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2025 DIGILAW 2153 (MAD)

C. Anand v. R. Muthuswamy

2025-04-17

SATHI KUMAR SUKUMARA KURUP

body2025
JUDGMENT : 1. This Criminal Appeal had been filed against the Judgment of acquittal passed by the learned Judicial Magistrate-I, Salem, in C.C. No. 222 of 2012, dated 22.04.2015. 2. The brief facts, which are necessary for the disposal of this Criminal Appeal, are as follows:- 2.1. The Appellant herein had filed C.C. No. 222 of 2012 before the learned Judicial Magistrate No.I, Salem contending that he knew the Accused /Respondent herein for the past 10 years. According to the Appellant/Complainant, having regard to such proximity of their relationship, the Accused requested the Appellant/Complainant to pay Rs.3,00,000/- to meet his urgent family and business needs. On the basis of such request, the Appellant had paid a sum of Rs.3,00,000/- to the Respondent/Accused on 28.07.2012. On receipt of the amount, the Accused issued the Cheque No. 0240730 dated 28.09.2012 for Rs.3,00,000/- drawn on Lakshmi Vilas Bank, Salem in favour of the Complainant. When the said cheque was presented by the Appellant with his Bankers Urban Bank, Ammapet Branch on 05.10.2012. On 11.10.2012 the cheque was returned along with a memo indicating that the cheque was issued from an “NPA Account”. Therefore, on 15.10.2012, the Appellant sent a notice to the Respondent calling upon him to pay the cheque amount. The notice was sent to the Respondent/Accused to his office address as well as residential address. While the notice dated 26.10.2012 sent to the office address of the Accused was returned unserved, the notice sent to his residential address was received. However, the Accused has not sent any reply, hence, the complaint was filed by the Complainant/Appellant herein. 2.2. The complaint filed by the Appellant was taken cognizance on 21.12.2012 and summons were sent to the Respondent/Accused. When the Accused appeared before the Court of the learned Judicial Magistrate No.I, Salem, copies of the documents filed by the Complainant have been furnished to him at free of costs. When the Accused was questioned about the incriminating evidences appearing against him, he denied the same. Therefore, trial was ordered. During the trial, the Appellant/Complainant examined himself as P.W-1 and marked Ex.P-1 to Ex.P-5. When the Accused was questioned under Section 313 (1) of the Code of Criminal Procedure, the Accused had stated that a false case had been foisted against him. The Accused, on his side, examined the Assistant Manager of Lakshmi Vilas Bank, Salem as D.W-1 and marked two documents as Ex. When the Accused was questioned under Section 313 (1) of the Code of Criminal Procedure, the Accused had stated that a false case had been foisted against him. The Accused, on his side, examined the Assistant Manager of Lakshmi Vilas Bank, Salem as D.W-1 and marked two documents as Ex. D-1 and Ex. D-2. 2.3. The trial Court, on considering the oral and documentary evidence, concluded that the cheque in question was tendered by the Accused in the year 2000 to one Mr. Nataraj for security purpose and it was the subject matter of C.C. No. 221 and 222 of 2012. It was also concluded that the above cheques have been tendered in blank. When the Accused herein settled the debt incurred against Mr. Nataraj and asked for the cheque to be returned, the said Nataraj had informed him that the cheque had been lost. However, the said Natarajan has tendered the cheque of the Accused to the Complainant herein to institute the present complaint. Further, D.W-1, Manager of the Bank had deposed that the subject matter of the cheque was issued ten years before containing the cheque leaves bearing 0240726 to 0240750 and one of the cheques contained in the said cheque book was presented for clearance after ten years by the Complainant. D.W-1 also deposed that except two cheques, which are the subject matter of C.C. Nos. 221 and 222 of 2012, the other cheques have been passed for payment ten years ago. Further, it was stated that the cheque in question was a non-MICR Cheque which are not in use now. Having regard to the above deposition of D.W-1, the trial Court concluded that the cheque in question was not issued for a legally enforceable debt and liability and the cheque was issued ten years before to one Natarajan, brother of the Complainant. The Complainant also failed to state as to how the sum of Rs.3,00,000/- was paid to the Accused on 22.07.2012, either by cash or cheque. In the absence of the same, the preponderance of probability had to be proved only by the Complainant, which he had failed to prove. The Complainant also failed to state as to how the sum of Rs.3,00,000/- was paid to the Accused on 22.07.2012, either by cash or cheque. In the absence of the same, the preponderance of probability had to be proved only by the Complainant, which he had failed to prove. Accordingly, the trial Court held that the Complainant failed to prove that the cheque in question was issued by the Accused for a legally enforceable debt/liability and dismissed the complaint filed by the Complainant by acquitting the Respondent/Accused for the offence under Section 138 of The Negotiable Instruments Act, 1881. 