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2024 DIGILAW 43 (AP)

J. v. Ramaraju VS Sundaram Finance Ltd. & Anr.

2024-01-05

V.SRINIVAS

body2024
ORDER 1. Assailing the judgment dated 23.02.2010 in Crl.A.No.110 of 2008 on the file of the Court of learned III Additional Sessions Judge (FTC), Bhimavaram, confirming the conviction and sentence imposed by the judgment dated 15.04.2008 in C.C.No.12 of 2007 on the file of the Court of learned Judicial Magistrate of First Class, Bhimavaram, for the offence under section 138 of Negotiable Instruments Act (hereinafter referred to as 'N.I.Act'), the petitioner/accused filed the present criminal revision case under Section 397 r/w.401 of the Criminal Procedure Code, 1973 (hereinafter referred to as 'Cr.P.C.'). 2. The revision case was admitted on 25.02.2010 and the sentence of imprisonment imposed against the petitioner was suspended, vide orders in Crl.R.C.M.P.No.547 of 2010. 3. The shorn of necessary facts are that: i) . The complainant M/s.Sundaram Finance Limited has been doing finance business and its sister concern Lakshmi General Finance is having branch at Bhimavaram. Petitioner/accused was approached the said Lakshmi General finance and availed finance of Rs.4,50,000/- for purchase of lorry on hire purpose. The said amount was paid to him by way of cheque for Rs.1,75,000/- drawn in his favour and the remaining amount of Rs.2,75,000/- by way of cheque drawn in favour of P.Muralikrishnam Raju, who is authorized agent of the accused. ii) . Petitioner and the said Lakshmi General Finance have entered into a bilateral agreement dated 03.12.2004. According to which, accused has to pay the loan amount along with interest within thirty-five (35) equal installments and one R.Ramakrishnam Raju stood as guarantor for such transaction. iii) . The said Lakshmi General Finance Company was amalgamated into the complainant company and it was upheld by the High Court of Judicature of Madras on 25.02.2005. Thereby, the complainant company is authorized to recover the balance amount from the petitioner. On being made a demand by the complainant for repayment of balance, the petitioner has issued a cheque for Rs.2,49,119/- on 15.11.2006 drawn on Bank of Baroda Bhimavaram branch towards part payment of the balance due. iv) . Subsequently, the said cheque was presented by the complainant in its account in Indian Overseas Bank, Bhimavaram and it was returned by the petitioner back with a memo dated 17.11.2006 as account closed and the same was informed to the complainant by its banker with a memo dated 18.11.2006. iv) . Subsequently, the said cheque was presented by the complainant in its account in Indian Overseas Bank, Bhimavaram and it was returned by the petitioner back with a memo dated 17.11.2006 as account closed and the same was informed to the complainant by its banker with a memo dated 18.11.2006. Then the complainant got issued a legal notice to the petitioner, but the said notice was returned as 'person not available'. Hence, the complaint. 4. Now the point that arises for determination in this revision is 'whether there is any manifest error of law or flagrant miscarriage of justice in the findings recorded by the Trial Court as well first Appellate Court?' 5. Sri B.Chandrasekhar, learned counsel representing Sri Raja Reddy Koneti, learned counsel for the petitioner, submits that the 1st respondent without there being any proper material filed the calendar case and the trial Court as well Sessions Court committed error in passing the judgment in favour of 1st respondent herein. 6. He further submits that complaint filed without proper authorization, which is nothing but illegal and as such the same is liable to be rejected; that the complainant is not a person in whose favour the alleged cheque was issued, thereby, the complaint itself is not maintainable and there is no legally enforceable debt and there is no obligation on the part of the petitioner/accused to discharge the same. 7. In view of the facts and contentions raised by the learned counsel, this Court closely perused the material available on record. The complainant examined one J.B.V.Subrahmanyam, who is Branch Manager of Complainant's Company, before the trial Court. He reiterated the facts stated in the complaint in his evidence and through him Exs.P.1 to P.11 were exhibited and he was cross examined at length by the learned counsel for the accused. 8. The contention before the trial Court is that the cheque in question covered under Ex.P.4 is a postdated cheque, the said cheque was filled and without knowledge of the accused presented into the bank. It is also contended that the complainant company i.e., M/s.Sundaram Finance Limited has no right to take any legal action against the petitioner/accused and that accused has no liability to discharge the amount covered under Ex.P.4. 9. It is also contended that the complainant company i.e., M/s.Sundaram Finance Limited has no right to take any legal action against the petitioner/accused and that accused has no liability to discharge the amount covered under Ex.P.4. 9. The trial Court held that if the cheque was drawn for payment of amount towards discharge of liability and the cheque was dishonoured; that the same was presented within prescribed period; that payment/payee made a demand for payment of the money by giving a notice in writing to the drawer within the stipulated period and that the drawer failed to make the payment within fifteen (15) days of the receipt of the notice, the accused is liable for punishment under the N.I. Act and the trial Court after discussing the above said legal points also placed reliance on judgment reported in K.Bhaskaran v. Sankaran Vaidhyan Balan, 2001 ALT (Crl.) 42 (SC) as well Musaraf Hossain Khan v. Bhagheeratha Engg. Ltd., 2006 (3) SCJ 604 and D.Vinod v. Shiyappa, 2006 (8) SCJ 63 and after considering the entire material on record i.e., Exs.P.1 to P.11 and as there is no other evidence to disprove the contents in the evidence of P.W.1, the trial Court found the accused guilty of the offence under Section 138 of N.I. Act and sentenced him to undergo simple imprisonment for a period of six (6) months and to pay fine of Rs.5,000/-, in default to suffer simple imprisonment for one (1) month. 