Madras High Court
Originally Numbered As ... vs R.Saravanan on 8 October, 2021
Crl.A.(MD)Nos.403 to 406 of 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Dated : 08.10.2021
CORAM
THE HON'BLE MR.JUSTICE R. PONGIAPPAN
Criminal Appeal (MD) Nos.403 to 406 of 2021
[Originally numbered as Crl.R.C.(MD)Nos.589 & 596/2016, 118 & 119/2017]
K.Nagaraj ... Appellant
in all the Criminal Appeals
versus
R.Saravanan ... Respondent
in all the Criminal Appeals
Prayer in all the Criminal Appeals:- Criminal Appeals filed under Section
374(2) of the Code of Criminal Procedure, against the judgment dated
17.09.2010 passed in Criminal Appeal Nos.24, 23, 25 and 26 of 2008, by
the learned Sessions Judge, Karur, reversing the order of conviction and
sentence, dated 15.04.2008, passed in C.C.Nos.21, 12, 281 and 498 of 2006,
by the learned Judicial Magistrate No.I, Karur, respectively.
For Appellant : Mr.V.Raghavachari
in all the Criminal Appeals
For Respondent : Mr.N.Shanmugaselvam
in all the Criminal Appeals
COMMON JUDGMENT
Initially, the appellant has filed Crl.R.C.(MD)Nos.589 and 596 of
2016 and Crl.R.C.(MD)Nos.118 and 119 of 2017 against the order of
acquittal dated 17.09.2010, passed by the learned Sessions Judge, Karur, in
C.A.Nos.24, 23, 25 and 26 of 2008, reversing the order of conviction and
sentence, dated 15.04.2008, passed in C.C.Nos.21, 12, 281 and 498 of 2006,
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Crl.A.(MD)Nos.403 to 406 of 2021
by the learned Judicial Magistrate No.I, Karur, respectively. In view of the
judgment rendered by a Full Bench of this Court in the case of
K.Rajalingam Vs. R.Suganthalakshmi reported in 2020 (4) CTC 1
[Crl.A.Nos.89 and 90 of 2020 and Crl.R.C.Nos.494 and 536 of 2019,
decided on 28.05.2020], which was further clarified on 16.07.2021, by the
Full Bench of this Court, an appeal would lie against the judgment of the
Sessions Court, reversing the conviction and sentence passed by the
Magistrate. Therefore, this Court on 27.09.2021 directed the Registry to
convert the Criminal Revisions as Criminal Appeals. Accordingly, they are
converted into Crl.A.(MD)Nos.403 to 406 of 2021.
2.Since the issue involved and the parties in all these criminal appeals
are one and the same, all these criminal appeals have been taken up for
hearing together and disposed of by virtue of this common judgment.
3.For the sake of convenience, the parties are referred to hereunder
according to their litigative status and ranking before the trial Court.
4.Before the trial Court, the complainant filed four private complaints
against the accused under Section 138 of the Negotiable Instruments Act, in
C.C.Nos.21, 12, 281 and 498 of 2006. By judgment dated 15.04.2008, the
learned Judicial Magistrate No.I, Karur, found the accused guilty under
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Section 138 of the Negotiable Instruments Act, in all the cases, convicted
and sentenced him to undergo simple imprisonment for two years and to pay
a fine of Rs.5,000/-, in default, to undergo simple imprisonment for a period
of six months.
5.Challenging the same, the accused preferred appeals in C.A.Nos.24,
23, 25 and 26 of 2008 before the Court of Sessions, Karur. The learned
Sessions Judge, Karur, by judgment dated 17.09.2010, allowed the appeals
and set aside the conviction and sentence imposed by the trial Court.
6.Aggrieved over the same, the complainant is before this Court with
these Criminal Appeals.
