THE HON'BLE Dr. JUSTICE SHAMEEM AKTHER
CRIMINAL APPEAL No.430 of 2008
JUDGMENT:
This Criminal Appeal, under Section 378(4) of the Code of Criminal Procedure, 1973 (for short, 'Cr.P.C'), is filed by the appellant/complainant, challenging the judgment, dated 31.12.2007, passed in C.C.No.250 of 2003 by the Judicial Magistrate of First Class at Madhira, whereby, the Court below acquitted the respondent No.1/accused under Section 255(1) of Cr.P.C., for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (for short, 'N.I.Act').
2. Heard the leaned counsel for the appellant/complainant, the learned Additional Public Prosecutor appearing for respondent No.2/State and perused the record.
3. It is evident from the record that that during the pendency of this appeal, the appellant/complainant died and the Legal representatives of the appellant/complainant filed Crl.M.P.No.18 of 2010 seeking leave of this Court to continue this appeal. Vide order, dated 05.02.2010, this Court granted leave and as such, the legal representatives of the appellant/complainant are brought on record as appellant Nos.2 to 5.
4. Learned counsel for the appellant/complainant would submit that the respondent No.1/accused borrowed an amount of Rs.1,00,000/- from the complainant on 17.05.2002 promising to repay the same with interest @ 24% per annum and executed a promissory note. In spite of repeated demands, the accused failed 2 Dr.SA, J Crl.A.No.430 of 2008 to repay the said amount and issued a cheque for Rs.1,25,000/- towards discharge of legally enforceable debt. When the said cheque was presented for payment, the same got dishonoured stating the reason as 'exceeds arrangement'. There is a valid legal notice, dated 05.07.2003. In spite of the same, the amount was not paid by the accused, which constituted cause of action against him. Though there is clear and cogent evidence on record, the Court below erroneously acquitted the accused. Further, the Court below erred in holding that the complainant is not possessing valid license to do money lending business. In the cross-examination of P.W.1, it is elicited that the money was advanced to the accused personally. There is legally enforceable debt. The trial Court also erred in holding that Ex.P.1 cheque was given as collateral security. It further erred in holding that a complaint under Section 138 of N.I.Act cannot be filed in respect of an unenforceable debt and ultimately prayed to allow the appeal as prayed for.
5. On the other hand, the learned Additional Public Prosecutor would contend that the categorical admissions of the complainant in his evidence clearly establishes that he was doing money lending business without license. The circumstances of the case reveal that Ex.P.1 cheque as not issued by the accused in discharge of legally enforceable debt. The Court below, after analyzing the entire evidence on record and referring to various precedents, rightly acquitted the accused of the offence under Section 138 of N.I.Act. There are no circumstances to interfere with the same and ultimately prayed to dismiss the Criminal Appeal. 3
Dr.SA, J Crl.A.No.430 of 2008
6. In view of the above submissions, the points that arise for determination in this appeal are as follows:
1. Whether there is legally enforceable debt as alleged by the appellant/complainant?
2. Whether Ex.P.1 cheque was issued by the respondent No.1/accused towards discharge of legally enforceable debt?
3. Whether the judgment, dated 31.12.2007, passed in C.C.No.250 of 2003 by the Judicial Magistrate of First Class at Madhira, is liable to be set aside, consequently, whether the respondent No.1/accused is liable to be convicted for the offence punishable under Section 138 of N.I.Act?
POINTS:-
7. The case of the appellant/complainant, as averred in the subject private complaint, is that the accused borrowed an amount of Rs.1,00,000/- from the complainant on 17.05.2002 and executed a promissory note. In spite of repeated demands, the accused did not repay the said amount and finally issued a cheque bearing No.175327 for Rs.1,25,000/- drawn on Andhra Bank, Madhira Branch, towards discharge of legally enforceable debt. When the said cheque was presented in bank for payment, it was dishonoured stating the reason 'exceeds arrangement'. The complainant got issued legal notice, dated 05.07.2003 demanding the accused to pay the amount. In spite of receiving the said legal notice, the accused neither replied to the same nor repaid the amount. Hence, the complainant filed the subject private complaint to take action against the accused.
