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2012 DIGILAW 2935 (MAD)

M. R. Govarthanam v. UBC, Rep.

2012-07-10

C.S.KARNAN

body2012
Judgment :- The history of the case is as follows:- The appellant herein / complainant had filed a case in C.C.No.388 of 2002, on the file of the Judicial Magistrate-II, Erode, against the respondents / accused. The first accused, viz., M/s.UBC, is a partnership firm, in which the second accused viz., Mr.K.N.Unnikrishnan is the Managing Partner, the third accused, viz., Mrs.U.K.Radhamaniammal is the partner and Mrs.Sindhu Unnikrishnan is also the partner. The complainant states that he and the accused are doing textile business. The accused used to purchase lunghis from the complainant on credit basis. In the course of the business transaction, the accused had to pay a sum of Rs.19,92,952/- to the complainant. The complainant and the accused had negotiated for settlement of said amount and had finally come to a compromise. As such, the accused agreed to pay a sum of Rs.11,55,653/-, as full and final settlement. In oder to settle the amount, four cheques were issued on behalf of the first accused firm by the sister concern of the first accused firm,viz., Valarmathi Textiles. The first cheque dated 29.10.2001 for a sum of Rs.3,55,653/-, the second cheque dated 04.11.2001 for a sum of Rs.3,00,000/-, the third cheque was dated 08.11.2001 for a sum of Rs.3,00,000/- and the fourth cheque was dated 12.11.2001 for a sum of Rs.2,00,000/-. The last three cheques were presented on 06.12.2001, in the complainant's bank viz., Tamil Nadu Mercantile Bank for realisation. On the date of presentation, all the three cheques were returned with the endorsement of "payment stopped by the drawer". 2. Hence, the complainant had filed a case on 26.04.2002, on the file of Judicial Magistrate, Egmore, Chennai, against the accused, for cheating him. In the said case, the accused had approached the complainant and effected a compromise and paid cash of a sum of Rs.2,00,000/-. For the balance amount i.e., a sum of Rs.6,00,000/-, the accused had issued four cheques and a compromise deed was also made. Out of the four cheques, the first cheque was dated 16.06.2002 for a sum of Rs.2,00,000/- the second cheque was dated 21.06.2002 for a sum of Rs.2,00,000/-, the third cheque was dated 30.06.2002 for a sum of Rs.1,00,000/- and the fourth cheque was dated 10.07.2002 for a sum of Rs.1,00,000/-. Out of the four cheques, the first cheque was dated 16.06.2002 for a sum of Rs.2,00,000/- the second cheque was dated 21.06.2002 for a sum of Rs.2,00,000/-, the third cheque was dated 30.06.2002 for a sum of Rs.1,00,000/- and the fourth cheque was dated 10.07.2002 for a sum of Rs.1,00,000/-. The second accused, viz., Mr.K.N.Unnikrishnan, the Managing Partner of the first accused company had signed on the said cheques on behalf of the sister concern, Akshay and Company. All the cheques were drawn on State Bank of Travancore, Ernakulam Branch. The first cheque was presented in the complainant's bank, viz., Federal Bank, Erode;, on 17.06.2002. The cheque was returned on 22.06.2002 with the endorsement stating that "payment stopped by drawer". Thereafter, the complainant had observed all legal formalities and filed the said case. 3. On the side of the complainant, he was examined as P.W.1 and the Bank Manager of State Bank of Travancore was examined as P.W.2. 10 documents had been marked viz., Ex.P1-cheque dated 16.06.2002, Ex.P2-return memo dated 22.06.2002, Ex.P3-debit advice, Ex.P4-advocate notice dated 03.07.2002, Ex.P5-postal receipt (5 in nos) dated 03.07.2002, Ex.P6-acknowledgment card series, Ex.P7-returned cover series, Ex.P8-reply notice, Ex.P9-bank account statement of accused, Ex.P10-extract of return cheque register. 