7.The case of the complainant is as follows:-
(i) The complainant is doing Handloom and Powerloom
business under the name and style of Nagaraj Exports. The accused is also
doing Handloom and Powerloom business under the name and style of India
Exports. The accused after giving orders for manufacturing of finished
goods, used to purchase the same from the complainant on credit basis and
thereby, agreed to pay interest at the rate of 24% p.a. on the outstanding
balance of each transaction. As per the regular accounts maintained by the
complainant for the period from 12.03.2005 to 01.08.2005, the accused is
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Crl.A.(MD)Nos.403 to 406 of 2021
liable to pay a sum of Rs.3,02,572.10. In order to discharge the said
amount, he issued 8 cheques on 21.10.2005, as follows:-
Sl. No. Date of Issue Cheque No. Amount Cheque Date
1 21.10.2005 050758 40,000/- 21.10.2005
2 21.10.2005 050759 40,000/- 26.10.2005
3 21.10.2005 050760 40,000/- 08.11.2005
4 21.10.2005 050761 40,000/- 11.11.2005
5 21.10.2005 050762 40,000/- 15.11.2005
6 21.10.2005 050763 40,000/- 18.11.2005
7 21.10.2005 050764 40,000/- 22.11.2005
8 21.10.2005 050765 20,000/- 30.11.2005
(ii) The complainant presented the cheques with the State of Bank of
India, Siruthozhil Branch, for collection. The cheques were returned /
dishonoured for want of funds. Hence, a notice was issued by the
complainant. The accused, who received the notice, did not give any reply
or did not care to pay the amount. Therefore, the complainant filed four
cases on different dates. The learned Judicial Magistrate No.I, Karur, had
taken all the four cases on file and questioned the accused in terms of
Section 251 Cr.P.C., for which, the accused gave reply, as he is not guilty
under Section 138 of the Negotiable Instruments Act. While at the time of
trying the said cases, the complainant was examined as P.W.1 and the
accused was examined as R.W.1.
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Crl.A.(MD)Nos.403 to 406 of 2021
(iii) In otherwise, in C.C.No.281 of 2006, on the side of the
complainant, 11 documents were exhibited as Exs.P.1 to P.11 and on the
side of the accused, one document was marked as Ex.D.1. Similarly, in
C.C.Nos.12 and 21 of 2006, on the side of the complainant, 9 documents
were exhibited as Exs.P.1 to P.9 and on the side of the accused, one
document was marked as Ex.D.1. In C.C.No.498 of 2006, on the side of the
complainant, 6 documents were exhibited as Exs.P.1 to P.6 and on the side
of the accused, one document was marked as Ex.D.1.
(iv) The common evidence given by P.W.1 is that, in view of the
transactions, which had happened between himself and the accused for the
period from 12.03.2005 to 01.08.2005, the accused is liable to pay the
principal sum of Rs.3,02,572.10 to him. In order to discharge the said
liability, the accused issued 8 cheques and when at the time the same were
presented for collection, all the cheques were returned with an endorsement
as ''Insufficient Funds''. Thereafter, within 15 days from the date of return,
he sent a statutory notice to the accused through his Advocate regarding
bouncing of cheques, demanding payment from the accused. After receipt
of the said notice, the accused has neither replied nor repaid the amount to
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Crl.A.(MD)Nos.403 to 406 of 2021
the complainant. Hence, the complainant presented private complaints
against the accused under Section 138 of the Negotiable Instruments Act,
alleging that the accused had defrauded him by issuing the cheques without
sufficient funds in his account.
8.When the above incriminating materials were put to the accused
under Section 313 Cr.P.C., he denied the same as false. He examined
himself as D.W.1 and marked 5 purchase orders as Ex.D.1. [In all the cases].
9.It is the evidence given by the accused as D.W.1. that he used to get
orders from the Export Companies and distribute the same to various parties
with a condition to finish the work in a particular time and after finishing
the work, he collected the finished goods and send the same to the Export
Companies. Likewise, he took orders from one J.J.M. Company, Chennai,
and placed 5 purchase orders with the complainant's Company, i.e., Nagaraj
Exports on condition to complete the work within 40 days. While at the
time of placing orders with the complainant's Company on 01.02.2005, the
complainant affixed his Company seal in the copies of 5 purchase orders
and agreed to give delivery of the goods within 40 days, i.e., 12.03.2005. He
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Crl.A.(MD)Nos.403 to 406 of 2021
has further stated before the trial Court as, instead of complying the
undertaking given at the time of placing the orders, he failed to deliver the
goods within the stipulated period of 40 days and delivered the goods only
after 45 days. The extra goods delivered were also found defective and the
same were returned to the complainant. Since the complainant delivered the
finished goods beyond the stipulated period, the accused could not deliver
the same to J.J.M. Company, Chennai, within the stipulated period, as a
result of which, the orders given by J.J.M. Company in favour of the
accused were rejected and thereby, the accused sold the finished goods at
discount rates and incurred a loss of Rs.2,40,000/-. It is the further evidence
given by the accused as D.W.1 that while at the time of taking delivery of
belated goods, he issued 8 cheques to the complainant with a condition that
the same have to be encashed after taking delivery of the goods by J.J.M.
