THE HONOURABLE MR v. A.V.Ramachandaran

IN THE HIGH COURT OF JUDICATURE AT MADRASDATE : 19.07.2007CORAM:THE HONOURABLE MR.JUSTICE A.C.ARUMUGAPERUMAL ADITYANCrl.R.C.No.730 of 2003N.Somasundaram.. Petitioner/Petitionervs.A.V.Ramachandaran .. Respondent/RespondentPrayer: This revision filed under section 397 r/w 401 of Crl PChas been preferred against the judgment dated 18.4.2001 inC.A.No.264 of 1999 passed by the VI Additional Judge, City CivilCourt, Chennai, modifying the judgment in C.C.No.6561 of 1996 onthe file of the XIII Metropolitan Magistrate, Egmore, Chennai,dated 24.9.1999.For Petitioner : Mr.S.SrinivasanFor Respondent : Mr.M.Prem KumarJUDGMENTThis revision has been preferred against the judgment inCA.No.264 of 1999 on the file of the VI Additional Judge, CityCivil Court, Chennai, which has arisen out of the judgment inC.C.No.6561 of 1996 on the file of the XIII MetropolitanMagistrate, Egmore, Chennai.2.A private complaint was preferred by the complainant underSection 200 of Cr.P.C., against the accused for an offence underSection 138 of the Negotiable Instruments Act on the ground thaton 22.3.1995 the accused had borrowed Rs.50,000/- and also on8.4.1995 he had borrowed another sum of Rs.50,000/- from thecomplainant and had drawn a cheque for Rs.1,15,000/- on 10.7.1996in favour of the complainant and when the same was presented inBank of Baroda, Mount Road Branch, Chennai, the same was returnedas "not arranged for". The complainant had sent a noticeinforming the dishonour of the cheque on 19.7.1996, which wasreceived by the accused and a reply notice was sent by theaccused, but the accused has not chosen to repay the amount.Hence, the complaint. https://hcservices.ecourts.gov.in/hcservices/

3.After taking the complaint on file, the learned JudicialMagistrate had issued summons to the accused and on his appearancecopies under Section 207 of Cr.P.C., were furnished to the accusedand when the charge levelled against the accused was explained tothe accused, he pleaded not guilty. On the side of thecomplainant, P.W.1 & P.W.2 were examined and Ex.P.1 to Ex.P.9 weremarked.4.P.W.1 is the complainant. He would narrate what he hadstated in his private complaint. Ex.P.1 is the impugned chequedated 10.7.1996 drawn by the accused in favour of the complainantfor a sum of Rs.1,15,000/-. Ex.P.2 is the return memo sent alongwith Ex.P.1-impugned cheque by Bank of Baroda, Anna Nagar Branch,stating the reason for the return of the cheque as 'nor arrangedfor'. Ex.P.3 is the letter also sent along with Ex.P.1. Ex.P.4is the copy of the notice dated 19.7.1996. Ex.P.5 is theacknowledgment. Ex.P.6 is the reply notice, in which the accusedhad admitted his liability to the tune of Rs.89,188/-. Ex.P.7 isthe rejoinder notice dated 21.8.1996. Ex.P.8 is theacknowledgment. 5.P.W.2 is the Manager of Indian Oversees Bank, AmbaturIndustrial Branch. According to him, Ex.P.1-cheque was forwardedto their bank on 16.7.1998 but the same was returned with anendorsement 'nor arranged for'. Ex.P.2 is the return memo.Ex.P.9 is the copy of the statement of accounts.6.When incriminating circumstances were put to the accused,he would deny his complicity with the crime. On the side of theaccused D.W.1 & D.W.2 were examined and Ex.D.1 & Ex.D.2 weremarked. The learned trial judge after meticulously going throughthe evidence both oral and documentary has come to the conclusionthat the accused is liable to be convicted under Section 138 ofthe Negotiable Instruments Act and sentenced to pay a fine ofRs.2,30,000/- with default sentence and further directed that outof the fine amount Rs.1,15,000/- shall be given to the complainantas compensation under Section 357 of Cr.P.C. Aggrieved by thefindings of the learned trial judge, the accused had preferred anappeal in C.A.No.264 of 1999 before the VI Additional Judge, CityCivil Court, Chennai. The learned first appellate Judge, afterscanning the evidence and also after giving due deliberations tothe submissions made on behalf of the appellant as well as therespondent, has confirmed the conviction, but modified thesentence to that of a fine of Rs.5000/- with default sentence andalso awarded Rs.1,00,000/- towards compensation under Section 357(3) of Cr.P.C., which necessitated the accused to approach thisCourt by way of this revision. https://hcservices.ecourts.gov.in/hcservices/

