THE HONOURABLE MR v. S.Kasiviswanathan

IN THE HIGH COURT OF JUDICATURE AT MADRASDATE : 10.07.2007CORAM:THE HONOURABLE MR.JUSTICE A.C.ARUMUGAPERUMAL ADITYANCrl.A.No.659 of 2001R.Mani.. Appellant/Complainantvs.S.Kasiviswanathan .. Respondent/AccusedPrayer:- This Appeal has been preferred against the judgment dated27.6.2001 made in C.C.No.114 of 2000 on the file of the JudicialMagistrate No.I, Erode.For Appellant :Mr.N.ManokaranFor Respondent :Mr.G.Saravanan, Legal Aid CounselJUDGMENTThis appeal has been preferred against the judgment in C.C.No.114 of2000 on the file of the Judicial Magistrate No.I, Erode. The complaintwas preferred by the power of attorney holder of the complainant underSection 200 of Cr.P.C., against the accused for offence under Section 138of the Negotiable Instruments Act.2.After taking cognizance of the offence, the learned JudicialMagistrate has secured the accused by sending summons and on hisappearance copies under Section 207 of Cr.P.C., were furnished to theaccused and when the offence was explained to the accused and questioned,the accused pleaded not guilty.3.The short facts of the case narrated in the complaint is that on1.1.1999 the accused had borrowed a sum of Rs.1,50,000/- as an hand loanand drawn a cheque dated 1.12.1999 in favour of the complainant in orderto discharge the said loan. When the said cheque was presented in theCity Union Bank, P.N.Palayam Branch, Coimbatore, the cheque was returnedwith an endorsement that there is no sufficient funds in the account ofthe drawer of the cheque. The complainant had issued notice to theaccused informing the fact that the cheque drawn by him in favour of the https://hcservices.ecourts.gov.in/hcservices/ complainant on presentation in the bank was dishonoured. Since theaccused has not sent any reply notice within the time stipulated undersection 138 of the Negotiable Instruments Act, the complainant has filedthis complaint through his power of attorney agent. 4.P.W.1 is the power of attorney agent, who would narrate what he hadstated in the complaint. Through P.W.1, Ex.P.1-power of attorney,Ex.P.2-impugned cheque dated 1.10.1999, bank return memo-Ex.P.3 dated29.1.2000 sent along with Ex.P.2-impugned cheque, Ex.P.4-debit advice,Ex.P.5-copy of the notice, Ex.P.6-postal receipt, Ex.P.7-acknowledgmentfor the accused having received the original of Ex.P.5, Ex.P.8-statementof account of the accused, Ex.P.9-copy of cheque return register, Ex.P.10-copy of the signature of the accused and Ex.P.11-account opening register,were exhibited. 5.When incriminating circumstances were put to the accused, he woulddeny his complicity with the crime. On the side of the accused one Babuwas examined as D.W.1. The learned trial Judge after going through theevidence both oral and documentary has come to the conclusion that theoffence under Section 138 of the Negotiable Instruments Act was not madeout against the accused and accordingly acquitted the accused from thecharges levelled against him, which necessitated the complainant to preferthis appeal.6.Now the point for determination in this appeal is whether thefindings of the learned trial Court in C.C.No.114 of 2000 on the file ofthe Judicial Magistrate No.I, Erode, is pervers in nature to warrant anyinterference from this Court?7.The Point:-7(a) The learned trial judge has acquitted the accused on twogrounds. The first one being the complainant has failed to prove thatEx.P.2-cheque was drawn by the accused only in order to discharge asubsisting liability and the second one being the impugned cheque-Ex.P.2was drawn only to discharge a liability due to one Shanmugam, brother-in-law of the complainant, who was running a chit transaction in which theaccused was a subscriber and that this cheque along with another chequewas handed over to the said Shanmugam as a security for the prize amountof the accused. The learned trail Judge has come to such a conclusiononly on the basis of the evidence let in on the side of the accusedthrough D.W.1 one Babu. P.W.1, power of attorney holder, even though hasno knowledge about each and every money transaction of the complainant hasin categorical terms admitted in the cross-examination itself that onlyin his presence