Company, Chennai. The complainant also had given an undertaking to bear
the loss incurred due to the belated delivery of the goods. Hence, in the said
circumstances, it cannot be concluded that the cheques issued by him are
for the legally enforceable debt.
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Crl.A.(MD)Nos.403 to 406 of 2021
10.Having considered the materials placed before him and after
perusing the materials on record, the learned Judicial Magistrate No.I,
Karur, came to the conclusion that the accused is guilty under Section 138
of the Negotiable Instruments Act and sentenced him to undergo rigorous
imprisonment for two years and to pay a fine of Rs.5,000/-, in default, to
undergo six months simple imprisonment in all the cases.
11.Challenging the said conviction and sentence, the accused
preferred appeals before the Sessions Court, Karur. The learned Sessions
Judge, Karur, by judgment dated 17.09.2010, allowed the said appeals and
set aside the conviction and sentence awarded by the trial Court.
12.Aggrieved over the said findings, the complainant is before this
Court with these Criminal Appeals.
13.I have heard Mr.V.Ragavachari, learned counsel appearing for the
complainant and Mr.N.Shanmugaselvam, learned counsel appearing for the
accused.
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14.The learned counsel appearing for the complainant would contend
that during the relevant point of time, only after receiving the finished
goods, in order to discharge his liability, the accused issued 8 cheques in
question. In otherwise, if the goods sent to J.J.M. Company, Chennai, were
returned, necessarily, they have to issue a rejection order. Further, the same
has to be reflected in the Daybook and Ledger etc. Therefore, without
producing the relevant documents, the accused gave evidence as the goods
delivered to J.J.M. Company, Chennai, were returned. The first appellate
Court without considering the said aspect, blindly came to the conclusion
that the complainant alone is having the duty to prove that the cheques were
issued for discharging the liability, which is erroneous.
15.It is further case of the complainant that if really the story put forth
by the accused is genuine one, it is for him to intimate the said
circumstances either by way of sending reply notice or by way of sending
separate notice. So, without doing anything, now, after filing complaints
before the learned Judicial Magistrate No.I, Karur, gave evidence and argue
as above, reveals the fact that to escape from the liability, the accused has
come out with the false story.
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Crl.A.(MD)Nos.403 to 406 of 2021
16.Per contra, the learned counsel appearing for the accused would
contend that while at the time of giving evidence as P.W.1, the complainant
himself admitted that he did not deliver the goods within the stipulated time
fixed at the time of placing orders. Therefore, it is not possible to the
accused to deliver the same to the Company, from which, he obtained
orders. Only in the said circumstances, he incurred a loss and the same was
not compensated by the complainant. Therefore, after breach of contract,
claiming that the cheques in dispute have been issued by the accused only to
discharge the legally enforceable debt is not found correct. Accordingly,
the findings arrived at by the first appellate Court does not require
interference at the hands of this Court.
17.I have considered the rival submissions made by the learned
counsel appearing on either side and perused the materials available on
record.
18.Primarily, in respect of filing of 4 cases by the complainant, he
deposed before the trial Court that, all the cases were filed within the time
stipulated under Section 138 of the Negotiable Instruments Act. Further, it
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Crl.A.(MD)Nos.403 to 406 of 2021
is not in dispute on the side of the accused that the complainant has filed
four cases after violating the limitations narrated in Section 138 of the
Negotiable Instruments Act. Therefore, it was concluded that all the cases
were filed within the limitation as contemplated under Section 138 of the
Negotiable Instruments Act.
