THE HONOURABLE MR v. A.Jaganathan

IN THE HIGH COURT OF JUDICATURE AT MADRASDATE : 26.06.2007CORAM:THE HONOURABLE MR.JUSTICE A.C.ARUMUGAPERUMAL ADITYANCrl.A.No.552 of 2001Mani .. Appellant/Complainantvs.A.Jaganathan .. Respondent/accused Prayer: This Appeal has been preferred against the judgment dated16.3.2001 made in C.C.No.72 of 2000 on the file of the JudicialMagistrate, Udhagamandalam.For Appellant : Mr.A.M.Rahamath AliFor Respondent : Mr.Lenin and BhagyaJUDGMENTThe learned counsel for the appellant is present today and argued theappeal in the presence of the learned counsel for the respondent.2.This appeal has been preferred against the judgment in C.C.No.72 of2000 on the file of the Judicial Magistrate, Udhagamandalam. Thecomplainant, who has lost his case before the trial Court, has preferredthis appeal against the acquittal. 3.According to the complainant, who has preferred a complaint underSection 200 of Cr.P.C., for an offence under Section 138 of the NegotiableInstruments Act against the accused, is that on 11.2.2000 the accused haddrawn a cheque for Rs.5,00,000/- in Andra Bank, Coimbatore Branch, whichon presentation before the Indian Bank was returned with an endorsementthat the drawer had no sufficient funds in his account to honour thecheque. After the return of the cheque, the complainant had issued anotice on 24.2.2000 to the accused informing him about the return of thecheque. Inspite of the receipt of the above said notice the accused hadnot chosen to send any reply nor repay the loan amount. Hence, thecomplaint. https://hcservices.ecourts.gov.in/hcservices/

4.After taking cognizance of the complaint, the learned JudicialMagistrate issued summons to the accused and on his appearance copiesunder Section 207 of Cr.P.C., were furnished to the accused and when theoffence was explained to the accused and questioned he pleaded not guilty.Before the trial Court P.W.1 to P.W.3 were examined and Ex.P.1 to Ex.P.6were marked. 5.P.W.1 is the complainant, who would depose what he had narrated inthe complaint. He has identified Ex.P.1 as the impugned cheque drawn bythe accused for Rs.5,00,000/- on 11.2.2000 in order to discharge thesubsisting liability of hand loan borrowed on various dates from thecomplainant. Ex.P.2 is the memo dated 11.2.2000 sent along with Ex.P.1-cheque by Andra bank informing the complainant that the said cheque wasreturned, since the drawer has no sufficient funds in his account. Ex.P.3is also another memo of intimation issued by the Indian Bank, wherein thedrawer of the cheque (accused) is having his account. Under the originalof Ex.P.4 the complainant had sent a notice to the accused informing aboutthe impugned cheque-Ex.P.1 which on presentation was returned by the Bankfor the reason "funds insufficient". The said notice was received by theaccused on 28.2.2000 under Ex.P.5-acknowledgment.6.P.W.2 is the Assistant Manager of Indian Bank, UdhagamandalamBranch. According to him, the complainant is an account holder underaccount No.5239. He would admit that the impugned cheque was presented inthe bank for realization and the same was forwarded to Andra Bank,Coimbatore Branch, wherein the accused was having his account, but thesame was returned with an endorsement that there is no sufficient funds inthe account of the accused. Ex.P.2 is the memo sent by Andhra Bank,Coimbatore Branch. Ex.P.3 is the notice given by Indian Bank informingabout the dishonour of the cheque for want of sufficient funds in theaccounts of the accused. 7.P.W.3 is an officer in the Andhra Bank, Coimbatore Branch. Hewould admit that the accused is a customer of their bank and his accountnumber is No.2309. He would admit that Ex.P.1-cheque belongs to AndhraBank, Coimbatore Branch and that the same was forwarded to their bank forcollection on 11.2.2000, but on the date of presentation of the chequethere was only Rs.2,243/- remains as the balance of credit in the accountof the accused. Ex.P.6 is the statement of accounts for the accused'saccount. 8.When incriminating circumstances were put to the accused, he woulddeny his complicity with the crime. He has examined D.W.1 to D.W.4 andalso marked Ex.D.1 & Ex.D.2 on his side. https://hcservices.ecourts.gov.in/hcservices/