2.4. Aggrieved by the judgment of acquittal recorded by the learned Judicial Magistrate No.I, Salem, the Complainant had filed this Criminal Appeal. 3. The learned Counsel for the Appellant submitted that the cheque issued by the Respondent was returned on the ground that signature and other particulars in the cheque differs. The Appellant herein, therefore, issued notice regarding the same to the Accused to his residential address as well as his official address. The statutory notice sent through registered post to the residential address was received by the Respondent/Accused, but he had not chosen to send any reply. After waiting for the response of the Accused, the Complainant had preferred the private complaint. However, the trial Court acquitted the Accused on the ground that the cheque was a non-MICR cheque issued ten years before. It is the submission of the learned Counsel for the Complainant/Appellant that both MICR and Non-MICR cheques are accepted by the Banks. In any event, when the Accused had not replied to the statutory notice, he was precluded from making defence in the complaint. Further, the Accused is not entitled to contend that the Complainant does not have the resources to advance Rs.3,00,000/-. When the complainant had proved that the cheque was issued for a legally enforceable debt and liability by issuing the statutory notice, the trial Court ought not to have dismissed the complaint. 4. Per contra, it is the contention of the learned Counsel for the Respondent/Accused that the Complainant does not have the resources to advance such a huge amount of Rs.3,00,000/- to the Accused. The Accused examined D.W-1 to prove that the cheque was issued 10 years before. 4. Per contra, it is the contention of the learned Counsel for the Respondent/Accused that the Complainant does not have the resources to advance such a huge amount of Rs.3,00,000/- to the Accused. The Accused examined D.W-1 to prove that the cheque was issued 10 years before. Further, it was demonstrated that the cheque was issued to the brother of the Complainant by name Natarajan for security purpose which was entrusted to the Complainant, who had filled up the cheque and presented it. On the date of presenting the cheque, the cheque was not accepted by the Bank as it is not a MICR cheque. 5. The learned Counsel for the Respondent invited the attention of this Court to the discussion of evidence by the learned Judicial Magistrate, which is as follows: 2008 Cri. L.J. 3353 Binod Kumar Lali Vs. State of Jharkhand and Anr. “Whether the petitioner complainant was competent to advance Rs.2,35,000/- by way of loan to the opposite party at length in which he found that the petitioner-complainant having no regular source of income nor any business, was not in a position to advance such a huge amount of loan.” 6. The learned Counsel for the Respondent further submitted that the cheque alleged to have been issued by the Accused was non-MICR cheque. The transaction under non-MICR cheque was stopped before 2012, for which the Accused had examined D.W-1, Assistant Manager of the Bank. Also, the learned Counsel for the Respondent/Accused suggested that the Complainant does not have the wherewithal to extend the loan for Rs.3,00,000/-. In the cross-examination of P.W-1, he had stated that he had submitted income tax returns upto 2009. When he asked as to why he had not submitted the tax returns after 2009, he said that the income received during the subsequent years were almost equal to the expenses. He also deposed that the income that he get was hardly sufficient to meet his requirements. Therefore, he did not have sufficient income for declaring income tax. Thus, it is clear that the Complainant could not pay income tax for want of profits or income in the business. While so, it is too hard to accept that the Complainant paid Rs.3,00,000/- as loan to the Accused during July, 2012. In this