19.It is another thing that the accused has not disputed the signature
found in the cheques in dispute. Therefore, being the reason that the
signatures found in the cheques were admitted by the accused, the statutory
presumption comes into play. At this juncture, it would be relevant to see
the judgment of our Hon'ble Apex Court in the case of Rangappa vs. Sri
Mohan reported in 2010 (4) CTC 118, wherein our Hon'ble Apex Court has
held that ''since the accused did admit that the signature on the cheque was
his, the statutory presumption comes into play''.
20Further, in the case of M.M.T.C. Limited and another vs.
Medchl Chemicals and Pharma (P) Limited reported in 2001 (4) CTC
749 (SC) : 2002 (1) SCC 234, our Hon'ble Apex Court has held that ''the
authority shows that even when the cheque is dishonoured by reason of stop
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Crl.A.(MD)Nos.403 to 406 of 2021
payment instruction, by virtue of Section 139 the Court has to presume that
the cheque was received by the holder for the discharge in whole or in part,
of any debt or liability.''
21.Accordingly, in view of the above settled legal position, it should
be presumed that being the reason that the signatures found in the cheques
were admitted by the accused, this Court is in a position to presume that the
said cheques have been issued to discharge the debt or liability.
22.However, there can be no doubt that there is an initial
presumption, which favours the complainant. Section 139 of the Negotiable
Instruments Act is an example reverse onus clause that has been included in
furtherance of the legislative objective of improving the credibility of
negotiable instruments. Therefore, it is for the accused to rebut the
presumption by adducing credible evidence that the cheques were issued as
a guarantee or for some other reasons.
23.Here, it is a case, the evidence given by P.W.1 and D.W.1 reveals
the fact that after getting orders from J.J.M. Company, Chennai, the accused
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distributed the same to the complainant with a condition that the finished
goods should be delivered within 40 days. In this regard, in respect of
return of finished goods, P.W.1 himself admitted that the finished goods
have not been delivered within the agreed period. In the said circumstances,
it is a stand taken by the accused that because of the reason that the finished
goods were not delivered to him within the agreed period, he could not sent
the same to J.J.M. Company, Chennai and thereby, the said Company had
rejected the order, as a result of which, he sold the same at discount rates
and incurred a loss to the tune of Rs.2,40,000/-.
24.The said evidence given by the accused was strongly denied on the
side of the complainant. In the said circumstances, it is necessary to show
whether the said evidence given by the accused is probable and the same is
true one. In this respect, while at the time of giving evidence as D.W.1, in
his cross-examination D.W.1 deposed that he is having accounts in respect
of getting and giving orders. Further, he gave evidence as he did not know
on what date J.J.M. Company, Chennai, had rejected the order, which has
already been issued to him. He has clearly stated that the document related
to the accounts and the rejection orders have not been produced before the
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trial Court. Therefore, the said evidence given by D.W.1 appears that
without producing the relevant documents, he had given evidence as, he
only incurred a loss due to delay in delivery of goods by the complainant.
At this juncture, it is necessary to see the judgment of our Hon'ble Apex
Court in the case of T.P.Murugan (Dead) Through Legal
Representatives vs. Bojan reported in 2018 (8) SCC 469, wherein our
Hon'ble Apex Court has held as, rebuttable presumption must be by
adducing credible evidence. Therefore, only in the circumstance, after
seeing the accounts maintained by the accused and after seeing the rejection
orders given by J.J.M. Company, Chennai, this Court comes to the
conclusion that due to belated delivery of the goods, the accused alone
incurred loss and therefore, the cheques issued by him are not for
discharging his liability.
25.In this occasion, as rightly pointed out by the learned counsel
appearing for the complainant, after withholding the documents, which are
necessary to substantiate his claim, mere the oral evidence given by the
accused cannot be accepted. In this aspect, the first appellate Court without
understanding the onus of proof, came to the conclusion that the non-
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production of accounts by the complainant is fatal to the complainant's case
and set aside the conviction and sentence. The accused during the time of
giving evidence, he himself admitted that he is liable to pay a sum of Rs.
