Sakthi Ganesh Finance v. C. Ashok Kumar

IN THE HIGH COURT OF JUDICATURE AT MADRASDATE : 28.10.2008CORAM:THE HONOURABLE MR.JUSTICE A.C.ARUMUGAPERUMAL ADITYANCrl.A.No.408 of 2002Sakthi Ganesh Financea Firm represented by itsManaging Partner Chinnasamy.. Appellant/Complainantvs.C.Ashok Kumar .. Respondent/Accused This appeal has been preferred under section 378 of CriminalProceedure Code against the Judgment dated 20.12.2001, in C.A.No.186of 2001 on the file of Second Additional Sessions Judge, Erodeagainst the Judgment dated 16.10.2001 in C.C.No.632 of 2000 on thefile of Judicial Magistrate No.1, Erode.For Appellant : Mr.A.K.Kumarasamy,Advocate For Respondent : Mr.N.Manoharan,Advocate JUDGMENTThis appeal has been preferred against the judgment in C.A.No.168of 2001 on the file of Second Additional Sessions Judge, Erode whichhad arisen out of a Judgment in C.C.No.632 of 2000 on the file ofCourt of Judicial Magistrate No.1, Erode.2. The appellant/complainant had preferred C.C.No.632 of 2000under Section 138 of Negotiable Instruments Act(hereinafter referredto as N.I.Act) According to the complainant, the accused/respondenthad borrowed a sum of Rs.1,50,000/- from the complainant/appellant on4.3.1998 and executed a promissory note and the xerox copy of thesame was marked before the trial Court as Ex P1. According to thecomplainant, upto 3.12.1998,the accused has paid the interest at theagreed rate under the original of Ex P1. To discharge the saidloan,the accused had drawn a cheque for Rs.1,50,000/- . When the samewas presented before the concerned Bank, the same was returned withan endorsement "Account closed". Thereafter, the complainant issueda notice on 21.9.2000 under the original of Ex P5 which was receivedby the accused under Ex P6 acknowledgment. After the receipt oforiginal Ex P5 notice, the accused had drawn Ex P2 cheque for https://hcservices.ecourts.gov.in/hcservices/ Rs.2,15,000/- dated 12.9.2000 and that it is a post dated chequewhich was handed over to him on 15.6.2000. When the said cheque waspresented on 12.9.2000, the same was dishonoured on the ground that"insufficient funds" as per Ex P3 and Ex P4 advices. As per Ex P7statement of account in September 2000,the accused was having only asum of Rs.1684.50ps in his account. No exhibit was marked on the sideof the accused and no oral evidence was also let in on the side ofthe accused. On the basis of the oral and documentary evidence letin on the side of the complainant, the trial Judge had come to aconclusion that the accused is guilty under Section 138 of N.I.Actand accordingly convicted and sentenced the accused to undergo sixmonths rigorous imprisonment and a fine of Rs.5,000/- with defaultsentence. Aggrieved by the findings of the learned trial Judge, theaccused has preferred an appeal before the first appellate Court inC.A.No.186 of 2001 on the file of Second Additional Sessions Judge,Erode. The first appellate Judge, after considering the submissionsmade by the learned counsel on both sides and after going through thematerials placed before the trial Court, had allowed the appealthereby setting aside the conviction and sentence imposed by thelearned trial Judge in C.C.No.632 of 2000 and acquitted the accusedfrom the charges levelled against him which necessitated thecomplainant to prefer this appeal.3. Heard Mr.A.K.Kumarasamy, learned counsel for the appellant andMr.N.Manoharan, learned counsel for the respondent and consideredtheir rival submissions.4. Now the point to be decided in this appeal is whether theoffence under Section 138 of NI Act has been made out against theaccused to warrant conviction under the said provision of law?5.The point:-The learned first appellate Judge had set aside the convictionand sentence imposed by the learned trial Judge in C.C.No.632 of 2000on the following grounds.a) The cheque amount under Ex P2 ie., Rs.2,15,000/- is not inconformity with the statement of account filed under Ex P11 producedby the complainant and that as per Ex P11, if the interest iscalculated for the principal amount of Rs.1,50,000/- due for theperiod from 4.12.1998 to 15.6.2000 at the rate of Rs.3,150/- p.m., itcomes to Rs.56,700/-and if this interest amount is added to theprincipal amount of Rs.1,50,000/-, the amount due comes toRs.2,06,700/- but Ex P2 cheque was drawn by the accused forRs.2,15,000/- and hence the learned first appellate Judge has heldthat Ex P2 is not drawn to discharge the subsisting liability. b) The other reasoning given in the first appellate Judge's Judgmentfor allowing the appeal is that in the cross examination P.W.1 hasadmitted that the cheque issued on 3.6.2000 was bearing chequeNo.068920 whereas Ex P2 cheque No. is 068919 and hence no credencecan be attached to the cheque which was admittedly drawn on 12.9.2000 https://hcservices.ecourts.gov.in/hcservices/ and earlier Cheque No. is 068919 whereas admittedly the earliercheque dated 3.6 .2000 was bearing cheque No.068920, which givessuspecion regarding the drawal of Ex.P.2 cheque on 12.9.2000 asalleged by the complainant.6. The learned counsel appearing