Research › Search › Judgment

Andhra High Court · body

2007 DIGILAW 393 (AP)

K. Deenadayalan v. A. K. Sumathi

2007-04-11

A.C.ARUMUGAPERUMAL ADITYAN

body2007
ORDER (Per A.C. Arumugaperumal Adityan, J.) These revisions have been referred against the judgments in CA Nos. 119 and 120 of 2002 on the file of the VI Additional Judge, City Civil Court, Chennai. The accused in C.C.Nos. 4270 and 3061 of 1997 on the file of the VII Metropolitan Magistrate, Chennai, was tried for an offence under Section 138 of the Negotiable Instruments Act on the basis of the private complaint preferred by the complainant under Section 200 of Cr.P.C. 2. The learned trial judge had found the accused guilty under Section 138 of the Negotiable Instruments Act and convicted and sentenced to undergo two months RI and a fine of Rs. 5,000 with default sentence in C.C.No. 4270/1997 and has also convicted and sentenced the accused under Section 138 of the Negotiable Instruments cut to undergo two months RI and a fine of Rs. 5, 000 which with default sentence in C.C.No. 3061 of1997. The learned trial Judge has further directed under Section 357 (1) of Cr.P.C., that out of the fine amount a sum of Rs. 4,000 each was ordered to be paid to the complainant as compensation. Aggrieved by the findings of the learned trial Judge, the accused had preferred appeals in CA No. 119 of2002 against the judgment in C.C. NO. 4270 of 1997 and C.A. 120 of 2002 against the judgment in C.C. No. 3061 of1997 before the VI Additional Judge, City Civil Court, Chennai, who after careful scrutiny of the evidence of both oral and documentary and after due deliberation on the submissions made by the both the Counsel, had confirmed the findings of the learned trial Judge in both the cases, which necessitated the accused to prefer these revisions. 3. (a) The brief facts in the complaint preferred in C.C. No. 4270 of 1997 is that in order to discharge the debt incurred by him to the complainant, the accused had drawn three cheques each for a sum of Rs. 25,000 dated 25-3-1997,25-4-1997 and 25-5-1997 in favour of the complainant and when those cheques were presented for collection in the Central Bank of lndia, George Towll Branch, Chennai, they were returned with an endorsement 'insufficient funds'. A notice was issued by the complainant on 6-6-1997 as required under Section 138 (b) of the Negotiable Instruments Act which was acknowledged by the accused on 9-6-1997. The accused has failed to make any payment. A notice was issued by the complainant on 6-6-1997 as required under Section 138 (b) of the Negotiable Instruments Act which was acknowledged by the accused on 9-6-1997. The accused has failed to make any payment. (b) On the side of the complainant P.W.1 to P.W.4 were examined and EX.P-1 to EX.P-13 were marked. (c) P.W.1 is the complainant who would narrate what he has stated in the complaint. (d) P.W. 2 is the Bank official of Central Co-operative Bank, Porur Branch, wherein the complainant is having his account. He would depose that cheques EX.P-1 to EX.P-3 were presented in his Bank for collection but on the date of presentation of those cheques there was only a sum ofRs. 100 in the credit of the account of the accused. (e) P.W.3woulddeposethattheaccused had issued a cheque for Rs. 60,000 in the name of the complainant and requested to discharge the debt due to P.W. 3 and P.W. 4, and the complainant had given Rs. 40,000 to P.W.3. (f) P.W. 4 has deposed that he had entered into an agreement for the purchase of 25 cents land and has paidasumofRs.10,000 as advance. The accused promised to pay a sum of Rs. 10,000 together with compensation amount of Rs. 10,000. (g) On the above evidence when incriminating circumstances were put to the accused under Section 313 of Cr.P.C., the accused had denied his complicity with the crime. The accused has examined three witnesses on his side. (h) After going through the oral and documentary evidence the learned trial Judge held that the complainant has proved the guilt of the accused for an offence under Section 138 of the Negotiable Instruments Act and accordingly convicted and sentenced the accused as indicated above and the appeal preferred by the accused before the first appellate Court also ended against him. Hence, the accused has preferred Criminal R.C. No. 242 of 2003 before this Court. 4 (a) In C.C. No. 3061 of 1997, according to the complainant, in order to discharge a subsisting liability the accused had drawn a cheque for Rs. 25,000 25-2-1997 and when the cheque was presented for collection in Central Bank of lndia, George Town Branch, Chennai, the same was returned with an endorsement 'insufficient funds'. A statutory notice was issued by the complainant dated 11-3-1997, which was received by the accused. The accused had sent a reply on 19-4-1997 with frivolous contentions. 