7.Now the point for determination in this revision is whetherthe conviction and sentenced passed by the learned first appellatejudge is sustainable for the reasons stated in the memorandum ofrevision?8.The Point:- 8(a) Ex.P.1 is the impugned cheque forRs.1,15,000/- drawn by the accused in favour of the complainant.The learned counsel for the revision petitioner would contend thatEx.P.1 is the blank cheque and the contents in it were written bythe complainant himself and that the blank cheque was handed overto the complainant only for the purpose of dispersing arrears ofpay to the employees of the firm conducted jointly by thecomplainant and the accused. The case of the complainant is thatthe accused had borrowed Rs.50,000/- on 23.2.1995 and anotherRs.50,000/- on 8.4.1995 and to discharge the said loan amount theaccused had drawn a cheque for Rs.1,15,000/- on 10.7.1996. Insupport of the contention that the cheque under Ex.P.1 was drawnonly for the purpose of dispersing the salary of the employees theaccused had examined two witnesses viz. D.W.1 & D.W.2. D.W.1would depose in his chief examination that for the jointenterprises conducted by the complainant and the accused in thename and style of S.R. Enterprises, the complainant had investedRs.10,000/- and the accused had invested Rs.10,000/- as workingpartners and that a months salary for the employees was due andonly to disperse the arrears of salary for the employees theaccused had drawn a blank cheque. But in the cross-examinationD.W.1 would categorically admit that the accused had borrowedRs.50,000/- on one occasion and also another Rs.50,000/- onanother occasion. D.W.2 would also state that the accused hadsent a cheque for Rs.5,000/- through him in order to disperse thearrears of salary for the employees and that he had only signed inthe cheque dated 8.11.1995 without filling the rest of theparticulars in the cheque. It is nobody's case that a cheque forRs.5,000/- alone was drawn by the accused, but D.W.2 would saythat the accused had drawn a cheque for Rs.5,000/- on 8.11.1995,so it goes without saying that D.W.2 has not deposed about theimpugned cheque-Ex.P.1 because according to the accused it was ablank cheque. On the other hand, D.W.1, the first witnessexamined by the accused, would admit in the cross-examination thatthe accused had borrowed Rs.1,00,000/- in two occasions each forRs.50,000/- from the complainant, but gave a blank cheque. To showthat there was arrears of salary to the employees of the firm runby the complainant and the accused absolutely there is no documentproduced by the accused. Ex.D.1 is the xerox copy of thepartnership deed and Ex.D.2 is the police complaint preferred bythe accused against the complainant under Section 420 IPC. It isnot known whether the police have taken any action on the https://hcservices.ecourts.gov.in/hcservices/ complaint preferred by the accused against the complainant. Even,according to P.W.1, the partnership firm was dissolved on8.5.1995, if it is so, there is no necessity to prefer a complaintby the accused against the complainant in the year 1999(25.2.1999) under Ex.D.2. As rightly observed by the Courts belowthat the presumption under Section 118 & 139 of the NegotiableInstruments Act is that the cheque was drawn for the discharge inwhole or in part of the debt or other liability. Except Ex.D.2-complaint preferred by the accused in the year 1999 against thecomplainant, there is no other complaint or notice given by theaccused to the complainant demanding the return of the allegedblank cheque from the complainant. The present complaint waspreferred by the complainant in the year 1996. Subsequent to thefiling of the private complaint only the accused has preferredEx.D.2-complaint