10. Aggrieved by the same, the petitioner/accused filed an appeal, vide Crl.A.No.110 of 2008, before the learned III Additional Sessions Judge (FTC), Bhimavaram. The learned Sessions Judge categorically held at paragraph No.10 of the impugned judgment that 'the initial burden is on the complaint to prove that there is preexisting liability and in discharge of the said debt the cheque in question was issued and also held that the complainant issued Ex.P.1 authorization to P.W.1 to look all legal matters on behalf of the complainant company'. 11. The learned Sessions Judge also considered the contention of the accused that the complainant failed to establish that M/s. Lakshmi General Finance Limited was amalgamated with the complainant company. But, the learned Sessions Judge, after elaborate discussion held that Ex.P.10 discloses that by order is with effect from 01.04.2004 and M/s.Lakshmi General Finance Limited was amalgamated to the complainant company. The learned Sessions Judge also considered the contention of the accused that the complainant failed to establish that M/s. Lakshmi General Finance Limited was amalgamated with the complainant company. But, the learned Sessions Judge, after elaborate discussion held that Ex.P.10 discloses that by order is with effect from 01.04.2004 and M/s.Lakshmi General Finance Limited was amalgamated to the complainant company. Further Ex.P.11 account copy of the complainant relating to the accused discloses that the accused used to pay the installments to the complainant company even after amalgamation. Thereby, it can be said that accused recognized the complainant company is aware of the fact that M/s.Lakshmi General Finance Limited is amalgamated with the complainant company and as such he paid installments even after 01.04.2004 as born out from Ex.P.11 account copy. 12. As such, the learned Sessions Judge also found that the accused issued Ex.P.4 cheque in discharging legally enforceable debt for the pre-existing liability of him. It is also found that since the accused paying the amount to the complainant company and the account copy under Ex.P.11 clearly goes to show that he is paying installments after amalgamation of its sister concern. Therefore, the complaint has proved its contentions and to rebut the same, even the accused not entered into witness box nor placed any record or piece of paper to show that he is not liable to discharge the debt amount rather legally enforceable debt covered under Ex.B.4. 13. Section 139 of N.I.Act enjoins the Court to presume that the holder of the cheque received it for the discharge of any debt or liability and the burden is only on the accused to rebut the said presumption. Thereby, before the trial Court the complaint established its case and both the Courts below rightly appreciated the material on record and found the guilt of the accused under Section 138 of N.I.Act and in view of the above discussion there are no grounds put forth by the petitioner to interfere with the findings recording by the both the Courts below. 14. 14. However, now, coming to operation of sentence is concerned, the learned counsel for the petitioner brought to the notice of this Court a judgment of this Court reported in Laxminivas Agarwal v. Andhra Semi Conductors Pvt.Ltd., (2006) 1 ALD Crl.300 (A.P.) as well judgment of Hon'ble Supreme Court reported in Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197 , wherein at paragraph Nos.18, 19, 28 and 29 held as follows: 18. The Appellate Court affirmed the aforesaid factual findings. The Trial Court and the Appellate Court arrived at the specific concurrent factual finding that the cheque had admittedly been signed by the respondent-accused. The Trial Court and the Appellate Court rejected the plea of the respondent-accused that the appellant-complainant had misused a blank signed cheque made over by the respondent-accused to the appellant-complainant for deposit of Income Tax, in view of the admission of the respondent-accused that taxes were paid in cash for which the appellant-complainant used to take payment from the respondent in cash. 19. It is well settled that in exercise of revisional jurisdiction under Section 482 of the Criminal Procedure Code, the High Court does not, in the absence of perversity, upset concurrent factual findings. It is not for the Revisional Court to re-analyse and re-interpret the evidence on record. 28. In R. Vijayan vs. Baby and Another (2012) 1 SCc 260 this Court observed that the object of Chapter XVII of the Negotiable Instruments Act is both punitive as also compensatory and restitutive. It provides a single forum and single proceeding for enforcement of criminal liability by reason of dishonour of cheque and for enforcement of the civil liability for realization of the cheque amount, thereby obviating the need for the creditor to move two different fora for relief. This Court expressed its anguish that some Magistrates went by the traditional view, that the criminal proceedings were for imposing punishment and did not exercise discretion to direct payment of compensation, causing considerable difficulty to the complainant, as invariably the limitation for filing civil cases would expire by the time the criminal case was decided. 