25,000 25-2-1997 and when the cheque was presented for collection in Central Bank of lndia, George Town Branch, Chennai, the same was returned with an endorsement 'insufficient funds'. A statutory notice was issued by the complainant dated 11-3-1997, which was received by the accused. The accused had sent a reply on 19-4-1997 with frivolous contentions. (b) Before the Trial Court P.W. 1 to P.W.4were examined and EX.P-1 to EX.P-14 were marked. (c) P.w.1 would depose that the accused had borrowed a sum of Rs. 2,50,000 for his business purpose under a promissory note executed in favour of the complainant and that the accused had repaid in several installments a sum of Rs. 50,000 only and he had drawn a cheque EX.P-3 which when presented for collection 025-2-1997 in the Bank, was returned with an endorsement 'insufficient funds'. Subsequently the accused had drawn nine cheques each for Rs. 25,000 and also entered into an agreement on 31-9-1995 under which a sum of Rs. 1 ,00,000was given to the accused and on the same date another sum of Rs. 25,000 was also given to the accused for the purchase of land and that the accused is liable for Rs. 4,60,000 out of which a sum of Rs. 60,000 was paid by he accused, which is to be distributed to P.W. 3 and P.W, 4 and as per the request made by the accused P.W.1 has also returned Rs. 60,000 to P.W. 3 and P.W. 4 and the admitted subsisting liability as pre Ex. P-14 by the accused to the complainant is Rs.4,00,000. (d) P.W. 2 a Bank official would state that Ex. P-3 cheque was received by Bank for collection and on that date a sum of Rs. 100 was in the credit of the accused's account. (e) P.W. 3 would depose that he had entered into an agreement with the accused for the purchase of land and paid a sum of Rs. 25,000 as advance and the accused had not acted in accordance with the terms of the agreement and hence P.W. 3 demanded for the repayment of the money which he had already advanced. The accused had written a letter dated 10-8-1995 in which he has admitted that P. W. 3 has suffered a lot because of the accused and promised to repay a sum of Rs. 40,000. The accused issued a cheque for Rs. The accused had written a letter dated 10-8-1995 in which he has admitted that P. W. 3 has suffered a lot because of the accused and promised to repay a sum of Rs. 40,000. The accused issued a cheque for Rs. 60,000 in the name of the complainant and requested to discharge the debt due to P.W. 3 and P.W. 4, as such the complainant has paid a sum of Rs. 40,000 to P.W. 3. (f) P.W. 4 would depose that he has entered into an agreement for the purchase of 25 cents of land and has paidasumfRs.10,000 as advance. The accused promised to pay a sum of Rs. 10,000 together with compensation amount of Rs.10,000. Since P.W. 4 is residing at Andhra Pradesh, he has requested to accused to pay the said sum to the complainant. He would admit that he has received a sum of Rs. 25,000 from the complainant. (g) When the incriminating circumstances were put to the accused under Section 313 of Cr.P.C., the accused denied each and every incriminating circumstance. On the side of the accused D.W.1 to D.W.3 were examined. After going through the oral and documentary evidence, the learned trial Judge has held that the guilt against the accused under Section 138 of the Negotiable Instruments Act has been proved beyond any reasonable doubt and accordingly the learned trial Judge has convicted and sentenced the accused as indicated above. The appeal preferred by the accused against the findings of the Trial Court in CA No. 120 of 2002 also ended in failure, which necessitated the accused to approach this Court by way of this Criminal R.C. No. 243 of 2003. 5. Now the point for determination in these revisions is whether the findings of the first appellant Court in C.A. Nos. 119 and 120 of 2002 are liable to be set aside for the reasons stated in the memorandum of revision? The Point: 6. When both the revisions were taken up for hearing and when the ratio decided in Goa Plast (P) Ltd. v. Chico Ursula D'Souza1 was pointed out, the learned Counsel Mr. N. Kumaraswami appearing for the revision petition would fairly concede that he will be satisfied with the modification of sentence in terms of the above said ratio decidendi. When both the revisions were taken up for hearing and when the ratio decided in Goa Plast (P) Ltd. v. Chico Ursula D'Souza1 was pointed out, the learned Counsel Mr. N. Kumaraswami appearing for the revision petition would fairly concede that he will be satisfied with the modification of sentence in terms of the above said ratio decidendi. The dictum of the Hon'ble Apex Court in the above said ratio decidendi relevant for the purpose of these revisions are as follows: "It has to be presumed that a cheque is issued in discharge of any debt or other liability. The presumption can be rebutted by adducing evidence and the burden of proof is on the person who wants to rebut the presumption. This presumption coupled with the object of Chapter XVII of the Act which is to promote the efficacy of Banking operation and to ensure credibility in business transactions through Banks persuades us to take a view that by countermanding payment of post-dated cheque, a party should not be allowed to get away from the penal provision of Section 138 of the Act. A contrary view would render Section 138 a dead letter and will provide a handle to persons trying to avoid payment under legal obligations undertaken by them through their own acts which in other words can be said to be taking advantage of one' sown wrong. If we hold otherwise, by giving instructions to Banks to stop payment of a cheque after issuing the same against a debt or liability, a drawer will easily avoid penal consequences under Section 138. Once a cheque is issued by a Drawer, a presumption under Section 139 must follow and merely because the drawer issued notice to the