9.After going through the evidence both oral and documentary, thelearned trial Judge carried away by the defence taken by the accused thatthe complainant has failed to prove his affluent status to lendRs.5,00,000/- towards loan to the accused forgetting the fact whether thecomplainant has proved the guilt of the accused as contemplated underSection 138 & 139 of the Negotiable Instruments Act, has acquitted theaccused from the charge under Section 138 of the Negotiable InstrumentsAct levelled against him, which necessitated the complainant to comebefore this Court with this appeal. 10.Now the point for determination in this appeal is whether thefindings of the learned trial judge is perverse in nature to warrantinterference from this Court?11.The Point:- Relying on the ratio in 1998 Crl.L.J. 906(A.Bhoosanrao Vs. Prushothamdas Pantani and another), the learned trialjudge has held that when the complainant says that he had lent huge amountby way of cheque, which was denied by the accused, the burden is on thecomplainant to prove that he had sufficient capacity to lend the saidamount that too by cheque. The facts of the above said case is asfollows:-"The complainant in that case has preferred a complaint underSection 200 of Cr.P.C., for an offence under Section 138 of theNegotiable Instruments Act alleging that the cheque amount waspaid by the complainant to the accused from out of his salaryand that there was no account maintained by him and he is not anincome-tax assessee. To show that he had sufficient capacity tolend the said amount, the complainant in the witness box wouldsay that he had earned lakhs of rupees through real estatebusiness every year. But he has not filed any income-tax returnto substantiate this claim. Only under such circumstance, theCourt held that the complainant had failed to provesatisfactorily that he has sufficient capacity to lend theamount of Rs.1,25,000/-. Apart from this ground, the Court haddismissed the complaint on the other ground that in the cheque-Ex.P.2 the entire body of the letter was typed but the sum ofRs.1,25,000/- was written both in figures and words in ink,which was also not properly explained by the complainant underwhat circumstance Ex.P.2-impugned cheque was partially typed andthe amount only written in hand writing with ink."But that is not the case herein. P.W.1 in his evidence would depose thatthe accused had borrowed money from him on several occasions and only todischarge the liability of Rs.5,00,000/- which was the amount due to him https://hcservices.ecourts.gov.in/hcservices/ on the date of drawal of the impugned cheque i.e., on 11.2.2000, theaccused had drawn Ex.P.1-cheque in favour of him. He would admit in thechief-examination itself that the accused is the owner of Murugan Lodge atUdhagamandalam and that he is indulged in cine field and to meet cinemashooting expenses the accused used to borrow money from him on severaloccasions. According to him, about 20 persons were employed under him inhis land and doing agriculture and that the accused came to his house on11.2.2000 and after receiving the loan amount, had drawn Ex.P.1-cheque in favour of him.11(a) The defence taken by the accused in this case is that theimpugned cheque-Ex.P.1 belongs to his brother D.W.4 and the same wasstolen away from him and that with the stolen cheque the accused hasforged the same and filed this complaint. D.W.4, the brother of theaccused, would depose that the complainant had worked under him for nearly3 years and during that period he had lost one cheque leaf. But in thecross-examination he would admit that he has not preferred any complaintwith the police regarding the loss of the cheque and he has furtheradmitted that he has also not informed about the loss of the cheque leafto the Bank concerned. Further he has also not produced any documentaryevidence to show that the complainant had worked under him for nearlythree years. It is not the case of the accused in defence that hissignature has been forged in Ex.P.1-cheque. On the other hand even afterthe receipt of the original of Ex.P.4-notice under Ex.P.5-acknowledgment, the accused has not chosen to send any reply denying theaverments contained in the original of Ex.P.4-notice. Under suchcircumstances, it is to be presumed that the fact thatEx.P.1-impugned cheque for Rs.5,00,000/- was drawn by the accused infavour