context, the learned Counsel for the Respondent/Accused relied on the ruling of the Hon'ble Supreme Court in 2008 Cri. While so, it is too hard to accept that the Complainant paid Rs.3,00,000/- as loan to the Accused during July, 2012. In this context, the learned Counsel for the Respondent/Accused relied on the ruling of the Hon'ble Supreme Court in 2008 Cri. L.J. 3353 in the case of Binod Kumar Lal vs. State of Jharkhand and another , wherein it has been observed as follows:- “whether the petitioner Complainant was competent to advance Rs.2,35,000/- by way of loan with the opposite party at length in which he found that the fetish of Complainant having no regular source of income nor any business was not in a position to advance such a huge amount of loan.” 7. The learned Counsel for the Respondent therefore submitted that the learned Judicial Magistrate-I had arrived at a right conclusion that the Complainant did not have sufficient means to extend the loan and he was not able to prove the claim made in the complaint. Therefore, the complaint was rightly dismissed by the trial Court and the Respondent/Accused was acquitted from the charge under Section 138 of Negotiable Instruments Act, 1881. The learned Counsel for the defence/Accused also relied on the ruling 2010 Cri. L.J. 1265 (AP) in the case of D. Atchyutha Reddy vs. The State of Andhra Pradesh , wherein it was held as follows:- “The N.I Act contains provisions raising presumptions as regards the negotiable Instrument under Section 118(a) of the Act as also under Section 139 thereof. The said presumptions are rebuttable. Whether the presumption rebutted or not would depend upon the facts and circumstances of each case. The Supreme Court clearly lad down in catena of decisions that the standard of proof in discharge that the standard of proof in discharge of the burden in terms of Sections 118 and 139 of Negotiable Instruments At being the preponderance of a probability, the inference thereof can be drawn not only from the material brought on record but also from the reference to the circumstances upon which the Accused relief upon. The burden to rebut the presumptions on the Accused is not an high as that of the prosecution”. 8. Thus, based on tho above ruling, which was also relied on by the trial Court, it was concluded that on 22.07.2012 the Complainant did not have Rs.3,00,000/- with him to advance loan to the Accused. The burden to rebut the presumptions on the Accused is not an high as that of the prosecution”. 8. Thus, based on tho above ruling, which was also relied on by the trial Court, it was concluded that on 22.07.2012 the Complainant did not have Rs.3,00,000/- with him to advance loan to the Accused. And also the Complainant failed to prove that the Accused had given a cheque on 28.09.2012 towards repayment. The cheque in question was not at all in operation at the relevant point of time as it was a non-MICR cheque. Therefore the claim of the Complainant was found not acceptable. The cheque was issued 10 years back which had been pressed into service by the Complainant. While so, it is for the Complainant to explain under what circumstances the cheque reached his hands. Therefore, to disprove the defence of the Accused, the Complainant was unable to establish his case. Under those circumstances, the learned Judicial Magistrate-I, Salem had rejected the claim of the Complainant. The judgment of the learned Judicial Magistrate-I, Salem, is a well reasoned judgment and does not warrant any interference by this court. 9. The learned Counsel for the Respondent further Submitted that if actually the Respondent had issued the cheque, the Complainant would have obtained endorsement regarding material alteration from the Accused, but he had not done so. Therefore, adverse inference had to be drawn against the Complainant. For this purpose, the learned Counsel for the Respondent relied on the judgment in Crl. R.C. No. 891 of 2004, dated 31.03.2015 by Justice M.Satyanarayan in the case of T. Kalavathy vs. Veera Exports by Rajendran. 10. By pointing out the above decision, the learned Counsel for the Respondent submits that this Criminal Appeal has no merits and it has to be dismissed. Point for consideration: Whether the Judgment of acquittal dated 22.04.2015 recorded in C.C. No. 222 of 2012 against the Accused by the learned Judicial Magistrate-I, Salem, is to be set aside as perverse? 11. Heard Thiru. R. Suryaprakash, learned Counsel for the Appellant as well as Thiru. M. Karthik for M/s. I.C. Vasudevan learned Counsel for the Respondent. Perused the material records placed, including the Judgment dated 22.04.2015 of the trial court. 