M/S. Kakinada Chit Funds P Ltd, vs Sri Chukkala Satyanarayana And ...
2023 Latest Caselaw 4250 AP

          HON'BLE SRI JUSTICE A.V.RAVINDRA BABU

               CRIMINAL APPEAL No.853 OF 2007

JUDGMENT:

The unsuccessful complainant in Calendar Case No.101 of

2002, on the file of the Court of III Additional Judicial Magistrate

of First Class, Kakinada, East Godavari District (for short, 'the

learned Magistrate'), filed the present Appeal impugning the

judgment, dated 20.06.2007, wherein the learned Magistrate

found the respondent/accused not guilty of the offence under

Section 138 of the Negotiable Instruments Act, 1881 (for short,

'the NI Act') and accordingly acquitted him under Section 255(1)

Cr.P.C.

2. The parties to this Criminal Appeal will hereinafter be

referred to as described before the trial Court, for the sake of

convenience.

3. The case of the complainant, in brief, according to the

averments in the complaint is that accused joined as subscriber in

one of the Chits conducted by complainant in Chit Group No.KCS-

1C/11 on 11.10.1999 for the chit value of Rs.1,00,000/- payable

in 25 monthly installments at the rate of Rs.4,000/- p.m.

AVRB,J Crl.A. No.853/2007

commencing from 18.07.1999 and terminating by 18.07.2001. It is

alleged that accused paid some installments, participated in

auction held on 19.12.1999 and became highest bidder. He agreed

to forego a sum of Rs.36,500/- and received prize money of

Rs.63,500/- from the complainant but he did not pay the

installments to the complainant in spite of repeated requests and

demands except some installments up to 11.05.2000. It is further

alleged that on the demand of complainant officials, accused

issued a cheque on 31.08.2001 for Rs.70,000/- drawn on Andhra

Bank, Main Branch, Kakinada towards part payment of chit due to

the complainant. Complainant presented the said cheque in

Andhra Bank, Main Branch, Kakinada on 24.09.2001 for

encashment but it was dishonoured with an endorsement 'Exceeds

Arrangement'. Complainant got issued legal notice on 05.10.2001

calling upon the accused to make payment due under the cheque.

On receipt of notice, the accused approached the complainant

company and requested it not to file a case and took away the

dishonoured cheque and issued another cheque dated 31.12.2001

for Rs.75,000/- drawn on Andhra Bank, Main Branch, Kakinada

towards part payment and assured the complainant people that it

will be honoured. Believing the words, complainant people

presented the said cheque in Andhra Bank, Kakinada on

AVRB,J Crl.A. No.853/2007

03.01.2002 for encashment but it was also dishonoured on

03.01.2002 with an endorsement of 'Exceeds Arrangement'. Again,

the complainant issued notice to the accused on 11.01.2002. It

was received by the accused on 16.01.2002, but the accused never

paid the amount nor sent any reply. Hence, the complaint to

prosecute the accused for issuing a cheque without having

sufficient funds in his account.

4. The learned Magistrate took the case on file under Section

138 of the NI Act.

5. After following the procedure under Section 207 Cr.P.C and

on appearance of the accused, copies of case documents were

furnished to him under Section 207 Cr.P.C. The accused was

examined under Section 251 Cr.P.C. for which he denied the

offence, pleaded not guilty and claimed to be tried.

6. The complainant, to bring home the guilt against the

accused, examined the Manager of the complainant Company as

PW.1 and got marked Exs.P-1 to P.10.

7. After closure of the evidence of prosecution, accused was

examined under Section 313 Cr.P.C. for which he denied the

AVRB,J Crl.A. No.853/2007

incriminating circumstances appearing against him. He examined

himself as DW.1.

8. The learned Magistrate on hearing both sides and after

considering the oral and documentary evidence on record, found

the accused not guilty of the charge for the offence under Section

138 of the NI Act.

9. Felt aggrieved of the same, the unsuccessful complainant is

before this Court as appellant.

10. Now, in deciding this Criminal Appeal, the points that arise

for consideration are:

1. Whether the complainant before the learned III

Additional Judicial Magistrate of First Class, Kakinada

proved that the accused issued Ex.P-1 - cheque

towards discharge of a legally enforceable debt?

2. Whether the complainant proved the offence under

Section 138 of the NI Act against the accused beyond

reasonable doubt?

3. Whether the impugned judgment, dated

20.06.2007, is sustainable under law and facts and

AVRB,J Crl.A. No.853/2007

whether there are any grounds to interfere with the

same?

POINT Nos.1 & 2:

11. Sri N. Siva Reddy, learned counsel appearing on behalf of

the appellant-complainant, would contend that the judgment of

the learned trial Judge is not sustainable under law and facts and

the learned Magistrate erroneously held that there is no legally

enforceable debt and that the evidence on record would prove the

alleged offence as such Appeal against the accused may be

allowed.