of the complaint has been proved and from the evidence of P.W.2 &P.W.3 it has been proved that on presentation of the said cheque with thebank the same was returned or dishonoured with an endorsement that thereis no sufficient funds in the account of the accused. The presumptionunder Section 118 and 139 of the Negotiable Instruments Act is that onlyfor a valuable consideration the impugned cheque Ex.P.1 was drawn by theaccused in favour of the complainant. Hence, I am of the view that thefindings of the learned trial Judge that the complainant has failed toprove that he had sufficient funds to lend loan amount to the accused andthat the offence under Section 138 of the Negotiable Instruments Act wasnot attracted against the accused cannot be sustainable. 12.Now coming to the point of sentence the ratio laid down in 2004(2) SCC 235 (Goa Plast (P) Ltd. Vs. Chico Ursula D'Souza), by the https://hcservices.ecourts.gov.in/hcservices/ Honourable Apex Court is to be followed in this case also. The relevantobservation of the Honourable Apex Court in the said ratio is extractedbelow for the purpose of deciding this appeal:-"We have no doubt that the respondent has committed anoffence punishable under the provisions of Section 138 of the NIAct and is liable to be punished. The transaction in questiontook place between the parties in the year 1993, therefore,Section 138, as it stood at the relevant time, would beapplicable to the present case. Section 138 providesimprisonment for a term which may extend to one year, or withfine which may extend to twice the amount of the cheque, or withboth. Section 138 has now been amended and the penalty ofimprisonment for a term which may extend to one year has beensubstituted by two years as provided by the amending Act of 2002and the fine which may extend to twice the amount of the cheque.This has been prescribed as the punishment for the offence underSection 138 of the Act. The object and the ingredients under the provisions, inparticular, 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 uponthe integrity and honesty of the parties. In our country, in alarge number of commercial transactions, it was noted that thecheques were issued even merely as a device not only to stallbut even to defraud the creditors. The sanctity and credibilityof issuance of cheques in commercial transactions was eroded toa large extent. Undoubtedly, dishonour of a cheque by the bankcauses incalculable loss, injury and inconvenience to the payeeand the entire credibility of the business transactions withinand outside the country suffers a serious setback. Parliament,in order to restore the credibility of cheques as a trustworthysubstitute for cash payment enacted the aforesaid provisions.The remedy available in a civil Court is a long-drawn matter andan unscrupulous drawer normally takes various pleas to defeatthe genuine claim of the payee.With the above observation the Honourable Apex Court hasdisposed of the above appeal as follows:-"We, therefore, grant one month's time from this date tothe respondent herein to pay a sum of Rs.80,000/- (twice theamount of the cheque) by way of demand draft drawn in favour ofthe appellant and payable at Goa (on the address given in the https://hcservices.ecourts.gov.in/hcservices/ paper-book). In default thereof, the respondent shall suffersimple imprisonment for six months.""I am of the opinion that the same yardstick can be followed for thisappeal also. Point is answered accordingly.12. In fine, the appeal is allowed and the judgment in C.C.No.72 of2000 on the file of the Judicial Magistrate, Udhagamandalam, is set asideand the accused/respondent herein is convicted under Section 138 of theNegotiable Instruments Act and a month's time is granted from this date tothe accused/respondent herein to pay a sum of Rs.10,00,000/- (Rupees TenLakhs) only (twice the cheque amount) to the complainant/appellant herein,in default thereof, the respondent herein shall suffer Simple Imprisonmentfor one year. The appeal is disposed of with the above observation.ssvSd/Asst. Registrar/true copy/Sub Asst.RegistrarTo,1.The Judicial Magistrate, Udhagamandalam.2.-do- Thro The Chief Judicial Magistrate, Nilgiris. + One cc to Mr. A.M. Ramath Ali, Advocate sR 37733PV (co)sg 10/7/07Crl.A.No.552 of 200126.06.2007