8. In support of his case, the complainant himself got examined as P.W.1 besides P.Ws.2 and 3 and got marked Exs.P.1 to P.7. 4
Dr.SA, J Crl.A.No.430 of 2008 P.W.2 and P.W.3 are the Branch Managers of Andhra Bank. Ex.P.1 is the cheque bearing No.175327 for Rs.1,20,000/-, dated 17.06.2003. Ex.P.2 is Memo issued by Andhra Bank, dated 25.06.2003. Ex.P.3 is the Memo issued by SBH, Madhira Branch, dated 26.06.2003. Ex.P.4 is the Memo issued by SBH, Wyra Branch, dated 03.07.2003. Ex.P.5 is the office copy of Legal Notice, dated 05.07.2003. Ex.P.6 is the postal acknowledgement and Ex.P.7 is the certified copy Promissory note, dated 17.05.2002.
9. P.W.1 deposed in his cross-examination that he was doing chit fund business and also money lending business since 7 to 8 years in the name and style of 'Mithra Employees Finance' and 'Wyra Chit Fund and Finance (Pvt) Limited, Wyra; he had acquaintance with the accused since 7 to 8 years during chit transactions; the accused is one of the subscribers in Chit No.LTWA 22/11 and LTWA 22/12, during June, 2001 and the accused was the successful bidder for both the chits and prized amount was paid to the accused, who in turn, produced sureties. The case of the accused is that there is no legally enforceable debt as alleged and that the blank cheque was not given towards discharge of any legally enforceable debt, but for collateral purpose with regard to chit transaction and that the complainant, in order to gain wrongfully, concocted a story that the subject cheque was given towards discharge of legally enforceable debt. P.W.1 stated in his cross-examination that the accused came to his house, handed over the subject cheque, which was already drafted. He further deposed that he do not know whether the writing on the subject cheque was that of the accused and where it was drafted. Further 5 Dr.SA, J Crl.A.No.430 of 2008 the subject cheque, dated 17.05.2002 was for Rs.1,20,000/. Under the circumstances, the trial Court rightly held that the cheque was not drafted by the accused and that the accused is not a rustic man or an illiterate and that if at all the accused issued the subject cheque towards discharge of legally enforceable debt, it should be for Rs.1,24,000/- since the interest on the amount alleged to be borrowed was 24% per annum and that the circumstances reveal that Ex.P.1 cheque was not issued by the accused towards legally enforceable debt. Further, the admissions of the complainant in his evidence as P.W.1 clearly reveals that the complainant is doing money lending business without license in Telangana area. He did not file a single document to show that he was having a valid license to do money lending business. Further, he admitted in his evidence that he filed 20 suits for recovery of money and 12 cases for dishonour of cheques before various Courts. In the given circumstances, the Court below, relying on Krishnam Raju Finance, Hyderabad Vs. Abida Sultana and another {2004 Volume I ALD (Crl) 546} wherein it was held that since the appellant therein had no money lending business license, it cannot be said that there was a legally enforceable liability, rightly concluded that there is no legally enforceable debt to be discharged by the accused.
10. The Explanation to Section 138 of N.I.Act clearly states that the dishonoured cheque shall relate to a legally enforceable debt or liability. In the instant case, since the complainant had no valid money lending business, he cannot legally enforce such a debt of liability. Under these circumstances, the Court below rightly 6 Dr.SA, J Crl.A.No.430 of 2008 concluded that the complainant is not entitled to prosecute the accused for the offence under Section 138 of N.I.Act and therefore, the accused is entitled for acquittal. The conclusions reached by the trial Court are based on evidence on record. There is nothing to take a different view. The accusations against the accused under Section 138 of N.I.Act are not proved beyond reasonable doubt. The contentions raised on behalf of the complainant do not merit consideration. The Criminal Appeal is devoid of merit and is liable to be dismissed.
11. In the result, the Criminal Appeal is dismissed, confirming the judgment, dated 31.12.2007, passed in C.C.No.250 of 2003 by the Judicial Magistrate of First Class at Madhira.
Miscellaneous petitions, if any, pending in this Criminal Appeal, shall stand closed.
__________________ Dr. SHAMEEM AKTHER, J 30th November, 2021 Bvv