for the respondent relying on adecision reported in Krishna Janardhan Bhat-v- Dattatraya G.Hegde(2008 SAR (criminal) 224 ) contended that non examination of theaccused before the trial Court is not fatal to the defence raised bythe accused and that the burden of proof is on the complainant toprove his case. Further basing his reliance on Section 139 ofN.I.Act, the learned counsel for the respondent would contend thatthe burden of the complainant is to prove that the impugned cheque ExP2 was drawn only for the purpose of discharging a subsistingliability as contemplated under Explanation to Section 138 ofN.I.Act. The learned counsel has placed his reliance at paragraph 20of the above said ratio wherein it has been held by the HonourableApex Court as follows:"Indisputably, a mandatory presumption is requiredto be raised in terms of Section 118(b) andSection 139 of the Act. Section 13(1) of the Actdefines "negotiable instrument" to mean" apromissory note, bill of exchange or chequepayable either to order or to bearer"Section 138 of the Act has three ingredients,viz.,(i) that there is a legally enforceable debt;(ii) that the cheque was drawn from the account ofbank for discharge in whole or in part of any debtor other liability which pre-supposes a legallyenforceable debt' and'(iii) that the cheque so issued had been returneddue to insufficiency of funds. The provisoappended to the said section provides forcompliance of legal requirements before acomplaint petition can be acted upon by a Court oflaw. Section 139 of the Act merely raises apresumption in regard to the second aspect of thematter. Existence of legally recoverable debt isnot a matter of presumption under Section 139 ofthe Act. It merely raises a presumption in favourof holder of the cheque that the same has beenissued for discharge of any debt or otherliability."6. The learned counsel would further contend that the accused haddischarged his initial burden that Ex P2 cheque was not drawn by theaccused for discharging a subsisting liability and hence this Courtcannot interfere with the findings of the learned first appellate https://hcservices.ecourts.gov.in/hcservices/ Judge who has given a clear finding as to the effect that amount dueas on 15.6.2000 comes to only Rs.2,06,700/- whereas Ex P2 was drawnby the accused for Rs.2,15,000/- and hence the learned counsel wouldcontend that the complainant has failed to discharge his burden andthat the impugned cheque Ex P2 was drawn to discharge a legallyenforceable debt. But Ex P11, statement of account produced by thecomplainant for the suit transactions coupled with Ex P13 seriesreceipt issued by the complainant to the accused for payment made bythe accused towards interest due shows that the accused had paidinterest for the principal amount of Rs.1,50,000/- upto 3.12.1998.For the balance amount only the accused had drawn Ex P2 cheque on12.9.2000 for a sum of Rs.2,15,000/-. There is no material placedbefore the trial Court to show that the accused had paid interest duefrom 4.12.1998 to 12.9.2000. ie., for a period of 21 months whichcomes to Rs.66,150/- and if the said interest of Rs.66,150/- is addedto the principal amount of Rs.1,50,000/-, the amount due as on12.9.2000 comes to Rs.2,16,150/-, which is below amount mentionedunder Ex P2 cheque. It has been laid down in M.S.Narayana MenonAlias Mani-v-State of Kerala and another(2006)6 Supreme Court Cases39). If the impugned cheque drawn by the accused in favaour ofcomplainant for the amount larger than due or exist on the date ofdrawal of the cheque then on the basis of the impugned cheque , itcannot be construed that the said cheque was drawn to discharge asubsisting liability. The learned counsel appearing for therespondent relied on the following passage at paragraph 48 of thesaid ratio which runs as follows:"One of the cardinal principles which has alwaysto be kept in view in our system ofadministration of justice for criminal cases isthat a person arraigned as an accused is presumedto be innocent unless that presumption isrebutted by the prosecution by production ofevidence as may show him to be guilty of theoffence with which he is charged. The burden ofproving the guilt of the accused is upon theprosecution and unless it relieves itself of thatburden, the courts cannot record a finding of theguilt of the accused. There are certain cases inwhich statutory presumptions arise regarding theguilt of the accused, but the burden even inthose cases is upon the prosecution to prove theexistence of facts which have to be presentbefore the presumption can be drawn. Once thosefacts are shown by the prosecution to exist, theCourt can raise the statutory presumption and itwould, in such an event, be for the accused torebut the presumption. The onus even in suchcases upon the accused is not as heavy as isnormally upon the prosecution to prove the guilt https://hcservices.ecourts.gov.in/hcservices/ of the accused. If some material is brought onthe record consistent with the innocence of theaccused which may reasonably be true, even thoughit is not positively proved to be true, theaccused would be entitled toacquittal."