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2016 DIGILAW 218 (CAL)

R. Balasubramaniam v. C. H. Rambabu

2016-02-29

ASHA ARORA

body2016
JUDGMENT : Asha Arora, J. 1. By consent of the learned Counsel for the parties, CRAN 10 of 2016 and CRR 03 of 2016 are taken together for disposal. 2. The revisional application arises out of the judgment dated th January, 2016 passed by the learned Sessions Judge, Andaman & Nicobar Islands in Criminal Appeal No. 11 of 2015 and the judgment and order dated 24th June, 2015 rendered by the learned Judicial Magistrate Second Court at Port Blair in CR case No. 54 of 2014/T.R.No.01 of 2015. 3. By the impugned judgment the learned Sessions Judge, Andaman and Nicobar Islands affirmed the judgment and order of conviction and sentence dated 24th June, 2015 passed by the learned Judicial Magistrate in CR case No. 54 of 2014 whereby the petitioner/ accused was held guilty of the offence under section 138 of the Negotiable Instruments Act (hereinafter referred to as the N.I. Act). For the aforesaid offence the accused/petitioner was convicted and sentenced to suffer “one day imprisonment till rising of the court and also to pay compensation of Rs. 4,60,000 from the date of the order as per Section 357 (3) of the Cr.PC.” In default of payment of compensation the accused/petitioner was directed to suffer simple imprisonment for thirty days. 4. Aggrieved, the accused/petitioner filed the instant revisional application. 5. The factual matrix of the case in brief is that the respondent No.1 C.H.Ram Babu filed a complaint against the petitioner/accused R. Balasubramaniam under section 138 of the N.I. Act contending that he had sold a bus bearing registration No. AN 01 C 3109 to the petitioner/accused on 7th March, 2014 for a sum of Rs.3,30,000/-. A written agreement was executed between the parties on the same day and a sum of Rs. 1,00,000/-was paid by the accused/petitioner to the complainant/respondent No. 1. One post dated cheque of Rs. 2,30,000/-of the State Bank of India, Haddo Branch vide cheque No. 417188 dated 7th July, 2014 was also issued by the accused/petitioner in favour of the complainant/respondent No.1 towards the balance consideration amount. Thereafter the complainant/respondent No.1 handed over possession of the said bus along with all connected papers to the accused/petitioner who accepted the same and started plying the bus for his business purpose. The further case is that the cheque which was issued by the accused/petitioner was dishonoured due to insufficient fund. Thereafter the complainant/respondent No.1 handed over possession of the said bus along with all connected papers to the accused/petitioner who accepted the same and started plying the bus for his business purpose. The further case is that the cheque which was issued by the accused/petitioner was dishonoured due to insufficient fund. Thereafter the respondent No.1/complainant verbally asked the petitioner/accused to make payment of the cheque amount in cash but to no effect. A legal notice under section 138 of the N.I. Act was issued to the petitioner/accused who received the same but no payment was made by him nor did he give any reply to the said notice. The respondent No.1/complainant was therefore constrained to file a complaint under section 138 of the N.I. Act against the accused/ petitioner which was registered as CR Case No. 54 of 2014. 6. According to the petitioner/accused the bus was hypothecated to Nisha Bothra Sow Carpet, Madras. The loan amount was not paid by the complainant/respondent No.1 to the said firm so as per the terms of the agreement he (petitioner) was not liable to make any payment to the respondent No.1/complainant. It has further been contended that the bus has not been transferred in his name due to non payment of loan. For the aforesaid reason the State Transport Authority has not renewed the permit of the said bus so the petitioner is unable to ply the same. It is asserted by the petitioner that neither the learned Trial Court nor the learned Sessions Judge considered the aforesaid aspects and convicted him for the offence under section 138 of the N.I. Act. 7. Referring to paragraph 11 of the petition of complaint, Mr. Rao, learned Advocate for the petitioner submitted that there has been suppression of fact by the complainant/ respondent No.1 who made an incorrect averment therein by stating that “... even after receipt of the demand notice, the accused neither issued any reply to the notice nor paid the cheque amount to the complainant till date”. In support of such submission learned Advocate for the petitioner pressed into service exhibit 7 which is the reply dated th August, 2014 to the legal notice dated 11th August, 2014 addressed to the complainant Mr. C.H.Rambabu by the learned Advocate for the accused/petitioner. In support of such submission learned Advocate for the petitioner pressed into service exhibit 7 which is the reply dated th August, 2014 to the legal notice dated 11th August, 2014 addressed to the complainant Mr. C.H.Rambabu by the learned Advocate for the accused/petitioner. The second limb of argument on behalf of the petitioner is that the learned Trial Court did not take into consideration the evidence of DW-1 Jayanta Adhikari, the Motor Vehicles Inspector, nor is there any discussion in the judgment regarding the evidence of this witness. It has further been submitted that even exhibits A and C were not considered or looked into. To substantiate his submission Mr. Rao led this Court through page 3 of the impugned judgment. The next argument of Mr. Rao is that the learned Trial Court failed to consider whether the complainant had discharged his liability of payment of loan in respect of