against the complainant in the year 1999 i.e.,there years after the filing of the private complainant. Undersuch circumstances, I do not find any reason to interfere with thefindings of the learned first appellate Judge in C.A.No.264 of1999 on the file of the VI Additional Judge, City Civil Court,Chennai, in holding that the accused is guilty under Section 138of the Negotiable Instruments Act.8(b)When coming to the question of sentence, the learnedfirst appellate Judge, has modified the sentence of the learnedtrial judge and imposed a fine of Rs.5,000/- with default sentenceand also awarded a compensation of Rs.1,00,000/- under Section 357(3) of Cr.P.C. But as per the ratio decidendi in 2004(2) SCC 235(Goa Plast (P) Ltd. Vs. Chico Ursula D'Souza), in a case ofsimilar nature, it has been held by the Honourable Apex Court thatonly double the cheque amount is to be awarded as compensation.The relevant observation of the Honourable Apex Court in the saidratio is as follows:-"We have no doubt that the respondent has committedan offence punishable under the provisions of Section138 of the NI Act and is liable to be punished. Thetransaction in question took place between the partiesin the year 1993, therefore, Section 138, as it stood atthe relevant time, would be applicable to the presentcase. Section 138 provides imprisonment for a termwhich may extend to one year, or with fine which mayextend to twice the amount of the cheque, or with both.Section 138 has now been amended and the penalty ofimprisonment for a term which may extend to one year hasbeen substituted by two years as provided by theamending Act of 2002 and the fine which may extend totwice the amount of the cheque. This has beenprescribed as the punishment for the offence underSection 138 of the Act. https://hcservices.ecourts.gov.in/hcservices/ The object and the ingredients under theprovisions, in particular, Sections 138 and 139 of theAct cannot be ignored. Proper and smooth functioning ofall business transactions, particularly, of cheques asinstruments, primarily depends upon the integrity andhonesty of the parties. In our country, in a largenumber of commercial transactions, it was noted that thecheques were issued even merely as a device not only tostall but even to defraud the creditors. The sanctityand credibility of issuance of cheques in commercialtransactions was eroded to a large extent. Undoubtedly,dishonour of a cheque by the bank causes incalculableloss, injury and inconvenience to the payee and theentire credibility of the business transactions withinand outside the country suffers a serious setback.Parliament, in order to restore the credibility ofcheques as a trustworthy substitute for cash paymentenacted the aforesaid provisions. The remedy availablein a civil Court is a long-drawn matter and anunscrupulous drawer normally takes various pleas todefeat the genuine claim of the payee."After observing above, the Honourable Apex Court has directed theaccused to pay Rs.80,000/- (double the cheque amount) within amonth to the complainant in default thereof to suffer SI for sixmonths. I am of the opinion that the same yardstick can beapplied for this appeal also. Point is answered accordingly.12. In fine, the revision is dismissed, but with thefollowing modification in the judgment of the first appellateCourt in C.A.No.264 of 1999 by the VI Additional Judge, City CivilCourt, Chennai. The accused is convicted under Section 138 of theNegotiable Instruments Act and directed to pay a sum ofRs.2,30,000/- (twice the cheque amount) within six weeks from thisdate in default to undergo SI for six months.ssvSd/Asst.Registrar/true copy/Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ To,1.The VI Additional Judge, City Civil Court, Chennai.2.The Principal Sessions Judge, Chennai.3.The XIII Metropolitan Magistrate, Egmore, Madras.4.-do-The Chief Judicial Magistrate, Egmore, Madras.+ 1 cc to Mr. A. K. Lakshmipathy, Advocate SR No. 44410+ 1 cc to Mr. S. Srinivasan, Advocate SR No. 44190NSM(CO)SR/25.7.2007Crl.R.C.No.730 of 2003