S.Sathyanathan Robert vs E.Sathish David
2021 Latest Caselaw 10722 Mad

                                                                               Crl.A.No.121 of 2019

                             IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                DATED : 27.04.2021

                                                      CORAM

                              THE HONOURABLE MR. JUSTICE P.VELMURUGAN

                                                Crl.A.No.121 of 2019

                      S.Sathyanathan Robert
                      S/o. Solomon                                      ... Appellant

                                                   Versus
                      E.Sathish David                                   ... Respondent

                      PRAYER: Criminal Appeal is filed under Section 378 of Cr.P.C, to set
                      aside the Judgment passed by the learned XVIII Additional Sessions Judge,
                      Chennai dated 04.09.2018 in C.A.No.175/2018, acquitting the accused for
                      the offences under Section 138 of Negotiable Instruments Act, 1881,
                      thereby modifying the Judgment passed by the learned Metropolitan
                      Magistrate, Fast Track Court No.IV, George Town, Chennai dated
                      12.03.2018 made in C.C.No.653/2016 and allow the Criminal Appeal.


                             For Petitioner        : Mr.B.Maheswaran
                             For Respondents       : Mr.T.Gowthaman




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                                                                                  Crl.A.No.121 of 2019




                                                      ORDER

This Criminal Appeal is preferred by the appellant/complainant

against the order passed by the learned XVIII Additional Sessions Judge,

Chennai dated 04.09.2018 in C.A.No.175/2018, acquitting the accused for

the offence under Section 138 of Negotiable Instruments Act, 1881.

2. The appellant is complainant and respondent is accused. The

appellant filed a complaint before the learned Metropolitan Magistrate, Fast

Track Court – IV, George Town, Chennai, for the offence under Section 138

of Negotiable Instruments Act and the learned Magistrate after enquiry

convicted the accused and sentenced him to undergo six months Simple

Imprisonment and to pay a compensation of Rs.10,00,000/- to the

complainant under Section 357 (3) Cr.P.C., within one month and in default

payment of the compensation, the accused shall undergo a further period of

two months Simple Imprisonment. Challenging the said conviction and

sentence, the respondent/accused filed C.A.No.175 of 2018 before the

XVIII Additional Sessions Judge, Chennai. The learned Additional Sessions

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Judge, Chennai after hearing arguments, allowed the appeal and set aside

the judgment of conviction and sentence passed by the learned Metropolitan

Magistrate.

3. Aggrieved against the judgment dated 04.09.2018, the

appellant/complainant is before this Court with the present appeal.

4. The learned counsel for the appellant would submit that the

respondent/accused borrowed a sum of Rs.10,00,000/- in October 2013

from the appellant and issued two cheques each Rs.5,00,000/- dated

27.01.2015 drawn on DCB Bank Limited. When the appellant/complainant

presented the cheques for encashment, the same were returned as

“insufficient funds”. Hence the appellant issued legal notice and even after

receipt of the legal notice, neither the respondent repaid the amount, nor

sent any reply. Therefore, the appellant constrained to file a criminal

complaint against the respondent for the offence under Section 138 of

Negotiable Instruments Act. The learned Magistrate has rightly convicted

the respondent/accused to undergo six months simple imprisonment and

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also directed him to pay the compensation of Rs.10,00,000/- to the

appellant/ complainant. However, the Appellate Court, without considering

the materials, simply allowed the appeal and set aside the judgment passed

by the learned Metropolitan Magistrate. He would further submit that the

respondent has admitted the borrowal of money and executed the cheques

and executed the two promissory notes (Exs.P.11 and P.12) and hence the

appellant has proved his case. The lower Court had rightly come to the

conclusion that when the execution of the cheques are admitted, it is for the

respondent/accused to rebut the presumption under Section 118 and 139 of

NI Act. However, the respondent/accused failed to rebut the said legal

presumption and hence the learned Magistrate had rightly convicted the

petitioner. However, the learned Sessions Judge failed to consider the same

and allowed the appeal, which warrants interference.