...............we in the facts andcircumstances of this case, need not go into thequestion as to whether even if the prosecutionfails to prove that a large portion of the amountclaimed to be a part of the debt was not owingand due to the complainant by the accused andonly because he has issued a cheque for a higheramount, he would be convicted if it is held thatexistence of debt in respect of large part of thesaid amount has not been proved. The appellantclearly said that nothing is due and the chequewas issued by way of security. The said defencehas been accepted as probable. If the defence isacceptable as probable the cheque therefor cannotbe held to have been issued in discharge of thedebt as, for example, if a cheque is issued forsecurity or for any other purpose the same wouldnot come within the purview of Section 138 of theAct."The learned first appellate Judge had calculated interest only upto15.6.2000 and arrived at figure that only a sum of Rs.2,06,700/- wasdue. But impugned cheque Ex P2 was for Rs.2,15,000/- which is higherthan the amount due to the complainant and so has come to aconclusion that Ex P2 cheque is not for discharge of a subsistingliability. Forgetting a moment , the cheque dated 12.9.2000 , theinterest is to be calculated upto 12.9.2000 in the absence of anyevidence to show on the side of the accused that he had paidsubsequent interest from 4.12.1998 to 12.9.2000 or any part of thesame. If the interest is calculated upto 12.9.2000 and the same isadded to the principal amount of Rs.1,50,000/-, the amount due to thecomplainant from the accused comes to Rs.2,16,150/- whereas Ex P2impugned cheque was drawn only for Rs.2,15,000/- which is lessor thanthe amount due. Under such circumstances, Ex P2 impugned cheque wasdrawn by the accused only to discharge a subsisting liability. Sothe findings of the learned first appellate Judge that Ex P2 chequewas drawn to discharge the subsisting liability cannot hold any water.7. The other contentions of the learned counsel appearing forthe respondent that cheque dated 3.6.2000 was drawn in the chequeleaf bearing cheque No.068920 whereas the subsequent cheque under ExP2 dated 12.9.2000 was drawn in the cheque bearing NO.068919. Thesaid cheques were drawn by the accused. It is not the case of theaccused that Ex P2 is a forged one. There is no dispute with regard https://hcservices.ecourts.gov.in/hcservices/ to the signatures of the accused contained in Ex P2. Presumptionunder Section 118 of the Indian Evidence Act is to the effect thatonly for a valuable consideration, the impugned cheque was drawn. Theborrowal of Rs.1,50,000/- and also subsequent payment of interestupto 3.12.1998 has been proved by the complainant under Exs P11 toP14. Under such circumstances, the second limb of argument advancedby the learned counsel for the respondent is also not sustainable.8.Relying on Kamala,S.-v.Vidhyadharan M.J and another(2007)5 SCC264) and also C.Antony-v- K.G.Raghavan Nair(2003(1) S.C.C 1),thelearned counsel appearing for the respondent would contend that thisCourt while exercising the powers of Second appellate Court cannotinterfere with the order of acquittal of the Court below and cannotreappreciate the evidence in appeal. There cannot be two opinionwith regard to the law laid down under the above said dictums. Butwhen it is brought to the Court that prima facie, the first appellateCourt has committed an error in coming to a conclusion that theimpugned Cheque Ex P2 is not for discharging the subsistingliability on the basis of a wrong calculation, this Court is bound tointerfere with to set right mistakes committed by the Court below.Under such circumstances, I am of the view that the findings of thelearned first appellate Judge is liable to be set aside and the sameis hereby set aside.9. In fine, the appeal is allowed and the Judgment of thelearned first appellate Judge in C.A.No.186 of 2001 on the file ofSecond Additional Sessions Judge, Erode is set aside and theaccused is convicted under Section 138 of Negotiable Instruments Act.For question of sentence, the accused is directed to appear beforethis Court on 31.10.2008. 28.10.200831.10.2008When the appeal was taken up for question of sentence, theaccused is present. Learned counsel appearing for the accusedMr.N.Manoharan has filed an affidavit stating that if six weeks timeis given, he will settle the entire issue. Learned counsel appearingfor complainant Mr.A.K.Kumarasamy has no objection for granting five(5)weeks time for filing memo of compromise. Post on 05.12.2008under the caption 'For Reporting Settlement'. Recall the warrant,Since the accused is present today.Sd/Asst.Registrar/true copy/Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ To1. The Judicial Magistrate No.1, Erode2. -do- the Chief Judicial Magistrate, Erode3. The II Additional Sessions Judge, Erode4.-do- the District and Sessions Judge, Erode.Copy toThe Section Officer,Criminal Section,High Court of Madras, Madras.Crl.A.No.408 of 2002VM(CO)SRA(6/11/2008)