12. Sri K. Kanaka Raju, learned counsel, representing Sri K.

Subrahmanyam, learned counsel for the 1st respondent/accused,

would contend that the complainant did not file account copy

before the trial Court to show the amount due by the accused as

on the date of Ex.P-1 and, on the other hand, the suit filed by the

complainant before the learned I Additional Senior Civil Judge,

Kakinada was decided by holding that the amount due was only

Rs.25,000/- and, if that be the case, issuance of Ex.P-1 in the

manner as alleged is highly doubtful. Accused examined himself

as DW.1 to contend that the complainant obtained Ex.P-1 in

AVRB,J Crl.A. No.853/2007

accordance with some other transaction but not relating to the

chit transaction alleged against him. The learned trial Judge with

elaborate reasons found the respondent/accused not guilty as

such Appeal is liable to be dismissed.

13. PW.1 before the trial Court was no other than the Manager

of the Complainant Company and he adverted to the case in

accordance with the averments in the complaint. Through him,

Exs.P-1 to P-10 were marked. The accused examined himself as

DW.1 to explain the circumstances in which he signed Ex.P-1.

14. As evident from the cross-examination of PW.1, he did not

file the statement of account pertaining to the so called chit

transaction entered into by the accused with the complainant's

company. Apart from these, there is no dispute as evident from

Ex.P-10 that when the complainant filed a Suit before the learned

Additional Senior Civil Judge, seeking huge amount, it was

decided that only an amount of Rs.25,000/- was due by the

accused to the complainant's company. It may be the fact that the

complainant filed an Appeal under Ex.P-10 before the learned III

Additional District Judge, Kakinada but it is not the case of the

complainant that he got any favourable order in the above case. It

is to be noted that according to the evidence adduced by the

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complainant coupled with Ex.P-7 - chit agreement, the value of

the chit was Rs.1,00,000/- payable in 25 monthly installments.

The averments in the complaint that accused paid some

installments as on the date of participating in the auction and

after becoming successful bidder, he paid some installments is

nothing but vague. The chit installment amount per month after

the accused took the prized amount was Rs.4,000/-. Ex.P-7

discloses that if a subscriber commits default consecutively for

three installments, the complainant had every cause of action to

terminate the chit agreement and to recover the amount in lump

sum. So, Ex.P-1 was subsequent to completion of the chit auction

successfully by the accused. It is not understandable as to why

the complainant kept quiet without availing the legal remedies

when the accused committed default for three consecutive

installments. Under the circumstances, it is the duty of the

complainant to connect Ex.P-1 with that of a legally enforceable

debt. It is quietly evident that from the evidence that when the

complainant filed a suit in O.S. No.157 of 2004 before the learned

I Additional Senior Civil Judge, Kakinada the learned Additional

Senior Civil Judge gave a finding that the complainant was

entitled only for Rs.25,000/-. Though the complainant filed an

Appeal before the learned III Additional District Judge, Kakinada

AVRB,J Crl.A. No.853/2007

but nothing is clarified that whether he got any favourable order

as against the decision of the learned Senior Civil Judge in O.S.

No.157 of 2004. Needless to point out here that the judgment of

the Civil Court is binding on the Criminal Court. The learned

Magistrate elaborately discussed all these aspects. So, it is quite

clear that the claim of the complainant before a competent Senior

Civil Judge claiming huge amount of Rs.75,000/- was disbelieved

by holding the amount due was only Rs.25,000/-. So, in such

circumstances, it is really doubtful as to whether accused could

have issued Ex.P-1 for a sum of Rs.75,000/-. So, important link is

missing in the evidence to connect Ex.P-1 with that of a legally

enforceable debt pertaining to the chit transaction. Though, there

is no dispute about the factum of dishonor of cheque but the

complainant has to establish that it was issued towards discharge

of a legally enforceable debt. The evidence on record would not at

all prove all those aspects. This Appeal is against an order of

acquittal. Having gone through the judgment of the trial Court, as

above, it cannot be held that the learned III Additional Judicial

Magistrate of First Class decided the matter with any un-

reasonable grounds.

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15. Having regard to the above, I am of the considered view that

there are no reasons whatsoever to interfere with the judgment in

Calendar Case No.101 of 2002, dated 20.06.2007, on the file of the

Court of III Additional Judicial Magistrate of First Class, Kakinada.

The complainant miserably failed to prove the offence under

Section 138 of the NI Act against the respondent/accused beyond

reasonable doubt.

16. POINT No.3: In the result, the Criminal Appeal is dismissed

as such the judgment in Calendar Case No.101 of 2002, dated

20.06.2007, on the file of the Court of III Additional Judicial

Magistrate of First Class, Kakinada stands confirmed.

Consequently, Miscellaneous Applications pending, if any,

shall stand closed.

________________________________ JUSTICE A.V.RAVINDRA BABU Date: 14.09.2023 DSH