5. The learned counsel for the respondent/accused would submit that

the cheques were issued in the name of Vaagai Business Services and

Education Private Limited, and the complainant instituted the case without

adding the company as a party, whereas the appellant issued legal notice in

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the name of the respondent/accused and not issued in the name of said

company. He would further submit that the appellant / complainant filed the

complaint against the respondent stating that cheques were issued by the

Company, but, the appellant/complainant neither added the company as a

party nor served notice to the Company. In the absence of company being

served with notice, prosecution of accused is not maintainable, that too,

when there is no demand notice against the Company, which is a

precondition under Section 138 of the Negotiable Instruments Act and

therefore, the complaint itself is not maintainable. In support of his

contentions, the learned counsel has cited the Judgment of the Hon'ble

Supreme Court in the case of Himanshu Vs. B.Shivamurthu [(2019) 3 SCC

797].

6. Heard the learned counsel appearing on either side and perused the

materials available on record.

7. Admittedly, the appellant filed a complaint before the learned

Metropolitan Magistrate in C.C.No.653 of 2016 for the offence under

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Section 138 of Negotiable Instruments Act. During the trial, in order to

prove the charges, on the side of complainant, the complainant himself was

examined as P.W.1 and 13 documents were marked as Exs.P.1 to P.13 and

on the side of defence, the accused was examined as D.W.1 and five

documents were marked as Exs.D.1 to D.5. On a reading of the entire

materials on record, though admittedly, the respondent had borrowed money

and issued cheques, it is the case of the respondent/accused that he

borrowed money on behalf of the company and issued the cheques on behalf

of the company. On a perusal of Exs.P.1 and P.2, copy of the cheques

were signed by the respondent as authorized signatory of the Vaigai

Business Services and Education Pvt. Ltd, which clearly shows that the

cheques were issued on behalf of the company. However, the complaint

has been filed by the appellant/complainant against the respondent/accused

as an authorized signatory in his individual capacity and also notice sent to

the respondent in his individual capacity. However, the appellant has not

lodged the complaint against the company, therefore, the said company was

not arrayed as accused. As per the decision of the Hon'ble Supreme Court

reported in [(2019) 3 SCC 797], the complaint itself is not maintainable.

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Though the learned counsel for the appellant vehemently contended that the

respondent/accused has not objected the borrowal of money, it is for the

appellant/complainant to prove that the respondent/complainant borrowed

the money on his individual capacity, and not on behalf of the company.

Under these circumstances, the appellant/complainant cannot say only the

borrowal of money by the respondent in his individual capacity and cheques

also issued only in the individual capacity. As per the decision of the

Hon'ble Supreme Court, the complaint should be filed against the Company

and the Company has to be arrayed as one of the accused. Therefore, the

complaint against the respondent/accused in the individual capacity is not

maintainable. The trial Court failed to consider the same and however, the

appellate Court, rightly re-appreciated the entire evidence and has given

independent findings. Therefore, this Court appreciated the judgment of the

appellate Court and confirms the findings of the learned XVIII Additional

Sessions Judge, Chennai. The possibility of two views in the appeal is, one,

this Court can interfere with the Judgment of the appellate Court and

another, it is to be tested that whether, the question of law involved in this

appeal, as per the decision of the Hon'ble Supreme Court in the case

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reported in [(2019) 3 SCC 797], that, in the absence of the company being

arrayed as an accused, a complaint against the respondent itself is not

maintainable. Admittedly, in the case on hand, the appellant/complainant

has not impleaded the Vaigai Business Services and Education Pvt. Ltd as a

party in this case.

8. Under these circumstances, this Court does not find any perversity

in the order passed by the XVIII Additional Sessions Judge, Chennai.

Accordingly, this Criminal Appeal is dismissed.

27.04.2021

dh

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To The XVIII Additional Sessions Judge, Chennai.

http://www.judis.nic.in Crl.A.No.121 of 2019

P.VELMURUGAN, J.

dh

Crl.A.No.121 of 2019

27.04.2021

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