4. On the side of the accused, no witness was examined and two documents were marked, viz., Ex.R1, compromise deed and Ex.R2, F.I.R. 5. P.W.1 had adduced evidence that he is the proprietor of "M.R.Govarthanam Firm". The second accused is the Managing partner of the first accused company, the third and fourth accused are partners of the first accused firm. Accused 2 to 4 are looking after the conduct and business affairs of the accused firm. The first accused firm had purchased 'lunghis' from his firm and as such the first accused company has to pay Rs.19,92,952.25/- to him. P.W.1 further stated that agreement was subsequently made between the accused and P.W.1. As per the terms of contract, it was agreed to reduce a sum of Rs.7,00,000/- from the due amount. After deducting this amount, the balance amount of a sum of Rs.11,55,643/-is payable to P.W.1. P.W.1 further stated that agreement was subsequently made between the accused and P.W.1. As per the terms of contract, it was agreed to reduce a sum of Rs.7,00,000/- from the due amount. After deducting this amount, the balance amount of a sum of Rs.11,55,643/-is payable to P.W.1. In order to settle the said due, the first accused sister concern operating in the name and style of "Valarmathi Textiles" had issued four cheques; the first cheque is for a sum of Rs.3,55,653.54/-dated 29.10.2001, the second cheque is for a sum of Rs.3,00,000/-dated 04.01.2001, the third cheque is for a sum of Rs.3,00,000/-, dated 08.11.2001 and the fourth cheque is for a sum of Rs.2,00,000/-, dated 12.11.2001. Out of these four cheques, the last three cheques were presented with his bankers viz., Tamil Nadu Mercantile Bank on 06.12.2001. The same were returned with an endorsement of "payment stopped by drawer". P.W.1 further stated that he had lodged a complaint against the accused before the Judicial Magistrate, Egmore, on 26.04.2002 for cheating. The accused came forward for compromise. Compromise was effected. As per compromise, the accused had paid a sum of Rs.2,00,000/-by cash. Besides this, the accused had issued four cheques for a total sum of Rs.6,00,000/-. The first cheque is for a sum of Rs.2,00,000/-, dated 16.06.2002, the second cheque is for a sum of Rs.2,00,000/-, dated 21.06.2002, the third cheque is for a sum of Rs.1,00,000/-dated 30.06.2002 and the fourth cheque is for Rs.1,00,000/-, dated 10.07.2002. These cheques had been signed by the second accused, on behalf of the first accused firm, viz., Akshay And Company. The first cheque dated 16.06.2002 had been presented for encashment. The same was returned unpaid. In support of his evidence, he had marked the documents listed above. 6. P.W.2, the Manager of the State Bank of Travancore had adduced evidence that the accused Unnikrishnan, has an account int he name of Akshay & Co. and the company account number is CC 8291. P.W.2 further stated that the Ex.P1 cheque had been returned with the endorsement of "payment stopped by drawer". P.W.2 further stated that on the relevant date, the balance payable by the accused to the Bank was a sum of Rs.14,92,382.51/-. In support of his contention, Exs.P9 and Ex.P10 were marked. 7. and the company account number is CC 8291. P.W.2 further stated that the Ex.P1 cheque had been returned with the endorsement of "payment stopped by drawer". P.W.2 further stated that on the relevant date, the balance payable by the accused to the Bank was a sum of Rs.14,92,382.51/-. In support of his contention, Exs.P9 and Ex.P10 were marked. 7. On considering the evidence of the complainant and on perusing the exhibits marked by both sides, the learned Magistrate has observed that no documents had been marked to show that "UBC firm" and "Akshay & Co. Firm" are sister concerns. The case has been filed without notice to "Akshay and Company", but the cheque had been issued on behalf of "Akshay and Company". The "Akshay & Company" is not a partnership firm but a proprietary concern. As such, the accused three and four are not necessary parties in the instant case. Therefore, the learned Magistrate has held that the case had not been proved against the accused. Hence, the case was dismissed. 8. Against the dismissal of the said case, the complainant has filed the above appeal. 