29. This Court expressed its anguish that some Magistrates went by the traditional view, that the criminal proceedings were for imposing punishment and did not exercise discretion to direct payment of compensation, causing considerable difficulty to the complainant, as invariably the limitation for filing civil cases would expire by the time the criminal case was decided. 29. In R. Vijayan vs. Baby and another (supra) this Court observed that unless there were special circumstances, in all cases of conviction, the Court should uniformly exercise the power to levy fine up to twice the cheque amount and keeping in view the cheque amount and the simple interest thereon at 9% per annum as the reasonable quantum of loss, direct payment of such amount as compensation. This Court rightly observed that uniformity and consistency in deciding similar cases by different courts not only increases the credibility of the cheque as a Negotiable Instrument but also the credibility of the Courts of Justice.' 15. It is also brought to the notice of this Court a judgment of the Hon'ble Supreme Court reported in Meters and Instruments Private Limited v. Kanchan Mehta, AIR 2017 SC 4594 , wherein at paragraph No.18 held as follows: '18. From the above discussion following aspects emerge: i) Offence under Section 138 of the Act is primarily a civil wrong. Burden of proof is on accused in view presumption under Section 139 but the standard of such proof is 'preponderance of probabilities'. The same has to be normally tried summarily as per provisions of summary trial under the Cr.P.C. but with such variation as may be appropriate to proceedings under Chapter XVII of the Act. Thus read, principle of Section 258 Cr.P.C. will apply and the Court can close the proceedings and discharge the accused on satisfaction that the cheque amount with assessed costs and interest is paid and if there is no reason to proceed with the punitive aspect. ii) The object of the provision being primarily compensatory, punitive element being mainly with the object of enforcing the compensatory element, compounding at the initial stage has to be encouraged but is not debarred at later stage subject to appropriate compensation as may be found acceptable to the parties or the Court. ii) The object of the provision being primarily compensatory, punitive element being mainly with the object of enforcing the compensatory element, compounding at the initial stage has to be encouraged but is not debarred at later stage subject to appropriate compensation as may be found acceptable to the parties or the Court. iii) Though compounding requires consent of both parties, even in absence of such consent, the Court, in the interests of justice, on being satisfied that the complainant has been duly compensated, can in its discretion close the proceedings and discharge the accused. iv) Procedure for trial of cases under Chapter XVII of the Act has normally to be summary. The discretion of the Magistrate under second proviso to Section 143, to hold that it was undesirable to try the case summarily as sentence of more than one year may have to be passed, is to be exercised after considering the further fact that apart from the sentence of imprisonment, the Court has jurisdiction under Section 357(3) Cr.P.C. to award suitable compensation with default sentence under Section 64 IPC and with further powers of recovery under Section 431 Cr.P.C. With this approach, prison sentence of more than one year may not be required in all cases. v) Since evidence of the complaint can be given on affidavit, subject to the Court summoning the person giving affidavit and examining him and the bank's slip being prima facie evidence of the dishonor of cheque, it is unnecessary for the Magistrate to record any further preliminary evidence. Such affidavit evidence can be read as evidence at all stages of trial or other proceedings. The manner of examination of the person giving affidavit can be as per Section 264 Cr.P.C. The scheme is to follow summary procedure except where exercise of power under second proviso to Section 143 becomes necessary, where sentence of one year may have to be awarded and compensation under Section 357(3) is considered inadequate, having regard to the amount of the cheque, the financial capacity and the conduct of the accused or any other circumstances.' 16. Considering the above authoritative pronouncements and as discussed supra, this Court does not find any grounds to interfere with the concurrent findings recorded by both the Courts below regarding conviction under Section 138 of N.I.Act against the petitioner. Considering the above authoritative pronouncements and as discussed supra, this Court does not find any grounds to interfere with the concurrent findings recorded by both the Courts below regarding conviction under Section 138 of N.I.Act against the petitioner. However, to meet the ends of justice, on being satisfied that the complainant has been duly compensated, can in its discretion close the proceedings and discharge the accused, the present Criminal Revision case is disposed of by modifying the sentence that the petitioner/accused is directed to pay the cheque amount of Rs.2,49,119/- to the complainant within a period of six (6) weeks from the date of receipt of copy of this order, in default he shall undergo the sentence of imprisonment as well fine as affirmed by the trial Court, which was confirmed by the Appellate Court. 17. With the above observations, the present Criminal Revision Case is disposed off. Interim orders granted earlier if any, stand vacated. As a sequel, miscellaneous applications pending, if any, shall stand closed.