3,02,572.10, but in respect of the said evidence, the first appellate Court
interpreted the same in a different manner and came to the conclusion that
the same would not amount to admission, ultimately, allowed the appeal.
26.It is well settled legal position that the presumption under Section
139 of the Negotiable Instruments Act is a rebuttable presumption and the
onus is on the accused to raise the probable defence. The standard of proof
for doing so is that, on preponderance of probability. Therefore, to rebut the
presumption, it is open for the accused to rely on evidence led by him or the
accused can also rely on the materials submitted by the complainant in order
to raise a probable defence. Inference of preponderance of probabilities can
be drawn not only from the materials brought on record by the parties but
also by reference to the circumstances upon which they rely.
27.Therefore, as already observed, here it is a case, the evidence
given by D.W.1 may be in his favour, being the reason that the same has not
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been substantiated by producing the necessary documents, the same cannot
be accepted as a real/true evidence. Further, if the story put forth by him is
found correct, it is not necessary for him to instruct the complainant to
present the cheques after getting consent from him.
28.In view of the above, I am of the considered opinion that the
cheques pertain to these 4 cases, have been issued by the accused only to
discharge the legally enforceable debt and being the reason, the same were
dishonoured, it should be held that the accused had committed an offence
under Section 138 of the Negotiable Instruments Act. The first appellate
Court without appreciating the same in proper perspective, particularly,
without understanding the onus of proof, has held that the accused is not
guilty under Section 138 of the Negotiable Instruments Act and the said
finding is not in accordance with law. Therefore, all these appeals are liable
to be allowed. In respect of quantum of sentence, considering the value of
the cheques, I am of the opinion that the punishment of two years simple
imprisonment awarded by the trial Court in all the cases is not necessary.
Hence, this Court reduces the same to three months and confirms the fine
amount awarded by the trial Court in all the cases.
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28.In fine,
(i) Crl.A.(MD)No.403 of 2021 is allowed and the judgment of the
first appellate Court in C.A.No.24 of 2008, dated 17.09.2010, is set aside.
The accused is found guilty under Section 138 of the Negotiable
Instruments Act, convicted and sentenced to undergo simple imprisonment
for a period of three months and to pay a fine of Rs.5,000/-, in default, to
undergo simple imprisonment for a period of one month.
(ii) Crl.A.(MD)No.404 of 2021 is allowed and the judgment of the
first appellate Court in C.A.No.23 of 2008, dated 17.09.2010, is set aside.
The accused is found guilty under Section 138 of the Negotiable
Instruments Act, convicted and sentenced to undergo simple imprisonment
for a period of three months and to pay a fine of Rs.5,000/-, in default, to
undergo simple imprisonment for a period of one month.
(iii) Crl.A.(MD)No.405 of 2021 is allowed and the judgment of the
first appellate Court in C.A.No.25 of 2008, dated 17.09.2010, is set aside.
The accused is found guilty under Section 138 of the Negotiable
Instruments Act, convicted and sentenced to undergo simple imprisonment
for a period of three months and to pay a fine of Rs.5,000/-, in default, to
undergo simple imprisonment for a period of one month.
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(iv) Crl.A.(MD)No.406 of 2021 is allowed and the judgment of the
first appellate Court in C.A.No.26 of 2008, dated 17.09.2010, is set aside.
The accused is found guilty under Section 138 of the Negotiable
Instruments Act, convicted and sentenced to undergo simple imprisonment
for a period of three months and to pay a fine of Rs.5,000/-, in default, to
undergo simple imprisonment for a period of one month.
08.10.2021
Speaking/Non-speaking order
Index : Yes / No
Internet: Yes
smn2
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Crl.A.(MD)Nos.403 to 406 of 2021
To
1.The Sessions Judge,
Karur.
2.The Judicial Magistrate No.I,
Karur.
3.The Section Officer,
Criminal Section (Records),
Madurai Bench of Madras High Court,
Madurai.
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Crl.A.(MD)Nos.403 to 406 of 2021
R.PONGIAPPAN, J.
smn2
Common Judgment in
Criminal Appeal (MD) Nos.403 to 406 of 2021
08.10.2021
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