receipt of information by him from the bank regarding thereturn of the cheque as unpaid.16. As per this proviso, after dishonour of the cheque, it ismandatory on the part of the complainant, to issue proper legal notice ascontemplated under the Section, so as to maintain the complaint underSection 138 of Negotiable Instruments Act. Here in the instant case, byreply notice, Ex.P.7, the respondent / accused has clearly stated to thecounsel for the appellant / complainant that he had received only an emptycover, sent by registered post with acknowledgement due on 19.05.2000 forthe reasons best known to the counsel for the appellant / complainant.17. In such circumstance, the burden is upon the appellant /complainant to prove that proper notice was served on the respondent /accused and not empty cover. It is strange that even without sending acopy or another notice stating the facts, the case has been instituted.Considering the facts and circumstances, I concur the view taken by thetrial court that the mandatory provision of Section 138 (b) of NegotiableInstruments Act has not been complied with by the appellant / complainant. https://hcservices.ecourts.gov.in/hcservices/

18. As per the evidence of the appellant / complainant, that he hadborrowed a sum of Rs.3,00,000/- from his friend one Moorthy and handedover to the respondent / accused and got two post dated cheques, for whichthere was no interest payable, no receipt or pronote or security had beenobtained, cannot be accepted. Further, the appellant, who was examined asP.W.1 has admitted in his cross-examination that he had to payRs.2,00,000/- under the hire purchase agreement relating to words, thepurchase of the aforesaid lorry. When the appellant / complainant himselfhad to pay Rs.2,00,000/- towards purchase of lorry under hire purchaseagreement and entered into an agreement with the respondent / accusedunder Ex.D.1, it is quite improbable for him to lend a loan ofRs.3,00,000/- to the respondent / accused even without knowing the name ofhis father, mother and brothers and other details and that too withoutinterest.19. As found by the trial court, it has been clearly established byoral and documentary evidence that the appellant / complainant had enteredinto an agreement with the respondent / accused on 30.12.1999 under Ex.D.1to sell his lorry bearing Registration No.KA-01-M-6615 for which therespondent / accused had to pay a balance amount of Rs.3,00,000/- in twoinstalments. As per the agreement, advance was also paid by the respondent/ accused. Only towards the said agreement, the respondent / accusedhanded over two cheques, which was subsequently dishonoured. As thebalance amount was not paid, the appellant / complainant had taken backthe vehicle from the respondent / accused and sold the same to some thirdparty. There is no proper notice to the respondent / accused ascontemplated under Section 138 (b) of Negotiable Instruments Act. Thecomplaint filed by the appellant would show that it is only an attempt bythe appellant / complainant to reap unjust enrichment.20. As per Section 139 of Negotiable Instruments Act, unless thecontrary is proved, it should be presumed in favour of the holder of thecheque that the cheque is supported by consideration. In the instantcase, the evidence would clearly establish the contrary to the saidpresumption under the aforesaid Section, as it is a reputable presumption.21. On the facts and circumstances, I am of the considered view thatthere is no error or perverse finding in the judgment of acquittalrecorded by the trial court and hence the appeal fails. https://hcservices.ecourts.gov.in/hcservices/

22. In the result, confirming the judgment of the trial court, theCriminal Appeal is dismissed.tsvnSd/Asst. Registrar/true copy/Sub Asst.RegistrarTo1.The Chief Judicial Magistrate, Erode.2. The Judicial Magistrate No.I, Erode. 3. The Public Prosecutor High Court of Madras, Chennai.+ One cc to Mr. N. Manoharan, Advocate sR 29697SSV (co)sg 7/6/07 Crl.A.No.463 of 2001