9. The learned counsel for the appellant submits that the accused had issued four different cheques for the total amount of Rs.6,00,000/-, in which three other complaints, in respect of three other cheques, had ended in conviction. This was not considered by the learned Magistrate. The first accused company and its sister concern viz. M/s.Akshay & Company are one and the same. The learned counsel further submits that regarding the liability, on two occasions, compromise was effected. The second accused had duly signed in the cheques on behalf of Akshay & Company and therefore, the second accused had committed an offence under Section 138 of Negotiated Instruments Act. The learned judge ought to have considered that the second accused had issued cheque on behalf of 'Akshay & Company" to discharge the liability of its sister concern company viz., the first accused firm herein. 10. The learned counsel for the respondent / accused argued that the complainant had initiated case against the accused 3 to 4 stating that they had issued cheque on behalf of the first accused firm, which is not relevant as the cheques belongs to "Akshay & Company" and it had been signed by the second accused herein. Therein A1, A3 and A4 are mis-joinders in the said case. Therein A1, A3 and A4 are mis-joinders in the said case. Therefore, the case is not sustainable under law. As such, the learned Magistrate dismissed the said complaint. 11. Per contra, the learned counsel for the appellant submits that on the same cause of action, cheating case had been filed before the Judicial Magistrate, Egmore. The accused 2 to 4 came for compromise with the complainant and paid Rs.2,00,000/-by way of cash and for the balance of a sum of Rs.6,00,000/-, four cheques were issued. Therefore, the liability had been established and as such the compromise had been effected. 12. On checking the facts and circumstances of the case, and submissions made by the learned counsels on either side and on perusing the impugned judgment of the learned Magistrate, this Court is of the considered view that the second accused had issued the cheques on behalf of 'Akshay & Company" . It is evident that the said "Akshay & Company" issued the said cheques in order to settle the liability of the first accused company, as can be seen from the compromise effected on two occasions. This Court further opines that the case was filed in the year 2002. Almost 10 years have elapsed. Hence, this Court holds that the second accused, viz., Mr.K.N.Unnikrishnan had issued cheque which was duly signed by him on behalf of "Akshay & Company". The same was not realized. Therefore, the second accused is found guilty of offence under Section 138 r/w 142 of Negotiable Instruments Act. Therefore, this Court imposes a sentence of simple imprisonment, for a period of six months, on the second accused and also awards a compensation of Rs.2,00,000/-to the complainant payable by the second accused herein. The rest of the accused are discharged from the said offence. 13. The case was filed in the year 2002. Therefore, this Court directs the learned Judicial Magistrate-II, Erode to issue bailable warrant on the second accused herein viz., K.N.Unnikrishnan and secure him into judicial custody forthwith. However, if the accused remits the said compensation amount i.e., a sum of Rs.2,00,000/- (Rupees Two Lakhs only) into the credit of C.C.No.388 of 2002 on the file of the Judicial Magistrate-II, Erode, before being remanded into judicial custody, the accused would be set at liberty and this Court order would not be operated against him, any further. However, if the accused remits the said compensation amount i.e., a sum of Rs.2,00,000/- (Rupees Two Lakhs only) into the credit of C.C.No.388 of 2002 on the file of the Judicial Magistrate-II, Erode, before being remanded into judicial custody, the accused would be set at liberty and this Court order would not be operated against him, any further. If the accused remits the said compensation amount, the complainant is at liberty to withdraw the said amount after filing a Memo. This order has been passed by this Court after invoking the discretionary power vested with it. The other accused in C.C.No.388 of 2002 on the file of the Judicial Magistrate-II, Erode, are set at liberty since the case was not proved against them. 14. Resultantly, the above Criminal Appeal is partly allowed with the above rectification and order passed in C.C.No.388 of 2002 on the file of the Judicial Magistrate-II, Erode, dated 05.03.2007, is modified. Accordingly ordered.