12. The claim of the Complainant in the complaint is that the cheque was returned as NPA (“Non-Performing Assets”) cheque. 11. Heard Thiru. R. Suryaprakash, learned Counsel for the Appellant as well as Thiru. M. Karthik for M/s. I.C. Vasudevan learned Counsel for the Respondent. Perused the material records placed, including the Judgment dated 22.04.2015 of the trial court. 12. The claim of the Complainant in the complaint is that the cheque was returned as NPA (“Non-Performing Assets”) cheque. The Accused knowing fully well that his Bank account is under NPA (“Non-Performing Assets”) had issued the cheque thereby committed fraud on the Complainant. 13. In the cross examination of P.W-1, the attempt of the learned Counsel for the defence/Accused was to elicit that the Complainant did not have the wherewithal to extend the loan for Rs.3,00,000/-. The learned Judicial Magistrate-I, Salem had relied on the reported ruling cited by the learned Counsel for the Accused that the Complainant has to establish that he had the resources to pay the loan amount to the Accused. In this case, the cheque was issued by the Accused in blank. The Bank to which the cheque was presented had not returned the cheque as “insufficient funds” but it has made an endorsement stating as “NPA (“Non-Performing Assets”) account. This shows that the account was inoperative and the cheque issued by the Accused was from such an account. Therefore, the Complainant had clearly stated that knowing fully well that it is NPA (“Non-Performing Assets”) account the Accused had issued a cheque towards repayment of the amount and thereby committed the offence under Section 138 of The Negotiable Instruments Act, 1881. 14. The defence of the Accused is that he had issued the cheque to one Natarajan and it is for the Complainant to explain how it reached him. The said Natarajan is a cousin of the Complainant. If what had been stated in the defence of the Accused is true, he should have either summoned the said Natarajan. Even if Natarajan had not appeared before the Court, the Court can draw adverse inference against Natarajan, but it was not done. Above all, statutory notice was given by the Complainant for which no reply was issued by the Respondent/Accused. The Court has to draw adverse inference against conduct of the Accused in evading statutory notice or in not denying a signature in the cheque. Above all, statutory notice was given by the Complainant for which no reply was issued by the Respondent/Accused. The Court has to draw adverse inference against conduct of the Accused in evading statutory notice or in not denying a signature in the cheque. His only defence is that the cheque was not at all in circulation in the Bank as it is an non-MICR Cheque, issued a decade before. The Accused also examined the Assistant Manager of Lakshmi Villas Bank as D.W-1. D.W-1 had let in evidence. In the cross examination, D.W-1 had admitted that both MICR cheque as well as non- MICR cheque are honored by the Bank, if there are sufficient amount in the account of the depositor/account holder. Also he admitted that in the year 2002, the account of the Accused was declared as “Non-Performing Asset” account. Therefore, the Complainant had in his complaint clearly stated that at the time of issuing of the cheque, the Accused was aware that the account is not operative and it was classified as a “Non Performing Asset” account. The learned trial Judge failed to consider these aspects. Instead he had taken a different defence that the Complainant did not have sufficient means to extend the loan. If what had been claimed by him is true, he should have examined or summoned Natarajan. It is for the Accused to explain how a cheque signed by him reached the hands of the Complainant. The fact that the Accused did not issue reply to the statutory notice itself gives a presumption against the Accused under Section 114 of the Indian Evidence Act. 15. After summon was served on the Accused, the Accused appeared before the Court and contested the claim wherein he had confused the Court by using technical defence that the cheque is non-MICR cheque and there was overwriting in the cheque which was not endorsed by the Accused. D.W-1 Assistant Manager, Lakshmi Vilas Bank in his cross examination had clearly admitted that the cheque was not returned on the ground that there are overwriting or the signature is disputed but it was returned only on the ground that the account was classified as Non-Performing Asset account