the amount for Ex.P.2-cheque was given by the complainantto the accused and only to discharge the said loan the accused had drawnEx.P.2-cheque in favour of the complainant. He has further deposed to the https://hcservices.ecourts.gov.in/hcservices/ fact that the cheque Ex.P.2 was brought by the accused and only in hispresence the accused had signed in the said cheque, after receiving theamount mentioned in it. So the reasoning of the learned trial judge thatthe complainant has failed to prove that there was no subsisting liabilityfor which Ex.P.2-cheque was drawn by the accused cannot be sustainable.7(b)The next point on which the learned trial Judge has thrown awaythe claim of the claimant is that Ex.P.2-cheque was given by the accusedto one Shanmugam, the brother-in-law of the complainant, by way ofsecurity for the price amount in chit conducted by the said Shanmugam.But such a defence was not even raised by the accused by way of a replynotice even after the receipt of the notice issued by the complainant andreceived by the accused under Ex.P.7. The evidence of D.W.1 is of any useto the accused because D.W.1 is not a subscriber to the chit conducted byShanmugam and he has not spoken to anything about the chit conducted bythe said Shanmugam in which the accused claims to be a subscriber. Thetrial Court has admitted that the accused has failed to prove the defencethrough D.W.1 but has strangely relied on the evidence of D.W.1 and cometo the conclusion that the claimant has failed to prove his claim. Theaccused has not chosen to enter into the box to prove that he was asubscriber in the chit conducted by the said Shanmugam. Under suchcircumstances, the defence taken by the accused that Ex.P.2-cheque wasgiven as a security for the prize amount drawn by him in the chitconducted by Shanmugam holds no water. The accused admits his signaturein Ex.P.2 and it is in evidence from P.W.1 that the impugned cheque Ex.P.2was drawn to discharge a subsisting liablity of Rs.1,50,000/- received bythe accused from the complainant in his (P.W.1) presence. Under suchcircumstance, the presumption under Section 139 of the NegotiableInstruments Act is that the holder of a cheque received the cheque, of thenature referred to in section 138, for the discharge, in whole or in part,of any debt or other liability. Under such circumstances, I hold thatthe accused is guilty under Section 138 of the Negotiable Instruments Actand accordingly convict the accused under Section 138 of the NegotiableInstruments Act.7(c) When coming to the question of sentence following the ratiodecidendi in 2004(2) SCC 235 (Goa Plast (P) Ltd. Vs. Chico UrsulaD'Souza), I am of the view that the accused is liable to pay acompensation, viz., double the cheque amount. The relevant observation ofthe Honourable Apex Court in the above said dictum runs as follows:-"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 of https://hcservices.ecourts.gov.in/hcservices/ imprisonment 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."After observing in the above lines the Honourable Apex Courthas given a month's time to the accused to pay a sum ofRs.80,000/- (twice the amount of the cheque) to the complainantwith default sentence. I am of the opinion that the same yardstick can be applied to the presentfacts of the case also. Point is answered accordingly.9. In fine, two months time is given from this date to therespondent/accused to pay the compensation of Rs.3,00,000/- (twice thecheque amount) to the complainant in default the respondent/accused shallsuffer SI for six months. The appeal is disposed of accordingly.The services rendered by the learned Legal Aid CounselMr.G.Saravanan is recorded with appreciation. The Member Secretary of theTamil Nadu Legal Services Authority is directed to pay Rs.3,000/- to thelegal aid counsel towards his remuneration.ssvSd/-Asst.Registrar/true copy/ Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ To,1.The Judicial Magistrate No.I, Erode.2.-do-The Chief Judicial Magistrate, Erode.3. The Member Secretary, Tamil Nadu Legal Services Authority, Chennai.+1 cc to Mr.G.Saravanan, Advocate Sr.No.41581.+1 cc to Mr.N.Manokaran, Advocate Sr.No.41542.SSV(CO)dcp/17.7.07Crl.A.No.659 of 2001