the bus in question. Learned Advocate for the petitioner contended that the question of encashment of the cheque would arise only after the complainant had discharged his liability of payment of loan. Inviting the attention of this Court to exhibit C which is a letter dated 4th March, 2015 issued by the State Transport Authority to the petitioner on the subject “Request for renewal of permit and return of original document”, Mr. Rao submitted that this letter goes to show that the bus permit could not be renewed for want of N.O.C from the financier as the bus was hypothecated to Nisha Bothra. It is also the contention of Mr. Rao that none of the bank officers were examined by the complainant in support of his case. Assailing the judgment of the learned Sessions Judge, Mr. Rao argued that there was no application of mind nor were the submissions on behalf of the appellant considered by the said Court. In this context reference has been made to page 3 of the judgment the relevant portion of which is reproduced hereunder: “Ld. Advocate for the appellant submitted before this Court that Ld. Court below has failed to appreciate the facts and circumstance of this case and the order of conviction passed by the Court below is erroneous. In this context reference has been made to page 3 of the judgment the relevant portion of which is reproduced hereunder: “Ld. Advocate for the appellant submitted before this Court that Ld. Court below has failed to appreciate the facts and circumstance of this case and the order of conviction passed by the Court below is erroneous. He further submitted before this Court that the Tata bus was never handed over to the appellant and the Registration No. of the bus is still today in the name of the A. Shanmugam and the bus was hypothecated to other Private company at Chennai, so the alleged transfer of possession of the bus by the respondent to the appellant is not correct.” 8. Mr. Rao contended that no such submission was made on behalf of the appellant before the learned Sessions Judge which has incorrectly been recorded. It is the further contention of Mr.Rao that in view of the observation of the learned Sessions Judge at page 4 of the judgment that the argument of the appellant “may invite any case of cheating against the respondent...”, there was no justification in affirming the judgment and order of conviction and sentence passed by the learned Trial Court. 9. Per contra Mr. Halder, learned Advocate appearing for the respondent No.1/complainant argued that there has been no suppression of fact as contended on behalf of the petitioner since the letter of reply (exhibit 7) was received by the complainant after filing of the complaint and this fact has been stated in the evidence by the complainant who has been examined as PW-1. Mr. Halder further argued that the fact of issuance of the cheque by the accused/ petitioner and that it was dishonoured due to insufficiency of fund not having been disputed, there was no necessity for examining any officer from the bank. It has also been submitted on behalf of the respondent No.1 that as regards exhibit C, no notice was given by the accused/petitioner to the complainant informing him that for want of N.O.C from the financer the bus permit could not be renewed. On the point of non payment of loan, it has been argued by Mr. It has also been submitted on behalf of the respondent No.1 that as regards exhibit C, no notice was given by the accused/petitioner to the complainant informing him that for want of N.O.C from the financer the bus permit could not be renewed. On the point of non payment of loan, it has been argued by Mr. Halder that from paragraph 2 of the letter of reply (exhibit 7) it is clear that “...in the event of any demand made by the financier as aforesaid at any point of time, the vendor will handle the same and he will be liable to adjust amount.....”. Mr. Halder contended that no such demand has been made by the financier so the question of the complainant’s liability would not arise. Learned Advocate for the respondent No.1 concluded that the impugned judgments are perfectly justified since all the requirements for the offence under section 138 of the N.I. Act have been satisfied in the present case and the issues raised on behalf of the petitioner do not fall within the scope of section 138 of the N.I. Act. 10. In reply, Mr. Rao referred to the concluding part of paragraph 3 of exhibit 7 which reads thus: “I therefore through this notice call upon you to clear the dues of Rs.2,73,000/- (Rupees two lakh seventy three thousand only) with additional interest @ 18% from 1st May, 2006 with respect of the said bus and only after the clearance of the said due to Nisha Bothra, my client will be in a position to clear the balance amount to you.” The learned Counsel for the petitioner submitted that from the aforesaid it is evident that there was no mensrea and the petitioner/accused expressed his readiness to clear the balance amount after payment of the loan by the complainant/respondent No.1. 