which means there is no sufficient funds. Also in the cross examination, D.W-1 admitted that the Bank had filed civil case for the liability of the Accused towards the Bank. Also in the cross examination, D.W-1 admitted that the Bank had filed civil case for the liability of the Accused towards the Bank. Under those circumstances, it is to be presumed that the Accused is in the habit of availing loan and he is a chronic defaulter. Therefore, that much of evidence is available against the Accused during the trial. The fact that the Accused was able to probabilize the defence is not correct. The cross examination of D.W-1 indicates that the Accused is a regular defaulter and in the habit of availing loan. The Assistant Manager of the Bank had deposed evidence as D.W-1 stated that the Bank honors the cheque irrespective of MICR or non-MICR, if there are sufficient funds. 16. Here in this case the cheque in question was not returned for the reason there is overwriting, but it was returned only as NPA account indicating inoperative account. Therefore, the claim made by the Complainant in the complaint had been proved. The Assistant Manager of the Bank had in his cross examination, clearly admitted the suggestion of the learned Counsel for the Complainant that irrespective of MICR or non-MICR, if there are sufficient funds, the Bank honors. To the pointed question, what happened to the rest of the cheques, when the account was declared as Non-Performing Asset account, the Assistant Manager of the Bank claims ignorance. It is not known whether they had demanded the account holder to surrender those cheques. Therefore, through the materials available before the trial Court, the Accused himself had not entered the witness box to let in rebuttal evidence. Therefore, the presumption under Sections 118 and 139 of the Negotiable Instruments Act, 1881, is against the Accused, when he had not at all denied the signature in the cheque. The finding of the learned Judicial Magistrate-I is found to have been carried away by the argument skill of the Counsel for the Accused before the trial Court. 17. The learned Counsel for the Accused relied on reported decisions which are not applicable to the fact of this case. The Accused had received the statutory notice but not questioned the wherewithal of the Complainant. When the Accused had not denied signature in the cheque, the presumption always is in favor of the Complainant and against the Accused. The Complainant had clearly stated that the cheque was returned as NPA account. The Accused had received the statutory notice but not questioned the wherewithal of the Complainant. When the Accused had not denied signature in the cheque, the presumption always is in favor of the Complainant and against the Accused. The Complainant had clearly stated that the cheque was returned as NPA account. Therefore, the Complainant had stated in the complaint that knowing fully well that the Bank account of the Accused was NPA account, he had issued cheque. That itself attracts section 138 of Negotiable Instruments Act, 1881. The presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881, are against Accused. Added to that, he had evaded the statutory notice. When the Complainant was cross-examined as P.W-1, the learned Counsel for the Accused had confused the Court by putting up questions which are not relevant to the facts and issue in this case and placing reliance on rulings which are not applicable to the facts of this case. After having availed the loan instead of repaying the loan, the conduct of the Accused that the Complainant does not have the wherewithal to extend such loan and the Accused had not at all borrowed money from the Complainant, is not proper. He had not entered the witness box. After having availed the loan and having committed default, the conduct of the Accused teasing the Complainant as he does not have the resources to extend loan cannot at all be accepted by a Court of law. The Accused cannot be permitted to raise such defense when he had not denied the signature in the cheque. When he had admitted that he had issued cheque in question but not to the Complainant but to a different person, it is found to be an evasive denial which does not have evidentiary value before the Court of law. 18. The preponderance of probabilities theory invoked in this case is not helpful to the Accused. If the Accused had entered the witness box and let in evidence to disprove the claim of the Complainant, then it can be stated that the Accused was successful in establishing Preponderance of probabilities