drawee or to the Bank for stoppage of payment it will not preclude on action under Section 138 of the Act by the drawee or the holder of the cheque in due course. This was the view taken by this Court in Modi Cements Ltd. v. Kunchil Kumar Nandi, (1998) 3 SCC 249 . On same facts is the decision of this Court in Ashok Yeshwant Badave v. Surendra Madhavarao Nighojakar, (2001) 3 SCC 726 . This was the view taken by this Court in Modi Cements Ltd. v. Kunchil Kumar Nandi, (1998) 3 SCC 249 . On same facts is the decision of this Court in Ashok Yeshwant Badave v. Surendra Madhavarao Nighojakar, (2001) 3 SCC 726 . The decision in Modi case overruled an earlier decision of this Court in Electronics Trade and Technology Development Corporation Ltd. v. Indian Technologists and Engineers (Electronics) (P) Ltd., 1996 SCC (Cri) 454, which had taken a contrary view. We are in respectful agreement with the view taken in Modi case. The said view is in consonance with the object of the legislation. On the faith of payment by way of a post-dated cheque, the payee alters his position by accepting the cheque. If stoppage of payment before the due date of the cheque is allowed to take the transaction out of the pur-view of Section 138 of the Act, it will shake the confidence which a cheque is otherwise intended to inspire regarding payment being available on the due date. We have no doubt that the respondent has committed an offence punishable under the provisions of Section 138 of the Act and is liable to be punished. The transaction in question took place between the parties I the year 1993, therefore, Section 138, as it stood at the relevant time, would be applicable to the present case. Section 138 provides imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both. Section 138 has now been amended and the penalty of imprisonment for a term which may extend to one yea has been substituted by two yeas as provided by the amending Act of 2002 and the fine which may extend to twice the amount of the cheque. This has been prescribed as the punishment for the offence under Section 138 of the Act. The object and the ingredients under the provisions, in particular, 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 upon the integrity and honesty of the parties. In our country, in a large number of commercial transactions, it was noted that the cheques were issued even merely as a device not only to stall but even to defraud the creditors. Proper and smooth functioning of all business transactions, particularly, of cheques as instruments, primarily depends upon the integrity and honesty of the parties. In our country, in a large number of commercial transactions, it was noted that the cheques were issued even merely as a device not only to stall but even to defraud the creditors. The sanctity and credibility of issuance of cheques in commercial transactions was eroded to a large extent. Undoubtedly, dishonour of a cheque by the Bank causes incalculable loss, injury and inconvenience to the payee and the entire credibility of the business transactions within and outside the country suffers a serious setback. Parliament, in order to restore the credibility of cheques as a trustworthy substitute for cash payment enacted the aforesaid provisions. The remedy available in a Civil Court is a long drawn matter and an unscrupulous drawer normally takes various pleas to defeat the genuine claim of the payee." After observing as above the Hon'ble Apex Court held that instead of sentencing the accused to imprisonment awarded compensation twice the amount of the cheque to complainant. So following the same yardstick, I am of the view that instead of imposing punishment by way of imprisonment and fine the accused may be ordered to pay compensation twice the amount of cheque. Point is answered accordingly. 7.ln the result, the Criminal R.C. Nos. 242 and 243 of 203 are dismissed confirming the judgment in CA Nos. 119 and 120 of2002 on the file of the VI Additional Judge, City Civil Court, Chennai, in respect of the conviction. The accused in C.C. No. 4270 of 1997 on the file of the VII Metropolitan Magistrate, George own, Chennai, is convicted under Section 138 of the Negotiable Instruments Act and sentenced to pay a compensation of Rs. 1,50,000 (twice the amount of the cheque) to the complainant, instead of two months RI and a fine of Rs. 5,000. The time for payment is thee months. Fine amount, if any paid by the accused, is to be adjusted with the above said compensation. The accused in C.C. No. 3061 of 1997 on the file of the VII Metropolitan Magistrate, George Town, Chennai, is convicted under Section 138 of the Negotiable Instruments Act and sentenced to pay a compensation of Rs. 50,000 (twice the amount of the cheque) to the complainant, instead of two months RI and a fine of Rs. The accused in C.C. No. 3061 of 1997 on the file of the VII Metropolitan Magistrate, George Town, Chennai, is convicted under Section 138 of the Negotiable Instruments Act and sentenced to pay a compensation of Rs. 50,000 (twice the amount of the cheque) to the complainant, instead of two months RI and a fine of Rs. 5,000. The time for payment is three months. Fine amount, if any paid by the accused, is to be adjusted with the above said compensation. Connected Criminal M.P. Nos. 1744 and 1745 of 2003 are closed. Crl. R.C.s and Cr. M.Ps, dismissed.