11. In his evidence as PW-1 the complainant categorically stated that the reply to his notice was received after filing of this case. This assertion of PW-1 remained unchallenged in cross-examination. Apart from that, if the complainant/respondent No.1 intended to suppress the letter of reply (exhibit 7), he would not have produced the same during evidence. Therefore the submission on behalf of the petitioner that there has been suppression of fact is devoid of merit. This assertion of PW-1 remained unchallenged in cross-examination. Apart from that, if the complainant/respondent No.1 intended to suppress the letter of reply (exhibit 7), he would not have produced the same during evidence. Therefore the submission on behalf of the petitioner that there has been suppression of fact is devoid of merit. There is also no substance in the argument that the Trial Court did not consider the crucial point as to whether the complainant had discharged his liability of payment of loan in respect of the bus in question. We cannot lose sight of the fact that the complainant’s case is for an offence under section 138 of the N.I. Act which reads thus: “138. Dishonour of cheque for insufficiency, etc., of funds in the account. We cannot lose sight of the fact that the complainant’s case is for an offence under section 138 of the N.I. Act which reads thus: “138. Dishonour of cheque for insufficiency, etc., of funds in the account. – Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for [a term with may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.” 12. It is therefore clear from a plain reading of the aforesaid provision that the offence under section 138 of the N.I. Act is completed with the following acts, namely, 1) Drawing of the cheque 2) Presentation of the cheque to the Bank 3) Returning of the cheque unpaid by the drawee bank 4) Giving of notice in writing to the drawer of the cheque demanding payment of the amount 5) Failure of the drawer to make payment within 15 days of the receipt of the said notice. A concatenation of all the above acts is the sine qua non for the completion of the offence under section 138 of the N.I. Act which have been proved in the present case in which there is no dispute regarding the issuance of the cheque by the petitioner/accused who did not even dispute his signature thereon, the amount mentioned in the cheque and the reason for which it was issued. It has also been proved that the cheque was dishonoured due to insufficiency of fund and a notice was issued by the complainant which was duly served upon accused/petitioner who failed to make payment. The argument that there was no mensrea and that accused/petitioner was ready to discharge his liability if the complainant paid the loan amount is not sustainable for the simple reason that the defence taken by the petitioner/accused in no way helps to exonerate him from the liability of the offence under section 138 of the N.I. Act. The issue raised by the petitioner/accused is beyond the ambit of section 138 of the Act. For the purpose of constituting an offence under section 138 of the Act it is essential that a cheque is issued by a person who has signed on it and the complainant reasonably discharges the burden that the cheque had been issued for discharge of a lawful debt or a liability. It is then for the accused to discharge the burden under section 139 of the N.I. Act that the cheque had not been issued towards discharge of a legal debt or liability but was issued for any other reason. It is then for the accused to discharge the burden under section 139 of the N.I. Act that the cheque had not been issued towards discharge of a legal debt or liability but was issued for any other reason. If the complainant reasonably discharges the burden that the payment was towards a lawful debt or liability, it is not open for the accused/signatory of the cheque to set up a defence that although the cheque which had been signed by him and was dishonoured, the same would not constitute an offence under section 138 of the N.I. Act. 13. The existence of a liability has been proved in the instant case by the complainant. The accused/petitioner did not dispute that the dishonoured cheque was issued by him towards discharge of his liability for payment of the amount mentioned therein. In this context it is pertinent to refer to section 139 of the N.I. Act which provides thus: “139.Presumption in favour of holder.-It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.” A rebuttable presumption is created under section 139 of the Act that the cheque was issued by the drawer in discharge of a debt or liability owed by him to its holder. Such a presumption has not been rebutted by the accused by adducing evidence to the contrary. The defence set up by the accused is of no avail in the instant case relating to the question of criminal liability on account of dishonour of a cheque which was admittedly issued by the accused for the discharge of a liability. We are concerned with the offence under section 138 of the N.I. Act which has clearly been proved against the accused. 14. For the aforesaid reasons, I am of the view that no interference is warranted with the impugned judgments. There is no merit in the revisional application which is liable to be dismissed. 15. The revisional application being CRR 03 of 2016 is thus dismissed. 16. In view of the disposal of the main revisional application, CRAN 10 of 2016 has become infructuous and is accordingly disposed of. 17. There is no merit in the revisional application which is liable to be dismissed. 15. The revisional application being CRR 03 of 2016 is thus dismissed. 16. In view of the disposal of the main revisional application, CRAN 10 of 2016 has become infructuous and is accordingly disposed of. 17. Petitioner is directed to surrender before the Trial Court within one month from date to serve out the sentence failing which the Trial Court shall proceed against him in accordance with law. 18. A copy of this judgment along with the L.C.R be sent forthwith to the Trial Court. 19. Urgent photostat certified copy of the judgment if applied for, be supplied to the parties upon compliance of requisite formalities. Later : Learned counsel for the petitioner prayed for stay of the operation of the judgment passed by this Court. Considering the facts and circumstances, I am not inclined to grant any stay. Hence such prayer is refused.