of the case. 18. The preponderance of probabilities theory invoked in this case is not helpful to the Accused. If the Accused had entered the witness box and let in evidence to disprove the claim of the Complainant, then it can be stated that the Accused was successful in establishing Preponderance of probabilities of the case. Here, the attempt of the Accused to examine the Assistant Manager of the Lakshmi Vilas Bank as D.W-1 to prove that the cheque book containing the cheque in question in this case was issued to the Accused during 2000-2001 which was pressed into service by the Complainant when actually non-MICR cheques were not in circulation was futile as per the answers in cross examination by D.W-1. The Manager is competent to speak about the operations of the Bank, he had clearly stated irrespective of MICR or non- MICR when the account holder has sufficient amount in the Bank, the Bank is ready to honor the cheque. The Assistant Manager D.W-1 was not able to specify in clear terms after the account of the Accused was declared as NPA account, whether the Accused was directed to surrender the unused cheques, he was unable to answer. Also, he had admitted in cross examination that since the account is declared as NPA account the Bank had filed civil suit for recovery of the amount from the Accused. But, he was unable to give particulars when it is Non Performing Assets naturally Bank will proceed with recovery proceedings. Therefore, the attempt of the Accused to disprove the case of the Complainant had boomeranged on the Accused. Instead of supporting the case of the Accused, the cross examination of the learned Counsel for the Complainant and the answers given by the Assistant Manager of the Bank as D.W-1 was in favor of the Complainant's case. Regarding the conduct of the Accused in issuing a cheque which was given as non-MICR cheque book 10 years back and also in the year 2002, the Bank account was declared as Non-Performing Assets account and recovery proceedings had been initiated against Accused. 19. Under those circumstances, the learned Judicial Magistrate-I, Salem, rejecting the complaint and acquitting the Accused is perverse. 19. Under those circumstances, the learned Judicial Magistrate-I, Salem, rejecting the complaint and acquitting the Accused is perverse. When the materials available are in favour of the Complainant and Accused had not denied the issuance of cheque, then the presumption under Sections 118 and 139 of the Negotiable Instruments Act, 1881, is against the Accused and in favour of the Complainant. The Complainant had issued statutory notice stating clearly that the cheque was returned as NPA account. Therefore, the Complainant had proved his case before the trial Court. The discussion of evidence in paragraphs 11 to 13 is found perverse and the same is set aside. The Complainant had proved the case against the Accused. 20. In the light of the above discussion, the point for consideration is answered in favour of the Appellant/Complainant and against the Respondent /Accused. The judgment of the learned Judicial Magistrate-I, Salem in C.C. No. 222 of 2012, dated 22.04.2015 is found perverse warranting interference by this Court, exercising the power of the Appellate Court under Section 374 of the Code of Criminal Procedure, 1973. 21. In the result, this Criminal Appeal is allowed . The Judgment of acquittal recorded by the learned Judicial Magistrate-I, Salem in C.C. No. 222 of 2012, dated 22.04.2015 is set aside. The Accused is convicted for the offence under Section 138 of Negotiable Instruments Act and he is sentence to undergo imprisonment of one year and to pay compensation under Section 357 of the Code of Criminal Procedure, 1973 of Rs.3,00,000/- (Rupees three lakhs only). 22. The learned Judicial Magistrate-I, Salem shall issue warrant to the Accused and secure the Accused by directing the jurisdictional Police to secure the Accused and report compliance to this Court to undergo sentence of imprisonment of one year. The Complainant shall file appropriate petition to execute the recovery of the amount either through civil court or through the learned Judicial Magistrate court for recovery of Rs.3,00,000/- including attachment of assets of the Accused. As per the earlier ruling of this High Court, after getting a Judgment in favour of the Complainant the Complainant is within his a right to approach the executing court/Civil Court, the Judgment in Section 138 of Negotiable Instrument Act, 1881, will be treated as a decree. 23. Therefore, the Complainant can avail those reliefs.